0000019617 us-gaap:ResidentialMortgageBackedSecuritiesMember 2018-01-01 2018-09-30 0000019617 jpm:ConsumerExcludingCreditCardLoanPortfolioSegmentMember us-gaap:RealEstateLoanMember us-gaap:PaymentDeferralMember 2017-01-01 2017-09-30 0000019617 jpm:RefreshedFicoScoresEqualToOrGreaterThan660Member jpm:ConsumerExcludingCreditCardLoanPortfolioSegmentMember jpm:HomeEquityLoanandHomeEquityLineofCreditMember jpm:LTV101to125PercentMember 2018-09-30 0000019617 us-gaap:AccountingStandardsUpdate201708Member us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2017-12-31


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period endedCommission file
September 30, 20172018number 1-5805


JPMorgan Chase & Co.
(Exact name of registrant as specified in its charter)
Delaware13-2624428
(State or other jurisdiction of
incorporation or organization)
(I.R.S. employer
identification no.)
  
270 Park Avenue, New York, New York10017
(Address of principal executive offices)(Zip Code)
  
Registrant’s telephone number, including area code: (212) 270-6000


Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days.
xYes
oNo


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
xYes
oNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x
Accelerated filero
   
Non-accelerated filer (Do not check if a smaller reporting company)o
Smaller reporting companyo
   
 Emerging growth companyo
   
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
oYes
xNo
 
Number of shares of common stock outstanding as of September 30, 2017: 3,469,725,5772018: 3,325,410,725
 



FORM 10-Q
TABLE OF CONTENTS
Part I – Financial information
Page
Item 1.
Financial Statements.
 
 
Consolidated Financial Statements – JPMorgan Chase & Co.:
 
 
Consolidated statements of income (unaudited) for the three and nine months ended September 30, 20172018 and 20162017
8386
 
Consolidated statements of comprehensive income (unaudited) for the three and nine months ended September 30, 20172018 and 20162017
8487
 
Consolidated balance sheets (unaudited) at September 30, 2017,2018 and December 31, 20162017
8588
 
Consolidated statements of changes in stockholders’ equity (unaudited) for the nine months ended September 30, 20172018 and 20162017
8689
 
Consolidated statements of cash flows (unaudited) for the nine months ended September 30, 20172018 and 20162017
8790
 
Notes to Consolidated Financial Statements (unaudited)
8891
 
Report of Independent Registered Public Accounting Firm
165172
 
Consolidated Average Balance Sheets, Interest and Rates (unaudited) for the three and nine months ended September 30, 20172018 and 20162017
166173
 
Glossary of Terms and Acronyms and Line of Business Metrics
168175
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
 
Consolidated Financial Highlights
3
 
Introduction
4
 
Executive Overview
5
 
Consolidated Results of Operations
78
 
Consolidated Balance Sheets and Cash Flows Analysis
1112
 
Consolidated Cash Flows AnalysisOff-Balance Sheet Arrangements
1315
 
Off-Balance Sheet Arrangements
14
Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures
1516
 
Business Segment Results
1819
 
Enterprise-Wide Risk Management
41
Capital Risk Management
42
 
CreditCapital Risk Management
44
Liquidity Risk Management
49
 
Country Risk ManagementConsumer Credit Portfolio
6757
 
Liquidity Risk ManagementWholesale Credit Portfolio
6862
 
Investment Portfolio Risk Management
72
Market Risk Management
73
 
Critical Accounting Estimates Used by the FirmCountry Risk Management
78
 
Critical Accounting and Reporting DevelopmentsEstimates Used by the Firm
8079
 
Forward-Looking StatementsAccounting and Reporting Developments
82
Forward-Looking Statements
85
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
176183
Item 4.
Controls and Procedures.
176183
Part II – Other information
 
Item 1.
Legal Proceedings.
176183
Item 1A.
Risk Factors.
176183
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
176183
Item 3.
Defaults Upon Senior Securities.
177184
Item 4.
Mine Safety Disclosures.
177184
Item 5.
Other Information.
177184
Item 6.
Exhibits.
178184



JPMorgan Chase & Co.
Consolidated financial highlights
(unaudited)
As of or for the period ended, (in millions, except per share, ratio, headcount data and where otherwise noted)
(unaudited)
As of or for the period ended, (in millions, except per share, ratio, headcount data and where otherwise noted)
 Nine months ended Sept. 30,
(unaudited)
As of or for the period ended, (in millions, except per share, ratio, headcount data and where otherwise noted)

    Nine months ended Sept. 30, 
3Q17
2Q17
1Q17
4Q16
3Q16
2017
2016
3Q18
2Q18
1Q18
4Q17
 3Q17
 2018
2017
 
Selected income statement dataSelected income statement data Selected income statement data      
Total net revenueTotal net revenue$25,326
$25,470
$24,675
$23,376
$24,673
$75,471
$72,292
Total net revenue$27,260
$27,753
$27,907
$24,457
 $25,578
 $82,920
$76,248
 
Total noninterest expenseTotal noninterest expense14,318
14,506
15,019
13,833
14,463
43,843
41,938
Total noninterest expense15,623
15,971
16,080
14,895
 14,570
 47,674
44,620
 
Pre-provision profitPre-provision profit11,008
10,964
9,656
9,543
10,210
31,628
30,354
Pre-provision profit11,637
11,782
11,827
9,562
 11,008
 35,246
31,628
 
Provision for credit lossesProvision for credit losses1,452
1,215
1,315
864
1,271
3,982
4,497
Provision for credit losses948
1,210
1,165
1,308
 1,452
 3,323
3,982
 
Income before income tax expenseIncome before income tax expense9,556
9,749
8,341
8,679
8,939
27,646
25,857
Income before income tax expense10,689
10,572
10,662
8,254
 9,556
 31,923
27,646
 
Income tax expenseIncome tax expense2,824
2,720
1,893
1,952
2,653
7,437
7,851
Income tax expense2,309
2,256
1,950
4,022
 2,824
 6,515
7,437
 
Net incomeNet income$6,732
$7,029
$6,448
$6,727
$6,286
$20,209
$18,006
Net income$8,380
$8,316
$8,712
$4,232
 $6,732
 $25,408
$20,209
 
Earnings per share dataEarnings per share data  Earnings per share data      
Net income: BasicNet income: Basic$1.77
$1.83
$1.66
$1.73
$1.60
$5.26
$4.51
Net income: Basic$2.35
$2.31
$2.38
$1.08
 $1.77
 $7.04
$5.26
 
Diluted Diluted1.76
1.82
1.65
1.71
1.58
5.22
4.48
 Diluted2.34
2.29
2.37
1.07
 1.76
 7.00
5.22
 
Average shares: BasicAverage shares: Basic3,534.7
3,574.1
3,601.7
3,611.3
3,637.7
3,570.9
3,674.6
Average shares: Basic3,376.1
3,415.2
3,458.3
3,489.7
 3,534.7
 3,416.5
3,570.9
 
Diluted Diluted3,559.6
3,599.0
3,630.4
3,646.6
3,669.8
3,597.0
3,704.5
 Diluted3,394.3
3,434.7
3,479.5
3,512.2
 3,559.6
 3,436.2
3,597.0
 
Market and per common share dataMarket and per common share data Market and per common share data      
Market capitalizationMarket capitalization331,393
321,633
312,078
307,295
238,277
331,393
238,277
Market capitalization375,239
350,204
374,423
366,301
 331,393
 375,239
331,393
 
Common shares at period-endCommon shares at period-end3,469.7
3,519.0
3,552.8
3,561.2
3,578.3
3,469.7
3,578.3
Common shares at period-end3,325.4
3,360.9
3,404.8
3,425.3
 3,469.7
 3,325.4
3,469.7
 
Share price:(a)
Share price:(a)
 
Share price:(a)
      
HighHigh$95.88
$92.65
$93.98
$87.39
$67.90
$95.88
$67.90
High$119.24
$115.15
$119.33
$108.46
 $95.88
 $119.33
$95.88
 
LowLow88.08
81.64
83.03
66.10
58.76
81.64
52.50
Low102.20
103.11
103.98
94.96
 88.08
 102.20
81.64
 
CloseClose95.51
91.40
87.84
86.29
66.59
95.51
66.59
Close112.84
104.20
109.97
106.94
 95.51
 112.84
95.51
 
Book value per shareBook value per share66.95
66.05
64.68
64.06
63.79
66.95
63.79
Book value per share69.52
68.85
67.59
67.04
 66.95
 69.52
66.95
 
Tangible book value per share (“TBVPS”)(b)
Tangible book value per share (“TBVPS”)(b)
54.03
53.29
52.04
51.44
51.23
54.03
51.23
Tangible book value per share (“TBVPS”)(b)
55.68
55.14
54.05
53.56
 54.03
 55.68
54.03
 
Cash dividends declared per shareCash dividends declared per share0.56
0.50
0.50
0.48
0.48
1.56
1.40
Cash dividends declared per share0.80
0.56
0.56
0.56
 0.56
 1.92
1.56
 
Selected ratios and metricsSelected ratios and metrics Selected ratios and metrics      
Return on common equity (“ROE”)(c)Return on common equity (“ROE”)(c)11%12%11%11%10%11%10%Return on common equity (“ROE”)(c)14%14%15%7% 11% 14%11% 
Return on tangible common equity (“ROTCE”)(b)(c)
Return on tangible common equity (“ROTCE”)(b)(c)
13
14
13
14
13
14
13
Return on tangible common equity (“ROTCE”)(b)(c)
17
17
19
8
 13
 18
14
 
Return on assets(c)Return on assets(c)1.04
1.10
1.03
1.06
1.01
1.06
0.99
Return on assets(c)1.28
1.28
1.37
0.66
 1.04
 1.31
1.06
 
Overhead ratioOverhead ratio57
57
61
59
59
58
58
Overhead ratio57
58
58
61
 57
 57
59
 
Loans-to-deposits ratioLoans-to-deposits ratio63
63
63
65
65
63
65
Loans-to-deposits ratio65
65
63
64
 63
 65
63
 
High quality liquid assets (“HQLA”) (in billions)(c)
$568
$541
$528
$524
$539
   NA
$539
Liquidity coverage ratio (“LCR”) (average)120%115%NA%
NA%
NA%
NA%
NA%
Common equity Tier 1 (“CET1”) capital ratio(d)
12.6
12.6
12.5
12.4
12.0
12.6
12.0
Tier 1 capital ratio(d)
14.3
14.4
14.3
14.1
13.6
14.3
13.6
Total capital ratio(d)
16.1
16.0
15.6
15.5
15.1
16.1
15.1
Tier 1 leverage ratio(d)
8.4
8.5
8.4
8.4
8.5
8.4
8.5
Liquidity coverage ratio (“LCR”) (average)(d)
Liquidity coverage ratio (“LCR”) (average)(d)
115
115
115
119
 120
 115
118
 
Common equity Tier 1 (“CET1”) capital ratio(e)
Common equity Tier 1 (“CET1”) capital ratio(e)
12.0
12.0
11.8
12.2
 12.5
(h)12.0
12.5
(h)
Tier 1 capital ratio(e)
Tier 1 capital ratio(e)
13.6
13.6
13.5
13.9
 14.1
(h)13.6
14.1
(h)
Total capital ratio(e)
Total capital ratio(e)
15.4
15.5
15.3
15.9
 16.1
 15.4
16.1
 
Tier 1 leverage ratio(e)
Tier 1 leverage ratio(e)
8.2
8.2
8.2
8.3
 8.4
 8.2
8.4
 
Supplementary leverage ratio (“SLR”)(f)
Supplementary leverage ratio (“SLR”)(f)
6.5
6.5
6.5
6.5
 6.6
 6.5
6.6
 
Selected balance sheet data (period-end)Selected balance sheet data (period-end) Selected balance sheet data (period-end)      
Trading assetsTrading assets$420,418
$407,064
$402,513
$372,130
$374,837
$420,418
$374,837
Trading assets$419,827
$418,799
$412,282
$381,844
 $420,418
 $419,827
$420,418
 
Securities263,288
263,458
281,850
289,059
272,401
263,288
272,401
Investment securitiesInvestment securities231,398
233,015
238,188
249,958
 263,288
 231,398
263,288
 
LoansLoans913,761
908,767
895,974
894,765
888,054
913,761
888,054
Loans954,318
948,414
934,424
930,697
 913,761
 954,318
913,761
 
Core loansCore loans843,432
834,935
812,119
806,152
795,077
843,432
795,077
Core loans899,006
889,433
870,536
863,683
 843,432
 899,006
843,432
 
Average core loansAverage core loans837,522
824,583
805,382
799,698
779,383
822,611
759,207
Average core loans894,279
877,640
861,089
850,166
 837,522
 877,774
822,611
 
Total assetsTotal assets2,563,074
2,563,174
2,546,290
2,490,972
2,521,029
2,563,074
2,521,029
Total assets2,615,183
2,590,050
2,609,785
2,533,600
 2,563,074
 2,615,183
2,563,074
 
DepositsDeposits1,439,027
1,439,473
1,422,999
1,375,179
1,376,138
1,439,027
1,376,138
Deposits1,458,762
1,452,122
1,486,961
1,443,982
 1,439,027
 1,458,762
1,439,027
 
Long-term debt(e)
Long-term debt(e)
288,582
292,973
289,492
295,245
309,418
288,582
309,418
Long-term debt(e)
270,124
273,114
274,449
284,080
 288,582
 270,124
288,582
 
Common stockholders’ equityCommon stockholders’ equity232,314
232,415
229,795
228,122
228,263
232,314
228,263
Common stockholders’ equity231,192
231,390
230,133
229,625
 232,314
 231,192
232,314
 
Total stockholders’ equityTotal stockholders’ equity258,382
258,483
255,863
254,190
254,331
258,382
254,331
Total stockholders’ equity258,956
257,458
256,201
255,693
 258,382
 258,956
258,382
 
HeadcountHeadcount251,503
249,257
246,345
243,355
242,315
251,503
242,315
Headcount255,313
252,942
253,707
252,539
 251,503
 255,313
251,503
 
Credit quality metricsCredit quality metrics Credit quality metrics      
Allowance for credit lossesAllowance for credit losses$14,648
$14,480
$14,490
$14,854
$15,304
$14,648
$15,304
Allowance for credit losses$14,225
$14,367
$14,482
$14,672
 $14,648
 $14,225
$14,648
 
Allowance for loan losses to total retained loansAllowance for loan losses to total retained loans1.49%1.49%1.52%1.55%1.61%1.49%1.61%Allowance for loan losses to total retained loans1.39%1.41%1.44%1.47% 1.49% 1.39%1.49% 
Allowance for loan losses to retained loans excluding purchased credit-impaired loans(f)(g)
Allowance for loan losses to retained loans excluding purchased credit-impaired loans(f)(g)
1.29
1.28
1.31
1.34
1.37
1.29
1.37
Allowance for loan losses to retained loans excluding purchased credit-impaired loans(f)(g)
1.23
1.22
1.25
1.27
 1.29
 1.23
1.29
 
Nonperforming assetsNonperforming assets$6,154
$6,432
$6,826
$7,535
$7,779
$6,154
$7,779
Nonperforming assets$5,034
$5,767
$6,364
$6,426
 $6,154
 $5,034
$6,154
 
Net charge-offs(g)
Net charge-offs(g)
1,265
1,204
1,654
1,280
1,121
4,123
3,412
Net charge-offs(g)
1,033
1,252
1,335
1,264
 1,265
 3,620
4,123
(i)
Net charge-off rate(g)
Net charge-off rate(g)
0.56%0.54%0.76%0.58%0.51%0.62%0.53%
Net charge-off rate(g)
0.43%0.54%0.59%0.55% 0.56% 0.52%0.62%(i)
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
(a)ShareBased on daily prices are fromreported by the New York Stock Exchange.
(b)TBVPS and ROTCE are non-GAAP financial measures. For a further discussion of these measures, seerefer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Financial Performance Measures on pages 15–17.16-18.
(c)HQLA represents the amount of assets that qualify for inclusion in the LCR. The amounts represent quarterly average balances for September 30, 2017 and June 30, 2017, and period-end balances for the remaining periods. For additional information, see HQLA on page 68.Quarterly ratios are based upon annualized amounts.
(d)For the nine months ended September 30, 2017, the percentage represents the Firm’s reported average LCR per the U.S. LCR public disclosure requirements effective April 1, 2017.  
(e)Ratios presented are calculated under the Basel III Transitional capital rules and for the capital ratios represent the lower of the Standardized or Advanced approach as required by the Collins Amendment of the Dodd-Frank Act (the “Collins Floor”). Seeapproach. Refer to Capital Risk Management on pages 42–4844-48 for additional information on Basel III and the Collins Floor.
(e)Included unsecured long-term debt of $221.7 billion, $221.0 billion, $212.0 billion, $212.6 billion and $226.8 billion at September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016 respectively.    III.
(f)Effective January 1, 2018, the SLR was fully phased-in under Basel III. The SLR is defined as Tier 1 capital divided by the Firm’s total leverage exposure. Ratios prior to March 31, 2018 were calculated under the Basel III Transitional rules.    
(g)Excluded the impact of residential real estate purchased credit-impaired (“PCI”) loans, a non-GAAP financial measure. For a further discussion of these measures, seerefer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 15–17.16-18. For a further discussion, seerefer to Allowance for credit losses on pages 64–66.69–71.
(g)(h)The prior period ratios have been revised to conform with the current period presentation.
(i)Excluding net charge-offs of $467 million related to the student loan portfolio transfer,sale, the net charge-off ratesrate for the three months ended March 31, 2017 and nine months ended September 30, 2017 would have been 0.54% and 0.55%, respectively..


INTRODUCTION
The following is management’s discussion and analysis (“MD&A”) of the financial condition and results of operations of JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) for the third quarter of 2017.2018.
This Form 10-Q should be read in conjunctiontogether with JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the U.S. Securities and Exchange Commission2017 (“20162017 Annual Report” or 2016 “Form“2017 Form 10-K”), to which reference is hereby made. Seemade, and which is referred to throughout this document. Refer to the Glossary of terms and acronyms and line of business metrics on pages 168–175175–182 for definitions of terms and acronyms used throughout this Form 10-Q.
The MD&A included in thisThis Form 10-Q contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. For a further discussion of certain of those risks and uncertainties and the factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties, seerefer to Forward-looking Statements on page 8285 of this Form 10-Q and Part I, Item 1A, Risk Factors, on pages 8–2126 of JPMorgan Chase’s 20162017 Annual Report.
JPMorgan Chase & Co.,a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the United States of America (“U.S.”), with operations worldwide; the Firm had $2.6$2.6 trillion in assets and $258.4$259.0 billion in stockholders’ equity as of September 30, 2017. 2018. The Firm is a leader in investment
 
banking, financial services for consumers and small businesses, commercialbanking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S. and many of the world’s most prominent corporate, institutional and government clients.
JPMorgan Chase’s principal bank subsidiaries are JPMorgan Chase Bank, National Association (“JPMorgan Chase Bank, N.A.”), a national banking association with U.S. branches in 23 states as of September 30, 2018, and Chase Bank USA, National Association (“Chase Bank USA, N.A.”), a national banking association that is the Firm’s principal credit card-issuing bank. JPMorgan Chase’s principal nonbank subsidiary is J.P. Morgan Securities LLC (“JPMorganJ.P. Morgan Securities”), the Firm’sa U.S. investment banking firm.broker-dealer. The bank and nonbanknon-bank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, and representative offices and subsidiary foreign banks.offices. The Firm’s principal operating subsidiary in the United Kingdom (“U.K.U.K.”) is J.P. Morgan Securities plc, a subsidiary of JPMorgan Chase Bank, N.A.
For management reporting purposes, the Firm’s activities are organized into four major reportable business segments, as well as a Corporate segment. The Firm’s consumer business segment is the Consumer & Community Banking (“CCB”) segment.. The Firm’s wholesale business segments are Corporate & Investment Bank (“CIB”), Commercial Banking (“CB”), and Asset & Wealth Management (“AWM”). For a description of the Firm’s business segments and the products and services they provide to their respective
client bases, refer to Note 3331 of JPMorgan Chase’s 2016 Annual Report.2017 Form 10-K.







EXECUTIVE OVERVIEW
This executive overview of the MD&A highlights selected information and doesmay not contain all of the information that is important to readers of this Form 10-Q. For a complete description of the trends and uncertainties, as well as the risks and critical accounting estimates affecting the Firm and its various lines of business, this Form 10-Q and incorporated documentsthe 2017 Form 10-K should be read in their entirety.
Effective January 1, 2018, the Firm adopted several new accounting standards, of which the most significant to the Firm are the guidance related to revenue recognition, and recognition and measurement of financial assets. The revenue recognition guidance required gross presentation of certain costs that were previously offset against revenue. This change was adopted retrospectively and, accordingly, prior period amounts were revised, resulting in both total net revenue and total noninterest expense increasing with no impact to net income. The adoption of the recognition and measurement guidance resulted in $505 million of fair value gains, which were recorded in total net revenue in the first quarter of 2018, on certain equity investments that were previously held at cost. For additional information, refer to Note 1.
Financial performance of JPMorgan ChaseFinancial performance of JPMorgan Chase        Financial performance of JPMorgan Chase        
(unaudited)
As of or for the period ended,
(in millions, except per share data and ratios)
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
2017
 2016
 Change
 2017
 2016
 Change
2018
 2017
 Change
 2018
 2017
 Change
Selected income statement data                      
Total net revenue$25,326
 $24,673
 3 % $75,471
 $72,292
 4 %$27,260
 $25,578
 7 % $82,920
 $76,248
 9 %
Total noninterest expense14,318
 14,463
 (1) 43,843
 41,938
 5
15,623
 14,570
 7
 47,674
 44,620
 7
Pre-provision profit11,008
 10,210
 8
 31,628
 30,354
 4
11,637
 11,008
 6
 35,246
 31,628
 11
Provision for credit losses1,452
 1,271
 14
 3,982
 4,497
 (11)948
 1,452
 (35) 3,323
 3,982
 (17)
Net income6,732
 6,286
 7
 20,209
 18,006
 12
8,380
 6,732
 24
 25,408
 20,209
 26
Diluted earnings per share$1.76
 $1.58
 11
 $5.22
 $4.48
 17
$2.34
 $1.76
 33
 $7.00
 $5.22
 34
Selected ratios and metrics                      
Return on common equity11% 10%   11% 10%  14% 11%   14% 11%  
Return on tangible common equity13
 13
   14
 13
  17
 13
   18
 14
  
Book value per share$66.95
 $63.79
 5
 $66.95
 $63.79
 5
$69.52
 $66.95
 4
 $69.52
 $66.95
 4
Tangible book value per share54.03
 51.23
 5
 54.03
 51.23
 5
55.68
 54.03
 3
 55.68
 54.03
 3
Capital ratios(a)
                      
CET1(b)12.6% 12.0%   12.6% 12.0%  12.0% 12.5%   12.0% 12.5%  
Tier 1 capital(b)14.3
 13.6
   14.3
 13.6
  13.6
 14.1
   13.6
 14.1
  
Total capital16.1
 15.1
   16.1
 15.1
  15.4
 16.1
   15.4
 16.1
  
(a)Ratios presented are calculated under the Basel III Transitional capital rules and represent the Collins Floor. Seerules. Refer to Capital Risk Management on pages 42–4844-48 for additional information on Basel III.
(b)The prior period ratios have been revised to conform with the current period presentation.


Comparisons noted in the sections below are calculated for the third quarter of 20172018 versus the prior-year third quarter of 2017, unless otherwise specified.
Firmwide overview
JPMorgan Chase reported strong results in the current quarter of 2018, with record net income and EPS for a third quarter of 2017 with net income of $6.7$8.4 billion, or $1.76$2.34 per share, on net revenue of $25.3$27.3 billion. Excluding the impact of the Tax Cuts & Jobs Acts (”TCJA”), net income and EPS were still records for a third quarter. The Firm reported ROE of 11%14% and ROTCE of 13%17%.
Net income increased 7%24%, reflecting higher net revenue and the impact of the lower U.S. federal statutory income tax rate as a result of the TCJA, partially offset by a higher provision for credit losses.an increase in noninterest expense.
Total net revenue increased 3%7%. Net interest income was $12.8$13.9 billion, up 10%9%, primarily driven by the net impact of higher rates, which includes lower Markets net interest ratesincome in CIB, as well as loan and loan growth,deposit growth. Noninterest revenue was $13.4 billion, up 4%, largely driven by higher Markets noninterest revenue and auto lease income, partially offset by declines in Markets net interest income. Noninterest revenue was $12.5 billion, down 4%, driven by lower Markets revenue in the CIB.markdowns on certain legacy private equity investments of approximately $220 million.
Noninterest expense was $14.3$15.6 billion, down 1%. The prior year included two itemsup 7%, predominantly driven by investments in Consumer & Community Banking totaling $175 million related to liabilities from a merchant in bankruptcythe business, including higher compensation expense on increased headcount, technology, marketing and mortgage servicing reserves.real estate, and higher revenue-related costs, including auto lease depreciation.
The provision for credit losses was $1.5 billion, an increase$948 million, down from $1.3$1.5 billion in the prior year. The increase reflected a net addition to the allowance for credit losses in the Consumer portfolio of $303 million,decrease was driven by Card, and higher net charge-offs of $148 million (including $63 million of incremental charge-offs recorded in accordance with regulatory guidance), partially offset bythe consumer portfolio, largely reflecting a net reduction to the allowance for credit losses in the
Wholesale portfolio of $116 million, primarily driven by Oil & Gas and Real Estate. current quarter, compared to a net addition in the prior year.
The total allowance for credit losses was $14.6$14.2 billion at September 30, 2017,2018, and the Firm had a loan loss coverage ratio, excluding the PCI portfolio, of 1.29%1.23%, compared with 1.37%1.29% in the prior year. The Firm’s nonperforming assets totaled $6.2$5.0 billion at September 30, 2017,2018, a decrease from $7.8$6.2 billion in the prior year.year, reflecting improved credit performance in the consumer portfolio, and reductions in the wholesale portfolio including repayments and loan sales.
Firmwide average core loans increased 7%, and excluding CIB, core loans increased 6%.

Selected capital-related metrics
The Firm’s Basel III Fully Phased-In CET1 capital was $187$185 billion, and the Standardized and Advanced CET1 ratios were 12.5%12.0% and 12.9%, respectively.
The Firm’s Fully Phased-In supplementary leverage ratio (“SLR”)SLR was 6.6% for the Firm.6.5% at September 30, 2018.
The Firm continued to grow tangible book value per share (“TBVPS”), ending the third quarter of 20172018 at $54.03,$55.68, up 5%3%.
ROTCE and TBVPS are consideredeach non-GAAP financial measures. Core loans and each of the Fully Phased-In capital and certain leverage measures are all considered key performance measures. For a further discussion of each of these measures, seerefer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 15–17,16-18, and Capital Risk Management on pages 42–48.44-48.


Lines of business highlights
Selected business metrics for each of the Firm’s four lines of business are presented below for the third quarter of 2017.2018.
CCB
ROE 19%31%
 
•
Average core loans up 8%6%; average deposits of $646$674 billion up 9%4%
•
29.3 million active mobile customers,Client investment assets of $298 billion, up 12%14%
•
Credit card sales volume up 12% and merchant processing volume each up 13%14%
CIB
ROE 13%14%
 
•
Maintained #1 ranking for Global Investment Banking fees with 8.2%8.7% wallet share YTDyear-to-date
•
BankingEquity Markets revenue of $1.6 billion, up 17%
•
Treasury Services revenue up 5%; Markets12% and Securities Services revenue down 21%up 5%
CB
ROE 17%21%
 
•
Record revenue of $2.1 billion, up 15%; net income of $881 million, up 13%
•
Average loan balances up 4%
•
Strong credit quality with a net recovery of $200 billion, up 10%3 bps
AWM
ROE 29%31%
 
•
Record net income of $674 million, up 21%; revenue of $3.2 billion, up 6%
•
Average loan balances of $125 billion, up 10%12%
•
Record assetsAssets under management (“AUM”) of $1.9$2.1 trillion, up 10%; 81% of mutual fund AUM ranked in the 1st or 2nd quartile over 5 years7%
For a detailed discussion of results by line of business, refer to the Business Segment Results on pages 18–40.19-41.
Credit provided and capital raised
JPMorgan Chase continues to support consumers, businesses and communities around the globe. The Firm provided credit and raised capital of $1.7$1.9 trillion for wholesale and consumer clients during the first nine months of 2017:2018:
$197174 billion of credit for consumers
$1716 billion of credit for U.S. small businesses
$601682 billion of credit for corporations
$820960 billion of capital raised for corporate clients and non-U.S. government entities
$6541 billion of credit and capital raised for U.S. government and nonprofit entities, including states, municipalities, hospitals and universities.
Recent events
DuringOn August 29, 2018, JPMorgan Chase announced the second halflaunch of 2017, natural disasters caused significant disruptionsYou Invest, a new U.S. digital investment platform.
On September 12, 2018, JPMorgan Chase announced the creation of AdvancingCities, a new $500 million, five-year initiative to individualsdrive inclusive growth and businesses, and damage to homes and communitiescreate greater economic opportunity in several regions wherecities across the Firm conducts business. The Firm continues to provide assistance to customers, clients, communities and employees who have been affected by these disasters. These events did not have a material impact on the Firm’s third quarter 2017 financial results.world.
2017
2018 outlook
These current expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on
the current beliefs and expectations of JPMorgan Chase’s management and are subject to significant risks and uncertainties. TheseFor a further discussion of certain of those risks and uncertainties and the factors that could cause the Firm’sJPMorgan Chase’s actual results to differ materially frombecause of those set forth in such forward-looking statements. Seerisks and uncertainties, refer to Forward-Looking Statements on page 8285 of this Form 10-Q and Risk Factors on pages 8–2126 of JPMorgan Chase’s 20162017 Annual Report. There is no assurance that actual results for the full year of 20172018 will be in line with the outlook set forth below, and the Firm does not undertake to update any forward-looking statements to reflect the impact of circumstances or events that arise after the date hereof.statements.
JPMorgan Chase’s outlook for the remainder of 20172018 should be viewed against the backdrop of the global and U.S. economies, financial markets activity, the geopolitical environment, the competitive environment, client and customer activity levels, and regulatory and legislative developments in the U.S. and other countries where the Firm does business. Each of these interrelated factors will affect the performance of the Firm and its lines of business. The Firm expects that it will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the legal, regulatory, business and economic environments in which it operates.
Firmwide
ManagementFor full-year 2018, management expects 2017 net interest income, on a managed basis, to increase bybe approximately $4$55.5 billion, compared with the prior year,depending on market conditions.
Management expects full-year 2018 noninterest revenue growth of 7-8% on a managed basis, depending on market conditions.
The Firm continues to take a disciplined approach to managing its expenses, while investing infor growth and innovation. As a result, Firmwidemanagement expects full-year 2018 adjusted expense in 2017 is expected to beof approximately $58$63.5 billion (excluding Firmwide legal expense).
The Firm continuesManagement estimates the full-year 2018 effective tax rate to experience charge-off rates at or near historically low levels, reflecting favorable credit conditions acrossbe approximately 20%, depending upon several factors, including the consumergeographic mix of taxable income and wholesale portfolios. Management expects total net charge-offs of approximately $5 billion in 2017, excluding net charge-offs of $467 million relatedrefinements to the write-downestimates of the student loan portfolio inimpacts of the first quarter of 2017.TCJA.
Management expects average core loan growth, excluding CIB, of approximately 8% in 2017.6-7% for full-year 2018.
CCB
Management expects Card, Commerce Solutions & Auto (“CCSA”) revenue for the fourth quarter of 2017 to be approximately flat compared to the third quarter of 2017.
In Card, management expects the portfolio average net charge-off rate in 2017 to remain below 3% for the year, reflecting continued loan growth and the seasoning of newer vintages, with quarterly net charge-off rates reflecting normal seasonal trends.
CIB
Management expects Markets revenue in the fourth quarter of 2017 to be lower compared to a strong prior-year period.
CB
Management expects expense in the fourth quarter of 2017 to be approximately flat compared to the third quarter of 2017.


CONSOLIDATED RESULTS OF OPERATIONS
This section provides a comparative discussion of JPMorgan Chase’s Consolidated Results of Operations on a reported basis for the three and nine months ended September 30, 20172018 and 2016,2017, unless otherwise specified. Factors that relate primarily to a single business segment are discussed in more detail within that business segment. For a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations, see refer to pages 78–7979–81 of this Form 10-Q and pages 132–134138–140 of JPMorgan Chase’s 20162017 Annual Report.
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
Revenue                      
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017
 2016
 Change
 2017
 2016
 Change
2018
 2017
 Change
 2018
 2017
 Change
Investment banking fees$1,843
 $1,866
 (1)% $5,470
 $4,843
 13 %$1,832
 $1,868
 (2)% $5,736
 $5,594
 3 %
Principal transactions2,721
 3,451
 (21) 9,440
 9,106
 4
2,964
 2,721
 9
 10,698
 9,440
 13
Lending- and deposit-related fees1,497
 1,484
 1
 4,427
 4,290
 3
1,542
 1,497
 3
 4,514
 4,427
 2
Asset management, administration and commissions3,846
 3,597
 7
 11,347
 10,902
 4
4,310
 4,072
 6
 12,923
 11,996
 8
Securities gains/(losses)(1) 64
 NM
 (38) 136
 NM
Investment securities losses(46) (1) NM
 (371) (38) NM
Mortgage fees and related income429
 624
 (31) 1,239
 1,980
 (37)262
 429
 (39) 1,051
 1,239
 (15)
Card income1,242
 1,202
 3
 3,323
 3,861
 (14)1,328
 1,242
 7
 3,623
 3,323
 9
Other income(a)
951
 782
 22
 3,193
 2,844
 12
1,160
 952
 22
 4,041
 3,197
 26
Noninterest revenue12,528
 13,070
 (4) 38,401
 37,962
 1
13,352
 12,780
 4
 42,215
 39,178
 8
Net interest income12,798
 11,603
 10
 37,070
 34,330
 8
13,908
 12,798
 9
 40,705
 37,070
 10
Total net revenue$25,326
 $24,673
 3 % $75,471
 $72,292
 4 %$27,260
 $25,578
 7 % $82,920
 $76,248
 9 %
(a)Included operating lease income of $928 million$1.2 billion and $708$928 million for the three months ended September 30, 2017 and 2016,, respectively, and $2.6$3.3 billion and $2.0$2.6 billion for the nine months ended September 30, 2017 and 2016,, respectively.
Quarterly results
Investment banking fees remained relatively flat, as declines decreased slightly compared to a strong prior year, with overall share gains, driven by higher equity underwriting fees, which were more than offset by lower debt underwriting and advisory fees. The increase in equity underwriting fees driven by a lower share of fees, and debt underwriting fees driven by lower industry-wide fees were offset by higher advisory feeswas driven by a higher numbershare of completed transactionsfees including a strong performance in CIB.the IPO market. The decrease in debt underwriting fees was driven by declines in industry-wide fee levels, and advisory fees declined compared to a strong prior year. For additional information, seerefer to CIB segment results on pages 25–3026-31 and Note 5.5.
Principal transactions revenue decreased compared with a increased primarily reflecting higher revenue in CIB driven by:
higher Equity Markets revenue in derivatives and prime brokerage reflecting strong prior yearclient activity, and
•
in Fixed Income Markets, higher revenue in Currencies & Emerging Markets on increased activity levels, as well as in Commodities compared to a challenging prior year. The increase was partially offset by lower revenue in Credit and Securitized Products. For additional information, refer to CIB segment results on pages 26-31 , and Note 5.
The increase in CIB’s Markets business, primarily reflecting:
lower Fixed Income-related revenue across products driven by sustained low volatility and tighter credit spreads
CIB was partially offset by
higher Equity-related revenue primarily in Prime Services.
The decrease also reflected lower gains private equity losses reflecting markdowns on certain legacy private equity investments in several businesses. Corporate.
For additional information see CIB, Corporateon lending- and CCBdeposit-related fees, refer to the segment results
for CCB on pages 25–30 21–25, page 39 and CIB on pages 20–24 26-31, respectively,CB on pages 32-35 and Note 5.5.
Asset management, administration and commissions revenue increased as a result of reflecting:
higher asset management fees in AWM and CCB and higher asset-based fees in CIB, both driven by higher market levels as well as and net long-term product inflows, partially offset by fee compression in AWM, and
higher brokerage commissions driven by higher volumes. volumes in CIB.
For additional information, seerefer to AWM, CCB and CIB segment results on pages 35–38, 36–39, pages 20–2421–25 and pages 25–30,26-31, respectively, and Note 5.
5.
For further information on investment securities gains/(losses) and the investment securities portfolio, refer to Corporate segment results on pages 40–41 and Note 9.
Mortgage fees and related income decreased driven by lower net production revenue on lower margins and volumes, lower mortgage servicing rights (“MSR”)revenue reflecting lower MSR risk management results and lower servicing revenue on a lower averagelevel of third-party loans serviced.serviced, as well as lower net production revenue reflecting lower production margins and volumes. For further information, seerefer to CCB segment results on pages 20–2421–25 and Note 14.14.

Card income increased predominantly driven by by:
lower new account origination costs, and
higher credit card-relatedmerchant processing fees on higher volumes,
largely annual fees, predominantlyoffset by
lower net interchange income reflecting higher rewards costs and partner payments, largely offset by higher credit card new account origination costs. sales volumes.
For further information, seerefer to CCB segment results on pages 20–24.21–25 and Note 5.
Other income increased primarily driven by reflects higher operating lease income reflectingfrom growth in auto operating lease volume in CCB.
For further information, seerefer to Note 5.5.
Net interest income increased primarily driven bydue to the net impact of higher rates, and loan growth, partially offset by declines inwhich includes lower Markets net interest income in CIB.CIB, as well as loan and deposit growth. The Firm’s average interest-earning assets were $2.2 trillion, up $26.1 billion from the prior year, and the net interest yield on these assets, on a fully taxable-equivalenttaxable equivalent (“FTE”FTE”) basis, was 2.37%2.51%, an increase of 1314 basis points from the prior year.
The net interest yield excluding CIB Markets was 3.30%, an increase of 40 basis points from the prior year. Net interest yield excluding CIB Markets is a non-GAAP financial measure. For additional informationa further discussion of this measure, refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on lending- and deposit-related fees, see the segment results for CCB on pages 20–24, CIB on pages 25–30, and CB on pages 31–34 and Note 5; and on securities gains, see the Corporate segment discussion on page 39.

16-18.
Year-to-date results
Investment banking fees increased reflecting reflecting:
higher debt and equity underwriting and advisory fees in CIB. The increase in debtequity underwriting fees was driven by a higher share of fees, and an overall increaseprimarily due to strong performance in industry-wide fees; andthe IPO market; the increase in equity underwritingadvisory fees was driven by growth in industry-wide issuance, including a stronger IPO market.
Principalhigher number of large completed transactions, revenue increased primarily as a result of higher client-driven market-making revenue in CIB, primarily reflecting:
higher Equity-related revenue primarily in Prime Services, and
higher Lending-related revenue reflecting lower fair value losses on hedges of accrual loans
partially offset by
lower Fixed Income-related revenuedebt underwriting fees primarily driven by sustained low volatilitydeclines in industry-wide fee levels and tighter credit spreads.a lower share in leveraged finance.
Principal transactions revenue increased primarily reflecting higher revenue in CIB driven by:
strength across products in Equity Markets, primarily in derivatives and prime brokerage, reflecting strong client activity, and
in Fixed Income Markets, higher revenue in Commodities compared to a challenging prior year, and strong performance in Currencies & Emerging Markets, largely offset by lower revenue in Credit.
The increase in CIB was partially offset by private equity losses reflecting markdowns on certain legacy private equity investments compared with gains in the prior year in Corporate.
Asset management, administration and commissions revenue increased as a result of reflecting:
higher asset management fees in AWM and CCB and higher asset-based fees in CIB, both driven by higher market levels as well as and net long-term product inflows partially offset by fee compression in AWM
higher brokerage commissions driven by higher volumes in CIB and AWM.AWM, and higher asset-based fees in CIB driven by net client inflows and higher market levels.
Investment securities losses increased due to sales related to the repositioning of the investment securities portfolio.
Mortgage fees and related income decreased driven by lower MSR risk management results, lower net production revenue onreflecting lower production margins, and volumes, andas well as lower net servicing revenue reflecting lower servicing revenue on a lower averagelevel of third-party loans serviced.
Card income decreased predominantly drivenserviced, partially offset by higher credit cardMSR risk management results.
Card income increased driven by:
lower new account origination costs, partiallyand
higher merchant processing fees on higher volumes,
largely offset by
lower net interchange income reflecting higher rewards costs and partner payments, largely offset by higher credit card-related fees, largely annual fees.
Other income increased primarily duecard sales volumes. The rewards costs included an adjustment to the following:credit card rewards liability of approximately $330 million in the second quarter of 2018, driven by an increase in redemption rate assumptions.
Other income increased reflecting:
higher operating lease income reflectingfrom growth in auto operating lease volume in CCB
fair value gains of $505 million recognized in the first quarter of 2018 related to the adoption of the new recognition and measurement accounting guidance for certain equity investments previously held at cost,
partially offset by
the absence of a legal benefit of $645 million that was recorded in the second quarter of 2017prior year in Corporate related to a settlement with the FDIC receivership for Washington Mutual and with Deutsche Bank as trustee to certain Washington Mutual truststrusts.
partially offset by
the absence in the current year of both gains on the sale of Visa Europe interests in CCB, as well as on the disposal of an asset in AWM, and
lower other income in CIB.
Net interest income increased primarily driven bydue to the net impact of higher rates, and loan growth across the businesses, partially offset by declines inwhich includes lower Markets net interest income in CIB.CIB, as well as loan and deposit growth. The Firm’s average interest-earning assets were $2.2 trillion, up $37.9 billion from the prior year, and the net interest yield on these assets, on aan FTE basis, was 2.34%2.49%, an increase of 815 basis points from the prior year. The net interest yield excluding CIB Markets was 3.21%, an increase of 40 basis points from the prior year.

Provision for credit lossesProvision for credit losses          Provision for credit losses          
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)

2017
 2016
 Change
 2017
 2016
 Change
2018
 2017
 Change
 2018
 2017
 Change
Consumer, excluding credit card$206
 $262
 (21)% $660
 $578
 14 %$(242) $206
 NM
 $(152) $660
 NM
Credit card1,319
 1,038
 27
 3,699
 2,978
 24
1,223
 1,319
 (7)% 3,557
 3,699
 (4)
Total consumer1,525
 1,300
 17
 4,359
 3,556
 23
981
 1,525
 (36) 3,405
 4,359
 (22)
Wholesale(73) (29) (152) (377) 941
 NM
(33) (73) 55
 (82) (377) 78
Total provision for credit losses$1,452
 $1,271
 14 % $3,982
 $4,497
 (11)%$948
 $1,452
 (35)% $3,323
 $3,982
 (17)%
Quarterly results
The provision for credit losses increased decreased as a result of:
•
a decrease in the consumer provision in CCB due to
–
a $250 million reduction in the allowance for loan losses in the residential real estate PCI portfolio, reflecting continued improvement in home prices and lower delinquencies,
–
a $150 million addition to the allowance for loan losses in the credit card portfolio, due to loan growth and higher loss rates, as anticipated, compared to a $300 million addition in the prior year,
–
lower net charge-offs in the residential real estate portfolio, largely driven by a recovery of approximately $80 million from a loan sale, and
–
lower net charge-offs in the auto portfolio as the prior year included $49 million of incremental charge-offs recorded in accordance with regulatory guidance
a higher consumer provision driven by:partially offset by
–$148 million of
higher net charge-offs primarily in the credit card portfolio due to seasoning of newermore recent vintages, in line with expectations, partially offset by a decrease in net charge-offs in the residential real estate portfolio reflecting continued improvement in home prices and delinquencies. The higher net charge-offs included $63 million of incremental charge-offs recorded in accordance with regulatory guidance, andas anticipated
–•
a $300 million addition to the allowance for credit lossesdecrease in the credit card portfolio, due to higher loss rates and loan growth, comparedconsumer provision was partially offset by a lower net benefit in the wholesale provision in the current period, which includes net recoveries predominantly related to a $200 million additionloan sale in the prior yearCIB.
the increase was partially offset by
a higher net benefit of $44 million due to a net reduction of $116 million in the wholesale allowance for credit losses, primarily driven by paydowns and loan sales in the Oil & Gas portfolio, and improvements in the overall quality of the Real Estate portfolio.
For a more detailed discussion of the credit portfolio and the allowance for credit losses, seerefer to the segment discussions of CCB on pages 20–24,21–25, CIB on pages 25–30,26-31, CB on pages 31–34,32-35, the Allowance for Credit Losses on pages 64–6669–71 and
Note 12.

Year-to-date results
The provision for credit lossesdecreased as a result of:
•
a decrease in the consumer provision in CCB due to
–
a $150 million addition to the allowance for loan losses in the credit card portfolio, due to loan growth and higher loss rates, as anticipated, compared to a $650 million addition in the prior year,
–
lower net charge-offs in the residential real estate portfolio, largely driven by recoveries from loan sales, and
–
a $250 million reduction in the allowance for loan losses in the residential real estate PCI portfolio, reflecting continued improvement in home prices and lower delinquencies, compared to a $175 million reduction in the non credit-impaired portfolio in the prior year
a net $450 million reduction in the wholesale allowance for credit losses, reflecting credit quality improvements in Oil & Gas, Natural Gas Pipelines and Metals & Mining portfolios, compared with an addition of $680 million in the prior year driven by downgrades in the same portfolios
the decrease was partially offset by
a higher consumer provision driven by:
–
$432 million of higher net charge-offs primarily in the credit card portfolio due to seasoning of newermore recent vintages, in line with expectations, partially offset by a decrease
in net charge-offs in the residential real estate portfolio reflecting continued improvement in home prices and delinquencies,
–
a $218 million impact related to the transfer of the student loan portfolio to held-for-sale, andas anticipated
–
the prior year included a $153$218 million higher addition towrite-down recorded in connection with the allowance for credit losses, which included current year additions tosale of the allowancestudent loan portfolio
•
the decrease in the credit card, business bankingconsumer provision was partially offset by a lower net benefit in the wholesale provision with the current period net benefit primarily driven by loan sales and auto portfolios,other activity related to a single name in the Oil & Gas portfolio, partially offset by other net portfolio activity. The prior year benefit was driven by a reduction in the allowance for credit losses in the residential real estate portfolio.Oil & Gas, Natural Gas Pipelines, and Metals and Mining portfolios.
For a more detailed discussion of the student loan sale, see CCB segment results on pages 20–24.
Noninterest expense          
 Three months ended September 30, Nine months ended September 30,
(in millions)

2018
 2017
 Change
 2018
 2017
 Change
Compensation expense$8,108
 $7,697
 5% $25,308
 $23,710
 7 %
Noncompensation expense:           
Occupancy1,014
 930
 9
 2,883
 2,803
 3
Technology, communications and equipment2,219
 1,972
 13
 6,441
 5,677
 13
Professional and outside services2,086
 1,955
 7
 6,333
 5,646
 12
Marketing798
 710
 12
 2,396
 2,179
 10
Other expense(a)(b)
1,398
 1,306
 7
 4,313
 4,605
 (6)
Total noncompensation expense7,515
 6,873
 9
 22,366
 20,910
 7
Total noninterest expense$15,623
 $14,570
 7% $47,674
 $44,620
 7 %
Noninterest expense          
 Three months ended September 30, Nine months ended September 30,
(in millions)

2017
 2016
 Change
 2017
 2016
 Change
Compensation expense$7,646
 $7,669
 —
 $23,553
 $23,107
 2 %
Noncompensation expense:           
Occupancy930
 899
 3
 2,803
 2,681
 5
Technology, communications and equipment1,972
 1,741
 13
 5,670
 5,024
 13
Professional and outside services1,705
 1,665
 2
 4,892
 4,913
 —
Marketing710
 825
 (14) 2,179
 2,200
 (1)
Other expense(a)(b)
1,355
 1,664
 (19) 4,746
 4,013
 18
Total noncompensation expense6,672
 6,794
 (2) 20,290
 18,831
 8
Total noninterest expense$14,318
 $14,463
 (1)% $43,843
 $41,938
 5 %
(a)
Included Firmwide legal expense/(benefit) of $(107)$20 million and $(71)$(107) million for the three months ended September 30, 20172018 and 2016,2017, respectively, and $172$90 million and $(547)$172 million for the nine months ended September 30, 20172018 and 2016, respectively.2017.
(b)Included FDIC-related expense of $353$349 million and $360$353 million for the three months ended September 30, 20172018 and 2016,2017, respectively, and $1.1 billion and $912 million for each of the nine months ended September 30, 20172018 and 2016, respectively.2017.

Quarterly results
Compensation expense decreased predominantly increased driven by lower performance-based compensation expense in CIB, partially offset by investments in certainheadcount across the businesses, including bankers and advisors, as well as technology and other support staff.staff; and higher revenue-related compensation expense.
Noncompensation expense decreased as a result of:
two items totaling $175 million included in the prior year in CCB related to liabilities from a merchant in bankruptcy and mortgage servicing reserves, and
lower marketing expense in CCB
partially offset by
higher depreciation expense from growth in auto operating lease volume in CCB.
For a discussion of legal expense, see Note 21.

Year-to-date results
Compensation expense increased predominantly driven by investments in certain businesses, including bankers and support staff, partially offset by lower performance-based compensation expense particularly in CIB.
Noncompensation expense increased as a result of:
higher legal expense as the prior year was a legal benefit
higher depreciation expense fromdue to growth in auto operating lease volume in CCB
higher FDIC-related expenses and
contributions to the Firm’s Foundation,
partially offset by
two items totaling $175 million included inlegal expense; the prior year was a net benefit
higher outside services expense primarily due to higher volume-related transaction costs in CCB relatedCIB and higher external fees on revenue growth in AWM
higher investments in technology, and
higher marketing expense in CCB.
For a discussion of legal expense, refer to liabilities from a merchant in bankruptcy and mortgage servicing reserves.
Note 22.

Income tax expense       
 Three months ended September 30, Nine months ended September 30,
(in millions)

2017
 2016
 Change
 2017
 2016
 Change
Income before income tax expense$9,556
 $8,939
 7% $27,646
 $25,857
 7 %
Income tax expense2,824
 2,653
 6
 7,437
 7,851
 (5)
Effective tax rate29.6% 29.7%   26.9% 30.4% 

Quarterly results
The effective tax rate was relatively flat compared to the prior period.
 
Year-to-date results
Compensation expense increased driven by investments in headcount across the businesses, including bankers and advisors, as well as technology and other support staff, and higher revenue-related compensation expense largely in CIB.
Noncompensation expense increased as a result of:
higher outside services expense primarily due to higher volume-related transaction costs in CIB and higher external fees on revenue growth in AWM
higher depreciation expense due to growth in auto operating lease volume in CCB
higher marketing expense in CCB
a loss of $174 million recorded in other expense in Corporate on the liquidation of a legal entity, and
higher investments in technology.
For additional information on the liquidation of a legal entity, refer to Note 17.
Income tax expense       
 Three months ended September 30, Nine months ended September 30,
(in millions)

2018
 2017
 Change
 2018
 2017
 Change
Income before income tax expense$10,689
 $9,556
 12 % $31,923
 $27,646
 15 %
Income tax expense2,309
 2,824
 (18) 6,515
 7,437
 (12)
Effective tax rate21.6% 29.6%   20.4% 26.9% 

Quarterly results
The effective tax rate decreased predominantly due to largerthe TCJA, including the reduction in the U.S. federal statutory income tax benefitsrate as well as a $132 million net tax benefit resulting from changes in the vesting of employee-based stock awards and the release of a valuation allowance. The tax benefits resulting from employee-based stock awards wereestimates related to the appreciationremeasurement of certain deferred taxes and the Firm’s stock price upon vestingdeemed repatriation tax on non-U.S. earnings. These items that reduced the effective tax rate were partially offset by the impact of these awards above their original grant price.higher pre-tax income, and the change in mix of income and expense subject to U.S. federal, state and local taxes.
Year-to-date results
The effective tax rate decreased due to the TCJA, including the reduction in the U.S. federal statutory income tax rate as well as a $305 million net tax benefit recorded in the first nine months of 2018 resulting from changes in the estimates related to the remeasurement of certain deferred taxes and the deemed repatriation tax on non-U.S. earnings. These items that reduced the effective tax rate were partially offset by the impact of higher pre-tax income, and the change in mix of income and expense subject to U.S. federal, state and local taxes.



CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
Consolidated balance sheets overviewanalysis
The following is a discussion of the significant changes between September 30, 2017,2018, and December 31, 2016.2017.
Selected Consolidated balance sheets data
(in millions)Sep 30,
2017
 Dec 31,
2016
Change
Sep 30,
2018
 Dec 31,
2017
Change
Assets        
Cash and due from banks$21,994
 $23,873
(8)%$23,225
 $25,898
(10)%
Deposits with banks435,810
 365,762
19
395,872
 405,406
(2)
Federal funds sold and securities purchased under resale agreements185,454
 229,967
(19)217,632
 198,422
10
Securities borrowed101,680
 96,409
5
122,434
 105,112
16
Trading assets:        
Debt and equity instruments362,158
 308,052
18
359,765
 325,321
11
Derivative receivables58,260
 64,078
(9)60,062
 56,523
6
Securities263,288
 289,059
(9)
Investment securities231,398
 249,958
(7)
Loans913,761
 894,765
2
954,318
 930,697
3
Allowance for loan losses(13,539) (13,776)(2)(13,128) (13,604)(3)
Loans, net of allowance for loan losses900,222
 880,989
2
941,190
 917,093
3
Accrued interest and accounts receivable61,757
 52,330
18
78,792
 67,729
16
Premises and equipment14,218
 14,131
1
14,180
 14,159
—
Goodwill47,309
 47,288
—
Mortgage servicing rights5,738
 6,096
(6)
Other intangible assets808
 862
(6)
Goodwill, MSRs and other intangible assets54,697
 54,392
1
Other assets104,378
 112,076
(7)115,936
 113,587
2
Total assets$2,563,074
 $2,490,972
3 %$2,615,183
 $2,533,600
3 %
Cash and due from banks and deposits with banksincreased decreased primarily driven by deposit growth andas a shift in the deploymentresult of excess cash from securities purchased under resale agreements and investment securities into deposits with banks.net long-term debt maturities. The Firm’s excess cash is largely placed with various central banks, predominantly Federal Reserve Banks.
Federal funds sold and securities purchased under resale agreementsdecreased increased primarily due to the shifthigher client-driven market-making activities and higher demand for securities to cover short positions in the deployment of excess cash to deposits with banks.CIB. For additional information on the Firm’s Liquidity Risk Management, see refer to pages 68–72.49–54.
Trading assets and trading liabilities–debt and equity instrumentsSecurities borrowedincreased predominantlydriven by higher demand for securities to cover short positions related to client-driven market-making activities in CIB.
The increaseTrading assets-debt and equity instruments increased predominantly as a result of client-driven market-making activities in trading assets wasCIB, primarily equity instruments in prime brokerage, and debt instruments in Fixed Income Markets, driven by higher debt and equity instruments in Prime Services reflecting client demand, and in Rates reflecting higher levels of client activity when compared to lower levels at year-end
The increase in trading liabilities was driven by higher levels of client-driven short positions in equity instruments in Prime Services, partially offset by reductions in debt instruments in Securitized products.
demand. For additional information, refer to Note 2.
Notes 2 and 4.
Trading assets and trading liabilities–derivative receivables and payables decreased predominantly related to client-driven market-making activities in CIB Markets, reflecting lower foreign exchange and interest rate derivative receivables and payables, driven by maturities and market movements. The decrease in derivative receivables was partially offset by higher equity derivative receivables driven by higher market levels. For additional information, refer to Derivative contracts on pages 62–63, and Notes 2 and 4.
SecuritiesInvestment securities decreased primarily reflecting net sales, paydowns and maturities of
U.S. Treasuries.government agency mortgage-backed securities (“MBS”), commercial MBS, and obligations of U.S. states and municipalities. For additional information on Securities, seeInvestment securities, refer to Corporate segment results on pages 40–41, Investment Portfolio Risk Management on page 72, and Notes 2 and 9.
and 9.
Loansincreased reflecting the following:reflecting:
higher wholesale loans across all lines of business, predominantly driven by new originations in CB and higherCIB, including loans to Private Bankingfinancial institution and commercial and industrial clients, and in AWM partially offset by paydownsdue to an increase in CIBloans to Wealth Management clients globally, and
higher consumer loans as a result of higherdriven by retention of originated high-quality prime mortgages in CCB and AWM, largelypredominantly offset by the sale of the student loan portfolio, lower home equity loans, and the run-off of PCI loans.loans, lower auto loans, and mortgage loan sales.
The allowance for loan losses decreased reflecting the following:
a net reduction in the wholesale allowance, reflecting credit quality improvements in the Oil & Gas, Natural Gas Pipelines and Metals & Mining portfolios
partially offset by
an increase in the consumer allowance, reflecting additions to the allowance for the credit card, business banking and auto portfolios, predominantly driven byby:
•
a $250 million reduction in the CCB allowance for loan losses in the residential real estate PCI portfolio, reflecting continued improvement in home prices and lower delinquencies, as well as a $151 million reduction in the allowance for write-offs of PCI loans partially due to loan sales. These reductions were partially offset by a $150 million addition in the credit card portfolio, due to loan growth and higher loss rates, as anticipated.
•
a reduction in the wholesale allowance primarily driven by loan sales related to a single name in the Oil & Gas portfolio in the first quarter of 2018 and other net portfolio activity.

higher loss rates and loan growth in credit card, largely offset by the utilization of the allowance in connection with the transfer of the student loan portfolio to held-for-sale, andFor a reduction in the allowance for the residential real estate portfolio predominantly driven by continued improvement in home prices and delinquencies.
For detailed discussion of loans and the allowance for loan losses, refer to Credit Risk Management on pages 49–66,55-72, and Notes 2, 3, 11 and 12.
12.
Accrued interest and accounts receivableincreased primarily reflecting higher client receivables related to client-driven market-making activities in CIB.

Other assets decreased as a result of a shift increased reflecting higher auto operating lease assets from growth in the collateral pledged by CIB from cash to securities (which are classified within trading assets).business volume in CCB.
For information on Goodwill and MSRs, seerefer to Note 14.14.
Selected Consolidated balance sheets data (continued)Selected Consolidated balance sheets data (continued) Selected Consolidated balance sheets data (continued) 
(in millions)Sep 30,
2017
 Dec 31,
2016
Change
Sep 30,
2018
 Dec 31,
2017
Change
Liabilities        
Deposits$1,439,027
 $1,375,179
5 %$1,458,762
 $1,443,982
1 %
Federal funds purchased and securities loaned or sold under repurchase agreements169,393
 165,666
2
181,608
 158,916
14
Commercial paper24,248
 11,738
107
Other borrowed funds29,719
 22,705
31
Short-term borrowings64,635
 51,802
25
Trading liabilities:        
Debt and equity instruments89,089
 87,428
2
109,457
 85,886
27
Derivative payables39,446
 49,231
(20)41,693
 37,777
10
Accounts payable and other liabilities196,764
 190,543
3
209,707
 189,383
11
Beneficial interests issued by consolidated variable interest entities (“VIEs”)28,424
 39,047
(27)20,241
 26,081
(22)
Long-term debt288,582
 295,245
(2)270,124
 284,080
(5)
Total liabilities2,304,692
 2,236,782
3
2,356,227
 2,277,907
3
Stockholders’ equity258,382
 254,190
2
258,956
 255,693
1
Total liabilities and stockholders’ equity$2,563,074
 $2,490,972
3 %$2,615,183
 $2,533,600
3 %
Deposits increased due to the following:in CIB and CCB, largely offset by decreases in AWM and CB.
higher consumer deposits reflecting the continuation of strong growth from new and existing customers, and low attrition rates
higher wholesale deposits The increase in CIB was predominantly driven by growth in client cash management activity in CIB’s SecuritiesTreasury Services, and Treasury Services businesses,in CCB driven by the continuation of growth from new customers, partially offset by lower balances in AWM reflecting balance migration into investment-related products.
The decrease in AWM was driven by balance migration predominantly into the Firm’s investment-related products, (retained predominantly within the Firm), and in CB primarily driven by the impact of seasonality in both CB and AWM.
migration of non-operating deposits into higher-yielding investment products.
For more information, on deposits, refer to the Liquidity Risk Management discussion on pages 68–72;49–54; and Notes 2
and 15.15.
Federal funds purchased and securities loaned or sold under repurchase agreements increased reflecting on-going client activityhigher secured financing of trading assets-debt and equity instruments and client-driven market-making activities in CIB partially offset by a change in.
Short-term borrowings increased due to the mixnet issuance of funding to commercial paper and other borrowed funds.
Commercial paper increased due to higher issuance in the wholesale market, reflecting a change in the mix of fundingshort-term advances from securities sold under repurchase agreements for CIB Markets activities.Federal Home Loan Banks (“FHLBs”). For additional information, seerefer to Liquidity Risk Management on pages 68–72.49–54.
 
Other borrowed fundsTrading liabilities–debt and equity instruments increased driven bypredominantly as a changeresult of client-driven market-making activities in the mixCIB, primarily debt instruments in Fixed Income Markets, and equity instruments in prime brokerage. For additional information, refer to Note 2 .
Trading liabilities–derivative payables increased predominantly as a result of funding from securities sold under repurchase agreementsclient-driven market-making activities, which increased equity and commodity derivative payables. For additional information, refer to Derivative contracts on pages 67–68, and Notes 2 and 4.
Accounts payable and other liabilities increased partly as a result of higher client payables related to prime brokerage activities in CIB.
Beneficial interests issued by consolidated VIEsdecreased due to net maturities of credit card securitizations and the deconsolidation of the student loan securitization entities.securitizations. For further information on Firm-sponsored VIEs and loan securitization trusts, seerefer to Off-Balance Sheet Arrangements on page 1415 and Notes 13 and 19; and for a more detailed discussion20.
Long-term debt decreased primarily driven by lower FHLB advances, partially offset by net issuance of the student loan sale, see CCB segment results on pages 20–24 and Note 23.
structured notes in CIB. For additional information on the Firm’s long-term debt activities, seerefer to Liquidity Risk Management on pages 68–72;49–54.
For information on changes in stockholders’ equity, see refer to page 86,89, and on the Firm’s capital actions, seerefer to Capital actions on page 47.pages 47-48.



CONSOLIDATED CASH FLOWS ANALYSIS
Consolidated cash flows overviewanalysis
The following is a discussion of cash flow activities during
the nine months ended September 30, 20172018 and 2016.2017.
(in millions) Nine months ended September 30,
 2018
 2017
Net cash provided by/(used in)    
Operating activities $13,765
 $(23,381)
Investing activities (39,782) 47,706
Financing activities 16,319
 36,405
Effect of exchange rate changes on cash (2,509) 7,272
Net increase/(decrease) in cash and due from banks and deposits with banks $(12,207) $68,002
(in millions) Nine months ended September 30,
 2017
 2016
Net cash provided by/(used in)    
Operating activities $(16,038) $(18,715)
Investing activities (22,342) (112,102)
Financing activities 36,405
 131,699
Effect of exchange rate changes on cash 96
 18
Net increase/(decrease) in cash and due from banks $(1,879) $900
Operating activities
Cash used in operating activities for the nine month period ending September 30, 2017 resulted from:
Client-driven market-making activities in CIB
an increaseIn 2018, cash provided primarily reflected net income, increased trading liabilities and accounts payable and other liabilities, partially offset by increases in trading assets was driven by higher debt and equity instrumentssecurities borrowed.
In 2017, cash used primarily reflected increases in Prime Services reflecting client demand,trading assets, and in Rates reflecting higher levels of client activity when compared to lower levels at year-end
a decreasedecreases in trading liabilities, predominantly reflecting lower foreign exchange and interest rate derivative payables
an increase in accrued interest and accounts receivable due to higher client receivables.
Partially offsetting these outflows waspayable and other liabilities, partially offset by net income and a decrease in other assets as a result of a shift in the collateral pledged in CIB from cash to securities.
Cash used in operating activities for the nine month period ending September 30, 2016 resulted from:
Client-driven market-making activities in CIB
an increase in trading assets, which was largely offset by an increase in trading liabilities
an increase in accrued interest and accounts receivable driven by higher client receivables
an increase in securities borrowed driven by higher demand for securities to cover short positions.
Investing activities
Cash used in investing activities during 2017 resulted from:
an increase in deposits with banks, primarily driven by growth in deposits and a shift in the deployment of excess cash from securities purchased under resale agreements and investment securities into deposits with banks
higher wholesale loans driven by new originations in CB and higher loans to Private Banking clients in AWM, partially offset by paydowns in CIB
higher consumer loans as a result of higher retention of originated high-quality prime mortgages in CCB and AWM,  largely offset by the sale of the student loan portfolio, lower home equity loans and the run-off of PCI loansassets.
 
CashInvesting activities
In 2018, cash used in investing activities during 2016 resulted from:
reflected higher net loan originations of consumer and wholesale loans
an increase in deposits with banks primarily due to growth in deposits and an increase in long-term debt
an increase in securities purchased under resale agreements, due to the deployment of excess cash by Treasury and higher demand for securities to cover short positions related to client-driven market-making activities in CIB.
For both periods, partially offsetting these cash outflows were net proceeds from paydowns, maturities, sales and purchases of investment securities.
Financing activities
Cash provided by financing activities in 2017 resulted from:
higher wholesale deposits driven by growth in client cash management activity in CIB’s Securities Services and Treasury Services businesses, partially offset by lower balancesinvestment securities.
In 2017, cash provided reflected a decrease in AWM reflecting balance migration predominantly into the Firm’s investment-related products,securities purchased under resale agreements and the impact of seasonality in both CB and AWMlower investment securities, partially offset by higher net loan originations.
higher consumer deposits reflecting the continuation of strong growth from new and existing customers, and low attrition rates
an increase in commercial paper due to higher issuance in the wholesale market, reflecting a change in the mix of funding from securities sold under repurchase agreements for CIB MarketsFinancing activities
Partially offsetting these inflows were net payments of long-term borrowings.
CashIn 2018, cash provided by financing activities in 2016 resulted from:
reflected higher consumer and wholesale deposits
an increase in securities loaned or sold under repurchase agreements, predominantly due todeposits and short-term borrowings, partially offset by a decrease in long-term borrowings.
In 2017, cash provided reflected higher client-driven market-making activitiesdeposits and short-term borrowings, partially offset by a decrease in CIBlong-term borrowings.
higher net proceeds from long-term borrowings consistent with Treasury’s long-term funding plans.
ForAdditionally, for both periods, cash was used for repurchases of common stock and dividends on common and preferred stock.
For a further discussion of the activities affecting the Firm’s cash flows, seerefer to Consolidated Balance Sheets Analysis on pages 11–12,12–14, Capital Risk Management on pages 42–48,44-48, and Liquidity Risk Management on pages 68–7249–54 of this Form 10-Q, and pages 110–11592–97 of JPMorgan Chase’s 20162017 Annual Report.





OFF-BALANCE SHEET ARRANGEMENTS
In the normal course of business, the Firm enters into various contractual obligations that may require future cash payments. Certain obligations are recognized on-balance sheet, while others are off-balance sheet under accounting principles generally accepted in the U.S. (“U.S. GAAP”).
The Firm is involved with several types of off–balance sheet arrangements, including through nonconsolidated special-purpose entities (“SPEs”), which are a type of VIE, and through lending-related financial instruments (e.g., commitments and guarantees). For further discussion, see Note 19 of this Form 10-Q and Off–Balance Sheet Arrangements and Contractual Cash Obligations on pages 45–46 and Note 29 of JPMorgan Chase’s 2016 Annual Report.
Special-purpose entities
The most common type of VIE is an SPE. SPEs are commonly used in securitization transactions in order to isolate certain assets and distribute the cash flows from those assets to investors. SPEs are an important part of the financial markets, including the mortgage- and asset-backed securities and commercial paper markets, as they provide market liquidity by facilitating investors’ access to specific portfolios of assets and risks. The Firm holds capital, as deemed appropriate, against all SPE-related transactions and related exposures, such as derivative transactions and lending-related commitments and guarantees. For further information on
The Firm has no commitments to issue its own stock to support any SPE transaction, and its policies require that transactions with SPEs be conducted at arm’s length and reflect market pricing. Consistent with this policy, no JPMorgan Chase employee is permitted to invest in SPEs with which the typesFirm is involved where such investment would violate the Firm’s Code of SPEs, see Note 13Conduct.
The table below provides an index of where in this Form 10-Q and Note 1 and Note 16 of JPMorgan Chase’s 2016 Annual Report.
Implications of a credit rating downgrade to JPMorgan Chase Bank, N.A.
For certain liquidity commitments to SPEs, JPMorgan Chase Bank, N.A. could be required to provide funding if its short-term credit rating were downgraded below specific levels, primarily “P-1”, “A-1” and “F1” for Moody’s Investors Service (“Moody’s”), Standard & Poor’s and Fitch, respectively. These liquidity commitments support the issuance of asset-backed commercial paper by Firm-administered consolidated SPEs. In the event of a short-term credit rating downgrade, JPMorgan Chase Bank, N.A., absent other solutions, would be required to provide funding to the SPE if the commercial paper could not be reissued as it matured. The aggregate amounts of commercial paper outstanding held by third parties as of September 30, 2017, and December 31, 2016, was $2.9 billion and $2.7 billion, respectively. The aggregate amounts of commercial paper issued by these SPEs could increase in future periods should clientsdiscussion of the Firm-administered consolidated SPEs draw down on certain unfunded lending-related commitments. These unfunded lending-related commitments were $7.3 billion and $7.4 billion at September 30, 2017, and December 31, 2016, respectively. The Firm could facilitateFirm’s various off-balance sheet arrangements can be found. In addition, refer to Note 1 for information about the refinancing of some of the clients’ assets in order to reduce the fundingFirm’s consolidation policies.
Type of off-balance sheet arrangementLocation of disclosurePage references
Special-purpose entities: variable interests and other obligations, including contingent obligations, arising from variable interests in nonconsolidated VIEsRefer to Note 13148-153
Off-balance sheet lending-related financial instruments, guarantees, and other commitmentsRefer to Note 20162-165
obligation. For further information, see the discussion of Firm-administered multiseller conduits in Note 13.

The Firm also acts as liquidity provider for certain municipal bond vehicles. The Firm’s obligation to perform as liquidity provider is conditional and is limited by certain termination events, which include bankruptcy or failure to pay by the municipal bond issuer and any credit enhancement provider, an event of taxability on the municipal bonds or the immediate downgrade of the municipal bond to below investment grade. See Note 13 for additional information.
Off–balance sheet lending-related financial instruments, guarantees, and other commitments
JPMorgan Chase provides lending-related financial instruments (e.g., commitments and guarantees) to meet the financing needs of its customers. The contractual amount of these financial instruments represents the maximum possible credit risk to the Firm should the counterparty draw upon the commitment or the Firm be required to fulfill its obligation under the guarantee, and should the counterparty subsequently fail to perform according to the terms of the contract. Most of these commitments and guarantees are refinanced, extended, cancelled, or expire without being drawn upon or a default occurring. As a result, the total contractual amount of these instruments is not, in the Firm’s view, representative of its expected future credit exposure or funding requirements. For further discussion of lending-related financial instruments, guarantees and other commitments, and the Firm’s accounting for them, see Lending-related commitments on page 62 and Note 19. For a discussion of liabilities associated with loan sales and securitization-related indemnifications, see Note 19.


EXPLANATION AND RECONCILIATION OF THE FIRM’S USE OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES
Non-GAAP financial measures
The Firm prepares its Consolidated Financial Statements using U.S. GAAP; these financial statements appear on pages 83–87.86-90. That presentation, which is referred to as “reported” basis, provides the reader with an understanding of the Firm’s results that can be tracked consistently from year-to-year and enables a comparison of the Firm’s performance with other companies’ U.S. GAAP financial statements.
In addition to analyzing the Firm’s results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a “managed” basis; these Firmwide managed basis results are considered non-GAAP financial measures. The Firm also reviews the results of the lines of business on a managed basis. The Firm’s definition of managed basis starts, in each case, with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm (and each of the reportable business segments) on aan FTE basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. These
financial measures allow management to assess the comparability of revenue from year-to-year arising from
both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business.
Management also uses certain non-GAAP financial measures at the Firm and business-segment level, because these other non-GAAP financial measures provide information to investors about the underlying operational performance and trends of the Firm or of the particular business segment, as the case may be, and, therefore, facilitate a comparison of the Firm or the business segment with the performance of its relevant competitors. For additional information on these non-GAAP measures, seerefer to Business Segment Results on pages 18–40.
Additionally, certain credit metrics and ratios disclosed by the Firm exclude PCI loans, and are therefore non-GAAP measures. For additional information on these non-GAAP measures, see Credit Risk Management on pages 49–66.19-41.
Non-GAAP financial measures used by the Firm may not be comparable to similarly named non-GAAP financial measures used by other companies.
The following summary table providestables provide a reconciliation from the Firm’s reported U.S. GAAP results to managed basis.
Three months ended September 30,Three months ended September 30,
2017 20162018 2017
(in millions, except ratios)Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis		 Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis		Reported
results		 
Fully taxable-equivalent adjustments(a)(b)
 Managed
basis		 Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis
Other income$951
 $555
 $1,506
 $782
 $540
 $1,322
$1,160
 $408
 $1,568
 $952
 $555
 $1,507
Total noninterest revenue12,528
 555
 13,083
 13,070
 540
 13,610
13,352
 408
 13,760
 12,780
 555
 13,335
Net interest income12,798
 319
 13,117
 11,603
 299
 11,902
13,908
 154
 14,062
 12,798
 319
 13,117
Total net revenue25,326
 874
 26,200
 24,673
 839
 25,512
27,260
 562
 27,822
 25,578
 874
 26,452
Pre-provision profit11,008
 874
 11,882
 10,210
 839
 11,049
11,637
 562
 12,199
 11,008
 874
 11,882
Income before income tax expense9,556
 874
 10,430
 8,939
 839
 9,778
10,689
 562
 11,251
 9,556
 874
 10,430
Income tax expense$2,824
 $874
 $3,698
 $2,653
 $839
 $3,492
$2,309
 $562
 $2,871
 $2,824
 $874
 $3,698
Overhead ratio57% NM
 55% 59% NM
 57%57% NM
 56% 57% NM
 55%
                      
Nine months ended September 30,Nine months ended September 30,
2017 20162018 2017
(in millions, except ratios)Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis		 Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis		Reported
results		 
Fully taxable-equivalent adjustments(a)(b)
 Managed
basis		 Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis
Other income$3,193
 $1,733
 $4,926
 $2,844
 $1,620
 $4,464
$4,041
 $1,337
 $5,378
 $3,197
 $1,733
 $4,930
Total noninterest revenue38,401
 1,733
 40,134
 37,962
 1,620
 39,582
42,215
 1,337
 43,552
 39,178
 1,733
 40,911
Net interest income37,070
 987
 38,057
 34,330
 897
 35,227
40,705
 473
 41,178
 37,070
 987
 38,057
Total net revenue75,471
 2,720
 78,191
 72,292
 2,517
 74,809
82,920
 1,810
 84,730
 76,248
 2,720
 78,968
Pre-provision profit31,628
 2,720
 34,348
 30,354
 2,517
 32,871
35,246
 1,810
 37,056
 31,628
 2,720
 34,348
Income before income tax expense27,646
 2,720
 30,366
 25,857
 2,517
 28,374
31,923
 1,810
 33,733
 27,646
 2,720
 30,366
Income tax expense$7,437
 $2,720
 $10,157
 $7,851
 $2,517
 $10,368
$6,515
 $1,810
 $8,325
 $7,437
 $2,720
 $10,157
Overhead ratio58% NM
 56% 58% NM
 56%57% NM
 56% 59% NM
 57%
(a) Predominantly recognized in CIBEffective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, CB business segments and Corporate.accordingly, prior period amounts were revised. For additional information, refer to Note 1.
(a)Predominantly recognized in CIB and CB business segments and Corporate.
(b)The decrease in fully taxable-equivalent adjustments in the three and nine months ended September 30, 2018, reflects the impact of the TCJA.

Net interest income and net yield excluding CIB’s Markets businesses
In addition to reviewing net interest income and the net interest yield on a managed basis, management also reviews net interest incomethese metrics excluding net interest income arising from CIB’s Markets businesses to assess the performance of the Firm’s lending, investing (including asset-liability management) and deposit-raising activities. This net interest income isThe resulting metrics are referred to as non-markets related net interest income.income and net yield. CIB’s
Markets businesses represent bothare Fixed Income Markets and Equity Markets. Management believes that disclosure of non-marketsnon-
markets related net interest income
and net yield provides investors and analysts with another measureother measures by which to analyze the non-markets-related business trends of the Firm and provides a comparable measure to other financial institutions that are primarily focused on lending, investing and deposit-raising activities.



The data presented below are non-GAAP financial measures due to the exclusion of markets-related net interest income arising from CIB.


(in millions, except rates)
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
2017
2016
 Change
 20172016 Change2018
2017
 Change
 20182017 Change
Net interest income – managed basis(a)(b)
$13,117
$11,902
 10 % $38,057
$35,227
 8 %$14,062
$13,117
 7 % $41,178
$38,057
 8 %
Less: CIB Markets net interest income(c)
1,070
1,625
 (34) 3,509
4,703
 (25)704
1,070
 (34) 2,488
3,509
 (29)
Net interest income excluding CIB Markets(a)
$12,047
$10,277
 17
 $34,548
$30,524
 13
$13,358
$12,047
 11
 $38,690
$34,548
 12
              
Average interest-earning assets$2,194,174
$2,116,493
 4
 $2,177,520
$2,080,133
 5
$2,220,258
$2,194,174
 1
 $2,215,377
$2,177,520
 2
Less: Average CIB Markets interest-earning assets(c)
544,867
518,862
 5
 535,044
518,989
 3
613,737
544,867
 13
 605,653
535,044
 13
Average interest-earning assets excluding CIB Markets$1,649,307
$1,597,631
 3 % $1,642,476
$1,561,144
 5 %$1,606,521
$1,649,307
 (3)% $1,609,724
$1,642,476
 (2)%
Net interest yield on average interest-earning assets – managed basis2.37%2.24%   2.34%2.26%  2.51%2.37%   2.49%2.34%  
Net interest yield on average CIB Markets interest-earning assets(c)
0.78
1.25
   0.88
1.21
  0.46
0.78
   0.55
0.88
  
Net interest yield on average interest-earning assets excluding
CIB Markets
2.90%2.56%   2.81%2.61%  3.30%2.90%   3.21%2.81%  
(a)Interest includes the effect of related hedges. Taxable-equivalent amounts are used where applicable.
(b)For a reconciliation of net interest income on a reported and managed basis, seerefer to reconciliation from the Firm’s reported U.S. GAAP results to managed basis on page 15.16.
(c)The amounts in this table differ from the prior-period to align with CIB’s Markets businesses. For further information on CIB’s Markets businesses, seerefer to page 29.30.
The Firm also reviews adjusted expense, which is noninterest expense excluding Firmwide legal expense and is therefore a non-GAAP financial measure. Additionally, certain credit metrics and ratios disclosed by the Firm exclude PCI loans, and are therefore non-GAAP measures. Management believes these measures help investors
understand the effect of these items on reported results and provide an alternate presentation of the Firm’s performance. For additional information on credit metrics and ratios excluding PCI loans, refer to Credit and Investment Risk Management on pages 55-72.


Tangible common equity, ROTCE and TBVPS
Tangible common equity (“TCE”), ROTCE and TBVPS are each non-GAAP financial measures. TCE represents the Firm’s common stockholders’ equity (i.e., total stockholders’ equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. ROTCE measures the Firm’s net income
 
applicable to common equity as a percentage of average TCE. TBVPS represents the Firm’s TCE at period-end divided by common shares at period-end. TCE, ROTCE, and TBVPS are utilized by the Firm, as well as investors and analysts, in assessing the Firm’s use of equity.
The following summary table provides a reconciliation from the Firm’s common stockholders’ equity to TCE.
Period-end AveragePeriod-end Average
(in millions, except per share and ratio data)Sep 30,
2017
Dec 31,
2016
 Three months ended September 30, Nine months ended September 30,Sep 30,
2018
Dec 31,
2017
 Three months ended September 30, Nine months ended September 30,
2017
2016
 2017
2016
 2018
2017
 2018
2017
Common stockholders’ equity$232,314
$228,122
 $231,861
$226,089
 $229,937
$224,034
$231,192
$229,625
 $230,439
$231,861
 $228,995
$229,937
Less: Goodwill47,309
47,288
 47,309
47,302
 47,297
47,314
47,483
47,507
 47,490
47,309
 47,496
47,297
Less: Certain identifiable intangible assets808
862
 818
903
 836
938
Add: Deferred tax liabilities(a)
3,271
3,230
 3,262
3,226
 3,243
3,205
Less: Other intangible assets781
855
 795
818
 820
836
Add: Certain Deferred tax liabilities(a)(b)
2,239
2,204
 2,233
3,262
 2,221
3,243
Tangible common equity$187,468
$183,202
 $186,996
$181,110
 $185,047
$178,987
$185,167
$183,467
 $184,387
$186,996
 $182,900
$185,047
          
Return on tangible common equityNA
NA
 13%13% 14%13%NA
NA
 17%13% 18%14%
Tangible book value per share$54.03
$51.44
 NA
NA
 NA
NA
$55.68
$53.56
 NA
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.
(b)Amounts presented for December 31, 2017 and later periods include the effect from the revaluation of the Firm's net deferred tax liability as a result of the TCJA.
Key performance measures
The Firm considers the following to be key regulatory capital measures:
▪Capital, risk-weighted assets (“RWA”), and capital and leverage ratios presented under Basel III Standardized and Advanced Fully Phased-In rules and
▪SLR calculated under Basel III Advanced Fully Phased-In rules.
Capital, risk-weighted assets (“RWA”), and capital and leverage ratios presented under Basel III Standardized and Advanced Fully Phased-In rules, and
SLR calculated under Basel III Advanced Fully Phased-In rules.
The Firm, as well as banking regulators, investors and analysts use these measures to assess the Firm’s regulatory capital position and to compare the Firm’s regulatory capital to that of other financial services companies.
For additional information on these measures, seerefer to Capital Risk Management on pages 42–48.44-48.
 
Core loans are also considered a key performance measure. Core loans represent loans considered central to the Firm’s ongoing businesses; and exclude loans classified as trading assets, runoff portfolios, discontinued portfolios and portfolios the Firm has an intent to exit. Core loans is a measure utilized by the Firm and its investors and analysts in assessing actual growth in the loan portfolio.


BUSINESS SEGMENT RESULTS
The Firm is managed on a line of business basis. There are four major reportable business segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset & Wealth Management. In addition, there is a Corporate segment.
The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by management. Results of these lines of business are presented on a managed basis. For a definition of managed basis, seerefer to Explanation and Reconciliation of the Firm’s use of Non-GAAP Financial Measures and Key Performance Measures on pages 15–17.16-18.
Description of business segment reporting methodology
Results of the business segments are intended to reflectpresent each segment as if it were a stand-alone business. The management reporting process that derives business segment results allocatesincludes the allocation of certain income and expense using market-based methodologies.items. For further information about line of business capital, seerefer to Line of business equity
on page 46.
47. The Firm periodically assesses the assumptions, methodologies and reporting classifications used for segment reporting, and further refinements may be implemented in future periods.
Business segment capital allocation changes
Effective January 1, 2017,The amount of capital assigned to each business is referred to as equity. On at least an annual basis, the Firm’s methodology used to allocateFirm assesses the level of capital to the business segments was updated. Under the new methodology, capital is no longer allocated torequired for each line of business for goodwill and other intangibles associated with acquisitions effected by the line of business. In addition, the new methodology incorporates Basel III Standardized Fully Phased-In RWA (asas well as Basel III Advanced Fully Phased-In RWA), leverage, the global systemically important banks (“GSIB”) surcharge,assumptions and a simulationmethodologies used to allocate capital. For additional information on business segment capital allocation, refer to Line of capital in a severe stress environment. The methodology will continue to be weighted towards Basel III Advanced Fully Phased-In RWA because the Firm believes it to be the best proxy for economic risk.business equity on pages 88-89 of JPMorgan Chase’s 2017 Annual Report.
For a further discussion of those methodologies, seerefer to Business Segment Results – Description of business segment reporting methodology on pages 51–5255–56 of JPMorgan Chase’s 20162017 Annual Report.

The following discussions of the business segment results are based on a comparison of the three and nine months ended September 30, 2017 versus the corresponding period in the prior year, unless otherwise specified.
Segment results – managed basis
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
Net income in 2018 for the business segments reflects the favorable impact of the reduction in the U.S. federal statutory income tax rate as a result of the TCJA.
The following tables summarize the business segment results for the periods indicated.
Three months ended September 30,Total net revenue Total noninterest expense Pre-provision profit/(loss)Total net revenue Total noninterest expense Pre-provision profit/(loss)
(in millions)2017
2016
Change
 2017
2016
Change
 2017
2016
Change
2018
2017
Change 2018
2017
Change
 2018
2017
Change
Consumer & Community Banking$12,033
$11,328
6 % $6,495
$6,510
—
 $5,538
$4,818
15 %$13,290
$12,033
10 $6,982
$6,495
7 % $6,308
$5,538
14 %
Corporate & Investment Bank8,590
9,455
(9) 4,768
4,934
(3) 3,822
4,521
(15)8,805
8,615
2 5,175
4,793
8
 3,630
3,822
(5)
Commercial Banking2,146
1,870
15
 800
746
7
 1,346
1,124
20
2,271
2,146
6 853
800
7
 1,418
1,346
5
Asset & Wealth Management3,245
3,047
6
 2,181
2,130
2
 1,064
917
16
3,559
3,472
3 2,585
2,408
7
 974
1,064
(8)
Corporate186
(188)NM
 74
143
(48) 112
(331)NM
(103)186
NM 28
74
(62) (131)112
NM
Total$26,200
$25,512
3 % $14,318
$14,463
(1)% $11,882
$11,049
8 %$27,822
$26,452
5 $15,623
$14,570
7 % $12,199
$11,882
3 %
Three months ended September 30,Provision for credit losses  Net income/(loss) Return on equityProvision for credit losses Net income/(loss) Return on equity
(in millions, except ratios)2017
2016
Change
 2017
2016
Change
 2017
2016
2018
2017
Change
 2018
2017
Change 2018
2017
Consumer & Community Banking$1,517
$1,294
17 % $2,553
$2,204
16 % 19%16%$980
$1,517
(35)% $4,086
$2,553
60 31%19%
Corporate & Investment Bank(26)67
NM
 2,546
2,912
(13) 13
17
(42)(26)(62) 2,626
2,546
3 14
13
Commercial Banking(47)(121)61
 881
778
13
 17
18
(15)(47)68
 1,089
881
24 21
17
Asset & Wealth Management8
32
(75) 674
557
21
 29
24
23
8
188
 724
674
7 31
29
Corporate—
(1)100
 78
(165)NM
 NM
NM
2
—
NM
 (145)78
NM NM
NM
Total$1,452
$1,271
14 % $6,732
$6,286
7 % 11%10%$948
$1,452
(35)% $8,380
$6,732
24 14%11%
Nine months ended September 30,Total net revenue Total noninterest expense Pre-provision profit/(loss)Total net revenue Total noninterest expense Pre-provision profit/(loss)
(in millions)2017
2016
Change 2017
2016
Change
 2017
2016
Change
2018
2017
Change 2018
2017
Change 2018
2017
Change
Consumer & Community Banking$34,415
$33,896
2 $19,390
$18,602
4 % $15,025
$15,294
(2)%$38,384
$34,415
12 $20,770
$19,390
7 $17,614
$15,025
17
Corporate & Investment Bank27,015
26,755
1 14,730
14,820
(1) 12,285
11,935
3
29,211
27,139
8 16,237
14,854
9 12,974
12,285
6
Commercial Banking6,252
5,490
14 2,415
2,190
10
 3,837
3,300
16
6,753
6,252
8 2,541
2,415
5 4,212
3,837
10
Asset & Wealth Management9,544
8,958
7 6,953
6,303
10
 2,591
2,655
(2)10,637
10,197
4 7,732
7,606
2 2,905
2,591
12
Corporate965
(290)NM 355
23
NM
 610
(313)NM
(255)965
NM 394
355
11 (649)610
NM
Total$78,191
$74,809
5 $43,843
$41,938
5 % $34,348
$32,871
4 %$84,730
$78,968
7 $47,674
$44,620
7 $37,056
$34,348
8
Nine months ended September 30,Provision for credit losses Net income/(loss) Return on equityProvision for credit losses Net income/(loss) Return on equity
(in millions, except ratios)2017
2016
Change
 2017
2016
Change
 2017
2016
2018
2017
Change
 2018
2017
Change 2018
2017
Consumer & Community Banking$4,341
$3,545
22 % $6,764
$7,350
(8)% 17%18%$3,405
$4,341
(22)% $10,824
$6,764
60 27%17%
Corporate & Investment Bank(175)761
NM
 8,497
7,384
15
 15
14
(142)(175)19
 9,798
8,497
15 18
15
Commercial Banking(214)158
NM
 2,582
1,970
31
 16
15
23
(214)NM
 3,201
2,582
24 20
16
Asset & Wealth Management30
37
(19) 1,683
1,665
1
 24
24
40
30
33
 2,249
1,683
34 32
24
Corporate—
(4)100
 683
(363)NM
 NM
NM
(3)—
NM
 (664)683
NM NM
NM
Total$3,982
$4,497
(11)% $20,209
$18,006
12 % 11%10%$3,323
$3,982
(17)% $25,408
$20,209
26 14%11%

The following sections provide a comparative discussion of business segment results as of or for the three and nine months ended September 30, 2018 versus the corresponding period in the prior year, unless otherwise specified.





CONSUMER & COMMUNITY BANKING
For a discussion of the business profile of CCB, see refer to pages 53–5757-61 of JPMorgan Chase’s 20162017 Annual Report and Line of Business Metrics on page 173.180.
Selected income statement dataSelected income statement data          Selected income statement data          
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions, except ratios)2017
 2016
 Change 2017
 2016
 Change2018
 2017
 Change
 2018
 2017
 Change
Revenue                      
Lending- and deposit-related fees$885
 $841
 5 % $2,547
 $2,390
 7 %$936
 $885
 6 % $2,668
 $2,547
 5 %
Asset management, administration and commissions543
 531
 2
 1,644
 1,596
 3
626
 543
 15
 1,792
 1,644
 9
Mortgage fees and related income428
 624
 (31) 1,235
 1,980
 (38)260
 428
 (39) 1,049
 1,235
 (15)
Card income1,141
 1,099
 4
 3,019
 3,543
 (15)1,219
 1,141
 7
 3,299
 3,019
 9
All other income901
 773
 17
 2,454
 2,303
 7
1,135
 901
 26
 3,255
 2,454
 33
Noninterest revenue3,898
 3,868
 1
 10,899
 11,812
 (8)4,176
 3,898
 7
 12,063
 10,899
 11
Net interest income8,135
 7,460
 9
 23,516
 22,084
 6
9,114
 8,135
 12
 26,321
 23,516
 12
Total net revenue12,033
 11,328
 6
 34,415
 33,896
 2
13,290
 12,033
 10
 38,384
 34,415
 12
                      
Provision for credit losses1,517
 1,294
 17
 4,341
 3,545
 22
980
 1,517
 (35) 3,405
 4,341
 (22)
                      
Noninterest expense                      
Compensation expense(a)2,554
 2,453
 4
 7,598
 7,255
 5
2,635
 2,548
 3
 7,916
 7,578
 4
Noncompensation expense(a)(b)
3,941
 4,057
 (3) 11,792
 11,347
 4
4,347
 3,947
 10
 12,854
 11,812
 9
Total noninterest expense6,495
 6,510
 —
 19,390
 18,602
 4
6,982
 6,495
 7
 20,770
 19,390
 7
Income before income tax expense4,021
 3,524
 14
 10,684
 11,749
 (9)5,328
 4,021
 33
 14,209
 10,684
 33
Income tax expense1,468
 1,320
 11
 3,920
 4,399
 (11)1,242
 1,468
 (15) 3,385
 3,920
 (14)
Net income$2,553
 $2,204
 16 % $6,764
 $7,350
 (8)%$4,086
 $2,553
 60
 $10,824
 $6,764
 60
                      
Revenue by line of business                      
Consumer & Business Banking$5,408
 $4,719
 15
 $15,547
 $13,885
 12
$6,385
 $5,408
 18
 $18,238
 $15,547
 17
Mortgage Banking1,558
 1,874
 (17) 4,513
 5,671
 (20)
Card, Commerce Solutions & Auto5,067
 4,735
 7
 14,355
 14,340
 —
Home Lending1,306
 1,558
 (16) 4,162
 4,513
 (8)
Card, Merchant Services & Auto5,599
 5,067
 10
 15,984
 14,355
 11
                      
Mortgage fees and related income details:                      
Net production revenue158
 247
 (36) 451
 670
 (33)108
 158
 (32) 296
 451
 (34)
Net mortgage servicing revenue(b)(c)
270
 377
 (28) 784
 1,310
 (40)152
 270
 (44) 753
 784
 (4)
Mortgage fees and related income$428
 $624
 (31)% $1,235
 $1,980
 (38)%$260
 $428
 (39)% $1,049
 $1,235
 (15)%
                      
Financial ratios                      
Return on equity19% 16%   17% 18%  31% 19%   27% 17%  
Overhead ratio54
 57
   56
 55
  53
 54
   54
 56
  
Note: In the discussion and the tables which follow, CCB presents certain financial measures which exclude the impact of PCI loans; these are non-GAAP financial measures.
(a)Effective in the first quarter of 2018, certain operations staff were transferred from CCB to CB. The prior period amounts have been revised to conform with the current period presentation. For a further discussion of this transfer, refer to CB segment results on page 32.
(b)Included operating lease depreciation expense of $688$862 million and $504$688 million for the three months ended September 30, 2018 and 2017, respectively, and 2016, respectively,$2.5 billion and $1.9 billion and $1.4 billion for the nine months ended September 30, 20172018 and 2016,2017, respectively.
(b)(c)Included MSR risk management results of $(23)$(88) million and $38$(23) million for the three months ended September 30, 2018 and 2017, respectively, and 2016, respectively,$(94) million and $(132) million and $240 million for the nine months ended September 30, 20172018 and 2016,2017, respectively.



Quarterly results
Net income was $2.6$4.1 billion, an increase of 16%, driven by higher net revenue, partially offset by a higher provision for credit losses.60%.
Net revenue was $12.0$13.3 billion, an increase of 6%10%.
Net interest income was $8.1$9.1 billion, up 9%12%, driven by deposit margin expansion, by:
higher deposit margins and growth in deposit balances in CBB, as well as margin expansion and higher loan balances in Card,
partially offset by
loan spread compression from higher rates including the impact of higher funding costs, in Mortgage BankingHome Lending and Auto.
Noninterest revenue was $3.9$4.2 billion, up 1%7%, driven by by:
higher auto lease volume,
higher card income due to
–lower new account origination costs, and
–higher merchant processing fees on higher volumes
largely offset by
–lower net interchange reflecting higher rewards costs and partner payments, largely offset by higher card sales volumes
higher asset management fees reflecting an increase in client investment assets,
partially offset by
lower net mortgage servicing revenue reflecting lower MSR risk management results and higher card- and deposit-related fees, predominantly offset by higher new account origination costs in Card,lower mortgage servicing revenue on a lower level of third-party loans serviced, as well as lower net production revenue reflecting lower mortgage production margins and volumes, lower MSR risk management results and lower mortgage servicing revenue as a result of a lower level of third-party loans serviced. Seevolumes.
Refer to Note 14 for further information regarding changes in value of the MSR asset and related hedges, and mortgage fees and related income.
Noninterest expense was $6.5$7.0 billion, flat compared to prior year, as a result of:up 7%, driven by:
two items totaling $175 million includedinvestments in the prior year related to liabilities from a merchant in bankruptcytechnology and mortgage servicing reserves,marketing, and
lower marketing expense
offset by
higher auto lease depreciation, and
continued business growth.depreciation.
The provision for credit losses was $1.5 billion, an increase$980 million, a decrease of 17%35% from the prior year, reflecting:
a $250 million reduction in the allowance for loan losses in the residential real estate PCI portfolio, reflecting continued improvement in home prices and lower delinquencies,
a $150 million addition to the allowance for loan losses in the credit card portfolio, due to loan growth and higher loss rates, as anticipated, compared to a $300 million addition in the prior year,
lower net charge-offs in the residential real estate portfolio, largely driven by:by a recovery of approximately $80 million from a loan sale, and
$148lower net charge-offs in the auto portfolio as the prior year included $49 million of incremental charge-offs recorded in accordance with regulatory guidance
partially offset by
higher net charge-offs primarily in the credit card portfolio due to seasoning of newermore recent vintages, in line with expectations, partially offset by a decrease in net charge-offs in the residential real estate portfolio reflecting continued improvement in home prices and delinquencies. The higher net charge-offs included $63 million of incremental charge-offs recorded in accordance with regulatory guidance regarding the timing of loss recognition for certain auto and residential real estate loans in bankruptcy and auto loans where assets were acquired in loan satisfaction, and
a $75 million higher addition to the allowance for credit losses, primarily related to the credit card portfolio.as anticipated.
 
Year-to-date results
Net income was $6.8$10.8 billion, a decreasean increase of 8%, driven by a higher provision for credit losses and noninterest expense, partially offset by higher net revenue.60%.
Net revenue was $34.4$38.4 billion, an increase of 2%12%.
Net interest income was $23.5$26.3 billion, up 6%12%, driven by by:
higher deposit margins and growth in deposit balances in CBB, as well as margin expansion and higher loan balances in Card, and deposit margin expansion,
partially offset by
loan spread compression from higher rates including the impact of higher funding costs, in Mortgage BankingHome Lending and Auto, the impact of the student loan portfolio sale and an adjustment for capitalized interest on modified loans in Mortgage Banking.Auto.
Noninterest revenue was $10.9$12.1 billion, down 8%up 11%, driven by by:
higher auto lease volume,
higher card income due to
–lower new account origination costs, and
–higher merchant processing fees on higher volumes
largely offset by
–lower net interchange reflecting higher rewards costs and partner payments, largely offset by higher card sales volumes. The rewards costs included an adjustment to the credit card rewards liability of approximately $330 million in the second quarter of 2018, driven by an increase in redemption rate assumptions
higher deposit-related fees, as well as higher asset management fees reflecting an increase in Card, lower MSR risk management results, the absence in the current year of a gain on the sale of Visa Europe interests and client investment assets,
partially offset by
lower net production revenue reflecting lower mortgage production margins and volumes, largely offset by higher auto lease volume and higher card- and deposit-related fees.margins.
Noninterest expense was $19.4$20.8 billion, an increase of 4%up 7%, driven by:
investments in technology and marketing, and
higher auto lease depreciation, and
continued business growth
partially offset by
two items totaling $175 million included in the prior year related to liabilities from a merchant in bankruptcy and mortgage servicing reserves.depreciation.
The provision for credit losses was $4.3$3.4 billion, an increasea decrease of 22% from the prior year, reflecting:
$428a $150 million of addition to the allowance for loan losses in the credit card portfolio, due to loan growth and higher loss rates, as anticipated, compared to a $650 million addition in the prior year,
lower net charge-offs in the residential real estate portfolio, largely driven by recoveries from loan sales, and
a $250 million reduction in the allowance for loan losses in the residential real estate PCI portfolio, reflecting continued improvement in home prices and lower delinquencies, compared to a $175 million reduction in the non credit-impaired portfolio in the prior year
partially offset by
higher net charge-offs primarily in the credit card portfolio due to seasoning of newermore recent vintages, in line with expectations, partially offset by a decrease in net charge-offs in as anticipated
the residential real estate portfolio reflecting continued improvement in home prices and delinquencies,
prior year included a $218 million impact related towrite-down recorded in connection with the transfersale of the student loan portfolio to held-for-sale, and
a $150 million higher addition to the allowance for credit losses.
See the Allowance for credit losses section on page 64 of this Form 10-Q for additional information regarding the consumer portfolio.
The Firm transferred the student loan portfolio to held-for-sale in the first quarter of 2017. The Firm sold substantially all of the portfolio in the second quarter of 2017, and such sale did not have a material impact on the Firm’s Consolidated Financial Statements.




Selected metrics                      
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except headcount)2017 2016 Change 2017 2016 Change2018
 2017
 Change
 2018 2017 Change
Selected balance sheet data (period-end)                      
Total assets$537,459
 $521,276
 3 % $537,459
 $521,276
 3 %$560,432
 $537,459
 4 % $560,432
 $537,459
 4 %
Loans:                      
Consumer & Business Banking25,275
 23,846
 6
 25,275
 23,846
 6
26,451
 25,275
 5
 26,451
 25,275
 5
Home equity44,542
 52,445
 (15) 44,542
 52,445
 (15)37,461
 44,542
 (16) 37,461
 44,542
 (16)
Residential mortgage195,134
 181,564
 7
 195,134
 181,564
 7
205,389
 195,134
 5
 205,389
 195,134
 5
Mortgage Banking239,676
 234,009
 2
 239,676
 234,009
 2
Home Lending242,850
 239,676
 1
 242,850
 239,676
 1
Card141,313
 133,435
 6
 141,313
 133,435
 6
147,881
 141,313
 5
 147,881
 141,313
 5
Auto65,102
 64,512
 1
 65,102
 64,512
 1
63,619
 65,102
 (2) 63,619
 65,102
 (2)
Student47
 7,354
 (99) 47
 7,354
 (99)—
 47
 NM —
 47
 NM
Total loans471,413
 463,156
 2
 471,413
 463,156
 2
480,801
 471,413
 2
 480,801
 471,413
 2
Core loans401,648
 371,060
 8
 401,648
 371,060
 8
425,917
 401,648
 6
 425,917
 401,648
 6
Deposits653,460
 605,117
 8
 653,460
 605,117
 8
677,260
 653,460
 4
 677,260
 653,460
 4
Equity51,000
 51,000
 —
 51,000
 51,000
 —
51,000
 51,000
 —
 51,000
 51,000
 —
Selected balance sheet data (average)                      
Total assets$531,959
 $521,882
 2
 $530,884
 $512,550
 4
$551,080
 $531,959
 4
 $544,931
 $530,884
 3
Loans:                      
Consumer & Business Banking25,166
 23,678
 6
 24,753
 23,227
 7
26,351
 25,166
 5
 26,104
 24,753
 5
Home equity45,424
 53,501
 (15) 47,333
 55,604
 (15)38,211
 45,424
 (16) 39,951
 47,333
 (16)
Residential mortgage192,805
 180,669
 7
 187,954
 175,059
 7
204,689
 192,805
 6
 201,665
 187,954
 7
Mortgage Banking238,229
 234,170
 2
 235,287
 230,663
 2
Home Lending242,900
 238,229
 2
 241,616
 235,287
 3
Card141,172
 132,713
 6
 138,852
 129,481
 7
146,272
 141,172
 4
 143,986
 138,852
 4
Auto65,175
 64,068
 2
 65,321
 62,998
 4
64,060
 65,175
 (2) 65,096
 65,321
 —
Student58
 7,490
 (99) 3,847
 7,759
 (50)—
 58
 NM —
 3,847
 NM
Total loans469,800
 462,119
 2
 468,060
 454,128
 3
479,583
 469,800
 2
 476,802
 468,060
 2
Core loans398,319
 367,999
 8
 389,103
 356,072
 9
422,582
 398,319
 6
 415,662
 389,103
 7
Deposits645,732
 593,671
 9
 636,257
 579,741
 10
674,211
 645,732
 4
 669,244
 636,257
 5
Equity51,000
 51,000
 —
 51,000
 51,000
 —
51,000
 51,000
 —
 51,000
 51,000
 —
                      
Headcount(b)134,553
 132,092
 2 % 134,553
 132,092
 2 %129,891
 134,151
 (3)% 129,891
 134,151
 (3)%
(a)Effective in the first quarter of 2018, certain operations staff were transferred from CCB to CB. The prior period amount has been revised to conform with the current period presentation. For further discussion of this transfer, refer to CB segment results on page 32.
(b)During the third quarter of 2018, approximately 1,200 employees transferred from CCB to CIB as part of the reorganization of the Commercial Card business.






Selected metricsSelected metrics          Selected metrics          
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except ratio data)2017
2016 Change 2017 2016 Change2018

2017
 Change
 2018 2017 Change
Credit data and quality statistics                      
Nonaccrual loans(a)(b)
$4,068

$4,853

(16)%
$4,068

$4,853

(16)%$3,520

$4,068

(13)%
$3,520

$4,068

(13)%
                      
Net charge-offs/(recoveries)(d)(c)
                      
Consumer & Business Banking$71
 $71
 —
 $184
 $180
 2
68
 71
 (4) 171
 184
 (7)
Home equity13
 42
 (69) 67
 136
 (51)(12) 13
 NM
 (3) 67
 NM
Residential mortgage(2) 7
 NM
 (3) 11
 NM
(105) (2) NM
 (252) (3) NM
Mortgage Banking11
 49
 (78) 64
 147
 (56)
Home Lending(117) 11
 NM
 (255) 64
 NM
Card1,019
 838
 22
 3,049
 2,528
 21
1,073
 1,019
 5
 3,407
 3,049
 12
Auto116
 79
 47
 245
 192
 28
56
 116
 (52) 182
 245
 (26)
Student—
 32
 NM
 498
(i) 
98
 408
—
 —
 —
 —
 498
(h) 
NM
Total net charge-offs/(recoveries)$1,217
 $1,069
 14
 $4,040
(i) 
$3,145
 28
$1,080
 $1,217
(g) 
(11) $3,505
 $4,040
(h) 
(13)
                      
Net charge-off/(recovery) rate(d)(c)
                      
Consumer & Business Banking1.12% 1.19%   0.99% 1.04%  1.02 % 1.12%   0.88% 0.99%  
Home equity(e)(d)
0.15
 0.42
   0.25
 0.44
  (0.17) 0.15
   (0.01) 0.25
  
Residential mortgage(e)(d)
—
 0.02
   —
 0.01
  (0.22) —
   (0.18) —
  
Mortgage Banking(e)
0.02
 0.10
   0.04
 0.10
  
Home Lending(d)
(0.21) 0.02
   (0.16) 0.04
  
Card2.87
 2.51
   2.94
 2.61
  2.91
 2.87
   3.16
 2.94
  
Auto0.71
 0.49
   0.50
 0.41
  0.35
 0.71
   0.37
 0.50
  
Student—
 1.70
   NM
 1.69
  —
 —
   —
 NM
  
Total net charge-off/(recovery) rate(e)(d)
1.10
 1.00
   1.25
(i) 
1.01
  0.95
 1.10
(g) 
  1.05
 1.25
(h) 
 
                      
30+ day delinquency rate                      
Mortgage Banking(f)(g)
1.03% 1.27%   1.03% 1.27%  
Home Lending(e)(f)
0.81% 1.03%   0.81% 1.03%  
Card1.76
 1.53
   1.76
 1.53
  1.75
 1.76
   1.75
 1.76
  
Auto0.93
 1.08
   0.93
 1.08
  0.82
 0.93
   0.82
 0.93
  
Student(h)
—
 1.81
   —
 1.81
  
                      
90+ day delinquency rate — Card0.86
 0.75
   0.86
 0.75
  0.85
 0.86
   0.85
 0.86
  
                      
Allowance for loan losses                      
Consumer & Business Banking$796
 $703
 13
 $796
 $703
 13
$796
 $796
 —
 $796
 $796
 —
Mortgage Banking, excluding PCI loans1,153
 1,488
 (23) 1,153
 1,488
 (23)
Mortgage Banking — PCI loans(d)
2,245
 2,618
 (14) 2,245
 2,618
 (14)
Home Lending, excluding PCI loans1,003
 1,153
 (13) 1,003
 1,153
 (13)
Home Lending — PCI loans(c)
1,824
 2,245
 (19) 1,824
 2,245
 (19)
Card4,684
 3,884
 21
 4,684
 3,884
 21
5,034
 4,684
 7
 5,034
 4,684
 7
Auto499
 474
 5
 499
 474
 5
464
 499
 (7) 464
 499
 (7)
Student—
 274
 NM
 —
 274
 NM
Total allowance for loan losses(d)
$9,377
 $9,441
 (1)% $9,377
 $9,441
 (1)%
Total allowance for loan losses(c)
$9,121
 $9,377
 (3)% $9,121
 $9,377
 (3)%
(a)Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as they are alleach of the pools is performing.
(b)At September 30, 20172018 and 2016,2017, nonaccrual loans excluded mortgage loans 90 or more days past due as follows: (1) mortgage loansand insured by U.S. government agencies of $4.0$2.9 billion and $5.0$4.0 billion, respectively; and (2) student loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) of zero and $259 million, 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 three months ended September 30, 2018 and 2017, excluded $58 million and $20 million, respectively, and for nine months ended September 30, 2018 and 2017, excluded $151 million and $66 million, respectively, of write-offs in the PCI portfolio. These write-offs decreased the allowance for loan losses for PCI loans. For further information on PCI write-offs, refer to Summary of changes in the allowance for credit losses on page 70.
(d)Excludes the impact of PCI loans. For the three months ended September 30, 2018 and 2017, the net charge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of (0.12)% and 0.11%, respectively; (2) residential mortgage of (0.20)% and -%, respectively; (3) Home Lending of (0.19)% and 0.02%, respectively; and (4) total CCB of 0.89% and 1.03%, respectively. For the nine months ended September 30, 2018 and 2017, the net charge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of (0.01)% and 0.19%, respectively; (2) residential mortgage of (0.17)% and -%, respectively; (3) Home Lending of (0.14)% and 0.04%, respectively; and (4) total CCB of 0.98% and 1.16%, respectively.
(e)At September 30, 2018 and 2017, excluded mortgage loans insured by U.S. government agencies of $4.5 billion and $5.9 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 9.39% and 9.30% at September 30, 2018 and 2017, respectively.
(g)Net charge-offs and net charge-off rates for the three and nine months ended September 30, 2017 included $63 million of incremental charge-offs recorded in accordance with regulatory guidance regarding the timing of loss recognition for certain auto and residential real estate loans in bankruptcy and auto loans where assets were acquired in loan satisfaction.
(d)Net charge-offs/(recoveries) and the net charge-off/(recovery) rates for the three months ended September 30, 2017 and 2016, excluded $20 million and $36 million, respectively, and for nine months ended September 30, 2017 and 2016, excluded $66 million and $124 million, respectively, of write-offs in the PCI portfolio. These write-offs decreased the allowance for loan losses for PCI loans. For further information on PCI write-offs, see summary of changes in the allowances on page 65.
(e)Excludes the impact of PCI loans. For the three months ended September 30, 2017 and 2016, the net charge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of 0.11% and 0.31%, respectively; (2) residential mortgage of -% and 0.02%, respectively; (3) Mortgage Banking of 0.02% and 0.08%, respectively; and (4) total CCB of 1.03% and 0.92%, respectively. For the nine months ended September 30, 2017 and 2016, the net charge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of 0.19% and 0.33%, respectively; (2) residential mortgage of -% and 0.01%,respectively; (3) Mortgage Banking of 0.04% and 0.09%, respectively; and (4) total CCB of 1.16% and 0.93%, respectively.
(f)At September 30, 2017 and 2016, excluded mortgage loans insured by U.S. government agencies of $5.9 billion and $7.0 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
(g)Excludes PCI loans. The 30+ day delinquency rate for PCI loans was 9.30% and 10.01% at September 30, 2017 and 2016, respectively.


(h)Excluded student loans insured by U.S. government agencies under FFELP of $461 million at September 30, 2016, that are 30 or more days past due. This amount has been excluded based upon the government guarantee.
(i)Excluding net charge-offs of $467 million related to the student loan portfolio transfer in the first quarter of 2017,sale, the total net charge-off rate for the nine months ended September 30, 2017 would have been 1.10%.


Selected metricsSelected metrics          Selected metrics          
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in billions, except ratios and where otherwise noted)2017
 2016
 Change
 2017
 2016
 Change
2018
 2017
 Change
 2018
 2017
 Change
Business Metrics                      
CCB households (in millions)(a)
61.2
 60.0
 2 % 61.2
 60.0
 2 %
Number of branches5,174
 5,310
 (3) 5,174
 5,310
 (3)5,066
 5,174
 (2)% 5,066
 5,174
 (2)%
Active digital customers
(in thousands)(b)
46,349
 43,657
 6
 46,349
 43,657
 6
Active mobile customers
(in thousands)(c)
29,273
 26,047
 12
 29,273
 26,047
 12
Debit and credit card sales volume(a)
$231.1

$207.9

11
 $671.8

$601.6
 12
Active digital customers
(in thousands)(a)
48,664
 46,349
 5
 48,664
 46,349
 5
Active mobile customers
(in thousands)(b)
32,538
 29,273
 11
 32,538
 29,273
 11
Debit and credit card sales volume$259.0

$231.1

12
 $746.4

$671.8
 11
                      
Consumer & Business Banking                      
Average deposits$630.4
 $576.6
 9
 $621.7
 $564.2
 10
$659.5
 $630.4
 5
 $655.3
 $621.7
 5
Deposit margin2.02% 1.79%   1.95% 1.82%  2.43% 2.02%   2.33% 1.95%  
Business banking origination volume$1.7
 $1.8
 (8) $5.6
 $5.7
 (2)$1.6
 $1.7
 (2) $5.2
 $5.6
 (6)
Client investment assets262.5
 231.6
 13
 262.5
 231.6
 13
298.4
 262.5
 14
 298.4
 262.5
 14
                      
Mortgage Banking           
Home Lending           
Mortgage origination volume by channel                      
Retail$10.6
 $11.7
 (9) $29.3
 $31.6
 (7)$10.6
 $10.6
 —
 $29.3
 $29.3
 —
Correspondent16.3
 15.4
 6
 43.9
 42.9
 2
11.9
 16.3
 (27) 32.9
 43.9
 (25)
Total mortgage origination volume(d)
$26.9
 $27.1
 (1) $73.2
 $74.5
 (2)
Total mortgage origination volume(c)
$22.5
 $26.9
 (16) $62.2
 $73.2
 (15)
                      
Total loans serviced (period-end)$821.6
 $863.3
 (5) $821.6
 $863.3
 (5)$798.6
 $821.6
 (3) $798.6
 $821.6
 (3)
Third-party mortgage loans serviced (period-end)556.9
 609.2
 (9) 556.9
 609.2
 (9)526.5
 556.9
 (5) 526.5
 556.9
 (5)
MSR carrying value (period-end)5.7
 4.9
 16
 5.7
 4.9
 16
6.4
 5.7
 12
 6.4
 5.7
 12
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end)1.02% 0.80%   1.02% 0.80%  1.22% 1.02%   1.22% 1.02%  
                      
MSR revenue multiple(e)
2.91x 2.29x   2.91x 2.29x  
MSR revenue multiple(d)
3.49x 2.91x   3.49x 2.91x  
                      
Card, excluding Commercial Card                      
Credit card sales volume$157.7
 $139.2
 13
 $454.2
 $396.9
 14
$176.0
 $157.7
 12
 $507.1
 $454.2
 12
New accounts opened (in millions)1.9
 2.7
 (30) 6.5
 7.7
 (16)1.9
 1.9
 —
 5.8
 6.5
 (11)
                      
Card Services                      
Net revenue rate10.95% 11.04%   10.55% 11.70%  11.50% 10.95%   11.17% 10.55%  
                      
Commerce Solutions           
Merchant Services           
Merchant processing volume$301.6
 $267.2
 13
 $870.3
 $778.5
 12
$343.8
 $301.6
 14
 $990.9
 $870.3
 14
                      
Auto                      
Loan and lease origination volume$8.8
 $9.3
 (5) $25.1
 $27.4
 (8)$8.1
 $8.8
 (8) $24.8
 $25.1
 (1)
Average Auto operating lease assets15.6
 11.4
 37 % 14.7
 10.5
 40 %
Average auto operating lease assets19.2
 15.6
 23 % 18.4
 14.7
 25 %
(a)The prior period amounts have been revised to conform with the current period presentation.
(b)Users of all web and/or mobile platforms who have logged in within the past 90 days.
(c)(b)Users of all mobile platforms who have logged in within the past 90 days.
(d)(c)Firmwide mortgage origination volume was $29.2$24.5 billion and $30.9$29.2 billion for the three months ended September 30, 20172018 and 2016,2017, respectively, and $81.0$68.2 billion and $83.9$81.0 billion for the nine months ended September 30, 20172018 and 2016,2017, respectively.
(e)(d)Represents the ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) divided by the ratio of annualized loan servicing-related revenue to third-party mortgage loans serviced (average).




CORPORATE & INVESTMENT BANK
For a discussion of the business profile of CIB, seerefer to pages 58–6262–66 of JPMorgan Chase’s 20162017 Annual Report and Line of Business Metrics on page 173.180.
Effective January 1, 2018, the Firm adopted several new accounting standards; the guidance which had the most significant impact on the CIB segment results was revenue recognition, and recognition and measurement of financial assets. The revenue recognition guidance was applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
Selected income statement dataSelected income statement data        Selected income statement data        
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions, except ratios)2017 2016 Change 2017 2016 Change2018 2017 Change 2018 2017 Change
Revenue                      
Investment banking fees$1,819
 $1,855
 (2)% $5,434
 $4,812
 13 %$1,823
 $1,844
 (1)% $5,658
 $5,558
 2 %
Principal transactions2,673
 3,282
 (19) 9,108
 8,717
 4
3,091
 2,673
 16
 10,786
 9,108
 18
Lending- and deposit-related fees374
 402
 (7) 1,149
 1,181
 (3)373
 374
 —
 1,136
 1,149
 (1)
Asset management, administration and commissions1,041
 968
 8
 3,161
 3,062
 3
1,130
 1,041
 9
 3,416
 3,161
 8
All other income187
 183
 2
 622
 927
 (33)88
 187
 (53) 958
 622
 54
Noninterest revenue6,094
 6,690
 (9) 19,474
 18,699
 4
6,505
 6,119
 6
 21,954
 19,598
 12
Net interest income2,496
 2,765
 (10) 7,541
 8,056
 (6)2,300
 2,496
 (8) 7,257
 7,541
 (4)
Total net revenue(a)
8,590
 9,455
 (9) 27,015
 26,755
 1
8,805
 8,615
 2
 29,211
 27,139
 8
                      
Provision for credit losses(26) 67
 NM
 (175) 761
 NM
(42) (26) (62) (142) (175) 19
                      
Noninterest expense                      
Compensation expense2,286
 2,513
 (9) 7,537
 7,850
 (4)2,402
 2,284
 5
 8,158
 7,534
 8
Noncompensation expense2,482
 2,421
 3
 7,193
 6,970
 3
2,773
 2,509
 11
 8,079
 7,320
 10
Total noninterest expense4,768
 4,934
 (3) 14,730
 14,820
 (1)5,175
 4,793
 8
 16,237
 14,854
 9
Income before income tax expense3,848
 4,454
 (14) 12,460
 11,174
 12
3,672
 3,848
 (5) 13,116
 12,460
 5
Income tax expense1,302
 1,542
 (16) 3,963
 3,790
 5
1,046
 1,302
 (20) 3,318
 3,963
 (16)
Net income$2,546
 $2,912
 (13)% $8,497
 $7,384
 15 %$2,626
 $2,546
 3 % $9,798
 $8,497
 15 %
Financial ratios                      
Return on equity13% 17%   15% 14%  14% 13%   18% 15%  
Overhead ratio56
 52
   55
 55
  59
 56
   56
 55
  
Compensation to revenue ratio27
 27
   28
 29
  
Compensation expense as percentage of total net revenue27
 27
   28
 28
  
(a)Included 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 $505$354 million and $483$505 million for the three months ended September 30, 20172018 and 2016,2017, respectively, and $1.6$1.2 billion and $1.5$1.6 billion for the nine months ended September 30, 20172018 and 2016,2017, respectively.
Selected income statement dataSelected income statement data        Selected income statement data        
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017 2016 Change 2017 2016 Change2018 2017 Change 2018 2017 Change
Revenue by business                      
Investment Banking$1,705
 $1,740
 (2)% $5,051
 $4,463
 13 %$1,731
 $1,730
 —
 $5,267
 $5,175
 2 %
Treasury Services1,058
 917
 15
 3,094
 2,693
 15
1,183
 1,058
 12
 3,480
 3,094
 12
Lending331
 283
 17
 1,093
 862
 27
331
 331
 —
 954
 1,093
 (13)
Total Banking3,094
 2,940
 5
 9,238
 8,018
 15
3,245
 3,119
 4
 9,701
 9,362
 4
Fixed Income Markets3,164
 4,334
 (27) 10,595
 11,890
 (11)2,844
 3,164
 (10) 10,850
 10,595
 2
Equity Markets1,363
 1,414
 (4) 4,555
 4,590
 (1)1,595
 1,363
 17
 5,571
 4,555
 22
Securities Services1,007
 916
 10
 2,905
 2,704
 7
1,057
 1,007
 5
 3,219
 2,905
 11
Credit Adjustments & Other(a)
(38) (149) 74
 (278) (447) 38
64
 (38) NM
 (130) (278) 53
Total Markets & Investor Services5,496
 6,515
 (16) 17,777
 18,737
 (5)5,560
 5,496
 1
 19,510
 17,777
 10
Total net revenue$8,590
 $9,455
 (9)% $27,015
 $26,755
 1 %$8,805
 $8,615
 2 % $29,211
 $27,139
 8 %
(a)Consists primarily of credit valuation adjustments (“CVA”) managed centrally within CIB and funding valuation adjustments (“FVA”) and debit valuation adjustments (“DVA”) on derivatives. Results 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. For additional information, see Accounting and Reporting Developments on pages 80–81, and Notes 2, 3 and 17.



Quarterly results
Net income was $2.5$2.6 billion, down 13%, reflecting lower net revenue, partially offset by lower noninterest expense and a lower provision for credit losses.up 3%.
Net revenue was $8.6$8.8 billion, down 9%up 2%.
Banking revenue was $3.1$3.2 billion, up 5%4%. Investment bankingBanking revenue was $1.7 billion, down 2%,flat compared to a strong prior year, driven by lowerhigher equity andunderwriting fees offset by lower debt underwriting fees, largely offset by higherand advisory fees. The Firm maintained its #1 ranking for Global Investment Banking fees with overall share gains, according to Dealogic. Equity underwriting fees were $293$420 million, down 21%up 40%, driven by a lowerhigher share of fees including a strong performance in the IPO market. Advisory fees were $581 million, down 6% compared to a strong prior year. Debt underwriting fees were $906$822 million, down 4%11% compared to a strong prior year, primarily driven by declines in industry-wide fee levels. Treasury Services revenue was $1.2 billion, up 12%, predominantly driven by the impact of higher interest rates and growth in operating deposits.
Markets & Investor Services revenue was $5.6 billion, up 1%. Fixed Income Markets revenue was $2.8 billion, down 10%. Excluding the reduction of approximately $140 million in tax-equivalent adjustments as a result of the TCJA, Fixed Income Markets revenue was down 6%. Fixed Income Markets reflected lower revenue in Rates, Fixed Income Financing, Credit and Securitized Products as a result of compressed margins and tighter spreads in competitive markets. This decline was partially offset by increased activity levels in Currencies & Emerging Markets, and higher Commodities revenue compared to a challenging prior year. Equity Markets revenue was $1.6 billion, up 17%, driven by strength across derivatives, prime brokerage and Cash Equities, reflecting strong client activity. Securities Services revenue was $1.1 billion, up 5%, driven by higher interest rates and operating deposit growth, as well as higher asset-based fees driven by net client inflows.
The provision for credit losses was a benefit of $42 million, reflecting a net recovery related to a loan sale. The prior year was a benefit of $26 million.
Noninterest expense was $5.2 billion, up 8%, predominantly due to a combination of higher legal expense, higher compensation expense largely driven by investments in technology and bankers, and higher volume-related transaction costs.


Year-to-date results
Net income was $9.8 billion, up 15%.
Net revenue was $29.2 billion, up 8%.
Banking revenue was $9.7 billion, up 4%. Investment Banking revenue was $5.3 billion, up 2%, driven by higher equity underwriting and advisory fees, largely offset by lower debt underwriting fees. The Firm maintained its #1 ranking for Global Investment Banking fees with overall share gains, according to Dealogic. Equity underwriting fees were $1.3 billion, up 21% driven by a higher share of fees, primarily due to strong performance in the IPO market. Advisory fees were $620 million,$1.8 billion, up 14%10%, driven by a higher number of large completed transactions. Debt underwriting fees were $2.5 billion, down 10%, primarily driven by declines in industry-wide fee levels and a lower share in leveraged finance. Treasury Services revenue was $1.1$3.5 billion, up 15%12%, predominantly driven by the impact of higher interest rates and growth in operating deposits. Lending revenue was $331$954 million, up 17%down 13%, driven by lower net interest income primarily reflecting lower fair value lossesa change in the portfolio composition and overall spread tightening as well as higher gains in the prior year on hedges of accrual loans.securities received from restructurings.
Markets & Investor Services revenue was $5.5$19.5 billion, down 16%up 10%. The results included approximately $500 million of fair value gains related to the adoption in the first quarter of 2018 of the new recognition and measurement accounting guidance for certain equity investments previously held at cost, and a reduction of approximately $450 million in tax-equivalent adjustments as a result of the TCJA. Fixed Income Markets revenue was $3.2$10.9 billion, down 27%up 2%. Excluding the impact of these fair value gains and tax-equivalent adjustments, Fixed Income Markets revenue remained up 2%, aswith strong performance in Currencies & Emerging Markets, and higher Commodities revenue compared to a challenging prior year, largely offset by lower revenue across products was driven by sustained low volatilityin Rates and tighter credit spreads, against a very strong prior year.Credit. Equity Markets revenue was $1.4$5.6 billion, down 4% compared to a strong prior year,up 22%, driven by lower revenue instrength across derivatives, predominantly due to low volatility offset by higher revenue in Prime Servicesprime brokerage and Cash Equities.Equities, reflecting strong client activity. Securities Services revenue was $1.0$3.2 billion, up 10%11%, predominantly driven by the impact of higher interest rates and operating deposit growth as well as higher asset-based fees driven by net client inflows and higher market levels.
The provision for credit losses was a benefit of $26 million. The prior year was an expense of $67$142 million, which included an additionprimarily driven by loan sales and other activity related to the allowance for credit losses driven bya single name in the Oil & Gas portfolio.
Noninterest expense was $4.8 billion, down 3%, driven by lower performance-based compensation expense.




Year-to-date results
Net income was $8.5 billion, up 15%, reflecting a lower provision for credit losses, higher net revenue and a tax benefit resulting from the vesting of employee-based stock awards.
Net revenue was $27.0 billion, relatively flat.
Banking revenue was $9.2 billion, up 15%. Investment banking revenue was $5.1 billion, up 13%, primarily driven by higher debt and equity underwriting fees. The Firm maintained its #1 ranking for Global Investment Banking fees, according to Dealogic. Debt underwriting fees were $2.8 billion, up 17%, driven by a higher share of fees and an overall increase in industry-wide fees. Equity underwriting fees were $1.1 billion, up 23%, driven by growth in industry-wide issuance including a strong IPO market. Advisory fees were $1.6 billion, up 2%. Treasury Services revenue was $3.1 billion, up 15%, driven by the impact of higher interest rates and growth in operating deposits. Lending revenue was $1.1 billion, up 27%, reflecting lower fair value losses on hedges of accrual loans.
Markets & Investor Services revenue was $17.8 billion, down 5%. Fixed Income Markets revenue was $10.6 billion, down 11%, as lower revenue across products was driven by sustained low volatility and tighter credit spreads, against a strong prior year. Equity Markets revenue was $4.6 billion, down 1%, driven by lower revenue in derivativesportfolio, partially offset by higher revenue in Prime Services and Cash Equities. Securities Services revenue was $2.9 billion, up 7%, driven by the impact of higher interest rates and deposit growth, as well as higher asset-based fees driven by higher market levels. Credit Adjustments & Other was a loss of $278 million, largely driven by valuation adjustments.
other net portfolio activity. The provision for credit lossesprior year was a benefit of $175 million which includedprimarily driven by a net reduction in the allowance for credit losses driven byin the Oil & Gas and Metals & Mining portfolios. The prior year was an expense of $761 million, which included an addition to the allowance for credit losses driven by the Oil & Gas and Metals & Mining portfolios.
Noninterest expense was $14.7$16.2 billion, down 1%.up 9%, predominantly driven by higher compensation expense including performance-related compensation expense and investments in technology and bankers, as well as volume-related transaction costs and legal expense.

Selected metricsSelected metrics          Selected metrics          
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except headcount)2017 2016 Change 2017 2016 Change2018 2017 Change 2018 2017 Change
Selected balance sheet data (period-end)                      
Assets$851,808
 $825,933
 3 % $851,808
 $825,933
 3 %$928,148
 $851,808
 9 % $928,148
 $851,808
 9%
Loans:                      
Loans retained(a)
106,955
 117,133
 (9) 106,955
 117,133
 (9)117,084
 106,955
 9
 117,084
 106,955
 9
Loans held-for-sale and loans at fair value3,514
 4,184
 (16) 3,514
 4,184
 (16)6,133
 3,514
 75
 6,133
 3,514
 75
Total loans110,469
 121,317
 (9) 110,469
 121,317
 (9)123,217
 110,469
 12
 123,217
 110,469
 12
Core loans110,133
 120,885
 (9) 110,133
 120,885
 (9)122,953
 110,133
 12
 122,953
 110,133
 12
Equity70,000
 64,000
 9
 70,000
 64,000
 9
70,000
 70,000
 —
 70,000
 70,000
 —
Selected balance sheet data (average)                      
Assets$858,912
 $811,217
 6
 $853,948
 $808,228
 6
$924,909
 $858,912
 8
 $924,145
 $853,948
 8
Trading assets-debt and equity instruments349,448
 306,431
 14
 343,232
 299,350
 15
349,390
 349,448
 —
 354,270
 343,232
 3
Trading assets-derivative receivables55,875
 63,829
 (12) 56,575
 62,619
 (10)62,025
 55,875
 11
 60,943
 56,575
 8
Loans:                      
Loans retained(a)
$107,829
 $110,941
 (3) $108,741
 $110,442
 (2)$115,390
 $107,829
 7
 $112,921
 $108,741
 4
Loans held-for-sale and loans at fair value4,674
 3,864
 21
 5,254
 3,414
 54
7,328
 4,674
 57
 6,263
 5,254
 19
Total loans$112,503
 $114,805
 (2) $113,995
 $113,856
 —
$122,718
 $112,503
 9
 $119,184
 $113,995
 5
Core loans112,168
 114,380
 (2) 113,631
 113,410
 —
122,442
 112,168
 9
 118,877
 113,631
 5
Equity70,000
 64,000
 9
 70,000
 64,000
 9
70,000
 70,000
 —
 70,000
 70,000
 —
Headcount(b)50,641
 49,176
 3 % 50,641
 49,176
 3 %54,052
 50,641
 7 % 54,052
 50,641
 7%
(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.
(b)During the third quarter of 2018 approximately 1,200 employees transferred from CCB to CIB as part of the reorganization of the Commercial Card business.
Selected metrics                      
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except ratios)2017 2016 Change 2017 2016 Change2018 2017 Change 2018 2017 Change
Credit data and quality statistics                      
Net charge-offs/(recoveries)$20
 $3
 NM
 $49
 $139
 (65)%$(40) $20
 NM
 $94
 $49
 92 %
Nonperforming assets:                      
Nonaccrual loans:                      
Nonaccrual loans retained(a)
$437
 $614
 (29)% $437
 $614
 (29)$318
 $437
 (27)% $318
 $437
 (27)
Nonaccrual loans held-for-sale and loans at fair value
2
 26
 (92) 2
 26
 (92)9
 2
 350
 9
 2
 350
Total nonaccrual loans439
 640
 (31) 439
 640
 (31)327
 439
 (26) 327
 439
 (26)
Derivative receivables164
 232
 (29) 164
 232
 (29)90
 164
 (45) 90
 164
 (45)
Assets acquired in loan satisfactions92
 75
 23
 92
 75
 23
61
 92
 (34) 61
 92
 (34)
Total nonperforming assets$695
 $947
 (27) $695
 $947
 (27)$478
 $695
 (31) $478
 $695
 (31)
Allowance for credit losses:                      
Allowance for loan losses$1,253
 $1,611
 (22) $1,253
 $1,611
 (22)$1,068
 $1,253
 (15) $1,068
 $1,253
 (15)
Allowance for lending-related commitments745
 837
 (11) 745
 837
 (11)802
 745
 8
 802
 745
 8
Total allowance for credit losses$1,998
 $2,448
 (18)% $1,998
 $2,448
 (18)%$1,870
 $1,998
 (6)% $1,870
 $1,998
 (6)%
Net charge-off/(recovery) rate(b)
0.07% 0.01%   0.06% 0.17%  (0.14)% 0.07%   0.11% 0.06%  
Allowance for loan losses to period-end loans retained1.17
 1.38
   1.17
 1.38
  0.91
 1.17
   0.91
 1.17
  
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(c)
1.79
 2.02
   1.79
 2.02
  1.27
 1.79
   1.27
 1.79
  
Allowance for loan losses to nonaccrual loans retained(a)
287
 262
   287
 262
  336
 287
   336
 287
  
Nonaccrual loans to total period-end loans0.40% 0.53%   0.40% 0.53%  0.27 % 0.40%   0.27% 0.40%  
(a)Allowance for loan losses of $177$145 million and $202$177 million were held against these nonaccrual loans at September 30, 20172018 and 2016,2017, 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 feesInvestment banking fees          Investment banking fees          
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017 2016 Change 2017 2016 Change2018 2017 Change 2018 2017 Change
Advisory$620
 $542
 14 % $1,624
 $1,593
 2%$581
 $620
 (6)% $1,782
 $1,624
 10 %
Equity underwriting293
 370
 (21) 1,054
 860
 23
420
 300
 40
 1,336
 1,107
 21
Debt underwriting(a)
906
 943
 (4) 2,756
 2,359
 17
822
 924
 (11) 2,540
 2,827
 (10)
Total investment banking fees$1,819
 $1,855
 (2)% $5,434
 $4,812
 13%$1,823
 $1,844
 (1)% $5,658
 $5,558
 2 %
(a)Includes loans syndication.loan syndications.
League table results – wallet shareLeague table results – wallet share   League table results – wallet share   
Nine months ended September 30, 2017 Full-year 2016Three months ended September 30, 2018 Full-year 2017
RankShare RankShareRankShare RankShare
Based on fees(a)
        
Debt, equity and equity-related    
Global#1
 7.5 #1
 7.1
U.S.1
 11.0 1
 11.9
Long-term debt(b)
        
Global1
 7.6 1
 6.8#1
 7.4 #1
 7.8
U.S.2
 10.8 2
 11.12
 11.2 2
 11.1
Equity and equity-related(c)
        
Global1
 7.4 1
 7.63
 9.2 2
 7.1
U.S.1
 11.4 1
 13.31
 12.5 1
 11.6
M&A(d)
        
Global2
 8.7 2
 8.32
 9.0 2
 8.4
U.S.2
 9.0 2
 9.82
 9.4 2
 9.1
Loan syndications        
Global1
 9.4 1
 9.41
 9.6 1
 9.3
U.S.1
 11.0 2
 11.91
 12.2 1
 10.9
Global investment banking fees(e)
#1
 8.2 #1
 8.0#1
 8.7 #1
 8.1
(a)Source: Dealogic as of OctoberOct 1, 2017.2018. Reflects the ranking of revenue wallet and market share.
(b)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.
(c)Global equity and equity-related ranking includes rights offerings and Chinese A-Shares.
(d)Global M&A reflect the removal of any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S.
(e)Global investment banking fees exclude money market, short-term debt and shelf deals.



Markets revenue
The following table summarizes select income statement data for the Markets businesses. Markets includes both Fixed Income Markets and Equity Markets. Markets revenue comprises principal transactions, fees, commissions and other income, as well as net interest income. The Firm assesses its Markets business performance on a total revenue basis, as offsets may occur across revenue line items. For example, securities that generate net interest income may be risk-managed by derivatives that are
recorded in principal transactions.transactions revenue. For a description of the composition of these income statement line items, seerefer to Notes 5 and 6.
Principal transactions reflects6. For further information, refer to Markets revenue on financial instruments and commodities transactions that arise from client-driven market making activity. Principal transactions revenue includes amounts recognized upon executing new transactions with market participants, as well as “inventory-related revenue”, which is revenue recognized from gains and losses on derivatives and other instruments that the
page 65 of JPMorgan Chase’s 2017 Annual Report.
Firm has been holding in anticipation of, or in response to, client demand, and changes in the fair value of instruments used by the Firm to actively manage the risk exposure arising from such inventory. Principal transactions revenue recognized upon executing new transactions with market participants is driven by many factors including the level of client activity, the bid-offer spread (which is the difference between the price at which a market participant is willing to sell an instrument to the Firm and the price at which another market participant is willing to buy it from the Firm, and vice versa), market liquidity and volatility. These factors are interrelated and sensitive to the same factors that drive inventory-related revenue, which include general market conditions, such as interest rates, foreign exchange rates, credit spreads, and equity and commodity prices, as well as other macroeconomic conditions. For the periods presented below, the predominant source of principal transactions revenue was the amount recognized upon executing new transactions.
 Three months ended September 30, Three months ended September 30,
 2018 2017

(in millions)
Fixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal Markets
Principal transactions$1,849
$1,252
$3,101
 $1,837
$948
$2,785
Lending- and deposit-related fees51
1
52
 47
2
49
Asset management, administration and commissions96
446
542
 93
397
490
All other income33
7
40
 121
12
133
Noninterest revenue2,029
1,706
3,735
 2,098
1,359
3,457
Net interest income(a)
815
(111)704
 1,066
4
1,070
Total net revenue$2,844
$1,595
$4,439
 $3,164
$1,363
$4,527
 Three months ended September 30, Three months ended September 30,
 2017 2016

(in millions)
Fixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal Markets
Principal transactions$1,837
$948
$2,785
 $2,622
$843
$3,465
Lending- and deposit-related fees47
2
49
 55
—
55
Asset management, administration and commissions93
397
490
 95
347
442
All other income121
12
133
 184
(23)161
Noninterest revenue2,098
1,359
3,457
 2,956
1,167
4,123
Net interest income(a)
1,066
4
1,070
 1,378
247
1,625
Total net revenue$3,164
$1,363
$4,527
 $4,334
$1,414
$5,748
 Nine months ended September 30, Nine months ended September 30,
 2017 2016

(in millions)
Fixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal Markets
Principal transactions$6,389
$3,066
$9,455
 $6,699
$2,651
$9,350
Lending- and deposit-related fees144
4
148
 164
1
165
Asset management, administration and commissions300
1,230
1,530
 299
1,160
1,459
All other income505
3
508
 805
(2)803
Noninterest revenue7,338
4,303
11,641
 7,967
3,810
11,777
Net interest income(a)
3,257
252
3,509
 3,923
780
4,703
Total net revenue$10,595
$4,555
$15,150
 $11,890
$4,590
$16,480
Selected metrics           
 As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except where otherwise noted)2017 2016 Change 2017 2016 Change
Assets under custody (“AUC”) by asset class (period-end)
(in billions):
           
Fixed Income$12,878

$12,857
 — $12,878
 $12,857
 —
Equity7,439

6,440
 16 7,439
 6,440
 16
Other(b)
2,421

1,927
 26 2,421
 1,927
 26
Total AUC$22,738

$21,224
 7 $22,738
 $21,224
 7
Client deposits and other third party liabilities (average)(c)
$421,588

$381,542
 10 $406,184
 $371,417
 9
Trade finance loans (period-end)17,171

16,957
 1 17,171
 16,957
 1
 Nine months ended September 30, Nine months ended September 30,
 2018 2017

(in millions)
Fixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal Markets
Principal transactions$6,795
$4,528
$11,323
 $6,389
$3,066
$9,455
Lending- and deposit-related fees147
4
151
 144
4
148
Asset management, administration and commissions313
1,364
1,677
 300
1,230
1,530
All other income764
18
782
 505
3
508
Noninterest revenue8,019
5,914
13,933
 7,338
4,303
11,641
Net interest income(a)
2,831
(343)2,488
 3,257
252
3,509
Total net revenue$10,850
$5,571
$16,421
 $10,595
$4,555
$15,150
(a)Declines in Markets net interest income were driven by higher funding costs.

Selected metrics           
 As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except where otherwise noted)2018 2017 Change 2018 2017 Change
Assets under custody (“AUC”) by asset class (period-end)
(in billions):
           
Fixed Income$12,339

$12,878
 (4)% $12,339
 $12,878
 (4)%
Equity9,174

7,439
 23
 9,174
 7,439
 23
Other(a)
2,890

2,421
 19
 2,890
 2,421
 19
Total AUC$24,403

$22,738
 7
 $24,403
 $22,738
 7
Client deposits and other third party liabilities (average)(b)
$434,847

$421,588
 3 % $430,640
 $406,184
 6 %
(b)(a)Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts.
(c)(b)Client deposits and other third party liabilities pertain to the Treasury Services and Securities Services businesses.

International metrics                      
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except where otherwise noted)2017 2016 Change 2017 2016 Change2018 2017 Change 2018 2017 Change
Total net revenue(a)
                      
Europe/Middle East/Africa$2,751
 $2,798
 (2)% $8,974
 $8,078
 11 %$2,766
 $2,751
 1 % $9,842
 $8,974
 10 %
Asia/Pacific1,169
 1,281
 (9) 3,442
 3,793
 (9)1,242
 1,169
 6
 4,123
 3,442
 20
Latin America/Caribbean329
 307
 7
 914
 1,031
 (11)321
 329
 (2) 1,064
 914
 16
Total international net revenue4,249
 4,386
 (3) 13,330
 12,902
 3
4,329
 4,249
 2
 15,029
 13,330
 13
North America4,341
 5,069
 (14) 13,685
 13,853
 (1)4,476
 4,366
 3
 14,182
 13,809
 3
Total net revenue$8,590
 $9,455
 (9) $27,015
 $26,755
 1
$8,805
 $8,615
 2
 $29,211
 $27,139
 8
                      
Loans retained (period-end)(a)
           
Loans retained (period-end)(a)
          
Europe/Middle East/Africa$25,677
 $32,016
 (20) $25,677
 $32,016
 (20)$25,941
 $25,677
 1
 $25,941
 $25,677
 1
Asia/Pacific13,398
 15,262
 (12) 13,398
 15,262
 (12)16,812
 13,398
 25
 16,812
 13,398
 25
Latin America/Caribbean6,737
 8,896
 (24) 6,737
 8,896
 (24)4,896
 6,737
 (27) 4,896
 6,737
 (27)
Total international loans45,812
 56,174
 (18) 45,812
 56,174
 (18)47,649
 45,812
 4
 47,649
 45,812
 4
North America61,143
 60,959
 —
 61,143
 60,959
 —
69,435
 61,143
 14
 69,435
 61,143
 14
Total loans retained(a)$106,955
 $117,133
 (9) $106,955
 $117,133
 (9)$117,084
 $106,955
 9
 $117,084
 $106,955
 9
                      
Client deposits and other third-party liabilities (average)(a)(b)
                      
Europe/Middle East/Africa$160,778
 $138,628
 16
 $154,259
 $135,201
 14
$162,060
 $160,778
 1
 $162,102
 $154,259
 5
Asia/Pacific78,334
 70,301
 11
 75,284
 67,158
 12
81,771
 78,334
 4
 82,272
 75,284
 9
Latin America/Caribbean25,236
 22,802
 11
 25,126
 22,555
 11
26,196
 25,236
 4
 26,477
 25,126
 5
Total international$264,348
 $231,731
 14
 $254,669
 $224,914
 13
$270,027
 $264,348
 2
 $270,851
 $254,669
 6
North America157,240
 149,811
 5
 151,515
 146,503
 3
164,820
 157,240
 5
 159,789
 151,515
 5
Total client deposits and other third-party liabilities$421,588
 $381,542
 10
 $406,184
 $371,417
 9
$434,847
 $421,588
 3
 $430,640
 $406,184
 6
                      
AUC (period-end)(a)
(in billions)
                      
North America$13,574
 $12,685
 7
 $13,574
 $12,685
 7
$15,148
 $13,574
 12
 $15,148
 $13,574
 12
All other regions9,164
 8,539
 7
 9,164
 8,539
 7
9,255
 9,164
 1
 9,255
 9,164
 1
Total AUC$22,738
 $21,224
 7 % $22,738
 $21,224
 7 %$24,403
 $22,738
 7 % $24,403
 $22,738
 7 %
(a)Total net revenue is based predominantly on the domicile of the client or location of the trading desk, as applicable. Loans outstanding (excluding loans held-for-sale and loans at fair value), client deposits and other third-party liabilities, and AUC are based predominantly on the domicile of the client.
(b)Client deposits and other third party liabilities pertain to the Treasury Services and Securities Services businesses.


COMMERCIAL BANKING
For a discussion of the business profile of CB, see refer to pages 63–6567–69 of JPMorgan Chase’s 20162017 Annual Report and Line of Business Metrics on page 174.181.
Selected income statement dataSelected income statement data      Selected income statement data      
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017
 2016
 Change
 2017
 2016
 Change2018
 2017
 Change
 2018
 2017
 Change
Revenue                      
Lending- and deposit-related fees$223
 $228
 (2)% $690
 $687
 — %$216
 $223
 (3)% $666
 $690
 (3)%
Asset management, administration and commissions16
 14
 14
 50
 54
 (7)18
 16
 13
 52
 50
 4
All other income(a)
353
 336
 5
 1,034
 979
 6
342
 353
 (3) 1,040
 1,034
 1
Noninterest revenue592
 578
 2
 1,774
 1,720
 3
576
 592
 (3) 1,758
 1,774
 (1)
Net interest income1,554
 1,292
 20
 4,478
 3,770
 19
1,695
 1,554
 9
 4,995
 4,478
 12
Total net revenue(b)
2,146
 1,870
 15
 6,252
 5,490
 14
2,271
 2,146
 6
 6,753
 6,252
 8
                      
Provision for credit losses(47) (121) 61
 (214) 158
 NM
(15) (47) 68
 23
 (214) NM
                      
Noninterest expense                      
Compensation expense(c)370
 343
 8
 1,106
 999
 11
432
 386
 12
 1,268
 1,156
 10
Noncompensation expense(c)430
 403
 7
 1,309
 1,191
 10
421
 414
 2
 1,273
 1,259
 1
Total noninterest expense800
 746
 7
 2,415
 2,190
 10
853
 800
 7
 2,541
 2,415
 5
                      
Income before income tax expense1,393
 1,245
 12
 4,051
 3,142
 29
1,433
 1,393
 3
 4,189
 4,051
 3
Income tax expense512
 467
 10
 1,469
 1,172
 25
344
 512
 (33) 988
 1,469
 (33)
Net income$881
 $778
 13 % $2,582
 $1,970
 31 %$1,089
 $881
 24 % $3,201
 $2,582
 24 %
(a)Includes revenue from investment banking products and commercial card transactions.
(b)Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities that provide loans to qualified businesses in low-income communities, as well as tax-exempt income related to municipal financing activities of $143$107 million and $127$143 million for the three months ended September 30, 20172018 and 2016,2017 respectively, and $395$316 million and $371$395 million for the nine months ended September 30, 2018 and September 30, 2017, respectively. The decrease in taxable-equivalent adjustments reflects the impact of TCJA.
(c)Effective in the first quarter of 2018, certain Operations and 2016, respectively.Compliance staff were transferred from CCB and Corporate, respectively, to CB. As a result, expense for this staff is now reflected in CB’s compensation expense with a corresponding adjustment for expense allocations reflected in noncompensation expense. CB’s, Corporate’s and CCB’s previously reported headcount, compensation expense and noncompensation expense have been revised to reflect this transfer.
Quarterly results
Net income was $881 million,$1.1 billion, an increase of 13%, driven by higher net revenue, partially offset by a lower net benefit for credit losses and higher noninterest expense.24%.
Net revenue was $2.1$2.3 billion, an increase of 15%6%. Net interest income was $1.6$1.7 billion, an increase of 20%9%, driven by higher deposit spreads and loan growth.margins, partially offset by lower deposit balances, largely due to non-operating deposits migrating to higher yielding investments. Noninterest revenue was $576 million, 3% lower than the prior year.
Noninterest expense was $800$853 million, an increase of 7%, largelypredominantly driven by hiring of bankers and business-related support staff, and investments in banker coverage and technology.
The provision for credit losses was a benefit of $15 million driven by net recoveries. The prior year was a benefit of $47 million, driven by net reductions in the allowance for credit losses, largely in the Real Estate portfolio. The prior year provision for credit losses was a benefit of $121 million driven by net reductions in the allowance for credit losses largely in the Oil & Gas portfolio.

 
Year-to-date results
Net income was $2.6$3.2 billion, an increase of 31%, driven by higher net revenue and a lower provision for credit losses, partially offset by higher noninterest expense.24%.
Net revenue was $6.3$6.8 billion, up 14%an increase of 8%. Net interest income was $4.5$5.0 billion, up 19%an increase of 12%, driven by higher deposit spreads and loan growth.margins. Noninterest revenue was $1.8was$1.8 billion, up 3%, driven by higher investment banking revenue from loan syndications and equity underwriting.flat compared with the prior year.
Noninterest expense was $2.4$2.5 billion, up 10%an increase of 5%, largely driven by hiring of bankers and business-related support staff, and investments in banker coverage and technology.
The provision for credit losses was an expense of $23 million. The prior year was a benefit of $214 million, driven by net reductions in the allowance for credit losses, including in the Oil & Gas, Natural Gas Pipelines and Metals & Mining portfolios. The prior year provision for credit losses was $158 million reflecting net additions to the allowance for credit losses for downgrades in the Oil & Gas and Natural Gas Pipeline portfolios.



Selected income statement data (continued)Selected income statement data (continued)      Selected income statement data (continued)      
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions, except ratios)2017
 2016
 Change
 2017
 2016
 Change2018
 2017
 Change
 2018
 2017
 Change
Revenue by product                      
Lending$1,030
 $956
 8 % $3,045
 $2,801
 9 %$1,027
 $1,030
 — % $3,052
 $3,045
 —
Treasury services873
 693
 26
 2,523
 2,067
 22
1,021
 873
 17
 3,019
 2,523
 20
Investment banking(a)
196
 203
 (3) 601
 565
 6
206
 196
 5
 644
 601
 7
Other47
 18
 161
 83
 57
 46
17
 47
 (64) 38
 83
 (54)
Total Commercial Banking net revenue$2,146
 $1,870
 15
 $6,252
 $5,490
 14
$2,271
 $2,146
 6
 $6,753
 $6,252
 8
                      
Investment banking revenue, gross(b)
$570
 $600
 (5) $1,740
 $1,678
 4
$581
 $578
 1
 $1,889
 $1,777
 6
                      
Revenue by client segment                      
Middle Market Banking(c)
$848
 $706
 20
 $2,471
 $2,095
 18
$935
 $848
 10
 $2,749
 $2,471
 11
Corporate Client Banking(c)
688
 622
 11
 2,016
 1,784
 13
749
 688
 9
 2,243
 2,016
 11
Commercial Term Lending367
 350
 5
 1,098
 1,053
 4
339
 367
 (8) 1,035
 1,098
 (6)
Real Estate Banking157
 117
 34
 438
 328
 34
175
 157
 11
 509
 438
 16
Other86
 75
 15
 229
 230
 —
73
 86
 (15) 217
 229
 (5)
Total Commercial Banking net revenue$2,146
 $1,870
 15 % $6,252
 $5,490
 14 %$2,271
 $2,146
 6 % $6,753
 $6,252
 8 %
                      
Financial ratios                      
Return on equity17% 18%   16% 15%  21% 17%   20% 16%  
Overhead ratio37
 40
   39
 40
  38
 37
   38
 39
  
(a)Includes total Firm revenue from investment banking products sold to CB clients, net of revenue sharing with the CIB.
(b)Represents total Firm revenue from investment banking products sold to CB clients. As a result of the adoption of the revenue recognition guidance, prior period amounts have been revised to conform with the current period presentation. For additional information, refer to Note 1.



Selected metrics      
 As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except headcount)2018
2017
Change
 20182017Change
Selected balance sheet data (period-end)       
Total assets$217,194
$220,064
(1)% $217,194
$220,064
(1)%
Loans:       
Loans retained205,177
201,463
2
 205,177
201,463
2
Loans held-for-sale and loans at fair value405
764
(47) 405
764
(47)
Total loans$205,582
$202,227
2
 $205,582
$202,227
2
Core loans205,418
201,999
2
 205,418
201,999
2
Equity20,000
20,000
—
 20,000
20,000
—
        
Period-end loans by client segment       
Middle Market Banking$57,324
$56,192
2
 $57,324
$56,192
2
Corporate Client Banking46,890
47,682
(2) 46,890
47,682
(2)
Commercial Term Lending76,201
74,349
2
 76,201
74,349
2
Real Estate Banking18,013
17,127
5
 18,013
17,127
5
Other7,154
6,877
4
 7,154
6,877
4
Total Commercial Banking loans$205,582
$202,227
2
 $205,582
$202,227
2
        
Selected balance sheet data (average)       
Total assets$219,232
$218,196
—
 $218,270
$216,574
1
Loans:       
Loans retained205,603
199,487
3
 203,950
195,604
4
Loans held-for-sale and loans at fair value1,617
675
140
 1,139
931
22
Total loans$207,220
$200,162
4
 $205,089
$196,535
4
Core loans207,052
199,920
4
 204,902
196,254
4
        
Average loans by client segment       
Middle Market Banking$57,258
$55,782
3
 $57,121
$55,239
3
Corporate Client Banking49,004
46,451
5
 47,650
45,516
5
Commercial Term Lending75,919
74,136
2
 75,393
73,041
3
Real Estate Banking17,861
16,936
5
 17,774
16,205
10
Other7,178
6,857
5
 7,151
6,534
9
Total Commercial Banking loans$207,220
$200,162
4
 $205,089
$196,535
4
        
Client deposits and other third-party liabilities$168,169
$176,218
(5) $171,483
$175,402
(2)
Equity20,000
20,000
—
 20,000
20,000
—
        
Headcount(a)
10,937
10,014
9 % 10,937
10,014
9 %
(c)(a)Certain clientsEffective in the first quarter of 2018, certain Operations and Compliance staff were transferred from Middle Market BankingCCB and Corporate, respectively, to Corporate Client Banking in the second quarter of 2017.CB. The prior period amounts have been revised to conform with the current period presentation. For a further discussion of this transfer, refer to page 32, Selected income statement data, footnote (c).



Selected metrics      
 As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except headcount)2017
2016
Change
 20172016Change
Selected balance sheet data (period-end)       
Total assets$220,064
$212,189
4% $220,064
$212,189
4%
Loans:       
Loans retained201,463
185,609
9
 201,463
185,609
9
Loans held-for-sale and loans at fair value764
191
300
 764
191
300
Total loans$202,227
$185,800
9
 $202,227
$185,800
9
Core loans201,999
185,354
9
 201,999
185,354
9
Equity20,000
16,000
25
 20,000
16,000
25
        
Period-end loans by client segment       
Middle Market Banking(a)
$56,192
$53,581
5
 $56,192
$53,581
5
Corporate Client Banking(a)
47,682
43,517
10
 47,682
43,517
10
Commercial Term Lending74,349
69,133
8
 74,349
69,133
8
Real Estate Banking17,127
13,905
23
 17,127
13,905
23
Other6,877
5,664
21
 6,877
5,664
21
Total Commercial Banking loans$202,227
$185,800
9
 $202,227
$185,800
9
        
Selected balance sheet data (average)       
Total assets$218,196
$208,765
5
 $216,574
$205,748
5
Loans:       
Loans retained199,487
180,962
10
 195,604
175,695
11
Loans held-for-sale and loans at fair value675
517
31
 931
516
80
Total loans$200,162
$181,479
10
 $196,535
$176,211
12
Core loans199,920
181,016
10
 196,254
175,651
12
        
Average loans by client segment       
Middle Market Banking(a)
$55,782
$52,646
6
 $55,239
$51,716
7
Corporate Client Banking(a)
46,451
42,141
10
 45,516
40,872
11
Commercial Term Lending74,136
67,696
10
 73,041
65,486
12
Real Estate Banking16,936
13,382
27
 16,205
12,597
29
Other6,857
5,614
22
 6,534
5,540
18
Total Commercial Banking loans$200,162
$181,479
10
 $196,535
$176,211
12
        
Client deposits and other third-party liabilities$176,218
$173,696
1
 $175,402
$172,502
2
Equity20,000
16,000
25
 20,000
16,000
25
        
Headcount8,965
8,333
8% 8,965
8,333
8%
(a)Certain clients were transferred from Middle Market Banking to Corporate Client Banking in the second quarter of 2017. The prior period amounts have been revised to conform with the current period presentation.

Selected metrics (continued)Selected metrics (continued)        Selected metrics (continued)        
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except ratios)2017
2016
Change
 2017
 2016
 Change2018
2017
Change
 2018
 2017
 Change
Credit data and quality statistics                
Net charge-offs/(recoveries)$19
$44
(57)% $17
 $110
 (85)%$(18)$19
NM
 $16
 $17
 (6)%
Nonperforming assets                
Nonaccrual loans:                
Nonaccrual loans retained(a)
$744
$1,212
(39)% $744
 $1,212
 (39)%$452
$744
(39)% $452
 $744
 (39)%
Nonaccrual loans held-for-sale and loans at fair value—
—
—
 —
 —
 —
5
—
NM
 5
 —
 NM
Total nonaccrual loans$744
$1,212
(39) $744
 $1,212
 (39)$457
$744
(39) $457
 $744
 (39)
Assets acquired in loan satisfactions3
1
200
 3
 1
 200
2
3
(33) 2
 3
 (33)
Total nonperforming assets$747
$1,213
(38) $747
 $1,213
 (38)$459
$747
(39) $459
 $747
 (39)
Allowance for credit losses:                
Allowance for loan losses$2,620
$2,858
(8) $2,620
 $2,858
 (8)$2,619
$2,620
—
 $2,619
 $2,620
 —
Allowance for lending-related commitments323
244
32
 323
 244
 32
249
323
(23) 249
 323
 (23)
Total allowance for credit losses$2,943
$3,102
(5)% $2,943
 $3,102
 (5)%$2,868
$2,943
(3)% $2,868
 $2,943
 (3)%
Net charge-off/(recovery) rate(b)
0.04%0.10%  0.01% 0.08%  (0.03)%0.04%  0.01% 0.01%  
Allowance for loan losses to period-end loans retained
1.30
1.54
  1.30
 1.54
  1.28
1.30
  1.28
 1.30
  
Allowance for loan losses to nonaccrual loans retained(a)
352
236
  352
 236
  579
352
  579
 352
  
Nonaccrual loans to period-end total loans0.37
0.65
  0.37
 0.65
  0.22
0.37
  0.22
 0.37
  
(a)Allowance for loan losses of $128$105 million and $221$128 million was held against nonaccrual loans retained at September 30, 20172018 and 2016,2017, respectively.
(b)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.



ASSET & WEALTH MANAGEMENT
For a discussion of the business profile of AWM, see refer to pages 66–6870–72 of JPMorgan Chase’s 20162017 Annual Report and Line of Business Metrics on pages 174–175.181–182.
Effective January 1, 2018, the Firm adopted several new accounting standards; the guidance which had the most significant impact on the AWM segment results was revenue recognition. The revenue recognition guidance was applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
Selected income statement dataSelected income statement data   Selected income statement data   
(in millions, except ratios)Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
2017
2016
Change
 2017
2016
Change
2018
2017
Change
 2018
2017
Change
Revenue          
Asset management, administration and commissions$2,240
$2,087
7 % $6,556
$6,205
6 %$2,563
$2,466
4 % $7,623
$7,205
6 %
All other income150
190
(21) 468
509
(8)117
151
(23) 374
472
(21)
Noninterest revenue2,390
2,277
5
 7,024
6,714
5
2,680
2,617
2
 7,997
7,677
4
Net interest income855
770
11
 2,520
2,244
12
879
855
3
 2,640
2,520
5
Total net revenue3,245
3,047
6
 9,544
8,958
7
3,559
3,472
3
 10,637
10,197
4
          
Provision for credit losses8
32
(75) 30
37
(19)23
8
188
 40
30
33
          
Noninterest expense          
Compensation expense1,319
1,279
3
 3,928
3,769
4
1,391
1,319
5
 4,112
3,928
5
Noncompensation expense862
851
1
 3,025
2,534
19
1,194
1,089
10
 3,620
3,678
(2)
Total noninterest expense2,181
2,130
2
 6,953
6,303
10
2,585
2,408
7
 7,732
7,606
2
          
Income before income tax expense1,056
885
19
 2,561
2,618
(2)951
1,056
(10) 2,865
2,561
12
Income tax expense382
328
16
 878
953
(8)227
382
(41) 616
878
(30)
Net income$674
$557
21
 $1,683
$1,665
1
$724
$674
7
 $2,249
$1,683
34
          
Revenue by line of business          
Asset Management$1,587
$1,497
6
 $4,635
$4,420
5
$1,827
$1,814
1
 $5,440
$5,288
3
Wealth Management1,658
1,550
7
 4,909
4,538
8
1,732
1,658
4
 5,197
4,909
6
Total net revenue$3,245
$3,047
6 % $9,544
$8,958
7 %$3,559
$3,472
3 % $10,637
$10,197
4 %
          
Financial ratios          
Return on equity29%24%  24%24% 31%29%  32%24% 
Overhead ratio67
70
  73
70
 73
69
  73
75
 
Pre-tax margin ratio:          
Asset Management34
31
  22
31
 27
29
  27
19
 
Wealth Management32
27
  31
27
 26
32
  27
31
 
Asset & Wealth Management33
29
  27
29
 27
30
  27
25
 
Quarterly results
Net income was $674$724 million, an increase of 21%, reflecting higher net revenue partially offset by higher noninterest expense.7%.
Net revenue was $3.2$3.6 billion, an increase of 6%3%. Net interest income was $855$879 million, up 11%3%, predominantlydriven by deposit margin expansion and loan growth. Noninterest revenue was $2.7 billion, up 2%, driven by higher deposit spreads. Noninterest revenue was $2.4 billion, up 5%, predominantly reflectingmanagement fees on higher market levels.levels and net long-term product inflows, partially offset by fee compression and the impact of lower market valuation gains, including on seed capital investments.
Noninterest expense was $2.2$2.6 billion, an increase of 2%up 7%, largely driven by a combination of higher compensation expensecontinued investments in advisors and technology, as well as higher external fees.fees on revenue growth.
 
Year-to-date results
Net income was $1.7$2.2 billion, an increase of 1%, reflecting higher revenue and a tax benefit resulting from the vesting of employee-based stock awards, offset by higher noninterest expense.34%.
Net revenue was $9.5$10.6 billion, an increase of 7%4%. Net interest income was $2.5 billion, up 12%, driven by higher deposit spreads. Noninterest revenue was $7.0$2.6 billion, up 5%, driven by deposit margin expansion and loan growth. Noninterest revenue was $8.0 billion, up 4%, driven by higher management fees on higher market levels and brokerage revenue,net long-term product inflows, partially offset by fee compression and the absenceimpact of a gain in the prior yearlower market valuation gains, including on the disposal of an asset.seed capital investments.
Noninterest expense was $7.0$7.7 billion, an increase of 10%2%, driven by higher external fees on revenue growth and investments in advisors and technology, offset by higher legal expense and compensation expense on higher revenue.in the prior year.

Selected metrics          
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except ranking data, headcount and ratios)2017
2016
Change
 2017
2016
Change
2018
2017
Change
 2018
2017
Change
% of JPM mutual fund assets rated as 4- or 5-star(b)(a)
65%54%  65%54% 64%65%  64%65% 
% of JPM mutual fund assets ranked in 1st or 2nd quartile:(c)(b)
          
1 year(b)
61
46
  61
46
 65
61
  65
61
 
3 years(b)
82
74
  82
74
 64
82
  64
82
 
5 years(b)
81
78
  81
78
 83
81
  83
81
 
          
Selected balance sheet data (period-end)          
Total assets$149,170
$137,295
9 % $149,170
$137,295
9 %$166,716
$149,170
12 % $166,716
$149,170
12 %
Loans128,038
116,043
10
 128,038
116,043
10
143,162
128,038
12
 143,162
128,038
12
Core loans128,038
116,043
10
 128,038
116,043
10
143,162
128,038
12
 143,162
128,038
12
Deposits141,409
157,274
(10) 141,409
157,274
(10)130,497
141,409
(8) 130,497
141,409
(8)
Equity9,000
9,000
—
 9,000
9,000
—
9,000
9,000
—
 9,000
9,000
—
          
Selected balance sheet data (average)          
Total assets$146,388
$134,920
8
 $142,541
$132,090
8
$161,982
$146,388
11
 $158,218
$142,541
11
Loans125,445
114,201
10
 122,002
112,142
9
140,558
125,445
12
 136,663
122,002
12
Core loans125,445
114,201
10
 122,002
112,142
9
140,558
125,445
12
 136,663
122,002
12
Deposits144,496
153,121
(6) 151,311
151,656
—
133,021
144,496
(8) 138,885
151,311
(8)
Equity9,000
9,000
—
 9,000
9,000
—
9,000
9,000
—
 9,000
9,000
—
          
Headcount22,685
21,142
7
 22,685
21,142
7
23,747
22,685
5
 23,747
22,685
5
          
Number of Wealth Management client advisors2,581
2,560
1
 2,581
2,560
1
2,808
2,581
9
 2,808
2,581
9
          
Credit data and quality statistics          
Net charge-offs$5
$5
—
 $10
$16
(38)$11
$5
120
 $7
$10
(30)
Nonaccrual loans337
372
(9) 337
372
(9)285
337
(15) 285
337
(15)
Allowance for credit losses:          
Allowance for loan losses$285
$285
—
 $285
$285
—
$317
$285
11
 $317
$285
11
Allowance for lending-related commitments10
5
100
 10
5
100
15
10
50
 15
10
50
Total allowance for credit losses$295
$290
2 % $295
$290
2 %$332
$295
13 % $332
$295
13 %
Net charge-off rate0.02%0.02%  0.01%0.02% 0.03%0.02%  0.01%0.01% 
Allowance for loan losses to period-end loans0.22
0.25
  0.22
0.25
 0.22
0.22
  0.22
0.22
 
Allowance for loan losses to nonaccrual loans85
77
  85
77
 111
85
  111
85
 
Nonaccrual loans to period-end loans0.26
0.32
  0.26
0.32
 0.20
0.26
  0.20
0.26
 
(a)Represents the “overall star rating” derived from Morningstar for the U.S., the U.K., Luxembourg, Hong Kong and Taiwan domiciled funds; and Nomura “star rating” for Japan domiciled funds. Includes only Asset Management retail open-ended mutual funds that have a rating. Excludes money market funds, Undiscovered Managers Fund, and Brazil and India domiciled funds.
(b)The prior period amounts have been revised to conform with current period presentation.
(c)Quartile ranking sourced from: Lipper for the U.S. and Taiwan domiciled funds; Morningstar for the U.K., Luxembourg and Hong Kong domiciled funds; Nomura for Japan domiciled funds and Fund Doctor for South Korea domiciled funds. 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 and India domiciled funds.


Client assets
Client assets of $2.7$2.9 trillion and assets under management of $1.9$2.1 trillion were both up 9% and 10%7%, respectively, reflecting higher market levels, anddriven by net inflows into long-term and liquidity and long-term products.products, as well as higher market levels.
Client assets    
September 30,September 30,
(in billions)2017
2016
Change
2018
2017
Change
Assets by asset class    
Liquidity$441
$403
9%$463
$441
5 %
Fixed income461
437
5
457
461
(1)
Equity405
357
13
452
405
12
Multi-asset and alternatives638
575
11
705
638
11
Total assets under management1,945
1,772
10
2,077
1,945
7
Custody/brokerage/administration/deposits733
675
9
790
733
8
Total client assets$2,678
$2,447
9
$2,867
$2,678
7
    
Memo:    
Alternatives client assets (a)
$161
$157
3
$172
$161
7
    
Assets by client segment    
Private Banking$507
$433
17
$576
$507
14
Institutional921
862
7
945
921
3
Retail517
477
8
556
517
8
Total assets under management$1,945
$1,772
10
$2,077
$1,945
7
    
Private Banking$1,217
$1,089
12
$1,339
$1,217
10
Institutional941
879
7
967
941
3
Retail520
479
9
561
520
8
Total client assets$2,678
$2,447
9%$2,867
$2,678
7 %
(a)Represents assets under management, as well as client balances in brokerage accounts.account
Client assets (continued)      


Three months ended September 30, Nine months ended
September 30,		Three months ended
September 30,		Nine months ended
September 30,
(in billions)2017
2016
 2017
2016
2018
2017
 2018
2017
Assets under management rollforward      
Beginning balance$1,876
$1,693
 $1,771
$1,723
$2,028
$1,876
 $2,034
$1,771
Net asset flows:      
Liquidity5
18
 (1)(11)14
5
 10
(1)
Fixed income17
9
 24
36
3
17
 (9)24
Equity(5)(7) (12)(17)1
(5) 8
(12)
Multi-asset and alternatives9
21
 26
25
4
9
 29
26
Market/performance/other impacts43
38
 137
16
27
43
 5
137
Ending balance, September 30$1,945
$1,772
 $1,945
$1,772
$2,077
$1,945
 $2,077
$1,945
      
Client assets rollforward      
Beginning balance$2,598
$2,344
 $2,453
$2,350
$2,799
$2,598
 $2,789
$2,453
Net asset flows25
47
 37
42
33
25
 58
37
Market/performance/other impacts55
56
 188
55
35
55
 20
188
Ending balance, September 30$2,678
$2,447
 $2,678
$2,447
$2,867
$2,678
 $2,867
$2,678

International metrics          
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions)2017
2016
Change
 2017
2016
Change
2018
2017
Change
 2018
2017
Change
Total net revenue (a)
          
Europe/Middle East/Africa$526
$475
11% $1,482
$1,369
8%$677
$697
(3)% $2,095
$1,975
6%
Asia/Pacific302
280
8
 858
802
7
377
358
5
 1,161
1,018
14
Latin America/Caribbean227
181
25
 628
539
17
228
227
—
 689
628
10
Total international net revenue1,055
936
13
 2,968
2,710
10
1,282
1,282
—
 3,945
3,621
9
North America2,190
2,111
4
 6,576
6,248
5
2,277
2,190
4
 6,692
6,576
2
Total net revenue(a)$3,245
$3,047
6% $9,544
$8,958
7%$3,559
$3,472
3 % $10,637
$10,197
4%
(a)Regional revenue is based on the domicile of the client.
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in billions)2017
2016
Change
 2017
2016
Change
2018
2017
Change
 2018
2017
Change
Assets under management          
Europe/Middle East/Africa$357
$314
14% $357
$314
14%$375
$357
5% $375
$357
5%
Asia/Pacific144
131
10
 144
131
10
164
144
14
 164
144
14
Latin America/Caribbean59
45
31
 59
45
31
65
59
10
 65
59
10
Total international assets under management560
490
14
 560
490
14
604
560
8
 604
560
8
North America1,385
1,282
8
 1,385
1,282
8
1,473
1,385
6
 1,473
1,385
6
Total assets under management$1,945
$1,772
10
 $1,945
$1,772
10
$2,077
$1,945
7
 $2,077
$1,945
7
          
Client assets          
Europe/Middle East/Africa$411
$364
13
 $411
$364
13
$435
$411
6
 $435
$411
6
Asia/Pacific206
186
11
 206
186
11
228
206
11
 228
206
11
Latin America/Caribbean157
116
35
 157
116
35
162
157
3
 162
157
3
Total international client assets774
666
16
 774
666
16
825
774
7
 825
774
7
North America1,904
1,781
7
 1,904
1,781
7
2,042
1,904
7
 2,042
1,904
7
Total client assets$2,678
$2,447
9% $2,678
$2,447
9%$2,867
$2,678
7% $2,867
$2,678
7%


CORPORATE
For a discussion of Corporate, see refer to pages 69–7073–74 of JPMorgan Chase’s 20162017 Annual Report.
Selected income statement and balance sheet dataSelected income statement and balance sheet data      Selected income statement and balance sheet data      
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except headcount)2017
2016
 Change
 2017
 2016
 Change
2018
2017
 Change
 2018
 2017
 Change
Revenue                  
Principal transactions$(2)$57
 NM
 $161
 $183
 (12)%$(161)$(2) NM
 $(222) $161
 NM
Securities gains/(losses)—
64
 (100)% (37) 135
 NM
Investment securities losses(46)—
 NM
 (371) (37) NM
All other income/(loss)(a)
111
76
 46
 839
 319
 163
30
111
 (73)% 373
 839
 (56)%
Noninterest revenue109
197
 (45) 963
 637
 51
(177)109
 NM
 (220) 963
 NM
Net interest income77
(385) NM
 2
 (927) NM
74
77
 (4)% (35) 2
 NM
Total net revenue(b)
186
(188) NM
 965
 (290) NM
(103)186
 NM
 (255) 965
 NM
                  
Provision for credit losses—
(1) 100
 —
 (4) 100
2
—
 NM
 (3) —
 NM
                  
Noninterest expense(c)
74
143
 (48) 355
 23
 NM
28
74
 (62)% 394
 355
 11 %
Income/(loss) before income tax expense/(benefit)112
(330) NM
 610
 (309) NM
(133)112
 NM
 (646) 610
 NM
Income tax expense/(benefit)34
(165) NM
 (73) 54
 NM
12
34
 (65)% 18
 (73) NM
Net income/(loss)$78
$(165) NM
 $683
 $(363) NM
$(145)$78
 NM
 $(664) $683
 NM
Total net revenue                  
Treasury and CIO$265
$(211) NM
 $344
 $(531) NM
$186
$265
 (30)% $235
 $344
 (32)%
Other Corporate(79)23
 NM
 621
 241
 158
(289)(79) (266) (490) 621
 NM
Total net revenue$186
$(188) NM
 $965
 $(290) NM
$(103)$186
 NM
 $(255) $965
 NM
Net income/(loss)                  
Treasury and CIO$75
$(208) NM
 $(6) $(518) 99
$96
$75
 28 % $(244) $(6) NM
Other Corporate3
43
 (93) 689
 155
 345
(241)3
 NM
 (420) 689
 NM
Total net income/(loss)$78
$(165) NM
 $683
 $(363) NM
$(145)$78
 NM
 $(664) $683
 NM
Total assets (period-end)$804,573
$824,336
 (2) $804,573
 $824,336
 (2)$742,693
$804,573
 (8) $742,693
 $804,573
 (8)
Loans (period-end)1,614
1,738
 (7) 1,614
 1,738
 (7)1,556
1,614
 (4) 1,556
 1,614
 (4)
Core loans(d)
1,614
1,735
 (7) 1,614
 1,735
 (7)1,556
1,614
 (4) 1,556
 1,614
 (4)
Headcount(e)34,659
31,572
 10 % 34,659
 31,572
 10 %36,686
34,012
 8 % 36,686
 34,012
 8 %
(a)Included revenue related to a legal settlement of $645 million for the nine months ended September 30, 2017.
(b)Included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments of $216$94 million and $218$216 million for the three months ended September 30, 2018 and 2017, respectively, and 2016, respectively,$287 million and $681 million and $663 million for the nine months ended September 30, 2018 and 2017, and 2016, respectively. The decrease in taxable-equivalent adjustments reflects the impact of the TCJA.
(c)Included legal expense/(benefit) of $(148)$(175) million and $(85)$(148) million for the three months ended September 30, 2018 and 2017, respectively, and 2016, respectively,$(225) million and $(360) million and $(550) million for the nine months ended September 30, 20172018 and 2016,2017, respectively.
(d)Average core loans were $1.7$1.6 billion and $1.8$1.7 billion for the three months ended September 30, 20172018 and 2016,2017, respectively, and $1.6$1.7 billion and $1.9$1.6 billion for the nine months ended September 30, 20172018 and 2016,2017, respectively.

(e)Effective in the first quarter of 2018, certain Compliance staff were transferred from Corporate to CB. The prior period amounts have been revised to conform with the current period presentation. For a further discussion of this transfer, refer to CB segment results on page 32.
Quarterly results
Net incomeloss was $78$145 million, compared with a net lossincome of $165 million in the prior-year quarter. Net revenue was $186 million, compared with a loss of $188$78 million in the prior year, primarily dueyear.
Net revenue was a loss of $103 million, largely driven by markdowns on certain legacy private equity investments of approximately $220 million.
Noninterest expense was $28 million, including a net legal benefit partially offset by higher real estate expense.
Current period income tax expense reflects a net benefit of $132 million resulting from changes in estimates under the TCJA related to the benefitremeasurement of higher rates.certain deferred taxes and the deemed repatriation tax on non-U.S. earnings, which were more than offset by changes to certain tax reserves as well as other tax adjustments.
 
Year-to-date results
Net loss was $664 million, compared with net income of $683 million in the prior year.
Net revenue was $683a loss of $255 million, compared with a net lossgain of $363 million in the prior year. Net revenue was $965 million, compared with a loss of $290 million in the prior-year. CurrentThe current period net revenue wasincludes investment securities losses related to the repositioning of the investment securities portfolio and losses largely driven by markdowns on certain legacy private equity investments. The prior year included a $645 million benefit from a legal settlementsettlement.
Income tax expense reflects a net benefit of $305 million resulting from changes in estimates under the TCJA related to the remeasurement of certain deferred taxes and the deemed repatriation tax on non-U.S. earnings, along with the FDIC receivership for Washington Mutual and with Deutsche Bank as trusteeother tax adjustments, which were more than offset by changes to certain Washington Mutual trusts; and by the net impact of higher rates. Noninterest expense was $355 million, up $332 million from prior year, driven by a lower legal benefit and higher compensation expense.

tax reserves.

Treasury and CIO overview
At September 30, 2017,2018, the average credit rating of the Treasury and CIO investment securities comprising the portfolio in the table below was AA+ (based upon external ratings where available and, where not available, based primarily upon internal ratings that correspond to ratings as defined by S&P and Moody’s). SeeRefer to Note 9 for further information on the Firm’s investment securities portfolio.
 
For further information on liquidity and funding risk, seerefer to Liquidity Risk Management on pages 68–72.49–54. For information on interest rate, foreign exchange and other risks, seerefer to Market Risk Management on pages 73–77.

77.
Selected income statement and balance sheet dataSelected income statement and balance sheet data      Selected income statement and balance sheet data      
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions)2017
 2016
 Change
 2017
 2016
 Change
2018
 2017
 Change
 2018
 2017
 Change
Securities gains/(losses)$—
 $64
 (100)% $(49) $135
 NM
AFS investment securities (average)$212,633
 $219,042
 (3) $224,094
 $226,533
 (1)%
HTM investment securities (average)47,034
 52,774
 (11) 48,201
 51,518
 (6)
Investment securities losses$(46) $—
 NM
 $(371) $(49) NM
Available-for-sale (“AFS”) investment securities (average)$197,230
 $212,633
 (7)% $200,569
 $224,094
 (10)%
Held-to-maturity (“HTM”) investment securities (average)31,232
 47,034
 (34) 31,842
 48,201
 (34)
Investment securities portfolio (average)$259,667
 $271,816
 (4) $272,295
 $278,051
 (2)$228,462
 $259,667
 (12) $232,411
 $272,295
 (15)
AFS investment securities (period-end)$214,257
 $217,196
 (1) $214,257
 $217,196
 (1)$198,523
 $214,257
 (7) $198,523
 $214,257
 (7)
HTM investment securities (period-end)47,079
 52,011
 (9) 47,079
 52,011
 (9)31,368
 47,079
 (33) 31,368
 47,079
 (33)
Investment securities portfolio (period-end)$261,336
 $269,207
 (3)% $261,336
 $269,207
 (3)%$229,891
 $261,336
 (12)% $229,891
 $261,336
 (12)%


As permitted by the new hedge accounting guidance, the Firm elected to transfer certain investment securities from HTM to AFS in the first quarter of 2018. For additional information, refer to Notes 1 and 9.




ENTERPRISE-WIDE RISK MANAGEMENT
Risk is an inherent part of JPMorgan Chase’s business activities. When the Firm extends a consumer or wholesale loan, advises customers on their investment decisions, makes markets in securities, or offers other products or services, the Firm takes on some degree of risk. The Firm’s overall objective is to manage its businesses, and the associated risks, in a manner that balances serving the interests of its clients, customers and investors and protects the safety and soundness of the Firm.
Firmwide Risk Management is overseen and managed on an enterprise-wide basis. The Firm’s approach to risk management covers a broad spectrum of economic and other core risk areas, such as credit, market, liquidity, model, principal, country, operational, compliance, conduct, legal, capital, and reputation risk, with controls and governance established for each area, as appropriate.
The Firm believes that effective risk management requires:
•
Acceptance of responsibility, including identification and escalation of risk issues, by all individuals within the Firm;
•
Ownership of risk identification, assessment, data and management by each of the lines of business and corporate functions; and
•
Firmwide structures for risk governance.
Acceptance of responsibility, including identification and escalation of risk issues, by all individuals within the Firm;
Ownership of risk identification, assessment, data and management by each of the lines of business and corporate functions; and
Firmwide structures for risk governance.
The Firm’s Operating Committee, which consists of the Firm’s Chief Executive Officer (“CEO”), Chief Risk Officer (“CRO”), Chief Financial Officer (“CFO”) and other senior executives, is the ultimate management escalation point in the Firm and may refer matters to the Firm’s Board of Directors. The Operating Committee is responsible and accountable to the Firm’s Board of Directors.
In June 2017, the Firm announced the departure of its Chief Operating Officer. As a result, his responsibilities have transitioned to other members of the Operating Committee. The Chief Investment Officer/Treasurer now reports to the Firm’s CFO, and will continue to chair the Firmwide Asset Liability Committee (“ALCO”). For further discussion on the Firm’s ALCO, see page 75 of JPMorgan Chase’s 2016 Annual Report.
The Firm strives for continual improvement through efforts to enhance controls, ongoing employee training and development, talent retention, and other measures. The Firm follows a disciplined and balanced compensation framework with strong internal governance and independent Board oversight. The impact of risk and control issues are carefully considered in the Firm’s performance evaluation and incentive compensation processes.
Firmwide Risk Management is overseen and managed on an enterprise-wide basis. The Firm’s approach to risk management involves understanding drivers of risks, risk types, and impacts of risks.
Drivers of risk include, but are not limited to, the economic environment, regulatory or government policy, competitor or market evolution, business decisions, process or judgment error, deliberate wrongdoing, dysfunctional markets, and natural disasters.
The Firm’s risks are generally categorized in the following four risk types:
•
Strategic risk is the risk associated with the Firm’s current and future business plans and objectives, including capital risk, liquidity risk, and the impact to the Firm’s reputation.
•
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 inadequate or failed internal processes, people and systems, or from external events and includes compliance risk, conduct risk, legal risk, and estimations and model risk.
There may be many consequences of risks manifesting, including quantitative impacts such as reduction in earnings and capital, liquidity outflows, and fines or penalties, or qualitative impacts, such as reputation damage, loss of clients, and regulatory and enforcement actions.


The Firm has established Firmwide risk management functions to manage different risk types. The scope of a particular risk management function may include multiple risk types. For example, the Firm’s Country Risk Management function oversees country risk which may be a driver of risk or an aggregation of exposures that could give rise to multiple risk types such as credit or market risk. The following provides an index of where in this Form 10-Q and in JPMorgan Chase’s 20162017 Annual Report information about the Firm’s management of its key risks can be found.
Risk disclosureForm 10-Q page referenceAnnual Report page reference
Enterprise-Wide Risk Management41–7771–131
I. Economic risks
Capital Risk Management42–4876–85
Credit Risk Management49–6686–107
Country Risk Management67108–109
Liquidity Risk Management68–72110–115
Market Risk Management73–77116–123
Principal Risk Management124
II. Other core risks
Compliance Risk Management125
Conduct Risk Management126
Legal Risk Management127
Model Risk Management128
Operational Risk Management129–130
Reputation Risk Management131
Risk disclosuresForm 10-Q page referenceAnnual Report page reference
Enterprise-wide risk management42–4375–80
Strategic risk management 81
Capital risk management44–4882–91
Liquidity risk management49–5492–97
Reputation risk management 98
Consumer credit portfolio

57-61102–107
Wholesale credit portfolio62–68108–116
Investment portfolio risk management72120
Market risk management73–77121–128
Country risk management78129–130
Operational risk management 131–133
Compliance risk management

 134
Conduct risk management 135
Legal risk management 136
Estimations and Model risk management 137


CAPITAL RISK MANAGEMENT
Capital risk is the risk the Firm has an insufficient level and composition of capital to support the Firm’s business activities and associated risks during normal economic environments and under stressed conditions. For a discussion of the Firm’s Capital Risk Management, see pages 76–85 of JPMorgan Chase’s 2016 Annual Report.
A strong capital position is essential to the Firm’s business strategy and competitive position. Maintaining a strong balance sheet to manage through economic volatility is considered a strategic imperative of the Firm’s Board of Directors, CEO and Operating Committee. The Firm’s balance sheet philosophy focuses on risk-adjusted returns, strong capital and robust liquidity. The Firm’s capital risk management strategy focuses on maintaining long-term stability to enable it to build and invest in market-leading businesses, even in a highly stressed environment. Prior to making any decisions on future business activities, seniorSenior management considers the implications on the Firm’s capital.capital prior to making decisions that could impact future business activities. In addition to considering the Firm’s earnings outlook, senior management evaluates all sources and uses of capital with a view to preservingensuring the Firm’s capital strength.
The Firm’s capital risk management objectives are achieved through the establishment of minimum capital targets and a strong capital governance framework. Capital risk management is intended to be flexible in order to react to a range of potential events. The Firm’s minimum capital targets are based on the most binding of three pillars: an internal assessment of the Firm’s capital needs; an estimate of required capital under the Comprehensive Capital Analysis and Review (“CCAR”)CCAR and Dodd-Frank Act stress testing requirements; and Basel III Fully Phased-In regulatory minimums. Where necessary, each pillar may include a management-established buffer. The capital governance framework requires regular monitoring
For a further discussion of the Firm’s capital positions, stress testingCapital Risk Management, refer to pages 82–91 of JPMorgan Chase’s
2017 Annual Report, Note 19 of this Form 10-Q, and escalation protocols, both at the Firm and material legal entity levels.


The following tables present the Firm’s Transitional and Fully Phased-In risk-based and leverage-based capital metrics under both the Basel III Standardized and Advanced Approaches. The Firm’s Basel III ratios exceed both the Transitional and Fully Phased-In regulatory minimums as of September 30, 2017, and December 31, 2016. For further discussion of these capital metrics, including regulatory minimums, and the Standardized and Advanced Approaches, refer to Strategy and GovernancePillar 3 Regulatory Capital Disclosures reports,
which are available on pages 78–82 of JPMorgan Chase’s 2016 Annual Report.
 Transitional Fully Phased-In 
September 30, 2017
(in millions, except ratios)
Standardized Advanced Minimum capital ratios Standardized Advanced Minimum capital ratios 
Risk-based capital metrics:            
CET1 capital$187,061
 $187,061
   $186,831
 $186,831
   
Tier 1 capital212,297
 212,297
   212,196
 212,196
   
Total capital242,949
 232,794
   241,668
 231,513
   
Risk-weighted assets1,482,267
 1,443,019
   1,491,954
 1,453,287
   
CET1 capital ratio12.6% 13.0% 7.5% 12.5% 12.9% 10.5% 
Tier 1 capital ratio14.3
 14.7
 9.0
 14.2
 14.6
 12.0
 
Total capital ratio16.4
 16.1
 11.0
 16.2
 15.9
 14.0
 
Leverage-based capital metrics            
Adjusted average assets(a)
$2,521,889
 $2,521,889
   $2,522,504
 $2,522,504
   
Tier 1 leverage ratio(b)
8.4% 8.4% 4.0% 8.4% 8.4% 4.0% 
Total leverage exposureNA
 $3,211,053
   NA
 $3,211,667
   
SLR(c)
NA
 6.6% NA
 NA
 6.6% 5.0%
(d) 
 Transitional Fully Phased-In 
December 31, 2016
(in millions, except ratios)		Standardized Advanced Minimum capital ratios Standardized Advanced Minimum capital ratios 
Risk-based capital metrics:            
CET1 capital$182,967
 $182,967
   $181,734
 $181,734
   
Tier 1 capital208,112
 208,112
   207,474
 207,474
   
Total capital239,553
 228,592
   237,487
 226,526
   
Risk-weighted assets1,464,981
 1,476,915
   1,474,665
 1,487,180
   
CET1 capital ratio12.5% 12.4% 6.25% 12.3% 12.2% 10.5% 
Tier 1 capital ratio14.2
 14.1
 7.75
 14.1
 14.0
 12.0
 
Total capital ratio16.4
 15.5
 9.75
 16.1
 15.2
 14.0
 
Leverage-based capital metrics            
Adjusted average assets(a)
$2,484,631
 $2,484,631
   $2,485,480
 $2,485,480
   
Tier 1 leverage ratio(b)
8.4% 8.4% 4.0% 8.3% 8.3% 4.0% 
Total leverage exposureNA
 $3,191,990
   NA
 $3,192,839
   
SLR(c)
NA
 6.5% NA
 NA
 6.5% 5.0%
(d) 
Note: As of September 30, 2017, and December 31, 2016, the lower of the Standardized or Advanced capital ratios under each of the Transitional and Fully Phased-In approaches in the table above represents the Firm’s Collins Floor, as discussed in Risk-based capital regulatory minimums on page 44.website (https://jpmorganchaseco.gcs-web.com/financial-information/basel-pillar-3-us-lcr-disclosures).
(a)Adjusted average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for unrealized gains/(losses) on available-for-sale (“AFS”) securities, less deductions for goodwill and other intangible assets, defined benefit pension plan assets, and deferred tax assets related to net operating loss (“NOL”) and tax credit carryforwards.
(b)The Tier 1 leverage ratio is calculated by dividing Tier 1 capital by adjusted average assets.
(c)The SLR leverage ratio is calculated by dividing Tier 1 capital by total leverage exposure. For additional information on total leverage exposure, see SLR on page 46.
(d)In the case of the SLR, the Fully Phased-In minimum ratio is effective January 1, 2018.

Basel III overview
Capital rules under Basel III establish minimum capital ratios and overall capital adequacy standards for large and internationally active U.S. bank holding companies and banks, including theThe Firm and its insured depository institution (“IDI”) subsidiaries.subsidiaries are subject to Basel III sets forth two comprehensive approaches for calculating RWA: a standardized approach (“Basel III Standardized”), and an advanced approach (“Basel III Advanced”). Certain of thecapital rules which include minimum capital ratio requirements of Basel IIIthat are subject to phase-in periods that began on January 1, 2014 and continue(“transitional period”) through the end of 2018 (“transitional period”).
Basel III establishes2018. While the required capital requirements for calculating credit risk and market risk RWA, and in the case of Basel III Advanced, operational risk RWA. In additionremains subject to the RWAtransitional rules during 2018, the Firm's capital ratios as of September 30, 2018 were equivalent whether calculated under these methodologies, the Firm may supplement such amounts to incorporate management judgment and feedback from its bank regulators. For additional information on Basel III methodology refer to Basel III Overviewa transitional basis or on pages 78-80 of JPMorgan Chase’s 2016 Annual Report.
Basel III also includes a requirement for Advanced Approach banking organizations, including the Firm, to calculate the SLR. For additional information on the SLR, see page 46.
Basel III Fully Phased-In
Basel III capital rules will become fully phased-in on January 1, 2019, at which point the Firm will continue to calculate its capital ratios under both the Basel III Standardized and Advanced Approaches. In the case of the SLR, the Fully Phased-In well-capitalized ratio is effective January 1, 2018. The Firm manages each of the businesses, as well as the corporate functions, primarily on a Basel III Fully Phased-In basis.
For additional information on the Firm, JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A.’s capital, RWA and capital ratios under the Basel III Standardized and Advanced Fully Phased-In rules and SLRs calculated under the Basel III Advanced Fully Phased-In rules, all of which are considered key regulatory capital measures, see Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 15–17.
The Basel III Standardized and Advanced Fully Phased-In capital, RWA and capital ratios, and SLRs for the Firm, JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. are based on the current published U.S. Basel III rules.











Risk-based capital regulatory minimums
The capital adequacy of the Firm and its IDI subsidiaries, both during the transitional period and upon full phase-in, is evaluated against the lower of the two ratios as calculated under the Basel III approaches (Standardized or Advanced) as required by the Collins Amendment of the Dodd-Frank Act (the “Collins Floor”). The Basel III Standardized Fully Phased-In CET1 ratio is the Firm’s current binding constraint, and the Firm expects that this will remain its binding constraint for the foreseeable future.
The Basel III rules include minimum capital ratio requirements that are subject to phase-in periods through the end of 2018. In addition to having to maintain the CET1 minimum capital ratio of 4.5%, the Firm is also required to hold additional amounts of capital to serve as a “capital conservation buffer.” As an expansion of the capital conservation buffer, the Firm is also required to hold additional levels of capital in the form of a GSIB surcharge and a countercyclical capital buffer. For additional information on minimum capital ratios, the capital conservation buffer, the countercyclical buffer, and the GSIB surcharge, refer to Risk-based capital regulatory minimums on pages 79-80 of JPMorgan Chase’s 2016 Annual Report.
The Firm believes that it will operate with a Basel III CET1 capital ratio between 11% and 12.5% over time. It is the Firm’s intention that the Firm’s capital ratios will continue to meet regulatory minimums as they are fully implemented in 2019 and thereafter.
The following table represents the ratios the Firm and its IDI subsidiaries, must maintainas appropriate, are subject to meet the definition of “well-capitalized”minimum capital ratios under Basel III rules and well-capitalized ratios under the regulations issued by the Federal Reserve and the Prompt Corrective Action (“PCA”) requirements of the FDIC Improvement Act (“FDICIA”), respectively. For additional information, refer to Note 19.


The following tables present the Firm’s Transitional and Fully Phased-In risk-based and leverage-based capital metrics under both the Basel III Standardized and Advanced Approaches. The Firm’s Basel III ratios exceeded both the Transitional and Fully Phased-In regulatory minimums as of September 30, 2018 and December 31, 2017. For a further discussion of these capital metrics, including regulatory minimums, and the Standardized and Advanced Approaches, refer to Strategy and Governance on pages 84–88 of JPMorgan Chase’s 2017 Annual Report.

 Well-capitalized ratios
 BHC IDI
Capital ratios     
CET1—%  6.5% 
Tier 1 capital6.0   8.0  
Total capital10.0   10.0  
Tier 1 leverage—   5.0  
SLR(a)
5.0   6.0  
 Transitional Fully Phased-In 
September 30, 2018
(in millions, except ratios)
Standardized Advanced Minimum capital ratios Standardized Advanced Minimum capital ratios 
Risk-based capital metrics:            
CET1 capital$184,972
 $184,972
   $184,972
 $184,972
   
Tier 1 capital210,589
 210,589
   210,589
 210,589
   
Total capital238,303
 228,574
   238,303
 228,574
   
Risk-weighted assets1,545,326
 1,438,529
   1,545,326
 1,438,529
   
CET1 capital ratio12.0% 12.9% 9.0% 12.0% 12.9% 10.5% 
Tier 1 capital ratio13.6
 14.6
 10.5
 13.6
 14.6
 12.0
 
Total capital ratio15.4
 15.9
 12.5
 15.4
 15.9
 14.0
 
Leverage-based capital metrics:            
Adjusted average assets(a)
$2,552,612
 $2,552,612
   $2,552,612
 $2,552,612
   
Tier 1 leverage ratio8.2% 8.2% 4.0% 8.2% 8.2% 4.0% 
Total leverage exposureNA
 NA
   NA
 $3,235,518
   
SLR(b)
NA
 NA
 NA
 NA
 6.5% 5.0%
(b) 
 Transitional Fully Phased-In 
December 31, 2017
(in millions, except ratios)		Standardized Advanced Minimum capital ratios Standardized Advanced Minimum capital ratios 
Risk-based capital metrics:            
CET1 capital$183,300
 $183,300
   $183,244
 $183,244
   
Tier 1 capital208,644
 208,644
   208,564
 208,564
   
Total capital238,395
 227,933
   237,960
 227,498
   
Risk-weighted assets1,499,506
 1,435,825
   1,509,762
 1,446,696
   
CET1 capital ratio12.2% 12.8% 7.5% 12.1% 12.7% 10.5% 
Tier 1 capital ratio13.9
 14.5
 9.0
 13.8
 14.4
 12.0
 
Total capital ratio15.9
 15.9
 11.0
 15.8
 15.7
 14.0
 
Leverage-based capital metrics:            
Adjusted average assets(a)
$2,514,270
 $2,514,270
   $2,514,822
 $2,514,822
   
Tier 1 leverage ratio8.3% 8.3% 4.0% 8.3% 8.3% 4.0% 
Total leverage exposureNA
 $3,204,463
   NA
 $3,205,015
   
SLR(b)
NA
 6.5% NA
 NA
 6.5% 5.0%
(b) 
(a)
InAdjusted average assets, for purposes of calculating the case ofTier 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)Effective January 1, 2018, the SLR was fully phased-in under Basel III. The December 31, 2017 amounts were calculated under the Fully Phased-In well-capitalized ratio is effective January 1, 2018.Basel III Transitional rules.
Additional information regarding the Firm’s capital ratios, as well as the U.S. federal regulatory capital standards to which the Firm is subject, is presented in Note 18.
For further information on the Firm’s Basel III measures, see the Firm’s Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website (http://investor.shareholder.com/jpmorganchase/basel.cfm).



Capital components
The following table presents reconciliations of total stockholders’ equity to Basel III Fully Phased-In CET1 capital, Tier 1 capital and Basel III Advanced and Standardized Fully Phased-In Total capital as of September 30, 20172018 and December 31, 2016.
For additional information on the components of regulatory capital, see Note 18.2017.
Capital components 
(in millions)September 30, 2017
December 31, 2016
September 30, 2018
December 31, 2017
Total stockholders’ equity$258,382
$254,190
$258,956
$255,693
Less: Preferred stock26,068
26,068
Less: Preferred stock(a)
27,764
26,068
Common stockholders’ equity232,314
228,122
231,192
229,625
Less:  
Goodwill47,309
47,288
47,483
47,507
Other intangible assets808
862
781
855
Add:  
Deferred tax liabilities(a)
3,271
3,230
Deferred tax liabilities(b)
2,239
2,204
Less: Other CET1 capital adjustments637
1,468
195
223
Standardized/Advanced Fully
Phased-In CET1 capital
186,831
181,734
184,972
183,244
Preferred stock26,068
26,068
Less: 
Other Tier 1 adjustments(b)
703
328
Preferred stock(a)
27,764
26,068
Less: Other Tier 1 adjustments(a)
2,147
748
Standardized/Advanced Fully
Phased-In Tier 1 capital
$212,196
$207,474
$210,589
$208,564
Long-term debt and other instruments qualifying as Tier 2 capital$14,929
$15,253
$13,342
$14,827
Qualifying allowance for credit losses14,648
14,854
14,225
14,672
Other(105)(94)147
(103)
Standardized Fully Phased-In Tier 2 capital$29,472
$30,013
$27,714
$29,396
Standardized Fully Phased-In Total capital$241,668
$237,487
$238,303
$237,960
Adjustment in qualifying allowance for credit losses for Advanced Tier 2 capital(10,155)(10,961)(9,729)(10,462)
Advanced Fully Phased-In Tier 2 capital$19,317
$19,052
$17,985
$18,934
Advanced Fully Phased-In Total capital$231,513
$226,526
$228,574
$227,498
  
(a)As of September 30, 2018, Preferred stock includes the issuance of $1.7 billion of Series DD preferred stock, and other Tier 1 adjustments includes $1.7 billion of Series I preferred stock called for redemption and subsequently redeemed on October 30, 2018. Tier 1 capital as of September 30, 2018 reflects both the issuance and the redemption.
(b)Represents certain deferred tax liabilities related to tax-deductible goodwill and identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating TCE.
(b)Includes the deduction associated with the permissible holdings of covered funds (as defined by the Volcker Rule) acquired after December 31, 2013. The deduction was not material as of September 30, 2017 and December 31, 2016.
The following table presents reconciliations of the Firm’s Basel III Transitional CET1 capital to the Firm’s Basel III Fully Phased-In CET1 capital as of September 30, 2017 and December 31, 2016.
(in millions)September 30, 2017
December 31, 2016
Transitional CET1 capital$187,061
$182,967
AOCI phase-in(a)
106
(156)
CET1 capital deduction phase-in(b)
(183)(695)
Intangibles deduction phase-in(c)
(148)(312)
Other adjustments to CET1 capital(d)
(5)(70)
Fully Phased-In CET1 capital$186,831
$181,734

 
(a)Includes the remaining balance of accumulated other comprehensive income (“AOCI”) related to AFS debt securities and defined benefit pension and other postretirement employee benefit (“OPEB”) plans that will qualify as Basel III CET1 capital upon full phase-in.
(b)Predominantly includes regulatory adjustments related to changes in DVA, as well as CET1 deductions for defined benefit pension plan assets and deferred tax assets related to NOL and tax credit carryforwards.
(c)Relates to intangible assets, other than goodwill and MSRs, that are required to be deducted from CET1 capital upon full phase-in.
(d)Includes minority interest and the Firm’s investments in its own CET1 capital instruments.
Capital rollforward
The following table presents the changes in Basel III Fully Phased-In CET1 capital, Tier 1 capital and Tier 2 capital for the nine months ended September 30, 2017.2018.
Nine months ended September 30,
(in millions)		2017
2018
Standardized/Advanced CET1 capital at December 31, 2016$181,734
Standardized/Advanced CET1 capital at December 31, 2017$183,244
Net income applicable to common equity18,974
24,241
Dividends declared on common stock(5,587)(6,554)
Net purchase of treasury stock(9,131)(12,385)
Changes in additional paid-in capital(930)(1,246)
Changes related to AOCI748
(1,995)
Adjustment related to DVA(a)
402
(148)
Other621
Increase in Standardized/Advanced CET1 capital5,097
Standardized/Advanced CET1 capital at September 30, 2017$186,831
Changes related to other CET1 capital adjustments(185)
Change in Standardized/Advanced CET1 capital1,728
Standardized/Advanced CET1 capital at September 30, 2018$184,972
  
Standardized/Advanced Tier 1 capital at December 31, 2016$207,474
Standardized/Advanced Tier 1 capital at December 31, 2017$208,564
Change in CET1 capital5,097
1,728
Net issuance of noncumulative perpetual preferred stock(b)—
—
Other(375)297
Increase in Standardized/Advanced Tier 1 capital4,722
Standardized/Advanced Tier 1 capital at September 30, 2017$212,196
Change in Standardized/Advanced Tier 1 capital2,025
Standardized/Advanced Tier 1 capital at September 30, 2018$210,589
  
Standardized Tier 2 capital at December 31, 2016$30,013
Standardized Tier 2 capital at December 31, 2017$29,396
Change in long-term debt and other instruments qualifying as Tier 2(324)(1,485)
Change in qualifying allowance for credit losses(206)(448)
Other(11)251
Decrease in Standardized Tier 2 capital(541)
Standardized Tier 2 capital at September 30, 2017$29,472
Standardized Total capital at September 30, 2017$241,668
Change in Standardized Tier 2 capital(1,682)
Standardized Tier 2 capital at September 30, 2018$27,714
Standardized Total capital at September 30, 2018$238,303
  
Advanced Tier 2 capital at December 31, 2016$19,052
Advanced Tier 2 capital at December 31, 2017$18,934
Change in long-term debt and other instruments qualifying as Tier 2(324)(1,485)
Change in qualifying allowance for credit losses600
285
Other(11)251
Increase in Advanced Tier 2 capital265
Advanced Tier 2 capital at September 30, 2017$19,317
Advanced Total capital at September 30, 2017$231,513
Change in Advanced Tier 2 capital(949)
Advanced Tier 2 capital at September 30, 2018$17,985
Advanced Total capital at September 30, 2018$228,574
(a)
Includes DVA related to structured notes recorded in other comprehensive income (“OCI”).
AOCI
(b)Includes the net effect of $1.7 billion of preferred stock that was issued on September 21, 2018 and $1.7 billion of preferred stock that was called for redemption on September 27, 2018 and redeemed on October 30, 2018.

RWA rollforward
The following table presents changes in the components of RWA under Basel III Standardized and Advanced Fully Phased-In for the nine months ended September 30, 2017.2018. The amounts in the rollforward categories are estimates, based on the predominant driver of the change.
Standardized AdvancedStandardized Advanced 
Nine months ended
September 30, 2017
(in millions)		Credit risk RWAMarket risk RWATotal RWA Credit risk RWAMarket risk RWA
Operational risk
RWA
Total RWA
At December 31, 2016$1,346,986
$127,679
$1,474,665
 $959,523
$127,657
$400,000
$1,487,180
Nine months ended
September 30, 2018
(in millions)		Credit risk RWAMarket risk RWATotal RWA Credit risk RWAMarket risk RWA
Operational risk
RWA
Total RWA
At December 31, 2017$1,386,060
$123,702
$1,509,762
 $922,905
$123,791
$400,000
$1,446,696
Model & data changes(a)
(5,379)4,539
(840) (6,081)4,539
—
(1,542)(5,282)(3,550)(8,832) 4,446
(3,550)—
896
Portfolio runoff(b)
(11,600)—
(11,600) (14,300)—
—
(14,300)(7,073)—
(7,073) (8,984)—
—
(8,984)
Movement in portfolio levels(c)
32,220
(2,491)29,729
 (15,622)(2,429)—
(18,051)52,456
(987)51,469
 9,534
(1,014)(8,599)(79)
Changes in RWA15,241
2,048
17,289
 (36,003)2,110
—
(33,893)40,101
(4,537)35,564
 4,996
(4,564)(8,599)(8,167)
September 30, 2017$1,362,227
$129,727
$1,491,954
 $923,520
$129,767
$400,000
$1,453,287
September 30, 2018$1,426,161
$119,165
$1,545,326
 $927,901
$119,227
$391,401
$1,438,529
(a)
Model & data changes refer to movements in levels of RWA as a result of revised methodologies and/or treatment per regulatory guidance (exclusive of rule changes).
(b)Portfolio runoff for credit risk RWA primarily reflects (under both the Standardized and Advanced approaches) reduced risk from position rolloffs in legacy portfolios in Mortgage Banking , the sale of substantially all of the student loan portfolio during the second quarter of 2017, and the sale of reverse mortgages during the third quarter of 2017.Home Lending.
(c)
Movement in portfolio levels for credit risk RWA(inclusive of rule changes) refers toto: changes in book size, composition, credit quality, and market movements; andmovements for marketcredit risk RWA refers toRWA; changes in position and market movements.
movements for market risk RWA; and updates to cumulative losses for operational risk RWA.

Supplementary leverage ratio
The SLR is defined as Tier 1 capital under Basel III divided by the Firm’s total leverage exposure. For additional information, on SLR, seerefer to Capital Risk Management on page 8288 of JPMorgan Chase’s 20162017 Annual Report.
The following table presents the components of the Firm’s Fully Phased-In SLR as of September 30, 20172018 and December 31, 2016.2017.
(in millions, except ratio)September 30, 2017
December 31, 2016
September 30,
2018
December 31, 2017
Tier 1 capital$212,196
$207,474
$210,589
$208,564
Total average assets2,569,231
2,532,457
2,599,621
2,562,155
Less: Adjustments for deductions from Tier 1 capital46,727
46,977
47,009
47,333
Total adjusted average assets(a)
2,522,504
2,485,480
2,552,612
2,514,822
Off-balance sheet exposures(b)
689,163
707,359
682,906
690,193
Total leverage exposure$3,211,667
$3,192,839
$3,235,518
$3,205,015
SLR6.6%6.5%6.5%6.5%
(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 quarter.
As of September 30, 2017,For JPMorgan Chase Bank, N.A.’s and Chase Bank USA, N.A.’s Fully Phased-In SLRs are approximately 6.8% and 11.1%, respectively.SLR ratios, refer to Note 19.

Line of business equity
The Firm’s framework for allocating capital to its business segments (line of business equity) is based on the following objectives:
Integrate Firmwide and line of business capital risk management activities;
Measure performance consistently across all lines of business; and
Provide comparability with peer firms for each of the lines of business.
Each business segment is allocated capital by taking into consideration stand-alone peer comparisons and regulatory capital requirements. ROE is measured and internal targets for expected returns are established as key measuresFor additional information, refer to page 88 of aJPMorgan Chase’s 2017 Annual Report.


The following table represents the capital allocated to each business segment’s performance.segment:
Line of business equity

(in billions)
September 30,
2017
 December 31,
2016
September 30,
2018
 December 31,
2017
Consumer & Community Banking$51.0
 $51.0
$51.0
 $51.0
Corporate & Investment Bank70.0
 64.0
70.0
 70.0
Commercial Banking20.0
 16.0
20.0
 20.0
Asset & Wealth Management9.0
 9.0
9.0
 9.0
Corporate82.3
 88.1
81.2
 79.6
Total common stockholders’ equity$232.3
 $228.1
$231.2
 $229.6
Effective January 1, 2017, the Firm’s methodology used to allocate capital to the business segments was updated.For additional information on the new methodology, see Business Segment Results on pages 18–40.

Planning and stress testing
Comprehensive Capital Analysis and Review
The Federal Reserve requires large bank holding companies, including the Firm, to submit a capital plan on an annual basis. Through the CCAR process, the Federal Reserve evaluates each bank holding company’s (“BHC”) capital adequacy and internal capital adequacy assessment processes, as well as its plans to make capital distributions, such as dividend payments or stock repurchases.
On June 28, 2017,2018, the Federal Reserve informed the Firm that it did not object, on either a quantitative or qualitative basis, to the Firm’s 20172018 capital plan.
Capital actions
Preferred stock
Preferred stock dividends declared were $412$379 million and $1.2 billion for the three and nine months ended September 30, 2017.2018.
On October 20, 2017,September 21, 2018, the Firm issued $1.3$1.7 billion of fixed-to-floatingfixed rate 5.75% non-cumulative preferred stock, Series CC, with an initial dividend rate of 4.625%.DD. On October 31, 2017,30, 2018, the Firm announced that it will redeem all $1.3redeemed $1.7 billion of its outstanding 5.50%fixed-to-floating rate non-cumulative perpetual preferred stock, Series O, on December 1, 2017.I. For additional information on the Firm’s preferred stock, seerefer to Note 2220 of JPMorgan Chase’s 20162017 Annual Report.

Common stock dividends
On September 19, 2017,18, 2018, the Firm announced that its Board of Directors had declared a quarterly common stock dividend of $0.56$0.80 per share, effective with the dividend paid on October 31, 2017.2018. The Firm’s dividends are subject to the Board of Directors’ approval on a quarterly basis.
Common equity
Effective as of June 28, 2017,2018, the Firm’s Board of Directors authorized the repurchase of up to $19.4$20.7 billion of common equity (common stock and warrants) between July 1, 20172018 and June 30, 2018,2019, as part of its annual capital plan.
There were 16.5 million and 24.9 million warrants outstanding at September 30, 2017 and December 31,
2016, respectively.
The following table sets forth the Firm’s repurchases of common equity for the three and nine months ended September 30, 20172018 and 2016.2017. There were no repurchases of warrants during the three and nine months ended September 30, 20172018 and 2016.
2017.

Three months ended September 30,
Nine months ended September 30,Three months ended
September 30,
Nine months ended September 30,
(in millions)
(in millions)2017
2016

2017
2016
2018
2017

2018
2017
Total shares of common stock repurchased51.7
35.6

118.8
110.6
39.3
51.7

126.0
118.8
Aggregate common stock repurchases$4,763
$2,295

$10,602
$6,831
$4,416
$4,763

$14,055
$10,602
The Firm may, from time to time, enter into written trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934 to facilitate repurchases in accordance with the common equity repurchase program. A Rule 10b5-1 repurchase plan allows the Firm to repurchase its equity during periods when it would not otherwise be repurchasing common equity — for example, during internal trading blackout periods. All purchases under Rule 10b5-1 plans must be made according to predefined plans established when the Firm is not aware of material nonpublic information.
The authorization to repurchase common equity will be utilized at management’s discretion, and the timing of purchases and the exact amount of common equity that may be repurchased is subject to various factors, including market conditions; legal and regulatory considerations affecting the amount and timing of repurchase activity; the Firm’s capital position (taking into account goodwill and intangibles); internal capital generation; and alternative investment opportunities. The repurchase program does not include specific price targets or timetables; may be executed through open market purchases or privately negotiated transactions, or utilizing Rule 10b5-1 programs; and may be suspended at any time.
For additional information regarding repurchases of the Firm’s equity securities, seerefer to Part II, Item 2: Unregistered Sales of Equity Securities and Use of Proceeds and Part II, Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities on page 22183 of this Form 10-Q and page 28 of JPMorgan Chase’s 20162017 Form 10-K.10-K, respectively.
There were 7.7 million and 15.0 million warrants outstanding at September 30, 2018 and December 31, 2017, respectively. All outstanding warrants that were not exercised on or before October 29, 2018 have expired.

Other capital requirements
TLAC
On December 15, 2016, theThe Federal Reserve issued its final Total Loss Absorbing Capacity (“TLAC”)Reserve’s TLAC rule which requires the top-tier holding companies of eight U.S. global systemically important bankGSIB holding companies, including the Firm, to maintain minimum levels of external TLAC and external long-term debt that satisfies certain eligibility criteria (“eligible LTD”)LTD effective January 1, 2019.
The minimum external TLAC and the minimum level of eligible long-term debt requirements are shown below:
a3qtlacnewa02.jpg
(a) RWA is the greater of Standardized and Advanced.
The final TLAC rule permanently grandfathered all long-term debt issued before December 31, 2016, to the extent these debt securities would be ineligible because they contained impermissible acceleration rights or were governed by non-U.S. law. As of September 30, 2017,2018, the Firm iswas compliant with the requirements underof the current rule to which it will be subject on January 1, 2019. For additional information, refer to page 90 of JPMorgan Chase’s 2017 Annual Report.

 

Broker-dealer regulatory capital
JPMorganJ.P. Morgan Securities
JPMorgan Chase’s principal U.S. broker-dealer subsidiary is JPMorganJ.P. Morgan Securities. JPMorganJ.P. Morgan Securities is subject to Rule 15c3-1 under the Securities Exchange Act of 1934 (the “Net Capital Rule”). JPMorganJ.P. Morgan Securities is also registered as a futures commission merchantsmerchant and subject to Rule 1.17 of the Commodity Futures Trading Commission (“CFTC”).
JPMorganJ.P. Morgan Securities has elected to compute its minimum net capital requirements in accordance withunder the “Alternative Net Capital Requirements” of the Net Capital Rule.
In accordance withUnder the market and credit risk standards of Appendix E of the Net Capital Rule, JPMorganJ.P. Morgan Securities is eligible to use the alternative method of computing net capital if, in addition to meeting its minimum net capital requirement, it maintains tentative net capital of at least $1.0 billion andbillion. J.P. Morgan Securities is also required to notify the Securities and Exchange Commission (“SEC”) in the event that tentative net capital is less than $5.0 billion. As of September 30, 2017, JPMorgan2018, J.P. Morgan Securities maintained tentative net capital in excess of the minimum and notification requirements.
The following table presents JPMorganJ.P. Morgan Securities’ net capital information:
September 30, 2017Net Capital
(in billions)Actual
Minimum
JPMorgan Securities$15.6
$2.8

September 30, 2018Net Capital
(in millions)Actual
Minimum
J.P. Morgan Securities$18,258
$2,903
J.P. Morgan Securities plc
J.P. Morgan Securities plc is a wholly-owned subsidiary of JPMorgan Chase Bank, N.A. and is the Firm’s principal operating subsidiary in the U.K. It has authority to engage in banking, investment banking and broker-dealer activities. J.P. Morgan Securities plc is jointly regulated by the U.K. Prudential Regulatory Authority (“PRA”) and the Financial Conduct Authority (“FCA”). J.P. Morgan Securities plc is subject to the European Union Capital Requirements Regulation and the U.K. PRA capital rules, each of which implemented Basel III and thereby subject J.P. Morgan Securities plc to its requirements.

The following table presents J.P. Morgan Securities plc’s capital information:
September 30, 2017Total capital CET1 ratio Total capital ratio
(in billions, except ratios)Estimated EstimatedMinimum EstimatedMinimum
J.P. Morgan Securities plc$39.6
 15.94.5 15.98.0
September 30, 2018Total capital CET1 ratio Total capital ratio
(in millions, except ratios)Estimated EstimatedMinimum EstimatedMinimum
J.P. Morgan Securities plc$41,284 16.8%4.5% 16.8%8.0%

LIQUIDITY RISK MANAGEMENT
Liquidity risk is the risk that the Firm will be unable to meet its contractual and contingent financial obligations as they arise or that it does not have the appropriate amount, composition and tenor of funding and liquidity to support its assets and liabilities. For a further discussion of the Firm’s Liquidity Risk Management, refer to pages 92–97 of JPMorgan Chase’s 2017 Annual Report and the Firm’s US LCR Disclosure reports, which are available on the Firm’s website at: (https://jpmorganchaseco.gcs-web.com/financial-information/basel-pillar-3-us-lcr-disclosures).
LCR and HQLA
The LCR rule requires the Firm to maintain an amount of unencumbered HQLA that is sufficient to meet its estimated total net cash outflows over a prospective 30 calendar-day period of significant stress. HQLA is the amount of liquid assets that qualify for inclusion in the LCR. HQLA primarily consist of unencumbered cash and certain high quality liquid securities as defined in the LCR rule.
Under the LCR rule, the amount of HQLA held by JPMorgan Chase Bank N.A. and Chase Bank USA, N.A that are in excess of each entity’s standalone 100% minimum LCR requirement, and that are not transferable to non-bank affiliates, must be excluded from the Firm’s reported HQLA.The LCR is required to be a minimum of 100%.
On August 22, 2018, the U.S. banking regulators published a final rule permitting investment-grade municipal obligations that meet certain criteria to qualify as HQLA for purposes of the U.S. LCR rule. The final rule went into effect on August 30, 2018, and did not have a material impact on the Firm’s HQLA or LCR for the three months ended September 30, 2018.
The following table summarizes the Firm’s average LCR for the three months ended September 30, 2018, June 30, 2018 and September 30, 2017 based on the Firm’s current interpretation of the finalized LCR framework.
 Three months ended
Average amount
(in billions)
September 30, 2018June 30, 2018September 30, 2017
HQLA   
Eligible cash(a)
$345
$363
$390
Eligible securities(b)(c)
190
166
179
Total HQLA(d)
$535
$529
$568
Net cash outflows$467
$458
$475
LCR115%115%120%
Net excess HQLA (d)
$68
$71
$93
(a)Represents cash on deposit at central banks, primarily Federal Reserve Banks.
(b)Predominantly U.S. Treasuries, U.S. Agency MBS, and sovereign bonds net of applicable haircuts under the LCR rules.
(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. and Chase Bank USA, N.A. that are not transferable to non-bank affiliates.
The Firm’s average LCR was 115% for the three months ended September 30, 2018 and June 30, 2018.
The Firm’s average LCR decreased during the three months ended September 30, 2018, compared with the prior year period due to a reduction in cash primarily driven by long-term debt maturities and CIB client-driven markets activities.
The Firm’s average LCR may fluctuate from period to period, due to changes in its HQLA and estimated net cash outflows under the LCR as a result of ongoing business activity. The Firm’s HQLA are expected to be available to meet its liquidity needs in a time of stress.

Other liquidity sources
As of September 30, 2018, in addition to assets reported in the Firm’s HQLA under the LCR rule, the Firm had approximately $225 billion of unencumbered marketable securities, such as equity securities and fixed income debt securities, available to raise liquidity, if required. This includes HQLA-eligible securities included as part of the excess liquidity at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates.
As of September 30, 2018, the Firm also had approximately $298.9 billion of available borrowing capacity at various FHLBs, discount windows at Federal Reserve Banks and various other central banks as a result of collateral pledged by the Firm to such banks. This borrowing capacity excludes the benefit of securities reported in the Firm’s HQLA or other unencumbered securities that are currently pledged at Federal Reserve Bank discount windows. Although available, the Firm does not view the borrowing capacity at the Federal Reserve Bank discount windows and the various other central banks as a primary source of liquidity.
Funding
Sources of funds
Management believes that the Firm’s unsecured and secured funding capacity is sufficient to meet its on- and off-balance sheet obligations.
The Firm funds its global balance sheet through diverse sources of funding including a stable deposit franchise as well as secured and unsecured funding in the capital markets.The Firm’s loan portfoliois funded with a portion of the Firm’s deposits, through securitizations and, with respect to a portion of the Firm’s real estate-related loans, with secured borrowings from the FHLBs. Deposits in excess of the amount utilized to fund loans are primarily invested in the Firm’s investment securities portfolio or deployed in cash or other short-term liquid investments based on their interest rate and liquidity risk characteristics.Securities borrowed or purchased under resale agreements and trading assets-debt and equity instruments are primarily funded by the Firm’s securities loaned or sold under agreements to repurchase, trading liabilities-debt and equity instruments, and a portion of the Firm’s long-term debt and stockholders’ equity. In addition to funding securities borrowed or purchased under resale agreements and trading assets-debt and Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance. Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance.equity instruments, proceeds from the Firm’s debt and equity issuances are used to fund certain loans and other financial and non-financial assets, or may be invested in the Firm’s investment securities portfolio. Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance.


Deposits
The table below summarizes, by line of business, the deposit balances as of September 30, 2018, and December 31, 2017, and the average deposit balances for the three and nine months ended September 30, 2018 and 2017, respectively.
 September 30, 2018
December 31, 2017
 Three months ended September 30, Nine months ended
September 30,
Deposits Average Average
(in millions) 2018
2017
 2018
2017
Consumer & Community Banking$677,260
$659,885
 $674,211
$645,732
 $669,244
$636,257
Corporate & Investment Bank482,490
455,883
 476,995
461,961
 472,879
444,064
Commercial Banking168,112
181,512
 168,102
176,095
 171,403
175,265
Asset & Wealth Management130,497
146,407
 133,021
144,496
 138,885
151,311
Corporate403
295
 533
2,739
 736
4,152
Total Firm$1,458,762
$1,443,982
 $1,452,862
$1,431,023
 $1,453,147
$1,411,049
A key strength of the Firm is its diversified deposit franchise, through each of its lines of business, whichprovides a stable source of funding and limits reliance on the wholesale funding markets. A significant portion of the Firm’s deposits are consumer and wholesale operating deposits, which are both considered to be stable sources of liquidity. Wholesale operating deposits are considered to be stable sources of liquidity because they are generated from customers that maintain operating service relationships with the Firm.
The table below shows the loan and deposit balances, the loans-to-deposits ratios, and deposits as a percentage of total liabilities, as of September 30, 2018 and December 31, 2017.
(in billions except ratios)September 30, 2018
 December 31, 2017
Deposits$1,458.8
 $1,444.0
Deposits as a % of total liabilities62% 63%
Loans$954.3
 $930.7
Loans-to-deposits ratio65% 64%
The Firm believes that average deposit balances are generally more representative of deposit trends than period-end deposit balances.
Average deposits increased for the three months ended September 30, 2018 in CCB and CIB, partially offset by declines in AWM, CB and Corporate.
The increase in CCB reflects the continuation of growth from new customers, partially offset by balance migration into investment-related products, and in CIB reflects growth in operating deposits in Treasury Services driven by growth in client activity. 
The decline in AWM was driven by balance migration predominantly into the Firm’s investment-related products, and in CB was primarily driven by the migration of non-operating deposits into higher-yielding investment products . The decline in Corporate was predominantly due to maturities of wholesale non-operating deposits, consistent with the Firm’s efforts to reduce such deposits.
Average deposits increased for the nine months ended September 30, 2018 in CCB and CIB, partially offset by declines in AWM, CB and Corporate.
The increase in CCB reflects the continuation of growth from new customers, partially offset by balance migration into investment-related products, and in CIB reflects growth in operating deposits in Treasury Services and Securities Services driven by growth in client activity. 
The decline in AWM was driven by balance migration predominantly into the Firm’s investment-related products, and in CB was primarily driven by the migration of non-operating deposits into higher-yielding investment products. The decline in Corporate was predominantly due to maturities of wholesale non-operating deposits, consistent with the Firm’s efforts to reduce such deposits.
For further information on deposit and liability balance trends, refer to the discussion of the Firm’s Business Segment Results and the Consolidated Balance Sheets Analysis on pages 19-41 and pages 12–14, respectively.

The following table summarizes short-term and long-term funding, excluding deposits, as of September 30, 2018, and December 31, 2017, and average balances for the three and nine months endedSeptember 30, 2018 and 2017, respectively. For additional information, refer to the Consolidated Balance Sheets Analysis on pages 12–14 and Note 10.
 September 30, 2018December 31, 2017 Three months ended September 30, Nine months ended September 30,
Sources of funds (excluding deposits)Average Average
(in millions)2018
2017
 2018
2017
Commercial paper$29,313
$24,186
 $28,702
$23,022
 $27,289
$18,653
Other borrowed funds(a)
10,857
10,727
 11,172
10,469
 11,716
10,484
Total short-term unsecured funding(a)
$40,170
$34,913
 $39,874
$33,491
 $39,005
$29,137
Securities sold under agreements to repurchase(a)(b)
$168,450
$147,713
 $174,436
$169,638
 $178,929
$174,777
Securities loaned(a)(b)
12,357
9,211
 9,131
10,946
 10,900
13,370
Other borrowed funds(a)
24,465
16,889
 21,169
19,467
 21,336
15,136
Obligations of Firm-administered multi-seller conduits(c)
$4,304
$3,045
 $3,102
$2,947
 $3,070
$3,351
Total short-term secured funding(a)
$209,576
$176,858
 $207,838
$202,998
 $214,235
$206,634
         
Senior notes$155,099
$155,852
 $154,820
$159,270
 $152,046
$154,148
Trust preferred securities(d)
—
690
 517
2,336
 629
2,340
Subordinated debt(d)
16,426
16,553
 16,079
18,399
 16,106
20,029
Structured notes(e)
52,187
45,727
 50,905
44,157
 48,874
42,025
Total long-term unsecured funding$223,712
$218,822
 $222,321
$224,162
 $217,655
$218,542
         
Credit card securitization(c)
$14,142
$21,278
 $15,052
$24,709
 $16,620
$27,041
Other securitizations(c)(f)
—
—
 —
—
 —
837
Federal Home Loan Bank (“FHLB”) advances41,457
60,617
 48,645
67,288
 54,378
72,504
Other long-term secured funding(g)
4,955
4,641
 5,013
3,176
 4,832
3,202
Total long-term secured funding$60,554
$86,536
 $68,710
$95,173
 $75,830
$103,584
         
Preferred stock(h)
$27,764
$26,068
 $26,252
$26,068
 $26,130
$26,068
Common stockholders’ equity(h)
$231,192
$229,625
 $230,439
$231,861
 $228,995
$229,937
(a)The prior period amounts have been revised to conform with the current period presentation.
(b)Primarily consists of short-term securities loaned or sold under agreements to repurchase.
(c)Included in beneficial interests issued by consolidated variable interest entities on the Firm’s Consolidated balance sheets.
(d)Subordinated debt includes $1.6 billion and $664 million of junior subordinated debentures distributed pro rata to the holders of trust preferred securities which were cancelled on December 18, 2017 and September 10, 2018, respectively. For further information refer to Note 19 of JPMorgan Chase’s 2017 Annual Report.
(e)Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
(f)Other securitizations include securitizations of student loans. The Firm deconsolidated the student loan securitization entities in the second quarter of 2017 as it no longer had a controlling financial interest in these entities as a result of the sale of the student loan portfolio. The Firm’s wholesale businesses also securitize loans for client-driven transactions, which are not considered to be a source of funding for the Firm and are not included in the table.
(g)Includes long-term structured notes which are secured.
(h)For additional information on preferred stock and common stockholders’ equity refer to Capital Risk Management on pages 44-48, Consolidated statements of changes in stockholders’ equity, and Note 20 and Note 21 of JPMorgan Chase’s 2017 Annual Report.
Short-term funding
The Firm’s sources of short-term secured funding primarily consist of securities loaned or sold under agreements to repurchase. These instruments are secured predominantly by high-quality securities collateral, including government-issued debt and agency MBS, and constitute a significant portion of the federal funds purchased and securities loaned or sold under repurchase agreements on the Consolidated balance sheets. The increase at September 30, 2018, from December 31, 2017, reflected higher secured financing of trading assets-debt and equity instruments and client-driven market-making activities in CIB.
The balances associated with securities loaned or sold under agreements to repurchase fluctuate over time due to customers’ investment and financing activities; the Firm’s demand for financing; the ongoing management of the mix of the Firm’s liabilities, including its secured and unsecured financing (for both the investment securities and market-making portfolios); and other market and portfolio factors.
The Firm’s sources of short-term unsecured funding primarily consist of issuance of wholesale commercial paper. The increase in commercial paper was due to higher net issuance.

Long-term funding and issuance
Long-term funding provides additional sources of stable funding and liquidity for the Firm. The Firm’s long-term funding plan is driven primarily by expected client activity, liquidity considerations, and regulatory requirements, including TLAC. Long-term funding objectives include maintaining diversification, maximizing market access and optimizing funding costs. The Firm evaluates various funding markets, tenors and currencies in creating its optimal long-term funding plan.
The significant majority of the Firm’s long-term unsecured funding is issued by the Parent Company to provide maximum flexibility in support of both bank and nonbank subsidiary funding needs.The Parent Company advances substantially all net funding proceeds to its subsidiary, the Intermediate Holding Company (“IHC”). The IHC does not issue debt to external counterparties. The presentation in the following table has been revised to provide the notional value of the long-term unsecured issuance and maturities or redemptions by the Parent Company and subsidiaries for the three and nine months ended September 30, 2018 and 2017. For additional information on the IHC and long-term debt, refer to Liquidity Risk Management and Note 19 of JPMorgan Chase’s 2017 Annual Report.
Long-term unsecured funding          
 Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30,
 2018
2017
 2018
2017
 2018
2017
 2018
2017
(Notional in millions)
Parent Company(b)
 
Subsidiaries(b)
Issuance           
Senior notes issued in the U.S. market$6,000
$4,000
 $17,000
$18,750
 $1,250
$—
 $8,761
$—
Senior notes issued in non-U.S. markets—
—
 1,175
2,220
 —
—
 —
—
Total senior notes6,000
4,000
 18,175
20,970
 1,250
—
 8,761
—
Subordinated debt—
—
 —
—
 —
—
 —
—
Structured notes(a)
387
337
 2,047
2,046
 5,934
6,250
 20,159
21,135
Total long-term unsecured funding – issuance$6,387
$4,337
 $20,222
$23,016
 $7,184
$6,250
 $28,920
$21,135
            
Maturities/redemptions           
Senior notes$646
$4,000
 $18,633
$16,826
 $1,503
$152
 $4,466
$1,368
Subordinated debt15
395
 15
3,401
 —
500
 —
500
Structured notes582
1,505
 2,465
4,785
 3,474
4,152
 12,104
13,245
Total long-term unsecured funding – maturities/redemptions$1,243
$5,900
 $21,113
$25,012
 $4,977
$4,804
 $16,570
$15,113
(a)Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
(b)The prior period amounts have been revised to conform with the current period presentation.
The Firmraises secured long-term funding through securitization of consumer credit card loans and advances from the FHLBs. The following table summarizes the securitization issuance and FHLB advances and their respective maturities or redemptions for the three and nine months ended September 30, 2018 and 2017, respectively.
Long-term secured funding         
 Three months ended September 30, Nine months ended September 30,
 Issuance Maturities/Redemptions Issuance Maturities/Redemptions
(in millions)20182017 20182017 2018
2017
 2018
2017
Credit card securitization$—
$—
 $2,375
$2,264
 $1,396
$1,545
 $8,500
$9,270
Other securitizations(a)
—
—
 —
—
 —
—
 —
55
FHLB advances—
—
 10,704
4,694
 4,000
—
 23,157
15,748
Other long-term secured funding(b)(c)
117
189
 139
516
 312
726
 161
640
Total long-term secured funding$117
$189
 $13,218
$7,474
 $5,708
$2,271
 $31,818
$25,713
(a)Other securitizations includes securitizations of student loans. The Firm deconsolidated the student loan securitization entities in the second quarter of 2017 as it no longer had a controlling financial interest in these entities as a result of the sale of the student loan portfolio.
(b)Includes long-term structured notes which are secured.
(c)The prior period amounts have been revised to conform with the current period presentation.
The Firm’s wholesale businesses also securitize loans for client-driven transactions; those client-driven loan securitizations are not considered to be a source of funding for the Firm and are not included in the table above. For further description of the client-driven loan securitizations, refer to Note 14 of JPMorgan Chase’s 2017 Annual Report.

Credit ratings
The cost and availability of financing are influenced by credit ratings. Reductions in these ratings could have an adverse effect on the Firm’s access to liquidity sources, increase the cost of funds, trigger additional collateral or funding requirements and decrease the number of investors and counterparties willing to lend to the Firm.

Additionally, the Firm’s funding requirements for VIEs and other third-party commitments may be adversely affected by a decline in credit ratings. For additional information on the impact of a credit ratings downgrade on the funding requirements for VIEs, and on derivatives and collateral agreements, refer to SPEs on page 15, and Liquidity risk and credit-related contingent features in Note 4.
The credit ratings of the Parent Company and the Firm’s principal bank and nonbank subsidiaries as of September 30, 2018, except as noted below, were as follows.
JPMorgan Chase & Co.
JPMorgan Chase Bank, N.A.
Chase Bank USA, N.A.
J.P. Morgan Securities LLC
J.P. Morgan Securities plc
September 30, 2018Long-term issuerShort-term issuerOutlookLong-term issuerShort-term issuerOutlookLong-term issuerShort-term issuerOutlook
Moody’s Investors Service(a)
A2P-1StableAa2P-1StableAa3P-1Stable
Standard & Poor’sA-A-2StableA+A-1StableA+A-1Stable
Fitch RatingsAA-F1+StableAAF1+StableAAF1+Stable
(a)Moody’s ratings as of October 25, 2018
On October 25, 2018, Moody’s upgraded the Parent Company’s long-term issuer rating to A2 (previously A3) and short-term issuer rating to P-1 (previously P-2). The long-term issuer ratings were also upgraded for JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. to Aa2 (previously Aa3), and for J.P. Morgan Securities LLC and J.P. Morgan Securities plc to Aa3 (previously A1).
On June 21, 2018, Fitch upgraded the Parent Company’s long-term issuer rating to AA- (previously A+) and short-term issuer rating to F1+ (previously F1). The long-term issuer ratings were also upgraded to AA for JPMorgan Chase Bank, N.A, Chase Bank USA, N.A., J.P. Morgan Securities LLC and J.P. Morgan Securities plc (all previously AA-).
Downgrades of the Firm’s long-term ratings by one or two notches could result in an increase in its cost of funds, and access to certain funding markets could be reduced. The nature and magnitude of the impact of ratings downgrades depends on numerous contractual and behavioral factors which the Firm believes are incorporated in its liquidity risk and stress testing metrics. The Firm believes that it maintains sufficient liquidity to withstand a potential decrease in funding capacity due to ratings downgrades.
JPMorgan Chase’s unsecured debt does not contain requirements that would call for an acceleration of payments, maturities or changes in the structure of the existing debt, provide any limitations on future borrowings or require additional collateral, based on unfavorable changes in the Firm’s credit ratings, financial ratios, earnings, or stock price.
Critical factors in maintaining high credit ratings include a stable and diverse earnings stream, strong capital and liquidity ratios, strong credit quality and risk management controls, and diverse funding sources. Rating agencies continue to evaluate economic and geopolitical trends, regulatory developments, future profitability, risk management practices, and litigation matters, as well as their broader ratings methodologies. Changes in any of these factors could lead to changes in the Firm’s credit ratings.


CREDIT AND INVESTMENT RISK MANAGEMENT
Credit and investment risk is the risk of loss arising fromassociated with the default or change in credit profile of a customer, client, counterparty or counterparty. The Firm provides creditcustomer; or loss of principal or a reduction in expected returns on investments. For a further discussion of Credit Risk refer to pages 55-72. For a variety of customers, ranging from large corporate and institutional clientsfurther discussion on Investment Portfolio Risk, refer to individual consumers and small businesses.page 72. For a further discussion of the Firm’s Credit and Investment Risk Management framework and organization, and the identification, monitoring and management, of credit risks, seerefer to Credit and Investment Risk Management on pages 86–10799–120 of JPMorgan Chase’s 20162017 Annual Report.


CREDIT PORTFOLIO
Credit risk is the risk associated with the default or change in credit profile of a client, counterparty or customer.
In the following tables, totalreported loans include loans retained (i.e., held-for-investment); loans held-for-sale; and certain loans accounted for at fair value. The following tables do not include certain loans which the Firm accounts for at fair value and classifies as trading assets. For further information regarding these loans, seerefer to Notes 2 and 3.3. For additional information on the Firm’s loans, lending-related commitments and derivative receivables, including the Firm’s accounting policies, seerefer to Notes 11 19,, 20, and 4, respectively.
For further information regarding the credit risk inherent in the Firm’s cash placed with banks, seerefer to Wholesale credit exposure – industry exposures on pages 58–60;64–66; for information regarding the credit risk inherent in the
Firm’s investment securities portfolio, seerefer to Note 9 of this Form 10-Q, and Note 1210 of JPMorgan Chase’s 20162017 Annual Report; and for information regarding the credit risk inherent in the securities financing portfolio, seerefer to Note 10 of this Form 10-Q, and Note 1311 of JPMorgan Chase’s 20162017 Annual Report.

For a further discussion of the consumer credit environment and consumer loans, refer to Consumer Credit Portfolio on pages 102-107 of JPMorgan Chase’s 2017 Annual Report and Note 11 of this Form 10-Q. For a further discussion of the wholesale credit environment and wholesale loans,

refer to Wholesale Credit Portfolio on pages 108–116 of JPMorgan Chase’s 2017 Annual Report and Note 11 of this Form 10-Q.
 
Total credit portfolioTotal credit portfolio   Total credit portfolio   
Credit exposure 
Nonperforming(b)(c)
Credit exposure 
Nonperforming(d)(e)
(in millions)Sep 30,
2017
Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Loans retained$909,182
$889,907
 $5,628
$6,721
$947,651
$924,838
 $4,630
$5,943
Loans held-for-sale2,833
2,628
 5
162
3,680
3,351
 14
—
Loans at fair value1,746
2,230
 —
—
2,987
2,508
 —
—
Total loans913,761
894,765
 5,633
6,883
Total loans – reported954,318
930,697
 4,644
5,943
Derivative receivables58,260
64,078
 164
223
60,062
56,523
 90
130
Receivables from customers and other(a)19,350
17,560
 —
—
26,137
26,272
 —
—
Total credit-related assets991,371
976,403
 5,797
7,106
1,040,517
1,013,492
 4,734
6,073
Assets acquired in loan satisfactions      
Real estate ownedNA
NA
 322
370
NA
NA
 268
311
OtherNA
NA
 35
59
NA
NA
 32
42
Total assets acquired in loan satisfactions
NA
NA
 357
429
NA
NA
 300
353
Total assets991,371
976,403
 6,154
7,535
Lending-related commitments1,002,092
976,702
 764
506
1,048,674
991,482
 252
731
Total credit portfolio$1,993,463
$1,953,105
 $6,918
$8,041
$2,089,191
$2,004,974
 $5,286
$7,157
Credit derivatives used
in credit portfolio management activities(a)
$(20,181)$(22,114) $—
$—
Liquid securities and other cash collateral held against derivatives(21,353)(22,705) NA
NA
Credit derivatives used
in credit portfolio management activities(b)
$(14,206)$(17,609) $—
$—
Liquid securities and other cash collateral held against derivatives(c)
(16,943)(16,108) NA
NA
(in millions,
except ratios)
Three months
ended September 30,
 Nine months ended
September 30,		Three months ended
September 30,		 Nine months ended
September 30,
2017
2016
 2017
2016
2018
2017
 2018
2017
Net charge-offs(d)(f)
$1,265
$1,121
 $4,123
$3,412
$1,033
$1,265
 $3,620
$4,123
Average retained loans      
Loans903,892
869,676
 894,170
853,973
942,583
903,892
 931,766
894,170
Loans – excluding residential real estate PCI loans871,465
831,956
 860,443
814,923
916,205
871,465
 903,377
860,443
Net charge-off rates(d)(f)
      
Loans0.56%0.51% 0.62%0.53%0.43%0.56% 0.52%0.62%
Loans – excluding PCI0.58
0.54
 0.64
0.56
0.45
0.58
 0.54
0.64
(a)Receivables from customers and other primarily represents held-for-investment margin loans to brokerage customers.
(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. For additional information, seerefer to Credit derivatives on page 6368 and Note 4.
(b)(c)Includes collateral related to derivative instruments where an appropriate legal opinion has not been either sought or obtained.
(d)Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as they are alleach of the pools is performing.
(c)(e)At September 30, 2017,2018, and December 31, 2016,2017, nonperforming assets excluded: (1)excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $4.0$2.9 billion and $5.0$4.3 billion, respectively, that are 90 or more days past due; (2) student loans insured by U.S. government agencies under the FFELP of zero and $263 million, respectively, that are 90 or more days past due; and (3) real estate owned (“REO”) insured by U.S. government agencies of $99$78 million and $142$95 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”).
(d)(f)For the nine months ended September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio transfer, the net charge-off rate for loansLoans would have been 0.55% and for loansLoans – excluding PCI would have been 0.57%. For additional information refer to CCB segment results on page 21.


CONSUMER CREDIT PORTFOLIO
The Firm’s retained consumer portfolio consists primarily of residential real estate loans, credit card loans, auto loans, and business banking loans, andas well as associated lending-related commitments. The Firm’s focus is on serving primarily the prime segment of the consumer credit market. For further
information on consumer loans, seerefer to Note 11 of this Form
10-Q and Consumer Credit Portfolio on pages 89–95102-107 and Note 1412 of JPMorgan Chase’s 20162017 Annual Report. For further information on lending-related commitments, seerefer to Note 1920 of this Form 10-Q.10-Q and Note 27 of JPMorgan Chase’s 2017 Annual Report.
The following table presents consumer credit-related information with respect to the credit portfolio held by CCB, prime mortgage and home equity loans held by AWM, and prime mortgage loans held by Corporate. For further information about the Firm’s nonaccrual and charge-off accounting policies, refer to Note 12 of JPMorgan Chase’s 2017 Annual Report.
Consumer credit portfolioConsumer credit portfolio        Consumer credit portfolio           
    Three months ended September 30, Nine months ended September 30,     Three months ended September 30, Nine months ended September 30,

(in millions, except ratios)		Credit exposure 
Nonaccrual
loans(k)(l)
Net
charge-offs(m)(n)
Average
annual net charge-off rate(m)(n)(o)
 
Net
charge-offs(e)(m)(n)
Average
annual net charge-off rate(e)(m)(n)(o)
Credit exposure 
Nonaccrual
loans(i)(j)
 
Net
charge-offs/(recoveries)(k)(l)
 
Average annual
net charge-off/(recoveries) rate(k)(l)(m)
 
Net
charge-offs/(recoveries)(d)(k)
 
Average annual
net charge-off/(recoveries) rate(d)(k)(m)
Sep 30,
2017
 Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
2017
2016
2017
2016
 2017
2016
2017
2016
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
 2018
2017
 2018
2017
 2018
2017
 2018
2017
Consumer, excluding credit card                       
Loans, excluding PCI loans and loans held-for-sale                    
Residential mortgage$231,361
$216,496
 $1,880
$2,175
 $(105)$3
 (0.18)%0.01% $(256)$3
 (0.15)%—%
Home equity$34,657
 $39,063
 $1,601
$1,845
$13
$45
0.15%0.43% $71
$140
0.26%0.43%29,318
33,450
 1,382
1,610
 (12)13
 (0.16)0.15
 (2)71
 (0.01)0.26
Residential mortgage(a)
212,558
 192,486
 2,095
2,256
3
9
0.01
0.02
 3
13
—
0.01
Auto(c)(b)
65,102
 65,814
 188
214
116
79
0.71
0.49
 245
192
0.50
0.41
63,619
66,242
 137
141
 56
116
 0.35
0.71
 182
245
 0.37
0.50
Consumer & Business
Banking(a)(c)(d)
25,275
 24,307
 274
287
71
71
1.12
1.19
 184
180
0.99
1.04
Consumer & Business Banking(b)(c)
26,451
25,789
 237
283
 68
71
 1.02
1.12
 171
184
 0.88
0.99
Student(e)(d)
—
 7,057
 —
165
—
32
—
1.70
 498
98
NM
1.69
—
—
 —
—
 —
—
 —
—
 —
498
 —
NM
Total loans, excluding PCI loans and loans held-for-sale337,592
 328,727
 4,158
4,767
203
236
0.24
0.29
 1,001
623
0.40
0.26
350,749
341,977
 3,636
4,209
 7
203
 0.01
0.24
 95
1,001
 0.04
0.40
Loans – PCI                      
Home equity11,321
 12,902
 NA
NA
NA
NA
NA
NA
 NA
NA
NA
NA
9,393
10,799
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Prime mortgage6,747
 7,602
 NA
NA
NA
NA
NA
NA
 NA
NA
NA
NA
4,931
6,479
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Subprime mortgage2,691
 2,941
 NA
NA
NA
NA
NA
NA
 NA
NA
NA
NA
2,072
2,609
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Option ARMs(f)(e)
11,062
 12,234
 NA
NA
NA
NA
NA
NA
 NA
NA
NA
NA
8,813
10,689
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – PCI31,821
 35,679
 NA
NA
NA
NA
NA
NA
 NA
NA
NA
NA
25,209
30,576
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – retained369,413
 364,406
 4,158
4,767
203
236
0.22
0.26
 1,001
623
0.37
0.23
375,958
372,553
 3,636
4,209
 7
203
 0.01
0.22
 95
1,001
 0.03
0.37
Loans held-for-sale188
(j) 
238
(j) 
3
53
—
—
—
—
 —
—
—
—
104
128
 —
—
 —
—
 —
—
 —
—
 —
—
Total consumer, excluding credit card loans369,601
 364,644
 4,161
4,820
203
236
0.22
0.26
 1,001
623
0.37
0.23
376,062
372,681
 3,636
4,209
 7
203
 0.01
0.22
 95
1,001
 0.03
0.37
Lending-related commitments(g)(f)
55,071
 54,797
      50,630
48,553
          
Receivables from customers(h)(g)
132
 120
      155
133
          
Total consumer exposure, excluding credit card424,804
 419,561
      426,847
421,367
          
Credit card                    
Loans retained(i)(h)
141,200
 141,711
 —
—
1,019
838
2.87
2.51
 3,049
2,528
2.94
2.61
147,856
149,387
 —
—
 1,073
1,019
 2.91
2.87
 3,407
3,049
 3.16
2.94
Loans held-for-sale113
 105
 —
—
—
—
—
—
 —
—
—
—
25
124
 —
—
 —
—
 —
—
 —
—
 —
—
Total credit card loans141,313
 141,816
 —
—
1,019
838
2.87
2.51
 3,049
2,528
2.94
2.61
147,881
149,511
 —
—
 1,073
1,019
 2.91
2.87
 3,407
3,049
 3.16
2.94
Lending-related commitments(g)(f)
574,641
 553,891
      600,728
572,831
          
Total credit card exposure715,954
 695,707
      748,609
722,342
          
Total consumer credit portfolio$1,140,758
 $1,115,268
 $4,161
$4,820
$1,222
$1,074
0.95%0.86% $4,050
$3,151
1.07%0.87%$1,175,456
$1,143,709
 $3,636
$4,209
 $1,080
$1,222
 0.82 %0.95% $3,502
$4,050
 0.90 %1.07%
Memo: Total consumer credit portfolio, excluding PCI$1,108,937
 $1,079,589
 $4,161
$4,820
$1,222
$1,074
1.02%0.93% $4,050
$3,151
1.15%0.94%$1,150,247
$1,113,133
 $3,636
$4,209
 $1,080
$1,222
 0.86 %1.02% $3,502
$4,050
 0.96 %1.15%
(a)Certain loan portfolios have been reclassified. The prior period amounts have been revised to conform with the current period presentation.
(b)At September 30, 2017,2018, and December 31, 2016,2017, excluded operating lease assets of $16.2$19.6 billion and $13.2$17.1 billion, respectively. These operating lease assets are included in other assets on the Firm’s Consolidated balance sheets. The risk of loss on these assets relates to the residual value of the leased vehicles, which is managed through projection of the lease residual value at lease origination, periodic review of residual values, and through arrangements with certain auto manufacturers that mitigates this risk.
(c)(b)Includes certain business banking and auto dealer risk-rated loans that apply the wholesale methodology 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.
(d)(c)Predominantly includes Business Banking loans.
(e)(d)For the nine months ended September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio transfer,sale, the net charge-off rate for Total consumer, excluding credit card and PCI loans and loans held-for-sale would have been 0.22%; Total consumer–consumer – retained excluding credit card loans would have been 0.20%; Total consumer credit portfolio would have been 0.95%; and Total consumer credit portfolio, excluding PCI loans would have been 1.02%. For additional information refer to CCB segment results on page 21.
(f)(e)At both September 30, 2017,2018, and December 31, 2016,2017, approximately 68% and 66%, respectively, of the PCI option adjustable rate mortgage (“ARM”) portfolio has been modified into fixed-rate, fully amortizing loans.

(g)(f)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, (if certain conditions are met), 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. For further information, refer to Note 20.

(h)(g)Receivables from customers represent held-for-investment margin loans to brokerage customers that are collateralized through assets maintained in the clients’ brokerage accounts, as such no allowance is held against these receivables.accounts. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.
(i)(h)Includes billed interest and fees net of an allowance for uncollectible interest and fees.
(j)Includes residential mortgage loans held-for-sale at both September 30, 2017 and December 31, 2016. Also includes student loans held-for-sale at September 30, 2017.
(k)(i)At September 30, 20172018 and December 31, 2016,2017, nonaccrual loans excluded mortgage loans 90 or more days past due as follows: (1) mortgage loansand insured by U.S. government agencies of $4.0$2.9 billion and $5.0$4.3 billion, respectively; and (2) student loans insured by U.S. government agencies under the FFELP of zero and $263 million, 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.
(l)(j)Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as they are alleach of the pools is performing.
(m)(k)Net charge-offs and the net charge-off rates excluded write-offs in the PCI portfolio of $20$58 million and $36$20 million for the three months ended September 30, 20172018 and 2016,2017, respectively, and $66$151 million and $124$66 million for the nine months ended September 30, 20172018 and 2016,2017, respectively. These write-offs decreased the allowance for loan losses for PCI loans. SeeRefer to Allowance for Credit Losses on pages 64–6669–71 for further details.information.
(n)(l)Net charge-offs and net charge-off rates for the three and nine months ended September 30, 2017 included $63 million of incremental charge-offs recorded in accordance with regulatory guidance regarding the timing of loss recognition for certain auto and residential real estate loans in bankruptcy and auto loans where assets were acquired in loan satisfaction.
(o)(m)Average consumer loans held-for-sale were $339$196 million and $337$339 million for the three months ended September 30, 20172018 and 2016,2017, respectively, and $240 million and $1.9 billion and $372 million for the nine months ended September 30, 20172018 and 2016,2017, respectively. These amounts were excluded when calculating net charge-off rates.


Consumer, excluding credit card
Portfolio analysis
Consumer loan balances increased from December 31, 20162017 predominantly due to originations of high-quality prime mortgage loans that have been retained on the balance sheet, partiallylargely offset by the sale of the student loan portfolio as well as paydowns and the charge-off or liquidation of delinquent loans. The credit environment remained favorable as a result of low unemployment levels and increases in home prices.
PCI loans are excluded from the following discussions of individual loan products and are addressed separately below. For further information about the Firm’s consumer portfolio, including information about delinquencies, loan modifications and other credit quality indicators, see
refer to Note 11 of this Form 10-Q.
Home equity:The home equity portfolio declined from December 31, 2016 primarily reflecting loan paydowns and charge-offs. Both early-stage and late-stage delinquencies showed improvement from December 31, 2016. Nonaccrual loans decreased from December 31, 2016 primarily as a result of loss mitigation activities. Net charge-offs for the three and nine months ended September 30, 2017 declined when compared with the same periods of the prior year, partially as a result of lower loan balances.
At September 30, 2017, approximately 90% of the Firm’s home equity portfolio consists of home equity lines of credit (“HELOCs”) and the remainder consists of home equity loans (“HELOANs”). For further information on the Firm’s home equity portfolio, see Note 11 of this Form 10-Q and Consumer Credit Portfolio on pages 89–95 of JPMorgan Chase’s 2016 Annual Report.
The carrying value of HELOCs outstanding was $31 billion at September 30, 2017. Of such amounts, $14 billion have recast from interest-only to fully amortizing payments or have been modified. Of the remaining $17 billion, approximately:
$12 billion are scheduled to recast from interest-only to fully amortizing payments in future periods, and
$5 billion are interest-only balloon HELOCs, which primarily mature after 2030.

The following chart illustrates the payment recast composition of the approximately $17 billion of HELOCs scheduled to recast in the future, based upon their current contractual terms.
HELOCs scheduled to recast
(at September 30, 2017)
corpq32017_chart-41522.jpgThe Firm has considered this payment recast risk in its allowance for loan losses based upon the estimated amount of payment shock (i.e., the excess of the fully-amortizing payment over the interest-only payment in effect prior to recast) resulting from the increase in the monthly payment expected to occur at the payment recast date, along with the corresponding estimated probability of default (“PD”) and loss severity assumptions. As part of its allowance estimate, the Firm also expects, based on observed activity in recent years, that approximately 25% of the carrying value of HELOCs scheduled to recast will voluntarily pre-pay prior to or after the recast. The HELOCs that have previously recast to fully amortizing payments generally have higher delinquency rates than the HELOCs within the revolving period, primarily as a result of the payment shock at the time of recast. Certain other factors, such as future developments in both unemployment rates and home prices, could also have a significant impact on the performance of these loans.

The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are exhibiting a material deterioration in their credit risk profile. The Firm will continue to evaluate both the near-term and longer-term recast risks inherent in its HELOC portfolio to ensure that changes in the Firm’s estimate of incurred losses are appropriately considered in the allowance for loan losses and that the Firm’s account management practices are appropriate given the portfolio’s risk profile.
Junior lien loans where the borrower has a senior lien loan that is either delinquent or has been modified are considered high-risk seconds. Such loans are considered to pose a higher risk of default than junior lien loans for which the senior lien is neither delinquent nor modified. At September 30, 2017, the Firm estimated that the carrying value of its home equity portfolio contained approximately $0.8 billion of current junior lien loans that were considered high risk seconds, compared with $1.1 billion at December 31, 2016. The Firm estimates the balance of its total exposure to high-risk seconds on a quarterly basis using internal data and loan level credit bureau data (which typically provides the delinquency status of the senior lien). The Firm considers the increased PD associated with these high-risk seconds in estimating the allowance for loan losses and classifies those loans that are subordinated to a first lien loan that is more than 90 days delinquent as nonaccrual loans. The estimated balance of these high-risk seconds may vary from quarter to quarter for reasons such as the movement of related senior liens into and out of the 30+ day delinquency bucket. The Firm continues to monitor the risks associated with these loans. For further information, see Note 11.
Residential mortgage:The residential mortgage portfolio predominantly consists of high-quality prime mortgage loans, with a small component (approximatelyapproximately 1%) of the residential mortgage portfolio consisting of subprime mortgage loans. These subprime mortgage loans continue to run-offrun off and are performing in line with expectations. The residential mortgage portfolio, including loans held-for-sale, increased from December 31, 2016 due to2017 as the amount of retained originations of primarily high-quality fixed rate prime mortgage loans partially offset by paydowns and the charge-off or liquidation of delinquent loans. Both early-stage and late-stageexceeded paydowns. Residential mortgage 30+ day delinquencies showed improvementdecreased from December 31, 2016.2017. Nonaccrual loans decreased from December 31, 2016 primarily as a result of loss mitigation activities.2017 due to lower delinquencies. Net charge-offsrecoveries for the three and nine months ended September 30, 2017 remain low,2018 improved when compared with the same period in the prior year reflecting loan sales as well as continued improvement in home prices and lower delinquencies.
At September 30, 2017,2018, and December 31, 2016, the Firm’s residential mortgage portfolio, including loans held-for-sale, included $8.4 billion and $9.5 billion, respectively, of mortgage loans insured and/or guaranteed by U.S. government agencies, of which $5.9 billion and $7.0 billion, respectively, were 30 days or more past due (of these past due loans, $4.0 billion and $5.0 billion, respectively, were
90 days or more past due). The Firm monitors its exposure to certain potential unrecoverable claim payments related to government-insured loans and considers this exposure in estimating the allowance for loan losses.
At September 30, 2017, and December 31, 2016, the Firm’s residential mortgage portfolio included $19.8$21.3 billion and $19.1$20.2 billion, respectively, of interest-only loans. These loans have an interest-only payment period generally followed by an adjustable-rate or fixed-rate fully amortizing payment period to maturity and are typically originated as higher-balance loans to higher-income borrowers. To date, losses on this portfolio generally have been consistent with the broader residential mortgage portfolio and the Firm’s expectations.portfolio. The Firm continues to monitor the risks associated with these loans.
The following table provides a summary of the Firm’s residential mortgage portfolio insured and/or guaranteed by U.S. government agencies, including loans held-for-sale. The Firm monitors its exposure to certain potential unrecoverable claim payments related to government-insured loans and considers this exposure in estimating the allowance for loan losses.
(in millions)September 30, 2018
December 31, 2017
Current$2,741
$2,401
30-89 days past due1,563
1,958
90 or more days past due2,896
4,264
Total government guaranteed loans$7,200
$8,623
Home equity:The home equity portfolio declined from December 31, 2017 primarily reflecting loan paydowns. The amount of 30+ day delinquencies decreased from December 31, 2017. Nonaccrual loans decreased from December 31, 2017 due to lower delinquencies. Net recoveries for the three and nine months ended September 30, 2018 improved when compared with the same period in the prior year, as a result of continued improvement in home prices and lower delinquencies.
At September 30, 2018, approximately 90% of the Firm’s home equity portfolio consisted of home equity lines of credit (“HELOCs”) and the remainder consisted of home equity loans (“HELOANs”). The carrying value of HELOCs outstanding was $26 billion at September 30, 2018. This amount included $12 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modified and $4 billion of interest-only balloon HELOCs, which primarily mature after 2030. The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are exhibiting a material deterioration in their credit risk profile.

The Firm monitors risks associated with junior lien loans where the borrower has a senior lien loan that is either delinquent or has been modified. These loans are considered “high-risk seconds” and are classified as nonaccrual as they are considered to pose a higher risk of default than other junior lien loans. The carrying value of high-risk seconds declined from December 31, 2017.
For further information on the Firm’s home equity portfolio, refer to Note 11 of this Form 10-Q and Consumer Credit Portfolio on pages 102-107 of JPMorgan Chase’s 2017 Annual Report.
Auto: AutoThe auto loan portfolio, which predominantly consists of prime-quality loans, were relatively flatdeclined when compared with December 31, 2016,2017, as paydowns and the charge-off or liquidation of delinquent loans were largelypredominantly offset by new originations. Nonaccrual loans decreased compared withfrom December 31, 2016.2017. Net charge-offs for the three and nine months endedSeptember 30, 2017 increased2018 declined when compared with the same period in the prior year primarily as a result of an incremental $49 million recorded in the prior year in accordance with regulatory guidance regarding the timing of loss recognition for certain loans in bankruptcy and loans where assets were acquired in loan satisfaction. The auto portfolio predominantly consists of prime-quality loans.
Consumer & Business Banking: Consumer & Business Banking loans increased when compared with December 31, 2016, as growth in2017 due to higher loan originations, was partiallypredominantly offset by paydowns and the charge-off or liquidationcharge-offs of delinquent loans. Nonaccrual loans decreased compared withfrom December 31, 2016.2017. Net charge-offs for the three and nine months endedSeptember 30, 2017 were relatively flat2018 decreased when compared towith the same period in the prior year.
Student: The Firm transferred the student loan portfolio to held-for-sale in the first quarter of 2017 and sold substantially all of the portfolio in the second quarter of 2017. Net charge-offs for the nine months ended September 30, 2017 increased as a result of the write-down of the portfolio at the time of the transfer.
Purchased credit-impaired loans:PCI loans decreased as thefrom December 31, 2017 due to portfolio continues to run off.off and loan sales. As of September 30, 2017,2018, approximately 11% of the option ARM PCI loans were delinquent and approximately 68% of the portfolio had been modified into fixed-rate, fully amortizing loans. SubstantiallyThe borrowers for substantially all of the remaining loans are making amortizing payments, although such payments are not necessarily fully amortizing. This latter group of loans is subject to the risk of payment shock due to future payment recast. Default rates generally increase on option ARM loans when payment recast results in a payment increase. The expected increase in default rates is considered in the Firm’s quarterly impairment assessment.

The following table provides a summary of lifetime principal loss estimates included in either the nonaccretable difference or the allowance for loan losses.
Summary of PCI loans lifetime principal loss estimates
Lifetime loss
 estimates(a)
 
Life-to-date liquidation
 losses(b)
Lifetime loss
 estimates(a)
 
Life-to-date
liquidation losses(b)
(in billions)Sep 30,
2017
 Dec 31,
2016
 Sep 30,
2017
 Dec 31,
2016
Sep 30,
2018
 Dec 31,
2017
 Sep 30,
2018
 Dec 31,
2017
Home equity$14.2
 $14.4
 $12.9
 $12.8
$14.1
 $14.2
 $13.0
 $12.9
Prime mortgage4.0
 4.0
 3.8
 3.7
4.0
 4.0
 3.8
 3.8
Subprime mortgage3.3
 3.2
 3.1
 3.1
3.3
 3.3
 3.1
 3.1
Option ARMs10.0
 10.0
 9.7
 9.7
10.2
 10.0
 9.9
 9.7
Total$31.5
 $31.6
 $29.5
 $29.3
$31.6
 $31.5
 $29.8
 $29.5
(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 $900$556 million and $1.1 billion$842 million at September 30, 2017,2018, and December 31, 2016,2017, respectively.
(b)Life-to-date liquidation losses representRepresents both realization of loss upon loan resolution and any principal forgiven upon modification.
Geographic composition of residential real estate loans
For information on the geographic composition of the Firm’s residential real estate loans, refer to Note 11.
Current estimated loan-to-value ratio of residential real estate loans
TheAverage current estimated average loan-to-value (“LTV”) ratio for residential real estate loans retained, excluding mortgage loans guaranteed and/or insured by U.S. government agencies and PCI loans, was 57% at September 30, 2017, compared with 58% at December 31, 2016. The current estimated average LTV ratio for residential real estate PCI loans, based on the unpaid principal balances, was 61% at September 30, 2017, compared with 64% at December 31, 2016.
Average LTV ratios have declined consistent with recent improvements in home prices, customer pay downs,paydowns, and charge-offs or liquidations of higher LTV loans. For further information on current estimated LTVs on residential real estate loans, seerefer to Note 11.11.
Geographic composition ofLoan modification activities for residential real estate loans
For information on the geographic composition of the Firm’s residential real estate loans, see Note 11.
Loan modification activities – residential real estate loans
The performance of modified loans generally differs by product type due to differences in both the credit quality and the types of modifications provided. The performance of modifications completedto the residential real estate portfolios as measured through cumulative redefault rates, were not materially different from December 31, 2017. For further information on the Firm’s cumulative redefault rates refer to Consumer Credit Portfolio on pages 102-107 of JPMorgan Chase’s 2017 Annual Report.
Certain loans that were modified under both the U.S. Government’s Home Affordable Modification Program (“HAMP”) and the Firm’s proprietary modification programs (primarily the Firm’s modification program that was modeled after HAMP), as measured through cumulative redefault rates, was not materially different from December 31, 2016. For further information on the Firm’s cumulative redefault rates see Consumer Credit Portfolio on pages 89–95 of JPMorgan Chase’s 2016 Annual Report.
Certain loans that were modified under HAMP and the Firm’s proprietary modification programs have interest rate reset provisions (“step-rate modifications”). Interest rates on these loans generally began to increase commencing in 2014 by 1% per year, and will continue to do so, until the rate reaches a specified cap. The cap on these loans is typically at a prevailing market interest rate for a fixed-rate mortgage loan as of the modification date. At September 30, 2017,2018, the carrying value of non-PCI loans and the unpaid principal balance of PCI loans modified in step-rate modifications, which have not yet met their specified caps, were $3$2 billion and $8$4 billion, respectively. The Firm continues to monitor this risk exposure and the impact of these potential interest rate

increases is considered in the Firm’s allowance for loan losses.
The following table presents information as of September 30, 2017,2018, and December 31, 2016,2017, relating to modified retained residential real estate loans for which concessions have been granted to borrowers experiencing financial difficulty. For further information on modifications for the three and nine months ended September 30, 2018 and 2017, and 2016, seerefer to Note 11.11.
Modified residential real estate loans
September 30, 2017 December 31, 2016September 30, 2018 December 31, 2017
(in millions)Retained loans
Non-accrual
retained loans(d)
 Retained loans
Non-accrual
retained loans(d)
Retained loans
Non-accrual
retained loans(d)
 Retained loans
Non-accrual
retained loans(d)
Modified residential real estate loans, excluding
PCI loans(a)(b)
      
Residential mortgage$4,722
$1,536
 $5,620
$1,743
Home equity$2,134
$1,021
 $2,264
$1,116
2,056
993
 2,118
1,032
Residential mortgage5,667
1,656
 6,032
1,755
Total modified residential real estate loans, excluding PCI loans$7,801
$2,677
 $8,296
$2,871
$6,778
$2,529
 $7,738
$2,775
Modified PCI loans(c)
      
Home equity$2,315
NA
 $2,447
NA
$2,135
NA
 $2,277
NA
Prime mortgage4,624
NA
 5,052
NA
3,296
NA
 4,490
NA
Subprime mortgage2,747
NA
 2,951
NA
2,162
NA
 2,678
NA
Option ARMs8,523
NA
 9,295
NA
6,660
NA
 8,276
NA
Total modified PCI loans$18,209
NA
 $19,745
NA
$14,253
NA
 $17,721
NA
(a)Amounts represent the carrying value of modified residential real estate loans.
(b)At September 30, 2017,2018, and December 31, 2016, $3.72017, $4.0 billion and $3.4$3.8 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. For additional information about sales of loans in securitization transactions with Ginnie Mae, refer to Note 13.
of loans in securitization transactions with Ginnie Mae, see Note 13.
(c)Amounts represent the unpaid principal balance of modified PCI loans.
(d)At September 30, 2017,2018, and December 31, 2016,2017, nonaccrual loans included $2.2$2.0 billion and $2.3$2.2 billion, respectively, of troubled debt restructurings (“TDRs”) for which the borrowers were less than 90 days past due. For additional information about loans modified in a TDR that are on nonaccrual status, seerefer to Note 11.

Nonperforming assets
The following table presents information as of September 30, 2017,2018, and December 31, 2016,2017, about consumer, excluding credit card, nonperforming assets.
Nonperforming assets(a)
      
(in millions)September 30,
2017
 December 31,
2016
September 30,
2018
 December 31,
2017
Nonaccrual loans(b)
      
Residential real estate(c)
$3,696
 $4,154
$3,262
 $3,785
Other consumer(c)
465
 666
374
 424
Total nonaccrual loans4,161
 4,820
3,636
 4,209
Assets acquired in loan satisfactions      
Real estate owned229
 292
205
 225
Other33
 57
32
 40
Total assets acquired in loan satisfactions262
 349
237
 265
Total nonperforming assets$4,423
 $5,169
$3,873
 $4,474
(a)At September 30, 2017,2018, and December 31, 2016,2017, nonperforming assets excluded: (1)excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $4.0$2.9 billion and $5.0$4.3 billion, respectively, that are 90 or more days past due; (2) student loans insured by U.S. government agencies under the FFELP of zero and $263 million, respectively, that are 90 or more days past due; and (3) REO insured by U.S. government agencies of $99$78 million and $142$95 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 they are alleach of the pools is performing.
(c)Certain loan portfolios have been reclassified. The prior period amounts have been revised to conform with the current period presentation.
Nonaccrual loans in the residential real estate portfolio decreased to $3.7 billion at September 30, 20172018 decreased to $3.3 billion from $4.2$3.8 billion at December 31, 2016,2017, of which 26%25% and 29%, respectively,26% were greater than 150 days past due.due, respectively. In the aggregate, the unpaid principal balance of residential real estate loans greater than 150 days past due was charged down by approximately 42%33% and 43%, respectively,40% to the estimated net realizable value of the collateral at September 30, 2017,2018, and December 31, 2016.2017, respectively.
Active and suspended foreclosure: For information on loans that were in the process of active or suspended foreclosure, see Note 11.
Nonaccrual loans: The following table presents changes in consumer, excluding credit card, nonaccrual loans for the nine months ended September 30, 20172018 and 2016.2017.
Nonaccrual loan activity    
Nine months ended September 30, (in millions) 2017
2016
 2018
2017
Beginning balance $4,820
$5,413
 $4,209
$4,820
Additions 2,553
2,804
 2,174
2,553
Reductions:  

  
Principal payments and other(a)
 1,245
1,078
 1,119
1,245
Charge-offs 561
572
 354
561
Returned to performing status 1,121
1,215
 1,057
1,121
Foreclosures and other liquidations 285
391
 217
285
Total reductions 3,212
3,256
 2,747
3,212
Net changes (659)(452) (573)(659)
Ending balance $4,161
$4,961
 $3,636
$4,161
(a)Other reductions includes loan sales.
Active and suspended foreclosure: For information on loans that were in the process of active or suspended foreclosure, refer to Note 11.


Credit card
Total credit card loans decreased from December 31, 20162017 due to seasonality. The September 30, 20172018 30+ day delinquency rate increasedseasonally decreased to 1.76%1.75% from 1.61%1.80% at December 31, 2016, but remains near record lows.2017, and the September 30, 2018 90+ day delinquency rate decreased to 0.85% from 0.92% at December 31, 2017, in line with expectations. Net charge-offs increased for the three and nine months endedSeptember 30, 20172018 when compared with the same periods in the prior year, as expected, primarily due to the seasoning of newermore recent vintages in line with expectations. The credit card portfolio continues to reflect a largely well-seasoned portfolio that has good U.S. geographic diversification. The higher mix of near-prime accounts in recent credit card originations have generated higher loss rates, thanas anticipated given underwriting standards at the more seasoned portiontime of the portfolio; however, they are in lineorigination.
Consistent with the Firm’s policy, all credit parameterscard loans typically remain on accrual status until charged off. However, the Firm establishes an allowance, which is offset against loans and once seasoned, these accounts have net revenue ratescharged to interest income, for the estimated uncollectible portion of accrued and returns on equity that are higher than the portfolio average. billed interest and fee income.
Geographic and FICO composition of credit card loans
For information on the geographic and FICO composition of the Firm’s credit card loans, seerefer to Note 11.11.
Modifications of credit card loans
At both September 30, 20172018 and December 31, 2016,2017, the Firm had $1.3 billion and $1.2 billion, respectively, of credit card loans outstanding that have been modified in TDRs. These balances included both credit card loans with modified payment terms and credit card loans that reverted back to their pre-modification payment terms because the cardholder did not comply with the modified payment terms.
Consistent with the Firm’s policy, all credit card loans typically remain on accrual status until charged-off. However, the Firm establishes an allowance, which is offset against loans and charged to interest income, for the estimated uncollectible portion of accrued and billed interest and fee income.
For additional information about loan modification programs to borrowers, seerefer to Note 11.11.


WHOLESALE CREDIT PORTFOLIO
The Firm’sIn its wholesale businesses, arethe Firm is exposed to credit risk primarily through its underwriting, lending, market-making, and hedging activities with and for clients and counterparties, as well as through various operating services such(such as cash management and clearing activities.activities), securities financing activities and cash placed with banks. A portion of the loans originated or acquired by the Firm’s wholesale businesses is generally retained on the balance sheet. The Firm distributes a significant percentage of the loans that it originates into the market as part of its syndicated loan business and to manage portfolio concentrations and credit risk.
The credit quality of the wholesale credit portfolio continued to be generallywas stable for the nine months ended September 30, 2017,2018, characterized by low levels of criticized exposure, nonaccrual loans and charge-offs. SeeRefer to the industry discussion on pages 58–6064–66 for further information. TheRetained loans increased across all wholesale lines of business, predominantly driven by CIB, including loans to financial institution and commercial and industrial clients, and in AWM due to an increase in retained loans was driven by new originations in CB and higher loans to Private BankingWealth Management clients in AWM, which was partially offset by paydowns in CIB. Discipline in underwriting across all areas of lending continues to remain a key point of focus.globally. The wholesale portfolio is actively managed, in part by conducting ongoing, in-depth reviews of client credit quality and transaction structure inclusive of collateral where applicable, as well as reviewsand of industry, product and client concentrations.
 
In the following tables, the Firm’s wholesale credit portfolio includes exposure held in CIB, CB, AWM and Corporate, and excludes all exposure managed by CCB.
Wholesale credit portfolio
Credit exposure 
Nonperforming(c)
Credit exposure 
Nonperforming(c)
(in millions)Sep 30,
2017
Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Loans retained$398,569
$383,790
 $1,470
$1,954
$423,837
$402,898
 $994
$1,734
Loans held-for-sale2,532
2,285
 2
109
3,551
3,099
 14
—
Loans at fair value1,746
2,230
 —
—
2,987
2,508
 —
—
Loans402,847
388,305
 1,472
2,063
430,375
408,505
 1,008
1,734
Derivative receivables58,260
64,078
 164
223
60,062
56,523
 90
130
Receivables from customers and other(a)
19,218
17,440
 —
—
25,982
26,139
 —
—
Total wholesale credit-related assets480,325
469,823
 1,636
2,286
516,419
491,167
 1,098
1,864
Lending-related commitments372,380
368,014
 764
506
397,316
370,098
 252
731
Total wholesale credit exposure$852,705
$837,837
 $2,400
$2,792
$913,735
$861,265
 $1,350
$2,595
Credit derivatives used in credit portfolio management activities(b)
$(20,181)$(22,114) $—
$—
$(14,206)$(17,609) $—
$—
Liquid securities and other cash collateral held against derivatives(21,353)(22,705) NA
NA
(16,943)(16,108) NA
NA
(a)Receivables from customers and other include $19.1$26.0 billion and $17.3 billion of held-for-investment margin loans at both September 30, 2017,2018, and December 31, 2016, respectively,2017, to prime brokerage customers;customers 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. For additional information, seerefer to Credit derivatives on page 63,68, and Note 4.
(c)Excludes assets acquired in loan satisfactions.

The following tables present the maturity and ratings profiles of the wholesale credit portfolio as of September 30, 2017,2018, and December 31, 2016.2017. The ratings scale is based on the Firm’s internal risk ratings, which generally correspond to the ratings assigned by S&P and Moody’s. For additional information on wholesale loan portfolio risk ratings, seerefer to Note 1412 of JPMorgan Chase’s 20162017 Annual Report.
Wholesale credit exposure – maturity and ratings profileWholesale credit exposure – maturity and ratings profile     Wholesale credit exposure – maturity and ratings profile     
Maturity profile(d)
 Ratings profile
Maturity profile(d)
 Ratings profile
Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IGDue in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
September 30, 2017
(in millions, except ratios)
 AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below
September 30, 2018
(in millions, except ratios)
Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal AAA/Aaa to BBB-/Baa3 BB+/Ba1 & belowTotalTotal % of IG
Loans retained$118,523
$176,895
$103,151
$398,569
 $307,194
 $91,375
$398,569
77% $324,343
 $99,494
Derivative receivables 58,260
    58,260
  60,062
    60,062
 
Less: Liquid securities and other cash collateral held against derivatives (21,353)    (21,353)  (16,943)    (16,943) 
Total derivative receivables, net of all collateral19,998
8,126
8,783
36,907
 29,893
 7,014
36,907
81
11,650
12,637
18,832
43,119
 34,602
 8,517
43,119
80
Lending-related commitments93,737
265,830
12,813
372,380
 277,432
 94,948
372,380
75
92,332
291,650
13,334
397,316
 297,286
 100,030
397,316
75
Subtotal232,258
450,851
124,747
807,856
 614,519
 193,337
807,856
76
240,814
488,453
135,005
864,272
 656,231
 208,041
864,272
76
Loans held-for-sale and loans at fair value(a)
 4,278
    4,278
  6,538
    6,538
 
Receivables from customers and other 19,218
    19,218
  25,982
    25,982
 
Total exposure – net of liquid securities and other cash collateral held against derivatives $831,352
    $831,352
  $896,792
    $896,792
 
Credit derivatives used in credit portfolio management activities(b)(c)
$(1,301)$(11,306)$(7,574)$(20,181) $(17,226) $(2,955)$(20,181)85%$(1,586)$(7,053)$(5,567)$(14,206) $(12,537) $(1,669)$(14,206)88%
Maturity profile(d)
 Ratings profile
Maturity profile(d)
 Ratings profile
Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IGDue in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
December 31, 2016
(in millions, except ratios)		 AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below
December 31, 2017
(in millions, except ratios)		Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal AAA/Aaa to BBB-/Baa3 BB+/Ba1 & belowTotalTotal % of IG
Loans retained$117,238
$167,235
$99,317
$383,790
 $289,923
 $93,867
$383,790
76% $311,681
 $91,217
Derivative receivables 64,078
    64,078
  56,523
    56,523
 
Less: Liquid securities and other cash collateral held against derivatives (22,705)    (22,705)  (16,108)    (16,108) 
Total derivative receivables, net of all collateral14,019
8,510
18,844
41,373
 33,081
 8,292
41,373
80
9,882
10,463
20,070
40,415
 32,373
 8,042
40,415
80
Lending-related commitments88,399
271,825
7,790
368,014
 269,820
 98,194
368,014
73
80,273
275,317
14,508
370,098
 274,127
 95,971
370,098
74
Subtotal219,656
447,570
125,951
793,177
 592,824
 200,353
793,177
75
211,798
462,813
138,800
813,411
 618,181
 195,230
813,411
76
Loans held-for-sale and loans at fair value(a)
 4,515
    4,515
  5,607
    5,607
 
Receivables from customers and other 17,440
    17,440
  26,139
    26,139
 
Total exposure – net of liquid securities and other cash collateral held against derivatives $815,132
    $815,132
  $845,157
    $845,157
 
Credit derivatives used in credit portfolio management activities(b)(c)
$(1,354)$(16,537)$(4,223)$(22,114) $(18,710) $(3,404)$(22,114)85%$(1,807)$(11,011)$(4,791)$(17,609) $(14,984) $(2,625)$(17,609)85%
(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 including credit derivatives 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 the remaining contractual maturity. Derivative contracts that are in a receivable position at September 30, 2017,2018, may become payable prior to maturity based on their cash flow profile or changes in market conditions.



Wholesale credit exposure – industry exposures
The Firm focuses on the management and diversification of its industry exposures, and pays particular attention to industries with actual or potential credit concerns. Exposures deemed criticized align with the U.S. banking regulators’ definition of criticized exposures, which consist of the special mention, substandard and doubtful
 
categories. The total criticized component of the portfolio, excluding loans held-for-sale and loans at fair value, was $16.7$11.2 billion at September 30, 2017,2018, compared with $19.8$15.6 billion at December 31, 2016,2017. The decrease was largely driven by a 36% decrease inselect names within Oil & Gas.Gas, including a loan sale.
Effective in the first quarter of 2017, the Firm revised its methodology for the assignment of industry classifications, to better monitor and manage concentrations. This largely resulted in the re-assignment of holding companies from All other to the industry of risk category based on the primary business activity of the holding company’s underlying entities. In the tables and industry discussions below, the prior period amounts have been revised to conform with the current period presentation.
Below are summaries of the Firm’s exposures as of September 30, 2017,2018, and December 31, 2016.2017. The industry of risk category is generally based on the client or counterparty’s primary business activity. For additional information on industry concentrations, seerefer to Note 54 of JPMorgan Chase’s 20162017 Annual Report.
Wholesale credit exposure – industries(a)
Wholesale credit exposure – industries(a)
    
Wholesale credit exposure – industries(a)
    
    Selected metrics     Selected metrics
     30 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables		     30 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables
  Noninvestment-grade  Noninvestment-grade
As of or for the nine months ended
Credit exposure(e)
Investment- grade Noncriticized Criticized performingCriticized nonperforming
Credit exposure(e)
Investment- grade Noncriticized Criticized performingCriticized nonperforming
September 30, 2017
September 30, 2018
(in millions)
Credit exposure(e)
Investment- grade Noncriticized Criticized performingCriticized nonperforming30 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables
Credit exposure(e)
Investment- grade Noncriticized Criticized performingCriticized nonperforming30 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables
Real Estate
Consumer & Retail
Technology, Media &
Telecommunications		74,286
48,676
 23,560
 2,005
45
Industrials63,375
44,835
 17,400
 996
144
57,810
38,374
 18,202
 1,052
182
Technology, Media & Telecommunications58,282
35,466
 20,256
 2,485
75
19
(15)(465)(66)
Healthcare53,952
37,912
 15,223
 788
29
22
(4)—
(134)
Banks & Finance Cos49,557
35,827
 13,253
 471
6
58
6
(1,382)(4,958)52,194
37,491
 14,376
 323
4
27
—
(622)(3,794)
Healthcare48,658
37,034
 10,812
 771
41
12
(1)—
(278)
Oil & Gas38,692
19,092
 13,530
 4,968
1,102
17
55
(908)(24)45,205
24,985
 18,236
 1,641
343
—
33
(349)(5)
Asset Managers35,252
30,034
 5,200
 18
—
12
—
—
(6,456)41,951
36,286
 5,646
 5
14
11
—
—
(5,752)
Utilities29,872
24,549
 4,978
 124
221
—
11
(196)(106)28,944
24,312
 4,321
 158
153
—
38
(199)(74)
State & Municipal Govt(b)
28,274
27,662
 582
 1
29
62
—
(130)(569)26,381
25,772
 609
 —
—
16
(1)(20)(16)
Central Govt18,466
18,074
 343
 49
—
2
—
(10,822)(2,977)18,935
18,778
 104
 53
—
3
—
(8,688)(1,972)
Automotive17,385
9,677
 7,398
 300
10
1
—
(226)—
Chemicals & Plastics16,632
11,069
 5,500
 63
—
1
—
(10)(6)17,353
11,108
 6,227
 18
—
1
—
(25)—
Transportation16,383
10,173
 5,486
 615
109
16
16
(32)(164)16,225
10,058
 5,622
 482
63
45
6
(32)(51)
Automotive16,259
10,636
 5,526
 97
—
2
1
(346)(9)
Metals & Mining13,370
6,409
 6,249
 712
—
2
(13)(362)(56)14,320
7,262
 6,768
 247
43
5
—
(278)(3)
Insurance11,975
9,896
 1,988
 —
91
8
—
(182)(2,350)13,704
10,323
 3,342
 —
39
—
—
(37)(2,513)
Financial Markets Infrastructure9,921
8,762
 1,159
 —
—
—
—
—
(947)5,697
5,555
 142
 —
—
—
—
—
(26)
Securities Firms4,476
3,012
 1,456
 8
—
—
—
(274)(577)4,599
3,129
 1,470
 —
—
—
—
(230)(674)
All other(c)
144,318
131,042
 12,758
 280
238
857
1
(4,623)(1,730)161,470
144,967
 16,124
 213
166
1,111
17
(2,379)(1,881)
Subtotal$829,209
$633,729
 $178,768
 $14,314
$2,398
$1,330
$73
$(20,181)$(21,353)$881,215
$670,864
 $199,120
 $9,895
$1,336
$1,478
$119
$(14,206)$(16,943)
Loans held-for-sale and loans at fair value4,278
      6,538
      
Receivables from customers and other19,218
     25,982
     
Total(d)
$852,705
     $913,735
     

(continued from previous page)(continued from previous page)     (continued from previous page)     







Selected metrics





Selected metrics







30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables





30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables



Noninvestment-grade

Noninvestment-grade
As of or for the year ended
Credit exposure(e)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming
Credit exposure(e)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming
December 31, 2016
December 31, 2017
(in millions)
Credit exposure(e)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables
Credit exposure(e)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables
Real Estate
Consumer & Retail
Technology, Media & Telecommunications59,274
36,510
 20,453
 2,258
53
Industrials55,733
36,710
 17,854
 1,033
136
55,272
37,198

16,770

1,159
145
Technology, Media & Telecommunications63,324
39,998

21,751

1,559
16
9
2
(589)(30)
Healthcare55,997
42,643
 12,731
 585
38
82
(1)—
(207)
Banks & Finance Cos48,393
35,385
 12,560
 438
10
21
(2)(1,336)(7,337)49,037
34,654

13,767

612
4
1
6
(1,216)(3,174)
Healthcare49,445
39,244

9,279

882
40
86
37
(286)(246)
Oil & Gas40,367
18,629

12,274

8,069
1,395
31
233
(1,532)(18)41,317
21,430

14,854

4,046
987
22
71
(747)(1)
Asset Managers33,201
29,194

4,006

1
—
17
—
—
(5,737)32,531
28,029

4,484

4
14
27
—
—
(5,290)
Utilities29,672
24,203

4,959

424
86
8
—
(306)39
29,317
24,486

4,383

227
221
—
11
(160)(56)
State & Municipal Govt(b)
28,263
27,603

624

6
30
107
(1)(130)398
28,633
27,977

656

—
—
12
5
(130)(524)
Central Govt20,408
20,123

276

9
—
4
—
(11,691)(4,183)19,182
18,741

376

65
—
4
—
(10,095)(2,520)
Automotive14,820
9,321
 5,278
 221
—
10
1
(284)—
Chemicals & Plastics15,043
10,405
 4,452
 156
30
3
—
(35)(3)15,945
11,107

4,764

74
—
4
—
—
—
Transportation19,096
12,178

6,421

444
53
9
10
(93)(188)15,797
9,870

5,302

527
98
9
14
(32)(131)
Automotive16,736
9,235

7,299

201
1
7
—
(401)(14)
Metals & Mining13,419
5,523

6,744

1,133
19
—
36
(621)(62)14,171
6,989

6,822

321
39
3
(13)(316)(1)
Insurance13,510
10,918

2,459

—
133
9
—
(275)(2,538)14,089
11,028

2,981

—
80
1
—
(157)(2,195)
Financial Markets Infrastructure8,732
7,980

752

—
—
—
—
—
(390)5,036
4,775

261

—
—
—
—
—
(23)
Securities Firms4,211
1,812

2,399

—
—
—
—
(273)(491)4,113
2,559

1,553

1
—
—
—
(274)(335)
All other(c)
137,238
124,661

11,988

303
286
598
6
(3,634)(1,785)147,900
134,110

13,283

260
247
901
8
(2,817)(1,600)
Subtotal$815,882
$613,400

$182,633

$17,166
$2,683
$1,318
$341
$(22,114)$(22,705)$829,519
$632,565

$181,349

$13,010
$2,595
$1,524
$119
$(17,609)$(16,108)
Loans held-for-sale and loans at fair value4,515

















5,607

















Receivables from customers and other17,440


















26,139


















Total(d)
$837,837
     $861,265
     
(a)The industry rankings presented in the table as of December 31, 2016,2017, are based on the industry rankings of the corresponding exposures at September 30, 2017,2018, not actual rankings of such exposures at December 31, 2016.2017.
(b)In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at September 30, 2017,2018, and December 31, 2016,2017, noted above, the Firm held: $7.5$9.5 billion and $9.1$9.8 billion, respectively, of trading securities; $32.1$38.1 billion and $31.6$32.3 billion, respectively, of AFS securities; and $14.4$4.8 billion and $14.5$14.4 billion, respectively, of held-to-maturity (“HTM”) securities, issued by U.S. state and municipal governments. For further information, seerefer to Note 2 and Note 9.
(c)All other includes: individuals; SPEs;individuals (predominantly Wealth Management clients within AWM), SPEs, and private education and civic organizations;organizations, representing approximately 60%59%, 36%38%, and 4%3%, respectively, at September 30, 2017,2018, and 59%, 37%, and 4%, respectively, at December 31, 2016.2017.
(d)
Excludes cash placed with banks of $450.1$410.5 billion and $380.2$421.0 billion, at September 30, 2017,2018, and December 31, 2016,2017, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.
(e)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.
(f)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.



Presented below is a discussion of certain industries to which the Firm has significant exposures and/or which present actual or potential credit concerns.
Real EstateLCR and HQLA
ExposureThe LCR rule requires the Firm to maintain an amount of unencumbered HQLA that is sufficient to meet its estimated total net cash outflows over a prospective 30 calendar-day period of significant stress. HQLA is the Real Estate industry increased $4.1 billion duringamount of liquid assets that qualify for inclusion in the nineLCR. HQLA primarily consist of unencumbered cash and certain high quality liquid securities as defined in the LCR rule.
Under the LCR rule, the amount of HQLA held by JPMorgan Chase Bank N.A. and Chase Bank USA, N.A that are in excess of each entity’s standalone 100% minimum LCR requirement, and that are not transferable to non-bank affiliates, must be excluded from the Firm’s reported HQLA.The LCR is required to be a minimum of 100%.
On August 22, 2018, the U.S. banking regulators published a final rule permitting investment-grade municipal obligations that meet certain criteria to qualify as HQLA for purposes of the U.S. LCR rule. The final rule went into effect on August 30, 2018, and did not have a material impact on the Firm’s HQLA or LCR for the three months ended September 30, 2017, to $138.4 billion, predominantly driven by multifamily lending within CB. During2018.
The following table summarizes the nineFirm’s average LCR for the three months ended September 30, 2018, June 30, 2018 and September 30, 2017 based on the credit qualityFirm’s current interpretation of the total Real Estate exposure has improved, with the investment-grade percentage increasing from 78% to 82%. For further information on Real Estate loans, see Note 11.finalized LCR framework.
 September 30, 2017 
(in millions, except ratios)Loans and Lending-related Commitments Derivative Receivables Credit exposure % Investment-grade
% Drawn(c)
Multifamily(a)
$83,972
 $31
 $84,003
 87% 91% 
Other54,266
 156
 54,422
 74
 65
 
Total Real Estate Exposure(b)
138,238
 187
 138,425
 82
 81
 
           
 December 31, 2016 
(in millions, except ratios)Loans and Lending-related Commitments 
Derivative
Receivables
 Credit exposure 
% Investment-
grade
% Drawn(c)
Multifamily(a)
$80,280
 $34
 $80,314
 82% 90% 
Other53,801
 172
 53,973
 72
 62
 
Total Real Estate Exposure(b)
134,081
 207
 134,287
 78
 79
 
 Three months ended
Average amount
(in billions)
September 30, 2018June 30, 2018September 30, 2017
HQLA   
Eligible cash(a)
$345
$363
$390
Eligible securities(b)(c)
190
166
179
Total HQLA(d)
$535
$529
$568
Net cash outflows$467
$458
$475
LCR115%115%120%
Net excess HQLA (d)
$68
$71
$93
(a)Multifamily exposure is largely in California.Represents cash on deposit at central banks, primarily Federal Reserve Banks.
(b)Real Estate exposure is predominantly secured; unsecured exposure is largely investment-grade.Predominantly U.S. Treasuries, U.S. Agency MBS, and sovereign bonds net of applicable haircuts under the LCR rules.
(c)Represents drawn exposure as a percentage of credit exposure.
Oil & Gas and Natural Gas Pipelines
Exposure to the Oil & Gas and Natural Gas Pipelines portfolios decreased by $0.9 billion during the nine months ended September 30, 2017 to $43.8 billion. During the nine months ended September 30, 2017, the credit quality of this exposure has improved, with the investment-grade percentage increasing from 48% to 50% and criticized exposure decreasing $3.4 billion.
 September 30, 2017 
(in millions, except ratios)Loans and Lending-related Commitments Derivative Receivables Credit exposure % Investment-grade
% Drawn(d)
Exploration & Production (“E&P”) and Oilfield Services$20,129
 $494
 $20,623
 32% 33% 
Other Oil & Gas(a)
17,590
 479
 18,069
 69
 30
 
Total Oil & Gas37,719
 973
 38,692
 49
 31
 
Natural Gas Pipelines(b)
5,090
 61
 5,151
 54
 12
 
Total Oil & Gas and Natural Gas Pipelines(c)
$42,809
 $1,034
 $43,843
 50
 29
 
           
 December 31, 2016 
(in millions, except ratios)Loans and Lending-related Commitments 
Derivative
Receivables
 Credit exposure 
% Investment-
grade
% Drawn(d)
E&P and Oilfield Services$20,971
 $1,256
 $22,227
 27% 35% 
Other Oil & Gas(a)
17,518
 622
 18,140
 70
 31
 
Total Oil & Gas38,489
 1,878
 40,367
 46
 33
 
Natural Gas Pipelines(b)
4,253
 106
 4,359
 66
 30
 
Total Oil & Gas and Natural Gas Pipelines(c)
$42,742
 $1,984
 $44,726
 48
 33
 
(a)Other Oil & Gas includes Integrated Oil & Gas companies, Midstream/Oil Pipeline companies and refineries.
(b)Natural Gas Pipelines isHQLA eligible securities may be reported withinin securities borrowed or purchased under resale agreements, trading assets, or investment securities on the Utilities industry.
(c)Secured lending is $14.6 billion and $14.3 billion, at September 30, 2017 and December 31, 2016, respectively, approximately half of which is reserve-based lending to the Exploration & Production sub-sector; unsecured exposure is largely investment-grade.Firm’s Consolidated balance sheets.
(d)Represents drawn exposure as a percentage of credit exposure.Excludes average excess HQLA at JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. that are not transferable to non-bank affiliates.
LoansThe Firm’s average LCR was 115% for the three months ended September 30, 2018 and June 30, 2018.
InThe Firm’s average LCR decreased during the normal course of its wholesale business,three months ended September 30, 2018, compared with the Firm provides loansprior year period due to a varietyreduction in cash primarily driven by long-term debt maturities and CIB client-driven markets activities.
The Firm’s average LCR may fluctuate from period to period, due to changes in its HQLA and estimated net cash outflows under the LCR as a result of customers, ranging from large corporate and institutional clientsongoing business activity. The Firm’s HQLA are expected to high-net-worth
individuals. For further discussion on loans, including information on credit quality indicators and salesbe available to meet its liquidity needs in a time of loans, see Note 11.stress.

The following table presents the changeOther liquidity sources
As of September 30, 2018, in addition to assets reported in the nonaccrual loan portfolio forFirm’s HQLA under the nine months ended LCR rule, the Firm had approximately $225 billion of unencumbered marketable securities, such as equity securities and fixed income debt securities, available to raise liquidity, if required. This includes HQLA-eligible securities included as part of the excess liquidity at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates.
As of September 30, 20172018, the Firm also had approximately $298.9 billion of available borrowing capacity at various FHLBs, discount windows at Federal Reserve Banks and 2016.various other central banks as a result of collateral pledged by the Firm to such banks. This borrowing capacity excludes the benefit of securities reported in the Firm’s HQLA or other unencumbered securities that are currently pledged at Federal Reserve Bank discount windows. Although available, the Firm does not view the borrowing capacity at the Federal Reserve Bank discount windows and the various other central banks as a primary source of liquidity.
Wholesale nonaccrual loan activity(a)
Nine months ended September 30,
(in millions)

 2017
2016
Beginning balance $2,063
$1,016
Additions 993
2,520
Reductions:   
Paydowns and other 997
701
Gross charge-offs 155
287
Returned to performing status 184
201
Sales 248
170
Total reductions 1,584
1,359
Net changes (591)1,161
Ending balance $1,472
$2,177
Funding
(a)Loans are placed on nonaccrual status when management believes full payment of principal or interest is not expected, regardless of delinquency status, or when principal or interest have been in default for a period of 90 days or more, unless the loan is both well-secured and in the process of collection.
Sources of funds
Management believes that the Firm’s unsecured and secured funding capacity is sufficient to meet its on- and off-balance sheet obligations.
 
The followingFirm funds its global balance sheet through diverse sources of funding including a stable deposit franchise as well as secured and unsecured funding in the capital markets.The Firm’s loan portfoliois funded with a portion of the Firm’s deposits, through securitizations and, with respect to a portion of the Firm’s real estate-related loans, with secured borrowings from the FHLBs. Deposits in excess of the amount utilized to fund loans are primarily invested in the Firm’s investment securities portfolio or deployed in cash or other short-term liquid investments based on their interest rate and liquidity risk characteristics.Securities borrowed or purchased under resale agreements and trading assets-debt and equity instruments are primarily funded by the Firm’s securities loaned or sold under agreements to repurchase, trading liabilities-debt and equity instruments, and a portion of the Firm’s long-term debt and stockholders’ equity. In addition to funding securities borrowed or purchased under resale agreements and trading assets-debt and Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance. Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance.equity instruments, proceeds from the Firm’s debt and equity issuances are used to fund certain loans and other financial and non-financial assets, or may be invested in the Firm’s investment securities portfolio. Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance.


Deposits
The table presents net charge-offs/recoveries, which are definedbelow summarizes, by line of business, the deposit balances as gross charge-offs less recoveries,of September 30, 2018, and December 31, 2017, and the average deposit balances for the three and nine months ended September 30, 2018 and 2017, respectively.
 September 30, 2018
December 31, 2017
 Three months ended September 30, Nine months ended
September 30,
Deposits Average Average
(in millions) 2018
2017
 2018
2017
Consumer & Community Banking$677,260
$659,885
 $674,211
$645,732
 $669,244
$636,257
Corporate & Investment Bank482,490
455,883
 476,995
461,961
 472,879
444,064
Commercial Banking168,112
181,512
 168,102
176,095
 171,403
175,265
Asset & Wealth Management130,497
146,407
 133,021
144,496
 138,885
151,311
Corporate403
295
 533
2,739
 736
4,152
Total Firm$1,458,762
$1,443,982
 $1,452,862
$1,431,023
 $1,453,147
$1,411,049
A key strength of the Firm is its diversified deposit franchise, through each of its lines of business, whichprovides a stable source of funding and 2016. limits reliance on the wholesale funding markets. A significant portion of the Firm’s deposits are consumer and wholesale operating deposits, which are both considered to be stable sources of liquidity. Wholesale operating deposits are considered to be stable sources of liquidity because they are generated from customers that maintain operating service relationships with the Firm.
The amounts in the table below do not include gains or losses from salesshows the loan and deposit balances, the loans-to-deposits ratios, and deposits as a percentage of nonaccrual loans.total liabilities, as of September 30, 2018 and December 31, 2017.
Wholesale net charge-offs/(recoveries)
(in millions, except ratios)Three months ended
September 30,		 Nine months ended
September 30,
2017
2016
 2017
2016
Loans – reported     
Average loans retained$395,420
$374,593
 $390,062
$368,225
Gross
charge-offs
55
63
 154
291
Gross recoveries(12)(16) (81)(30)
Net
charge-offs/(recoveries)
43
47
 73
261
Net charge-off/(recovery) rate0.04%0.05% 0.03%0.09%

Lending-related commitments
(in billions except ratios)September 30, 2018
 December 31, 2017
Deposits$1,458.8
 $1,444.0
Deposits as a % of total liabilities62% 63%
Loans$954.3
 $930.7
Loans-to-deposits ratio65% 64%
The Firm uses lending-related financial instruments, such as commitments (including revolving credit facilities)believes that average deposit balances are generally more representative of deposit trends than period-end deposit balances.
Average deposits increased for the three months ended September 30, 2018 in CCB and guarantees, to meetCIB, partially offset by declines in AWM, CB and Corporate.
The increase in CCB reflects the financing needscontinuation of its customers. growth from new customers, partially offset by balance migration into investment-related products, and in CIB reflects growth in operating deposits in Treasury Services driven by growth in client activity. 
The contractual amounts of these financial instruments represent the maximum possible credit risk should the counterparties draw down on these commitments or the Firm fulfills its obligations under these guarantees, and the counterparties subsequently fail to perform according to the terms of these contracts. Most of these commitments and guarantees are refinanced, extended, cancelled, or expire without being drawn upon or a default occurring. Indecline in AWM was driven by balance migration predominantly into the Firm’s view,investment-related products, and in CB was primarily driven by the total contractual amountmigration of thesenon-operating deposits into higher-yielding investment products . The decline in Corporate was predominantly due to maturities of wholesale lending-related commitments is not representative ofnon-operating deposits, consistent with the Firm’s expected future credit exposure or funding requirements. efforts to reduce such deposits.
Average deposits increased for the nine months ended September 30, 2018 in CCB and CIB, partially offset by declines in AWM, CB and Corporate.
The increase in CCB reflects the continuation of growth from new customers, partially offset by balance migration into investment-related products, and in CIB reflects growth in operating deposits in Treasury Services and Securities Services driven by growth in client activity. 
The decline in AWM was driven by balance migration predominantly into the Firm’s investment-related products, and in CB was primarily driven by the migration of non-operating deposits into higher-yielding investment products. The decline in Corporate was predominantly due to maturities of wholesale non-operating deposits, consistent with the Firm’s efforts to reduce such deposits.
For further information on wholesale lending-related commitments, see Note 19.
Derivative contracts
Indeposit and liability balance trends, refer to the normal course of business, the Firm uses derivative instruments predominantly for market-making activities. Derivatives enable clients to manage exposures to fluctuations in interest rates, currencies and other markets. The Firm also uses derivative instruments to manage its own credit and other market risk exposure. For further discussion of derivative contracts, see Note 4.the Firm’s Business Segment Results and the Consolidated Balance Sheets Analysis on pages 19-41 and pages 12–14, respectively.

The following table summarizes the net derivative receivablesshort-term and long-term funding, excluding deposits, as of September 30, 2018, and December 31, 2017, and average balances for the periods presented.three and nine months endedSeptember 30, 2018 and 2017, respectively. For additional information, refer to the Consolidated Balance Sheets Analysis on pages 12–14 and Note 10.
Derivative receivables  
(in millions)Derivative receivables
September 30,
2017
December 31,
2016
Interest rate$25,701
$28,302
Credit derivatives915
1,294
Foreign exchange17,077
23,271
Equity8,831
4,939
Commodity5,736
6,272
Total, net of cash collateral58,260
64,078
Liquid securities and other cash collateral held against derivative receivables(a)
(21,353)(22,705)
Total, net of collateral$36,907
$41,373
 September 30, 2018December 31, 2017 Three months ended September 30, Nine months ended September 30,
Sources of funds (excluding deposits)Average Average
(in millions)2018
2017
 2018
2017
Commercial paper$29,313
$24,186
 $28,702
$23,022
 $27,289
$18,653
Other borrowed funds(a)
10,857
10,727
 11,172
10,469
 11,716
10,484
Total short-term unsecured funding(a)
$40,170
$34,913
 $39,874
$33,491
 $39,005
$29,137
Securities sold under agreements to repurchase(a)(b)
$168,450
$147,713
 $174,436
$169,638
 $178,929
$174,777
Securities loaned(a)(b)
12,357
9,211
 9,131
10,946
 10,900
13,370
Other borrowed funds(a)
24,465
16,889
 21,169
19,467
 21,336
15,136
Obligations of Firm-administered multi-seller conduits(c)
$4,304
$3,045
 $3,102
$2,947
 $3,070
$3,351
Total short-term secured funding(a)
$209,576
$176,858
 $207,838
$202,998
 $214,235
$206,634
         
Senior notes$155,099
$155,852
 $154,820
$159,270
 $152,046
$154,148
Trust preferred securities(d)
—
690
 517
2,336
 629
2,340
Subordinated debt(d)
16,426
16,553
 16,079
18,399
 16,106
20,029
Structured notes(e)
52,187
45,727
 50,905
44,157
 48,874
42,025
Total long-term unsecured funding$223,712
$218,822
 $222,321
$224,162
 $217,655
$218,542
         
Credit card securitization(c)
$14,142
$21,278
 $15,052
$24,709
 $16,620
$27,041
Other securitizations(c)(f)
—
—
 —
—
 —
837
Federal Home Loan Bank (“FHLB”) advances41,457
60,617
 48,645
67,288
 54,378
72,504
Other long-term secured funding(g)
4,955
4,641
 5,013
3,176
 4,832
3,202
Total long-term secured funding$60,554
$86,536
 $68,710
$95,173
 $75,830
$103,584
         
Preferred stock(h)
$27,764
$26,068
 $26,252
$26,068
 $26,130
$26,068
Common stockholders’ equity(h)
$231,192
$229,625
 $230,439
$231,861
 $228,995
$229,937
(a)The prior period amounts have been revised to conform with the current period presentation.
(b)Primarily consists of short-term securities loaned or sold under agreements to repurchase.
(c)Included in beneficial interests issued by consolidated variable interest entities on the Firm’s Consolidated balance sheets.
(d)Subordinated debt includes $1.6 billion and $664 million of junior subordinated debentures distributed pro rata to the holders of trust preferred securities which were cancelled on December 18, 2017 and September 10, 2018, respectively. For further information refer to Note 19 of JPMorgan Chase’s 2017 Annual Report.
(e)Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
(f)Other securitizations include securitizations of student loans. The Firm deconsolidated the student loan securitization entities in the second quarter of 2017 as it no longer had a controlling financial interest in these entities as a result of the sale of the student loan portfolio. The Firm’s wholesale businesses also securitize loans for client-driven transactions, which are not considered to be a source of funding for the Firm and are not included in the table.
(g)Includes long-term structured notes which are secured.
(h)For additional information on preferred stock and common stockholders’ equity refer to Capital Risk Management on pages 44-48, Consolidated statements of changes in stockholders’ equity, and Note 20 and Note 21 of JPMorgan Chase’s 2017 Annual Report.
Short-term funding
The Firm’s sources of short-term secured funding primarily consist of securities loaned or sold under agreements to repurchase. These instruments are secured predominantly by high-quality securities collateral, including government-issued debt and agency MBS, and constitute a significant portion of the federal funds purchased and securities loaned or sold under repurchase agreements on the Consolidated balance sheets. The increase at September 30, 2018, from December 31, 2017, reflected higher secured financing of trading assets-debt and equity instruments and client-driven market-making activities in CIB.
The balances associated with securities loaned or sold under agreements to repurchase fluctuate over time due to customers’ investment and financing activities; the Firm’s demand for financing; the ongoing management of the mix of the Firm’s liabilities, including its secured and unsecured financing (for both the investment securities and market-making portfolios); and other market and portfolio factors.
The Firm’s sources of short-term unsecured funding primarily consist of issuance of wholesale commercial paper. The increase in commercial paper was due to higher net issuance.

Long-term funding and issuance
Long-term funding provides additional sources of stable funding and liquidity for the Firm. The Firm’s long-term funding plan is driven primarily by expected client activity, liquidity considerations, and regulatory requirements, including TLAC. Long-term funding objectives include maintaining diversification, maximizing market access and optimizing funding costs. The Firm evaluates various funding markets, tenors and currencies in creating its optimal long-term funding plan.
The significant majority of the Firm’s long-term unsecured funding is issued by the Parent Company to provide maximum flexibility in support of both bank and nonbank subsidiary funding needs.The Parent Company advances substantially all net funding proceeds to its subsidiary, the Intermediate Holding Company (“IHC”). The IHC does not issue debt to external counterparties. The presentation in the following table has been revised to provide the notional value of the long-term unsecured issuance and maturities or redemptions by the Parent Company and subsidiaries for the three and nine months ended September 30, 2018 and 2017. For additional information on the IHC and long-term debt, refer to Liquidity Risk Management and Note 19 of JPMorgan Chase’s 2017 Annual Report.
Long-term unsecured funding          
 Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30,
 2018
2017
 2018
2017
 2018
2017
 2018
2017
(Notional in millions)
Parent Company(b)
 
Subsidiaries(b)
Issuance           
Senior notes issued in the U.S. market$6,000
$4,000
 $17,000
$18,750
 $1,250
$—
 $8,761
$—
Senior notes issued in non-U.S. markets—
—
 1,175
2,220
 —
—
 —
—
Total senior notes6,000
4,000
 18,175
20,970
 1,250
—
 8,761
—
Subordinated debt—
—
 —
—
 —
—
 —
—
Structured notes(a)
387
337
 2,047
2,046
 5,934
6,250
 20,159
21,135
Total long-term unsecured funding – issuance$6,387
$4,337
 $20,222
$23,016
 $7,184
$6,250
 $28,920
$21,135
            
Maturities/redemptions           
Senior notes$646
$4,000
 $18,633
$16,826
 $1,503
$152
 $4,466
$1,368
Subordinated debt15
395
 15
3,401
 —
500
 —
500
Structured notes582
1,505
 2,465
4,785
 3,474
4,152
 12,104
13,245
Total long-term unsecured funding – maturities/redemptions$1,243
$5,900
 $21,113
$25,012
 $4,977
$4,804
 $16,570
$15,113
(a)Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
(b)The prior period amounts have been revised to conform with the current period presentation.
The Firmraises secured long-term funding through securitization of consumer credit card loans and advances from the FHLBs. The following table summarizes the securitization issuance and FHLB advances and their respective maturities or redemptions for the three and nine months ended September 30, 2018 and 2017, respectively.
Long-term secured funding         
 Three months ended September 30, Nine months ended September 30,
 Issuance Maturities/Redemptions Issuance Maturities/Redemptions
(in millions)20182017 20182017 2018
2017
 2018
2017
Credit card securitization$—
$—
 $2,375
$2,264
 $1,396
$1,545
 $8,500
$9,270
Other securitizations(a)
—
—
 —
—
 —
—
 —
55
FHLB advances—
—
 10,704
4,694
 4,000
—
 23,157
15,748
Other long-term secured funding(b)(c)
117
189
 139
516
 312
726
 161
640
Total long-term secured funding$117
$189
 $13,218
$7,474
 $5,708
$2,271
 $31,818
$25,713
(a)Other securitizations includes securitizations of student loans. The Firm deconsolidated the student loan securitization entities in the second quarter of 2017 as it no longer had a controlling financial interest in these entities as a result of the sale of the student loan portfolio.
(b)Includes long-term structured notes which are secured.
(c)The prior period amounts have been revised to conform with the current period presentation.
The Firm’s wholesale businesses also securitize loans for client-driven transactions; those client-driven loan securitizations are not considered to be a source of funding for the Firm and are not included in the table above. For further description of the client-driven loan securitizations, refer to Note 14 of JPMorgan Chase’s 2017 Annual Report.

Credit ratings
The cost and availability of financing are influenced by credit ratings. Reductions in these ratings could have an adverse effect on the Firm’s access to liquidity sources, increase the cost of funds, trigger additional collateral or funding requirements and decrease the number of investors and counterparties willing to lend to the Firm.

Additionally, the Firm’s funding requirements for VIEs and other third-party commitments may be adversely affected by a decline in credit ratings. For additional information on the impact of a credit ratings downgrade on the funding requirements for VIEs, and on derivatives and collateral agreements, refer to SPEs on page 15, and Liquidity risk and credit-related contingent features in Note 4.
The credit ratings of the Parent Company and the Firm’s principal bank and nonbank subsidiaries as of September 30, 2018, except as noted below, were as follows.
JPMorgan Chase & Co.
JPMorgan Chase Bank, N.A.
Chase Bank USA, N.A.
J.P. Morgan Securities LLC
J.P. Morgan Securities plc
September 30, 2018Long-term issuerShort-term issuerOutlookLong-term issuerShort-term issuerOutlookLong-term issuerShort-term issuerOutlook
Moody’s Investors Service(a)
A2P-1StableAa2P-1StableAa3P-1Stable
Standard & Poor’sA-A-2StableA+A-1StableA+A-1Stable
Fitch RatingsAA-F1+StableAAF1+StableAAF1+Stable
(a)Moody’s ratings as of October 25, 2018
On October 25, 2018, Moody’s upgraded the Parent Company’s long-term issuer rating to A2 (previously A3) and short-term issuer rating to P-1 (previously P-2). The long-term issuer ratings were also upgraded for JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. to Aa2 (previously Aa3), and for J.P. Morgan Securities LLC and J.P. Morgan Securities plc to Aa3 (previously A1).
On June 21, 2018, Fitch upgraded the Parent Company’s long-term issuer rating to AA- (previously A+) and short-term issuer rating to F1+ (previously F1). The long-term issuer ratings were also upgraded to AA for JPMorgan Chase Bank, N.A, Chase Bank USA, N.A., J.P. Morgan Securities LLC and J.P. Morgan Securities plc (all previously AA-).
Downgrades of the Firm’s long-term ratings by one or two notches could result in an increase in its cost of funds, and access to certain funding markets could be reduced. The nature and magnitude of the impact of ratings downgrades depends on numerous contractual and behavioral factors which the Firm believes are incorporated in its liquidity risk and stress testing metrics. The Firm believes that it maintains sufficient liquidity to withstand a potential decrease in funding capacity due to ratings downgrades.
JPMorgan Chase’s unsecured debt does not contain requirements that would call for an acceleration of payments, maturities or changes in the structure of the existing debt, provide any limitations on future borrowings or require additional collateral, based on unfavorable changes in the Firm’s credit ratings, financial ratios, earnings, or stock price.
Critical factors in maintaining high credit ratings include a stable and diverse earnings stream, strong capital and liquidity ratios, strong credit quality and risk management controls, and diverse funding sources. Rating agencies continue to evaluate economic and geopolitical trends, regulatory developments, future profitability, risk management practices, and litigation matters, as well as their broader ratings methodologies. Changes in any of these factors could lead to changes in the Firm’s credit ratings.


CREDIT AND INVESTMENT RISK MANAGEMENT
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. For a further discussion of Credit Risk refer to pages 55-72. For a further discussion on Investment Portfolio Risk, refer to page 72. For a further discussion of the Firm’s Credit and Investment Risk Management framework and organization, and the identification, monitoring and management, refer to Credit and Investment Risk Management on pages 99–120 of JPMorgan Chase’s 2017 Annual Report.


CREDIT PORTFOLIO
Credit risk is the risk associated with the default or change in credit profile of a client, counterparty or customer.
In the following tables, reported loans include loans retained (i.e., held-for-investment); loans held-for-sale; and certain loans accounted for at fair value. The following tables do not include loans which the Firm accounts for at fair value and classifies as trading assets. For further information regarding these loans, refer to Notes 2 and 3. For additional information on the Firm’s loans, lending-related commitments and derivative receivables, including the Firm’s accounting policies, refer to Notes 11, 20, and 4, respectively.
For further information regarding the credit risk inherent in the Firm’s cash placed with banks, refer to Wholesale credit exposure – industry exposures on pages 64–66; for information regarding the credit risk inherent in the Firm’s investment securities portfolio, refer to Note 9 of this Form 10-Q, and Note 10 of JPMorgan Chase’s 2017 Annual Report; and for information regarding the credit risk inherent in the securities financing portfolio, refer to Note 10 of this Form 10-Q, and Note 11 of JPMorgan Chase’s 2017 Annual Report.
For a further discussion of the consumer credit environment and consumer loans, refer to Consumer Credit Portfolio on pages 102-107 of JPMorgan Chase’s 2017 Annual Report and Note 11 of this Form 10-Q. For a further discussion of the wholesale credit environment and wholesale loans,
refer to Wholesale Credit Portfolio on pages 108–116 of JPMorgan Chase’s 2017 Annual Report and Note 11 of this Form 10-Q.
Total credit portfolio    
 Credit exposure 
Nonperforming(d)(e)
(in millions)Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Loans retained$947,651
$924,838
 $4,630
$5,943
Loans held-for-sale3,680
3,351
 14
—
Loans at fair value2,987
2,508
 —
—
Total loans – reported954,318
930,697
 4,644
5,943
Derivative receivables60,062
56,523
 90
130
Receivables from customers and other(a)
26,137
26,272
 —
—
Total credit-related assets1,040,517
1,013,492
 4,734
6,073
Assets acquired in loan satisfactions     
Real estate ownedNA
NA
 268
311
OtherNA
NA
 32
42
Total assets acquired in loan satisfactions
NA
NA
 300
353
Lending-related commitments1,048,674
991,482
 252
731
Total credit portfolio$2,089,191
$2,004,974
 $5,286
$7,157
Credit derivatives used
in credit portfolio management activities(b)
$(14,206)$(17,609) $—
$—
Liquid securities and other cash collateral held against derivatives(c)
(16,943)(16,108) NA
NA
(in millions,
except ratios)
Three months ended
September 30,		 Nine months ended
September 30,
2018
2017
 2018
2017
Net charge-offs(f)
$1,033
$1,265
 $3,620
$4,123
Average retained loans     
Loans942,583
903,892
 931,766
894,170
Loans – excluding residential real estate PCI loans916,205
871,465
 903,377
860,443
Net charge-off rates(f)
     
Loans0.43%0.56% 0.52%0.62%
Loans – excluding PCI0.45
0.58
 0.54
0.64
(a)Receivables from customers and other primarily represents held-for-investment margin loans to brokerage customers.
(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. For additional information, refer to Credit derivatives on page 68 and Note 4.
(c)Includes collateral related to derivative instruments where an appropriate legal opinion has not been either sought or obtained.
The fair value of derivative receivables reported on the Consolidated balance sheets were $58.3 billion and $64.1 billion at September 30, 2017, and December 31, 2016, respectively. These amounts represent the fair value of the derivative contracts after giving effect to legally enforceable master netting agreements and cash collateral held by the Firm. However, in management’s view, the appropriate measure of current credit risk should also take into consideration additional liquid securities (primarily U.S. government and agency securities and other group of seven nations (“G7”) government securities) and other cash collateral held by the Firm aggregating $21.4 billion and $22.7 billion at September 30, 2017, and December 31, 2016, respectively, that may be used as security when the fair value of the client’s exposure is in the Firm’s favor. The decrease in derivative receivables at September 30, 2017 from December 31, 2016 is predominantly related to client-driven market-making activities in CIB Markets, reflecting lower foreign exchange and interest rate derivative receivables, driven by maturities and market movements, partially offset by higher equity derivative receivables driven by higher market levels.
In addition to the collateral described in the preceding paragraph, the Firm also holds additional collateral (primarily cash, G7 government securities, other liquid government-agency and guaranteed securities, and corporate debt and equity securities) delivered by clients at the initiation of transactions, as well as collateral related to contracts that have a non-daily call frequency and collateral that the Firm has agreed to return but has not yet settled as of the reporting date. Although this collateral does not reduce the balances and is not included in the table above, it is available as security against potential exposure that could arise should the fair value of the client’s derivative transactions move in the Firm’s favor.
The derivative receivables fair value, net of all collateral, also does not include other credit enhancements, such as letters of credit. For additional information on the Firm’s use of collateral agreements, see Note 4.

The following table summarizes the ratings profile by derivative counterparty of the Firm’s derivative receivables, including credit derivatives, net of all collateral, at the dates indicated. The ratings scale is based on the Firm’s internal ratings, which generally correspond to the ratings as defined by S&P and Moody’s.
Ratings profile of derivative receivables     
 September 30, 2017 December 31, 2016
Rating equivalent
(in millions, except ratios)
Exposure net of collateral% of exposure net of collateral Exposure net of collateral% of exposure net of collateral
AAA/Aaa to AA-/Aa3$9,856
27% $11,449
28%
A+/A1 to A-/A37,262
20
 8,505
20
BBB+/Baa1 to BBB-/Baa312,775
35
 13,127
32
BB+/Ba1 to B-/B36,473
17
 7,308
18
CCC+/Caa1 and below541
1
 984
2
Total$36,907
100% $41,373
100%
As previously noted, the Firm uses collateral agreements to mitigate counterparty credit risk. The percentage of the Firm’s derivatives transactions subject to collateral agreements — excluding foreign exchange spot trades, which are not typically covered by collateral agreements due to their short maturity — was 91% and 90% at September 30, 2017 and December 31, 2016, respectively.
Credit derivatives
The Firm uses credit derivatives for two primary purposes: first, in its capacity as a market-maker, and second, as an end-user, to manage the Firm’s own credit risk associated with various exposures.
Credit portfolio management activities
Included in the Firm’s end-user activities are credit derivatives used to mitigate the credit risk associated with traditional lending activities (loans and unfunded commitments) and derivatives counterparty exposure in the Firm’s wholesale businesses (collectively, “credit portfolio management” activities). Information on credit portfolio management activities is provided in the table below.
Credit derivatives used in credit portfolio management activities
 
Notional amount of protection
purchased and sold(a)
(in millions)September 30,
2017
 December 31,
2016
Credit derivatives used to manage:   
Loans and lending-related commitments$1,559
 $2,430
Derivative receivables18,622
 19,684
Credit derivatives used in credit portfolio management activities$20,181
 $22,114
(a)(d)Amounts are presented net, consideringExcludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the Firm’s net protection purchased or sold with respect to each underlying reference entity or index.pools is performing.
For further information on credit derivatives and derivatives used in credit portfolio management activities, see Credit derivatives in Note 4 of this Form 10-Q, and Note 6 of JPMorgan Chase’s 2016 Annual Report.

ALLOWANCE FOR CREDIT LOSSES
JPMorgan Chase’s allowance for loan losses covers both the consumer (primarily scored) portfolio and wholesale (risk-rated) portfolio. Management also determines an allowance for wholesale and certain consumer lending-related commitments.
For a further discussion of the components of the allowance for credit losses and related management judgments, see Critical Accounting Estimates Used by the Firm on pages 78–79 and Note 12 of this Form 10-Q, and Critical Accounting Estimates Used by the Firm on pages 132–134 and Note 15 of JPMorgan Chase’s 2016 Annual Report.
At least quarterly, the allowance for credit losses is reviewed by the CRO, the CFO and the Controller of the Firm, and discussed with the Board of Directors’ Risk Policy Committee (“DRPC”) and Audit Committee. As of September 30, 2017, JPMorgan Chase deemed the allowance for credit losses to be appropriate and sufficient to absorb probable credit losses inherent in the portfolio.
Overall, the consumer allowance for credit losses increased from December 31, 2016. Changes to the allowance for credit losses included:
additions to the allowance for loan losses in the credit card, business banking and auto portfolios, predominantly driven by higher loss rates and loan growth in credit card,
largely offset by
the utilization of the allowance for loan losses in connection with the transfer of the student loan portfolio to held-for-sale; and
a reduction in the residential real estate portfolio, predominantly reflecting continued improvements in home prices and delinquencies.
The wholesale allowance for credit losses decreased from December 31, 2016, reflecting credit quality improvements in the Oil & Gas, Natural Gas Pipelines, and Metals & Mining portfolios.
For additional information on the consumer portfolio, see Consumer Credit Portfolio on pages 50–55 and Note 11.
For additional information on the wholesale portfolio, see Wholesale Credit Portfolio on pages 56–63 and Note 11.

Summary of changes in the allowance for credit losses     
 2017 2016
Nine months ended September 30,
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
(in millions, except ratios) 
Allowance for loan losses         
Beginning balance at January 1,$5,198
$4,034
$4,544
$13,776
 $5,806
$3,434
$4,315
$13,555
Gross charge-offs1,479
3,344
154
4,977
 1,071
2,803
291
4,165
Gross recoveries(478)(295)(81)(854) (448)(275)(30)(753)
Net charge-offs(a)
1,001
3,049
73
4,123
 623
2,528
261
3,412
Write-offs of PCI loans(b)
66
—
—
66
 124
—
—
124
Provision for loan losses653
3,699
(401)3,951
 578
2,978
628
4,184
Other(2)—
3
1
 —
—
1
1
Ending balance at September 30,$4,782
$4,684
$4,073
$13,539
 $5,637
$3,884
$4,683
$14,204
Impairment methodology         
Asset-specific(c)
$271
$376
$363
$1,010
 $352
$363
$490
$1,205
Formula-based2,266
4,308
3,710
10,284
 2,667
3,521
4,193
10,381
PCI2,245
—
—
2,245
 2,618
—
—
2,618
Total allowance for loan losses$4,782
$4,684
$4,073
$13,539
 $5,637
$3,884
$4,683
$14,204
Allowance for lending-related commitments         
Beginning balance at January 1,$26
$—
$1,052
$1,078
 $14
$—
$772
$786
Provision for lending-related commitments7
—
24
31
 —
—
313
313
Other—
—
—
—
 —
—
1
1
Ending balance at September 30,$33
$—
$1,076
$1,109
 $14
$—
$1,086
$1,100
Impairment methodology         
Asset-specific$—
$—
$220
$220
 $—
$—
$162
$162
Formula-based33
—
856
889
 14
—
924
938
Total allowance for lending-related commitments(d)
$33
$—
$1,076
$1,109
 $14
$—
$1,086
$1,100
Total allowance for credit losses$4,815
$4,684
$5,149
$14,648
 $5,651
$3,884
$5,769
$15,304
Memo:         
Retained loans, end of period$369,413
$141,200
$398,569
$909,182
 $363,398
$133,346
$386,449
$883,193
Retained loans, average365,359
138,749
390,062
894,170
 356,347
129,401
368,225
853,973
PCI loans, end of period31,821
—
3
31,824
 37,045
—
3
37,048
Credit ratios         
Allowance for loan losses to retained loans1.29%3.32%1.02%1.49% 1.55%2.91%1.21%1.61%
Allowance for loan losses to retained nonaccrual loans(e)
115
NM
277
241
 115
NM
218
201
Allowance for loan losses to retained nonaccrual loans excluding credit card115
NM
277
157
 115
NM
218
146
Net charge-off rates(a)
0.37
2.94
0.03
0.62
 0.23
2.61
0.09
0.53
Credit ratios, excluding residential real estate PCI loans         
Allowance for loan losses to retained loans0.75
3.32
1.02
1.29
 0.93
2.91
1.21
1.37
Allowance for loan losses to retained nonaccrual loans(e)
61
NM
277
201
 62
NM
218
164
Allowance for loan losses to retained nonaccrual loans excluding credit card61
NM
277
117
 62
NM
218
109
Net charge-off rates(a)
0.40%2.94%0.03%0.64% 0.26%2.61%0.09%0.56%
Note: In the table above, the financial measures which exclude the impact of PCI loans are non-GAAP financial measures.
(a)(e)At September 30, 2018, and December 31, 2017, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $2.9 billion and $4.3 billion, respectively, and real estate owned (“REO”) insured by U.S. government agencies of $78 million and $95 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”).
(f)For the nine months ended September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio transfer, the net charge-off rate for Consumer, excluding credit cardLoans would have been 0.20%; total Firm would have been 0.55%; Consumer, excluding credit card and PCI loans would have been 0.22%; and total Firm,for Loans – excluding PCI would have been 0.57%. For additional

CONSUMER CREDIT PORTFOLIO
The Firm’s retained consumer portfolio consists primarily of residential real estate loans, credit card loans, auto loans, and business banking loans, as well as associated lending-related commitments. The Firm’s focus is on serving primarily the prime segment of the consumer credit market. For further information on consumer loans, refer to Note 11 of this Form
10-Q and Consumer Credit Portfolio on pages 102-107 and Note 12 of JPMorgan Chase’s 2017 Annual Report. For further information on lending-related commitments, refer to Note 20 of this Form 10-Q and Note 27 of JPMorgan Chase’s 2017 Annual Report.
The following table presents consumer credit-related information with respect to the credit portfolio held by CCB, prime mortgage and home equity loans held by AWM, and prime mortgage loans held by Corporate. For further information about the Firm’s nonaccrual and charge-off accounting policies, refer to Note 12 of JPMorgan Chase’s 2017 Annual Report.
Consumer credit portfolio                
      Three months ended September 30, Nine months ended September 30,

(in millions, except ratios)		Credit exposure 
Nonaccrual
loans(i)(j)
 
Net
charge-offs/(recoveries)(k)(l)
 
Average annual
net charge-off/(recoveries) rate(k)(l)(m)
 
Net
charge-offs/(recoveries)(d)(k)
 
Average annual
net charge-off/(recoveries) rate(d)(k)(m)
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
 2018
2017
 2018
2017
 2018
2017
 2018
2017
Consumer, excluding credit card                 
Loans, excluding PCI loans and loans held-for-sale                 
Residential mortgage$231,361
$216,496
 $1,880
$2,175
 $(105)$3
 (0.18)%0.01% $(256)$3
 (0.15)%—%
Home equity29,318
33,450
 1,382
1,610
 (12)13
 (0.16)0.15
 (2)71
 (0.01)0.26
Auto(a)(b)
63,619
66,242
 137
141
 56
116
 0.35
0.71
 182
245
 0.37
0.50
Consumer & Business Banking(b)(c)
26,451
25,789
 237
283
 68
71
 1.02
1.12
 171
184
 0.88
0.99
Student(d)
—
—
 —
—
 —
—
 —
—
 —
498
 —
NM
Total loans, excluding PCI loans and loans held-for-sale350,749
341,977
 3,636
4,209
 7
203
 0.01
0.24
 95
1,001
 0.04
0.40
Loans – PCI                 
Home equity9,393
10,799
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Prime mortgage4,931
6,479
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Subprime mortgage2,072
2,609
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Option ARMs(e)
8,813
10,689
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – PCI25,209
30,576
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – retained375,958
372,553
 3,636
4,209
 7
203
 0.01
0.22
 95
1,001
 0.03
0.37
Loans held-for-sale104
128
 —
—
 —
—
 —
—
 —
—
 —
—
Total consumer, excluding credit card loans376,062
372,681
 3,636
4,209
 7
203
 0.01
0.22
 95
1,001
 0.03
0.37
Lending-related commitments(f)
50,630
48,553
               
Receivables from customers(g)
155
133
               
Total consumer exposure, excluding credit card426,847
421,367
               
Credit card                 
Loans retained(h)
147,856
149,387
 —
—
 1,073
1,019
 2.91
2.87
 3,407
3,049
 3.16
2.94
Loans held-for-sale25
124
 —
—
 —
—
 —
—
 —
—
 —
—
Total credit card loans147,881
149,511
 —
—
 1,073
1,019
 2.91
2.87
 3,407
3,049
 3.16
2.94
Lending-related commitments(f)
600,728
572,831
               
Total credit card exposure748,609
722,342
               
Total consumer credit portfolio$1,175,456
$1,143,709
 $3,636
$4,209
 $1,080
$1,222
 0.82 %0.95% $3,502
$4,050
 0.90 %1.07%
Memo: Total consumer credit portfolio, excluding PCI$1,150,247
$1,113,133
 $3,636
$4,209
 $1,080
$1,222
 0.86 %1.02% $3,502
$4,050
 0.96 %1.15%
(a)At September 30, 2018, and December 31, 2017, excluded operating lease assets of $19.6 billion and $17.1 billion, respectively. These operating lease assets are included in other assets on the Firm’s Consolidated balance sheets. The risk of loss on these assets relates to CCB segment results on page 21.the residual value of the leased vehicles, which is managed through projection of the lease residual value at lease origination, periodic review of residual values, and through arrangements with certain auto manufacturers that mitigates this risk.
(b)Write-offs of PCIIncludes certain business banking and auto dealer risk-rated loans are recorded againstthat apply the wholesale methodology for determining the allowance for loan losses when actual losseslosses; these loans are managed by CCB, and therefore, for a pool exceed estimated losses that were recorded as purchase accounting adjustments atconsistency in presentation, are included within the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool (e.g., upon liquidation).consumer portfolio.
(c)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.Predominantly includes Business Banking loans.
(d)The allowanceFor the nine months ended September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio sale, the net charge-off rate for Total consumer, excluding credit card and PCI loans and loans held-for-sale would have been 0.22%; Total consumer – retained excluding credit card loans would have been 0.20%; Total consumer credit portfolio would have been 0.95%; and Total consumer credit portfolio, excluding PCI loans would have been 1.02%.
(e)At both September 30, 2018, and December 31, 2017, approximately 68% of the PCI option adjustable rate mortgage (“ARM”) portfolio has been modified into fixed-rate, fully amortizing loans.

(f)Credit card and home equity lending-related commitments isrepresent 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. For further information, refer to Note 20.
(g)Receivables from customers represent held-for-investment margin loans to brokerage customers that are collateralized through assets maintained in the clients’ brokerage accounts. These receivables are reported inwithin accrued interest and accounts payable and other liabilitiesreceivable on the Firm’s Consolidated balance sheets.
(e)(h)TheIncludes billed interest and fees net of an allowance for uncollectible interest and fees.
(i)At September 30, 2018 and December 31, 2017, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $2.9 billion and $4.3 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.guidance issued by the FFIEC.




Provision for credit losses
The following table presents the components of the Firm’s provision for credit losses:
 Three months ended September 30, Nine months ended September 30,
 Provision for loan losses Provision for lending-related commitments 
Total provision for
credit losses
 Provision for loan losses Provision for lending-related commitments Total provision for credit losses
(in millions)2017
2016
 2017
2016
 2017
2016
 2017
2016
 2017
2016
 2017
2016
Consumer, excluding credit card$205
$262
 $1
$—
 $206
$262
 $653
$578
 $7
$—
 $660
$578
Credit card1,319
1,038
 —
—
 1,319
1,038
 3,699
2,978
 —
—
 3,699
2,978
Total consumer1,524
1,300
 1
—
 1,525
1,300
 4,352
3,556
 7
—
 4,359
3,556
Wholesale(64)(168) (9)139
 (73)(29) (401)628
 24
313
 (377)941
Total$1,460
$1,132
 $(8)$139
 $1,452
$1,271
 $3,951
$4,184
 $31
$313
 $3,982
$4,497
Quarterly discussion
The provision for credit losses increased as a result of:
a higher consumer provision driven by:
–(j)$148 millionExcludes PCI loans. The Firm is recognizing interest income on each pool of higherPCI loans as each of the pools is performing.
(k)Net charge-offs and the net charge-offs, primarilycharge-off rates excluded write-offs in the credit cardPCI portfolio dueof $58 million and $20 million for the three months ended September 30, 2018 and 2017, respectively, and $151 million and $66 million for the nine months ended September 30, 2018 and 2017, respectively. These write-offs decreased the allowance for loan losses for PCI loans. Refer to seasoning of newer vintages in line with expectations, partially offset by a decrease inAllowance for Credit Losses on pages 69–71 for further information.
(l)Net charge-offs and net charge-offs incharge-off rates for the residential real estate portfolio reflecting continued improvement in home prices and delinquencies. The higher net charge-offsthree months ended September 30, 2017 included $63 million of incremental charge-offs recorded in accordance with regulatory guidance regarding the timing of loss recognition for certain auto and residential real estate loans in bankruptcy and auto loans where assets were acquired in loan satisfaction, andsatisfaction.
–(m)
a $300Average consumer loans held-for-sale were $196 million addition toand $339 million for the allowancethree months ended September 30, 2018 and 2017, respectively, and $240 million and $1.9 billion for credit losses in the credit card portfolio, due to higher loss ratesnine months ended September 30, 2018 and loan growth, compared to a $200 million addition in the prior year
2017, respectively. These amounts were excluded when calculating net charge-off rates.
the increase was partially offset by
a higher net benefit of $44 million
Consumer, excluding credit card
Portfolio analysis
Consumer loan balances increased from December 31, 2017 predominantly due to a net reductionoriginations of $116 million inhigh-quality prime mortgage loans that have been retained on the wholesale allowance for credit losses, primarily drivenbalance sheet, largely offset by paydowns and the charge-off or liquidation of delinquent loans.
PCI loans are excluded from the following discussions of individual loan sales inproducts and are addressed separately below. For further information about the Oil & GasFirm’s consumer portfolio, including information about delinquencies, loan modifications and improvements in the overall quality of the Real Estate portfolio.
Year-to-date discussion
The provision for credit losses decreased as a result of:
a net $450 million reduction in the wholesale allowance for credit losses, reflectingother credit quality improvementsindicators, refer to Note 11 of this Form 10-Q.
Residential mortgage:The residential mortgage portfolio predominantly consists of high-quality prime mortgage loans, with approximately 1% consisting of subprime mortgage loans. These subprime mortgage loans continue to run off and are performing in line with expectations. The residential mortgage portfolio, including loans held-for-sale, increased from December 31, 2017 as the Oil & Gas, Natural Gas Pipelinesamount of retained originations of primarily high-quality prime mortgage loans exceeded paydowns. Residential mortgage 30+ day delinquencies decreased from December 31, 2017. Nonaccrual loans decreased from December 31, 2017 due to lower delinquencies. Net recoveries for the three and Metals & Mining portfolios,nine months ended September 30, 2018 improved when compared with an addition of $680 millionthe same period in the prior year drivenreflecting loan sales as well as continued improvement in home prices and lower delinquencies.
At September 30, 2018, and December 31, 2017, the Firm’s residential mortgage portfolio included $21.3 billion and $20.2 billion, respectively, of interest-only loans. These loans have an interest-only payment period generally followed by downgradesan adjustable-rate or fixed-rate fully amortizing payment period to maturity and are typically originated as higher-balance loans to higher-income borrowers. To date, losses on this portfolio generally have been consistent with the broader residential mortgage portfolio. The Firm continues to monitor the risks associated with these loans.
The following table provides a summary of the Firm’s residential mortgage portfolio insured and/or guaranteed by U.S. government agencies, including loans held-for-sale. The Firm monitors its exposure to certain potential unrecoverable claim payments related to government-insured loans and considers this exposure in estimating the allowance for loan losses.
(in millions)September 30, 2018
December 31, 2017
Current$2,741
$2,401
30-89 days past due1,563
1,958
90 or more days past due2,896
4,264
Total government guaranteed loans$7,200
$8,623
Home equity:The home equity portfolio declined from December 31, 2017 primarily reflecting loan paydowns. The amount of 30+ day delinquencies decreased from December 31, 2017. Nonaccrual loans decreased from December 31, 2017 due to lower delinquencies. Net recoveries for the three and nine months ended September 30, 2018 improved when compared with the same period in the same portfolios.prior year, as a result of continued improvement in home prices and lower delinquencies.
At September 30, 2018, approximately 90% of the decreaseFirm’s home equity portfolio consisted of home equity lines of credit (“HELOCs”) and the remainder consisted of home equity loans (“HELOANs”). The carrying value of HELOCs outstanding was partially$26 billion at September 30, 2018. This amount included $12 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modified and $4 billion of interest-only balloon HELOCs, which primarily mature after 2030. The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are exhibiting a material deterioration in their credit risk profile.

The Firm monitors risks associated with junior lien loans where the borrower has a senior lien loan that is either delinquent or has been modified. These loans are considered “high-risk seconds” and are classified as nonaccrual as they are considered to pose a higher risk of default than other junior lien loans. The carrying value of high-risk seconds declined from December 31, 2017.
For further information on the Firm’s home equity portfolio, refer to Note 11 of this Form 10-Q and Consumer Credit Portfolio on pages 102-107 of JPMorgan Chase’s 2017 Annual Report.
Auto: The auto loan portfolio, which predominantly consists of prime-quality loans, declined when compared with December 31, 2017, as paydowns and the charge-off or liquidation of delinquent loans were predominantly offset by new originations. Nonaccrual loans decreased from December 31, 2017. Net charge-offs for the three and nine months endedSeptember 30, 2018 declined when compared with the same period in the prior year primarily as a result of an incremental $49 million recorded in the prior year in accordance with regulatory guidance regarding the timing of loss recognition for certain loans in bankruptcy and loans where assets were acquired in loan satisfaction.
Consumer & Business Banking: Consumer & Business Banking loans increased when compared with December 31, 2017 due to higher loan originations, predominantly offset by paydowns and charge-offs of delinquent loans. Nonaccrual loans decreased from December 31, 2017. Net charge-offs for the three and nine months endedSeptember 30, 2018 decreased when compared with the same period in the prior year.
Purchased credit-impaired loans:PCI loans decreased from December 31, 2017 due to portfolio run off and loan sales. As of September 30, 2018, approximately 11% of the option ARM PCI loans were delinquent and approximately 68% of the portfolio had been modified into fixed-rate, fully amortizing loans. The borrowers for substantially all of the remaining loans are making amortizing payments, although such payments are not necessarily fully amortizing. This latter group of loans is subject to the risk of payment shock due to future payment recast. Default rates generally increase on option ARM loans when payment recast results in a higher consumer provision driven by:payment increase. The expected increase in default rates is considered in the Firm’s quarterly impairment assessment.
The following table provides a summary of lifetime principal loss estimates included in either the nonaccretable difference or the allowance for loan losses.
Summary of PCI loans lifetime principal loss estimates
 
Lifetime loss
 estimates(a)
 
Life-to-date
liquidation losses(b)
(in billions)Sep 30,
2018
 Dec 31,
2017
 Sep 30,
2018
 Dec 31,
2017
Home equity$14.1
 $14.2
 $13.0
 $12.9
Prime mortgage4.0
 4.0
 3.8
 3.8
Subprime mortgage3.3
 3.3
 3.1
 3.1
Option ARMs10.2
 10.0
 9.9
 9.7
Total$31.6
 $31.5
 $29.8
 $29.5
–(a)$432Includes 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 $556 million of higher net charge-offs, primarily in the credit card portfolio due to seasoning of newer vintages in line with expectations, partially offset by a decrease in net charge-offs in the residential real estate portfolio reflecting continued improvement in home prices and delinquencies,$842 million at September 30, 2018, and December 31, 2017, respectively.
–(b)
a $218 million impact relatedRepresents both realization of loss upon loan resolution and any principal forgiven upon modification.
Geographic composition of residential real estate loans
For information on the geographic composition of the Firm’s residential real estate loans, refer to Note 11.
Current estimated loan-to-value ratio of residential real estate loans
Average current estimated loan-to-value (“LTV”) ratios have declined consistent with recent improvements in home prices, customer paydowns, and charge-offs or liquidations of higher LTV loans. For further information on current estimated LTVs on residential real estate loans, refer to Note 11.
Loan modification activities for residential real estate loans
The performance of modified loans generally differs by product type due to differences in both the credit quality and the types of modifications provided. The performance of modifications to the residential real estate portfolios as measured through cumulative redefault rates, were not materially different from December 31, 2017. For further information on the Firm’s cumulative redefault rates refer to Consumer Credit Portfolio on pages 102-107 of JPMorgan Chase’s 2017 Annual Report.
Certain loans that were modified under the U.S. Government’s Home Affordable Modification Program (“HAMP”) and the Firm’s proprietary modification programs have interest rate reset provisions (“step-rate modifications”). Interest rates on these loans generally began to increase commencing in 2014 by 1% per year, and will continue to do so, until the rate reaches a specified cap. The cap on these loans is typically at a prevailing market interest rate for a fixed-rate mortgage loan as of the modification date. At September 30, 2018, the carrying value of non-PCI loans and the unpaid principal balance of PCI loans modified in step-rate modifications, which have not yet met their specified caps, were $2 billion and $4 billion, respectively. The Firm continues to monitor this risk exposure and the impact of these potential interest rate

increases is considered in the Firm’s allowance for loan losses.
The following table presents information as of September 30, 2018, and December 31, 2017, relating to modified retained residential real estate loans for which concessions have been granted to borrowers experiencing financial difficulty. For further information on modifications for the three and nine months ended September 30, 2018 and 2017, refer to Note 11.
Modified residential real estate loans
 September 30, 2018 December 31, 2017
(in millions)Retained loans
Non-accrual
retained loans(d)
 Retained loans
Non-accrual
retained loans(d)
Modified residential real estate loans, excluding
PCI loans(a)(b)
     
Residential mortgage$4,722
$1,536
 $5,620
$1,743
Home equity2,056
993
 2,118
1,032
Total modified residential real estate loans, excluding PCI loans$6,778
$2,529
 $7,738
$2,775
Modified PCI loans(c)
     
Home equity$2,135
NA
 $2,277
NA
Prime mortgage3,296
NA
 4,490
NA
Subprime mortgage2,162
NA
 2,678
NA
Option ARMs6,660
NA
 8,276
NA
Total modified PCI loans$14,253
NA
 $17,721
NA
(a)Amounts represent the transfercarrying value of the student loan portfolio to held-for-sale, andmodified residential real estate loans.
–(b)a $153 million higher additionAt September 30, 2018, and December 31, 2017, $4.0 billion and $3.8 billion, respectively, of loans modified subsequent to repurchase from Ginnie Mae in accordance with the allowance for credit losses.
Current year additions to the consumer allowance for credit losses included:
◦a $650 million addition tostandards of the allowance for credit lossesappropriate 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 credit card portfolio, duetable above. When such loans perform subsequent to higher loss rates andmodification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan growth, comparedpools. Modified loans that do not re-perform become subject to a $450 million additionforeclosure. For additional information about sales of loans in the prior year;securitization transactions with Ginnie Mae, refer to Note 13.
◦(c)a $50 million addition toAmounts represent the allowance for credit losses in the business banking portfolio; andunpaid principal balance of modified PCI loans.
◦(d)At September 30, 2018, and December 31, 2017, nonaccrual loans included $2.0 billion and $2.2 billion, respectively, of troubled debt restructurings (“TDRs”) for which the borrowers were less than 90 days past due. For additional information about loans modified in a $25 million additionTDR that are on nonaccrual status, refer to the allowance for credit losses in the auto portfolio, compared to a $75 million addition in the prior year;Note 11.
the additions were partially offset by
Nonperforming assets
The following table presents information as of September 30, 2018, and December 31, 2017, about consumer, excluding credit card, nonperforming assets.
Nonperforming assets(a)
   
(in millions)September 30,
2018
 December 31,
2017
Nonaccrual loans(b)
   
Residential real estate$3,262
 $3,785
Other consumer374
 424
Total nonaccrual loans3,636
 4,209
Assets acquired in loan satisfactions   
Real estate owned205
 225
Other32
 40
Total assets acquired in loan satisfactions237
 265
Total nonperforming assets$3,873
 $4,474
◦(a)a $167At September 30, 2018, and December 31, 2017, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $2.9 billion and $4.3 billion, respectively, and REO insured by U.S. government agencies of $78 million net reduction in the allowance for credit losses in the residential real estate portfolio, reflecting continued improvement in home prices and delinquencies, compared to a $95 million, net reduction inrespectively. These amounts have been excluded based upon the prior year.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.
Nonaccrual loans in the residential real estate portfolio at September 30, 2018 decreased to $3.3 billion from $3.8 billion at December 31, 2017, of which 25% and 26% were greater than 150 days past due, respectively. In the aggregate, the unpaid principal balance of residential real estate loans greater than 150 days past due was charged down by approximately 33% and 40% to the estimated net realizable value of the collateral at September 30, 2018, and December 31, 2017, respectively.
Nonaccrual loans: The following table presents changes in consumer, excluding credit card, nonaccrual loans for the nine months ended September 30, 2018 and 2017.
Nonaccrual loan activity  
Nine months ended September 30,
(in millions)		 2018
2017
Beginning balance $4,209
$4,820
Additions 2,174
2,553
Reductions:   
Principal payments and other(a)
 1,119
1,245
Charge-offs 354
561
Returned to performing status 1,057
1,121
Foreclosures and other liquidations 217
285
Total reductions 2,747
3,212
Net changes (573)(659)
Ending balance $3,636
$4,161
(a)Other reductions includes loan sales.
Active and suspended foreclosure: For information on loans that were in the process of active or suspended foreclosure, refer to Note 11.

Credit card
Total credit card loans decreased from December 31, 2017 due to seasonality. The September 30, 2018 30+ day delinquency rate seasonally decreased to 1.75% from 1.80% at December 31, 2017, and the September 30, 2018 90+ day delinquency rate decreased to 0.85% from 0.92% at December 31, 2017, in line with expectations. Net charge-offs increased for the three and nine months ended September 30, 2018 when compared with the same periods in the prior year, as expected, primarily due to the seasoning of more recent vintages with higher loss rates, as anticipated given underwriting standards at the time of origination.
Consistent with the Firm’s policy, all credit card loans typically remain on accrual status until charged off. However, the Firm establishes an allowance, which is offset against loans and charged to interest income, for the estimated uncollectible portion of accrued and billed interest and fee income.
Geographic and FICO composition of credit card loans
For information on the geographic and FICO composition of the Firm’s credit card loans, refer to Note 11.
Modifications of credit card loans
At September 30, 2018 and December 31, 2017, the Firm had $1.3 billion and $1.2 billion, respectively, of credit card loans outstanding that have been modified in TDRs. These balances included both credit card loans with modified payment terms and credit card loans that reverted back to their pre-modification payment terms because the cardholder did not comply with the modified payment terms.
For additional information on the Firm’s studentabout loan portfolio, which was transferredmodification programs to held-for-sale in the first quarter of 2017, seeborrowers, refer to Note 23.

11.


COUNTRY RISK MANAGEMENTWHOLESALE CREDIT PORTFOLIO
CountryIn its wholesale businesses, the Firm is exposed to credit risk primarily through its underwriting, lending, market-making, and hedging activities with and for clients and counterparties, as well as through various operating services (such as cash management and clearing activities), securities financing activities and cash placed with banks. A portion of the loans originated or acquired by the Firm’s wholesale businesses is generally retained on the risk that a sovereign event or action alters the value or terms of contractual obligations of obligors, counterparties and issuers or adversely affects markets related to a particular country.balance sheet. The Firm hasdistributes a country risk management framework for assessing country risks, determining risk tolerance, and measuring and monitoring its direct country exposures. The Country Risk Management group is responsible for developing guidelines and policies for managing country risk in both emerging and developed countries. The Country Risk Management group actively monitors the various portfolios giving rise to country risk to ensure the Firm’s country risk exposures are diversified and that exposure levels are appropriate given the Firm’s strategy and risk tolerance relative to a country.
Country Risk Management periodically defines and runs stress scenarios for individual countries or groups of countries in response to specific or potential market events, sector performance concerns and geopolitical risks.
For a discussionsignificant percentage of the Firm’s Country Risk Management organization; identificationloans that it originates into the market as part of its syndicated loan business and measurement; stress testing; monitoringto manage portfolio concentrations and control; and reporting, see pages 108–109credit risk.
The credit quality of JPMorgan Chase’s 2016 Annual Report.
The following table presents the Firm’s top 20 exposures by country (excludingwholesale portfolio was stable for the U.S.) as ofnine months ended September 30, 2017. The selection2018, characterized by low levels of countries is based solelycriticized exposure, nonaccrual loans and charge-offs. Refer to the industry discussion on the Firm’s largest total exposurespages 64–66 for further information. Retained loans increased across all wholesale lines of business, predominantly driven by country, based on the Firm’s internal country risk management approach,CIB, including loans to financial institution and does not represent the Firm’s view of any actual or potentially adverse credit conditions. Country exposures may fluctuate from period to periodcommercial and industrial clients, and in AWM due to an increase in loans to Wealth Management clients globally. The wholesale portfolio is actively managed, in part by conducting ongoing, in-depth reviews of client activitycredit quality and market flows.transaction structure inclusive of collateral where applicable, and of industry, product and client concentrations.
 
In the following tables, the Firm’s wholesale credit portfolio includes exposure held in CIB, CB, AWM and Corporate, and excludes all exposure managed by CCB.
Top 20 country exposures (excluding the U.S.) 
  September 30, 2017

(in billions)
 
Lending and deposits(a)
Trading and investing(b)(c)
Other(d)
Total exposure
Germany $43.9
$13.9
$0.2
$58.0
United Kingdom 34.0
14.3
0.9
49.2
Japan 16.4
7.5
0.2
24.1
France 12.4
8.7
0.3
21.4
China 8.7
6.2
0.9
15.8
Switzerland 8.1
1.3
5.6
15.0
Canada 11.7
3.0
0.2
14.9
India 4.6
5.7
1.1
11.4
Australia 6.0
5.2
—
11.2
Netherlands 7.3
1.9
0.7
9.9
Luxembourg 7.5
1.4
—
8.9
South Korea 5.4
2.0
0.3
7.7
Brazil 3.4
3.2
—
6.6
Italy 3.7
1.8
0.2
5.7
Spain 3.4
2.1
—
5.5
Singapore 2.8
1.3
1.1
5.2
Hong Kong 2.3
1.2
1.6
5.1
Saudi Arabia 3.8
0.8
—
4.6
Mexico 3.2
1.3
—
4.5
Ireland 1.1
0.7
1.2
3.0
Wholesale credit portfolio
 Credit exposure 
Nonperforming(c)
(in millions)Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Loans retained$423,837
$402,898
 $994
$1,734
Loans held-for-sale3,551
3,099
 14
—
Loans at fair value2,987
2,508
 —
—
Loans430,375
408,505
 1,008
1,734
Derivative receivables60,062
56,523
 90
130
Receivables from customers and other(a)
25,982
26,139
 —
—
Total wholesale credit-related assets516,419
491,167
 1,098
1,864
Lending-related commitments397,316
370,098
 252
731
Total wholesale credit exposure$913,735
$861,265
 $1,350
$2,595
Credit derivatives used in credit portfolio management activities(b)
$(14,206)$(17,609) $—
$—
Liquid securities and other cash collateral held against derivatives(16,943)(16,108) NA
NA
(a)LendingReceivables from customers and deposits includesother include $26.0 billion of held-for-investment margin loans at both September 30, 2018, and December 31, 2017, to prime brokerage customers in CIB and AWM; these are classified in accrued interest and accounts receivable (net of collateral andon 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 from settlement and clearing activities.Consolidated balance sheets.
(b)Includes market-making inventory, AFS securities, counterparty exposureRepresents 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. For additional information, refer to Credit derivatives on derivativepage 68, and securities financings net of collateral and hedging.Note 4.
(c)Includes singleExcludes assets acquired in loan satisfactions.

The following tables present the maturity and ratings profiles of the wholesale credit portfolio as of September 30, 2018, and December 31, 2017. The ratings scale is based on the Firm’s internal risk ratings, which generally correspond to the ratings assigned by S&P and Moody’s. For additional information on wholesale loan portfolio risk ratings, refer to Note 12 of JPMorgan Chase’s 2017 Annual Report.
Wholesale credit exposure – maturity and ratings profile      
 
Maturity profile(d)
 Ratings profile
 Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
September 30, 2018
(in millions, except ratios)
 AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below
Loans retained$136,832
$184,166
$102,839
$423,837
 $324,343
 $99,494
$423,837
77%
Derivative receivables   60,062
    60,062
 
Less: Liquid securities and other cash collateral held against derivatives   (16,943)    (16,943) 
Total derivative receivables, net of all collateral11,650
12,637
18,832
43,119
 34,602
 8,517
43,119
80
Lending-related commitments92,332
291,650
13,334
397,316
 297,286
 100,030
397,316
75
Subtotal240,814
488,453
135,005
864,272
 656,231
 208,041
864,272
76
Loans held-for-sale and loans at fair value(a)
   6,538
    6,538
 
Receivables from customers and other   25,982
    25,982
 
Total exposure – net of liquid securities and other cash collateral held against derivatives   $896,792
    $896,792
 
Credit derivatives used in credit portfolio management activities(b)(c)
$(1,586)$(7,053)$(5,567)$(14,206) $(12,537) $(1,669)$(14,206)88%
 
Maturity profile(d)
 Ratings profile
 Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
December 31, 2017
(in millions, except ratios)		 AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below
Loans retained$121,643
$177,033
$104,222
$402,898
 $311,681
 $91,217
$402,898
77%
Derivative receivables   56,523
    56,523
 
Less: Liquid securities and other cash collateral held against derivatives   (16,108)    (16,108) 
Total derivative receivables, net of all collateral9,882
10,463
20,070
40,415
 32,373
 8,042
40,415
80
Lending-related commitments80,273
275,317
14,508
370,098
 274,127
 95,971
370,098
74
Subtotal211,798
462,813
138,800
813,411
 618,181
 195,230
813,411
76
Loans held-for-sale and loans at fair value(a)
   5,607
    5,607
 
Receivables from customers and other   26,139
    26,139
 
Total exposure – net of liquid securities and other cash collateral held against derivatives   $845,157
    $845,157
 
Credit derivatives used in credit portfolio management activities(b)(c)
$(1,807)$(11,011)$(4,791)$(17,609) $(14,984) $(2,625)$(17,609)85%
(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 (“single-name”), index and tranchedthe ratings profile shown is based on the ratings of the reference entity on which protection has been purchased. Predominantly all of the credit derivatives for which one or more ofentered into by the underlying reference entities isFirm where it has purchased protection used in a country listed in the above table.credit portfolio management activities are executed with investment-grade counterparties.
(d)Includes capital investedThe maturity profile of retained loans, lending-related commitments and derivative receivables is based on the remaining contractual maturity. Derivative contracts that are in local entities and physical commodity inventory.a receivable position at September 30, 2018, may become payable prior to maturity based on their cash flow profile or changes in market conditions.



Wholesale credit exposure – industry exposures
The Firm focuses on the management and diversification of its industry exposures, and pays particular attention to industries with actual or potential credit concerns. Exposures deemed criticized align with the U.S. banking regulators’ definition of criticized exposures, which consist of the special mention, substandard and doubtful
categories. The total criticized component of the portfolio, excluding loans held-for-sale and loans at fair value, was $11.2 billion at September 30, 2018, compared with $15.6 billion at December 31, 2017. The decrease was largely driven by select names within Oil & Gas, including a loan sale.
Below are summaries of the Firm’s exposures as of September 30, 2018, and December 31, 2017. The industry of risk category is generally based on the client or counterparty’s primary business activity. For additional information on industry concentrations, refer to Note 4 of JPMorgan Chase’s 2017 Annual Report.
Wholesale credit exposure – industries(a)
         
      Selected metrics
        30 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables
    Noninvestment-grade
As of or for the nine months ended
Credit exposure(e)
Investment- grade Noncriticized Criticized performingCriticized nonperforming
September 30, 2018
(in millions)
Real Estate$141,053
$117,770
 $22,312
 $841
$130
$68
$(19)$—
$(3)
Consumer & Retail89,751
58,429
 29,438
 1,769
115
41
49
(252)(4)
Technology, Media &
Telecommunications		74,286
48,676
 23,560
 2,005
45
9
—
(723)(17)
Industrials57,810
38,374
 18,202
 1,052
182
118
—
(146)(24)
Healthcare53,952
37,912
 15,223
 788
29
22
(4)—
(134)
Banks & Finance Cos52,194
37,491
 14,376
 323
4
27
—
(622)(3,794)
Oil & Gas45,205
24,985
 18,236
 1,641
343
—
33
(349)(5)
Asset Managers41,951
36,286
 5,646
 5
14
11
—
—
(5,752)
Utilities28,944
24,312
 4,321
 158
153
—
38
(199)(74)
State & Municipal Govt(b)
26,381
25,772
 609
 —
—
16
(1)(20)(16)
Central Govt18,935
18,778
 104
 53
—
3
—
(8,688)(1,972)
Automotive17,385
9,677
 7,398
 300
10
1
—
(226)—
Chemicals & Plastics17,353
11,108
 6,227
 18
—
1
—
(25)—
Transportation16,225
10,058
 5,622
 482
63
45
6
(32)(51)
Metals & Mining14,320
7,262
 6,768
 247
43
5
—
(278)(3)
Insurance13,704
10,323
 3,342
 —
39
—
—
(37)(2,513)
Financial Markets Infrastructure5,697
5,555
 142
 —
—
—
—
—
(26)
Securities Firms4,599
3,129
 1,470
 —
—
—
—
(230)(674)
All other(c)
161,470
144,967
 16,124
 213
166
1,111
17
(2,379)(1,881)
Subtotal$881,215
$670,864
 $199,120
 $9,895
$1,336
$1,478
$119
$(14,206)$(16,943)
Loans held-for-sale and loans at fair value6,538
          
Receivables from customers and other25,982
          
Total(d)
$913,735
          

(continued from previous page)          








Selected metrics








30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables




Noninvestment-grade
As of or for the year ended
Credit exposure(e)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming
December 31, 2017
(in millions)
Real Estate$139,409
$115,401

$23,012

$859
$137
$254
$(4)$—
$(2)
Consumer & Retail87,679
55,737

29,619

1,791
532
30
34
(275)(9)
Technology, Media & Telecommunications59,274
36,510
 20,453
 2,258
53
14
(12)(910)(19)
Industrials55,272
37,198

16,770

1,159
145
150
(1)(196)(21)
Healthcare55,997
42,643
 12,731
 585
38
82
(1)—
(207)
Banks & Finance Cos49,037
34,654

13,767

612
4
1
6
(1,216)(3,174)
Oil & Gas41,317
21,430

14,854

4,046
987
22
71
(747)(1)
Asset Managers32,531
28,029

4,484

4
14
27
—
—
(5,290)
Utilities29,317
24,486

4,383

227
221
—
11
(160)(56)
State & Municipal Govt(b)
28,633
27,977

656

—
—
12
5
(130)(524)
Central Govt19,182
18,741

376

65
—
4
—
(10,095)(2,520)
Automotive14,820
9,321
 5,278
 221
—
10
1
(284)—
Chemicals & Plastics15,945
11,107

4,764

74
—
4
—
—
—
Transportation15,797
9,870

5,302

527
98
9
14
(32)(131)
Metals & Mining14,171
6,989

6,822

321
39
3
(13)(316)(1)
Insurance14,089
11,028

2,981

—
80
1
—
(157)(2,195)
Financial Markets Infrastructure5,036
4,775

261

—
—
—
—
—
(23)
Securities Firms4,113
2,559

1,553

1
—
—
—
(274)(335)
All other(c)
147,900
134,110

13,283

260
247
901
8
(2,817)(1,600)
Subtotal$829,519
$632,565

$181,349

$13,010
$2,595
$1,524
$119
$(17,609)$(16,108)
Loans held-for-sale and loans at fair value5,607

















Receivables from customers and other26,139


















Total(d)
$861,265
          
LIQUIDITY RISK MANAGEMENT(a)The industry rankings presented in the table as of December 31, 2017, are based on the industry rankings of the corresponding exposures at September 30, 2018, not actual rankings of such exposures at December 31, 2017.
(b)In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at September 30, 2018, and December 31, 2017, noted above, the Firm held: $9.5 billion and $9.8 billion, respectively, of trading securities; $38.1 billion and $32.3 billion, respectively, of AFS securities; and $4.8 billion and $14.4 billion, respectively, of held-to-maturity (“HTM”) securities, issued by U.S. state and municipal governments. For further information, refer to Note 2 and Note 9.
(c)All other includes: individuals (predominantly Wealth Management clients within AWM), SPEs, and private education and civic organizations, representing approximately 59%, 38%, and 3%, respectively, at September 30, 2018, and 59%, 37%, and 4%, respectively, at December 31, 2017.
(d)
Excludes cash placed with banks of $410.5 billion and $421.0 billion, at September 30, 2018, and December 31, 2017, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.
(e)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.
(f)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.

Liquidity risk is the risk that the Firm will be unable to meet its contractual and contingent obligations or that it does not have the appropriate amount, composition or tenor of funding and liquidity to support its assets and liabilities. The following discussion of JPMorgan Chase’s Liquidity Risk Management should be read together with pages 110–115 of JPMorgan Chase’s 2016 Annual Report.
LCR and HQLA
The LCR rule requires the Firm to maintain an amount of unencumbered HQLA that is sufficient to meet its estimated total net cash outflows over a prospective 30 calendar-day period of significant stress. HQLA is the amount of liquid assets that qualify for inclusion in the LCR. HQLA primarily consist of unencumbered cash and certain high quality liquid securities as defined in the LCR rule.
Under the LCR rule, the amount of HQLA held by JPMorgan Chase Bank N.A. and Chase Bank USA, N.A that are in excess of each entity’s standalone 100% minimum LCR requirement, and that are not transferable to non-bank affiliates, must be excluded from the Firm’s reported HQLA. Commencing January 1, 2017, theThe LCR is required to be a minimum of 100%.
On December 19, 2016,August 22, 2018, the Federal ReserveU.S. banking regulators published a final rule permitting investment-grade municipal obligations that meet certain criteria to qualify as HQLA for purposes of the U.S. LCR public disclosure requirements for certain bank holding companiesrule. The final rule went into effect on August 30, 2018, and nonbank financial companies. Beginning withdid not have a material impact on the second quarter of 2017, the Firm disclosed its averageFirm’s HQLA or LCR for the quarter and the key quantitative components of the average LCR, along with a qualitative discussion of material drivers of the ratio. The Firm will continue to make available its U.S. LCR Disclosure report on a quarterly basis on the Firm’s website at: (https://investor.shareholder.com/jpmorganchase/basel.cfm)three months ended September 30, 2018.
The following table summarizes the Firm’s average LCR for the three months ended September 30, 2018, June 30, 2018 and September 30, 2017 based on the Firm’s current interpretation of the finalized LCR framework.
Average amount
(in millions)
Three months ended
September 30, 2017
Three months ended
Average amount
(in billions)
September 30, 2018June 30, 2018September 30, 2017
HQLA  
Eligible cash(a)
$389,516
$345
$363
$390
Eligible securities(b)(c)
178,803
190
166
179
Total HQLA(d)
$568,319
$535
$529
$568
Net cash outflows$475,229
$467
$458
$475
LCR120%115%115%120%
Net excess HQLA (d)
$93,090
$68
$71
$93
(a)Represents cash on deposit at central banks, primarily Federal Reserve Banks.
(b)Predominantly U.S. Treasuries, U.S. Agency MBS, U.S. Treasuries, and sovereign bonds net of applicable haircuts under the LCR rulesrules.
(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. and Chase Bank USA, N.A. that are not transferable to non-bank affiliates.
ForThe Firm’s average LCR was 115% for the three months ended September 30, 2017, the2018 and June 30, 2018.
The Firm’s average LCR was 120%, compared with an average of 115% fordecreased during the three months ended JuneSeptember 30, 2017 as reported2018, compared with the prior year period due to a reduction in the Firm’s U.S. LCR Public Disclosure. The increase in the ratio was largely attributable to an increase in average HQLA,cash primarily driven by an increase in the amount of cashlong-term debt maturities and securities held by JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A that became available to transfer to non-bank affiliates. CIB client-driven markets activities.
The Firm’s average LCR may fluctuate from period to period, due to changes in its HQLA and estimated net cash outflows under the LCR as a result of ongoing business activity. The Firm’s HQLA are expected to be available to meet its liquidity needs in a time of stress.

Other liquidity sources
As of September 30, 2017,2018, in addition to assets reported in the Firm’s HQLA under the LCR rule, the Firm had approximately $234$225 billion of unencumbered marketable securities, such as equity securities and fixed income debt securities, available to raise liquidity, if required. This includes HQLA-eligible securities included as part of the excess liquidity at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates.
As of September 30, 2017,2018, the Firm also had approximately $273 $298.9 billion of available borrowing capacity at various Federal Home Loan Banks (“FHLBs”), theFHLBs, discount windows at Federal Reserve Bank discount windowBanks and various other central banks as a result of collateral pledged by the Firm to such banks. This remaining borrowing capacity excludes the benefit of securities reported in the Firm’s HQLA or other unencumbered securities that are currently pledged at the Federal Reserve Bank discount window, but for which the Firm has not drawn liquidity.windows. Although available, the Firm does not view the borrowing capacity at the Federal Reserve Bank discount windowwindows and the various other central banks as a primary source of liquidity.
NSFR
The Net Stable Funding Ratio (“NSFR”) is intended to measure the adequacy of “available” and “required” amounts of stable funding over a one-year horizon. On April 26, 2016, the U.S. NSFR proposal was released for large banks and bank holding companies and was largely consistent with the Basel Committee's final standard.
While the final U.S. NSFR has yet to be released, the Firm estimates it was compliant with the proposed 100% minimum NSFR based on data as of June 30, 2017, and on its current understanding of the proposed rule.

Funding
Sources of funds
Management believes that the Firm’s securedunsecured and unsecuredsecured funding capacity is sufficient to meet its on- and off-balance sheet obligations.
The Firm funds its global balance sheet through diverse sources of funding including a stable deposit franchise as well as secured and unsecured funding in the capital markets.The Firm’s loan portfoliois funded with a portion of the Firm’s deposits and , through securitizations and, with respect to a portion of the Firm’s real estate-related loans, with secured borrowings from the FHLBs. Deposits in excess of the amount utilized to fund loans are primarily invested in the Firm’s investment securities portfolio or deployed in cash or other short-term liquid investments based on their interest rate and liquidity risk characteristics.Securities
borrowed or purchased under resale agreements and trading assets-debt and equity instruments are primarily funded by the Firm’s securities loaned or sold under agreements to repurchase, trading liabilities-debt and equity instruments, and a portion of the Firm’s long-term debt and stockholders’ equity. In addition to funding securities borrowed or purchased under resale agreements and trading assets-debt and Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance. Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance.equity instruments, proceeds from the Firm’s debt and equity issuances are used to fund certain loans and other financial and non-financial assets, or may be invested in the Firm’s investment securities portfolio. See Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance.


Deposits
The table below summarizes, by line of business, the deposit balances as of September 30, 2017,2018, and December 31, 2016,2017, and the average deposit balances for the three and nine months ended September 30, 20172018 and 2016,2017, respectively.
September 30, 2017
December 31, 2016
 Three months ended September 30, Nine months ended September 30,September 30, 2018
December 31, 2017
 Three months ended September 30, Nine months ended
September 30,
Deposits Average Average Average Average
(in millions) 2017
2016
 2017
2016
 2018
2017
 2018
2017
Consumer & Community Banking$653,460
$618,337
 $645,732
$593,671
 $636,257
$579,741
$677,260
$659,885
 $674,211
$645,732
 $669,244
$636,257
Corporate & Investment Bank466,323
412,434
 461,961
413,698
 444,064
404,501
482,490
455,883
 476,995
461,961
 472,879
444,064
Commercial Banking176,452
179,532
 176,095
172,204
 175,265
170,810
168,112
181,512
 168,102
176,095
 171,403
175,265
Asset & Wealth Management141,409
161,577
 144,496
153,121
 151,311
151,656
130,497
146,407
 133,021
144,496
 138,885
151,311
Corporate1,383
3,299
 2,739
5,281
 4,152
5,788
403
295
 533
2,739
 736
4,152
Total Firm$1,439,027
$1,375,179
 $1,431,023
$1,337,975
 $1,411,049
$1,312,496
$1,458,762
$1,443,982
 $1,452,862
$1,431,023
 $1,453,147
$1,411,049
A key strength of the Firm is its diversified deposit franchise, through each of its lines of business, which
provides a stable source of funding and limits reliance on the wholesale funding markets. A significant portion of the Firm’s deposits are consumer and wholesale operating deposits, which are both considered to be stable sources of liquidity. Wholesale operating deposits are considered ato be stable sourcesources of liquidity because they are generated from customers that maintain operating service relationships with the Firm.
The table below shows the loan and deposit balances, the loans-to-deposits ratios, and deposits as a percentage of total liabilities, as of September 30, 20172018 and December 31, 2016.2017.
(in billions except ratios)September 30, 2017
December 31, 2016
Deposits$1,439.0
$1,375.2
Deposits as a % of total liabilities62%61%
Loans913.8
894.8
Loans-to-deposits ratio63%65%
Deposits increased due to both higher wholesale and consumer deposits. The higher wholesale deposits were driven by growth in client cash management activity in CIB’s Securities Services and Treasury Services businesses, partially offset by lower balances in AWM reflecting balance migration into investment-related products (retained predominantly within the Firm), and the impact of seasonality in both CB and AWM. The higher consumer deposits reflected the continuation of strong growth from new and existing customers, and low attrition rates.
(in billions except ratios)September 30, 2018
 December 31, 2017
Deposits$1,458.8
 $1,444.0
Deposits as a % of total liabilities62% 63%
Loans$954.3
 $930.7
Loans-to-deposits ratio65% 64%
The Firm believes that average deposit balances are generally more representative of deposit trends than period-end deposit balances.
Average deposits increased for the three months ended September 30, 2018 in CCB and CIB, partially offset by declines in AWM, CB and Corporate.
The increase in averageCCB reflects the continuation of growth from new customers, partially offset by balance migration into investment-related products, and in CIB reflects growth in operating deposits in Treasury Services driven by growth in client activity. 
The decline in AWM was driven by balance migration predominantly into the Firm’s investment-related products, and in CB was primarily driven by the migration of non-operating deposits into higher-yielding investment products . The decline in Corporate was predominantly due to maturities of wholesale non-operating deposits, consistent with the Firm’s efforts to reduce such deposits.
Average deposits increased for the three and nine months ended September 30, 2017, compared with2018 in CCB and CIB, partially offset by declines in AWM, CB and Corporate.
The increase in CCB reflects the threecontinuation of growth from new customers, partially offset by balance migration into investment-related products, and nine months ended September 30, 2016,in CIB reflects growth in operating deposits in Treasury Services and Securities Services driven by growth in client activity. 
The decline in AWM was driven by an increasebalance migration predominantly into the Firm’s investment-related products, and in both consumer andCB was primarily driven by the migration of non-operating deposits into higher-yielding investment products. The decline in Corporate was predominantly due to maturities of wholesale non-operating deposits, consistent with the Firm’s efforts to reduce such deposits.
For further discussions ofinformation on deposit and liability balance trends, seerefer to the discussion of the Firm’s Business Segment Results and the Consolidated Balance Sheets Analysis on pages 18–4019-41 and pages 11–12,12–14, respectively.

The following table summarizes short-term and long-term funding, excluding deposits, as of September 30, 2017,2018, and December 31, 2016,2017, and average balances for the three and nine months endedSeptember 30, 20172018 and 2016,2017, respectively. For additional information, seerefer to the Consolidated Balance Sheets Analysis on pages 11–1212–14 and Note 10.
 September 30, 2017December 31, 2016 Three months ended September 30, Nine months ended September 30,
Sources of funds (excluding deposits) Average Average
(in millions) 2017
2016
 2017
2016
Commercial paper$24,248
$11,738
 $23,022
$13,798
 $18,653
$16,257
         
Obligations of Firm-administered multi-seller conduits(a)
$2,923
$2,719
 $2,947
$5,872
 $3,351
$5,900
Other borrowed funds$29,719
$22,705
 $29,936
$19,818
 $25,620
$20,051
         
Securities loaned or sold under agreements to repurchase:        
Securities sold under agreements to repurchase(b)(c)
$154,463
$149,826
 $167,652
$165,120
 $173,334
$157,808
Securities loaned(c)(d)
9,867
12,137
 9,637
10,946
 12,094
13,270
Total securities loaned or sold under agreements to repurchase(c)(e)
$164,330
$161,963
 $177,289
$176,066
 $185,428
$171,078
         
Senior notes$157,495
$151,042
 $159,270
$157,318
 $154,148
$152,894
Trust preferred securities2,334
2,345
 2,336
3,965
 2,340
3,968
Subordinated debt18,079
21,940
 18,399
23,779
 20,029
24,769
Structured notes43,760
37,292
 44,157
37,323
 42,025
35,499
Total long-term unsecured funding$221,668
$212,619
 $224,162
$222,385
 $218,542
$217,130
         
Credit card securitization(a)
$23,473
$31,181
 $24,709
$31,074
 $27,041
$28,604
Other securitizations(a)(f)
—
1,527
 —
1,639
 837
1,698
Federal Home Loan Bank (“FHLB”) advances63,769
79,519
 67,288
72,687
 72,504
71,158
Other long-term secured funding(g)
3,145
3,107
 3,176
5,223
 3,202
5,130
Total long-term secured funding$90,387
$115,334
 $95,173
$110,623
 $103,584
$106,590
         
Preferred stock(h)
$26,068
$26,068
 $26,068
$26,068
 $26,068
$26,068
Common stockholders’ equity(h)
$232,314
$228,122
 $231,861
$226,089
 $229,937
$224,034
 September 30, 2018December 31, 2017 Three months ended September 30, Nine months ended September 30,
Sources of funds (excluding deposits)Average Average
(in millions)2018
2017
 2018
2017
Commercial paper$29,313
$24,186
 $28,702
$23,022
 $27,289
$18,653
Other borrowed funds(a)
10,857
10,727
 11,172
10,469
 11,716
10,484
Total short-term unsecured funding(a)
$40,170
$34,913
 $39,874
$33,491
 $39,005
$29,137
Securities sold under agreements to repurchase(a)(b)
$168,450
$147,713
 $174,436
$169,638
 $178,929
$174,777
Securities loaned(a)(b)
12,357
9,211
 9,131
10,946
 10,900
13,370
Other borrowed funds(a)
24,465
16,889
 21,169
19,467
 21,336
15,136
Obligations of Firm-administered multi-seller conduits(c)
$4,304
$3,045
 $3,102
$2,947
 $3,070
$3,351
Total short-term secured funding(a)
$209,576
$176,858
 $207,838
$202,998
 $214,235
$206,634
         
Senior notes$155,099
$155,852
 $154,820
$159,270
 $152,046
$154,148
Trust preferred securities(d)
—
690
 517
2,336
 629
2,340
Subordinated debt(d)
16,426
16,553
 16,079
18,399
 16,106
20,029
Structured notes(e)
52,187
45,727
 50,905
44,157
 48,874
42,025
Total long-term unsecured funding$223,712
$218,822
 $222,321
$224,162
 $217,655
$218,542
         
Credit card securitization(c)
$14,142
$21,278
 $15,052
$24,709
 $16,620
$27,041
Other securitizations(c)(f)
—
—
 —
—
 —
837
Federal Home Loan Bank (“FHLB”) advances41,457
60,617
 48,645
67,288
 54,378
72,504
Other long-term secured funding(g)
4,955
4,641
 5,013
3,176
 4,832
3,202
Total long-term secured funding$60,554
$86,536
 $68,710
$95,173
 $75,830
$103,584
         
Preferred stock(h)
$27,764
$26,068
 $26,252
$26,068
 $26,130
$26,068
Common stockholders’ equity(h)
$231,192
$229,625
 $230,439
$231,861
 $228,995
$229,937
(a)The prior period amounts have been revised to conform with the current period presentation.
(b)Primarily consists of short-term securities loaned or sold under agreements to repurchase.
(c)Included in beneficial interests issued by consolidated variable interest entities on the Firm’s Consolidated balance sheets.
(b)(d)Excluded long-term structured repurchase agreements of $2.0Subordinated debt includes $1.6 billion and $1.8 billion as$664 million of September 30,junior subordinated debentures distributed pro rata to the holders of trust preferred securities which were cancelled on December 18, 2017 and December 31, 2016, respectively, average balancesSeptember 10, 2018, respectively. For further information refer to Note 19 of $2.0 billion and $1.9 billion for the three months ended September 30,JPMorgan Chase’s 2017 and 2016, respectively, and $1.4 billion and $2.9 billion for the nine months ended September 30, 2017 and 2016, respectively.
(c)The prior period amounts have been revised to conform with the current period presentation.
(d)Excludes long-term securities loaned of $1.3 billion and $1.2 billion as of September 30, 2017, and December 31, 2016, respectively, average balances of $1.3 billion and $1.2 billion for the three months ended September 30, 2017 and 2016, respectively, and $1.3 billion for both the nine months ended September 30, 2017 and 2016.Annual Report.
(e)Excludes federal funds purchased.Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
(f)Other securitizations include securitizations of student loans. The Firm deconsolidated the student loan securitization entities in the second quarter of 2017 as it no longer had a controlling financial interest in these entities as a result of the sale of the student loan portfolio. For additional information about the sale of the student loan portfolio, see CCB Business Segment Results on pages 20–24. The Firm’s wholesale businesses also securitize loans for client-driven transactions, which are not considered to be a source of funding for the Firm and are not included in the table.
(g)Includes long-term structured notes which are secured.
(h)For additional information on preferred stock and common stockholders’ equity seerefer to Capital Risk Management on pages 42–48 and the44-48, Consolidated statements of changes in stockholders’ equity, on page 86; and Note 2220 and Note 2321 of JPMorgan Chase’s 20162017 Annual Report.
Short-term funding
The Firm’s sources of short-term secured funding primarily consist of securities loaned or sold under agreements to repurchase. Securities loaned or sold under agreements to repurchaseThese instruments are secured predominantly by high-quality securities collateral, including government-issued debt and agency MBS, and constitute a significant portion of the federal funds purchased and securities loaned or sold under repurchase agreements on the Consolidated balance sheets.
The increase in the average balance of securities loaned or sold under agreements to repurchase for the three and nine months endedat September 30, 2018, from December 31, 2017, compared with September 30, 2016, was largely due to reflected higher secured financing of trading assets-debt and equity instruments in the CIB related toand client-driven market-making activities.activities in CIB.
 
The balances associated with securities loaned or sold under agreements to repurchase fluctuate over time due to customers’ investment and financing activities; the Firm’s demand for financing; the ongoing management of the mix of the Firm’s liabilities, including its secured and unsecured financing (for both the investment securities and market-making portfolios); and other market and portfolio factors.
The Firm’s sources of short-term unsecured funding primarily consist of issuance of wholesale commercial paper. The increase in commercial paper as of September 30, 2017, compared to December 31, 2016, was due to a change in the mix of funding from securities sold under repurchase agreements.higher net issuance.

Long-term funding and issuance
Long-term funding provides additional sources of stable funding and liquidity for the Firm. The Firm’s long-term funding plan is driven primarily by expected client activity, liquidity considerations, and regulatory requirements, including TLAC. TLAC. Long-term funding objectives include maintaining diversification, maximizing market access and optimizing funding costs. The Firm evaluates various funding markets, tenors and currencies in creating its optimal long-term funding plan.
The significant majority of the Firm’s long-term unsecured funding is issued by the Parent Company to provide maximum flexibility in support of both bank and nonbank subsidiary funding needs.The Parent Company advances substantially all net funding proceeds to its subsidiary, the Intermediate Holding Company (“IHC”). The IHC does not issue debt to external counterparties. The presentation in the following table summarizeshas been revised to provide the notional value of the long-term unsecured issuance and maturities or redemptions by the Parent Company and subsidiaries for the three and nine months ended September 30, 20172018 and 2016.2017. For additional information on the IHC and long-term debt, refer to Liquidity Risk Management and the IHC, see Note 21 and Executive Overview19 of JPMorgan Chase’s 20162017 Annual Report.
Long-term unsecured funding          
 Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30,
 2018
2017
 2018
2017
 2018
2017
 2018
2017
(Notional in millions)
Parent Company(b)
 
Subsidiaries(b)
Issuance           
Senior notes issued in the U.S. market$6,000
$4,000
 $17,000
$18,750
 $1,250
$—
 $8,761
$—
Senior notes issued in non-U.S. markets—
—
 1,175
2,220
 —
—
 —
—
Total senior notes6,000
4,000
 18,175
20,970
 1,250
—
 8,761
—
Subordinated debt—
—
 —
—
 —
—
 —
—
Structured notes(a)
387
337
 2,047
2,046
 5,934
6,250
 20,159
21,135
Total long-term unsecured funding – issuance$6,387
$4,337
 $20,222
$23,016
 $7,184
$6,250
 $28,920
$21,135
            
Maturities/redemptions           
Senior notes$646
$4,000
 $18,633
$16,826
 $1,503
$152
 $4,466
$1,368
Subordinated debt15
395
 15
3,401
 —
500
 —
500
Structured notes582
1,505
 2,465
4,785
 3,474
4,152
 12,104
13,245
Total long-term unsecured funding – maturities/redemptions$1,243
$5,900
 $21,113
$25,012
 $4,977
$4,804
 $16,570
$15,113
(a)Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
(b)The prior period amounts have been revised to conform with the current period presentation.
Long-term unsecured funding    
 Three months ended September 30, Nine months ended September 30,
(in millions)2017
2016
 2017
2016
Issuance     
Senior notes issued in the U.S. market$3,967
$8,467
 $18,646
$21,654
Senior notes issued in non-U.S. markets—
2,172
 2,210
7,063
Total senior notes3,967
10,639
 20,856
28,717
Subordinated debt—
—
 —
—
Structured notes6,587
4,643
 23,181
18,254
Total long-term unsecured funding – issuance$10,554
$15,282
 $44,037
$46,971
      
Maturities/redemptions     
Senior notes$4,152
$6,229
 $18,194
$22,539
Trust preferred securities—
—
 —
—
Subordinated debt895
521
 3,901
2,523
Structured notes5,657
3,233
 18,030
11,774
Total long-term unsecured funding – maturities/redemptions$10,704
$9,983
 $40,125
$36,836

The Firmraises secured long-term funding primarily through securitization of consumer credit card loans and advances from the FHLBs. The following table summarizes the securitization issuance and FHLB advances and their respective maturities or redemptions for the three and nine months ended September 30, 2018 and 2017, and 2016, respectively.
Long-term secured fundingLong-term secured funding       Long-term secured funding      
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
Issuance Maturities/Redemptions Issuance Maturities/RedemptionsIssuance Maturities/Redemptions Issuance Maturities/Redemptions
(in millions)2017
2016
 2017
2016
 2017
2016
 2017
2016
20182017 20182017 2018
2017
 2018
2017
Credit card securitization$—
$4,463
 $2,264
$—
 $1,545
$8,277
 $9,270
$2,775
$—
$—
 $2,375
$2,264
 $1,396
$1,545
 $8,500
$9,270
Other securitizations(a)
—
—
 —
58
 —
—
 55
177
—
—
 —
—
 —
—
 —
55
FHLB advances—
15,900
 4,694
5,902
 —
15,900
 15,748
7,956
—
—
 10,704
4,694
 4,000
—
 23,157
15,748
Other long-term secured funding(b)(c)
186
89
 516
2,546
 727
415
 640
2,635
117
189
 139
516
 312
726
 161
640
Total long-term secured funding$186
$20,452
 $7,474
$8,506
 $2,272
$24,592
 $25,713
$13,543
$117
$189
 $13,218
$7,474
 $5,708
$2,271
 $31,818
$25,713
(a)
Other securitizations includes securitizations of student loans. The Firm deconsolidated the student loan securitization entities in the second quarter of 2017 as it no longer had a controlling financial interest in these entities as a result of the sale of the student loan portfolio. For additional information about the sale of the student loan portfolio, see CCB Business Segment Results on pages 20–24.
(b)Includes long-term structured notes which are secured.
(c)The prior period amounts have been revised to conform with the current period presentation.
The Firm’s wholesale businesses also securitize loans for client-driven transactions; those client-driven loan securitizations are not considered to be a source of funding for the Firm and are not included in the table above. For further description of the client-driven loan securitizations, seerefer to Note 1614 of JPMorgan Chase’s 20162017 Annual Report.


Credit ratings
The cost and availability of financing are influenced by credit ratings. Reductions in these ratings could have an adverse effect on the Firm’s access to liquidity sources, increase the cost of funds, trigger additional collateral or funding requirements and decrease the number of investors and counterparties willing to lend to the Firm.


 
Additionally, the Firm’s funding requirements for VIEs and other third-party commitments may be adversely affected by a decline in credit ratings. For additional information on the impact of a credit ratings downgrade on the funding requirements for VIEs, and on derivatives and collateral agreements, seerefer to SPEs on page 14,15, and Liquidity risk and
credit-related contingent features in Note 4.4.
The credit ratings of the Parent Company and the Firm’s principal bank and nonbank subsidiaries as of September 30, 2017,2018, except as noted below, were as follows.
 JPMorgan Chase & Co. 
JPMorgan Chase Bank, N.A.
Chase Bank USA, N.A.
 
J.P. Morgan Securities LLC
J.P. Morgan Securities plc
September 30, 20172018Long-term issuerShort-term issuerOutlook Long-term issuerShort-term issuerOutlook Long-term issuerShort-term issuerOutlook
Moody’s Investors Service(a)
A3P-2StableAa3A2P-1Stable A1Aa2P-1StableAa3P-1Stable
Standard & Poor’sA-A-2Stable A+A-1Stable A+A-1Stable
Fitch RatingsA+F1StableAA-F1+Stable AA-AAF1+StableAAF1+Stable
(a)Moody’s ratings as of October 25, 2018
On June 1, 2017,October 25, 2018, Moody’s upgraded the Parent Company’s long-term issuer rating to A2 (previously A3) and short-term issuer rating to P-1 (previously P-2). The long-term issuer ratings were also upgraded for JPMorgan Chase Bank, N.A. terminated its guarantee of the payment of all obligations ofand Chase Bank USA, N.A. to Aa2 (previously Aa3), and for J.P. Morgan Securities LLC and J.P. Morgan Securities plc arising after such termination.to Aa3 (previously A1).
On June 21, 2018, Fitch upgraded the Parent Company’s long-term issuer rating to AA- (previously A+) and short-term issuer rating to F1+ (previously F1). The long-term issuer ratings were also upgraded to AA for JPMorgan Chase Bank, N.A, Chase Bank USA, N.A., J.P. Morgan Securities LLC and J.P. Morgan Securities plc whose credit ratings(all previously reflected the benefit of this guarantee, is now rated on a stand-alone, non-guaranteed basis.AA-).
Downgrades of the Firm’s long-term ratings by one or two notches could result in an increase in its cost of funds, and the Firm's access to certain funding markets could be reduced. The nature and magnitude of the impact of ratings downgrades depends on numerous contractual and behavioral factors (whichwhich the Firm believes are incorporated in its liquidity risk and stress testing metrics).metrics. The Firm believes that it maintains sufficient liquidity to withstand a potential decrease in funding capacity due to ratings downgrades.
JPMorgan Chase’s unsecured debt does not contain requirements that would call for an acceleration of payments, maturities or changes in the structure of the existing debt, provide any limitations on future borrowings or require additional collateral, based on unfavorable changes in the Firm’s credit ratings, financial ratios,
earnings, or stock price.
Critical factors in maintaining high credit ratings include a stable and diverse earnings stream, strong capital and liquidity ratios, strong credit quality and risk management controls, and diverse funding sources, and disciplined liquidity monitoring procedures.sources. Rating agencies continue to evaluate economic and geopolitical trends, regulatory developments, future profitability, risk management practices, and litigation matters, as well as their broader ratings methodologies. Changes in any of these factors could lead to changes in the Firm’s credit ratings.
Although

CREDIT AND INVESTMENT RISK MANAGEMENT
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. For a further discussion of Credit Risk refer to pages 55-72. For a further discussion on Investment Portfolio Risk, refer to page 72. For a further discussion of the Firm’s Credit and Investment Risk Management framework and organization, and the identification, monitoring and management, refer to Credit and Investment Risk Management on pages 99–120 of JPMorgan Chase’s 2017 Annual Report.


CREDIT PORTFOLIO
Credit risk is the risk associated with the default or change in credit profile of a client, counterparty or customer.
In the following tables, reported loans include loans retained (i.e., held-for-investment); loans held-for-sale; and certain loans accounted for at fair value. The following tables do not include loans which the Firm closelyaccounts for at fair value and classifies as trading assets. For further information regarding these loans, refer to Notes 2 and 3. For additional information on the Firm’s loans, lending-related commitments and derivative receivables, including the Firm’s accounting policies, refer to Notes 11, 20, and 4, respectively.
For further information regarding the credit risk inherent in the Firm’s cash placed with banks, refer to Wholesale credit exposure – industry exposures on pages 64–66; for information regarding the credit risk inherent in the Firm’s investment securities portfolio, refer to Note 9 of this Form 10-Q, and Note 10 of JPMorgan Chase’s 2017 Annual Report; and for information regarding the credit risk inherent in the securities financing portfolio, refer to Note 10 of this Form 10-Q, and Note 11 of JPMorgan Chase’s 2017 Annual Report.
For a further discussion of the consumer credit environment and consumer loans, refer to Consumer Credit Portfolio on pages 102-107 of JPMorgan Chase’s 2017 Annual Report and Note 11 of this Form 10-Q. For a further discussion of the wholesale credit environment and wholesale loans,
refer to Wholesale Credit Portfolio on pages 108–116 of JPMorgan Chase’s 2017 Annual Report and Note 11 of this Form 10-Q.
Total credit portfolio    
 Credit exposure 
Nonperforming(d)(e)
(in millions)Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Loans retained$947,651
$924,838
 $4,630
$5,943
Loans held-for-sale3,680
3,351
 14
—
Loans at fair value2,987
2,508
 —
—
Total loans – reported954,318
930,697
 4,644
5,943
Derivative receivables60,062
56,523
 90
130
Receivables from customers and other(a)
26,137
26,272
 —
—
Total credit-related assets1,040,517
1,013,492
 4,734
6,073
Assets acquired in loan satisfactions     
Real estate ownedNA
NA
 268
311
OtherNA
NA
 32
42
Total assets acquired in loan satisfactions
NA
NA
 300
353
Lending-related commitments1,048,674
991,482
 252
731
Total credit portfolio$2,089,191
$2,004,974
 $5,286
$7,157
Credit derivatives used
in credit portfolio management activities(b)
$(14,206)$(17,609) $—
$—
Liquid securities and other cash collateral held against derivatives(c)
(16,943)(16,108) NA
NA
(in millions,
except ratios)
Three months ended
September 30,		 Nine months ended
September 30,
2018
2017
 2018
2017
Net charge-offs(f)
$1,033
$1,265
 $3,620
$4,123
Average retained loans     
Loans942,583
903,892
 931,766
894,170
Loans – excluding residential real estate PCI loans916,205
871,465
 903,377
860,443
Net charge-off rates(f)
     
Loans0.43%0.56% 0.52%0.62%
Loans – excluding PCI0.45
0.58
 0.54
0.64
(a)Receivables from customers and other primarily represents held-for-investment margin loans to brokerage customers.
(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. For additional information, refer to Credit derivatives on page 68 and Note 4.
(c)Includes collateral related to derivative instruments where an appropriate legal opinion has not been either sought or obtained.
(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 September 30, 2018, and December 31, 2017, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $2.9 billion and $4.3 billion, respectively, and real estate owned (“REO”) insured by U.S. government agencies of $78 million and $95 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”).
(f)For the nine months ended September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio transfer, the net charge-off rate for Loans would have been 0.55% and for Loans – excluding PCI would have been 0.57%.

CONSUMER CREDIT PORTFOLIO
The Firm’s retained consumer portfolio consists primarily of residential real estate loans, credit card loans, auto loans, and business banking loans, as well as associated lending-related commitments. The Firm’s focus is on serving primarily the prime segment of the consumer credit market. For further information on consumer loans, refer to Note 11 of this Form
10-Q and Consumer Credit Portfolio on pages 102-107 and Note 12 of JPMorgan Chase’s 2017 Annual Report. For further information on lending-related commitments, refer to Note 20 of this Form 10-Q and Note 27 of JPMorgan Chase’s 2017 Annual Report.
The following table presents consumer credit-related information with respect to the credit portfolio held by CCB, prime mortgage and home equity loans held by AWM, and prime mortgage loans held by Corporate. For further information about the Firm’s nonaccrual and charge-off accounting policies, refer to Note 12 of JPMorgan Chase’s 2017 Annual Report.
Consumer credit portfolio                
      Three months ended September 30, Nine months ended September 30,

(in millions, except ratios)		Credit exposure 
Nonaccrual
loans(i)(j)
 
Net
charge-offs/(recoveries)(k)(l)
 
Average annual
net charge-off/(recoveries) rate(k)(l)(m)
 
Net
charge-offs/(recoveries)(d)(k)
 
Average annual
net charge-off/(recoveries) rate(d)(k)(m)
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
 2018
2017
 2018
2017
 2018
2017
 2018
2017
Consumer, excluding credit card                 
Loans, excluding PCI loans and loans held-for-sale                 
Residential mortgage$231,361
$216,496
 $1,880
$2,175
 $(105)$3
 (0.18)%0.01% $(256)$3
 (0.15)%—%
Home equity29,318
33,450
 1,382
1,610
 (12)13
 (0.16)0.15
 (2)71
 (0.01)0.26
Auto(a)(b)
63,619
66,242
 137
141
 56
116
 0.35
0.71
 182
245
 0.37
0.50
Consumer & Business Banking(b)(c)
26,451
25,789
 237
283
 68
71
 1.02
1.12
 171
184
 0.88
0.99
Student(d)
—
—
 —
—
 —
—
 —
—
 —
498
 —
NM
Total loans, excluding PCI loans and loans held-for-sale350,749
341,977
 3,636
4,209
 7
203
 0.01
0.24
 95
1,001
 0.04
0.40
Loans – PCI                 
Home equity9,393
10,799
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Prime mortgage4,931
6,479
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Subprime mortgage2,072
2,609
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Option ARMs(e)
8,813
10,689
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – PCI25,209
30,576
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – retained375,958
372,553
 3,636
4,209
 7
203
 0.01
0.22
 95
1,001
 0.03
0.37
Loans held-for-sale104
128
 —
—
 —
—
 —
—
 —
—
 —
—
Total consumer, excluding credit card loans376,062
372,681
 3,636
4,209
 7
203
 0.01
0.22
 95
1,001
 0.03
0.37
Lending-related commitments(f)
50,630
48,553
               
Receivables from customers(g)
155
133
               
Total consumer exposure, excluding credit card426,847
421,367
               
Credit card                 
Loans retained(h)
147,856
149,387
 —
—
 1,073
1,019
 2.91
2.87
 3,407
3,049
 3.16
2.94
Loans held-for-sale25
124
 —
—
 —
—
 —
—
 —
—
 —
—
Total credit card loans147,881
149,511
 —
—
 1,073
1,019
 2.91
2.87
 3,407
3,049
 3.16
2.94
Lending-related commitments(f)
600,728
572,831
               
Total credit card exposure748,609
722,342
               
Total consumer credit portfolio$1,175,456
$1,143,709
 $3,636
$4,209
 $1,080
$1,222
 0.82 %0.95% $3,502
$4,050
 0.90 %1.07%
Memo: Total consumer credit portfolio, excluding PCI$1,150,247
$1,113,133
 $3,636
$4,209
 $1,080
$1,222
 0.86 %1.02% $3,502
$4,050
 0.96 %1.15%
(a)At September 30, 2018, and December 31, 2017, excluded operating lease assets of $19.6 billion and $17.1 billion, respectively. These operating lease assets are included in other assets on the Firm’s Consolidated balance sheets. The risk of loss on these assets relates to the residual value of the leased vehicles, which is managed through projection of the lease residual value at lease origination, periodic review of residual values, and through arrangements with certain auto manufacturers that mitigates this risk.
(b)Includes certain business banking and auto dealer risk-rated loans that apply the wholesale methodology 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)For the nine months ended September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio sale, the net charge-off rate for Total consumer, excluding credit card and PCI loans and loans held-for-sale would have been 0.22%; Total consumer – retained excluding credit card loans would have been 0.20%; Total consumer credit portfolio would have been 0.95%; and Total consumer credit portfolio, excluding PCI loans would have been 1.02%.
(e)At both September 30, 2018, and December 31, 2017, approximately 68% of the PCI option adjustable rate mortgage (“ARM”) portfolio has been modified into fixed-rate, fully amortizing loans.

(f)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. For further information, refer to Note 20.
(g)Receivables from customers represent held-for-investment margin loans to brokerage customers that are collateralized through assets maintained in the clients’ brokerage accounts. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.
(h)Includes billed interest and fees net of an allowance for uncollectible interest and fees.
(i)At September 30, 2018 and December 31, 2017, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $2.9 billion and $4.3 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.
(j)Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the pools is performing.
(k)Net charge-offs and the net charge-off rates excluded write-offs in the PCI portfolio of $58 million and $20 million for the three months ended September 30, 2018 and 2017, respectively, and $151 million and $66 million for the nine months ended September 30, 2018 and 2017, respectively. These write-offs decreased the allowance for loan losses for PCI loans. Refer to Allowance for Credit Losses on pages 69–71 for further information.
(l)Net charge-offs and net charge-off rates for the three months ended September 30, 2017 included $63 million of incremental charge-offs recorded in accordance with regulatory guidance regarding the timing of loss recognition for certain auto and residential real estate loans in bankruptcy and auto loans where assets were acquired in loan satisfaction.
(m)Average consumer loans held-for-sale were $196 million and $339 million for the three months ended September 30, 2018 and 2017, respectively, and $240 million and $1.9 billion for the nine months ended September 30, 2018 and 2017, respectively. These amounts were excluded when calculating net charge-off rates.

Consumer, excluding credit card
Portfolio analysis
Consumer loan balances increased from December 31, 2017 predominantly due to originations of high-quality prime mortgage loans that have been retained on the balance sheet, largely offset by paydowns and the charge-off or liquidation of delinquent loans.
PCI loans are excluded from the following discussions of individual loan products and are addressed separately below. For further information about the Firm’s consumer portfolio, including information about delinquencies, loan modifications and other credit quality indicators, refer to Note 11 of this Form 10-Q.
Residential mortgage:The residential mortgage portfolio predominantly consists of high-quality prime mortgage loans, with approximately 1% consisting of subprime mortgage loans. These subprime mortgage loans continue to run off and are performing in line with expectations. The residential mortgage portfolio, including loans held-for-sale, increased from December 31, 2017 as the amount of retained originations of primarily high-quality prime mortgage loans exceeded paydowns. Residential mortgage 30+ day delinquencies decreased from December 31, 2017. Nonaccrual loans decreased from December 31, 2017 due to lower delinquencies. Net recoveries for the three and nine months ended September 30, 2018 improved when compared with the same period in the prior year reflecting loan sales as well as continued improvement in home prices and lower delinquencies.
At September 30, 2018, and December 31, 2017, the Firm’s residential mortgage portfolio included $21.3 billion and $20.2 billion, respectively, of interest-only loans. These loans have an interest-only payment period generally followed by an adjustable-rate or fixed-rate fully amortizing payment period to maturity and are typically originated as higher-balance loans to higher-income borrowers. To date, losses on this portfolio generally have been consistent with the broader residential mortgage portfolio. The Firm continues to monitor the risks associated with these loans.
The following table provides a summary of the Firm’s residential mortgage portfolio insured and/or guaranteed by U.S. government agencies, including loans held-for-sale. The Firm monitors its exposure to certain potential unrecoverable claim payments related to government-insured loans and endeavorsconsiders this exposure in estimating the allowance for loan losses.
(in millions)September 30, 2018
December 31, 2017
Current$2,741
$2,401
30-89 days past due1,563
1,958
90 or more days past due2,896
4,264
Total government guaranteed loans$7,200
$8,623
Home equity:The home equity portfolio declined from December 31, 2017 primarily reflecting loan paydowns. The amount of 30+ day delinquencies decreased from December 31, 2017. Nonaccrual loans decreased from December 31, 2017 due to manage,lower delinquencies. Net recoveries for the three and nine months ended September 30, 2018 improved when compared with the same period in the prior year, as a result of continued improvement in home prices and lower delinquencies.
At September 30, 2018, approximately 90% of the Firm’s home equity portfolio consisted of home equity lines of credit (“HELOCs”) and the remainder consisted of home equity loans (“HELOANs”). The carrying value of HELOCs outstanding was $26 billion at September 30, 2018. This amount included $12 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modified and $4 billion of interest-only balloon HELOCs, which primarily mature after 2030. The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are exhibiting a material deterioration in their credit risk profile.

The Firm monitors risks associated with junior lien loans where the borrower has a senior lien loan that is either delinquent or has been modified. These loans are considered “high-risk seconds” and are classified as nonaccrual as they are considered to pose a higher risk of default than other junior lien loans. The carrying value of high-risk seconds declined from December 31, 2017.
For further information on the Firm’s home equity portfolio, refer to Note 11 of this Form 10-Q and Consumer Credit Portfolio on pages 102-107 of JPMorgan Chase’s 2017 Annual Report.
Auto: The auto loan portfolio, which predominantly consists of prime-quality loans, declined when compared with December 31, 2017, as paydowns and the charge-off or liquidation of delinquent loans were predominantly offset by new originations. Nonaccrual loans decreased from December 31, 2017. Net charge-offs for the three and nine months endedSeptember 30, 2018 declined when compared with the same period in the prior year primarily as a result of an incremental $49 million recorded in the prior year in accordance with regulatory guidance regarding the timing of loss recognition for certain loans in bankruptcy and loans where assets were acquired in loan satisfaction.
Consumer & Business Banking: Consumer & Business Banking loans increased when compared with December 31, 2017 due to higher loan originations, predominantly offset by paydowns and charge-offs of delinquent loans. Nonaccrual loans decreased from December 31, 2017. Net charge-offs for the three and nine months endedSeptember 30, 2018 decreased when compared with the same period in the prior year.
Purchased credit-impaired loans:PCI loans decreased from December 31, 2017 due to portfolio run off and loan sales. As of September 30, 2018, approximately 11% of the option ARM PCI loans were delinquent and approximately 68% of the portfolio had been modified into fixed-rate, fully amortizing loans. The borrowers for substantially all of the remaining loans are making amortizing payments, although such payments are not necessarily fully amortizing. This latter group of loans is subject to the risk of payment shock due to future payment recast. Default rates generally increase on option ARM loans when payment recast results in a payment increase. The expected increase in default rates is considered in the Firm’s quarterly impairment assessment.
The following table provides a summary of lifetime principal loss estimates included in either the nonaccretable difference or the allowance for loan losses.
Summary of PCI loans lifetime principal loss estimates
 
Lifetime loss
 estimates(a)
 
Life-to-date
liquidation losses(b)
(in billions)Sep 30,
2018
 Dec 31,
2017
 Sep 30,
2018
 Dec 31,
2017
Home equity$14.1
 $14.2
 $13.0
 $12.9
Prime mortgage4.0
 4.0
 3.8
 3.8
Subprime mortgage3.3
 3.3
 3.1
 3.1
Option ARMs10.2
 10.0
 9.9
 9.7
Total$31.6
 $31.5
 $29.8
 $29.5
(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 $556 million and $842 million at September 30, 2018, and December 31, 2017, respectively.
(b)Represents both realization of loss upon loan resolution and any principal forgiven upon modification.
Geographic composition of residential real estate loans
For information on the geographic composition of the Firm’s residential real estate loans, refer to Note 11.
Current estimated loan-to-value ratio of residential real estate loans
Average current estimated loan-to-value (“LTV”) ratios have declined consistent with recent improvements in home prices, customer paydowns, and charge-offs or liquidations of higher LTV loans. For further information on current estimated LTVs on residential real estate loans, refer to Note 11.
Loan modification activities for residential real estate loans
The performance of modified loans generally differs by product type due to differences in both the credit quality and the types of modifications provided. The performance of modifications to the residential real estate portfolios as measured through cumulative redefault rates, were not materially different from December 31, 2017. For further information on the Firm’s cumulative redefault rates refer to Consumer Credit Portfolio on pages 102-107 of JPMorgan Chase’s 2017 Annual Report.
Certain loans that were modified under the U.S. Government’s Home Affordable Modification Program (“HAMP”) and the Firm’s proprietary modification programs have interest rate reset provisions (“step-rate modifications”). Interest rates on these loans generally began to increase commencing in 2014 by 1% per year, and will continue to do so, until the rate reaches a specified cap. The cap on these loans is typically at a prevailing market interest rate for a fixed-rate mortgage loan as of the modification date. At September 30, 2018, the carrying value of non-PCI loans and the unpaid principal balance of PCI loans modified in step-rate modifications, which have not yet met their specified caps, were $2 billion and $4 billion, respectively. The Firm continues to monitor this risk exposure and the impact of these potential interest rate

increases is considered in the Firm’s allowance for loan losses.
The following table presents information as of September 30, 2018, and December 31, 2017, relating to modified retained residential real estate loans for which concessions have been granted to borrowers experiencing financial difficulty. For further information on modifications for the three and nine months ended September 30, 2018 and 2017, refer to Note 11.
Modified residential real estate loans
 September 30, 2018 December 31, 2017
(in millions)Retained loans
Non-accrual
retained loans(d)
 Retained loans
Non-accrual
retained loans(d)
Modified residential real estate loans, excluding
PCI loans(a)(b)
     
Residential mortgage$4,722
$1,536
 $5,620
$1,743
Home equity2,056
993
 2,118
1,032
Total modified residential real estate loans, excluding PCI loans$6,778
$2,529
 $7,738
$2,775
Modified PCI loans(c)
     
Home equity$2,135
NA
 $2,277
NA
Prime mortgage3,296
NA
 4,490
NA
Subprime mortgage2,162
NA
 2,678
NA
Option ARMs6,660
NA
 8,276
NA
Total modified PCI loans$14,253
NA
 $17,721
NA
(a)Amounts represent the carrying value of modified residential real estate loans.
(b)At September 30, 2018, and December 31, 2017, $4.0 billion and $3.8 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. For additional information about sales of loans in securitization transactions with Ginnie Mae, refer to Note 13.
(c)Amounts represent the unpaid principal balance of modified PCI loans.
(d)At September 30, 2018, and December 31, 2017, nonaccrual loans included $2.0 billion and $2.2 billion, respectively, of troubled debt restructurings (“TDRs”) for which the borrowers were less than 90 days past due. For additional information about loans modified in a TDR that are on nonaccrual status, refer to Note 11.
Nonperforming assets
The following table presents information as of September 30, 2018, and December 31, 2017, about consumer, excluding credit card, nonperforming assets.
Nonperforming assets(a)
   
(in millions)September 30,
2018
 December 31,
2017
Nonaccrual loans(b)
   
Residential real estate$3,262
 $3,785
Other consumer374
 424
Total nonaccrual loans3,636
 4,209
Assets acquired in loan satisfactions   
Real estate owned205
 225
Other32
 40
Total assets acquired in loan satisfactions237
 265
Total nonperforming assets$3,873
 $4,474
(a)At September 30, 2018, and December 31, 2017, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $2.9 billion and $4.3 billion, respectively, and REO insured by U.S. government agencies of $78 million and $95 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.
Nonaccrual loans in the residential real estate portfolio at September 30, 2018 decreased to $3.3 billion from $3.8 billion at December 31, 2017, of which 25% and 26% were greater than 150 days past due, respectively. In the aggregate, the unpaid principal balance of residential real estate loans greater than 150 days past due was charged down by approximately 33% and 40% to the estimated net realizable value of the collateral at September 30, 2018, and December 31, 2017, respectively.
Nonaccrual loans: The following table presents changes in consumer, excluding credit card, nonaccrual loans for the nine months ended September 30, 2018 and 2017.
Nonaccrual loan activity  
Nine months ended September 30,
(in millions)		 2018
2017
Beginning balance $4,209
$4,820
Additions 2,174
2,553
Reductions:   
Principal payments and other(a)
 1,119
1,245
Charge-offs 354
561
Returned to performing status 1,057
1,121
Foreclosures and other liquidations 217
285
Total reductions 2,747
3,212
Net changes (573)(659)
Ending balance $3,636
$4,161
(a)Other reductions includes loan sales.
Active and suspended foreclosure: For information on loans that were in the process of active or suspended foreclosure, refer to Note 11.

Credit card
Total credit card loans decreased from December 31, 2017 due to seasonality. The September 30, 2018 30+ day delinquency rate seasonally decreased to 1.75% from 1.80% at December 31, 2017, and the September 30, 2018 90+ day delinquency rate decreased to 0.85% from 0.92% at December 31, 2017, in line with expectations. Net charge-offs increased for the three and nine months ended September 30, 2018 when compared with the same periods in the prior year, as expected, primarily due to the seasoning of more recent vintages with higher loss rates, as anticipated given underwriting standards at the time of origination.
Consistent with the Firm’s policy, all credit card loans typically remain on accrual status until charged off. However, the Firm establishes an allowance, which is offset against loans and charged to interest income, for the estimated uncollectible portion of accrued and billed interest and fee income.
Geographic and FICO composition of credit card loans
For information on the geographic and FICO composition of the Firm’s credit card loans, refer to Note 11.
Modifications of credit card loans
At September 30, 2018 and December 31, 2017, the Firm had $1.3 billion and $1.2 billion, respectively, of credit card loans outstanding that have been modified in TDRs. These balances included both credit card loans with modified payment terms and credit card loans that reverted back to their pre-modification payment terms because the cardholder did not comply with the modified payment terms.
For additional information about loan modification programs to borrowers, refer to Note 11.

WHOLESALE CREDIT PORTFOLIO
In its wholesale businesses, the Firm is exposed to credit risk primarily through its underwriting, lending, market-making, and hedging activities with and for clients and counterparties, as well as through various operating services (such as cash management and clearing activities), securities financing activities and cash placed with banks. A portion of the loans originated or acquired by the Firm’s wholesale businesses is generally retained on the balance sheet. The Firm distributes a significant percentage of the loans that it originates into the market as part of its syndicated loan business and to manage portfolio concentrations and credit risk.
The credit quality of the wholesale portfolio was stable for the nine months ended September 30, 2018, characterized by low levels of criticized exposure, nonaccrual loans and charge-offs. Refer to the industry discussion on pages 64–66 for further information. Retained loans increased across all wholesale lines of business, predominantly driven by CIB, including loans to financial institution and commercial and industrial clients, and in AWM due to an increase in loans to Wealth Management clients globally. The wholesale portfolio is actively managed, in part by conducting ongoing, in-depth reviews of client credit quality and transaction structure inclusive of collateral where applicable, and of industry, product and client concentrations.
In the following tables, the Firm’s wholesale credit portfolio includes exposure held in CIB, CB, AWM and Corporate, and excludes all exposure managed by CCB.
Wholesale credit portfolio
 Credit exposure 
Nonperforming(c)
(in millions)Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Loans retained$423,837
$402,898
 $994
$1,734
Loans held-for-sale3,551
3,099
 14
—
Loans at fair value2,987
2,508
 —
—
Loans430,375
408,505
 1,008
1,734
Derivative receivables60,062
56,523
 90
130
Receivables from customers and other(a)
25,982
26,139
 —
—
Total wholesale credit-related assets516,419
491,167
 1,098
1,864
Lending-related commitments397,316
370,098
 252
731
Total wholesale credit exposure$913,735
$861,265
 $1,350
$2,595
Credit derivatives used in credit portfolio management activities(b)
$(14,206)$(17,609) $—
$—
Liquid securities and other cash collateral held against derivatives(16,943)(16,108) NA
NA
(a)Receivables from customers and other include $26.0 billion of held-for-investment margin loans at both September 30, 2018, and December 31, 2017, to prime brokerage customers 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. For additional information, refer to Credit derivatives on page 68, and Note 4.
(c)Excludes assets acquired in loan satisfactions.

The following tables present the maturity and ratings profiles of the wholesale credit portfolio as of September 30, 2018, and December 31, 2017. The ratings scale is based on the Firm’s internal risk ratings, which generally correspond to the ratings assigned by S&P and Moody’s. For additional information on wholesale loan portfolio risk ratings, refer to Note 12 of JPMorgan Chase’s 2017 Annual Report.
Wholesale credit exposure – maturity and ratings profile      
 
Maturity profile(d)
 Ratings profile
 Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
September 30, 2018
(in millions, except ratios)
 AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below
Loans retained$136,832
$184,166
$102,839
$423,837
 $324,343
 $99,494
$423,837
77%
Derivative receivables   60,062
    60,062
 
Less: Liquid securities and other cash collateral held against derivatives   (16,943)    (16,943) 
Total derivative receivables, net of all collateral11,650
12,637
18,832
43,119
 34,602
 8,517
43,119
80
Lending-related commitments92,332
291,650
13,334
397,316
 297,286
 100,030
397,316
75
Subtotal240,814
488,453
135,005
864,272
 656,231
 208,041
864,272
76
Loans held-for-sale and loans at fair value(a)
   6,538
    6,538
 
Receivables from customers and other   25,982
    25,982
 
Total exposure – net of liquid securities and other cash collateral held against derivatives   $896,792
    $896,792
 
Credit derivatives used in credit portfolio management activities(b)(c)
$(1,586)$(7,053)$(5,567)$(14,206) $(12,537) $(1,669)$(14,206)88%
 
Maturity profile(d)
 Ratings profile
 Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
December 31, 2017
(in millions, except ratios)		 AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below
Loans retained$121,643
$177,033
$104,222
$402,898
 $311,681
 $91,217
$402,898
77%
Derivative receivables   56,523
    56,523
 
Less: Liquid securities and other cash collateral held against derivatives   (16,108)    (16,108) 
Total derivative receivables, net of all collateral9,882
10,463
20,070
40,415
 32,373
 8,042
40,415
80
Lending-related commitments80,273
275,317
14,508
370,098
 274,127
 95,971
370,098
74
Subtotal211,798
462,813
138,800
813,411
 618,181
 195,230
813,411
76
Loans held-for-sale and loans at fair value(a)
   5,607
    5,607
 
Receivables from customers and other   26,139
    26,139
 
Total exposure – net of liquid securities and other cash collateral held against derivatives   $845,157
    $845,157
 
Credit derivatives used in credit portfolio management activities(b)(c)
$(1,807)$(11,011)$(4,791)$(17,609) $(14,984) $(2,625)$(17,609)85%
(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 the remaining contractual maturity. Derivative contracts that are in a receivable position at September 30, 2018, may become payable prior to maturity based on their cash flow profile or changes in market conditions.


Wholesale credit exposure – industry exposures
The Firm focuses on the management and diversification of its industry exposures, and pays particular attention to industries with actual or potential credit concerns. Exposures deemed criticized align with the U.S. banking regulators’ definition of criticized exposures, which consist of the special mention, substandard and doubtful
categories. The total criticized component of the portfolio, excluding loans held-for-sale and loans at fair value, was $11.2 billion at September 30, 2018, compared with $15.6 billion at December 31, 2017. The decrease was largely driven by select names within Oil & Gas, including a loan sale.
Below are summaries of the Firm’s exposures as of September 30, 2018, and December 31, 2017. The industry of risk category is generally based on the client or counterparty’s primary business activity. For additional information on industry concentrations, refer to Note 4 of JPMorgan Chase’s 2017 Annual Report.
Wholesale credit exposure – industries(a)
         
      Selected metrics
        30 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables
    Noninvestment-grade
As of or for the nine months ended
Credit exposure(e)
Investment- grade Noncriticized Criticized performingCriticized nonperforming
September 30, 2018
(in millions)
Real Estate$141,053
$117,770
 $22,312
 $841
$130
$68
$(19)$—
$(3)
Consumer & Retail89,751
58,429
 29,438
 1,769
115
41
49
(252)(4)
Technology, Media &
Telecommunications		74,286
48,676
 23,560
 2,005
45
9
—
(723)(17)
Industrials57,810
38,374
 18,202
 1,052
182
118
—
(146)(24)
Healthcare53,952
37,912
 15,223
 788
29
22
(4)—
(134)
Banks & Finance Cos52,194
37,491
 14,376
 323
4
27
—
(622)(3,794)
Oil & Gas45,205
24,985
 18,236
 1,641
343
—
33
(349)(5)
Asset Managers41,951
36,286
 5,646
 5
14
11
—
—
(5,752)
Utilities28,944
24,312
 4,321
 158
153
—
38
(199)(74)
State & Municipal Govt(b)
26,381
25,772
 609
 —
—
16
(1)(20)(16)
Central Govt18,935
18,778
 104
 53
—
3
—
(8,688)(1,972)
Automotive17,385
9,677
 7,398
 300
10
1
—
(226)—
Chemicals & Plastics17,353
11,108
 6,227
 18
—
1
—
(25)—
Transportation16,225
10,058
 5,622
 482
63
45
6
(32)(51)
Metals & Mining14,320
7,262
 6,768
 247
43
5
—
(278)(3)
Insurance13,704
10,323
 3,342
 —
39
—
—
(37)(2,513)
Financial Markets Infrastructure5,697
5,555
 142
 —
—
—
—
—
(26)
Securities Firms4,599
3,129
 1,470
 —
—
—
—
(230)(674)
All other(c)
161,470
144,967
 16,124
 213
166
1,111
17
(2,379)(1,881)
Subtotal$881,215
$670,864
 $199,120
 $9,895
$1,336
$1,478
$119
$(14,206)$(16,943)
Loans held-for-sale and loans at fair value6,538
          
Receivables from customers and other25,982
          
Total(d)
$913,735
          

(continued from previous page)          








Selected metrics








30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables




Noninvestment-grade
As of or for the year ended
Credit exposure(e)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming
December 31, 2017
(in millions)
Real Estate$139,409
$115,401

$23,012

$859
$137
$254
$(4)$—
$(2)
Consumer & Retail87,679
55,737

29,619

1,791
532
30
34
(275)(9)
Technology, Media & Telecommunications59,274
36,510
 20,453
 2,258
53
14
(12)(910)(19)
Industrials55,272
37,198

16,770

1,159
145
150
(1)(196)(21)
Healthcare55,997
42,643
 12,731
 585
38
82
(1)—
(207)
Banks & Finance Cos49,037
34,654

13,767

612
4
1
6
(1,216)(3,174)
Oil & Gas41,317
21,430

14,854

4,046
987
22
71
(747)(1)
Asset Managers32,531
28,029

4,484

4
14
27
—
—
(5,290)
Utilities29,317
24,486

4,383

227
221
—
11
(160)(56)
State & Municipal Govt(b)
28,633
27,977

656

—
—
12
5
(130)(524)
Central Govt19,182
18,741

376

65
—
4
—
(10,095)(2,520)
Automotive14,820
9,321
 5,278
 221
—
10
1
(284)—
Chemicals & Plastics15,945
11,107

4,764

74
—
4
—
—
—
Transportation15,797
9,870

5,302

527
98
9
14
(32)(131)
Metals & Mining14,171
6,989

6,822

321
39
3
(13)(316)(1)
Insurance14,089
11,028

2,981

—
80
1
—
(157)(2,195)
Financial Markets Infrastructure5,036
4,775

261

—
—
—
—
—
(23)
Securities Firms4,113
2,559

1,553

1
—
—
—
(274)(335)
All other(c)
147,900
134,110

13,283

260
247
901
8
(2,817)(1,600)
Subtotal$829,519
$632,565

$181,349

$13,010
$2,595
$1,524
$119
$(17,609)$(16,108)
Loans held-for-sale and loans at fair value5,607

















Receivables from customers and other26,139


















Total(d)
$861,265
          
(a)The industry rankings presented in the table as of December 31, 2017, are based on the industry rankings of the corresponding exposures at September 30, 2018, not actual rankings of such exposures at December 31, 2017.
(b)In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at September 30, 2018, and December 31, 2017, noted above, the Firm held: $9.5 billion and $9.8 billion, respectively, of trading securities; $38.1 billion and $32.3 billion, respectively, of AFS securities; and $4.8 billion and $14.4 billion, respectively, of held-to-maturity (“HTM”) securities, issued by U.S. state and municipal governments. For further information, refer to Note 2 and Note 9.
(c)All other includes: individuals (predominantly Wealth Management clients within AWM), SPEs, and private education and civic organizations, representing approximately 59%, 38%, and 3%, respectively, at September 30, 2018, and 59%, 37%, and 4%, respectively, at December 31, 2017.
(d)
Excludes cash placed with banks of $410.5 billion and $421.0 billion, at September 30, 2018, and December 31, 2017, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.
(e)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.
(f)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.


Real Estate
Presented below is additional information on the Real Estate industry to which the Firm has significant exposure.
Real Estate exposure increased $1.6 billion to $141.1 billion during the nine months ended September 30, 2018, while the investment-grade percentage of the portfolio remained flat at 83%. For further information on Real Estate loans, refer to Note 11.
 September 30, 2018 
(in millions, except ratios)Loans and Lending-related Commitments Derivative Receivables Credit exposure % Investment-grade
% Drawn(c)
Multifamily(a)
$85,410
 $14
 $85,424
 89% 93% 
Other55,527
 102
 55,629
 75
 65
 
Total Real Estate Exposure(b)
140,937
 116
 141,053
 83
 82
 
           
 December 31, 2017 
(in millions, except ratios)Loans and Lending-related Commitments 
Derivative
Receivables
 Credit exposure 
% Investment-
grade
% Drawn(c)
Multifamily(a)
$84,635
 $34
 $84,669
 89% 92% 
Other54,620
 120
 54,740
 74
 66
 
Total Real Estate Exposure(b)
139,255
 154
 139,409
 83
 82
 
(a)Multifamily exposure is largely in California.
(b)Real Estate exposure is predominantly secured; unsecured exposure is predominantly investment-grade.
(c)Represents drawn exposure as a percentage of credit exposure.
Loans
In the normal course of its wholesale business, the Firm provides loans to a variety of clients, ranging from large corporate and institutional clients to high-net-worth individuals. For a further discussion on loans, including information on credit quality indicators and sales of loans, refer to Note 11.
The following table presents the change in the nonaccrual loan portfolio for the nine months ended September 30, 2018 and 2017.
Wholesale nonaccrual loan activity
Nine months ended September 30,
(in millions)		 2018
2017
Beginning balance $1,734
$2,063
Additions 570
993
Reductions:   
Paydowns and other 541
997
Gross charge-offs 251
155
Returned to performing status 217
184
Sales 287
248
Total reductions 1,296
1,584
Net changes (726)(591)
Ending balance $1,008
$1,472
The following table presents net charge-offs/recoveries, which are defined as gross charge-offs less recoveries, for the three and nine months ended September 30, 2018 and 2017. The amounts in the table below do not include gains or losses from sales of nonaccrual loans.
Wholesale net charge-offs/(recoveries)
(in millions, except ratios)Three months ended
September 30,		 Nine months ended
September 30,
2018
2017
 2018
2017
Loans – reported     
Average loans retained$420,597
$395,420
 $413,537
$390,062
Gross charge-offs23
55
 264
154
Gross recoveries(70)(12) (146)(81)
Net charge-offs/(recoveries)(47)43
 118
73
Net charge-off/(recovery) rate(0.04)%0.04% 0.04%0.03%

Lending-related commitments
The Firm uses lending-related financial instruments, such as commitments (including revolving credit facilities) and guarantees, to address the financing needs of its clients. The contractual amounts of these financial instruments represent the maximum possible credit risk should the clients draw down on these commitments or the Firm fulfills its obligations under these guarantees, and the clients subsequently fail to perform according to the terms of these contracts. Most of these commitments and guarantees are refinanced, extended, cancelled, or expire without being drawn upon or a default occurring. In the Firm’s view, the total contractual amount of these wholesale lending-related commitments is not representative of the Firm’s expected future credit exposure or funding requirements. For further information on wholesale lending-related commitments, refer to Note 20 .
Derivative contracts
Derivatives enable clients and counterparties to manage risks including credit risk and risks arising from fluctuations in interest rates, foreign exchange, equities, and commodities. The Firm makes markets in derivatives in order to meet these needs and uses derivatives to manage certain risks associated with net open risk positions from its market-making activities, including the counterparty credit risk arising from derivative receivables. The Firm also uses derivative instruments to manage its own credit and other market risk exposure. For a further discussion of derivative contracts, refer to Note 4.
The following table summarizes the net derivative receivables for the periods presented.
Derivative receivables  
(in millions)Derivative receivables
September 30,
2018
December 31,
2017
Interest rate$23,397
$24,673
Credit derivatives582
869
Foreign exchange17,043
16,151
Equity10,104
7,882
Commodity8,936
6,948
Total, net of cash collateral60,062
56,523
Liquid securities and other cash collateral held against derivative receivables(a)
(16,943)(16,108)
Total, net of collateral$43,119
$40,415
(a)Includes collateral related to derivative instruments where appropriate legal opinions have not been either sought or obtained with respect to master netting agreements.
The fair value of derivative receivables reported on the Consolidated balance sheets were $60.1 billion and $56.5 billion at September 30, 2018, and December 31, 2017, respectively. 
Derivative receivables represent the fair value of the derivative contracts after giving effect to legally enforceable master netting agreements and cash collateral held by the Firm. However, in management’s view, the appropriate measure of current credit risk should also take into consideration additional liquid securities (primarily U.S. government and agency securities and other group of seven nations (“G7”) government securities) and other cash collateral held by the Firm aggregating $16.9 billion and $16.1 billion at September 30, 2018, and December 31, 2017, respectively, that may be used as security when the fair value of the client’s exposure is in the Firm’s favor.
In addition to the collateral described in the preceding paragraph, the Firm also holds additional collateral (primarily cash, G7 government securities, other liquid government-agency and guaranteed securities, and corporate debt and equity securities) delivered by clients at the initiation of transactions, as well as collateral related to contracts that have a non-daily call frequency and collateral that the Firm has agreed to return but has not yet settled as of the reporting date. Although this collateral does not reduce the balances and is not included in the table above, it is able, factors influencing its credit ratings, there is no assuranceavailable as security against potential exposure that its credit ratings will not be changedcould arise should the fair value of the client’s derivative transactions move in the future.Firm’s favor.
The derivative receivables fair value, net of all collateral, also does not include other credit enhancements, such as letters of credit. For additional information on the Firm’s use of collateral agreements, refer to Note 4.


















The following table summarizes the ratings profile of the Firm’s derivative receivables, including credit derivatives, net of all collateral, at the dates indicated. The ratings scale is based on the Firm’s internal ratings, which generally correspond to the ratings as assigned by S&P and Moody’s.
Ratings profile of derivative receivables     
 September 30, 2018 December 31, 2017
Rating equivalent
(in millions, except ratios)
Exposure net of collateral% of exposure net of collateral Exposure net of collateral% of exposure net of collateral
AAA/Aaa to AA-/Aa3$13,208
31% $11,529
29%
A+/A1 to A-/A37,568
17
 6,919
17
BBB+/Baa1 to BBB-/Baa313,826
32
 13,925
34
BB+/Ba1 to B-/B37,744
18
 7,397
18
CCC+/Caa1 and below773
2
 645
2
Total$43,119
100% $40,415
100%

As previously noted, the Firm uses collateral agreements to mitigate counterparty credit risk. The percentage of the Firm’s over-the-counter derivatives transactions subject to collateral agreements — excluding foreign exchange spot trades, which are not typically covered by collateral agreements due to their short maturity and centrally cleared trades that are settled daily — was approximately 90% at both September 30, 2018, and December 31, 2017.
Credit derivatives
The Firm uses credit derivatives for two primary purposes: first, in its capacity as a market-maker, and second, as an end-user, to manage the Firm’s own credit risk associated with various exposures.
Credit portfolio management activities
Included in the Firm’s end-user activities are credit derivatives used to mitigate the credit risk associated with traditional lending activities (loans and unfunded commitments) and derivatives counterparty exposure in the Firm’s wholesale businesses (collectively, “credit portfolio management” activities). Information on credit portfolio management activities is provided in the table below.
Credit derivatives used in credit portfolio management activities
 
Notional amount of protection
purchased and sold(a)
(in millions)September 30,
2018
 December 31,
2017
Credit derivatives used to manage:   
Loans and lending-related commitments$1,060
 $1,867
Derivative receivables13,146
 15,742
Credit derivatives used in credit portfolio management activities$14,206
 $17,609
(a)Amounts are presented net, considering the Firm’s net protection purchased or sold with respect to each underlying reference entity or index.
For further information on credit derivatives and derivatives used in credit portfolio management activities, refer to Credit derivatives in Note 4 of this Form 10-Q, and Note 5 of JPMorgan Chase’s 2017 Annual Report.

ALLOWANCE FOR CREDIT LOSSES
The Firm’s allowance for credit losses covers the retained consumer and wholesale loan portfolios, as well as the Firm’s wholesale and certain consumer lending-related commitments.
For further information on the components of the allowance for credit losses and related management judgments, refer to Critical Accounting Estimates Used by the Firm on pages 79–81 and Note 12 of this Form 10-Q, and Critical Accounting Estimates Used by the Firm on pages 138–140 and Note 13 of JPMorgan Chase’s 2017 Annual Report.
At least quarterly, the allowance for credit losses is reviewed by the CRO, the CFO and the Controller of the Firm. As of September 30, 2018, JPMorgan Chase deemed the allowance for credit losses to be appropriate and sufficient to absorb probable credit losses inherent in the portfolio.
The consumer allowance for credit losses decreased compared with December 31, 2017 reflecting:
•
a $250 million reduction in the CCB allowance for loan losses in the residential real estate PCI portfolio, reflecting continued improvement in home prices and lower delinquencies, as well as a $151 million reduction in the allowance for write-offs of PCI loans partially due to loan sales. These reductions were partially offset by a $150 million addition in the credit card portfolio, due to loan growth and higher loss rates, as anticipated, and
a reduction in the wholesale allowance primarily driven by loan sales related to a single name in the Oil & Gas portfolio in the first quarter of 2018 and other net portfolio activity.
For additional information on the consumer and wholesale credit portfolios, refer to Consumer Credit Portfolio on pages 57–61 and Note 11, and Wholesale Credit Portfolio on pages 62–68.


Summary of changes in the allowance for credit losses     
 2018 2017
Nine months ended September 30,
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
(in millions, except ratios) 
Allowance for loan losses         
Beginning balance at January 1,$4,579
$4,884
$4,141
$13,604
 $5,198
$4,034
$4,544
$13,776
Gross charge-offs776
3,777
264
4,817
 1,479
3,344
154
4,977
Gross recoveries(681)(370)(146)(1,197) (478)(295)(81)(854)
Net charge-offs(a)
95
3,407
118
3,620
 1,001
3,049
73
4,123
Write-offs of PCI loans(b)
151
—
—
151
 66
—
—
66
Provision for loan losses(152)3,557
(111)3,294
 653
3,699
(401)3,951
Other1
—
—
1
 (2)—
3
1
Ending balance at September 30,$4,182
$5,034
$3,912
$13,128
 $4,782
$4,684
$4,073
$13,539
Impairment methodology         
Asset-specific(c)
$204
$421
$280
$905
 $271
$376
$363
$1,010
Formula-based2,154
4,613
3,632
10,399
 2,266
4,308
3,710
10,284
PCI1,824
—
—
1,824
 2,245
—
—
2,245
Total allowance for loan losses$4,182
$5,034
$3,912
$13,128
 $4,782
$4,684
$4,073
$13,539
Allowance for lending-related commitments         
Beginning balance at January 1,$33
$—
$1,035
$1,068
 $26
$—
$1,052
$1,078
Provision for lending-related commitments—
—
29
29
 7
—
24
31
Other—
—
—
—
 —
—
—
—
Ending balance at September 30,$33
$—
$1,064
$1,097
 $33
$—
$1,076
$1,109
Impairment methodology         
Asset-specific$—
$—
$71
$71
 $—
$—
$220
$220
Formula-based33
—
993
1,026
 33
—
856
889
Total allowance for lending-related commitments(d)
$33
$—
$1,064
$1,097
 $33
$—
$1,076
$1,109
Total allowance for credit losses$4,215
$5,034
$4,976
$14,225
 $4,815
$4,684
$5,149
$14,648
Memo:         
Retained loans, end of period$375,958
$147,856
$423,837
$947,651
 $369,413
$141,200
$398,569
$909,182
Retained loans, average374,298
143,931
413,537
931,766
 365,359
138,749
390,062
894,170
PCI loans, end of period25,209
—
3
25,212
 31,821
—
3
31,824
Credit ratios         
Allowance for loan losses to retained loans1.11%3.40%0.92%1.39% 1.29%3.32%1.02%1.49%
Allowance for loan losses to retained nonaccrual loans(e)
115
NM
394
284
 115
NM
277
241
Allowance for loan losses to retained nonaccrual loans excluding credit card115
NM
394
175
 115
NM
277
157
Net charge-off rates(a)
0.03
3.16
0.04
0.52
 0.37
2.94
0.03
0.62
Credit ratios, excluding residential real estate PCI loans         
Allowance for loan losses to retained loans0.67
3.40
0.92
1.23
 0.75
3.32
1.02
1.29
Allowance for loan losses to retained nonaccrual loans(e)
65
NM
394
244
 61
NM
277
201
Allowance for loan losses to retained nonaccrual loans excluding credit card65
NM
394
135
 61
NM
277
117
Net charge-off rates(a)
0.04%3.16%0.04%0.54% 0.40%2.94%0.03%0.64%
Note: In the table above, the financial measures which exclude the impact of PCI loans are non-GAAP financial measures.
(a)For the nine months ended September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio transfer, the net charge-off rate for Consumer, excluding credit card would have been 0.20%; total Firm would have been 0.55%; Consumer, excluding credit card and PCI loans would have been 0.22%; and total Firm, excluding PCI would have been 0.57%.
(b)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.
(c)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.
(d)The allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets.
(e)The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.


Provision for credit losses
The following table presents the components of the Firm’s provision for credit losses:
 Three months ended September 30, Nine months ended September 30,
 Provision for loan losses Provision for lending-related commitments 
Total provision for
credit losses
 Provision for loan losses Provision for lending-related commitments Total provision for credit losses
(in millions)2018
2017
 2018
2017
 2018
2017
 2018
2017
 2018
2017
 2018
2017
Consumer, excluding credit card$(242)$205
 $—
$1
 $(242)$206
 $(152)$653
 $—
$7
 $(152)$660
Credit card1,223
1,319
 —
—
 1,223
1,319
 3,557
3,699
 —
—
 3,557
3,699
Total consumer981
1,524
 —
1
 981
1,525
 3,405
4,352
 —
7
 3,405
4,359
Wholesale(13)(64) (20)(9) (33)(73) (111)(401) 29
24
 (82)(377)
Total$968
$1,460
 $(20)$(8) $948
$1,452
 $3,294
$3,951
 $29
$31
 $3,323
$3,982
Quarterly discussion
The provision for credit losses decreased as a result of:
•
a decrease in the consumer provision in CCB due to
–
a $250 million reduction in the allowance for loan losses in the residential real estate PCI portfolio, reflecting continued improvement in home prices and lower delinquencies,
–
a $150 million addition to the allowance for loan losses in the credit card portfolio, due to loan growth and higher loss rates, as anticipated, compared to a $300 million addition in the prior year
–lower net charge-offs in the residential real estate portfolio, largely driven by a recovery of approximately $80 million from a loan sale, and
–lower net charge-offs in the auto portfolio as the prior year included $49 million of incremental charge-offs recorded in accordance with regulatory guidance
partially offset by
–higher net charge-offs in the credit card portfolio due to seasoning of more recent vintages, as anticipated
•
the decrease in the consumer provision was partially offset by a lower net benefit in the wholesale provision in the current period, which includes net recoveries predominantly related to a loan sale in CIB.
Year-to-date discussion
The provision for credit losses decreased as a result of:
•
a decrease in the consumer provision in CCB due to
–a $150 million addition to the allowance for loan losses in the credit card portfolio, due to loan growth and higher loss rates, as anticipated, compared to a $650 million addition in the prior year,
–lower net charge-offs in the residential real estate portfolio, largely driven by recoveries from loan sales, and
–a $250 million reduction in the allowance for loan losses in the residential real estate PCI portfolio, reflecting continued improvement in home prices and lower delinquencies, compared to a $175 million reduction in the non credit-impaired portfolio in the prior year
partially offset by
–higher net charge-offs in the credit card portfolio due to seasoning of more recent vintages, as anticipated
–
the prior year included a $218 million write-down recorded in connection with the sale of the student loan portfolio
•
the decrease in the consumer provision was partially offset bya lower net benefit in the wholesale provision with the current period net benefit primarily driven by loan sales and other activity related to a single name in the Oil & Gas portfolio, partially offset by other net portfolio activity. The prior year benefit was driven by a reduction in the allowance for credit losses in the Oil & Gas, Natural Gas Pipelines, and Metals and Mining portfolios.





INVESTMENT PORTFOLIO RISK MANAGEMENT
Investment portfolio risk is the risk associated with the loss of principal or a reduction in expected returns on investments arising from the investment securities portfolio held by Treasury and CIO in connection with the Firm’s balance sheet or asset-liability management objectives or from principal investments managed in various LOBs in predominantly privately-held financial assets and instruments. Investments are typically intended to be held over extended periods and, accordingly, the Firm has no expectation for short-term realized gains with respect to these investments.
Investment securities risk
Investment securities risk includes the exposure associated with a default in the payment of principal and interest. This risk is minimized given that Treasury and CIO generally invest in high-quality securities. At September 30, 2018, the investment securities portfolio was $229.9 billion, and the average credit rating of the securities comprising the portfolio was AA+ (based upon external ratings where available and where not available, based primarily upon internal ratings that correspond to ratings as defined by S&P and Moody’s). For further information on the investment securities portfolio, refer to Corporate segment results on pages 40–41 and Note 9. For further information on the market risk inherent in the portfolio, refer to Market Risk Management on pages 73–77. For further information on related liquidity risk, refer to Liquidity Risk on pages 49–54.

Principal investment risk
Principal investments are typically private non-traded financial instruments representing ownership or other forms of junior capital. Principal investments cover multiple asset classes and are made either in stand-alone investing businesses or as part of a broader business platform. Increasingly, new principal investments are made to enhance or accelerate LOB strategic business initiatives. The Firm’s principal investments are managed by the various LOBs and are reflected within the respective LOB financial results. Effective January 1, 2018, the Firm adopted new accounting guidance related to the recognition and measurement of financial assets, which requires fair value adjustments upon observable price changes to certain equity investments previously held at cost in the principal investment portfolios. For additional information, refer to Note 2.
As of September 30, 2018 and December 31, 2017, the aggregate carrying values of the principal investment portfolios were $20.1 billion and $19.5 billion, respectively, which included tax-oriented investments (e.g., affordable housing and alternative energy investments) of $13.7 billion and $14.0 billion, respectively, and private equity, various debt and equity instruments, and real assets of $6.4 billion and $5.5 billion, respectively.
For a discussion of the Firm’s Investment Portfolio Risk Management governance and oversight, refer to page 120 of JPMorgan Chase’s 2017 Annual Report.


MARKET RISK MANAGEMENT
Market risk is the risk of loss arising from potential adverse changes inassociated with the valueeffect of the Firm’s assets and liabilities resulting from changes in market variablesfactors such as interest rates,and foreign exchange rates, equity prices,and commodity prices, credit spreads or implied volatilities, or credit spreads.on the value of assets and liabilities held for both the short and long term. For a discussion of the Firm’s Market Risk Management organization, tools used to measure risk, risk monitoring and control and risk identification and classification, seerefer to Market Risk Management on pages 116–123121-128 of JPMorgan Chase’s 20162017 Annual Report.
Value-at-risk
JPMorgan Chase utilizes value-at-risk (“VaR”), a statistical risk measure, to estimate the potential loss from adverse market moves in a normal market environment. The Firm has a single VaR framework used as a basis for calculating Risk Management VaR and Regulatory VaR.
Since As VaR is based on historical data, it is an imperfect measure of market risk exposure and potential futurelosses and it is not used to estimate the impact of stressed market conditions or to manage any impact from potential stress events. . In addition, based on their reliance on available historical data, limited time horizons, and other factors, VaR measures are inherently limited in their ability to measure certain risks and to predict losses, particularly those associated with market illiquidity and sudden or severe shifts in market conditions.
For certain products, specific risk parameters are not captured in VaR due to the lack of inherent liquidity and availability of appropriate historical data. The Firm uses proxies to estimate the VaR for these and other products when daily time series are not available. It is likely that using an actual price-based time series for these products, if available, would affect the VaR results presented. The Firm therefore considers other measures such as stress testing and nonstatistical measures, in addition to VaR, to capture and manage its market risk positions. For further information, seerefer to Other risk measures on pages 121–123126-128 of JPMorgan Chase’s 20162017 Annual Report.
 
The Firm’s VaR model calculations are periodically evaluated and enhanced in response to changes in the composition of the Firm’s portfolios, changes in market conditions, improvements in the Firm’s modeling techniques and measurements, and other factors. Such changes may affect historical comparisons of VaR results. For information regarding model reviews and approvals, seerefer to Estimations and Model Risk Management on page 128137 of JPMorgan Chase’s 20162017 Annual Report.
The Firm’s Risk Management VaR is calculated assuming a one-day holding period and an expected tail-loss methodology which approximates a 95% confidence level. For risk management purposes, the Firm believes this methodology provides a stable measure of VaR that closely aligns to the day-to-day risk management decisions made by the lines of business, and provides the necessary and appropriate information to respond to risk events on a daily basis. The Firm calculates separately a daily aggregated VaR in accordance with regulatory rules (“Regulatory VaR”), which is used to derive the Firm’s regulatory VaR-based capital requirements under Basel III. For further information regarding the key differences between Risk Management VaR and Regulatory VaR, seerefer to page 118123 of JPMorgan Chase’s 20162017 Annual Report. For additional information on Regulatory VaR and the other components of market risk regulatory capital for the Firm (e.g., VaR-based measure, stressed VaR-based measure and the respective backtesting), seerefer to JPMorgan Chase’s Basel III Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website at:
(http:https://investor.shareholder.com/jpmorganchase/basel.cfm)jpmorganchaseco.gcs-web.com/financial-information/basel-pillar-3-us-lcr-disclosures).



The table below shows the results of the Firm’s Risk Management VaR measure using a 95% confidence level.
Total VaR                                    
Three months ended, Three months ended 
September 30, 2017 June 30, 2017 September 30, 2016 September 30, 2018 June 30, 2018 September 30, 2017 
(in millions) Avg.MinMax  Avg.MinMax  Avg.MinMax
  Avg.MinMax  Avg.MinMax  Avg.MinMax
 
CIB trading VaR by risk type                                    
Fixed income$28
 $24
 $31
 $28
 $25
 $31
 $49
 $38
 $65
 $30
 $25
 $37
 $31
 $26
 $36
 $28
 $24
 $31
 
Foreign exchange13
 6
 20
 8
 5
 12
 16
 10
 27
 5
 3
 11
 6
 4
 10
 13
 6
 20
 
Equities12
 11
 14
 12
 9
 16
 8
 5
 10
 16
 13
 19
 15
 13
 18
 12
 11
 14
 
Commodities and other6
 4
 8
 8
 6
 10
 9
 7
 11
 9
 7
 11
 7
 5
 9
 6
 4
 8
 
Diversification benefit to CIB trading VaR(31)
(a) 
 NM
(b) 
 NM
(b) 
 (30)
(a) 
 NM
(b) 
 NM
(b) 
 (42)
(a) 
NM
(b) 
NM
(b) 
(27)
(a) 
 NM
(b) 
 NM
(b) 
 (27)
(a) 
 NM
(b) 
 NM
(b) 
 (31)
(a) 
 NM
(b) 
 NM
(b) 
CIB trading VaR28
 24
 32
 26
 20
 31
 40
 34
 50
 33
 27
(b) 
41
(b) 
 32
 26
(b) 
42
(b) 
 28
 24
(b) 
32
(b) 
Credit portfolio VaR5
 5
 6
 9
 6
 10
 13
 11
 16
 3
 3
 4
 4
 3
 4
 5
 5
 6
 
Diversification benefit to CIB VaR(3)
(a) 
 NM
(b) 
 NM
(b) 
 (8)
(a) 
 NM
(b) 
 NM
(b) 
 (10)
(a) 
NM
(b) 
NM
(b) 
(3)
(a) 
 NM
(b) 
 NM
(b) 
 (3)
(a) 
 NM
(b) 
 NM
(b) 
 (3)
(a) 
NM
(b) 
NM
(b) 
CIB VaR30
 25
 33
 27
 22
 32
 43
 37
 51
 33
 28
(b) 
42
(b) 
 33
 26
(b) 
42
(b) 
 30
 25
(b) 
33
(b) 
                                    
CCB VaR2
 1
 3
 2
 2
 3
 3
 2
 4
 1
 1
 2
 1
 1
 3
 2
 1
 3
 
Corporate VaR3
 1
 3
 3
 2
 3
 3
 3
 5
 13
 12
 14
 12
 10
 13
 3
 1
 3
 
Diversification benefit to other VaR(1)
(a) 
 NM
(b) 
 NM
(b) 
 (2)
(a) 
 NM
(b) 
 NM
(b) 
 (1)
(a) 
NM
(b) 
NM
(b) 
(1)
(a) 
 NM
(b) 
 NM
(b) 
 (1)
(a) 
 NM
(b) 
 NM
(b) 
 (1)
(a) 
NM
(b) 
NM
(b) 
Other VaR4
 3
 5
 3
 3
 4
 5
 4
 6
 13
 12
(b) 
14
(b) 
 12
 10
(b) 
14
(b) 
 4
 3
(b) 
5
(b) 
Diversification benefit to CIB and other VaR(4)
(a) 
 NM
(b) 
 NM
(b) 
 (3)
(a) 
 NM
(b) 
 NM
(b) 
 (5)
(a) 
NM
(b) 
NM
(b) 
(11)
(a) 
 NM
(b) 
 NM
(b) 
 (10)
(a) 
 NM
(b) 
 NM
(b) 
 (4)
(a) 
NM
(b) 
NM
(b) 
Total VaR$30
 $26
 $34
 $27
 $22
 $33
 $43
 $37
 $49
 $35
 $30
(b) 
$43
(b) 
 $35
 $28
(b) 
$44
(b) 
 $30
 $26
(b) 
$34
(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 the fact that the risks are not perfectly correlated.
(b)Designated as NM, becauseDiversification 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 lines of business and risk types. The maximum and minimum and maximumVaR for each portfolio may occurhave occurred on different trading days for different riskthan the components and hence itconsequently diversification benefit is not meaningful to compute a portfolio-diversification effect.meaningful.
Quarter over Quarterquarter results
Average total VaR remained unchanged for the threemonths ended September 30, 2018 as compared with the prior quarter. There was a modest increase in Commodities, offset by reductions in Fixed Income exposure within CIB Trading VaR.


Year over year results
Average total VaR increased by $3$5 million for the threemonths ended September 30, 2017 as compared with the prior quarter, reflecting a change in exposure profile for the Foreign exchange risk type, partially offset by reduced volatility in the one-year historical look-back period.
Year over Year results
Average total VaR decreased by $13 million for the three months ended September 30, 2017,2018, compared with the same period in the prior year. The decreaseincrease in average total VaR is primarily due to the inclusion of a Corporate private equity position that became publicly traded in the Fixed income risk type. The reduction reflects enhancements to VaR models to more appropriately reflect risk exposure for certain asset backed products and reduced volatility in the one-year historical look-back period.


The Firm refined the historical proxy time series inputs to certain VaR models during the firstfourth quarter of 2017. In the absence of this refinement, the average Total VaR for the three months ended September 30, 2017 would have been higher by $4 million and each of the components would have been higher by the amounts reportedcertain investments in the following table:
(in millions)Amount by which reported VaR would have been higher for the three months ended September 30, 2017
CIB fixed income VaR $4
 
CIB trading VaR 5
 
CIB VaR 5
 
CIB VaR.
VaR can vary significantly as positions change, market volatility fluctuates, and diversification benefits change.

VaR back-testing
The Firm evaluates the effectiveness of its VaR methodology by back-testing, which compares the daily Risk Management VaR results with the daily gains and losses actually recognized on market-risk related revenue.
The Firm’s definition of market risk-related gains and losses is consistent with the definition used by the banking regulators under Basel III. Under this definition market risk-related gains and losses are defined as: gains and losses on the positions included in the Firm’s Risk Management VaR excluding fees, commissions, certain valuation adjustments (e.g., liquidity and DVA)FVA), net interest income, and gains and losses arising from intraday trading.
The following chart compares actual daily market risk-related gains and losses with the Firm’s Risk Management VaR for the nine months ended September 30, 2017.2018. As the chart presents market risk-related gains and losses related to those positions included in the Firm’s Risk Management VaR, the results in the table below differ from the results of back-testing disclosed in the Market Risk section of the Firm’s Basel III Pillar 3 Regulatory Capital Disclosures reports, which are based on Regulatory VaR applied to covered positions. The chart shows that for the nine months ended September 30, 2017,2018, the Firm observed eightfive VaR back-testing exceptions and posted market risk-related gains on 126 113of the 194 days. The Firm observed oneno VaR back-testing exceptionexceptions and posted market risk-related gains on 4638 of the 65 days for the three months ended September 30, 2017.2018.
Daily Market Risk-Related Gains and Losses
vs. Risk Management VaR (1-day, 95% Confidence level)
Nine months ended September 30, 20172018
 
Market Risk-Related Gains and Losses
 
Risk Management VaR
corpq32017_chart-42587.jpgchart-cb8b4ee367505588bfd.jpg
First Quarter 20172018Second Quarter 20172018Third Quarter 20172018




Earnings-at-risk
The VaR and sensitivity measures illustrate the economic sensitivity of the Firm’s Consolidated balance sheets to changes in market variables. The effect of interest rate exposure on the Firm’s reported net income is also important as interest rate risk represents one of the Firm’s significant market risks. Interest rate risk arises not only from trading activities but also from the Firm’s traditional banking activities, which include extension of loans and credit facilities, taking deposits and issuing debt. The Firm evaluates its structural interest rate risk exposure through earnings-at-risk, which measures the extent to which changes in interest rates will affect the Firm’s net interest income and interest rate-sensitive fees. For a summary by line of business, identifying positions included in earnings-at-risk, seerefer to the table on page 117122 of JPMorgan Chase’s 20162017 Annual Report.
The Firm generates a baseline for net interest income and certain interest rate-sensitive fees, and then conducts simulations of changes for interest rate-sensitive assets and liabilities denominated in U.S. dollars and other currencies (“non-U.S. dollar” currencies). This simulation primarily includes retained loans, deposits, deposits with banks, investment securities, long term debt and any related interest rate hedges, and excludes other positions in risk management VaR and other sensitivity-based measures as described on page 122 of JPMorgan Chase’s 2017 Annual Report.
Earnings-at-risk scenarios estimate the potential change in this baseline, over the following 12 months utilizing multiple assumptions. These scenarios consider the impact on exposures as a result of changes in interest rates from baseline rates, as well as pricing sensitivities of deposits, optionality and changes in product mix. The scenarios include forecasted balance sheet changes, 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 scenario interest rates 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 in the baseline and scenarios use modeledassumed rates paid which may differ from actual rates paid due to timing lags and other factors. The Firm’s earnings-at-risk scenarios areperiodically evaluated and enhanced in response to changes in the composition of the Firm’s balance sheet, changes in market conditions, improvements in the Firm’s simulation and other factors.
 
The Firm’s U.S. dollar sensitivities are presented in the table below.
JPMorgan Chase’s 12-month earnings-at-risk sensitivity profiles
U.S. dollarInstantaneous change in rates
(in billions)+200bps+100bps-100bps-200bps
September 30, 2017$2.9

$1.9

$(4.0)
(a) 
NM
(b) 
December 31, 2016$4.0

$2.4

NM
(b) 
NM
(b) 
JPMorgan Chase’s 12-month earnings-at-risk sensitivity profiles
U.S. dollarInstantaneous change in rates
(in billions)+200 bps+100 bps-100 bps-200 bps
September 30, 2018$1.7
 $0.8
 $(1.9) NA
(a) 
December 31, 2017$2.4
 $1.7
 $(3.6) NA
(a) 
(a)
As a result of the June 2017 increase in the Fed Funds target rate to between 1.00% and 1.25%, the -100 bps sensitivity has been included.
(b)Given the level ofcurrent market interest rates,rate environment, these downward parallel earnings-at-risk scenarios are not considered to be meaningful.reasonably possible in the near term.
The non-U.S. dollar sensitivities for an instantaneous
increase in rates by 200 and 100 basis points results in a 12-month benefit to net interest income of approximately $600 million and $400 million, respectively, at September 30, 2017. The non-U.S. dollar sensitivity for an instantaneous decrease in rates by 200 and 100 basis points is not material to the Firm’s earnings-at-risk at September 30, 2017.
The Firm’s sensitivity to rates is largely a result of assets re-pricing at a faster pace than deposits.
The Firm’s net U.S. dollar sensitivitysensitivities to 200 and 100 basis points instantaneous increaserate increases decreased by approximately $700 million and $900 million, respectively, while the Firm’s net U.S. dollar sensitivity to 100 basis points instantaneous decrease in rates decreased by approximately $1.1$1.7 billion and $500 million, respectively, when compared to December 31, 2016.2017. The primary driver of that decreasethese decreases was the updating of the Firm’s baseline to reflect higher interest rates. As higher interest rates are reflected in the Firm’s baselines, the magnitude of the sensitivitysensitivities to further increaseschanges in rates would beare expected to be less significant.
The non-U.S. dollar sensitivities for an instantaneous increase in rates by 200 and 100 basis points results in a 12-month benefit to net interest income of approximately $800 millionand $500 million, respectively, at both September 30, 2018 and December 31, 2017. The non-U.S. dollar sensitivities for an instantaneous decrease in rates by 200 and 100 basis points are not material to the Firm’s earnings-at-risk at September 30, 2018 and December 31, 2017.
Separately, another U.S. dollar interest rate scenario used by the Firm — involving a steeper yield curve with long-term rates rising by 100 basis points and short-term rates staying at current levels — results in a 12-month benefit to net interest income of approximately $500 million and $700 million. million at September 30, 2018 and December 31, 2017, respectively. The increase in net interest income under this scenario reflects the Firm reinvesting at the higher long-term rates, with funding costs remaining unchanged. The resultresults of the comparable non-U.S. dollar scenario wasscenarios are not material to the Firm.Firm at September 30, 2018 and December 31, 2017.



Other sensitivity-based measures
The Firm quantifies the market risk of certain investment and funding activities by assessing the potential impact on net revenue and OCI due to changes in relevant market variables. For additional information on the positions
 
captured in other sensitivity-based measures, please refer to the Risk identification and classification table on page 117122 of JPMorgan Chase’s 20162017 Annual Report.

The table below represents the potential impact to net revenue or OCI for market risk-sensitive instruments that are not included in VaR or earnings-at-risk. Where appropriate, instruments used for hedging purposes are reported along with the positions being hedged. The sensitivities disclosed in the table below may not be representative of the actual gain or loss that would have been realized at September 30, 20172018 and December 31, 2016,2017, as the movement in market parameters across maturities may vary and are not intended to imply management’s expectation of future deterioration in these sensitivities.
Gain/(loss) (in millions)
 September 30, 2017
 December 31, 2016
 September 30, 2018
 December 31, 2017
Activity Description Sensitivity measure   Description Sensitivity measure  
        
Investment activities(a)        
Investment management activities Consists of seed capital and related hedges; and fund co-investments 10% decline in market value $(103) $(166) Consists of seed capital and related hedges; and fund co-investments 10% decline in market value $(147) $(110)
Other investments Consists of private equity and other investments held at fair value 10% decline in market value (376) (358) Consists of privately held equity and other investments held at fair value 10% decline in market value (246) (338)
        
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 1 basis point parallel tightening of cross currency basis (10) (7) 
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 (9) (10)
Non-USD LTD hedges foreign currency (“FX”) exposure Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges 10% depreciation of currency (12) (23) 
Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges(b)
 10% depreciation of currency 13
 (13)
Funding spread risk – derivatives Impact of changes in the spread related to derivatives DVA/FVA 1 basis point parallel increase in spread (5) (4)
Funding spread risk – fair value option elected liabilities(a)
 Impact of changes in the spread related to fair value option elected liabilities DVA 1 basis point parallel increase in spread 19
 17
Derivatives – funding spread risk Impact of changes in the spread related to derivatives FVA 1 basis point parallel increase in spread (4) (6)
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 27
 22
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 (1) (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.




COUNTRY RISK MANAGEMENT
The Firm has a country risk management framework for monitoring and assessing how financial, economic, political or other significant developments adversely affect the value of the Firm’s exposures related to a particular country or set of countries. The Country Risk Management group actively monitors the various portfolios which may be impacted by these developments to ensure the Firm’s country risk exposures are diversified and that exposure levels are appropriate given the Firm’s strategy and risk tolerance relative to a country.
Country Risk Management periodically designs and runs tailored stress scenarios to test vulnerabilities to individual countries or groups of countries in response to specific or potential market events, sector performance concerns and geopolitical risks. These tailored stress results are used to inform potential risk reduction across the firm, as necessary.
For a further discussion of the Firm’s Country Risk Management organization; identification and measurement; stress testing; monitoring and control; and reporting, refer to pages 129–130 of JPMorgan Chase’s 2017 Annual Report.
The following table presents the Firm’s top 20 exposures by country (excluding the U.S.) as of September 30, 2018. The selection of countries represents the Firm’s largest total exposures by country, based on the Firm’s internal country risk management approach, and does not represent the Firm’s view of any actual or potentially adverse credit conditions. Country exposures may fluctuate from period to period due to client activity and market flows.
Top 20 country exposures (excluding the U.S.)(a)
 
  September 30, 2018

(in billions)
 
Lending and deposits(b)
Trading and investing(c)(d)
Other(e)
Total exposure
Germany $55.1
$11.1
$0.3
$66.5
United Kingdom 28.8
9.4
11.8
50.0
Japan 32.9
7.1
0.3
40.3
China 9.8
7.7
1.8
19.3
Switzerland 14.0
0.5
4.0
18.5
France 11.3
5.6
0.6
17.5
Canada 11.8
3.0
0.1
14.9
Australia 6.9
4.4
—
11.3
India 6.0
3.7
1.4
11.1
Luxembourg 9.5
0.5
—
10.0
Brazil 4.9
3.0
—
7.9
Netherlands 6.3
0.6
0.7
7.6
Spain 4.6
1.5
0.3
6.4
Italy 2.4
3.9
0.1
6.4
South Korea 4.1
2.0
0.1
6.2
Hong Kong 3.0
1.0
2.1
6.1
Saudi Arabia 5.3
0.5
—
5.8
Singapore 3.4
1.2
1.1
5.7
Mexico 4.1
1.0
—
5.1
United Arab Emirates 2.7
0.5
—
3.2
(a)Country exposures presented in the table reflect 88% of total firmwide non-U.S. exposure.
(b)Lending and deposits includes loans and accrued interest receivable (net of 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 from settlement and clearing activities.
(c)Includes market-making inventory, AFS securities, counterparty exposure on derivative and securities financings net of collateral and hedging.
(d)Includes 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.
(e)Includes capital invested in local entities and physical commodity inventory.


CRITICAL ACCOUNTING ESTIMATES USED BY THE FIRM
JPMorgan Chase’s accounting policies and use of estimates are integral to understanding its reported results. The Firm’s most complex accounting estimates require management’s judgment to ascertain the appropriate carrying value of assets and liabilities. The Firm has established policies and control procedures intended to ensure that estimation methods, including any judgments made as part of such methods, are well-controlled, independently reviewed and applied consistently from period to period. The methods used and judgments made reflect, among other factors, the nature of the assets or liabilities and the related business and risk management strategies, which may vary across the Firm’s businesses and portfolios. In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner. The Firm believes its estimates for determining the carrying value of its assets and liabilities are appropriate. The following is a brief description of the Firm’s critical accounting estimates involving significant judgments.
Allowance for credit losses
JPMorgan Chase’s allowance for credit losses covers the retained consumer and wholesale loan portfolios, as well as the Firm’s wholesale and certain consumer lending-related commitments. The allowance for loan losses is intended to adjust the carrying value of the Firm’s loan assets to reflect probable credit losses inherent in the loan portfolio as of the balance sheet date. Similarly, the allowance for lending-related commitments is established to cover probable credit losses inherent in the lending-related commitments portfolio as of the balance sheet date.
The allowance for credit losses includes a formula-based component, an asset-specific component, and a component related to PCI loans. The determination of each of these components involves significant judgment on a number of matters. For further discussion ofinformation on these components, areas of judgment and methodologies used in establishing the Firm’s allowance for credit losses, see refer to pages 105–107, pages 132–133117–119, page 138 and Note 1513 of JPMorgan Chase’s 20162017 Annual Report; and seerefer to Allowance for credit losses on pages 64–6669–71 and Note 12 of this Form 10-Q.
As noted in the discussion on pages 132–133page 138 of JPMorgan Chase’s 20162017 Annual Report, the Firm’s allowance for credit losses is sensitive to numerous factors, which may differ depending on the portfolio. Changes in economic conditions or in the Firm’s assumptions and estimates could affect its estimate of probable credit losses inherent in the portfolio at the balance sheet date. The Firm uses its best judgment to assess these economic conditions and loss data in estimating the allowance for credit losses and these estimates are subject to periodic refinement based on changes to underlying external or Firm-specific historical data. During the second quarter of 2017, the Firm refined its loss estimates relatingRefer to the wholesale portfolio. See Note 12 of this Form 10-Q for further discussion. The use of alternate estimates, data sources, adjustments to modeled loss estimates for model imprecision and other factors
would result in a different estimated allowance for credit losses, as well as impact any related sensitivities described below.
To illustrate the potential magnitude of certain alternate judgments, the Firm estimates that changes in the following inputs would have the following effects on the Firm’s
modeled credit loss estimates as of September 30, 2017,2018, without consideration of any offsetting or correlated effects of other inputs in the Firm’s allowance for loan losses:
A combined 5% decline in housing prices and a 100 basis point increase in unemployment rates from current levels could imply:
◦an increase to modeled credit loss estimates of approximately $550$425 million for PCI loans.
◦an increase to modeled annual credit loss estimates of approximately $100$75 million for the residential real estate loans, excluding PCI loans.
For credit card loans, a 100 basis point increase in unemployment rates from current levels could imply an increase to modeled annual credit loss estimates of approximately $975$775 million.
An increase in PDprobability 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 $1.5$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 $175 million.
The purpose of these sensitivity analyses is to provide an indication of the isolated impacts of hypothetical alternative assumptions on modeled loss estimates. The changes in the inputs presented above are not intended to imply management’s expectation of future deterioration of those risk factors. In addition, these analyses are not intended to estimate changes in the overall allowance for loan losses, which would also be influenced by the judgment management applies to the modeled loss estimates to reflect the uncertainty and imprecision of these modeled loss estimates based on then-current circumstances and conditions.
It is difficult to estimate how potential changes in specific factors might affect the overall allowance for credit losses because management considers a variety of factors and inputs in estimating the allowance for credit losses. Changes in these factors and inputs may not occur at the same rate and may not be consistent across all geographies or product types, and changes in factors may be directionally inconsistent, such that improvement in one factor may offset deterioration in other factors. In addition, it is difficult to predict how changes in specific economic conditions or assumptions could affect borrower behavior or other factors considered by management in estimating the allowance for credit losses. Given the process the Firm

follows and the judgments made in evaluating the risk factors related to its loss estimates, management believes that its current estimate of the allowance for credit losses is appropriate.

Fair value of financial instruments, MSRs and commodities inventory
Assets measured at fair value
The following table includes the Firm’s assets measured at fair value and the portion of such assets that are classified within level 3 of the valuation hierarchy. For further information, seerefer to Note 2.2.
September 30, 2017
(in billions, except ratios)		Total assets at fair value Total level 3 assets
September 30, 2018
(in billions, except ratios)
Total assets at fair value Total level 3 assets
Trading–debt and equity instruments$362.1
  $6.1
$359.7
  $4.2
Derivative receivables(a)
58.3
 5.5
60.1
 7.1
Trading assets420.4
 11.6
419.8
 11.3
AFS securities216.2
 0.5
200.0
 0.1
Loans1.7
 0.3
3.0
 0.1
MSRs5.7
 5.7
6.4
 6.4
Other26.5
 1.8
28.5
 1.1
Total assets measured at fair value on a recurring basis
$670.5
 $19.9
$657.7
 $19.0
Total assets measured at fair value on a nonrecurring basis1.1
 0.8
1.8
 1.1
Total assets measured at fair value
$671.6
 $20.7
$659.5
 $20.1
Total Firm assets$2,563.1
  $2,615.2
  
Level 3 assets as a percentage of total Firm assets(a)
  0.8%  0.8%
Level 3 assets as a percentage of total Firm assets at fair value(a)
  3.1%  3.0%
(a)For purposes of the table above, the derivative receivables total reflects the impact of netting adjustments; however, the $5.5$7.1 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.
Valuation
Estimating fair value requires the application of judgment. The type and level of judgment required is largely dependent on the amount of observable market information available to the Firm. For instruments valued using internally developed valuation models and other valuation techniques that use significant unobservable inputs and are therefore classified within level 3 of the valuation hierarchy, judgments used to estimate fair value are more significant than those required when estimating the fair value of instruments classified within levels 1 and 2.
In arriving at an estimate of fair value for an instrument within level 3, management must first determine the appropriate valuation technique to use. Second, the lack of observability of certain significant inputs requires management to assess all relevant empirical data in deriving valuation inputs — including, for example, transaction details, yield curves, interest rates, prepayment rates, default rates, volatilities, correlations, equity or debt prices, valuations of comparable instruments, foreign exchange rates and credit curves. For a further discussion of the valuation of level 3 instruments, including unobservable inputs used, seerefer to Note 2.2.
For instruments classified in levels 2 and 3, management judgment must be applied to assess the appropriate level of
valuation adjustments to reflect counterparty credit quality, the Firm’s creditworthiness, market funding rates, liquidity considerations, unobservable parameters, and for portfolios that meet specified criteria, the size of the net open risk position. The judgments made are typically affected by the type of product and its specific contractual terms, and the level of liquidity for the product or within the market as a whole. For a further discussion of valuation adjustments applied by the Firm seerefer to Note 2.2.
Imprecision in estimating unobservable market inputs or other factors can affect the amount of gain or loss recorded for a particular position. Furthermore, while the Firm believes its valuation methods are appropriate and consistent with those of other market participants, the methods and assumptions used reflect management judgment and may vary across the Firm’s businesses and portfolios.
The Firm uses various methodologies and assumptions in the determination of fair value. The use of methodologies or assumptions different than those used by the Firm could result in a different estimate of fair value at the reporting date. For a detailed discussion of the Firm’s valuation process and hierarchy, and its determination of fair value for individual financial instruments, seerefer to Note 2.2.
Goodwill impairment
Management applies significant judgment when testing goodwill for impairment. The goodwill associated with each business combination is allocated to the related reporting units for goodwill impairment testing. For a description of the significant valuation judgments associated with goodwill impairment, seerefer to Goodwill impairment on pages 133–134139–140 of JPMorgan Chase’s 20162017 Annual Report.
For the three months ended September 30, 2017,2018, the Firm reviewed current economic conditions, (including the estimated effects of regulatory and legislative changes and the currentbusiness performance, estimated market cost of equity)equity, and prior projections of business performance for all its businesses. Based upon such reviews, the Firm concluded that the goodwill allocated to its reporting units was not impaired as of September 30, 2017.2018.
Declines in business performance, increases in credit losses, increases in equity capital requirements, as well as deterioration in economic or market conditions, adverse regulatory or legislative changes or increases in the estimated market cost of equity, could cause the estimated fair values of the Firm’s reporting units or their associated goodwill to decline in the future, which could result in a material impairment charge to earnings in a future period related to some portion of the associated goodwill.
For additional information on goodwill, seerefer to Note 14.

Credit card rewards liability
JPMorgan Chase offers credit cards with various rewards programs which allow cardholders to earn rewards points based on their account activity and the terms and conditions of the rewards program. Generally, there are no limits on the points that an eligible cardholder can earn, nor do the points expire, and the points can be redeemed for a variety of rewards, including cash (predominantly in the form of account credits), gift cards and travel. The Firm maintains a rewards liability which represents the estimated cost of rewards points earned and expected to be redeemed by cardholders. The rewards liability is sensitive to various assumptions, including cost per point and redemption rates for each of the various rewards programs, which are evaluated periodically. The liability is accrued as the cardholder earns the benefit and is reduced when the cardholder redeems points. This liability was $5.8 billion and $4.9 billion at September 30, 2018 and December 31, 2017, respectively, and is recorded in accounts payable and other liabilities on the Consolidated balance sheets.
Income taxes
For a description of the significant assumptions, judgments and interpretations associated with the accounting for income taxes, seerefer to Note 1, and Income taxes on page 134140 of JPMorgan Chase’s 20162017 Annual Report.
Litigation reserves
For a description of the significant estimates and judgments associated with establishing litigation reserves, seerefer to Note 2122 of this Form 10-Q, and Note 3129 of JPMorgan Chase’s 20162017 Annual Report.


ACCOUNTING AND REPORTING DEVELOPMENTS
Financial Accounting Standards Board (“FASB”) Standards Issued but not yet Adopted since January 1, 2018
     
Standard Summary of guidance Effects on financial statements
     
Revenue recognition – revenue from contracts with customers
Issued May 2014


 
 • Requires that revenue from contracts with customers be recognized upon transfer of control of a good or service in the amount of consideration expected to be received.
 • Changes the accounting for certain contract costs, including whether they may be offset against revenue in the Consolidated statements of income, and requires additional disclosures about revenue and contract costs.
 • May be adopted using a full retrospective approach or a modified, cumulative effect approach wherein the guidance is applied only to existing contracts as of the date of initial application, and to new contracts transacted after that date.
 
 • Required effective date:Adopted January 1, 2018.(a)
 • Because the guidance does not applyFor further information, refer to revenue associated with financial instruments, including loans and securities that are accounted for under other U.S. GAAP, the Firm does not expect the new revenue recognition guidance to have a material impact on the elements of its Consolidated statements of income most closely associated with financial instruments, including securities gains, interest income and interest expense.
 • The Firm plans to adopt the revenue recognition guidance in the first quarter of 2018 using the modified retrospective method of adoption.
 • The Firm’s implementation efforts include the identification of revenue and associated costs within the scope of the guidance, as well as the evaluation of revenue contracts, and any changes to existing revenue recognition policies. While the Firm has not yet identified any material changes in the timing of revenue recognition, the Firm’s review is ongoing, and it continues to evaluate the presentation of certain contract costs (whether presented gross or offset against noninterest revenue). Based on its implementation work to date, the Firm expects it will be required to present certain underwriting costs (currently offset against Investment banking fees), as well as certain distribution costs (currently offset against Asset management, administration and commissions) gross as non-interest expense upon adoption. The Firm plans to expand its quantitative and qualitative disclosures within the noninterest revenue and noninterest expense note to the Consolidated Financial Statements.Note 1.
Recognition and
measurement of financial assets and financial liabilities
Issued January 2016
 
 • Requires that certain equity instruments be measured at fair value, with changes in fair value recognized in earnings.
 • Generally requiresProvides a cumulative-effect adjustmentmeasurement alternative for equity securities without readily determinable fair values to retained earnings asbe measured at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of the same issuer. Any such price changes are reflected in earnings beginning ofin the reporting period of adoption, except for those equity investments that are eligible for the measurement alternative.adoption.

 
 • Required effective date:Adopted January 1, 2018.(a)
 • The Firm early adopted the provisionsFor further information, refer to Note 1.
Classification of this guidance related to presenting DVA in OCI for financial liabilities where the fair value option has been elected, effective January 1, 2016. The Firm plans to adopt the portions of the guidance that were not eligible for early adoptioncertain cash receipts and cash payments in the first quarterstatement of cash flows
Issued August 2016

 • Provides targeted amendments to the classification of certain cash flows, including the treatment of settlement payments for zero coupon debt instruments and distributions received from equity method investments.
 • Adopted January 1, 2018.
 • The Firm is currently evaluating the additional impacts on the Consolidated Financial Statements. The Firm’s implementation efforts include the identification of securities within the scopeadoption of the guidance had no material impact as the evaluation ofFirm was either in compliance with the measurement alternative available for equity securities without a readily determinable fair value, andamendments or the related impactamounts to accounting policies, presentation, and disclosures. The Firm expects to elect the measurement alternative for the majority of its equity investments that do not have readily determinable fair values.which it was applied were immaterial.
LeasesTreatment of restricted cash on the statement of cash flows
Issued FebruaryNovember 2016

 
 • Requires lesseesrestricted cash to recognize all leases longer than twelve monthsbe combined with unrestricted cash when reconciling the beginning and ending cash balances on the Consolidated balance sheets as lease liabilities with corresponding right-of-use assets.statements of cash flows.
 • Requires lessees and lessorsadditional disclosures to classify most leases using principles similar to existing lease accounting, but eliminatessupplement the “bright line” classification tests.
 • Expands qualitative and quantitative disclosures regarding leasing arrangements.
 • Requires adoption using a modified cumulative effect approach wherein the guidance is applied to all periods presented.
 • Required effective date: January 1, 2019.(a)
 • The Firm is in the process of its implementation which has included an initial evaluation of its leasing contracts and activities. As a lessee, the Firm is developing its methodology to estimate the right-of-use assets and lease liabilities, which is based on the present value of lease payments. The Firm expects to recognize lease liabilities and corresponding right-of-use assets (at their present value) related to predominantly all of the $10 billion of future minimum payments required under operating leases as disclosed in Note 30 of JPMorgan Chase’s 2016 Annual report. However, the population of contracts subject to balance sheet recognition and their initial measurement remains under evaluation. The Firm does not expect material changes to the recognition of operating lease expense in its Consolidated statements of income.cash flows.
 • The Firm plans to adopt the new guidance in the first quarter of 2019.
Financial instruments – credit losses
Issued June 2016
 
 • Replaces existing incurred loss impairment guidance and establishes a single allowance framework for financial assets carried at amortized cost (including HTM securities), which will reflect management’s estimate of credit losses over the full remaining expected life of the financial assets.Adopted January 1, 2018
 • Eliminates existing guidance for PCI loans, and requires recognition of an allowance for expected credit losses on financial assets purchased with more than insignificant credit deterioration since origination.
 • Amends existing impairment guidance for AFS securitiesFor further information, refer to incorporate an allowance, which will allow for reversals of impairment losses 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.
 • Required effective date: January 1, 2020.(a)
 • The Firm has begun its implementation efforts by establishing a Firmwide, cross-discipline governance structure.  The Firm is currently identifying key interpretive issues, and is assessing existing credit loss forecasting models and processes against the new guidance to determine what modifications may be required. The Firm is also evaluating the timing of adoption, as early adoption is permitted as of January 1, 2019.
 • The Firm expects that the new guidance will result in an increase in its allowance for credit losses due to several factors, including:
Note 1.
The allowance related to the Firm’s loans and commitments will increase to cover credit losses over the full remaining expected life of the portfolio, and will consider expected future changes in macroeconomic conditions
2.
The nonaccretable difference on PCI loans will be recognized as an allowance, offset by an increase in the carrying value of the related loans
3.
An allowance will be established for estimated credit losses on HTM securities
 • The extent of the increase is under evaluation, but will depend upon the nature and characteristics of the Firm’s portfolio at the adoption date, and the macroeconomic conditions and forecasts at that date.


     
FASB Standards Issued but not yet Adopted since January 1, 2018 (continued)
     
Standard Summary of guidance Effects on financial statements
     
Classification of certain cash receipts and cash payments in the statement of cash flows
Issued August 2016

 • Provides targeted amendments to the classification of certain cash flows, including treatment of cash payments for settlement of zero-coupon debt instruments and distributions received from equity method investments.
 • Requires retrospective application to all periods presented.
 • Required effective date: January 1, 2018.(a)
 • No material impact is expected because the Firm is either already in compliance with the new guidance or the balances to which it would be applied are immaterial. The Firm plans to adopt the new guidance in the first quarter of 2018.
Treatment of restricted cash on the statement of cash flows
Issued November 2016

 • Requires inclusion of restricted cash in the cash and cash equivalents balances in the Consolidated statements of cash flows.
 • Requires additional disclosures to supplement the Consolidated statements of cash flows.
 • Requires retrospective application to all periods presented.

 • Required effective date: January 1, 2018.(a)
 • The guidance will have no impact on the Firm’s Consolidated statements of income or Consolidated balance sheets, but will result in reclassification of restricted cash balances and associated changes on the Consolidated statements of cash flows.
 • The Firm plans to adopt the new guidance in the first quarter of 2018.
Definition of a business
Issued January 2017

 
 • Narrows the definition of a business and clarifies that, to be considered a business, substantially all of the fair value of the gross assets acquired (or disposed of) may not be substantially all concentrated in a single identifiable asset or a group of similar assets.
 • In addition, in order to be considered a business,the definition now requires that a set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs.
 
 • Required effective date:Adopted January 1, 2018.(a)
 • No material impact is expected becauseThe adoption of the guidance is to be applied prospectively, althoughhad no impact because it is anticipated that afterbeing applied prospectively. Subsequent to adoption, fewer transactions will be treated as acquisitions or dispositions of a business.
Presentation of net periodic pension cost and net periodic postretirement benefit cost
Issued March 2017

 • Requires the service cost component of net periodic pension and postretirement benefit cost to be reported separately in the Consolidated statements of income from the other components (e.g., expected return on assets, interest costs, amortization of gains/losses and prior service costs).
 • Adopted January 1, 2018.
 • For further information, refer to Note 1.
Premium amortization on purchased callable debt securities
Issued March 2017

 • Requires amortization of premiums to the earliest call date on debt securities with call features that are explicit, noncontingent and callable at fixed prices and on preset dates.
 • Does not impact debt securities held at a discount; the discount continues to be amortized to the contractual maturity date.
 • Adopted January 1, 2018.
 • For further information, refer to Note 1.
Hedge accounting
Issued August 2017
 • Aligns the accounting with the economics of the risk management activities.
 • Expands the ability for certain hedges of interest rate risk to qualify for hedge accounting.
 • Allows recognition of ineffectiveness in cash flow hedges and net investment hedges in OCI.
 • Permits an election at adoption to transfer certain investment securities classified as held-to-maturity to available-for-sale.
 • Simplifies hedge documentation requirements.
 • Adopted January 1, 2018.
 • For further information, refer to Note 1.
Reclassification of certain tax effects from AOCI
Issued February 2018
 • Permits reclassification of the income tax effects of the TCJA on items within AOCI to retained earnings so that the tax effects of items within AOCI reflect the appropriate tax rate.
 • Adopted January 1, 2018.
 • For further information, refer to Note 1.


FASB Standards Issued but not yet Adopted
StandardSummary of guidanceEffects 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.
 • Permits the Firm to generally account for its existing leases consistent with current guidance, except for the incremental balance sheet recognition.
 • Expands qualitative and quantitative leasing disclosures.
 • May be adopted using a modified cumulative effect approach wherein the guidance is applied only to existing contracts as of the date of initial application, and to new contracts transacted after that date, or a cumulative-effect adjustment to retained earnings at the effective date without revising prior comparative periods.
 • Required effective date: January 1, 2019.(a)
 • The Firm is in the final stages of its implementation which includes implementing a new lease accounting software solution for its real estate leases, and updating processes and internal controls for its leasing activities. As a lessee, the Firm is finalizing its estimate of the right-of-use asset and lease liability, which is based on the present value of lease payments. The Firm expects to recognize a lease liability and a corresponding right-of-use asset (at their present value) related to predominantly all of the $10 billion of future minimum payments required under operating leases as disclosed in Note 28 of JPMorgan Chase’s 2017 Annual Report. However, the population of contracts subject to balance sheet recognition and their initial measurement remains under evaluation; final financial statement impacts will depend on the lease portfolio at the time of adoption. The Firm does not expect material changes to the recognition of operating lease expense in its Consolidated statements of income.
 • The Firm plans to adopt the new lease guidance on January 1, 2019 through a cumulative-effect adjustment without revising prior comparative periods and elect the available practical expedients, which will not require it to reassess whether an existing contract contains a lease or whether classification or unamortized initial lease costs would be different under the new lease guidance.




Financial instruments – credit losses
Issued June 2016
 • Replaces existing incurred loss impairment guidance and establishes a single allowance framework for financial assets carried at amortized cost, which will reflect management’s estimate of credit losses over the full remaining expected life of the financial assets and will consider 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, which will be offset by an increase in the carrying value of the related loans.
 • 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.
 • Required effective date: January 1, 2020.(a)
 • The Firm has established a Firmwide, cross-discipline governance structure, which provides implementation oversight.  The Firm continues to identify key interpretive issues, and is in the process of developing and implementing current expected credit loss models that satisfy the requirements of the new standard.
•
The Firm expects that the allowance related to the Firm’s loans and commitments will increase as it will cover credit losses over the full remaining expected life of the portfolios, with the most significant impact expected from the Firm’s credit card portfolio.
 • The extent of the increase in the allowance is under evaluation, but will depend upon the nature and characteristics of the Firm’s portfolio at the adoption date, and the macroeconomic conditions and forecasts at that date.
•
The Firm plans to adopt the new guidance in the first quarter of 2018.on January 1, 2020.
Goodwill
Issued January 2017

 
 • Requires an impairment loss to be recognized when the estimated fair value of a reporting unit falls below its carrying value.
 • Eliminates the second condition in the current guidance that requires an impairment loss to be recognized only if the estimated implied fair value of the goodwill is below its carrying value.
 
 • Required effective date: January 1, 2020.(a)
 • Based on current impairment test results, the Firm does not expect a material effect on the Consolidated Financial Statements. However, the impact of the new accounting guidance will depend on the performance of the reporting units and the market conditions at the time of adoption.
 • After adoption, the guidance may result in more frequent goodwill impairment losses due to the removal of the second condition.
 • The Firm is evaluating the timing of adoption.

Presentation of net periodic pension cost and net periodic postretirement benefit cost
Issued March 2017

 • Requires the service cost component of net periodic pension and postretirement benefit cost to be reported separately in the consolidated results of operations from the other components (e.g., expected return on assets, interest costs, amortization of gains/losses and prior service costs).
 • Requires presentation in the consolidated results of operations of the service cost component in the same line item as other employee compensation costs and presentation of the other components in a different line item from the service cost component.
 • Required effective date: January 1, 2018.(a)
 • The guidance will have no impact on the Firm’s net income, but based on recent trends, the Firm expects that the guidance will result in an increase in compensation expense and a reduction in other expense. The Firm plans to adopt the new guidance in the first quarter of 2018.
Premium amortization on purchased callable debt securities
Issued March 2017
 • Requires amortization of premiums to the earliest call date on debt securities with call features that are explicit, noncontingent and callable at fixed prices and on preset dates.
 • Does not impact securities held at a discount; the discount continues to be amortized to the contractual maturity.
 • Requires adoption on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.
 • Required effective date: January 1, 2019.(a)
 • The Firm is currently evaluating the impact on the Consolidated Financial Statements as well as the timing of adoption. At adoption, the guidance is expected to result in a cumulative effect adjustment which will reduce retained earnings which, for AFS securities, would have a corresponding increase in AOCI. Post-adoption, it will result in reduced interest income prior to the call date on callable debt securities held at a premium because those premiums will be amortized over a shorter time period.
 • The Firm’s implementation efforts include identifying the population of debt securities subject to the new guidance (primarily obligations of U.S. states and municipalities) and quantifying the expected impact.
Hedge accounting
Issued August 2017
 • Reduces earnings volatility by better aligning the accounting with the economics of the risk management activities.
 • Expands  the ability for certain hedges of interest rate risk to qualify for hedge accounting.
 • Allows recognition of ineffectiveness in cash flow hedges and net investment hedges in OCI.
 • Allows a one-time election at adoption to transfer certain securities classified as held-to-maturity to available-for-sale.
 • Simplifies hedge documentation requirements.

 • Required effective date: January 1, 2019.(a)
 • The Firm’s implementation efforts include identifying the population of hedge activity subject to the new guidance, evaluating the various transition elections and the timing of adoption, and determining the potential impact on the Consolidated Financial Statements.2020.
(a)Early adoption is permitted.



FORWARD-LOOKING STATEMENTS
From time to time, the Firm has made and will make forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipate,” “target,” “expect,” “estimate,” “intend,” “plan,” “goal,” “believe,” or other words of similar meaning. Forward-looking statements provide JPMorgan Chase’s current expectations or forecasts of future events, circumstances, results or aspirations. JPMorgan Chase’s disclosures in this Form 10-Q contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Firm also may make forward-looking statements in its other documents filed or furnished with the SEC. In addition, the Firm’s senior management may make forward-looking statements orally to investors, analysts, representatives of the media and others.
All forward-looking statements are, by their nature, subject to risks and uncertainties, many of which are beyond the Firm’s control. JPMorgan Chase’s actual future results may differ materially from those set forth in its forward-looking statements. While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ from those in the 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 deal effectively with an economic slowdown or other economic or market disruption;
Technology changes instituted by the Firm, its counterparties or competitors;
 
The successeffectiveness of the Firm’s business simplification initiatives and the effectiveness of its control agenda;
Ability of the Firm to develop newor 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 expense;expenses;
Competitive pressures;
Changes in the credit quality of the Firm’s 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 or conflicts and the Firm’s ability to deal effectively with disruptions caused by the foregoing;
Ability of the Firm to maintain the security and integrity of its financial, accounting, technology, data processing and other operatingoperational 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 information or disrupt its systems; and
The other risks and uncertainties detailed in Part I,
Item 1A: Risk Factors in JPMorgan Chase’s 20162017 Annual Report on Form 10-K for the year ended December 31, 2016.2017.
Any forward-looking statements made by or on behalf of the Firm speak only as of the date they are made, and JPMorgan Chase does not undertake to update any forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.statements. The reader should, however, consult any further disclosures of a forward-looking nature the Firm may make in any subsequent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, or Current Reports on Form 8-K.



JPMorgan Chase & Co.
Consolidated statements of income (unaudited)
  Three months ended
September 30,		 Nine months ended
September 30,
(in millions, except per share data) 2018
 2017
 2018
 2017
Revenue        
Investment banking fees $1,832
 $1,868
 $5,736
 $5,594
Principal transactions 2,964
 2,721
 10,698
 9,440
Lending- and deposit-related fees 1,542
 1,497
 4,514
 4,427
Asset management, administration and commissions 4,310
 4,072
 12,923
 11,996
Investment securities losses (46) (1) (371) (38)
Mortgage fees and related income 262
 429
 1,051
 1,239
Card income 1,328
 1,242
 3,623
 3,323
Other income 1,160
 952
 4,041
 3,197
Noninterest revenue 13,352
 12,780
 42,215
 39,178
Interest income 19,840
 16,687
 56,404
 47,379
Interest expense 5,932
 3,889
 15,699
 10,309
Net interest income 13,908
 12,798
 40,705
 37,070
Total net revenue 27,260
 25,578
 82,920
 76,248
         
Provision for credit losses 948
 1,452
 3,323
 3,982
         
Noninterest expense        
Compensation expense 8,108
 7,697
 25,308
 23,710
Occupancy expense 1,014
 930
 2,883
 2,803
Technology, communications and equipment expense 2,219
 1,972
 6,441
 5,677
Professional and outside services 2,086
 1,955
 6,333
 5,646
Marketing 798
 710
 2,396
 2,179
Other expense 1,398
 1,306
 4,313
 4,605
Total noninterest expense 15,623
 14,570
 47,674
 44,620
Income before income tax expense 10,689
 9,556
 31,923
 27,646
Income tax expense 2,309
 2,824
 6,515
 7,437
Net income $8,380
 $6,732
 $25,408
 $20,209
Net income applicable to common stockholders $7,948
 $6,262
 $24,067
 $18,786
Net income per common share data        
Basic earnings per share $2.35
 $1.77
 $7.04
 $5.26
Diluted earnings per share 2.34
 1.76
 7.00
 5.22
         
Weighted-average basic shares 3,376.1
 3,534.7
 3,416.5
 3,570.9
Weighted-average diluted shares 3,394.3
 3,559.6
 3,436.2
 3,597.0
Cash dividends declared per common share $0.80
 $0.56
 $1.92
 $1.56

  Three months ended
September 30,		 Nine months ended
September 30,
(in millions, except per share data) 2017
 2016
 2017
 2016
Revenue        
Investment banking fees $1,843
 $1,866
 $5,470
 $4,843
Principal transactions 2,721
 3,451
 9,440
 9,106
Lending- and deposit-related fees 1,497
 1,484
 4,427
 4,290
Asset management, administration and commissions 3,846
 3,597
 11,347
 10,902
Securities gains/(losses) (1) 64
 (38) 136
Mortgage fees and related income 429
 624
 1,239
 1,980
Card income 1,242
 1,202
 3,323
 3,861
Other income 951
 782
 3,193
 2,844
Noninterest revenue 12,528
 13,070
 38,401
 37,962
Interest income 16,687
 14,070
 47,379
 41,435
Interest expense 3,889
 2,467
 10,309
 7,105
Net interest income 12,798
 11,603
 37,070
 34,330
Total net revenue 25,326
 24,673
 75,471
 72,292
         
Provision for credit losses 1,452
 1,271
 3,982
 4,497
         
Noninterest expense        
Compensation expense 7,646
 7,669
 23,553
 23,107
Occupancy expense 930
 899
 2,803
 2,681
Technology, communications and equipment expense 1,972
 1,741
 5,670
 5,024
Professional and outside services 1,705
 1,665
 4,892
 4,913
Marketing 710
 825
 2,179
 2,200
Other expense 1,355
 1,664
 4,746
 4,013
Total noninterest expense 14,318
 14,463
 43,843
 41,938
Income before income tax expense 9,556
 8,939
 27,646
 25,857
Income tax expense 2,824
 2,653
 7,437
 7,851
Net income $6,732
 $6,286
 $20,209
 $18,006
Net income applicable to common stockholders(a)
 $6,262
 $5,812
 $18,786
 $16,584
Net income per common share data        
Basic earnings per share $1.77
 $1.60
 $5.26
 $4.51
Diluted earnings per share 1.76
 1.58
 5.22
 4.48
         
Weighted-average basic shares(a)
 3,534.7
 3,637.7
 3,570.9
 3,674.6
Weighted-average diluted shares(a)
 3,559.6
 3,669.8
 3,597.0
 3,704.5
Cash dividends declared per common share $0.56
 $0.48
 $1.56
 $1.40
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
(a)The prior period amounts have been revised to conform with the current period presentation. The revision had no impact on the Firm’s reported earnings per share.
The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.




     





JPMorgan Chase & Co.
Consolidated statements of comprehensive income (unaudited)
  Three months ended
September 30,		 Nine months ended
September 30,
(in millions) 2018
 2017
 2018
 2017
Net income $8,380
 $6,732
 $25,408
 $20,209
Other comprehensive income/(loss), after–tax        
Unrealized gains/(losses) on investment securities (819) 147
 (2,280) 842
Translation adjustments, net of hedges (31) —
 84
 7
Fair value hedges 34
 NA
 (74) NA
Cash flow hedges (88) 26
 (327) 170
Defined benefit pension and OPEB plans 19
 22
 78
 26
DVA on fair value option elected liabilities (402) (112) 125
 (179)
Total other comprehensive income/(loss), after–tax (1,287) 83
 (2,394) 866
Comprehensive income $7,093
 $6,815
 $23,014
 $21,075

  Three months ended
September 30,		 Nine months ended
September 30,
(in millions) 2017
 2016
 2017
 2016
Net income $6,732
 $6,286
 $20,209
 $18,006
Other comprehensive income/(loss), after–tax        
Unrealized gains/(losses) on investment securities 147
 (160) 842
 1,132
Translation adjustments, net of hedges —
 4
 7
 5
Cash flow hedges 26
 36
 170
 (121)
Defined benefit pension and OPEB plans 22
 42
 26
 123
DVA on fair value option elected liabilities (112) (66) (179) (11)
Total other comprehensive income/(loss), after–tax 83
 (144) 866
 1,128
Comprehensive income $6,815
 $6,142
 $21,075
 $19,134
Effective January 1, 2018, the Firm adopted several new accounting standards. For additional information, refer to Note 1.
The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.




JPMorgan Chase & Co.
Consolidated balance sheets (unaudited)
(in millions, except share data)Sep 30, 2018 Dec 31, 2017
Assets   
Cash and due from banks$23,225
 $25,898
Deposits with banks395,872
 405,406
Federal funds sold and securities purchased under resale agreements (included $12,226 and $14,732 at fair value)
217,632
 198,422
Securities borrowed (included $4,528 and $3,049 at fair value)
122,434
 105,112
Trading assets (included assets pledged of $114,850 and $109,887)
419,827
 381,844
Investment securities (included $200,030 and $202,225 at fair value and assets pledged of $10,534 and $17,969)
231,398
 249,958
Loans (included $2,987 and $2,508 at fair value)
954,318
 930,697
Allowance for loan losses(13,128) (13,604)
Loans, net of allowance for loan losses941,190
 917,093
Accrued interest and accounts receivable78,792
 67,729
Premises and equipment14,180
 14,159
Goodwill, MSRs and other intangible assets54,697
 54,392
Other assets (included $12,479 and $16,128 at fair value and assets pledged of $5,334 and $7,980)
115,936
 113,587
Total assets(a)
$2,615,183
 $2,533,600
Liabilities   
Deposits (included $20,500 and $21,321 at fair value)
$1,458,762
 $1,443,982
Federal funds purchased and securities loaned or sold under repurchase agreements (included $1,059 and $697 at fair value)
181,608
 158,916
Short-term borrowings (included $7,885 and $9,191 at fair value)
64,635
 51,802
Trading liabilities151,150
 123,663
Accounts payable and other liabilities (included $5,159 and $9,208 at fair value)
209,707
 189,383
Beneficial interests issued by consolidated VIEs (included $17 and $45 at fair value)
20,241
 26,081
Long-term debt (included $54,112 and $47,519 at fair value)
270,124
 284,080
Total liabilities(a)
2,356,227
 2,277,907
Commitments and contingencies (refer to Notes 20, 21 and 22)


 


Stockholders’ equity   
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,776,375 and 2,606,750 shares)
27,764
 26,068
Common stock ($1 par value; authorized 9,000,000,000 shares; issued 4,104,933,895 shares)
4,105
 4,105
Additional paid-in capital89,333
 90,579
Retained earnings195,180
 177,676
Accumulated other comprehensive loss(2,425) (119)
Shares held in restricted stock units (“RSU”) Trust, at cost (472,953 shares)
(21) (21)
Treasury stock, at cost (779,523,170 and 679,635,064 shares)
(54,980) (42,595)
Total stockholders’ equity258,956
 255,693
Total liabilities and stockholders’ equity$2,615,183
 $2,533,600

(in millions, except share data)Sep 30, 2017 Dec 31, 2016
Assets   
Cash and due from banks$21,994
 $23,873
Deposits with banks435,810
 365,762
Federal funds sold and securities purchased under resale agreements (included $16,545 and $21,506 at fair value)
185,454
 229,967
Securities borrowed (included $3,080 and $0 at fair value)
101,680
 96,409
Trading assets (included assets pledged of $124,872 and $115,847)
420,418
 372,130
Securities (included $216,209 and $238,891 at fair value and assets pledged of $16,771 and $16,115)
263,288
 289,059
Loans (included $1,746 and $2,230 at fair value)
913,761
 894,765
Allowance for loan losses(13,539) (13,776)
Loans, net of allowance for loan losses900,222
 880,989
Accrued interest and accounts receivable61,757
 52,330
Premises and equipment14,218
 14,131
Goodwill47,309
 47,288
Mortgage servicing rights5,738
 6,096
Other intangible assets808
 862
Other assets (included $7,509 and $7,557 at fair value and assets pledged of $1,491 and $1,603)
104,378
 112,076
Total assets(a)
$2,563,074
 $2,490,972
Liabilities   
Deposits (included $21,157 and $13,912 at fair value)
$1,439,027
 $1,375,179
Federal funds purchased and securities loaned or sold under repurchase agreements (included $714 and $687 at fair value)
169,393
 165,666
Commercial paper24,248
 11,738
Other borrowed funds (included $8,730 and $9,105 at fair value)
29,719
 22,705
Trading liabilities128,535
 136,659
Accounts payable and other liabilities (included $12,557 and $9,120 at fair value)
196,764
 190,543
Beneficial interests issued by consolidated VIEs (included $118 and $120 at fair value)
28,424
 39,047
Long-term debt (included $44,170 and $37,686 at fair value)
288,582
 295,245
Total liabilities(a)
2,304,692
 2,236,782
Commitments and contingencies (see Notes 19, 20 and 21)

 

Stockholders’ equity   
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,606,750 shares)
26,068
 26,068
Common stock ($1 par value; authorized 9,000,000,000 shares; issued 4,104,933,895 shares)
4,105
 4,105
Additional paid-in capital90,697
 91,627
Retained earnings175,827
 162,440
Accumulated other comprehensive (loss)(309) (1,175)
Shares held in restricted stock units (“RSU”) Trust, at cost (472,953 shares)
(21) (21)
Treasury stock, at cost (635,208,318 and 543,744,003 shares)
(37,985) (28,854)
Total stockholders’ equity258,382
 254,190
Total liabilities and stockholders’ equity$2,563,074
 $2,490,972
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
(a)The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at September 30, 2017,2018, and December 31, 2016.2017. The difference between total VIEassets of the consolidated VIEs are used to settle the liabilities of those entities. The holders of the beneficial interests generally do not have recourse to the general credit of JPMorgan Chase. The assets and liabilities representsin the Firm’s intereststable below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in those entities, which are eliminated in consolidation. For a further discussion, refer to Note 13.
(in millions)Sep 30, 2018 Dec 31, 2017
Assets   
Trading assets$1,567
 $1,449
Loans57,114
 68,995
All other assets2,407
 2,674
Total assets$61,088
 $73,118
Liabilities   
Beneficial interests issued by consolidated VIEs$20,241
 $26,081
All other liabilities330
 349
Total liabilities$20,571
 $26,430
(in millions)Sep 30, 2017 Dec 31, 2016
Assets   
Trading assets$1,595
 $3,185
Loans69,052
 75,614
All other assets2,698
 3,321
Total assets$73,345
 $82,120
Liabilities   
Beneficial interests issued by consolidated VIEs$28,424
 $39,047
All other liabilities412
 490
Total liabilities$28,836
 $39,537
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. At September 30, 2017, and December 31, 2016, the Firm provided limited program-wide credit enhancements of $2.7 billion and $2.4 billion, respectively, related to its Firm-administered multi-seller conduits, which are eliminated in consolidation. For further discussion, see Note 13.
The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.


JPMorgan Chase & Co.
Consolidated statements of changes in stockholders’ equity (unaudited)
  Nine months ended September 30,
(in millions, except per share data) 2018
 2017
     
Preferred stock    
Balance at January 1 $26,068
 $26,068
Issuance 1,696
 —
Balance at September 30 $27,764
 $26,068
     
Common stock    
Balance at January 1 and September 30 4,105
 4,105
     
Additional paid-in capital    
Balance at January 1 90,579
 91,627
Shares issued and commitments to issue common stock for employee shared-based compensation awards, and related tax effects (897) (680)
Other (349) (250)
Balance at September 30 89,333
 90,697
     
Retained earnings    
Balance at January 1 177,676
 162,440
Cumulative effect of changes in accounting principles (183) —
Net income 25,408
 20,209
Dividends declared:    
Preferred stock (1,167) (1,235)
Common stock ($1.92 and $1.56 per share)
 (6,554) (5,587)
Balance at September 30 195,180
 175,827
     
Accumulated other comprehensive income/(loss)    
Balance at January 1 (119) (1,175)
Cumulative effect of changes in accounting principles 88
 —
Other comprehensive income/(loss) (2,394) 866
Balance at September 30 (2,425) (309)
     
Shares held in RSU Trust, at cost    
Balance at January 1 and September 30 (21) (21)
     
Treasury stock, at cost    
Balance at January 1 (42,595) (28,854)
Repurchase (14,055) (10,602)
Reissuance 1,670
 1,471
Balance at September 30 (54,980) (37,985)
     
Total stockholders’ equity $258,956
 $258,382

  Nine months ended September 30,
(in millions, except per share data) 2017
 2016
Preferred stock    
Balance at January 1 and September 30 $26,068
 $26,068
Common stock    
Balance at January 1 and September 30 4,105
 4,105
Additional paid-in capital    
Balance at January 1 91,627
 92,500
Shares issued and commitments to issue common stock for employee stock-based compensation awards, and related tax effects (680) (380)
Other (250) (17)
Balance at September 30 90,697
 92,103
Retained earnings    
Balance at January 1 162,440
 146,420
Cumulative effect of change in accounting principle —
 (154)
Net income 20,209
 18,006
Dividends declared:    
Preferred stock (1,235) (1,235)
Common stock ($1.56 and $1.40 per share)
 (5,587) (5,167)
Balance at September 30 175,827
 157,870
Accumulated other comprehensive income/(loss)    
Balance at January 1 (1,175) 192
Cumulative effect of change in accounting principle —
 154
Other comprehensive income 866
 1,128
Balance at September 30 (309) 1,474
Shares held in RSU Trust, at cost    
Balance at January 1 and September 30 (21) (21)
Treasury stock, at cost    
Balance at January 1 (28,854) (21,691)
Purchase of treasury stock (10,602) (6,831)
Reissuance from treasury stock 1,471
 1,254
Balance at September 30 (37,985) (27,268)
Total stockholders’ equity $258,382
 $254,331
Effective January 1, 2018, the Firm adopted several new accounting standards. For additional information, refer to Note 1.
The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.




JPMorgan Chase & Co.
Consolidated statements of cash flows (unaudited)
 Nine months ended September 30,
(in millions)2018
 2017
Operating activities   
Net income$25,408
 $20,209
Adjustments to reconcile net income to net cash used in operating activities:   
Provision for credit losses3,323
 3,982
Depreciation and amortization5,716
 4,547
Deferred tax (benefit)/expense(323) (187)
Other2,179
 1,655
Originations and purchases of loans held-for-sale(68,235) (75,907)
Proceeds from sales, securitizations and paydowns of loans held-for-sale68,214
 75,255
Net change in:   
Trading assets(44,427) (31,189)
Securities borrowed(17,344) (5,191)
Accrued interest and accounts receivable(11,335) (9,795)
Other assets2,909
 18,668
Trading liabilities21,580
 (23,162)
Accounts payable and other liabilities26,677
 (10,124)
Other operating adjustments(577) 7,858
Net cash provided by/(used in) operating activities13,765
 (23,381)
Investing activities   
Net change in:   
Federal funds sold and securities purchased under resale agreements(19,259) 44,463
Held-to-maturity securities:   
Proceeds from paydowns and maturities2,268
 3,508
Purchases(8,613) (594)
Available-for-sale securities:   
Proceeds from paydowns and maturities29,618
 43,536
Proceeds from sales34,322
 57,640
Purchases(46,530) (73,717)
Proceeds from sales and securitizations of loans held-for-investment20,154
 11,600
Other changes in loans, net(49,755) (39,385)
All other investing activities, net(1,987) 655
Net cash provided by/(used in) investing activities(39,782) 47,706
Financing activities   
Net change in:   
Deposits15,274
 51,352
Federal funds purchased and securities loaned or sold under repurchase agreements22,719
 3,731
Short-term borrowings12,974
 19,006
Beneficial interests issued by consolidated VIEs975
 (1,312)
Proceeds from long-term borrowings54,842
 46,311
Payments of long-term borrowings(69,636) (65,932)
Proceeds from issuance of preferred stock1,655
 —
Treasury stock repurchased(14,055) (10,602)
Dividends paid(6,989) (6,478)
All other financing activities, net(1,440) 329
Net cash provided by financing activities16,319
 36,405
Effect of exchange rate changes on cash and due from banks and deposits with banks(2,509) 7,272
Net increase/(decrease) in cash and due from banks and deposits with banks(12,207) 68,002
Cash and due from banks and deposits with banks at the beginning of the period431,304
 391,154
Cash and due from banks and deposits with banks at the end of the period$419,097
 $459,156
Cash interest paid$15,144
 $10,294
Cash income taxes paid, net2,197
 3,238

 Nine months ended September 30,
(in millions)2017
 2016
Net income$20,209
 $18,006
Adjustments to reconcile net income to net cash provided by operating activities:   
Provision for credit losses3,982
 4,497
Depreciation and amortization4,547
 4,032
Deferred tax (benefit)/expense(187) 851
Other1,655
 1,424
Originations and purchases of loans held-for-sale(75,907) (32,619)
Proceeds from sales, securitizations and paydowns of loans held-for-sale75,255
 31,756
Net change in:   
Trading assets(31,189) (44,082)
Securities borrowed(5,191) (10,475)
Accrued interest and accounts receivable(9,795) (17,731)
Other assets18,835
 (6,428)
Trading liabilities(23,162) 23,308
Accounts payable and other liabilities(2,948) 5,655
Other operating adjustments7,858
 3,091
Net cash used in operating activities(16,038) (18,715)
Investing activities   
Net change in:   
Deposits with banks(70,048) (56,185)
Federal funds sold and securities purchased under resale agreements44,463
 (20,048)
Held-to-maturity securities:   
Proceeds from paydowns and maturities3,508
 4,442
Purchases(594) (134)
Available-for-sale securities:   
Proceeds from paydowns and maturities43,536
 49,652
Proceeds from sales57,640
 34,971
Purchases(73,717) (66,767)
Proceeds from sales and securitizations of loans held-for-investment11,600
 8,761
Other changes in loans, net(39,385) (65,204)
All other investing activities, net655
 (1,590)
Net cash used in investing activities(22,342) (112,102)
Financing activities   
Net change in:   
Deposits51,352
 113,365
Federal funds purchased and securities loaned or sold under repurchase agreements3,731
 15,797
Commercial paper and other borrowed funds19,006
 (469)
Beneficial interests issued by consolidated VIEs(1,312) (4,767)
Proceeds from long-term borrowings46,311
 72,021
Payments of long-term borrowings(65,932) (51,054)
Treasury stock purchased(10,602) (6,831)
Dividends paid(6,478) (6,189)
All other financing activities, net329
 (174)
Net cash provided by financing activities36,405
 131,699
Effect of exchange rate changes on cash and due from banks96
 18
Net increase/(decrease) in cash and due from banks(1,879) 900
Cash and due from banks at the beginning of the period23,873
 20,490
Cash and due from banks at the end of the period$21,994
 $21,390
Cash interest paid$10,294
 $6,922
Cash income taxes paid, net3,238
 1,810
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.


SeeRefer to the Glossary of Terms and Acronyms on pages 168–175175–179 for definitions of terms and acronyms used throughout the Notes to Consolidated Financial Statements.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Note 1 – Basis of presentation
JPMorgan Chase & Co. (“JPMorgan Chase” or “the Firm”), a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the U.S., with operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small business,businesses, commercial banking, financial transaction processing and asset management. For a further discussion of the Firm’s business segments, seerefer to Note 22.23.
The accounting and financial reporting policies of JPMorgan Chase and its subsidiaries conform to U.S. GAAP. Additionally, where applicable, the policies conform to the accounting and reporting guidelines prescribed by regulatory authorities.
The unaudited Consolidated Financial Statements prepared in conformity with U.S. GAAP require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expense, and the disclosures of contingent assets and liabilities. Actual results could be different from these estimates. In the opinion of management, all normal, recurring adjustments have been included such that this interim financial information is fairly presented.
These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements, and related notes thereto, included in JPMorgan Chase’s 20162017 Annual Report.
Certain amounts reported in prior periods have been reclassified to conform with the current presentation.
Consolidation
The Consolidated Financial Statements include the accounts of JPMorgan Chase and other entities in which the Firm has a controlling financial interest. All material intercompany balances and transactions have been eliminated.
Assets held for clients in an agency or fiduciary capacity by the Firm are not assets of JPMorgan Chase and are not included on the Consolidated balance sheets.
The Firm determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity.
For a further description of JPMorgan Chase’s accounting policies regarding consolidation, seerefer to Notes1 and 1614 of JPMorgan Chase’s 20162017 Annual Report.
 
Offsetting assets and liabilities
U.S. GAAP permits entities to present derivative receivables and derivative payables with the same counterparty and the related cash collateral receivables and payables on a net basis on the Consolidated balance sheets when a legally enforceable master netting agreement exists. U.S. GAAP also permits securities financing activities to be presented on a net basis when specified conditions are met, including the existence of a legally enforceable master netting agreement. The Firm has elected to net such balances when the specified conditions are met. For further information on offsetting assets and liabilities, seerefer to Note1 of JPMorgan Chase’s 20162017 Annual Report.
Application of U.S. GAAP related to the Tax Cuts and Jobs Act (“TCJA”) SEC Staff Accounting Bulletin No. 118
On December 22, 2017, the TCJA was signed into law and the Firm recorded the estimated impact of the deemed repatriation of the Firm’s unremitted non-U.S. earnings and the remeasurement of deferred taxes under the TCJA. These provisional amounts represent estimates under SEC guidance, which provides a one-year measurement period in which to refine the estimates based on new information or the issuance of interpretative guidance. Based on legislative guidance and adjustments to the 2017 federal tax return as filed, the Firm recorded a net tax benefit of $132 million in the third quarter for changes in the estimates to both the remeasurement of certain deferred taxes and the deemed repatriation tax on non-U.S. earnings. The year-to-date benefit recorded for changes in estimates was $305 million and the Firm may recognize additional adjustments during the fourth quarter as a result of the issuance of additional legislative and accounting guidance. The Firm considers any legislative or accounting guidance issued as of the balance sheet date when evaluating potential refinements to these estimates.









Accounting standards adopted January 1, 2018
The following table identifies the standards adopted, and the note where further information on the impact of the new guidance can be found:
Revenue recognition – revenue from contracts with customersNote 5
Recognition and measurement of financial assets and financial liabilitiesNotes 2 and 9
Treatment of restricted cash on the statement of cash flowsNote 18
Presentation of net periodic pension cost and net periodic postretirement benefit costNote 7
Premium amortization on purchased callable debt securitiesNotes 9 and 17
Hedge accountingNotes 4, 9 and 17
Reclassification of certain tax effects from AOCINote 17

Certain of the new accounting standards were applied retrospectively and prior period amounts were revised accordingly. The most significant of the new standards was revenue recognition, which requires gross presentation of certain costs that were previously offset against revenue. This change resulted in noninterest revenue and noninterest expense each increasing by $252 million and $777 million for the three and nine months ended September 30, 2017, respectively, with no impact to net income.
Upon adoption of the restricted cash guidance, to align the Consolidated balance sheets with the Consolidated statements of cash flows, the Firm reclassified restricted cash into cash and due from banks or deposits with banks. In addition, for the Firm’s Consolidated statements of cash flows, cash is defined as those amounts included in cash and due from banks and deposits with banks. This guidance was applied retrospectively and, accordingly, prior period amounts have been revised, resulting in cash and due from banks and deposits with banks increasing by $71 million and $1.1 billion, respectively, and other assets decreasing by $1.2 billion at December 31, 2017.
Business changes and developments
On October 30, 2018, the Firm redeemed $1.7 billion of its fixed-to-floating rate non-cumulative perpetual preferred stock, Series I. For additional information on the Firm’s preferred stock, refer to Note 20 of JPMorgan Chase’s 2017 Annual Report.


Note 2 – Fair value measurement
For a discussion of the Firm’s valuation methodologies for assets, liabilities and lending-related commitments measured at fair value and the fair value hierarchy, seerefer to Note 32 of JPMorgan Chase’s 20162017 Annual Report.




The following table presents the assets and liabilities reported at fair value as of September 30, 2017,2018, and December 31, 2016, 2017, by major product category and fair value hierarchy.hierarchy.
Assets and liabilities measured at fair value on a recurring basisAssets and liabilities measured at fair value on a recurring basis




Assets and liabilities measured at fair value on a recurring basis





Fair value hierarchy
Derivative netting adjustments

Fair value hierarchy
Derivative
netting
adjustments
September 30, 2017 (in millions)Level 1Level 2
Level 3
Total fair value
     
September 30, 2018 (in millions)Level 1Level 2
Level 3
Derivative
netting
adjustments		Total fair value
Federal funds sold and securities purchased under resale agreements$—
$16,545

$—

$—
$16,545
$—
$12,226

$—

$12,226
Securities borrowed—
3,080

—

—
3,080
—
4,528

—

4,528
Trading assets:























Debt instruments:























Mortgage-backed securities:























U.S. government agencies(a)
—
37,406

323

—
37,729
—
46,252

529

—
46,781
Residential – nonagency—
1,634

107

—
1,741
—
1,681

77

—
1,758
Commercial – nonagency—
1,489

27

—
1,516
—
1,420

13

—
1,433
Total mortgage-backed securities—
40,529

457

—
40,986
—
49,353

619

—
49,972
U.S. Treasury and government agencies(a)
33,625
6,246

1

—
39,872
40,815
7,443

—

—
48,258
Obligations of U.S. states and municipalities—
6,742

715

—
7,457
—
8,785

699

—
9,484
Certificates of deposit, bankers’ acceptances and commercial paper—
2,147
 —
 —
2,147
—
3,070
 —
 —
3,070
Non-U.S. government debt securities32,227
32,036
 80
 —
64,343
26,824
28,875
 164
 —
55,863
Corporate debt securities—
25,538
 361
 —
25,899
—
23,210
 395
 —
23,605
Loans(b)
—
34,322
 3,207
 —
37,529
—
40,051
 1,533
 —
41,584
Asset-backed securities—
2,428
 271
 —
2,699
—
2,779
 76
 —
2,855
Total debt instruments65,852
149,988
 5,092
 —
220,932
67,639
163,566
 3,486
 —
234,691
Equity securities123,229
383
 288
 —
123,900
104,701
405
 329
 —
105,435
Physical commodities(c)
3,253
1,119
 —
 —
4,372
3,727
1,256
 —
 —
4,983
Other—
12,212
 691
 —
12,903
—
14,188
 413
 —
14,601
Total debt and equity instruments(d)
192,334
163,702
 6,071
 —
362,107
176,067
179,415
 4,228
 —
359,710
Derivative receivables:          
Interest rate297
473,589
 1,884
 (450,069)25,701
715
258,744
 2,000
 (238,062)23,397
Credit—
24,103
 1,593
 (24,781)915
—
22,553
 952
 (22,923)582
Foreign exchange848
167,191
 564
 (151,526)17,077
734
187,377
 773
 (171,841)17,043
Equity—
39,771
 1,298
 (32,238)8,831
—
43,791
 3,141
 (36,828)10,104
Commodity—
17,759
 142
 (12,165)5,736
—
22,129
 239
 (13,432)8,936
Total derivative receivables(e)
1,145
722,413
 5,481
 (670,779)58,260
1,449
534,594
 7,105
 (483,086)60,062
Total trading assets(f)
193,479
886,115
 11,552
 (670,779)420,367
177,516
714,009
 11,333
 (483,086)419,772
Available-for-sale securities:          
Mortgage-backed securities:          
U.S. government agencies(a)
—
71,355
 —
 —
71,355
—
63,110
 —
 —
63,110
Residential – nonagency—
13,075
 1
 —
13,076
—
9,216
 1
 —
9,217
Commercial – nonagency—
6,118
 —
 —
6,118
—
7,048
 —
 —
7,048
Total mortgage-backed securities—
90,548
 1
 —
90,549
—
79,374
 1
 —
79,375
U.S. Treasury and government agencies(a)
26,209
—
 —
 —
26,209
U.S. Treasury and government agencies27,816
—
 —
 —
27,816
Obligations of U.S. states and municipalities—
32,092
 —
 —
32,092
—
38,121
 —
 —
38,121
Certificates of deposit—
58
 —
 —
58
—
75
 —
 —
75
Non-U.S. government debt securities20,101
11,186
 —
 —
31,287
16,544
8,130
 —
 —
24,674
Corporate debt securities—
3,759
 —
 —
3,759
—
2,056
 —
 —
2,056
Asset-backed securities:          
Collateralized loan obligations—
22,017
 486
 —
22,503
—
20,048
 61
 —
20,109
Other

9,200
 —
 —
9,200
—
7,804
 —
 —
7,804
Equity securities552
—
 —
 —
552
Total available-for-sale securities46,862
168,860
 487
 —
216,209
44,360
155,608
 62
 —
200,030
Loans—
1,469
 277
 —
1,746
—
2,847
 140
 —
2,987
Mortgage servicing rights—
—
 5,738
 —
5,738
—
—
 6,433
 —
6,433
Other assets(f)(g)
4,905
—
 1,871
 —
6,776
10,684
20
 1,063
 —
11,767
Total assets measured at fair value on a recurring basis$245,246
$1,076,069
 $19,925
 $(670,779)$670,461
$232,560
$889,238
 $19,031
 $(483,086)$657,743
Deposits$—
$17,319
 $3,838
 $—
$21,157
$—
$16,060
 $4,440
 $—
$20,500
Federal funds purchased and securities loaned or sold under repurchase agreements—
713
 1
 —
714
—
1,059
 —
 —
1,059
Other borrowed funds—
7,259
 1,471
 —
8,730
Short-term borrowings—
5,914
 1,971
 —
7,885
Trading liabilities:     

     

Debt and equity instruments(d)
65,973
23,073
 43
 —
89,089
84,958
24,403
 96
 —
109,457
Derivative payables:     

     

Interest rate220
438,880
 1,220
 (433,155)7,165
310
232,614
 1,309
 (227,142)7,091
Credit—
24,540
 1,629
 (24,499)1,670


22,435
 925
 (21,908)1,452
Foreign exchange895
161,820
 1,103
 (150,794)13,024
880
175,664
 1,075
 (165,217)12,402
Equity—
41,590
 3,673
 (35,387)9,876
—
45,937
 5,418
 (39,377)11,978
Commodity—
20,381
 242
 (12,912)7,711
—
22,075
 764
 (14,069)8,770
Total derivative payables(e)
1,115
687,211
 7,867
 (656,747)39,446
1,190
498,725
 9,491
 (467,713)41,693
Total trading liabilities67,088
710,284
 7,910
 (656,747)128,535
86,148
523,128
 9,587
 (467,713)151,150
Accounts payable and other liabilities12,548
—
 9
 —
12,557
5,127
20
 12
 —
5,159
Beneficial interests issued by consolidated VIEs—
—
 118
 —
118
—
16
 1
 —
17
Long-term debt—
27,519
 16,651
 —
44,170
—
34,074
 20,038
 —
54,112
Total liabilities measured at fair value on a recurring basis$79,636
$763,094
 $29,998
 $(656,747)$215,981
$91,275
$580,271
 $36,049
 $(467,713)$239,882




Fair value hierarchy
Derivative netting adjustments
 
Fair value hierarchy
Derivative
netting
adjustments		 
December 31, 2016 (in millions)Level 1
Level 2

Level 3

 Total fair value
     
December 31, 2017 (in millions)Level 1
Level 2

Level 3

Derivative
netting
adjustments		 Total fair value
Federal funds sold and securities purchased under resale agreements$—
$21,506

$—

$—
 $21,506
$—
$14,732

$—

 $14,732
Securities borrowed—
—

—

—
 —
—
3,049

—

 3,049
Trading assets: 
 
    
 
   
Debt instruments: 
 
    
 
   
Mortgage-backed securities: 
 
    
 
   
U.S. government agencies(a)
13
40,586

392

—
 40,991
—
41,515

307

—
 41,822
Residential – nonagency—
1,552

83

—
 1,635
—
1,835

60

—
 1,895
Commercial – nonagency—
1,321

17

—
 1,338
—
1,645

11

—
 1,656
Total mortgage-backed securities13
43,459

492

—
 43,964
—
44,995

378

—
 45,373
U.S. Treasury and government agencies(a)
19,554
5,201

—

—
 24,755
30,758
6,475

1

—
 37,234
Obligations of U.S. states and municipalities—
8,403

649

—
 9,052
—
9,067

744

—
 9,811
Certificates of deposit, bankers’ acceptances and commercial paper—
1,649

—

—
 1,649
—
226

—

—
 226
Non-U.S. government debt securities28,443
23,076

46

—
 51,565
28,887
28,831

78

—
 57,796
Corporate debt securities—
22,751

576

—
 23,327
—
24,146

312

—
 24,458
Loans(b)
—
28,965

4,837

—
 33,802
—
35,242

2,719

—
 37,961
Asset-backed securities—
5,250

302

—
 5,552
—
3,284

153

—
 3,437
Total debt instruments48,010
138,754

6,902

—
 193,666
59,645
152,266

4,385

—
 216,296
Equity securities96,759
281

231

—
 97,271
87,346
197

295

—
 87,838
Physical commodities(c)
5,341
1,620

—

—
 6,961
4,924
1,322

—

—
 6,246
Other—
9,341

761

—
 10,102
—
14,197

690

—
 14,887
Total debt and equity instruments(d)
150,110
149,996

7,894

—
 308,000
151,915
167,982

5,370

—
 325,267
Derivative receivables: 







 

 







 

Interest rate715
602,747

2,501

(577,661) 28,302
181
314,107

1,704

(291,319) 24,673
Credit—
28,256

1,389

(28,351) 1,294
—
21,995

1,209

(22,335) 869
Foreign exchange812
231,743

870

(210,154) 23,271
841
158,834

557

(144,081) 16,151
Equity—
34,032

908

(30,001) 4,939
—
37,722

2,318

(32,158) 7,882
Commodity158
18,360

125

(12,371) 6,272
—
19,875

210

(13,137) 6,948
Total derivative receivables(e)
1,685
915,138

5,793

(858,538) 64,078
1,022
552,533

5,998

(503,030) 56,523
Total trading assets(f)
151,795
1,065,134

13,687

(858,538) 372,078
152,937
720,515

11,368

(503,030) 381,790
Available-for-sale securities: 







 

 







 

Mortgage-backed securities: 







 

 







 

U.S. government agencies(a)
—
64,005

—

—
 64,005
—
70,280

—

—
 70,280
Residential – nonagency—
14,442

1

—
 14,443
—
11,366

1

—
 11,367
Commercial – nonagency—
9,104

—

—
 9,104
—
5,025

—

—
 5,025
Total mortgage-backed securities—
87,551

1

—
 87,552
—
86,671

1

—
 86,672
U.S. Treasury and government agencies(a)
44,072
29

—

—
 44,101
U.S. Treasury and government agencies22,745
—

—

—
 22,745
Obligations of U.S. states and municipalities—
31,592

—

—
 31,592
—
32,338

—

—
 32,338
Certificates of deposit—
106

—

—
 106
—
59

—

—
 59
Non-U.S. government debt securities22,793
12,495

—

—
 35,288
18,140
9,154

—

—
 27,294
Corporate debt securities—
4,958

—

—
 4,958
—
2,757

—

—
 2,757
Asset-backed securities: 







 

 







 

Collateralized loan obligations—
26,738

663

—
 27,401
—
20,720

276

—
 20,996
Other—
6,967

—

—
 6,967
—
8,817

—

—
 8,817
Equity securities926
—

—

—
 926
Equity securities(g)
547
—

—

—
 547
Total available-for-sale securities67,791
170,436

664

—
 238,891
41,432
160,516

277

—
 202,225
Loans—
1,660

570

—
 2,230
—
2,232

276

—
 2,508
Mortgage servicing rights—
—

6,096

—
 6,096
—
—

6,030

—
 6,030
Other assets(f)
4,357
—

2,223

—
 6,580
Other assets(f)(g)
13,795
343

1,265

—
 15,403
Total assets measured at fair value on a recurring basis$223,943
$1,258,736

$23,240

$(858,538) $647,381
$208,164
$901,387

$19,216

$(503,030) $625,737
Deposits$—
$11,795

$2,117

$—
 $13,912
$—
$17,179

$4,142

$—
 $21,321
Federal funds purchased and securities loaned or sold under repurchase agreements—
687

—

—
 687
—
697

—

—
 697
Other borrowed funds—
7,971

1,134

—
 9,105
Short-term borrowings—
7,526

1,665

—
 9,191
Trading liabilities: 
 


 

 
 


 

Debt and equity instruments(d)
68,304
19,081

43

—
 87,428
64,664
21,183

39

—
 85,886
Derivative payables: 



    



   
Interest rate539
569,001

1,238

(559,963) 10,815
170
282,825

1,440

(277,306) 7,129
Credit—
27,375

1,291

(27,255) 1,411
—
22,009

1,244

(21,954) 1,299
Foreign exchange902
231,815

2,254

(214,463) 20,508
794
154,075

953

(143,349) 12,473
Equity—
35,202

3,160

(30,222) 8,140
—
39,668

5,727

(36,203) 9,192
Commodity173
20,079

210

(12,105) 8,357
—
21,017

884

(14,217) 7,684
Total derivative payables(e)
1,614
883,472

8,153

(844,008) 49,231
964
519,594

10,248

(493,029) 37,777
Total trading liabilities69,918
902,553

8,196

(844,008) 136,659
65,628
540,777

10,287

(493,029) 123,663
Accounts payable and other liabilities9,107
—

13

—
 9,120
9,074
121

13

—
 9,208
Beneficial interests issued by consolidated VIEs—
72

48

—
 120
—
6

39

—
 45
Long-term debt—
23,792

13,894

—
 37,686
—
31,394

16,125

—
 47,519
Total liabilities measured at fair value on a recurring basis$79,025
$946,870

$25,402

$(844,008) $207,289
$74,702
$597,700

$32,271

$(493,029) $211,644
(a)At September 30, 2017,2018, and December 31, 2016,2017, included total U.S. government-sponsored enterprise obligations of $78.5$77.3 billion and $80.6$78.0 billion, respectively, which were predominantly mortgage-related.
(b)At September 30, 2017,2018, and December 31, 2016,2017, included within trading loans were $16.1$13.8 billion and $16.5$11.4 billion, respectively, of residential first-lien mortgages, and $3.4$2.6 billion and $3.3$4.2 billion, respectively, of commercial first-lien mortgages. Residential mortgage loans include conforming mortgage loans originated with the intent to sell to U.S. government agencies of $10.2$9.2 billion and $11.0$5.7 billion, respectively, and reverse mortgages of $838zero and $836 million and $2.0 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 approximates fair value, because under fair value hedge accounting, the cost basis is adjusted for changes in fair value. For a further discussion of the Firm’s hedge accounting relationships, see Note 4. To provide consistent fair value disclosure information, all physical commodities inventories have been included in each period presented.

value of physical commodities approximates fair value, because under fair value hedge accounting, the cost basis is adjusted for changes in fair value. For a further discussion of the Firm’s hedge accounting relationships, refer to Note 4. To provide consistent fair value disclosure information, all physical commodities inventories have been included in each period presented.
(d)Balances reflect the reduction of securities owned (long positions) by the amount of identical securities sold but not yet purchased (short positions).

(e)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. For purposes of the tables above, the Firm does not reduce derivative receivables and derivative payables balances for this netting adjustment, either within or across the levels of the fair value hierarchy, as such netting is not relevant to a presentation based on the transparency of inputs to the valuation of an asset or liability. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.
(f)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 September 30, 2017,2018, and December 31, 2016,2017, the fair values of these investments, which include certain hedge funds, private equity funds, real estate and other funds, were $784$767 million and $1.0 billion,$779 million, respectively. Included in these balances at September 30, 2017,2018, and December 31, 2016,2017, were trading assets of $51$55 million and $52$54 million, respectively, and other assets of $733$712 million and $977$725 million, respectively.
(g)
Effective January 1, 2018, the Firm adopted the recognition and measurement guidance. Equity securities that were previously reported as AFS securities were reclassified to other assets upon adoption.


Transfers between levels for instruments carried at fair
value on a recurring basis
For both the three months ended September 30, 20172018 and 20162017 and the nine months ended September 30, 2017 there were no individually significant transfers.
For the nine months ended September 30, 2016,2018, the only significant transfers were between levels 2 and 3.
Significant transfers from level 3 to level 2 included $1.3the following:
$1.2 billion of long-termtotal debt and equity instruments, the majority of which were trading loans, driven by an increase in observability.
$1.0 billion of gross equity derivative receivables and $1.2 billion of gross equity derivative payables as a result of an increase in observability and a reduction ofdecrease in the significance of unobservable inputs.
Significant transfers from level 2 to level 3 included the following:
$1.0 billion of gross equity derivative payables as a result of a decrease in observability and an increase in the significance of unobservable inputs for certain structured notes.inputs.
All transfers are based on changes in the observability of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur.

Level 3 valuations
For further information on the Firm’s valuation process and a detailed discussion of the determination of fair value for individual financial instruments, seerefer to Note 32 of JPMorgan Chase’s 20162017 Annual Report.
The following table presents the Firm’s primary level 3 financial instruments, the valuation techniques used to measure the fair value of those financial instruments, the significant unobservable inputs, the range of values for those inputs and, for certain instruments, the weighted averages of such inputs. While the determination to classify an instrument within level 3 is based on the significance of the unobservable inputs to the overall fair value measurement, level 3 financial instruments typically include observable components (that is, components that are actively quoted and can be validated to external sources) in addition to the unobservable components. The level 1 and/or level 2 inputs are not included in the table. In addition, the Firm manages the risk of the observable components of level 3 financial instruments using securities and derivative positions that are classified within levels 1 or 2 of the fair value hierarchy.
The range of values presented in the table is representative of the highest and lowest level input used to value the significant groups of instruments within a product/instrument classification. Where provided, the weighted averages of the input values presented in the table are calculated based on the fair value of the instruments that the input is being used to value.

In the Firm’s view, the input range and the weighted average value do not reflect the degree of input uncertainty or an assessment of the reasonableness of the Firm’s estimates and assumptions. Rather, they reflect the characteristics of the various instruments held by the Firm and the relative distribution of instruments within the range of characteristics. For example, two option contracts may have similar levels of market risk exposure and valuation uncertainty, but may have significantly different implied volatility levels because the option contracts have different underlyings, tenors, or strike prices. The input range and weighted average values will therefore vary from period-to-period and parameter-to-parameter based on the characteristics of the instruments held by the Firm at each balance sheet date.
For the Firm’s derivatives and structured notes positions classified within level 3 at September 30, 2017,2018, interest rate correlation inputs used in estimating fair value were concentrated towards the upper end of the range presented;range; equity correlation, and equity-FX, and equity-IR correlation inputs were
concentrated in the middle of the range; commodity correlation inputs were concentrated in the middle of the range; credit correlation inputs were distributed acrossconcentrated towards the lower end of the range; and the interest rate-foreign exchange (“IR-FX”) correlation inputs were concentrated towards the lower end ofdistributed across the range. In addition, the interest rate spread volatility inputs used in estimating fair value were distributed across the range presented;range; equity volatilities and commodity volatilities were concentrated towards the lower end of the range; and forward commodity prices used in estimating the fair value of commodity derivatives were concentrated intowards the middlelower end of the range presented. Recovery rate, yield, prepaymentrange. Prepayment speed conditional default rate and loss severity inputs used in estimating fair value of interest rate derivatives were concentrated towards the lower end of the range. Recovery rate, yield and prepayment speed inputs used in estimating fair value of credit derivatives were distributed across the range; and credit spreads and conditional default rates were concentrated towards the lower end of the range; loss severity and price inputs were concentrated towards the upper end of the range.

Level 3 inputs(a)
Level 3 inputs(a)
      
Level 3 inputs(a)
      
September 30, 2017      
September 30, 2018September 30, 2018      
Product/Instrument
Fair value
(in millions)
 Principal valuation technique
Unobservable inputs(g)
Range of input valuesWeighted average 
Fair value
(in millions)
 Principal valuation technique
Unobservable inputs(g)
Range of input valuesWeighted average 
Residential mortgage-backed securities and loans(b)
$1,490
 Discounted cash flowsYield4 %–16% 6%$823
 Discounted cash flowsYield0 %–28% 6%
 Prepayment speed0 %–40% 9%  Prepayment speed0 %–39% 9%
  Conditional default rate0 %–10% 1%  Conditional default rate0 %–6% 1%
  Loss severity0 %–100% 5%  Loss severity0 %–100% 5%
Commercial mortgage-backed securities and loans(c)
842
 Market comparablesPrice$1
–$102
 $94
439
 Market comparablesPrice$4
–$101
 $93
Obligations of U.S. states and municipalities715
 Market comparablesPrice$59
–$100
 $97
699
 Market comparablesPrice$60
–$100
 $97
Corporate debt securities361
 Market comparablesPrice$6
–$109
 $73
395
 Market comparablesPrice$3
–$110
 $80
Loans(d)
1,610
 Market comparablesPrice$5
–$105
 $82
1,031
 Market comparablesPrice$3
–$102
 $79
Asset-backed securities486
 Discounted cash flowsCredit spread186bps–326bps216bps
61
 Discounted cash flowsCredit spread219 bps 219 bps
  Prepayment speed20% 20%  Prepayment speed20% 20%
  Conditional default rate2% 2%  Conditional default rate2% 2%
  Loss severity30% 30%  Loss severity30% 30%
271
 Market comparablesPrice$3
–$179
 $92
76
 Market comparablesPrice$0
–$100
 $51
Net interest rate derivatives605
 Option pricingInterest rate spread volatility3 %–38%  528
 Option pricingInterest rate spread volatility16 bps–38 bps 
  Interest rate correlation(50)%–98%    Interest rate correlation(45)%–97%  
  IR-FX correlation60 %–70%    IR-FX correlation55 %–60%  
59
 Discounted cash flowsPrepayment speed4 %–25%  163
 Discounted cash flowsPrepayment speed0 %–30%  
Net credit derivatives(41) Discounted cash flowsCredit correlation40 %–75%  26
 Discounted cash flowsCredit correlation35 %–60%  
  Credit spread6bps
–1502bps   Credit spread6 bps–1,543 bps  
  Recovery rate20 %–70%    Recovery rate20 %–70%  
  Yield4 %–8%    Yield3 %–52%  
  Prepayment speed2 %–10%    Prepayment speed5 %–17%  
  Conditional default rate1 %–100%    Conditional default rate0 %–100%  
  Loss severity30 %–100%    Loss severity0 %–100%  
5
 Market comparablesPrice$10

$98
  1
 Market comparablesPrice$10
–$98
  
Net foreign exchange derivatives(345) Option pricingIR-FX correlation(50)%–70%  (121) Option pricingIR-FX correlation(45)%–60%  
(194) Discounted cash flowsPrepayment speed7%  (181) Discounted cash flowsPrepayment speed8 %–9%  
Net equity derivatives(2,375) Option pricingEquity volatility5 %–55%  (2,277) Option pricingEquity volatility10 %–60%  
  Equity correlation(5)%–
90%    Equity correlation10 %–95%  
  Equity-FX correlation(50)%–
30%    Equity-FX correlation(75)%–60%  
  Equity-IR correlation10 %–40%    Equity-IR correlation20 %–60%  
Net commodity derivatives(100) Option pricingForward commodity price$46
–$ 59 per barrel (525) Option pricingForward commodity price$61
–$ 83 per barrel
  Commodity volatility19 %–
44%    Commodity volatility5 %–48%  
  Commodity correlation(52)%–
88%    Commodity correlation(52)%–95%  
MSRs5,738
 Discounted cash flowsRefer to Note 14  6,433
 Discounted cash flowsRefer to Note 14  
Other assets1,028
 Discounted cash flowsCredit spread40bps
–90bps65bps322
 Discounted cash flowsCredit spread70 bps 70 bps
  Yield8 %–46% 37%  Yield8 %–10% 8%
1,534
 Market comparables
EBITDA multiple

6.8x
–
11.5x
 8.2x1,154
 Market comparablesPrice$34
–$106
 $45
Long-term debt, other borrowed funds, and deposits(e)
21,960
 Option pricingInterest rate spread volatility3 %–38%  
 Interest rate correlation(50)%–98%  
 IR-FX correlation(50)%–70%  
 Equity correlation(5)%–90%  
 Equity-FX correlation(50)%–30%  
 Equity-IR correlation10 %–40%  
  
EBITDA multiple

3.0x
–9.2x
 8.4x
Long-term debt, short-term borrowings, and deposits(e)
26,449
 Option pricingInterest rate spread volatility16 bps–38 bps 
 Interest rate correlation(45)%–97%  
 IR-FX correlation(45)%–60%  
 Equity correlation10 %–95%  
 Equity-FX correlation(75)%–60%  
 Equity-IR correlation20 %–60%  
Other level 3 assets and liabilities, net(f)
198
      384
      
(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)Includes U.S. government agency securities of $309$502 million, nonagency securities of $108$78 million and trading loans of $1.1 billion.$243 million.
(c)Includes U.S. government agency securities of $14$27 million, nonagency securities of $27$13 million, trading loans of $525$259 million and non-trading loans of $276$140 million.
(d)IncludesComprises trading loans of $1.6 billion and non-trading loans of $1 million.loans.
(e)Long-term debt, other borrowed fundsshort-term borrowings and deposits include structured notes issued by the Firm that are predominantly financial instruments containingthat 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 $100.

Changes in and ranges of unobservable inputs
For a discussion of the impact on fair value of changes in unobservable inputs and the relationships between unobservable inputs as well as a description of attributes of the underlying instruments and external market factors that affect the range of inputs used in the valuation of the Firm’s positions seerefer to Note 3 2 of JPMorgan Chase’s 20162017 Annual Report.
Changes in level 3 recurring fair value measurements
The following tables include a rollforward of the Consolidated balance sheets amounts (including changes in fair value) for financial instruments classified by the Firm within level 3 of the fair value hierarchy for the three and nine months ended September 30, 20172018 and 2016. 2017. When a determination is made to classify a financial instrument within level 3, the determination is based on the significance of the unobservable parameters to the overall
 
the overall fair value measurement. However, level 3 financial instruments typically include, in addition to the unobservable or level 3 components, observable components (that is, components that are actively quoted and can be validated to external sources); accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology. Also, the Firm risk-manages the observable components of level 3 financial instruments using securities and derivative positions that are classified within level 1 or 2 of the fair value hierarchy; as these level 1 and level 2 risk management instruments are not included below, the gains or losses in the following tables do not reflect the effect of the Firm’s risk management activities related to such level 3 instruments.



Fair value measurements using significant unobservable inputs  Fair value measurements using significant unobservable inputs  
Three months ended
September 30, 2017
(in millions)		Fair
value at
July 1, 2017		Total realized/unrealized gains/(losses) 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2017		Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2017
Purchases(f)
Sales 
Settlements(g)
Three months ended
September 30, 2018
(in millions)		Fair
value at
July 1, 2018		Total realized/unrealized gains/(losses) 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2018		Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2018
Purchases(f)
Sales 
Settlements(g)
Assets:                    
Trading assets:                    
Debt instruments:                    
Mortgage-backed securities:                    
U.S. government agencies$365
 $(2) $—
$(15) $(20)$10
$(15) $323
 $(2) $478
 $2
 $14
$(28) $(17)$83
$(3) $529
 $—
 
Residential – nonagency98
 6
 4
(4) (12)50
(35) 107
 5
 87
 1
 —
(6) (3)18
(20) 77
 1
 
Commercial – nonagency65
 3
 10
(24) —
3
(30) 27
 3
 18
 (1) —
—
 —
9
(13) 13
 (1) 
Total mortgage-backed securities528
 7
 14
(43) (32)63
(80) 457
 6
 583
 2
 14
(34) (20)110
(36) 619
 —
 
U.S. Treasury and government agencies

—
 —
 —
—
 —
1
—
 1
 —
 —
 —
 —
—
 —
—
—
 —
 —
 
Obligations of U.S. states and municipalities681
 3
 31
—
 —
—
—
 715
 3
 736
 8
 26
(70) (1)—
—
 699
 7
 
Non-U.S. government debt securities37
 —
 252
(217) —
23
(15) 80
 —
 183
 (9) 44
(29) (2)1
(24) 164
 (9) 
Corporate debt securities461
 7
 193
(327) (22)68
(19) 361
 8
 274
 (2) 156
(87) (4)82
(24) 395
 (3) 
Loans4,488
 131
 564
(1,498) (421)246
(303) 3,207
 71
 1,986
 17
 188
(146) (199)48
(361) 1,533
 3
 
Asset-backed securities83
 5
 170
(10) (8)36
(5) 271
 4
 87
 6
 5
(7) (13)5
(7) 76
 3
 
Total debt instruments6,278
 153
 1,224
(2,095) (483)437
(422) 5,092
 92
 3,849
 22
 433
(373) (239)246
(452) 3,486
 1
 
Equity securities284
 6
 29
(40) —
16
(7) 288
 7
 288
 20
 6
(48) —
82
(19) 329
 (18) 
Other731
 20
 5
(38) (25)—
(2) 691
 16
 406
 30
 13
—
 (37)2
(1) 413
 10
 
Total trading assets – debt and equity instruments7,293
 179
(c) 
1,258
(2,173) (508)453
(431) 6,071
 115
(c) 
4,543
 72
(c) 
452
(421) (276)330
(472) 4,228
 (7)
(c) 
Net derivative receivables:(a)
                    
Interest rate712
 101
 16
(23) (182)21
19
 664
 (7) 489
 236
 28
(22) (101)68
(7) 691
 216
 
Credit(45) (32) —
(1) (2)40
4
 (36) (22) (24) (19) 1
—
 47
6
16
 27
 (15) 
Foreign exchange(686) 16
 9
(2) 68
(39)95
 (539) 37
 (245) (56) 29
(7) (49)(2)28
 (302) (54) 
Equity(2,444) (10) 355
(184) (132)(1)41
 (2,375) 82
 (2,578) (94) 643
(635) 622
(251)16
 (2,277) (121) 
Commodity(58) (30) —
—
 (3)(2)(7) (100) (51) (752) 318
 —
—
 (113)15
7
 (525) 138
 
Total net derivative receivables(2,521) 45
(c) 
380
(210) (251)19
152
 (2,386) 39
(c) 
(3,110) 385
(c) 
701
(664) 406
(164)60
 (2,386) 164
(c) 
Available-for-sale securities:                    
Asset-backed securities547
 2
 —
—
 (63)—
—
 486
 2
 147
 —
 —
—
 (86)—
—
 61
 —
 
Other1
 —
 —
—
 —
—
—
 1
 —
 1
 —
 —
—
 —
—
—
 1
 —
 
Total available-for-sale securities548
 2
(d) 
—
—
 (63)—
—
 487
 2
(d) 
148
 —

—
—
 (86)—
—
 62
 —

Loans305
 8
(c) 
—
(26) (10)—
—
 277
 8
(c) 
159
 (1)
(c) 
1
—
 (19)—
—
 140
 (1)
(c) 
Mortgage servicing rights5,753
 (66)
(e) 
253
(2) (200)—
—
 5,738
 (66)
(e) 
6,241
 98
(e) 
291
(2) (195)—
—
 6,433
 98
(e) 
Other assets1,934
 18
(c) 
3
(2) (82)—
—
 1,871
 16
(c) 
1,225
 (160)
(c) 
2
—
 (7)3
—
 1,063
 (160)
(c) 
                    
Fair value measurements using significant unobservable inputs  Fair value measurements using significant unobservable inputs  
Three months ended
September 30, 2017
(in millions)		Fair
value at
July 1, 2017		Total realized/unrealized (gains)/losses 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2017		Change in unrealized (gains)/
losses related
to financial instruments held at September 30, 2017
PurchasesSalesIssuances
Settlements(g)
Three months ended
September 30, 2018
(in millions)		Fair
value at
July 1, 2018		Total realized/unrealized (gains)/losses 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2018		Change in unrealized (gains)/
losses related
to financial instruments held at September 30, 2018
PurchasesSalesIssuances
Settlements(g)
Liabilities:(b)
                    
Deposits$2,131
 $33
(c) 
$—
$—
$1,909
$(58)$—
$(177) $3,838
 $27
(c) 
$4,305
 $(84)
(c)(i) 
$—
$—
$517
$(170)$1
$(129) $4,440
 $(82)
(c)(i) 
Federal funds purchased and securities loaned or sold under repurchase agreements—
 —
 —
—
—
—
1
—
 1
 —
 
Other borrowed funds1,314
 33
(c) 
—
—
818
(631)13
(76) 1,471
 21
(c) 
Short-term borrowings2,209
 (47)
(c)(i) 
—
—
713
(885)6
(25) 1,971
 (31)
(c)(i) 
Trading liabilities – debt and equity instruments36
 2
(c) 
(23)28
—
—
—
—
 43
 3
(c) 
43
 36
(c) 
(6)19
—
(2)7
(1) 96
 36
(c) 
Accounts payable and other liabilities10
 —
 —
—
—
(1)—
—
 9
 —
 8
 1
 —
—
—
—
3
—
 12
 1
 
Beneficial interests issued by consolidated VIEs1
 —

—
39
—
—
78
—
 118
 —

1
 —

—
—
—
—
—
—
 1
 —

Long-term debt16,660
 397
(c) 
—
—
3,174
(3,552)181
(209) 16,651
 320
(c) 
18,262
 194
(c)(i) 
—
—
3,551
(1,809)59
(219) 20,038
 192
(c)(i) 


Fair value measurements using significant unobservable inputs


 
Three months ended
September 30, 2017
(in millions)		Fair
value
at July 1, 2017		Total realized/unrealized gains/(losses)


 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2017		Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2017
Purchases(f)
Sales
 
Settlements(g)
Assets:





 

 








Trading assets:





 

 








Debt instruments:





 

 








Mortgage-backed securities:





 

 








U.S. government agencies$365
$(2)
$—
$(15)
 $(20)$10
$(15)
$323

$(2)
Residential – nonagency98
6

4
(4)
 (12)50
(35)
107

5

Commercial – nonagency65
3

10
(24)
 —
3
(30)
27

3

Total mortgage-backed securities528
7

14
(43)
 (32)63
(80)
457

6

U.S. Treasury and
government agencies
—
—
 —
—
  —
1
—
 1
 —
 
Obligations of U.S. states and municipalities681
3

31
—

 —
—
—

715

3

Non-U.S. government debt securities37
—

252
(217)
 —
23
(15)
80

—

Corporate debt securities461
7

193
(327)
 (22)68
(19)
361

8

Loans4,488
131

564
(1,498)
 (421)246
(303)
3,207

71

Asset-backed securities83
5

170
(10)
 (8)36
(5)
271

4

Total debt instruments6,278
153

1,224
(2,095)
 (483)437
(422)
5,092

92

Equity securities284
6

29
(40)
 —
16
(7)
288

7

Other731
20

5
(38)
 (25)—
(2)
691

16

Total trading assets – debt and equity instruments7,293
179
(c) 
1,258
(2,173)
 (508)453
(431)
6,071

115
(c) 
Net derivative receivables:(a)










 

 








Interest rate712
101

16
(23)
 (182)21
19

664

(7)
Credit(45)(32)
—
(1)
 (2)40
4

(36)
(22)
Foreign exchange(686)16

9
(2)
 68
(39)95

(539)
37

Equity(2,444)(10)
355
(184)
 (132)(1)41

(2,375)
82

Commodity(58)(30)
—
—

 (3)(2)(7)
(100)
(51)
Total net derivative receivables(2,521)45
(c) 
380
(210)
 (251)19
152

(2,386)
39
(c) 
Available-for-sale securities:  
  
    
 
 
Asset-backed securities547
2

—
—

 (63)—
—

486

2

Other1
—

—
—

 —
—
—

1

—

Total available-for-sale securities548
2
(d) 
—
—

 (63)—
—

487

2
(d) 
Loans305
8
(c) 
—
(26)
 (10)—
—

277

8
(c) 
Mortgage servicing rights5,753
(66)
(e) 
253
(2)
 (200)—
—

5,738

(66)
(e) 
Other assets1,934
18
(c) 
3
(2)  (82)—
—
 1,871
 16
(c) 
                

Fair value measurements using significant unobservable inputs

Three months ended
September 30, 2017
(in millions)
Fair
value
at July 1, 2017
Total realized/unrealized (gains)/losses


 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2017		Change in unrealized (gains)/losses related
to financial instruments held at September 30, 2017
PurchasesSalesIssuances
Settlements(g)
Liabilities:(b)






 

 







Deposits$2,131
$33
(c) 
$—
$—
$1,909
 $(58)$—
$(177)
$3,838

$27
(c) 
Federal funds purchased and securities loaned or sold under repurchase agreements—
—
 —
—
—
 —
1
—
 1
 —
 
Short-term borrowings1,314
33
(c) 
—
—
818
 (631)13
(76)
1,471

21
(c) 
Trading liabilities – debt and equity instruments36
2
(c) 
(23)28
—
 —
—
—

43

3
(c) 
Accounts payable and other liabilities10
—

—
—
—
 (1)—
—

9

—

Beneficial interests issued by consolidated VIEs1
—

—
39
—
 —
78
—

118

—

Long-term debt14,732
319
(c)(j) 
—
—
3,023
(j) 
(3,552)181
(209)
14,494
(j) 
242
(c)(j) 



Fair value measurements using significant unobservable inputs
 Fair value measurements using significant unobservable inputs  
Three months ended
September 30, 2016
(in millions)		Fair
value at
July 1, 2016		Total realized/unrealized gains/(losses)
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2016		Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2016
Purchases(f)
Sales
Settlements(g)
Nine months ended
September 30, 2018
(in millions)		Fair
value at
January 1, 2018		Total realized/unrealized gains/(losses) 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2018		Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2018
Purchases(f)
Sales 
Settlements(g)
Assets:












 








          
Federal funds sold and securities purchased under resale agreements$—
$—
 $—
$—
 $—
$—
$—
 $—
 $—
 
Trading assets:












 








          
Debt instruments:












 








          
Mortgage-backed securities:












 








          
U.S. government agencies473
(4)
4
(22)

(31)9
(3)
426

—

$307
 $5
 $348
$(126) $(56)$92
$(41) $529
 $3
 
Residential – nonagency200
(3)
43
(66)

(5)10
(73)
106

1

60
 1
 45
(19) (6)58
(62) 77
 4
 
Commercial – nonagency30
—

—
(1)

(1)33
(20)
41

—

11
 2
 7
(8) (13)30
(16) 13
 (1) 
Total mortgage-backed securities703
(7)
47
(89)

(37)52
(96)
573

1

378
 8
 400
(153) (75)180
(119) 619
 6
 
U.S. Treasury and government agencies
1
 —
 —
—
 —
—
(1) —
 —
 
Obligations of U.S. states and municipalities551
2

68
(25)

—
—
—

596

2

744
 (3) 107
(70) (79)—
—
 699
 (3) 
Non-U.S. government debt securities37
(1)
54
(35)

(2)—
(12)
41

(1)
78
 (19) 395
(213) (2)18
(93) 164
 (18) 
Corporate debt securities516
17

63
(43)

(30)21
(44)
500

(1)
312
 (6) 297
(227) (15)249
(215) 395
 (1) 
Loans6,016
23

498
(1,111)

(297)159
(358)
4,930

18

2,719
 58
 1,223
(1,680) (528)422
(681) 1,533
 (22) 
Asset-backed securities959
18

133
(173)

(40)29
(600)
326

13

153
 15
 64
(29) (53)18
(92) 76
 8
 
Total debt instruments8,782
52

863
(1,476)

(406)261
(1,110)
6,966

32

4,385
 53
 2,486
(2,372) (752)887
(1,201) 3,486
 (30) 
Equity securities246
21

42
(35)

(2)2
(2)
272

18

295
 (1) 99
(108) (1)86
(41) 329
 11
 
Other670
45

276
—


(305)1
(6)
681

30

690
 (209) 47
(40) (75)3
(3) 413
 (250) 
Total trading assets – debt and equity instruments9,698
118
(c) 
1,181
(1,511)

(713)264
(1,118)
7,919

80
(c) 
5,370
 (157)
(c) 
2,632
(2,520) (828)976
(1,245) 4,228
 (269)
(c) 
Net derivative receivables:(a)













 








          
Interest rate1,107
247

36
(7)

(319)(1)180

1,243

79

264
 576
 83
(77) (234)40
39
 691
 498
 
Credit279
(231)
8
—


48
(8)(3)
93

(237)
(35) 19
 3
(7) 22
5
20
 27
 7
 
Foreign exchange(1,205)126

—
(5)

(509)4
1

(1,588)
(103)
(396) 184
 42
(15) (46)(114)43
 (302) 42
 
Equity(1,892)(251)
106
(249)
158
(6)(303)
(2,437)
(67)
(3,409) 688
 1,467
(1,919) 1,043
(324)177
 (2,277) 31
 
Commodity(719)(169)
—
(9)

10
5
(12)
(894)
1

(674) 468
 —
—
 (287)7
(39) (525) 158
 
Total net derivative receivables(2,430)(278)
(c) 
150
(270)
(612)(6)(137)
(3,583)
(327)
(c) 
(4,250) 1,935
(c) 
1,595
(2,018) 498
(386)240
 (2,386) 736
(c) 
Available-for-sale securities: 
 

 
 
 


         
Asset-backed securities809
18

—
—


(5)—
(42)
780

18

276
 1
 —
—
 (216)—
—
 61
 1
 
Other1
—

—
—


—
—
—

1

—

1
 —
 —
—
 —
—
—
 1
 —
 
Total available-for-sale securities810
18
(d) 
—
—


(5)—
(42)
781

18
(d) 
277
 1
(d) 
—
—
 (216)—
—
 62
 1
(d) 
Loans785
7
(c) 
75
—


(23)—
—

844

7
(c) 
276
 (5)
(c) 
123
—
 (180)—
(74) 140
 (5)
(c) 
Mortgage servicing rights5,072
(87)
(e) 
190
(5)

(233)—
—

4,937

(87)
(e) 
6,030
 576
(e) 
770
(401) (542)—
—
 6,433
 576
(e) 
Other assets2,369
24
(c) 
6
—
 (34)—
—
 2,365
 15
(c) 
1,265
 (210)
(c) 
49
(16) (28)4
(1) 1,063
 (217)
(c) 

Fair value measurements using significant unobservable inputs

          
Three months ended
September 30, 2016
(in millions)
Fair
value at
July 1, 2016
Total realized/unrealized (gains)/losses

Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2016		Change in unrealized (gains)/losses related
to financial instruments held at September 30, 2016
PurchasesSalesIssuances
Settlements(g)
Fair value measurements using significant unobservable inputs  
Nine months ended
September 30, 2018
(in millions)		Fair
value at
January 1, 2018		Total realized/unrealized (gains)/losses 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2018		Change in unrealized (gains)/
losses related
to financial instruments held at September 30, 2018
PurchasesSalesIssuances
Settlements(g)
Liabilities:(b)












 







          
Deposits$2,409
$1
(c) 
$—
$—
$602
$(191)$—
$(192)
$2,629

$(10)
(c) 
$4,142
 $(125)
(c)(i) 
$—
$—
$1,272
$(425)$2
$(426) $4,440
 $(115)
(c)(i) 
Federal funds purchased and securities loaned or sold under repurchase agreements—
—
 —
—
—
—
—
—
 —
 —
 
Other borrowed funds907
(67)
(c) 
—
—
584
(420)63
(16)
1,051

(48)
(c) 
Short-term borrowings1,665
 (229)
(c)(i) 
—
—
2,783
(2,245)61
(64) 1,971
 26
(c)(i) 
Trading liabilities – debt and equity instruments57
(4)
(c) 
(8)5
—
(6)11
—

55

—
(c) 
39
 28
(c) 
(68)95
—
(1)9
(6) 96
 11
(c) 
Accounts payable and other liabilities15
—

—
—
—
(1)—
—

14

—

13
 —
 (6)1
—
—
4
—
 12
 —
 
Beneficial interests issued by consolidated VIEs584
(11)
(c) 
—
—
—
(525)—
—

48

7
(c) 
39
 —
 —
—
—
(38)—
—
 1
 —
 
Long-term debt13,147
324
(c) 
—
—
1,877
(1,432)30
(217)
13,729

268
(c) 
16,125
 (396)
(c)(i) 
—
—
10,382
(6,155)653
(571) 20,038
 (576)
(c)(i) 

 Fair value measurements using significant unobservable inputs  
Nine months ended
September 30, 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
September 30, 2017		Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2017
Purchases(f)
Sales 
Settlements(g)
Assets:               
Trading assets:               
Debt instruments:               
Mortgage-backed securities:               
U.S. government agencies$392
 $(9) $161
$(166) $(55)$37
$(37) $323
 $(17) 
Residential – nonagency83
 14
 40
(24) (21)111
(96) 107
 2
 
Commercial – nonagency17
 5
 27
(38) (5)63
(42) 27
 1
 
Total mortgage-backed securities492
 10
 228
(228) (81)211
(175) 457
 (14) 
U.S. Treasury and government agencies

—
 —
 —
—
 —
1
—
 1
 —
 
Obligations of U.S. states and municipalities649
 15
 126
(70) (5)—
—
 715
 15
 
Non-U.S. government debt securities46
 3
 426
(395) —
50
(50) 80
 —
 
Corporate debt securities576
 —
 690
(473) (398)128
(162) 361
 11
 
Loans4,837
 309
 2,055
(2,565) (1,186)564
(807) 3,207
 73
 
Asset-backed securities302
 27
 279
(178) (44)50
(165) 271
 2
 
Total debt instruments6,902
 364
 3,804
(3,909) (1,714)1,004
(1,359) 5,092
 87
 
Equity securities231
 40
 142
(87) —
18
(56) 288
 34
 
Other761
 85
 27
(45) (137)10
(10) 691
 46
 
Total trading assets – debt and equity instruments7,894
 489
(c) 
3,973
(4,041) (1,851)1,032
(1,425) 6,071
 167
(c) 
Net derivative receivables:(a)
               
Interest rate1,263
 182
 53
(76) (833)55
20
 664
 (184) 
Credit98
 (126) 1
(4) (64)57
2
 (36) (57) 
Foreign exchange(1,384) 86
 13
(6) 633
(16)135
 (539) (12) 
Equity(2,252) 24
 840
(312) (660)(182)167
 (2,375) 76
 
Commodity(85) (34) —
—
 22
2
(5) (100) 27
 
Total net derivative receivables(2,360) 132
(c) 
907
(398) (902)(84)319
 (2,386) (150)
(c) 
Available-for-sale securities:               
Asset-backed securities663
 14
 —
(50) (141)—
—
 486
 12
 
Other1
 —
 —
—
 —
—
—
 1
 —
 
Total available-for-sale securities664
 14
(d) 
—
(50) (141)—
—
 487
 12
(d) 
Loans570
 32
(c) 
—
(26) (299)—
—
 277
 8
(c) 
Mortgage servicing rights6,096
 (223)
(e) 
624
(140) (619)—
—
 5,738
 (224)
(e) 
Other assets2,223
 248
(c) 
35
(157) (478)—
—
 1,871
 126
(c) 
 Fair value measurements using significant unobservable inputs  
Nine months ended
September 30, 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
September 30, 2017		Change in unrealized (gains)/losses related
to financial instruments held at September 30, 2017
PurchasesSalesIssuances
Settlements(g)
Liabilities:(b)
               
Deposits$2,117
 $39
(c) 
$—
$—
$2,510
$(169)$—
$(659) $3,838
 $140
(c) 
Federal funds purchased and securities loaned or sold under repurchase agreements—
 —
 —
—
—
—
1
—
 1
 —
 
Other borrowed funds1,134
 80
(c) 
—
—
2,208
(1,873)53
(131) 1,471
 50
(c) 
Trading liabilities – debt and equity instruments43
 1
(c) 
(31)32
—
1
3
(6) 43
 1
(c) 
Accounts payable and other liabilities13
 —
 (1)—
—
(3)—
—
 9
 —
 
Beneficial interests issued by consolidated VIEs48
 3
(c) 
(44)39
—
(6)78
—
 118
 —

Long-term debt13,894
 1,030
(c) 
—
—
10,757
(8,637)269
(662) 16,651
 1,108
(c) 


Fair value measurements using significant unobservable inputs  Fair value measurements using significant unobservable inputs  
Nine months ended
September 30, 2016
(in millions)
Fair
value at
January 1, 2016
Total realized/unrealized gains/(losses) 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2016
Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2016
Purchases(f)
Sales 
Settlements(g)
Nine months ended
September 30, 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
September 30, 2017		Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2017
Purchases(f)
Sales  
Settlements(g)
Assets:                    
Federal funds sold and securities purchased under resale agreements$—
$—
 $—
$—
 $—
$4
$(4) $—
 $—
 
Trading assets:                    
Debt instruments:                    
Mortgage-backed securities:                    
U.S. government agencies715
(78) 133
(230) (89)96
(121) 426
 (78) $392
 $(9) $161
$(166)  $(55)$37
$(37) $323
 $(17) 
Residential – nonagency194
(4) 220
(250) (16)54
(92) 106
 (3) 83
 14
 40
(24)  (21)111
(96) 107
 2
 
Commercial – nonagency115
(6) 65
(29) (1)168
(271) 41
 2
 17
 5
 27
(38)  (5)63
(42) 27
 1
 
Total mortgage-backed securities1,024
(88) 418
(509) (106)318
(484) 573
 (79) 492
 10
 228
(228)  (81)211
(175) 457
 (14) 
U.S. Treasury and government agencies
—
 —
 —
—
  —
1
—
 1
 —
 
Obligations of U.S. states and municipalities651
11
 104
(132) (38)

—
 596
 11
 649
 15
 126
(70)  (5)—
—
 715
 15
 
Non-U.S. government debt securities74
1
 83
(86) (2)

(29) 41
 (2) 46
 3
 426
(395)  —
50
(50) 80
 —
 
Corporate debt securities736
(15) 222
(187) (155)76
(177) 500
 (28) 576
 —
 690
(473)  (398)128
(162) 361
 11
 
Loans6,604
(165) 1,363
(2,255) (939)922
(600) 4,930
 65
 4,837
 309
 2,055
(2,565)  (1,186)564
(807) 3,207
 73
 
Asset-backed securities1,832
35
 565
(643) (957)270
(776) 326
 (7) 302
 27
 279
(178)  (44)50
(165) 271
 2
 
Total debt instruments10,921
(221) 2,755
(3,812) (2,197)1,586
(2,066) 6,966
 (40) 6,902
 364
 3,804
(3,909)  (1,714)1,004
(1,359) 5,092
 87
 
Equity securities265
18
 75
(68) (24)9
(3) 272
 32
 231
 40
 142
(87)  —
18
(56) 288
 34
 
Other744
(1) 629
(287) (340)26
(90) 681
 73
 761
 85
 27
(45)  (137)10
(10) 691
 46
 
Total trading assets – debt and equity instruments11,930
(204)
(c) 
3,459
(4,167) (2,561)1,621
(2,159) 7,919
 65
(c) 
7,894
 489
(c) 
3,973
(4,041)  (1,851)1,032
(1,425) 6,071
 167
(c) 
Net derivative receivables:(a)
                    
Interest rate876
787
 142
(27) (761)4
222
 1,243
 (167) 1,263
 182
 53
(76)  (833)55
20
 664
 (184) 
Credit549
(679) 8
(2) 165
40
12
 93
 (662) 98
 (126) 1
(4)  (64)57
2
 (36) (57) 
Foreign exchange(725)(68) 58
(123) (709)(41)20
 (1,588) (291) (1,384) 86
 13
(6)  633
(16)135
 (539) (12) 
Equity(1,514)(615) 248
(571) 231
32
(248) (2,437) (599) (2,252) 24
 840
(312)  (660)(182)167
 (2,375) 76
 
Commodity(935)58
 —
9
 (30)8
(4) (894) (7) (85) (34) —
—
  22
2
(5) (100) 27
 
Total net derivative receivables(1,749)(517)
(c) 
456
(714) (1,104)43
2
 (3,583) (1,726)
(c) 
(2,360) 132
(c) 
907
(398)  (902)(84)319
 (2,386) (150)
(c) 
Available-for-sale securities:                    
Asset-backed securities823
17
 —
—
 (18)—
(42) 780
 17
 663
 14
 —
(50)  (141)—
—
 486
 12
 
Other1
—
 —
—
 —
—
—
 1
 —
 1
 —
 —
—
  —
—
—
 1
 —
 
Total available-for-sale securities824
17
(d) 
—
—
 (18)—
(42) 781
 17
(d) 
664
 14
(d) 
—
(50)  (141)—
—
 487
 12
(d) 
Loans1,518
(7)
(c) 
259
—
 (613)—
(313) 844
 38
(c) 
570
 32
(c) 
—
(26)  (299)—
—
 277
 8
(c) 
Mortgage servicing rights6,608
(1,296)
(e) 
410
(72) (713)—
—
 4,937
 (1,296)
(e) 
6,096
 (223)
(e) 
624
(140)  (619)—
—
 5,738
 (224)
(e) 
Other assets2,401
170
(c) 
477
(438) (245)—
—
 2,365
 94
(c) 
2,223
 248
(c) 
35
(157)  (478)—
—
 1,871
 126
(c) 
                    
Fair value measurements using significant unobservable inputs  Fair value measurements using significant unobservable inputs  
Nine months ended
September 30, 2016
(in millions)
Fair
value at
January 1, 2016
Total realized/unrealized (gains)/losses  
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2016		Change in unrealized (gains)/losses related
to financial instruments held at September 30, 2016
PurchasesSalesIssuances
Settlements(g)
Nine months ended
September 30, 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
September 30, 2017		Change in unrealized (gains)/
losses related
to financial instruments held at September 30, 2017
PurchasesSalesIssuances 
Settlements(g)
Liabilities:(b)
                    
Deposits$2,950
$76
(c) 
$—
$—
$1,085
$(868)$—
$(614) $2,629
 $(24)
(c) 
$2,117
 $39
(c) 
$—
$—
$2,510
 $(169)$—
$(659) $3,838
 $140
(c) 
Federal funds purchased and securities loaned or sold under repurchase agreements—
—
 —
—
—
—
4
(4) —
 —
 —
 —
 —
—
—
 —
1
—
 1
 —
 
Other borrowed funds639
(223)
(c) 
—


1,356
(789)113
(45) 1,051
 (113)
(c) 
Short-term borrowings1,134
 80
(c) 
—
 2,208
 (1,873)53
(131) 1,471
 50
(c) 
Trading liabilities – debt and equity instruments63
(11)
(c) 
(8)23
—
(21)14
(5) 55
 —
 43
 1
(c) 
(31)32
—
 1
3
(6) 43
 1
(c) 
Accounts payable and other liabilities19
—
 —
—
—
(5)—
—
 14
 —
 13
 —
 (1)—
—
 (3)—
—
 9
 —
 
Beneficial interests issued by consolidated VIEs549
(33)
(c) 
—
—
143
(611)—
—
 48
 —
 48
 3
 (44)39
—
 (6)78
—
 118
 —
 
Long-term debt11,613
716
(c) 
—
—
6,752
(4,327)289
(1,314) 13,729
 1,678
(c) 
12,850
 918
(c)(j) 
—
—
9,756
(j) 
(8,637)269
(662) 14,494
(j) 
996
(c)(j) 

(a)All level 3 derivatives are presented on a net basis, irrespective of the underlying counterparty.
(b)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 14% and 12%15% at both September 30, 20172018 and December 31, 2016,2017, respectively.
(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)
Realized gains/(losses) on AFS securities, as well as other-than-temporary impairment (“OTTI”(“OTTI”) losses that are recorded in earnings, are reported in investment securities gains.losses. Unrealized gains/(losses) are reported in OCI. RealizedThere were no realized gains/(losses) andor foreign exchange hedge accounting adjustments recorded in income on AFS securities were zero for the three and nine months ended September 30, 20172018 and 2016,2017, respectively. Unrealized gains/(losses) recorded on AFS securities in OCI were $2 millionzero and $18$2 million for the three months ended September 30, 20172018 and 2016,2017, respectively and $14$1 million and $16$14 million for the nine months ended September 30, 2018 and 2017, and 2016, respectively.
(e)Changes in fair value for CCB MSRs are reported in mortgage fees and related income.
(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 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 due to DVA for fair value option elected liabilities are reported in principal transactions revenue. Unrealized (gains)/losses are reported in OCI. Unrealized (gains)/losses were $123 million for the three months ended September 30, 2018 and unrealized (gains)/losses were not material for the nine months ended September 30, 2018. There were no material realized (gains)/losses for the three and nine months ended September 30, 2018, respectively.
(j)The prior period amounts have been revised to conform with the current period presentation.
Level 3 analysis
Consolidated balance sheets changes
Level 3 assets (including assets measured at fair value on a nonrecurring basis) were 0.8% of total Firm assets at September 30, 2017. 2018. The following describes significant changes to level 3 assets since December 31, 2016, 2017, for those items measured at fair value on a recurring basis. For further information on changes impacting items measured at fair value on a nonrecurring basis, seerefer to Assets and liabilities measured at fair value on a nonrecurring basis onpage 99.105.
Three months ended September 30, 20172018
Level 3 assets were $19.9$19.0 billion at September 30, 2017,2018, reflecting a decrease of $514$272 million from June 30, 2018 with no movements that were individually significant.
Nine months ended September 30, 2018
Level 3 assets at September 30, 2018 decreased by $185 million from December 31, 2017 with no movements that were individually significant.
Nine months ended September 30, 2017
Level 3 assets at September 30, 2017 decreased by $3.3 billion from December 31, 2016, largely due to the following:
$2.1 billion decrease in trading assets driven by $1.6 billion in trading loans due to sales and settlements and $617 million in interest rate derivative receivables due to settlements.
Gains and losses
The following describes significant components of total realized/unrealized gains/(losses) for instruments measured at fair value on a recurring basis for the periods indicated. For further information on these instruments, seerefer to Changes in level 3 recurring fair value measurements rollforward tables onpages 94–98.99–104.
Three months ended September 30, 2018
$394 million of net gains on assets and $100 million of net gains on liabilities, none of which were individually significant.
Three months ended September 30, 2017
$186 million of net gains on assets and $465$387 million of net losses on liabilities, none of which were individually significant.
ThreeNine months ended September 30, 20162018
$1982.1 billion of net gains on assets predominantly driven by market movements in derivative receivables.
$722 million of net losses on assets and $243 million of net lossesgains on liabilities, none of which were individually significant.
 
Nine months ended September 30, 2017
$692 million of of net gains on assets and $1.2$1.0 billion of net losses on liabilities driven by market movements in long-term debt.
Nine months ended September 30, 2016
$1.8 billion of net losses on assets largely driven by $1.3 billion loss on MSRs. For further details see Note 14.
$525 million of net losses on liabilities, none of which were individually significant.
Credit and funding adjustments — derivatives
The following table provides the impact of credit and funding adjustments on principal transactions revenue in the respective periods, excluding the effect of any associated hedging activities. The DVA and FVA reportedpresented below includeincludes the impact of the Firm’s own credit quality on the inception value of liabilities as well as the impact of changes in the Firm’s own credit quality over time.
 Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
Credit and funding adjustments:       
Derivatives CVA$66
 $245
 $223
 $715
Derivatives FVA88
 (222) 102
 (289)

 
Three months ended
September 30,
 Nine months ended September 30,
(in millions)2017
 2016
 2017
 2016
Credit and funding adjustments:       
Derivatives CVA$245
 $97
 $715
 $(659)
Derivatives DVA and FVA(222) (154) (289) (277)
For further information about both credit and funding adjustments, as well as information about valuation adjustments on fair value option elected liabilities, seerefer to Note 32 of JPMorgan Chase’s 20162017 Annual Report.

Assets and liabilities measured at fair value on a nonrecurring basis
The following table presentstables present the assets and liabilities reported on a nonrecurring basis at fair valuestill held as of September 30, 2018 and 2017, respectively, for which a nonrecurring fair value adjustment was recorded during the nine months ended September 30, 2018 and 2016,2017, respectively, by major product category and fair value hierarchy.
Fair value hierarchy Total fair valueFair value hierarchy Total fair value
September 30, 2017 (in millions)Level 1
Level 2
 Level 3
 
September 30, 2018 (in millions)Level 1
Level 2
 Level 3
 Total fair value
Loans$—
$338

$542
(a) 
$880
$—
$492

$243
(a) 
Other assets(b)—
7
 245
 252
—
216
 826
 1,042
Total assets measured at fair value on a nonrecurring basis—
345
 787
(a) 
1,132
$—
$708
 $1,069

$1,777
Accounts payable and other liabilities—
1
 1
 2
Total liabilities measured at fair value on a nonrecurring basis$—
$1
 $1
 $2
Fair value hierarchy Total fair valueFair value hierarchy Total fair value
September 30, 2016 (in millions)Level 1
Level 2
 Level 3
 
September 30, 2017 (in millions)Level 1
Level 2
 Level 3
 Total fair value
Loans$—
$272
 $470
 $742
$—
$338
 $542
 
Other assets—
9
 314
 323
—
7
 245
 252
Total assets measured at fair value on a nonrecurring basis—
281
 784
 1,065
$—
$345
 $787
 $1,132
Accounts payable and other liabilities—
2
 7
 9
Total liabilities measured at fair value on a nonrecurring basis$—
$2
 $7
 $9
(a)Of the $787$243 million in level 3 assets measured at fair value on a nonrecurring basis as of September 30, 2017, $3952018, $200 million related to residential real estate loans carried at the net realizable value of the underlying collateral (e.g., collateral-dependent loans and other loans charged off in accordance with regulatory guidance). These amounts are classified as level 3 as they are valued using a broker’s price opinion and discounted based upon the Firm��sFirm’s experience with actual liquidation values. These discounts to the broker price opinions ranged from 20%13% to 48%40% with a weighted average of 29%22%.
(b)Primarily includes equity securities without readily determinable fair values that were adjusted based on observable price changes in orderly transactions from an identical or similar investment of the same issuer (measurement alternative) as a result of the adoption of the recognition and measurement guidance. Of the $826 million in level 3 assets measured at fair value on a nonrecurring basis as of September 30, 2018, $724 million related to such equity securities. These equity securities are classified as level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.
There were no material liabilities measured at fair value on a nonrecurring basis at September 30, 2018 and at September 30, 2017.
Nonrecurring fair value changes
The following table presents the total change in value of assets and liabilities for which a fair value adjustment has been recognized for the three and nine months ended September 30, 20172018 and 2016,2017, related to financial instruments held at those dates.
 Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
Loans$(22) $(52) $(36)
$(157)
Other assets(117)
(a) 
(11) 383
(a) 
(44)
Accounts payable and other liabilities—
 —
 —
 (1)
Total nonrecurring fair value gains/(losses)$(139) $(63) $347
 $(202)

(a)Included $(113) million and $384 million for the three months and nine months ended September 30, 2018, respectively, of fair value gains/(losses) as a result of the measurement alternative.

 
Three months ended
September 30,
 Nine months ended September 30,
 2017
 2016
 2017
 2016
Loans$(52) $(61) $(157)
$(150)
Other Assets(11) 33
 (44) (29)
Accounts payable and other liabilities—
 —
 (1) (2)
Total nonrecurring fair value gains/(losses)$(63) $(28) $(202) $(181)
For further information about the measurement of impaired collateral-dependent loans, and other loans where the carrying value is based on the fair value of the underlying collateral (e.g., residential mortgage loans charged off in accordance with regulatory guidance), seerefer to Note 1412 of JPMorgan Chase’s 20162017 Annual Report.




Additional disclosures about the fair value of financial instruments that are not carried on the Consolidated balance sheets at fair value
The following table presents by fair value hierarchy classification the carrying values and estimated fair values at September 30, 2017,2018, and December 31, 2016, 2017, of financial assets and liabilities, excluding financial instruments that are carried at fair value on a recurring basis, and their classification within the fair value hierarchy. For additional information regarding the financial instruments within the scope of this disclosure, and the methods and significant assumptions used to estimate their fair value, seerefer to Note 32 of JPMorgan Chase’s 20162017 Annual Report.
September 30, 2017 December 31, 2016September 30, 2018 December 31, 2017
 Estimated fair value hierarchy   Estimated fair value hierarchy  Estimated fair value hierarchy   Estimated fair value hierarchy 
(in billions)
Carrying
value
Level 1Level 2Level 3
Total estimated
fair value
 
Carrying
value
Level 1Level 2Level 3
Total estimated
fair value
Carrying
value
Level 1Level 2Level 3
Total estimated
fair value
 
Carrying
value
Level 1Level 2Level 3
Total estimated
fair value
Financial assets      
Cash and due from banks$22.0
$22.0
$—
$—
$22.0
 $23.9
$23.9
$—
$—
$23.9
$23.2
$23.2
$—
$—
$23.2
 $25.9
$25.9
$—
$—
$25.9
Deposits with banks435.8
434.0
1.8
—
435.8
 365.8
362.0
3.8
—
365.8
395.9
392.2
3.7
—
395.9
 405.4
401.8
3.6
—
405.4
Accrued interest and accounts receivable60.5
—
60.4
0.1
60.5
 52.3
—
52.2
0.1
52.3
77.7
—
77.6
0.1
77.7
 67.0
—
67.0
—
67.0
Federal funds sold and securities purchased under resale agreements168.9
—
168.9
—
168.9
 208.5
—
208.3
0.2
208.5
205.4
—
205.4
—
205.4
 183.7
—
183.7
—
183.7
Securities borrowed98.6
—
98.6
—
98.6
 96.4
—
96.4
—
96.4
117.9
—
117.9
—
117.9
 102.1
—
102.1
—
102.1
Securities, held-to-maturity47.1
—
48.2
—
48.2
 50.2
—
50.9
—
50.9
31.4
—
30.9
—
30.9
 47.7
—
48.7
—
48.7
Loans, net of allowance for loan losses(a)
898.5
—
27.2
874.4
901.6
 878.8
—
24.1
851.0
875.1
938.2
—
227.3
710.0
937.3
 914.6
—
213.2
707.1
920.3
Other(b)62.9
—
52.7
15.7
68.4
 71.4
0.1
60.8
14.3
75.2
55.0
—
54.1
1.0
55.1
 53.9
—
52.1
9.2
61.3
Financial liabilities      
Deposits$1,417.9
$—
$1,417.9
$—
$1,417.9
 $1,361.3
$—
$1,361.3
$—
$1,361.3
$1,438.3
$—
$1,438.4
$—
$1,438.4
 $1,422.7
$—
$1,422.7
$—
$1,422.7
Federal funds purchased and securities loaned or sold under repurchase agreements168.7
—
168.7
—
168.7
 165.0
—
165.0
—
165.0
180.5
—
180.5
—
180.5
 158.2
—
158.2
—
158.2
Commercial paper24.2
—
24.2
—
24.2
 11.7
—
11.7
—
11.7
Other borrowed funds21.0
—
21.0
—
21.0
 13.6
—
13.6
—
13.6
Short-term borrowings56.7
—
56.7
—
56.7
 42.6
—
42.4
0.2
42.6
Accounts payable and other liabilities155.8
—
152.8
2.7
155.5
 148.0
—
144.8
3.4
148.2
173.4
—
170.0
3.1
173.1
 152.0
—
148.9
2.9
151.8
Beneficial interests issued by consolidated VIEs28.3
—
28.3
—
28.3
 38.9
—
38.9
—
38.9
20.2
—
20.2
—
20.2
 26.0
—
26.0
—
26.0
Long-term debt and junior subordinated deferrable interest debentures244.4
—
247.9
2.6
250.5
 257.5
—
260.0
2.0
262.0
216.0
—
217.5
3.3
220.8
 236.6
—
240.3
3.2
243.5
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised.
(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 loss 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. For a further discussion of the Firm’s methodologies for estimating the fair value of loans and lending-related commitments, seerefer to Valuation hierarchy on pages 150–153156–159 of JPMorgan Chase’s 20162017 Annual Report.
(b)The prior period amounts have been revised to conform with the current period presentation.
The majority of the Firm’s lending-related commitments are not carried at fair value on a recurring basis on the Consolidated balance sheets, nor are they actively traded.sheets. The carrying value of the wholesale allowance for lending-related commitments and the estimated fair value of these wholesale lending-related commitments were as follows for the periods indicated.
September 30, 2017 December 31, 2016September 30, 2018 December 31, 2017
 Estimated fair value hierarchy   Estimated fair value hierarchy  Estimated fair value hierarchy Estimated fair value hierarchy 
(in billions)
Carrying value(a)
Level 1Level 2Level 3Total estimated fair value 
Carrying value(a)
Level 1Level 2Level 3Total estimated fair value
Carrying value(a)
Level 1Level 2Level 3Total estimated fair value 
Carrying value(a)
Level 1Level 2Level 3Total estimated fair value
Wholesale lending-related commitments$1.1
$—
$—
$1.6
$1.6
 $1.1
$—
$—
$2.1
$2.1
$1.1$—$1.5 $1.1$—$1.6
(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.

The Firm does not estimate the fair value of consumer lending-related commitments. In many cases, the Firm can reduce or cancel these commitments by providing the borrower notice or, in some cases as permitted by law, without notice. For a further discussion of the valuation of lending-related commitments, seerefer to page 151157 of JPMorgan Chase’s 20162017 Annual Report.

Equity securities without readily determinable fair values
As a result of the adoption of the recognition and measurement guidance and the election of the measurement alternative in the first quarter of 2018, the Firm measures equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of the same issuer, with such changes recognized in earnings.
In its determination of the new carrying values upon observable price changes, the Firm may adjust the prices if deemed necessary to arrive at the Firm’s estimated fair values. Such adjustments may include adjustments to reflect the different rights and obligations of similar securities, and other adjustments that are consistent with the Firm’s valuation techniques for private equity direct investments.
The following table presents the carrying value of equity securities without readily determinable fair values still held as of September 30, 2018, that are measured under the measurement alternative and the related adjustments recorded during the periods presented for those securities with observable price changes. These securities are included in the nonrecurring fair value tables when applicable price changes are observable.
 As of or for the
(in millions)Three months ended September 30, 2018 Nine months ended September 30, 2018
Other assets   
Carrying value$1,801
 $1,801
Upward carrying value changes14
 540
Downward carrying value changes/impairment(127) (156)


Included in other assets above is the Firm’s interest in approximately 40 millionVisa Class B shares, recorded at a nominal carrying value. These shares are subject to certain transfer restrictions currently and will be convertible into Visa Class A shares upon final resolution of certain litigation matters involving Visa. The conversion rate of Visa Class B shares into Visa Class A shares is 1.6298 at September 30, 2018, and may be adjusted by Visa depending on developments related to the litigation matters.



Note 3 – Fair value option
For a discussion of the primary financial instruments for which the fair value option was elected, including the basis for those elections and the determination of instrument-specific credit risk, where relevant, seerefer to Note 43 of JPMorgan Chase’s 20162017 Annual Report.
Changes in fair value under the fair value option election
The following tables present table presentsthe changes in fair value included in the Consolidated statements of income for the three and nine months ended September 30, 2018 and 2017, and 2016, for items for which the fair value option was elected. The profit and loss information presented below only includes the financial instruments that were elected to be measured at fair value; related risk management instruments, which are required to be measured at fair value, are not included in the table.
 Three months ended September 30,

2018 2017
(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)
Federal funds sold and securities purchased under resale agreements$(23)
$—

$(23)
 $(17) $—
 $(17)
Securities borrowed(24)
—

(24)
 (10) —
 (10)
Trading assets: 
 



      
Debt and equity instruments, excluding loans(45)
5
(c) 
(40)
 412
 —
 412
Loans reported as trading assets: 
 



      
Changes in instrument-specific credit risk122

1
(c) 
123

 139
 (2)
(c) 
137
Other changes in fair value(6)
49
(c) 
43

 111
 249
(c) 
360
Loans: 
 



      
Changes in instrument-specific credit risk(1)
—

(1)
 —
 —
 —
Other changes in fair value1

—

1

 3
 —
 3
Other assets2

16
(d) 
18

 3
 (4)
(d) 
(1)
Deposits(a)
32

—

32

 (117) —
 (117)
Federal funds purchased and securities loaned or sold under repurchase agreements8

—

8

 2
 —
 2
Short-term borrowings(a)
(25)
—

(25)
 (54) —
 (54)
Trading liabilities2

—

2

 (3) —
 (3)
Long-term debt(a)(b)
259

—

259

 (793) —
 (793)
 Three months ended September 30,

2017 2016
(in millions)Principal transactions
All other incomeTotal changes in fair
value recorded		 Principal transactions All other incomeTotal changes in fair value recorded
Federal funds sold and securities purchased under resale agreements$(17)
$—

$(17)
 $(54) $—
 $(54)
Securities borrowed(10)
—

(10)
 —
 —
 —
Trading assets:








      
Debt and equity instruments, excluding loans412

—
(c) 
412

 256
 —
(c) 
256
Loans reported as trading assets:








      
Changes in instrument-specific credit risk139

(2)
(c) 
137

 286
 10
(c) 
296
Other changes in fair value111

249
(c) 
360

 2
 452
(c) 
454
Loans:








      
Changes in instrument-specific credit risk—

—

—

 —
 —
 —
Other changes in fair value3

—

3

 1
 —
 1
Other assets3

(4)
(d) 
(1)
 2
 (3)
(d) 
(1)
Deposits(a)
(117)
—

(117)
 38
 —
 38
Federal funds purchased and securities loaned or sold under repurchase agreements2

—

2

 4
 —
 4
Other borrowed funds(a)
(54)
—

(54)
 (291) —
 (291)
Trading liabilities(3)
—

(3)
 3
 —
 3
Beneficial interests issued by consolidated VIEs—

—

—

 —
 —
 —
Long-term debt(a)(b)
(793)
—

(793)
 (619) —
 (619)



Nine months ended September 30,Nine months ended September 30,
2017  20162018 2017
(in millions)Principal transactions All other incomeTotal changes in fair value recorded Principal transactions All other incomeTotal changes in fair value recordedPrincipal 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$(50) $—
 $(50)  $14
 $—
 $14
$(49) $—
 $(49)  $(50) $—
 $(50)
Securities borrowed80
 —
 80
 1
 —
 1
(22) —
 (22) 80
 —
 80
Trading assets:    

     

  —
        
Debt and equity instruments, excluding loans1,107
 2
(c) 
1,109
 143
 —
 143
(490) 6
(c) 
(484) 1,107
 2
(c) 
1,109
Loans reported as trading assets:    

     

  —
        
Changes in instrument-specific credit risk382
 13
(c) 
395
 384
 24
(c) 
408
458
 5
(c) 
463
 382
 13
(c) 
395
Other changes in fair value188
 601
(c) 
789
 188
 975
(c) 
1,163
64
 24
(c) 
88
 188
 601
(c) 
789
Loans:    

     

           
Changes in instrument-specific credit risk(1) —
 (1) 13
 —
 13
(2) —
 (2) (1) —
 (1)
Other changes in fair value4
 3
 7
 5
 —
 5
(1) 


 (1) 4
 3
(c) 
7
Other assets10
 (26)
(d) 
(16) 16
 79
(d) 
95
4
 6
(d) 
10
 10
 (26)
(d) 
(16)
Deposits(a)
(362) —
 (362) (531) —
 (531)371
 —
 371
 (362) —
 (362)
Federal funds purchased and securities loaned or sold under repurchase agreements4
 —
 4
 (16) —
 (16)27
 —
 27
 4
 —
 4
Other borrowed funds(a)
(485) —
 (485) (292) —
 (292)86
 —
 86
 (485) —
 (485)
Trading liabilities(4) —
 (4) 5
 —
 5
1
 —
 1
 (4) —
 (4)
Beneficial interests issued by consolidated VIEs—
 —
 —
 23
 —
 23
Long-term debt(a)(b)
(1,716) —
 (1,716) (1,537) —
 (1,537)1,486
 —
 1,486
 (1,716) —
 (1,716)
(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 transactiontransactions revenue were not material for the three and nine months ended September 30, 20172018 and 2016,2017, respectively.
(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. For further information regarding interest income and interest expense, refer to Note 6.



Difference between aggregate fair value and aggregate remaining contractual principal balance outstanding
The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding as of September 30, 2017,2018, and December 31, 2016, 2017, for loans, long-term debt and long-term beneficial interests for which the fair value option has been elected.
September 30, 2017 December 31, 2016September 30, 2018 December 31, 2017
(in millions)Contractual principal outstanding
Fair valueFair value over/(under) contractual principal outstanding Contractual principal outstanding Fair valueFair value over/(under) contractual principal outstandingContractual principal outstanding
Fair valueFair value over/(under) contractual principal outstanding Contractual principal outstanding Fair valueFair value over/(under) contractual principal outstanding
Loans(a)







    






    
Nonaccrual loans






    






    
Loans reported as trading assets$3,938

$1,266
$(2,672) $3,338
 $748
$(2,590)$4,171

$1,189
$(2,982) $4,219
 $1,371
$(2,848)
Loans39

—
(39) —
 —
—
—

—
—
 39
 —
(39)
Subtotal3,977

1,266
(2,711) 3,338
 748
(2,590)4,171

1,189
(2,982) 4,258
 1,371
(2,887)
All other performing loans






    






    
Loans reported as trading assets38,050

36,263
(1,787) 35,477
 33,054
(2,423)41,986

40,395
(1,591) 38,157
 36,590
(1,567)
Loans1,760

1,745
(15) 2,259
 2,228
(31)3,039

2,987
(52) 2,539
 2,508
(31)
Total loans$43,787

$39,274
$(4,513) $41,074
 $36,030
$(5,044)$49,196

$44,571
$(4,625) $44,954
 $40,469
$(4,485)
Long-term debt






    






    
Principal-protected debt$24,307
(c) 
$21,828
$(2,479) $21,602
(c) 
$19,195
$(2,407)$31,858
(c) 
$27,518
$(4,340) $26,297
(c) 
$23,848
$(2,449)
Nonprincipal-protected debt(b)
NA

22,342
NA
 NA
 18,491
NA
NA

26,594
NA
 NA
 23,671
NA
Total long-term debtNA

$44,170
NA
 NA
 $37,686
NA
NA

$54,112
NA
 NA
 $47,519
NA
Long-term beneficial interests






       

    
Nonprincipal-protected debtNA

$118
NA
 NA
 $120
NA
NA

$17
NA
 NA
 $45
NA
Total long-term beneficial interestsNA

$118
NA
 NA
 $120
NA
NA

$17
NA
 NA
 $45
NA
(a)There were no performing loans that were ninety days or more past due as of September 30, 2017,2018, and December 31, 2016,2017, respectively.
(b)Remaining contractual principal is not applicable to nonprincipal-protected notes. Unlike principal-protected structured notes, for which the Firm is obligated to return a stated amount of principal at the maturity of the note, nonprincipal-protected structured notes do not obligate the Firm to return a stated amount of principal at maturity, but 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 protectedprincipal-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.
At September 30, 2017,2018, and December 31, 2016, 2017, the contractual amount of lending-related commitments for which the fair value option was elected was $4.5 $9.1 billion and $4.6$7.4 billion, respectively,with a corresponding fair value of $(90) $(53) million and $(118)$(76) million, respectively. For further information regarding off-balance sheet lending-related financial instruments, seerefer to Note 2927 of JPMorgan Chase’s 20162017 Annual Report, and Note 1920 of this Form 10-Q.
Structured note products by balance sheet classification and risk component
The following table presents the fair value of the structured notes issued by the Firm, by balance sheet classification and the primary risk type.

September 30, 2018
December 31, 2017
(in millions)Long-term debtShort-term borrowingsDepositsTotal
Long-term debtShort-term borrowingsDepositsTotal
Risk exposure
















Interest rate$23,333
$616
$9,269
$33,218

$22,056
$69
$8,058
$30,183
Credit3,771
483
—
4,254

4,329
1,312
—
5,641
Foreign exchange2,930
96
37
3,063

2,841
147
38
3,026
Equity21,950
6,258
7,330
35,538

17,581
7,106
6,548
31,235
Commodity355
7
1,715
2,077

230
15
4,468
4,713
Total structured notes$52,339
$7,460
$18,351
$78,150

$47,037
$8,649
$19,112
$74,798


September 30, 2017
December 31, 2016
(in millions)Long-term debtOther borrowed fundsDepositsTotal
Long-term debtOther borrowed fundsDepositsTotal
Risk exposure
















Interest rate$19,903
$87
$7,755
$27,745

$16,296
$184
$4,296
$20,776
Credit3,794
61
—
3,855

3,267
225
—
3,492
Foreign exchange2,841
208
30
3,079

2,365
135
6
2,506
Equity17,094
7,302
6,196
30,592

14,831
8,234
5,481
28,546
Commodity297
22
4,841
5,160

488
37
1,811
2,336
Total structured notes$43,929
$7,680
$18,822
$70,431

$37,247
$8,815
$11,594
$57,656






Note 4 – Derivative instruments
JPMorgan Chase makes markets in derivatives for clients and also uses derivatives to hedge or manage its own risk exposures. For a further discussion of the Firm’s use of and accounting policies regarding derivative instruments, seerefer to Note 65 of JPMorgan Chase’s 20162017 Annual Report.
The Firm’s disclosures are based on the accounting treatment and purpose of these derivatives. A limited number of the Firm’s derivatives are designated in hedge
accounting relationships and are disclosed according to the type of hedge (fair value hedge, cash flow hedge, or net investment hedge). Derivatives not designated in hedge accounting relationships include certain derivatives that are used to manage certain risks associated with specified assets or liabilities (“specified risk management” positions) as well as derivatives used in the Firm’s market-making businesses or for other purposes.
Derivatives designated as hedges
The adoption of the new hedge accounting guidance in the first quarter of 2018 better aligns hedge accounting with the economics of the Firm’s risk management activities. For additional information on the impact of the new guidance, refer to Note17.
To qualify for hedge accounting, a derivative must be highly effective at reducing the risk associated with the exposure being hedged. In addition, for a derivative to be designated as a hedge, the risk management objective and strategy must be documented. Hedge documentation must identify the derivative hedging instrument, the asset or liability or forecasted transaction and type of risk to be hedged, and how the effectiveness of the derivative is assessed prospectively and retrospectively. To assess effectiveness, the Firm uses statistical methods such as regression analysis, nonstatistical methods such as dollar-value comparisons of the change in the fair value of the derivative to the change in the fair value or cash flows of the hedged item, and qualitative comparisons of critical terms and the evaluation of any changes in those terms. The extent to which a derivative has been, and is expected to continue to be, highly effective at offsetting changes in the fair value or
cash flows of the hedged item must be assessed and documented at least quarterly. If it is determined that a derivative is not highly effective at hedging the designated exposure, hedge accounting is discontinued.
For qualifying fair value hedges, changes in the fair value of the derivative, and in the value of the hedged item for the risk being hedged, are recognized in earnings. Certain amounts excluded from the assessment of effectiveness are recorded in OCI and recognized in earnings through an amortization approach over the life of the derivative. If the hedge relationship is terminated, then the adjustment to the hedged item continues to be reported as part of the basis of the hedged item, and for benchmark interest rate hedges, is amortized to earnings as a yield adjustment. Derivative amounts affecting earnings are recognized consistent with the classification of the hedged item - primarily net interest income and principal transactions revenue.
For qualifying cash flow hedges, changes in the fair value of the derivative are recorded in OCI and recognized in earnings as the hedged item affects earnings. Derivative amounts affecting earnings are recognized consistent with the classification of the hedged item - primarily interest income, interest expense, noninterest revenue and compensation expense. If the hedge relationship is terminated, then the change in value of the derivative recorded in AOCI is recognized in earnings when the cash flows that were hedged affect earnings. For hedge relationships that are discontinued because a forecasted transaction is not expected to occur according to the original hedge forecast, any related derivative values recorded in AOCI are immediately recognized in earnings.
For qualifying net investment hedges, changes in the fair value of the derivatives due to changes in spot foreign exchange rates are recorded in OCI as translation adjustments. Amounts excluded from the assessment of effectiveness are recorded directly in earnings.


The following table outlines the Firm’s primary uses of derivatives and the related hedge accounting designation or disclosure category.
Type of DerivativeUse of DerivativeDesignation and disclosure
Affected
segment or unit
10-Q page reference
Manage specifically identified risk exposures in qualifying hedge accounting relationships:   
◦
 • Interest rate
Hedge fixed rate assets and liabilitiesFair value hedgeCorporate110118-119
◦
 • Interest rate
Hedge floating-rate assets and liabilitiesCash flow hedgeCorporate111120
◦
 • Foreign exchange
Hedge foreign currency-denominated assets and liabilitiesFair value hedgeCorporate110118-119
◦
 • Foreign exchange
Hedge foreign currency-denominated forecasted revenue and expenseCash flow hedgeCorporate111120
◦
 • Foreign exchange
Hedge the value of the Firm’s investments in non-U.S. dollar functional currency entitiesNet investment hedgeCorporate112121
◦
 • Commodity
Hedge commodity inventoryFair value hedgeCIB110118-119
Manage specifically identified risk exposures not designated in qualifying hedge accounting relationships:   
◦
 • Interest rate
Manage the risk of the mortgage pipeline, warehouse loans and MSRsSpecified risk managementCCB112121
◦
 • Credit
Manage the credit risk of wholesale lending exposuresSpecified risk managementCIB112121
◦
 Commodity
Manage the risk of certain commodities-related contracts and investmentsSpecified risk managementCIB112
◦
 • Interest rate and
foreign exchange
Manage the risk of certain other specified assets and liabilitiesSpecified risk managementCorporate112121
Market-making derivatives and other activities:   
◦
 • Various
Market-making and related risk managementMarket-making and otherCIB112121
◦
 • Various
Other derivativesMarket-making and otherCIB, Corporate112121


Notional amount of derivative contracts
The following table summarizes the notional amount of derivative contracts outstanding as of September 30, 2017,2018, and December 31, 2016.2017.
Notional amounts(b)
Notional amounts(b)
(in billions)September 30, 2017
December 31, 2016
September 30, 2018
December 31, 2017
Interest rate contracts  
Swaps$22,098
$22,000
$25,236
$21,043
Futures and forwards5,954
5,289
7,326
4,904
Written options3,973
3,091
4,718
3,576
Purchased options4,184
3,482
5,233
3,987
Total interest rate contracts36,209
33,862
42,513
33,510
Credit derivatives(a)
1,851
2,032
1,603
1,522
Foreign exchange contracts  
Cross-currency swaps4,037
3,359
3,893
3,953
Spot, futures and forwards6,763
5,341
6,812
5,923
Written options883
734
961
786
Purchased options874
721
956
776
Total foreign exchange contracts12,557
10,155
12,622
11,438
Equity contracts  
Swaps307
258
402
367
Futures and forwards92
59
106
90
Written options587
417
596
531
Purchased options499
345
543
453
Total equity contracts1,485
1,079
1,647
1,441
Commodity contracts  
Swaps118
102
140
116
Spot, futures and forwards170
130
164
168
Written options98
83
157
98
Purchased options103
94
134
93
Total commodity contracts489
409
595
475
Total derivative notional amounts$52,591
$47,537
$58,980
$48,386
(a)For more information on volumes and types of credit derivative contracts, seerefer to the Credit derivatives discussion on page 113.122.
(b)Represents the sum of gross long and gross short third-party notional derivative contracts.
While the notional amounts disclosed above give an indication of the volume of the Firm’s derivatives activity, the notional amounts significantly exceed, in the Firm’s view, the possible losses that could arise from such transactions. For most derivative transactions, the notional amount is not exchanged; it is used simply as a reference to calculate payments.


Impact of derivatives on the Consolidated balance sheets
The following table summarizes information on derivative receivables and payables (before and after netting adjustments) that are reflected on the Firm’s Consolidated balance sheets as of September 30, 2017,2018, and December 31, 2016, 2017, by accounting designation (e.g., whether the derivatives were designated in qualifying hedge accounting relationships or not) and contract type.
Free-standing derivative receivables and payables(a)
          
 Gross derivative receivables   Gross derivative payables  
September 30, 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$260,636
 $823
 $261,459
 $23,397
 $234,232
 $1
 $234,233
 $7,091
Credit23,505
 —
 23,505
 582
 23,360
 —
 23,360
 1,452
Foreign exchange188,261
 623
 188,884
 17,043
 176,771
 848
 177,619
 12,402
Equity46,932
 —
 46,932
 10,104
 51,355
 —
 51,355
 11,978
Commodity22,175
 193
 22,368
 8,936
 22,749
 90
 22,839
 8,770
Total fair value of trading assets and liabilities$541,509
 $1,639
 $543,148
 $60,062
 $508,467
 $939
 $509,406
 $41,693
                
 Gross derivative receivables   Gross derivative payables  
December 31, 2017
(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$314,962
(c) 
$1,030
(c) 
$315,992
 $24,673
 $284,433
(c) 
$3
(c) 
$284,436
 $7,129
Credit23,205
 —
 23,205
 869
 23,252
 —
 23,252
 1,299
Foreign exchange159,740
 491
 160,231
 16,151
 154,601
 1,221
 155,822
 12,473
Equity40,040
 —
 40,040
 7,882
 45,395
 —
 45,395
 9,192
Commodity20,066
 19
 20,085
 6,948
 21,498
 403
 21,901
 7,684
Total fair value of trading assets and liabilities$558,013
(c) 
$1,540
(c) 
$559,553
 $56,523
 $529,179
(c) 
$1,627
(c) 
$530,806
 $37,777
Free-standing derivative receivables and payables(a)
         
 Gross derivative receivables   Gross derivative payables  
September 30, 2017
(in millions)		Not designated as hedges Designated as hedgesTotal 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$471,949
 $3,822
$475,771
 $25,701
 $438,686
 $1,634
$440,320
 $7,165
Credit25,695
 —
25,695
 915
 26,169
 —
26,169
 1,670
Foreign exchange167,943
 661
168,604
 17,077
 162,698
 1,121
163,819
 13,024
Equity41,068
 —
41,068
 8,831
 45,262
 —
45,262
 9,876
Commodity17,846
 55
17,901
 5,736
 20,473
 150
20,623
 7,711
Total fair value of trading assets and liabilities$724,501
 $4,538
$729,039
 $58,260
 $693,288
 $2,905
$696,193
 $39,446
              
 Gross derivative receivables   Gross derivative payables  
December 31, 2016
(in millions)		Not designated as hedges Designated as hedgesTotal 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$601,557
 $4,406
$605,963
 $28,302
 $567,894
 $2,884
$570,778
 $10,815
Credit29,645
 —
29,645
 1,294
 28,666
 —
28,666
 1,411
Foreign exchange232,137
 1,289
233,426
 23,271
 233,823
 1,148
234,971
 20,508
Equity34,940
 —
34,940
 4,939
 38,362
 —
38,362
 8,140
Commodity18,505
 137
18,642
 6,272
 20,283
 179
20,462
 8,357
Total fair value of trading assets and liabilities$916,784
 $5,832
$922,616
 $64,078
 $889,028
 $4,211
$893,239
 $49,231

(a)Balances exclude structured notes for which the fair value option has been elected. SeeRefer 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.
(c)The prior period amounts have been revised to conform with the current period presentation.




Derivatives netting
The following tables present, as of September 30, 2017,2018, and December 31, 2016, 2017, gross and net derivative receivables and payables by contract and settlement type. Derivative receivables and payables, as well as the related cash collateral from the same counterparty have been netted on the Consolidated balance sheets where the Firm has obtained an appropriate legal opinion with respect to the master netting agreement. Where such a legal opinion has not been either sought or obtained, amounts are not eligible for netting on the Consolidated balance sheets, and those derivative receivables and payables are shown separately in the tables below.
In addition to the cash collateral received and transferred that is presented on a net basis with derivative receivables and payables, the Firm receives and transfers additional collateral (financial instruments and cash). These amounts mitigate counterparty credit risk associated with the Firm’s derivative instruments, but are not eligible for net presentation:
•
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.
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.
 September 30, 2018 December 31, 2017
(in millions)Gross derivative receivablesAmounts netted on the Consolidated balance sheetsNet derivative receivables Gross derivative receivables 
Amounts netted
on the Consolidated balance sheets
Net derivative receivables
U.S. GAAP nettable derivative receivables          
Interest rate contracts:          
Over-the-counter (“OTC”)$250,181
$(230,533) $19,648
 $305,569
 $(284,917) $20,652
OTC–cleared7,512
(7,374) 138
 6,531
 (6,318) 213
Exchange-traded(a)
300
(155) 145
 185
 (84) 101
Total interest rate contracts257,993
(238,062) 19,931
 312,285
 (291,319) 20,966
Credit contracts:          
OTC12,502
(12,153) 349
 15,390
 (15,165) 225
OTC–cleared10,806
(10,770) 36
 7,225
 (7,170) 55
Total credit contracts23,308
(22,923) 385
 22,615
 (22,335) 280
Foreign exchange contracts:          
OTC184,421
(171,163) 13,258
 155,289
 (142,420) 12,869
OTC–cleared676
(659) 17
 1,696
 (1,654) 42
Exchange-traded(a)
42
(19) 23
 141
 (7) 134
Total foreign exchange contracts185,139
(171,841) 13,298
 157,126
 (144,081) 13,045
Equity contracts:          
OTC25,197
(22,380) 2,817
 22,024
 (19,917) 2,107
Exchange-traded(a)
16,789
(14,448) 2,341
 14,188
 (12,241) 1,947
Total equity contracts41,986
(36,828) 5,158
 36,212
 (32,158) 4,054
Commodity contracts:          
OTC12,497
(4,916) 7,581
 10,903
 (4,436) 6,467
Exchange-traded(a)
9,198
(8,516) 682
 8,854
 (8,701) 153
Total commodity contracts21,695
(13,432) 8,263
 19,757
 (13,137) 6,620
Derivative receivables with appropriate legal opinion530,121
(483,086)
(b) 
47,035
 547,995
 (503,030)
(b) 
44,965
Derivative receivables where an appropriate legal opinion has not been either sought or obtained13,027
  13,027
 11,558
   11,558
Total derivative receivables recognized on the Consolidated balance sheets$543,148
  $60,062
 $559,553
   $56,523
Collateral not nettable on the Consolidated balance sheets(c)(d)
   (13,826)     (13,363)
Net amounts   $46,236
     $43,160
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.
 September 30, 2017 December 31, 2016
(in millions)Gross derivative receivablesAmounts netted on the Consolidated balance sheetsNet derivative receivables Gross derivative receivables 
Amounts netted
on the Consolidated balance sheets
Net derivative receivables
U.S. GAAP nettable derivative receivables          
Interest rate contracts:          
Over-the-counter (“OTC”)$309,845
$(289,072) $20,773
 $365,227
 $(342,173) $23,054
OTC–cleared160,949
(160,926) 23
 235,399
 (235,261) 138
Exchange-traded(a)
172
(71) 101
 241
 (227) 14
Total interest rate contracts470,966
(450,069) 20,897
 600,867
 (577,661) 23,206
Credit contracts:          
OTC16,852
(16,621) 231
 23,130
 (22,612) 518
OTC–cleared8,209
(8,160) 49
 5,746
 (5,739) 7
Total credit contracts25,061
(24,781) 280
 28,876
 (28,351) 525
Foreign exchange contracts:          
OTC163,138
(150,110) 13,028
 226,271
 (208,962) 17,309
OTC–cleared1,506
(1,404) 102
 1,238
 (1,165) 73
Exchange-traded(a)
133
(12) 121
 104
 (27) 77
Total foreign exchange contracts164,777
(151,526) 13,251
 227,613
 (210,154) 17,459
Equity contracts:          
OTC21,917
(19,963) 1,954
 20,868
 (20,570) 298
OTC–cleared—
—
 —
 —
 —
 —
Exchange-traded(a)
14,657
(12,275) 2,382
 11,439
 (9,431) 2,008
Total equity contracts36,574
(32,238) 4,336
 32,307
 (30,001) 2,306
Commodity contracts:          
OTC8,884
(4,479) 4,405
 11,571
 (5,605) 5,966
OTC–cleared—
—
 —
 —
 —
 —
Exchange-traded(a)
7,957
(7,686) 271
 6,794
 (6,766) 28
Total commodity contracts16,841
(12,165) 4,676
 18,365
 (12,371) 5,994
Derivative receivables with appropriate legal opinion714,219
(670,779)
(b) 
43,440
 908,028
 (858,538)
(b) 
49,490
Derivative receivables where an appropriate legal opinion has not been either sought or obtained14,820
  14,820
 14,588
   14,588
Total derivative receivables recognized on the Consolidated balance sheets$729,039
  $58,260
 $922,616
   $64,078
Collateral not nettable on the Consolidated balance sheets(c)(d)
   (15,391)     (18,638)
Net amounts   $42,869
     $45,440


September 30, 2017 December 31, 2016 September 30, 2018 December 31, 2017
(in millions)(in millions)Gross derivative payablesAmounts netted on the Consolidated balance sheetsNet derivative payables Gross derivative payables 
Amounts netted
on the Consolidated balance sheets
Net derivative payables(in millions)Gross derivative payablesAmounts netted on the Consolidated balance sheetsNet derivative payables Gross derivative payables 
Amounts netted
on the Consolidated balance sheets
Net derivative payables
U.S. GAAP nettable derivative payablesU.S. GAAP nettable derivative payables         U.S. GAAP nettable derivative payables         
Interest rate contracts:Interest rate contracts:         Interest rate contracts:         
OTCOTC$279,319
$(274,060) $5,259
 $338,502
 $(329,325) $9,177
OTC$225,999
$(220,369) $5,630
 $276,960
 $(271,294) $5,666
OTC–clearedOTC–cleared159,146
(159,026) 120
 230,464
 (230,463) 1
OTC–cleared6,650
(6,618) 32
 6,004
 (5,928) 76
Exchange-traded(a)
Exchange-traded(a)
103
(69) 34
 196
 (175) 21
Exchange-traded(a)
172
(155) 17
 127
 (84) 43
Total interest rate contractsTotal interest rate contracts438,568
(433,155) 5,413
 569,162
 (559,963) 9,199
Total interest rate contracts232,821
(227,142) 5,679
 283,091
 (277,306) 5,785
Credit contracts:Credit contracts:         Credit contracts:         
OTCOTC17,338
(16,530) 808
 22,366
 (21,614) 752
OTC13,133
(11,852) 1,281
 16,194
 (15,170) 1,024
OTC–clearedOTC–cleared7,991
(7,969) 22
 5,641
 (5,641) —
OTC–cleared10,062
(10,056) 6
 6,801
 (6,784) 17
Total credit contractsTotal credit contracts25,329
(24,499) 830
 28,007
 (27,255) 752
Total credit contracts23,195
(21,908) 1,287
 22,995
 (21,954) 1,041
Foreign exchange contracts:Foreign exchange contracts:         Foreign exchange contracts:         
OTCOTC159,282
(149,643) 9,639
 228,300
 (213,296) 15,004
OTC173,389
(164,557) 8,832
 150,966
 (141,789) 9,177
OTC–clearedOTC–cleared1,141
(1,140) 1
 1,158
 (1,158) —
OTC–cleared679
(654) 25
 1,555
 (1,553) 2
Exchange-traded(a)
Exchange-traded(a)
118
(11) 107
 328
 (9) 319
Exchange-traded(a)
25
(6) 19
 98
 (7) 91
Total foreign exchange contractsTotal foreign exchange contracts160,541
(150,794) 9,747
 229,786
 (214,463) 15,323
Total foreign exchange contracts174,093
(165,217) 8,876
 152,619
 (143,349) 9,270
Equity contracts:Equity contracts:         Equity contracts:         
OTCOTC27,679
(23,112) 4,567
 24,688
 (20,808) 3,880
OTC28,618
(24,869) 3,749
 28,193
 (23,969) 4,224
OTC–cleared—
—
 —
 —
 —
 —
Exchange-traded(a)
Exchange-traded(a)
12,704
(12,275) 429
 10,004
 (9,414) 590
Exchange-traded(a)
16,234
(14,508) 1,726
 12,720
 (12,234) 486
Total equity contractsTotal equity contracts40,383
(35,387) 4,996
 34,692
 (30,222) 4,470
Total equity contracts44,852
(39,377) 5,475
 40,913
 (36,203) 4,710
Commodity contracts:Commodity contracts:         Commodity contracts:         
OTCOTC12,110
(5,224) 6,886
 12,885
 (5,252) 7,633
OTC13,607
(5,600) 8,007
 12,645
 (5,508) 7,137
OTC–cleared—
—
 —
 —
 —
 —
Exchange-traded(a)
Exchange-traded(a)
7,800
(7,688) 112
 7,099
 (6,853) 246
Exchange-traded(a)
8,558
(8,469) 89
 8,870
 (8,709) 161
Total commodity contractsTotal commodity contracts19,910
(12,912) 6,998
 19,984
 (12,105) 7,879
Total commodity contracts22,165
(14,069) 8,096
 21,515
 (14,217) 7,298
Derivative payables with appropriate legal opinions684,731
(656,747)
(b) 
27,984
 881,631
 (844,008)
(b) 
37,623
Derivative payables with appropriate legal opinionDerivative payables with appropriate legal opinion497,126
(467,713)
(b) 
29,413
 521,133
 (493,029)
(b) 
28,104
Derivative payables where an appropriate legal opinion has not been either sought or obtainedDerivative payables where an appropriate legal opinion has not been either sought or obtained11,462
  11,462
 11,608
   11,608
Derivative payables where an appropriate legal opinion has not been either sought or obtained12,280
  12,280
 9,673
   9,673
Total derivative payables recognized on the Consolidated balance sheetsTotal derivative payables recognized on the Consolidated balance sheets$696,193
  $39,446
 $893,239
   $49,231
Total derivative payables recognized on the Consolidated balance sheets$509,406
  $41,693
 $530,806
   $37,777
Collateral not nettable on the Consolidated balance sheets(c)(d)(e)
  (5,137)     (8,925)
Collateral not nettable on the Consolidated balance sheets(c)(d)
Collateral not nettable on the Consolidated balance sheets(c)(d)
  (3,566)     (4,180)
Net amountsNet amounts  $34,309
     $40,306
Net amounts  $38,127
     $33,597
(a)Exchange-traded derivative balances that relate to futures contracts are settled daily.
(b)Net derivatives receivable included cash collateral netted of $57.6 billion and $71.9$55.5 billion at both September 30, 2017,2018, and December 31, 2016,2017, respectively. Net derivatives payable included cash collateral netted of $43.5$40.1 billion and $57.3$45.5 billion related to OTC and OTC-cleared derivatives at September 30, 2017,2018, and December 31, 2016,2017, respectively.
(c)Excludes all collateral related to derivative instruments where an appropriate legal opinion has not been either sought or obtained.
(d)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.
(e)(d)Derivative payables collateral relates only to OTC and OTC-cleared derivative instruments. Amounts exclude collateral transferred related to exchange-traded derivative instruments.




Liquidity risk and credit-related contingent features
For a more detailed discussion of liquidity risk and credit-related contingent features related to the Firm’s derivative contracts, seerefer to Note 6 5of JPMorgan Chase’s 20162017 Annual Report.
The following table shows the aggregate fair value of net derivative payables related to OTC and OTC-cleared derivatives that contain contingent collateral or termination features that may be triggered upon a ratings downgrade, and the associated collateral the Firm has posted in the normal course of business, at September 30, 2017,2018, and
December 31, 2016.2017.
 
OTC and OTC-cleared derivative payables containing downgrade triggers
(in millions)September 30, 2017
December 31, 2016
September 30, 2018
December 31, 2017
Aggregate fair value of net derivative payables$12,228
$21,550
$10,103
$11,916
Collateral posted10,117
19,383
8,926
9,973








The following table shows the impact of a single-notch and two-notch downgrade of the long-term issuer ratings of JPMorgan Chase & Co. and its subsidiaries, predominantly JPMorgan Chase Bank, National Association (“JPMorgan Chase Bank, N.A.”),
at September 30, 2017,2018, and December 31, 2016, 2017, related to OTC and OTC-cleared derivative contracts with contingent collateral or termination features that may be triggered upon a ratings downgrade. Derivatives contracts generally require additional collateral to be posted or terminations to be triggered when the predefined threshold rating is breached. A downgrade by a single rating agency that does not result in a rating lower than a preexisting corresponding rating provided by another major rating agency will generally not result in additional collateral, (except in certain instances in which additional initial margin may be required upon a ratings downgrade), nor in termination payments requirements. The liquidity impact in the table is calculated based upon a downgrade below the lowest current rating of the rating agencies referred to in the derivative contract.
Liquidity impact of downgrade triggers on OTC and OTC-cleared derivativesLiquidity impact of downgrade triggers on OTC and OTC-cleared derivatives   Liquidity impact of downgrade triggers on OTC and OTC-cleared derivatives   
September 30, 2017 December 31, 2016September 30, 2018 December 31, 2017
(in millions)Single-notch downgradeTwo-notch downgrade Single-notch downgradeTwo-notch downgradeSingle-notch downgradeTwo-notch downgrade Single-notch downgradeTwo-notch downgrade
Amount of additional collateral to be posted upon downgrade(a)
$90
$2,041
 $560
$2,497
$116
$2,046
 $79
$1,989
Amount required to settle contracts with termination triggers upon downgrade(b)
239
547
 606
1,049
317
861
 320
650
(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.
Derivatives executed in contemplation of a sale of the underlying financial asset
In certain instances the Firm enters into transactions in which it transfers financial assets but maintains the economic exposure to the transferred assets by entering into a derivative with the same counterparty in contemplation of the initial transfer. The Firm generally accounts for such transfers as collateralized financing transactions as described in Note10, but in limited circumstances they may qualify to be accounted for as a sale and a derivative under U.S. GAAP. There were noThe amount of such transfers accounted for as a sale where the associated derivative was outstanding at September 30, 2017,2018 was not material, and there were no such transfers at December 31, 2016 were not material.2017.




Impact of derivatives on the Consolidated statements of income
The following tables provide information related to gains and losses recorded on derivatives based on their hedge accounting designation or purpose.
Fair value hedge gains and losses
The following tables present derivative instruments, by contract type, used in fair value hedge accounting relationships, as well as pre-tax gains/(losses) recorded on such derivatives and the related hedged items for thethree and nine months ended September 30, 2018 and 2017, and 2016, respectively. The Firm includes gains/(losses) on the hedging derivative and the related hedged item in the same line item in the Consolidated statements of income.income as the related hedged item.
Gains/(losses) recorded in income Income statement impact due to:Gains/(losses) recorded in income 
Income statement impact of
excluded components(f)
 OCI impact
Three months ended September 30, 2017
(in millions)		DerivativesHedged itemsTotal income statement impact 
Hedge ineffectiveness(e)
Excluded components(f)
Three months ended September 30, 2018
(in millions)		DerivativesHedged itemsIncome statement impact Amortization approachChanges in fair value 
Derivatives - Gains/(losses) recorded in OCI(g)
Contract type        
Interest rate(a)(b)
$22
$182
$204
 $(2)$206
$(870)$1,032
$162
 $—
$160
 $—
Foreign exchange(c)
(982)1,002
20
 —
20
277
(165)112
 (137)112
 45
Commodity(d)
(457)461
4
 4
—
454
(461)(7) —
(5) —
Total$(1,417)$1,645
$228
 $2
$226
$(139)$406
$267
 $(137)$267
 $45
   
Gains/(losses) recorded in income Income statement impact due to:
Three months ended September 30, 2016
(in millions)		DerivativesHedged itemsTotal income statement impact 
Hedge ineffectiveness(e)
Excluded components(f)
Contract type   
Interest rate(a)(b)
$(232)$430
$198
 $7
$191
Foreign exchange(c)
(143)194
51
 —
51
Commodity(d)
(203)229
26
 1
25
Total$(578)$853
$275
 $8
$267
   
Gains/(losses) recorded in income Income statement impact due to:
Nine months ended September 30, 2017
(in millions)		DerivativesHedged itemsTotal income statement impact 
Hedge ineffectiveness(e)
Excluded components(f)
Contract type   
Interest rate(a)(b)
$(131)$759
$628
 $(16)$644
Foreign exchange(c)
(3,254)3,235
(19) —
(19)
Commodity(d)
(823)861
38
 23
15
Total$(4,208)$4,855
$647
 $7
$640
   
Gains/(losses) recorded in income Income statement impact due to:
Nine months ended September 30, 2016
(in millions)		DerivativesHedged itemsTotal income statement impact 
Hedge ineffectiveness(e)
Excluded components(f)
Contract type   
Interest rate(a)(b)
$2,049
$(1,478)$571
 $36
$535
Foreign exchange(c)
46
104
150
 —
150
Commodity(d)
(276)307
31
 (11)42
Total$1,819
$(1,067)$752
 $25
$727
 Gains/(losses) recorded in income Income statement impact due to:  
Three months ended September 30, 2017
(in millions)		DerivativesHedged itemsIncome statement impact 
Hedge ineffectiveness(e)
Excluded components(f)
  
Contract type        
Interest rate(a)(b)
$22
$182
$204
 $(2)$206
  
Foreign exchange(c)
(982)1,002
20
 —
20
  
Commodity(d)
(457)461
4
 4
—
  
Total$(1,417)$1,645
$228
 $2
$226
  
 Gains/(losses) recorded in income 
Income statement impact of
excluded components(f)
 OCI impact
Nine months ended September 30, 2018
(in millions)		DerivativesHedged itemsIncome statement impact Amortization approachChanges in fair value 
Derivatives - Gains/(losses) recorded in OCI(g)
Contract type        
Interest rate(a)(b)
$(2,747)$3,214
$467
 $—
$459
 $—
Foreign exchange(c)
797
(452)345
 (404)345
 (96)
Commodity(d)
649
(626)23
 —
29
 —
Total$(1,301)$2,136
$835
 $(404)$833
 $(96)
 Gains/(losses) recorded in income Income statement impact due to:  
Nine months ended September 30, 2017
(in millions)		DerivativesHedged itemsIncome statement impact 
Hedge ineffectiveness(e)
Excluded components(f)
  
Contract type        
Interest rate(a)(b)
$(131)$759
$628
 $(16)$644
  
Foreign exchange(c)
(3,254)3,235
(19) —
(19)  
Commodity(d)
(823)861
38
 23
15
  
Total$(4,208)$4,855
$647
 $7
$640
  

(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 time values.cross-currency basis spreads. Under the new hedge accounting guidance, the initial amount of the excluded components may be amortized into income over the life of the derivative, or changes in fair value may be recognized in current period earnings.
(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.

As of September 30, 2018, the following amounts were recorded on the Consolidated balance sheets related to certain cumulative fair value hedge basis adjustments that are expected to reverse through the income statement in future periods as an adjustment to yield.
  
Carrying amount of the hedged items(a)(b)
 
Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items:

September 30, 2018
(in millions)		  Active hedging relationships
Discontinued hedging relationships(d)
Total
Assets      
Investment securities - AFS

 $47,896
(c) 
$(2,292)$438
$(1,854)
Liabilities      
Long-term debt $135,239
 $(2,693)$(5)$(2,698)
Beneficial interests issued by consolidated VIEs 6,976
 —
(42)(42)
(a)Excludes physical commodities with a carrying value of $4.6 billion 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. Given 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. The carrying amount excluded for available-for-sale securities is $14.7 billion and for long-term debt is $7.2 billion.
(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.

Cash flow hedge gains and losses
The following tables present derivative instruments, by contract type, used in cash flow hedge accounting relationships, and the pre-tax gains/(losses) recorded on such derivatives, for the three and nine months ended September 30, 2018 and 2017, and 2016, respectively. The Firm includes the gain/(loss) on the hedging derivative and the change in cash flows on the hedged item in the same line item in the Consolidated statements of income as the change in cash flows on the related hedged item.
Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended September 30, 2018
(in millions)		Amounts reclassified from AOCI to incomeAmounts recorded in OCITotal change
in OCI
for period
Contract type 
Interest rate(a)
$10
$(30)$(40)
Foreign exchange(b)
(19)(92)(73)
Total$(9)$(122)$(113)
 
Gains/(losses) recorded in income and other comprehensive income/(loss)Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended September 30, 2017
(in millions)		Derivatives – effective portion reclassified from AOCI to income
Hedge ineffectiveness recorded directly in income(c)
Total income statement impact Derivatives – effective portion recorded in OCI
Total change
in OCI
for period
Amounts reclassified from AOCI to income
Amounts recorded in OCI(c)
Total change
in OCI
for period
Contract type    
Interest rate(a)
$1
$—
$1
 $(1)$(2)$1
$(1)$(2)
Foreign exchange(b)
(11)—
(11) 30
41
(11)30
41
Total$(10)$—
$(10) $29
$39
$(10)$29
$39
   
Gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended September 30, 2016
(in millions)		Derivatives – effective portion reclassified from AOCI to income
Hedge ineffectiveness recorded directly in income(c)
Total income statement impact Derivatives – effective portion recorded in OCITotal change
in OCI
for period
Contract type   
Interest rate(a)
$(18)$—
$(18) $22
$40
Foreign exchange(b)
(104)—
(104) (86)18
Total$(122)$—
$(122) $(64)$58
   
Gains/(losses) recorded in income and other comprehensive income/(loss)
Nine months ended September 30, 2017
(in millions)		Derivatives – effective portion reclassified from AOCI to income
Hedge ineffectiveness recorded directly in income(c)
Total income statement impact Derivatives – effective portion recorded in OCITotal change
in OCI
for period
Contract type   
Interest rate(a)
$(16)$—
$(16) $11
$27
Foreign exchange(b)
(144)—
(144) 100
244
Total$(160)$—
$(160) $111
$271
   
Gains/(losses) recorded in income and other comprehensive income/(loss)
Nine months ended September 30, 2016
(in millions)		Derivatives – effective portion reclassified from AOCI to income
Hedge ineffectiveness recorded directly in income(c)
Total income statement impact Derivatives – effective portion recorded in OCITotal change
in OCI
for period
Contract type   
Interest rate(a)
$(58)$—
$(58) $(78)$(20)
Foreign exchange(b)
(167)—
(167) (340)(173)
Total$(225)$—
$(225) $(418)$(193)
 Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Nine months ended September 30, 2018
(in millions)		Amounts reclassified from AOCI to incomeAmounts recorded in OCI
Total change
in OCI
for period
Contract type   
Interest rate(a)
$36
$(141)$(177)
Foreign exchange(b)
26
(224)(250)
Total$62
$(365)$(427)
    
 Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Nine months ended September 30, 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)
$(16)$11
$27
Foreign exchange(b)
(144)100
244
Total$(160)$111
$271
(a)Primarily consists of benchmark interest rate 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 the three and nine months ended September 30, 2017.
The Firm did not experience any forecasted transactions that failed to occur for the three and nine months ended September 30, 20172018 and 2016.2017.
Over the next 12 months, the Firm expects that approximately $58 $(118) million (after-tax) of net gainslosses recorded in AOCI at September 30, 2017, 2018, related to cash flow hedges will be recognized in income. For terminated cash flow hedges, the maximum length of time over which
forecasted transactions are remaining is approximately 6 six years.
For open cash flow hedges, the maximum length of time over which forecasted transactions are hedged is approximately 2 six years. The Firm’s longer-dated forecasted transactions relate to core lending and borrowing activities.

Net investment hedge gains and losses
The following table presents hedging instruments, by contract type, that were used in net investment hedge accounting relationships, and the pre-tax gains/(losses) recorded on such instruments for the three and nine months ended September 30, 20172018 and 2016.2017.
Gains/(losses) recorded in income and other comprehensive income/(loss)
2017 20162018 2017
Three months ended September 30, (in millions)
Excluded components recorded directly
in income(a)
Effective portion recorded in OCI 
Excluded components
recorded directly
in income(a)
Effective portion recorded in OCI
Amounts recorded in
income(a)(c)
Amounts recorded in OCI 
Amounts recorded in
income(a)(c)
Amounts recorded in OCI(b)
Foreign exchange derivatives $(39) $(286) $(69) $(30) $2
 $311
 $(39) $(286)
                
Gains/(losses) recorded in income and other comprehensive income/(loss)2018 2017
2017 2016
Nine months ended September 30, (in millions)
Excluded components recorded directly
in income(a)
Effective portion recorded in OCI 
Excluded components
recorded directly
in income(a)
Effective portion recorded in OCI
Amounts recorded in
income(a)(c)
Amounts recorded in OCI 
Amounts recorded in
income(a)(c)
Amounts recorded in OCI(b)
Foreign exchange derivatives $(150) $(1,161) $(219) $(603) $(5) $1,126
 $(150) $(1,161)
(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. Amounts relatedThe Firm elects to excluded components are recordedrecord changes in fair value of these amounts directly in other income.
(b)Represents the effective portion of changes in value of the related hedging derivative. The Firm measures thedid not recognize any ineffectiveness ofon net investment hedge accounting relationships based on changeshedges directly in spot foreign currency rates, and, therefore, there was no significant ineffectiveness for net investment hedge accounting relationshipsincome during the three and nine months ended September 30, 2017 and 2016.2017.
(c)Excludes amounts reclassified from AOCI to income on the sale or liquidation of hedged entities. For additional information, refer to Note 17.
Gains and losses on derivatives used for specified risk management purposes
The following table presents pre-tax gains/(losses) recorded on a limited number of derivatives, not designated in hedge accounting relationships, that are used to manage risks associated with certain specified assets and liabilities, including certain risks arising from the mortgage pipeline, warehouse loans, MSRs, wholesale lending exposures, and foreign currency-denominated assets and liabilities, and commodities-related contracts and investments.liabilities.
 
Derivatives gains/(losses)
recorded in income
 Three months ended September 30, Nine months ended September 30,
(in millions)20182017 20182017
Contract type     
Interest rate(a)
$(42)$97
 $(277)$318
Credit(b)
(7)(18) (17)(70)
Foreign exchange(c)
52
(18) 152
(52)
Total$3
$61
 $(142)$196
 
Derivatives gains/(losses)
recorded in income
 Three months ended September 30,Nine months ended September 30,
(in millions)2017201620172016
Contract type    
Interest rate(a)
$97
$312
$318
$1,956
Credit(b)
(18)(84)(70)(244)
Foreign exchange(c)
(18)(2)(52)(2)
Total$61
$226
$196
$1,710

(a)Primarily represents interest rate derivatives used to hedge the interest rate risk inherent in the mortgage pipeline, 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.
 
Gains and losses on derivatives related to market-making activities and other derivatives
The Firm makes markets in derivatives in order to meet the needs of customers and uses derivatives to manage certain risks associated with net open risk positions from its market-making activities, including the counterparty credit risk arising from derivative receivables. All derivatives not included in the hedge accounting or specified risk management categories above are included in this category. Gains and losses on these derivatives are primarily recorded in principal transactions revenue. SeeRefer to Note5for information on principal transactions revenue.


Credit derivatives
For a more detailed discussion of credit derivatives, seerefer to Note 65 of JPMorgan Chase’s 20162017 Annual Report. The Firm does not use notional amounts of credit derivatives as the primary measure of risk management for such derivatives, because the notional amount does not take into account the probability of the occurrence of a credit event, the recovery value of the reference obligation, or related cash instruments and economic hedges, each of which reduces, in the Firm’s view, the risks associated with such derivatives.
Total credit derivatives and credit-related notes
Maximum payout/Notional amountMaximum payout/Notional amount
September 30, 2017 (in millions)Protection sold
Protection
purchased with
identical underlyings(b)
Net protection (sold)/purchased(c)
 
Other protection purchased(d)
September 30, 2018 (in millions)Protection sold
Protection
purchased with
identical underlyings(b)
Net protection (sold)/purchased(c)
 
Other protection purchased(d)
Credit derivatives          
Credit default swaps$(848,527) $853,147
$4,620
 $11,164
$(746,195) $754,889
$8,694
 $6,341
Other credit derivatives(a)
(61,205) 57,534
(3,671) 19,467
(38,928) 45,393
6,465
 11,563
Total credit derivatives(909,732) 910,681
949
 30,631
(785,123) 800,282
15,159
 17,904
Credit-related notes(53) —
(53) 6,370
(18) —
(18) 7,653
Total$(909,785) $910,681
$896
 $37,001
$(785,141) $800,282
$15,141
 $25,557
          
Maximum payout/Notional amountMaximum payout/Notional amount
December 31, 2016 (in millions)Protection sold
Protection
purchased with
identical underlyings(b)
Net protection (sold)/purchased(c)
 
Other protection purchased(d)
December 31, 2017 (in millions)Protection sold
Protection
purchased with
identical underlyings(b)
Net protection (sold)/purchased(c)
 
Other protection purchased(d)
Credit derivatives          
Credit default swaps$(961,003) $974,252
$13,249
 $7,935
$(690,224) $702,098
$11,874
 $5,045
Other credit derivatives(a)
(36,829) 31,859
(4,970) 19,991
(54,157) 59,158
5,001
 11,747
Total credit derivatives(997,832) 1,006,111
8,279
 27,926
(744,381) 761,256
16,875
 16,792
Credit-related notes(41) —
(41) 4,505
(18) —
(18) 7,915
Total$(997,873) $1,006,111
$8,238
 $32,431
$(744,399) $761,256
$16,857
 $24,707
(a)Other credit derivatives largely consists of credit swap options.
(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.
The following tables summarize the notional amounts by the ratings, maturity profile, and total fair value, of credit derivatives and credit-related notes as of September 30, 2017,2018, and December 31, 2016, 2017, where JPMorgan Chase is the seller of protection. The maturity profile is based on the remaining contractual maturity of the credit derivative contracts. The ratings profile is based on the rating of the reference entity on which the credit derivative contract is based. The ratings and maturity profile of credit derivatives and credit-related notes where JPMorgan Chase is the purchaser of protection are comparable to the profile reflected below.
Protection sold — credit derivatives and credit-related notes ratings(a)/maturity profile
Protection sold — credit derivatives and credit-related notes ratings(a)/maturity profile
   
Protection sold — credit derivatives and credit-related notes ratings(a)/maturity profile
   
September 30, 2017
(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
September 30, 2018
(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$(222,740) $(306,362) $(71,992) $(601,094) $8,914
 $(1,447) $7,467
$(116,930) $(364,470) $(71,226) $(552,626) $8,043
 $(1,859) $6,184
Noninvestment-grade(100,298) (170,219) (38,174) (308,691) 8,884
 (5,764) 3,120
(53,103) (147,117) (32,295) (232,515) 8,337
 (4,519) 3,818
Total$(323,038) $(476,581) $(110,166) $(909,785) $17,798
 $(7,211) $10,587
$(170,033) $(511,587) $(103,521) $(785,141) $16,380
 $(6,378) $10,002
December 31, 2017
(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$(159,286) $(319,726) $(39,429) $(518,441) $8,516
 $(1,134) $7,382
Noninvestment-grade(73,394) (134,125) (18,439) (225,958) 7,407
 (5,313) 2,094
Total$(232,680) $(453,851) $(57,868) $(744,399) $15,923
 $(6,447) $9,476
December 31, 2016
(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$(273,688) $(383,586) $(39,281) $(696,555) $7,841
 $(3,055) $4,786
Noninvestment-grade(107,955) (170,046) (23,317) (301,318) 8,184
 (8,570) (386)
Total$(381,643) $(553,632) $(62,598) $(997,873) $16,025
 $(11,625) $4,400

(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.


Note 5 – Noninterest revenue and noninterest
expense
Noninterest revenue
For a discussion of the components of and accounting policies for the Firm’s noninterest revenue, seerefer to Note 76 of JPMorgan Chase’s 20162017 Annual Report.
The adoption of the revenue recognition guidance in the first quarter of 2018, required gross presentation of certain costs previously offset against revenue, predominantly associated with certain distribution costs (previously offset against asset management, administration and commissions), with the remainder associated with certain underwriting costs (previously offset against investment banking fees). Adoption of the guidance did not result in any material changes in the timing of revenue recognition. This guidance was adopted retrospectively and, accordingly, prior period amounts were revised, which resulted in an increase in both noninterest revenue and noninterest expense. For additional information, refer to Note1.
Investment banking fees
The following table presents the components of investment banking fees.

Three months ended September 30,
Nine months ended September 30,
(in millions)2018
 2017

2018
2017
Underwriting






Equity$417

$302

$1,342

$1,105
Debt836

945

2,596

2,873
Total underwriting1,253

1,247

3,938

3,978
Advisory579

621

1,798

1,616
Total investment banking fees$1,832

$1,868

$5,736

$5,594

Three months ended September 30,
Nine months ended September 30,
(in millions)2017
 2016

2017
2016
Underwriting






Equity$295

$369

$1,052

$854
Debt927

958

2,802

2,404
Total underwriting1,222

1,327

3,854

3,258
Advisory621

539

1,616

1,585
Total investment banking fees$1,843

$1,866

$5,470

$4,843

Principal transactions
The following table presents all realized and unrealized gains and losses recorded in principal transactions revenue. This table excludes interest income and interest expense on trading assets and liabilities, which are an integral part of the overall performance of the Firm’s client-driven market-making activities. SeeRefer to Note 6 for further information on interest income and interest expense. Trading revenue is presented primarily by instrument type. The Firm’s client-driven market-making businesses generally utilize a variety of instrument types in connection with their market-making and related risk-management activities; accordingly, the trading revenue presented in the table below is not representative of the total revenue of any individual line of business.busi
ness.
 Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018 2017
Trading revenue by instrument type       
Interest rate$338
 $649
 $1,784
 $2,032
Credit202
 330
 1,230
 1,288
Foreign exchange937
 681
 2,706
 2,363
Equity1,363
 915
 4,376
 3,153
Commodity277
 156
 800
 461
Total trading revenue3,117
 2,731
 10,896
 9,297
Private equity gains/(losses)(a)
(153) (10) (198) 143
Principal transactions$2,964
 $2,721
 $10,698
 $9,440

 Three months ended September 30, Nine months ended September 30,
(in millions)2017
 2016
 2017 2016
Trading revenue by instrument type       
Interest rate$649
 $825
 $2,032
 $1,843
Credit330
 549
 1,288
 1,652
Foreign exchange681
 818
 2,363
 2,101
Equity915
 893
 3,153
 2,584
Commodity156
 245
 461
 695
Total trading revenue2,731
 3,330
 9,297
 8,875
Private equity gains/(losses)(10) 121
 143
 231
Principal transactions$2,721
 $3,451
 $9,440
 $9,106

(a)The third quarter of 2018 included markdowns of approximately $220 million on certain private equity investments in Corporate, with $170 million recorded within principal transactions revenue and $50 million in other income.
Lending- and deposit-related fees
The following table presents the components of lending- and deposit-related fees.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017
 2016
 2017 20162018
 2017
 2018
 2017
Lending-related fees$280
 $282
 $824
 $829
$284
 $280
 $838
 $824
Deposit-related fees1,217
 1,202
 3,603
 3,461
1,258
 1,217
 3,676
 3,603
Total lending- and deposit-related fees$1,497
 $1,484
 $4,427
 $4,290
$1,542
 $1,497
 $4,514
 $4,427

Asset management, administration and commissions
The following table presents the components of Firmwide asset management, administration and commissions.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017
 2016
 2017 20162018
 2017
 2018 2017
Asset management fees              
Investment management
fees(a)
$2,410
 $2,203
 $6,955
 $6,541
$2,716
 $2,636
 $8,081
 $7,603
All other asset management fees(b)
63
 90
 225
 277
79
 63
 211
 226
Total asset management fees2,473
 2,293
 7,180
 6,818
2,795
 2,699
 8,292
 7,829
              
Total administration fees(c)
514
 478
 1,500
 1,444
533
 514
 1,651
 1,500
              
Commission and other fees              
Brokerage commissions546
 505
 1,691
 1,628
604
 546
 1,887
 1,691
All other commissions and fees313
 321
 976
 1,012
378
 313
 1,093
 976
Total commissions and fees859
 826
 2,667
 2,640
982
 859
 2,980
 2,667
Total asset management, administration and commissions$3,846
 $3,597
 $11,347
 $10,902
$4,310
 $4,072
 $12,923
 $11,996
(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.
(c)Predominantly includes fees for custody, securities lending, funds services and securities clearance.

Card income
The following table presents the components of card income:
 Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
Interchange and merchant processing income$4,781
 $4,342
 $13,863
 $12,557
Rewards costs and partner payments(3,276) (2,727) (9,687)
(b) 
(7,941)
Other card income(a)
(177) (373) (553) (1,293)
Total card income$1,328
 $1,242
 $3,623
 $3,323
(a)Predominantly represents annual fees and new account origination costs, which are deferred and recognized on a straight-line basis over a 12-month period.
(b)Includes an adjustment to the credit card rewards liability of approximately $330 million, recorded in the second quarter of 2018.
Other income
Other income on the Firm’s Consolidated statements of income included the following:
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017
 2016
 2017
 2016
2018
 2017
 2018
 2017
Operating lease income$928
 $708
 $2,625
 $1,974
$1,157
 $928
 $3,316
 $2,625
Other income also included a legal benefit of$645 million recorded in Corporate in the second quarter of 2017 related to a settlement with the FDIC receivership for Washington Mutual and with Deutsche Bank as trustee to certain Washington Mutual trusts.
Noninterest expense
Other expense
Other expense on the Firm’s Consolidated statements of income included the following:
 Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
Legal expense$20
 $(107) $90
 $172
FDIC-related expense349
 353
 1,100
 1,110


 Three months ended September 30, Nine months ended September 30,
(in millions)2017
 2016
 2017
 2016
Legal expense/(benefit)$(107) $(71) $172
 $(547)
FDIC-related expense353
 360
 1,110
 912


Note 6 – Interest income and Interest expense
For a description of JPMorgan Chase’s accounting policies regarding interest income and interest expense, seerefer to Note 87 of JPMorgan Chase’s 20162017 Annual Report.
The following table presents the components of interest income and interest expense.

Three months ended
September 30,
Nine months ended
September 30,		Three months ended
September 30,
Nine months ended
September 30,
(in millions)2017

2016

2017

2016
2018

2017

2018

2017
Interest income





















Loans(a)
$10,519

$9,237

$30,265

$27,065
$12,207

$10,519

$34,915

$30,265
Taxable securities1,362

1,365

4,202

4,187
1,402

1,362

4,098

4,202
Nontaxable securities(b)
456

436

1,393

1,321
Total securities1,818

1,801

5,595

5,508
Non-taxable securities(b)
394

456

1,199

1,393
Total investment securities(a)
1,796

1,818

5,297

5,595
Trading assets1,947

1,890

5,611

5,448
2,155

1,947

6,369

5,611
Federal funds sold and securities purchased under resale agreements622

566

1,676

1,696
952

622

2,490

1,676
Securities borrowed(c)
—

(91)
(65)
(279)200

—

410

(65)
Deposits with banks1,256

448

2,986

1,374
1,585

1,259

4,449

3,002
Other assets(d)
525

219

1,311

623
All other interest-earning assets(d)
945

522

2,474

1,295
Total interest income16,687

14,070

47,379

41,435
19,840

16,687

56,404

47,379
Interest expense





















Interest-bearing deposits837

340

1,949

981
1,621

837

4,021

1,949
Federal funds purchased and securities loaned or sold under repurchase agreements451

286

1,131

828
827

451

2,164

1,131
Commercial paper83

34

186

105
Trading liabilities – debt, short-term and other liabilities(e)
636

285

1,622

826
Beneficial interests issued by consolidated VIEs123
 135
 386
 366
Short-term borrowings(e)
288

149

757

318
Trading liabilities – debt and all other interest-bearing liabilities(f)
1,018

570

2,579

1,490
Long-term debt1,759

1,387

5,035

3,999
2,056
 1,759
 5,812
 5,035
Beneficial interest issued by consolidated VIEs122

123

366

386
Total interest expense3,889

2,467

10,309

7,105
5,932

3,889

15,699

10,309
Net interest income12,798

11,603

37,070

34,330
13,908

12,798

40,705

37,070
Provision for credit losses1,452

1,271

3,982

4,497
948

1,452

3,323

3,982
Net interest income after provision for credit losses$11,346

$10,332

$33,088

$29,833
$12,960

$11,346

$37,382

$33,088
(a)Includes the amortizationamortization/accretion of unearned income (e.g., purchase price premiums/discounts, or premiums, as well as net deferred loan fees or costs.fees/costs, etc.).
(b)Represents securities which are tax-exempt for U.S. federal income tax purposes.
(c)Negative interest income is related to client-driven demand for certain securities combined with the impact of low interest rates. This is matched book activity and the negative interest expense on the corresponding securities loaned is recognized in interest expense.
(d)LargelyIncludes held-for-investment margin loans.loans, which are classified in accrued interest and accounts receivable, and all other interest-earning assets included in other assets on the Consolidated balance sheets.
(e)Includes largelycommercial paper.
(f)Other interest-bearing liabilities include brokerage customer payables, and to a lesser extent, other borrowed funds.payables.




Note 7 – Pension and other postretirement employee benefit plans
For a discussion of JPMorgan Chase’s pension and OPEB plans, seerefer to Note 98 of JPMorgan Chase’s 20162017 Annual Report.
The following table presents the components of net periodic benefit costs reported in the Consolidated statements of income for the Firm’s U.S. and non-U.S. defined benefit pension, defined contribution and OPEB plans.
Pension plans  
U.S. Non-U.S. OPEB plans
Three months ended September 30, (in millions)2017
2016
 2017
2016
 2017
2016
(in millions)Three months ended September 30, Nine months ended September 30,
20182017 20182017 20182017 20182017
Defined benefit pension plans OPEB plans  Defined benefit pension plans OPEB plans
Components of net periodic benefit cost            
Benefits earned during the period$75
$74
 $8
$9
 $—
$—
$88
$83
 $—
$—
 $267
$247
 $—
$—
Interest cost on benefit obligations130
133
 18
21
 7
7
139
148
 6
7
 417
447
 18
21
Expected return on plan assets(208)(223) (34)(32) (24)(26)(246)(242) (25)(24) (741)(725) (77)(72)
Amortization:             
Net (gain)/loss55
59
 8
6
 —
—
26
63
 —
—
 78
187
 —
—
Prior service cost/(credit)(9)(9) —
—
 —
—
(7)(9) —
—
 (19)(27) —
—
Net periodic defined benefit cost43
34
 —
4
 (17)(19)
Other defined benefit pension plans(a)
3
3
 3
3
 NA
NA
Settlement—
—
 —
—
 —
(3) —
—
Net periodic defined benefit cost(a)
—
43
 (19)(17) 2
126
 (59)(51)
Other defined benefit pension plans(b)
6
6
 NA
NA
 21
16
 NA
NA
Total defined benefit plans46
37
 3
7
 (17)(19)6
49
 (19)(17) 23
142
 (59)(51)
Total defined contribution plans136
123
 85
80
 NA
NA
229
221
 NA
NA
 661
617
 NA
NA
Total pension and OPEB cost included in compensation expense$182
$160
 $88
$87
 $(17)$(19)
     
Pension plans  
U.S. Non-U.S. OPEB plans
Nine months ended September 30, (in millions)2017
2016
 2017
2016
 2017
2016
Components of net periodic benefit cost     
Benefits earned during the period$224
$221
 $23
$27
 $—
$—
Interest cost on benefit obligations390
399
 57
71
 21
22
Expected return on plan assets(624)(668) (101)(102) (72)(78)
Amortization:      
Net (gain)/loss165
176
 22
17
 —
—
Prior service cost/(credit)(26)(26) (1)(1) —
—
Settlement (gain)/loss
—
—
 (3)—
 —
—
Net periodic defined benefit cost129
102
 (3)12
 (51)(56)
Other defined benefit pension plans(a)
9
10
 7
8
 NA
NA
Total defined benefit plans138
112
 4
20
 (51)(56)
Total defined contribution plans363
345
 254
249
 NA
NA
Total pension and OPEB cost included in compensation expense$501
$457
 $258
$269
 $(51)$(56)
Total pension and OPEB cost included in noninterest expense$235
$270
 $(19)$(17) $684
$759
 $(59)$(51)
(a)Effective January 1, 2018, benefits earned during the period 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.
The following table presents the fair values of plan assets for the U.S. defined benefit pension and OPEB plans and for the material non-U.S. defined benefit pension plans:plans.
(in billions)September 30,
2018
 December 31, 2017
Fair value of plan assets   
Defined benefit pension plans$19.2
 $19.6
OPEB plans2.8
 2.8

(in billions)September 30, 2017
 December 31, 2016
Fair value of plan assets   
U.S. defined benefit pension and OPEB plans$17.4
 $16.2
Material non-U.S. defined benefit pension plans3.8
 3.4
There are no expected contributions to the U.S. defined benefit pension plan for 2017.2018.


Note 8 – Employee stock-basedshare-based incentives
For a discussion of the accounting policies and other information relating to employee stock-basedshare-based incentives, seerefer to Note 109 of JPMorgan Chase’s 20162017 Annual Report.
The Firm recognized the following noncash compensation expense related to its various employee stock-basedshare-based incentive plans in its Consolidated statements of income.
 Three months ended
September 30,		 Nine months ended
September 30,
(in millions)2018
 2017
 2018
 2017
Cost of prior grants of RSUs, stock appreciation rights (“SARs”) and performance share units (“PSUs”) that are amortized over their applicable vesting periods$282
 $267
 $956
 $867
Accrual of estimated costs of share-based awards to be granted in future periods including those to full-career eligible employees240
 224
 852
 750
Total noncash compensation expense related to employee share-based incentive plans$522
 $491
 $1,808
 $1,617

 Three months ended
September 30,		 Nine months ended
September 30,
(in millions)2017
 2016
 2017
 2016
Cost of prior grants of RSUs, stock appreciation rights (“SARs”) and performance share units (“PSUs”) that are amortized over their applicable vesting periods$267
 $257
 $867
 $808
Accrual of estimated costs of stock-based awards to be granted in future periods including those to full-career eligible employees224
 230
 750
 752
Total noncash compensation expense related to employee stock-based incentive plans$491
 $487
 $1,617
 $1,560
In the first quarter of 2017, 2018, in connection with its annual incentive grant for the 20162017 performance year, the Firm granted 23 17 million RSUs and 675 516 thousand PSUs all with a weighted-average grant date fair valuevalues of $84.25. $111.17 per RSU and $110.46 per PSU.


Note 9 – SecuritiesInvestment securities
SecuritiesInvestment securities consist of debt securities that are classified as trading, AFS or HTM. SecuritiesDebt securities classified as trading assets are discussed in Note 2. 2. Predominantly all of the Firm’s AFS and HTM securities are held by Treasury and CIO within the investment securities portfolio in connection with the Firm’sits asset-liability management objectives.activities. At September 30, 2017, 2018, the investment securities portfolio consisted of debt securities
with an average credit rating ofAA+ (based(based upon external ratings where available, and where not available, based primarily upon internal ratings which correspond to ratings as defined by S&P and Moody’s). For additional information regarding the investment securities portfolio, seerefer to Note 1210 of JPMorgan Chase’s 20162017 Annual Report.
As a result of the adoption of the premium amortization accounting guidance in the first quarter of 2018, premiums
on purchased callable debt securities must be amortized to the earliest call date for debt securities with call features that are explicit, noncontingent and callable at fixed prices and on preset dates. The guidance primarily impacts obligations of U.S. states and municipalities held in the Firm’s investment securities portfolio. For additional information, refer to Note17.
As permitted by the new hedge accounting guidance, the Firm also elected to transfer U.S. government agency MBS, commercial MBS, and obligations of U.S. states and municipalities with a carrying value of $22.4 billion from HTM to AFS in the first quarter of 2018. This transfer was a non-cash transaction. For additional information, refer to Note17.
The amortized costs and estimated fair values of the investment securities portfolio were as follows for the dates indicated.
September 30, 2017 December 31, 2016September 30, 2018 December 31, 2017
(in millions)Amortized costGross unrealized gainsGross unrealized lossesFair value Amortized costGross unrealized gainsGross unrealized lossesFair valueAmortized costGross unrealized gainsGross unrealized lossesFair value Amortized costGross unrealized gainsGross unrealized lossesFair value
Available-for-sale debt securities       
Available-for-sale securities       
Mortgage-backed securities:              
U.S. government agencies(a)
$70,554
$1,061
$260
 $71,355
 $63,367
$1,112
$474
 $64,005
$64,229
$389
$1,508
 $63,110
 $69,879
$736
$335
 $70,280
Residential:              
U.S.(b)
8,771
205
11
 8,965
 8,171
100
28
 8,243
U.S.6,396
127
36
 6,487
 8,193
185
14
 8,364
Non-U.S.3,974
139
2
 4,111
 6,049
158
7
 6,200
2,639
94
3
 2,730
 2,882
122
1
 3,003
Commercial6,024
102
8
 6,118
 9,002
122
20
 9,104
7,151
79
182
 7,048
 4,932
98
5
 5,025
Total mortgage-backed securities89,323
1,507
281
 90,549
 86,589
1,492
529
 87,552
80,415
689
1,729
 79,375
 85,886
1,141
355
 86,672
U.S. Treasury and government agencies(a)
26,225
180
196
 26,209
 44,822
75
796
 44,101
27,526
486
196
 27,816
 22,510
266
31
 22,745
Obligations of U.S. states and municipalities30,262
1,894
64
 32,092
 30,284
1,492
184
 31,592
36,659
1,580
118
 38,121
 30,490
1,881
33
 32,338
Certificates of deposit58
—
—
 58
 106
—
—
 106
75
—
—
 75
 59
—
—
 59
Non-U.S. government debt securities30,738
580
31
 31,287
 34,497
836
45
 35,288
24,398
321
45
 24,674
 26,900
426
32
 27,294
Corporate debt securities3,660
101
2
 3,759
 4,916
64
22
 4,958
1,993
64
1
 2,056
 2,657
101
1
 2,757
Asset-backed securities:              
Collateralized loan obligations22,451
54
2
 22,503
 27,352
75
26
 27,401
20,139
12
42
 20,109
 20,928
69
1
 20,996
Other9,136
80
16
 9,200
 6,950
62
45
 6,967
7,761
70
27
 7,804
 8,764
77
24
 8,817
Total available-for-sale debt securities211,853
4,396
592
 215,657
 235,516
4,096
1,647
 237,965
198,966
3,222
2,158
 200,030
 198,194
3,961
477
 201,678
Available-for-sale equity securities(b)552
—
—
 552
 914
12
—
 926
—
—
—
 —
 547
—
—
 547
Total available-for-sale securities212,405
4,396
592
 216,209
 236,430
4,108
1,647
 238,891
198,966
3,222
2,158
 200,030
 198,741
3,961
477
 202,225
Held-to-maturity debt securities       
Held-to-maturity securities       
Mortgage-backed securities:              
U.S. government agencies(c)
26,899
715
24
 27,590
 29,910
638
37
 30,511
26,537
5
493
 26,049
 27,577
558
40
 28,095
Commercial5,793
2
67
 5,728
 5,783
—
129
 5,654
—
—
—
 —
 5,783
1
74
 5,710
Total mortgage-backed securities32,692
717
91
 33,318
 35,693
638
166
 36,165
26,537
5
493
 26,049
 33,360
559
114
 33,805
Obligations of U.S. states and municipalities14,387
583
65
 14,905
 14,475
374
125
 14,724
4,831
69
31
 4,869
 14,373
554
80
 14,847
Total held-to-maturity debt securities47,079
1,300
156
 48,223
 50,168
1,012
291
 50,889
Total securities$259,484
$5,696
$748
 $264,432
 $286,598
$5,120
$1,938
 $289,780
Total held-to-maturity securities31,368
74
524
 30,918
 47,733
1,113
194
 48,652
Total investment securities$230,334
$3,296
$2,682
 $230,948
 $246,474
$5,074
$671
 $250,877
(a)IncludedIncludes total U.S. government-sponsored enterprise obligations with fair values of $51.8$44.2 billion and $45.8 billion at September 30, 2017,2018, and December 31, 2016, respectively, which were predominantly mortgage-related.2017, respectively.
(b)Prior period amounts have been revisedEffective January 1, 2018, the Firm adopted the recognition and measurement guidance. Equity securities that were previously reported as AFS securities were reclassified to conform with current period presentation.other assets upon adoption.
(c)Included total U.S. government-sponsored enterprise obligations with amortized cost of $22.9$20.6 billion and $25.6$22.0 billion at September 30, 2017,2018, and December 31, 2016, respectively, which were mortgage-related.2017, respectively.


SecuritiesInvestment securities impairment
The following tables present the fair value and gross unrealized losses for investment securities by aging category at September 30, 2017,2018, and December 31, 2016.2017.
Securities with gross unrealized lossesInvestment securities with gross unrealized losses
Less than 12 months 12 months or more Less than 12 months 12 months or more 
September 30, 2017 (in millions)Fair value
Gross
unrealized losses
 Fair value
Gross
unrealized losses
Total fair valueTotal gross unrealized losses
Available-for-sale debt securities   
September 30, 2018 (in millions)Fair value
Gross
unrealized losses
 Fair value
Gross
unrealized losses
Total fair valueTotal gross unrealized losses
Available-for-sale securities   
Mortgage-backed securities:      
U.S. government agencies$21,380
$156
 $3,698
$104
$25,078
$260
$37,109
$988
 $10,492
$520
$47,601
$1,508
Residential:      
U.S.
464
1
 749
10
1,213
11
1,343
20
 860
16
2,203
36
Non-U.S.634
1
 430
1
1,064
2
635
2
 180
1
815
3
Commercial1,055
4
 789
4
1,844
8
914
11
 3,018
171
3,932
182
Total mortgage-backed securities23,533
162
 5,666
119
29,199
281
40,001
1,021
 14,550
708
54,551
1,729
U.S. Treasury and government agencies695
2
 5,803
194
6,498
196
4,556
100
 1,416
96
5,972
196
Obligations of U.S. states and municipalities3,495
32
 910
32
4,405
64
4,171
63
 1,291
55
5,462
118
Certificates of deposit—
—
 —
—
—
—
—
—
 —
—
—
—
Non-U.S. government debt securities4,514
10
 797
21
5,311
31
4,237
16
 1,798
29
6,035
45
Corporate debt securities—
—
 406
2
406
2
—
—
 38
1
38
1
Asset-backed securities:      
Collateralized loan obligations—
—
 545
2
545
2
10,267
42
 —
—
10,267
42
Other3,132
8
 1,290
8
4,422
16
2,018
6
 2,545
21
4,563
27
Total available-for-sale debt securities35,369
214
 15,417
378
50,786
592
Available-for-sale equity securities—
—
 —
—
—
—
Total available-for-sale securities65,250
1,248
 21,638
910
86,888
2,158
Held-to-maturity securities      
Mortgage-backed securities      
U.S. government agencies2,706
24
 —
—
2,706
24
22,131
356
 2,595
137
24,726
493
Commercial5,253
61
 274
6
5,527
67
—
—
 —
—
—
—
Total mortgage-backed securities7,959
85
 274
6
8,233
91
22,131
356
 2,595
137
24,726
493
Obligations of U.S. states and municipalities1,137
11
 1,803
54
2,940
65
853
10
 677
21
1,530
31
Total held-to-maturity securities9,096
96
 2,077
60
11,173
156
22,984
366
 3,272
158
26,256
524
Total securities with gross unrealized losses$44,465
$310
 $17,494
$438
$61,959
$748
Total investment securities
with gross unrealized losses
$88,234
$1,614
 $24,910
$1,068
$113,144
$2,682



 Investment securities with gross unrealized losses
 Less than 12 months 12 months or more  
December 31, 2017 (in millions)Fair value
Gross
unrealized losses
 Fair value
Gross
unrealized losses
Total fair valueTotal gross unrealized losses
Available-for-sale securities       
Mortgage-backed securities:       
U.S. government agencies$36,037
$139
 $7,711
$196
$43,748
$335
Residential:       
U.S.1,112
5
 596
9
$1,708
14
Non-U.S.—
—
 266
1
266
1
Commercial528
4
 335
1
863
5
Total mortgage-backed securities37,677
148
 8,908
207
46,585
355
U.S. Treasury and government agencies1,834
11
 373
20
2,207
31
Obligations of U.S. states and municipalities949
7
 1,652
26
2,601
33
Certificates of deposit—
—
 —
—
—
—
Non-U.S. government debt securities6,500
15
 811
17
7,311
32
Corporate debt securities—
—
 52
1
52
1
Asset-backed securities:       
Collateralized loan obligations—
—
 276
1
276
1
Other3,521
20
 720
4
4,241
24
Total available-for-sale securities50,481
201
 12,792
276
63,273
477
Held-to-maturity securities       
Mortgage-backed securities       
U.S. government agencies4,070
38
 205
2
4,275
40
Commercial3,706
41
 1,882
33
5,588
74
Total mortgage-backed securities7,776
79
 2,087
35
9,863
114
Obligations of U.S. states and municipalities584
9
 2,131
71
2,715
80
Total held-to-maturity securities8,360
88
 4,218
106
12,578
194
Total investment securities with gross unrealized losses$58,841
$289
 $17,010
$382
$75,851
$671

 Securities with gross unrealized losses
 Less than 12 months 12 months or more  
December 31, 2016 (in millions)Fair value
Gross
unrealized losses
 Fair value
Gross
unrealized losses
Total fair valueTotal gross unrealized losses
Available-for-sale debt securities       
Mortgage-backed securities:       
U.S. government agencies$29,856
$463
 $506
$11
$30,362
$474
Residential:       
U.S.(a)
1,373
6
 1,073
22
$2,446
28
Non-U.S.—
—
 886
7
886
7
Commercial2,328
17
 1,078
3
3,406
20
Total mortgage-backed securities33,557
486
 3,543
43
37,100
529
U.S. Treasury and government agencies23,543
796
 —
—
23,543
796
Obligations of U.S. states and municipalities7,215
181
 55
3
7,270
184
Certificates of deposit—
—
 —
—
—
—
Non-U.S. government debt securities4,436
36
 421
9
4,857
45
Corporate debt securities797
2
 829
20
1,626
22
Asset-backed securities:       
Collateralized loan obligations766
2
 5,263
24
6,029
26
Other739
6
 1,992
39
2,731
45
Total available-for-sale debt securities71,053
1,509
 12,103
138
83,156
1,647
Available-for-sale equity securities—
—
 —
—
—
—
Held-to-maturity debt securities       
Mortgage-backed securities       
U.S. government agencies3,129
37
 —
—
3,129
37
Commercial5,163
114
 441
15
5,604
129
Total mortgage-backed securities8,292
151
 441
15
8,733
166
Obligations of U.S. states and municipalities4,702
125
 —
—
4,702
125
Total Held-to-maturity securities12,994
276
 441
15
13,435
291
Total securities with gross unrealized losses$84,047
$1,785
 $12,544
$153
$96,591
$1,938
(a)Prior period amounts have been revised to conform with current period presentation.

Gross unrealized losses
The Firm has recognized unrealized losses on investment securities that it intends to sell as OTTI. The Firm does not intend to sell any of the remaining investment securities with an unrealized loss in AOCI as of September 30, 2017,2018, and it is not likely that the Firm will be required to sell these securities before recovery of their amortized cost basis. Except for the securities for which credit losses have been recognized in income, the Firm believes that the investment securities with an unrealized loss in AOCI as of September 30, 2017,2018, are not other-than-temporarily impaired. For additional information on other-than-temporary impairment, seerefer to Note 1210 of the JPMorgan Chase’s 20162017 Annual Report.
SecuritiesInvestment securities gains and losses
The following table presents realized gains and losses and OTTI losses from AFS securities that were recognized in income.
 
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017
2016
 2017
2016
2018
2017
 2018
2017
Realized gains$122
$95
 $664
$284
$58
$122
 $137
$664
Realized losses(123)(22) (696)(110)(103)(123) (507)(696)
OTTI losses(a)
—
(9) (6)(38)(1)—
 (1)(6)
Net securities gains/(losses)$(1)$64
 $(38)$136
Net investment securities losses$(46)$(1) $(371)$(38)
      
OTTI losses      
Credit-related losses recognized in income$—
$—
 $—
$(1)$—
$—
 $—
$—
Securities the Firm intends to sell(a)
—
(9) (6)(37)
Investment securities the Firm intends to sell(a)
(1)—
 (1)(6)
Total OTTI losses recognized in income$—
$(9) $(6)$(38)$(1)$—
 $(1)$(6)

(a)Excludes realized losses on securities sold of $6$21 million and $14$6 million for the nine months ended September 30, 20172018 and 2016, respectively,2017 that had been previously reported as an OTTI loss due to the intention to sell the securities.
Changes in the credit loss component of credit-impaired debt securities
The cumulative credit loss component, including any changes therein, of OTTI losses that have been recognized in income related to AFS debt securities that the Firm does not intend to sell was not material as of and during the three and nine month periods ended September 30, 20172018 and 2016.2017.

Contractual maturities and yields
The following table presents the amortized cost and estimated fair value at September 30, 2017,2018, of JPMorgan Chase’s investment securities portfolio by contractual maturity.
By remaining maturity
September 30, 2017 (in millions)
Due in one
year or less
Due after one year through five yearsDue after five years through 10 years
Due after
10 years(c)
 Total
Available-for-sale debt securities   
By remaining maturity
September 30, 2018 (in millions)
Due in one
year or less
Due after one year through five yearsDue after five years through 10 years
Due after
10 years(c)
 Total
Available-for-sale securities   
Mortgage-backed securities(a)
      
Amortized cost982
1,564
6,160
80,617
 $89,323
$258
$377
$5,746
$74,034
 $80,415
Fair value984
1,591
6,342
81,632
 $90,549
260
379
5,827
72,909
 79,375
Average yield(b)
1.66%2.12%3.14%3.33% 3.28%1.84%2.45%3.44%3.48% 3.46%
U.S. Treasury and government agencies







  







  
Amortized cost99
—
22,004
4,122
 $26,225
$84
$8,565
$13,644
$5,233
 $27,526
Fair value100
—
21,968
4,141
 $26,209
85
8,673
13,533
5,525
 27,816
Average yield(b)
0.93%—%1.52%1.64% 1.54%2.12%2.70%2.53%2.91% 2.66%
Obligations of U.S. states and municipalities







  







  
Amortized cost44
797
1,174
28,247
 $30,262
$103
$715
$2,783
$33,058
 $36,659
Fair value44
820
1,241
29,987
 $32,092
104
728
2,872
34,417
 38,121
Average yield(b)
2.07%3.70%6.53%6.60% 6.51%2.07%3.89%5.05%5.01% 4.98%
Certificates of deposit







  







  
Amortized cost58
—
—
—
 $58
$75
$—
$—
$—
 $75
Fair value58
—
—
—
 $58
75
—
—
—
 75
Average yield(b)
0.50%—%—%—% 0.50%0.49%—%—%—% 0.49%
Non-U.S. government debt securities







  







  
Amortized cost4,683
14,216
11,785
54
 $30,738
$4,289
$14,711
$5,398
$—
 $24,398
Fair value4,689
14,441
12,105
52
 $31,287
4,289
14,886
5,499
—
 24,674
Average yield(b)
2.95%1.56%1.10%0.79% 1.59%3.00%1.86%1.30%—% 1.94%
Corporate debt securities







  







  
Amortized cost971
1,128
1,415
146
 $3,660
$70
$914
$872
$137
 $1,993
Fair value972
1,164
1,470
153
 $3,759
70
936
905
145
 2,056
Average yield(b)
2.02%3.39%3.48%3.19% 3.05%4.04%4.40%4.57%4.73% 4.48%
Asset-backed securities







  







  
Amortized cost—
3,604
17,060
10,923
 $31,587
$—
$3,537
$5,345
$19,018
 $27,900
Fair value—
3,597
17,099
11,007
 $31,703
—
3,515
5,347
19,051
 27,913
Average yield(b)
—%2.18%2.59%2.31% 2.45%—%2.83%3.19%3.04% 3.04%
Total available-for-sale debt securities







  
Amortized cost$6,837
$21,309
$59,598
$124,109
 $211,853
Fair value$6,847
$21,613
$60,225
$126,972
 $215,657
Average yield(b)
2.58%1.88%2.06%3.93% 3.15%
Available-for-sale equity securities







  
Amortized cost—
—
—
552
 552
Fair value—
—
—
552
 552
Average yield(b)
—%—%—%0.63% 0.63%
Total available-for-sale securities







  







  
Amortized cost$6,837
$21,309
$59,598
$124,661
 $212,405
$4,879
$28,819
$33,788
$131,480
 $198,966
Fair value$6,847
$21,613
$60,225
$127,524
 $216,209
4,883
29,117
33,983
132,047
 200,030
Average yield(b)
2.58%1.88%2.06%3.91% 3.14%2.88%2.37%2.85%3.78% 3.39%
Held-to-maturity debt securities







  
Held-to-maturity securities







  
Mortgage-backed securities(a)








  







  
Amortized cost—
—
—
32,692
 $32,692
$—
$—
$2,765
$23,772
 $26,537
Fair value—
—
—
33,318
 $33,318
—
—
2,725
23,324
 26,049
Average yield(b)
—%—%—%3.28% 3.28%—%—%3.52%3.33% 3.35%
Obligations of U.S. states and municipalities







  







  
Amortized cost—
56
1,974
12,357
 $14,387
$—
$—
$20
$4,811
 $4,831
Fair value—
55
2,047
12,803
 $14,905
—
—
20
4,849
 4,869
Average yield(b)
—%6.25%5.18%5.68% 5.61%—%—%3.90%4.11% 4.11%
Total held-to-maturity securities







  







  
Amortized cost$—
$56
$1,974
$45,049
 $47,079
$—
$—
$2,785
$28,583
 $31,368
Fair value$—
$55
$2,047
$46,121
 $48,223
—
—
2,745
28,173
 30,918
Average yield(b)
—%6.25%5.18%3.94% 3.99%—%—%3.53%3.46% 3.47%
(a)As of September 30, 2017,2018, mortgage-backed securities issued by Fannie Mae exceeded 10% of JPMorgan Chase’s total stockholders’ equity; the amortized cost and fair value of such securities was $59.7$51.2 billion and $61.0$50.6 billion, respectively.

(b)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.
(c)Includes investment securities with no stated maturity. Substantially all of the Firm’s U.S. residential MBS and collateralized mortgage obligations are due in 10 years or more, based on contractual maturity. The estimated weighted-average life, which reflects anticipated future prepayments, is approximately 67 years for agency residential MBS, 3 years for agency residential collateralized mortgage obligations and 3 years for nonagency residential collateralized mortgage obligations.

Note 10 – Securities financing activities
For a discussion of accounting policies relating to securities financing activities, seerefer to Note 1311 of JPMorgan Chase’s 20162017 Annual Report. For further information regarding securities borrowed and securities lending agreements for which the fair value option has been elected, see refer to Note 3. 3. For further information regarding assets pledged and collateral received in securities financing agreements, see refer to Note 20.21.
The table below summarizes the gross and net amounts of the Firm’s securities financing agreements as of September 30, 20172018 and December 31, 2016. 2017. When the Firm has obtained an appropriate legal opinion with respect to the master netting agreement with a counterparty and where other relevant netting criteria under U.S. GAAP are met, the Firm nets, on the Consolidated balance sheets,
the balances outstanding under its securities financing agreements with the same counterparty. In addition, the Firm exchanges securities and/or cash collateral with its counterparties; this collateral also reduces in the Firm’s view, the economic exposure withthe counterparty. Such collateral, along with securities financing balances that do not meet all these relevant netting criteria under U.S. GAAP, is presented as “Amounts not nettable on the Consolidated balance sheets,” and reduces the “Net amounts” presented below, if the Firm has an appropriate legal opinion with respect to the master netting agreement with the counterparty. Where a legal opinion has not been either sought or obtained, the securities financing balances are presented gross in the “Net amounts” below, and related collateral does not reduce the amounts presented.the Firm has an appropriate legal opinion with respect to the master netting agreement with the counterparty. Where a legal opinion has not been either sought or obtained, the securities financing balances are presented gross in the “Net amounts” below, and related collateral does not reduce the amounts presented.the counterparty. Such collateral, along with securities financing balances that do not meet all these relevant netting criteria under U.S. GAAP, is presented as “Amounts not nettable on the Consolidated balance sheets,” and reduces the “Net amounts” presented below, if the Firm has an appropriate legal opinion with respect to the master netting agreement with the counterparty. Where a legal opinion has not been either sought or obtained, the securities financing balances are presented gross in the “Net amounts” below, and related collateral does not reduce the amounts presented.
September 30, 2017September 30, 2018
(in millions)Gross amountsAmounts netted on the Consolidated balance sheets
Amounts presented on the Consolidated balance sheets(b)
Amounts not nettable on the Consolidated balance sheets(c)
Net
amounts(d)
Gross amountsAmounts netted on the Consolidated balance sheets
Amounts presented on the Consolidated balance sheets(b)
Amounts not nettable on the Consolidated balance sheets(c)
Net
amounts(d)
Assets      
Securities purchased under resale agreements$454,541
$(269,164)$185,377
$(175,359) $10,018
$521,732
$(304,110)$217,622
$(205,345) $12,277
Securities borrowed105,338
(3,658)101,680
(75,372) 26,308
143,644
(21,210)122,434
(89,771) 32,663
Liabilities      
Securities sold under repurchase agreements$425,670
$(269,164)$156,506
$(140,740) $15,766
$472,560
$(304,110)$168,450
$(154,335) $14,115
Securities loaned and other(a)
27,373
(3,658)23,715
(23,414) 301
38,720
(21,210)17,510
(17,146) 364
December 31, 2016December 31, 2017
(in millions)Gross amountsAmounts netted on the Consolidated balance sheets
Amounts presented on the Consolidated balance sheets(b)
Amounts not nettable on the Consolidated balance sheets(c)
Net
amounts(d)
Gross amountsAmounts netted on the Consolidated balance sheets
Amounts presented on the Consolidated balance sheets(b)
Amounts not nettable on the Consolidated balance sheets(c)
Net
amounts(d)
Assets      
Securities purchased under resale agreements$480,735
$(250,832)$229,903
$(222,413)
$7,490
$448,608
$(250,505)$198,103
$(188,502)
$9,601
Securities borrowed96,409
—
96,409
(66,822) 29,587
113,926
(8,814)105,112
(76,805) 28,307
Liabilities      
Securities sold under repurchase agreements$402,465
$(250,832)$151,633
$(133,300)
$18,333
$398,218
$(250,505)$147,713
$(129,178)
$18,535
Securities loaned and other(a)
22,451
—
22,451
(22,177) 274
27,228
(8,814)18,414
(18,151) 263
(a)Includes securities-for-securities lending transactions of $12.5$5.2 billion and $9.1$9.2 billion at September 30, 20172018 and December 31, 2016,2017, respectively, accounted for at fair value, where the Firm is acting as lender. These amounts are presented within other liabilities in the Consolidated balance sheets.
(b)Includes securities financing agreements accounted for at fair value. At September 30, 20172018 and December 31, 2016,2017, included securities purchased under resale agreements of $16.5$12.2 billion and $21.5$14.7 billion, respectively and securities sold under agreements to repurchase of $714 million$1.1 billion and $687$697 million, respectively. There were $3.1$4.5 billion and $3.0 billion of securities borrowed at September 30, 20172018 and there were no securities borrowed at December 31, 2016.2017, respectively. There were no securities loaned accounted for at fair value in either period.
(c)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 asset or liability with that counterparty.
(d)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 September 30, 20172018 and December 31, 2016,2017, included $7.2$6.4 billion and $4.8$7.5 billion, respectively, of securities purchased under resale agreements; $23.8$29.7 billion and $27.1$25.5 billion, respectively, of securities borrowed; $12.7$13.2 billion and $15.9$16.5 billion, respectively, of securities sold under agreements to repurchase; and $200$45 million and $90$29 million, respectively, of securities loaned and other.

The tables below present as of September 30, 2017,2018, and December 31, 2016 2017 the types of financial assets pledged in securities financing agreements and the remaining contractual maturity of the securities financing agreements.
Gross liability balanceGross liability balance
September 30, 2017 December 31, 2016September 30, 2018 December 31, 2017
(in millions)Securities sold under repurchase agreements
Securities loaned and other(a)
 Securities sold under repurchase agreements
Securities loaned and other(a)
Securities sold under repurchase agreements
Securities loaned and other(a)
 Securities sold under repurchase agreements
Securities loaned and other(a)
Mortgage-backed securities$7,903
$—
 $10,546
$—
   
U.S. government agencies25,116
—
 13,100
—
Residential - nonagency1,861
—
 2,972
—
Commercial - nonagency1,431
—
 1,594
—
U.S. Treasury and government agencies206,803
—
 199,030
—
236,939
14
 177,581
14
Obligations of U.S. states and municipalities1,282
—
 2,491
—
1,161
—
 1,557
—
Non-U.S. government debt175,554
3,234
 149,008
1,279
174,400
2,294
 170,196
2,485
Corporate debt securities16,562
174
 18,140
108
15,474
216
 14,231
287
Asset-backed securities3,290
—
 7,721
—
2,543
—
 3,508
—
Equity securities14,276
23,965
 15,529
21,064
13,635
36,196
 13,479
24,442
Total$425,670
$27,373
 $402,465
$22,451
$472,560
$38,720
 $398,218
$27,228
Remaining contractual maturity of the agreementsRemaining contractual maturity of the agreements
Overnight and continuous 
Greater than
90 days
 Overnight and continuous    
Greater than
90 days
 
September 30, 2017 (in millions)Up to 30 days30 – 90 daysTotal
September 30, 2018 (in millions)Overnight and continuous Up to 30 days 30 – 90 days
Greater than
90 days
Total
Total securities sold under repurchase agreements$181,071
$141,831
$57,732
$45,036
$425,670
 $166,754
 $46,511
$472,560
Total securities loaned and other(a)
20,992
1,107
1,676
3,598
27,373
29,415
 138
 1,805
7,362
38,720
Remaining contractual maturity of the agreementsRemaining contractual maturity of the agreements
Overnight and continuous 
Greater than
90 days
 Overnight and continuous    
Greater than
90 days
 
December 31, 2016 (in millions)Up to 30 days30 – 90 daysTotal
December 31, 2017 (in millions)Overnight and continuous Up to 30 days 30 – 90 days
Greater than
90 days
Total
Total securities sold under repurchase agreements$140,318
$157,860
$55,621
$48,666
$402,465
(b) 
$180,674
(b) 
$41,611
$398,218
Total securities loaned and other(a)
13,586
1,371
2,877
4,617
22,451
22,876
 375
 2,328
1,649
27,228
(a)Includes securities-for-securities lending transactions of $12.5$5.2 billion and $9.1$9.2 billion at September 30, 20172018 and December 31, 2016,2017, respectively, accounted for at fair value, where the Firm is acting as lender. These amounts are presented within other liabilities on the Consolidated balance sheets.
(b)The prior period amounts have been revised to conform with the current period presentation.
Transfers not qualifying for sale accounting
At September 30, 2017,2018, and December 31, 2016,2017, the Firm held $4.1$1.6 billion and $5.9$1.5 billion respectively, of financial assets for which the rights have been transferred to third parties; however, the transfers did not qualify as a sale in accordance with U.S. GAAP. These transfers have been recognized as collateralized financing transactions. The transferred assets are recorded in trading assets and loans, and the corresponding liabilities are recorded predominantly in other borrowed fundsshort-term borrowings on the Consolidated balance sheets.


Note 11 – Loans
Loan accounting framework
The accounting for a loan depends on management’s strategy for the loan, and on whether the loan was credit-impaired at the date of acquisition. The Firm accounts for loans based on the following categories:
Originated or purchased loans held-for-investment (i.e., “retained”), other than PCI loans
•
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
 
For a detailed discussion of loans, including accounting policies, seerefer to Note 1412 of JPMorgan Chase’s 20162017 Annual Report. SeeRefer to Note3 of this Form 10-Q for further information on the Firm’s elections of fair value accounting under the fair value option. SeeRefer to Note2 of this Form 10-Q for information on loans carried at fair value and classified as trading assets.


Loan portfolio
The Firm’s loan portfolio is divided into three portfolio segments, which are the same segments used by the Firm to determine the allowance for loan losses: Consumer, excluding credit card; Credit card; and Wholesale. Within each portfolio segment the Firm monitors and assesses the credit risk in the following classes of loans, based on the risk characteristics of each loan class.
Consumer, excluding
credit card(a)
 Credit card 
Wholesale(f)
Residential real estate – excluding PCI
• Residential mortgage(b)
• Home equity(b)
• Residential mortgage(c)
Other consumer loans(d)
• Auto(d)
• Consumer & Business Banking(d)(e)
• Student
Residential real estate – PCI
• Home equity
• Prime mortgage
• Subprime mortgage
• Option ARMs
 • Credit card loans 
• Commercial and industrial
• Real estate
• Financial institutions
• Government agencies
• Other(g)
(a)Includes loans held in CCB, prime mortgage and home equity loans held in AWM and prime mortgage loans held in Corporate.
(b)Includes seniorPredominantly includes prime (including option ARMs) and junior lien home equitysubprime loans.
(c)Predominantly includes prime (including option ARMs)Includes senior and subprimejunior lien home equity loans.
(d)Includes certain business banking and auto dealer risk-rated loans that apply the wholesale methodology 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 prime mortgage and home equity loans held in AWM and prime mortgage loans held in Corporate. Classes are internally defined and may not align with regulatory definitions.
(g)Includes loans to: individuals; SPEs;individuals (predominantly Wealth Management clients within AWM), SPEs, and private education and civic organizations. For more information on SPEs, seerefer to Note 1614 of JPMorgan Chase’s 20162017 Annual Report.
The following tables summarize the Firm’s loan balances by portfolio segment.
September 30, 2017Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
September 30, 2018Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
(in millions)Consumer, excluding credit card 
Credit card(a)
 Wholesale Total  
Retained
(b) 
$375,958
 $147,856
 $423,837
 $947,651
(b) 
Held-for-sale188
 113
 2,532
 2,833
 104
 25
 3,551
 3,680
 
At fair value—
 —
 1,746
 1,746
 —
 —
 2,987
 2,987
 
Total$369,601
 $141,313
 $402,847
 $913,761
 $376,062
 $147,881
 $430,375
 $954,318
 
                
December 31, 2016Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
December 31, 2017Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
(in millions)Consumer, excluding credit card 
Credit card(a)
 Wholesale Total  
Retained
(b) 
$372,553
 $149,387
 $402,898
 $924,838
(b) 
Held-for-sale238
 105
 2,285
 2,628
 128
 124
 3,099
 3,351
 
At fair value—
 —
 2,230
 2,230
 —
 —
 2,508
 2,508
 
Total$364,644
 $141,816
 $388,305
 $894,765
 $372,681
 $149,511
 $408,505
 $930,697
 
(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 loans for which the fair value option has been elected) are presented net of unearned income, unamortized discounts and premiums, and net deferred loan fees or costs. These amounts were not material as of September 30, 2017,2018, and December 31, 2016.2017.


The following table provides tables provide information about the carrying value of retained loans purchased, sold and reclassified to held-for-sale during the periods indicated. This table excludesReclassifications of loans recorded at fair value.to held-for sale are non-cash transactions.The Firm manages its exposure to credit risk on an ongoing basis. Selling loans is one way that the Firm reduces its credit exposures.Loans that were reclassified to held-for-sale and sold in a subsequent period are excluded from the sales line of this table.

 
2018 2017
Three months ended September 30,
(in millions)		 
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
Purchases 
$561
(a)(b) 
$—
$285
$846
 $711
(a)(b) 
$—
$479
$1,190
Sales 
1,789

—
4,197
5,986
 672
 —
3,342
4,014
Retained loans reclassified to held-for-sale 
—
 —
666
666
 —

—
367
367
              
   2018 2017
Nine months ended September 30,
(in millions)		  
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
Purchases  $2,164
(a)(b) 
$—
$1,915
$4,079
 $2,277
(a)(b) 
$—
$1,357
$3,634
Sales  4,661
 —
12,829
17,490
 2,025
 —
8,166
10,191
Retained loans reclassified to held-for-sale  36
 —
1,926
1,962
 6,340
(c) 
—
961
7,301


2017 2016
Three months ended September 30, (in millions)
Consumer, excluding credit card
Credit cardWholesaleTotal Consumer, excluding credit card Credit cardWholesaleTotal
Purchases
$711
(a)(b) 
$—
$479
$1,190
 $959
(a)(b) 
$—
$282
$1,241
Sales
672

—
3,342
4,014
 577
 —
2,637
3,214
Retained loans reclassified to held-for-sale
—
 —
367
367
 176

—
777
953
             
  2017 2016
Nine months ended September 30, (in millions) Consumer, excluding credit card Credit cardWholesaleTotal Consumer, excluding credit card Credit cardWholesaleTotal
Purchases $2,277
(a)(b) 
$—
$1,357
$3,634
 $3,048
(a)(b) 
$—
$975
$4,023
Sales 2,025
 —
8,166
10,191
 2,242
 —
6,383
8,625
Retained loans reclassified to held-for-sale 6,340
(c) 
—
961
7,301
 259
 —
1,393
1,652

(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 $5.6 billionand $6.9 billionand $6.7 billionfor the three months ended September 30, 20172018and 20162017, respectively, and $18.2$14.5 billion and $23.8$18.2 billion for the nine months ended September 30, 2018 and 2017, and 2016, respectively.
(c)Includes the Firm’s student loan portfolio which was transferred to held-for-salesold in the first quarter of 2017. For additional information see Note 23.
The following table provides information about gainsGains and losses on loan sales includingof loans
Gains and losses on sales of loans (including adjustments to record loans held-for-sale at the lower of cost or fair value adjustments, by portfolio segment.value) recognized in other income were not material to the Firm for the three and nine months ended September 30, 2018 and 2017. In addition, the sale of loans may also result in write downs, recoveries or changes in the allowance recognized in the provision for credit losses.
 Three months ended
September 30,		 Nine months ended September 30,
(in millions)20172016 20172016
Net gains/(losses) on sales of loans (including lower of cost or fair value adjustments)(a)
     
Consumer, excluding credit card(b)
$37
$51
 $(177)$168
Credit card(2)(2) (4)(6)
Wholesale11
17
 33
15
Total net gains on sales of loans (including lower of cost or fair value adjustments)$46
$66
 $(148)$177
(a)Excludes sales related to loans accounted for at fair value.
(b)Includes the Firm’s student loan portfolio, which was transferred to held-for-sale in the first quarter of 2017. For additional information see Note 23.
Consumer, excluding credit card loan portfolio
Consumer loans, excluding credit card loans, consist primarily of residential mortgages, home equity loans and lines of credit, auto loans and consumer and business banking loans, and student loans, with a focus on serving the prime consumer credit market. The portfolio also includes home equity loans secured by junior liens, prime mortgage loans with an interest-only payment period, and certain payment-option loans that may result in negative amortization.
The following table below provides information about retained consumer loans, excluding credit card, by class. In the first quarter of 2017, the Firm transferred thesold its student loan portfolio to held-for-sale. For additional information see Note 23.
portfolio.
(in millions)September 30,
2018
December 31,
2017
Residential real estate – excluding PCI  
Residential mortgage$231,361
$216,496
Home equity29,318
33,450
Other consumer loans  
Auto63,619
66,242
Consumer & Business Banking26,451
25,789
Residential real estate – PCI  
Home equity9,393
10,799
Prime mortgage4,931
6,479
Subprime mortgage2,072
2,609
Option ARMs8,813
10,689
Total retained loans$375,958
$372,553

(in millions)September 30,
2017
December 31,
2016
Residential real estate – excluding PCI  
Home equity$34,657
$39,063
Residential mortgage(a)
212,558
192,486
Other consumer loans  
Auto65,102
65,814
Consumer & Business Banking(a)
25,275
24,307
Student(a)
—
7,057
Residential real estate – PCI  
Home equity11,321
12,902
Prime mortgage6,747
7,602
Subprime mortgage2,691
2,941
Option ARMs11,062
12,234
Total retained loans$369,413
$364,406
(a)Certain loan portfolios have been reclassified. The prior period amounts have been revised to conform with the current period presentation.
For further information on consumer credit quality indicators, seerefer to Note 1412 of JPMorgan Chase’s 20162017 Annual Report.

Residential real estate – excluding PCI loans
The following table provides information by class for retained residential real estate – excluding retained PCI loans in the consumer, excluding credit card, portfolio segment.loans.
Residential real estate – excluding PCI loansResidential real estate – excluding PCI loans   Residential real estate – excluding PCI loans   
(in millions, except ratios)Home equity 
Residential mortgage(g)
 Total residential real estate – excluding PCIResidential mortgage Home equity Total residential real estate – excluding PCI
Sep 30,
2017
Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Loan delinquency(a)
          
Current$33,675
$37,941
 $205,496
$184,133
 $239,171
$222,074
$225,799
$208,713
 $28,554
$32,391
 $254,353
$241,104
30–149 days past due586
646
 3,460
3,828
 4,046
4,474
2,825
4,234
 470
671
 3,295
4,905
150 or more days past due396
476
  3,602
4,525
 3,998
5,001
2,737
3,549
  294
388
 3,031
3,937
Total retained loans$34,657
$39,063
 $212,558
$192,486
 $247,215
$231,549
$231,361
$216,496
 $29,318
$33,450
 $260,679
$249,946
% of 30+ days past due to total retained loans(b)
2.83%2.87% 0.61%0.75% 0.92%1.11%0.51%0.77% 2.61%3.17% 0.75%1.09%
90 or more days past due and government guaranteed(c)
$—
$—
 $3,877
$4,858
 $3,877
$4,858
$2,828
$4,172
 $—
$—
 $2,828
$4,172
Nonaccrual loans1,601
1,845
 2,095
2,256
 3,696
4,101
1,880
2,175
 1,382
1,610
 3,262
3,785
Current estimated LTV ratios(d)(e)
     

     

Greater than 125% and refreshed FICO scores:     

     

Equal to or greater than 660$12
$70
 $12
$30
 $24
$100
$28
$37
 $6
$10
 $34
$47
Less than 6604
15
 31
48
 35
63
30
19
 1
3
 31
22
101% to 125% and refreshed FICO scores:     

     

Equal to or greater than 660360
668
 47
135
 407
803
20
36
 138
296
 158
332
Less than 660117
221
 119
177
 236
398
60
88
 46
95
 106
183
80% to 100% and refreshed FICO scores:     

     

Equal to or greater than 6601,959
2,961
 4,357
4,026
 6,316
6,987
3,606
4,369
 1,059
1,676
 4,665
6,045
Less than 660635
945
 550
718
 1,185
1,663
314
483
 359
569
 673
1,052
Less than 80% and refreshed FICO scores:     

     

Equal to or greater than 66025,756
27,317
 190,749
169,579
 216,505
196,896
212,585
194,758
 22,851
25,262
 235,436
220,020
Less than 6603,896
4,380
 6,974
6,759
 10,870
11,139
6,734
6,952
 3,501
3,850
 10,235
10,802
No FICO/LTV available1,918
2,486
 1,444
1,650
 3,362
4,136
888
1,259
 1,357
1,689
 2,245
2,948
U.S. government-guaranteed—
—
 8,275
9,364
 8,275
9,364
7,096
8,495
 —
—
 7,096
8,495
Total retained loans$34,657
$39,063
 $212,558
$192,486
 $247,215
$231,549
$231,361
$216,496
 $29,318
$33,450
 $260,679
$249,946
Geographic region            
California$6,771
$7,644
 $67,329
$59,802
 $74,100
$67,446
$74,324
$68,855
 $5,852
$6,582
 $80,176
$75,437
New York7,148
7,978
 27,198
24,916
 34,346
32,894
29,146
27,473
 6,016
6,866
 35,162
34,339
Illinois2,615
2,947
 14,343
13,126
 16,958
16,073
15,242
14,501
 2,208
2,521
 17,450
17,022
Texas2,072
2,225
 12,209
10,772
 14,281
12,997
13,926
12,508
 1,843
2,021
 15,769
14,529
Florida1,899
2,133
 9,407
8,395
 11,306
10,528
10,624
9,598
 1,619
1,847
 12,243
11,445
New Jersey2,010
2,253
 7,073
6,374
 9,083
8,627
7,448
7,142
 1,702
1,957
 9,150
9,099
Washington8,057
6,962
 904
1,026
 8,961
7,988
Colorado603
677
 7,168
6,306
 7,771
6,983
8,131
7,335
 525
632
 8,656
7,967
Washington1,079
1,229
 6,668
5,451
 7,747
6,680
Massachusetts316
371
 6,265
5,834
 6,581
6,205
6,545
6,323
 246
295
 6,791
6,618
Arizona1,516
1,772
 4,039
3,595
 5,555
5,367
4,519
4,109
 1,211
1,439
 5,730
5,548
All other(f)
8,628
9,834
  50,859
47,915
 59,487
57,749
53,399
51,690
  7,192
8,264
 60,591
59,954
Total retained loans$34,657
$39,063
 $212,558
$192,486
 $247,215
$231,549
$231,361
$216,496
 $29,318
$33,450
 $260,679
$249,946
(a)Individual delinquency classifications include mortgage loans insured by U.S. government agencies as follows: current included $2.5$2.7 billion and $2.5$2.4 billion; 30–149 days past due included $2.8$2.2 billion and $3.1$3.2 billion; and 150 or more days past due included $3.0$2.2 billion and $3.8$2.9 billion at September 30, 2017,2018, and December 31, 2016,2017, respectively.
(b)At September 30, 20172018, and December 31, 2016,2017, residential mortgage loans excluded mortgage loans insured by U.S. government agencies of $5.8$4.4 billion and $6.9$6.1 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
(c)These balances, which are 90 days or more past due, were 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 September 30, 2017,2018, and December 31, 2016,2017, these balances included $1.6$1.3 billion and $2.2$1.5 billion, 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 no loans that were not guaranteed by U.S. government agencies that are 90 or more days past due and still accruing interest at September 30, 2017,2018, and December 31, 2016.2017.
(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)At September 30, 2017,2018, and December 31, 2016,2017, included mortgage loans insured by U.S. government agencies of $8.3$7.1 billion and $9.4$8.5 billion, respectively.
(g)Certain loan portfolios have been reclassified. The prior period These amounts have been revised to conform withexcluded from the current period presentation.geographic regions presented based upon the government guarantee.


Approximately 37% of the home equity portfolio are senior lien loans; the remaining balance are junior lien HELOANs or HELOCs. The following table represents the Firm’s delinquency statistics for junior lien home equity loans and lines of credit as of September 30, 2017,2018, and December 31, 2016.2017.
Total loans Total 30+ day delinquency rateTotal loans Total 30+ day delinquency rate
(in millions, except ratios)Sep 30,
2017
Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
HELOCs:(a)
      
Within the revolving period(b)
$7,058
$10,304
 0.62%1.27%$5,482
$6,363
 0.22%0.50%
Beyond the revolving period13,613
13,272
 3.11
3.05
11,982
13,532
 2.78
3.56
HELOANs1,477
1,861
 2.91
2.85
1,104
1,371
 2.99
3.50
Total$22,148
$25,437
 2.30%2.32%$18,568
$21,266
 2.04%2.64%
(a)These HELOCs are predominantly revolving loans for a 10-year period, after which time the HELOC converts to a loan with a 20-year amortization period, but also include HELOCs that allow interest-only payments beyond the revolving period.
(b)The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are experiencing financial difficulty.
 
HELOCs beyond the revolving period and HELOANs have higher delinquency rates than HELOCs within the revolving period.That is primarily because the fully-amortizing payment that is generally required for thoseproducts is higher than the minimum payment optionsavailable for HELOCs within the revolving period. The higher delinquency rates associated with amortizing HELOCs and HELOANs are factored into the Firm’s allowance for loan losses.


Impaired loans
The table below sets forth information about the Firm’s residential real estate impaired loans, excluding PCI loans. These loans are considered to be impaired as they have been modified in a TDR. All impaired loans are evaluated for an asset-specific allowance as described in Note 1513 of JPMorgan Chase’s 20162017 Annual Report.

(in millions)		Home equity Residential mortgage Total residential real estate – excluding PCIResidential mortgage Home equity Total residential real estate – excluding PCI
Sep 30,
2017
Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Impaired loans          
With an allowance$1,224
$1,266
 $4,418
$4,689
 $5,642
$5,955
$3,558
$4,407
 $1,177
$1,236
 $4,735
$5,643
Without an allowance(a)
910
998
 1,249
1,343
 2,159
2,341
1,164
1,213
 879
882
 2,043
2,095
Total impaired loans(b)(c)
$2,134
$2,264
 $5,667
$6,032
 $7,801
$8,296
$4,722
$5,620
 $2,056
$2,118
 $6,778
$7,738
Allowance for loan losses related to impaired loans$110
$121
 $66
$68
 $176
$189
$97
$62
 $42
$111
 $139
$173
Unpaid principal balance of impaired loans(d)
3,754
3,847
 7,842
8,285
 11,596
12,132
6,439
7,741
 3,537
3,701
 9,976
11,442
Impaired loans on nonaccrual status(e)
1,021
1,116
 1,656
1,755
 2,677
2,871
1,536
1,743
 993
1,032
 2,529
2,775
(a)Represents collateral-dependent residential real estate loans that are charged off to the fair value of the underlying collateral less cost 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 September 30, 2017,2018, Chapter 7 residential real estate loans included approximately 12%13% of residential mortgages and 9% of home equity and 14% of residential mortgages that were 30 days or more past due.
(b)At September 30, 2017,2018, and December 31, 2016, $3.72017, $4.0 billion and $3.4$3.8 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 residential real estate impaired loans, excluding PCI loans, are in the U.S.
(d)Represents the contractual amount of principal owed at September 30, 2017,2018, and December 31, 2016.2017. 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 ofAt September 30, 20172018 and December 31, 2016,2017, nonaccrual loans included $2.2$2.0 billion and $2.3$2.2 billion, respectively, of TDRs for which the borrowers were less than 90 days past due. For additional information about loans modified in a TDR that are on nonaccrual status refer to the Loan accounting framework in Note 1412 of JPMorgan Chase’s 20162017 Annual Report.

The following tables present average impaired loans and the related interest income reported by the Firm.
Three months ended September 30,
(in millions)
Average impaired loans 
Interest income on
impaired loans(a)
 
Interest income on impaired
loans on a cash basis(a)
Average impaired loans 
Interest income on
impaired loans(a)
 
Interest income on impaired
loans on a cash basis(a)
2017
2016
 2017
2016
 2017
2016
2018
2017
 2018
2017
 2018
2017
Residential mortgage$4,872
$5,743
 $61
$71
 $19
$19
Home equity$2,150
$2,276
 $32
$31
 $20
$20
2,065
2,150
 33
32
 21
20
Residential mortgage5,743
6,305
 71
76
 19
19
Total residential real estate – excluding PCI$7,893
$8,581
 $103
$107
 $39
$39
$6,937
$7,893
 $94
$103
 $40
$39
          
Nine months ended September 30,
(in millions)
Average impaired loans 
Interest income on
impaired loans(a)
 
Interest income on impaired
loans on a cash basis(a)
2017
2016
 2017
2016
 2017
2016
Nine months ended September 30, 2018
(in millions)		Average impaired loans 
Interest income on
impaired loans(a)
 
Interest income on impaired
loans on a cash basis(a)
2018
2017
 2018
2017
 2018
2017
Residential mortgage$5,242
$5,861
 $197
$217
 $58
$57
Home equity$2,213
$2,325
 $95
$94
 $60
$61
2,092
2,213
 98
95
 63
60
Residential mortgage5,861
6,457
 217
231
 57
58
Total residential real estate – excluding PCI$8,074
$8,782
 $312
$325
 $117
$119
$7,334
$8,074
 $295
$312
 $121
$117
(a)Generally, interest income on loans modified in TDRs is recognized on a cash basis until such time as the borrower has made a minimum of six payments under the new terms, unless the loan is deemed to be collateral-dependent.


Loan modifications
Modifications of residential real estate loans, excluding PCI loans, are generally accounted for and reported as TDRs. There were no additional commitments to lend to borrowers whose residential real estate loans, excluding PCI loans, have been modified in TDRs.
 
The following table presents new TDRs reported by the Firm.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017
2016
 2017
2016
2018
2017
 2018
2017
Residential mortgage$67
$57
 $314
$225
Home equity$82
$62
 $232
$258
55
82
 241
232
Residential mortgage57
72
 225
194
Total residential real estate – excluding PCI$139
$134
 $457
$452
$122
$139
 $555
$457



Nature and extent of modifications
The U.S. Treasury’s Making Home Affordable programs, as well as the Firm’s proprietary modification programs, generally provide various concessions to financially troubled borrowers including, but not limited to, interest rate reductions, term or payment extensions and deferral of principal and/or interest payments that would otherwise have been required under the terms of the original agreement.
The following tables provide information about how residential real estate loans, excluding PCI loans, were modified under the Firm’sloss mitigation programs described above during the periods presented. These tables exclude Chapter 7 loans where the sole concession granted is the discharge of debt.
Three months ended September 30, 
Total residential
real estate –
excluding PCI
 
Total residential
real estate –
excluding PCI
Home equity Residential mortgage Residential mortgage Home equity 
2017
2016
 2017
2016
 2017
2016
2018
2017
 2018
2017
 2018
2017
Number of loans approved for a trial modification536
351
 206
386
 742
737
513
206
 586
536
 1,099
742
Number of loans permanently modified1,228
1,163
 510
849
 1,738
2,012
719
510
 939
1,228
 1,658
1,738
Concession granted:(a)
          
Interest rate reduction60%83% 64%81% 61%82%58%64% 77%60% 69%61%
Term or payment extension66
76
 80
86
 70
81
83
80
 88
66
 86
70
Principal and/or interest deferred8
21
 22
15
 12
18
30
22
 11
8
 19
12
Principal forgiveness19
6
 17
25
 19
14
9
17
 7
19
 8
19
Other(b)
32
6
 15
27
 27
15
36
15
 58
32
 49
27
          
Nine months ended September 30, Total residential
real estate –
excluding PCI		 Total residential
real estate –
excluding PCI
Home equity Residential mortgage Residential mortgage Home equity 
2017
2016
 2017
2016
 2017
2016
2018
2017
 2018
2017
 2018
2017
Number of loans approved for a trial modification1,844
2,088
 1,052
1,521
 2,896
3,609
1,789
1,052
 1,895
1,844
 3,684
2,896
Number of loans permanently modified4,028
3,804
 1,952
2,560
 5,980
6,364
2,374
1,952
 4,005
4,028
 6,379
5,980
Concession granted:(a)
          
Interest rate reduction68%74% 73%75% 69%75%36%73% 57%68% 49%69%
Term or payment extension78
84
 84
89
 80
86
49
84
 62
78
 57
80
Principal and/or interest deferred12
12
 16
18
 13
18
47
16
 22
12
 31
13
Principal forgiveness12
9
 18
27
 14
16
7
18
 7
12
 7
14
Other(b)
19
1
 24
14
 21
11
40
24
 58
19
 52
21
(a)Represents concessions granted in permanent modifications as a percentage of the number of loans permanently modified. The sum of the percentages exceeds 100% because predominantly all of the modifications include more than one type of concession. A significant portion ofConcessions offered on trial modifications include interest rate reductions and/or term or payment extensions.are generally consistent with those granted on permanent modifications.
(b)Predominantly representsIncludes variable interest rate to fixed interest rate modifications.modifications for the three and nine months ended September 30, 2018 and 2017. Also includes forbearances that meet the definition of a TDR for the three and nine months ended September 30, 2018. Forbearances suspend or reduce monthly payments for a specific period of time to address a temporary hardship.

Financial effects of modifications and redefaults
The following tables provide information about the financial effects of the various concessions granted in modifications of residential real estate loans, excluding PCI loans, under the loss mitigation programs described above and about redefaults of certain loans modified in TDRs for the periods presented. Because the specific types and amounts of concessions offered to borrowers frequently change between the trial modification and the permanent modification, theThe following tables present only the financial effects of permanent modifications and does not include temporary concessions offered through trial modifications. These tables also exclude Chapter 7 loans where the sole concession granted is the discharge of debt.
Three months ended September 30,
(in millions, except weighted-average data)
Home equity Residential mortgage Total residential real estate – excluding PCIResidential mortgage Home equity Total residential real estate – excluding PCI
20172016 20172016 201720162018
2017
 2018
2017
 2018
2017
Weighted-average interest rate of loans with interest rate reductions – before TDR5.26%4.99% 4.92%5.76% 5.06%5.47%6.13%4.92% 5.69%5.26% 5.89%5.06%
Weighted-average interest rate of loans with interest rate reductions – after TDR2.96
2.28
 2.89
2.99
 2.92
2.73
4.23
2.89
 3.83
2.96
 4.01
2.92
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR18
19
 24
24
 22
22
22
24
 18
18
 21
22
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR38
38
 38
38
 38
38
39
38
 39
38
 39
38
Charge-offs recognized upon permanent modification$—
$

 $

$1
 $

$1
$—
$—
 $—
$—
 $—
$—
Principal deferred1
6
 3
7
 4
13
7
3
 2
1
 9
4
Principal forgiven4
1
 5
12
 9
13
3
5
 1
4
 4
9
Balance of loans that redefaulted within one year of permanent modification(a)
$17
$13
 $32
$29
 $49
$42
$27
$32
 $19
$17
 $46
$49
          
Nine months ended September 30,
(in millions, except weighted-average)		Home equity Residential mortgage Total residential real estate – excluding PCIResidential mortgage Home equity Total residential real estate – excluding PCI
20172016 20172016 201720162018
2017
 2018
2017
 2018
2017
Weighted-average interest rate of loans with interest rate reductions – before TDR4.92%5.08% 5.16%5.66% 5.06%5.43%5.45%5.16% 5.34%4.92% 5.39%5.06%
Weighted-average interest rate of loans with interest rate reductions – after TDR2.55
2.40
 2.97
2.94
 2.79
2.73
3.64
2.97
 3.39
2.55
 3.49
2.79
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR22
18
 24
25
 23
22
24
24
 18
22
 22
23
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR39
38
 38
38
 38
38
38
38
 39
39
 38
38
Charge-offs recognized upon permanent modification$1
$1
 $1
$3
 $2
$4
$—
$1
 $1
$1
 $1
$2
Principal deferred8
18
 10
26
 18
44
17
10
 7
8
 24
18
Principal forgiven9
5
 16
37
 25
42
9
16
 5
9
 14
25
Balance of loans that redefaulted within one year of permanent modification(a)
$36
$31
 $86
$72
 $122
$103
$69
$86
 $49
$36
 $118
$122
(a)Represents loans permanently modified in TDRs that experienced a payment default in the periods presented, and for which the payment default occurred within 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 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 12 months may not be representative of ultimate redefault levels.


At September 30, 2017, 2018, the weighted-average estimated remaining lives of residential real estate loans, excluding PCI loans, permanently modified in TDRs were 10 yearsfor residential mortgage and 9 years for home equity and 14 years for residential mortgage.equity. The estimated remaining lives of these loans reflect estimated prepayments, both voluntary and involuntary (i.e., foreclosures and other forced liquidations).
 


Active and suspended foreclosure
At September 30, 2017,2018, and December 31, 2016,2017, the Firm had non-PCI residential real estate loans, excluding those insured by U.S. government agencies, with a carrying value of $836 $719 million and $932$787 million, respectively, that were not included in REO, but were in the process of active or suspended foreclosure.

Other consumer loans
The table below provides information for other consumer retained loan classes, including auto and business banking loans. This table excludes student loans as a result of the transfer of the student loan portfolio to held-for-sale in the first quarter of 2017 and its subsequent sale in the second quarter of 2017.
(in millions, except ratios)Auto 
Consumer & Business Banking(c)
Auto 
Consumer &
Business Banking
 Total other consumer
Sep 30, 2017
 Dec 31, 2016
 Sep 30, 2017
 Dec 31, 2016
Sep 30, 2018
Dec 31, 2017
 Sep 30, 2018
Dec 31, 2017
 Sep 30, 2018
Dec 31, 2017
Loan delinquency            
Current$64,496
 $65,029
 $24,934
 $23,920
$63,095
$65,651
 $26,170
$25,454
 $89,265
$91,105
30–119 days past due606
 773
 204
 247
517
584
 183
213
 700
797
120 or more days past due—
 12
 137
 140
7
7
 98
122
 105
129
Total retained loans$65,102
 $65,814
 $25,275
 $24,307
$63,619
$66,242
 $26,451
$25,789
 $90,070
$92,031
% of 30+ days past due to total retained loans0.93% 1.19% 1.35% 1.59%0.82%0.89% 1.06%1.30% 0.89%1.01%
Nonaccrual loans(a)
188
 214
 274
 287
137
141
 237
283
 374
424
Geographic region            
California$8,355
 $7,975
 $4,829
 $4,426
$8,382
$8,445
 $5,375
$5,032
 $13,757
$13,477
Texas6,754
 7,041
 2,873
 2,954
6,497
7,013
 3,002
2,916
 9,499
9,929
New York3,919
 4,078
 4,115
 3,979
3,843
4,023
 4,218
4,195
 8,061
8,218
Illinois3,945
 3,984
 1,865
 1,758
3,667
3,916
 2,045
2,017
 5,712
5,933
Florida3,319
 3,374
 1,355
 1,195
3,332
3,350
 1,484
1,424
 4,816
4,774
Arizona2,061
2,221
 1,451
1,383
 3,512
3,604
Ohio2,077
 2,194
 1,410
 1,402
1,987
2,105
 1,346
1,380
 3,333
3,485
Arizona2,129
 2,209
 1,333
 1,307
New Jersey1,990
2,044
 738
721
 2,728
2,765
Michigan1,411
 1,567
 1,349
 1,343
1,378
1,418
 1,332
1,357
 2,710
2,775
New Jersey2,037
 2,031
 704
 623
Louisiana1,672
 1,814
 872
 979
1,570
1,656
 860
849
 2,430
2,505
All other29,484
 29,547
 4,570
 4,341
28,912
30,051
 4,600
4,515
 33,512
34,566
Total retained loans$65,102
 $65,814
 $25,275
 $24,307
$63,619
$66,242
 $26,451
$25,789
 $90,070
$92,031
Loans by risk ratings(b)
            
Noncriticized$14,136
 $13,899
 $17,640
 $16,858
$14,193
$15,604
 $18,644
$17,938
 $32,837
$33,542
Criticized performing125
 201
 803
 816
337
93
 760
791
 1,097
884
Criticized nonaccrual48
 94
 207
 217
3
9
 195
213
 198
222
(a)There were no loans that were 90 or more days past due and still accruing interest at September 30, 2017,2018, and December 31, 2016.2017.
(b)For risk-rated business banking and auto loans, the primary credit quality indicator is the risk rating of the loan, including whether the loans are considered to be criticized and/or nonaccrual.
(c)Certain loan portfolios have been reclassified. The prior period amounts have been revised to conform with the current period presentation.



Other consumer impaired loans and loan
modifications
The table below sets forth information about the Firm’s other consumer impaired loans, including risk-rated business banking and auto loans that have been placed on nonaccrual status, and loans that have been modified in TDRs.
(in millions)September 30,
2017
 December 31,
2016
September 30,
2018
 December 31,
2017
Impaired loans      
With an allowance$317
 $614
$227
 $272
Without an allowance(a)
29
 30
41
 26
Total impaired loans(b)(c)
$346
 $644
$268
 $298
Allowance for loan losses related to impaired loans$95
 $119
$65
 $73
Unpaid principal balance of impaired loans(d)
439
 753
372
 402
Impaired loans on nonaccrual status311
 508
244
 268
(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 $366$271 million and $683$366 million for the three months ended September 30, 20172018 and 2016,2017, respectively, and $459$281 million and $626$459 million for the nine months ended September 30, 20172018 and 2016,2017, respectively. The related interest income on impaired loans, including those on a cash basis, was not material for the three and nine months ended September 30, 20172018 and 2016.2017.
(d)Represents the contractual amount of principal owed at September 30, 2017,2018, and December 31, 2016.2017. 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.
 
Loan modifications
Certain other consumer loan modifications are considered to be TDRs as they provide various concessions to borrowers who are experiencing financial difficulty. All of these TDRs are reported as impaired loans in the table above. Seeloans. Refer to Note 1412 of JPMorgan Chase’s 20162017 Annual Report for further information on other consumer loans modified in TDRs.
The following table provides information about the Firm’s At September 30, 2018 and December 31, 2017, other consumer loans modified in TDRs. NewTDRs were $90 million and $102 million, respectively. The impact of these modifications, as well as new TDRs, were not material to the Firm for the three and nine months ended September 30, 2018 and 2017. Additional commitments to lend to borrowers whose loans have been modified in TDRs as of September 30, 2018 and December 31, 2017 were not material. TDRs on nonaccrual status were $66 million and 2016.$72 million at September 30, 2018 and December 31, 2017, respectively.
(in millions)September 30,
2017
 December 31,
2016
Loans modified in TDRs(a)(b)
$115
 $362
TDRs on nonaccrual status80
 226
(a)The impact of these modifications were not material to the Firm for the three and nine months ended September 30, 2017 and 2016.
(b)Additional commitments to lend to borrowers whose loans have been modified in TDRs as of September 30, 2017, and December 31, 2016, were immaterial.

Purchased credit-impaired loans
For a detailed discussion of PCI loans, including the related accounting policies, seerefer to Note 1412 of JPMorgan Chase’s 20162017 Annual Report.
Residential real estate – PCI loans
The table below sets forth information about the Firm’s consumer, excluding credit card, PCI loans.

(in millions, except ratios)		Home equity
Prime mortgage
Subprime mortgage
Option ARMs
Total PCIHome equity
Prime mortgage
Subprime mortgage
Option ARMs
Total PCI
Sep 30,
2017
Dec 31,
2016

Sep 30,
2017
Dec 31,
2016

Sep 30,
2017
Dec 31,
2016

Sep 30,
2017
Dec 31,
2016

Sep 30,
2017
Dec 31,
2016
Sep 30,
2018
Dec 31,
2017

Sep 30,
2018
Dec 31,
2017

Sep 30,
2018
Dec 31,
2017

Sep 30,
2018
Dec 31,
2017

Sep 30,
2018
Dec 31,
2017
Carrying value(a)
$11,321
$12,902

$6,747
$7,602

$2,691
$2,941

$11,062
$12,234

$31,821
$35,679
$9,393
$10,799

$4,931
$6,479

$2,072
$2,609

$8,813
$10,689

$25,209
$30,576
Related allowance for loan losses(b)
1,133
1,433

883
829

150
—

79
49

2,245
2,311
Loan delinquency (based on unpaid principal balance)Loan delinquency (based on unpaid principal balance)



















Loan delinquency (based on unpaid principal balance)



















Current$10,860
$12,423

$6,111
$6,840

$2,798
$3,005

$10,086
$11,074

$29,855
$33,342
$9,047
$10,272

$4,429
$5,839

$2,152
$2,640

$7,904
$9,662

$23,532
$28,413
30–149 days past due289
291

311
336

316
361

468
555

1,384
1,543
257
356

269
336

297
381

427
547

1,250
1,620
150 or more days past due408
478

349
451

182
240

739
917

1,678
2,086
263
392

257
327

143
176

526
689

1,189
1,584
Total loans$11,557
$13,192

$6,771
$7,627

$3,296
$3,606

$11,293
$12,546

$32,917
$36,971
$9,567
$11,020

$4,955
$6,502

$2,592
$3,197

$8,857
$10,898

$25,971
$31,617
% of 30+ days past due to total loans6.03%5.83%
9.75%10.32%
15.11%16.67%
10.69%11.73%
9.30%9.82%5.44%6.79%
10.62%10.20%
16.98%17.42%
10.76%11.34%
9.39%10.13%
Current estimated LTV ratios (based on unpaid principal balance)(c)(d)

















Current estimated LTV ratios (based on unpaid principal balance)(b)(c)
Current estimated LTV ratios (based on unpaid principal balance)(b)(c)

















Greater than 125% and refreshed FICO scores:















































Equal to or greater than 660$38
$69

$4
$6

$5
$7

$6
$12

$53
$94
$17
$33

$1
$4

$—
$2

$3
$6

$21
$45
Less than 66022
39

17
17

23
31

12
18

74
105
15
21

10
16

12
20

8
9

45
66
101% to 125% and refreshed FICO scores:















































Equal to or greater than 660331
555

25
52

24
39

53
83

433
729
153
274

7
16

8
20

24
43

192
353
Less than 660163
256

55
84

88
135

90
144

396
619
73
132

24
42

38
75

46
71

181
320
80% to 100% and refreshed FICO scores:















































Equal to or greater than 6601,373
1,860

276
442

140
214

361
558

2,150
3,074
846
1,195

92
221

62
119

145
316

1,145
1,851
Less than 660618
804

267
381

341
439

445
609

1,671
2,233
394
559

132
230

192
309

220
371

938
1,469
Lower than 80% and refreshed FICO scores:















































Equal to or greater than 6606,305
6,676

3,624
3,967

910
919

6,253
6,754

17,092
18,316
5,627
6,134

2,791
3,551

753
895

5,235
6,113

14,406
16,693
Less than 6602,086
2,183

2,153
2,287

1,609
1,645

3,553
3,783

9,401
9,898
1,940
2,095

1,649
2,103

1,403
1,608

2,792
3,499

7,784
9,305
No FICO/LTV available621
750

350
391

156
177

520
585

1,647
1,903
502
577

249
319

124
149

384
470

1,259
1,515
Total unpaid principal balance$11,557
$13,192

$6,771
$7,627

$3,296
$3,606

$11,293
$12,546

$32,917
$36,971
$9,567
$11,020

$4,955
$6,502

$2,592
$3,197

$8,857
$10,898

$25,971
$31,617
Geographic region (based on unpaid principal balance)Geographic region (based on unpaid principal balance)



















Geographic region (based on unpaid principal balance)



















California$6,890
$7,899

$3,860
$4,396

$821
$899

$6,402
$7,128

$17,973
$20,322
$5,678
$6,555

$2,706
$3,716

$627
$797

$4,966
$6,225

$13,977
$17,293
Florida1,178
1,306

447
501

305
332

939
1,026

2,869
3,165
1,014
1,137

351
428

249
296

753
878

2,367
2,739
New York630
697

474
515

337
363

642
711

2,083
2,286
543
607

383
457

282
330

538
628

1,746
2,022
Washington565
673

141
167

62
68

248
290

1,016
1,198
442
532

103
135

46
61

185
238

776
966
Illinois242
273

164
200

131
161

211
249

748
883
New Jersey251
280

190
210

115
125

363
401

919
1,016
217
242

145
178

94
110

283
336

739
866
Illinois282
314

208
226

165
178

263
282

918
1,000
Massachusetts82
94

155
173

101
110

312
346

650
723
67
79

118
149

78
98

252
307

515
633
Maryland59
64

134
144

135
145

239
267

567
620
51
57

104
129

106
132

188
232

449
550
Virginia56
66

94
123

39
51

234
280

423
520
Arizona213
241

110
124

61
68

160
181

544
614
175
203

70
106

45
60

121
156

411
525
Virginia68
77

127
142

52
56

288
314

535
589
All other1,339
1,547

925
1,029

1,142
1,262

1,437
1,600

4,843
5,438
1,082
1,269

717
881

895
1,101

1,126
1,369

3,820
4,620
Total unpaid principal balance$11,557
$13,192

$6,771
$7,627

$3,296
$3,606

$11,293
$12,546

$32,917
$36,971
$9,567
$11,020

$4,955
$6,502

$2,592
$3,197

$8,857
$10,898

$25,971
$31,617
(a)Carrying value includes the effect of fair value adjustments that were applied to the consumer PCI portfolio at the date of acquisition.
(b)Management concluded as part of the Firm’s regular assessment of the PCI loan pools that it was probable that higher expected credit losses would result in a decrease in expected cash flows. As a result, an allowance for loan losses for impairment of these pools has been recognized.
(c)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.
(d)(c)Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.

Approximately 25% of the PCI home equity portfolio are senior lien loans; the remaining balance are junior lien HELOANs or HELOCs.The following table sets forth represents the Firm’s delinquency statistics for PCI junior lien home equity loans and lines of credit based on the unpaid principal balance as of September 30, 2017,2018, and December 31, 2016.2017.
Total loans Total 30+ day delinquency rateTotal loans Total 30+ day delinquency rate
(in millions, except ratios)Sep 30,
2017
Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
HELOCs:(a)
      
Within the revolving period(b)
$283
$2,126
 2.83%3.67%$6
$51
 —%1.96%
Beyond the revolving period(c)
8,051
7,452
 4.10
4.03
6,837
7,875
 3.79
4.63
HELOANs384
465
 4.69
5.38
296
360
 3.38
5.28
Total$8,718
$10,043
 4.08%4.01%$7,139
$8,286
 3.77%4.65%
(a)In general, these HELOCs are revolving loans for a 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.
(b)Substantially all undrawn HELOCs within the revolving period have been closed.
(c)Includes loans modified into fixed rate amortizing loans.

The table below sets forth the accretable yield activity for the Firm’s PCI consumer loans for the three and nine months endedSeptember 30, 2018 and 2017, and 2016, and represents the Firm’s estimate of gross interest income expected to be earned over the remaining life of the PCI loan portfolios. The table excludes the cost to fund the PCI portfolios, and therefore the accretable yield does not represent net interest income expected to be earned on these portfolios.
Total PCITotal PCI
(in millions, except ratios)Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
20172016 2017201620182017 20182017
Beginning balance$12,639
$12,301
 $11,768
$13,491
$8,722
$12,639
 $11,159
$11,768
Accretion into interest income(345)(382) (1,061)(1,184)(303)(345) (958)(1,061)
Changes in interest rates on variable-rate loans51
42
 218
143
37
51
 (231)218
Other changes in expected cash flows(a)
(1,333)291
 87
(198)46
(1,333) (1,468)87
Balance at September 30$11,012
$12,252
 $11,012
$12,252
$8,502
$11,012
 $8,502
$11,012
Accretable yield percentage4.54%4.33% 4.48%4.35%4.95%4.54% 4.88%4.48%
(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.
Active and suspended foreclosure
At September 30, 2017,2018, and December 31, 2016,2017, the Firm had PCI residential real estate loans with an unpaid principal balance of $1.4 $1.1 billion and $1.7$1.3 billion, respectively,that were not included in REO, but were in the process of active or suspended foreclosure.




 
Credit card loan portfolio
For further information on the credit card loan portfolio, including credit quality indicators, seerefer to Note 1412 of JPMorgan Chase’s 20162017 Annual Report.
The table below sets forth information about the Firm’s credit card loans.
(in millions, except ratios)September 30,
2018
December 31,
2017
Loan delinquency  
Current and less than 30 days
past due and still accruing
$145,271
$146,704
30–89 days past due and still accruing1,323
1,305
90 or more days past due and still accruing1,262
1,378
Total retained credit card loans$147,856
$149,387
Loan delinquency ratios  
% of 30+ days past due to total retained loans1.75%1.80%
% of 90+ days past due to total retained loans0.85
0.92
Credit card loans by geographic region  
California$22,166
$22,245
Texas14,171
14,200
New York12,908
13,021
Florida9,064
9,138
Illinois8,482
8,585
New Jersey6,345
6,506
Ohio4,803
4,997
Pennsylvania4,677
4,883
Colorado4,090
4,006
Michigan3,710
3,826
All other57,440
57,980
Total retained credit card loans$147,856
$149,387
Percentage of portfolio based on carrying value with estimated refreshed FICO scores  
Equal to or greater than 66083.7%84.0%
Less than 66014.9
14.6
No FICO available1.4
1.4

(in millions, except ratios)September 30,
2017
December 31,
2016
Loan delinquency  
Current and less than 30 days
past due and still accruing
$138,716
$139,434
30–89 days past due and still accruing1,269
1,134
90 or more days past due and still accruing1,215
1,143
Total retained credit card loans$141,200
$141,711
Loan delinquency ratios  
% of 30+ days past due to total retained loans1.76%1.61%
% of 90+ days past due to total retained loans0.86
0.81
Credit card loans by geographic region  
California$20,839
$20,571
Texas13,376
13,220
New York12,468
12,249
Florida8,589
8,585
Illinois8,155
8,189
New Jersey6,185
6,271
Ohio4,732
4,906
Pennsylvania4,612
4,787
Colorado3,792
3,699
Michigan3,648
3,741
All other54,804
55,493
Total retained credit card loans$141,200
$141,711
Percentage of portfolio based on carrying value with estimated refreshed FICO scores  
Equal to or greater than 66084.1%84.4%
Less than 66015.0
14.2
No FICO available0.9
1.4





Credit card impaired loans and loan modifications
For a detailed discussion of impaired credit card loans, including credit card loan modifications, seerefer to Note 1412 of JPMorgan Chase’s 20162017 Annual Report.
The table below sets forth information about the Firm’s impaired credit card loans. All of these loans are considered to be impaired as they have been modified in TDRs.
(in millions)September 30,
2017
December 31,
2016
September 30,
2018
December 31,
2017
Impaired credit card loans with an allowance(a)(b)
  
Credit card loans with modified payment terms(c)
$1,080
$1,098
$1,228
$1,135
Modified credit card loans that have reverted to pre-modification payment terms(d)
126
142
56
80
Total impaired credit card loans(e)
$1,206
$1,240
$1,284
$1,215
Allowance for loan losses related to impaired credit card loans$376
$358
$421
$383
(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)Represents credit card loans outstanding to borrowers enrolled in a credit card modification program as of the date presented.
(d)Represents credit card loans that were modified in TDRs but that have subsequently reverted back to the loans’ pre-modification payment terms.
At September 30, 2017,2018, and December 31, 2016, $872017, $26 million and $94$43 million, respectively, of loans have reverted back to the pre-modification payment terms of the loans due to noncompliance with the terms of the modified loans. The remaining $39$30 million and $48$37 million at September 30, 2017,2018, and December 31, 2016,2017, respectively, of these loans are to borrowers who have successfully completed a short-term modification program. The Firm continues to report these loans as TDRs since the borrowers’ credit lines remain closed.
(e)Predominantly all impaired credit card loans are in the U.S.
The following table presents average balances of impaired credit card loans and interest income recognized on those loans.
 Three months ended September 30, Nine months ended September 30,
(in millions)2018
2017
 2018
2017
Average impaired credit card loans$1,267
$1,205
 $1,245
$1,215
Interest income on impaired credit card loans17
15
 48
44
 Three months ended September 30, Nine months ended September 30,
(in millions)2017
2016
 2017
2016
Average impaired credit card loans$1,205
$1,283
 $1,215
$1,349
Interest income on impaired credit card loans15
15
 44
48

Loan modifications
The Firm may modify loansoffer one of a number of loan modification programs to credit card borrowers who are experiencing financial difficulty. Most of these loans have been modified under long-term programs thatfor borrowers who are experiencing financial difficulties. Modifications under long-term programs involve placing the customer on a fixed payment plan, with a reduced interest rate, generally for 60 months. All of these credit card loanSubstantially all modifications are considered to be TDRs. New enrollments in these loan modification programs were $215 million and $191 million and $162 million for the three months ended September 30, 2018 and 2017, respectively, and 2016, respectively,$640 million and $552 million and $462 million for the nine months ended September 30, 2018 and 2017, and 2016, respectively. For all periods disclosed, new enrollments were less than 1% of total retained credit card loans.  
For additional information about credit card loan modifications, seerefer to Note 1412 of JPMorgan Chase’s 20162017 Annual Report.
Financial effects of modifications and redefaults
The following table provides information about the financial effects of the concessions granted on credit card loans modified in TDRs and redefaults for the periods presented.
(in millions, except
weighted-average data)
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
2017
2016
 2017
2016
2018
2017
 2018
2017
Weighted-average interest rate of loans –
before TDR
16.84%15.60% 16.52%15.56%18.25%16.84% 17.82%16.52%
Weighted-average interest rate of loans –
after TDR
4.95
4.66
 4.84
4.76
5.10
4.95
 5.12
4.84
Loans that redefaulted within one year of modification(a)
$27
$20
 $72
$57
$31
$27
 $82
$72
(a)Represents loans modified in TDRs that experienced a payment default in the periods presented, and for which the payment default occurred within 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.
For credit card loans modified in TDRs, payment default is deemed to have occurred when the loans becomeborrower misses two payments past due.consecutive contractual payments. A substantial portion of these loans isare expected to be charged-off in accordance with the Firm’s standard charge-off policy. Based on historical experience, the estimated weighted-average default rate for modified credit card loans was expected to be 31.23%32.78% and 28.87%31.54% as of September 30, 2017,2018, and December 31, 2016,2017, respectively.


Wholesale loan portfolio
Wholesale loans include loans made to a variety of customers,clients, ranging from large corporate and institutional clients to high-net-worth individuals. The primary credit quality indicator for wholesale loans is the risk rating assigned to
 
assigned to each loan. For further information on these risk ratings, seerefer to Note 14 12and Note 1513 of JPMorgan Chase’s 20162017 Annual Report.


The table below provides information by class of receivable for the retained loans in the Wholesale portfolio segment.
Effective in the first quarter of 2017, the Firm revised its methodology for the assignment of industry classifications, to better monitor and manage concentrations. This largely resulted in the re-assignment of holding companies from Other to the industry of risk category based on the primary business activity of the holding company’s underlying entities. In the tables below, the prior period amounts have been revised to conform with the current period presentation.
Commercial
 and industrial
 Real estate Financial
institutions		Government agencies 
Other(d)
Total
retained loans
Commercial
 and industrial
 Real estate Financial
institutions		Government agencies 
Other(d)
Total
retained loans
(in millions,
except ratios)
Sep 30,
2017		Dec 31,
2016		 Sep 30,
2017		Dec 31,
2016		 Sep 30,
2017		Dec 31,
2016		Sep 30,
2017		Dec 31,
2016		 Sep 30,
2017		Dec 31,
2016		Sep 30,
2017		Dec 31,
2016		Sep 30,
2018		Dec 31,
2017		 Sep 30,
2018		Dec 31,
2017		 Sep 30,
2018		Dec 31,
2017		Sep 30,
2018		Dec 31,
2017		 Sep 30,
2018		Dec 31,
2017		Sep 30,
2018		Dec 31,
2017
Loans by risk ratings              
Investment-grade$67,484
$65,687
 $96,289
$88,649
 $25,342
$24,294
$15,583
$15,935
 $102,496
$95,358
$307,194
$289,923
$66,968
$68,071
 $100,036
$98,467
 $31,194
$26,791
$14,435
$15,140
 $111,710
$103,212
$324,343
$311,681
Noninvestment-grade:              
Noncriticized47,344
47,531
 14,560
16,155
 11,880
11,075
399
439
 9,901
9,360
84,084
84,560
51,758
46,558
 14,526
14,335
 14,374
13,071
168
369
 13,288
9,988
94,114
84,321
Criticized performing4,594
6,186
 695
798
 252
200
1
6
 279
163
5,821
7,353
3,429
3,983
 604
710
 142
210
—
—
 211
259
4,386
5,162
Criticized nonaccrual1,080
1,491
 159
200
 3
9
—
—
 228
254
1,470
1,954
696
1,357
 130
136
 2
2
—
—
 166
239
994
1,734
Total noninvestment-
grade
53,018
55,208
 15,414
17,153
 12,135
11,284
400
445
 10,408
9,777
91,375
93,867
55,883
51,898
 15,260
15,181
 14,518
13,283
168
369
 13,665
10,486
99,494
91,217
Total retained loans$120,502
$120,895
 $111,703
$105,802
 $37,477
$35,578
$15,983
$16,380
 $112,904
$105,135
$398,569
$383,790
$122,851
$119,969
 $115,296
$113,648
 $45,712
$40,074
$14,603
$15,509
 $125,375
$113,698
$423,837
$402,898
% of total criticized exposure to
total retained loans
4.71%6.35% 0.76%0.94% 0.68%0.59%0.01%0.04% 0.45%0.40%1.83%2.43%3.36%4.45% 0.64%0.74% 0.32%0.53%—%—% 0.30%0.44%1.27%1.71%
% of criticized nonaccrual
to total retained loans
0.90
1.23
 0.14
0.19
 0.01
0.03
—
—
 0.20
0.24
0.37
0.51
0.57
1.13
 0.11
0.12
 —
—
—
—
 0.13
0.21
0.23
0.43
              
Loans by geographic
distribution(a)
              
Total non-U.S.$28,090
$30,563
 $2,803
$3,302
 $15,366
$15,147
$3,365
$3,726
 $43,879
$38,776
$93,503
$91,514
$30,435
$28,470
 $2,741
$3,101
 $17,748
$16,790
$2,973
$2,906
 $49,030
$44,112
$102,927
$95,379
Total U.S.92,412
90,332
 108,900
102,500
 22,111
20,431
12,618
12,654
 69,025
66,359
305,066
292,276
92,416
91,499
 112,555
110,547
 27,964
23,284
11,630
12,603
 76,345
69,586
320,910
307,519
Total retained loans$120,502
$120,895
 $111,703
$105,802
 $37,477
$35,578
$15,983
$16,380
 $112,904
$105,135
$398,569
$383,790
$122,851
$119,969
 $115,296
$113,648
 $45,712
$40,074
$14,603
$15,509
 $125,375
$113,698
$423,837
$402,898
              
Loan delinquency(b)
              
Current and less than
30 days past due and still accruing
$119,192
$119,050
 $111,440
$105,396
 $37,396
$35,523
$15,919
$16,269
 $111,822
$104,280
$395,769
$380,518
$121,913
$118,288
 $115,098
$113,258
 $45,671
$40,042
$14,585
$15,493
 $124,097
$112,559
$421,364
$399,640
30–89 days past due
and still accruing
93
268
 50
204
 71
25
62
107
 850
582
1,126
1,186
211
216
 52
242
 38
15
15
12
 1,110
898
1,426
1,383
90 or more days
past due and
still accruing(c)
137
86
 54
2
 7
21
2
4
 4
19
204
132
31
108
 16
12
 1
15
3
4
 2
2
53
141
Criticized nonaccrual1,080
1,491
 159
200
 3
9
—
—
 228
254
1,470
1,954
696
1,357
 130
136
 2
2
—
—
 166
239
994
1,734
Total retained loans$120,502
$120,895
 $111,703
$105,802
 $37,477
$35,578
$15,983
$16,380
 $112,904
$105,135
$398,569
$383,790
$122,851
$119,969
 $115,296
$113,648
 $45,712
$40,074
$14,603
$15,509
 $125,375
$113,698
$423,837
$402,898
(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. For a further discussion, seerefer to Note 1412 of JPMorgan Chase’s 20162017 Annual Report.
(c)Represents loans that are considered well-collateralized and therefore still accruing interest.
(d)
Includes loans to: individuals; SPEs;Other includes individuals (predominantly Wealth Management clients within AWM), SPEs, and private education and civic organizations. For more information on SPEs, seerefer to Note 1614 of JPMorgan Chase’s 20162017 Annual Report.

The following table presents additional information on the real estate class of loans within the Wholesale portfolio segment for the periods indicated. For further information on real estate loans, seerefer to Note 1412 of JPMorgan Chase’s 20162017 Annual Report.

(in millions, except ratios)
Multifamily Other commercial Total real estate loans
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Real estate retained loans$79,112
$77,597
 $36,184
$36,051
 $115,296
$113,648
Criticized exposure383
491
 351
355
 734
846
% of total criticized exposure to total real estate retained loans0.48%0.63% 0.97%0.98% 0.64%0.74%
Criticized nonaccrual$47
$44
 $83
$92
 $130
$136
% of criticized nonaccrual loans to total real estate retained loans0.06%0.06% 0.23%0.26% 0.11%0.12%

(in millions, except ratios)
Multifamily Other commercial Total real estate loans
Sep 30,
2017
Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
Real estate retained loans$76,418
$72,143
 $35,285
$33,659
 $111,703
$105,802
Criticized exposure447
539
 407
459
 854
998
% of total criticized exposure to total real estate retained loans0.58%0.75% 1.15%1.36% 0.76%0.94%
Criticized nonaccrual$70
$57
 $89
$143
 $159
$200
% of criticized nonaccrual loans to total real estate retained loans0.09%0.08% 0.25%0.42% 0.14%0.19%


Wholesale impaired retained loans and loan modifications
Wholesale impaired retained loans consist of loans that have been placed on nonaccrual status and/or that have been modified in a TDR. All impaired loans are evaluated for an asset-specific allowance as described in Note 1513 of JPMorgan Chase’s 20162017 Annual Report.
The table below sets forth information about the Firm’s wholesale impaired retained loans.

(in millions)
Commercial
and industrial
 Real estate 
Financial
institutions
 
Government
 agencies
 Other 
Total
retained loans
 
Commercial
and industrial
 Real estate 
Financial
institutions
 
Government
 agencies
 Other 
Total
retained loans
 
Sep 30,
2017		Dec 31,
2016		 Sep 30,
2017		Dec 31,
2016		 Sep 30,
2017		Dec 31,
2016		 Sep 30,
2017		Dec 31,
2016		 Sep 30,
2017		Dec 31,
2016		 Sep 30,
2017		 Dec 31,
2016		 Sep 30,
2018		Dec 31,
2017		 Sep 30,
2018		Dec 31,
2017		 Sep 30,
2018		Dec 31,
2017		 Sep 30,
2018		Dec 31,
2017		 Sep 30,
2018		Dec 31,
2017		 Sep 30,
2018		 Dec 31,
2017		 
Impaired loans                            
With an allowance$891
$1,127
 $100
$124
 $95
$9
 $—
$—
 $161
$180
 $1,247
 $1,440
 $658
$1,170
 $78
$78
 $2
$93
 $—
$—
 $151
$168
 $889
 $1,509
 
Without an allowance(a)
263
414
 61
87
 —
—
 —
—
 67
76
 391
 577
 84
228
 53
60
 —
—
 —
—
 25
70
 162
 358
 
Total impaired loans
$1,154
$1,541
 $161
$211
 $95
$9
 $—
$—
 $228
$256
 $1,638
(c) 
$2,017
(c) 
$742
$1,398
 $131
$138
 $2
$93
 $—
$—
 $176
$238
 $1,051
(c) 
$1,867
(c) 
Allowance for loan losses related to impaired loans$292
$260
 $11
$18
 $7
$3
 $—
$—
 $53
$61
 $363
 $342
 $243
$404
 $15
$11
 $1
$4
 $—
$—
 $21
$42
 $280
 $461
 
Unpaid principal balance of impaired loans(b)
1,428
1,754
 234
295
 96
12
 —
—
 205
284
 1,963
 2,345
 846
1,604
 198
201
 2
94
 —
—
 387
255
 1,433
 2,154
 
(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 September 30, 2017,2018, and December 31, 2016.2017. 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.
The following table presents the Firm’s average impaired retained loans for the periods indicated.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017
2016
 2017
2016
2018
2017
 2018
2017
Commercial and industrial$1,042
$1,489
 $1,002
$1,437
$838
$1,207
 $1,095
$1,277
Real estate184
210
 168
227
134
167
 138
175
Financial institutions19
16
 9
13
45
70
 76
38
Government agencies—
—
 —
—
—
—
 —
—
Other200
213
 204
197
202
231
 214
246
Total(a)(b)
$1,445
$1,928
 $1,383
$1,874
$1,219
$1,675
 $1,523
$1,736
(a)The related interest income on accruing impaired loans and interest income recognized on a cash basis were not material for the three and nine months ended September 30, 20172018 and 2016.2017.
(b)The prior period amounts have been revised to conform with the current period presentation.
 
Certain loan modifications are considered to be TDRs as they provide various concessions to borrowers who are experiencing financial difficulty. All TDRs are reported as impaired loans in the tables above. TDRs were $699$517 million and $733$614 million as of September 30, 2017,2018, and December 31, 2016,2017, respectively.




Note 12 – Allowance for credit losses
For a detailed discussion of the allowance for credit losses and the related accounting policies, seerefer to Note 1513 of JPMorgan Chase’s 20162017 Annual Report. During the second quarter of 2017, the Firm refined its loss estimates relating to the wholesale portfolio by incorporating the use of internal historical data versus external credit rating agency default statistics to estimate PD. In addition, an adjustment to the modeled loss estimates for wholesale lending-related commitments was incorporated similar to the adjustment applied for wholesale loans. The impacts of these refinements were not material to the allowance for credit losses.
Allowance for credit losses and related information
The table below summarizes information about the allowances for loan losses and lending-related commitments, and includes a breakdown of loans and lending-related commitments by impairment methodology.
 2018 2017 
Nine months ended September 30,
(in millions)
Consumer, excluding
credit card
Credit card WholesaleTotal Consumer, excluding credit card Credit card WholesaleTotal 
Allowance for loan losses             
Beginning balance at January 1,$4,579
$4,884
 $4,141
$13,604
 $5,198
 $4,034
 $4,544
$13,776
 
Gross charge-offs776
3,777
 264
4,817
 1,479
 3,344
 154
4,977
 
Gross recoveries(681)(370) (146)(1,197) (478) (295) (81)(854) 
Net charge-offs95
3,407
 118
3,620
 1,001
 3,049
 73
4,123
 
Write-offs of PCI loans(a)
151
—
 —
151
 66
 —
 —
66
 
Provision for loan losses(152)3,557
 (111)3,294
 653
 3,699
 (401)3,951
 
Other1
—
 —
1
 (2) —
 3
1
 
Ending balance at September 30,$4,182
$5,034
 $3,912
$13,128
 $4,782
 $4,684
 $4,073
$13,539
 
              
Allowance for loan losses by impairment methodology             
Asset-specific(b)
$204
$421
(c) 
$280
$905
 $271
 $376
(c) 
$363
$1,010
 
Formula-based2,154
4,613
 3,632
10,399
 2,266
 4,308
 3,710
10,284
 
PCI1,824
—
 —
1,824
 2,245
 —
 —
2,245
 
Total allowance for loan losses$4,182
$5,034
 $3,912
$13,128
 $4,782
 $4,684
 $4,073
$13,539
 
              
Loans by impairment methodology             
Asset-specific$7,046
$1,284
 $1,051
$9,381
 $8,147
 $1,206
 $1,638
$10,991
 
Formula-based343,703
146,572
 422,783
913,058
 329,445
 139,994
 396,928
866,367
 
PCI25,209
—
 3
25,212
 31,821
 —
 3
31,824
 
Total retained loans$375,958
$147,856
 $423,837
$947,651
 $369,413
 $141,200
 $398,569
$909,182
 
              
Impaired collateral-dependent loans             
Net charge-offs$15
$—
 $—
$15
 $47
 $—
 $30
$77
 
Loans measured at fair value of collateral less cost to sell2,077
—
 258
2,335
 2,198
 —
 250
2,448
 
              
Allowance for lending-related commitments             
Beginning balance at January 1,$33
$—
 $1,035
$1,068
 $26
 $—
 $1,052
$1,078
 
Provision for lending-related commitments—
—
 29
29
 7
 —
 24
31
 
Other—
—
 —
—
 —
 —
 —
—
 
Ending balance at September 30,$33
$—
 $1,064
$1,097
 $33
 $—
 $1,076
$1,109
 
              
Allowance for lending-related commitments by impairment methodology             
Asset-specific$—
$—
 $71
$71
 $—
 $—
 $220
$220
 
Formula-based33
—
 993
1,026
 33
 —
 856
889
 
Total allowance for lending-related commitments$33
$—
 $1,064
$1,097
 $33
 $—
 $1,076
$1,109
 
              
Lending-related commitments by impairment methodology             
Asset-specific$—
$—
 $252
$252
 $—
 $—
 $764
$764
 
Formula-based50,630
600,728
 397,064
1,048,422
 52,796
(d) 
574,641
 371,616
999,053
(d) 
Total lending-related commitments$50,630
$600,728
 $397,316
$1,048,674
 $52,796
(d) 
$574,641
 $372,380
$999,817
(d) 
 2017 2016
Nine months ended September 30,
(in millions)		Consumer, excluding credit cardCredit card WholesaleTotal Consumer, excluding credit cardCredit card WholesaleTotal
Allowance for loan losses           
Beginning balance at January 1,$5,198
$4,034
 $4,544
$13,776
 5,806
$3,434
 $4,315
$13,555
Gross charge-offs1,479
3,344
 154
4,977
 1,071
2,803
 291
4,165
Gross recoveries(478)(295) (81)(854) (448)(275) (30)(753)
Net charge-offs1,001
3,049
 73
4,123
 623
2,528
 261
3,412
Write-offs of PCI loans(a)
66
—
 —
66
 124
—
 —
124
Provision for loan losses653
3,699
 (401)3,951
 578
2,978
 628
4,184
Other(2)—
 3
1
 —
—
 1
1
Ending balance at September 30,$4,782
$4,684
 $4,073
$13,539
 $5,637
$3,884
 $4,683
$14,204
            
Allowance for loan losses by impairment methodology           
Asset-specific(b)
$271
$376
(d) 
$363
$1,010
 $352
$363
(c) 
$490
$1,205
Formula-based2,266
4,308
 3,710
10,284
 2,667
3,521
 4,193
10,381
PCI2,245
—
 —
2,245
 2,618
—
 —
2,618
Total allowance for loan losses$4,782
$4,684
 $4,073
$13,539
 $5,637
$3,884
 $4,683
$14,204
            
Loans by impairment methodology           
Asset-specific$8,147
$1,206
 $1,638
$10,991
 $9,145
$1,264
 $2,233
$12,642
Formula-based329,445
139,994
 396,928
866,367
 317,208
132,082
 384,213
833,503
PCI31,821
—
 3
31,824
 37,045
—
 3
37,048
Total retained loans$369,413
$141,200
 $398,569
$909,182
 $363,398
$133,346
 $386,449
$883,193
            
Impaired collateral-dependent loans           
Net charge-offs$47
$—
 $30
$77
 $63
$—
 $7
$70
Loans measured at fair value of collateral less cost to sell2,198
—
 250
2,448
 2,371
—
 346
2,717
            
Allowance for lending-related commitments           
Beginning balance at January 1,$26
$—
 $1,052
$1,078
 $14
$—
 $772
$786
Provision for lending-related commitments7
—
 24
31
 —
—
 313
313
Other—
—
 —
—
 —
—
 1
1
Ending balance at September 30,$33
$—
 $1,076
$1,109
 $14
$—
 $1,086
$1,100
            
Allowance for lending-related commitments by impairment methodology           
Asset-specific$—
$—
 $220
$220
 $—
$—
 $162
$162
Formula-based33
—
 856
889
 14
—
 924
938
Total allowance for lending-related commitments$33
$—
 $1,076
$1,109
 $14
$—
 $1,086
$1,100
            
Lending-related commitments by impairment methodology           
Asset-specific$—
$—
 $764
$764
 $—
$—
 $503
$503
Formula-based55,071
574,641
 371,616
1,001,328
 59,990
549,634
 368,484
978,108
Total lending-related commitments$55,071
$574,641
 $372,380
$1,002,092
 $59,990
$549,634
 $368,987
$978,611
Note: In the first quarter of 2017, the Firm transferred the student loan portfolio to held-for-sale. For additional information see Note 23.
(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 (e.g., upon liquidation).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.
(d)The prior period amounts have been revised to conform with the current period presentation.


Note 13 – Variable interest entities
For a further description of JPMorgan Chase’s accounting policies regarding consolidation of VIEs, seerefer to Note1of JPMorgan Chase’s 20162017 Annual Report.
The following table summarizes the most significant types of Firm-sponsored VIEs by business segment.
Line of BusinessTransaction TypeActivityForm 10-Q page reference
CCBCredit card securitization trustsSecuritization of both originated and purchased credit card receivables139148
 Mortgage securitization trustsServicing and securitization of both originated and purchased residential mortgages139–141148-150
CIBMortgage and other securitization trustsSecuritization of both originated and purchased residential and commercial mortgages, and studentother consumer loans139–141148-150
 
Multi-seller conduits
Investor intermediation activities
Assist clients in accessing the financial markets in a cost-efficient manner and structures transactions to meet investor needs141150
Municipal bond vehiclesFinancing of municipal bond investments150

The Firm also invests in and provides financing and other services to VIEs sponsored by third parties, as described on page 141 parties. Refer to pages 151-152of this Note.Note for more information on the VIEs sponsored by third parties.
Significant Firm-sponsored VIEs
Credit card securitizations
For a more detailed discussion of JPMorgan Chase’s involvement with credit card securitizations, seerefer to Note 1614 of JPMorgan Chase’s 20162017 Annual Report.
As a result of the Firm’s continuing involvement, the Firm is considered to be the primary beneficiary of its Firm-sponsored credit card securitization trusts, including its primary vehicle, the Chase Issuance Trust. SeeRefer to the table on page 142151 of this Note for further information on
consolidated VIE assets and liabilities.
Firm-sponsored mortgage and other securitization trusts
The Firm securitizes (or has securitized) originated and purchased residential mortgages, commercial mortgages and other consumer loans (including student loans) primarily in its CCB and CIB businesses. Depending on the particular transaction, as well as the respective business involved, the Firm may act as the servicer of the loans and/or retain certain beneficial interests in the securitization trusts.
For a detailed discussion of the Firm’s involvement with Firm-sponsored mortgage and other securitization trusts, as well as the accounting treatment relating to such trusts, seerefer to Note 1614 of JPMorgan Chase’s 20162017 Annual Report.

The following table presents the total unpaid principal amount of assets held in Firm-sponsored private-label securitization entities, including those in which the Firm has continuing involvement, and those that are consolidated by the Firm. Continuing involvement includes servicing the loans, holding senior interests or subordinated interests (including amounts required to be held pursuant to credit risk retention rules), recourse or guarantee arrangements, and derivative transactions. In certain instances, the Firm’s only continuing involvement is servicing the loans. SeeRefer to Securitization activity onpage 142 152of this Note for further information regarding the Firm’s cash flows associated with and interests retained in nonconsolidated VIEs, and page 143 pages 152-153of this Note for information on the Firm’s loan sales to U.S. government agencies.
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
September 30, 2017 (in millions)Total assets held by securitization VIEsAssets
held in consolidated securitization VIEs		Assets held in nonconsolidated securitization VIEs with continuing involvement Trading assetsAFS securitiesTotal interests held by JPMorgan
Chase
September 30, 2018 (in millions)Total assets held by securitization VIEsAssets
held in consolidated securitization VIEs		Assets held in nonconsolidated securitization VIEs with continuing involvement Trading assets Investment securitiesOther financial assetsTotal interests held by JPMorgan
Chase
Securitization-related(a)
      
Residential mortgage:      
Prime/Alt-A and option ARMs$69,534
$3,795
$51,666
 $348
$1,021
$1,369
$65,481
$3,314
$51,914
 $607
$704
$—
$1,311
Subprime19,592
—
18,164
 94
—
94
17,278
19
15,950
 55
—
—
55
Commercial and other(b)
92,078
140
65,043
 583
1,309
1,892
102,603
—
77,494
 497
869
216
1,582
Total$181,204
$3,935
$134,873
 $1,025
$2,330
$3,355
$185,362
$3,333
$145,358
 $1,159
$1,573
$216
$2,948
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
December 31, 2016 (in millions)Total assets held by securitization VIEs
Assets
held in consolidated securitization VIEs
Assets held in nonconsolidated securitization VIEs with continuing involvement Trading assetsAFS securities
Total interests held by
JPMorgan
Chase
December 31, 2017 (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 securitiesOther financial assets
Total interests held by
JPMorgan
Chase
Securitization-related(a)
      
Residential mortgage:      
Prime/Alt-A and option ARMs$76,789
$4,209
$57,543
 $226
$1,334
$1,560
$68,874
$3,615
$52,280
 $410
$943
$—
$1,353
Subprime21,542
—
19,903
 76
—
76
18,984
7
17,612
 93
—
—
93
Commercial and other(b)
101,265
107
71,464
 509
2,064
2,573
94,905
63
63,411
 745
1,133
157
2,035
Total$199,596
$4,316
$148,910
 $811
$3,398
$4,209
$182,763
$3,685
$133,303
 $1,248
$2,076
$157
$3,481
(a)Excludes U.S. government agency securitizations and re-securitizations, which are not Firm-sponsored. See page 143Refer to pages 152-153 of this Note for information on the Firm’s loan sales to U.S. government agencies.
(b)Consists of securities backed by commercial loans (predominantly real estate) and non-mortgage-related consumer receivables purchased from third parties.
(c)Excludes the following: retained servicing (see(refer to Note 14 for a discussion of MSRs); securities retained from loan sales to U.S. government agencies; interest rate and foreign exchange derivatives primarily used to manage interest rate and foreign exchange risks of securitization entities (See(Refer to Note 4 for further information on derivatives); senior and subordinated securities of $198$75 million and $23$111 million, respectively, at September 30, 2017,2018, and $180$88 million and $49$48 million, respectively, at December 31, 2016,2017, which the Firm purchased in connection with CIB’s secondary market-making activities.
(d)Includes interests held in re-securitization transactions.
(e)As of September 30, 2017,2018, and December 31, 2016, 63%2017, 66% and 61%, 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 $1.3 billion of investment-grade at both September 30, 2018 and $1.5December 31, 2017, and $34 million and $48 million of noninvestment-grade at September 30, 2018, and December 31, 2017, respectively. The retained interests in commercial and other securitizations trusts consisted of $1.2 billion and $1.6 billion of investment-grade and $94$410 million and $77$412 million of noninvestment-grade retained interests at September 30, 2017,2018, and December 31, 2016, respectively. The retained interests in commercial and other securitization trusts consisted of $1.7 billion and $2.4 billion of investment-grade and $235 million and $210 million of noninvestment-grade retained interests at September 30, 2017, and December 31, 2016, respectively.

Residential mortgage
The Firm securitizes residential mortgage loans originated by CCB, as well as residential mortgage loans purchased from third parties by either CCB or CIB.CIB. For a more detailed description of the Firm’s involvement with residential mortgage securitizations, seerefer to Note 1614 of JPMorgan Chase’s 20162017 Annual Report. SeeRefer to the table onpage 142 151of this Note for more information on the consolidated residential mortgage securitizations, and the table on the previous page of this Note for further information on interests held in nonconsolidated residential mortgage securitizations.
Commercial mortgages and other consumer securitizations
CIB originates and securitizes commercial mortgage loans, and engages in underwriting and trading activities involving the securities issued by securitization trusts. For a more detailed description of the Firm’s involvement with commercial mortgage and other consumer securitizations, seerefer to Note 1614 of JPMorgan Chase’s 20162017 Annual Report. SeeRefer to the table onpage 142 151of this Note for more information on the consolidated commercial mortgage securitizations, and the table on the previous page of this Note for further information on interests held in nonconsolidated securitizations.
Re-securitizations
For a more detailed description of JPMorgan Chase’s participation in certain re-securitization transactions, seerefer to Note 1614 of JPMorgan Chase’s 20162017 Annual Report.
The following table representspresents the transfersprincipal amount of securities transferred to re-securitization VIEs.
Three months ended
September 30,		 Nine months ended
September 30,		Three months ended September 30, Nine months ended September 30,
(in millions)2017
 2016
 2017
 2016
2018
 2017
 2018
 2017
Transfers of securities to VIEs              
Firm-sponsored private-label$—
 $503
 $—
 $647
Agency$1,477
 $1,237
 $6,163
 $7,587
$2,540
 $1,477
 $11,321
 $6,163
The following table representspresents information on nonconsolidated re-securitization VIEs.
Nonconsolidated
re-securitization VIEs
Nonconsolidated
re-securitization VIEs
(in millions)September 30, 2017
 December 31, 2016
September 30, 2018 December 31, 2017
Firm-sponsored private-label      
Assets held in VIEs with continuing involvement(a)
$860
 $875
$198
 $783
Interest in VIEs26
 43
10
 29
Agency      
Interest in VIEs1,593
 1,986
2,263
 2,250
(a)IncludesRepresents the principal amount and includes the notional amount of interest-only securities.
As of September 30, 2017,2018, and December 31, 2016,2017, the Firm did not consolidate any Firm-sponsored private-label re-securitizations and agency re-securitizations.


re-securitization VIEs
 
or any Firm-sponsored private-label re-securitization VIEs.
Multi-seller conduits
For a more detailed description of JPMorgan Chase’s principal involvement with Firm-administered Firm-administered multi-seller conduits, seerefer to Note 1614 of JPMorgan Chase’s 20162017 Annual Report.
In the normal course of business, JPMorgan Chase makes markets in and invests in commercial paper issued by the Firm-administeredFirm-administered multi-seller conduits. The Firm held $21.8 $18.7 billion and $21.2$20.4 billionof the commercial paper issued by the Firm-administeredFirm-administered multi-seller conduits atSeptember 30, 2017,2018, and December 31, 20162017, respectively, which have been eliminated in consolidation. The Firm’s investments reflect the Firm’s funding needs and capacity and were not driven by market illiquidity.Other than the amounts required to be held pursuant to credit risk retention rules, the Firm is not obligated under any agreement to purchase the commercial paper issued by the Firm-administeredFirm-administered multi-seller conduits.
Deal-specific liquidity facilities, program-wide liquidity and credit enhancement provided by the Firm have been eliminated in consolidation. The Firm or the Firm-administered multi-seller conduits provide lending-related commitments to certain clients of the Firm-administered multi-seller conduits. The unfunded commitments were $7.3 $9.2 billion and $7.4$8.8 billion at September 30, 2017,2018, and December 31, 2016,2017, respectively, and are reported as off-balance sheet lending-related commitments. For more information on off-balance sheet lending-related commitments, seerefer to Note 19.
VIEs associated with investor intermediation activities20.
Municipal bond vehicles
Municipal bond vehicles or tender option bond (“TOB”) trusts allow institutions to finance their municipal bond investments at short-term rates. TOB transactions are known as Customer TOB trusts and Non-Customer TOB trusts. Customer TOB trusts are sponsored by a third party; refer topages 151-152of this Note for further information.
The Firm serves as sponsor for all Non-Customer TOB transactions. For a more detailed description of JPMorgan Chase’s investor intermediation activities, seeMunicipal bond vehicles, refer to Note 1614 of JPMorgan Chase’s 20162017 Annual Report.
The Firm’s maximumFirm had no exposure as a liquidity provider to nonconsolidated Firm-sponsored Firm-sponsored municipal bond VIEsvehicles at September 30, 20172018 and December 31, 2016, was zero2017, respectively.
Refer topages 151-152of this Note for further information on consolidated municipal bond vehicles.


Consolidated VIE assets and $662 million, respectively.liabilities
The following table presents information on assets and liabilities related to VIEs consolidated by the Firm as of September 30, 2018, and December 31, 2017.
 Assets Liabilities
September 30, 2018 (in millions)Trading assetsLoans
Other(b) 
 Total
assets(c)
 
Beneficial interests in
VIE assets(d)
Other(e)
Total
liabilities
VIE program type        
Firm-sponsored credit card trusts$—
$30,949
$504
$31,453
 $14,142
$12
$14,154
Firm-administered multi-seller conduits1
22,797
129
22,927
 4,304
30
4,334
Municipal bond vehicles1,370
—
4
1,374
 1,344
2
1,346
Mortgage securitization entities(a)
62
3,368
37
3,467
 304
171
475
Other134
—
1,733
1,867
 147
115
262
Total$1,567
$57,114
$2,407
$61,088
 $20,241
$330
$20,571
         
 Assets Liabilities
December 31, 2017 (in millions)Trading assetsLoans
Other(b) 
 Total
assets(c)
 
Beneficial interests in
VIE assets(d)
Other(e)
Total
liabilities
VIE program type        
Firm-sponsored credit card trusts$—
$41,923
$652
$42,575
 $21,278
$16
$21,294
Firm-administered multi-seller conduits—
23,411
48
23,459
 3,045
28
3,073
Municipal bond vehicles1,278
—
3
1,281
 1,265
2
1,267
Mortgage securitization entities(a)
66
3,661
55
3,782
 359
199
558
Other105
—
1,916
2,021
 134
104
238
Total$1,449
$68,995
$2,674
$73,118
 $26,081
$349
$26,430
(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. For conduits program-wide credit enhancements, refer to note 14 of JPMorgan Chase’s 2017 Annual Report. Included in beneficial interests in VIE assets are long-term beneficial interests of $14.6 billion and $21.8 billion at September 30, 2018, and December 31, 2017, respectively.
(e)Includes liabilities classified as accounts payable and other liabilities on the Consolidated balance sheets.
VIEs sponsored by third parties
The Firm enters into transactions with VIEs structured by other parties. These include, for example, acting as a derivative counterparty, liquidity provider, investor, underwriter, placement agent, remarketing agent, trustee or custodian. These transactions are conducted at arm’s-length, and individual credit decisions are based on the analysis of the specific VIE, taking into consideration the quality of the underlying assets. Where the Firm does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, or a variable interest that could potentially be significant, the Firmgenerally does not consolidate the VIE, but it records and reports these positions on its Consolidated balance sheets in the same manner it would record and report positions in respect of any other third-party transaction.
Tax credit vehicles
The Firm holds investments in unconsolidated tax credit vehicles, which are limited partnerships and similar entities that construct, own and operate affordable housing, wind, solar and other alternative energy projects. These entities are primarily considered VIEs. A third party is typically the
general partner or managing member and has control over the significant activities of the tax credit vehicles, and accordingly the Firm does not consolidate tax credit vehicles. The Firm generally invests in these partnerships as a limited partner and earns a return primarily through the receipt of tax credits allocated to the projects. The maximum loss exposure, represented by equity investments and funding commitments, was $13.7 billion and $13.4 billion, of which $3.2 billion was unfunded at both September 30, 2018 and December 31, 2017, respectively. In order to reduce the risk of loss, the Firm assesses each project and withholds varying amounts of its capital investment until qualification of the project for tax credits. For further information on affordable housing tax credits, refer to Note24 of JPMorgan Chase’s 2017 Annual Report. For more information on off-balance sheet lending-related commitments, refer to Note20 of this Form 10-Q.
Customer municipal bond vehicles (TOB trusts)
The Firm may provide various services to Customer TOB trusts, including remarketing agent, liquidity or tender option provider. In certain Customer TOB transactions, the

Consolidated VIE assets and liabilities
Firm, as liquidity provider, has entered into a reimbursement agreement with the Residual holder.
The following table presents information on assets and liabilities related to VIEs consolidated byIn those transactions, upon the termination of the vehicle, the Firm has recourse to the third party Residual holders for any shortfall. The Firm does not have any intent to protect Residual holders from potential losses on any of the underlying municipal bonds. The Firm does not consolidate Customer TOB trusts, since the Firm does not have the power to make decisions that significantly impact the economic performance of the municipal bond vehicle.
The Firm’s maximum exposure as ofa liquidity provider to Customer TOB trusts at September 30, 2018 and
December 31, 2017 was $5.0 billion and $5.3 billion, respectively. The fair value of assets held by such VIEs at September 30, 2018 and December 31, 2016.2017, was $8.0 billion and $9.2 million, respectively. For more information on off-balance sheet lending-related commitments, refer to Note20.
 Assets Liabilities
September 30, 2017 (in millions)Trading assetsLoans
Other(d) 

 Total
assets(e)
 
Beneficial interests in
VIE assets(f)
Other(g)

Total
liabilities
VIE program type(a)
        
Firm-sponsored credit card trusts$—
$40,706
$666
$41,372
 $23,473
$16
$23,489
Firm-administered multi-seller conduits1
24,504
44
24,549
 2,923
25
2,948
Municipal bond vehicles1,374
—
6
1,380
 1,452
2
1,454
Mortgage securitization entities(b)
151
3,842
53
4,046
 441
260
701
Student loan securitization entities(c)
—
—
—
—
 —
—
—
Other69
—
1,929
1,998
 135
109
244
Total$1,595
$69,052
$2,698
$73,345
 $28,424
$412
$28,836
         
 Assets Liabilities
December 31, 2016 (in millions)Trading assetsLoans
Other(d) 

 Total
assets(e)
 
Beneficial interests in
VIE assets(f)
Other(g)

Total
liabilities
VIE program type(a)
        
Firm-sponsored credit card trusts$—
$45,919
$790
$46,709
 $31,181
$18
$31,199
Firm-administered multi-seller conduits—
23,760
43
23,803
 2,719
33
2,752
Municipal bond vehicles2,897
—
8
2,905
 2,969
2
2,971
Mortgage securitization entities(b)
143
4,246
103
4,492
 468
313
781
Student loan securitization entities(c)
—
1,689
59
1,748
 1,527
4
1,531
Other145
—
2,318
2,463
 183
120
303
Total$3,185
$75,614
$3,321
$82,120
 $39,047
$490
$39,537
(a)Excludes intercompany transactions which are eliminated in consolidation.
(b)Includes residential and commercial mortgage securitizations.
(c)The Firm deconsolidated the student loan securitization entities in the second quarter of 2017 as it no longer had a controlling financial interest in these entities as a result of the sale of the student loan portfolio. For additional information see Note 23.
(d)Includes assets classified as cash and other assets on the Consolidated balance sheets.
(e)The assets of the consolidated VIEs included in the program types above are used to settle the liabilities of those entities. The difference between total assets and total liabilities recognized for consolidated VIEs represents the Firm’s interest in the consolidated VIEs for each program type.
(f)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 VIEs.” The holders of these beneficial interests do not have recourse to the general credit of JPMorgan Chase. Included in beneficial interests in VIE assets are long-term beneficial interests of $24.0 billion and $33.4 billion at September 30, 2017, and December 31, 2016, respectively. The maturities of the long-term beneficial interests as of September 30, 2017, were as follows: $10.7 billion under one year, $13.0 billion between one and five years, and $0.3 billion over five years.
(g)Includes liabilities classified as accounts payable and other liabilities on the Consolidated balance sheets.
Loan securitizations
The Firm has securitized and sold a variety of loans, including residential mortgage, credit card, student and commercial (primarily related to real estate) loans. mortgage.For afurther description of the Firm’s accounting policies regarding securitizations, seerefer to Note 16 14
of JPMorgan Chase’s 20162017 Annual Report.

Securitization activity
The following table provides information related to the Firm’s securitization activities for the three and nine months ended September 30, 2018 and 2017, and 2016, related to assets held in Firm-sponsoredFirm-sponsored securitization entities that were not consolidated by the Firm, and where sale accounting was achieved based on the accounting rules in effect at the time of the securitization.
 Three months ended September 30, Nine months ended September 30,
 2017 2016 2017 2016
(in millions)
Residential mortgage(c)
Commercial and other(d)
 
Residential mortgage(c)
Commercial and other(d)
 
Residential mortgage(c)
Commercial and other(d)
 
Residential mortgage(c)
Commercial and other(d)
Principal securitized$1,017
$4,411
 $698
$3,428
 $3,066
$7,723
 $1,111
$5,786
All cash flows during the period(a):
           
Proceeds from loan sales as securities           
Level 2$1,049
$4,419
 $709
$3,551
 $3,132
$7,796
 $1,122
$5,924
Level 34
—
 —
—
 4
—
 —
2
Total proceeds received from loan sales$1,053
$4,419
 $709
$3,551
 $3,136
$7,796
 $1,122
$5,926
Servicing fees collected128
1
 111
1
 395
3
 334
2
Purchases of previously transferred financial assets (or the underlying collateral)(b)
—
—
 —
—
 1
—
 37
—
Cash flows received on interests125
287
 121
535
 384
828
 326
1,115
 Three months ended September 30, Nine months ended September 30,
 2018 2017 2018 2017
(in millions)
Residential mortgage(e)
Commercial and other(f)
 
Residential mortgage(e)
Commercial and other(f)
 
Residential mortgage(e)
Commercial and other(f)
 
Residential mortgage(e)
Commercial and other(f)
Principal securitized$1,513
$3,533
 $1,017
$4,411
 $5,972
$8,705
 $3,066
$7,723
All cash flows during the period(a):
           
Proceeds received from loan sales as financial instruments(b)
$1,524
$3,558
 $1,053
$4,419
 $5,984
$8,745
 $3,136
$7,796
Servicing fees collected(c)
43
1
 49
1
 134
1
 151
3
Purchases of previously transferred financial assets (or the underlying collateral)(d)
—
—
 —
—
 —
—
 1
—
Cash flows received on interests99
99
 125
287
 328
230
 384
828
(a)Excludes re-securitization transactions.
(b)Predominantly includes Level 2 assets.
(c)The prior period amounts have been revised to conform with the current period presentation.
(d)Includes cash paid by the Firm to reacquire assets from off–balance sheet, nonconsolidated entities – for example, loan repurchases due to representation and warranties and servicer clean-up“clean-up” calls.
(c)(e)Includes prime, Alt-A, subprime, and option ARMs. Excludes certain loan securitization transactions entered into with Ginnie Mae, Fannie Mae and Freddie Mac.
(d)(f)Includes commercial mortgage and student loan securitizations.other consumer loans.


Loans and excess MSRs sold to U.S. government-sponsored
enterprises, loans in securitization transactions pursuant to
Ginnie Mae guidelines, and other third-party-sponsored
securitization entities
In addition to the amounts reported in the securitization activity tables above, the Firm, in the normal course of business, sells originated and purchased mortgage loans and certain originated excess MSRs on a nonrecourse basis, predominantly to U.S. government-sponsored enterprises The Firm also sells loans into securitization transactions pursuant to Ginnie Mae guidelines; these loans are typically insured or guaranteed by another U.S. government agency. The Firm does not consolidate the securitization vehicles underlying these transactions as it is not the primary beneficiary. For a limited number of loan sales, the Firm is obligated to share a portion of the credit risk associated with the sold loans with the purchaser. Refer to Note 20 of this Form 10-Q, and Note 27 of JPMorgan Chase’s 2017 Annual Report for additional information aThe Firm also sells loans into securitization transactions pursuant to Ginnie Mae guidelines; these loans are typically insured or guaranteed by another U.S. government agency. The Firm does not consolidate the securitization vehicles underlying these transactions as it is not the primary beneficiary. For a limited number of loan sales, the Firm is obligated to share a portion of the credit risk associated with the sold loans with the purchaser. Refer to Note 20 of this Form 10-Q, and Note 27 of JPMorgan Chase’s 2017 Annual Report for additional information about the Firm’s loan sales- and securitization-related indemnifications. Refer to Note14for additional information about the impact of the Firm’s sale of certain excess MSRs. (“U.S. GSEs”). These loans and excess MSRs are sold primarily for the purpose of securitization by the U.S. GSEs, who provide certain guarantee provisions (e.g., credit enhancement of the loans). The Firm also sells loans into securitization transactions pursuant to Ginnie Mae guidelines; these loans are typically insured or guaranteed by another U.S. government agency. The Firm does not consolidate the securitization vehicles underlying these transactions as it is not the primary beneficiary. For a limited number of loan sales, the Firm is obligated to share a portion of the credit risk associated with the sold loans with the purchaser. SeeRefer to Note 1920 of this Form 10-Q, and Note 2927 of JPMorgan Chase’s 20162017 Annual Report for additional information about
bout the Firm’s loan sales- and securitization-related indemnifications. SeeRefer to Note14for additional information about the impact of the Firm’sFirm’s sale of certain excess MSRs. about the Firm’s loan sales- and securitization-related indemnifications. Refer to Note14for additional information about the impact of the Firm’s sale of certain excess MSRs.

The following table summarizes the activities related to loans sold to the U.S. GSEs, loans in securitization transactions pursuant to Ginnie Mae guidelines, and other third-party-sponsored securitization entities.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017
2016
 201720162018
2017
 20182017
Carrying value of loans sold$15,402
$14,811
 $44,282
$32,647
$11,968
$15,402
 $28,804
$44,282
Proceeds received from loan sales as cash104
68
 117
306
1
104
 1
117
Proceeds received from loan sales as securities(a)
15,093
14,610
 43,682
32,113
Proceeds from loan sales as securities(a)
11,713
15,093
 28,291
43,682
Total proceeds received from loan sales(b)
$15,197
$14,678
 $43,799
$32,419
$11,714
$15,197
 $28,292
$43,799
Gains on loan sales(c)(d)
$41
$50
 $114
$164
$9
$41
 $32
$114
(a)Predominantly includes securities from U.S. GSEs and Ginnie Mae that are generally sold shortly after receipt.
(b)Excludes the value of MSRs retained upon the sale of loans.
(c)Gains on loan sales include the value of MSRs.
(d)The carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale.

Options to repurchase delinquent loans
In addition to the Firm’s obligation to repurchase certain loans due to material breaches of representations and warranties as discussed in Note 19,20, the Firm also has the option to repurchase delinquent loans that it services for Ginnie Mae loan pools, as well as for other U.S. government
agencies under certain arrangements.arrangements. The Firm typically elects to repurchase delinquent loans from Ginnie Mae loan pools as it continues to service them and/or manage the foreclosure process in accordance with the applicable requirements, and such loans continue to be insured or guaranteed. When the Firm’s repurchase option becomes exercisable, such loans must be reported on the Consolidated balance sheets as a loan with a corresponding liability. For additional information, refer to Note 11 of this Form 10-Q and Note 14 of JPMorgan Chase’s 2016 Annual Report.
.
The following table presents loans the Firm repurchased or had an option to repurchase, real estate owned, and foreclosed government-guaranteed residential mortgage loans recognized on the Firm’s Consolidated balance sheets as of September 30, 20172018 and December 31, 2016. 2017. Substantially all of these loans and real estate are insured or guaranteed by U.S. government agencies.
(in millions)Sept 30, 2017
Dec 31,
2016
Sep 30,
2018
Dec 31,
2017
Loans repurchased or option to repurchase(a)
$8,424
$9,556
$7,207
$8,629
Real estate owned99
142
78
95
Foreclosed government-guaranteed residential mortgage loans(b)
625
1,007
404
527
(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.


Loan delinquencies and liquidation losses
The table below includes information about components of nonconsolidated securitized financial assets held in Firm-sponsored Firm-sponsored private-label securitization entities, in which the Firm has continuing involvement, and delinquencies as of September 30, 2017,2018, and December 31, 2016.2017.
     
Net liquidation losses(a)
 Securitized assets 90 days past due Three months ended September 30, Nine months ended September 30,
(in millions)Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
 2018
2017
 2018
2017
Securitized loans           
Residential mortgage:           
Prime / Alt-A & option ARMs$51,914
$52,280
 $3,612
$4,870
 $182
$184
 $453
$622
Subprime15,950
17,612
 2,637
3,276
 155
153
 (307)529
Commercial and other77,494
63,411
 526
957
 71
2
 119
59
Total loans securitized$145,358
$133,303
 $6,775
$9,103
 $408
$339
 $265
$1,210

(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.

     Liquidation losses
 Securitized assets 90 days past due Three months ended September 30, Nine months ended September 30,
(in millions)Sep 30,
2017
Dec 31,
2016
 Sep 30,
2017
Dec 31,
2016
 2017
2016
 20172016
Securitized loans           
Residential mortgage:           
Prime / Alt-A & option ARMs$51,666
$57,543
 $5,039
$6,169
 $184
$275
 $622
$933
Subprime18,164
19,903
 3,435
4,186
 153
280
 529
898
Commercial and other65,043
71,464
 1,027
1,755
 2
78
 59
564
Total loans securitized$134,873
$148,910
 $9,501
$12,110
 $339
$633
 $1,210
$2,395



Note14 – Goodwill and Mortgage servicing rights
For a discussion of the accounting policies related to goodwill and mortgage servicing rights, seerefer to Note 1715 of JPMorgan Chase’s 20162017 Annual Report.
Goodwill
The following table presents goodwill attributed to the business segments.
(in millions)September 30,
2018
December 31,
2017
Consumer & Community Banking$30,995
$31,013
Corporate & Investment Bank6,771
6,776
Commercial Banking2,860
2,860
Asset & Wealth Management6,857
6,858
Total goodwill$47,483
$47,507
(in millions)September 30,
2017
December 31,
2016
Consumer & Community Banking$30,815
$30,797
Corporate & Investment Bank6,776
6,772
Commercial Banking2,860
2,861
Asset & Wealth Management6,858
6,858
Total goodwill$47,309
$47,288

The following table presents changes in the carrying amount of goodwill.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2017
 2016
 2017
 2016
2018
 2017
 2018
 2017
Balance at beginning
of period
$47,300
 $47,303
 $47,288
 $47,325
$47,488
 $47,300
 $47,507
 $47,288
Changes during the period from:              
Dispositions(a)
—
 —
 —

(71)
Other(b)
9
 (1) 21
 48
Other(a)
(5) 9
 (24) 21
Balance at September 30,$47,309
 $47,302
 $47,309
 $47,302
$47,483
 $47,309
 $47,483
 $47,309
(a)During the nine months ended September 30, 2016, represents AWM goodwill, which was disposed of as part of AWM sales completed in March 2016.
(b)Includes foreign currency translation adjustmentsremeasurement and other tax-related adjustments.
 
Goodwill Impairment testing
For a further description of the Firm’s goodwill impairment testing, including the primary method used to estimate the fair value of the reporting units, and the assumptions used in the goodwill impairment test, seerefer to Impairment testing on pages 240–241244–245 of JPMorgan Chase’s 20162017 Annual Report.
Goodwill was not impaired at September 30, 2017,2018, or December 31, 2016,2017, nor was goodwill written off due to impairment during the nine months ended September 30, 20172018 or 2016.2017.
Declines in business performance, increases in credit losses, increases in equity capital requirements, as well as deterioration in economic or market conditions, estimates of adverse regulatory or legislative changes or increases in the estimated market cost of equity, could cause the estimated fair values of the Firm’s reporting units or their associated goodwill to decline in the future, which could result in a material impairment charge to earnings in a future period related to some portion of the associated goodwill.

Mortgage servicing rights
MSRs represent the fair value of expected future cash flows for performing servicing activities for others. The fair value considers estimated future servicing fees and ancillary revenue, offset by estimated costs to service the loans, and generally declines over time as net servicing cash flows are received, effectively amortizing the MSR asset against contractual servicing and ancillary fee income. MSRs are either purchased from third parties or recognized upon sale or securitization of mortgage loans if servicing is retained. For a further description of the MSR asset, interest rate risk management, and the valuation of MSRs, seerefer to Note 17s 2 and 15 of JPMorgan Chase’s 20162017 Annual Report and Note 2 of this Form 10-Q.Report.
The following table summarizes MSR activity for the three and nine months endedSeptember 30, 20172018 and 2016.2017.
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		 As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		 
(in millions, except where otherwise noted)2017
 2016
 2017
 2016
 2018
 2017
 2018
 2017
 
Fair value at beginning of period$5,753
 $5,072
 $6,096
 $6,608
 $6,241
 $5,753
 $6,030
 $6,096
 
MSR activity:                
Originations of MSRs253
 190
 624
 410
 278
 253
 611
 624
 
Purchase of MSRs—
 —
 —
 —
 13
 —
 159
 —
 
Disposition of MSRs(a)
(2) (5) (140) (72) (2) (2) (401) (140) 
Net additions251
 185
 484
 338
 
Net additions/(dispositions)289
 251
 369
 484
 
                
Changes due to collection/realization of expected cash flows(200) (233) (619) (713) (195) (200) (542) (619) 
                
Changes in valuation due to inputs and assumptions:                
Changes due to market interest rates and other(b)
(67) (35) (188) (1,230) 150
 (67) 635
 (188) 
Changes in valuation due to other inputs and assumptions:                
Projected cash flows (e.g., cost to service)(116) (21) (102) (28) 14
 (116) 14
 (102) 
Discount rates—
 —
 (19) 7
 —
 —
 24
 (19) 
Prepayment model changes and other(c)
117
 (31) 86
 (45) (66) 117
 (97) 86
 
Total changes in valuation due to other inputs and assumptions1
 (52) (35) (66) (52) 1
 (59) (35) 
Total changes in valuation due to inputs and assumptions(66) (87) (223) (1,296) 98
 (66) 576
 (223) 
Fair value at September 30,$5,738
 $4,937
 $5,738
 $4,937
 $6,433
 $5,738
 $6,433
 $5,738
 
                
Change in unrealized gains/(losses) included in income related to MSRs held at September 30,$(66) $(87) $(223) $(1,296) $98
 $(66) $576
 $(223) 
Contractual service fees, late fees and other ancillary fees included in income463
 523
 1,427
 1,629
 428
 463
 1,339
 1,427
 
Third-party mortgage loans serviced at September 30, (in billions)558
 611
 558
 611
 528
 558
 528
 558
 
Net servicer advances at September 30, (in billions)(d)
3.9
 5.0
 3.9
 5.0
 3.1
 3.9
 3.1
 3.9
 
(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.

The following table presents the components of mortgage fees and related income (including the impact of MSR risk management activities) for the three and nine months ended September 30, 20172018 and 2016.2017.
 Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30,
(in millions) 2017
 2016
 2017
 2016
 2018
 2017
 2018
 2017
CCB mortgage fees and related income                
                
Net production revenue $158
 $247
 $451
 $670
 $108
 $158
 $296
 $451
                
Net mortgage servicing revenue:                
Operating revenue:                
Loan servicing revenue 493
 571
 1,533
 1,780
 435
 493
 1,389
 1,533
Changes in MSR asset fair value due to collection/realization of expected cash flows (200) (232) (617) (710) (195) (200) (542) (617)
Total operating revenue 293
 339
 916
 1,070
 240
 293
 847
 916
Risk management:                
Changes in MSR asset fair value due to market interest rates and other(a)
 (67) (35) (188) (1,230) 150
 (67) 636
 (188)
Other changes in MSR asset fair value due to other inputs and assumptions
in model(b)
 1
 (52) (35) (66) (52) 1
 (59) (35)
Change in derivative fair value and other 43
 125
 91
 1,536
 (186) 43
 (671) 91
Total risk management (23) 38
 (132) 240
 (88) (23) (94) (132)
Total net mortgage servicing revenue 270
 377
 784
 1,310
 152
 270
 753
 784
                
Total CCB mortgage fees and related income 428
 624
 1,235
 1,980
 260
 428
 1,049
 1,235
                
All other 1
 —
 4
 —
 2
 1
 2
 4
Mortgage fees and related income $429
 $624
 $1,239
 $1,980
 $262
 $429
 $1,051
 $1,239
(a)Represents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments.
(b)Represents the aggregate impact of changes in model inputs and assumptions such as projected cash flows (e.g., cost to service), discount rates and changes in prepayments other than those attributable to changes in market interest rates (e.g., changes in prepayments due to changes in home prices).
The table below outlines the key economic assumptions used to determine the fair value of the Firm’s MSRs at September 30, 2017,2018, and December 31, 2016, 2017, and outlines hypothetical sensitivities of those fair values to immediate adverse changes in those assumptions, as defined below.
(in millions, except rates)(in millions, except rates)Sep 30,
2017
 Dec 31,
2016
(in millions, except rates)Sep 30,
2018
 Dec 31,
2017
Weighted-average prepayment speed assumption (“CPR”)Weighted-average prepayment speed assumption (“CPR”)9.60% 9.41%Weighted-average prepayment speed assumption (“CPR”)8.40% 9.35%
Impact on fair value of 10% adverse changeImpact on fair value of 10% adverse change$(220) $(231)Impact on fair value of 10% adverse change$(194) $(221)
Impact on fair value of 20% adverse changeImpact on fair value of 20% adverse change(424) (445)Impact on fair value of 20% adverse change(376) (427)
Weighted-average option adjusted spreadWeighted-average option adjusted spread9.17% 8.55%Weighted-average option adjusted spread8.65% 9.04%
Impact on fair value of a 100 basis point adverse changeImpact on fair value of a 100 basis point adverse change$(239) $(248)Impact on fair value of a 100 basis point adverse change$(251) $(250)
Impact on fair value of a 200 basis point adverse changeImpact on fair value of a 200 basis point adverse change(460) (477)Impact on fair value of a 200 basis point adverse change(483) (481)
CPR: Constant prepayment rate.
 
Changes in fair value based on variation in assumptions generally cannot be easily extrapolated, because the relationship of the change in the assumptions to the change in fair value are often highly interrelated and may not be linear. In this table, the effect that a change in a particular assumption may have on the fair value is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another, which couldwould either magnify or counteract the impact of the initial change.




Note 15 – Deposits
For further discussioninformation on deposits, seerefer to Note 1917 of JPMorgan Chase’s 20162017 Annual Report.
At September 30, 2017,2018, and December 31, 2016, 2017, noninterest-bearing and interest-bearing deposits were as follows.
(in millions)September 30,
2017
 December 31, 2016
September 30,
2018
 December 31, 2017
U.S. offices      
Noninterest-bearing$390,863
 $400,831
$374,603
 $393,645
Interest-bearing (included $14,601 and $12,245 at fair value)(a)
783,233
 737,949
Interest-bearing (included $16,526 and $14,947 at fair value)(a)
814,988
 793,618
Total deposits in U.S. offices1,174,096
 1,138,780
1,189,591
 1,187,263
Non-U.S. offices      
Noninterest-bearing17,907
 14,764
19,127
 15,576
Interest-bearing (included $6,556 and $1,667 at fair value)(a)
247,024
 221,635
Interest-bearing (included $3,974 and $6,374 at fair value)(a)
250,044
 241,143
Total deposits in non-U.S. offices264,931
 236,399
269,171
 256,719
Total deposits$1,439,027
 $1,375,179
$1,458,762
 $1,443,982
(a)Includes structured notes classified as deposits for which the fair value option has been elected. For a further discussion, seerefer to Note 3 of JPMorgan Chase’s 20162017 Annual Report.


 
Note 16 – Earnings per share
For a discussion of the computation of basic and diluted earnings per share (“EPS”), seerefer to Note 2422 of JPMorgan Chase’s 20162017 Annual Report. The following table presents the calculation of basic and diluted EPS for the three and nine months ended September 30, 20172018 and 2016.2017.
(in millions, except per share amounts)Three months ended
September 30,		 Nine months ended
September 30,
2018
2017
 2018
2017
Basic earnings per share     
Net income$8,380
$6,732
 $25,408
$20,209
Less: Preferred stock dividends379
412
 1,167
1,235
Net income applicable to common equity8,001
6,320
 24,241
18,974
Less: Dividends and undistributed earnings allocated to participating securities53
58
 174
188
Net income applicable to common stockholders$7,948
$6,262
 $24,067
$18,786
      
Total weighted-average basic shares
  outstanding
3,376.1
3,534.7
 3,416.5
3,570.9
Net income per share$2.35
$1.77
 $7.04
$5.26
      
Diluted earnings per share     
Net income applicable to common stockholders$7,948
$6,262
 $24,067
$18,786
Total weighted-average basic shares
  outstanding
3,376.1
3,534.7
 3,416.5
3,570.9
Add: Employee stock options, SARs, warrants and unvested PSUs18.2
24.9
 19.7
26.1
Total weighted-average diluted shares outstanding3,394.3
3,559.6
 3,436.2
3,597.0
Net income per share$2.34
$1.76
 $7.00
$5.22


(in millions, except per share amounts)Three months ended
September 30,		 Nine months ended
September 30,
2017
2016
 2017
2016
Basic earnings per share     
Net income$6,732
$6,286
 $20,209
$18,006
Less: Preferred stock dividends412
412
 1,235
1,235
Net income applicable to common equity6,320
5,874
 18,974
16,771
Less: Dividends and undistributed earnings allocated to participating securities(a)
58
62
 188
187
Net income applicable to common stockholders(a)
$6,262
$5,812
 $18,786
$16,584
      
Total weighted-average basic shares
  outstanding(a)
3,534.7
3,637.7
 3,570.9
3,674.6
Net income per share$1.77
$1.60
 $5.26
$4.51
      
Diluted earnings per share     
Net income applicable to common stockholders(a)
$6,262
$5,812
 $18,786
$16,584
Total weighted-average basic shares
  outstanding(a)
3,534.7
3,637.7
 3,570.9
3,674.6
Add: Employee stock options, SARs, warrants and unvested PSUs24.9
32.1
 26.1
29.9
Total weighted-average diluted shares outstanding(a)
3,559.6
3,669.8
 3,597.0
3,704.5
Net income per share$1.76
$1.58
 $5.22
$4.48
(a)The prior period amounts have been revised to conform with the current period presentation. The revision had no impact on the Firm’s reported earnings per share.


Note 17 – Accumulated other comprehensive income/(loss)
AOCI includes the after-tax change in unrealized gains and losses on investment securities, foreign currency translation adjustments (including the impact of related derivatives), fair value changes of excluded components on fair value hedges, cash flow hedging activities, net loss and prior service costs/(credit) related to the Firm’s defined benefit pension and OPEB plans.
 As of or for the three months ended
September 30, 2018
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges 
Fair value hedges(b)
Cash flow hedges Defined benefit
pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at July 1, 2018 $1,599
   $(632)  $(162) $(147)   $(1,876)  $80
  $(1,138) 
 Net change (819)   (31)  34
 (88)   19
  (402)  (1,287) 
 Balance at September 30, 2018 $780
   $(663)  $(128) $(235)   $(1,857)  $(322)  $(2,425) 
                        
 As of or for the three months ended
September 30, 2017
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at July 1, 2017 $2,219
   $(157)  NA
 $44
   $(2,255)  $(243)  $(392) 
 Net change 147
   —
  NA
 26
   22
  (112)  83
 
 Balance at September 30, 2017 $2,366
   $(157)  NA
 $70
   $(2,233)  $(355)  $(309) 
                        
 As of or for the nine months ended
September 30, 2018
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit
pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at January 1, 2018 $2,164
   $(470)  $—
 $76
   $(1,521)  $(368)  $(119) 
 
Cumulative effect of changes in accounting principles(a):
                      
 Premium amortization on purchased callable debt securities 261
   —
  —
 —
   —
  —
  261
 
 Hedge accounting 169
   —
  (54) —
   —
  —
  115
 
 Reclassification of certain tax effects from AOCI 466
   (277)  —
 16
   (414)  (79)  (288) 
 Net change (2,280)   84
  (74) (327)   78
  125
  (2,394) 
 Balance at September 30, 2018 $780
   $(663)  $(128) $(235)   $(1,857)  $(322)  $(2,425) 
                        
 As of or for the nine months ended
September 30, 2017
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at January 1, 2017 $1,524
   $(164)  NA
 $(100)   $(2,259)  $(176)  $(1,175) 
 Net change 842
   7
  NA
 170
   26
  (179)  866
 
 Balance at September 30, 2017 $2,366
   $(157)  NA
 $70
   $(2,233)  $(355)  $(309) 
 As of or for the three months ended
September 30, 2017
(in millions)
Unrealized
gains/(losses)
on investment securities(b)
 Translation adjustments, net of hedges Cash flow hedges Defined benefit
pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at July 1, 2017 $2,219
   $(157)   $44
   $(2,255)  $(243)  $(392) 
 Net change 147
   —
   26
   22
  (112)  83
 
 Balance at September 30, 2017 $2,366
   $(157)   $70
   $(2,233)  $(355)  $(309) 
                       
 As of or for the three months ended
September 30, 2016
(in millions)
Unrealized
gains/(losses)
on investment securities(b)
 Translation adjustments, net of hedges Cash flow hedges 
Defined benefit pension and
OPEB plans
DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at July 1, 2016 $3,921
   $(161)   $(201)   $(2,150)  $209
  $1,618
 
 Net change (160)   4
   36
   42
  (66)  (144) 
 Balance at September 30, 2016 $3,761
   $(157)   $(165)   $(2,108)  $143
  $1,474
 
                       
 As of or for the nine months ended
September 30, 2017
(in millions)
Unrealized
gains/(losses)
on investment securities(b)
 Translation adjustments, net of hedges Cash flow hedges Defined benefit
pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at January 1, 2017 $1,524
   $(164)   $(100)   $(2,259)  $(176)  $(1,175) 
 Net change 842
   7
   170
   26
  (179)  866
 
 Balance at September 30, 2017 $2,366
   $(157)   $70
   $(2,233)  $(355)  $(309) 
                       
 As of or for the nine months ended
September 30, 2016
(in millions)
Unrealized
gains/(losses)
on investment securities(b)
 Translation adjustments, net of hedges Cash flow hedges Defined benefit pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at January 1, 2016 $2,629
   $(162)   $(44)   $(2,231)  NA
  $192
 
 
Cumulative effect of change in accounting principle(a)
 —
   —
   —
   —
  154
  154
 
 Net change 1,132
   5
   (121)   123
  (11)  1,128
 
 Balance at September 30, 2016 $3,761
   $(157)   $(165)   $(2,108)  $143
  $1,474
 

(a)Effective January 1, 2016,Represents the Firm adoptedadjustment to AOCI as a result of the new accounting guidance related to the recognition and measurement of financial liabilities where the fair value option has been elected. This guidance requires the portion of the total change in fair value caused by changesstandards adopted in the Firm’s own credit risk (DVA) to be presented separately in OCI; previously these amounts were recognized in net income.first quarter of 2018.
(b)Represents the after-tax difference between thechanges 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 amortizedrecorded in other comprehensive income. The initial cost of securities accounted forcross-currency basis spreads is recognized in earnings as AFS, including net unamortized unrealized gains and losses related to AFS securities transferred to HTM.part of the accrual of interest on the cross currency swap.




The following table presents the pre-tax and after-tax changes in the components of OCI.
2017 20162018 2017
Three months ended September 30, (in millions)Pre-tax Tax effect After-tax Pre-tax Tax effect After-taxPre-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$232
 $(86) $146
 $(192) $72
 $(120)$(1,117) $262
 $(855) $232
 $(86) $146
Reclassification adjustment for realized (gains)/losses included in
net income(a)
1
 —
 1
 (64) 24
 (40)46
 (10) 36
 1
 —
 1
Net change233
 (86) 147
 (256) 96
 (160)(1,071) 252
 (819) 233
 (86) 147
Translation adjustments(b):
           
Translation adjustments:           
Translation286
 (106) 180
 34
 (12) 22
(314) 45
 (269) 286
 (106) 180
Hedges(286) 106
 (180) (30) 12
 (18)311
 (73) 238
 (286) 106
 (180)
Net change—
 —
 —
 4
 —
 4
(3) (28) (31) —
 —
 —
Fair value hedges, net change(b):

45
 (11) 34
 NA
 NA
 NA
Cash flow hedges:                      
Net unrealized gains/(losses) arising during the period29
 (11) 18
 (64) 23
 (41)(122) 27
 (95) 29
 (11) 18
Reclassification adjustment for realized (gains)/losses included in
net income(c)
10
 (2) 8
 122
 (45) 77
9
 (2) 7
 10
 (2) 8
Net change39
 (13) 26
 58
 (22) 36
(113) 25
 (88) 39
 (13) 26
Defined benefit pension and OPEB plans:                      
Net gains/(losses) arising during the period—
 —
 —
 —
 —
 —
—
 —
 —
 —
 —
 —
Reclassification adjustments included in net income(d):
                      
Amortization of net loss63
 (23) 40
 65
 (24) 41
26
 (6) 20
 63
 (23) 40
Prior service costs/(credits)(9) 3
 (6) (9) 3
 (6)(7) 2
 (5) (9) 3
 (6)
Foreign exchange and other(19) 7
 (12) 12
 (5) 7
7
 (3) 4
 (19) 7
 (12)
Net change35
 (13) 22
 68
 (26) 42
26
 (7) 19
 35
 (13) 22
DVA on fair value option elected liabilities, net change:$(178) $66
 $(112) $(106) $40
 $(66)(527) 125
 (402) (178) 66
 (112)
Total other comprehensive income/(loss)$129
 $(46) $83
 $(232) $88
 $(144)$(1,643) $356
 $(1,287) $129
 $(46) $83
                      
2017 20162018 2017
Nine months ended September 30, (in millions)Pre-tax Tax effect After-tax Pre-tax Tax effect After-taxPre-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$1,294
 $(476) $818
 $1,948
 $(731) $1,217
$(3,351) $787
 $(2,564) $1,294
 $(476) $818
Reclassification adjustment for realized (gains)/losses included in
net income(a)
38
 (14) 24
 (136) 51
 (85)371
 (87) 284
 38
 (14) 24
Net change1,332
 (490) 842
 1,812
 (680) 1,132
(2,980) 700
 (2,280) 1,332
 (490) 842
Translation adjustments:(b)
           
Translation adjustments(e):
           
Translation1,185
 (448) 737
 613
 (228) 385
(981) 188
 (793) 1,185
 (448) 737
Hedges(1,161) 431
 (730) (603) 223
 (380)1,149
 (272) 877
 (1,161) 431
 (730)
Net change24
 (17) 7
 10
 (5) 5
168
 (84) 84
 24
 (17) 7
Fair value hedges, net change(b):
(96) 22
 (74) NA
 NA
 NA
Cash flow hedges:                      
Net unrealized gains/(losses) arising during the period111
 (42) 69
 (418) 156
 (262)(365) 85
 (280) 111
 (42) 69
Reclassification adjustment for realized (gains)/losses included in
net income(c)
160
 (59) 101
 225
 (84) 141
(62) 15
 (47) 160
 (59) 101
Net change271
 (101) 170
 (193) 72
 (121)(427) 100
 (327) 271
 (101) 170
Defined benefit pension and OPEB plans:                      
Net gains/(losses) arising during the period(52) 19
 (33) (15) 6
 (9)25
 (6) 19
 (52) 19
 (33)
Reclassification adjustments included in net income(d):
                      
Amortization of net loss187
 (69) 118
 193
 (73) 120
78
 (18) 60
 187
 (69) 118
Prior service costs/(credits)(27) 10
 (17) (27) 10
 (17)(19) 5
 (14) (27) 10
 (17)
Settlement (gain)/loss

(3) 1
 (2) —
 —
 —
—
 —
 —
 (3) 1
 (2)
Foreign exchange and other(51) 11
 (40) 46
 (17) 29
19
 (6) 13
 (51) 11
 (40)
Net change54
 (28) 26
 197
 (74) 123
103
 (25) 78
 54
 (28) 26
DVA on fair value option elected liabilities, net change:$(283) $104
 $(179) $(18) $7
 $(11)$163
 $(38) $125
 $(283) $104
 $(179)
Total other comprehensive income/(loss)$1,398
 $(532) $866
 $1,808
 $(680) $1,128
$(3,069) $675
 $(2,394) $1,398
 $(532) $866
(a)The pre-tax amount is reported in investment securities gains/(losses)losses in the Consolidated statements of income.
(b)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.
(c)The pre-tax amounts are predominantly recorded in noninterest revenue, net interest income and compensation expense in the Consolidated statements of income.
(d)The pre-tax amount is reported in other expense in the Consolidated statements of income.
(e)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. The amounts were not material forDuring the periods presented.nine months ended September 30, 2018, the Firm reclassified a net pre-tax loss of $174 million to other expense related to the liquidation of a legal entity, $23 million related to net investment hedge losses and $151 million related to cumulative translation adjustments. During the nine months ended September 30, 2017, the Firm reclassified a net pre-tax loss of $25 million to other expense related to the liquidation of a legal entity, $47 million related to net investment hedge gains and $72 million related to cumulative translation adjustments.

Note 18 – Restricted cash and other restricted
assets
For a detailed discussion of the Firm’s restricted cash and other restricted assets, refer to Note 25 of JPMorgan Chase’s 2017 Annual Report.
As a result of the adoption of the restricted cash accounting guidance in the first quarter of 2018, restricted cash is included with unrestricted cash when reconciling the beginning and ending cash balances on the Consolidated statements of cash flows.
The following table presents the components of the Firm’s restricted cash:
(in billions)September 30,
2018
December 31, 2017
Cash reserves – Federal Reserve Banks$23.6
$25.7
Segregated for the benefit of securities and futures brokerage customers15.3
16.8
Cash reserves at non-U.S. central banks and held for other general purposes3.3
3.3
Total restricted cash(a)
$42.2
$45.8
(c)(a)The pre-tax amounts are predominantly recordedComprises $40.7 billion and $44.8 billion in net interest incomedeposits with banks, and $1.5 billion and $1.0 billion in cash and due from banks on the Consolidated statementsbalance sheets as of income.September 30, 2018 and December 31, 2017, respectively.
(d)The pre-tax amount is reported in compensation expense in the Consolidated statements of income.

Also, as of September 30, 2018 and December 31, 2017, the Firm had:
Cash and securities pledged with clearing organizations for the benefit of customers of $18.8 billion and $18.0 billion, respectively.
Securities with a fair value of $2.2 billion and $3.5 billion, respectively, were also restricted in relation to customer activity.



Note 1819 – Regulatory capital
For a detailed discussion on regulatory capital, refer to Note 26 of JPMorgan Chase’s 2017 Annual Report.
The Federal Reserve establishes capital requirements, including well-capitalized standards, for the consolidated financial holding company. The Office of the Comptroller of the Currency (“OCC”) establishes similar minimum capital requirements and standards for the Firm’s insured depository institutions (“IDI”), including JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A.
Capital rules under Basel III establishUnder the risk-based capitalguidelines of the Federal Reserve, JPMorgan Chase is required to maintain minimum ratios for CET1, Tier 1, Total, Tier 1 leverage and the SLR. Failure to meet these minimum requirements could cause the Federal Reserve to take action. IDI subsidiaries are also subject to these capital requirements by their respective primary regulators.
The following table represents the minimum and well-capitalized ratios and overall capital adequacy standards for large and internationally active U.S. bank holding companies and banks, includingto which the Firm and its IDI subsidiaries. Basel III sets forth two comprehensive approaches for calculating RWA: a standardized approach (“Basel III Standardized”),subsidiaries were subject as of September 30, 2018.
 Minimum capital ratios Well-capitalized ratios
 
BHC(a)(e)(f)

IDI(b)(e)(f)

 
BHC(c) 

IDI(d)

Capital ratios     
CET19.0%6.375% —%6.5%
Tier 110.5
7.875
 6.0
8.0
Total12.5
9.875
 10.0
10.0
Tier 1 leverage4.0
4.0
 5.0
5.0
SLR5.0
6.0
 —
6.0
Note: The table above is as defined by the regulations issued by the Federal Reserve, OCC and an advanced approach (“Basel III Advanced”). Certain ofFDIC and to which the requirements of Basel IIIFirm and its IDI subsidiaries are subject to phase-in periods that began on January 1, 2014 and continue through the end of 2018 (“transitional period”).subject.
The three categories of risk-based capital and their predominant components under the Basel III Transitional rules are illustrated below:
(a)
Represents the Transitional minimum capital ratios applicable to the Firm under Basel III at September 30, 2018. At September 30, 2018, the CET1 minimum capital ratio includes 1.875% resulting from the phase in of the Firm’s 2.5% capital conservation buffer, and 2.625% resulting from the phase in of the Firm’s 3.5% GSIB surcharge.
(b)
Represents requirements for JPMorgan Chase’s IDI subsidiaries. The CET1 minimum capital ratio includes 1.875% resulting from the phase in of the 2.5% capital conservation buffer 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, 2017, the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm were 7.5%, 9.0%, 11.0% and 4.0%, and the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm’s IDI subsidiaries were 5.75%, 7.25%, 9.25% and 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.

a3qtiernewa011.jpg

The following tables present the risk-based and leverage-based capital metrics for JPMorgan Chase and its significant IDI subsidiaries under both the Basel III Standardized Transitional and Basel III Advanced Transitional approaches atApproaches. As of September 30, 2017,2018 and December 31, 2016.2017, JPMorgan Chase and all of its IDI subsidiaries were well-capitalized and met all capital requirements to which each was subject.

JPMorgan Chase & Co.
Basel III Standardized Transitional Basel III Advanced Transitional
(in millions,
except ratios)
Sep 30,
2017
 Dec 31,
2016
 Sep 30,
2017
 Dec 31,
2016
September 30, 2018
(in millions, except ratios)		Basel III Standardized Transitional Basel III Advanced Transitional
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
Chase Bank
USA, N.A.
 
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
Chase Bank
USA, N.A.
Regulatory capital          
CET1 capital$187,061
 $182,967
 $187,061
 $182,967
$184,972
$188,608
$23,136
 $184,972
$188,608
$23,136
Tier 1 capital(a)
212,297
 208,112
 212,297
 208,112
Tier 1 capital210,589
188,608
23,136
 210,589
188,608
23,136
Total capital242,949
 239,553
 232,794
 228,592
238,303
199,634
28,026
 228,574
193,613
26,636
          
Assets          
Risk-weighted1,482,267
 1,464,981
 1,443,019
 1,476,915
1,545,326
1,362,039
109,138
 1,438,529
1,211,473
182,177
Adjusted
average(b)
2,521,889
 2,484,631
 2,521,889
 2,484,631
Adjusted average(a)
2,552,612
2,141,332
116,411
 2,552,612
2,141,332
116,411
          
Capital ratios(c)
       
Capital ratios(b)
   
CET112.6% 12.5% 13.0% 12.4%12.0%13.8%21.2% 12.9%15.6%12.7%
Tier 1(a)
14.3
 14.2
 14.7
 14.1
Tier 113.6
13.8
21.2
 14.6
15.6
12.7
Total16.4
 16.4
 16.1
 15.5
15.4
14.7
25.7
 15.9
16.0
14.6
Tier 1 leverage(d)
8.4
 8.4
 8.4
 8.4
Tier 1 leverage(c)
8.2
8.8
19.9
 8.2
8.8
19.9
 JPMorgan Chase Bank, N.A.
 Basel III Standardized Transitional Basel III Advanced Transitional
(in millions,
  except ratios)
Sep 30,
2017
 Dec 31,
2016
 Sep 30,
2017
 Dec 31,
2016
Regulatory capital       
CET1 capital$186,440
 $179,319
 $186,440
 $179,319
Tier 1 capital(a)
186,440
 179,341
 186,440
 179,341
Total capital197,962
 191,662
 191,503
 184,637
        
Assets       
Risk-weighted1,312,292
 1,293,203
 1,240,585
 1,262,613
Adjusted
average(b)
2,123,214
 2,088,851
 2,123,214
 2,088,851
        
Capital ratios(c)
       
CET114.2% 13.9% 15.0% 14.2%
Tier 1(a)
14.2
 13.9
 15.0
 14.2
Total15.1
 14.8
 15.4
 14.6
Tier 1 leverage(d)
8.8
 8.6
 8.8
 8.6

Chase Bank USA, N.A.
Basel III Standardized Transitional Basel III Advanced Transitional
(in millions,
except ratios)
Sep 30,
2017
 Dec 31,
2016
 Sep 30,
2017
 Dec 31,
2016
December 31, 2017
(in millions, except ratios)		Basel III Standardized Transitional Basel III Advanced Transitional
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
Chase Bank
USA, N.A.
 
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
Chase Bank
USA, N.A.
Regulatory capital              
CET1 capital$20,114
 $16,784
 $20,114
 $16,784
$183,300
$184,375
 $21,600
 $183,300
$184,375
 $21,600
Tier 1 capital(a)
20,114
 16,784
 20,114
 16,784
Tier 1 capital208,644
184,375
 21,600
 208,644
184,375
 21,600
Total capital26,152
 22,862
 24,764
 21,434
238,395
195,839
 27,691
 227,933
189,510
(d) 
26,250
              
Assets              
Risk-weighted108,901
 112,297
 192,734
 186,378
1,499,506
1,338,970
(d) 
113,108
 1,435,825
1,241,916
(d) 
190,523
Adjusted
average(b)
124,082
 120,304
 124,082
 120,304
Adjusted average(a)
2,514,270
2,116,031
 126,517
 2,514,270
2,116,031
 126,517
              
Capital ratios(c)
       
Capital ratios(b)
       
CET118.5% 14.9% 10.4% 9.0%12.2%13.8% 19.1% 12.8%14.8%
(d) 
11.3%
Tier 1(a)
18.5
 14.9
 10.4
 9.0
Tier 113.9
13.8
 19.1
 14.5
14.8
(d) 
11.3
Total24.0
 20.4
 12.8
 11.5
15.9
14.6
(d) 
24.5
 15.9
15.3
(d) 
13.8
Tier 1 leverage(d)
16.2
 14.0
 16.2
 14.0
Tier 1 leverage(c)
8.3
8.7
 17.1
 8.3
8.7
 17.1
(a)Includes the deduction associated with the permissible holdings of covered funds (as defined by the Volcker Rule) acquired after December 31, 2013. The deduction was not material as of September 30, 2017 and December 31, 2016.
(b)
Adjusted average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for unrealized gains/(losses) on AFS securities, less deductions foron-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets, defined benefit pension plan assets, and deferred tax assets related to NOL and tax credit carryforwards.assets.
(c)(b)
For each of the risk-based capital ratios, the capital adequacy of the Firm and its IDI subsidiaries is evaluated against the lower of the two ratios as calculated under Basel III approaches (Standardized or Advanced) as required by the Collins Amendment of the Dodd-Frank Act (the “Collins Floor”).
(d)(c)
The Tier 1 leverage ratio is not a risk-based measure of capital. This ratio is calculated by dividing Tier 1 capital by adjusted average assets.

Under the risk-based capital guidelines of the Federal Reserve, JPMorgan Chase is required to maintain minimum ratios of CET1, Tier 1 and Total capital to RWA, as well as a minimum leverage ratio (which is defined as Tier 1 capital divided by adjusted quarterly average assets). Failure to meet these minimum requirements could cause the Federal Reserve to take action. IDI subsidiaries also are subject to these capital requirements by their respective primary regulators. The following table presents the minimum ratios to which the Firm and its IDI subsidiaries are subject as of September 30, 2017.
 Minimum capital ratios Well-capitalized ratios
 
BHC(a)(e)

IDI(b)(e)

 
BHC(c) 

IDI(d)

Capital ratios     
CET17.50%5.75% —%6.50%
Tier 19.00
7.25
 6.00
8.00
Total11.00
9.25
 10.00
10.00
Tier 1 leverage4.00
4.00
 —
5.00
Note: The table above is as defined by the regulations issued by the Federal Reserve, OCC and FDIC and to which the Firm and its IDI subsidiaries are subject.
(a)Represents the Transitional minimum capital ratios applicable to the Firm under Basel III at September 30, 2017. At September 30, 2017, the CET1 minimum capital ratio includes 1.25% resulting from the phase in of the Firm’s 2.5% capital conservation buffer and 1.75%, resulting from the phase in of the Firm’s 3.5% GSIB surcharge.
(b)Represents requirements for JPMorgan Chase’s IDI subsidiaries. The CET1 minimum capital ratio includes 1.25% resulting from the phase in of the 2.5% capital conservation buffer 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 pursuantThe prior period amounts have been revised to regulations issued underconform with the FDIC Improvement Act.
current period presentation.

 September 30, 2018 December 31, 2017
 Basel III Advanced Fully Phased-InBasel III Advanced Transitional
(in millions, except ratios)
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
Chase Bank
USA, N.A.
 
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
Chase Bank
USA, N.A.
Total leverage exposure(a)
$3,235,518
$2,765,905
$175,153
 $3,204,463
$2,775,041
$182,803
SLR(a)
6.5%6.8%13.2% 6.5%6.6%11.8%
(e)(a)ForEffective January 1, 2018, the period endedSLR was fully phased-in under Basel III. The December 31, 20162017 amounts were calculated under the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm were 6.25%, 7.75%, 9.75% and 4.0% and the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm’s IDI subsidiaries were 5.125%, 6.625%, 8.625% and 4.0% respectively.Basel III Transitional rules.

As of September 30, 2017, and December 31, 2016, JPMorgan Chase and all of its IDI subsidiaries were well-capitalized and met all capital requirements to which each was subject.


Note 1920 – Off–balance sheet lending-related
financial instruments, guarantees, and other
commitments
JPMorgan Chase provides lending-related financial instruments (e.g., commitments and guarantees) to meetaddress the financing needs of its customers.customers and clients. The contractual amount of these financial instruments represents the maximum possible credit risk to the Firm should the counterpartycustomer or client draw upon the commitment or the Firm be required to fulfill its obligation under the guarantee, and should the counterpartycustomer or client subsequently fail to perform according to the terms of the contract. Most of these commitments and guarantees are refinanced, extended, cancelled, or expire without being drawn upon or a default occurring. As a result, the total contractual amount of these instruments is not, in the Firm’s view, representative of its expected future credit exposure or funding requirements. For a further discussion of lending-related commitments and guarantees, and the Firm’s related accounting policies, seerefer to Note 2927 of JPMorgan Chase’s 20162017 Annual Report.
 
To provide for probable credit losses inherent in wholesale and certain consumer lending-related commitments, an allowance for credit losses on lending-related commitments is maintained. SeeRefer to Note12for further information regarding the allowance for credit losses on lending-related commitments.
The following table summarizes the contractual amounts and carrying values of off-balance sheet lending-related financial instruments, guarantees and other commitments at September 30, 2017,2018, and December 31, 2016. 2017. The amounts in the table below for credit card and home equity lending-related commitments represent the total available credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit for these products will be utilized at the same time. The Firm can reduce or cancel credit card lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. In addition, the Firm typically closes credit card lines when the borrower is 60 days or more past due. The Firm may reduce or close HELOCs when there are significant decreases in the value of the underlying property, or when there has been a demonstrable decline in the creditworthiness of the borrower.

Off–balance sheet lending-related financial instruments, guarantees and other commitmentsOff–balance sheet lending-related financial instruments, guarantees and other commitments
Off–balance sheet lending-related financial instruments, guarantees and other commitments

Contractual amount
Carrying value(h)
Contractual amount
Carrying value(g)

September 30, 2017
Dec 31,
2016

Sep 30,
2017
Dec 31,
2016
September 30, 2018
Dec 31,
2017

Sep 30,
2018
Dec 31,
2017
By remaining maturity
(in millions)		Expires in 1 year or lessExpires after
1 year through
3 years		Expires after
3 years through
5 years		Expires after 5 yearsTotal
Total

Expires in 1 year or lessExpires after
1 year through
3 years		Expires after
3 years through
5 years		Expires after 5 yearsTotal
Total

Lending-related

















     
Consumer, excluding credit card:

















     
Home equity$3,052
$1,519
$1,311
$14,593
$20,475

$21,714

$12
$12
$916
$1,110
$1,693
$16,942
$20,661

$20,360

$12
$12
Residential mortgage(b)(a)
11,152
—
—
11
11,163

11,882

—
—
6,955
—
—
12
6,967

5,736

—
—
Auto8,604
951
333
82
9,970

8,468

2
2
7,911
1,430
200
89
9,630

9,255

2
2
Consumer & Business Banking(b)
11,911
899
113
540
13,463

12,733

19
12
12,127
647
111
487
13,372

13,202

19
19
Total consumer, excluding credit card34,719
3,369
1,757
15,226
55,071

54,797

33
26
27,909
3,187
2,004
17,530
50,630

48,553

33
33
Credit card574,641
—
—
—
574,641

553,891

—
—
600,728
—
—
—
600,728

572,831

—
—
Total consumer(c)(b)
609,360
3,369
1,757
15,226
629,712

608,688

33
26
628,637
3,187
2,004
17,530
651,358

621,384

33
33
Wholesale:

















     
Other unfunded commitments to extend credit(d)(c)
73,709
117,020
132,228
10,633
333,590

328,497

881
905
74,427
128,149
148,414
10,995
361,985

331,160

886
840
Standby letters of credit and other financial guarantees(d)(c)
16,698
8,317
7,945
2,179
35,139

35,947

575
586
14,561
9,810
5,038
2,339
31,748

35,226

585
636
Other letters of credit(d)(c)
3,330
206
114
1
3,651

3,570

4
2
3,344
137
102
—
3,583

3,712

7
3
Total wholesale(e)(d)
93,737
125,543
140,287
12,813
372,380

368,014

1,460
1,493
92,332
138,096
153,554
13,334
397,316

370,098

1,478
1,479
Total lending-related$703,097
$128,912
$142,044
$28,039
$1,002,092

$976,702

$1,493
$1,519
$720,969
$141,283
$155,558
$30,864
$1,048,674

$991,482

$1,511
$1,512
Other guarantees and commitments



































Securities lending indemnification agreements and guarantees(f)(e)
$177,835
$—
$—
$—
$177,835

$137,209

$—
$—
$202,622
$—
$—
$—
$202,622

$179,490

$—
$—
Derivatives qualifying as guarantees3,002
268
10,494
39,918
53,682

51,966

382
80
2,800
361
12,384
40,349
55,894

57,174

370
304
Unsettled reverse repurchase and securities borrowing agreements89,327
—
—
—
89,327

50,722

—
—
119,762
—
—
—
119,762

76,859

—
—
Unsettled repurchase and securities lending agreements84,687
—
—
—
84,687

26,948

—
—
92,115
—
—
—
92,115

44,205

—
—
Loan sale and securitization-related indemnifications:



































Mortgage repurchase liabilityNA
NA
NA
NA
NA

NA

124
133
NA
NA
NA
NA
NA

NA

89
111
Loans sold with recourseNA
NA
NA
NA
1,708

2,730

41
64
NA
NA
NA
NA
1,066

1,169

33
38
Other guarantees and commitments(g)(f)
1,801
2,058
130
1,452
5,441

5,715

(90)(118)10,091
1,443
384
2,641
14,559

11,867

(53)(76)
(a)Includes certain commitments to purchase loans from correspondents.
(b)Certain loan portfolios have been reclassified. The prior period amounts have been revised to conform with the current period presentation.
(c)Predominantly all consumer lending-related commitments are in the U.S.
(d)(c)At September 30, 2017,2018, and December 31, 2016,2017, reflected the contractual amount net of risk participations totaling $375$287 million and $328$334 million respectively, for other unfunded commitments to extend credit; $10.5$9.9 billion and $11.1$10.4 billion, respectively, for standby letters of credit and other financial guarantees; and $372$469 million and $265$405 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.
(e)(d)At both September 30, 2017,2018, and December 31, 2016,2017, the U.S. portion of the contractual amount of total wholesale lending-related commitments was 78% and 79%, respectively.76%.
(f)(e)At September 30, 2017,2018, and December 31, 2016,2017, collateral held by the Firm in support of securities lending indemnification agreements was $187.0$214.3 billion and $143.2$188.7 billion, respectively. Securities lending collateral primarily consists of cash and securities issued by governments that are members of the Organisation for Economic Co-operation and DevelopmentG7 and U.S. government agencies.
(g)(f)Included unfunded commitments of $41 million and $48 million at
At September 30, 2017, 2018, and December 31, 2016, respectively to third-party private equity funds; and $830 million and $1.0 billion, at September 30, 2017, and December 31, 2016, respectively, to other equity investments. These commitments included $29 million and $34 million, respectively, related to investments that are generally fair valued at net asset value as discussed in Note 2. In addition, includedprimarily includes letters of credit hedged by derivative transactions and managed on a market risk basis, of $4.5 billionunfunded commitments related to institutional lending and $4.6 billion at September 30, 2017, and December 31, 2016, respectively.commitments associated with the Firm’s membership in certain clearing houses. Additionally, includes unfunded commitments predominantly related to certain tax-oriented equity investments.
(h)(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.



Other unfunded commitments to extend credit
Other unfunded commitments to extend credit generally consist of commitments for working capital and general corporate purposes, extensions of credit to support commercial paper facilities and bond financings in the event that those obligations cannot be remarketed to new investors, as well as committed liquidity facilities to clearing organizations. The Firm also issues commitments under multipurpose facilities which could be drawn upon in several forms, including the issuance of a standby letter of credit.
The Firm acts as a settlement and custody bank in the U.S. tri-party repurchase transaction market. In its role as settlement and custody bank, the Firm in part is exposed to the intra-day credit risk of its cash borrower clients, usually broker-dealers. This exposure arises under secured
 
clearance advance facilities that the Firm extendsextended to its clients (i.e., cash borrowers); these facilities contractually limit the Firm’s intra-day credit risk to the facility amount
and must be repaid by the end of the day. As of September 30, 2017, and December 31, 2016, the maximum outstanding commitment under 2017 the secured clearance advance facility maximum outstanding commitment amount was$1.6 billion and $2.4 billion, respectively.1.5 billion. As of September 30, 2018 the Firm no longer offers such arrangements to its clients.
Standby letters of credit and other financial guarantees
Standby letters of credit and other financial guarantees are conditional lending commitments issued by the Firm to guarantee the performance of a client or customer to a third party under certain arrangements, such as commercial paper facilities, bond financings, acquisition financings, trade and similar transactions.


The following table summarizes the standby letters of credit and other letters of credit arrangementsas of September 30, 2017,2018, and December 31, 2016.2017.
Standby letters of credit, other financial guarantees and other letters of credit
September 30, 2017 December 31, 2016September 30, 2018 December 31, 2017
(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
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)
$28,160
 $2,646
 $28,245
 $2,781
$25,038
 $2,507
 $28,492
 $2,646
Noninvestment-grade(a)
6,979
 1,005
 7,702
 789
6,710
 1,076
 6,734
 1,066
Total contractual amount$35,139
 $3,651
 $35,947
 $3,570
$31,748
 $3,583
 $35,226
 $3,712
              
Allowance for lending-related commitments$191
 $4
 $145
 $2
$171
 $7
 $192
 $3
Guarantee liability384
 —
 441
 —
414
 —
 444
 —
Total carrying value$575
 $4
 $586
 $2
$585
 $7
 $636
 $3
              
Commitments with collateral$17,956
 $889
 $19,346
 $940
$16,074
 $559
 $17,421
 $878
(a)The ratings scale is based on the Firm’s internal ratings which generally correspond to ratings as defined by S&P and Moody’s.
Derivatives qualifying as guarantees
The Firm transacts certain derivative contracts that have the characteristics of a guarantee under U.S. GAAP. For further information on these derivatives, seerefer to Note 2927 of JPMorgan Chase’s 20162017 Annual Report.
The following table summarizes the derivatives qualifying as guarantees as of September 30, 2017,2018, and December 31, 2016.2017.
(in millions)September 30, 2018
 December 31, 2017
Notional amounts   
Derivative guarantees$55,894
 $57,174
Stable value contracts with contractually limited exposure28,574
 29,104
Maximum exposure of stable value contracts with contractually limited exposure2,954
 3,053
    
Fair value   
Derivative payables370
 304
Derivative receivables—
 —

(in millions)September 30, 2017
 December 31, 2016
Total notional value of derivatives(a)
53,682
 51,966
Notional amount of stable value contracts(b)
28,995
 28,665
Maximum exposure to loss on stable value contracts3,042
 3,012
    
Fair value(c)
   
Derivative payables382
 96
Derivative receivables—
 16

(a)
The notional amount generally represents the Firm’s maximum exposure to derivatives qualifying as guarantees.
(b)
Exposure to certain stable value contracts is contractually limited to a substantially lower percentage of the notional amount.
(c)
The fair value of the contracts reflect the probability, in the Firm’s view, of whether the Firm will be required to perform under the contract.
 
The Firm reduces exposures to these contracts by entering into offsetting transactions, or by entering into contracts that hedge the market risk related to the derivative guarantees.
In addition to derivative contracts that meet the characteristics of a guarantee, the Firm is both a purchaser and seller of credit protection in the credit derivatives market. For a further discussion of credit derivatives, seerefer to Note 4.4.

Loan sales- and securitization-related indemnifications
In connection with the Firm’s mortgage loan sale and securitization activities with GSEs and in certain private label transactions, the Firm has made representations and warranties that the loans sold meet certain requirements, and that may require the Firm to repurchase the mortgage loans and/or indemnify the loan purchaser if such representations and warranties are breached by the Firm. In addition, Further, although the Firm’s securitizations are predominantly nonrecourse, the Firm does provide recourse servicing in certain limited cases where it agrees to share credit risk with the owner of the mortgage loans. For additional information, seerefer to Note 2927 of JPMorgan Chase’s 20162017 Annual Report.

The liability related to repurchase demands associated with private label securitizations is separately evaluated by the Firm in establishing its litigation reserves. For additional information regarding litigation, seerefer to Note 2122 of this Form 10-Q and Note 3129 of JPMorgan Chase’s 20162017 Annual Report.
Guarantees of subsidiary
The Parent Company has guaranteed certain long-term debt and structured notes of its subsidiaries, including JPMorgan Chase Financial Company LLC (“JPMFC”), a 100%-owned finance subsidiary. All securities issued by JPMFC are fully and unconditionally guaranteed by the Parent Company, and these guarantees rank on a parity with the Firm’s unsecured and unsubordinated indebtedness.























 
Note 2021 – Pledged assets and collateral
For a discussion of the Firm’s pledged assets and collateral, seerefer to Note 3028 of JPMorgan Chase’s 20162017 Annual Report.
Pledged assets
The Firm may pledge financial assets that it owns to maintain potential borrowing capacity with central banks and for other purposes, including to secure borrowings and public deposits, collateralize repurchase and other securities financing agreements, and cover customer short sales. sales. Certain of these pledged assets may be sold or repledged or otherwise used by the secured parties and are parenthetically identified as financial instruments owned (pledged to various parties) on the Consolidated balance sheets.sheets as assets pledged.
The following table presents the Firm’sFirm’s pledged assets.
(in billions)September 30, 2018
 December 31, 2017
Assets that may be sold or repledged or otherwise used by secured parties$130.7
 $135.8
Assets that may not be sold or repledged or otherwise used by secured parties76.2
 68.1
Assets pledged at Federal Reserve banks and FHLBs488.9
 493.7
Total assets pledged$695.8
 $697.6

(in billions)September 30, 2017
 December 31,
2016
Assets that may be sold or repledged or otherwise used by secured parties$143.1
 $133.6
Assets that may not be sold or repledged or otherwise used by secured parties75.4
 53.5
Assets pledged at Federal Reserve banks and FHLBs487.8
 441.9
Total assets pledged$706.3
 $629.0
Total assets pledged do not include assets of consolidated VIEs; these assets are used to settle the liabilities of those entities. SeeRefer to Note 13for additional information on assets and liabilities of consolidated VIEs. For additional information on the Firm’sFirm’s securities financing activities, seerefer to Note 10. 10. For additional information on the Firm’sFirm’s long-term debt, seerefer to Note 21 19 of JPMorgan Chase’s 20162017 Annual Report.
Collateral
The Firm had acceptedaccepts financial assets as collateral that it couldis permitted to sell or repledge, deliver or otherwise use. This collateral wasis generally obtained under resale agreements, securities borrowing agreements, customer margin loans and derivative agreements. Collateral wasis generally used under repurchase agreements, securities lending agreements or to cover customer short sales and to collateralize deposits and derivative agreements.
The following table presents the fair value of collateral accepted.
(in billions)September 30, 2018
 December 31, 2017
Collateral permitted to be sold or repledged, delivered, or otherwise used$1,114.1
 $968.8
Collateral sold, repledged, delivered or otherwise used927.5
 771.0

Certain prior period amounts for both collateral and pledged assets (including the corresponding pledged assets parenthetical disclosure for trading assets and other assets on the Consolidated balance sheets) have been revised to conform with the current period presentation.
(in billions)September 30, 2017
 December 31,
2016
Collateral that could be sold or repledged, delivered, or otherwise used$957.2
 $914.1
Collateral sold, repledged, delivered or otherwise used785.0
 746.6



Note 2122 – Litigation
Contingencies
As of September 30, 2017,2018, the Firm and its subsidiaries and affiliates are defendants or putative defendants in numerous legal proceedings, including private, civil litigations and regulatory/government investigations. The litigations range from individual actions involving a single plaintiff to class action lawsuits with potentially millions of class members. Investigations involve both formal and informal proceedings, by both governmental agencies and self-regulatory organizations. These legal proceedings are at varying stages of adjudication, arbitration or investigation, and involve each of the Firm’s lines of business and geographies and a wide variety of claims (including common law tort and contract claims and statutory antitrust, securities and consumer protection claims), some of which present novel legal theories.
The Firm believes the estimate of the aggregate range of reasonably possible losses, in excess of reserves established, for its legal proceedings is from $0 to approximately $1.8$1.6 billion at September 30, 2017.2018. This estimated aggregate range of reasonably possible losses was based upon currently available information for those proceedings in which the Firm believes that an estimate of reasonably possible loss can be made. For certain matters, the Firm does not believe that such an estimate can be made, as of that date. The Firm’s estimate of the aggregate range of reasonably possible losses involves significant judgment, given given:
the number, variety and varying stages of the proceedings, (includingincluding the fact that many are in preliminary stages), stages,
the existence in many such proceedings of multiple defendants, (includingincluding the Firm)Firm, whose share of liability (if any) has yet to be determined,
the numerous yet-unresolved issues in many of the proceedings, (includingincluding issues regarding class certification and the scope of many of the claims)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.
In addition, the outcome of a particular proceeding may be a result which the Firm did not take into account in its estimate because the Firm had deemed the likelihood of that outcome to be remote. Accordingly, the Firm’s estimate of the aggregate range of reasonably possible losses will change from time to time, and actual losses may vary significantly.
Set forth below are descriptions of the Firm’s material legal proceedings.
American Depositary Receipts Pre-Release Inquiry. The Staff of the U.S. Securities and Exchange Commission’s Enforcement Division has been investigating depositary banks and broker-dealers, including the Firm, in connection with activity relating to pre-released American Depositary Receipts. The Staff’s investigation focuses on the period of 2011 to 2015. The Firm continues to cooperate with this investigation and is currently engaged in settlement discussions. There is no assurance that such discussions will result in a settlement.
Foreign Exchange Investigations and Litigation. The Firm previously reported settlements with certain government authorities relating to its foreign exchange (“FX”) sales and trading activities and controls related to those activities. FX-related investigations and inquiries by government authorities, including competition authorities, are ongoing, and the Firm is cooperating with and working to resolve those matters. In May
2015, the Firm pleaded guilty to a single violation of federal antitrust law. In January 2017, the Firm was sentenced, with judgment entered thereafter.thereafter and a term of probation ending in January 2020. The Department of Labor has granted the Firm a temporary one-year waiverfive-year exemption of disqualification effective upon entry of judgment, that allows the Firm and its affiliates to continue to rely on the Qualified Professional Asset Manager exemption under the Employee Retirement Income Security Act (“ERISA”). until January 2023. The Firm’s applicationFirm will need to reapply in due course for a lengthierfurther exemption is pending.to cover the remainder of the ten-year disqualification period. Separately, in February 2017 the South Africa Competition Commission referred its FX investigation of the Firm and other banks to the South Africa Competition Tribunal, which has initiatedis conducting civil proceedings. proceedings concerning that matter.
The Firm is also one of a number of foreign exchange dealers defendingnamed as defendants in a class action filed in the United States District Court for the Southern District of New York by U.S.-based plaintiffs, principally alleging violations of federal antitrust laws based on an alleged conspiracy to manipulate foreign exchange rates (the “U.S. class action”). In January 2015, the Firm entered into a settlement agreement in the U.S. class action. Following this settlement, a number of additional putative class actions were filed seeking damages for persons who transacted FX futures and options on futures (the “exchanged-based actions”), consumers who purchased foreign currencies at allegedly inflated rates (the “consumer action”), participants or beneficiaries of qualified ERISA plans (the “ERISA actions”), and purported indirect purchasers of FX instruments (the “indirect purchaser action”). Since then, the Firm has entered into a revised settlement agreement to resolve the consolidated U.S. class action, including the exchange-based actions, and actions. The Court granted final approval of

that settlement agreement has been preliminarily approved byin August 2018. Certain members of the Court.settlement class have filed requests to the Court to be excluded from the class. The District Court has dismissed one of the ERISA actions, and the United States Court of Appeals for the Second Circuit affirmed that dismissal in July 2018. The District Court has also dismissed the indirect purchaser action, and the plaintiffs have filed an appeal.sought leave to replead their complaint. The consumer action and a second ERISA action and the indirect purchaser action remain pending in the District Court.
General Motors Litigation. JPMorgan Chase Bank, N.A. participated in, and was the Administrative Agent on behalf of a syndicate of lenders on, a $1.5 billion syndicated Term Loan facility (“Term Loan”) for General Motors Corporation (“GM”). In July 2009, in connection with the GM bankruptcy proceedings, the Official Committee of Unsecured Creditors of Motors Liquidation Company (“Creditors Committee”) filed a lawsuit against JPMorgan Chase Bank, N.A., in its individual capacity and as Administrative Agent for other lenders on the Term Loan, seeking to hold the underlying lien invalid based on the filing of a UCC-3 termination statement relating to the Term Loan. In January 2015, following several court proceedings, the United States Court of Appeals for the Second Circuit reversed the Bankruptcy Court’s dismissal of the Creditors Committee’s claim and remanded the case to the Bankruptcy Court with instructions to enter partial summary judgment for the Creditors Committee as to the termination statement. The

proceedings in the Bankruptcy Court continue with respect to, among other things, additional defenses asserted by JPMorgan Chase Bank, N.A. and the value of additional collateral on the Term Loan that was unaffected by the filing of the termination statement at issue. In connection with that additional collateral, a trial in the Bankruptcy Court regarding the value of certain representative assets concluded in May 2017, and a ruling was issued in September 2017. The Bankruptcy Court found that 33 of the 40 representative assets are fixtures and that these fixtures generally should be valued on a “going concern” basis. The Creditors Committee is seekingsought leave to appeal the Bankruptcy Court’s ruling that the fixtures should be valued on a “going concern” basis rather than on a liquidation basis. The parties have agreed to engagebasis, and in mediation concerningSeptember 2018, the value of the remaining additional collateral in light of the Bankruptcy Court’s ruling regarding the representative assets, as well as other issues.District Court denied that request. In addition, certain Term Loan lenders filed cross-claims in the Bankruptcy Court against JPMorgan Chase Bank, N.A. seeking indemnification and asserting various claims. The cross-claims are also expected to be addressed atparties have engaged in mediation concerning, among other things, the mediation.
Hopper Estate Litigation. The Firm is a defendant in an action in connection with its role as an independent administratorcharacterization and value of an estate. The plaintiffs sought in excess of
$7 million in compensatory damages, primarily relating to attorneys’ fees incurred by the plaintiffs. After a trial in probate court in Dallas, Texas that ended in September 2017, the jury returned a verdict against the Firm, awarding plaintiffs their full compensatory damages and multiple billions in punitive damages. Notwithstanding the jury verdict,remaining additional collateral, in light of legal limitations on the availability of damages, certain ofBankruptcy Court’s ruling regarding the plaintiffs movedrepresentative assets, as well as other issues, including the cross-claims. In September 2018, the Bankruptcy Court approved a schedule for entry of judgment incontinued proceedings concerning issues that the total amount of approximately $71 million, including punitive damages, while another plaintiff has not yet moved for judgment. The court has not yet entered a judgment in this matter. The parties are engaged in post-trial briefing.have been unable to resolve through mediation.
Interchange Litigation. A group of merchants and retail associations filed a series of class action complaints alleging that Visa and MasterCard, as well as certain banks, conspired to set the price of credit and debit card
interchange fees and enacted respective rules in violation of antitrust laws. The parties entered into an agreement to settlesettled the cases for a cash payment, of $6.1 billion to the class plaintiffs (of which the Firm’s share is approximately 20%) and an amount equal to ten basis pointsa temporary reduction of credit card interchange, for a period of eight months to be measured from a date within 60 days of the end of the opt-out period. The agreement also provided forand modifications to eachcertain credit card network’s rules, including those that prohibit surcharging credit card transactions.network rules. In December 2013, the District Court granted final approval of the settlement.
A number of merchants appealed the settlement to the United States Court of Appeals for the Second Circuit, which, in June 2016,
vacated the District Court’s certification of the class action and reversed the approval of the class settlement. Both the plaintiffs and the defendants filed petitions seeking review byIn March 2017, the U.S. Supreme Court declined petitions seeking review of the Second Circuit’s decision and those petitions were denied in March 2017.of the Court of Appeals. The case has beenwas remanded to the District Court for further proceedings consistent with the appellate decision. The original class action was divided into two separate actions, one seeking primarily monetary relief and the other seeking primarily injunctive relief. In September 2018, the parties to the class action seeking monetary relief finalized an agreement which amends and supersedes the prior settlement agreement, and the plaintiffs filed a motion seeking preliminary approval of the modified settlement. This settlement provides for the defendants to contribute an additional $900 million to the approximately $5.3 billion currently held in escrow from the original settlement. Upon preliminary approval by the District Court, $600 million of that additional amount will be funded from the litigation escrow account established under the Visa defendants’ Retrospective Responsibility Plan, and $300 million will be paid by Mastercard and certain banks in accordance with an agreement among themselves regarding their respective shares. In June 2018, Visa deposited an additional $600 million into its litigation escrow account, which in turn led to a corresponding change in the conversion rate of Visa Class B to Class A shares. Of the Mastercard-related portion, the Firm’s share is approximately $36 million. The class action seeking primarily injunctive relief continues separately.
In addition, certain merchants have filed individual actions raising similar allegations against Visa and MasterCard,Mastercard, as well as against the Firm and other banks, and those actions are proceeding.
LIBOR and Other Benchmark Rate Investigations and Litigation. JPMorgan Chase has received subpoenas and requests for documents and, in some cases, interviews, from federal and state agencies and entities, including the U.S. Department of Justice (“DOJ”), the U.S. Commodity Futures Trading Commission (“CFTC”), the U.S. Securities and Exchange Commission (“SEC”) and various state attorneys general, as well as the European Commission (“EC”), the U.K. Financial Conduct Authority (“FCA”), the Canadian Competition Bureau, the Swiss Competition Commission (“ComCo”) and other regulatory authorities and banking associations around the world relating primarily to the process by which interest rates were submitted to the British Bankers Association (“BBA”) in connection with the setting of the BBA’s London Interbank Offered Rate (“LIBOR”) for various currencies, principally in 2007 and 2008. Some of the inquiries also relate to similar processes by which information on rates was submitted to the European Banking Federation (“EBF”) in connection with

the setting of the EBF’s Euro Interbank Offered Rates (“EURIBOR”) and to the Japanese Bankers’ Association for the setting of Tokyo Interbank Offered Rates (“TIBOR”) during similar time periods, as well as processes for the setting of U.S. dollar ISDAFIX rates and other reference rates in various parts of the world during similar time periods, including through 2012. The Firm continues to cooperate with these ongoing investigations and is currently engaged in discussionsto the extent that they are ongoing. The Firm has recently reached a resolution with the CFTC about resolving itsconcerning the CFTC’s U.S. dollar ISDAFIX-related investigation with respect to the Firm. There is no assurance that such discussions will result in a settlement.investigation. As previously reported, the Firm has resolved EC inquiries relating to Yen LIBOR and Swiss Franc LIBOR. In December 2016, the Firm resolved ComCo inquiries relating to these same rates. ComCo’s investigation relating to EURIBOR, to which the Firm and other banks are subject, continues. In December 2016, the EC issued a decision against the Firm and other banks finding an infringement of European antitrust rules relating to EURIBOR. The Firm has filed an appeal of that decision with the European General Court. In June 2016, the DOJ informed the FirmCourt, and that the DOJ had closed its inquiry into LIBOR and other benchmark rates with respect to the Firm without taking action. Certain other inquiries have been discontinued without any action against JPMorgan Chase, including by the SEC, FCA and the Canadian Competition Bureau.appeal is pending.

In addition, the Firm has been named as a defendant along with other banks in a series of individual and putative class actions filed in various United States District Courts. These actions have been filed, or consolidated for pre-trial purposes, in the United States District Court for the Southern District of New York. In these actions, plaintiffs make varying allegations that in various periods, starting in 2000 or later, defendants either individually or collectively manipulated the U.S. dollar LIBOR, Yen LIBOR, Swiss franc LIBOR, Euroyen TIBOR, EURIBOR, Singapore Interbank Offered Rate (“SIBOR”), Singapore Swap Offer Rate (“SOR”) and/or the Bank Bill Swap Reference Rate (“BBSW”)various benchmark rates by submitting rates that were artificially low or high. Plaintiffs allege that they transacted in loans, derivatives or other financial instruments whose values are affected by changes in U.S. dollar LIBOR, Yen LIBOR, Swiss franc LIBOR, Euroyen TIBOR, EURIBOR, SIBOR, SOR or BBSWthese rates and assert a variety of claims including antitrust claims seeking treble damages. These matters are in various stages of litigation.
The Firm has agreed to settle the putative class actions related to Yen LIBOR, Euroyen TIBOR andexchange-traded Eurodollar futures contracts, Swiss franc LIBOR.LIBOR, EURIBOR, the Singapore Interbank Offered Rate, the Singapore Swap Offer Rate and the Australian Bank Bill Swap Reference Rate. Those settlements are all subject to approval by the Court.   further documentation and court approval.
In the EURIBOR action, the District Court dismissed all claims except a single antitrust claim and two common law claims, and dismissed all defendants except the Firm and Citibank.
In theactions related to U.S. dollar LIBOR-related actions,LIBOR, the District Court dismissed certain claims, including antitrust claims brought by some plaintiffs whom the District Court found did not have standing to assert such claims, and permitted antitrust claims, claims under the Commodity Exchange Act and common law claims to proceed. The plaintiffs whose antitrust claims were dismissed for lack of standing have filed an appeal. In May 2017, plaintiffs in three putative classFebruary 2018, as to those actions moved inwhich the Firm has not agreed to settle, the District Court for(i) granted class certification with respect to certain antitrust claims related to bonds and interest rate swaps sold directly by the Firmdefendants, (ii) denied class certification with respect to state common law claims brought by the holders of those bonds and other defendants have opposed that motion.
Inswaps and (iii) denied class certification with respect to the putative class action related to SIBOR and SOR, the District Court dismissed without prejudice all claims except a single antitrust claim, and dismissed without prejudice all defendants except the Firm, Bank of America and Citibank. The plaintiffs filed an amended complaint in September 2017, which the Firm and other defendants have moved to dismiss.LIBOR-based loans held by plaintiff lending institutions.
The Firm is one of the defendants in a number of putative class actions alleging that defendant banks and ICAP conspired to manipulate the U.S. dollar ISDAFIX rates. Plaintiffs primarily assert claims under the federal antitrust laws and Commodity Exchange Act. In April 2016, the Firm settled the ISDAFIXthis litigation, along with certain other banks. Those settlements have been preliminarily approved by the Court.
Madoff Litigation. Investors in the Ponzi scheme perpetrated by Bernard L. Madoff Investment Securities LLC (“Madoff”) who were “net winners” (i.e., Madoff customers who took more money out of their accounts than they invested) filed
a lawsuit in the United States District Court for the Middle District of Florida against the Firm and affiliates alleging violations of federal securities law and state law, including claims that the Firm aided and abetted Madoff’s fraud. The District Court granted the Firm’s motion to dismiss the federal claims and declined to exercise jurisdiction over the state law claims. The United States Court of Appeals for the Eleventh Circuit affirmed the dismissal of the federal claims, and the United States Supreme Court denied plaintiffs’ petition for writ of certiorari. The same plaintiffs have re-filed their state claims in Florida state court. In October 2017, the Firm filed a motion to dismiss the Florida state court action.
Mortgage-Backed Securities and Repurchase Litigation and Related Regulatory Investigations. The Firm and affiliates (together, “JPMC”), Bear Stearns and affiliates (together, “Bear Stearns”) and certain Washington Mutual affiliates (together, “Washington Mutual”) have been named as defendants in a number of cases in their various roles in offerings of MBS. The remaining civil cases include one investor action and actions for repurchase of mortgage loans. The Firm and certain of its current and former officers and Board members have also been sued in a shareholder derivative action relating to the Firm’s MBS activities, which remains pending.
Issuer Litigation – Individual Purchaser Actions. With the exception of one remaining action, the Firm has resolved all of the individual actions brought against JPMC, Bear Stearns and Washington Mutual as MBS issuers (and, in some cases, also as underwriters of their own MBS offerings).
Repurchase Litigation. The Firm is defending a few actions brought by trustees, securities administrators and/or master servicers of various MBS trusts on behalf of purchasers of securities issued by those trusts. These cases generally allege breaches of various representations and warranties regarding securitized loans and seek repurchase of those loans or equivalent monetary relief, as well as indemnification of attorneys’ fees and costs and other remedies. These repurchase actions, each specific to one or more MBS transactions issued by JPMC, are in various stages of litigation.
In addition, the Firm and a group of 21 institutional MBS investors made a binding offer to the trustees of MBS issued by JPMC and Bear Stearns providing for the payment of $4.5 billion and the implementation of certain servicing changes by JPMC, to resolve all repurchase and servicing claims that have been asserted or could have been asserted with respect to 330 MBS trusts created between 2005 and 2008. The offer does not resolve claims relating to Washington Mutual MBS. The trustees (or separate and successor trustees) for this group of 330 trusts have accepted the settlement for 319 trusts in whole or in part and excluded from the settlement 16 trusts in whole or in part. The trustees’ acceptance has received final approval from the court and the trustees have secured the necessary rulings from the Internal Revenue Service triggering their obligation to allocate the settlement funds among the

settling trusts. The trustees are currently in the process of determining allocation amounts for each trust. The Firm expects to make payments pursuant to this settlement by January 2018. 
Additional actions have been filed against third-party trustees that relate to loan repurchase and servicing claims involving trusts sponsored by JPMC, Bear Stearns and Washington Mutual.
In actions against the Firm involving offerings of MBS issued by the Firm, the Firm has contractual rights to indemnification from sellers of mortgage loans that were securitized in such offerings. However, certain of those indemnity rights may prove effectively unenforceable in various situations, such as where the loan sellers are now defunct.
The Firm has entered into agreements with a number of MBS trustees or entities that purchased MBS that toll applicable statute of limitations periods with respect to their claims, and has settled, and in the future may settle, tolled claims. There is no assurance that the Firm will not be named as a defendant in additional MBS-related litigation.
Derivative Action. A shareholder derivative action against the Firm, as nominal defendant, and certain of its current and former officers and members of its Board of Directors relating to the Firm’s MBS activities is pending in California federal court. In June 2017, the court granted defendants’ motion to dismiss the cause of action that alleged material misrepresentations and omissions in the Firm’s proxy statement, found that the court did not have personal jurisdiction over the individual defendants with respect to the remaining causes of action, and transferred that remaining portion of the case to the United States District Court for the Southern District of New York without ruling on the merits.
Government Enforcement Investigations and Litigation. The Firm is responding to an ongoing investigation being conducted by the DOJ’s Criminal Division and two United States Attorney’s Offices relating to MBS offerings securitized and sold by the Firm and its subsidiaries.
Mortgage-Related Investigations and Litigation. In January 2017, a Consent Order was entered by the United States District Court for the Southern District of New York resolving allegations by the Civil Division of the United States Attorney’s Office for the Southern District of New York that the Firm violated the Fair Housing Act and Equal Credit Opportunity Act by giving pricing discretion to independent mortgage brokers in its wholesale lending origination channel which, according to the government’s model, may have charged higher fees and interest rates to African-American and Hispanic borrowers than non-Hispanic White borrowers during the period between 2006 and 2009. The Firm denied liability, but agreed to pay a total of approximately $55 million to resolve this matter. In addition, three municipalities have commenced litigation against the Firm alleging violations of an unfair competition law or the Fair Housing Act. The municipalities seek, among
other things, civil penalties for the unfair competition claim, and, for the Fair Housing Act claims, damages resulting from lost tax revenue and increased municipal costs associated with foreclosed properties. Two of the municipal actions were stayed pending an appeal to the United States Supreme Court. In May 2017, the Supreme Court held that the City of Miami has standing to bring claims under the Fair Housing Act, and remanded the case to the lower court to determine whether the City sufficiently alleged that the defendant’s conduct proximately caused the alleged damages. In the two stayed municipal actions against the Firm, one remains stayed pending the resolution of the City of Miami case on remand, and in the other, the municipality has moved to reopen the case, which the Firm has opposed. The third municipal action against the Firm was stayed pending an appeal by the City of Los Angeles to the United States Court of Appeals for the Ninth Circuit in a related action. In May 2017, the Court of Appeals affirmed judgments against the City of Los Angeles and in favor of the defendants, and following that decision, the court has lifted the stay in the action against the Firm.
Municipal Derivatives Litigation. Several civil actions were commenced in New York and Alabama courts against the Firm relating to certain Jefferson County, Alabama (the “County”) warrant underwritings and swap transactions. The claims in the civil actions generally alleged that the Firm made payments to certain third parties in exchange for being chosen to underwrite more than $3$3.0 billion in warrants issued by the County and to act as the counterparty for certain swaps executed by the County. The County filed for bankruptcy in November 2011. In June 2013, the County filed a Chapter 9 Plan of Adjustment, as amended (the “Plan of Adjustment”), which provided that all the above-described actions against the Firm would be released and dismissed with prejudice. In November 2013, the Bankruptcy Court confirmed the Plan of Adjustment, and in December 2013, certain sewer rate payers filed an appeal challenging the confirmation of the Plan of Adjustment. All conditions to the Plan of Adjustment’s effectiveness, including the dismissal of the actions against the Firm, were satisfied or waived and the transactions contemplated by the Plan of Adjustment occurred in December 2013. Accordingly, all the above-described actions against the Firm have been dismissed pursuant to the terms of the Plan of Adjustment. The appeal of the Bankruptcy Court’s order confirming the Plan of Adjustment remains pending.
Petters Bankruptcy and Related Matters. JPMorgan Chase and certain of its affiliates, including One Equity Partners (“OEP”), were named as defendants in several actions filed in connection with the receivership and bankruptcy proceedings pertaining to Thomas J. Petters and certain affiliated entities (collectively, “Petters”) and the Polaroid Corporation. The principal actions against JPMorgan Chase and its affiliates were brought by a court-appointed receiver for Petters and the trustees in bankruptcy proceedings for three Petters entities. These actions generally sought to avoid certain putative transfers in connection with (i) the

2005 acquisition by Petters of Polaroid, which at the time was majority-owned by OEP; (ii) two credit facilities that JPMorgan Chase and other financial institutions entered into with Polaroid; and (iii) a credit line and investment accounts held by Petters. In January 2017, the Court substantially denied the defendants’ motion to dismiss an amended complaint filed by the plaintiffs. In October 2017, JPMorgan Chase and its affiliates reached an agreement in principle to settle the litigation brought by the Petters bankruptcy trustees, or their successors, and the receiver for Thomas J. Petters. The settlement is subject to final documentation and Court approval. 
Proprietary Products Investigations and Litigation. In December 2015, JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC agreed to a settlement with the SEC, and JPMorgan Chase Bank, N.A. agreed to a settlement with the CFTC, regarding disclosures to clients concerning conflicts associated with the Firm’s sale and use of proprietary products, such as J.P. Morgan mutual funds, in the Firm’s CCB and AWM wealth management businesses, and the U.S. Private Bank’s disclosures concerning the use of hedge funds that pay placement agent fees to JPMorgan Chase broker-dealer affiliates. The Firm settled with an additional government authority in July 2016, and continues to cooperate with inquiries from other government authorities concerning disclosure of conflicts associated with the Firm’s sale and use of proprietary products. A putative class action, which was filed in the United States District Court for the Northern District of Illinois on behalf of financial advisory clients from 2007 to the present whose funds were invested in proprietary funds and who were charged investment management fees, was dismissed by the Court. The dismissal was affirmed on appeal, and the United States Supreme Court has denied plaintiffs’ petitionin August 2018, but appellants have filed a motion for writ of certiorari.rehearing which remains pending.
Referral Hiring Practices Investigations. In November 2016, the Firm entered into settlements with DOJ, the SEC and the Board of Governors of the Federal Reserve System (the “Federal Reserve”) to resolve those agencies’ respective investigations relating to a former hiring program for candidates referred by clients, potential clients and government officials in the Asia Pacific region. Other related investigations are ongoing, and the Firm continues to cooperate with these investigations.
Wendel. Since 2012, the French criminal authorities have been investigating a series of transactions entered into by senior managers of Wendel Investissement (“Wendel”) during the period from 2004 through 2007 to restructure their shareholdings in Wendel. JPMorgan Chase Bank, N.A., Paris branch provided financing for the transactions to a number of managers of Wendel in 2007. JPMorgan Chase has cooperated with the investigation. The investigating judges issued an ordonnance de renvoi in November 2016, referring JPMorgan Chase Bank, N.A. to the French tribunal correctionnel for alleged complicity in tax fraud. No date for trial has been set by the court. The Firm has been successful in legal challenges made to the Court of
Cassation, France’s highest court, which have been referred backwith respect to and remain pending beforethe criminal proceedings. In January 2018, the Paris Court of Appeal.Appeal issued a decision cancelling the mise en examen of JPMorgan Chase Bank, N.A. The Court of Cassation ruled in September 2018 that a mise en examen is a prerequisite for an ordonnance de renvoi and remanded the case to the Court of Appeal to consider JPMorgan Chase Bank, N.A.’s application for the annulment of the ordonnance de renvoi referring JPMorgan Chase Bank, N.A. to the French tribunal correctionnel. Any further actions in the criminal proceedings are stayed pending the outcome of that

application. In addition, a number of the managers have commenced civil proceedings have been commenced against JPMorgan Chase Bank, N.A. by a number of the managers. The claims are separate, involve different allegations and are at various stages of proceedings.
* * *
In addition to the various legal proceedings discussed above, JPMorgan Chase and its subsidiaries are named as defendants or are otherwise involved in a substantial number of other legal proceedings. The Firm believes it has meritorious defenses to the claims asserted against it in its currently outstanding legal proceedings and it intends to defend itself vigorously. Additional legal proceedings may be initiated from time to time in the future.
The Firm has established reserves for several hundred of its currently outstanding legal proceedings. In accordance with the provisions of U.S. GAAP for contingencies, the Firm accrues for a litigation-related liability when it is probable that such a liability has been incurred and the amount of the loss can be reasonably estimated. The Firm evaluates its outstanding legal proceedings each quarter to assess its litigation reserves, and makes adjustments in such reserves, upwards or downward, as appropriate, based on management’s best judgment after consultation with counsel. The Firm’s legal expenseexpense/(benefit) was a benefit of $(107)$20 million and $(71)$(107) million for the three months ended September 30, 20172018 and 2016,2017, respectively, and an expense of $172$90 million and a benefit of $(547)$172 million for the nine months ended September 30, 20172018 and 2016, respectively.2017. There is no assurance that the Firm’s litigation reserves will not need to be adjusted in the future.
In view of the inherent difficulty of predicting the outcome of legal proceedings, particularly where the claimants seek very large or indeterminate damages, or where the matters present novel legal theories, involve a large number of parties or are in early stages of discovery, the Firm cannot state with confidence what will be the eventual outcomes of the currently pending matters, the timing of their ultimate resolution or the eventual losses, fines, penalties or consequences related to those matters. JPMorgan Chase believes, based upon its current knowledge and after consultation with counsel, consideration of the material legal proceedings described above and after taking into account its current litigation reserves and its estimated aggregate range of possible losses, that the other legal proceedings currently pending against it should not have a material adverse effect on the Firm’s consolidated financial condition. The Firm notes, however, that in light of the uncertainties involved in such proceedings, there is no assurance that the ultimate resolution of these matters will not significantly exceed the reserves it has currently accrued or that a matter will not have material reputational consequences. As a result, the outcome of a particular matter may be material to JPMorgan Chase’s operating results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of JPMorgan Chase’s income for that period.


Note 2223 – Business segments
The Firm is managed on a line of business basis. There are four major reportable business segments - Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset & Wealth Management. In addition, there is a Corporate segment.
The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by management. Results of these lines of business are presented on a managed basis. For a further discussion concerning JPMorgan Chase’s business segments, seerefer to Segment results below, and Note 3331 of JPMorgan Chase’s 20162017 Annual Report.
Segment results
The following table provides a summary of the Firm’s segment results as of or for the three and nine months ended September 30, 20172018 and 2016,2017, on a managed basis. The Firm’s definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm (and
(and each of the reportable business segments) on aan FTE basis. Accordingly, revenue from investments that receive tax credits and tax-
exempttax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. This allows management to assess the comparability of revenue from year-to-year arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business.
Effective January 1, 2017,Business segment capital allocation
The amount of capital assigned to each business is referred to as equity. On at least an annual basis, the Firm’s methodology used to allocateFirm assesses the level of capital to the business segments was updated.��Under the new methodology, capital is no longer allocated torequired for each line of business for goodwillas well as the assumptions and other intangibles associated with acquisitions effected bymethodologies used to allocate capital. For additional information on business segment capital allocation, refer to Line of business equity on pages 88-89 of JPMorgan Chase’s 2017 Annual Report.
Effective January 1, 2018, the lineFirm adopted several new accounting standards. Certain of business. In addition, the new methodology incorporates Basel III Standardized Fully Phased-In RWA (as wellaccounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note1.
Net income in 2018 for the business segments reflects the favorable impact of the reduction in the U.S. federal statutory income tax rate as Basel III Advanced Fully Phased-In RWA), leverage,a result of the global systemically important banks (“GSIB”) surcharge, and a simulation of capital in a severe stress environment. The methodology will continue to be weighted towards Basel III Advanced Fully Phased-In RWA because the Firm believes it to be the best proxy for economic risk.
TCJA.
Segment results and reconciliation(a)
Segment results and reconciliation(a)
Segment results and reconciliation(a)
As of or for the three months ended September 30,
(in millions, except ratios)		Consumer &
Community Banking		 Corporate &
Investment Bank		 Commercial Banking Asset & Wealth ManagementConsumer &
Community Banking		 Corporate &
Investment Bank		 Commercial Banking Asset & Wealth Management
2017
2016
 2017
2016
 2017
2016
 2017
2016
2018
2017
 2018
2017
 2018
2017
 2018
2017
Noninterest revenue$3,898
$3,868
 $6,094
$6,690
 $592
$578
 $2,390
$2,277
$4,176
$3,898
 $6,505
$6,119
 $576
$592
 $2,680
$2,617
Net interest income8,135
7,460
 2,496
2,765
 1,554
1,292
 855
770
9,114
8,135
 2,300
2,496
 1,695
1,554
 879
855
Total net revenue12,033
11,328
 8,590
9,455
 2,146
1,870
 3,245
3,047
13,290
12,033
 8,805
8,615
 2,271
2,146
 3,559
3,472
Provision for credit losses1,517
1,294
 (26)67
 (47)(121) 8
32
980
1,517
 (42)(26) (15)(47) 23
8
Noninterest expense6,495
6,510
 4,768
4,934
 800
746
 2,181
2,130
6,982
6,495
 5,175
4,793
 853
800
 2,585
2,408
Income before income tax expense4,021
3,524
 3,848
4,454
 1,393
1,245
 1,056
885
5,328
4,021
 3,672
3,848
 1,433
1,393
 951
1,056
Income tax expense1,468
1,320
 1,302
1,542
 512
467
 382
328
1,242
1,468
 1,046
1,302
 344
512
 227
382
Net income$2,553
$2,204
 $2,546
$2,912
 $881
$778
 $674
$557
$4,086
$2,553
 $2,626
$2,546
 $1,089
$881
 $724
$674
Average equity$51,000
$51,000
 $70,000
$64,000
 $20,000
$16,000
 $9,000
$9,000
$51,000
$51,000
 $70,000
$70,000
 $20,000
$20,000
 $9,000
$9,000
Total assets537,459
521,276
 851,808
825,933
 220,064
212,189
 149,170
137,295
560,432
537,459
 928,148
851,808
 217,194
220,064
 166,716
149,170
Return on equity19%16% 13%17% 17%18% 29%24%31%19% 14%13% 21%17% 31%29%
Overhead ratio54
57
 56
52
 37
40
 67
70
53
54
 59
56
 38
37
 73
69
As of or for the three months ended September 30,
(in millions, except ratios)		Corporate 
Reconciling Items(a)
 Total
2018
2017
 2018
2017
 2018
2017
Noninterest revenue$(177)$109
 $(408)$(555) $13,352
$12,780
Net interest income74
77
 (154)$(319) 13,908
12,798
Total net revenue(103)186
 (562)$(874) 27,260
25,578
Provision for credit losses2
—
 —
—
 948
1,452
Noninterest expense28
74
 —
—
 15,623
14,570
Income/(loss) before income tax expense/(benefit)(133)112
 (562)(874) 10,689
9,556
Income tax expense/(benefit)12
34
 (562)(874) 2,309
2,824
Net income/(loss)$(145)$78
 $—
$—
 $8,380
$6,732
Average equity$80,439
$81,861
 $—
$—
 $230,439
$231,861
Total assets742,693
804,573
 NA
NA
 2,615,183
2,563,074
Return on equityNM
NM
 NM
NM
 14%11%
Overhead ratioNM
NM
 NM
NM
 57
57
As of or for the three months ended September 30,
(in millions, except ratios)		Corporate 
Reconciling Items(a)
 Total
2017
2016
 2017
2016
 2017
2016
Noninterest revenue$109
$197
 $(555)$(540) $12,528
$13,070
Net interest income77
(385) (319)$(299) 12,798
11,603
Total net revenue186
(188) (874)$(839) 25,326
24,673
Provision for credit losses—
(1) —
—
 1,452
1,271
Noninterest expense74
143
 —
—
 14,318
14,463
Income/(loss) before income tax expense/(benefit)112
(330) (874)(839) 9,556
8,939
Income tax expense/(benefit)34
(165) (874)(839) 2,824
2,653
Net income/(loss)$78
$(165) $—
$—
 $6,732
$6,286
Average equity$81,861
$86,089
 $—
$—
 $231,861
$226,089
Total assets804,573
824,336
 NA
NA
 2,563,074
2,521,029
Return on equityNM
NM
 NM
NM
 11%10%
Overhead ratioNM
NM
 NM
NM
 57
59

(a)Segment managed results reflect revenue on aan 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.

Segment results and reconciliation(a)

Segment results and reconciliation(a)

Segment results and reconciliation(a)
As of or for the nine months ended September 30,
(in millions, except ratios)
Consumer &
Community Banking
 
Corporate &
Investment Bank
 Commercial Banking Asset & Wealth ManagementConsumer &
Community Banking		 Corporate &
Investment Bank		 Commercial Banking Asset & Wealth Management
2017
2016
 2017
2016
 2017
2016
 2017
2016
2018
2017
 2018
2017
 2018
2017
 2018
2017
Noninterest revenue$10,899
$11,812
 $19,474
$18,699
 $1,774
$1,720
 $7,024
$6,714
$12,063
$10,899
 $21,954
$19,598
 $1,758
$1,774
 $7,997
$7,677
Net interest income23,516
22,084
 7,541
8,056
 4,478
3,770
 2,520
2,244
26,321
23,516
 7,257
7,541
 4,995
4,478
 2,640
2,520
Total net revenue34,415
33,896
 27,015
26,755
 6,252
5,490
 9,544
8,958
38,384
34,415
 29,211
27,139
 6,753
6,252
 10,637
10,197
Provision for credit losses4,341
3,545
 (175)761
 (214)158
 30
37
3,405
4,341
 (142)(175) 23
(214) 40
30
Noninterest expense19,390
18,602
 14,730
14,820
 2,415
2,190
 6,953
6,303
20,770
19,390
 16,237
14,854
 2,541
2,415
 7,732
7,606
Income before income tax expense10,684
11,749
 12,460
11,174
 4,051
3,142
 2,561
2,618
14,209
10,684
 13,116
12,460
 4,189
4,051
 2,865
2,561
Income tax expense3,920
4,399
 3,963
3,790
 1,469
1,172
 878
953
3,385
3,920
 3,318
3,963
 988
1,469
 616
878
Net income$6,764
$7,350
 $8,497
$7,384
 $2,582
$1,970
 $1,683
$1,665
$10,824
$6,764
 $9,798
$8,497
 $3,201
$2,582
 $2,249
$1,683
Average equity$51,000
$51,000
 $70,000
$64,000
 $20,000
$16,000
 $9,000
$9,000
$51,000
$51,000
 $70,000
$70,000
 $20,000
$20,000
 $9,000
$9,000
Total assets537,459
521,276
 851,808
825,933
 220,064
212,189
 149,170
137,295
560,432
537,459
 928,148
851,808
 217,194
220,064
 166,716
149,170
Return on equity17%18% 15%14% 16%15% 24%24%27%17% 18%15% 20%16% 32%24%
Overhead ratio56
55
 55
55
 39
40
 73
70
54
56
 56
55
 38
39
 73
75
As of or for the nine months ended September 30,
(in millions, except ratios)		Corporate 
Reconciling Items(a)
 TotalCorporate 
Reconciling Items(a)
 Total
2017
2016
 2017
2016
 2017
2016
2018
2017
 2018
2017
 2018
2017
Noninterest revenue$963
$637
 $(1,733)$(1,620) $38,401
$37,962
$(220)$963
 $(1,337)$(1,733) $42,215
$39,178
Net interest income2
(927) (987)(897) 37,070
34,330
(35)2
 (473)$(987) 40,705
37,070
Total net revenue965
(290) (2,720)(2,517) 75,471
72,292
(255)965
 (1,810)$(2,720) 82,920
76,248
Provision for credit losses—
(4) —
—
 3,982
4,497
(3)—
 —
—
 3,323
3,982
Noninterest expense355
23
 —
—
 43,843
41,938
394
355
 —
—
 47,674
44,620
Income/(loss) before income tax expense/(benefit)610
(309) (2,720)(2,517) 27,646
25,857
(646)610
 (1,810)(2,720) 31,923
27,646
Income tax expense/(benefit)(73)54
 (2,720)(2,517) 7,437
7,851
18
(73) (1,810)(2,720) 6,515
7,437
Net income/(loss)$683
$(363) $—
$—
 $20,209
$18,006
$(664)$683
 $—
$—
 $25,408
$20,209
Average equity$79,937
$84,034
 $—
$—
 $229,937
$224,034
$78,995
$79,937
 $—
$—
 $228,995
$229,937
Total assets804,573
824,336
 NA
NA
 2,563,074
2,521,029
742,693
804,573
 NA
NA
 2,615,183
2,563,074
Return on equityNM
NM
 NM
NM
 11%10%NM
NM
 NM
NM
 14%11%
Overhead ratioNM
NM
 NM
NM
 58
58
NM
NM
 NM
NM
 57
59
(a)Segment managed results reflect revenue on aan FTE basis with the corresponding income tax impact recorded within income tax expense/(benefit). These FTE adjustments are eliminated in reconciling items to arrive at the Firm’s reported U.S. GAAP results.



Note 23 – Business changes and developments
Student loan portfolio transfer and salepwclogobwaa01.jpg
The Firm transferred the student loan portfolio to held-for-sale in the first quarter of 2017. The transfer resulted in a write-down of the portfolio to the estimated fair value at the time of the transfer. This write-down was recognized predominantly as a $467 million charge-off, resulting in a $218 million increase in the provision for credit losses after utilization of the allowance for loan losses of $249 million in the first quarter of 2017. The Firm sold substantially all of the portfolio in the second quarter of 2017, and such sale did not have a material impact on the Firm’s Consolidated Financial Statements.
Preferred stock issuance and redemption
On October 20, 2017, the Firm issued $1.3 billion of fixed-to-floating rate non-cumulative preferred stock, Series CC, with an initial dividend rate of 4.625%. On October 31, 2017, the Firm announced that it will redeem all $1.3 billion of its outstanding 5.50% non-cumulative preferred stock, Series O, on December 1, 2017. For additional information on the Firm’s preferred stock, see Note 22 of JPMorgan Chase’s 2016 Annual Report.



pwclogobw.jpg

Report of Independent Registered Public Accounting Firm




To the Board of Directors and Stockholders of JPMorgan Chase & Co.:
Results of Review of Financial Statements
We have reviewed the accompanying consolidated balance sheet of JPMorgan Chase & Co. and its subsidiaries (the
“Firm” “Firm”) as of September 30, 2017,2018, and the related consolidated statements of income and comprehensive income for the three-month and nine-month periods ended September 30, 2018 and 2017 and 2016 andthe consolidated statements of changes in stockholders’ equity and of cash flows for the nine-month periods ended September 30, 2018 and 2017, and 2016. Theseincluding the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements arefor them to be in conformity with accounting principles generally accepted in the responsibilityUnited States of the Firm’s management.America.
We conducted our reviewhave previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)., the consolidated balance sheet of the Firm as of December 31, 2017, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and of cash flows for the year then ended (not presented herein), and in our report dated February 27, 2018, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2017, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results
These interim financial statements are the responsibility of the Firm’s management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Firm in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States),PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.pwcsig3q2018a10.jpg


October 31, 2018
We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2016, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for the year then ended (not presented herein), and in our report dated February 28, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2016, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived.
pwcsig1q2016.jpg
November 1, 2017
















































PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, NY 10017

JPMorgan Chase & Co.
Consolidated average balance sheets, interest and rates (unaudited)
(Taxable-equivalent interest and rates; in millions, except rates)
    
 Three months ended September 30, 2018 Three months ended September 30, 2017
 Average
balance
Interest(f)
 Rate
(annualized)		 Average
balance
Interest(f)
 Rate
(annualized)
Assets           
Deposits with banks$408,595
$1,585
 1.54%  $456,673
$1,259
 1.09 
Federal funds sold and securities purchased under resale agreements208,439
952
 1.81
  188,594
622
 1.31 
Securities borrowed117,057
200
 0.68
  95,597
—

— 
Trading assets – debt instruments258,027
2,170
 3.34
  240,876
1,974
 3.25 
Taxable securities187,942
1,402
 2.96
  216,011
1,362
 2.50 
Nontaxable securities(a)
42,045
490
 4.62
  45,106
676
 5.95 
Total investment securities229,987
1,892
 3.26
(g) 
 261,117
2,038
 3.10
(g) 
Loans951,724
12,250
 5.11
  909,580
10,591
 4.62 
All other interest-earning assets(b)
46,429
945
 8.07
  41,737
522
 4.96 
Total interest-earning assets2,220,258
19,994
 3.57
  2,194,174
17,006
 3.07 
Allowance for loan losses(13,207)     (13,290)    
Cash and due from banks21,101
     20,289
    
Trading assets – equity instruments102,962
     119,463
    
Trading assets – derivative receivables62,075
     59,839
    
Goodwill, MSRs and other intangible assets
54,652
     53,788
    
Other assets151,780
     134,968
    
Total assets$2,599,621
     $2,569,231
    
Liabilities           
Interest-bearing deposits$1,057,262
$1,621
 0.61%  $1,029,534
$837
 0.32 
Federal funds purchased and securities loaned or sold under repurchase agreements184,377
827
 1.78
  181,851
451
 0.98 
Short-term borrowings(c)
61,042
288
 1.87
  52,958
149
 1.12 
Trading liabilities – debt and other interest-bearing
liabilities(d)(e)
177,091
1,018
 2.28
  168,738
570
 1.34 
Beneficial interests issued by consolidated VIEs19,921
122
 2.41
  29,832
123
 1.62 
Long-term debt275,979
2,056
 2.96
  294,626
1,759
 2.37 
Total interest-bearing liabilities1,775,672
5,932
 1.33
  1,757,539
3,889
 0.88 
Noninterest-bearing deposits395,600
     401,489
    
Trading liabilities – equity instruments(e)
36,309
     20,905
    
Trading liabilities – derivative payables44,810
     44,627
    
All other liabilities, including the allowance for lending-related commitments90,539
     86,742
    
Total liabilities2,342,930
     2,311,302
    
Stockholders’ equity           
Preferred stock26,252
     26,068
    
Common stockholders’ equity230,439
     231,861
    
Total stockholders’ equity256,691
     257,929
    
Total liabilities and stockholders’ equity$2,599,621
     $2,569,231
    
Interest rate spread   2.24%     2.19 
Net interest income and net yield on interest-earning assets $14,062
 2.51
   $13,117
 2.37 
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
(a) Represents securities which are tax-exempt for U.S. federal income tax purposes.
(b) Includes held-for-investment margin loans, 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.
(c) Includes commercial paper.
(d) Other interest-bearing liabilities include brokerage customer payables.
(e) The combined balance of trading liabilities – debt and equity instruments were $106.4 billion and $89.4 billion for the three months ended September 30, 2018 and 2017, respectively.
(f) Interest includes the effect of certain related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(g) For the three months ended September 30, 2018 and 2017, the annualized rates for securities, based on amortized cost, were 3.29% and 3.14%, respectively; this does not give effect to changes in fair value that are reflected in AOCI.


JPMorgan Chase & Co.
Consolidated average balance sheets, interest and rates
(Taxable-equivalent interest and rates; in millions, except rates)
    
 Three months ended September 30, 2017 Three months ended September 30, 2016
 Average
balance
Interest(e)
 Rate
(annualized)		 Average
balance
Interest(e)
 Rate
(annualized)
Assets           
Deposits with banks$455,255
$1,256
 1.09%  $409,176
$448
 0.44 % 
Federal funds sold and securities purchased under resale agreements188,594
622
 1.31
  196,657
566
 1.14
 
Securities borrowed95,597
—

—
  102,790
(91)
(g) 
(0.35) 
Trading assets – debt instruments240,876
1,974
 3.25
  219,816
1,911
 3.46
 
Taxable securities216,011
1,362
 2.50
  228,719
1,365
 2.37
 
Nontaxable securities(a)
45,106
676
 5.95
  44,274
657
 5.91
 
Total securities261,117
2,038
 3.10
(f) 
 272,993
2,022
 2.95
(f) 
Loans909,580
10,591
 4.62
  874,396
9,294
 4.23
 
Other assets(b)
43,155
525
 4.83
  40,665
219
 2.14
 
Total interest-earning assets2,194,174
17,006
 3.07
  2,116,493
14,369
 2.70
 
Allowance for loan losses(13,290)     (14,046)    
Cash and due from banks20,222
     18,614
    
Trading assets – equity instruments119,463
     98,714
    
Trading assets – derivative receivables59,839
     72,520
    
Goodwill47,309
     47,302
    
Mortgage servicing rights5,662
     4,991
    
Other intangible assets818
     903
    
Other assets135,034
     131,471
    
Total assets$2,569,231
     $2,476,962
    
Liabilities           
Interest-bearing deposits$1,029,534
$837
 0.32%  $932,738
$340
 0.15 % 
Federal funds purchased and securities loaned or sold under repurchase agreements181,851
451
 0.98
  180,098
286
 0.63
 
Commercial paper23,022
83
 1.43
  13,798
34
 0.97
 
Trading liabilities – debt, short-term and other liabilities(c)(d)
198,674
636
 1.27
  196,247
285
 0.58
 
Beneficial interests issued by consolidated VIEs29,832
123
 1.62
  42,462
135
 1.26
 
Long-term debt294,626
1,759
 2.37
  300,295
1,387
 1.84
 
Total interest-bearing liabilities1,757,539
3,889
 0.88
  1,665,638
2,467
 0.59
 
Noninterest-bearing deposits401,489
     405,237
    
Trading liabilities – equity instruments(d)
20,905
     22,262
    
Trading liabilities – derivative payables44,627
     54,552
    
All other liabilities, including the allowance for lending-related commitments86,742
     77,116
    
Total liabilities2,311,302
     2,224,805
    
Stockholders’ equity           
Preferred stock26,068
     26,068
    
Common stockholders’ equity231,861
     226,089
    
Total stockholders’ equity257,929
     252,157
    
Total liabilities and stockholders’ equity$2,569,231
     $2,476,962
    
Interest rate spread   2.19%     2.11 % 
Net interest income and net yield on interest-earning assets $13,117
 2.37
   $11,902
 2.24
 
(a)Represents securities which are tax exempt for U.S. federal income tax purposes.
(b)Includes margin loans.
(c)Includes largely brokerage customer payables, and to a lesser extent, other borrowed funds.
(d)Included trading liabilities – debt and equity instruments of $89.4 billion and $94.7 billion for the three months ended September 30, 2017 and 2016, respectively.
(e)Interest includes the effect of certain related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(f)For the three months ended September 30, 2017 and 2016, the annualized rates for securities, based on amortized cost, were 3.14% and 3.02%, respectively; this does not give effect to changes in fair value that are reflected in accumulated other comprehensive income/(loss).
(g)Negative interest income and yield is related to client-driven demand for certain securities combined with the impact of low interest rates; this is matched book activity and the negative interest expense on the corresponding securities loaned is recognized in interest expense and reported within trading liabilities – debt, short-term and other liabilities.

JPMorgan Chase & Co.
Consolidated average balance sheets, interest and rates (unaudited)
(Taxable-equivalent interest and rates; in millions, except rates)
    
 Nine months ended September 30, 2018 Nine months ended September 30, 2017
 Average
balance
Interest(f)
 Rate
(annualized)		 Average
balance
Interest(f)
 Rate
(annualized)
Assets           
Deposits with banks$419,392
$4,449
 1.42%  $439,974
$3,002
 0.91 % 
Federal funds sold and securities purchased under resale agreements203,969
2,490
 1.63
  192,922
1,676
 1.16
 
Securities borrowed113,112
410
 0.49
  93,708
(65)
(h) 
(0.09) 
Trading assets – debt instruments256,872
6,415
 3.34
  233,884
5,691
 3.25
 
Taxable securities190,970
4,098
 2.87
  228,580
4,202
 2.46
 
Nontaxable securities(a)
42,911
1,494
 4.65
  45,123
2,086
 6.18
 
Total investment securities233,881
5,592
 3.20
(g) 
 273,703
6,288
 3.07
(g) 
Loans939,408
35,047
 4.99
  902,216
30,479
 4.52
 
All other interest-earning assets(b)
48,743
2,474
 6.79
  41,113
1,295
 4.21
 
Total interest-earning assets2,215,377
56,877
 3.43
  2,177,520
48,366
 2.97
 
Allowance for loan losses(13,303)     (13,453)    
Cash and due from banks21,771
     20,003
    
Trading assets – equity instruments107,580
     120,307
    
Trading assets – derivative receivables61,188
     59,824
    
Goodwill, MSRs and other intangible assets
54,656
     53,978
    
Other assets152,325
     135,830
    
Total assets$2,599,594
     $2,554,009
    
Liabilities           
Interest-bearing deposits$1,054,419
$4,021
 0.51%  $1,007,345
$1,949
 0.26 % 
Federal funds purchased and securities loaned or sold under repurchase agreements190,832
2,164
 1.52
  189,236
1,131
 0.80
 
Short-term borrowings(c)
60,341
757
 1.68
  44,273
318
 0.96
 
Trading liabilities – debt and other interest-bearing
liabilities(d)(e)
176,507
2,579
 1.95
  172,949
1,490
 1.15
 
Beneficial interests issued by consolidated VIEs21,449
366
 2.28
  34,197
386
 1.51
 
Long-term debt276,865
5,812
 2.81
  294,248
5,035
 2.29
 
Total interest-bearing liabilities1,780,413
15,699
 1.18
  1,742,248
10,309
 0.79
 
Noninterest-bearing deposits398,728
     403,704
    
Trading liabilities – equity instruments(e)
33,206
     20,441
    
Trading liabilities – derivative payables42,919
     45,900
    
All other liabilities, including the allowance for lending-related commitments89,203
     85,711
    
Total liabilities2,344,469
     2,298,004
    
Stockholders’ equity           
Preferred stock26,130
     26,068
    
Common stockholders’ equity228,995
     229,937
    
Total stockholders’ equity255,125
     256,005
    
Total liabilities and stockholders’ equity$2,599,594
     $2,554,009
    
Interest rate spread   2.25%     2.18 % 
Net interest income and net yield on interest-earning assets $41,178
 2.49
   $38,057
 2.34
 
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
JPMorgan Chase & Co.
Consolidated average balance sheets, interest and rates
(Taxable-equivalent interest and rates; in millions, except rates)
    
 Nine months ended September 30, 2017 Nine months ended September 30, 2016
 Average
balance
Interest(e)
 Rate
(annualized)		 Average
balance
Interest(e)
 Rate
(annualized)
Assets           
Deposits with banks$438,475
$2,986
 0.91 %  $384,217
$1,374
 0.48 % 
Federal funds sold and securities purchased under resale agreements192,922
1,676
 1.16
  201,157
1,696
 1.13
 
Securities borrowed93,708
(65)
(f) 
(0.09)  102,640
(279)
(f) 
(0.36) 
Trading assets – debt instruments233,884
5,691
 3.25
  214,656
5,505
 3.43
 
Taxable securities228,580
4,202
 2.46
  234,889
4,187
 2.38
 
Nontaxable securities(a)
45,123
2,086
 6.18
  44,263
1,993
 6.01
 
Total securities273,703
6,288
 3.07
(g) 
 279,152
6,180
 2.96
(g) 
Loans902,216
30,479
 4.52
  858,275
27,233
 4.24
 
Other assets(b)
42,612
1,311
 4.11
  40,036
623
 2.08
 
Total interest-earning assets2,177,520
48,366
 2.97
  2,080,133
42,332
 2.72
 
Allowance for loan losses(13,453)     (13,889)    
Cash and due from banks19,942
     18,505
    
Trading assets – equity instruments120,307
     94,555
    
Trading assets – derivative receivables59,824
     71,004
    
Goodwill47,297
     47,314
    
Mortgage servicing rights5,845
     5,472
    
Other intangible assets836
     938
    
Other assets135,891
     133,802
    
Total assets$2,554,009
     $2,437,834
    
Liabilities           
Interest-bearing deposits$1,007,345
$1,949
 0.26 %  $913,682
$981
 0.14 % 
Federal funds purchased and securities loaned or sold under repurchase agreements189,236
1,131
 0.80
  176,081
828
 0.63
 
Commercial paper18,653
186
 1.33
  16,257
105
 0.86
 
Trading liabilities – debt, short-term and other liabilities(c)(d)
198,569
1,622
 1.09
  197,537
826
 0.56
 
Beneficial interests issued by consolidated VIEs34,197
386
 1.51
  40,245
366
 1.22
 
Long-term debt294,248
5,035
 2.29
  293,418
3,999
 1.82
 
Total interest-bearing liabilities1,742,248
10,309
 0.79
  1,637,220
7,105
 0.58
 
Noninterest-bearing deposits403,704
     398,814
    
Trading liabilities – equity instruments(d)
20,441
     20,511
    
Trading liabilities – derivative payables45,900
     56,390
    
All other liabilities, including the allowance for lending-related commitments85,711
     74,797
    
Total liabilities2,298,004
     2,187,732
    
Stockholders’ equity           
Preferred stock26,068
     26,068
    
Common stockholders’ equity229,937
     224,034
    
Total stockholders’ equity256,005
     250,102
    
Total liabilities and stockholders’ equity$2,554,009
     $2,437,834
    
Interest rate spread 

 2.18 %     2.14 % 
Net interest income and net yield on interest-earning assets $38,057
 2.34
   $35,227
 2.26
 
(a) Represents securities which are tax-exempt for U.S. federal income tax purposes.
(a)Represents securities which are tax exempt for U.S. federal income tax purposes.
(b)Includes margin loans.
(c)Includes largely brokerage customer payables, and to a lesser extent, other borrowed funds.
(d)Included trading liabilities - debt and equity instruments of $91.3 billion and $92.5 billion for the nine months ended September 30, 2017 and 2016, respectively.
(e)Interest includes the effect of certain related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(f)Negative interest income and yield is related to client-driven demand for certain securities combined with the impact of low interest rates; this is matched book activity and the negative interest expense on the corresponding securities loaned is recognized in interest expense and reported within trading liabilities - debt, short-term and other liabilities.
(g)For the nine months ended September 30, 2017 and 2016, the annualized rates for securities, based on amortized cost, were 3.11% and 3.02% respectively; this does not give effect to changes in fair value that are reflected in accumulated other comprehensive income/(loss).
(b) Includes held-for-investment margin loans, 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.
(c) Includes commercial paper.
(d) Other interest-bearing liabilities include brokerage customer payables.
(e) The combined balance of trading liabilities – debt and equity instruments were $105.1 billion and $91.3 billion for the nine months ended September 30, 2018 and 2017, respectively.
(f) Interest includes the effect of certain related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(g) For the nine months ended September 30, 2018 and 2017, the annualized rates for securities, based on amortized cost, were 3.23% and 3.11%, respectively; this does not give effect to changes in fair value that are reflected in AOCI.
(h) Negative interest income and yield is related to client-driven demand for certain securities combined with the impact of low interest rates; this is matched book activity and the negative interest expense on the corresponding securities loaned is recognized in interest expense and reported within trading liabilities – debt and other interest-bearing liabilities


GLOSSARY OF TERMS AND ACRONYMS
20162017 Annual Report or 20162017 Form 10-K: Annual report on Form 10-K for year ended December 31, 2016,2017, filed with the U.S. Securities and Exchange Commission.
ABS: Asset-backed securities
Active foreclosures: Loans referred to foreclosure where formal foreclosure proceedings are ongoing. Includes both judicial and non-judicial states.
AFS: Available-for-sale
Allowance for loan losses to total loans: represents period-end allowance for loan losses divided by retained loans.
AOCI: Accumulated other comprehensive income/(loss)
ARM(s): Adjustable rate mortgage(s)
AWM: Asset & Wealth Management
Beneficial interests issued by consolidated VIEs:represents the interest of third-party holders of debt, equity securities, or other obligations, issued by VIEs that JPMorgan Chase consolidates.
Benefit obligation: refers to the projected benefit obligation for pension plans and the accumulated postretirement benefit obligation for OPEB plans.
BHC: Bank holding company
CB: Commercial Banking
CBB: Consumer & Business Banking
CCAR: Comprehensive Capital Analysis and Review
CCB: Consumer & Community Banking
CCP: “Central counterparty” is a clearing house that interposes itself between counterparties to contracts traded in one or more financial markets, becoming the buyer to every seller and the seller to every buyer and thereby ensuring the future performance of open contracts. A CCP becomes counterparty to trades with market participants through novation, an open offer system, or another legally binding arrangement.
CDS: Credit default swaps
CEO: Chief Executive Officer
CET1 Capital: Common Equityequity Tier 1 Capital
CFTC: Commodity Futures Trading Commission
CFO: Chief Financial Officer
Chase Bank USA, N.A.: Chase Bank USA, National Association
CIB: Corporate & Investment Bank
CIO: Chief Investment Office
Client deposits and other third party liabilities: Deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements) as part of client cash management programs.
CLO: Collateralized loan obligations
CLTV: Combined loan-to-value
 
Collateral-dependent:A loan is considered to be collateral-dependent when repayment of the loan is expected to be provided solely by the underlying collateral, rather than by cash flows from the borrower’s operations, income or other resources.
Commercial Card: provides a wide range of payment services to corporate and public sector clients worldwide through the commercial card products. Services include procurement, corporate travel and entertainment, expense management services, and business-to-business payment solutions.
Core loans: represents loans considered central to the Firm’s ongoing businesses; core loans exclude loans classified as trading assets, runoff portfolios, discontinued portfolios and portfolios the Firm has an intent to exit.
Credit derivatives:Financial instruments whose value is derived from the credit risk associated with the debt of a third party issuer (the reference entity) which allow one party (the protection purchaser) to transfer that risk to another party (the protection seller). Upon the occurrence of a credit event by the reference entity, which may include, among other events, the bankruptcy or failure to pay its obligations, or certain restructurings of the debt of the reference entity, neither party has recourse to the reference entity. The protection purchaser has recourse to the protection seller for the difference between the face value of the CDS contract and the fair value at the time of settling the credit derivative contract. The determination as to whether a credit event has occurred is generally made by the relevant International Swaps and Derivatives Association (“ISDA”) Determinations Committee.
Criticized: Criticized loans, lending-related commitments and derivative receivables that are classified as special mention, substandard and doubtful categories for regulatory purposes and are generally consistent with a rating of CCC+/Caa1 and below, as defined by S&P and Moody’s.
CRO: Chief Risk Officer
CVA: Credit valuation adjustmentsadjustment
DFAST: Dodd-Frank Act Stress Test
Dodd-Frank Act: Wall Street Reform and Consumer Protection Act
DOJ: U.S. Department of Justice
DOL: U.S.Department of Labor
DVA: Debit valuation adjustment
E&P: Exploration & Production
EC: European Commission
Eligible LTD: Long-term debt satisfying certain eligibility criteria
Embedded derivatives: are implicit or explicit terms or features of a financial instrument that affect some or all of the cash flows or the value of the instrument in a manner similar to a derivative. An instrument containing such terms

or features is referred to as a “hybrid.” The component of the hybrid that is the non-derivative instrument is referred

to as the “host.” For example, callable debt is a hybrid instrument that contains a plain vanilla debt instrument (i.e., the host) and an embedded option that allows the issuer to redeem the debt issue at a specified date for a specified amount (i.e., the embedded derivative). However, a floating rate instrument is not a hybrid composed of a fixed-rate instrument and an interest rate swap.
ERISA: Employee Retirement Income Security Act of 1974
EPS: Earnings per share
Exchange-traded derivatives: Derivative contracts that are executed on an exchange and settled via a central clearing house.
Fannie Mae: Federal National Mortgage Association
FASB: Financial Accounting Standards Board
FCA: Financial Conduct Authority
FCC: Firmwide Control Committee
FDIA: Federal Depository Insurance Act
FDIC: Federal Deposit Insurance Corporation
Federal Reserve: The Board of the Governors of the Federal Reserve System
Fee share: Proportion of fee revenue based on estimates of investment banking fees generated across the industry from investment banking transactions in M&A, equity and debt underwriting, and loan syndications. Source: Dealogic, a third party provider of investment banking fee competitive analysis and volume-based league tables for the above noted industry products.
FFELP: Federal Family Education Loan Program
FFIEC: Federal Financial Institutions Examination Council
FHA: Federal Housing Administration
FHLB: Federal Home Loan Bank
FICO score:A measure of consumer credit risk based on information in consumer credit reports produced by Fair Isaac Corporation. Because certain aged data is excluded from credit reports based on rules in the Fair Credit Reporting Act, FICO scores may not reflect all historical information about a consumer.
Firm: JPMorgan Chase & Co.
Forward points: represents the interest rate differential between two currencies, which is either added to or subtracted from the current exchange rate (i.e., “spot rate”) to determine the forward exchange rate.
Freddie Mac: Federal Home Loan Mortgage Corporation.Corporation
Free-standing derivatives: is a derivative contract entered into either separate and apart from any of the Firms Firm’s other financial instruments or equity transactions. Or, in conjunction with some other transaction and is legally detachable and separately exercisable.
FSB: Financial Stability Board
FTE: Fully taxable-equivalent
FVA: Funding valuation adjustment
FX: Foreign exchange
 
FX: Foreign exchange
G7: “Group of Seven nations”:Countries in the G7 are Canada, France, Germany, Italy, Japan, the U.K. and the U.S.
G7 government securities:Securities issued by the government of one of the G7 nations.
Ginnie Mae:Government National Mortgage Association
GSE: Fannie Mae and Freddie Mac
GSIB: GloballyGlobal systemically important banks
HAMP: Home affordable modification program
Headcount-related expense: Includes salary and benefits (excluding performance-based incentives), and other     noncompensation costs related to employees.
HELOAN: Home equity loan
HELOC: Home equity line of credit
Home equity – senior lien:represents loans and commitments where JPMorgan Chase holds the first security interest on the property.
Home equity – junior lien:represents loans and commitments where JPMorgan Chase holds a security interest that is subordinate in rank to other liens.
HQLA: High quality liquid assets
HTM: Held-to-maturity
IDI: Insured depository institutions
IHC: JPMorgan Chase Holdings LLC, an intermediate holding company
Impaired loan:Impaired loans are loans measured at amortized cost, for which it is probable that the Firm will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the agreement. Impaired loans include the following:
All wholesale nonaccrual loans
All TDRs (both wholesale and consumer), including ones that have returned to accrual status
Interchange income: A fee paid to a credit card issuer in the clearing and settlement of a sales or cash advance transaction.
Investment-grade:An indication of credit quality based on JPMorgan Chase’s internal risk assessment system. “Investment grade” generally represents a risk profile similar to a rating of a “BBB-”/“Baa3” or better, as defined by independent rating agencies.
IR: Interest rate
ISDA: International Swaps and Derivatives Association
JPMorgan Chase: JPMorgan Chase & Co.
JPMorgan Chase Bank, N.A.: JPMorgan Chase Bank, National Association
JPMorganJ.P. Morgan Securities: J.P. Morgan Securities LLC
LCR: Liquidity coverage ratio
LGD: Loss given default
LIBOR: London Interbank Offered Rate
LLC:Limited Liability Company

LOB: Line of business
Loss emergence period: represents the time period between the date at which the loss is estimated to have been incurred and the ultimate realization of that loss.

LTIP: Long-term incentive plan
LTV: “Loan-to-value ratio”: For residential real estate loans, the relationship, expressed as a percentage, between the principal amount of a loan and the appraised value of the collateral (i.e., residential real estate) securing the loan.
Origination date LTV ratio
The LTV ratio at the origination date of the loan. Origination date LTV ratios are calculated based on the actual appraised values of collateral (i.e., loan-level data) at the origination date.
Current estimated LTV ratio
An estimate of the LTV as of a certain date. The current estimated LTV ratios are calculated using estimated collateral values derived from a nationally recognized home price index measured at the metropolitan statistical area (“MSA”) level. These MSA-level home price indices consist of actual data to the extent available and forecasted data where actual data is not available. As a result, the estimated collateral values used to calculate these ratios do not represent actual appraised loan-level collateral values; as such, the resulting LTV ratios are necessarily imprecise and should therefore be viewed as estimates.
Combined LTV ratio
The LTV ratio considering all available lien positions, as well as unused lines, related to the property. Combined LTV ratios are used for junior lien home equity products.
Master netting agreement:AnA single agreement between two counterparties who havewith a counterparty that permits multiple contracts with each othertransactions governed by that provides for the net settlement of all contracts, as well as cash collateral,agreement to be terminated or accelerated and settled through a single payment in a single currency in the event of a default on(e.g., bankruptcy, failure to make a required payment or terminationsecurities transfer or deliver collateral or margin when due).
Measurement alternative: Measures equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of any one contract.the same issuer.
MBS: Mortgage-backed securities
MD&A: Management’s discussion and analysis
MMDA: Money Market Deposit Accounts
Moody’s: Moody’s Investor Services
Mortgage product types:
Alt-A
Alt-A loans are generally higher in credit quality than subprime loans but have characteristics that would disqualify the borrower from a traditional prime loan. Alt-A lending characteristics may include one or more of the following: (i) limited documentation; (ii) a high CLTV ratio; (iii) loans secured by non-owner occupied properties; or (iv) a debt-to-income ratio above normal limits. A substantial proportion of the Firm’s Alt-A loans are those where a borrower does not provide complete documentation of his or her assets or the amount or source of his or her income.
 
Option ARMs
The option ARM real estate loan product is an adjustable-rate mortgage loan that provides the borrower with the option each month to make a fully amortizing, interest-only or minimum payment. The minimum payment on an option ARM loan is based on the interest rate charged during the introductory period. This introductory rate is usually significantly below the fully indexed rate. The fully indexed rate is calculated using an index rate plus a margin. Once the introductory period ends, the contractual interest rate charged on the loan increases to the fully indexed rate and adjusts monthly to reflect movements in the index. The minimum payment is typically insufficient to cover interest accrued in the prior month, and any unpaid interest is deferred and added to the principal balance of the loan. Option ARM loans are subject to payment recast, which converts the loan to a variable-rate fully amortizing loan upon meeting specified loan balance and anniversary date triggers.
Prime
Prime mortgage loans are made to borrowers with good credit records who meet specific underwriting requirements, including prescriptive requirements related to income and overall debt levels. New prime mortgage borrowers provide full documentation and generally have reliable payment histories.
Subprime
Subprime loans are loans that, prior to mid-2008, were offered to certain customers with one or more high risk characteristics, including but not limited to: (i) unreliable or poor payment histories; (ii) a high LTV ratio of greater than 80% (without borrower-paid mortgage insurance); (iii) a high debt-to-income ratio; (iv) an occupancy type for the loan is other than the borrower’s primary residence; or (v) a history of delinquencies or late payments on the loan.
MSA: Metropolitan statistical areas
MSR: Mortgage servicing rights
NA:Data is not applicable or available for the period presented.
Net Capital Rule: Rule 15c3-1 under the Securities Exchange Act of 1934.
Net charge-off/(recovery) rate: represents net charge-offs/(recoveries) (annualized) divided by average retained loans for the reporting period.
Net interchange income includes the following components:
•
Interchange income:Fees earned by credit and debit card issuers on sales transactions.
•
Rewards 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.
Net yield on interest-earning assets: The average rate for interest-earning assets less the average rate paid for all sources of funds.

NM:Not meaningful
NOL: Net operating loss
Nonaccrual loans:Loans for which interest income is not recognized on an accrual basis. Loans (other than credit card loans and certain consumer loans insured by U.S. government agencies) are placed on nonaccrual status when full payment of principal and interest is not expected, regardless of delinquency status, or when principal and interest has been in default for a period of 90 days or more

unless the loan is both well-secured and in the process of collection. Collateral-dependent loans are typically maintained on nonaccrual status.
Nonperforming assets: Nonperforming assets include nonaccrual loans, nonperforming derivatives and certain assets acquired in loan satisfactions, predominantly real estate owned and other commercial and personal property.
NOW: Negotiable Order of Withdrawal
NSFR: Net stable funding ratio
OAS: Option-adjusted spread
OCC: Office of the Comptroller of the Currency
OCI: Other comprehensive income/(loss)
OEP: One Equity Partners
OIS: Overnight index swap
OPEB: Other postretirement employee benefit
OTC: “Over-the-counter derivatives”:Derivative contracts that are negotiated, executed and settled bilaterally between two derivative counterparties, where one or both counterparties is a derivatives dealer.
OTC cleared: “Over-the-counter cleared derivatives”:Derivative contracts that are negotiated and executed bilaterally, but subsequently settled via a central clearing house, such that each derivative counterparty is only exposed to the default of that clearing house.
OTTI: Other-than-temporary impairment
Overhead ratio: Noninterest expense as a percentage of total net revenue.
Parent Company: JPMorgan Chase & Co.
Participating securities: represents unvested stock-basedshare-based compensation awards containing nonforfeitable rights to dividends or dividend equivalents (collectively, “dividends”), which are included in the earnings per share calculation using the two-class method. JPMorgan Chase grants restricted stock and RSUs to certain employees under its stock-basedshare-based compensation programs, which entitle the recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities. Under the two-class method, all earnings (distributed and undistributed) are allocated to each class of common stock and participating securities, based on their respective rights to receive dividends.
PCA: Prompt corrective action
PCI: “Purchased credit-impaired” loansrepresents certain loans that were acquired in the Washington Mutual transaction and deemed to be credit-impaired on the acquisition date in accordance with the guidance of the FASB. The guidance allows purchasers to aggregate credit-impaired loans acquired in the same fiscal quarter into one or more pools, provided that the loans have
common risk characteristics (e.g., product type, LTV ratios, FICO scores, past due status, geographic location). A pool is then accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows.
PD: Probability of default
PRA: Prudential Regulatory Authority
Pre-provision profit/(loss): represents total net revenue less noninterest expense. The Firm believes that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses.
Principal transactions revenue:Principal transactions revenue is driven by many factors, including the bid-offer spread, which is the difference between the price at which the Firm is willing to buy a financial or other instrument and the price at which the Firm is willing to sell that instrument. It also consists of realized (as a result of closing out or termination of transactions, or interim cash payments) and unrealized (as a result of changes in valuation) gains and losses on financial and other instruments (including those accounted for under the fair value option) primarily used in client-driven market-making activities and on private equity investments. In connection with its client-driven market-making activities, the Firm transacts in debt and equity instruments, derivatives and commodities (including physical commodities inventories and financial instruments that reference commodities). Principal transactions revenue also includes certain realized and unrealized gains and losses related to hedge accounting and specified risk-management activities, including: (a) certain derivatives designated in qualifying hedge accounting relationships (primarily fair value hedges of commodity and foreign exchange risk), (b) certain derivatives used for specific risk management purposes, primarily to mitigate credit risk and foreign exchange risk and commodity risk, and (c) other derivatives.
PSU(s): Performance share units
Receivables from customers: primarily represents margin loans to brokerage customers that are collateralized through assets maintained in the clients’ brokerage accounts, as such no allowance is held against these receivables. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.
Regulatory VaR: Daily aggregated VaR calculated in accordance with regulatory rules.
REO: Real estate owned
Reported basis: Financial statements prepared under U.S. GAAP, which excludes the impact of taxable-equivalent adjustments.
Retained loans:Loans that are held-for-investment (i.e. excludes loans held-for-sale and loans at fair value).
Revenue wallet: Total fee revenue based on estimates of investment banking fees generated across the industry (i.e., the revenue wallet) from investment banking transactions in M&A, equity and debt underwriting, and loan syndications. Source: Dealogic, a third-party provider of investment banking competitive analysis and volume based league tables for the above noted industry products.

RHS:Rural Housing Service of the U.S. Department of Agriculture

ROE: Return on equity
ROTCE: Return on tangible common equity
RSU(s): Restricted stock units
RWA: “Risk-weighted assets”:Basel III establishes two comprehensive methodologiesapproaches for calculating RWA (a Standardized approach and an Advanced approach) which include capital requirements forcredit risk, market risk, and in the case of Basel III Advanced, also operational risk.Key differences in the calculation of credit risk RWA between the Standardized and Advanced approaches are that for Basel III Advanced, credit risk RWA is based on risk-sensitive approaches which largely rely on the use of internal credit models and parameters, whereas for Basel III Standardized, credit risk RWA is generally based on supervisory risk-weightings which vary primarily by counterparty type and asset class. Market risk RWA is calculated on a generally consistent basis between Basel III Standardized and Basel III Advanced.
S&P: Standard and Poor’s 500 Index
SAR(s): Stock appreciation rights
SCCL: Single-counterparty credit limits
Scored portfolio: The scored portfolio predominantly includes residential real estate loans, credit card loans and certain auto and business banking loans where credit loss estimates are based on statistical analysis of credit losses over discrete periods of time. The statistical analysis uses portfolio modeling, credit scoring and decision-support tools.
SEC: U.S.Securities and Exchange Commission
Seed capital: Initial JPMorgan capital invested in products, such as mutual funds, with the intention of ensuring the fund is of sufficient size to represent a viable offering to clients, enabling pricing of its shares, and allowing the manager to develop a track record. After these goals are achieved, the intent is to remove the Firm’s capital from the investment.
Short sale: is a sale of real estate in which proceeds from selling the underlying property are less than the amount owed the Firm under the terms of the related mortgage and the related lien is released upon receipt of such proceeds.
Single-name: Single reference-entities
SLR: Supplementary leverage ratio
SMBS: Stripped mortgage-backed securities
SOA: Society of Actuaries
SPEs: Special purpose entities
Structural interest rate risk: represents interest rate risk of the non-trading assets and liabilities of the Firm.
Structured notes:Structured notes are predominantly financial instruments containingwhose cash flows are linked to the movement in one or more indexes, interest rates, foreign exchange rates, commodities prices, prepayment rates, or other market variables. The notes typically contain embedded (but not separable or detachable) derivatives. Where present,Contractual cash flows for principal, interest, or both can vary in amount and timing throughout the embedded derivative islife of the primary drivernote based on non-traditional indexes or non-traditional uses of risk.traditional interest rates or indexes.
Suspended foreclosures:Loans referred to foreclosure where formal foreclosure proceedings have started but are currently on hold, whichwhic
h could be due to bankruptcy or loss mitigation. Includes both judicial and non-judicial states.
Taxable-equivalent basis: In presenting managed results, the total net revenue for each of the business segments and the Firm is presented on a tax-equivalent basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities; the
corresponding income tax impact related to tax-exempt items is recorded within income tax expense.
TBVPS: Tangible book value per share
TCE: Tangible common equity
TDR:“Troubled debt restructuring” is deemed to occur when the Firm modifies the original terms of a loan agreement by granting a concession to a borrower that is experiencing financial difficulty.
TLAC: Total Loss Absorbing Capacity
U.K.: United Kingdom
Unaudited:Financial statements and information that have not been subjected to auditing procedures sufficient to permit an independent certified public accountant to express an opinion.
U.S.: United States of America
U.S. GAAP:Accounting principles generally accepted in the United States of America.
U.S. GSE(s): “U.S. government-sponsored enterprises”:In the U.S., GSEs are quasi-governmental, privately-held entities established by Congress to improve the flow of credit to specific sectors of the economy and provide certain essential services to the public. U.S. GSEs include Fannie Mae and Freddie Mac, but do not include Ginnie Mae, which is directly owned by the U.S. Department of Housing and Urban Development. U.S. GSE obligations are not explicitly guaranteed as to the timely payment of principal and interest by the full faith and credit of the U.S. government.
U.S. Treasury:U.S. Department of the Treasury
VA: U.S. Department of Veterans Affairs
VaR: “Value-at-risk” is a measure of the dollar amount of potential loss from adverse market moves in an ordinary market environment.
VIEs: Variable interest entities
Warehouse loans:consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets.
Washington Mutual transaction:On September 25, 2008, JPMorgan Chase acquired certain of the assets of the banking operations of Washington Mutual Bank (“Washington Mutual”) from the FDIC.


LINE OF BUSINESS METRICS
CONSUMER & COMMUNITY BANKING (“CCB”)
Households: A household is a collection of individuals or entities aggregated together by name, address, tax identifier and phone. Reported on a one-month lag.
Debit and credit card sales volume: Dollar amount of cardmember purchases, net of returns.
Deposit margin/deposit spread: represents net interest income expressed as a percentage of average deposits.
MortgageHome Lending Production and MortgageHome Lending Servicing revenue comprises the following:
Net production revenue: includes net gains or losses on originations and sales of mortgage loans, other production-related fees and losses related to the repurchase of previously-sold loans.
Net mortgage servicing revenue: includes the following components:
a) Operating revenue predominantly represents the return on MortgageHome Lending Servicing’s MSR asset and includes:
Actual gross income earned from servicing third-party mortgage loans, such as contractually specified servicing fees and ancillary income; and
The change in the fair value of the MSR asset due to the collection or realization of expected cash flows.
b) Risk management represents the components of MortgageHome Lending Servicing’s MSR asset that are subject to ongoing risk management activities, together with derivatives and other instruments used in those risk management activities.
Mortgage origination channels comprise the following:
Retail: Borrowers who buy or refinance a home through direct contact with a mortgage banker employed by the Firm using a branch office, the Internet or by phone. Borrowers are frequently referred to a mortgage banker by a banker in a Chase branch, real estate brokers, home builders or other third parties.
Correspondent: Banks, thrifts, other mortgage banks and other financial institutions that sell closed loans to the Firm.
Card Services: includes the Card and Commerce SolutionsMerchant Services businesses.
Card: is a business that primarily issues credit cards to consumers and small businesses.
Commerce Solutions: Merchant Services: is a business that primarily processes transactions for merchants.
Net revenue rate: represents Card Services net revenue (annualized) expressed as a percentage of average loans for the period.
Auto loan and lease origination volume: Dollar amount of auto loans and leases originated.
 
CORPORATE & INVESTMENT BANK (“CIB”)
Definition of selected CIB revenue:
Investment Banking: incorporates all revenue associated with investment banking activities, and is reported net of investment banking revenue shared with other lines of business.
Treasury Services: offers a broad range of products and services that enable clients to manage payments and receipts, as well as invest and manage funds. Products include U.S. dollar and multi-currency clearing, ACH, lockbox, disbursement and reconciliation services, check deposits, and currency-related services.
Lending: includes net interest income, fees, gains or losses on loan sale activity, gains or losses on securities received as part of a loan restructuring, and the risk management results related to the credit portfolio. Lending also includes Trade Finance, which includes loans tied directly to goods crossing borders, export/import loans, commercial letters of credit, standby letters of credit, and supply chain finance.
Fixed Income Markets: primarily includes revenue related to market-making across global fixed income markets, including foreign exchange, interest rate, credit and commodities markets.
Equity Markets: primarily includes revenue related to market-making across global equity products, including cash instruments, derivatives, convertibles and Prime Services.prime brokerage.
Securities Services: primarilyincludes custody, fund accounting and administration, and securities lending products sold principally to asset managers, insurance companies and public and private investment funds. Also includes clearance, collateral management and depositary receipts business which provides broker-dealer clearing and custody services, including tri-party repo transactions, collateral management products, and depositary bank services for American and global depositary receipt programs.
Description of certain business metrics:
Assets under custody (“AUC”): represents activities associated with the safekeeping and servicing of assets on which Securities Services earns fees.
Investment banking fees: represents advisory, equity underwriting, bond underwriting and loan syndication fees.

COMMERCIAL BANKING (“CB”)
CB is divided into four primary client segments: Middle Market Banking, Corporate Client Banking, Commercial Term Lending, and Real Estate Banking.
Middle Market Banking: covers corporate, municipal and nonprofit clients, with annual revenue generally ranging between $20 million and $500 million.
Corporate Client Banking: covers clients with annual revenue generally ranging between $500 million and $2 billion and focuses on clients that have broader investment banking needs.
Commercial Term Lending: primarily provides term financing to real estate investors/owners for multifamily properties as well as office, retail and industrial properties.
Real Estate Banking: provides full-service banking to investors and developers of institutional-grade real estate investment properties.
Other: primarily includes lending and investment-related activities within the Community Development Banking business.
CB product revenue comprises 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 market products used by CB clients is also included.
Other: product revenue primarily includes tax-equivalent adjustments generated from Community Development Banking activity and certain income derived from principal transactions.
 
ASSET & WEALTH MANAGEMENT (“AWM”)
Assets under management (“AUM”): represent assets managed by AWM on behalf of its Private Banking, Institutional and Retail clients. Includes “Committed capital not Called.”
Client assets: represent assets under management, as well as custody, brokerage, administration and deposit accounts.
Multi-asset: Any fund or account that allocates assets under management to more than one asset class.
Alternative assets: The following types of assets constitute alternative investments – hedge funds, currency, real estate, private equity and other investment funds designed to focus on nontraditional strategies.
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. 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. 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, at a “primary share class” level to represent the quartile ranking of the U.K., Luxembourg and Hong Kong funds and at the 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 (applies to “Offshore Territories” and “HK SFC Authorized” funds only). The performance data could have been different if all funds/accounts would have been included. Past performance is not indicative of future results.




Item 3.    Quantitative and Qualitative Disclosures About Market Risk.
For a discussion of the quantitative and qualitative disclosures about market risk, seerefer to the Market Risk Management section of Management’s discussion and analysis on and pages 73–77 of this Form 10-Q and pages 116–123121-128 of JPMorgan Chase’s 20162017 Annual Report.
Item 4.    Controls and Procedures.
As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of the Firm’s management, including its Chairman and Chief Executive Officer and its Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, the Chairman and Chief Executive Officer and the Chief Financial Officer concluded that these disclosure controls and procedures were effective. SeeRefer to Exhibits 31.1 and 31.2 for the Certification statements issued by the Chairman and Chief Executive Officer and Chief Financial Officer.
The Firm is committed to maintaining high standards of internal control over financial reporting. Nevertheless, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, in a firm as large and complex as JPMorgan Chase, lapses or deficiencies in internal controls do occur from time to time, and there can be no assurance that any such deficiencies will not result in significant deficiencies or material weaknesses in internal controls in the future. For further information, seerefer to “Management’s report on internal control over financial reporting” on page 139146 of JPMorgan Chase’s 20162017 Annual Report. There was no change in the Firm’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during the three months ended September 30, 2017,2018, that has materially affected, or is reasonably likely to materially affect, the Firm’s internal control over financial reporting.

Part II – Other Information
Item 1. Legal Proceedings.
For information that updates the disclosures set forth under Part I, Item 3: Legal Proceedings, in JPMorgan Chase’s 20162017 Annual Report on Form 10-K, seerefer to the discussion of the Firm’s material legal proceedings in Note 2122 of this Form 10-Q.
Item 1A. Risk Factors.
For a discussion of certain risk factors affecting the Firm, seerefer to Part I, Item 1A: Risk Factors on pages 8–2126 of JPMorgan Chase’s 20162017 Annual Report on Form 10-K and Forward-Looking Statements on page 8285 of this Form 10-Q.
Supervision and regulation
For information on Supervision and Regulation, seerefer to Recent regulatory developments on page 44 of this Form 10-Q and the Supervision and regulation section on pages 1–8 of JPMorgan Chase’s 20162017 Form 10-K.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.
DuringThe Firm did not have any unregistered sale of equity securities during the three months ended September 30, 2017, no shares of common stock of JPMorgan Chase & Co. were issued in transactions exempt from registration under the Securities Act of 1933, pursuant to Section 4(2) thereof.2018.
Repurchases under the common equity repurchase program
Following receipt in June 2017 of the Federal Reserve’s non-objection to the Firm’s 2017 capital plan, the Firm’s Board of Directors authorized the repurchase of up to $19.4 billion of common equity (common stock and warrants) between July 1, 2017 and June 30, 2018. This authorization includes shares repurchased to offset issuancesFor information regarding repurchases under the Firm’s equity-based compensation plans.
The following table sets forth the Firm’s repurchases of common equity for the three and nine months ended September 30, 2017 and 2016. There were no warrants repurchased during the nine months ended September 30, 2017 and 2016.
  Three months ended September 30, Nine months ended September 30,
(in millions) 2017
2016
 20172016
Total shares of common stock repurchased 51.7
35.6
 118.8
110.6
Aggregate common stock repurchases $4,763
$2,295
 $10,602
$6,831
The Firm may, from time to time, enter into written trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934 to facilitate repurchases in accordance with the common equity repurchase program. A Rule 10b5-1 repurchase plan allows the Firmprogram, refer to repurchase its equity during periods when it would not otherwise be repurchasing common equity — for example, during internal trading blackout periods. All purchases under Rule 10b5-1 plans must be made according to predefined plans established when the Firm is not awareCapital Risk Management on pages 44-48 of material nonpublic information.this Form 10-Q and pages 82-91 of JPMorgan Chase’s 2017 10-K.

The authorization to repurchase common equity will be utilized at management’s discretion, and the timing of purchases and the exact amount of common equity that may be repurchased is subject to various factors, including market conditions; legal and regulatory considerations affecting the amount and timing of repurchase activity; the Firm’s capital position (taking into account goodwill and intangibles); internal capital generation; and alternative
investment opportunities. The repurchase program does not include specific price targets or timetables; may be executed through open market purchases or privately negotiated transactions, or utilizing Rule 10b5-1 programs; and may be suspended at any time.

Shares repurchased pursuant to the common equity repurchase program during the nine months ended September 30, 2017,2018, were as follows.
Nine months ended September 30, 2017Total shares of common stock repurchased 
Average price paid per share of common stock(a)
 
Aggregate repurchases of common equity
 (in millions)(a)
 
Dollar value of remaining authorized repurchase
(in millions)(a)
 
Nine months ended September 30, 2018Total shares of common stock repurchased 
Average price paid per share of common stock(a)
 
Aggregate repurchases
of common equity
 (in millions)(a)
 
Dollar value of remaining authorized repurchase
(in millions)(a)
 
First quarter32,132,964
 $88.14
 $2,832
 $3,221
(b) 
41,419,035
 $112.78
 $4,671
 $5,156
(b) 
Second quarter34,940,127
 86.05
 3,007
 214
(c) 
45,299,370
 109.67
 4,968
 188
(c) 
July14,353,325
 92.05
 1,321
 18,079
 15,450,734
 107.83
 1,666
 19,059
 
August20,326,765
 92.25
 1,875
 16,204
 12,302,781
 115.67
 1,423
 17,636
 
September17,076,802
 91.72
 1,567
 14,637
 11,528,761
 115.07
 1,327
 16,309
 
Third quarter51,756,892
 92.02
 4,763
 14,637
 39,282,276
 112.41
 4,416
 16,309
 
Year-to-date118,829,983
 $89.22
 $10,602
 $14,637
 126,000,681
 $111.55
 $14,055
 $16,309
 
(a)Excludes commissions cost.
(b)Represents the amount remaining under the $10.6$19.4 billion repurchase program that was authorized by the Board of Directors on June 29, 2016.28, 2017.
(c)The $214$188 million unused portion under the prior Board authorization was canceled when the $19.4$20.7 billion program was authorized.

Item 3.    Defaults Upon Senior Securities.
None.
Item 4.    Mine Safety Disclosures.
Not applicable.
Item 5.    Other Information.
None.



Item 6.    Exhibits.
Exhibit No. Description of Exhibit
   
15 
Letter re: Unaudited Interim Financial Information.(a)
   
31.1 
Certification.(a)
   
31.2 
Certification.(a)
   
32 
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(b)
   
101.INS 
The instance document does not appear in the interactive data file because its XBRL Instance Document.tags are embedded within the inline XBRL document.(a)(c)
101.SCH 
XBRL Taxonomy Extension Schema Document.(a)
101.CAL 
XBRL Taxonomy Extension Calculation Linkbase Document.(a)
101.DEF 
XBRL Taxonomy Extension Definition Linkbase Document.(a)
101.LAB 
XBRL Taxonomy Extension Label Linkbase Document.(a)
101.PRE 
XBRL Taxonomy Extension Presentation Linkbase Document.(a)
(a)Filed herewith.
(b)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.
(c)Pursuant to Rule 405 of Regulation S-T, includes the following financial information included in the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017,2018, formatted in XBRL (eXtensible Business Reporting Language) interactive data files: (i) the Consolidated statements of income (unaudited) for the three and nine months ended September 30, 20172018 and 2016,2017, (ii) the Consolidated statements of comprehensive income (unaudited) for the three and nine months ended September 30, 20172018 and 2016,2017, (iii) the Consolidated balance sheets (unaudited) as of September 30, 2017,2018, and December 31, 2016,2017, (iv) the Consolidated statements of changes in stockholders’ equity (unaudited) for the nine months ended September 30, 20172018 and 2016,2017, (v) the Consolidated statements of cash flows (unaudited) for the nine months ended September 30, 20172018 and 2016,2017, and (vi) the Notes to Consolidated Financial Statements (unaudited).


SIGNATURE






Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
JPMorgan Chase & Co.
(Registrant)




By:/s/ Nicole Giles
 Nicole Giles
 Managing Director and Corporate Controller
 (Principal Accounting Officer)




Date:November 1, 2017October 31, 2018












INDEX TO EXHIBITS






Exhibit No. Description of Exhibit
   
15 
Letter re: Unaudited Interim Financial Information.
   
31.1 
Certification.
   
31.2 
Certification.
   
32 
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†
   
101.INS The instance document does not appear in the interactive data file because its XBRL Instance Document.tags are embedded within the inline XBRL document.
101.SCH XBRL Taxonomy Extension Schema Document.
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB XBRL Taxonomy Extension Label Linkbase Document.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
   
† 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.






180186