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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
March 31,September 30, 2018number 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 March 31,September 30, 2018: 3,404,776,9223,325,410,725
 




FORM 10-Q
TABLE OF CONTENTS
Page
Item 1. 
  
 7486
 7587
 7688
 7789
 7890
 7991
 154172
 155173
 156175
Item 2. 
 3
 4
 5
 8
 1012
 1315
 14
16
 3019
 3242
 3844
 4549
 5057
 6062
 6172
 6673
 78
6779
 7082
 7385
Item 3.164183
Item 4.164183
 
Item 1.164183
Item 1A.164183
Item 2.164183
Item 3.165184
Item 4.165184
Item 5.165184
Item 6.166184



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)

1Q18
4Q17
3Q17
 2Q17
 1Q17
 3Q18
2Q18
1Q18
4Q17
 3Q17
 2018
2017
 
Selected income statement dataSelected income statement data      Selected income statement data      
Total net revenueTotal net revenue$27,907
$24,457
$25,578
 $25,731
 $24,939
 Total net revenue$27,260
$27,753
$27,907
$24,457
 $25,578
 $82,920
$76,248
 
Total noninterest expenseTotal noninterest expense16,080
14,895
14,570
 14,767
 15,283
 Total noninterest expense15,623
15,971
16,080
14,895
 14,570
 47,674
44,620
 
Pre-provision profitPre-provision profit11,827
9,562
11,008
 10,964
 9,656
 Pre-provision profit11,637
11,782
11,827
9,562
 11,008
 35,246
31,628
 
Provision for credit lossesProvision for credit losses1,165
1,308
1,452
 1,215
 1,315
 Provision for credit losses948
1,210
1,165
1,308
 1,452
 3,323
3,982
 
Income before income tax expenseIncome before income tax expense10,662
8,254
9,556
 9,749
 8,341
 Income before income tax expense10,689
10,572
10,662
8,254
 9,556
 31,923
27,646
 
Income tax expenseIncome tax expense1,950
4,022
2,824
 2,720
 1,893
 Income tax expense2,309
2,256
1,950
4,022
 2,824
 6,515
7,437
 
Net incomeNet income$8,712
$4,232
$6,732
 $7,029
 $6,448
 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$2.38
$1.08
$1.77
 $1.83
 $1.66
 Net income: Basic$2.35
$2.31
$2.38
$1.08
 $1.77
 $7.04
$5.26
 
Diluted Diluted2.37
1.07
1.76
 1.82
 1.65
  Diluted2.34
2.29
2.37
1.07
 1.76
 7.00
5.22
 
Average shares: BasicAverage shares: Basic3,458.3
3,489.7
3,534.7
 3,574.1
 3,601.7
 Average shares: Basic3,376.1
3,415.2
3,458.3
3,489.7
 3,534.7
 3,416.5
3,570.9
 
Diluted Diluted3,479.5
3,512.2
3,559.6
 3,599.0
 3,630.4
  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 capitalization374,423
366,301
331,393
 321,633
 312,078
 Market capitalization375,239
350,204
374,423
366,301
 331,393
 375,239
331,393
 
Common shares at period-endCommon shares at period-end3,404.8
3,425.3
3,469.7
 3,519.0
 3,552.8
 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$119.33
$108.46
$95.88
 $92.65
 $93.98
 High$119.24
$115.15
$119.33
$108.46
 $95.88
 $119.33
$95.88
 
LowLow103.98
94.96
88.08
 81.64
 83.03
 Low102.20
103.11
103.98
94.96
 88.08
 102.20
81.64
 
CloseClose109.97
106.94
95.51
 91.40
 87.84
 Close112.84
104.20
109.97
106.94
 95.51
 112.84
95.51
 
Book value per shareBook value per share67.59
67.04
66.95
 66.05
 64.68
 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)
54.05
53.56
54.03
 53.29
 52.04
 
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
0.56
0.56
 0.50
 0.50
 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”)15%7%11% 12% 11% 
Return on tangible common equity (“ROTCE”)(b)
19
8
13
 14
 13
 
Return on assets1.37
0.66
1.04
 1.10
 1.03
 
Return on common equity (“ROE”) (c)
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)
17
17
19
8
 13
 18
14
 
Return on assets(c)
Return on assets(c)
1.28
1.28
1.37
0.66
 1.04
 1.31
1.06
 
Overhead ratioOverhead ratio58
61
57
 57
 61
 Overhead ratio57
58
58
61
 57
 57
59
 
Loans-to-deposits ratioLoans-to-deposits ratio63
64
63
 63
 63
 Loans-to-deposits ratio65
65
63
64
 63
 65
63
 
High quality liquid assets (“HQLA”) (in billions)(c)
$539
$560
$568
 $541
 $528
 
Liquidity coverage ratio (“LCR”) (average)(d)Liquidity coverage ratio (“LCR”) (average)(d)115%119%120% 115% NA Liquidity coverage ratio (“LCR”) (average)(d)115
115
115
119
 120
 115
118
 
Common equity Tier 1 (“CET1”) capital ratio(d)(e)
Common equity Tier 1 (“CET1”) capital ratio(d)(e)
11.8
12.2
12.5
(h) 
12.5
(h) 
12.4
(h) 
Common equity Tier 1 (“CET1”) capital ratio(d)(e)
12.0
12.0
11.8
12.2
 12.5
(h)12.0
12.5
(h)
Tier 1 capital ratio(d)(e)
Tier 1 capital ratio(d)(e)
13.5
13.9
14.1
(h) 
14.2
(h) 
14.1
(h) 
Tier 1 capital ratio(d)(e)
13.6
13.6
13.5
13.9
 14.1
(h)13.6
14.1
(h)
Total capital ratio(d)(e)
Total capital ratio(d)(e)
15.3
15.9
16.1
 16.0
 15.6
 
Total capital ratio(d)(e)
15.4
15.5
15.3
15.9
 16.1
 15.4
16.1
 
Tier 1 leverage ratio(d)(e)
Tier 1 leverage ratio(d)(e)
8.2
8.3
8.4
 8.5
 8.4
 
Tier 1 leverage ratio(d)(e)
8.2
8.2
8.2
8.3
 8.4
 8.2
8.4
 
Supplementary leverage ratio (“SLR”)(e)(f)
Supplementary leverage ratio (“SLR”)(e)(f)
6.5%6.5%6.6% 6.7% 6.6% 
Supplementary leverage ratio (“SLR”)(e)(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$412,282
$381,844
$420,418
 $407,064
 $402,513
 Trading assets$419,827
$418,799
$412,282
$381,844
 $420,418
 $419,827
$420,418
 
Investment securitiesInvestment securities238,188
249,958
263,288
 263,458
 281,850
 Investment securities231,398
233,015
238,188
249,958
 263,288
 231,398
263,288
 
LoansLoans934,424
930,697
913,761
 908,767
 895,974
 Loans954,318
948,414
934,424
930,697
 913,761
 954,318
913,761
 
Core loansCore loans870,536
863,683
843,432
 834,935
 812,119
 Core loans899,006
889,433
870,536
863,683
 843,432
 899,006
843,432
 
Average core loansAverage core loans861,089
850,166
837,522
 824,583
 805,382
 Average core loans894,279
877,640
861,089
850,166
 837,522
 877,774
822,611
 
Total assetsTotal assets2,609,785
2,533,600
2,563,074
 2,563,174
 2,546,290
 Total assets2,615,183
2,590,050
2,609,785
2,533,600
 2,563,074
 2,615,183
2,563,074
 
DepositsDeposits1,486,961
1,443,982
1,439,027
 1,439,473
 1,422,999
 Deposits1,458,762
1,452,122
1,486,961
1,443,982
 1,439,027
 1,458,762
1,439,027
 
Long-term debtLong-term debt274,449
284,080
288,582
 292,973
 289,492
 Long-term debt270,124
273,114
274,449
284,080
 288,582
 270,124
288,582
 
Common stockholders’ equityCommon stockholders’ equity230,133
229,625
232,314
 232,415
 229,795
 Common stockholders’ equity231,192
231,390
230,133
229,625
 232,314
 231,192
232,314
 
Total stockholders’ equityTotal stockholders’ equity256,201
255,693
258,382
 258,483
 255,863
 Total stockholders’ equity258,956
257,458
256,201
255,693
 258,382
 258,956
258,382
 
HeadcountHeadcount253,707
252,539
251,503
 249,257
 246,345
 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$14,482
$14,672
$14,648
 $14,480
 $14,490
 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 loans1.44%1.47%1.49% 1.49% 1.52% 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)
1.25
1.27
1.29
 1.28
 1.31
 
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$6,364
$6,426
$6,154
 $6,432
 $6,826
 Nonperforming assets$5,034
$5,767
$6,364
$6,426
 $6,154
 $5,034
$6,154
 
Net charge-offs(g)
Net charge-offs(g)
1,335
1,264
1,265
 1,204
 1,654
 
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)
0.59%0.55%0.56% 0.54% 0.76% 
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, seerefer to Note 1.
(a)Based on daily prices reported 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 Performance Measures on pages 14–15.16-18.
(c)HQLA represents the average amount of assets that qualify for inclusion in the LCR for all periods presented except March 31, 2017, which represents the period-end balance. For additional information, see HQLA on page 38.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 32-3744-48 for additional information on Basel III and the Collins Floor.III.
(e)(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. Prior period ratiosRatios prior to March 31, 2018 were calculated under the Basel III Transitional rules.    
(f)(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 14–15.16-18. For a further discussion, seerefer to Allowance for credit losses on pages 57–59.
(g)Excluding net charge-offs of $467 million related to the student loan portfolio sale, the net charge-off rates for the three months ended March 31, 2017 would have been 0.54%.69–71.
(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 sale, the net charge-off rate for the nine months ended September 30, 2017 would have been 0.55%.


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 firstthird quarter of 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, 2017 filed with the U.S. Securities and Exchange Commission (“2017 Annual Report” or “2017 Form 10-K”), to which reference is hereby made, and which is referred to throughout this document. SeeRefer to the Glossary of terms and acronyms and line of business metrics on pages 156–163175–182 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 7385 of this Form 10-Q and Part I, Item 1A, Risk Factors, on pages 8–26 of JPMorgan Chase’s 2017 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 $256.2$259.0 billion in stockholders’ equity as of March 31,September 30, 2018. The Firm is a leader in investment banking, financial
 
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), a U.S. broker-dealer. The bank and non-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 31 of JPMorgan Chase’s 2017 Form 10-K.








EXECUTIVE OVERVIEW
This executive overview of the MD&A highlights selected information and may 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 requiresrequired 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 in the first quarter of 2018 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, seerefer 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 March 31,Three months ended September 30, Nine months ended September 30,
2018
 2017
 Change
2018
 2017
 Change
 2018
 2017
 Change
Selected income statement data                
Total net revenue$27,907
 $24,939
 12 %$27,260
 $25,578
 7 % $82,920
 $76,248
 9 %
Total noninterest expense16,080
 15,283
 5
15,623
 14,570
 7
 47,674
 44,620
 7
Pre-provision profit11,827
 9,656
 22
11,637
 11,008
 6
 35,246
 31,628
 11
Provision for credit losses1,165
 1,315
 (11)948
 1,452
 (35) 3,323
 3,982
 (17)
Net income8,712
 6,448
 35
8,380
 6,732
 24
 25,408
 20,209
 26
Diluted earnings per share$2.37
 $1.65
 44
$2.34
 $1.76
 33
 $7.00
 $5.22
 34
Selected ratios and metrics                
Return on common equity15% 11%  14% 11%   14% 11%  
Return on tangible common equity19
 13
  17
 13
   18
 14
  
Book value per share$67.59
 $64.68
 4
$69.52
 $66.95
 4
 $69.52
 $66.95
 4
Tangible book value per share54.05
 52.04
 4
55.68
 54.03
 3
 55.68
 54.03
 3
Capital ratios(a)
                
CET1(b)
11.8% 12.4%  12.0% 12.5%   12.0% 12.5%  
Tier 1 capital(b)
13.5
 14.1
  13.6
 14.1
   13.6
 14.1
  
Total capital15.3
 15.6
  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 32-3744-48 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 firstthird quarter of 2018 versus the firstthird quarter of 2017, unless otherwise specified.
Firmwide overview
JPMorgan Chase reported strong results in the firstcurrent quarter of 2018, with record net income and EPS for a third quarter of $8.7$8.4 billion, or $2.37$2.34 per share, on net revenue of $27.9$27.3 billion. Excluding the benefitimpact of tax reform,the Tax Cuts & Jobs Acts (”TCJA”), net income wasand EPS were still records for a record for thethird quarter. The Firm reported ROE of 15%14% and ROTCE of 19%17%.
Net income increased 35%24%, reflecting higher net revenue and the impact of the lower U.S. federal statutory income tax rate as a result of the Tax Cuts & Jobs Acts (“TCJA”),TCJA, partially offset by an increase in noninterest expense.
Total net revenue increased 12%7%. Net interest income was $13.3$13.9 billion, up 10%9%, driven by the net impact of higher rates, which includes lower Markets net interest income 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 CIB Markets net interest income. Noninterest revenue was $14.6 billion, up 13%, driven by higher CIB Markets revenue, lower new account origination costs, higher auto lease income and higher management fees in AWM, partially offset by lower investment banking fees. Noninterest revenue also included $505 million of fair value gains related to the adoption of the new recognition and measurement accounting guidance formarkdowns on certain legacy private equity investments previously held at cost.
of approximately $220 million.
Noninterest expense was $16.1$15.6 billion, up 5%7%, predominantly driven by investments in the business, including higher compensation expense volume-related transactionon increased headcount, technology, marketing and real estate, and higher revenue-related costs, in CIB Markets andincluding auto lease depreciation in CCB.depreciation.
The provision for credit losses was $1.2 billion,$948 million, down from $1.3$1.5 billion in the prior year. In Wholesale,The decrease was driven by the provisionconsumer portfolio, largely reflecting a net reduction to the allowance for credit losses was a benefit, reflecting a reduction in the allowance of $170 million in the current quarter, driven bycompared to a single namenet addition in the Oil & Gas portfolio. The consumer provision reflected higher net charge-offs in Card in the current quarter, in line with expectations. The prior year included a $218 million write-down of the student loan portfolio, which was sold in 2017.year.
The total allowance for credit losses was $14.5$14.2 billion at March 31,September 30, 2018, and the Firm had a loan loss coverage ratio, excluding the PCI portfolio, of 1.25%1.23%, compared with 1.31%1.29% in the prior year. The Firm’s nonperforming assets totaled $6.4$5.0 billion at March 31,September 30, 2018, a decrease from $6.8$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 8%6%.

Selected capital-related metrics
The Firm’s Basel III Fully Phased-In CET1 capital was $184$185 billion, and the Standardized and Advanced CET1 ratios were 11.8%12.0% and 12.5%12.9%, respectively.
Effective January 1, 2018, theThe Firm’s Fully Phased-In SLR was fully phased-in and was 6.5% at March 31,September 30, 2018.

The Firm continued to grow tangible book value per share (“TBVPS”), ending the firstthird quarter of 2018 at $54.05,
$55.68, up 4%3%.
ROTCE and TBVPS are each 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 14–15,16-18, and Capital Risk Management on pages 32-37.44-48.


Lines of business highlights
Selected business metrics for each of the Firm’s four lines of business are presented below for the firstthird quarter of 2018.
CCB
ROE 25%31%
 
Average core loans up 8%6%; average deposits of $660$674 billion up 6%4%
Client investment assets of $276$298 billion, up 13%, with record net flows this quarter14%
Credit card sales volume up 12% and merchant processing volume up 15%14%
CIB
ROE 22%14%
 
Maintained #1 ranking for Global Investment Banking fees with 8.1%8.7% wallet share in 1Q18year-to-date
Record Equity Markets revenue of $2.0$1.6 billion, up 17%
Treasury Services revenue up 14%12% and Securities Services revenue up 16%5%
CB
ROE 20%21%
 
Average loan balances of $202 billion, up 6%4%
Strong credit quality with 0a net recovery of 3 bps net charge-off rate
AWM
ROE 34%31%
 
Record averageAverage loan balances of $133 billion, up 12%
Assets under management (“AUM”) of $2.0$2.1 trillion, up 10%7%
For a detailed discussion of results by line of business, refer to the Business Segment Results on pages 16-29.19-41.
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 $617 billion$1.9 trillion for wholesale and consumer clients during the first threenine months of 2018:
$55174 billion of credit for consumers
$516 billion of credit for U.S. small businesses
$217682 billion of credit for corporations
$331960 billion of capital raised for corporate clients and non-U.S. government entities
$941 billion of credit and capital raised for U.S. government and nonprofit entities, including states, municipalities, hospitals and universities.

Recent events
On August 29, 2018, JPMorgan Chase announced the launch of You 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 drive inclusive growth and create greater economic opportunity in cities across the world.
 
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 7385 of this Form 10-Q and Risk Factors on pages 8–26 of JPMorgan Chase’s 2017 Annual Report. There is no assurance that actual results for the full year of 2018 will be in line with the outlook set forth below, and the Firm does not undertake to update any forward-looking statements.
JPMorgan Chase’s outlook for the remainder of 2018 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
For full-year 2018, management expects net interest income, on a managed basis, to be in the $54 to $55approximately $55.5 billion, range, depending on market conditions, and assuming expected core loan growth. Management expects Firmwide average core loan growth to be in the 6% to 7% range for 2018, excluding CIB loans.conditions.
Management expects Firmwidefull-year 2018 noninterest revenue for full-year 2018,growth of 7-8% on a managed basis, and depending on market conditions, to be up approximately 7%. Noninterest revenue includes the $1.2 billion impact of the revenue recognition accounting guidance.conditions.
The Firm continues to take a disciplined approach to managing its expenses, while investing for growth and innovation. As a result, management expects Firmwidefull-year 2018 adjusted expense for full-year 2018 to beof approximately $63$63.5 billion including the approximately $1.2 billion expected impact of the new revenue recognition accounting guidance, predominantly impacting AWM with the remainder in CIB. For additional information on the new accounting guidance, see Note 1.(excluding Firmwide legal expense).
Management estimates the full-year 2018 effective income tax rate to be approximately 20%, depending upon several factors, including the geographic mix of taxable income and refinements to estimates of the impacts of the TCJA.

Management expects theaverage core loan growth, excluding CIB, of 6-7% for full-year 2018 net charge-off rates to remain relatively flat across the wholesale and consumer portfolios, with the exception of Card.2018.
CCB
In Card, management expects the full-year 2018 net charge-off rate to be approximately 3.25%.
Management expects the full-year 2018 Card Services net revenue rate to be at or above 11.25%.


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 March 31,September 30, 2018 and 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 67–6979–81 of this Form 10-Q and pages 138–140 of JPMorgan Chase’s 2017 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, seerefer to Note 1.1.
Revenue                
Three months ended March 31,Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 Change
2018
 2017
 Change
 2018
 2017
 Change
Investment banking fees$1,736
 $1,880
 (8)%$1,832
 $1,868
 (2)% $5,736
 $5,594
 3 %
Principal transactions3,952
 3,582
 10
2,964
 2,721
 9
 10,698
 9,440
 13
Lending- and deposit-related fees1,477
 1,448
 2
1,542
 1,497
 3
 4,514
 4,427
 2
Asset management, administration and commissions4,309
 3,877
 11
4,310
 4,072
 6
 12,923
 11,996
 8
Investment securities losses(245) (3) NM
(46) (1) NM
 (371) (38) NM
Mortgage fees and related income465
 406
 15
262
 429
 (39) 1,051
 1,239
 (15)
Card income1,275
 914
 39
1,328
 1,242
 7
 3,623
 3,323
 9
Other income(a)
1,626
 771
 111
1,160
 952
 22
 4,041
 3,197
 26
Noninterest revenue14,595
 12,875
 13
13,352
 12,780
 4
 42,215
 39,178
 8
Net interest income13,312
 12,064
 10
13,908
 12,798
 9
 40,705
 37,070
 10
Total net revenue$27,907
 $24,939
 12 %$27,260
 $25,578
 7 % $82,920
 $76,248
 9 %
(a)Included operating lease income of $1.0$1.2 billion and $824$928 million for the three months ended March 31, 2018, respectively, and 2017.$3.3 billion and $2.6 billion for the nine months ended , respectively.
Quarterly results
Investment banking fees decreased reflecting lower debt andslightly compared to a strong prior year, with overall share gains, driven by higher equity underwriting fees, partiallywhich were more than offset by lower debt underwriting and advisory fees. The increase in equity underwriting fees was driven by a higher advisoryshare of fees 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, refer to CIB segment results on pages 26-31 and Note 5.
Principal transactions revenue increased primarily reflecting higher revenue in CIB driven by:
higher Equity Markets revenue in derivatives and prime brokerage reflecting strong client 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 was partially offset by private equity losses reflecting markdowns on certain legacy private equity investments in Corporate.
For information on lending- and deposit-related fees, refer to the segment results for CCB on pages 21–25, CIB on pages 26-31, CB on pages 32-35 and Note 5.
Asset management, administration and commissions revenue increased reflecting:
higher asset management fees in AWM and CCB driven by higher market levels and net long-term product inflows, partially offset by fee compression in AWM, and
higher brokerage commissions driven by higher volumes in CIB.
For additional information, refer to AWM, CCB and CIB segment results on pages 36–39, pages 21–25 and pages 26-31, respectively, and Note 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 mortgage servicing revenue reflecting lower MSR risk management results and lower servicing revenue on a lower level of third-party loans serviced, as well as lower net production revenue reflecting lower production margins and volumes. For further information, refer to CCB segment results on pages 21–25 and Note 14.

Card income increased driven by:
lower new account origination costs, and
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 card sales volumes.
For further information, refer to CCB segment results on pages 21–25 and Note 5.
Other income reflects higher operating lease income from growth in auto operating lease volume in CCB. For further information, refer to Note 5.
Net interest income increased primarily due to the net impact of higher rates, which includes lower Markets net interest income in 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 equivalent (“FTE”) basis, was 2.51%, an increase of 14 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 a 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 pages 16-18.
Year-to-date results
Investment banking fees increased reflecting:
higher equity underwriting and advisory fees in CIB. The increase in equity underwriting fees was driven by a higher share of fees, primarily due to strong performance in the IPO market; the increase in advisory fees was driven by a higher number of large completed transactions,
partially offset by
lower debt underwriting fees primarily driven by declines in industry-wide fee levels and a lower share in leveraged finance. The decrease in equity underwriting fees was also driven by declines in industry-wide fee levels as well as a lower share of large transactions. The increase in advisory fees was driven by a higher number of large completed transactions. For additional information, see CIB segment results on pages 20-24 and Note 5.
Principal transactions revenue increased primarily reflecting:
reflecting higher client-driven market-making revenue in CIB as a result of strong performancedriven by:
strength across products in Equity Markets, particularlyprimarily in derivatives and Prime Services.prime brokerage, reflecting strong client activity, and
in Fixed Income Markets, higher revenue was relatively flat, within Commodities compared to a challenging prior year, and strong performance in Currencies & Emerging Markets, and Commodities,largely offset by lower revenue in Credit and RatesCredit.
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.
For additional information, see CIB and Corporate segment results on pages 20-24 and page 29, respectively, and
Note 5.
 
For information on lending- and deposit-related fees, see the segment results for CCB on pages 17-19, CIB on pages 20-24, CB on pages 25-26 and Note 5.
Asset management, administration and commissions revenue increased as a result of:reflecting:
higher asset management fees in AWM and CCB due to growth in assets under management, which benefited fromdriven by higher market levels and net long-term product inflows andpartially offset by fee compression in AWM
higher brokerage commissions driven by higher volumes in CIB and AWM, and higher asset-based fees in CIB driven by net client inflows and higher volumes.market levels.
For additional information, see AWM, CCB and CIB segment results on pages 27-28, pages 17-19 and pages 20-24, respectively, and Note 5.
Investment securities losses increased primarily due to sales related to the repositioning of the investment securities portfolio. For further information, see the Corporate segment discussion on page 29.
Mortgage fees and related income increased decreased driven by higher MSR risk management results and servicing revenue, partially offset by lower net production revenue reflecting lower margins. For further information, see CCB segment resultsproduction margins, as well as lower net servicing revenue reflecting lower servicing revenue on pages 17-19 and Note 14.a lower level of third-party loans serviced, partially offset by higher MSR risk management results.
Card income increased driven by:
lower new account origination costs, and
higher merchant processing fees on higher volumes,
largely offset by
lower net interchange income reflecting higher card sales volume, predominantly offset by higher rewardrewards costs and partner payments, andlargely 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.
Other income increased reflecting:
higher merchant processing fees reflecting higher merchant processing volumes.operating lease income from growth in auto operating lease volume in CCB
For further information, see CCB segment results on pages 17-19 and Note 5.
Other income increased primarily due to:
Fairfair 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 prior year in Corporate related to a settlement with the FDIC receivership for Washington Mutual and with Deutsche Bank as trustee to certain Washington Mutual trusts.
higher operating lease income from growth in auto operating lease volume in CCB.
For further information, see Note 5.
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 $43$37.9 billion from the prior year, and the net interest yield on these assets, on a fully taxable

equivalent (“FTE”)an FTE basis, was 2.48%2.49%, an increase of 15 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 March 31,Three months ended September 30, Nine months ended September 30,
(in millions)

2018
 2017
 Change
2018
 2017
 Change
 2018
 2017
 Change
Consumer, excluding credit card$146
 $442
 (67)%$(242) $206
 NM
 $(152) $660
 NM
Credit card1,170
 993
 18
1,223
 1,319
 (7)% 3,557
 3,699
 (4)
Total consumer1,316
 1,435
 (8)981
 1,525
 (36) 3,405
 4,359
 (22)
Wholesale(151) (120) (26)(33) (73) 55
 (82) (377) 78
Total provision for credit losses$1,165
 $1,315
 (11)%$948
 $1,452
 (35)% $3,323
 $3,982
 (17)%
Quarterly results
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
a net $170 million reduction in the wholesale allowance for credit losses, primarily in the Oil & Gas portfolio drivenpartially offset by a single name, compared with a reduction of $93 million in the prior year primarily for Oil & Gas
and in consumer
$102 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, andas anticipated
the absence of a $218 million write-down recordeddecrease in the prior yearconsumer provision was partially offset by a lower net benefit in connection with the wholesale provision in the current period, which includes net recoveries predominantly related to a loan sale of the student loan portfolio. in CIB.
For a more detailed discussion of the credit portfolio and the allowance for credit losses, seerefer to the segment discussions of CCB on pages 17-19,21–25, CIB on pages 20-24,26-31, CB on pages 25-26,32-35, the Allowance for Credit Losses on pages 57–5969–71 and
Note 12.
 
Year-to-date results
Noninterest expense    
 Three months ended March 31,
(in millions)

2018
 2017
 Change
Compensation expense$8,862
 $8,256
 7 %
Noncompensation expense:     
Occupancy888
 961
 (8)
Technology, communications and equipment2,054
 1,834
 12
Professional and outside services2,121
 1,792
 18
Marketing800
 713
 12
Other expense(a)(b)
1,355
 1,727
 (22)
Total noncompensation expense7,218
 7,027
 3
Total noninterest expense$16,080
 $15,283
 5 %
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 by a 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.
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 %
(a)
Included Firmwide legal expenseexpense/(benefit) of $70$20 million and $218$(107) million for the three months ended March 31,September 30, 2018 and 2017, respectively.respectively, and $90 million and $172 million for the nine months ended September 30, 2018 and 2017.
(b)Included FDIC-related expense of $383$349 million and $381$353 million for the three months ended March 31,September 30, 2018 and 2017, respectively.respectively, and $1.1 billion for each of the nine months ended September 30, 2018 and 2017.

Quarterly results
Compensation expense increased driven by investments in headcount across the businesses, including bankers and business-relatedadvisors, as well as technology and other support staff; and higher performance-basedrevenue-related compensation expense predominantly in CIB.expense.
Noncompensation expense increased as a result of:
higher depreciation expense due to growth in auto operating lease volume in CCB
higher legal expense; the prior year was a net benefit
higher outside services expense primarily due to higher volume-related transaction costs in CIB and revenue-drivenhigher 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 Note 22.

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
partially offset byhigher marketing expense in CCB
lowera loss of $174 million recorded in other expense in Corporate on the liquidation of a legal expense.entity, and
higher investments in technology.
For additional information on the liquidation of a discussion of legal expense, seeentity, refer to Note 22.17.
Income tax expenseIncome tax expense Income tax expense       
Three months ended March 31,Three months ended September 30, Nine months ended September 30,
(in millions)

2018
 2017
 Change
2018
 2017
 Change
 2018
 2017
 Change
Income before income tax expense$10,662
 $8,341
 28%$10,689
 $9,556
 12 % $31,923
 $27,646
 15 %
Income tax expense1,950
 1,893
 3
2,309
 2,824
 (18) 6,515
 7,437
 (12)
Effective tax rate18.3% 22.7%  21.6% 29.6%   20.4% 26.9% 

Quarterly results
The effective tax rate decreased due to the TCJA, including the reduction ofin the U.S. federal statutory income tax rate as well as a result$132 million net tax benefit resulting from changes in the estimates related to the remeasurement of certain deferred taxes and the TCJA. The decrease wasdeemed repatriation tax on non-U.S. earnings. These items that reduced the effective tax rate were partially offset by changesthe impact of higher pre-tax income, and the change in the mix of income and expense subject to U.S. federal, state and local taxes,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 reserves.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, seerefer to Note 1.1.
Consolidated balance sheets analysis
The following is a discussion of the significant changes between March 31,September 30, 2018, and December 31, 2017.
Selected Consolidated balance sheets data
(in millions)Mar 31,
2018

 Dec 31,
2017

Change
Sep 30,
2018

 Dec 31,
2017

Change
Assets        
Cash and due from banks$24,834
 $25,898
(4)%$23,225
 $25,898
(10)%
Deposits with banks389,978
 405,406
(4)395,872
 405,406
(2)
Federal funds sold and securities purchased under resale agreements247,608
 198,422
25
217,632
 198,422
10
Securities borrowed116,132
 105,112
10
122,434
 105,112
16
Trading assets:        
Debt and equity instruments355,368
 325,321
9
359,765
 325,321
11
Derivative receivables56,914
 56,523
1
60,062
 56,523
6
Investment securities238,188
 249,958
(5)231,398
 249,958
(7)
Loans934,424
 930,697

954,318
 930,697
3
Allowance for loan losses(13,375) (13,604)(2)(13,128) (13,604)(3)
Loans, net of allowance for loan losses921,049
 917,093

941,190
 917,093
3
Accrued interest and accounts receivable72,659
 67,729
7
78,792
 67,729
16
Premises and equipment14,382
 14,159
2
14,180
 14,159

Goodwill, MSRs and other intangible assets54,533
 54,392

54,697
 54,392
1
Other assets118,140
 113,587
4
115,936
 113,587
2
Total assets$2,609,785
 $2,533,600
3 %$2,615,183
 $2,533,600
3 %
Cash and due from banks and deposits with banks decreased primarily reflectingas a shift in the deploymentresult of excess cash from deposits with banks and investment securities into securities purchased under resale agreements.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 agreements increased primarily due to the shift in the deployment of excess cash from deposits with banks and investment securities into securities purchased under resale agreements,higher client-driven market-making activities and higher client activitydemand for securities to cover short positions in CIB. For additional information on the Firm’s Liquidity Risk Management, see refer to pages 38–42.49–54.
Securities borrowed increased driven by higher demand for securities to cover short positions related to client-driven market-making activities in CIB.
Trading assets-debt and equity instruments increased predominantly as a result of client-driven market-making activities in CIB, primarily equity instruments in Prime Services,prime brokerage, and debt instruments in Fixed Income Markets, driven by higher client demand. For additional information, seerefer to Notes 2 and 4.4.
Investment securities decreased primarily reflecting net sales, paydowns and maturities of U.S. government agency mortgage-backed securities (“MBS”), commercial MBS, and obligations of U.S. states and municipalities, and commercial MBS.municipalities. For additional information on Investment securities, seerefer to Corporate segment results on page 29,pages 40–41, Investment Portfolio Risk Management on page 60,72, and Notes 2 and 9.9.
 
Loans were relatively flatincreased reflecting:
higher wholesale loans in CIB primarilyacross all lines of business, predominantly driven by higher originations ofCIB, including loans to financial institution and commercial and industrial loans,clients, and in AWM driven by higherdue to an increase in loans to Private BankingWealth Management clients globally, and
offset by
lowerhigher consumer loans driven by the seasonal declineretention of high-quality prime mortgages in Card balances.CCB and AWM, predominantly offset by lower home equity loans, run-off of PCI loans, lower auto loans, and mortgage loan sales.
The allowance for loan losses decreased reflecting:
a net reduction in the wholesale allowance primarily as a result of a reduction in the allowance for the Oil & Gas portfolio driven by a single nameby:
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.
the consumer allowance for loan losses was relatively unchanged, reflecting stable credit quality trends.
For a detailed discussion of loans and the allowance for loan losses, refer to Credit Risk Management on pages 43–60,55-72, and Notes 2, 3, 11 and 12.12.
Accrued interest and accounts receivable increased primarily reflecting higher client receivables related to client-driven activities in CIB.

Other assets increased partly reflecting higher cash collateral pledged for derivative contracts in CIB and higher auto operating lease assets from growth in 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)Mar 31,
2018

 Dec 31,
2017

Change
Sep 30,
2018

 Dec 31,
2017

Change
Liabilities        
Deposits$1,486,961
 $1,443,982
3 %$1,458,762
 $1,443,982
1 %
Federal funds purchased and securities loaned or sold under repurchase agreements179,091
 158,916
13
181,608
 158,916
14
Short-term borrowings62,667
 51,802
21
64,635
 51,802
25
Trading liabilities:        
Debt and equity instruments99,588
 85,886
16
109,457
 85,886
27
Derivative payables36,949
 37,777
(2)41,693
 37,777
10
Accounts payable and other liabilities192,295
 189,383
2
209,707
 189,383
11
Beneficial interests issued by consolidated variable interest entities (“VIEs”)21,584
 26,081
(17)20,241
 26,081
(22)
Long-term debt274,449
 284,080
(3)270,124
 284,080
(5)
Total liabilities2,353,584
 2,277,907
3
2,356,227
 2,277,907
3
Stockholders’ equity256,201
 255,693

258,956
 255,693
1
Total liabilities and stockholders’ equity$2,609,785
 $2,533,600
3 %$2,615,183
 $2,533,600
3 %
Deposits increased due to:in CIB and CCB, largely offset by decreases in AWM and CB.
higher consumer deposits reflecting the continuation of growth from new and existing customers, low attrition rates, and the impact of seasonalityThe increase in CCB
higher wholesale depositsCIB was predominantly driven by growth in client activity in CIB’s Treasury Services, and Securities Services businesses,in CCB driven by the continuation of growth from new customers, partially offset by balance migration into investment-related products.
The decrease in AWM was driven by balance migration predominantly into the Firm’s investment-related products, and in CB primarily driven by the impact of seasonality and migration of non-operating deposits into higher-yielding investment products.
in CB.
For more information, refer to the Liquidity Risk Management discussion on pages 38–42;49–54; and Notes 2
and 15.15.
Federal funds purchased and securities loaned or sold under repurchase agreements increased reflecting higher secured financing of trading assets-debt and equity instruments partially offset by a changeand client-driven market-making activities in the mix of funding to short-term borrowings in CIB.CIB.
Short-term borrowings increased driven by a change in
the mix of funding for CIB activities from federal funds
sold under repurchase agreementsdue to other borrowed funds, and the net issuance of commercial paper.paper and short-term advances from Federal Home Loan Banks (“FHLBs”). For additional information, seerefer to Liquidity Risk Management on pages 38–42.49–54.
 
Trading liabilities–debt and equity instruments increased predominantly related toas a result of client-driven market-making activities in CIB, Markets, driven by higher levels of short positionsprimarily debt instruments in both debtFixed Income Markets, and equity instruments.instruments in prime brokerage. For additional information, refer to Note 2 .
Trading liabilities–derivative payables increased predominantly as a result of client-driven market-making activities, which increased equity and commodity derivative payables. For additional information, refer to Derivative contracts on pages 55–56,67–68, and Notes 2 and 4.4.
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 VIEs decreased due to net maturities of credit card securitizations. For further information on Firm-sponsored VIEs and loan securitization trusts, seerefer to Off-Balance Sheet Arrangements on page 1315 and Notes 13 and 20.20.
Long-term debt decreased primarily driven by lower FHLB advances, partially offset by net maturitiesissuance of senior debt and lower Federal Home Loan Bank (“FHLB”) advances.structured notes in CIB. For additional information on the Firm’s long-term debt activities, seerefer to Liquidity Risk Management on pages 38–42.49–54.
For information on changes in stockholders’ equity, see refer to page 77,89, and on the Firm’s capital actions, seerefer to Capital actions on page 32.pages 47-48.


Consolidated cash flows analysis
The following is a discussion of cash flow activities during the threenine months ended March 31,September 30, 2018 and 2017.
(in millions) Three months ended March 31, Nine months ended September 30,
2018
 2017
2018
 2017
Net cash provided by/(used in)        
Operating activities $(35,109) $(22,559) $13,765
 $(23,381)
Investing activities (45,021) 47,112
 (39,782) 47,706
Financing activities 60,589
 43,605
 16,319
 36,405
Effect of exchange rate changes on cash 3,049
 2,574
 (2,509) 7,272
Net increase/(decrease) in cash and due from banks and deposits with banks $(16,492) $70,732
 $(12,207) $68,002
Operating activities
In 2018, cash usedprovided primarily reflected net income, increased trading liabilities and accounts payable and other liabilities, partially offset by increases in trading assets-debt and equity instruments,assets and securities borrowed.
In 2017, cash used primarily reflected an increaseincreases in trading assets-debtassets, and equity instruments; decreases in trading liabilities-derivative payables,liabilities, and accounts payable and other liabilities.liabilities, partially offset by net income and a decrease in other assets.
 
Investing activities
In 2018, cash used reflected higher net loan originations and an increase in securities purchased under resale agreements, partially offset by lower investment securities.
In 2017, cash provided reflected a decrease in securities purchased under resale agreements and lower investment securities.securities, partially offset by higher net loan originations.
Financing activities
In 2018, cash provided reflected higher securities loaned or sold under repurchase agreements, deposits and short-term borrowings, partially offset by a decrease in long-term borrowings.
In 2017, cash provided reflected higher deposits and securities loaned or sold under repurchase agreements,short-term borrowings, partially offset by a decrease in long-term borrowings.
Additionally, 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 10–12,12–14, Capital Risk Management on pages 32-37,44-48, and Liquidity Risk Management on pages 38–4249–54 of this Form 10-Q, and pages 92–97 of JPMorgan Chase’s 2017 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).
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.
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 Firm is involved where such investment would violate the Firm’s Code of Conduct.
The table below provides an index of where in this Form 10-Q a discussion of the Firm’s various off-balance sheet arrangements can be found. In addition, seerefer to Note 1 for information about the Firm’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 VIEsSeeRefer to Note 13130-135148-153
Off-balance sheet lending-related financial instruments, guarantees, and other commitmentsSeeRefer to Note 20145-148162-165






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 74-78.86-90. 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 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 an 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 16-29.
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 and Investment Risk Management on pages 43–60.19-41.
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 March 31,Three months ended September 30,
2018 20172018 2017
(in millions, except ratios)Reported
results
 
Fully taxable-equivalent adjustments(a)(b)
 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$1,626
 $455
 $2,081
 $771
 $582
 $1,353
$1,160
 $408
 $1,568
 $952
 $555
 $1,507
Total noninterest revenue14,595
 455
 15,050
 12,875
 582
 13,457
13,352
 408
 13,760
 12,780
 555
 13,335
Net interest income13,312
 158
 13,470
 12,064
 329
 12,393
13,908
 154
 14,062
 12,798
 319
 13,117
Total net revenue27,907
 613
 28,520
 24,939
 911
 25,850
27,260
 562
 27,822
 25,578
 874
 26,452
Pre-provision profit11,827
 613
 12,440
 9,656
 911
 10,567
11,637
 562
 12,199
 11,008
 874
 11,882
Income before income tax expense10,662
 613
 11,275
 8,341
 911
 9,252
10,689
 562
 11,251
 9,556
 874
 10,430
Income tax expense$1,950
 $613
 $2,563
 $1,893
 $911
 $2,804
$2,309
 $562
 $2,871
 $2,824
 $874
 $3,698
Overhead ratio58% NM
 56% 61% NM
 59%57% NM
 56% 57% NM
 55%
           
Nine months ended September 30,
2018 2017
(in millions, except ratios)Reported
results
 
Fully taxable-equivalent adjustments(a)(b)
 Managed
basis
 Reported
results
 
Fully taxable-equivalent adjustments(a)
 Managed
basis
Other income$4,041
 $1,337
 $5,378
 $3,197
 $1,733
 $4,930
Total noninterest revenue42,215
 1,337
 43,552
 39,178
 1,733
 40,911
Net interest income40,705
 473
 41,178
 37,070
 987
 38,057
Total net revenue82,920
 1,810
 84,730
 76,248
 2,720
 78,968
Pre-provision profit35,246
 1,810
 37,056
 31,628
 2,720
 34,348
Income before income tax expense31,923
 1,810
 33,733
 27,646
 2,720
 30,366
Income tax expense$6,515
 $1,810
 $8,325
 $7,437
 $2,720
 $10,157
Overhead ratio57% NM
 56% 59% NM
 57%
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, seerefer 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 March 31,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 are 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 March 31,
2018
2017
 Change
Net interest income – managed basis(a)(b)
$13,470
$12,393
 9 %
Less: CIB Markets net interest income(c)
1,030
1,364
 (24)
Net interest income excluding CIB Markets(a)
$12,440
$11,029
 13
     
Average interest-earning assets$2,203,413
$2,160,912
 2
Less: Average CIB Markets interest-earning assets(c)
591,547
522,759
 13
Average interest-earning assets excluding CIB Markets$1,611,866
$1,638,153
 (2)%
Net interest yield on average interest-earning assets – managed basis2.48%2.33%  
Net interest yield on average CIB Markets interest-earning assets(c)
0.71
1.06
  
Net interest yield on average interest-earning assets excluding CIB Markets3.13%2.73%  

(in millions, except rates)
Three months ended September 30, Nine months ended September 30,
2018
2017
 Change
 20182017 Change
Net interest income – managed basis(a)(b)
$14,062
$13,117
 7 % $41,178
$38,057
 8 %
Less: CIB Markets net interest income(c)
704
1,070
 (34) 2,488
3,509
 (29)
Net interest income excluding CIB Markets(a)
$13,358
$12,047
 11
 $38,690
$34,548
 12
          
Average interest-earning assets$2,220,258
$2,194,174
 1
 $2,215,377
$2,177,520
 2
Less: Average CIB Markets interest-earning assets(c)
613,737
544,867
 13
 605,653
535,044
 13
Average interest-earning assets excluding CIB Markets$1,606,521
$1,649,307
 (3)% $1,609,724
$1,642,476
 (2)%
Net interest yield on average interest-earning assets – managed basis2.51%2.37%   2.49%2.34%  
Net interest yield on average CIB Markets interest-earning assets(c)
0.46
0.78
   0.55
0.88
  
Net interest yield on average interest-earning assets excluding CIB Markets3.30%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 14.16.
(c)For further information on CIB’s Markets businesses, seerefer to page 23.30.
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)Mar 31,
2018

Dec 31,
2017

 Three months ended March 31, Sep 30,
2018

Dec 31,
2017

 Three months ended September 30, Nine months ended September 30,
2018
2017
  2018
2017
 2018
2017
Common stockholders’ equity$230,133
$229,625
 $227,615
$227,703
 $231,192
$229,625
 $230,439
$231,861
 $228,995
$229,937
Less: Goodwill47,499
47,507
 47,504
47,293
 47,483
47,507
 47,490
47,309
 47,496
47,297
Less: Other intangible assets832
855
 845
853
 781
855
 795
818
 820
836
Add: Certain Deferred tax liabilities(a)(b)
2,216
2,204
 2,210
3,228
 2,239
2,204
 2,233
3,262
 2,221
3,243
Tangible common equity$184,018
$183,467
 $181,476
$182,785
 $185,167
$183,467
 $184,387
$186,996
 $182,900
$185,047
         
Return on tangible common equityNA
NA
 19%13% NA
NA
 17%13% 18%14%
Tangible book value per share$54.05
$53.56
 NANA $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)IncludesAmounts presented for December 31, 2017 and later periods include the effect from the revaluation of the Firm’sFirm'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 32-37.44-48.
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 14–15.16-18.
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 includes the allocation of certain income and expense items. For further information about line of business capital, seerefer to Line of business equity on page 35.
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
The amount of capital assigned to each business is referred to as equity. On at least an annual basis, the Firm assesses the level of capital required for each line of business as well as the assumptions and methodologies used to allocate capital. For additional information on business segment capital allocation, seerefer to Line of business equity on page 88pages 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 55–56 of JPMorgan Chase’s 2017 Annual Report.

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, seerefer to Note 1.1.
Net income in the first quarter of 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 March 31,Total net revenue Total noninterest expense Pre-provision profit/(loss)
Three months ended September 30,Total net revenue Total noninterest expense Pre-provision profit/(loss)
(in millions)2018
2017
Change 2018
2017
Change
 2018
2017
Change
2018
2017
Change 2018
2017
Change
 2018
2017
Change
Consumer & Community Banking$12,597
$10,970
15 $6,909
$6,395
8 % $5,688
$4,575
24 %$13,290
$12,033
10 $6,982
$6,495
7 % $6,308
$5,538
14 %
Corporate & Investment Bank10,483
9,599
9 5,659
5,184
9
 4,824
4,415
9
8,805
8,615
2 5,175
4,793
8
 3,630
3,822
(5)
Commercial Banking2,166
2,018
7 844
825
2
 1,322
1,193
11
2,271
2,146
6 853
800
7
 1,418
1,346
5
Asset & Wealth Management3,506
3,288
7 2,581
2,781
(7) 925
507
82
3,559
3,472
3 2,585
2,408
7
 974
1,064
(8)
Corporate(232)(25)NM 87
98
(11) (319)(123)(159)(103)186
NM 28
74
(62) (131)112
NM
Total$28,520
$25,850
10 $16,080
$15,283
5 % $12,440
$10,567
18 %$27,822
$26,452
5 $15,623
$14,570
7 % $12,199
$11,882
3 %
Three months ended March 31,Provision for credit losses  Net income/(loss) Return on equity
Three months ended September 30,Provision for credit losses Net income/(loss) Return on equity
(in millions, except ratios)2018
2017
Change
 2018
2017
Change 2018
2017
2018
2017
Change
 2018
2017
Change 2018
2017
Consumer & Community Banking$1,317
$1,430
(8)% $3,326
$1,988
67 25%15%$980
$1,517
(35)% $4,086
$2,553
60 31%19%
Corporate & Investment Bank(158)(96)(65) 3,974
3,241
23 22
18
(42)(26)(62) 2,626
2,546
3 14
13
Commercial Banking(5)(37)86
 1,025
799
28 20
15
(15)(47)68
 1,089
881
24 21
17
Asset & Wealth Management15
18
(17) 770
385
100 34
16
23
8
188
 724
674
7 31
29
Corporate(4)
NM (383)35
NM NMNM2

NM
 (145)78
NM NM
NM
Total$1,165
$1,315
(11)% $8,712
$6,448
35 15%11%$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)
(in millions)2018
2017
Change 2018
2017
Change 2018
2017
Change
Consumer & Community Banking$38,384
$34,415
12 $20,770
$19,390
7 $17,614
$15,025
17
Corporate & Investment Bank29,211
27,139
8 16,237
14,854
9 12,974
12,285
6
Commercial Banking6,753
6,252
8 2,541
2,415
5 4,212
3,837
10
Asset & Wealth Management10,637
10,197
4 7,732
7,606
2 2,905
2,591
12
Corporate(255)965
NM 394
355
11 (649)610
NM
Total$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 equity
(in millions, except ratios)2018
2017
Change
 2018
2017
Change 2018
2017
Consumer & Community Banking$3,405
$4,341
(22)% $10,824
$6,764
60 27%17%
Corporate & Investment Bank(142)(175)19
 9,798
8,497
15 18
15
Commercial Banking23
(214)NM
 3,201
2,582
24 20
16
Asset & Wealth Management40
30
33
 2,249
1,683
34 32
24
Corporate(3)
NM
 (664)683
NM NM
NM
Total$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 March 31,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 57-61 of JPMorgan Chase’s 2017 Annual Report and Line of Business Metrics on page 161.180.
Selected income statement dataSelected income statement data    Selected income statement data          
Three months ended March 31,Three months ended September 30, Nine months ended September 30,
(in millions, except ratios)2018
 2017
 Change
2018
 2017
 Change
 2018
 2017
 Change
Revenue                
Lending- and deposit-related fees$857
 $812
 6 %$936
 $885
 6 % $2,668
 $2,547
 5 %
Asset management, administration and commissions575
 539
 7
626
 543
 15
 1,792
 1,644
 9
Mortgage fees and related income465
 406
 15
260
 428
 (39) 1,049
 1,235
 (15)
Card income1,170
 817
 43
1,219
 1,141
 7
 3,299
 3,019
 9
All other income1,072
 743
 44
1,135
 901
 26
 3,255
 2,454
 33
Noninterest revenue4,139
 3,317
 25
4,176
 3,898
 7
 12,063
 10,899
 11
Net interest income8,458
 7,653
 11
9,114
 8,135
 12
 26,321
 23,516
 12
Total net revenue12,597
 10,970
 15
13,290
 12,033
 10
 38,384
 34,415
 12
                
Provision for credit losses1,317
 1,430
 (8)980
 1,517
 (35) 3,405
 4,341
 (22)
   ��            
Noninterest expense                
Compensation expense(a)
2,660
 2,526
 5
2,635
 2,548
 3
 7,916
 7,578
 4
Noncompensation expense(a)(b)
4,249
 3,869
 10
4,347
 3,947
 10
 12,854
 11,812
 9
Total noninterest expense6,909
 6,395
 8
6,982
 6,495
 7
 20,770
 19,390
 7
Income before income tax expense4,371
 3,145
 39
5,328
 4,021
 33
 14,209
 10,684
 33
Income tax expense1,045
 1,157
 (10)1,242
 1,468
 (15) 3,385
 3,920
 (14)
Net income$3,326
 $1,988
 67 %$4,086
 $2,553
 60
 $10,824
 $6,764
 60
                
Revenue by line of business                
Consumer & Business Banking$5,722
 $4,906
 17
$6,385
 $5,408
 18
 $18,238
 $15,547
 17
Home Lending1,509
 1,529
 (1)1,306
 1,558
 (16) 4,162
 4,513
 (8)
Card, Merchant Services & Auto5,366
 4,535
 18
5,599
 5,067
 10
 15,984
 14,355
 11
                
Mortgage fees and related income details:                
Net production revenue95
 141
 (33)108
 158
 (32) 296
 451
 (34)
Net mortgage servicing revenue(c)
370
 265
 40
152
 270
 (44) 753
 784
 (4)
Mortgage fees and related income$465
 $406
 15 %$260
 $428
 (39)% $1,049
 $1,235
 (15)%
                
Financial ratios                
Return on equity25% 15%  31% 19%   27% 17%  
Overhead ratio55
 58
  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, seerefer to CB segment results on page 25.32.
(b)Included operating lease depreciation expense of $777$862 million and $599$688 million for the three months ended March 31,September 30, 2018 and 2017, respectively, and $2.5 billion and $1.9 billion for nine months ended September 30, 2018 and 2017, respectively.
(c)Included MSR risk management results of $17$(88) million and $(52)$(23) million for the three months ended March 31,September 30, 2018 and 2017, respectively, and $(94) million and $(132) million for nine months ended September 30, 2018 and 2017, respectively.


Quarterly results
Net income was $3.3$4.1 billion, an increase of 67%, driven by higher net revenue, partially offset by higher noninterest expense.60%.
Net revenue was $12.6$13.3 billion, an increase of 15%10%.
Net interest income was $8.5$9.1 billion, up 11%12%, driven by:
higher deposit margins and growth in deposit balances and
in CBB, as well as margin expansion and higher loan balances in Card,
partially offset by
loan spread compression from higher rates in Home Lending and Auto, and
the impact of the sale of the student loan portfolio in the prior year.Auto.
Noninterest revenue was $4.1$4.2 billion, up 25%7%, driven by:
lower new account origination costs in Card,
higher auto lease volume,
higher MSR risk management results,
higher net interchange reflecting higher card sales volume, predominantly offset by higher reward costs and partner payments,income due to
higher deposit-related fees, and
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 higher merchant processing volumesan increase in client investment assets,
partially offset by
lower net mortgage servicing revenue reflecting lower MSR risk management results and 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.margins and volumes.
SeeRefer 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 $6.9$7.0 billion, up 8%7%, driven by:
investments in technology and marketing, and
higher auto lease depreciation, and
continued business growth.depreciation.
The provision for credit losses was $1.3 billion,$980 million, a decrease of 8%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
$105lower 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, as anticipated.
Year-to-date results
Net income was $10.8 billion, an increase of 60%.
Net revenue was $38.4 billion, an increase of 12%.
Net interest income was $26.3 billion, up 12%, driven by:
higher deposit margins and growth in line with expectations, deposit balances in CBB, as well as margin expansion and higher loan balances in Card,
partially offset by
loan spread compression from higher rates in Home Lending and Auto.
Noninterest revenue was $12.1 billion, up 11%, driven 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 client investment assets,
partially offset by
lower net production revenue reflecting lower mortgage production margins.
Noninterest expense was $20.8 billion, up 7%, driven by:
investments in technology and marketing, and
higher auto lease depreciation.
The provision for credit losses was $3.4 billion, a decrease of 22% from the prior year, reflecting:
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, andcompared 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 absence ofprior year included a $218 million write-down recorded in the prior year in connection with the sale of the student loan portfolio.



Selected metrics     
 As of or for the three months
ended March 31,
(in millions, except headcount)2018
 2017
 Change
Selected balance sheet data (period-end)     
Total assets$540,659
 $524,770
 3 %
Loans:     
Consumer & Business Banking25,856
 24,386
 6
Home equity40,777
 48,234
 (15)
Residential mortgage199,548
 185,114
 8
Home Lending240,325
 233,348
 3
Card140,414
 135,016
 4
Auto66,042
 65,568
 1
Student
 6,253
 NM
Total loans472,637
 464,571
 2
Core loans409,296
 381,393
 7
Deposits685,170
 646,962
 6
Equity51,000
 51,000
 
Selected balance sheet data (average)     
Total assets$538,938
 $532,098
 1
Loans:     
Consumer & Business Banking25,845
 24,359
 6
Home equity41,786
 49,278
 (15)
Residential mortgage198,653
 183,756
 8
Home Lending240,439
 233,034
 3
Card142,927
 137,211
 4
Auto65,863
 65,315
 1
Student
 6,916
 NM
Total loans475,074
 466,835
 2
Core loans410,147
 381,016
 8
Deposits659,599
 622,915
 6
Equity51,000
 51,000
 
      
Headcount(a)
133,408
 133,176
 
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
 2018 2017 Change
Selected balance sheet data (period-end)           
Total assets$560,432
 $537,459
 4 % $560,432
 $537,459
 4 %
Loans:           
Consumer & Business Banking26,451
 25,275
 5
 26,451
 25,275
 5
Home equity37,461
 44,542
 (16) 37,461
 44,542
 (16)
Residential mortgage205,389
 195,134
 5
 205,389
 195,134
 5
Home Lending242,850
 239,676
 1
 242,850
 239,676
 1
Card147,881
 141,313
 5
 147,881
 141,313
 5
Auto63,619
 65,102
 (2) 63,619
 65,102
 (2)
Student
 47
 NM 
 47
 NM
Total loans480,801
 471,413
 2
 480,801
 471,413
 2
Core loans425,917
 401,648
 6
 425,917
 401,648
 6
Deposits677,260
 653,460
 4
 677,260
 653,460
 4
Equity51,000
 51,000
 
 51,000
 51,000
 
Selected balance sheet data (average)           
Total assets$551,080
 $531,959
 4
 $544,931
 $530,884
 3
Loans:           
Consumer & Business Banking26,351
 25,166
 5
 26,104
 24,753
 5
Home equity38,211
 45,424
 (16) 39,951
 47,333
 (16)
Residential mortgage204,689
 192,805
 6
 201,665
 187,954
 7
Home Lending242,900
 238,229
 2
 241,616
 235,287
 3
Card146,272
 141,172
 4
 143,986
 138,852
 4
Auto64,060
 65,175
 (2) 65,096
 65,321
 
Student
 58
 NM 
 3,847
 NM
Total loans479,583
 469,800
 2
 476,802
 468,060
 2
Core loans422,582
 398,319
 6
 415,662
 389,103
 7
Deposits674,211
 645,732
 4
 669,244
 636,257
 5
Equity51,000
 51,000
 
 51,000
 51,000
 
            
Headcount(a)(b)
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, seerefer to CB segment results on page 25.32.
(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 March 31,
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)2018

2017
 Change
2018

2017
 Change
 2018 2017 Change
Credit data and quality statistics                
Nonaccrual loans(a)(b)
$4,104

$4,442

(8)%$3,520

$4,068

(13)%
$3,520

$4,068

(13)%
                
Net charge-offs(c)
     
Net charge-offs/(recoveries)(c)
           
Consumer & Business Banking53
 57
 (7)68
 71
 (4) 171
 184
 (7)
Home equity16
 47
 (66)(12) 13
 NM
 (3) 67
 NM
Residential mortgage2
 3
 (33)(105) (2) NM
 (252) (3) NM
Home Lending18
 50
 (64)(117) 11
 NM
 (255) 64
 NM
Card1,170
 993
 18
1,073
 1,019
 5
 3,407
 3,049
 12
Auto76
 81
 (6)56
 116
 (52) 182
 245
 (26)
Student
 498
(g) 
NM

 
 
 
 498
(h) 
NM
Total net charge-offs$1,317
 $1,679
(g) 
(22)
Total net charge-offs/(recoveries)$1,080
 $1,217
(g) 
(11) $3,505
 $4,040
(h) 
(13)
                
Net charge-off rate(c)
     
Net charge-off/(recovery) rate(c)
           
Consumer & Business Banking0.83% 0.95%  1.02 % 1.12%   0.88% 0.99%  
Home equity(d)
0.21
 0.52
  (0.17) 0.15
   (0.01) 0.25
  
Residential mortgage(d)

 0.01
  (0.22) 
   (0.18) 
  
Home Lending(d)
0.03
 0.10
  (0.21) 0.02
   (0.16) 0.04
  
Card3.32
 2.94
  2.91
 2.87
   3.16
 2.94
  
Auto0.47
 0.50
  0.35
 0.71
   0.37
 0.50
  
Student
 NM
  
 
   
 NM
  
Total net charge-off rate(d)
1.20
 1.58
(g) 
 
Total net charge-off/(recovery) rate(d)
0.95
 1.10
(g) 
  1.05
 1.25
(h) 
 
                
30+ day delinquency rate                
Home Lending(e)(f)
0.98% 1.08%  0.81% 1.03%   0.81% 1.03%  
Card1.82
 1.66
  1.75
 1.76
   1.75
 1.76
  
Auto0.71
 0.93
  0.82
 0.93
   0.82
 0.93
  
                
90+ day delinquency rate — Card0.95
 0.87
  0.85
 0.86
   0.85
 0.86
  
                
Allowance for loan losses                
Consumer & Business Banking$796
 $753
 6
$796
 $796
 
 $796
 $796
 
Home Lending, excluding PCI loans1,003
 1,328
 (24)1,003
 1,153
 (13) 1,003
 1,153
 (13)
Home Lending — PCI loans(c)
2,205
 2,287
 (4)1,824
 2,245
 (19) 1,824
 2,245
 (19)
Card4,884
 4,034
 21
5,034
 4,684
 7
 5,034
 4,684
 7
Auto464
 474
 (2)464
 499
 (7) 464
 499
 (7)
Total allowance for loan losses(c)
$9,352
 $8,876
 5 %$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 each of the pools is performing.
(b)At March 31,September 30, 2018 and 2017, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $2.9 billion and $4.0 billion, and $4.5 billion, respectively. Student loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) and 90 or more days past due were also excluded from nonaccrual loans prior to sale of the student loan portfolio in the second quarter of 2017. These amounts have been excluded based upon the government guarantee.
(c)Net charge-offscharge-offs/(recoveries) and the net charge-offcharge-off/(recovery) rates for the three months ended March 31,September 30, 2018 and 2017, excluded $58 million and $20 million, respectively, and $24for 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, seerefer to Summary of changes in the allowance for credit losses on page 58.70.


(d)Excludes the impact of PCI loans. For the three months ended March 31,September 30, 2018 and 2017, the net charge-offcharge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of 0.16%(0.12)% and 0.39%0.11%, respectively; (2) residential mortgage of -%(0.20)% and 0.01%-%, respectively; (3) Home Lending of 0.03%(0.19)% and 0.09%0.02%, respectively; and (4) total CCB of 1.12%0.89% and 1.46%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 March 31,September 30, 2018 and 2017, excluded mortgage loans insured by U.S. government agencies of $5.7$4.5 billion and $6.3$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 9.49%9.39% and 9.11%9.30% at March 31,September 30, 2018 and 2017, respectively.
(g)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.
(h)Excluding net charge-offs of $467 million related to the student loan portfolio sale, the total net charge-off rate for the threenine months ended March 31,September 30, 2017 would have been 1.14%1.10%.


Selected metrics    
 As of or for the three months
ended March 31,
(in billions, except ratios and where otherwise noted)2018
 2017
 Change
Business Metrics     
Number of branches5,106
 5,246
 (3)%
Active digital customers
(in thousands)(a)
47,911
 45,463
 5
Active mobile customers
(in thousands)(b)
30,924
 27,256
 13
Debit and credit card sales volume(c)
$232.4

$209.4

11
      
Consumer & Business Banking     
Average deposits$646.4
 $609.0
 6
Deposit margin2.20% 1.88%  
Business banking origination volume$1.7
 $1.7
 (3)
Client investment assets276.2
 245.1
 13
      
Home Lending     
Mortgage origination volume by channel     
Retail$8.3
 $9.0
 (8)
Correspondent9.9
 13.4
 (26)
Total mortgage origination volume(d)
$18.2
 $22.4
 (19)
      
Total loans serviced (period-end)$804.9
 $836.3
 (4)
Third-party mortgage loans serviced (period-end)539.0
 582.6
 (7)
MSR carrying value (period-end)6.2
 6.1
 2
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end)1.15% 1.05%  
      
MSR revenue multiple(e)
3.19x 3.00x  
      
Card, excluding Commercial Card     
Credit card sales volume$157.1
 $139.7
 12
New accounts opened (in millions)2.0
 2.5
 (20)
      
Card Services     
Net revenue rate11.61% 10.15%  
      
Merchant Services     
Merchant processing volume$316.3
 $274.3
 15
      
Auto     
Loan and lease origination volume$8.4
 $8.0
 5
Average Auto operating lease assets17.6
 13.8
 28 %
Selected metrics          
 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)2018
 2017
 Change
 2018
 2017
 Change
Business Metrics           
Number of branches5,066
 5,174
 (2)% 5,066
 5,174
 (2)%
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$659.5
 $630.4
 5
 $655.3
 $621.7
 5
Deposit margin2.43% 2.02%   2.33% 1.95%  
Business banking origination volume$1.6
 $1.7
 (2) $5.2
 $5.6
 (6)
Client investment assets298.4
 262.5
 14
 298.4
 262.5
 14
            
Home Lending           
Mortgage origination volume by channel           
Retail$10.6
 $10.6
 
 $29.3
 $29.3
 
Correspondent11.9
 16.3
 (27) 32.9
 43.9
 (25)
Total mortgage origination volume(c)
$22.5
 $26.9
 (16) $62.2
 $73.2
 (15)
            
Total loans serviced (period-end)$798.6
 $821.6
 (3) $798.6
 $821.6
 (3)
Third-party mortgage loans serviced (period-end)526.5
 556.9
 (5) 526.5
 556.9
 (5)
MSR carrying value (period-end)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)1.22% 1.02%   1.22% 1.02%  
            
MSR revenue multiple(d)
3.49x 2.91x   3.49x 2.91x  
            
Card, excluding Commercial Card           
Credit card sales volume$176.0
 $157.7
 12
 $507.1
 $454.2
 12
New accounts opened (in millions)1.9
 1.9
 
 5.8
 6.5
 (11)
            
Card Services           
Net revenue rate11.50% 10.95%   11.17% 10.55%  
            
Merchant Services           
Merchant processing volume$343.8
 $301.6
 14
 $990.9
 $870.3
 14
            
Auto           
Loan and lease origination volume$8.1
 $8.8
 (8) $24.8
 $25.1
 (1)
Average auto operating lease assets19.2
 15.6
 23 % 18.4
 14.7
 25 %
(a)Users of all web and/or mobile platforms who have logged in within the past 90 days.
(b)Users of all mobile platforms who have logged in within the past 90 days.
(c)The prior period amount has been revised to conform with the current period presentation.
(d)Firmwide mortgage origination volume was $20.0$24.5 billion and $25.6$29.2 billion for the three months ended March 31,September 30, 2018 and 2017, respectively, and $68.2 billion and $81.0 billion for the nine months ended September 30, 2018 and 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 62–66 of JPMorgan Chase’s 2017 Annual Report and Line of Business Metrics on page 161.180.
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, seerefer to Note 1.
Selected income statement dataSelected income statement data  Selected income statement data        
Three months ended March 31,Three months ended September 30, Nine months ended September 30,
(in millions, except ratios)2018 2017 Change2018 2017 Change 2018 2017 Change
Revenue                
Investment banking fees$1,696
 $1,875
 (10)%$1,823
 $1,844
 (1)% $5,658
 $5,558
 2 %
Principal transactions4,029
 3,507
 15
3,091
 2,673
 16
 10,786
 9,108
 18
Lending- and deposit-related fees381
 388
 (2)373
 374
 
 1,136
 1,149
 (1)
Asset management, administration and commissions1,131
 1,052
 8
1,130
 1,041
 9
 3,416
 3,161
 8
All other income680
 177
 284
88
 187
 (53) 958
 622
 54
Noninterest revenue7,917
 6,999
 13
6,505
 6,119
 6
 21,954
 19,598
 12
Net interest income2,566
 2,600
 (1)2,300
 2,496
 (8) 7,257
 7,541
 (4)
Total net revenue(a)
10,483
 9,599
 9
8,805
 8,615
 2
 29,211
 27,139
 8
                
Provision for credit losses(158) (96) (65)(42) (26) (62) (142) (175) 19
                
Noninterest expense                
Compensation expense3,036
 2,799
 8
2,402
 2,284
 5
 8,158
 7,534
 8
Noncompensation expense2,623
 2,385
 10
2,773
 2,509
 11
 8,079
 7,320
 10
Total noninterest expense5,659
 5,184
 9
5,175
 4,793
 8
 16,237
 14,854
 9
Income before income tax expense4,982
 4,511
 10
3,672
 3,848
 (5) 13,116
 12,460
 5
Income tax expense1,008
 1,270
 (21)1,046
 1,302
 (20) 3,318
 3,963
 (16)
Net income$3,974
 $3,241
 23 %$2,626
 $2,546
 3 % $9,798
 $8,497
 15 %
Financial ratios                
Return on equity22% 18%  14% 13%   18% 15%  
Overhead ratio54
 54
  59
 56
   56
 55
  
Compensation expense as percentage of total net revenue29
 29
  27
 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 $405$354 million and $551$505 million for the three months ended March 31,September 30, 2018 and 2017, respectively, and $1.2 billion and $1.6 billion for the nine months ended September 30, 2018 and 2017, respectively.
Selected income statement dataSelected income statement data  Selected income statement data        
Three months ended March 31,Three months ended September 30, Nine months ended September 30,
(in millions)2018 2017 Change2018 2017 Change 2018 2017 Change
Revenue by business                
Investment Banking$1,587
 $1,714
 (7)%$1,731
 $1,730
 
 $5,267
 $5,175
 2 %
Treasury Services1,116
 981
 14
1,183
 1,058
 12
 3,480
 3,094
 12
Lending302
 389
 (22)331
 331
 
 954
 1,093
 (13)
Total Banking3,005
 3,084
 (3)3,245
 3,119
 4
 9,701
 9,362
 4
Fixed Income Markets4,553
 4,215
 8
2,844
 3,164
 (10) 10,850
 10,595
 2
Equity Markets2,017
 1,606
 26
1,595
 1,363
 17
 5,571
 4,555
 22
Securities Services1,059
 916
 16
1,057
 1,007
 5
 3,219
 2,905
 11
Credit Adjustments & Other(a)
(151) (222) 32
64
 (38) NM
 (130) (278) 53
Total Markets & Investor Services7,478
 6,515
 15
5,560
 5,496
 1
 19,510
 17,777
 10
Total net revenue$10,483
 $9,599
 9 %$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”) 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.

Quarterly results
Net income was $4.0$2.6 billion, up 23%, compared with the prior year reflecting higher net revenue, largely offset by higher noninterest expense.3%.
Net revenue was $10.5$8.8 billion, up 9%2%.
Banking revenue was $3.0$3.2 billion, down 3%up 4%. Investment bankingBanking revenue was $1.6$1.7 billion, down 7%,flat compared to a strong prior year, driven by higher equity underwriting fees offset by lower debt and equity underwriting fees, partially 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 $420 million, up 40%, driven by a higher 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 $775$822 million, down 18%11% compared to a strong prior year, 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 $1.8 billion, up 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. Equity underwriting fees were $346 million, down 19% compared to a strong prior year, driven by declines in industry-wide fee levels and a lower share of large transactions. Advisory fees were $575 million, up 15%, driven by a higher number of large completed transactions. Treasury Services revenue was $1.1$3.5 billion, up 14%12%, predominantly driven by the impact of higher interest rates and growth in operating deposits. Lending revenue was $302$954 million, down 22%13%, predominantly driven by lower net interest income primarily reflecting a change in the portfolio composition and overall spread tightening as well as higher gains in the prior year gains on securities received from restructurings.
Markets & Investor Services revenue was $7.5$19.5 billion, up 15%10%. The current quarterresults 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 $150$450 million in tax-equivalent adjustments as a result of the TCJA. Fixed Income Markets revenue was $4.6$10.9 billion, up 8%2%. Excluding the impact of these fair value gains and tax-equivalent adjustments, Fixed Income Markets revenue was flat,remained up 2%, with strong performance in Currencies & Emerging Markets, and higher Commodities revenue compared to a challenging prior year, largely offset

by lower revenue in Rates and Credit, which reverted to more normal levels following a strong prior year.Credit. Equity Markets revenue was $2.0$5.6 billion, up 26% (excluding the impact of fair value gains noted above up 25%)22%, driven by strength across derivatives, Prime Servicesprime brokerage and Cash Equities.Equities, reflecting strong client activity. Securities Services revenue was $1.1$3.2 billion, up 16%11%, predominantly driven by the impact of higher interest rates and operating deposit growth as well as increasedhigher asset-based fees driven by net client inflows and improvinghigher market levels.
The provision for credit losses was a benefit of $158$142 million, primarily driven by loan sales and other activity related to a reduction in the allowance for credit lossessingle name in the Oil & Gas portfolio, related to a single name.partially offset by other net portfolio activity. The prior year was a benefit of $96$175 million primarily driven by a reduction in the allowance for credit losses in the Oil & Gas portfolio. and Metals & Mining portfolios.
Noninterest expense was $5.7$16.2 billion, 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 in Markets.and legal expense.

Selected metricsSelected metrics    Selected metrics          
As of or for the three months
ended March 31,
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 Change2018 2017 Change 2018 2017 Change
Selected balance sheet data (period-end)                
Assets$909,845
 $840,304
 8 %$928,148
 $851,808
 9 % $928,148
 $851,808
 9%
Loans:                
Loans retained(a)
112,626
 107,902
 4
117,084
 106,955
 9
 117,084
 106,955
 9
Loans held-for-sale and loans at fair value6,122
 6,477
 (5)6,133
 3,514
 75
 6,133
 3,514
 75
Total loans118,748
 114,379
 4
123,217
 110,469
 12
 123,217
 110,469
 12
Core loans118,434
 114,003
 4
122,953
 110,133
 12
 122,953
 110,133
 12
Equity70,000
 70,000
 
70,000
 70,000
 
 70,000
 70,000
 
Selected balance sheet data (average)                
Assets$910,146
 $838,017
 9
$924,909
 $858,912
 8
 $924,145
 $853,948
 8
Trading assets-debt and equity instruments354,869
 328,339
 8
349,390
 349,448
 
 354,270
 343,232
 3
Trading assets-derivative receivables60,161
 58,948
 2
62,025
 55,875
 11
 60,943
 56,575
 8
Loans:                
Loans retained(a)
$109,355
 $108,389
 1
$115,390
 $107,829
 7
 $112,921
 $108,741
 4
Loans held-for-sale and loans at fair value5,480
 5,308
 3
7,328
 4,674
 57
 6,263
 5,254
 19
Total loans$114,835
 $113,697
 1
$122,718
 $112,503
 9
 $119,184
 $113,995
 5
Core loans114,514
 113,309
 1
122,442
 112,168
 9
 118,877
 113,631
 5
Equity70,000
 70,000
 
70,000
 70,000
 
 70,000
 70,000
 
Headcount(b)51,291
 48,700
 5 %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 March 31,
As of or for the three months
ended September 30,
 As of or for the nine months
ended September 30,
(in millions, except ratios)2018 2017 Change2018 2017 Change 2018 2017 Change
Credit data and quality statistics                
Net charge-offs/(recoveries)$20
 $(18) NM$(40) $20
 NM
 $94
 $49
 92 %
Nonperforming assets:                
Nonaccrual loans:                
Nonaccrual loans retained(a)
$668
 $308
 117 %$318
 $437
 (27)% $318
 $437
 (27)
Nonaccrual loans held-for-sale and loans at fair value
29
 109
 (73)9
 2
 350
 9
 2
 350
Total nonaccrual loans697
 417
 67
327
 439
 (26) 327
 439
 (26)
Derivative receivables132
 179
 (26)90
 164
 (45) 90
 164
 (45)
Assets acquired in loan satisfactions91
 87
 5
61
 92
 (34) 61
 92
 (34)
Total nonperforming assets$920
 $683
 35
$478
 $695
 (31) $478
 $695
 (31)
Allowance for credit losses:                
Allowance for loan losses$1,128
 $1,346
 (16)$1,068
 $1,253
 (15) $1,068
 $1,253
 (15)
Allowance for lending-related commitments800
 797
 
802
 745
 8
 802
 745
 8
Total allowance for credit losses$1,928
 $2,143
 (10)%$1,870
 $1,998
 (6)% $1,870
 $1,998
 (6)%
Net charge-off/(recovery) rate(b)
0.07% (0.07)%  (0.14)% 0.07%   0.11% 0.06%  
Allowance for loan losses to period-end loans retained1.00
 1.25
  0.91
 1.17
   0.91
 1.17
  
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(c)
1.46
 1.91
  1.27
 1.79
   1.27
 1.79
  
Allowance for loan losses to nonaccrual loans retained(a)
169
 437
  336
 287
   336
 287
  
Nonaccrual loans to total period-end loans0.59% 0.36 %  0.27 % 0.40%   0.27% 0.40%  
(a)Allowance for loan losses of $298$145 million and $61$177 million were held against these nonaccrual loans at March 31,September 30, 2018 and 2017, respectively.
(b)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.
(c)Management uses allowance for loan losses to period-end loans retained, excluding trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of CIB’s allowance coverage ratio.

Investment banking feesInvestment banking fees    Investment banking fees          
Three months ended March 31,Three months ended September 30, Nine months ended September 30,
(in millions)2018 2017 Change2018 2017 Change 2018 2017 Change
Advisory$575
 $501
 15 %$581
 $620
 (6)% $1,782
 $1,624
 10 %
Equity underwriting346
 425
 (19)420
 300
 40
 1,336
 1,107
 21
Debt underwriting(a)
775
 949
 (18)822
 924
 (11) 2,540
 2,827
 (10)
Total investment banking fees$1,696
 $1,875
 (10)%$1,823
 $1,844
 (1)% $5,658
 $5,558
 2 %
(a)Includes loan syndications.

League table results – wallet shareLeague table results – wallet share   League table results – wallet share   
Three months ended March 31, 2018 Full-year 2017Three months ended September 30, 2018 Full-year 2017
RankShare RankShareRankShare RankShare
Based on fees(a)
        
Long-term debt(b)
        
Global#2
 6.7 #1
 7.6#1
 7.4 #1
 7.8
U.S.2
 9.1 2
 11.02
 11.2 2
 11.1
Equity and equity-related(c)
        
Global3
 7.1 2
 7.13
 9.2 2
 7.1
U.S.2
 11.0 1
 11.61
 12.5 1
 11.6
M&A(d)
        
Global1
 10.3 2
 8.52
 9.0 2
 8.4
U.S.1
 11.7 2
 9.12
 9.4 2
 9.1
Loan syndications        
Global1
 8.3 1
 9.41
 9.6 1
 9.3
U.S.2
 9.7 1
 11.01
 12.2 1
 10.9
Global investment banking fees(e)
#1
 8.1 #1
 8.1#1
 8.7 #1
 8.1
(a)Source: Dealogic as of AprilOct 1, 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 March 31, Three months ended March 31,Nine months ended September 30, Nine months ended September 30,
2018 20172018 2017

(in millions)
Fixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal MarketsFixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal Markets
Principal transactions$2,732
$1,612
$4,344
 $2,701
$1,009
$3,710
$6,795
$4,528
$11,323
 $6,389
$3,066
$9,455
Lending- and deposit-related fees47
1
48
 49
1
50
147
4
151
 144
4
148
Asset management, administration and commissions113
458
571
 104
423
527
313
1,364
1,677
 300
1,230
1,530
All other income560
17
577
 177
(7)170
764
18
782
 505
3
508
Noninterest revenue3,452
2,088
5,540
 3,031
1,426
4,457
8,019
5,914
13,933
 7,338
4,303
11,641
Net interest income(a)
1,101
(71)1,030
 1,184
180
1,364
2,831
(343)2,488
 3,257
252
3,509
Total net revenue$4,553
$2,017
$6,570
 $4,215
$1,606
$5,821
$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 March 31,
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 Change2018 2017 Change 2018 2017 Change
Assets under custody (“AUC”) by asset class (period-end)
(in billions):
               
Fixed Income$13,145

$12,473
 5$12,339

$12,878
 (4)% $12,339
 $12,878
 (4)%
Equity8,241

6,856
 209,174

7,439
 23
 9,174
 7,439
 23
Other(a)
2,640

2,054
 292,890

2,421
 19
 2,890
 2,421
 19
Total AUC$24,026

$21,383
 12$24,403

$22,738
 7
 $24,403
 $22,738
 7
Client deposits and other third party liabilities (average)(b)
$423,301

$391,716
 8$434,847

$421,588
 3 % $430,640
 $406,184
 6 %
(a)Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts.
(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 March 31,
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 Change2018 2017 Change 2018 2017 Change
Total net revenue(a)
                
Europe/Middle East/Africa$3,656
 $3,189
 15 %$2,766
 $2,751
 1 % $9,842
 $8,974
 10 %
Asia/Pacific1,471
 1,239
 19
1,242
 1,169
 6
 4,123
 3,442
 20
Latin America/Caribbean414
 341
 21
321
 329
 (2) 1,064
 914
 16
Total international net revenue5,541
 4,769
 16
4,329
 4,249
 2
 15,029
 13,330
 13
North America4,942
 4,830
 2
4,476
 4,366
 3
 14,182
 13,809
 3
Total net revenue$10,483
 $9,599
 9
$8,805
 $8,615
 2
 $29,211
 $27,139
 8
                
Loans retained (period-end)(a)
Loans retained (period-end)(a)
    
Loans retained (period-end)(a)
          
Europe/Middle East/Africa$25,924
 $26,290
 (1)$25,941
 $25,677
 1
 $25,941
 $25,677
 1
Asia/Pacific16,451
 13,942
 18
16,812
 13,398
 25
 16,812
 13,398
 25
Latin America/Caribbean4,293
 7,074
 (39)4,896
 6,737
 (27) 4,896
 6,737
 (27)
Total international loans46,668
 47,306
 (1)47,649
 45,812
 4
 47,649
 45,812
 4
North America65,958
 60,596
 9
69,435
 61,143
 14
 69,435
 61,143
 14
Total loans retained(a)
$112,626
 $107,902
 4
$117,084
 $106,955
 9
 $117,084
 $106,955
 9
                
Client deposits and other third-party liabilities (average)(a)(b)
                
Europe/Middle East/Africa$159,414
 $137,504
 16
$162,060
 $160,778
 1
 $162,102
 $154,259
 5
Asia/Pacific83,668
 73,007
 15
81,771
 78,334
 4
 82,272
 75,284
 9
Latin America/Caribbean25,480
 23,897
 7
26,196
 25,236
 4
 26,477
 25,126
 5
Total international$268,562
 $234,408
 15
$270,027
 $264,348
 2
 $270,851
 $254,669
 6
North America154,739
 157,308
 (2)164,820
 157,240
 5
 159,789
 151,515
 5
Total client deposits and other third-party liabilities$423,301
 $391,716
 8
$434,847
 $421,588
 3
 $430,640
 $406,184
 6
                
AUC (period-end)(a)
(in billions)
                
North America$14,493
 $12,768
 14
$15,148
 $13,574
 12
 $15,148
 $13,574
 12
All other regions9,533
 8,615
 11
9,255
 9,164
 1
 9,255
 9,164
 1
Total AUC$24,026
 $21,383
 12 %$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 67–69 of JPMorgan Chase’s 2017 Annual Report and Line of Business Metrics on page 162.181.
Selected income statement dataSelected income statement dataSelected income statement data      
Three months ended March 31,Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 Change
2018
 2017
 Change
 2018
 2017
 Change
Revenue                
Lending- and deposit-related fees$226
 $235
 (4)%$216
 $223
 (3)% $666
 $690
 (3)%
Asset management, administration and commissions18
 18
 
18
 16
 13
 52
 50
 4
All other income(a)
305
 346
 (12)342
 353
 (3) 1,040
 1,034
 1
Noninterest revenue549
 599
 (8)576
 592
 (3) 1,758
 1,774
 (1)
Net interest income1,617
 1,419
 14
1,695
 1,554
 9
 4,995
 4,478
 12
Total net revenue(b)
2,166
 2,018
 7
2,271
 2,146
 6
 6,753
 6,252
 8
                
Provision for credit losses(5) (37) 86
(15) (47) 68
 23
 (214) NM
                
Noninterest expense                
Compensation expense(c)
421
 388
 9
432
 386
 12
 1,268
 1,156
 10
Noncompensation expense(c)
423
 437
 (3)421
 414
 2
 1,273
 1,259
 1
Total noninterest expense844
 825
 2
853
 800
 7
 2,541
 2,415
 5
                
Income before income tax expense1,327
 1,230
 8
1,433
 1,393
 3
 4,189
 4,051
 3
Income tax expense302
 431
 (30)344
 512
 (33) 988
 1,469
 (33)
Net income$1,025
 $799
 28 %$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 $103$107 million and $121$143 million for the three months ended March 31,September 30, 2018 and 2017.2017 respectively, and $316 million and $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 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 $1.0$1.1 billion, an increase of 28%, driven by higher net revenue, partially offset by a lower net benefit for credit losses and higher noninterest expense.24%.
Net revenue was $2.2$2.3 billion, an increase of 7%6%. Net interest income was $1.6$1.7 billion, an increase of 14%9%,
driven by higher deposit margins.margins, partially offset by lower deposit balances, largely due to non-operating deposits migrating to higher yielding investments. Noninterest revenue was $549$576 million, a decrease of 8% predominantly driven by3% lower investment banking revenue.than the prior year.
Noninterest expense was $844$853 million, an increase of 2%. Excluding the impairment of leased assets in the prior year of $29 million, noninterest expense would have been up 6%7%, predominantly driven by the hiring of bankers, business-related support staff,investments in banker coverage and technology investments.

technology.
The provision for credit losses was a benefit of $5$15 million reflecting strong credit performance.driven by net recoveries. The prior year was a benefit of $37$47 million, driven by net reductions in the allowance for credit losses, largely in the Real Estate portfolio.
Year-to-date results
Net income was $3.2 billion, an increase of 24%.
Net revenue was $6.8 billion, an increase of 8%. Net interest income was $5.0 billion, an increase of 12%, driven by higher deposit margins. Noninterest revenue was$1.8 billion, flat compared with the prior year.
Noninterest expense was $2.5 billion, an increase of 5%, driven by 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, portfolio, partially offset by select client downgrades.Natural Gas Pipelines and Metals & Mining portfolios.


Selected income statement data (continued)Selected income statement data (continued)Selected income statement data (continued)      
Three months ended March 31,Three months ended September 30, Nine months ended September 30,
(in millions, except ratios)2018
 2017
 Change
2018
 2017
 Change
 2018
 2017
 Change
Revenue by product                
Lending$999
 $992
 1 %$1,027
 $1,030
  % $3,052
 $3,045
 
Treasury services972
 796
 22
1,021
 873
 17
 3,019
 2,523
 20
Investment banking(a)
184
 216
 (15)206
 196
 5
 644
 601
 7
Other11
 14
 (21)17
 47
 (64) 38
 83
 (54)
Total Commercial Banking net revenue$2,166
 $2,018
 7
$2,271
 $2,146
 6
 $6,753
 $6,252
 8
                
Investment banking revenue, gross(b)
$569
 $666
 (15)$581
 $578
 1
 $1,889
 $1,777
 6
                
Revenue by client segment                
Middle Market Banking$895
 $784
 14
$935
 $848
 10
 $2,749
 $2,471
 11
Corporate Client Banking687
 666
 3
749
 688
 9
 2,243
 2,016
 11
Commercial Term Lending352
 367
 (4)339
 367
 (8) 1,035
 1,098
 (6)
Real Estate Banking164
 134
 22
175
 157
 11
 509
 438
 16
Other68
 67
 1
73
 86
 (15) 217
 229
 (5)
Total Commercial Banking net revenue$2,166
 $2,018
 7 %$2,271
 $2,146
 6 % $6,753
 $6,252
 8 %
                
Financial ratios                
Return on equity20% 15%  21% 17%   20% 16%  
Overhead ratio39
 41
  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, seerefer to Note 1.





Selected metricsSelected metrics  Selected metrics     
As of or for the three months
ended March 31,
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
2018
2017
Change
 20182017Change
Selected balance sheet data (period-end)        
Total assets$220,880
$217,348
2 %$217,194
$220,064
(1)% $217,194
$220,064
(1)%
Loans:       
Loans retained202,812
194,538
4
205,177
201,463
2
 205,177
201,463
2
Loans held-for-sale and loans at fair value2,473
1,056
134
405
764
(47) 405
764
(47)
Total loans$205,285
$195,594
5
$205,582
$202,227
2
 $205,582
$202,227
2
Core loans205,087
195,296
5
205,418
201,999
2
 205,418
201,999
2
Equity20,000
20,000

20,000
20,000

 20,000
20,000

       
Period-end loans by client segment       
Middle Market Banking$57,835
$55,113
5
$57,324
$56,192
2
 $57,324
$56,192
2
Corporate Client Banking47,562
45,798
4
46,890
47,682
(2) 46,890
47,682
(2)
Commercial Term Lending75,052
72,496
4
76,201
74,349
2
 76,201
74,349
2
Real Estate Banking17,709
15,846
12
18,013
17,127
5
 18,013
17,127
5
Other7,127
6,341
12
7,154
6,877
4
 7,154
6,877
4
Total Commercial Banking loans$205,285
$195,594
5
$205,582
$202,227
2
 $205,582
$202,227
2
       
Selected balance sheet data (average)       
Total assets$217,159
$213,784
2
$219,232
$218,196

 $218,270
$216,574
1
Loans:       
Loans retained201,966
190,774
6
205,603
199,487
3
 203,950
195,604
4
Loans held-for-sale and loans at fair value406
717
(43)1,617
675
140
 1,139
931
22
Total loans$202,372
$191,491
6
$207,220
$200,162
4
 $205,089
$196,535
4
Core loans202,161
191,180
6
207,052
199,920
4
 204,902
196,254
4
       
Average loans by client segment       
Middle Market Banking$56,754
$54,267
5
$57,258
$55,782
3
 $57,121
$55,239
3
Corporate Client Banking45,760
43,582
5
49,004
46,451
5
 47,650
45,516
5
Commercial Term Lending74,942
71,880
4
75,919
74,136
2
 75,393
73,041
3
Real Estate Banking17,845
15,525
15
17,861
16,936
5
 17,774
16,205
10
Other7,071
6,237
13
7,178
6,857
5
 7,151
6,534
9
Total Commercial Banking loans$202,372
$191,491
6
$207,220
$200,162
4
 $205,089
$196,535
4
       
Client deposits and other third-party liabilities$175,618
$176,780
(1)$168,169
$176,218
(5) $171,483
$175,402
(2)
Equity20,000
20,000

20,000
20,000

 20,000
20,000

       
Headcount(a)
10,372
9,593
8 %10,937
10,014
9 % 10,937
10,014
9 %
(a)Effective in the first quarter of 2018, certain Operations and Compliance staff were transferred from CCB and Corporate, respectively, 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 page 32, Selected income statement data, footnote (c).
of this transfer, see page 25, Selected income statement data,
footnote (c).

Selected metrics (continued)  
 As of or for the three months
ended March 31,
(in millions, except ratios)2018
2017
Change
Credit data and quality statistics   
Net charge-offs/(recoveries)$
$(10)100 %
Nonperforming assets   
Nonaccrual loans:   
Nonaccrual loans retained(a)
$666
$929
(28)
Nonaccrual loans held-for-sale and loans at fair value


Total nonaccrual loans$666
$929
(28)
Assets acquired in loan satisfactions1
11
(91)
Total nonperforming assets$667
$940
(29)
Allowance for credit losses:   
Allowance for loan losses$2,591
$2,896
(11)
Allowance for lending-related commitments263
251
5
Total allowance for credit losses$2,854
$3,147
(9)%
Net charge-off/(recovery) rate(b)

(0.02)% 
Allowance for loan losses to period-end loans retained
1.28
1.49
 
Allowance for loan losses to nonaccrual loans retained(a)
389
312
 
Nonaccrual loans to period-end total loans0.32
0.47
 
Selected metrics (continued)        
 As of or for the three months
ended September 30,
 As of or for the nine months
ended September 30,
(in millions, except ratios)2018
2017
Change
 2018
 2017
 Change
Credit data and quality statistics         
Net charge-offs/(recoveries)$(18)$19
NM
 $16
 $17
 (6)%
Nonperforming assets         
Nonaccrual loans:         
Nonaccrual loans retained(a)
$452
$744
(39)% $452
 $744
 (39)%
Nonaccrual loans held-for-sale and loans at fair value5

NM
 5
 
 NM
Total nonaccrual loans$457
$744
(39) $457
 $744
 (39)
Assets acquired in loan satisfactions2
3
(33) 2
 3
 (33)
Total nonperforming assets$459
$747
(39) $459
 $747
 (39)
Allowance for credit losses:         
Allowance for loan losses$2,619
$2,620

 $2,619
 $2,620
 
Allowance for lending-related commitments249
323
(23) 249
 323
 (23)
Total allowance for credit losses$2,868
$2,943
(3)% $2,868
 $2,943
 (3)%
Net charge-off/(recovery) rate(b)
(0.03)%0.04%  0.01% 0.01%  
Allowance for loan losses to period-end loans retained
1.28
1.30
  1.28
 1.30
  
Allowance for loan losses to nonaccrual loans retained(a)
579
352
  579
 352
  
Nonaccrual loans to period-end total loans0.22
0.37
  0.22
 0.37
  
(a)Allowance for loan losses of $116$105 million and $115$128 million was held against nonaccrual loans retained at March 31,September 30, 2018 and 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 70–72 of JPMorgan Chase’s 2017 Annual Report and Line of Business Metrics on pages 162–163.181–182.
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, seerefer to Note 1.1.
Selected income statement dataSelected income statement dataSelected income statement data   
(in millions, except ratios)Three months ended March 31,Three months ended September 30, Nine months ended September 30,
2018
2017
Change
2018
2017
Change
 2018
2017
Change
Revenue       
Asset management, administration and commissions$2,528
$2,304
10 %$2,563
$2,466
4 % $7,623
$7,205
6 %
All other income102
165
(38)117
151
(23) 374
472
(21)
Noninterest revenue2,630
2,469
7
2,680
2,617
2
 7,997
7,677
4
Net interest income876
819
7
879
855
3
 2,640
2,520
5
Total net revenue3,506
3,288
7
3,559
3,472
3
 10,637
10,197
4
       
Provision for credit losses15
18
(17)23
8
188
 40
30
33
       
Noninterest expense       
Compensation expense1,392
1,332
5
1,391
1,319
5
 4,112
3,928
5
Noncompensation expense1,189
1,449
(18)1,194
1,089
10
 3,620
3,678
(2)
Total noninterest expense2,581
2,781
(7)2,585
2,408
7
 7,732
7,606
2
       
Income before income tax expense910
489
86
951
1,056
(10) 2,865
2,561
12
Income tax expense140
104
35
227
382
(41) 616
878
(30)
Net income$770
$385
100
$724
$674
7
 $2,249
$1,683
34
       
Revenue by line of business       
Asset Management$1,787
$1,688
6
$1,827
$1,814
1
 $5,440
$5,288
3
Wealth Management1,719
1,600
7
1,732
1,658
4
 5,197
4,909
6
Total net revenue$3,506
$3,288
7 %$3,559
$3,472
3 % $10,637
$10,197
4 %
       
Financial ratios       
Return on equity34%16% 31%29%  32%24% 
Overhead ratio74
85
 73
69
  73
75
 
Pre-tax margin ratio:       
Asset Management26
1
 27
29
  27
19
 
Wealth Management26
30
 26
32
  27
31
 
Asset & Wealth Management26
15
 27
30
  27
25
 
Quarterly results
Net income was $770$724 million, driven by lower noninterest expense and higher net revenue.an increase of 7%.
Net revenue was $3.5$3.6 billion, an increase of 7%3%. Net interest income was $876$879 million, up 7%3%, driven by deposit margin expansion and loan growth. Noninterest revenue was $2.6$2.7 billion, up 7%2%, due todriven by higher management fees resulting from growth in assets under management.on higher market 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 $2.6 billion, a decrease ofup 7%, largely driven by lower legal expense, partially offset bycontinued investments in advisors and technology, as well as higher revenue driven external fees and compensation expense.on revenue growth.
 
Year-to-date results
Selected metrics   
 As of or for the three months
ended March 31,
(in millions, except ranking data, headcount and ratios)2018
2017
Change
% of JPM mutual fund assets rated as 4- or 5-star(a)
58%63% 
% of JPM mutual fund assets ranked in 1st or 2nd quartile:(b)
   
1 year61
59
 
3 years67
80
 
5 years82
77
 
    
Selected balance sheet data (period-end)   
Total assets$158,439
$141,049
12 %
Loans136,030
119,947
13
Core loans136,030
119,947
13
Deposits147,238
157,295
(6)
Equity9,000
9,000

    
Selected balance sheet data (average)   
Total assets$154,345
$138,178
12
Loans132,634
118,310
12
Core loans132,634
118,310
12
Deposits144,199
158,810
(9)
Equity9,000
9,000

    
Headcount23,268
22,196
5
    
Number of Wealth Management client advisors2,640
2,480
6
    
Credit data and quality statistics   
Net charge-offs$1
$3
(67)
Nonaccrual loans359
379
(5)
Allowance for credit losses:   
Allowance for loan losses$301
$289
4
Allowance for lending-related commitments13
4
225
Total allowance for credit losses$314
$293
7 %
Net charge-off rate
0.01% 
Allowance for loan losses to period-end loans0.22
0.24
 
Allowance for loan losses to nonaccrual loans84
76
 
Nonaccrual loans to period-end loans0.26
0.32
 
Net income was $2.2 billion, an increase of 34%.
Net revenue was $10.6 billion, an increase of 4%. Net interest income was $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 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 $7.7 billion, an increase of 2%, driven by higher external fees on revenue growth and investments in advisors and technology, offset by higher legal expense 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,
(in millions, except ranking data, headcount and ratios)2018
2017
Change
 2018
2017
Change
% of JPM mutual fund assets rated as 4- or 5-star(a)
64%65%  64%65% 
% of JPM mutual fund assets ranked in 1st or 2nd quartile:(b)
       
1 year65
61
  65
61
 
3 years64
82
  64
82
 
5 years83
81
  83
81
 
        
Selected balance sheet data (period-end)       
Total assets$166,716
$149,170
12 % $166,716
$149,170
12 %
Loans143,162
128,038
12
 143,162
128,038
12
Core loans143,162
128,038
12
 143,162
128,038
12
Deposits130,497
141,409
(8) 130,497
141,409
(8)
Equity9,000
9,000

 9,000
9,000

        
Selected balance sheet data (average)       
Total assets$161,982
$146,388
11
 $158,218
$142,541
11
Loans140,558
125,445
12
 136,663
122,002
12
Core loans140,558
125,445
12
 136,663
122,002
12
Deposits133,021
144,496
(8) 138,885
151,311
(8)
Equity9,000
9,000

 9,000
9,000

        
Headcount23,747
22,685
5
 23,747
22,685
5
        
Number of Wealth Management client advisors2,808
2,581
9
 2,808
2,581
9
        
Credit data and quality statistics       
Net charge-offs$11
$5
120
 $7
$10
(30)
Nonaccrual loans285
337
(15) 285
337
(15)
Allowance for credit losses:       
Allowance for loan losses$317
$285
11
 $317
$285
11
Allowance for lending-related commitments15
10
50
 15
10
50
Total allowance for credit losses$332
$295
13 % $332
$295
13 %
Net charge-off rate0.03%0.02%  0.01%0.01% 
Allowance for loan losses to period-end loans0.22
0.22
  0.22
0.22
 
Allowance for loan losses to nonaccrual loans111
85
  111
85
 
Nonaccrual loans to period-end loans0.20
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)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 $2.8$2.9 trillion and assets under management of $2.0$2.1 trillion were both up 9% and 10%7%, respectively, reflecting higher market levels anddriven by net inflows into long-term and liquidity products, partially offset by outflows from liquidity products.as well as higher market levels.
Client assets    
 March 31, September 30,
(in billions)2018
2017
Change
2018
2017
Change
Assets by asset class    
Liquidity$432
$444
(3)%$463
$441
5 %
Fixed income467
432
8
457
461
(1)
Equity432
378
14
452
405
12
Multi-asset and alternatives685
587
17
705
638
11
Total assets under management2,016
1,841
10
2,077
1,945
7
Custody/brokerage/administration/deposits772
707
9
790
733
8
Total client assets$2,788
$2,548
9
$2,867
$2,678
7
    
Memo:    
Alternatives client assets (a)
$169
$157
8
$172
$161
7
    
Assets by client segment    
Private Banking$537
$468
15
$576
$507
14
Institutional937
889
5
945
921
3
Retail542
484
12
556
517
8
Total assets under management$2,016
$1,841
10
$2,077
$1,945
7
    
Private Banking$1,285
$1,154
11
$1,339
$1,217
10
Institutional958
908
6
967
941
3
Retail545
486
12
561
520
8
Total client assets$2,788
$2,548
9 %$2,867
$2,678
7 %
(a)Represents assets under management, as well as client balances in brokerage account
Client assets (continued)  


Three months ended
March 31,
(in billions)2018
2017
Assets under management rollforward  
Beginning balance$2,034
$1,771
Net asset flows:  
Liquidity(21)1
Fixed income(5)5
Equity5
(4)
Multi-asset and alternatives16
7
Market/performance/other impacts(13)61
Ending balance, March 31$2,016
$1,841
   
Client assets rollforward  
Beginning balance$2,789
$2,453
Net asset flows14
10
Market/performance/other impacts(15)85
Ending balance, March 31$2,788
$2,548
Client assets (continued)     


Three months ended
September 30,
Nine months ended
September 30,
(in billions)2018
2017
 2018
2017
Assets under management rollforward     
Beginning balance$2,028
$1,876
 $2,034
$1,771
Net asset flows:     
Liquidity14
5
 10
(1)
Fixed income3
17
 (9)24
Equity1
(5) 8
(12)
Multi-asset and alternatives4
9
 29
26
Market/performance/other impacts27
43
 5
137
Ending balance, September 30$2,077
$1,945
 $2,077
$1,945
      
Client assets rollforward     
Beginning balance$2,799
$2,598
 $2,789
$2,453
Net asset flows33
25
 58
37
Market/performance/other impacts35
55
 20
188
Ending balance, September 30$2,867
$2,678
 $2,867
$2,678

International metrics       
As of or for the three months
ended March 31,
As of or for the three months
ended September 30,
 As of or for the nine months
ended September 30,
(in millions)2018
2017
Change
2018
2017
Change
 2018
2017
Change
Total net revenue (a)
       
Europe/Middle East/Africa$726
$615
18 %$677
$697
(3)% $2,095
$1,975
6%
Asia/Pacific393
318
24
377
358
5
 1,161
1,018
14
Latin America/Caribbean227
179
27
228
227

 689
628
10
Total international net revenue1,346
1,112
21
1,282
1,282

 3,945
3,621
9
North America2,160
2,176
(1)2,277
2,190
4
 6,692
6,576
2
Total net revenue(a)
$3,506
$3,288
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 March 31,
(in billions)2018
2017
Change
Assets under management   
Europe/Middle East/Africa$378
$323
17%
Asia/Pacific171
131
31
Latin America/Caribbean59
47
26
Total international assets under management608
501
21
North America1,408
1,340
5
Total assets under management$2,016
$1,841
10
    
Client assets   
Europe/Middle East/Africa$435
$374
16
Asia/Pacific237
187
27
Latin America/Caribbean156
118
32
Total international client assets828
679
22
North America1,960
1,869
5
Total client assets$2,788
$2,548
9%
 As of or for the three months
ended September 30,
 As of or for the nine months
ended September 30,
(in billions)2018
2017
Change
 2018
2017
Change
Assets under management       
Europe/Middle East/Africa$375
$357
5% $375
$357
5%
Asia/Pacific164
144
14
 164
144
14
Latin America/Caribbean65
59
10
 65
59
10
Total international assets under management604
560
8
 604
560
8
North America1,473
1,385
6
 1,473
1,385
6
Total assets under management$2,077
$1,945
7
 $2,077
$1,945
7
        
Client assets       
Europe/Middle East/Africa$435
$411
6
 $435
$411
6
Asia/Pacific228
206
11
 228
206
11
Latin America/Caribbean162
157
3
 162
157
3
Total international client assets825
774
7
 825
774
7
North America2,042
1,904
7
 2,042
1,904
7
Total client assets$2,867
$2,678
7% $2,867
$2,678
7%


CORPORATE
For a discussion of Corporate, see refer to pages 73–74 of JPMorgan Chase’s 2017 Annual Report.
Selected income statement and balance sheet dataSelected income statement and balance sheet dataSelected income statement and balance sheet data      
As of or for the three months
ended March 31,
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
2018
2017
 Change
 2018
 2017
 Change
Revenue            
Principal transactions$(144)$15
 NM
$(161)$(2) NM
 $(222) $161
 NM
Investment securities losses(245)(3) NM
(46)
 NM
 (371) (37) NM
All other income/(loss)(a)204
61
 234 %30
111
 (73)% 373
 839
 (56)%
Noninterest revenue(185)73
 NM
(177)109
 NM
 (220) 963
 NM
Net interest income(47)(98) 52
74
77
 (4)% (35) 2
 NM
Total net revenue(a)(b)
(232)(25) NM
(103)186
 NM
 (255) 965
 NM
            
Provision for credit losses(4)
 NM
2

 NM
 (3) 
 NM
            
Noninterest expense(b)(c)
87
98
 (11)28
74
 (62)% 394
 355
 11 %
Income/(loss) before income tax expense/(benefit)(315)(123) (156)(133)112
 NM
 (646) 610
 NM
Income tax expense/(benefit)68
(158) NM
12
34
 (65)% 18
 (73) NM
Net income/(loss)$(383)$35
 NM
$(145)$78
 NM
 $(664) $683
 NM
Total net revenue            
Treasury and CIO$(38)$(7) (443)$186
$265
 (30)% $235
 $344
 (32)%
Other Corporate(194)(18) NM
(289)(79) (266) (490) 621
 NM
Total net revenue$(232)$(25) NM
$(103)$186
 NM
 $(255) $965
 NM
Net income/(loss)            
Treasury and CIO$(187)$(67) (179)$96
$75
 28 % $(244) $(6) NM
Other Corporate(196)102
 NM
(241)3
 NM
 (420) 689
 NM
Total net income/(loss)$(383)$35
 NM
$(145)$78
 NM
 $(664) $683
 NM
Total assets (period-end)$779,962
$822,819
 (5)$742,693
$804,573
 (8) $742,693
 $804,573
 (8)
Loans (period-end)1,724
1,483
 16
1,556
1,614
 (4) 1,556
 1,614
 (4)
Core loans(c)(d)
1,689
1,480
 14
1,556
1,614
 (4) 1,556
 1,614
 (4)
Headcount(d)(e)
35,368
32,680
 8 %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 $98$94 million and $228$216 million for the three months ended March 31,September 30, 2018 and 2017, respectively, and $287 million and $681 million for nine months ended September 30, 2018 and 2017, respectively. The decrease in taxable-equivalent adjustments reflects the impact of the TCJA.
(b)(c)Included legal expense/(benefit) of $(42)$(175) million and $(228)$(148) million for the three months ended March 31,September 30, 2018 and 2017, respectively, and $(225) million and $(360) million for nine months ended September 30, 2018 and 2017, respectively.
(c)(d)Average core loans were $1.6 billion and $1.6$1.7 billion for the three months ended March 31,September 30, 2018 and 2017, respectively, and $1.7 billion and $1.6 billion for the nine months ended September 30, 2018 and 2017, respectively.
(d)(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, seerefer to CB segment results on page 25.32.

Quarterly results
Net loss was $383$145 million, compared with net income of $35$78 million in the prior-year quarter.prior year.
Net revenue was a loss of $232$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 remeasurement of 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 a loss of $255 million, compared with a lossgain of $25$965 million in the prior year, primarily driven by $245 million ofprior-year. The current period includes investment securities losses related to the repositioning of the investment securities portfolio and approximately $130 million of losses largely driven by markdowns on certain legacy private equity investments. The prior year included a $645 million benefit from a legal settlement.
Income tax expense was higher primarily driven by an increasereflects 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 other tax adjustments, andwhich were more than offset by changes to certain tax reserves.

Treasury and CIO overview
At March 31,September 30, 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 38–42.49–54. For information on interest rate, foreign exchange and other risks, seerefer to Market Risk Management on pages 61–65.73–77.
Selected income statement and balance sheet dataSelected income statement and balance sheet dataSelected income statement and balance sheet data      
As of or for the three months
ended March 31,
As of or for the three months
ended September 30,
 As of or for the nine months
ended September 30,
(in millions)2018
 2017
 Change
2018
 2017
 Change
 2018
 2017
 Change
Investment securities losses$(245) $(15) NM
$(46) $
 NM
 $(371) $(49) NM
Available-for-sale (“AFS”) investment securities (average)$204,323
 $234,841
 (13)%$197,230
 $212,633
 (7)% $200,569
 $224,094
 (10)%
Held-to-maturity (“HTM”) investment securities (average)34,020
 49,362
 (31)31,232
 47,034
 (34) 31,842
 48,201
 (34)
Investment securities portfolio (average)$238,343
 $284,203
 (16)$228,462
 $259,667
 (12) $232,411
 $272,295
 (15)
AFS investment securities (period-end)$207,703
 $230,617
 (10)$198,523
 $214,257
 (7) $198,523
 $214,257
 (7)
HTM investment securities (period-end)29,042
 48,913
 (41)31,368
 47,079
 (33) 31,368
 47,079
 (33)
Investment securities portfolio (period-end)$236,745
 $279,530
 (15)%$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.AFS in the first quarter of 2018. For additional information, seerefer 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.
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 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.
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 2017 Annual Report information about the Firm’s management of its key risks can be found.
Risk disclosuresForm 10-Q page referenceAnnual Report page referenceForm 10-Q page referenceAnnual Report page reference
Enterprise-wide risk management30–3175–8042–4375–80
Strategic risk management 81 81
Capital risk management32–3782–9144–4882–91
Liquidity risk management38–4292–9749–5492–97
Reputation risk management 98 98
Consumer credit portfolio

45–49102–10757-61102–107
Wholesale credit portfolio50–56108–11662–68108–116
Investment portfolio risk management6012072120
Market risk management61–65121–12873–77121–128
Country risk management66129–13078129–130
Operational risk management 131–133 131–133
Compliance risk management

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


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.
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. Senior management considers the implications on the Firm’s 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 ensuring 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.
For a further discussion of the Firm’s Capital Risk Management, see refer to pages 82–91 of JPMorgan Chase’s
2017 Annual Report, Note 19 of this Form 10-Q, and the Firm’s Pillar 3 Regulatory Capital Disclosures reports,
which are available on the Firm’s website (http:(https://investor.shareholder.com/jpmorganchase/basel.cfm)jpmorganchaseco.gcs-web.com/financial-information/basel-pillar-3-us-lcr-disclosures).
 
The Firm and its insured depository institution (“IDI”) subsidiaries are subject to Basel III capital rules which include minimum capital ratio requirements that are subject to phase-in periods (“transitional period”) through the end of 2018. While the required capital remains subject to the transitional rules during 2018, the Firm's capital ratios as of September 30, 2018 were equivalent whether calculated on a transitional basis or on a fully phased-in basis.
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 approachapproaches (Standardized or Advanced) which, for each quarter, results in the lower ratio 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 require the Firm to maintain a certain level of capital that is subject to phase-in periods through the end of 2018. While this required capital remains subject to the transitional rules during 2018, as of January 1, 2018, the Firm’s capital in the form of CET1 and Tier 1, and the Firm’s risk-weighted assets were equivalent whether calculated on a transitional basis or on a fully phased-in basis.
The Firm isand its IDI subsidiaries, as appropriate, are subject to minimum capital ratios under Basel III rules and well capitalizedwell-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, seerefer to Note 19.19.



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 March 31,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.

Transitional Fully Phased-In Transitional Fully Phased-In 
March 31, 2018
(in millions, except ratios)
Standardized Advanced Minimum capital ratios Standardized Advanced Minimum capital ratios 
September 30, 2018
(in millions, except ratios)
Standardized Advanced Minimum capital ratios Standardized Advanced Minimum capital ratios 
Risk-based capital metrics:                        
CET1 capital$183,655
 $183,655
   $183,655
 $183,655
   $184,972
 $184,972
   $184,972
 $184,972
   
Tier 1 capital209,296
 209,296
   209,296
 209,296
   210,589
 210,589
   210,589
 210,589
   
Total capital238,326
 228,320
   238,052
 228,045
   238,303
 228,574
   238,303
 228,574
   
Risk-weighted assets1,552,952
 1,466,095
   1,552,952
 1,466,095
   1,545,326
 1,438,529
   1,545,326
 1,438,529
   
CET1 capital ratio11.8% 12.5% 9.0% 11.8% 12.5% 10.5% 12.0% 12.9% 9.0% 12.0% 12.9% 10.5% 
Tier 1 capital ratio13.5
 14.3
 10.5
 13.5
 14.3
 12.0
 13.6
 14.6
 10.5
 13.6
 14.6
 12.0
 
Total capital ratio15.3
 15.6
 12.5
 15.3
 15.6
 14.0
 15.4
 15.9
 12.5
 15.4
 15.9
 14.0
 
Leverage-based capital metrics:                        
Adjusted average assets(a)
$2,539,183
 $2,539,183
   $2,539,183
 $2,539,183
   $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% 8.2% 8.2% 4.0% 8.2% 8.2% 4.0% 
Total leverage exposureNA
 NA
   NA
 $3,234,103
   NA
 NA
   NA
 $3,235,518
   
SLR(b)
NA
 NA
 NA
 NA
 6.5% 5.0%
(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) 
Note: As of March 31, 2018, and December 31, 2017, 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.
(a)Adjusted average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.
(b)Effective January 1, 2018, the SLR was fully phased-in under Basel III. The December 31, 2017 amounts were calculated under the Basel III Transitional rules.


Recent regulatory updates

On December 7, 2017, the Basel Committee issued the Basel III Reforms. For additional information, refer to Supervision & Regulation on pages 1–8 of JPMorgan Chase’s 2017 Annual Report.
In April 2018, U.S. banking regulators proposed the introduction of a stress capital buffer (“SCB”) and a modification to the regulations regarding enhanced supplementary leverage ratio (“eSLR”) standards for U.S. GSIB holding companies and certain of their IDI subsidiaries. As currently proposed the SCB would modify certain aspects of the Federal Reserve’s CCAR assessment and in part integrate the forward-looking stress test results with the Federal Reserve’s non-stress capital requirements. The proposed eSLR changes would replace the current fixed eSLR measure with a standard that would be tied to the risk-based capital surcharge of the Firm and correspond to recent changes proposed by the Basel Committee on Banking Supervision.


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 March 31,September 30, 2018 and December 31, 2017.
(in millions)March 31, 2018
December 31, 2017
September 30, 2018
December 31, 2017
Total stockholders’ equity$256,201
$255,693
$258,956
$255,693
Less: Preferred stock(a)26,068
26,068
27,764
26,068
Common stockholders’ equity230,133
229,625
231,192
229,625
Less:  
Goodwill47,499
47,507
47,483
47,507
Other intangible assets832
855
781
855
Add:  
Certain deferred tax liabilities(a)
2,216
2,204
Deferred tax liabilities(b)
2,239
2,204
Less: Other CET1 capital adjustments363
223
195
223
Standardized/Advanced Fully
Phased-In CET1 capital
183,655
183,244
184,972
183,244
Preferred stock(a)26,068
26,068
27,764
26,068
Less: Other Tier 1 adjustments(b)(a)
427
748
2,147
748
Standardized/Advanced Fully
Phased-In Tier 1 capital
$209,296
$208,564
$210,589
$208,564
Long-term debt and other instruments qualifying as Tier 2 capital$14,365
$14,827
$13,342
$14,827
Qualifying allowance for credit losses14,482
14,672
14,225
14,672
Other(91)(103)147
(103)
Standardized Fully Phased-In Tier 2 capital$28,756
$29,396
$27,714
$29,396
Standardized Fully Phased-In Total capital$238,052
$237,960
$238,303
$237,960
Adjustment in qualifying allowance for credit losses for Advanced Tier 2 capital(10,007)(10,462)(9,729)(10,462)
Advanced Fully Phased-In Tier 2 capital$18,749
$18,934
$17,985
$18,934
Advanced Fully Phased-In Total capital$228,045
$227,498
$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). The deduction was not material as of March 31, 2018 and December 31, 2017.

 
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 threenine months ended March 31,September 30, 2018.
Three months ended March 31,
(in millions)
2018
Nine months ended September 30,
(in millions)
2018
Standardized/Advanced CET1 capital at December 31, 2017$183,244
$183,244
Net income applicable to common equity8,303
24,241
Dividends declared on common stock(1,941)(6,554)
Net purchase of treasury stock(3,359)(12,385)
Changes in additional paid-in capital(1,368)(1,246)
Changes related to AOCI(887)(1,995)
Adjustment related to DVA(a)
(310)(148)
Changes related to other CET1 capital adjustments(27)(185)
Change in Standardized/Advanced CET1 capital411
1,728
Standardized/Advanced CET1 capital at March 31, 2018$183,655
Standardized/Advanced CET1 capital at September 30, 2018$184,972
  
Standardized/Advanced Tier 1 capital at December 31, 2017$208,564
$208,564
Change in CET1 capital411
1,728
Net issuance of noncumulative perpetual preferred stock(b)

Other321
297
Change in Standardized/Advanced Tier 1 capital732
2,025
Standardized/Advanced Tier 1 capital at March 31, 2018$209,296
Standardized/Advanced Tier 1 capital at September 30, 2018$210,589
  
Standardized Tier 2 capital at December 31, 2017$29,396
$29,396
Change in long-term debt and other instruments qualifying as Tier 2(463)(1,485)
Change in qualifying allowance for credit losses(190)(448)
Other13
251
Change in Standardized Tier 2 capital(640)(1,682)
Standardized Tier 2 capital at March 31, 2018$28,756
Standardized Total capital at March 31, 2018$238,052
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, 2017$18,934
$18,934
Change in long-term debt and other instruments qualifying as Tier 2(463)(1,485)
Change in qualifying allowance for credit losses265
285
Other13
251
Change in Advanced Tier 2 capital(185)(949)
Advanced Tier 2 capital at March 31, 2018$18,749
Advanced Total capital at March 31, 2018$228,045
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 AOCI.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 threenine months ended March 31,September 30, 2018. The amounts in the rollforward categories are estimates, based on the predominant driver of the change.
Standardized AdvancedStandardized Advanced 
Three months ended
March 31, 2018
(in millions)
Credit risk RWAMarket risk RWATotal RWA Credit risk RWAMarket risk RWA
Operational risk
RWA
Total RWA
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
$1,386,060
$123,702
$1,509,762
 $922,905
$123,791
$400,000
$1,446,696
Model & data changes(a)
2,800
300
3,100
 (62)300

238
(5,282)(3,550)(8,832) 4,446
(3,550)
896
Portfolio runoff(b)
(2,792)
(2,792) (2,840)

(2,840)(7,073)
(7,073) (8,984)

(8,984)
Movement in portfolio levels(c)
35,059
7,823
42,882
 14,019
7,982

22,001
52,456
(987)51,469
 9,534
(1,014)(8,599)(79)
Changes in RWA35,067
8,123
43,190
 11,117
8,282

19,399
40,101
(4,537)35,564
 4,996
(4,564)(8,599)(8,167)
March 31, 2018$1,421,127
$131,825
$1,552,952
 $934,022
$132,073
$400,000
$1,466,095
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 reduced risk from position rolloffs in legacy portfolios in 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, seerefer to Capital Risk Management on page 88 of JPMorgan Chase’s 2017 Annual Report.
The following table presents the components of the Firm’s Fully Phased-In SLR as of March 31,September 30, 2018 and December 31, 2017.
(in millions, except ratio)March 31, 2018
December 31, 2017
September 30,
2018

December 31, 2017
Tier 1 capital$209,296
$208,564
$210,589
$208,564
Total average assets2,586,043
2,562,155
2,599,621
2,562,155
Less: Adjustments for deductions from Tier 1 capital46,860
47,333
47,009
47,333
Total adjusted average assets(a)
2,539,183
2,514,822
2,552,612
2,514,822
Off-balance sheet exposures(b)
694,920
690,193
682,906
690,193
Total leverage exposure$3,234,103
$3,205,015
$3,235,518
$3,205,015
SLR6.5%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 March 31, 2018,For JPMorgan Chase Bank, N.A.’s and Chase Bank USA, N.A.’s Fully Phased-In SLRs were approximately 6.7% and 12.3%, respectively.SLR ratios, refer to Note 19.

Line of business equity
Each business segment is allocated capital by taking into consideration stand-alone peer comparisons and regulatory capital requirements. For additional information, seerefer to page 88 of JPMorgan Chase’s 2017 Annual Report.


The following table represents the capital allocated to each business segment:

(in billions)
March 31,
2018

 December 31,
2017

September 30,
2018

 December 31,
2017

Consumer & Community Banking$51.0
 $51.0
$51.0
 $51.0
Corporate & Investment Bank70.0
 70.0
70.0
 70.0
Commercial Banking20.0
 20.0
20.0
 20.0
Asset & Wealth Management9.0
 9.0
9.0
 9.0
Corporate80.1
 79.6
81.2
 79.6
Total common stockholders’ equity$230.1
 $229.6
$231.2
 $229.6



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 April 5,June 28, 2018, the Firm submitted its 2018 Capital Plan to the Federal Reserve underinformed the Federal Reserve’sFirm that it did not object, on either a quantitative or qualitative basis, to the Firm’s 2018 CCAR process. The Firm expects the Federal Reserve to respond to its capital plan submissions by June 30, 2018.plan.
Capital actions
Preferred stock
Preferred stock dividends declared were $409$379 million and $1.2 billion for the three and nine months ended March 31,September 30, 2018.
On September 21, 2018, the Firm issued $1.7 billion of fixed rate 5.75% non-cumulative preferred stock, Series DD. 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.

Common stock dividends
On September 19, 2017,18, 2018, the Firm announced that its Board of Directors increased thehad declared a quarterly common stock dividend to $0.56of $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 13.3 million and 15.0 million warrants outstanding at March 31, 2018 and December 31, 2017, respectively.
The following table sets forth the Firm’s repurchases of common equity for the three and nine months ended March 31,September 30, 2018 and 2017. There were no repurchases of warrants during the three and nine months ended March 31,September 30, 2018 and 2017.

Three months ended March 31,Three months ended
September 30,

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

2018
2017
Total shares of common stock repurchased41.4
32.1
39.3
51.7

126.0
118.8
Aggregate common stock repurchases$4,671
$2,832
$4,416
$4,763

$14,055
$10,602
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 164183 of this Form 10-Q and page 28 of JPMorgan Chase’s 2017 Form 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. GSIB 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.
As of March 31,September 30, 2018, the Firm was compliant with the requirements underof the current rule to which it will be subject on January 1, 2019. For additional information, seerefer 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 merchant and subject to Rule 1.17 of the Commodity Futures Trading Commission (“CFTC”). JPMorgan
J.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 March 31,September 30, 2018, JPMorganJ.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:
March 31, 2018Net Capital
(in millions)Actual
Minimum
JPMorgan Securities$16,407
$2,831
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:
March 31, 2018Total capital CET1 ratio Total capital ratio
September 30, 2018Total capital CET1 ratio Total capital ratio
(in millions, except ratios)Estimated EstimatedMinimum EstimatedMinimumEstimated EstimatedMinimum EstimatedMinimum
J.P. Morgan Securities plc$40,094
 16.34.5 16.38.0$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, seerefer 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://investor.shareholder.com/jpmorganchase/basel.cfm)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 March 31,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 March 31, 2018
Three months ended
Average amount
(in billions)
September 30, 2018June 30, 2018September 30, 2017
HQLA  
Eligible cash(a)
$358,257
$345
$363
$390
Eligible securities(b)(c)
180,765
190
166
179
Total HQLA(d)
$539,022
$535
$529
$568
Net cash outflows$467,629
$467
$458
$475
LCR115%115%115%120%
Net excess HQLA (d)
$71,393
$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.
For the three months ended March 31, 2018, theThe Firm’s average LCR was 115%, compared with an average of 119% for the three months ended December 31, 2017. September 30, 2018 and June 30, 2018.
The decrease inFirm’s average LCR decreased during the ratio was largely attributablethree months ended September 30, 2018, compared with the prior year period due to a decreasereduction in average cash HQLA,primarily driven primarily by long-term debt maturities and CIB client-driven markets activity in CIB. 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 March 31, September 30, 2018, in addition to assets reported in the Firm’s HQLA under the LCR rule, the Firm had approximately $244$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 March 31,September 30, 2018, the Firm also had approximately $287 $298.9 billion of available borrowing capacity at various Federal Home Loan Banks (“FHLBs”),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. 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 March 31,September 30, 2018, and December 31, 2017, and the average deposit balances for the three and nine months ended March 31,September 30, 2018 and 2017, respectively.
March 31, 2018
December 31, 2017
 Three months ended March 31,September 30, 2018
December 31, 2017
 Three months ended September 30, Nine months ended
September 30,
Deposits Average Average Average
(in millions) 2018
2017
 2018
2017
 2018
2017
Consumer & Community Banking$685,170
$659,885
 $659,599
$622,915
$677,260
$659,885
 $674,211
$645,732
 $669,244
$636,257
Corporate & Investment Bank479,543
455,883
 465,822
427,466
482,490
455,883
 476,995
461,961
 472,879
444,064
Commercial Banking174,509
181,512
 175,523
176,624
168,112
181,512
 168,102
176,095
 171,403
175,265
Asset & Wealth Management147,238
146,407
 144,199
158,810
130,497
146,407
 133,021
144,496
 138,885
151,311
Corporate501
295
 865
5,748
403
295
 533
2,739
 736
4,152
Total Firm$1,486,961
$1,443,982
 $1,446,008
$1,391,563
$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 March 31,September 30, 2018 and December 31, 2017.
(in billions except ratios)March 31, 2018
December 31, 2017
Deposits$1,487.0
$1,444.0
Deposits as a % of total liabilities63%63%
Loans934.4
930.7
Loans-to-deposits ratio63%64%
Deposits increased during the three months ended March 31, 2018, compared to the period ended December 31, 2017, due to both higher consumer and wholesale deposits. The higher consumer deposits reflected the continuation of growth from new and existing customers, low attrition rates, and the impact of seasonality in CCB. The higher wholesale deposits were driven by growth in client activity in CIB’s Treasury Services and Securities Services businesses, partially offset by the impact of seasonality in CB.
(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. The increase in average
Average deposits increased for the three months ended March 31,September 30, 2018 compared within CCB and CIB, partially offset by declines in AWM, CB and Corporate.
The increase in CCB reflects the three months ended March 31, 2017,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 anbalance 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 both consumerCCB 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 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 16-2919-41 and pages 10–12,12–14, respectively.

The following table summarizes short-term and long-term funding, excluding deposits, as of March 31,September 30, 2018, and December 31, 2017, and average balances for the three and nine months endedMarch 31,September 30, 2018 and 2017, respectively. For additional information, seerefer to the Consolidated Balance Sheets Analysis on pages 10–1212–14 and Note 10.
 March 31, 2018December 31, 2017 Three months ended March 31,
Sources of funds (excluding deposits) Average
(in millions) 2018
2017
Commercial paper$27,486
24,186
 $25,993
$13,364
Other borrowed funds35,181
27,616
 31,610
23,157
Total short-term borrowings$62,667
$51,802
 $57,603
$36,521
Obligations of Firm-administered multi-seller conduits(a)
$3,067
$3,045
 $3,116
$4,373
      
Securities loaned or sold under agreements to repurchase:     
Securities sold under agreements to repurchase(b)
$162,480
$147,713
 $184,396
$174,232
Securities loaned(b)
15,393
9,211
 10,526
14,451
Total securities loaned or sold under agreements to repurchase(b)(c)(d)
$177,873
$156,924
 $194,922
$188,683
      
Senior notes$148,765
$155,852
 $150,218
$149,403
Trust preferred securities(e)
686
690
 688
2,344
Subordinated debt(e)
16,116
16,553
 16,231
21,172
Structured notes46,978
45,727
 47,001
38,904
Total long-term unsecured funding$212,545
$218,822
 $214,138
$211,823
      
Credit card securitization(a)
$16,819
$21,278
 $18,665
$29,431
Other securitizations(a)(f)


 
1,524
Federal Home Loan Bank (“FHLB”) advances56,865
60,617
 60,385
77,280
Other long-term secured funding(g)
5,039
4,641
 4,482
3,121
Total long-term secured funding$78,723
$86,536
 $83,532
$111,356
      
Preferred stock(h)
$26,068
$26,068
 $26,068
$26,068
Common stockholders’ equity(h)
$230,133
$229,625
 $227,615
$227,703
 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)The prior period amounts have been revised to conform with the current period presentation.
(c)Primarily consists of short-term securities loaned or sold under agreements to repurchase.
(d)Excludes federal funds purchased.
(e)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, 2017.2017 and September 10, 2018, respectively. For further information seerefer 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 seerefer to Capital Risk Management on pages 32-37,44-48, 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 March 31,September 30, 2018, from December 31, 2017, reflected higher secured financing of trading assets-debt and equity instruments partially offset by a changeand client-driven market-making activities in the mix of funding to short-term borrowings in CIB.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. 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 March 31,September 30, 2018 and 2017. For additional information on the IHC and long-term debt, seerefer to Liquidity Risk Management and Note 19 of JPMorgan Chase’s 2017 Annual Report.
Long-term unsecured fundingLong-term unsecured funding Long-term unsecured funding       
Three months ended March 31,Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30,
(in millions)2018
2017
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$7,981
$6,465
$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 notes7,981
6,465
6,000
4,000
 18,175
20,970
 1,250

 8,761

Subordinated debt



 

 

 

Structured notes7,788
8,434
Structured notes(a)
387
337
 2,047
2,046
 5,934
6,250
 20,159
21,135
Total long-term unsecured funding – issuance$15,769
$14,899
$6,387
$4,337
 $20,222
$23,016
 $7,184
$6,250
 $28,920
$21,135
        
Maturities/redemptions        
Senior notes$14,124
$10,427
$646
$4,000
 $18,633
$16,826
 $1,503
$152
 $4,466
$1,368
Trust preferred securities

Subordinated debt
995
15
395
 15
3,401
 
500
 
500
Structured notes5,527
5,330
582
1,505
 2,465
4,785
 3,474
4,152
 12,104
13,245
Total long-term unsecured funding – maturities/redemptions$19,651
$16,752
$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 March 31,September 30, 2018 and 2017, respectively.
Long-term secured funding   
 Three months ended March 31,
 Issuance Maturities/Redemptions
(in millions)20182017 20182017
Credit card securitization$
$1,545
 $4,400
$3,990
Other securitizations(a)


 
55
FHLB advances4,000

 7,751
5,202
Other long-term secured funding(b)
121
103
 16
44
Total long-term secured funding$4,121
$1,648
 $12,167
$9,291
Long-term secured funding         
 Three months ended September 30, Nine months ended September 30,
 Issuance Maturities/Redemptions Issuance Maturities/Redemptions
(in millions)20182017 20182017 2018
2017
 2018
2017
Credit card securitization$
$
 $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, seerefer 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, seerefer to SPEs on page 13,15, 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 March 31,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
March 31,September 30, 2018Long-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 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, 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.




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 43–60.55-72. For a further discussion on Investment Portfolio risk,Risk, refer to page 60.72. For a further discussion of the Firm’s Credit and Investment Risk Management framework and organization, and the identification, monitoring and management, seerefer 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 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, 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 52–54;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 10 of JPMorgan Chase’s 2017 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 11 of JPMorgan Chase’s 2017 Annual Report.
For a further discussion of the consumer credit environment and consumer loans, seerefer 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,
seerefer to Wholesale Credit Portfolio on pages 108-116108–116 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(d)(e)
Credit exposure 
Nonperforming(d)(e)
(in millions)Mar 31,
2018

Dec 31,
2017

 Mar 31,
2018

Dec 31,
2017

Sep 30,
2018

Dec 31,
2017

 Sep 30,
2018

Dec 31,
2017

Loans retained$925,611
$924,838
 $5,820
$5,943
$947,651
$924,838
 $4,630
$5,943
Loans held-for-sale5,905
3,351
 63

3,680
3,351
 14

Loans at fair value2,908
2,508
 

2,987
2,508
 

Total loans - reported934,424
930,697
 5,883
5,943
Total loans – reported954,318
930,697
 4,644
5,943
Derivative receivables56,914
56,523
 132
130
60,062
56,523
 90
130
Receivables from customers and other(a)
27,996
26,272
 

26,137
26,272
 

Total credit-related assets1,019,334
1,013,492
 6,015
6,073
1,040,517
1,013,492
 4,734
6,073
Assets acquired in loan satisfactions      
Real estate ownedNA
NA
 314
311
NA
NA
 268
311
OtherNA
NA
 35
42
NA
NA
 32
42
Total assets acquired in loan satisfactions
NA
NA
 349
353
NA
NA
 300
353
Lending-related commitments1,022,023
991,482
 746
731
1,048,674
991,482
 252
731
Total credit portfolio$2,041,357
$2,004,974
 $7,110
$7,157
$2,089,191
$2,004,974
 $5,286
$7,157
Credit derivatives used
in credit portfolio management activities(b)
$(16,366)$(17,609) $
$
$(14,206)$(17,609) $
$
Liquid securities and other cash collateral held against derivatives(c)
(14,610)(16,108) NA
NA
(16,943)(16,108) NA
NA
(in millions,
except ratios)
Three months ended March 31,Three months ended
September 30,
 Nine months ended
September 30,
2018
2017
2018
2017
 2018
2017
Net charge-offs(f)
$1,335
$1,654
$1,033
$1,265
 $3,620
$4,123
Average retained loans    
Loans920,428
885,577
942,583
903,892
 931,766
894,170
Loans – excluding residential real estate PCI loans890,376
850,533
916,205
871,465
 903,377
860,443
Net charge-off rates(f)
    
Loans0.59%0.76%0.43%0.56% 0.52%0.62%
Loans – excluding PCI0.61
0.79
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 5668 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 March 31,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 $4.0$2.9 billion and $4.3 billion, respectively, and real estate owned (“REO”) insured by U.S. government agencies of $94$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 threenine months ended March 31,September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio sale,transfer, the net charge-off rate for loansLoans would have been 0.54%0.55% and for loansLoans – 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, seerefer 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, seerefer 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, seerefer to Note 12 of JPMorgan Chase’s 2017 Annual Report.
Consumer credit portfolioConsumer credit portfolio       Consumer credit portfolio           
    Three months ended March 31,     Three months ended September 30, Nine months ended September 30,

(in millions, except ratios)
Credit exposure 
Nonaccrual
loans
(i)(j)
 
Net
charge-offs
(d)(k)(l)
 
Average annual
net charge-off rate
(d)(k)(l)
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)
Mar 31,
2018

Dec 31,
2017

 Mar 31,
2018

Dec 31,
2017

 2018
2017
 2018
2017
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$220,048
$216,496
 $2,240
$2,175
 $
$3
 %0.01%$231,361
$216,496
 $1,880
$2,175
 $(105)$3
 (0.18)%0.01% $(256)$3
 (0.15)%%
Home equity31,792
33,450
 1,585
1,610
 17
49
 0.21
0.52
29,318
33,450
 1,382
1,610
 (12)13
 (0.16)0.15
 (2)71
 (0.01)0.26
Auto(a)(b)
66,042
66,242
 127
141
 76
81
 0.47
0.50
63,619
66,242
 137
141
 56
116
 0.35
0.71
 182
245
 0.37
0.50
Consumer & Business Banking(b)(c)
25,856
25,789
 274
283
 53
57
 0.83
0.95
26,451
25,789
 237
283
 68
71
 1.02
1.12
 171
184
 0.88
0.99
Student(d)


 

 
498
 
NM


 

 

 

 
498
 
NM
Total loans, excluding PCI loans and loans held-for-sale343,738
341,977
 4,226
4,209
 146
688
 0.17
0.84
350,749
341,977
 3,636
4,209
 7
203
 0.01
0.24
 95
1,001
 0.04
0.40
Loans – PCI                    
Home equity10,332
10,799
 NA
NA
 NA
NA
 NA
NA
9,393
10,799
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Prime mortgage6,259
6,479
 NA
NA
 NA
NA
 NA
NA
4,931
6,479
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Subprime mortgage2,549
2,609
 NA
NA
 NA
NA
 NA
NA
2,072
2,609
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Option ARMs(e)
10,365
10,689
 NA
NA
 NA
NA
 NA
NA
8,813
10,689
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – PCI29,505
30,576
 NA
NA
 NA
NA
 NA
NA
25,209
30,576
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – retained373,243
372,553
 4,226
4,209
 146
688
 0.16
0.76
375,958
372,553
 3,636
4,209
 7
203
 0.01
0.22
 95
1,001
 0.03
0.37
Loans held-for-sale152
128
 34

 

 

104
128
 

 

 

 

 

Total consumer, excluding credit card loans373,395
372,681
 4,260
4,209
 146
688
 0.16
0.76
376,062
372,681
 3,636
4,209
 7
203
 0.01
0.22
 95
1,001
 0.03
0.37
Lending-related commitments(f)
49,516
48,553
      50,630
48,553
          
Receivables from customers(g)
141
133
      155
133
          
Total consumer exposure, excluding credit card423,052
421,367
      426,847
421,367
          
Credit card                  
Loans retained(h)
140,348
149,387
 

 1,170
993
 3.32
2.94
147,856
149,387
 

 1,073
1,019
 2.91
2.87
 3,407
3,049
 3.16
2.94
Loans held-for-sale66
124
 

 

 

25
124
 

 

 

 

 

Total credit card loans140,414
149,511
 

 1,170
993
 3.32
2.94
147,881
149,511
 

 1,073
1,019
 2.91
2.87
 3,407
3,049
 3.16
2.94
Lending-related commitments(f)
588,232
572,831
      600,728
572,831
          
Total credit card exposure728,646
722,342
      748,609
722,342
          
Total consumer credit portfolio$1,151,698
$1,143,709
 $4,260
$4,209
 $1,316
$1,681
 1.04%1.35%$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$1,122,193
$1,113,133
 $4,260
$4,209
 $1,316
$1,681
 1.10%1.46%$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 March 31,September 30, 2018, and December 31, 2017, excluded operating lease assets of $18.0$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 threenine months ended March 31,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 0.27%0.22%; Total consumer – retained excluding credit card loans would have been 0.24%0.20%; Total consumer credit portfolio would have been 0.98%0.95%; and Total consumer credit portfolio, excluding PCI loans would have been 1.05%1.02%.
(e)At March 31,both September 30, 2018, and December 31, 2017, approximately 70% and 68%, respectively, 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, (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, seerefer 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 March 31,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 $4.0$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 $20$58 million and $24$20 million for the three months ended March 31,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. SeeRefer to Allowance for Credit Losses on pages 57–5969–71 for further details.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 $234$196 million and $302$339 million for the three months ended March 31,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, seerefer to Note 11 of this Form 10-Q.
Residential mortgage:The residential mortgage portfolio predominantly consists of high-quality prime mortgage loans, with a small componentapproximately 1% consisting of subprime mortgage loans (approximately 1%).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 increaseddecreased from December 31, 2017 due to the impact of recent hurricanes.lower delinquencies. Net charge-offsrecoveries for the three and nine months ended March 31,September 30, 2018 declinedimproved when compared with the same period ofin the prior year reflecting loan sales as well as continued improvement in home prices and lower delinquencies.
At March 31, 2018, and December 31, 2017, the Firm’s residential mortgage portfolio, including loans held-for-sale, included $8.7 billion and $8.6 billion, respectively, of mortgage loans insured and/or guaranteed by U.S. government agencies, of which $5.7 billion and $6.2 billion, respectively, wereSeptember 30, days or more past due (of these past due loans, $4.0 billion and $4.3 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 both March 31, 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 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 primarily as a result of loss mitigation activities.due to lower delinquencies. Net charge-offsrecoveries for the three and nine months ended March 31,September 30, 2018 declinedimproved when compared with the same period ofin the prior year, as a result of lower loan balances and continued improvement in home prices and lower delinquencies.
At March 31,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 $28$26 billion at March 31,September 30, 2018. This amount included $13$12 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modified and $5$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 was not materially differentdeclined from December 31, 2017.
For further information on the Firm’s home equity portfolio, seerefer 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, was relatively flatdeclined 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 ended March 31,September 30, 2018 decreaseddeclined when compared with the same period in the prior year.
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 were relatively flatincreased when compared with December 31, 2017 as growth due to higher loan originations, waspredominantly offset by paydowns and the charge-off or liquidationcharge-offs of delinquent loans. Nonaccrual loans decreased from December 31, 2017. Net charge-offs for the three and nine months endedMarch 31,September 30, 2018 decreased when compared with the same period in the prior year.
Purchased credit-impaired loans:PCI loans decreased from December 31, 2017 as thedue to portfolio continues to run off.off and loan sales. As of March 31,September 30, 2018, approximately 11% of the option ARM PCI loans were delinquent and approximately 70%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)
Lifetime loss
 estimates(a)
 
Life-to-date
liquidation losses(b)
(in billions)Mar 31,
2018

 Dec 31,
2017

 Mar 31,
2018

 Dec 31,
2017

Sep 30,
2018

 Dec 31,
2017

 Sep 30,
2018

 Dec 31,
2017

Home equity$14.1
 $14.2
 $12.9
 $12.9
$14.1
 $14.2
 $13.0
 $12.9
Prime mortgage4.1
 4.0
 3.8
 3.8
4.0
 4.0
 3.8
 3.8
Subprime mortgage3.3
 3.3
 3.1
 3.1
3.3
 3.3
 3.1
 3.1
Option ARMs10.3
 10.0
 9.8
 9.7
10.2
 10.0
 9.9
 9.7
Total$31.8
 $31.5
 $29.6
 $29.5
$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 $764$556 million and $842 million at March 31,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, seerefer to Note 11.11.
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 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.
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 completed under bothto 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),residential real estate portfolios as measured through cumulative redefault rates, waswere not materially different from December 31, 2017. For further information on the Firm’s cumulative redefault rates seerefer to Consumer Credit Portfolio on pages 102-107 of JPMorgan Chase’s 2017 Annual Report.
Certain loans that were modified under HAMPthe 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 March 31,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 $3$2 billion and $6$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 March 31,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 March 31,September 30, 2018 and 2017, see
refer to Note 11.11.
Modified residential real estate loans
March 31, 2018 December 31, 2017September 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$5,545
$1,796
 $5,620
$1,743
$4,722
$1,536
 $5,620
$1,743
Home equity2,113
1,057
 2,118
1,032
2,056
993
 2,118
1,032
Total modified residential real estate loans, excluding PCI loans$7,658
$2,853
 $7,738
$2,775
$6,778
$2,529
 $7,738
$2,775
Modified PCI loans(c)
      
Home equity$2,236
NA
 $2,277
NA
$2,135
NA
 $2,277
NA
Prime mortgage4,381
NA
 4,490
NA
3,296
NA
 4,490
NA
Subprime mortgage2,628
NA
 2,678
NA
2,162
NA
 2,678
NA
Option ARMs8,075
NA
 8,276
NA
6,660
NA
 8,276
NA
Total modified PCI loans$17,320
NA
 $17,721
NA
$14,253
NA
 $17,721
NA
(a)Amounts represent the carrying value of modified residential real estate loans.
(b)At March 31,September 30, 2018, and December 31, 2017, $4.2$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, seerefer to Note 13.
(c)Amounts represent the unpaid principal balance of modified PCI loans.
(d)At March 31,September 30, 2018, and December 31, 2017, nonaccrual loans included $2.3$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, seerefer to Note 11.
 
Nonperforming assets
The following table presents information as of March 31,September 30, 2018, and December 31, 2017, about consumer, excluding credit card, nonperforming assets.
Nonperforming assets(a)
      
(in millions)March 31,
2018

 December 31,
2017

September 30,
2018

 December 31,
2017

Nonaccrual loans(b)
      
Residential real estate$3,859
 $3,785
$3,262
 $3,785
Other consumer401
 424
374
 424
Total nonaccrual loans4,260
 4,209
3,636
 4,209
Assets acquired in loan satisfactions      
Real estate owned224
 225
205
 225
Other33
 40
32
 40
Total assets acquired in loan satisfactions257
 265
237
 265
Total nonperforming assets$4,517
 $4,474
$3,873
 $4,474
(a)At March 31,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 $4.0$2.9 billion and $4.3 billion, respectively, and REO insured by U.S. government agencies of $94$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 March 31,September 30, 2018 increaseddecreased to $3.9$3.3 billion from $3.8 billion at December 31, 2017, of which 28%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 35%33% and 40% to the estimated net realizable value of the collateral at March 31,September 30, 2018, and December 31, 2017, respectively.
Nonaccrual loans: The following table presents changes in consumer, excluding credit card, nonaccrual loans for the threenine months ended March 31,September 30, 2018 and 2017.
Nonaccrual loan activity    
Three months ended March 31, (in millions) 2018
2017
Nine months ended September 30,
(in millions)
 2018
2017
Beginning balance $4,209
$4,820
 $4,209
$4,820
Additions 911
877
 2,174
2,553
Reductions:  

  
Principal payments and other(a)
 340
447
 1,119
1,245
Charge-offs 140
232
 354
561
Returned to performing status 309
388
 1,057
1,121
Foreclosures and other liquidations 71
81
 217
285
Total reductions 860
1,148
 2,747
3,212
Net changes 51
(271) (573)(659)
Ending balance $4,260
$4,549
 $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, seerefer to Note 11.11.


Credit card
Total credit card loans decreased from December 31, 2017 due to seasonality. The March 31,September 30, 2018 30+ day delinquency rate increasedseasonally decreased to 1.82%1.75% from 1.80% at December 31, 2017, whileand the March 31,September 30, 2018 90+ day delinquency rate increaseddecreased to 0.95%0.85% from 0.92% at December 31, 2017, in line with expectations. Net charge-offs increased for the three and nine months endedMarch 31, September 30, 2018 when compared with the same periodperiods in the prior year, as expected, primarily due to growth in newerthe seasoning of more recent vintages which, as anticipated, havewith higher loss rates, thanas anticipated given underwriting standards at the more seasoned portiontime of the portfolio. The credit card portfolio continues to reflect a largely well-seasoned portfolio that has strong U.S. geographic diversification. For further information on the geographic and FICO composition of the Firm’s credit card loans, see Note 11.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 both March 31,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, seerefer to Note 11.11.


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 threenine months ended March 31,September 30, 2018, characterized by low levels of criticized exposure, nonaccrual loans and charge-offs. SeeRefer to the industry discussion on pages 52–5464–66 for further information. The increase in retainedRetained loans wasincreased across all wholesale lines of business, predominantly driven by increased utilization of credit lines and new originations in CIB, and higherincluding loans to Private Bankingfinancial institution and commercial and industrial clients, and in AWM. DisciplineAWM due to an increase in underwriting across all areas of lending continuesloans to be a key point of focus.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)
Credit exposure 
Nonperforming(c)
(in millions)Mar 31,
2018

Dec 31,
2017

 Mar 31,
2018

Dec 31,
2017

Sep 30,
2018

Dec 31,
2017

 Sep 30,
2018

Dec 31,
2017

Loans retained$412,020
$402,898
 $1,594
$1,734
$423,837
$402,898
 $994
$1,734
Loans held-for-sale5,687
3,099
 29

3,551
3,099
 14

Loans at fair value2,908
2,508
 

2,987
2,508
 

Loans420,615
408,505
 1,623
1,734
430,375
408,505
 1,008
1,734
Derivative receivables56,914
56,523
 132
130
60,062
56,523
 90
130
Receivables from customers and other(a)
27,855
26,139
 

25,982
26,139
 

Total wholesale credit-related assets505,384
491,167
 1,755
1,864
516,419
491,167
 1,098
1,864
Lending-related commitments384,275
370,098
 746
731
397,316
370,098
 252
731
Total wholesale credit exposure$889,659
$861,265
 $2,501
$2,595
$913,735
$861,265
 $1,350
$2,595
Credit derivatives used in credit portfolio management activities(b)
$(16,366)$(17,609) $
$
$(14,206)$(17,609) $
$
Liquid securities and other cash collateral held against derivatives(14,610)(16,108) NA
NA
(16,943)(16,108) NA
NA
(a)Receivables from customers and other include $27.8 billion and $26.0 billion of held-for-investment margin loans at March 31,both September 30, 2018, and December 31, 2017, respectively, to prime brokerage customers in CIB Prime Services and in 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 56,68, 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 March 31,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, seerefer to Note 12 of JPMorgan Chase’s 2017 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
March 31, 2018
(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$128,122
$180,981
$102,917
$412,020
 $316,805
 $95,215
$412,020
77% $324,343
 $99,494
Derivative receivables 56,914
    56,914
  60,062
    60,062
 
Less: Liquid securities and other cash collateral held against derivatives (14,610)    (14,610)  (16,943)    (16,943) 
Total derivative receivables, net of all collateral12,419
10,476
19,409
42,304
 34,561
 7,743
42,304
82
11,650
12,637
18,832
43,119
 34,602
 8,517
43,119
80
Lending-related commitments87,266
287,962
9,047
384,275
 284,335
 99,940
384,275
74
92,332
291,650
13,334
397,316
 297,286
 100,030
397,316
75
Subtotal227,807
479,419
131,373
838,599
 635,701
 202,898
838,599
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)
 8,595
    8,595
  6,538
    6,538
 
Receivables from customers and other 27,855
    27,855
  25,982
    25,982
 
Total exposure – net of liquid securities and other cash collateral held against derivatives $875,049
    $875,049
  $896,792
    $896,792
 
Credit derivatives used in credit portfolio management activities(b)(c)
$(2,020)$(7,610)$(6,736)$(16,366) $(13,743) $(2,623)$(16,366)84%$(1,586)$(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 March 31,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 $12.7$11.2 billion at March 31,September 30, 2018, compared with $15.6 billion at December 31, 2017. The decrease was largely driven by select names within Oil & Gas.Gas, including a loan sale.
Below are summaries of the Firm’s exposures as of March 31,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, seerefer to Note 4 of JPMorgan Chase’s 2017 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 three months ended
Credit exposure(e)
Investment- grade Noncriticized Criticized performingCriticized nonperforming
March 31, 2018
As of or for the nine months ended
Credit exposure(e)
Investment- grade Noncriticized Criticized performingCriticized nonperforming
September 30, 201830 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
(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
Real Estate$141,053
$117,770
 $22,312
 $841
$130
Consumer & Retail89,751
58,429
 29,438
 1,769
115
Technology, Media &
Telecommunications
67,592
38,532
 27,665
 1,362
33
74,286
48,676
 23,560
 2,005
45
Industrials60,856
40,339
 18,946
 1,371
200
57,810
38,374
 18,202
 1,052
182
118

(146)(24)
Healthcare55,630
41,483
 13,476
 642
29
15
(1)
(191)53,952
37,912
 15,223
 788
29
22
(4)
(134)
Banks & Finance Cos47,823
33,255
 14,079
 485
4
20

(1,027)(2,297)52,194
37,491
 14,376
 323
4
27

(622)(3,794)
Oil & Gas40,860
21,628
 16,275
 1,979
978

7
(636)(3)45,205
24,985
 18,236
 1,641
343

33
(349)(5)
Asset Managers35,800
30,955
 4,826
 4
15
11


(5,587)41,951
36,286
 5,646
 5
14
11


(5,752)
Utilities29,231
24,711
 4,157
 143
220

(1)(141)(32)28,944
24,312
 4,321
 158
153

38
(199)(74)
State & Municipal Govt (b)
26,774
26,186
 588
 

13

(110)(19)26,381
25,772
 609
 

16
(1)(20)(16)
Central Govt19,115
18,676
 367
 72

2

(9,292)(1,595)18,935
18,778
 104
 53

3

(8,688)(1,972)
Automotive17,385
9,677
 7,398
 300
10
1

(226)
Chemicals & Plastics17,523
11,015
 6,444
 64

1



17,353
11,108
 6,227
 18

1

(25)
Transportation16,413
10,486
 5,301
 543
83
24
(6)(32)(100)16,225
10,058
 5,622
 482
63
45
6
(32)(51)
Automotive15,576
9,844
 5,445
 287

7

(236)
Metals & Mining14,320
7,262
 6,768
 247
43
5

(278)(3)
Insurance14,402
11,702
 2,633
 
67
2

(37)(2,559)13,704
10,323
 3,342
 
39


(37)(2,513)
Metals & Mining14,075
7,209
 6,461
 342
63
1

(283)
Financial Markets Infrastructure7,186
6,978
 208
 




(75)5,697
5,555
 142
 




(26)
Securities Firms4,108
2,704
 1,402
 2

3

(272)(402)4,599
3,129
 1,470
 



(230)(674)
All other(c)
154,009
139,570
 14,093
 140
206
1,220
(9)(2,924)(1,711)161,470
144,967
 16,124
 213
166
1,111
17
(2,379)(1,881)
Subtotal$853,209
$648,551
 $191,941
 $10,245
$2,472
$1,612
$19
$(16,366)$(14,610)$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 value8,595
      6,538
      
Receivables from customers and other27,855
     25,982
     
Total(d)
$889,659
     $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, 2017
(in millions)
Real Estate$139,409
$115,401

$23,012

$859
$137
$254
$(4)$
$(2)$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)87,679
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)59,274
36,510
 20,453
 2,258
53
14
(12)(910)(19)
Industrials55,272
37,198

16,770

1,159
145
150
(1)(196)(21)55,272
37,198

16,770

1,159
145
150
(1)(196)(21)
Healthcare55,997
42,643
 12,731
 585
38
82
(1)
(207)55,997
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)49,037
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)41,317
21,430

14,854

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

4,484

4
14
27


(5,290)32,531
28,029

4,484

4
14
27


(5,290)
Utilities29,317
24,486

4,383

227
221

11
(160)(56)29,317
24,486

4,383

227
221

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

656



12
5
(130)(524)28,633
27,977

656



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

376

65

4

(10,095)(2,520)19,182
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



15,945
11,107

4,764

74

4



Transportation15,797
9,870

5,302

527
98
9
14
(32)(131)15,797
9,870

5,302

527
98
9
14
(32)(131)
Automotive14,820
9,321

5,278

221

10
1
(284)
Metals & Mining14,171
6,989

6,822

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

2,981


80
1

(157)(2,195)14,089
11,028

2,981


80
1

(157)(2,195)
Metals & Mining14,171
6,989

6,822

321
39
3
(13)(316)(1)
Financial Markets Infrastructure5,036
4,775

261






(23)5,036
4,775

261






(23)
Securities Firms4,113
2,559

1,553

1



(274)(335)4,113
2,559

1,553

1



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

13,283

260
247
901
8
(2,817)(1,600)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)$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

















5,607

















Receivables from customers and other26,139


















26,139


















Total(d)
$861,265
     $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 March 31,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 March 31,September 30, 2018, and December 31, 2017, noted above, the Firm held: $9.7$9.5 billion and $9.8 billion, respectively, of trading securities; $39.5$38.1 billion and $32.3 billion, respectively, of AFS securities; and $4.8 billion and 14.4$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 March 31,September 30, 2018, and 59%, 37%, and 4%, respectively, at December 31, 2017.
(d)
Excludes cash placed with banks of $405.4$410.5 billion and $421.0 billion, at March 31,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 remained flatincreased $1.6 billion to $141.1 billion during the threenine months ended March 31,September 30, 2018, at $139.3 billion. For thethree months ended March 31, 2018,while the investment-grade percentage of the portfolio was 84%, up fromremained flat at 83% for the year ended December 31, 2017.. For further information on Real Estate loans, seerefer to Note 11.11.
March 31, 2018 September 30, 2018 
(in millions, except ratios)Loans and Lending-related Commitments Derivative Receivables Credit exposure % Investment-grade
% Drawn(c)
Loans and Lending-related Commitments Derivative Receivables Credit exposure % Investment-grade
% Drawn(c)
Multifamily(a)
$85,077
 $45
 $85,122
 89% 91% $85,410
 $14
 $85,424
 89% 93% 
Other54,034
 131
 54,165
 75
 67
 55,527
 102
 55,629
 75
 65
 
Total Real Estate Exposure(b)
139,111
 176
 139,287
 84
 82
 140,937
 116
 141,053
 83
 82
 
                    
December 31, 2017 December 31, 2017 
(in millions, except ratios)Loans and Lending-related Commitments 
Derivative
Receivables
 Credit exposure 
% Investment-
grade
% Drawn(c)
Loans and Lending-related Commitments 
Derivative
Receivables
 Credit exposure 
% Investment-
grade
% Drawn(c)
Multifamily(a)
$84,635
 $34
 $84,669
 89% 92% $84,635
 $34
 $84,669
 89% 92% 
Other54,620
 120
 54,740
 74
 66
 54,620
 120
 54,740
 74
 66
 
Total Real Estate Exposure(b)
139,255
 154
 139,409
 83
 82
 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
Loans
In the normal course of its wholesale business, the Firm provides loans to a variety of customers,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, seerefer to Note 11.11.
The following table presents the change in the nonaccrual loan portfolio for the threenine months ended March 31,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
Wholesale nonaccrual loan activity
Three months ended March 31,
(in millions)

 2018
2017
Beginning balance $1,734
$2,063
Additions 313
290
Reductions:   
Paydowns and other 182
481
Gross charge-offs 55
24
Returned to performing status 117
103
Sales 70
65
Total reductions 424
673
Net changes (111)(383)
Ending balance $1,623
$1,680
The following table presents net charge-offs/recoveries, which are defined as gross charge-offs less recoveries, for the three and nine months ended March 31,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
March 31,
Three months ended
September 30,
 Nine months ended
September 30,
2018
2017
2018
2017
 2018
2017
Loans – reported    
Average loans retained$404,859
$382,367
$420,597
$395,420
 $413,537
$390,062
Gross charge-offs65
26
23
55
 264
154
Gross recoveries(46)(53)(70)(12) (146)(81)
Net charge-offs/(recoveries)19
(27)(47)43
 118
73
Net charge-off/(recovery) rate0.02%(0.03)%(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 meetaddress the financing needs of its customers.clients. The contractual amounts of these financial instruments represent the maximum possible credit risk should the counterpartiesclients draw down on these commitments or the Firm fulfills its obligations under these guarantees, and the counterpartiesclients 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, seerefer to Note 20 .
Derivative contracts
In the normal course of business, the Firm uses derivative instruments predominantly for market-making activities. Derivatives enable clients and counterparties to manage exposures torisks including credit risk and risks arising from fluctuations in interest rates, currenciesforeign exchange, equities, and other markets.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, seerefer to Note 4.4.
The following table summarizes the net derivative receivables for the periods presented.
Derivative receivables  
(in millions)Derivative receivablesDerivative receivables
March 31,
2018

December 31,
2017

September 30,
2018

December 31,
2017

Interest rate$23,778
$24,673
$23,397
$24,673
Credit derivatives1,062
869
582
869
Foreign exchange16,603
16,151
17,043
16,151
Equity8,803
7,882
10,104
7,882
Commodity6,668
6,948
8,936
6,948
Total, net of cash collateral56,914
56,523
60,062
56,523
Liquid securities and other cash collateral held against derivative receivables(a)
(14,610)(16,108)(16,943)(16,108)
Total, net of collateral$42,304
$40,415
$43,119
$40,415
(a)Includes collateral related to derivative instruments where an appropriate legal opinion hasopinions have not been either sought or obtained.obtained with respect to master netting agreements.
The fair value of derivative receivables reported on the Consolidated balance sheets were $56.9$60.1 billion and $56.5 billion at March 31,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 $14.6$16.9 billion and $16.1 billion at March 31,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 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, seerefer to Note 4.4.


















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 assigned by S&P and Moody’s.
Ratings profile of derivative receivables          
March 31, 2018 December 31, 2017September 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 collateralExposure net of collateral% of exposure net of collateral Exposure net of collateral% of exposure net of collateral
AAA/Aaa to AA-/Aa3$11,879
28% $11,529
29%$13,208
31% $11,529
29%
A+/A1 to A-/A37,665
18
 6,919
17
7,568
17
 6,919
17
BBB+/Baa1 to BBB-/Baa315,017
36
 13,925
34
13,826
32
 13,925
34
BB+/Ba1 to B-/B37,148
17
 7,397
18
7,744
18
 7,397
18
CCC+/Caa1 and below595
1
 645
2
773
2
 645
2
Total$42,304
100% $40,415
100%$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 88% andapproximately 90% at March 31,both September 30, 2018, and December 31, 2017, respectively.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)
Notional amount of protection
purchased and sold(a)
(in millions)March 31,
2018

 December 31,
2017

September 30,
2018

 December 31,
2017

Credit derivatives used to manage:      
Loans and lending-related commitments$1,723
 $1,867
$1,060
 $1,867
Derivative receivables14,643
 15,742
13,146
 15,742
Credit derivatives used in credit portfolio management activities$16,366
 $17,609
$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, seerefer 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
JPMorgan Chase’sThe 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 a further discussion ofinformation on the components of the allowance for credit losses and related management judgments, seerefer to Critical Accounting Estimates Used by the Firm on pages 67–6979–81 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, and reported to the Board of Directors’ Risk Policy Committee (“DRPC”) and Audit Committee.Firm. As of March 31,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 wholesaleconsumer allowance for credit losses decreased fromcompared with December 31, 2017 primarily as a result of 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 driven by a single name.in the first quarter of 2018 and other net portfolio activity.
The consumer allowance for credit losses was relatively unchanged from December 31, 2017, reflecting stable credit quality trends.
For additional information on the wholesaleconsumer and consumerwholesale credit portfolios, seerefer to Consumer Credit Portfolio on pages 57–61 and Note 11, and Wholesale Credit Portfolio on pages 50–56, and Consumer Credit Portfolio on pages 45–49 and Note 11.62–68.





Summary of changes in the allowance for credit lossesSummary of changes in the allowance for credit losses  Summary of changes in the allowance for credit losses  
2018 20172018 2017
Three months ended March 31,
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
Nine months ended September 30,
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
(in millions, except ratios)
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal 
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
$4,579
$4,884
$4,141
$13,604
 $5,198
$4,034
$4,544
$13,776
Gross charge-offs284
1,291
65
1,640
 847
1,086
26
1,959
776
3,777
264
4,817
 1,479
3,344
154
4,977
Gross recoveries(138)(121)(46)(305) (159)(93)(53)(305)(681)(370)(146)(1,197) (478)(295)(81)(854)
Net charge-offs(a)
146
1,170
19
1,335
 688
993
(27)1,654
95
3,407
118
3,620
 1,001
3,049
73
4,123
Write-offs of PCI loans(b)
20


20
 24


24
151


151
 66


66
Provision for loan losses146
1,170
(189)1,127
 442
993
(119)1,316
(152)3,557
(111)3,294
 653
3,699
(401)3,951
Other1

(2)(1) (2)
1
(1)1


1
 (2)
3
1
Ending balance at March 31,$4,560
$4,884
$3,931
$13,375
 $4,926
$4,034
$4,453
$13,413
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)
$266
$393
$474
$1,133
 $300
$373
$249
$922
$204
$421
$280
$905
 $271
$376
$363
$1,010
Formula-based2,089
4,491
3,457
10,037
 2,339
3,661
4,204
10,204
2,154
4,613
3,632
10,399
 2,266
4,308
3,710
10,284
PCI2,205


2,205
 2,287


2,287
1,824


1,824
 2,245


2,245
Total allowance for loan losses$4,560
$4,884
$3,931
$13,375
 $4,926
$4,034
$4,453
$13,413
$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
$33
$
$1,035
$1,068
 $26
$
$1,052
$1,078
Provision for lending-related commitments

38
38
 

(1)(1)

29
29
 7

24
31
Other

1
1
 







 



Ending balance at March 31,$33
$
$1,074
$1,107
 $26
$
$1,051
$1,077
Ending balance at September 30,$33
$
$1,064
$1,097
 $33
$
$1,076
$1,109
Impairment methodology      
Asset-specific$
$
$167
$167
 $
$
$228
$228
$
$
$71
$71
 $
$
$220
$220
Formula-based33

907
940
 26

823
849
33

993
1,026
 33

856
889
Total allowance for lending-related commitments(d)
$33
$
$1,074
$1,107
 $26
$
$1,051
$1,077
$33
$
$1,064
$1,097
 $33
$
$1,076
$1,109
Total allowance for credit losses$4,593
$4,884
$5,005
$14,482
 $4,952
$4,034
$5,504
$14,490
$4,215
$5,034
$4,976
$14,225
 $4,815
$4,684
$5,149
$14,648
Memo:      
Retained loans, end of period$373,243
$140,348
$412,020
$925,611
 $360,583
$134,917
$386,370
$881,870
$375,958
$147,856
$423,837
$947,651
 $369,413
$141,200
$398,569
$909,182
Retained loans, average372,739
142,830
404,859
920,428
 366,098
137,112
382,367
885,577
374,298
143,931
413,537
931,766
 365,359
138,749
390,062
894,170
PCI loans, end of period29,505

3
29,508
 34,385

3
34,388
25,209

3
25,212
 31,821

3
31,824
Credit ratios      
Allowance for loan losses to retained loans1.22%3.48%0.95%1.44% 1.37%2.99%1.15 %1.52%1.11%3.40%0.92%1.39% 1.29%3.32%1.02%1.49%
Allowance for loan losses to retained nonaccrual loans(e)
108
NM
247
230
 112
NM
283
225
115
NM
394
284
 115
NM
277
241
Allowance for loan losses to retained nonaccrual loans excluding credit card108
NM
247
146
 112
NM
283
157
115
NM
394
175
 115
NM
277
157
Net charge-off rates(a)
0.16
3.32
0.02
0.59
 0.76
2.94
(0.03)0.76
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 loans0.69
3.48
0.95
1.25
 0.81
2.99
1.15
1.31
0.67
3.40
0.92
1.23
 0.75
3.32
1.02
1.29
Allowance for loan losses to retained nonaccrual loans(e)
56
NM
247
192
 60
NM
283
187
65
NM
394
244
 61
NM
277
201
Allowance for loan losses to retained nonaccrual loans excluding credit card56
NM
247
108
 60
NM
283
119
65
NM
394
135
 61
NM
277
117
Net charge-off rates(a)
0.17%3.32%0.02%0.61% 0.84%2.94%(0.03)%0.79%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 threenine months ended March 31,September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio sale,transfer, the net charge-off rate for Consumer, excluding credit card would have been 0.24%0.20%; total Firm would have been 0.54%0.55%; Consumer, excluding credit card and PCI loans would have been 0.27%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 March 31,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
 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
 2018
2017
 2018
2017
 2018
2017
Consumer, excluding credit card$146
$442
 $
$
 $146
$442
$(242)$205
 $
$1
 $(242)$206
 $(152)$653
 $
$7
 $(152)$660
Credit card1,170
993
 

 1,170
993
1,223
1,319
 

 1,223
1,319
 3,557
3,699
 

 3,557
3,699
Total consumer1,316
1,435
 

 1,316
1,435
981
1,524
 
1
 981
1,525
 3,405
4,352
 
7
 3,405
4,359
Wholesale(189)(119) 38
(1) (151)(120)(13)(64) (20)(9) (33)(73) (111)(401) 29
24
 (82)(377)
Total$1,127
$1,316
 $38
$(1) $1,165
$1,315
$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
a net $170 million reduction in the wholesale allowance for credit losses, primarily in the Oil & Gas portfolio drivenpartially offset by a single name, compared with a reduction of $93 million in the prior year primarily for Oil & Gas
and in consumer
$102 million of higher net charge-offs primarily in the credit card portfolio due to seasoning of newermore recent vintages, as anticipated
the decrease in line with expectations,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, reflecting continued improvement in home priceslargely driven by recoveries from loan sales, and delinquencies, and
a $250 million reduction in the absenceallowance 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 the prior year in connection with the sale of the student loan portfolio.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 March 31,September 30, 2018, the investment securities portfolio was $236.7$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, seerefer to Corporate segment results on page 29pages 40–41 and Note 9.9. For further information on the market risk inherent in the portfolio, seerefer to Market Risk Management on pages 61–65.73–77. For further information on related liquidity risk, seerefer to Liquidity Risk on pages 38–42.49–54.


 
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. The adoption of the guidance resulted in $505 million ofassets, which requires fair value gains onadjustments upon observable price changes to certain equity investments previously held at cost in the principal investment portfolios. For additional information, seerefer to Note 1.2.
As of March 31,September 30, 2018 and December 31, 2017, the aggregate carrying values of the principal investment portfolios were $20.4$20.1 billion and $19.5 billion, respectively, which included tax-oriented investments (e.g., affordable housing and alternative energy investments) of $13.6$13.7 billion and $14.0 billion, respectively, and private equity, various debt and equity instruments, and real assets of $6.8$6.4 billion and $5.5 billion, respectively.
For a discussion of the Firm’s Investment Portfolio Risk Management governance and oversight, see refer to page 120 of JPMorgan Chase’s 2017 Annual Report.




MARKET RISK MANAGEMENT
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. 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 121-128 of JPMorgan Chase’s 2017 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.
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 126-128 of JPMorgan Chase’s 2017 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 137 of JPMorgan Chase’s 2017 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 123 of JPMorgan Chase’s 2017 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 
March 31, 2018 December 31, 2017 March 31, 2017 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$34
 $30
 $39
 $28
 $23
 $32
 $28
 $20
 $40
 $30
 $25
 $37
 $31
 $26
 $36
 $28
 $24
 $31
 
Foreign exchange9
 6
 15
 7
 4
 12
 10
 6
 16
 5
 3
 11
 6
 4
 10
 13
 6
 20
 
Equities17
 15
 22
 14
 12
 19
 11
 8
 14
 16
 13
 19
 15
 13
 18
 12
 11
 14
 
Commodities and other5
 4
 6
 6
 5
 7
 8
 5
 10
 9
 7
 11
 7
 5
 9
 6
 4
 8
 
Diversification benefit to CIB trading VaR(25)
(a) 
 NM
(b) 
 NM
(b) 
 (24)
(a) 
 NM
(b) 
 NM
(b) 
 (34)
(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 VaR40
 35
(b) 
49
(b) 
 31
 25
(b) 
38
(b) 
 23
 14
(b) 
34
(b) 
33
 27
(b) 
41
(b) 
 32
 26
(b) 
42
(b) 
 28
 24
(b) 
32
(b) 
Credit portfolio VaR3
 3
 4
 4
 3
 6
 10
 9
 12
 3
 3
 4
 4
 3
 4
 5
 5
 6
 
Diversification benefit to CIB VaR(3)
(a) 
 NM
(b) 
 NM
(b) 
 (3)
(a) 
 NM
(b) 
 NM
(b) 
 (8)
(a) 
NM
(b) 
NM
(b) 
(3)
(a) 
 NM
(b) 
 NM
(b) 
 (3)
(a) 
 NM
(b) 
 NM
(b) 
 (3)
(a) 
NM
(b) 
NM
(b) 
CIB VaR40
 35
(b) 
51
(b) 
 32
 26
(b) 
39
(b) 
 25
 17
(b) 
38
(b) 
33
 28
(b) 
42
(b) 
 33
 26
(b) 
42
(b) 
 30
 25
(b) 
33
(b) 
                                    
CCB VaR1
 1
 2
 2
 1
 4
 2
 1
 3
 1
 1
 2
 1
 1
 3
 2
 1
 3
 
Corporate VaR12
 10
 14
 9
 1
 16
 2
 2
 3
 13
 12
 14
 12
 10
 13
 3
 1
 3
 
Diversification benefit to other VaR(1)
(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) 
 (1)
(a) 
NM
(b) 
NM
(b) 
Other VaR12
 10
(b) 
14
(b) 
 10
 2
(b) 
16
(b) 
 3
 3
(b) 
4
(b) 
13
 12
(b) 
14
(b) 
 12
 10
(b) 
14
(b) 
 4
 3
(b) 
5
(b) 
Diversification benefit to CIB and other VaR(9)
(a) 
 NM
(b) 
 NM
(b) 
 (8)
(a) 
 NM
(b) 
 NM
(b) 
 (3)
(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$43
 $37
(b) 
$53
(b) 
 $34
 $26
(b) 
$42
(b) 
 $25
 $17
(b) 
$37
(b) 
$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 that the risks are not perfectly correlated.
(b)Diversification benefit represents the difference between the total VaR and each reported level and the sum of its individual components. Diversification benefit reflects the non-additive nature of VaR due to imperfect correlation across lines of business and risk types. The maximum and minimum VaR for each portfolio may have occurred on different trading days than the components and consequently diversification benefit is not meaningful.
Quarter over Quarterquarter results
Average total VaR increased by $9 millionremained unchanged for the threemonths ended March 31,September 30, 2018 as compared with the prior quarter. TheThere was a modest increase reflects higher volatility in the one-year historical look-back period, changesCommodities, offset by reductions in the exposure profile for the Equities and Fixed Income risk types, and the inclusion of certain equity investments previously held at cost, related to the adoption of the new recognition and measurement accounting guidance. For additional information, see Note 1.exposure within CIB Trading VaR.


 
Year over Yearyear results
Average total VaR increased by $18$5 million for the threemonths ended March 31,September 30, 2018, compared with the same period in the prior year. The increase in average total VaR is primarily due to a change in the exposure profile for the Equities and Fixed Income risk types, the inclusion of a Corporate private equity position that became publicly traded in the fourth quarter of 2017 and certain investments in 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 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 threenine months ended March 31,September 30, 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 threenine months ended March 31,September 30, 2018, the Firm observed fourfive VaR back-testing exceptions and posted market risk-related gains on 40 113of the 64194 days. The Firm observed no VaR back-testing exceptions and posted market risk-related gains on 38 of the 65 days for the three months ended September 30, 2018.
Daily Market Risk-Related Gains and Losses
vs. Risk Management VaR (1-day, 95% Confidence level)
ThreeNine months ended March 31,September 30, 2018
 
Market Risk-Related Gains and Losses
 
Risk Management VaR
chart-c4bbdb36ef11523dbf9.jpgchart-cb8b4ee367505588bfd.jpg
JanuaryFirst Quarter 2018FebruarySecond Quarter 2018MarchThird Quarter 2018




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 122 of JPMorgan Chase’s 2017 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 assumed 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 Instantaneous change in rates
(in billions)+200 bps+100 bps-100 bps-200 bps+200 bps+100 bps-100 bps-200 bps
March 31, 2018$2.0
 $1.3
 $(2.6) NM
(a) 
September 30, 2018$1.7
 $0.8
 $(1.9) NA
(a) 
December 31, 2017$2.4
 $1.7
 $(3.6) NM
(a) 
$2.4
 $1.7
 $(3.6) NA
(a) 
(a)
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 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 sensitivities to 200 and 100 basis points instantaneous rate increases each decreased by approximately $400$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 $1$1.7 billion when compared to December 31, 2017. The primary driver of these 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, our sensitivities to changes in rates are 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 March 31,September 30, 2018 and December 31, 2017. The non-U.S. dollar sensitivitysensitivities for an instantaneous decrease in rates by 200 and 100 basis points isare not material to the Firm’s earnings-at-risk at March 31, 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 $600$500 million and $700 million at March 31,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 results of the comparable non-U.S. dollar scenarios are not material to the Firm at March 31,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 122 of JPMorgan Chase’s 2017 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 March 31,September 30, 2018 and December 31, 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)
 March 31, 2018
 December 31, 2017
 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 $(117) $(110) 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 (342) (338) 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(a)
 1 basis point parallel tightening of cross currency basis (9) (10) 
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(a)
 10% depreciation of currency 1
 (13) 
Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges(b)
 10% depreciation of currency 13
 (13)
Derivatives – funding spread risk Impact of changes in the spread related to derivatives FVA 1 basis point parallel increase in spread (6) (6) 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(a)
 1 basis point parallel increase in spread 26
 22
 
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(a)
 1 basis point parallel increase in spread (1) (1) 
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 giving rise to country riskwhich 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, see 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 March 31,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)
Top 20 country exposures (excluding the U.S.)(a)
 
Top 20 country exposures (excluding the U.S.)(a)
 
 March 31, 2018 September 30, 2018

(in billions)
 
Lending and deposits(b)
Trading and investing(c)(d)
Other(e)
Total exposure 
Lending and deposits(b)
Trading and investing(c)(d)
Other(e)
Total exposure
Germany $49.1
$12.8
$0.3
$62.2
 $55.1
$11.1
$0.3
$66.5
United Kingdom 28.3
10.9
8.0
47.2
 28.8
9.4
11.8
50.0
Japan 17.7
5.0
0.3
23.0
 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 14.4
5.4
0.3
20.1
 11.3
5.6
0.6
17.5
China 10.2
7.7
1.1
19.0
Canada 12.8
3.8
0.2
16.8
 11.8
3.0
0.1
14.9
Switzerland 11.1
1.1
3.4
15.6
Australia 6.9
4.4

11.3
India 5.8
7.2
1.3
14.3
 6.0
3.7
1.4
11.1
Australia 6.0
5.6
0.3
11.9
Luxembourg 9.5
0.8

10.3
 9.5
0.5

10.0
Brazil 4.9
3.0

7.9
Netherlands 7.7
1.8
0.6
10.1
 6.3
0.6
0.7
7.6
Spain 6.4
2.1
0.1
8.6
 4.6
1.5
0.3
6.4
Italy 2.4
3.9
0.1
6.4
South Korea 4.3
3.0
0.1
7.4
 4.1
2.0
0.1
6.2
Brazil 4.6
2.8

7.4
Hong Kong 3.6
1.0
1.8
6.4
 3.0
1.0
2.1
6.1
Saudi Arabia 5.3
0.5

5.8
Singapore 3.3
1.2
1.9
6.4
 3.4
1.2
1.1
5.7
Mexico 4.3
1.0

5.3
 4.1
1.0

5.1
Italy 2.8
2.3
0.1
5.2
Saudi Arabia 4.0
0.9

4.9
Belgium 2.6
1.8

4.4
United Arab Emirates 2.7
0.5

3.2
(a)Country exposures abovepresented in the table reflect 85%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 a 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 117–119, page 138 and Note 13 of JPMorgan Chase’s 2017 Annual Report; and seerefer to Allowance for credit losses on pages 57–5969–71 and Note 12 of this Form 10-Q.
As noted in the discussion on page 138 of JPMorgan Chase’s 2017 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. SeeRefer to Note 12 of this Form 10-Q for further discussion.
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 March 31,September 30, 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 $525$425 million for PCI loans.
an increase to modeled annual credit loss estimates of approximately $100$75 million for 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 $850$775 million.
An increase in probability of default (“PD”) factors consistent with a one-notch downgrade in the Firm’s internal risk ratings for its entire wholesale loan portfolio could imply an increase in the Firm’s modeled credit loss estimates of approximately $1.5$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 $200$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.
March 31, 2018
(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$355.3
  $5.3
$359.7
  $4.2
Derivative receivables(a)
56.9
 6.2
60.1
 7.1
Trading assets412.2
 11.5
419.8
 11.3
AFS debt securities209.1
 0.2
AFS securities200.0
 0.1
Loans2.9
 0.4
3.0
 0.1
MSRs6.2
 6.2
6.4
 6.4
Other33.0
 1.2
28.5
 1.1
Total assets measured at fair value on a recurring basis
$663.4
 $19.5
$657.7
 $19.0
Total assets measured at fair value on a nonrecurring basis1.7
 0.7
1.8
 1.1
Total assets measured at fair value
$665.1
 $20.2
$659.5
 $20.1
Total Firm assets$2,609.8
  $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)
  3.0%  3.0%
(a)For purposes of the table above, the derivative receivables total reflects the impact of netting adjustments; however, the $6.2$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 and other intangible assets associated with each business combination areis 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 139–140 of JPMorgan Chase’s 2017 Annual Report.
For the three months ended March 31,September 30, 2018, the Firm reviewed current economic conditions, business performance, the current estimated market cost of 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 March 31,September 30, 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 rewardrewards programs which allow cardholders to earn rewardrewards points based on their account activity and the terms and conditions of the rewardrewards 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 rewardrewards 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 rewardrewards 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 both March 31,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 140 of JPMorgan Chase’s 2017 Annual Report.
Litigation reserves
For a description of the significant estimates and judgments associated with establishing litigation reserves, seerefer to Note 22 of this Form 10-Q, and Note 29 of JPMorgan Chase’s 2017 Annual Report.


ACCOUNTING AND REPORTING DEVELOPMENTS
Financial Accounting Standards Board (“FASB”) Standards 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.


 
 • Adopted January 1, 2018.
 • For further information, seerefer to 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.
 • Provides a measurement alternative for equity securities without readily determinable fair values to be 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 in the period of adoption.


 
 • Adopted January 1, 2018.
 • For further information, seerefer to Note 1.


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 the treatment of settlement payments for zero coupon debt instruments and distributions received from equity method investments.

 
 • Adopted January 1, 2018.
 • The adoption of the guidance had no material impact as the Firm was either in compliance with the amendments or the amounts to which it was applied were immaterial.
Treatment of restricted cash on the statement of cash flows
Issued November 2016
 
 • Requires restricted cash to be combined with unrestricted cash when reconciling the beginning and ending cash balances on the Consolidated statements of cash flows.
 • Requires additional disclosures to supplement the Consolidated statements of cash flows.


 
 • Adopted January 1, 2018.2018
 • For further information, seerefer to Note 1.





 
FASB Standards Adopted since January 1, 2018 (continued)
     
Standard Summary of guidance Effects on financial statements
     
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 concentrated in a single identifiable asset or a group of similar assets.
 • In addition, 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.
 
 • Adopted January 1, 2018.
 • The adoption of the guidance had no impact because it is to bebeing 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, seerefer 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, seerefer 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, seerefer 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, see 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 lease liabilities with corresponding right-of-use assets.
 • 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].
 • Required effective date: January 1, 2019.(a)
 • The Firm is in the process of its implementation which includes an evaluation of its leasing activities and certain contracts for embedded leases. 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 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. 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 guidance on January 1, 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, which will reflect management’s estimate of credit losses over the full remaining expected life of the financial assets.
 • 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 securities 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 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 new guidance will result in an increase in its allowance for credit losses due to several factors, including:
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, which will be offset by an increase in the carrying value of the related loans
3. An allowance will be established for estimated credit losses on non-agency HTM securities
 • 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 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.
 • 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.
(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 success of the Firm’s business simplification initiatives and the effectiveness of its control agenda;
Ability of the Firm to develop new products and services, and the extent to which products or services previously sold by the Firm (including but not limited to mortgages and asset-backed securities) require the Firm to incur liabilities or absorb losses not contemplated at their initiation or origination;
Acceptance of the Firm’s new and existing products and services by the marketplace and the ability of the Firm to innovate and to increase market share;
Ability of the Firm to attract and retain qualified employees;
Ability of the Firm to control expenses;
Competitive pressures;
Changes in the credit quality of the Firm’s 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 of its financial, accounting, technology, data processing and other operational systems and facilities;
Ability of the Firm to withstand disruptions that may be caused by any failure of its operational systems or those of third parties;
Ability of the Firm to effectively defend itself against cyberattacks and other attempts by unauthorized parties to access information of the Firm or its customers or to disrupt the Firm’s systems; and
The other risks and uncertainties detailed in Part I,
Item 1A: Risk Factors in JPMorgan Chase’s 2017 Annual Report on Form 10-K for the year ended December 31, 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. 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
March 31,
(in millions, except per share data) 2018
 2017
Revenue    
Investment banking fees $1,736
 $1,880
Principal transactions 3,952
 3,582
Lending- and deposit-related fees 1,477
 1,448
Asset management, administration and commissions 4,309
 3,877
Investment securities losses (245) (3)
Mortgage fees and related income 465
 406
Card income 1,275
 914
Other income 1,626
 771
Noninterest revenue 14,595
 12,875
Interest income 17,695
 15,042
Interest expense 4,383
 2,978
Net interest income 13,312
 12,064
Total net revenue 27,907
 24,939
     
Provision for credit losses 1,165
 1,315
     
Noninterest expense    
Compensation expense 8,862
 8,256
Occupancy expense 888
 961
Technology, communications and equipment expense 2,054
 1,834
Professional and outside services 2,121
 1,792
Marketing 800
 713
Other expense 1,355
 1,727
Total noninterest expense 16,080
 15,283
Income before income tax expense 10,662
 8,341
Income tax expense 1,950
 1,893
Net income $8,712
 $6,448
Net income applicable to common stockholders $8,238
 $5,975
Net income per common share data    
Basic earnings per share $2.38
 $1.66
Diluted earnings per share 2.37
 1.65
     
Weighted-average basic shares 3,458.3
 3,601.7
Weighted-average diluted shares 3,479.5
 3,630.4
Cash dividends declared per common share $0.56
 $0.50
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, see Note 1.
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
March 31,
(in millions) 2018
 2017
Net income $8,712
 $6,448
Other comprehensive income/(loss), after–tax    
Unrealized gains/(losses) on investment securities (1,234) 238
Translation adjustments, net of hedges 27
 7
Fair value hedges (40) NA
Cash flow hedges (73) 91
Defined benefit pension and OPEB plans 21
 (15)
DVA on fair value option elected liabilities 267
 (69)
Total other comprehensive income/(loss), after–tax (1,032) 252
Comprehensive income $7,680
 $6,700
Effective January 1, 2018, the Firm adopted several new accounting standards. For additional information, see 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)Mar 31, 2018 Dec 31, 2017
Assets   
Cash and due from banks$24,834
 $25,898
Deposits with banks389,978
 405,406
Federal funds sold and securities purchased under resale agreements (included $13,523 and $14,732 at fair value)
247,608
 198,422
Securities borrowed (included $3,023 and $3,049 at fair value)
116,132
 105,112
Trading assets (included assets pledged of $125,957 and $110,061)
412,282
 381,844
Investment securities (included $209,146 and $202,225 at fair value and assets pledged of $16,414 and $17,969)
238,188
 249,958
Loans (included $2,908 and $2,508 at fair value)
934,424
 930,697
Allowance for loan losses(13,375) (13,604)
Loans, net of allowance for loan losses921,049
 917,093
Accrued interest and accounts receivable72,659
 67,729
Premises and equipment14,382
 14,159
Goodwill, MSRs and other intangible assets54,533
 54,392
Other assets (included $17,124 and $16,128 at fair value and assets pledged of $1,314 and $1,526)
118,140
 113,587
Total assets(a)
$2,609,785
 $2,533,600
Liabilities   
Deposits (included $20,170 and $21,321 at fair value)
$1,486,961
 $1,443,982
Federal funds purchased and securities loaned or sold under repurchase agreements (included $735 and $697 at fair value)
179,091
 158,916
Short-term borrowings (included $8,823 and $9,191 at fair value)
62,667
 51,802
Trading liabilities136,537
 123,663
Accounts payable and other liabilities (included $9,968 and $9,208 at fair value)
192,295
 189,383
Beneficial interests issued by consolidated VIEs (included $7 and $45 at fair value)
21,584
 26,081
Long-term debt (included $49,152 and $47,519 at fair value)
274,449
 284,080
Total liabilities(a)
2,353,584
 2,277,907
Commitments and contingencies (see Notes 20, 21 and 22)

 

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 capital89,211
 90,579
Retained earnings183,855
 177,676
Accumulated other comprehensive loss(1,063) (119)
Shares held in restricted stock units (“RSU”) Trust, at cost (472,953 shares)
(21) (21)
Treasury stock, at cost (700,156,973 and 679,635,064 shares)
(45,954) (42,595)
Total stockholders’ equity256,201
 255,693
Total liabilities and stockholders’ equity$2,609,785
 $2,533,600
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, see Note 1.
(a)The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at March 31, 2018, and December 31, 2017. The assets 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 in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. For a further discussion, see Note 13.
(in millions)Mar 31, 2018 Dec 31, 2017
Assets   
Trading assets$1,222
 $1,449
Loans57,416
 68,995
All other assets2,410
 2,674
Total assets$61,048
 $73,118
Liabilities   
Beneficial interests issued by consolidated VIEs$21,584
 $26,081
All other liabilities348
 349
Total liabilities$21,932
 $26,430
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)
  Three months ended March 31,
(in millions, except per share data) 2018
 2017
Preferred stock    
Balance at January 1 and March 31 $26,068
 $26,068
Common stock    
Balance at January 1 and March 31 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 (1,307) (1,087)
Other (61) (145)
Balance at March 31 89,211
 90,395
Retained earnings    
Balance at January 1 177,676
 162,440
Cumulative effect of changes in accounting principles (183) 
Net income 8,712
 6,448
Dividends declared:    
Preferred stock (409) (412)
Common stock ($0.56 and $0.50 per share)
 (1,941) (1,813)
Balance at March 31 183,855
 166,663
Accumulated other comprehensive income/(loss)    
Balance at January 1 (119) (1,175)
Cumulative effect of changes in accounting principles 88
 
Other comprehensive income/(loss) (1,032) 252
Balance at March 31 (1,063) (923)
Shares held in RSU Trust, at cost    
Balance at January 1 and March 31 (21) (21)
Treasury stock, at cost    
Balance at January 1 (42,595) (28,854)
Repurchase (4,671) (2,832)
Reissuance 1,312
 1,262
Balance at March 31 (45,954) (30,424)
Total stockholders’ equity $256,201
 $255,863
Effective January 1, 2018, the Firm adopted several new accounting standards. For additional information, see 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)
 Three months ended March 31,
(in millions)2018
 2017
Operating activities   
Net income$8,712
 $6,448
Adjustments to reconcile net income to net cash used in operating activities:   
Provision for credit losses1,165
 1,315
Depreciation and amortization1,797
 1,464
Deferred tax (benefit)/expense(175) 629
Other951
 604
Originations and purchases of loans held-for-sale(20,010) (24,594)
Proceeds from sales, securitizations and paydowns of loans held-for-sale18,300
 21,262
Net change in:   
Trading assets(37,231) (17,654)
Securities borrowed(11,047) 4,177
Accrued interest and accounts receivable(5,009) (7,767)
Other assets(3,929) 11,826
Trading liabilities11,855
 (11,518)
Accounts payable and other liabilities(90) (11,543)
Other operating adjustments(398) 2,792
Net cash used in operating activities(35,109) (22,559)
Investing activities   
Net change in:   
Federal funds sold and securities purchased under resale agreements(49,179) 39,380
Held-to-maturity securities:   
Proceeds from paydowns and maturities698
 1,193
Purchases(4,686) 
Available-for-sale debt securities:   
Proceeds from paydowns and maturities10,785
 14,522
Proceeds from sales16,697
 12,751
Purchases(14,680) (20,416)
Proceeds from sales and securitizations of loans held-for-investment4,219
 2,251
Other changes in loans, net(8,226) (2,545)
All other investing activities, net(649) (24)
Net cash provided by/(used in) investing activities(45,021) 47,112
Financing activities   
Net change in:   
Deposits49,429
 35,930
Federal funds purchased and securities loaned or sold under repurchase agreements20,185
 17,655
Short-term borrowings11,029
 4,308
Beneficial interests issued by consolidated VIEs(93) 146
Proceeds from long-term borrowings19,916
 16,538
Payments of long-term borrowings(31,887) (26,049)
Treasury stock repurchased(4,671) (2,832)
Dividends paid(2,236) (2,045)
All other financing activities, net(1,083) (46)
Net cash provided by financing activities60,589
 43,605
Effect of exchange rate changes on cash and due from banks and deposits with banks3,049
 2,574
Net (decrease)/increase in cash and due from banks and deposits with banks(16,492) 70,732
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$414,812
 $461,886
Cash interest paid$4,431
 $3,195
Cash income taxes paid, net429
 356
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, see Note 1.
The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.


See the Glossary of Terms and Acronyms on pages 156–163 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 businesses, commercial banking, financial transaction processing and asset management. For a further discussion of the Firm’s business segments, see Note 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 2017 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, see Notes 1 and 14 of JPMorgan Chase’s 2017 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, see Note 1 of JPMorgan Chase’s 2017 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. The Firm anticipates refinements to both calculations as a result of the issuance of future legislative and accounting guidance as well as those in the normal course of business, including true-ups to the tax liability on the tax return as filed and the resolution of tax audits. The Firm considers any legislative or accounting guidance issued as of the balance sheet date when evaluating potential refinements to these estimates. There were no material changes to these estimates as of March 31, 2018.
Accounting standards adopted January 1, 2018
Revenue recognition – revenues from contracts with customers
The adoption of this guidance requires gross presentation of certain costs that were previously offset against revenue. Adoption of the guidance did not result in any material changes in the timing of the Firm’s 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, see the table on page 80 of this Note, and Note 5.
Recognition and measurement of financial assets and financial liabilities
The adoption of this guidance requires that certain equity instruments be measured at fair value, with changes in fair value recognized in earnings. The guidance also provides an alternative to measure 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 (the “measurement alternative”). The Firm elected the measurement alternative for its qualifying equity securities and the adoption of the guidance resulted in fair value gains of $505 million in other income in the first quarter of 2018. For additional information, see Notes 2 and 9.
Premium amortization on purchased callable debt securities
The adoption of this guidance requires that premiums be amortized to the earliest call date on certain debt securities. The adoption of this guidance resulted in a cumulative-effect adjustment to retained earnings and AOCI. For additional information, see the table below, and Notes 9 and 17.
Hedge accounting
The adoption of this guidance better aligns hedge accounting with the economics of the Firm’s risk management activities. As permitted by the guidance, the Firm also elected to transfer certain investment securities from HTM to AFS. The adoption of this guidance resulted in a cumulative-effect adjustment to retained earnings and AOCI as a result of the investment securities transfer and the revised guidance for excluded components. For additional information, see the table below, and Notes 4, 9
and 17.
Treatment of restricted cash on the statement of cash flows
The adoption of this guidance requires restricted cash to be combined with unrestricted cash when reconciling the beginning and ending cash balances on the Consolidated statements of cash flows. 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. For additional information, see the table below, and Note 18.
Presentation of net periodic pension cost and net periodic postretirement benefit cost
The adoption of this guidance requires the service cost component of net periodic pension cost to be reported separately in the Consolidated statements of income from the other components of pension cost. This change was adopted retrospectively and, accordingly, prior period amounts were revised, which resulted in an increase in compensation expense and a reduction in other expense. For additional information, see the table below, and Note 7.

Reclassification of certain tax effects from AOCI
The adoptionIssued February 2018
 • Permits reclassification of this guidance permitted the Firm to reclassify 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.The adoption
 • Adopted January 1, 2018.
 • For further information, refer to Note 1.


FASB Standards Issued but not yet Adopted
StandardSummary of thisguidanceEffects 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, resulted inexcept 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 AOCI. For additional information, seeupdating processes and internal controls for its leasing activities. As a lessee, the table below, and Note 17.
The following tables present the prior period impact to the Consolidated statements of income and the Consolidated balance sheets from the retrospective adoptionFirm is finalizing its estimate of the new accounting standards inright-of-use asset and lease liability, which is based on the first quarterpresent value of 2018:
Selected Consolidated statements of income data
Three months ended
March 31, 2017 (in millions)
Reported
Revisions(a)
Revised
Revenue   
Investment banking fees$1,817
$63
$1,880
Asset management, administration and commissions3,677
200
3,877
Other income770
1
771
Total net revenue24,675
264
24,939
    
Noninterest expense   
Compensation expense8,201
55
8,256
Technology, communication and equipment expense1,828
6
1,834
Professional and outside services1,543
249
1,792
Other expense1,773
(46)1,727
Total noninterest expense$15,019
$264
$15,283
(a)Revisions relate to revenue recognition and pension cost guidance.
Selected Consolidated balance sheets data
December 31, 2017
(in millions)

Reported
Revisions(a)
Revised
Assets   
Cash and due from banks$25,827
$71
$25,898
Deposits with banks404,294
1,112
405,406
Other assets114,770
(1,183)113,587
Total assets$2,533,600
$
$2,533,600
(a)Revisions relate to the reclassification of restricted cash.
lease payments. The following table presents the adjustmentFirm expects to retained earningsrecognize a lease liability and AOCI as a resultcorresponding right-of-use asset (at their present value) related to predominantly all of the new accounting standards$10 billion of future minimum payments required under operating leases as disclosed in the first quarter of 2018:
Increase/(decrease) (in millions)
Retained earnings

AOCI
Premium amortization on purchased callable debt securities$(505)$261
Hedge accounting34
115
Reclassification of certain tax effects from AOCI288
(288)
Total$(183)$88


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, see Note 228 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 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 plans to adopt the new guidance on January 1, 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 effectiveness of the Firm’s control agenda;
Ability of the Firm to develop or discontinue products and services, and the extent to which products or services previously sold by the Firm (including but not limited to mortgages and asset-backed securities) require the Firm to incur liabilities or absorb losses not contemplated at their initiation or origination;
Acceptance of the Firm’s new and existing products and services by the marketplace and the ability of the Firm to innovate and to increase market share;
Ability of the Firm to attract and retain qualified employees;
Ability of the Firm to control expenses;
Competitive pressures;
Changes in the credit quality of the Firm’s 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 of its financial, accounting, technology, data processing and other operational systems and facilities;
Ability of the Firm to withstand disruptions that may be caused by any failure of its operational systems or those of third parties;
Ability of the Firm to effectively defend itself against cyberattacks and other attempts by unauthorized parties to access information of the Firm or its customers or to disrupt the Firm’s systems; and
The other risks and uncertainties detailed in Part I,
Item 1A: Risk Factors in JPMorgan Chase’s 2017 Annual Report on Form 10-K for the year ended December 31, 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. 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

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.





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

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

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 theinformation on assets and liabilities reportedrelated to VIEs that are consolidated by the Firm at fair value asSeptember 30, 2018, and December 31, 2017. The assets of Marchthe 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 in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate 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
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

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

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.


Refer to the Glossary of Terms and Acronyms on pages 175–179 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 businesses, commercial banking, financial transaction processing and asset management. For a further discussion of the Firm’s business segments, refer to Note 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 2017 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, refer to Notes1 and 14 of JPMorgan Chase’s 2017 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, refer to Note1 of JPMorgan Chase’s 2017 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, refer to Note2 of JPMorgan Chase’s 2017 Annual Report.


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






Fair value hierarchy
Derivative
netting
adjustments

       
September 30, 2018 (in millions)Level 1Level 2
Level 3
Total fair value
Federal funds sold and securities purchased under resale agreements$
$12,226

$

$
$12,226
Securities borrowed
4,528




4,528
Trading assets:











Debt instruments:











Mortgage-backed securities:











U.S. government agencies(a)

46,252

529


46,781
Residential – nonagency
1,681

77


1,758
Commercial – nonagency
1,420

13


1,433
Total mortgage-backed securities
49,353

619


49,972
U.S. Treasury and government agencies(a)
40,815
7,443




48,258
Obligations of U.S. states and municipalities
8,785

699


9,484
Certificates of deposit, bankers’ acceptances and commercial paper
3,070
 
 
3,070
Non-U.S. government debt securities26,824
28,875
 164
 
55,863
Corporate debt securities
23,210
 395
 
23,605
Loans(b)

40,051
 1,533
 
41,584
Asset-backed securities
2,779
 76
 
2,855
Total debt instruments67,639
163,566
 3,486
 
234,691
Equity securities104,701
405
 329
 
105,435
Physical commodities(c)
3,727
1,256
 
 
4,983
Other
14,188
 413
 
14,601
Total debt and equity instruments(d)
176,067
179,415
 4,228
 
359,710
Derivative receivables:       
Interest rate715
258,744
 2,000
 (238,062)23,397
Credit
22,553
 952
 (22,923)582
Foreign exchange734
187,377
 773
 (171,841)17,043
Equity
43,791
 3,141
 (36,828)10,104
Commodity
22,129
 239
 (13,432)8,936
Total derivative receivables(e)
1,449
534,594
 7,105
 (483,086)60,062
Total trading assets(f)
177,516
714,009
 11,333
 (483,086)419,772
Available-for-sale securities:       
Mortgage-backed securities:       
U.S. government agencies(a)

63,110
 
 
63,110
Residential – nonagency
9,216
 1
 
9,217
Commercial – nonagency
7,048
 
 
7,048
Total mortgage-backed securities
79,374
 1
 
79,375
U.S. Treasury and government agencies27,816

 
 
27,816
Obligations of U.S. states and municipalities
38,121
 
 
38,121
Certificates of deposit
75
 
 
75
Non-U.S. government debt securities16,544
8,130
 
 
24,674
Corporate debt securities
2,056
 
 
2,056
Asset-backed securities:       
Collateralized loan obligations
20,048
 61
 
20,109
Other
7,804
 
 
7,804
Total available-for-sale securities44,360
155,608
 62
 
200,030
Loans
2,847
 140
 
2,987
Mortgage servicing rights

 6,433
 
6,433
Other assets(f)(g)
10,684
20
 1,063
 
11,767
Total assets measured at fair value on a recurring basis$232,560
$889,238
 $19,031
 $(483,086)$657,743
Deposits$
$16,060
 $4,440
 $
$20,500
Federal funds purchased and securities loaned or sold under repurchase agreements
1,059
 
 
1,059
Short-term borrowings
5,914
 1,971
 
7,885
Trading liabilities:      

Debt and equity instruments(d)
84,958
24,403
 96
 
109,457
Derivative payables:      

Interest rate310
232,614
 1,309
 (227,142)7,091
Credit


22,435
 925
 (21,908)1,452
Foreign exchange880
175,664
 1,075
 (165,217)12,402
Equity
45,937
 5,418
 (39,377)11,978
Commodity
22,075
 764
 (14,069)8,770
Total derivative payables(e)
1,190
498,725
 9,491
 (467,713)41,693
Total trading liabilities86,148
523,128
 9,587
 (467,713)151,150
Accounts payable and other liabilities5,127
20
 12
 
5,159
Beneficial interests issued by consolidated VIEs
16
 1
 
17
Long-term debt
34,074
 20,038
 
54,112
Total liabilities measured at fair value on a recurring basis$91,275
$580,271
 $36,049
 $(467,713)$239,882



Fair value hierarchy
Derivative
netting
adjustments
 
        
December 31, 2017 (in millions)Level 1
Level 2

Level 3

 Total fair value
Federal funds sold and securities purchased under resale agreements$
$14,732

$

$
 $14,732
Securities borrowed
3,049




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

41,515

307


 41,822
Residential – nonagency
1,835

60


 1,895
Commercial – nonagency
1,645

11


 1,656
Total mortgage-backed securities
44,995

378


 45,373
U.S. Treasury and government agencies(a)
30,758
6,475

1


 37,234
Obligations of U.S. states and municipalities
9,067

744


 9,811
Certificates of deposit, bankers’ acceptances and commercial paper
226




 226
Non-U.S. government debt securities28,887
28,831

78


 57,796
Corporate debt securities
24,146

312


 24,458
Loans(b)

35,242

2,719


 37,961
Asset-backed securities
3,284

153


 3,437
Total debt instruments59,645
152,266

4,385


 216,296
Equity securities87,346
197

295


 87,838
Physical commodities(c)
4,924
1,322




 6,246
Other
14,197

690


 14,887
Total debt and equity instruments(d)
151,915
167,982

5,370


 325,267
Derivative receivables: 







 

Interest rate181
314,107

1,704

(291,319) 24,673
Credit
21,995

1,209

(22,335) 869
Foreign exchange841
158,834

557

(144,081) 16,151
Equity
37,722

2,318

(32,158) 7,882
Commodity
19,875

210

(13,137) 6,948
Total derivative receivables(e)
1,022
552,533

5,998

(503,030) 56,523
Total trading assets(f)
152,937
720,515

11,368

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







 

Mortgage-backed securities: 







 

U.S. government agencies(a)

70,280




 70,280
Residential – nonagency
11,366

1


 11,367
Commercial – nonagency
5,025




 5,025
Total mortgage-backed securities
86,671

1


 86,672
U.S. Treasury and government agencies22,745





 22,745
Obligations of U.S. states and municipalities
32,338




 32,338
Certificates of deposit
59




 59
Non-U.S. government debt securities18,140
9,154




 27,294
Corporate debt securities
2,757




 2,757
Asset-backed securities: 







 

Collateralized loan obligations
20,720

276


 20,996
Other
8,817




 8,817
Equity securities(g)
547





 547
Total available-for-sale securities41,432
160,516

277


 202,225
Loans
2,232

276


 2,508
Mortgage servicing rights


6,030


 6,030
Other assets(f)(g)
13,795
343

1,265


 15,403
Total assets measured at fair value on a recurring basis$208,164
$901,387

$19,216

$(503,030) $625,737
Deposits$
$17,179

$4,142

$
 $21,321
Federal funds purchased and securities loaned or sold under repurchase agreements
697




 697
Short-term borrowings
7,526

1,665


 9,191
Trading liabilities:  
 


 

Debt and equity instruments(d)
64,664
21,183

39


 85,886
Derivative payables:  



   
Interest rate170
282,825

1,440

(277,306) 7,129
Credit
22,009

1,244

(21,954) 1,299
Foreign exchange794
154,075

953

(143,349) 12,473
Equity
39,668

5,727

(36,203) 9,192
Commodity
21,017

884

(14,217) 7,684
Total derivative payables(e)
964
519,594

10,248

(493,029) 37,777
Total trading liabilities65,628
540,777

10,287

(493,029) 123,663
Accounts payable and other liabilities9,074
121

13


 9,208
Beneficial interests issued by consolidated VIEs
6

39


 45
Long-term debt
31,394

16,125


 47,519
Total liabilities measured at fair value on a recurring basis$74,702
$597,700

$32,271

$(493,029) $211,644
(a)At September 30, 2018, and December 31, 2017, by major product categoryincluded total U.S. government-sponsored enterprise obligations of $77.3 billion and fair value hierarchy.
Assets and liabilities measured at fair value on a recurring basis






Fair value hierarchy
Derivative
netting
adjustments

       
March 31, 2018 (in millions)Level 1Level 2
Level 3
Total fair value
Federal funds sold and securities purchased under resale agreements$
$13,523

$

$
$13,523
Securities borrowed
3,023




3,023
Trading assets:











Debt instruments:











Mortgage-backed securities:











U.S. government agencies(a)

34,849

508


35,357
Residential – nonagency
1,906

55


1,961
Commercial – nonagency
1,825

14


1,839
Total mortgage-backed securities
38,580

577


39,157
U.S. Treasury and government agencies(a)
35,122
7,350




42,472
Obligations of U.S. states and municipalities
9,004

704


9,708
Certificates of deposit, bankers’ acceptances and commercial paper
2,281
 
 
2,281
Non-U.S. government debt securities30,555
34,174
 197
 
64,926
Corporate debt securities
25,563
 306
 
25,869
Loans(b)

38,908
 2,368
 
41,276
Asset-backed securities
3,129
 63
 
3,192
Total debt instruments65,677
158,989
 4,215
 
228,881
Equity securities104,905
429
 300
 
105,634
Physical commodities(c)
3,893
1,585
 
 
5,478
Other
14,626
 698
 
15,324
Total debt and equity instruments(d)
174,475
175,629
 5,213
 
355,317
Derivative receivables:       
Interest rate562
301,549
 1,761
 (280,094)23,778
Credit
22,609
 1,118
 (22,665)1,062
Foreign exchange1,106
164,190
 639
 (149,332)16,603
Equity
41,424
 2,564
 (35,185)8,803
Commodity
16,955
 165
 (10,452)6,668
Total derivative receivables(e)(f)
1,668
546,727
 6,247
 (497,728)56,914
Total trading assets(g)
176,143
722,356
 11,460
 (497,728)412,231
Available-for-sale debt securities:       
Mortgage-backed securities:       
U.S. government agencies(a)

67,209
 
 
67,209
Residential – nonagency
10,602
 1
 
10,603
Commercial – nonagency
9,140
 
 
9,140
Total mortgage-backed securities
86,951
 1
 
86,952
U.S. Treasury and government agencies25,450

 
 
25,450
Obligations of U.S. states and municipalities
39,491
 
 
39,491
Certificates of deposit
60
 
 
60
Non-U.S. government debt securities18,148
8,546
 
 
26,694
Corporate debt securities
2,268
 
 
2,268
Asset-backed securities:       
Collateralized loan obligations
19,835
 204
 
20,039
Other
8,192
 
 
8,192
Total available-for-sale securities43,598
165,343
 205
 
209,146
Loans
2,512
 396
 
2,908
Mortgage servicing rights

 6,202
 
6,202
Other assets(g)(h)
14,718
441
 1,220
 
16,379
Total assets measured at fair value on a recurring basis$234,459
$907,198
 $19,483
 $(497,728)$663,412
Deposits$
$16,153
 $4,017
 $
$20,170
Federal funds purchased and securities loaned or sold under repurchase agreements
735
 
 
735
Short-term borrowings
6,698
 2,125
 
8,823
Trading liabilities:      

Debt and equity instruments(d)
75,154
24,384
 50
 
99,588
Derivative payables:      

Interest rate579
271,996
 1,289
 (266,694)7,170
Credit
22,583
 1,113
 (21,983)1,713
Foreign exchange1,176
151,705
 927
 (143,011)10,797
Equity
43,162
 5,076
 (37,913)10,325
Commodity
17,544
 684
 (11,284)6,944
Total derivative payables(e)(f)
1,755
506,990
 9,089
 (480,885)36,949
Total trading liabilities76,909
531,374
 9,139
 (480,885)136,537
Accounts payable and other liabilities9,770
191
 7
 
9,968
Beneficial interests issued by consolidated VIEs
6
 1
 
7
Long-term debt
32,202
 16,950
 
49,152
Total liabilities measured at fair value on a recurring basis$86,679
$587,359
 $32,239
 $(480,885)$225,392



Fair value hierarchy
Derivative
netting
adjustments
 
        
December 31, 2017 (in millions)Level 1
Level 2

Level 3

 Total fair value
Federal funds sold and securities purchased under resale agreements$
$14,732

$

$
 $14,732
Securities borrowed
3,049




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

41,515

307


 41,822
Residential – nonagency
1,835

60


 1,895
Commercial – nonagency
1,645

11


 1,656
Total mortgage-backed securities
44,995

378


 45,373
U.S. Treasury and government agencies(a)
30,758
6,475

1


 37,234
Obligations of U.S. states and municipalities
9,067

744


 9,811
Certificates of deposit, bankers’ acceptances and commercial paper
226




 226
Non-U.S. government debt securities28,887
28,831

78


 57,796
Corporate debt securities
24,146

312


 24,458
Loans(b)

35,242

2,719


 37,961
Asset-backed securities
3,284

153


 3,437
Total debt instruments59,645
152,266

4,385


 216,296
Equity securities87,346
197

295


 87,838
Physical commodities(c)
4,924
1,322




 6,246
Other
14,197

690


 14,887
Total debt and equity instruments(d)
151,915
167,982

5,370


 325,267
Derivative receivables: 







 

Interest rate181
314,107

1,704

(291,319) 24,673
Credit
21,995

1,209

(22,335) 869
Foreign exchange841
158,834

557

(144,081) 16,151
Equity
37,722

2,318

(32,158) 7,882
Commodity
19,875

210

(13,137) 6,948
Total derivative receivables(e)(f)
1,022
552,533

5,998

(503,030) 56,523
Total trading assets(g)
152,937
720,515

11,368

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







 

Mortgage-backed securities: 







 

U.S. government agencies(a)

70,280




 70,280
Residential – nonagency
11,366

1


 11,367
Commercial – nonagency
5,025




 5,025
Total mortgage-backed securities
86,671

1


 86,672
U.S. Treasury and government agencies22,745





 22,745
Obligations of U.S. states and municipalities
32,338




 32,338
Certificates of deposit
59




 59
Non-U.S. government debt securities18,140
9,154




 27,294
Corporate debt securities
2,757




 2,757
Asset-backed securities: 







 

Collateralized loan obligations
20,720

276


 20,996
Other
8,817




 8,817
Equity securities(h)
547





 547
Total available-for-sale securities41,432
160,516

277


 202,225
Loans
2,232

276


 2,508
Mortgage servicing rights


6,030


 6,030
Other assets(g)(h)
13,795
343

1,265


 15,403
Total assets measured at fair value on a recurring basis$208,164
$901,387

$19,216

$(503,030) $625,737
Deposits$
$17,179

$4,142

$
 $21,321
Federal funds purchased and securities loaned or sold under repurchase agreements
697




 697
Short-term borrowings
7,526

1,665


 9,191
Trading liabilities:  
 


 

Debt and equity instruments(d)
64,664
21,183

39


 85,886
Derivative payables:  



   
Interest rate170
282,825

1,440

(277,306) 7,129
Credit
22,009

1,244

(21,954) 1,299
Foreign exchange794
154,075

953

(143,349) 12,473
Equity
39,668

5,727

(36,203) 9,192
Commodity
21,017

884

(14,217) 7,684
Total derivative payables(e)(f)
964
519,594

10,248

(493,029) 37,777
Total trading liabilities65,628
540,777

10,287

(493,029) 123,663
Accounts payable and other liabilities9,074
121

13


 9,208
Beneficial interests issued by consolidated VIEs
6

39


 45
Long-term debt
31,394

16,125


 47,519
Total liabilities measured at fair value on a recurring basis$74,702
$597,700

$32,271

$(493,029) $211,644
$78.0 billion, respectively, which were predominantly mortgage-related.
(a)At March 31, 2018, and December 31, 2017, included total U.S. government-sponsored enterprise obligations of $74.1 billion and $78.0 billion, respectively, which were predominantly mortgage-related.
(b)At March 31, 2018, and December 31, 2017, included within trading loans were $12.9 billion and $11.4 billion, respectively, of residential first-lien mortgages, and $2.4 billion and $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 $7.9 billion and $5.7 billion, respectively, and reverse mortgages of $324 million
(b)At September 30, 2018, and December 31, 2017, included within trading loans were $13.8 billion and $11.4 billion, respectively, of residential first-lien mortgages, and $2.6 billion and $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 $9.2 billion and $5.7 billion, respectively, and reverse mortgages of zero and $836 million 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, 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, 2018, and December 31, 2017, the fair values of these investments, which include certain hedge funds, private equity funds, real estate and other funds, were $767 million and $779 million, respectively. Included in these balances at September 30, 2018, and December 31, 2017, were trading assets of $55 million and $54 million, respectively, and other assets of $712 million and $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, 2018 and 2017 and the nine months ended September 30, 2017 there were no individually significant transfers.
For the nine months ended September 30, 2018, the only significant transfers were between levels 2 and 3.
Significant transfers from level 3 to level 2 included the following:
$1.2 billion of total 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 decrease 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.
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, refer to Note 2 of JPMorgan Chase’s 2017 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, 2018, interest rate correlation inputs used in estimating fair value were concentrated towards the upper end of the range; equity correlation, 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 concentrated towards the lower end of the range; and the interest rate-foreign exchange (“IR-FX”) correlation inputs were distributed across the range. In addition, the interest rate spread volatility inputs used in estimating fair value were distributed across the 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 towards the lower end of the range. Prepayment speed 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; 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)
      
September 30, 2018      
Product/Instrument
Fair value
(in millions)
 Principal valuation technique
Unobservable inputs(g)
Range of input valuesWeighted average 
Residential mortgage-backed securities and loans(b)
$823
 Discounted cash flowsYield0 %28% 6%
   Prepayment speed0 %39% 9%
    Conditional default rate0 %6% 1%
    Loss severity0 %100% 5%
Commercial mortgage-backed securities and loans(c)
439
 Market comparablesPrice$4
$101
 $93
Obligations of U.S. states and municipalities699
 Market comparablesPrice$60
$100
 $97
Corporate debt securities395
 Market comparablesPrice$3
$110
 $80
Loans(d)
1,031
 Market comparablesPrice$3
$102
 $79
Asset-backed securities61
 Discounted cash flowsCredit spread219 bps 219 bps
    Prepayment speed20% 20%
    Conditional default rate2% 2%
    Loss severity30% 30%
 76
 Market comparablesPrice$0
$100
 $51
Net interest rate derivatives528
 Option pricingInterest rate spread volatility16 bps38 bps 
    Interest rate correlation(45)%97%  
    IR-FX correlation55 %60%  
 163
 Discounted cash flowsPrepayment speed0 %30%  
Net credit derivatives26
 Discounted cash flowsCredit correlation35 %60%  
    Credit spread6 bps1,543 bps  
    Recovery rate20 %70%  
    Yield3 %52%  
    Prepayment speed5 %17%  
    Conditional default rate0 %100%  
    Loss severity0 %100%  
 1
 Market comparablesPrice$10
$98
  
Net foreign exchange derivatives(121) Option pricingIR-FX correlation(45)%60%  
 (181) Discounted cash flowsPrepayment speed8 %9%  
Net equity derivatives(2,277) Option pricingEquity volatility10 %60%  
    Equity correlation10 %95%  
    Equity-FX correlation(75)%60%  
    Equity-IR correlation20 %60%  
Net commodity derivatives(525) Option pricingForward commodity price$61
$ 83 per barrel
    Commodity volatility5 %48%  
    Commodity correlation(52)%95%  
MSRs6,433
 Discounted cash flowsRefer to Note 14  
Other assets322
 Discounted cash flowsCredit spread70 bps 70 bps
    Yield8 %10% 8%
 1,154
 Market comparablesPrice$34
$106
 $45
    
EBITDA multiple

3.0x
9.2x
 8.4x
Long-term debt, short-term borrowings, and deposits(e)
26,449
 Option pricingInterest rate spread volatility16 bps38 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)
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 $502 million, nonagency securities of $78 million and trading loans of $243 million.
(c)Includes U.S. government agency securities of $27 million, nonagency securities of $13 million, trading loans of $259 million and non-trading loans of $140 million.
(d)Comprises trading loans.
(e)Long-term debt, short-term borrowings and deposits include structured notes issued by the Firm that are financial instruments that typically contain embedded derivatives. The estimation of the fair value of structured notes includes the derivative features embedded within the instrument. The significant unobservable inputs are broadly consistent with those presented for derivative receivables.
(f)Includes level 3 assets and liabilities that are insignificant both individually and in aggregate.
(g)Price is a significant unobservable input for certain instruments. When quoted market prices are not readily available, reliance is generally placed on price-based internal valuation techniques. The price input is expressed assuming a par value of $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 refer to Note 2 of JPMorgan Chase’s 2017 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, 2018 and 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 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  
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$478
 $2
 $14
$(28) $(17)$83
$(3) $529
 $
 
Residential – nonagency87
 1
 
(6) (3)18
(20) 77
 1
 
Commercial – nonagency18
 (1) 

 
9
(13) 13
 (1) 
Total mortgage-backed securities583
 2
 14
(34) (20)110
(36) 619
 
 
U.S. Treasury and government agencies

 
 

 


 
 
 
Obligations of U.S. states and municipalities736
 8
 26
(70) (1)

 699
 7
 
Non-U.S. government debt securities183
 (9) 44
(29) (2)1
(24) 164
 (9) 
Corporate debt securities274
 (2) 156
(87) (4)82
(24) 395
 (3) 
Loans1,986
 17
 188
(146) (199)48
(361) 1,533
 3
 
Asset-backed securities87
 6
 5
(7) (13)5
(7) 76
 3
 
Total debt instruments3,849
 22
 433
(373) (239)246
(452) 3,486
 1
 
Equity securities288
 20
 6
(48) 
82
(19) 329
 (18) 
Other406
 30
 13

 (37)2
(1) 413
 10
 
Total trading assets – debt and equity instruments4,543
 72
(c) 
452
(421) (276)330
(472) 4,228
 (7)
(c) 
Net derivative receivables:(a)
               
Interest rate489
 236
 28
(22) (101)68
(7) 691
 216
 
Credit(24) (19) 1

 47
6
16
 27
 (15) 
Foreign exchange(245) (56) 29
(7) (49)(2)28
 (302) (54) 
Equity(2,578) (94) 643
(635) 622
(251)16
 (2,277) (121) 
Commodity(752) 318
 

 (113)15
7
 (525) 138
 
Total net derivative receivables(3,110) 385
(c) 
701
(664) 406
(164)60
 (2,386) 164
(c) 
Available-for-sale securities:               
Asset-backed securities147
 
 

 (86)

 61
 
 
Other1
 
 

 


 1
 
 
Total available-for-sale securities148
 



 (86)

 62
 

Loans159
 (1)
(c) 
1

 (19)

 140
 (1)
(c) 
Mortgage servicing rights6,241
 98
(e) 
291
(2) (195)

 6,433
 98
(e) 
Other assets1,225
 (160)
(c) 
2

 (7)3

 1,063
 (160)
(c) 
                
 Fair value measurements using significant unobservable inputs  
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$4,305
 $(84)
(c)(i) 
$
$
$517
$(170)$1
$(129) $4,440
 $(82)
(c)(i) 
Short-term borrowings2,209
 (47)
(c)(i) 


713
(885)6
(25) 1,971
 (31)
(c)(i) 
Trading liabilities – debt and equity instruments43
 36
(c) 
(6)19

(2)7
(1) 96
 36
(c) 
Accounts payable and other liabilities8
 1
 



3

 12
 1
 
Beneficial interests issued by consolidated VIEs1
 







 1
 

Long-term debt18,262
 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  
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:               
Trading assets:               
Debt instruments:               
Mortgage-backed securities:               
U.S. government agencies$307
 $5
 $348
$(126) $(56)$92
$(41) $529
 $3
 
Residential – nonagency60
 1
 45
(19) (6)58
(62) 77
 4
 
Commercial – nonagency11
 2
 7
(8) (13)30
(16) 13
 (1) 
Total mortgage-backed securities378
 8
 400
(153) (75)180
(119) 619
 6
 
U.S. Treasury and government agencies
1
 
 

 

(1) 
 
 
Obligations of U.S. states and municipalities744
 (3) 107
(70) (79)

 699
 (3) 
Non-U.S. government debt securities78
 (19) 395
(213) (2)18
(93) 164
 (18) 
Corporate debt securities312
 (6) 297
(227) (15)249
(215) 395
 (1) 
Loans2,719
 58
 1,223
(1,680) (528)422
(681) 1,533
 (22) 
Asset-backed securities153
 15
 64
(29) (53)18
(92) 76
 8
 
Total debt instruments4,385
 53
 2,486
(2,372) (752)887
(1,201) 3,486
 (30) 
Equity securities295
 (1) 99
(108) (1)86
(41) 329
 11
 
Other690
 (209) 47
(40) (75)3
(3) 413
 (250) 
Total trading assets – debt and equity instruments5,370
 (157)
(c) 
2,632
(2,520) (828)976
(1,245) 4,228
 (269)
(c) 
Net derivative receivables:(a)
               
Interest rate264
 576
 83
(77) (234)40
39
 691
 498
 
Credit(35) 19
 3
(7) 22
5
20
 27
 7
 
Foreign exchange(396) 184
 42
(15) (46)(114)43
 (302) 42
 
Equity(3,409) 688
 1,467
(1,919) 1,043
(324)177
 (2,277) 31
 
Commodity(674) 468
 

 (287)7
(39) (525) 158
 
Total net derivative receivables(4,250) 1,935
(c) 
1,595
(2,018) 498
(386)240
 (2,386) 736
(c) 
Available-for-sale securities:

              
Asset-backed securities276
 1
 

 (216)

 61
 1
 
Other1
 
 

 


 1
 
 
Total available-for-sale securities277
 1
(d) 


 (216)

 62
 1
(d) 
Loans276
 (5)
(c) 
123

 (180)
(74) 140
 (5)
(c) 
Mortgage servicing rights6,030
 576
(e) 
770
(401) (542)

 6,433
 576
(e) 
Other assets1,265
 (210)
(c) 
49
(16) (28)4
(1) 1,063
 (217)
(c) 
                
 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$4,142
 $(125)
(c)(i) 
$
$
$1,272
$(425)$2
$(426) $4,440
 $(115)
(c)(i) 
Short-term borrowings1,665
 (229)
(c)(i) 


2,783
(2,245)61
(64) 1,971
 26
(c)(i) 
Trading liabilities – debt and equity instruments39
 28
(c) 
(68)95

(1)9
(6) 96
 11
(c) 
Accounts payable and other liabilities13
 
 (6)1


4

 12
 
 
Beneficial interests issued by consolidated VIEs39
 
 


(38)

 1
 
 
Long-term debt16,125
 (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
 
 
Short-term borrowings1,134
 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
 (44)39

 (6)78

 118
 
 
Long-term debt12,850
 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 15% at both September 30, 2018 and December 31, 2017, respectively.
(c)Predominantly reported in principal transactions revenue, except for changes in fair value. For a further discussion ofvalue for CCB mortgage loans and lending-related commitments originated with the Firm’sintent 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”) losses that are recorded in earnings, are reported in investment securities losses. Unrealized gains/(losses) are reported in OCI. There were no realized gains/(losses) or foreign exchange hedge accounting relationships, see Note 4. To provide consistent fair value disclosure information, all physical commodities inventories have been includedadjustments recorded 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 balancesincome on AFS securities for the three and nine months ended September 30, 2018 and 2017, respectively. Unrealized gains/(losses) recorded on AFS securities in OCI were zero and $2 million 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)Reflects the Firm’s adoption of rulebook changes made by two CCPs that require or allow the Firm to treat certain OTC-cleared derivative transactions as daily settled. For
further information, see Note 5 of JPMorgan Chase's 2017 Annual Report.
(g)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 March 31, 2018, and December 31, 2017, the fair values of these investments, which include certain hedge funds, private equity funds, real estate and other funds, were $796 million and $779 million, respectively. Included in these balances at March 31, 2018, and December 31, 2017, were trading assets of $51 million and $54 million, respectively, and other assets of $745 million and $725 million, respectively.
(h)
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 the three months ended March 31,September 30, 2018 and 2017, there were no individually significant transfers.
respectively and $1 million and $14 million for the nine months ended September 30, 2018 and 2017, 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.
Level 3 valuations
For further information on the Firm’s valuation process and a detailed discussion of the determination of
(i)Realized (gains)/losses due to DVA for fair value for individual financial instruments, see Note 2 of JPMorgan Chase’s 2017 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 thatoption elected liabilities are actively quoted and can be validated to external sources)reported in addition to the unobservable components. The level 1 and/or level 2 inputsprincipal transactions revenue. Unrealized (gains)/losses are not includedreported 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 March 31, 2018, interest rate correlation inputs used in estimating fair valueOCI. Unrealized (gains)/losses were concentrated towards the upper end of the range; equity correlation, 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 concentrated towards the lower end of the range; and the interest rate-foreign exchange (“IR-FX”) correlation inputs were concentrated towards the lower end of the range. In addition, the interest rate spread volatility inputs used in estimating fair value were distributed across the 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 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; 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)
      
March 31, 2018      
Product/Instrument
Fair value
(in millions)
 Principal valuation technique
Unobservable inputs(g)
Range of input valuesWeighted average 
Residential mortgage-backed securities and loans(b)
$1,122
 Discounted cash flowsYield1 %32% 7%
   Prepayment speed0 %27% 8%
    Conditional default rate0 %41% 1%
    Loss severity0 %60% 3%
Commercial mortgage-backed securities and loans(c)
766
 Market comparablesPrice$12
$100
 $94
Obligations of U.S. states and municipalities704
 Market comparablesPrice$59
$100
 $98
Corporate debt securities306
 Market comparablesPrice$3
$110
 $83
Loans(d)
1,454
 Market comparablesPrice$4
$106
 $86
Asset-backed securities204
 Discounted cash flowsCredit spread201 bps 201 bps
    Prepayment speed20% 20%
    Conditional default rate2% 2%
    Loss severity30% 30%
 63
 Market comparablesPrice$1
$104
 $80
Net interest rate derivatives257
 Option pricingInterest rate spread volatility27 bps38 bps 
    Interest rate correlation(50)%98%  
    IR-FX correlation60 %70%  
 215
 Discounted cash flowsPrepayment speed0 %30%  
Net credit derivatives1
 Discounted cash flowsCredit correlation35 %70%  
    Credit spread5 bps1,463 bps�� 
    Recovery rate20 %70%  
    Yield1 %36%  
    Prepayment speed3 %20%  
    Conditional default rate1 %86%  
    Loss severity11 %100%  
 4
 Market comparablesPrice$10
$98
  
Net foreign exchange derivatives(106) Option pricingIR-FX correlation(50)%70%  
 (182) Discounted cash flowsPrepayment speed8 %9%  
Net equity derivatives(2,512) Option pricingEquity volatility20 %60%  
    Equity correlation0 %85%  
    Equity-FX correlation(70)%30%  
    Equity-IR correlation20 %40%  
Net commodity derivatives(519) Option pricingForward commodity price$52
$ 71 per barrel
    Commodity volatility5 %45%  
    Commodity correlation(52)%88%  
MSRs6,202
 Discounted cash flowsRefer to Note 14  
Other assets417
 Discounted cash flowsCredit spread70 bps 70 bps
    Yield8 %10% 8%
 1,501
 Market comparablesPrice$70
$71
 $71
    
EBITDA multiple

4.1x
8.2x
 7.8 x
Long-term debt, short-term borrowings, and deposits(e)
23,092
 Option pricingInterest rate spread volatility27 bps38 bps 
   Interest rate correlation(50)%98%  
   IR-FX correlation(50)%70%  
   Equity correlation0 %85%  
   Equity-FX correlation(70)%30%  
   Equity-IR correlation20 %40%  
Other level 3 assets and liabilities, net(f)
439
        
(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 $504$123 million nonagency securities of $56 million and trading loans of $562 million.
(c)Includes U.S. government agency securities of $4 million, nonagency securities of $14 million, trading loans of $352 million and non-trading loans of $396 million.
(d)Includes trading loans of $1.5 billion.
(e)Long-term debt, short-term borrowings and deposits include structured notes issued by the Firm that are predominantly financial instruments containing 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 see Note 2 of JPMorgan Chase’s 2017 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 months ended March 31,September 30, 2018 and 2017. When a determination is made to classify a financial instrument within level 3,unrealized (gains)/losses were not material for the determination is based onnine months ended September 30, 2018. There were no material realized (gains)/losses for the significance of the unobservable parameters to 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 quotedthree 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  
Three months ended
March 31, 2018
(in millions)
Fair
value at
Jan 1, 2018
Total realized/unrealized gains/(losses)    
Transfers into
level 3
(h)
Transfers (out of) level 3(h)
Fair value at
March 31, 2018
Change in unrealized gains/(losses) related
to financial instruments held at March 31, 2018
Purchases(f)
Sales 
Settlements(g)
Assets:               
Trading assets:               
Debt instruments:               
Mortgage-backed securities:               
U.S. government agencies$307
 $3
 $329
$(87) $(20)$4
$(28) $508
 $1
 
Residential – nonagency60
 (2) 
(2) (2)29
(28) 55
 
 
Commercial – nonagency11
 1
 6
(7) (1)4

 14
 
 
Total mortgage-backed securities378
 2
 335
(96) (23)37
(56) 577
 1
 
U.S. Treasury and government agencies

1
 
 

 

(1) 
 
 
Obligations of U.S. states and municipalities744
 (2) 39

 (77)

 704
 (2) 
Non-U.S. government debt securities78
 2
 225
(92) 
17
(33) 197
 3
 
Corporate debt securities312
 (1) 81
(100) (1)131
(116) 306
 (1) 
Loans2,719
 62
 470
(728) (137)123
(141) 2,368
 30
 
Asset-backed securities153
 5
 14
(13) (34)11
(73) 63
 
 
Total debt instruments4,385
 68
 1,164
(1,029) (272)319
(420) 4,215
 31
 
Equity securities295
 (8) 28
(10) 
4
(9) 300
 (7) 
Other690
 15
 18
(6) (20)1

 698
 15
 
Total trading assets – debt and equity instruments5,370
 75
(c) 
1,210
(1,045) (292)324
(429) 5,213
 39
(c) 
Net derivative receivables:(a)
               
Interest rate264
 53
 17
(4) 46
26
70
 472
 131
 
Credit(35) 17
 1
(2) 4
3
17
 5
 11
 
Foreign exchange(396) 146
 
(5) 11
(38)(6) (288) 156
 
Equity(3,409) 639
 218
(242) 434
(111)(41) (2,512) 448
 
Commodity(674) 185
 

 12
1
(43) (519) 227
 
Total net derivative receivables(4,250) 1,040
(c) 
236
(253) 507
(119)(3) (2,842) 973
(c) 
Available-for-sale securities:               
Asset-backed securities276
 1
 

 (73)

 204
 1
 
Other1
 
 

 


 1
 
 
Total available-for-sale securities277
 1
(d) 


 (73)

 205
 1
(d) 
Loans276
 5
(c) 
122

 (7)

 396
 5
(c) 
Mortgage servicing rights6,030
 384
(e) 
243
(295) (160)

 6,202
 384
(e) 
Other assets1,265
 (37)
(c) 
23
(14) (16)
(1) 1,220
 (38)
(c) 
                
 Fair value measurements using significant unobservable inputs  
Three months ended
March 31, 2018
(in millions)
Fair
value at
Jan 1, 2018
Total realized/unrealized (gains)/losses    
Transfers into
level 3
(h)
Transfers (out of) level 3(h)
Fair value at
March 31, 2018
Change in unrealized (gains)/
losses related
to financial instruments held at March 31, 2018
PurchasesSalesIssuances
Settlements(g)
Liabilities:(b)
               
Deposits$4,142
 $(90)
(c)(i) 
$
$
$321
$(198)$
$(158) $4,017
 $(125)
(c)(i) 
Federal funds purchased and securities loaned or sold under repurchase agreements
 
 





 
 
 
Short-term borrowings1,665
 15
(c)(i) 


1,208
(746)12
(29) 2,125
 43
(c)(i) 
Trading liabilities – debt and equity instruments39
 3
(c) 
(37)43

1
2
(1) 50
 5
(c) 
Accounts payable and other liabilities13
 
 (6)




 7
 
 
Beneficial interests issued by consolidated VIEs39
 




(38)

 1
 

Long-term debt16,125
 (246)
(c)(i) 


3,091
(2,263)375
(132) 16,950
 (354)
(c)(i) 


Fair value measurements using significant unobservable inputs


 
Three months ended
March 31, 2017
(in millions)
Fair
value
at Jan 1, 2017
Total realized/unrealized gains/(losses)


 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
March 31, 2017
Change in unrealized gains/(losses) related
to financial instruments held at March 31, 2017
Purchases(f)
Sales
 
Settlements(g)
Assets:





 

 








Trading assets:





 

 








Debt instruments:





 

 








Mortgage-backed securities:





 

 








U.S. government agencies$392
$4

$79
$(97)
 $(16)$7
$(16)
$353

$(1)
Residential – nonagency83
9

5
(17)
 (4)15
(56)
35

1

Commercial – nonagency17
3

7
(8)
 (3)30
(1)
45

(1)
Total mortgage-backed securities492
16

91
(122)
 (23)52
(73)
433

(1)
Obligations of U.S. states and municipalities649
8

85
(69)
 (5)


668

8

Non-U.S. government debt securities46


72
(83)
 
26
(14)
47



Corporate debt securities576
(9)
423
(108)
 (122)33
(55)
738

(9)
Loans4,837
110

762
(744)
 (375)196
(198)
4,588

61

Asset-backed securities302
14

98
(138)
 (11)8
(28)
245

5

Total debt instruments6,902
139

1,531
(1,264)
 (536)315
(368)
6,719

64

Equity securities231
13

56
(6)
 
1
(24)
271

12

Other761
22

19


 (47)8


763

31

Total trading assets – debt and equity instruments7,894
174
(c) 
1,606
(1,270)
 (583)324
(392)
7,753

107
(c) 
Net derivative receivables:(a)










 

 








Interest rate1,263
44

16
(23)
 (303)4
8

1,009

6

Credit98
(46)

(2)
 (42)11
(2)
17

(43)
Foreign exchange(1,384)(24)

(2)
 (91)11


(1,490)
(18)
Equity(2,252)69

336
(45)
 (24)(73)93

(1,896)
(89)
Commodity(85)18




 2
6
3

(56)
26

Total net derivative receivables(2,360)61
(c) 
352
(72)
 (458)(41)102

(2,416)
(118)
(c) 
Available-for-sale securities:  
  
    
 
 
Asset-backed securities663
10


(50)
 (1)


622

8

Other1





 



1



Total available-for-sale securities664
10
(d) 

(50)
 (1)


623

8
(d) 
Loans570
6
(c) 



 (172)


404

6
(c) 
Mortgage servicing rights6,096
43
(e) 
217
(71)
 (206)


6,079

43
(e) 
Other assets2,223
37
(c) 
3
(77)  (109)

 2,077
 33
(c) 

Fair value measurements using significant unobservable inputs

Three months ended
March 31, 2017
(in millions)
Fair
value
at Jan 1, 2017
Total realized/unrealized (gains)/losses


 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
March 31, 2017
Change in unrealized (gains)/losses related
to financial instruments held at March 31, 2017
PurchasesSalesIssuances
Settlements(g)
Liabilities:(b)






 

 







Deposits$2,117
$(24)
(c) 
$
$
$309
 $(80)$
$(189)
$2,133

$(25)
(c) 
Federal funds purchased and securities loaned or sold under repurchase agreements

 


 


 
 
 
Short-term borrowings1,134
1
(c) 


707
 (585)17
(13)
1,261

2
(c) 
Trading liabilities – debt and equity instruments43


(1)2

 1
2
(2)
45



Accounts payable and other liabilities13





 (2)


11



Beneficial interests issued by consolidated VIEs48
3
(c) 



 



51

3
(c) 
Long-term debt12,850
529
(c)(j) 


3,792
(j) 
(2,811)35
(301)
14,094
(j) 
524
(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 15% at March 31,nine months ended September 30, 2018, and December 31, 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”) losses that are recorded in earnings, are reported in investment securities losses. Unrealized gains/(losses) are reported in OCI. There were no realized gains/(losses) or foreign exchange hedge accounting adjustments recorded in income on AFS securities for the three months ended March 31, 2018 and 2017, respectively. Unrealized gains/(losses) recorded on AFS securities in OCI were $1 million and $10 million for the three months ended March 31, 2018 and 2017, 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 losses were $52 million for the three months ended March 31, 2018. There were no realized gains for three months ended March 31, 2018.
(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, 2018. The following describes significant changes to level 3 assets since December 31, 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, refer to Assets and liabilities measured at fair value on a nonrecurring basis onpage 105.
Three months ended September 30, 2018
Level 3 assets were $19.0 billion at September 30, 2018, reflecting a decrease of $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.
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, refer to Changes in level 3 recurring fair value measurements rollforward tables onpages 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 $387 million of net losses on liabilities, none of which were individually significant.
Nine months ended September 30, 2018
$2.1 billion of net gains on assets predominantly driven by market movements in derivative receivables.
$722 million of net gains on liabilities, none of which were individually significant.
Nine months ended September 30, 2017
$692 million of of net gains on assets and $1.0 billion 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 FVA presented below includes 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)

For further information about both credit and funding adjustments, as well as information about valuation adjustments on fair value option elected liabilities, refer to Note 2 of JPMorgan Chase’s 2017 Annual Report.

Assets and liabilities measured at fair value on a nonrecurring basis
The following tables present the assets still 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 2017, respectively, by major product category and fair value hierarchy.
 Fair value hierarchy Total fair value
September 30, 2018 (in millions)Level 1
Level 2
 Level 3
 
Loans$
$492

$243
(a) 
$735
Other assets(b)

216
 826
 1,042
Total assets measured at fair value on a nonrecurring basis$
$708
 $1,069

$1,777
 Fair value hierarchy Total fair value
September 30, 2017 (in millions)Level 1
Level 2
 Level 3
 
Loans$
$338
 $542
 $880
Other assets
7
 245
 252
Total assets measured at fair value on a nonrecurring basis$
$345
 $787
 $1,132
(a)Of the $243 million in level 3 assets measured at fair value on a nonrecurring basis) were 0.8%basis as of total Firm assetsSeptember 30, 2018, $200 million related to residential real estate loans carried at March 31, 2018. The following describes significant changes tothe 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 assets since December 31, 2017, for those items measured at fair value onas they are valued using a recurring basis. For further information on changes impacting items measured at fair value on a nonrecurring basis, see Assetsbroker’s price opinion and liabilities measured at fair value on a nonrecurring basis on page 90.
Three months ended March 31, 2018
Level 3 assets were $19.5 billion at March 31, 2018, reflecting an increase of $267 million from December 31, 2017 with no movements that were individually significant.

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, see Changes in level 3 recurring fair value measurements rollforward tables on pages 86–89.
Three months ended March 31, 2018
$1.5 billion of net gains on assets and $318 million of net gains on liabilities, none of which were individually significant.
Three months ended March 31, 2017
$331 million of net gains on assets and $509 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 FVA presented below includes the impact ofdiscounted based upon the Firm’s own credit quality onexperience with actual liquidation values. These discounts to the inception valuebroker price opinions ranged from 13% to 40% with a weighted average of liabilities as well as the impact of changes in the Firm’s own credit quality over time.
 Three months ended March 31, 2017
(in millions)2018
 2017
Credit and funding adjustments:   
Derivatives CVA$84
 $221
Derivatives FVA(83) (7)
For further information about both credit and funding adjustments, as well as information about valuation adjustments on fair value option elected liabilities, see Note 2 of JPMorgan Chase’s 2017 Annual Report.

Assets and liabilities measured at fair value on a nonrecurring basis
The following tables present the assets still held as of the reporting date for which a nonrecurring fair value adjustment was recorded during the three months ended 2018 and 2017, respectively, by major product category and fair value hierarchy.
 Fair value hierarchy Total fair value
March 31, 2018 (in millions)Level 1
Level 2
 Level 3
 
Loans$
$690

$165
(a) 
$855
Other assets(b)

236
 572
 808
Total assets measured at fair value on a nonrecurring basis$
$926
 $737

$1,663
 Fair value hierarchy Total fair value
March 31, 2017 (in millions)Level 1
Level 2
 Level 3
 
Loans$
$6,530
 $221
 $6,751
Other assets
4
 243
 247
Total assets measured at fair value on a nonrecurring basis$
$6,534
 $464
 $6,998
(a)Of the $165 million in level 3 assets measured at fair value on a nonrecurring basis as of March 31, 2018, $89 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’s experience with actual liquidation values. These discounts to the broker price opinions ranged from 13% to 38% with a weighted average of 21%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 $572 million in level 3 assets measured at fair value on a nonrecurring basis as of March 31, 2018, $406 million related to such equity securities. These equity securities are classified as level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.
There were no material liabilities measured at fair value on a nonrecurring basis at March 31, 2018 and March 31, 2017.
Nonrecurring fair value changes
The following table presents the total change in value of assets and liabilities for which a fair value adjustment has been recognized for the three months ended March 31, 2018 and 2017, related to financial instruments held at those dates.
 Three months ended
March 31,
 2018
 2017
Loans$(15) $(322)
Other assets496
(a) 
(31)
Total nonrecurring fair value gains/(losses)$481
 $(353)
(a)Included $505 million of fair value gains as a result of the measurement alternative. For additional information, see Note 1.

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), see Note 12 of JPMorgan Chase’s 2017 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 March 31, 2018, and December 31, 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,see Note 2 of JPMorgan Chase’s 2017 Annual Report.
 March 31, 2018 December 31, 2017
  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
Financial assets           
Cash and due from banks$24.8
$24.8
$
$
$24.8
 $25.9
$25.9
$
$
$25.9
Deposits with banks390.0
387.0
3.0

390.0
 405.4
401.8
3.6

405.4
Accrued interest and accounts receivable72.0

71.9
0.1
72.0
 67.0

67.0

67.0
Federal funds sold and securities purchased under resale agreements234.1

234.1

234.1
 183.7

183.7

183.7
Securities borrowed113.1

113.1

113.1
 102.1

102.1

102.1
Securities, held-to-maturity29.0

29.1

29.1
 47.7

48.7

48.7
Loans, net of allowance for loan losses(a)
918.1

217.0
703.5
920.5
 914.6

213.2
707.1
920.3
Other(b)
55.5

54.6
1.0
55.6
 53.9

52.1
9.2
61.3
Financial liabilities           
Deposits$1,466.8
$
$1,466.9
$
$1,466.9
 $1,422.7
$
$1,422.7
$
$1,422.7
Federal funds purchased and securities loaned or sold under repurchase agreements178.4

178.4

178.4
 158.2

158.2

158.2
Short-term borrowings53.9

53.6
0.2
53.8
 42.6

42.4
0.2
42.6
Accounts payable and other liabilities156.1

153.4
2.7
156.1
 152.0

148.9
2.9
151.8
Beneficial interests issued by consolidated VIEs21.6

21.6

21.6
 26.0

26.0

26.0
Long-term debt and junior subordinated deferrable interest debentures225.3

227.1
3.1
230.2
 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. For additional information, see Note 1.
(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, see Valuation hierarchy on pages 156–159 of JPMorgan Chase’s 2017 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. 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.
 March 31, 2018 December 31, 2017
  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
Wholesale lending-related commitments$1.1
$
$
$1.5
$1.5
 $1.1
$
$
$1.6
$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, see page 157 of JPMorgan Chase’s 2017 Annual Report.
Equity securities without readily determinable fair values
As a result of the adoption of the recognition and measurement guidanceguidance. Of the $826 million in level 3 assets measured at fair value on a nonrecurring basis as of September 30, 2018, $724 million related to such equity securities. These equity securities are classified as level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.
There were no material liabilities measured at fair value on a nonrecurring basis at September 30, 2018 and at September 30, 2017.
Nonrecurring fair value changes
The following table presents the total change in value of assets and liabilities for which a fair value adjustment has been recognized for the three and nine months ended September 30, 2018 and 2017, related to financial instruments held at those dates.
 Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
Loans$(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 electionthree months and nine months ended September 30, 2018, respectively, of fair value gains/(losses) as a result of the measurement alternative,alternative.

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), refer to Note 12 of JPMorgan Chase’s 2017 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, 2018, and December 31, 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, refer to Note2 of JPMorgan Chase’s 2017 Annual Report.
 September 30, 2018 December 31, 2017
  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
Financial assets           
Cash and due from banks$23.2
$23.2
$
$
$23.2
 $25.9
$25.9
$
$
$25.9
Deposits with banks395.9
392.2
3.7

395.9
 405.4
401.8
3.6

405.4
Accrued interest and accounts receivable77.7

77.6
0.1
77.7
 67.0

67.0

67.0
Federal funds sold and securities purchased under resale agreements205.4

205.4

205.4
 183.7

183.7

183.7
Securities borrowed117.9

117.9

117.9
 102.1

102.1

102.1
Securities, held-to-maturity31.4

30.9

30.9
 47.7

48.7

48.7
Loans, net of allowance for loan losses(a)
938.2

227.3
710.0
937.3
 914.6

213.2
707.1
920.3
Other(b)
55.0

54.1
1.0
55.1
 53.9

52.1
9.2
61.3
Financial liabilities           
Deposits$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 agreements180.5

180.5

180.5
 158.2

158.2

158.2
Short-term borrowings56.7

56.7

56.7
 42.6

42.4
0.2
42.6
Accounts payable and other liabilities173.4

170.0
3.1
173.1
 152.0

148.9
2.9
151.8
Beneficial interests issued by consolidated VIEs20.2

20.2

20.2
 26.0

26.0

26.0
Long-term debt and junior subordinated deferrable interest debentures216.0

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 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 investmentcharacteristics of the same issuer, with such changes recognized in earnings.
In its determinationunderlying 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 new carrying values upon observable price changes,underlying collateral. The difference between the Firm may adjust the prices if deemed necessary to arrive at the Firm’s estimated fair values. Such adjustments may include adjustments to reflectvalue and carrying value of a financial asset or liability is the result of the different rights and obligations of similar securities, and other adjustments thatmethodologies used to determine fair value as compared with carrying value. For example, credit losses are consistent with the Firm’s valuation techniquesestimated for private equity direct investments.
The following table presents equity securities without readily determinablea financial asset’s remaining life in a fair values thatvalue calculation but are measured under the measurement alternative and the related adjustments recorded during theestimated for a loss emergence period for those securities with observable price changes. These securities are included in the nonrecurringallowance for loan loss calculation; future loan income (interest and fees) is incorporated in a fair value tables when applicable price changes are observable.
As of or for three months ended March 31, 2018
(in millions)
Carrying value(a)
 
Upward carrying
value changes
Other assets$1,429 $505
(a) The amount of downward carrying value changes and impairment was immaterial.
Includedcalculation but is generally not considered in other assets above is the Firm’s interest in approximately 40 million Visa Class B shares, recorded at a nominal carrying value. These shares are subject to certain transfer restrictions currently and will be converted 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 1.6483 at March 31, 2018, and may be adjusted by Visa depending on developments related to the litigation matters.


Note 3 – Fair value option
allowance for loan losses. For a further discussion of the primary financial instrumentsFirm’s methodologies for whichestimating the fair value option was elected, including the basis for those electionsof loans and the determination of instrument-specific credit risk, where relevant, see Note 3lending-related commitments, refer to Valuation hierarchy on pages 156–159 of JPMorgan Chase’s 2017 Annual Report.
Changes in fair value under
(b)The prior period amounts have been revised to conform with the fair value option electioncurrent 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. 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, 2018 December 31, 2017
  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
Wholesale lending-related commitments$1.1$—$—$1.5$1.5 $1.1$—$—$1.6$1.6
The following table presents
(a)Excludes the changes in fair value included incurrent carrying values of the Consolidated statementsguarantee liability and the offsetting asset, each of income for the three months ended March 31, 2018 and 2017, 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 measuredis recognized at fair value are not included inat the table.
 Three months ended March 31,

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$7

$

$7

 $(21) $
 $(21)
Securities borrowed(27)


(27)
 77
 
 77
Trading assets: 
 



      
Debt and equity instruments, excluding loans(186)


(186)
 361
 
 361
Loans reported as trading assets: 
 



      
Changes in instrument-specific credit risk122

5
(c) 
127

 174
 6
(c) 
180
Other changes in fair value41

(90)
(c) 
(49)
 34
 123
(c) 
157
Loans: 
 



      
Changes in instrument-specific credit risk





 (1) 
 (1)
Other changes in fair value(1)


(1)
 
 
 
Other assets2

(7)
(d) 
(5)
 4
 (6)
(d) 
(2)
Deposits(a)
210



210

 (159) 
 (159)
Federal funds purchased and securities loaned or sold under repurchase agreements10



10

 5
 
 5
Short-term borrowings(a)
273



273

 (474) 
 (474)
Trading liabilities(7)


(7)
 (1) 
 (1)
Beneficial interests issued by consolidated VIEs





 
 
 
Long-term debt(a)(b)
1,031



1,031

 (753) 
 (753)
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, refer to page 157 of JPMorgan Chase’s 2017 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, refer to Note3 of JPMorgan Chase’s 2017 Annual Report.
Changes in fair value under the fair value option election
The followingtable presentsthe changes in fair value included in the Consolidated statements of income for the three months ended September 30, 2018 and 2017, 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)


 Nine 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$(49) $
 $(49)  $(50) $
 $(50)
Securities borrowed(22) 
 (22)  80
 
 80
Trading assets:  
         
Debt and equity instruments, excluding loans(490) 6
(c) 
(484)  1,107
 2
(c) 
1,109
Loans reported as trading assets:  
         
Changes in instrument-specific credit risk458
 5
(c) 
463
  382
 13
(c) 
395
Other changes in fair value64
 24
(c) 
88
  188
 601
(c) 
789
Loans:            
Changes in instrument-specific credit risk(2) 
 (2)  (1) 
 (1)
Other changes in fair value(1) 


 (1)  4
 3
(c) 
7
Other assets4
 6
(d) 
10
  10
 (26)
(d) 
(16)
Deposits(a)
371
 
 371
  (362) 
 (362)
Federal funds purchased and securities loaned or sold under repurchase agreements27
 
 27
  4
 
 4
Other borrowed funds(a)
86
 
 86
  (485) 
 (485)
Trading liabilities1
 
 1
  (4) 
 (4)
Long-term debt(a)(b)
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 transaction revenue were not material for the three months ended March 31, 2018 and 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, see 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 March 31, 2018, and December 31, 2017, for loans, long-term debt and long-term beneficial interests for which the fair value option has been elected.
 March 31, 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 outstanding
Loans(a)







     
Nonaccrual loans






     
Loans reported as trading assets$4,368

$1,585
$(2,783) $4,219
 $1,371
$(2,848)
Loans



 39
 
(39)
Subtotal4,368

1,585
(2,783) 4,258
 1,371
(2,887)
All other performing loans






     
Loans reported as trading assets41,599

39,691
(1,908) 38,157
 36,590
(1,567)
Loans2,995

2,908
(87) 2,539
 2,508
(31)
Total loans$48,962

$44,184
$(4,778) $44,954
 $40,469
$(4,485)
Long-term debt






     
Principal-protected debt$28,378
(c) 
$24,923
$(3,455) $26,297
(c) 
$23,848
$(2,449)
Nonprincipal-protected debt(b)
NA

24,229
NA
 NA
 23,671
NA
Total long-term debtNA

$49,152
NA
 NA
 $47,519
NA
Long-term beneficial interests   

     
Nonprincipal-protected debtNA

$7
NA
 NA
 $45
NA
Total long-term beneficial interestsNA

$7
NA
 NA
 $45
NA
(a)There were no performing loans that were ninety days or more past due as of March 31,elected is recorded in OCI, while realized gains/(losses) are recorded in principal transactions revenue. Realized gains/(losses) due to instrument-specific credit risk recorded in principal transactions revenue were not material for the three and nine months ended September 30, 2018 and December 31, 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, 2018, and December 31, 2017, for loans, long-term debt and long-term beneficial interests for which the fair value option has been elected.
 September 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 outstanding
Loans(a)







     
Nonaccrual loans






     
Loans reported as trading assets$4,171

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



 39
 
(39)
Subtotal4,171

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






     
Loans reported as trading assets41,986

40,395
(1,591) 38,157
 36,590
(1,567)
Loans3,039

2,987
(52) 2,539
 2,508
(31)
Total loans$49,196

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






     
Principal-protected debt$31,858
(c) 
$27,518
$(4,340) $26,297
(c) 
$23,848
$(2,449)
Nonprincipal-protected debt(b)
NA

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

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

     
Nonprincipal-protected debtNA

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

$17
NA
 NA
 $45
NA
(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 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 March 31,
(a)There were no performing loans that were ninety days or more past due as of September 30, 2018, and December 31, 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-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, 2018, and December 31, 2017, the contractual amount of lending-related commitments for which the fair value option was elected was $9.1 billion and $7.4 billion, respectively,with a corresponding fair value of $(53) million and $(76) million, respectively. For further information regarding off-balance sheet lending-related financial instruments, refer to Note27 of JPMorgan Chase’s 2017 Annual Report, and Note 20 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




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, refer to Note5 of JPMorgan Chase’s 2017 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 hedgeCorporate118-119
 • Interest rate
Hedge floating-rate assets and liabilitiesCash flow hedgeCorporate120
 • Foreign exchange
Hedge foreign currency-denominated assets and liabilitiesFair value hedgeCorporate118-119
 • Foreign exchange
Hedge foreign currency-denominated forecasted revenue and expenseCash flow hedgeCorporate120
 • Foreign exchange
Hedge the value of the Firm’s investments in non-U.S. dollar functional currency entitiesNet investment hedgeCorporate121
 • Commodity
Hedge commodity inventoryFair value hedgeCIB118-119
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 managementCCB121
 • Credit
Manage the credit risk of wholesale lending exposuresSpecified risk managementCIB121
 • Interest rate and
foreign exchange
Manage the risk of certain other specified assets and liabilitiesSpecified risk managementCorporate121
Market-making derivatives and other activities:
 • Various
Market-making and related risk managementMarket-making and otherCIB121
 • Various
Other derivativesMarket-making and otherCIB, Corporate121


Notional amount of derivative contracts
The following table summarizes the notional amount of derivative contracts outstanding as of September 30, 2018, and December 31, 2017.
 
Notional amounts(b)
(in billions)September 30, 2018
December 31, 2017
Interest rate contracts  
Swaps$25,236
$21,043
Futures and forwards7,326
4,904
Written options4,718
3,576
Purchased options5,233
3,987
Total interest rate contracts42,513
33,510
Credit derivatives(a)
1,603
1,522
Foreign exchange contracts  
Cross-currency swaps3,893
3,953
Spot, futures and forwards6,812
5,923
Written options961
786
Purchased options956
776
Total foreign exchange contracts12,622
11,438
Equity contracts  
Swaps402
367
Futures and forwards106
90
Written options596
531
Purchased options543
453
Total equity contracts1,647
1,441
Commodity contracts  
Swaps140
116
Spot, futures and forwards164
168
Written options157
98
Purchased options134
93
Total commodity contracts595
475
Total derivative notional amounts$58,980
$48,386
(a)For more information on volumes and types of credit derivative contracts, refer to the Credit derivatives discussion on page 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, 2018, and December 31, 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

(a)Balances exclude structured notes for which the fair value option was elected was $9.8 billion and $7.4 billion, respectively, with a corresponding fair value of $(584) million and $(76) million, respectively. For further information regarding off-balance sheet lending-related financial instruments, see Note 27 of JPMorgan Chase’s 2017 Annual Report, and Note 20 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.

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
















Interest rate$22,793
$149
$7,961
$30,903

$22,056
$69
$8,058
$30,183
Credit4,811
1,503

6,314

4,329
1,312

5,641
Foreign exchange2,790
122
39
2,951

2,841
147
38
3,026
Equity18,147
6,797
6,470
31,414

17,581
7,106
6,548
31,235
Commodity215
14
3,530
3,759

230
15
4,468
4,713
Total structured notes$48,756
$8,585
$18,000
$75,341

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



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, see Note 5 of JPMorgan Chase’s 2017 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 better aligns hedge accounting with the economics of the Firm’s risk management activities. For additional information, see Notes 1 and 17.
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 expectedelected. Refer 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 rateHedge fixed rate assets and liabilitiesFair value hedgeCorporate102
◦ Interest rateHedge floating-rate assets and liabilitiesCash flow hedgeCorporate103
 Foreign exchange
Hedge foreign currency-denominated assets and liabilitiesFair value hedgeCorporate102
 Foreign exchange
Hedge foreign currency-denominated forecasted revenue and expenseCash flow hedgeCorporate103
 Foreign exchange
Hedge the value of the Firm’s investments in non-U.S. dollar functional currency entitiesNet investment hedgeCorporate104
 Commodity
Hedge commodity inventoryFair value hedgeCIB102
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 managementCCB104
 Credit
Manage the credit risk of wholesale lending exposuresSpecified risk managementCIB104
 Interest rate and foreign exchange
Manage the risk of certain other specified assets and liabilitiesSpecified risk managementCorporate104
Market-making derivatives and other activities:
 Various
Market-making and related risk managementMarket-making and otherCIB104
 Various
Other derivativesMarket-making and otherCIB, Corporate104

Notional amount of derivative contracts
The following table summarizes the notional amount of derivative contracts outstanding as of March 31, 2018, and December 31, 2017.
 
Notional amounts(b)
(in billions)March 31, 2018
December 31, 2017
Interest rate contracts  
Swaps$23,090
$21,043
Futures and forwards7,216
4,904
Written options4,058
3,576
Purchased options4,380
3,987
Total interest rate contracts38,744
33,510
Credit derivatives(a)
1,605
1,522
Foreign exchange contracts  
Cross-currency swaps4,195
3,953
Spot, futures and forwards7,016
5,923
Written options873
786
Purchased options878
776
Total foreign exchange contracts12,962
11,438
Equity contracts  
Swaps377
367
Futures and forwards97
90
Written options594
531
Purchased options516
453
Total equity contracts1,584
1,441
Commodity contracts  
Swaps130
116
Spot, futures and forwards179
168
Written options112
98
Purchased options102
93
Total commodity contracts523
475
Total derivative notional amounts$55,418
$48,386
(a)For more information on volumes and types of credit derivative contracts, see the Credit derivatives discussion on page 105.
(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 March 31, 2018, and December 31, 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  
March 31, 2018
(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$301,480
 $2,391
$303,871
 $23,778
 $271,093
 $2,770
$273,863
 $7,170
Credit23,727
 
23,727
 1,062
 23,697
 
23,697
 1,713
Foreign exchange165,482
 453
165,935
 16,603
 152,846
 963
153,809
 10,797
Equity43,989
 
43,989
 8,803
 48,239
 
48,239
 10,325
Commodity16,927
 193
17,120
 6,668
 18,144
 82
18,226
 6,944
Total fair value of trading assets and liabilities$551,605
 $3,037
$554,642
 $56,914
 $514,019
 $3,815
$517,834
 $36,949
              
 Gross derivative receivables   Gross derivative payables  
December 31, 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$313,276
 $2,716
$315,992
 $24,673
 $283,092
 $1,344
$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$556,327
 $3,226
$559,553
 $56,523
 $527,838
 $2,968
$530,806
 $37,777
(a)Balances exclude structured notes for which the fair value option has been elected. See 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.


Derivatives netting
(c)The following tables present, as of March 31, 2018, and December 31, 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 counterpartyprior period amounts have been netted on the Consolidated balance sheets where the Firm has obtained an appropriate legal opinion with respectrevised 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 associatedconform with the Firm’s derivative instruments, but are not eligible for net presentation:current period presentation.


Derivatives netting
The following tables present, as of September 30, 2018, and December 31, 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.
 March 31, 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”)$291,712
$(272,007) $19,705
 $305,569
 $(284,917) $20,652
OTC–cleared8,080
(7,930) 150
 6,531
 (6,318) 213
Exchange-traded(a)
321
(157) 164
 185
 (84) 101
Total interest rate contracts300,113
(280,094) 20,019
 312,285
 (291,319) 20,966
Credit contracts:          
OTC14,755
(14,520) 235
 15,390
 (15,165) 225
OTC–cleared8,366
(8,145) 221
 7,225
 (7,170) 55
Total credit contracts23,121
(22,665) 456
 22,615
 (22,335) 280
Foreign exchange contracts:          
OTC161,340
(148,205) 13,135
 155,289
 (142,420) 12,869
OTC–cleared1,104
(1,097) 7
 1,696
 (1,654) 42
Exchange-traded(a)
131
(30) 101
 141
 (7) 134
Total foreign exchange contracts162,575
(149,332) 13,243
 157,126
 (144,081) 13,045
Equity contracts:          
OTC23,957
(21,172) 2,785
 22,024
 (19,917) 2,107
Exchange-traded(a)
16,443
(14,013) 2,430
 14,188
 (12,241) 1,947
Total equity contracts40,400
(35,185) 5,215
 36,212
 (32,158) 4,054
Commodity contracts:          
OTC9,701
(3,686) 6,015
 10,903
 (4,436) 6,467
Exchange-traded(a)
7,063
(6,766) 297
 8,854
 (8,701) 153
Total commodity contracts16,764
(10,452) 6,312
 19,757
 (13,137) 6,620
Derivative receivables with appropriate legal opinion542,973
(497,728)
(b) 
45,245
 547,995
 (503,030)
(b) 
44,965
Derivative receivables where an appropriate legal opinion has not been either sought or obtained11,669
  11,669
 11,558
   11,558
Total derivative receivables recognized on the Consolidated balance sheets$554,642
  $56,914
 $559,553
   $56,523
Collateral not nettable on the Consolidated balance sheets(c)(d)
   (13,101)     (13,363)
Net amounts   $43,813
     $43,160

 March 31, 2018 December 31, 2017
(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 payables          
Interest rate contracts:          
OTC$264,684
$(259,233) $5,451
 $276,960
 $(271,294) $5,666
OTC–cleared7,315
(7,305) 10
 6,004
 (5,928) 76
Exchange-traded(a)
186
(156) 30
 127
 (84) 43
Total interest rate contracts272,185
(266,694) 5,491
 283,091
 (277,306) 5,785
Credit contracts:          
OTC15,423
(14,247) 1,176
 16,194
 (15,170) 1,024
OTC–cleared7,797
(7,736) 61
 6,801
 (6,784) 17
Total credit contracts23,220
(21,983) 1,237
 22,995
 (21,954) 1,041
Foreign exchange contracts:          
OTC149,559
(142,008) 7,551
 150,966
 (141,789) 9,177
OTC–cleared1,005
(997) 8
 1,555
 (1,553) 2
Exchange-traded(a)
115
(6) 109
 98
 (7) 91
Total foreign exchange contracts150,679
(143,011) 7,668
 152,619
 (143,349) 9,270
Equity contracts:          
OTC28,082
(23,802) 4,280
 28,193
 (23,969) 4,224
Exchange-traded(a)
14,693
(14,111) 582
 12,720
 (12,234) 486
Total equity contracts42,775
(37,913) 4,862
 40,913
 (36,203) 4,710
Commodity contracts:          
OTC10,661
(4,592) 6,069
 12,645
 (5,508) 7,137
Exchange-traded(a)
6,796
(6,692) 104
 8,870
 (8,709) 161
Total commodity contracts17,457
(11,284) 6,173
 21,515
 (14,217) 7,298
Derivative payables with appropriate legal opinion506,316
(480,885)
(b) 
25,431
 521,133
 (493,029)
(b) 
28,104
Derivative payables where an appropriate legal opinion has not been either sought or obtained11,518
  11,518
 9,673
   9,673
Total derivative payables recognized on the Consolidated balance sheets$517,834
  $36,949
 $530,806
   $37,777
Collateral not nettable on the Consolidated balance sheets(c)(d)
   (3,711)     (4,180)
Net amounts   $33,238
     $33,597
(a)Exchange-traded derivative balances that relate to futures contracts are settled daily.
 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


 September 30, 2018 December 31, 2017
(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 payables          
Interest rate contracts:          
OTC$225,999
$(220,369) $5,630
 $276,960
 $(271,294) $5,666
OTC–cleared6,650
(6,618) 32
 6,004
 (5,928) 76
Exchange-traded(a)
172
(155) 17
 127
 (84) 43
Total interest rate contracts232,821
(227,142) 5,679
 283,091
 (277,306) 5,785
Credit contracts:          
OTC13,133
(11,852) 1,281
 16,194
 (15,170) 1,024
OTC–cleared10,062
(10,056) 6
 6,801
 (6,784) 17
Total credit contracts23,195
(21,908) 1,287
 22,995
 (21,954) 1,041
Foreign exchange contracts:          
OTC173,389
(164,557) 8,832
 150,966
 (141,789) 9,177
OTC–cleared679
(654) 25
 1,555
 (1,553) 2
Exchange-traded(a)
25
(6) 19
 98
 (7) 91
Total foreign exchange contracts174,093
(165,217) 8,876
 152,619
 (143,349) 9,270
Equity contracts:          
OTC28,618
(24,869) 3,749
 28,193
 (23,969) 4,224
Exchange-traded(a)
16,234
(14,508) 1,726
 12,720
 (12,234) 486
Total equity contracts44,852
(39,377) 5,475
 40,913
 (36,203) 4,710
Commodity contracts:          
OTC13,607
(5,600) 8,007
 12,645
 (5,508) 7,137
Exchange-traded(a)
8,558
(8,469) 89
 8,870
 (8,709) 161
Total commodity contracts22,165
(14,069) 8,096
 21,515
 (14,217) 7,298
Derivative 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 obtained12,280
  12,280
 9,673
   9,673
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)
   (3,566)     (4,180)
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 $61.9 billion and $55.5 billion at March 31, 2018, and December 31, 2017, respectively. Net derivatives payable included cash collateral netted of $45.1
(b)Net derivatives receivable included cash collateral netted of $55.5 billion at both September 30, 2018, and December 31, 2017, respectively. Net derivatives payable included cash collateral netted of $40.1 billion and $45.5 billion related to OTC and OTC-cleared derivatives at March 31, 2018, and December 31, 2017, respectively.
(c)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.
(d)Derivative collateral relates only to OTC and OTC-cleared 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, see Note 5 of JPMorgan Chase’s 2017 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 March 31, 2018, and December 31, 2017.
OTC and OTC-cleared derivative payables containing downgrade triggers
(in millions)March 31, 2018
December 31, 2017
Aggregate fair value of net derivative payables$11,022
$11,916
Collateral posted9,836
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 March 31,September 30, 2018, and December 31, 2017, respectively.
(c)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.
(d)Derivative collateral relates only to OTC and OTC-cleared 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, refer to Note5of JPMorgan Chase’s 2017 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, 2018, and
December 31, 2017.
OTC and OTC-cleared derivative payables containing downgrade triggers
(in millions)September 30, 2018
December 31, 2017
Aggregate fair value of net derivative payables$10,103
$11,916
Collateral posted8,926
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, 2018, and December 31, 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 derivatives    
 September 30, 2018 December 31, 2017
(in millions)Single-notch downgradeTwo-notch downgrade Single-notch downgradeTwo-notch downgrade
Amount of additional collateral to be posted upon downgrade(a)
$116
$2,046
 $79
$1,989
Amount required to settle contracts with termination triggers upon downgrade(b)
317
861
 320
650
(a)Includes the 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 doesfor initial margin.
(b)Amounts represent fair values of derivative payables, and do not result in a rating lower than a preexisting corresponding rating provided by another major rating agency will generally not result in additionalreflect 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 derivatives    
 March 31, 2018 December 31, 2017
(in millions)Single-notch downgradeTwo-notch downgrade Single-notch downgradeTwo-notch downgrade
Amount of additional collateral to be posted upon downgrade(a)
$80
$1,929
 $79
$1,989
Amount required to settle contracts with termination triggers upon downgrade(b)
344
679
 320
650
(a)Includes the additional collateral to be posted for initial margin.posted.
(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 Note 10, but in limited circumstances they may qualify to be accounted for as a sale and a derivative under U.S. GAAP. The amount of such transfers accounted for as a sale where the associated derivative was outstanding at March 31, 2018 was not material, and there were no such transfers at December 31, 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 the three months ended March 31, 2018 and 2017, respectively. The Firm includes gains/(losses) on the hedging derivative in the same line item in the Consolidated statements of income as the related hedged item.
 Gains/(losses) recorded in income 
Income statement impact of
excluded components
(f)
 OCI impact
Three months ended March 31, 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)
$(1,477)$1,629
$152
 $
$147
 $
Foreign exchange(c)
144
(33)111
 (122)111
 (52)
Commodity(d)
184
(147)37
 
18
 
Total$(1,149)$1,449
$300
 $(122)$276
 $(52)
 Gains/(losses) recorded in income Income statement impact due to:  
Three months ended March 31, 2017
(in millions)
DerivativesHedged itemsIncome statement impact 
Hedge ineffectiveness(e)
Excluded components(f)
  
Contract type        
Interest rate(a)(b)
$(281)$531
$250
 $(1)$251
  
Foreign exchange(c)
(775)740
(35) 
(35)  
Commodity(d)
(463)464
1
 16
(15)  
Total$(1,519)$1,735
$216
 $15
$201
  
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. The amount of such transfers accounted for as a sale where the associated derivative was outstanding at September 30, 2018 was not material, and there were no such transfers at December 31, 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, respectively. The Firm includes gains/(losses) on the hedging derivative in the same line item in the Consolidated statements of income as the related hedged item.
 Gains/(losses) recorded in income 
Income statement impact of
excluded components
(f)
 OCI impact
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)
$(870)$1,032
$162
 $
$160
 $
Foreign exchange(c)
277
(165)112
 (137)112
 45
Commodity(d)
454
(461)(7) 
(5) 
Total$(139)$406
$267
 $(137)$267
 $45
 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 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, respectively. The Firm includes the gain/(loss) on the hedging derivative 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)
    
 Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three 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)
$1
$(1)$(2)
Foreign exchange(b)
(11)30
41
Total$(10)$29
$39
 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, 2018 and 2017.
Over the next 12 months, the Firm expects that approximately $(118) million (after-tax) of net losses recorded in AOCI at September 30, 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 six years.
For open cash flow hedges, the maximum length of time over which forecasted transactions are hedged is approximately 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, 2018 and 2017.
 2018 2017
Three months ended September 30,
(in millions)
Amounts recorded in
income(a)(c)
Amounts recorded in OCI 
Amounts recorded in
income(a)(c)
Amounts recorded in OCI(b)
Foreign exchange derivatives $2
 $311
  $(39) $(286)
          
 2018 2017
Nine months ended September 30,
(in millions)
Amounts recorded in
income(a)(c)
Amounts recorded in OCI 
Amounts recorded in
income(a)(c)
Amounts recorded in OCI(b)
Foreign exchange derivatives $(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. The Firm elects to record 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 did not recognize any ineffectiveness on net investment hedges directly in income during the three and nine months ended September 30, 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.
 
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

(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.
(e)Hedge ineffectiveness is the amount by which the gain or loss on the designated derivative instrument does not exactly offset the gain or loss on the hedged item attributable to the hedged risk.
(f)The assessment of hedge effectiveness excludes certain components of the changes in fair values of the derivatives and hedged items such as forward points on foreign exchange forward contracts, time values and cross-currency basis spreads. 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 March 31, 2018, the following amounts were recorded on the Consolidated balance sheets related to certain cumulative fair value hedge basis adjustments that are expected to impact the income statement in future periods (e.g., as adjustments to yield or to securities gains/losses).
  
Carrying amount of the hedged items(a)(b)
 
Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items:

March 31, 2018
(in millions)
  Active hedging relationships
Discontinued hedging relationships(d)
Total
Assets      
Available-for-sale debt securities

 47,977
(c) 
(1,557)555
(1,002)
Liabilities      
Long-term debt 131,268
 (851)85
(766)
Beneficial interests issued by consolidated VIEs 8,752
 (2)(61)(63)
(a)Excludes physical commodities with a carrying value of $5.2 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 generally will not impact the income statement in future periods. The carrying amount excluded for available-for-sale debt securities is $15.8 billion and for long-term debt is $5.5 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 months ended March 31, 2018 and 2017, respectively. The Firm includes the gain/(loss) on the hedging derivative 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 March 31, 2018
(in millions)
Amounts reclassified from AOCI to incomeAmounts recorded in OCITotal change
in OCI
for period
Contract type   
Interest rate(a)
$13
$(78)$(91)
Foreign exchange(b)
39
34
(5)
Total$52
$(44)$(96)
    
 Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended March 31, 2017
(in millions)
Amounts reclassified from AOCI to income
Amounts recorded in OCI(c)
Total change
in OCI
for period
Contract type   
Interest rate(a)
$(11)$11
$22
Foreign exchange(b)
(74)48
122
Total$(85)$59
$144
(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 months ended March 31, 2017.
The Firm did not experience any forecasted transactions that failed to occur for the three months ended March 31, 2018 and 2017.
Over the next 12 months, the Firm expects that approximately $88 million (after-tax) of net gains recorded in AOCI at March 31, 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 five years.
For open cash flow hedges, the maximum length of time over which forecasted transactions are hedged is approximately seven 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 months ended March 31, 2018 and 2017.
 2018 2017
Three months ended March 31, (in millions)
Amounts recorded in income(a)
Amounts recorded in OCI 
Amounts recorded in income(a)
Amounts recorded in OCI(b)
Foreign exchange derivatives $(11) $(389)  $(62) $(556)
Gains and losses on derivatives related to market-making activities and other derivatives
(a)
Certain components of hedging derivatives are permitted to be excluded from the assessment of hedge effectiveness, such as forward points on foreign exchange forward contracts. The Firm elects to record changes in fair value of these amounts directly in other income.
(b)Represents the effective portion of changes in value of the related hedging derivative. The Firm did not recognize any ineffectiveness on net investment hedges directly in income during the three months ended March 31, 2017.
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.
 
Derivatives gains/(losses)
recorded in income
 Three months ended March 31,
(in millions)20182017
Contract type  
Interest rate(a)
$(210)$(17)
Credit(b)
(7)(45)
Foreign exchange(c)
(30)(20)
Total$(247)$(82)
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. Refer to Note5for information on principal transactions revenue.
(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. See Note 5 for information on principal transactions revenue.

Credit derivatives
For a more detailed discussion of credit derivatives, see Note

Credit derivatives
For a more detailed discussion of credit derivatives, refer to Note5 of JPMorgan Chase’s 2017 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 amount
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$(746,195) $754,889
$8,694
 $6,341
Other credit derivatives(a)
(38,928) 45,393
6,465
 11,563
Total credit derivatives(785,123) 800,282
15,159
 17,904
Credit-related notes(18) 
(18) 7,653
Total$(785,141) $800,282
$15,141
 $25,557
       
 Maximum payout/Notional amount
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$(690,224) $702,098
$11,874
 $5,045
Other credit derivatives(a)
(54,157) 59,158
5,001
 11,747
Total credit derivatives(744,381) 761,256
16,875
 16,792
Credit-related notes(18) 
(18) 7,915
Total$(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 probability of the occurrence of a credit event, the recoveryfair 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 amount
March 31, 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$(731,898) $739,263
$7,365
 $6,024
Other credit derivatives(a)
(58,210) 58,466
256
 11,409
Total credit derivatives(790,108) 797,729
7,621
 17,433
Credit-related notes(18) 
(18) 9,098
Total$(790,126) $797,729
$7,603
 $26,531
       
 Maximum payout/Notional amount
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$(690,224) $702,098
$11,874
 $5,045
Other credit derivatives(a)
(54,157) 59,158
5,001
 11,747
Total credit derivatives(744,381) 761,256
16,875
 16,792
Credit-related notes(18) 
(18) 7,915
Total$(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 March 31, 2018, and December 31, 2017, where JPMorgan Chase is 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, 2018, and December 31, 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
   
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$(116,930) $(364,470) $(71,226) $(552,626) $8,043
 $(1,859) $6,184
Noninvestment-grade(53,103) (147,117) (32,295) (232,515) 8,337
 (4,519) 3,818
Total$(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

(a)The ratings scale is primarily 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
   
March 31, 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$(160,144) $(305,679) $(71,789) $(537,612) $8,231
 $(1,022) $7,209
Noninvestment-grade(75,170) (142,517) (34,827) (252,514) 8,160
 (5,384) 2,776
Total$(235,314) $(448,196) $(106,616) $(790,126) $16,391
 $(6,406) $9,985
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
(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.
(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, see Note 6 of JPMorgan Chase’s 2017 Annual Report.
The adoption of the revenue recognition guidance requires 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, see Note 1.
Investment banking fees
The following table presents the components of investment banking fees.

Three months ended March 31,
(in millions)2018
 2017
Underwriting


Equity$352

$424
Debt796

960
Total underwriting1,148

1,384
Advisory588

496
Total investment banking fees$1,736

$1,880
Principal transactions

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, refer to Note 6 of JPMorgan Chase’s 2017 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

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. Refer 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 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

(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,
(in millions)2018
 2017
 2018
 2017
Lending-related fees$284
 $280
 $838
 $824
Deposit-related fees1,258
 1,217
 3,676
 3,603
Total lending- and deposit-related fees$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,
(in millions)2018
 2017
 2018 2017
Asset management fees       
Investment management fees(a)
$2,716
 $2,636
 $8,081
 $7,603
All other asset management fees(b)
79
 63
 211
 226
Total asset management fees2,795
 2,699
 8,292
 7,829
        
Total administration fees(c)
533
 514
 1,651
 1,500
        
Commission and other fees       
Brokerage commissions604
 546
 1,887
 1,691
All other commissions and fees378
 313
 1,093
 976
Total commissions and fees982
 859
 2,980
 2,667
Total asset management, administration and commissions$4,310
 $4,072
 $12,923
 $11,996
(a)Represents fees earned from managing assets on behalf of the Firm’s client-driven market-making activities. See Note 6clients, including investors in Firm-sponsored funds and owners of separately managed investment accounts.
(b)Represents fees for further informationservices that are ancillary to investment management services, such as commissions earned on interest incomethe sales or distribution of mutual funds to clients.
(c)Predominantly includes fees for custody, securities lending, funds services 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-makingsecurities 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 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.
 Three months ended March 31,
(in millions)2018
 2017
Trading revenue by instrument type   
Interest rate$774
 $795
Credit380
 680
Foreign exchange1,024
 781
Equity1,627
 1,120
Commodity277
 185
Total trading revenue4,082
 3,561
Private equity gains/(losses)(130) 21
Principal transactions$3,952
 $3,582
Lending- and deposit-related fees
The following table presents the components of lending- and deposit-related fees.
 Three months ended March 31,
(in millions)2018
 2017
Lending-related fees$274
 $275
Deposit-related fees1,203
 1,173
Total lending- and deposit-related fees$1,477
 $1,448
Asset management, administration and commissions
The following table presents the components of Firmwide asset management, administration and commissions.
 Three months ended March 31,
(in millions)2018
 2017
Asset management fees   
Investment management fees(a)
$2,694
 $2,416
All other asset management fees(b)
66
 79
Total asset management fees2,760
 2,495
    
Total administration fees(c)
561
 482
    
Commission and other fees   
Brokerage commissions652
 578
All other commissions and fees336
 322
Total commissions and fees988
 900
Total asset management, administration and commissions(a)
$4,309
 $3,877
(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 March 31,
(in millions)2018
 2017
Interchange and merchant processing income$4,359
 $3,906
Reward costs and partner payments(2,884) (2,525)
Other card income(a)
(200) (467)
Total card income$1,275
 $914
(a)Predominantly represents annual and other lending fees andnew account origination costs, (including 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,
(in millions)2018
 2017
 2018
 2017
Operating lease income$1,157
 $928
 $3,316
 $2,625

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


Note 6 – Interest income and Interest expense
For a description of JPMorgan Chase’s accounting policies regarding interest income and interest expense, refer to Note7 of JPMorgan Chase’s 2017 Annual Report.
The following table presents the components of interest income and interest expense.

Three months ended
September 30,

Nine months ended
September 30,
(in millions)2018

2017

2018

2017
Interest income










Loans(a)
$12,207

$10,519

$34,915

$30,265
Taxable securities1,402

1,362

4,098

4,202
Non-taxable securities(b)
394

456

1,199

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

1,818

5,297

5,595
Trading assets2,155

1,947

6,369

5,611
Federal funds sold and securities purchased under resale agreements952

622

2,490

1,676
Securities borrowed(c) 
200



410

(65)
Deposits with banks1,585

1,259

4,449

3,002
All other interest-earning assets(d)
945

522

2,474

1,295
Total interest income19,840

16,687

56,404

47,379
Interest expense










Interest-bearing deposits1,621

837

4,021

1,949
Federal funds purchased and securities loaned or sold under repurchase agreements827

451

2,164

1,131
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 debt2,056
 1,759
 5,812
 5,035
Beneficial interest issued by consolidated VIEs122

123

366

386
Total interest expense5,932

3,889

15,699

10,309
Net interest income13,908

12,798

40,705

37,070
Provision for credit losses948

1,452

3,323

3,982
Net interest income after provision for credit losses$12,960

$11,346

$37,382

$33,088
(a)Includes the amortization/accretion of unearned income
Other(e.g., purchase premiums/discounts, net deferred fees/costs, etc.).
(b)Represents securities which are tax-exempt for U.S. federal income ontax purposes.
(c)Negative interest income is related to client-driven demand for certain securities combined with the Firm’s Consolidated statementsimpact of income includedlow interest rates. This is matched book activity and the following:
 Three months ended March 31,
(in millions)2018
 2017
Operating lease income$1,047
 $824
Noninterest expense
Other expense
Othernegative interest expense on the Firm’scorresponding securities loaned is recognized in interest expense.
(d)Includes held-for-investment margin loans, which are classified in accrued interest and accounts receivable, and all other interest-earning assets included in other assets on the Consolidated statements of income included the following:
 Three months ended March 31,
(in millions)2018
 2017
Legal expense$70
 $218
FDIC-related expense383
 381

Note 6 – Interest income and Interest expense
For a description of JPMorgan Chase’s accounting policies regarding interest income and interest expense, see Note 7 of JPMorgan Chase’s 2017 Annual Report.
The following table presents the components of interest income and interest expense.

Three months ended
March 31,
(in millions)2018

2017
Interest income




Loans(a)
$11,074

$9,751
Taxable securities1,313

1,430
Non-taxable securities(b)
410

458
Total investment securities(a)
1,723

1,888
Trading assets2,103

1,858
Federal funds sold and securities purchased under resale agreements731

526
Securities borrowed(c) 
62

(44)
Deposits with banks1,321

725
All other interest-earning assets(d)
681

338
Total interest income17,695

15,042
Interest expense




Interest-bearing deposits1,060

483
Federal funds purchased and securities loaned or sold under repurchase agreements578

293
Short-term borrowings(e)
209

73
Trading liabilities – debt and all other interest-bearing liabilities(f)
660

405
Long-term debt1,753
 1,589
Beneficial interest issued by consolidated VIEs123

135
Total interest expense4,383

2,978
Net interest income13,312

12,064
Provision for credit losses1,165

1,315
Net interest income after provision for credit losses$12,147

$10,749
balance sheets.
(a)Includes the amortization/accretion of unearned income (e.g., purchase premiums/discounts, net deferred fees/costs, etc.).
(e)Includes commercial paper.
(f)Other interest-bearing liabilities include brokerage customer payables.
(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)Includes held-for-investment margin 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 commercial paper.
(f)Other interest-bearing liabilities include brokerage customer payables.


Note 7 – Pension and other postretirement employee benefit plans
For a discussion of JPMorgan Chase’s pension and OPEB plans, see Note 8 of JPMorgan Chase’s 2017 Annual Report.


Note 7 – Pension and other postretirement employee benefit plans
For a discussion of JPMorgan Chase’s pension and OPEB plans, refer to Note8 of JPMorgan Chase’s 2017 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.
(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$88
$83
 $
$
 $267
$247
 $
$
Interest cost on benefit obligations139
148
 6
7
 417
447
 18
21
Expected return on plan assets(246)(242) (25)(24) (741)(725) (77)(72)
Amortization:           
Net (gain)/loss26
63
 

 78
187
 

Prior service cost/(credit)(7)(9) 

 (19)(27) 

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 plans6
49
 (19)(17) 23
142
 (59)(51)
Total defined contribution plans229
221
 NA
NA
 661
617
 NA
NA
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 for the Firm’s U.S. and non-U.S.income.
(b)Includes various defined benefit pension defined contribution and OPEB plans.
  Defined benefit pension plans OPEB plans
 
Three months ended March 31, (in millions)2018
2017
2018
2017
Components of net periodic benefit cost     
Benefits earned during the period$90
$82
 $
$
Interest cost on benefit obligations139
149
 6
7
Expected return on plan assets(248)(241) (26)(24)
Amortization:     
Net (gain)/loss26
62
 

Prior service cost/(credit)(6)(9) 

Settlement
(3) 

Net periodic defined benefit cost(a)
1
40
 (20)(17)
Other defined benefit pension plans(b)
6
4
 NA
NA
Total defined benefit plans7
44
 (20)(17)
Total defined contribution plans210
186
 NA
NA
Total pension and OPEB cost included in noninterest expense$217
$230
 $(20)$(17)
(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. For additional information, see Note 1.
(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.
(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

There are no expected contributions to the U.S. defined benefit pension plan for 2018.

Note 8 – Employee share-based incentives
For a discussion of the accounting policies and other information relating to employee share-based incentives, refer to Note9 of JPMorgan Chase’s 2017 Annual Report.
The Firm recognized the following noncash compensation expense related to its various employee share-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

In the first quarter of 2018, in connection with its annual incentive grant for the 2017 performance year, the Firm granted 17 million RSUs and 516 thousand PSUswith weighted-average grant date fair values of $111.17 per RSU and $110.46 per PSU.

Note 9 – Investment securities
Investment securities consist of debt securities that are classified as AFS or HTM. Debt securities classified as trading assets are discussed in Note2. Predominantly all of the Firm’s AFS and HTM securities are held by Treasury and CIO in connection with its asset-liability management activities. At September 30, 2018, the investment securities portfolio consisted of debt securities with an average credit rating ofAA+(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, refer to Note10 of JPMorgan Chase’s 2017 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, 2018 December 31, 2017
(in millions)Amortized costGross unrealized gainsGross unrealized lossesFair value Amortized costGross unrealized gainsGross unrealized lossesFair value
Available-for-sale securities           
Mortgage-backed securities:           
U.S. government agencies(a) 
$64,229
$389
$1,508
 $63,110
 $69,879
$736
$335
 $70,280
Residential:           
U.S.6,396
127
36
 6,487
 8,193
185
14
 8,364
Non-U.S.2,639
94
3
 2,730
 2,882
122
1
 3,003
Commercial7,151
79
182
 7,048
 4,932
98
5
 5,025
Total mortgage-backed securities80,415
689
1,729
 79,375
 85,886
1,141
355
 86,672
U.S. Treasury and government agencies27,526
486
196
 27,816
 22,510
266
31
 22,745
Obligations of U.S. states and municipalities36,659
1,580
118
 38,121
 30,490
1,881
33
 32,338
Certificates of deposit75


 75
 59


 59
Non-U.S. government debt securities24,398
321
45
 24,674
 26,900
426
32
 27,294
Corporate debt securities1,993
64
1
 2,056
 2,657
101
1
 2,757
Asset-backed securities:           
Collateralized loan obligations20,139
12
42
 20,109
 20,928
69
1
 20,996
Other7,761
70
27
 7,804
 8,764
77
24
 8,817
Total available-for-sale debt securities198,966
3,222
2,158
 200,030
 198,194
3,961
477
 201,678
Available-for-sale equity securities(b)



 
 547


 547
Total available-for-sale securities198,966
3,222
2,158
 200,030
 198,741
3,961
477
 202,225
Held-to-maturity securities           
Mortgage-backed securities:           
U.S. government agencies(c)
26,537
5
493
 26,049
 27,577
558
40
 28,095
Commercial


 
 5,783
1
74
 5,710
Total mortgage-backed securities26,537
5
493
 26,049
 33,360
559
114
 33,805
Obligations of U.S. states and municipalities4,831
69
31
 4,869
 14,373
554
80
 14,847
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)Includes total U.S. government-sponsored enterprise obligations with fair values of plan assets for the U.S. defined benefit pension$44.2 billion and OPEB plans$45.8 billion at September 30, 2018, and for the material non-U.S. defined benefit pension plans:
(in billions)March 31, 2018
 December 31, 2017
Fair value of plan assets   
Defined benefit pension plans$19.5
 $19.6
OPEB plans2.7
 2.8
There are no expected contributions to the U.S. defined benefit pension plan for 2018.

Note 8 – Employee share-based incentives
For a discussion of the accounting policies and other information relating to employee share-based incentives, see Note 9 of JPMorgan Chase’sDecember 31, 2017, Annual Report.
The Firm recognized the following noncash compensation expense related to its various employee share-based incentive plans in its Consolidated statements of income.
 Three months ended
March 31,
(in millions)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$398
 $310
Accrual of estimated costs of share-based awards to be granted in future periods including those to full-career eligible employees308
 291
Total noncash compensation expense related to employee share-based incentive plans$706
 $601
In the first quarter ofrespectively.
(b)Effective January 1, 2018, in connection with its annual incentive grant for the 2017 performance year, the Firm granted 17 million RSUsadopted the recognition and 516 thousand PSUs with weighted-average grant date fair value of $111.17 per RSU and $110.46 per PSU.

Note 9 – Investment securities
Investment securities consist of debtmeasurement guidance. Equity securities that are classifiedwere previously reported as AFS or HTM. Debt securities classified as tradingwere reclassified to other assets are discussed in Note 2. Predominantly allupon adoption.
(c)Included total U.S. government-sponsored enterprise obligations with amortized cost of the Firm’s AFS$20.6 billion and HTM securities are held by Treasury and CIO in connection with its asset-liability management activities. At March 31, 2018, the investment securities portfolio consisted of debt securities with an average credit rating of AA+ (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, see Note 10 of JPMorgan Chase’s 2017 Annual Report.
As a result of the adoption of the premium amortization accounting guidance, 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$22.0 billion 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, see Notes 1 and 17.
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. The transfer of these investment securities resulted in the recognition of a net pre-tax unrealized
gain of $221 million within AOCI. This transfer was a non-cash transaction. For additional information, see Notes 1 and 17.
The amortized costs and estimated fair values of the investment securities portfolio were as follows for the dates indicated.
 March 31, 2018 December 31, 2017
(in millions)Amortized costGross unrealized gainsGross unrealized lossesFair value Amortized costGross unrealized gainsGross unrealized lossesFair value
Available-for-sale debt securities           
Mortgage-backed securities:           
U.S. government agencies(a) 
$67,614
$633
$1,038
 $67,209
 $69,879
$736
$335
 $70,280
Residential:           
U.S.7,659
166
26
 7,799
 8,193
185
14
 8,364
Non-U.S.2,686
118

 2,804
 2,882
122
1
 3,003
Commercial9,262
84
206
 9,140
 4,932
98
5
 5,025
Total mortgage-backed securities87,221
1,001
1,270
 86,952
 85,886
1,141
355
 86,672
U.S. Treasury and government agencies25,164
408
122
 25,450
 22,510
266
31
 22,745
Obligations of U.S. states and municipalities37,573
1,982
64
 39,491
 30,490
1,881
33
 32,338
Certificates of deposit60


 60
 59


 59
Non-U.S. government debt securities26,348
380
34
 26,694
 26,900
426
32
 27,294
Corporate debt securities2,191
79
2
 2,268
 2,657
101
1
 2,757
Asset-backed securities:           
Collateralized loan obligations19,989
51
1
 20,039
 20,928
69
1
 20,996
Other8,149
75
32
 8,192
 8,764
77
24
 8,817
Total available-for-sale debt securities206,695
3,976
1,525
 209,146
 198,194
3,961
477
 201,678
Available-for-sale equity securities(b)



 
 547


 547
Total available-for-sale securities206,695
3,976
1,525
 209,146
 198,741
3,961
477
 202,225
Held-to-maturity debt securities           
Mortgage-backed securities:           
U.S. government agencies(c)
24,197
124
189
 24,132
 27,577
558
40
 28,095
Commercial


 
 5,783
1
74
 5,710
Total mortgage-backed securities24,197
124
189
 24,132
 33,360
559
114
 33,805
Obligations of U.S. states and municipalities4,845
102
21
 4,926
 14,373
554
80
 14,847
Total held-to-maturity debt securities29,042
226
210
 29,058
 47,733
1,113
194
 48,652
Total investment securities$235,737
$4,202
$1,735
 $238,204
 $246,474
$5,074
$671
 $250,877
(a)Includes total U.S. government-sponsored enterprise obligations with fair values of $45.9 billion and $45.8 billion at March 31,September 30, 2018, and December 31, 2017, respectively.
(b)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.


Investment securities impairment
The following tables present the fair value and gross unrealized losses for investment securities by aging category at September 30, 2018, and December 31, 2017.
 Investment securities with gross unrealized losses
 Less than 12 months 12 months or more  
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$37,109
$988
 $10,492
$520
$47,601
$1,508
Residential:       
U.S. 
1,343
20
 860
16
2,203
36
Non-U.S.635
2
 180
1
815
3
Commercial914
11
 3,018
171
3,932
182
Total mortgage-backed securities40,001
1,021
 14,550
708
54,551
1,729
U.S. Treasury and government agencies4,556
100
 1,416
96
5,972
196
Obligations of U.S. states and municipalities4,171
63
 1,291
55
5,462
118
Certificates of deposit

 



Non-U.S. government debt securities4,237
16
 1,798
29
6,035
45
Corporate debt securities

 38
1
38
1
Asset-backed securities:       
Collateralized loan obligations10,267
42
 

10,267
42
Other2,018
6
 2,545
21
4,563
27
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 agencies22,131
356
 2,595
137
24,726
493
Commercial

 



Total mortgage-backed securities22,131
356
 2,595
137
24,726
493
Obligations of U.S. states and municipalities853
10
 677
21
1,530
31
Total held-to-maturity securities22,984
366
 3,272
158
26,256
524
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

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, 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, 2018, are not other-than-temporarily impaired. For additional information on other-than-temporary impairment, refer to Note10 of the JPMorgan Chase’s 2017 Annual Report.
Investment securities gains and losses
The following table presents realized gains and losses and OTTI from AFS securities that were recognized in income.
 Three months ended September 30, Nine months ended September 30,
(in millions)2018
2017
 2018
2017
Realized gains$58
$122
 $137
$664
Realized losses(103)(123) (507)(696)
OTTI losses(1)
 (1)(6)
Net investment securities losses$(46)$(1) $(371)$(38)
      
OTTI losses     
Credit-related losses recognized in income$
$
 $
$
Investment securities the Firm intends to sell(a)
(1)
 (1)(6)
Total OTTI losses recognized in income$(1)$
 $(1)$(6)

(a)Excludes realized losses on securities sold of $21 million and $6 million for the nine months ended September 30, 2018 and 2017 that had been previously reported as an OTTI loss due to the intention to sell the securities.
(c)Included total U.S. government-sponsored enterprise obligations with amortized cost of $18.1
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 securities that the Firm does not intend to sell was not material as of and during the nine month periods ended September 30, 2018 and 2017.

Contractual maturities and yields
The following table presents the amortized cost and estimated fair value at September 30, 2018, of JPMorgan Chase’s investment securities portfolio by contractual maturity.
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 cost$258
$377
$5,746
$74,034
 $80,415
Fair value260
379
5,827
72,909
 79,375
Average yield(b)
1.84%2.45%3.44%3.48% 3.46%
U.S. Treasury and government agencies







  
Amortized cost$84
$8,565
$13,644
$5,233
 $27,526
Fair value85
8,673
13,533
5,525
 27,816
Average yield(b)
2.12%2.70%2.53%2.91% 2.66%
Obligations of U.S. states and municipalities







  
Amortized cost$103
$715
$2,783
$33,058
 $36,659
Fair value104
728
2,872
34,417
 38,121
Average yield(b)
2.07%3.89%5.05%5.01% 4.98%
Certificates of deposit







  
Amortized cost$75
$
$
$
 $75
Fair value75



 75
Average yield(b)
0.49%%%% 0.49%
Non-U.S. government debt securities







  
Amortized cost$4,289
$14,711
$5,398
$
 $24,398
Fair value4,289
14,886
5,499

 24,674
Average yield(b)
3.00%1.86%1.30%% 1.94%
Corporate debt securities







  
Amortized cost$70
$914
$872
$137
 $1,993
Fair value70
936
905
145
 2,056
Average yield(b)
4.04%4.40%4.57%4.73% 4.48%
Asset-backed securities







  
Amortized cost$
$3,537
$5,345
$19,018
 $27,900
Fair value
3,515
5,347
19,051
 27,913
Average yield(b)
%2.83%3.19%3.04% 3.04%
Total available-for-sale securities







  
Amortized cost$4,879
$28,819
$33,788
$131,480
 $198,966
Fair value4,883
29,117
33,983
132,047
 200,030
Average yield(b)
2.88%2.37%2.85%3.78% 3.39%
Held-to-maturity securities







  
Mortgage-backed securities(a)








  
Amortized cost$
$
$2,765
$23,772
 $26,537
Fair value

2,725
23,324
 26,049
Average yield(b)
%%3.52%3.33% 3.35%
Obligations of U.S. states and municipalities







  
Amortized cost$
$
$20
$4,811
 $4,831
Fair value

20
4,849
 4,869
Average yield(b)
%%3.90%4.11% 4.11%
Total held-to-maturity securities







  
Amortized cost$
$
$2,785
$28,583
 $31,368
Fair value

2,745
28,173
 30,918
Average yield(b)
%%3.53%3.46% 3.47%
(a)As of September 30, 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 $51.2 billion and $50.6 billion, and $22.0 billion at March 31, 2018, and December 31, 2017, respectively.


Investment
(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 impairment
The following tables present the fair value and gross unrealized losses formay differ from their contractual or expected maturities as certain securities may be prepaid.
(c)Includes investment securities by aging categorywith 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 7 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, refer to Note 11 of JPMorgan Chase’s 2017 Annual Report. For further information regarding securities borrowed and securities lending agreements for which the fair value option has been elected, refer to Note 3. For further information regarding assets pledged and collateral received in securities financing agreements, refer to Note 21.
The table below summarizes the gross and net amounts of the Firm’s securities financing agreements as of September 30, 2018 and December 31, 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 the economic exposure with 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, 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)
Assets      
Securities purchased under resale agreements$521,732
$(304,110)$217,622
$(205,345) $12,277
Securities borrowed143,644
(21,210)122,434
(89,771) 32,663
Liabilities      
Securities sold under repurchase agreements$472,560
$(304,110)$168,450
$(154,335) $14,115
Securities loaned and other(a)
38,720
(21,210)17,510
(17,146) 364
 December 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)
Assets      
Securities purchased under resale agreements$448,608
$(250,505)$198,103
$(188,502)
$9,601
Securities borrowed113,926
(8,814)105,112
(76,805) 28,307
Liabilities      
Securities sold under repurchase agreements$398,218
$(250,505)$147,713
$(129,178)
$18,535
Securities loaned and other(a)
27,228
(8,814)18,414
(18,151) 263
(a)Includes securities-for-securities lending transactions of $5.2 billion and $9.2 billion at March 31,September 30, 2018 and December 31, 2017.
 Investment securities with gross unrealized losses
 Less than 12 months 12 months or more  
March 31, 2018 (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$34,422
$711
 $7,033
$327
$41,455
$1,038
Residential:       
U.S. 
1,527
17
 545
9
2,072
26
Non-U.S.

 



Commercial3,457
123
 1,712
83
5,169
206
Total mortgage-backed securities39,406
851
 9,290
419
48,696
1,270
U.S. Treasury and government agencies4,129
94
 364
28
4,493
122
Obligations of U.S. states and municipalities2,244
24
 1,276
40
3,520
64
Certificates of deposit

 



Non-U.S. government debt securities4,953
12
 1,196
22
6,149
34
Corporate debt securities98
1
 41
1
139
2
Asset-backed securities:       
Collateralized loan obligations907
1
 

907
1
Other3,904
28
 479
4
4,383
32
Total available-for-sale debt securities55,641
1,011
 12,646
514
68,287
1,525
Held-to-maturity securities       
Mortgage-backed securities       
U.S. government agencies10,193
182
 192
7
10,385
189
Commercial

 



Total mortgage-backed securities10,193
182
 192
7
10,385
189
Obligations of U.S. states and municipalities489
4
 683
17
1,172
21
Total held-to-maturity securities10,682
186
 875
24
11,557
210
Total investment securities
 with gross unrealized losses
$66,323
$1,197
 $13,521
$538
$79,844
$1,735


 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 debt 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 debt securities50,481
201
 12,792
276
63,273
477
Held-to-maturity debt 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
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 March 31, 2018, and it is not likely that2017, respectively, accounted for at fair value, where 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 AOCIis acting as of March 31, 2018,lender. These amounts are not other-than-temporarily impaired. For additional information on other-than-temporary impairment, see Note10 of the JPMorgan Chase’s 2017 Annual Report.
Investment securities gains and losses
The following table presents realized gains and losses and OTTI from AFS securities that were recognized in income.
 Three months ended March 31,
(in millions)2018
2017
Realized gains$70
$149
Realized losses(295)(140)
OTTI losses(20)(12)
Net investment securities gains/(losses)$(245)$(3)
   
OTTI losses  
Credit-related losses recognized in income$
$
Investment securities the Firm intends to sell(20)(12)
Total OTTI losses recognized in income$(20)$(12)
Changespresented within other liabilities 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 securities that the Firm does not intend to sell was not material as of and during the three month periods ended March 31, 2018 and 2017.

Contractual maturities and yields
The following table presents the amortized cost and estimated fair value at March 31, 2018, of JPMorgan Chase’s investment securities portfolio by contractual maturity.
By remaining maturity
March 31, 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 debt securities      
Mortgage-backed securities(a)
      
Amortized cost276
431
5,837
80,677
 $87,221
Fair value281
436
5,953
80,282
 $86,952
Average yield(b)
1.79%2.28%3.27%3.40% 3.38%
U.S. Treasury and government agencies







  
Amortized cost55

19,552
5,557
 $25,164
Fair value55

19,631
5,764
 $25,450
Average yield(b)
1.46%%2.34%2.26% 2.32%
Obligations of U.S. states and municipalities







  
Amortized cost64
801
2,474
34,234
 $37,573
Fair value64
816
2,576
36,035
 $39,491
Average yield(b)
1.85%3.46%4.94%4.94% 4.91%
Certificates of deposit







  
Amortized cost60



 $60
Fair value60



 $60
Average yield(b)
0.50%%%% 0.50%
Non-U.S. government debt securities







  
Amortized cost4,853
13,831
7,664

 $26,348
Fair value4,855
13,999
7,840

 $26,694
Average yield(b)
2.84%1.63%1.24%% 1.74%
Corporate debt securities







  
Amortized cost110
882
1,056
143
 $2,191
Fair value110
909
1,098
151
 $2,268
Average yield(b)
4.16%4.04%4.01%3.39% 3.99%
Asset-backed securities







  
Amortized cost
3,109
10,038
14,991
 $28,138
Fair value
3,083
10,048
15,100
 $28,231
Average yield(b)
%2.12%2.79%2.53% 2.58%
Total available-for-sale debt securities







  
Amortized cost$5,418
$19,054
$46,621
$135,602
 $206,695
Fair value$5,425
$19,243
$47,146
$137,332
 $209,146
Average yield(b)
2.76%1.92%2.55%3.65% 3.22%
Held-to-maturity debt securities







  
Mortgage-backed securities(a)








  
Amortized cost

282
23,915
 $24,197
Fair value

281
23,851
 $24,132
Average yield(b)
%%3.30%3.32% 3.32%
Obligations of U.S. states and municipalities







  
Amortized cost


4,845
 $4,845
Fair value


4,926
 $4,926
Average yield(b)
%%%4.11% 4.11%
Total held-to-maturity securities







  
Amortized cost$
$
$282
$28,760
 $29,042
Fair value$
$
$281
$28,777
 $29,058
Average yield(b)
%%3.30%3.45% 3.45%
(a)As of March 31, 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 $51.7 billion and $51.8 billion, respectively.Consolidated balance sheets.
(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 7 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, see Note 11 of JPMorgan Chase’s 2017 Annual Report. For further information regarding securities borrowed and securities lending agreements for which the fair value option has been elected, see Note 3. For further information regarding assets pledged and collateral received in securities financing agreements see Note 21.
The table below summarizes the gross and net amounts of the Firm’s securities financing agreements as of March 31,accounted for at fair value. At September 30, 2018 and December 31, 2017. When2017, included securities purchased under resale agreements of $12.2 billion and $14.7 billion, respectively and securities sold under agreements to repurchase of $1.1 billion and $697 million, respectively. There were $4.5 billion and $3.0 billion of securities borrowed at September 30, 2018 and December 31, 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 Firm has obtainednet 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 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 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.
 March 31, 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)
Assets      
Securities purchased under resale agreements$529,164
$(281,634)$247,530
$(238,149) $9,381
Securities borrowed131,750
(15,618)116,132
(85,976) 30,156
Liabilities      
Securities sold under repurchase agreements$444,114
$(281,634)$162,480
$(147,387) $15,093
Securities loaned and other(a)
40,974
(15,618)25,356
(25,028) 328
 December 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)
Assets      
Securities purchased under resale agreements$448,608
$(250,505)$198,103
$(188,502)
$9,601
Securities borrowed113,926
(8,814)105,112
(76,805) 28,307
Liabilities      
Securities sold under repurchase agreements$398,218
$(250,505)$147,713
$(129,178)
$18,535
Securities loaned and other(a)
27,228
(8,814)18,414
(18,151) 263
(a)Includes securities-for-securities lending transactions of $10.0 billion and $9.2 billion at March 31, 2018 and December 31, 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 March 31, 2018 and December 31, 2017, included securities purchased under resale agreements of $13.5 billion and $14.7 billion, respectively and securities sold under agreements to repurchase of $735 million and $697 million, respectively. There were $3.0 billion of securities borrowed at both March 31, 2018 and December 31, 2017. 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 March 31, 2018 and December 31, 2017, included $7.3 billion and $7.5 billion, respectively, of securities purchased under resale agreements; $28.2 billion and $25.5 billion, respectively, of securities borrowed; $13.6 billion and $16.5 billion, respectively, of securities sold under agreements to repurchase; and $19 million and $29 million, respectively, of securities loaned and other.

The tables below present as of March 31,obtained. At September 30, 2018 and December 31, 2017, the typesincluded $6.4 billion and $7.5 billion, respectively, of financial assets pledged in securities financingpurchased under resale agreements; $29.7 billion and $25.5 billion, respectively, of securities borrowed; $13.2 billion and $16.5 billion, respectively, of securities sold under agreements to repurchase; and the remaining contractual maturity$45 million and $29 million, respectively, of the securities financing agreements.
 Gross liability balance
 March 31, 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)
Mortgage-backed securities     
U.S. government agencies10,608

 13,100

Residential - nonagency1,932

 2,972

Commercial - nonagency1,224

 1,594

U.S. Treasury and government agencies200,550
46
 177,581
14
Obligations of U.S. states and municipalities1,397

 1,557

Non-U.S. government debt193,011
3,638
 170,196
2,485
Corporate debt securities14,847
418
 14,231
287
Asset-backed securities3,016
1
 3,508

Equity securities17,529
36,871
 13,479
24,442
Total$444,114
$40,974
 $398,218
$27,228
 Remaining contractual maturity of the agreements
 Overnight and continuous  
Greater than
90 days
 
March 31, 2018 (in millions)Up to 30 days30 – 90 daysTotal
Total securities sold under repurchase agreements$210,365
$154,243
$38,400
$41,106
$444,114
Total securities loaned and other(a)
31,051
765
2,773
6,385
40,974
 Remaining contractual maturity of the agreements
 Overnight and continuous  
Greater than
90 days
 
December 31, 2017 (in millions)Up to 30 days30 – 90 daysTotal
Total securities sold under repurchase agreements$166,425
$156,434
$41,611
$33,748
$398,218
Total securities loaned and other(a)
22,876
375
2,328
1,649
27,228
loaned and other.
(a)Includes securities-for-securities lending transactions of $10.0 billion and $9.2 billion at March

The tables below present as of September 30, 2018, and December 31, 2017 the types of financial assets pledged in securities financing agreements and the remaining contractual maturity of the securities financing agreements.
 Gross liability balance
 September 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)
Mortgage-backed securities     
U.S. government agencies25,116

 13,100

Residential - nonagency1,861

 2,972

Commercial - nonagency1,431

 1,594

U.S. Treasury and government agencies236,939
14
 177,581
14
Obligations of U.S. states and municipalities1,161

 1,557

Non-U.S. government debt174,400
2,294
 170,196
2,485
Corporate debt securities15,474
216
 14,231
287
Asset-backed securities2,543

 3,508

Equity securities13,635
36,196
 13,479
24,442
Total$472,560
$38,720
 $398,218
$27,228
 Remaining contractual maturity of the agreements
 Overnight and continuous    
Greater than
90 days
 
September 30, 2018 (in millions) Up to 30 days 30 – 90 daysTotal
Total securities sold under repurchase agreements$195,713
 $166,754
 $46,511
$63,582
$472,560
Total securities loaned and other(a)
29,415
 138
 1,805
7,362
38,720
 Remaining contractual maturity of the agreements
 Overnight and continuous    
Greater than
90 days
 
December 31, 2017 (in millions) Up to 30 days 30 – 90 daysTotal
Total securities sold under repurchase agreements$142,185
(b) 
$180,674
(b) 
$41,611
$33,748
$398,218
Total securities loaned and other(a)
22,876
 375
 2,328
1,649
27,228
(a)Includes securities-for-securities lending transactions of $5.2 billion and $9.2 billion at September 30, 2018 and December 31, 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.
Transfers not qualifying for sale accounting
At both March 31, 2018, and December 31, 2017, the Firm held $1.5 billion of financial assets for which the rights
(b)The prior period amounts have been transferredrevised to third parties; however,conform with the current period presentation.
Transfers not qualifying for sale accounting
At September 30, 2018, and December 31, 2017, the Firm held $1.6 billion and $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 short-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:

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
Loans held-for-sale
Loans at fair value
PCI loans held-for-investment
For a detailed discussion of loans, including accounting policies, refer to Note12 of JPMorgan Chase’s 2017 Annual Report. Refer to Note3 of this Form 10-Q for further information on the Firm’s elections of fair value accounting under the fair value option. Refer 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.
Loans held-for-sale
Consumer, excluding
Loans at fair valuecredit card(a)
Credit card
Wholesale(f)
Residential real estate – excluding PCI
• Residential mortgage(b)
• Home equity(c)
Other consumer loans(d)
• Auto
• Consumer & Business Banking(e)
Residential real estate – PCI
• Home equity
• Prime mortgage
• Subprime mortgage
• Option ARMs
• Credit card loans
• Commercial and industrial
• Real estate
• Financial institutions
• Government agencies
• Other(g)
(a)Includes loans held-for-investment
held in CCB, prime mortgage and home equity loans held in AWM and prime mortgage loans held in Corporate.
(b)Predominantly includes prime (including option ARMs) and subprime loans.
(c)Includes senior and junior 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 (predominantly Wealth Management clients within AWM), SPEs, and private education and civic organizations. For a detailed discussion of loans, including accounting policies, seemore information on SPEs, refer to Note 1214 of JPMorgan Chase’s 2017 Annual Report. See Note 3
The following tables summarize the Firm’s loan balances by portfolio segment.
September 30, 2018Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
(in millions) 
Retained$375,958
 $147,856
 $423,837
 $947,651
(b) 
Held-for-sale104
 25
 3,551
 3,680
 
At fair value
 
 2,987
 2,987
 
Total$376,062
 $147,881
 $430,375
 $954,318
 
         
December 31, 2017Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
(in millions) 
Retained$372,553
 $149,387
 $402,898
 $924,838
(b) 
Held-for-sale128
 124
 3,099
 3,351
 
At fair value
 
 2,508
 2,508
 
Total$372,681
 $149,511
 $408,505
 $930,697
 
(a)Includes accrued interest and fees net of this Form 10-Qan allowance for further information on the Firm’s electionsuncollectible portion of fair value accounting underaccrued interest and fee income.
(b)Loans (other than PCI loans and loans for which the fair value option. See Note 2option has been elected) are presented net of this Form 10-Q unamortized discounts and premiums, and net deferred loan fees or costs. These amounts were not material as of September 30, 2018, and December 31, 2017.


The following tables provide information about the carrying value of retained loans purchased, sold and reclassified to held-for-sale during the periods indicated. Reclassifications of loans 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

(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 billionfor information on loans carried at fair value the three months ended September 30, 2018and classified as trading assets.2017, respectively, and $14.5 billion and $18.2 billion for the nine months ended September 30, 2018 and 2017, respectively.

Loan portfolio
The
(c)Includes the Firm’s student loan portfolio is divided into three portfolio segments,which was sold in 2017.
Gains and losses on sales of loans
Gains and losses on sales of loans (including adjustments to record loans held-for-sale at the lower of cost or fair 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.
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, 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 provides information about retained consumer loans, excluding credit card, by class. In 2017, the Firm sold its student loan 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

For further information on consumer credit quality indicators, refer to Note12 of JPMorgan Chase’s 2017 Annual Report.

Residential real estate – excluding PCI loans
The following table provides information by class for retained residential real estate – excluding PCI loans.
Residential real estate – excluding PCI loans      
(in millions, except ratios)Residential mortgage  Home equity  Total residential real estate – excluding PCI
Sep 30,
2018

Dec 31,
2017

  Sep 30,
2018

Dec 31,
2017

  Sep 30,
2018

Dec 31,
2017

Loan delinquency(a)
          
Current$225,799
$208,713
  $28,554
$32,391
  $254,353
$241,104
30–149 days past due2,825
4,234
  470
671
  3,295
4,905
150 or more days past due2,737
3,549
  294
388
  3,031
3,937
Total retained loans$231,361
$216,496
  $29,318
$33,450
  $260,679
$249,946
% of 30+ days past due to total retained loans(b)
0.51%0.77%  2.61%3.17%  0.75%1.09%
90 or more days past due and government guaranteed(c)
$2,828
$4,172
  $
$
  $2,828
$4,172
Nonaccrual loans1,880
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$28
$37
  $6
$10
  $34
$47
Less than 66030
19
  1
3
  31
22
101% to 125% and refreshed FICO scores:         

Equal to or greater than 66020
36
  138
296
  158
332
Less than 66060
88
  46
95
  106
183
80% to 100% and refreshed FICO scores:         

Equal to or greater than 6603,606
4,369
  1,059
1,676
  4,665
6,045
Less than 660314
483
  359
569
  673
1,052
Less than 80% and refreshed FICO scores:         

Equal to or greater than 660212,585
194,758
  22,851
25,262
  235,436
220,020
Less than 6606,734
6,952
  3,501
3,850
  10,235
10,802
No FICO/LTV available888
1,259
  1,357
1,689
  2,245
2,948
U.S. government-guaranteed7,096
8,495
  

  7,096
8,495
Total retained loans$231,361
$216,496
  $29,318
$33,450
  $260,679
$249,946
Geographic region          
California$74,324
$68,855
  $5,852
$6,582
  $80,176
$75,437
New York29,146
27,473
  6,016
6,866
  35,162
34,339
Illinois15,242
14,501
  2,208
2,521
  17,450
17,022
Texas13,926
12,508
  1,843
2,021
  15,769
14,529
Florida10,624
9,598
  1,619
1,847
  12,243
11,445
New Jersey7,448
7,142
  1,702
1,957
  9,150
9,099
Washington8,057
6,962
  904
1,026
  8,961
7,988
Colorado8,131
7,335
  525
632
  8,656
7,967
Massachusetts6,545
6,323
  246
295
  6,791
6,618
Arizona4,519
4,109
  1,211
1,439
  5,730
5,548
All other(f)
53,399
51,690
  7,192
8,264
  60,591
59,954
Total retained loans$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 $2.7 billion and $2.4 billion; 30–149 days past due included $2.2 billion and $3.2 billion; and 150 or more days past due included $2.2 billion and $2.9 billion at September 30, 2018, and December 31, 2017, respectively.
(b)At September 30, 2018, and December 31, 2017, residential mortgage loans excluded mortgage loans insured by U.S. government agencies of $4.4 billion and $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 same segments usedloans are guaranteed by U.S government agencies. Typically the Firmprincipal balance of the loans is insured and interest is guaranteed at a specified reimbursement rate subject to determine the allowance for loan losses: Consumer, excluding credit card; Credit card;meeting agreed-upon servicing guidelines. At September 30, 2018, and Wholesale. Within each portfolio segment the Firm monitorsDecember 31, 2017, these balances included $1.3 billion and assesses the credit risk in the following classes$1.5 billion, respectively, of loans that are no longer accruing interest 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(c)
Other consumer loans(d)
• Auto
• Consumer & Business Banking(e)
Residential real estate – PCI
• Home equity
• Prime mortgage
• Subprime mortgage
• Option ARMs
• Credit card loans
• Commercial and industrial
• Real estate
• Financial institutions
• 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)Predominantly includes prime (including option ARMs) and subprime loans.
(c)Includes senior and junior 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; and private education and civic organizations.agreed-upon servicing guidelines. For more information on SPEs, see Note 14 of JPMorgan Chase’s 2017 Annual Report.
The following tables summarize the Firm’s loan balances by portfolio segment.
March 31, 2018Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
(in millions) 
Retained$373,243
 $140,348
 $412,020
 $925,611
(b) 
Held-for-sale152
 66
 5,687
 5,905
 
At fair value
 
 2,908
 2,908
 
Total$373,395
 $140,414
 $420,615
 $934,424
 
         
December 31, 2017Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
(in millions) 
Retained$372,553
 $149,387
 $402,898
 $924,838
(b) 
Held-for-sale128
 124
 3,099
 3,351
 
At fair value
 
 2,508
 2,508
 
Total$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 unamortized discounts and premiums, and net deferred loan fees or costs. These amounts were not material as of March 31, 2018, and December 31, 2017.


The following table provides information aboutremaining balance, interest is being accrued at the carrying value of retained loans purchased, sold and reclassified to held-for-sale during the periods indicated. Loans reclassified 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 sold out of the held-for-sale portfolio are excluded from this table.


2018 2017
Three months ended March 31, (in millions)
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
Purchases
$1,071
(a)(b) 
$
$1,098
$2,169
 $940
(a)(b) 
$
$284
$1,224
Sales
481


3,689
4,170
 590
 
2,447
3,037
Retained loans reclassified to held-for-sale
36
 
868
904
 6,309
(c) 

461
6,770
(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 $3.6 billionand $5.4 billionfor the three months ended March 31, 2018and 2017, respectively.
(c)Includes the Firm’s student loan portfolio which was sold in 2017.
The following table provides information about gains and losses on loan sales, including lower of cost or fair value adjustments, by portfolio segment.
 Three months ended
March 31,
 
(in millions)20182017 
Net gains/(losses) on sales of loans (including lower of cost or fair value adjustments)(a)
   
Consumer, excluding credit card$9
$(226)
(b) 
Credit card19
1
 
Wholesale(2)5
 
Total net gains on sales of loans (including lower of cost or fair value adjustments)$26
$(220) 
(a)Excludes sales related to loans accounted for at fair value.
(b)Includes the amounts related to the Firm’s student loan portfolio which was sold in 2017.
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, 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-optionguaranteed reimbursement rate. There were no loans that may result in negative amortization.

The accompanying table provides information about retained consumer loans, excluding credit card,were not guaranteed by class. In 2017, the Firm sold its student loan portfolio.
(in millions)March 31,
2018

December 31,
2017

Residential real estate – excluding PCI  
Residential mortgage$220,048
$216,496
Home equity31,792
33,450
Other consumer loans  
Auto66,042
66,242
Consumer & Business Banking25,856
25,789
Residential real estate – PCI  
Home equity10,332
10,799
Prime mortgage6,259
6,479
Subprime mortgage2,549
2,609
Option ARMs10,365
10,689
Total retained loans$373,243
$372,553
For further information on consumer credit quality indicators, see Note 12 of JPMorgan Chase’s 2017 Annual Report.

Residential real estate – excluding PCI loans
The following table provides information by class for residential real estate – excluding retained PCI loans.
Residential real estate – excluding PCI loans      
(in millions, except ratios)Residential mortgage  Home equity  Total residential real estate – excluding PCI
Mar 31,
2018

Dec 31,
2017

  Mar 31,
2018

Dec 31,
2017

  Mar 31,
2018

Dec 31,
2017

Loan delinquency(a)
          
Current$213,081
$208,713
  $30,894
$32,391
  $243,975
$241,104
30–149 days past due3,176
4,234
  498
671
  3,674
4,905
150 or more days past due3,791
3,549
  400
388
  4,191
3,937
Total retained loans$220,048
$216,496
  $31,792
$33,450
  $251,840
$249,946
% of 30+ days past due to total retained loans(b)
0.62%0.77%  2.82%3.17%  0.90%1.09%
90 or more days past due and government guaranteed(c)
$3,873
$4,172
  $
$
  $3,873
$4,172
Nonaccrual loans2,240
2,175
  1,585
1,610
  3,825
3,785
Current estimated LTV ratios(d)(e)
         

Greater than 125% and refreshed FICO scores:         

Equal to or greater than 660$65
$37
  $7
$10
  $72
$47
Less than 66018
19
  2
3
  20
22
101% to 125% and refreshed FICO scores:         

Equal to or greater than 66038
36
  219
296
  257
332
Less than 66076
88
  69
95
  145
183
80% to 100% and refreshed FICO scores:         

Equal to or greater than 6603,477
4,369
  1,410
1,676
  4,887
6,045
Less than 660410
483
  476
569
  886
1,052
Less than 80% and refreshed FICO scores:         

Equal to or greater than 660199,245
194,758
  24,260
25,262
  223,505
220,020
Less than 6606,861
6,952
  3,785
3,850
  10,646
10,802
No FICO/LTV available1,248
1,259
  1,564
1,689
  2,812
2,948
U.S. government-guaranteed8,610
8,495
  

  8,610
8,495
Total retained loans$220,048
$216,496
  $31,792
$33,450
  $251,840
$249,946
Geographic region          
California$70,090
$68,855
  $6,307
$6,582
  $76,397
$75,437
New York27,877
27,473
  6,528
6,866
  34,405
34,339
Illinois14,644
14,501
  2,396
2,521
  17,040
17,022
Texas12,848
12,508
  1,946
2,021
  14,794
14,529
Florida9,797
9,598
  1,750
1,847
  11,547
11,445
New Jersey7,166
7,142
  1,850
1,957
  9,016
9,099
Washington7,175
6,962
  975
1,026
  8,150
7,988
Colorado7,533
7,335
  567
632
  8,100
7,967
Massachusetts6,310
6,323
  279
295
  6,589
6,618
Arizona4,210
4,109
  1,352
1,439
  5,562
5,548
All other(f)
52,398
51,690
  7,842
8,264
  60,240
59,954
Total retained loans$220,048
$216,496
  $31,792
$33,450
  $251,840
$249,946
(a)Individual delinquency classifications include mortgage loans insured by U.S. government agencies as follows: current included $3.0 billion and $2.4 billion; 30–149 days past due included $2.5 billion and $3.2 billion; and 150 or more days past due included $3.1 billion and $2.9 billion at March 31, 2018, and December 31, 2017, respectively.
(b)At March 31, 2018 and December 31, 2017, residential mortgage loans excluded mortgage loans insured by U.S. government agencies of $5.6 billion and $6.1 billion, respectively, that are 90 or more days past due and still accruing interest at September 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 March 31, 2018, and December 31, 2017, these balances included $1.4 billion and $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 March 31, 2018, and December 31, 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, 2018, and December 31, 2017, included mortgage loans insured by U.S. government agencies of $7.1 billion and $8.5 billion, respectively. These amounts have been excluded from the 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, 2018, and December 31, 2017.
 Total loans Total 30+ day delinquency rate
(in millions, except ratios)Sep 30,
2018

Dec 31,
2017

 Sep 30,
2018

Dec 31,
2017

 
HELOCs:(a)
     
Within the revolving period(b)
$5,482
$6,363
 0.22%0.50%
Beyond the revolving period11,982
13,532
 2.78
3.56
HELOANs1,104
1,371
 2.99
3.50
Total$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 Note13 of JPMorgan Chase’s 2017 Annual Report.

(in millions)
Residential mortgage Home equity Total residential real estate – excluding PCI
Sep 30,
2018

Dec 31,
2017

 Sep 30,
2018

Dec 31,
2017

 Sep 30,
2018

Dec 31,
2017

Impaired loans        
With an allowance$3,558
$4,407
 $1,177
$1,236
 $4,735
$5,643
Without an allowance(a)
1,164
1,213
 879
882
 2,043
2,095
Total impaired loans(b)(c)
$4,722
$5,620
 $2,056
$2,118
 $6,778
$7,738
Allowance for loan losses related to impaired loans$97
$62
 $42
$111
 $139
$173
Unpaid principal balance of impaired loans(d)
6,439
7,741
 3,537
3,701
 9,976
11,442
Impaired loans on nonaccrual status(e)
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, 2018, Chapter 7 residential real estate loans included approximately 13% of residential mortgages and 9% of home equity that were 30 days or more past due.
(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., 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, 2018, and December 31, 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)At September 30, 2018 and December 31, 2017, nonaccrual loans included $2.0 billion and $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 12 of JPMorgan Chase’s 2017 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)
2018
2017
 2018
2017
 2018
2017
Residential mortgage$4,872
$5,743
 $61
$71
 $19
$19
Home equity2,065
2,150
 33
32
 21
20
Total residential real estate – excluding PCI$6,937
$7,893
 $94
$103
 $40
$39
         
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 equity2,092
2,213
 98
95
 63
60
Total residential real estate – excluding PCI$7,334
$8,074
 $295
$312
 $121
$117
(a)Generally, interest income on loans modified in TDRs is recognized on a cash basis until 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,
(in millions)2018
2017
 2018
2017
Residential mortgage$67
$57
 $314
$225
Home equity55
82
 241
232
Total residential real estate – excluding PCI$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
Residential mortgage Home equity 
2018
2017
 2018
2017
 2018
2017
Number of loans approved for a trial modification513
206
 586
536
 1,099
742
Number of loans permanently modified719
510
 939
1,228
 1,658
1,738
Concession granted:(a)
        
Interest rate reduction58%64% 77%60% 69%61%
Term or payment extension83
80
 88
66
 86
70
Principal and/or interest deferred30
22
 11
8
 19
12
Principal forgiveness9
17
 7
19
 8
19
Other(b)
36
15
 58
32
 49
27
         
Nine months ended September 30,  Total residential
real estate –
excluding PCI
Residential mortgage Home equity 
2018
2017
 2018
2017
 2018
2017
Number of loans approved for a trial modification1,789
1,052
 1,895
1,844
 3,684
2,896
Number of loans permanently modified2,374
1,952
 4,005
4,028
 6,379
5,980
Concession granted:(a)
        
Interest rate reduction36%73% 57%68% 49%69%
Term or payment extension49
84
 62
78
 57
80
Principal and/or interest deferred47
16
 22
12
 31
13
Principal forgiveness7
18
 7
12
 7
14
Other(b)
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. Concessions offered on trial modifications are generally consistent with those granted on permanent modifications.
(b)Includes variable interest rate to fixed interest rate modifications for the 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.The 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)
Residential mortgage Home equity Total residential real estate – excluding PCI
2018
2017
 2018
2017
 2018
2017
Weighted-average interest rate of loans with interest rate reductions – before TDR6.13%4.92% 5.69%5.26% 5.89%5.06%
Weighted-average interest rate of loans with interest rate reductions – after TDR4.23
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 TDR22
24
 18
18
 21
22
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR39
38
 39
38
 39
38
Charge-offs recognized upon permanent modification$
$
 $
$
 $
$
Principal deferred7
3
 2
1
 9
4
Principal forgiven3
5
 1
4
 4
9
Balance of loans that redefaulted within one year of permanent modification(a)
$27
$32
 $19
$17
 $46
$49
         
Nine months ended September 30,
(in millions, except weighted-average)
Residential mortgage Home equity Total residential real estate – excluding PCI
2018
2017
 2018
2017
 2018
2017
Weighted-average interest rate of loans with interest rate reductions – before TDR5.45%5.16% 5.34%4.92% 5.39%5.06%
Weighted-average interest rate of loans with interest rate reductions – after TDR3.64
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 TDR24
24
 18
22
 22
23
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR38
38
 39
39
 38
38
Charge-offs recognized upon permanent modification$
$1
 $1
$1
 $1
$2
Principal deferred17
10
 7
8
 24
18
Principal forgiven9
16
 5
9
 14
25
Balance of loans that redefaulted within one year of permanent modification(a)
$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, 2018, the weighted-average estimated remaining lives of residential real estate loans, excluding PCI loans, permanently modified in TDRs were 10 years for residential mortgage and 9 years for home 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, 2018, and December 31, 2017, the Firm had non-PCI residential real estate loans, excluding those insured by U.S. government agencies, with a carrying value of $719 million and $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.
(in millions, except ratios)Auto 
Consumer &
Business Banking
 Total other consumer
Sep 30, 2018
Dec 31, 2017
 Sep 30, 2018
Dec 31, 2017
 Sep 30, 2018
Dec 31, 2017
Loan delinquency        
Current$63,095
$65,651
 $26,170
$25,454
 $89,265
$91,105
30–119 days past due517
584
 183
213
 700
797
120 or more days past due7
7
 98
122
 105
129
Total retained loans$63,619
$66,242
 $26,451
$25,789
 $90,070
$92,031
% of 30+ days past due to total retained loans0.82%0.89% 1.06%1.30% 0.89%1.01%
Nonaccrual loans(a)
137
141
 237
283
 374
424
Geographic region        
California$8,382
$8,445
 $5,375
$5,032
 $13,757
$13,477
Texas6,497
7,013
 3,002
2,916
 9,499
9,929
New York3,843
4,023
 4,218
4,195
 8,061
8,218
Illinois3,667
3,916
 2,045
2,017
 5,712
5,933
Florida3,332
3,350
 1,484
1,424
 4,816
4,774
Arizona2,061
2,221
 1,451
1,383
 3,512
3,604
Ohio1,987
2,105
 1,346
1,380
 3,333
3,485
New Jersey1,990
2,044
 738
721
 2,728
2,765
Michigan1,378
1,418
 1,332
1,357
 2,710
2,775
Louisiana1,570
1,656
 860
849
 2,430
2,505
All other28,912
30,051
 4,600
4,515
 33,512
34,566
Total retained loans$63,619
$66,242
 $26,451
$25,789
 $90,070
$92,031
Loans by risk ratings(b)
        
Noncriticized$14,193
$15,604
 $18,644
$17,938
 $32,837
$33,542
Criticized performing337
93
 760
791
 1,097
884
Criticized nonaccrual3
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, 2018, and December 31, 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.


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,
2018

 December 31,
2017

Impaired loans   
With an allowance$227
 $272
Without an allowance(a)
41
 26
Total impaired loans(b)(c)
$268
 $298
Allowance for loan losses related to impaired loans$65
 $73
Unpaid principal balance of impaired loans(d)
372
 402
Impaired loans on nonaccrual status244
 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 $271 million and $366 million for the three months ended September 30, 2018 and 2017, respectively, and $281 million and $459 million for the nine months ended September 30, 2018 and 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, 2018 and 2017.
(d)Represents the contractual amount of principal owed at September 30, 2018, and December 31, 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. Refer to Note12 of JPMorgan Chase’s 2017 Annual Report for further information on other consumer loans modified in TDRs.
At September 30, 2018 and December 31, 2017, other consumer loans modified in TDRs 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 $72 million at September 30, 2018 and December 31, 2017, respectively.

Purchased credit-impaired loans
For a detailed discussion of PCI loans, including the related accounting policies, refer to Note12 of JPMorgan Chase’s 2017 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 PCI
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)
$9,393
$10,799

$4,931
$6,479

$2,072
$2,609

$8,813
$10,689

$25,209
$30,576
Loan delinquency (based on unpaid principal balance)



















Current$9,047
$10,272

$4,429
$5,839

$2,152
$2,640

$7,904
$9,662

$23,532
$28,413
30–149 days past due257
356

269
336

297
381

427
547

1,250
1,620
150 or more days past due263
392

257
327

143
176

526
689

1,189
1,584
Total loans$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 loans5.44%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)(b)(c)

















Greater than 125% and refreshed FICO scores:























Equal to or greater than 660$17
$33

$1
$4

$
$2

$3
$6

$21
$45
Less than 66015
21

10
16

12
20

8
9

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























Equal to or greater than 660153
274

7
16

8
20

24
43

192
353
Less than 66073
132

24
42

38
75

46
71

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























Equal to or greater than 660846
1,195

92
221

62
119

145
316

1,145
1,851
Less than 660394
559

132
230

192
309

220
371

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























Equal to or greater than 6605,627
6,134

2,791
3,551

753
895

5,235
6,113

14,406
16,693
Less than 6601,940
2,095

1,649
2,103

1,403
1,608

2,792
3,499

7,784
9,305
No FICO/LTV available502
577

249
319

124
149

384
470

1,259
1,515
Total unpaid principal balance$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)



















California$5,678
$6,555

$2,706
$3,716

$627
$797

$4,966
$6,225

$13,977
$17,293
Florida1,014
1,137

351
428

249
296

753
878

2,367
2,739
New York543
607

383
457

282
330

538
628

1,746
2,022
Washington442
532

103
135

46
61

185
238

776
966
Illinois242
273

164
200

131
161

211
249

748
883
New Jersey217
242

145
178

94
110

283
336

739
866
Massachusetts67
79

118
149

78
98

252
307

515
633
Maryland51
57

104
129

106
132

188
232

449
550
Virginia56
66

94
123

39
51

234
280

423
520
Arizona175
203

70
106

45
60

121
156

411
525
All other1,082
1,269

717
881

895
1,101

1,126
1,369

3,820
4,620
Total unpaid principal balance$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)Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates. Current estimated combined LTV for junior lien home equity loans considers all available lien positions, as well as unused lines, related to the property.
(c)Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.
(f)At March 31, 2018, and December 31, 2017, included mortgage loans insured by U.S. government agencies of $8.6 billion and $8.5 billion, respectively.

Approximately 25% of the PCI 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 PCI junior lien home equity loans and lines of credit based on the unpaid principal balance as of September 30, 2018, and December 31, 2017.
 Total loans Total 30+ day delinquency rate
(in millions, except ratios)Sep 30,
2018

Dec 31,
2017

 Sep 30,
2018

Dec 31,
2017

 
HELOCs:(a)
     
Within the revolving period(b)
$6
$51
 %1.96%
Beyond the revolving period(c)
6,837
7,875
 3.79
4.63
HELOANs296
360
 3.38
5.28
Total$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.


The following table represents the Firm’s delinquency statistics for junior lien home equity loans and lines as of March 31, 2018, and December 31, 2017.
 Total loans Total 30+ day delinquency rate
(in millions, except ratios)Mar 31,
2018

Dec 31,
2017

 Mar 31,
2018

Dec 31,
2017

 
HELOCs:(a)
     
Within the revolving period(b)
$5,645
$6,363
 0.32%0.50%
Beyond the revolving period13,207
13,532
 3.04
3.56
HELOANs1,280
1,371
 2.89
3.50
Total$20,132
$21,266
 2.27%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
(b)Substantially all 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 becauseperiod 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 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 PCI
(in millions, except ratios)Three months ended September 30, Nine months ended September 30,
20182017 20182017
Beginning balance$8,722
$12,639
 $11,159
$11,768
Accretion into interest income(303)(345) (958)(1,061)
Changes in interest rates on variable-rate loans37
51
 (231)218
Other changes in expected cash flows(a)
46
(1,333) (1,468)87
Balance at September 30$8,502
$11,012
 $8,502
$11,012
Accretable yield percentage4.95%4.54% 4.88%4.48%
(a)Other changes in expected cash flows may vary from period to period as the fully-amortizing payment that is generally requiredFirm continues to refine its cash flow model, for those products is higher thanexample cash flows expected to be collected due to the minimum payment options available for HELOCs within the revolving period. The higher delinquency rates associated with amortizing HELOCsimpact of modifications and HELOANs are factored into the Firm’s allowance for loan losses.

Impaired loans
The table below sets forth information about the Firm’schanges in prepayment assumptions.
Active and suspended foreclosure
At September 30, 2018, and December 31, 2017, the Firm had PCI residential real estate loans with an unpaid principal balance of $1.1 billion and $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, refer to Note 12 of JPMorgan Chase’s 2017 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




Credit card impaired loans and loan modifications
For a detailed discussion of impaired credit card loans, including credit card loan modifications, refer to Note12 of JPMorgan Chase’s 2017 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,
2018

December 31,
2017

Impaired credit card loans with an allowance(a)(b)
  
Credit card loans with modified payment terms(c)
$1,228
$1,135
Modified credit card loans that have reverted to pre-modification payment terms(d)
56
80
Total impaired credit card loans(e)
$1,284
$1,215
Allowance for loan losses related to impaired credit card loans$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 excluding PCI loans. Thesewithout an allowance.
(c)Represents credit card loans are consideredoutstanding to be impairedborrowers enrolled in a credit card modification program as they have beenof the date presented.
(d)Represents credit card loans that were modified in a TDR. AllTDRs but that have subsequently reverted back to the loans’ pre-modification payment terms.
At September 30, 2018, and December 31, 2017, $26 million and $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 $30 million and $37 million at September 30, 2018, and December 31, 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 loans are evaluated for an asset-specific allowance as described in Note 13 of JPMorgan Chase’s 2017 Annual Report.

(in millions)
Residential mortgage Home equity Total residential real estate – excluding PCI
Mar 31,
2018

Dec 31,
2017

 Mar 31,
2018

Dec 31,
2017

 Mar 31,
2018

Dec 31,
2017

Impaired loans        
With an allowance$4,324
$4,407
 $1,236
$1,236
 $5,560
$5,643
Without an allowance(a)
1,221
1,213
 877
882
 2,098
2,095
Total impaired loans(b)(c)
$5,545
$5,620
 $2,113
$2,118
 $7,658
$7,738
Allowance for loan losses related to impaired loans$77
$62
 $118
$111
 $195
$173
Unpaid principal balance of impaired loans(d)
7,618
7,741
 3,656
3,701
 11,274
11,442
Impaired loans on nonaccrual status(e)
1,796
1,743
 1,057
1,032
 2,853
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 March 31, 2018, Chapter 7 residential real estate loans included approximately 14% of residential mortgages and 11% of home equity that were 30 days or more past due.
(b)At March 31, 2018, and December 31, 2017, $4.2 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., 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 PCIcredit card loans are in the U.S.
(d)Represents the contractual amount of principal owed at March 31, 2018, and December 31, 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
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

Loan modifications
The Firm may offer 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 for borrowers who are experiencing financial difficulties. Modifications under long-term programs involve placing the customer on a fixed payment plan, generally for 60 months. Substantially all modifications are considered to be TDRs. New enrollments in these loan modification programs were $215 million and $191 million for the three months ended September 30, 2018 and 2017, respectively, and $640 million and $552 million for the nine months ended September 30, 2018 and 2017, 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, refer to Note12 of JPMorgan Chase’s 2017 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,
2018
2017
 2018
2017
Weighted-average interest rate of loans –
before TDR
18.25%16.84% 17.82%16.52%
Weighted-average interest rate of loans –
after TDR
5.10
4.95
 5.12
4.84
Loans that redefaulted within one year of modification(a)
$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 borrower misses two consecutive contractual payments. A substantial portion of these loans are 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 32.78% and 31.54% as of September 30, 2018, and December 31, 2017, respectively.

Wholesale loan portfolio
Wholesale loans include loans made to a variety of 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
each loan. For further information on these risk ratings, refer to Note12and Note13 of JPMorgan Chase’s 2017 Annual Report.

The table below provides information by class of receivable for the retained loans in the Wholesale portfolio segment.
 
Commercial
 and industrial
 Real estate Financial
institutions
Government agencies 
Other(d)
Total
retained loans
(in millions,
 except ratios)
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$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:               
Noncriticized51,758
46,558
 14,526
14,335
 14,374
13,071
168
369
 13,288
9,988
94,114
84,321
Criticized performing3,429
3,983
 604
710
 142
210


 211
259
4,386
5,162
Criticized nonaccrual696
1,357
 130
136
 2
2


 166
239
994
1,734
Total noninvestment-
grade
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$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
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
0.57
1.13
 0.11
0.12
 



 0.13
0.21
0.23
0.43
                
Loans by geographic
distribution(a)
               
Total non-U.S.$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.92,416
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$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$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
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)
31
108
 16
12
 1
15
3
4
 2
2
53
141
Criticized nonaccrual696
1,357
 130
136
 2
2


 166
239
994
1,734
Total
 retained loans
$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.
(e)As of March 31, 2018 and December 31, 2017, nonaccrual loans included $2.3 billion and $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
(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, refer to the Loan accounting framework in Note 12 of JPMorgan Chase’s 2017 Annual Report.

The following table presents average impaired loans and the related interest income reported by the Firm.
Three months ended March 31,
(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$5,608
$5,977
 $70
$73
 $19
$19
Home equity2,123
2,250
 32
31
 21
20
Total residential real estate – excluding PCI$7,731
$8,227
 $102
$104
 $40
$39
(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 March 31,
(in millions)2018
2017
Residential mortgage$147
$72
Home equity103
81
Total residential real estate – excluding PCI$250
$153
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 table provides 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 March 31,  
Total residential
real estate –
excluding PCI
Residential mortgage Home equity 
2018
2017
 2018
2017
 2018
2017
Number of loans approved for a trial modification299
456
 460
743
 759
1,199
Number of loans permanently modified969
783
 1,798
1,217
 2,767
2,000
Concession granted:(a)
        
Interest rate reduction20%82% 49%85% 39%84%
Term or payment extension28
89
 51
90
 43
90
Principal and/or interest deferred57
10
 25
18
 36
15
Principal forgiveness6
19
 5
9
 5
13
Other(b)
49
30
 60
11
 56
19
(a)
(c)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 of trial modifications include interest rate reductions and/or term or payment extensions.
(b)Predominantly represents variable interest rate to fixed interest rate modifications.

Financial effects of modifications and redefaults
The following table provides 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. The following table presents only the financial effects of permanent modifications and does not include temporary concessions offered through trial modifications. This table also excludes Chapter 7 loans where the sole concession granted is the discharge of debt.
Three months ended March 31,
(in millions, except weighted-average data)
Residential mortgage Home equity Total residential real estate – excluding PCI
20182017 20182017 20182017
Weighted-average interest rate of loans with interest rate reductions – before TDR5.11%5.36% 5.11%4.63% 5.11%5.03%
Weighted-average interest rate of loans with interest rate reductions – after TDR3.45
2.90
 3.05
2.45
 3.19
2.70
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR24
24
 19
20
 21
22
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR36
38
 38
39
 37
38
Charge-offs recognized upon permanent modification$
$1
 $1
$1
 $1
$2
Principal deferred6
3
 2
5
 8
8
Principal forgiven3
5
 2
2
 5
7
Balance of loans that redefaulted within one year of permanent modification(a)
$23
$32
 $15
$11
 $38
$43
(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 March 31, 2018, the weighted-average estimated remaining lives of residential real estate loans, excluding PCI loans, permanently modified in TDRs were 9 years for residential mortgage and 8 years for home 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 March 31, 2018, and December 31, 2017, the Firm had non-PCI residential real estate loans, excluding those insured by U.S. government agencies, with a carrying value of $822 million and $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.
(in millions, except ratios)Auto Consumer &
Business Banking
 Total other consumer
Mar 31, 2018
Dec 31, 2017
 Mar 31, 2018
Dec 31, 2017
 Mar 31, 2018
Dec 31, 2017
Loan delinquency        
Current$65,574
$65,651
 $25,570
$25,454
 $91,144
$91,105
30–119 days past due462
584
 165
213
 627
797
120 or more days past due6
7
 121
122
 127
129
Total retained loans$66,042
$66,242
 $25,856
$25,789
 $91,898
$92,031
% of 30+ days past due to total retained loans0.71%0.89% 1.11%1.30% 0.82%1.01%
Nonaccrual loans(a)
127
141
 274
283
 401
424
Geographic region        
California$8,540
$8,445
 $5,088
$5,032
 $13,628
$13,477
Texas6,866
7,013
 2,955
2,916
 9,821
9,929
New York4,070
4,023
 4,174
4,195
 8,244
8,218
Illinois3,888
3,916
 2,014
2,017
 5,902
5,933
Florida3,386
3,350
 1,391
1,424
 4,777
4,774
Arizona2,155
2,221
 1,415
1,383
 3,570
3,604
Ohio2,095
2,105
 1,357
1,380
 3,452
3,485
Michigan1,458
1,418
 1,348
1,357
 2,806
2,775
New Jersey2,044
2,044
 721
721
 2,765
2,765
Louisiana1,628
1,656
 877
849
 2,505
2,505
All other29,912
30,051
 4,516
4,515
 34,428
34,566
Total retained loans$66,042
$66,242
 $25,856
$25,789
 $91,898
$92,031
Loans by risk ratings(b)
        
Noncriticized$15,691
$15,604
 $18,060
$17,938
 $33,751
$33,542
Criticized performing225
93
 800
791
 1,025
884
Criticized nonaccrual8
9
 210
213
 218
222
(a)There were no loans that were 90 or more days past due and still accruing interest at March 31, 2018, and December 31, 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.


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)March 31,
2018

 December 31,
2017

Impaired loans   
With an allowance$269
 $272
Without an allowance(a)
26
 26
Total impaired loans(b)(c)
$295
 $298
Allowance for loan losses related to impaired loans$71
 $73
Unpaid principal balance of impaired loans(d)
401
 402
Impaired loans on nonaccrual status266
 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 $298 million and $650 million for the three months ended March 31, 2018 and 2017, respectively. The related interest income on impaired loans, including those on a cash basis, was not material for the three months ended March 31, 2018 and 2017.
(d)Represents the contractual amount of principal owed at March 31, 2018, and December 31, 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. See Note 12 of JPMorgan Chase’s 2017 Annual Report for furtherwell-collateralized and therefore still accruing interest.
(d)Other includes individuals (predominantly Wealth Management clients within AWM), SPEs, and private education and civic organizations. For more information on other consumer loans modified in TDRs.
Other consumer loans modified in TDRs were $100 million and $102 million for the three months ended March 31, 2018 and December 31, 2017, respectively. New TDRs, as well as the impact of these modifications were not materialSPEs, refer to the Firm for the three months ended March 31, 2018 and 2017. Additional commitments to lend to borrowers whose loans have been modified in TDRs as of March 31, 2018 and December 31, 2017 were not material. TDRs on nonaccrual status were $71 million and $72 million for the three months ended March 31, 2018 and December 31, 2017, respectively.


Purchased credit-impaired loans
For a detailed discussion of PCI loans, including the related accounting policies, see Note 12 of JPMorgan Chase’s 2017 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 PCI
Mar 31,
2018

Dec 31,
2017


Mar 31,
2018

Dec 31,
2017


Mar 31,
2018

Dec 31,
2017


Mar 31,
2018

Dec 31,
2017


Mar 31,
2018

Dec 31,
2017

Carrying value(a)
$10,332
$10,799

$6,259
$6,479

$2,549
$2,609

$10,365
$10,689

$29,505
$30,576
Loan delinquency (based on unpaid principal balance)



















Current$9,882
$10,272

$5,662
$5,839

$2,630
$2,640

$9,409
$9,662

$27,583
$28,413
30–149 days past due271
356

293
336

298
381

447
547

1,309
1,620
150 or more days past due368
392

328
327

195
176

693
689

1,584
1,584
Total loans$10,521
$11,020

$6,283
$6,502

$3,123
$3,197

$10,549
$10,898

$30,476
$31,617
% of 30+ days past due to total loans6.07%6.79%
9.88%10.20%
15.79%17.42%
10.81%11.34%
9.49%10.13%
Current estimated LTV ratios (based on unpaid principal balance)(b)(c)

















Greater than 125% and refreshed FICO scores:























Equal to or greater than 660$28
$33

$3
$4

$3
$2

$5
$6

$39
$45
Less than 66016
21

12
16

18
20

8
9

54
66
101% to 125% and refreshed FICO scores:























Equal to or greater than 660230
274

13
16

14
20

41
43

298
353
Less than 660104
132

40
42

64
75

61
71

269
320
80% to 100% and refreshed FICO scores:























Equal to or greater than 6601,065
1,195

177
221

106
119

249
316

1,597
1,851
Less than 660493
559

193
230

273
309

323
371

1,282
1,469
Lower than 80% and refreshed FICO scores:























Equal to or greater than 6605,980
6,134

3,478
3,551

893
895

6,027
6,113

16,378
16,693
Less than 6602,054
2,095

2,063
2,103

1,608
1,608

3,391
3,499

9,116
9,305
No FICO/LTV available551
577

304
319

144
149

444
470

1,443
1,515
Total unpaid principal balance$10,521
$11,020

$6,283
$6,502

$3,123
$3,197

$10,549
$10,898

$30,476
$31,617
Geographic region (based on unpaid principal balance)



















California$6,256
$6,555

$3,599
$3,716

$778
$797

$6,022
$6,225

$16,655
$17,293
Florida1,092
1,137

409
428

291
296

850
878

2,642
2,739
New York586
607

445
457

326
330

609
628

1,966
2,022
Washington500
532

128
135

59
61

229
238

916
966
Illinois262
273

196
200

158
161

243
249

859
883
New Jersey233
242

174
178

108
110

325
336

840
866
Massachusetts74
79

143
149

95
98

300
307

612
633
Maryland55
57

125
129

128
132

225
232

533
550
Virginia63
66

118
123

50
51

273
280

504
520
Arizona193
203

100
106

58
60

151
156

502
525
All other1,207
1,269

846
881

1,072
1,101

1,322
1,369

4,447
4,620
Total unpaid principal balance$10,521
$11,020

$6,283
$6,502

$3,123
$3,197

$10,549
$10,898

$30,476
$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)Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates. Current estimated combined LTV for junior lien home equity loans considers all available lien positions, as well as unused lines, related to the property.
(c)Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.

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 delinquency statistics for PCI junior lien home equity loans and lines of credit based on the unpaid principal balance as of March 31, 2018, and December 31, 2017.
 Total loans Total 30+ day delinquency rate
(in millions, except ratios)Mar 31,
2018

Dec 31,
2017

 Mar 31,
2018

Dec 31,
2017

 
HELOCs:(a)
     
Within the revolving period(b)
$10
$51
 10.00%1.96%
Beyond the revolving period(c)
7,542
7,875
 4.00
4.63
HELOANs338
360
 4.14
5.28
Total$7,890
$8,286
 4.02%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 months ended March 31, 2018 and 2017, 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 PCI
(in millions, except ratios)Three months ended March 31,
20182017
Beginning balance$11,159
$11,768
Accretion into interest income(328)(359)
Changes in interest rates on variable-rate loans280
116
Other changes in expected cash flows(a)
(861)1,597
Balance at March 31$10,250
$13,122
Accretable yield percentage4.78%4.36%
(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 both March 31, 2018, and December 31, 2017, the Firm had PCI residential real estate loans with an unpaid principal balance of $1.3 billion 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, see Note 12 of JPMorgan Chase’s 2017 Annual Report.
The table below sets forth information about the Firm’s credit card loans.
(in millions, except ratios)March 31,
2018

December 31,
2017

Loan delinquency  
Current and less than 30 days
past due and still accruing
$137,799
$146,704
30–89 days past due and still accruing1,211
1,305
90 or more days past due and still accruing1,338
1,378
Total retained credit card loans$140,348
$149,387
Loan delinquency ratios  
% of 30+ days past due to total retained loans1.82%1.80%
% of 90+ days past due to total retained loans0.95
0.92
Credit card loans by geographic region  
California$20,974
$22,245
Texas13,541
14,200
New York12,258
13,021
Florida8,674
9,138
Illinois8,057
8,585
New Jersey6,036
6,506
Ohio4,631
4,997
Pennsylvania4,511
4,883
Colorado3,793
4,006
Michigan3,546
3,826
All other54,327
57,980
Total retained credit card loans$140,348
$149,387
Percentage of portfolio based on carrying value with estimated refreshed FICO scores  
Equal to or greater than 66083.5%84.0%
Less than 66015.6
14.6
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, see Note 12 of JPMorgan Chase’s 2017 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)March 31,
2018

December 31,
2017

Impaired credit card loans with an allowance(a)(b)
  
Credit card loans with modified payment terms(c)
$1,173
$1,135
Modified credit card loans that have reverted to pre-modification payment terms(d)
68
80
Total impaired credit card loans(e)
$1,241
$1,215
Allowance for loan losses related to impaired credit card loans$393
$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 March 31, 2018, and December 31, 2017, $34 million and $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 $34 million and $37 million at March 31, 2018, and December 31, 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 March 31,
(in millions)2018
2017
Average impaired credit card loans$1,224
$1,228
Interest income on impaired credit card loans15
14
Loan modifications
The Firm may offer 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 for borrowers who are experiencing financial difficulties. Modifications under long-term programs involve placing the customer on a fixed payment plan, generally for 60 months. Substantially all modifications are considered to be TDRs. New enrollments in these loan modification programs were $223 million and $185 million for the three months ended March 31, 2018 and 2017, respectively. For additional information about credit card loan modifications, see Note 12 of JPMorgan Chase’s 2017 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 March 31,
2018
2017
Weighted-average interest rate of loans –
before TDR
17.25%16.16%
Weighted-average interest rate of loans –
after TDR
5.20
4.77
Loans that redefaulted within one year of modification(a)
$2
$21
(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, a substantial portion of these loans are 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 31.67% and 31.54% as of March 31, 2018, and December 31, 2017, respectively.

Wholesale loan portfolio
Wholesale loans include loans made to a variety of 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
each loan. For further information on these risk ratings, see Note 12 and Note 13 of JPMorgan Chase’s 2017 Annual Report.

The table below provides information by class of receivable for the retained loans in the Wholesale portfolio segment.
 
Commercial
 and industrial
 Real estate Financial
institutions
Government agencies 
Other(d)
Total
retained loans
(in millions,
 except ratios)
Mar 31,
2018
Dec 31,
2017
 Mar 31,
2018
Dec 31,
2017
 Mar 31,
2018
Dec 31,
2017
Mar 31,
2018
Dec 31,
2017
 Mar 31,
2018
Dec 31,
2017
Mar 31,
2018
Dec 31,
2017
Loans by risk ratings               
Investment-grade$68,705
$68,071
 $99,185
$98,467
 $27,424
$26,791
$15,135
$15,140
 $106,356
$103,212
$316,805
$311,681
Noninvestment-grade:               
Noncriticized49,917
46,558
 14,094
14,335
 13,781
13,071
332
369
 11,360
9,988
89,484
84,321
Criticized performing3,283
3,983
 620
710
 98
210


 136
259
4,137
5,162
Criticized nonaccrual1,249
1,357
 144
136
 2
2


 199
239
1,594
1,734
Total noninvestment-
grade
54,449
51,898
 14,858
15,181
 13,881
13,283
332
369
 11,695
10,486
95,215
91,217
Total retained loans$123,154
$119,969
 $114,043
$113,648
 $41,305
$40,074
$15,467
$15,509
 $118,051
$113,698
$412,020
$402,898
% of total criticized exposure to
total retained loans
3.68%4.45% 0.67%0.74% 0.24%0.53%%% 0.28%0.44%1.39%1.71%
% of criticized nonaccrual
to total retained loans
1.01
1.13
 0.13
0.12
 



 0.17
0.21
0.39
0.43
                
Loans by geographic
distribution(a)
               
Total non-U.S.$30,538
$28,470
 $3,127
$3,101
 $17,842
$16,790
$3,119
$2,906
 $47,352
$44,112
$101,978
$95,379
Total U.S.92,616
91,499
 110,916
110,547
 23,463
23,284
12,348
12,603
 70,699
69,586
310,042
307,519
Total retained loans$123,154
$119,969
 $114,043
$113,648
 $41,305
$40,074
$15,467
$15,509
 $118,051
$113,698
$412,020
$402,898
                
Loan
 delinquency(b)
               
Current and less than 30 days past due and still accruing$121,703
$118,288
 $113,761
$113,258
 $41,267
$40,042
$15,451
$15,493
 $116,632
$112,559
$408,814
$399,640
30–89 days past due
and still accruing
178
216
 131
242
 32
15
13
12
 1,220
898
1,574
1,383
90 or more days
past due and
still accruing(c)
24
108
 7
12
 4
15
3
4
 
2
38
141
Criticized nonaccrual1,249
1,357
 144
136
 2
2


 199
239
1,594
1,734
Total
 retained loans
$123,154
$119,969
 $114,043
$113,648
 $41,305
$40,074
$15,467
$15,509
 $118,051
$113,698
$412,020
$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, see Note 1214 of JPMorgan Chase’s 2017 Annual Report.
(c)Represents loans that are considered well-collateralized and therefore still accruing interest.
(d)Other includes individuals, SPEs, holding companies, private education and civic organizations. For more information on SPEs, see Note 14 of JPMorgan Chase’s 2017 Annual Report.

The following table presents additional information on the real estate class of loans within the Wholesale portfolio for the periods indicated. For further information on real estate loans, refer to Note12 of JPMorgan Chase’s 2017 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%

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 Note13 of JPMorgan Chase’s 2017 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
 
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$658
$1,170
 $78
$78
 $2
$93
 $
$
 $151
$168
 $889
 $1,509
 
Without an allowance(a)
84
228
 53
60
 

 

 25
70
 162
 358
 
Total impaired loans
$742
$1,398
 $131
$138
 $2
$93
 $
$
 $176
$238
 $1,051
(c) 
$1,867
(c) 
Allowance for loan losses related to impaired loans$243
$404
 $15
$11
 $1
$4
 $
$
 $21
$42
 $280
 $461
 
Unpaid principal balance of impaired loans(b)
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, 2018, and December 31, 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 withinin the Wholesale portfolio for the periods indicated. For further informationU.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,
(in millions)2018
2017
 2018
2017
Commercial and industrial$838
$1,207
 $1,095
$1,277
Real estate134
167
 138
175
Financial institutions45
70
 76
38
Government agencies

 

Other202
231
 214
246
Total(a)(b)
$1,219
$1,675
 $1,523
$1,736
(a)The related interest income on real estate loans, see Note 12 of JPMorgan Chase’s 2017 Annual Report.

(in millions, except ratios)
Multifamily Other commercial Total real estate loans
Mar 31,
2018

Dec 31,
2017

 Mar 31,
2018

Dec 31,
2017

 Mar 31,
2018

Dec 31,
2017

Real estate retained loans$77,846
$77,597
 $36,197
$36,051
 $114,043
$113,648
Criticized exposure433
491
 331
355
 764
846
% of total criticized exposure to total real estate retained loans0.56%0.63% 0.91%0.98% 0.67%0.74%
Criticized nonaccrual$47
$44
 $97
$92
 $144
$136
% of criticized nonaccrual loans to total real estate retained loans0.06%0.06% 0.27%0.26% 0.13%0.12%
Wholesaleaccruing impaired loans and loan modifications
Wholesale impaired loans consist of loans that have been placedinterest income recognized 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 13 of JPMorgan Chase’s 2017 Annual Report.
The table below sets forth information about the Firm’s wholesale impaired loans.

(in millions)
Commercial
and industrial
 Real estate 
Financial
institutions
 
Government
 agencies
 Other 
Total
retained loans
 
Mar 31,
2018
Dec 31,
2017
 Mar 31,
2018
Dec 31,
2017
 Mar 31,
2018
Dec 31,
2017
 Mar 31,
2018
Dec 31,
2017
 Mar 31,
2018
Dec 31,
2017
 Mar 31,
2018
 Dec 31,
2017
 
Impaired loans                   
With an allowance$1,051
$1,170
 $87
$78
 $92
$93
 $
$
 $129
$168
 $1,359
 $1,509
 
Without an allowance(a)
240
228
 59
60
 

 

 69
70
 368
 358
 
Total impaired loans
$1,291
$1,398
 $146
$138
 $92
$93
 $
$
 $198
$238
 $1,727
(c) 
$1,867
(c) 
Allowance for loan losses related to impaired loans$407
$404
 $16
$11
 $4
$4
 $
$
 $47
$42
 $474
 $461
 
Unpaid principal balance of impaired loans(b)
1,468
1,604
 218
201
 92
94
 

 439
255
 2,217
 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 March 31, 2018, and December 31, 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 loanscash basis were not material for the periods indicated.
 Three months ended March 31,
(in millions)2018
2017
Commercial and industrial$1,050
$1,097
Real estate135
172
Financial institutions17
4
Government agencies

Other211
202
Total(a)
$1,413
$1,475
(a)The related interest income on accruing impaired loans and interest income recognized on a cash basis were not material for the three months ended March 31,three and nine months ended September 30, 2018 and 2017.
Certain loan modifications are considered
(b)The prior period amounts have been revised to be TDRs as they provide various concessions to borrowers who are experiencing financial difficulty. All TDRs are reported as impaired loans inconform with the tables above. TDRs were $913 million and $614 million as of March 31, 2018, and December 31, 2017, respectively.


Note 12 – Allowance for credit losses
For a detailed discussion of the allowance for credit losses and the related accounting policies, see Note 13 of JPMorgan Chase’s 2017 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 
Three months ended March 31,
(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-offs284
1,291
 65
1,640
 847
 1,086
 26
1,959
 
Gross recoveries(138)(121) (46)(305) (159) (93) (53)(305) 
Net charge-offs146
1,170
 19
1,335
 688
 993
 (27)1,654
 
Write-offs of PCI loans(a)
20

 
20
 24
 
 
24
 
Provision for loan losses146
1,170
 (189)1,127
 442
 993
 (119)1,316
 
Other1

 (2)(1) (2) 
 1
(1) 
Ending balance at March 31,$4,560
$4,884
 $3,931
$13,375
 $4,926
 $4,034
 $4,453
$13,413
 
              
Allowance for loan losses by impairment methodology             
Asset-specific(b)
$266
$393
(c) 
$474
$1,133
 $300
 $373
(c) 
$249
$922
 
Formula-based2,089
4,491
 3,457
10,037
 2,339
 3,661
 4,204
10,204
 
PCI2,205

 
2,205
 2,287
 
 
2,287
 
Total allowance for loan losses$4,560
$4,884
 $3,931
$13,375
 $4,926
 $4,034
 $4,453
$13,413
 
              
Loans by impairment methodology             
Asset-specific$7,953
$1,241
 $1,727
$10,921
 $8,604
 $1,219
 $1,681
$11,504
 
Formula-based335,785
139,107
 410,290
885,182
 317,594
 133,698
 384,686
835,978
 
PCI29,505

 3
29,508
 34,385
 
 3
34,388
 
Total retained loans$373,243
$140,348
 $412,020
$925,611
 $360,583
 $134,917
 $386,370
$881,870
 
              
Impaired collateral-dependent loans             
Net charge-offs$12
$
 $
$12
 $31
 $
 $1
$32
 
Loans measured at fair value of collateral less cost to sell2,135

 262
2,397
 2,345
 
 264
2,609
 
              
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

 38
38
 
 
 (1)(1) 
Other

 1
1
 
 
 

 
Ending balance at March 31,$33
$
 $1,074
$1,107
 $26
 $
 $1,051
$1,077
 
              
Allowance for lending-related commitments by impairment methodology             
Asset-specific$
$
 $167
$167
 $
 $
 $228
$228
 
Formula-based33

 907
940
 26
 
 823
849
 
Total allowance for lending-related commitments$33
$
 $1,074
$1,107
 $26
 $
 $1,051
$1,077
 
              
Lending-related commitments by impairment methodology             
Asset-specific$
$
 $746
$746
 $
 $
 $882
$882
 
Formula-based49,516
588,232
 383,529
1,021,277
 51,806
(d) 
577,096
 363,638
992,540
(d) 
Total lending-related commitments$49,516
$588,232
 $384,275
$1,022,023
 $51,806
(d) 
$577,096
 $364,520
$993,422
(d) 
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 $517 million and $614 million as of September 30, 2018, and December 31, 2017, respectively.


Note 12 – Allowance for credit losses
For a detailed discussion of the allowance for credit losses and the related accounting policies, refer to Note 13 of JPMorgan Chase’s 2017 Annual Report.
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) 

(a)Write-offs of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool.
(b)Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a TDR.
(c)The asset-specific credit card allowance for loan losses is related to loans that have been modified in a TDR; such allowance is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.
(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, refer to Note1of JPMorgan Chase’s 2017 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 originated credit card receivables148
Mortgage securitization trustsServicing and securitization of both originated and purchased residential mortgages148-150
CIBMortgage and other securitization trustsSecuritization of both originated and purchased residential and commercial mortgages, and other consumer loans148-150
Multi-seller conduitsAssist clients in accessing the financial markets in a cost-efficient manner and structures transactions to meet investor needs150
Municipal bond vehiclesFinancing of municipal bond investments150

The Firm also invests in and provides financing and other services to VIEs sponsored by third parties. Refer to pages 151-152of this 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, refer to Note 14 of JPMorgan Chase’s 2017 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. Refer to the table on page 151 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 loansprimarily 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, refer to Note14 of JPMorgan Chase’s 2017 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. Refer to Securitization activity onpage 152of this Note for further information regarding the Firm’s cash flows associated with and interests retained in nonconsolidated VIEs, andpages 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)
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$65,481
$3,314
$51,914
 $607
$704
$
$1,311
Subprime17,278
19
15,950
 55


55
Commercial and other(b)
102,603

77,494
 497
869
216
1,582
Total$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)
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$68,874
$3,615
$52,280
 $410
$943
$
$1,353
Subprime18,984
7
17,612
 93


93
Commercial and other(b)
94,905
63
63,411
 745
1,133
157
2,035
Total$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. Refer 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 (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 (Refer to Note 4 for further information on derivatives); senior and subordinated securities of $75 million and $111 million, respectively, at September 30, 2018, and $88 million and $48 million, respectively, at December 31, 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, 2018, and December 31, 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 December 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 $410 million and $412 million of noninvestment-grade retained interests at September 30, 2018, and December 31, 2017, 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. For a more detailed description of the Firm’s involvement with residential mortgage securitizations, refer to Note14 of JPMorgan Chase’s 2017 Annual Report. Refer to the table onpage 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, refer to Note14 of JPMorgan Chase’s 2017 Annual Report. Refer to the table onpage 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, refer to Note 14 of JPMorgan Chase’s 2017 Annual Report.
The following table presents the principal amount of securities transferred to re-securitization VIEs.
 Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
Transfers of securities to VIEs       
Agency$2,540
 $1,477
 $11,321
 $6,163
The following table presents information on nonconsolidated re-securitization VIEs.
 
Nonconsolidated
re-securitization VIEs
(in millions)September 30, 2018 December 31, 2017
Firm-sponsored private-label   
Assets held in VIEs with continuing involvement(a)
$198
 $783
Interest in VIEs10
 29
Agency   
Interest in VIEs2,263
 2,250
(a)Represents the principal amount and includes the notional amount of interest-only securities.
As of September 30, 2018, and December 31, 2017, the Firm did not consolidate any agency 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 multi-seller conduits, refer to Note14 of JPMorgan Chase’s 2017 Annual Report.
In the normal course of business, JPMorgan Chase makes markets in and invests in commercial paper issued by the Firm-administered multi-seller conduits. The Firm held $18.7 billion and $20.4 billionof the commercial paper issued by the Firm-administered multi-seller conduits atSeptember 30, 2018, and December 31, 2017, 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-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 $9.2 billion and $8.8 billion at September 30, 2018, and December 31, 2017, respectively, and are reported as off-balance sheet lending-related commitments. For more information on off-balance sheet lending-related commitments, refer to Note20.
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 Municipal bond vehicles, refer to Note14 of JPMorgan Chase’s 2017 Annual Report. The Firm had no exposure to nonconsolidated Firm-sponsored municipal bond vehicles at September 30, 2018 and December 31, 2017, respectively.
Refer topages 151-152of this Note for further information on consolidated municipal bond vehicles.


Consolidated VIE assets and 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 Firm generally 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

Firm, as liquidity provider, has entered into a reimbursement agreement with the Residual holder.
In 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 a 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, 2017, was $8.0 billion and $9.2 million, respectively. For more information on off-balance sheet lending-related commitments, refer to Note20.
Loan securitizations
The Firm has securitized and sold a variety of loans, including residential mortgage, credit card, and commercial mortgage.For afurther description of the Firm’s accounting policies regarding securitizations, refer to Note14
of JPMorgan Chase’s 2017 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, related to assets held in Firm-sponsored securitization entities that were not consolidated by the Firm, and where sale accounting was achieved at the time of the securitization.
 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.

Note 13
(d)Includes cash paid by the Firm to reacquire assets from off–balance sheet, nonconsolidated entitiesVariablefor example, loan repurchases due to representation and warranties and servicer “clean-up” calls.
(e)Includes prime, Alt-A, subprime, and option ARMs. Excludes loan securitization transactions entered into with Ginnie Mae, Fannie Mae and Freddie Mac.
(f)Includes commercial mortgage and 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. Refer to Note 20 of this Form 10-Q, and Note 27 of JPMorgan Chase’s 2017 Annual Report for additional information
bout 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. 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,
(in millions)2018
2017
 20182017
Carrying value of loans sold$11,968
$15,402
 $28,804
$44,282
Proceeds received from loan sales as cash1
104
 1
117
Proceeds from loan sales as securities(a)
11,713
15,093
 28,291
43,682
Total proceeds received from loan sales(b)
$11,714
$15,197
 $28,292
$43,799
Gains on loan sales(c)(d)
$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 Note20, 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. 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.
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, 2018 and December 31, 2017. Substantially all of these loans and real estate are insured or guaranteed by U.S. government agencies.
(in millions)Sep 30,
2018

Dec 31,
2017

Loans repurchased or option to repurchase(a)
$7,207
$8,629
Real estate owned78
95
Foreclosed government-guaranteed residential mortgage loans(b)
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 entitiesand accounts receivable.

Loan delinquencies and liquidation losses
The table below includes information about components of nonconsolidated securitized financial assets held in Firm-sponsored private-label securitization entities, in which the Firm has continuing involvement, and delinquencies as of September 30, 2018, and December 31, 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.



Note14 – Goodwill and Mortgage servicing rights
For a discussion of the accounting policies related to goodwill and mortgage servicing rights, refer to Note15 of JPMorgan Chase’s 2017 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

The following table presents changes in the carrying amount of goodwill.
 Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
Balance at beginning
of period
$47,488
 $47,300
 $47,507
 $47,288
Changes during the period from:       
Other(a)
(5) 9
 (24) 21
Balance at September 30,$47,483
 $47,309
 $47,483
 $47,309
(a)Includes foreign currency remeasurement and other 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, refer to Impairment testing on pages 244–245 of JPMorgan Chase’s 2017 Annual Report.
Goodwill was not impaired at September 30, 2018, or December 31, 2017, nor was goodwill written off due to impairment during the nine months ended September 30, 2018 or 2017.
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.

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, refer to Notes 2 and 15 of JPMorgan Chase’s 2017 Annual Report.
The following table summarizes MSR activity for the three and nine months endedSeptember 30, 2018 and 2017.
 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
 2018
 2017
 
Fair value at beginning of period$6,241
 $5,753
 $6,030
 $6,096
 
MSR activity:        
Originations of MSRs278
 253
 611
 624
 
Purchase of MSRs13
 
 159
 
 
Disposition of MSRs(a)
(2) (2) (401) (140) 
Net additions/(dispositions)289
 251
 369
 484
 
         
Changes due to collection/realization of expected cash flows(195) (200) (542) (619) 
         
Changes in valuation due to inputs and assumptions:        
Changes due to market interest rates and other(b)
150
 (67) 635
 (188) 
Changes in valuation due to other inputs and assumptions:        
Projected cash flows (e.g., cost to service)14
 (116) 14
 (102) 
Discount rates
 
 24
 (19) 
Prepayment model changes and other(c)
(66) 117
 (97) 86
 
Total changes in valuation due to other inputs and assumptions(52) 1
 (59) (35) 
Total changes in valuation due to inputs and assumptions98
 (66) 576
 (223) 
Fair value at September 30,$6,433
 $5,738
 $6,433
 $5,738
 
         
Change in unrealized gains/(losses) included in income related to MSRs held at September 30,$98
 $(66) $576
 $(223) 
Contractual service fees, late fees and other ancillary fees included in income428
 463
 1,339
 1,427
 
Third-party mortgage loans serviced at September 30, (in billions)528
 558
 528
 558
 
Net servicer advances at September 30, (in billions)(d)
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, 2018 and 2017.
  Three months ended September 30, Nine months ended September 30,
(in millions) 2018
 2017
 2018
 2017
CCB mortgage fees and related income        
         
Net production revenue $108
 $158
 $296
 $451
         
Net mortgage servicing revenue:        
Operating revenue:        
Loan servicing revenue 435
 493
 1,389
 1,533
Changes in MSR asset fair value due to collection/realization of expected cash flows (195) (200) (542) (617)
Total operating revenue 240
 293
 847
 916
Risk management:        
Changes in MSR asset fair value due to market interest rates and other(a)
 150
 (67) 636
 (188)
Other changes in MSR asset fair value due to other inputs and assumptions
in model(b)
 (52) 1
 (59) (35)
Change in derivative fair value and other (186) 43
 (671) 91
Total risk management (88) (23) (94) (132)
Total net mortgage servicing revenue 152
 270
 753
 784
         
Total CCB mortgage fees and related income 260
 428
 1,049
 1,235
         
All other 2
 1
 2
 4
Mortgage fees and related income $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, 2018, and December 31, 2017, and outlines hypothetical sensitivities of those fair values to immediate adverse changes in those assumptions, as defined below.
(in millions, except rates)Sep 30,
2018

 Dec 31,
2017

Weighted-average prepayment speed assumption (“CPR”)8.40% 9.35%
Impact on fair value of 10% adverse change$(194) $(221)
Impact on fair value of 20% adverse change(376) (427)
Weighted-average option adjusted spread8.65% 9.04%
Impact on fair value of a 100 basis point adverse change$(251) $(250)
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 would either magnify or counteract the impact of the initial change.


Note 15 – Deposits
For further information on deposits, refer to Note17 of JPMorgan Chase’s 2017 Annual Report.
At September 30, 2018, and December 31, 2017, noninterest-bearing and interest-bearing deposits were as follows.
(in millions)September 30,
2018

 December 31, 2017
U.S. offices   
Noninterest-bearing$374,603
 $393,645
Interest-bearing (included $16,526 and $14,947 at fair value)(a)
814,988
 793,618
Total deposits in U.S. offices1,189,591
 1,187,263
Non-U.S. offices   
Noninterest-bearing19,127
 15,576
Interest-bearing (included $3,974 and $6,374 at fair value)(a)
250,044
 241,143
Total deposits in non-U.S. offices269,171
 256,719
Total deposits$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 description of JPMorgan Chase’s accounting policies regarding consolidation of VIEs, seediscussion, refer to Note 13 of JPMorgan Chase’s 2017 Annual Report.

Note 16 – Earnings per share
For a discussion of the computation of basic and diluted earnings per share (“EPS”), refer to Note 22 of JPMorgan Chase’s 2017 Annual Report. The following table presents the calculation of basic and diluted EPS for the three and nine months ended September 30, 2018 and 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



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) 

The following table summarizes
(a)Represents the most significant types of Firm-sponsored VIEs by business segment.
Line of BusinessTransaction TypeActivityForm 10-Q page reference
CCBCredit card securitization trustsSecuritization of originated credit card receivables130
Mortgage securitization trustsServicing and securitization of both originated and purchased residential mortgages130–132
CIBMortgage and other securitization trustsSecuritization of both originated and purchased residential and commercial mortgages, and other consumer loans130–132
Multi-seller conduitsAssist clients in accessing the financial markets in a cost-efficient manner and structures transactions to meet investor needs132
Municipal bond vehiclesFinancing of municipal bond investments132
The Firm also invests in and provides financing and other servicesadjustment to VIEs sponsored by third parties. See page 133 of this 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, see Note 14 of JPMorgan Chase’s 2017 Annual Report.
AsAOCI 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. See the table on page 133 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 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 interestsnew accounting standards adopted in the securitization trusts.
For a detailed discussionfirst quarter of the Firm’s involvement with Firm-sponsored mortgage and other securitization trusts, as well as the accounting treatment relating to such trusts, see Note 14 of JPMorgan Chase’s 2017 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. See Securitization activity on page 134 of this Note for further information regarding the Firm’s cash flows with and interests retained in nonconsolidated VIEs, and page 134 of 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)
March 31, 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$67,150
$3,514
$51,840
 $412
$876
$
$1,288
Subprime18,512
17
17,074
 57


57
Commercial and other(b)
99,298

69,192
 766
1,079
207
2,052
Total$184,960
$3,531
$138,106
 $1,235
$1,955
$207
$3,397
 Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
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$68,874
$3,615
$52,280
 $410
$943
$
$1,353
Subprime18,984
7
17,612
 93


93
Commercial and other(b)
94,905
63
63,411
 745
1,133
157
2,035
Total$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 134 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 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 Note 4 for further information on derivatives); senior and subordinated securities of $306 million and $31 million, respectively, at March 31, 2018, and $88 million and $48 million, respectively, at December 31, 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 March 31, 2018, and December 31, 2017, 68% 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 for both periods, and $16 million and $48 million of noninvestment-grade retained interests at March 31, 2018, and December 31, 2017, respectively. The retained interests in commercial and other securitizations trusts consisted of $1.7 billion and $1.6 billion of investment-grade and $362 million and $412 million of noninvestment-grade retained interests at March 31, 2018, and December 31, 2017, respectively.2018.

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. For a more detailed description of the Firm’s involvement with residential mortgage securitizations, see Note 14 of JPMorgan Chase’s 2017 Annual Report. See the table on page 133 of 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
(b)Represents changes 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, see Note 14 of JPMorgan Chase’s 2017 Annual Report. See the table on page 133 of 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, see Note 14 of JPMorgan Chase’s 2017 Annual Report.
The following table presents the principal amount of securities transferred to re-securitization VIEs.
 Three months ended
March 31,
(in millions)2018
 2017
Transfers of securities to VIEs   
Agency$4,786
 $3,224
The following table presents information on nonconsolidated re-securitization VIEs.
 
Nonconsolidated
re-securitization VIEs
(in millions)March 31, 2018
 December 31, 2017
Firm-sponsored private-label   
Assets held in VIEs with continuing involvement(a)
$722
 $783
Interest in VIEs15
 29
Agency   
Interest in VIEs1,804
 2,250
(a)represents the principal amount and includes the notional amount of interest-only securities.
As of March 31, 2018, and December 31, 2017, the Firm did not consolidate any agency re-securitizations or any Firm-sponsored private-label re-securitizations.
Multi-seller conduits
For a more detailed description of JPMorgan Chase’s principal involvement with Firm-administered multi-seller conduits, see Note 14 of JPMorgan Chase’s 2017 Annual Report.
In the normal course of business, JPMorgan Chase makes markets in and invests in commercial paper issued by the Firm-administered multi-seller conduits. The Firm held $19.1 billion and $20.4 billionof the commercial paper issued by the Firm-administered multi-seller conduits atMarch 31, 2018, and December 31, 2017 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-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 $10.0 billion and $8.8 billion at March 31, 2018, and December 31, 2017, respectively, and are reported as off-balance sheet lending-related commitments. For more information on off-balance sheet lending-related commitments, see Note 20.
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; see page 133 on 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 Municipal bond vehicles, see Note 14 of JPMorgan Chase’s 2017 Annual Report. The Firm had no exposure to nonconsolidated Firm-sponsored municipal bond vehicles at March 31, 2018 and December 31, 2017, respectively.
See page 133 of this Note for further information on consolidated municipal bond vehicles.


Consolidated VIE assets and liabilities
The following table presents information on assets and liabilities related to VIEs consolidated by the Firm as of March 31, 2018, and December 31, 2017.
 Assets Liabilities
March 31, 2018 (in millions)Trading assetsLoans
Other(c) 

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

Total
liabilities
VIE program type(a)
        
Firm-sponsored credit card trusts$
$31,773
$543
$32,316
 $16,819
$14
$16,833
Firm-administered multi-seller conduits
22,081
51
22,132
 3,067
30
3,097
Municipal bond vehicles1,203

3
1,206
 1,247
2
1,249
Mortgage securitization entities(b)
16
3,562
50
3,628
 310
191
501
Other3

1,763
1,766
 141
111
252
Total$1,222
$57,416
$2,410
$61,048
 $21,584
$348
$21,932
         
 Assets Liabilities
December 31, 2017 (in millions)Trading assetsLoans
Other(c) 

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

Total
liabilities
VIE program type(a)
        
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(b)
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)Excludes intercompany transactions which are eliminated in consolidation.
(b)Includes residential and commercial mortgage securitizations.
(c)Includes assets classified as cash and other assets on the Consolidated balance sheets.
(d)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.
(e)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, see note 14 of JPMorgan Chase’s 2017 Annual Report. Included in beneficial interests in VIE assets are long-term beneficial interests of $17.3 billion and $21.8 billion at March 31, 2018, and December 31, 2017, respectively.
(f)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 Firm generally 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 $12.9 billion and $13.4 billion, of which $2.9 billion and $3.2 billion was unfunded at March 31, 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, see Note 24 of JPMorgan Chase’s 2017 Annual Report. For more information on off-balance sheet lending-related commitments, see Note 20 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

Firm, as liquidity provider, has entered into a reimbursement agreement with the Residual holder.
In 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 a liquidity provider to Customer TOB trusts at both March 31, 2018 and
December 31, 2017 was $5.3 billion. The fair value of assets held by such VIEs at March 31, 2018cross-currency swaps attributable to changes in cross-currency basis spreads, which are excluded from the assessment of hedge effectiveness and December 31, 2017, was $9.0 billion and $9.2 billion, respectively. For more information on off-balance sheet lending-related commitments, see Note 20.
Loan securitizations
recorded in other comprehensive income. The Firm has securitized and sold a varietyinitial cost of loans, including residential mortgage, credit card, and commercial mortgage. For a further descriptioncross-currency basis spreads is recognized in earnings as part of the Firm’s accounting policies regarding securitizations, see Note 14accrual of JPMorgan Chase’s 2017 Annual Report.
Securitization activity
The following table provides information related tointerest on the Firm’s securitization activities for the three months ended March 31, 2018 and 2017, related to assets held in Firm-sponsored securitization entities that were not consolidated by the Firm, and where sale accounting was achieved at the time of the securitization.
 Three months ended March 31,
 2018 2017
(in millions)
Residential mortgage(d)
Commercial and other(e)
 
Residential mortgage(d)
Commercial and other(e)
Principal securitized$1,330
$2,991
 $1,029
$1,315
All cash flows during the period(a):
     
Proceeds received from loan sales as financial instruments(b)
$1,338
$2,991
 $1,035
$1,348
Servicing fees collected126
1
 133
1
Purchases of previously transferred financial assets (or the underlying collateral)(c)


 

Cash flows received on interests92
47
 131
335
(a)Excludes re-securitization transactions.cross currency swap.


The following table presents the pre-tax and after-tax changes in the components of OCI.
 2018 2017
Three months ended September 30, (in millions)Pre-tax Tax effect After-tax Pre-tax Tax effect After-tax
Unrealized gains/(losses) on investment securities:           
Net unrealized gains/(losses) arising during the period$(1,117) $262
 $(855) $232
 $(86) $146
Reclassification adjustment for realized (gains)/losses included in net income(a)
46
 (10) 36
 1
 
 1
Net change(1,071) 252
 (819) 233
 (86) 147
Translation adjustments:           
Translation(314) 45
 (269) 286
 (106) 180
Hedges311
 (73) 238
 (286) 106
 (180)
Net change(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 period(122) 27
 (95) 29
 (11) 18
Reclassification adjustment for realized (gains)/losses included in net income(c)
9
 (2) 7
 10
 (2) 8
Net change(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 loss26
 (6) 20
 63
 (23) 40
Prior service costs/(credits)(7) 2
 (5) (9) 3
 (6)
Foreign exchange and other7
 (3) 4
 (19) 7
 (12)
Net change26
 (7) 19
 35
 (13) 22
DVA on fair value option elected liabilities, net change:(527) 125
 (402) (178) 66
 (112)
Total other comprehensive income/(loss)$(1,643) $356
 $(1,287) $129
 $(46) $83
            
 2018 2017
Nine months ended September 30, (in millions)Pre-tax Tax effect After-tax Pre-tax Tax effect After-tax
Unrealized gains/(losses) on investment securities:           
Net unrealized gains/(losses) arising during the period$(3,351) $787
 $(2,564) $1,294
 $(476) $818
Reclassification adjustment for realized (gains)/losses included in net income(a)
371
 (87) 284
 38
 (14) 24
Net change(2,980) 700
 (2,280) 1,332
 (490) 842
Translation adjustments(e):
           
Translation(981) 188
 (793) 1,185
 (448) 737
Hedges1,149
 (272) 877
 (1,161) 431
 (730)
Net change168
 (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 period(365) 85
 (280) 111
 (42) 69
Reclassification adjustment for realized (gains)/losses included in net income(c)
(62) 15
 (47) 160
 (59) 101
Net change(427) 100
 (327) 271
 (101) 170
Defined benefit pension and OPEB plans:           
Net gains/(losses) arising during the period25
 (6) 19
 (52) 19
 (33)
Reclassification adjustments included in net income(d):
           
Amortization of net loss78
 (18) 60
 187
 (69) 118
Prior service costs/(credits)(19) 5
 (14) (27) 10
 (17)
Settlement (gain)/loss


 
 
 (3) 1
 (2)
Foreign exchange and other19
 (6) 13
 (51) 11
 (40)
Net change103
 (25) 78
 54
 (28) 26
DVA on fair value option elected liabilities, net change:$163
 $(38) $125
 $(283) $104
 $(179)
Total other comprehensive income/(loss)$(3,069) $675
 $(2,394) $1,398
 $(532) $866
(b)predominantly includes Level 2 assets.
(c)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” calls.
(d)Includes prime, Alt-A, subprime, and option ARMs. Excludes certain loan securitization transactions entered into with Ginnie Mae, Fannie Mae and Freddie Mac.
(e)Includes commercial mortgage and 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
(a)The pre-tax amount is reported in the securitization activity tables above, the Firm,investment securities losses in the normal courseConsolidated statements of business, sells originated and purchased mortgage loans and certain originated excess MSRs on a nonrecourse basis, predominantly to U.S. government-sponsored enterprises(“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. See 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. See Note 14 for 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 March 31,
(in millions)2018
2017
Carrying value of loans sold$8,760
$17,169
Proceeds received from loan sales as cash
9
Proceeds from loan sales as securities(a)
8,619
16,987
Total proceeds received from loan sales(b)
$8,619
$16,996
Gains on loan sales(c)(d)
$14
$31
(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 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. 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.
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 March 31, 2018 and December 31, 2017. Substantially all of these loans and real estate are insured or guaranteed by U.S. government agencies.
(in millions)March 31, 2018
Dec 31,
2017

Loans repurchased or option to repurchase(a)
$8,735
$8,629
Real estate owned94
95
Foreclosed government-guaranteed residential mortgage loans(b)
490
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 private-label securitization entities, in which the Firm has continuing involvement, and delinquencies as of March 31, 2018, and December 31, 2017.
     
Net liquidation losses(a)
 Securitized assets 90 days past due Three months ended March 31,
(in millions)Mar 31,
2018

Dec 31,
2017

 Mar 31,
2018

Dec 31,
2017

 2018
2017
Securitized loans        
Residential mortgage:        
Prime / Alt-A & option ARMs$51,840
$52,280
 $4,562
$4,870
 $102
$212
Subprime17,074
17,612
 3,181
3,276
 (602)175
Commercial and other69,192
63,411
 736
957
 27
52
Total loans securitized$138,106
$133,303
 $8,479
$9,103
 $(473)$439
(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.



Note14 – Goodwill and Mortgage servicing rights
For a discussion of the accounting policies related to goodwill and mortgage servicing rights, see Note 15 of JPMorgan Chase’s 2017 Annual Report.
Goodwill
The following table presents goodwill attributed to the business segments.
(in millions)March 31,
2018

December 31,
2017

Consumer & Community Banking$31,006
$31,013
Corporate & Investment Bank6,775
6,776
Commercial Banking2,860
2,860
Asset & Wealth Management6,858
6,858
Total goodwill$47,499
$47,507
The following table presents changes in the carrying amount of goodwill.
 Three months ended March 31,
(in millions)2018
 2017
Balance at beginning
of period
$47,507
 $47,288
Changes during the period from:   
Business combinations(1) 
Dispositions
 
Other(a)
(7) 4
Balance at March 31,$47,499
 $47,292
(a)Includes foreign currency remeasurement and other 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, see Impairment testing on pages 244–245 of JPMorgan Chase’s 2017 Annual Report.
Goodwill was not impaired at March 31, 2018, or December 31, 2017, nor was goodwill written off due to impairment during the three months ended March 31, 2018 or 2017.
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.

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, see Notes 2 and 15 of JPMorgan Chase’s 2017 Annual Report.
The following table summarizes MSR activity for the three months endedMarch 31, 2018 and 2017.
 As of or for the three months
ended March 31,
(in millions, except where otherwise noted)2018
 2017
Fair value at beginning of period$6,030
 $6,096
MSR activity:   
Originations of MSRs176
 217
Purchase of MSRs67
 
Disposition of MSRs(a)
(295) (71)
Net additions/(dispositions)(52) 146
    
Changes due to collection/realization of expected cash flows(160) (206)
    
Changes in valuation due to inputs and assumptions:   
Changes due to market interest rates and other(b)
382
 57
Changes in valuation due to other inputs and assumptions:   
Projected cash flows (e.g., cost to service)
 12
Discount rates24
 (12)
Prepayment model changes and other(c)
(22) (14)
Total changes in valuation due to other inputs and assumptions2
 (14)
Total changes in valuation due to inputs and assumptions384
 43
Fair value at March 31,$6,202
 $6,079
    
Change in unrealized gains/(losses) included in income related to MSRs held at March 31,$384
 $43
Contractual service fees, late fees and other ancillary fees included in income465
 487
Third-party mortgage loans serviced at March 31, (in billions)540
 584
Net servicer advances at March 31, (in billions)(d)
3.6
 4.4
(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 months ended March 31, 2018 and 2017.
  Three months ended March 31,
(in millions) 2018
 2017
CCB mortgage fees and related income    
     
Net production revenue $95
 $141
     
Net mortgage servicing revenue:    
Operating revenue:    
Loan servicing revenue 513
 522
Changes in MSR asset fair value due to collection/realization of expected cash flows (160) (205)
Total operating revenue 353
 317
Risk management:    
Changes in MSR asset fair value due to market interest rates and other(a)
 382
 57
Other changes in MSR asset fair value due to other inputs and assumptions
in model(b)
 2
 (14)
Change in derivative fair value and other (367) (95)
Total risk management 17
 (52)
Total net mortgage servicing revenue 370
 265
     
Total CCB mortgage fees and related income 465
 406
     
All other 
 
Mortgage fees and related income $465
 $406
(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 March 31, 2018, and December 31, 2017, and outlines hypothetical sensitivities of those fair values to immediate adverse changes in those assumptions, as defined below.
(in millions, except rates)Mar 31,
2018

 Dec 31,
2017

Weighted-average prepayment speed assumption (“CPR”)8.56% 9.35%
Impact on fair value of 10% adverse change$(202) $(221)
Impact on fair value of 20% adverse change(392) (427)
Weighted-average option adjusted spread8.77% 9.04%
Impact on fair value of a 100 basis point adverse change$(246) $(250)
Impact on fair value of a 200 basis point adverse change(473) (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 would either magnify or counteract the impact of the initial change.


Note 15 – Deposits
For a detailed discussion on deposits, see Note 17 of JPMorgan Chase’s 2017 Annual Report.
At March 31, 2018, and December 31, 2017, noninterest-bearing and interest-bearing deposits were as follows.
(in millions)March 31,
2018

 December 31, 2017
U.S. offices   
Noninterest-bearing$397,856
 $393,645
Interest-bearing (included $14,765 and $14,947 at fair value)(a)
825,223
 793,618
Total deposits in U.S. offices1,223,079
 1,187,263
Non-U.S. offices   
Noninterest-bearing17,019
 15,576
Interest-bearing (included $5,405 and $6,374 at fair value)(a)
246,863
 241,143
Total deposits in non-U.S. offices263,882
 256,719
Total deposits$1,486,961
 $1,443,982
(a)Includes structured notes classified as deposits for which the fair value option has been elected. For a further discussion, see Note 3 of JPMorgan Chase’s 2017 Annual Report.

Note 16 – Earnings per share
For a discussion of the computation of basic and diluted earnings per share (“EPS”), see Note 22 of JPMorgan Chase’s 2017 Annual Report. The following table presents the calculation of basic and diluted EPS for the three months ended March 31, 2018 and 2017.
(in millions, except per share amounts)Three months ended
March 31,
2018
2017
Basic earnings per share  
Net income$8,712
$6,448
Less: Preferred stock dividends409
412
Net income applicable to common equity8,303
6,036
Less: Dividends and undistributed earnings allocated to participating securities65
61
Net income applicable to common stockholders$8,238
$5,975
   
Total weighted-average basic shares
  outstanding
3,458.3
3,601.7
Net income per share$2.38
$1.66
   
Diluted earnings per share  
Net income applicable to common stockholders$8,238
$5,975
Total weighted-average basic shares
  outstanding
3,458.3
3,601.7
Add: Employee stock options, SARs, warrants and unvested PSUs21.2
28.7
Total weighted-average diluted shares outstanding3,479.5
3,630.4
Net income per share$2.37
$1.65


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
March 31, 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 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 (1,234)   27
  (40) (73)   21
  267
  (1,032) 
 Balance at March 31, 2018 $1,826
   $(720)  $(94) $19
   $(1,914)  $(180)  $(1,063) 
                        
 As of or for the three months ended
March 31, 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 238
   7
  NA
 91
   (15)  (69)  252
 
 Balance at March 31, 2017 $1,762
   $(157)  NA
 $(9)   $(2,274)  $(245)  $(923) 
(a)Represents the adjustment to AOCI as a result of the new accounting standards in the first quarter of 2018. For additional information, see Note 1.
(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 following table presents the pre-tax amounts are predominantly recorded in noninterest revenue, net interest income and after-tax changes in the components of OCI.
 2018 2017
Three months ended March 31, (in millions)Pre-tax Tax effect After-tax Pre-tax Tax effect After-tax
Unrealized gains/(losses) on debt investment securities:           
Net unrealized gains/(losses) arising during the period$(1,858) $437
 $(1,421) $367
 $(131) $236
Reclassification adjustment for realized (gains)/losses included in
net income(a)
245
 (58) 187
 3
 (1) 2
Net change(1,613) 379
 (1,234) 370
 (132) 238
Translation adjustments(b):
           
Translation389
 (65) 324
 582
 (225) 357
Hedges(389) 92
 (297) (556) 206
 (350)
Net change
 27
 27
 26
 (19) 7
Fair value hedges, net change(c):

(52) 12
 (40) NA
 NA
 NA
Cash flow hedges:           
Net unrealized gains/(losses) arising during the period(44) 11
 (33) 59
 (21) 38
Reclassification adjustment for realized (gains)/losses included in
net income(d)
(52) 12
 (40) 85
 (32) 53
Net change(96) 23
 (73) 144
 (53) 91
Defined benefit pension and OPEB plans:           
Net gains/(losses) arising during the period23
 (6) 17
 (58) 21
 (37)
Reclassification adjustments included in net income(e):
           
Amortization of net loss26
 (6) 20
 62
 (23) 39
Prior service costs/(credits)(6) 1
 (5) (9) 3
 (6)
Settlement (gain)/loss

 
 
 (3) 1
 (2)
Foreign exchange and other(19) 8
 (11) (7) (2) (9)
Net change24
 (3) 21
 (15) 
 (15)
DVA on fair value option elected liabilities, net change:350
 (83) 267
 (107) 38
 (69)
Total other comprehensive income/(loss)$(1,387) $355
 $(1,032) $418
 $(166) $252
(a)The pre-tax amount is reported in investment securities losses in the Consolidated statements of income.
(b)Reclassifications of pre-tax realized gains/(losses) on translation adjustments and related hedges are reported in other income/compensation expense in the Consolidated statements of income. The amounts were not material for the periods presented.
(c)Represents changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads, which are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income. The initial cost of cross-currency basis spreads is recognized in earnings as part of the accrual of interest on the cross currency swap.
(d)The pre-tax amounts are predominantly recorded in noninterest revenue, net interest income and compensation expense in the Consolidated statements of income.
(e)The pre-tax amount is reported in other expense in the Consolidated statements of income.



Note 18 – Restricted cash
(e)Reclassifications of pre-tax realized gains/(losses) on translation adjustments and related hedges are reported in other restricted
assets
For a detailed discussion of the Firm’s restricted cash and other restricted assets, see Note 25 of JPMorgan Chase’s 2017 Annual Report.
As a result of the adoption of the restricted cash accounting guidance, restricted cash is included with unrestricted cash when reconciling the beginning and ending cash balances onincome/expense in the Consolidated statements of income. During the 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
(a)Comprises $40.7 billion and $44.8 billion in deposits with banks, and $1.5 billion and $1.0 billion in cash flows.
The following table presentsand due from banks on the componentsConsolidated balance sheets as of the Firm’s restricted cash:
(in billions)March 31,
2018

December 31, 2017
Cash reserves – Federal Reserve Banks(a)
$22.6
$25.7
Segregated for the benefit of securities and futures brokerage customers18.7
16.8
Cash reserves at non-U.S. central banks and held for other general purposes3.1
3.3
Total restricted cash(b)
$44.4
$45.8
(a)Average cash reserves were $24.5 billion and $26.2 billion for the three months ended March 31,September 30, 2018 and December 31, 2017, respectively.
(b)Comprises $43.1 billion and $44.8 billion in deposits with banks, and $1.3 billion and $1.0 billion in cash and due from banks on the Consolidated balance sheets as of March 31, 2018 and December 31, 2017, respectively.


Also, as of March 31,

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 19 – 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.
Under 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 to which the Firm and its IDI 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 FDIC and to which the Firm and its IDI subsidiaries are subject.
(a)
Represents the Transitional minimum capital ratios applicable to the Firm had:
Cash and securities pledged with clearing organizations for the benefit of customers of $17.6 billion and $18.0 billion, respectively.
Securities with a fair value of $5.8 billion and $3.5 billion, respectively, were also restricted in relation to customer activity.



Note 19 – Regulatory capital
For a detailed discussion on regulatory capital, see 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.
Under the risk-based capital guidelines 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 to which the Firm and its IDI subsidiaries were subject as of March 31,under Basel III at September 30, 2018.
 Minimum capital ratios Well-capitalized ratios
 
BHC(a)(e)

IDI(b)(e)

 
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 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 March 31, 2018. At March 31, 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.

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 and Basel III Advanced Approaches. As of September 30, 2018 and December 31, 2017, JPMorgan Chase and all of its IDI subsidiaries were well-capitalized and met all capital requirements to which each was subject.

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$184,972
$188,608
$23,136
 $184,972
$188,608
$23,136
Tier 1 capital210,589
188,608
23,136
 210,589
188,608
23,136
Total capital238,303
199,634
28,026
 228,574
193,613
26,636
        
Assets       
Risk-weighted1,545,326
1,362,039
109,138
 1,438,529
1,211,473
182,177
Adjusted average(a)
2,552,612
2,141,332
116,411
 2,552,612
2,141,332
116,411
        
Capital ratios(b)
       
CET112.0%13.8%21.2% 12.9%15.6%12.7%
Tier 113.6
13.8
21.2
 14.6
15.6
12.7
Total15.4
14.7
25.7
 15.9
16.0
14.6
Tier 1 leverage(c)
8.2
8.8
19.9
 8.2
8.8
19.9
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$183,300
$184,375
 $21,600
 $183,300
$184,375
 $21,600
Tier 1 capital208,644
184,375
 21,600
 208,644
184,375
 21,600
Total capital238,395
195,839
 27,691
 227,933
189,510
(d) 
26,250
          
Assets         
Risk-weighted1,499,506
1,338,970
(d) 
113,108
 1,435,825
1,241,916
(d) 
190,523
Adjusted average(a)
2,514,270
2,116,031
 126,517
 2,514,270
2,116,031
 126,517
          
Capital ratios(b)
         
CET112.2%13.8% 19.1% 12.8%14.8%
(d) 
11.3%
Tier 113.9
13.8
 19.1
 14.5
14.8
(d) 
11.3
Total15.9
14.6
(d) 
24.5
 15.9
15.3
(d) 
13.8
Tier 1 leverage(c)
8.3
8.7
 17.1
 8.3
8.7
 17.1
(a)
Adjusted average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.
(b)
For each of the risk-based capital ratios, the capital adequacy of the Firm and its IDI subsidiaries is evaluated against the lower of the two ratios as calculated under Basel III approaches (Standardized or Advanced).
(c)The Tier 1 leverage ratio is not a risk-based measure of capital.
(d)The prior period amounts have been revised to conform with the 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%
(a)Effective January 1, 2018, the SLR was fully phased-in under Basel III. The December 31, 2017 amounts were calculated under the Basel III Standardized and Basel III Advanced Approaches. As of MarchTransitional rules.

Note 20 – Off–balance sheet lending-related
financial instruments, guarantees, and other
commitments
JPMorgan Chase provides lending-related financial instruments (e.g., commitments and guarantees) to address the financing needs of its customers and clients. The contractual amount of these financial instruments represents the maximum possible credit risk to the Firm should the customer or client draw upon the commitment or the Firm be required to fulfill its obligation under the guarantee, and should the customer 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 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, refer to Note27 of JPMorgan Chase’s 2017 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. Refer 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, 2018, and December 31, 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 commitments

Contractual amount
Carrying value(g)

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


Lending-related          
Consumer, excluding credit card:          
Home equity$916
$1,110
$1,693
$16,942
$20,661

$20,360

$12
$12
Residential mortgage(a)
6,955


12
6,967

5,736



Auto7,911
1,430
200
89
9,630

9,255

2
2
Consumer & Business Banking12,127
647
111
487
13,372

13,202

19
19
Total consumer, excluding credit card27,909
3,187
2,004
17,530
50,630

48,553

33
33
Credit card600,728



600,728

572,831



Total consumer(b)
628,637
3,187
2,004
17,530
651,358

621,384

33
33
Wholesale:          
Other unfunded commitments to extend credit(c)
74,427
128,149
148,414
10,995
361,985

331,160

886
840
Standby letters of credit and other financial guarantees(c)
14,561
9,810
5,038
2,339
31,748

35,226

585
636
Other letters of credit(c)
3,344
137
102

3,583

3,712

7
3
Total wholesale(d)
92,332
138,096
153,554
13,334
397,316

370,098

1,478
1,479
Total lending-related$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(e)
$202,622
$
$
$
$202,622

$179,490

$
$
Derivatives qualifying as guarantees2,800
361
12,384
40,349
55,894

57,174

370
304
Unsettled reverse repurchase and securities borrowing agreements119,762



119,762

76,859



Unsettled repurchase and securities lending agreements92,115



92,115

44,205



Loan sale and securitization-related indemnifications:

















Mortgage repurchase liabilityNA
NA
NA
NA
NA

NA

89
111
Loans sold with recourseNA
NA
NA
NA
1,066

1,169

33
38
Other guarantees and commitments(f)
10,091
1,443
384
2,641
14,559

11,867

(53)(76)
(a)Includes certain commitments to purchase loans from correspondents.
(b)Predominantly all consumer lending-related commitments are in the U.S.
(c)At September 30, 2018, and December 31, 2017, JPMorgan Chase and all of its IDI subsidiaries were well-capitalized and met all capital requirements to which each was subject.
March 31, 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$183,655
$187,903
$21,905
 $183,655
$187,903
$21,905
Tier 1 capital(a)
209,296
187,903
21,905
 209,296
187,903
21,905
Total capital238,326
199,271
27,850
 228,320
193,099
26,505
        
Assets       
Risk-weighted1,552,952
1,382,770
105,610
 1,466,095
1,260,775
185,468
Adjusted average(b)
2,539,183
2,136,238
120,490
 2,539,183
2,136,238
120,490
        
Capital ratios(c)
       
CET111.8%13.6%20.7% 12.5%14.9%11.8%
Tier 1(a)
13.5
13.6
20.7
 14.3
14.9
11.8
Total15.3
14.4
26.4
 15.6
15.3
14.3
Tier 1 leverage(d)
8.2
8.8
18.2
 8.2
8.8
18.2
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$183,300
$184,375
 $21,600
 $183,300
$184,375
 $21,600
Tier 1 capital(a)
208,644
184,375
 21,600
 208,644
184,375
 21,600
Total capital238,395
195,839
 27,691
 227,933
189,510
(e) 
26,250
          
Assets         
Risk-weighted1,499,506
1,338,970
(e) 
113,108
 1,435,825
1,241,916
(e) 
190,523
Adjusted average(b)
2,514,270
2,116,031
 126,517
 2,514,270
2,116,031
 126,517
          
Capital ratios(c)
         
CET112.2%13.8% 19.1% 12.8%14.8%
(e) 
11.3%
Tier 1(a)
13.9
13.8
 19.1
 14.5
14.8
(e) 
11.3
Total15.9
14.6
(e) 
24.5
 15.9
15.3
(e) 
13.8
Tier 1 leverage(d)
8.3
8.7
 17.1
 8.3
8.7
 17.1
(a)Includesreflected the deduction associated with the permissible holdings of covered funds (as defined by the Volcker Rule) for JPMorgan Chase & Co. and JPMorgan Chase Bank, N.A. The deduction was not material as of March 31, 2018 and December 31, 2017.
(b)Adjusted average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.
(c)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)The Tier 1 leverage ratio is not a risk-based measure of capital.
(e)The prior period amounts have been revised to conform with the current period presentation.
 March 31, 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)
$3,234,103
$2,799,403
$177,666
 $3,204,463
$2,775,041
$182,803
SLR(a)
6.5%6.7%12.3% 6.5%6.6%11.8%
(a)Effective January 1, 2018, the SLR was fully phased-in under Basel III. Prior period amounts were calculated under the Basel III Transitional rules.

Note 20 – 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 net 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,participations totaling $287 million 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 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, see Note 27 of JPMorgan Chase’s 2017 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. See Note 12 for 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 March 31, 2018, and December 31, 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 commitments

Contractual amount
Carrying value(g)

March 31, 2018
Dec 31,
2017


Mar 31,
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


Lending-related          
Consumer, excluding credit card:          
Home equity$1,712
$1,245
$1,439
$16,177
$20,573

$20,360

$12
$12
Residential mortgage(a)
6,661


13
6,674

5,736



Auto7,652
848
219
65
8,784

9,255

2
2
Consumer & Business Banking11,957
903
106
519
13,485

13,202

19
19
Total consumer, excluding credit card27,982
2,996
1,764
16,774
49,516

48,553

33
33
Credit card588,232



588,232

572,831



Total consumer(b)
616,214
2,996
1,764
16,774
637,748

621,384

33
33
Wholesale:          
Other unfunded commitments to extend credit(c)
68,984
130,836
139,583
7,115
346,518

331,160

870
840
Standby letters of credit and other financial guarantees(c)
15,543
10,086
7,241
1,932
34,802

35,226

719
636
Other letters of credit(c)
2,739
82
134

2,955

3,712

4
3
Total wholesale(d)
87,266
141,004
146,958
9,047
384,275

370,098

1,593
1,479
Total lending-related$703,480
$144,000
$148,722
$25,821
$1,022,023

$991,482

$1,626
$1,512
Other guarantees and commitments

















Securities lending indemnification agreements and guarantees(e)
$216,863
$
$
$
$216,863

$179,490

$
$
Derivatives qualifying as guarantees2,391
326
12,421
40,178
55,316

57,174

427
304
Unsettled reverse repurchase and securities borrowing agreements128,774



128,774

76,859



Unsettled repurchase and securities lending agreements90,034



90,034

44,205



Loan sale and securitization-related indemnifications:

















Mortgage repurchase liabilityNA
NA
NA
NA
NA

NA

111
111
Loans sold with recourseNA
NA
NA
NA
1,136

1,169

36
38
Other guarantees and commitments(f)
9,791
1,118
166
3,174
14,249

11,867

(584)(76)
(a)Includes certain commitments to purchase loans from correspondents.
(b)Predominantly all consumer lending-related commitments are in the U.S.
(c)At March 31, 2018, and December 31, 2017, reflected the contractual amount net of risk participations totaling $334 million for both periods, for other unfunded commitments to extend credit; $10.8 billion and $10.4 billion, respectively, for standby letters of credit and other financial guarantees; and $330 million and $405 million respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.
(d)At March 31, 2018, and December 31, 2017, the U.S. portion of the contractual amount of total wholesale lending-related commitments was 76% and 77%, respectively.
(e)At March 31, 2018, and December 31, 2017, collateral held by the Firm in support of securities lending indemnification agreements was $226.5 billion and $188.7 billion, respectively. Securities lending collateral primarily consists of cash and securities issued by governments that are members of G7 and U.S. government agencies.
(f)
At March 31, 2018, and December 31, 2017, primarily includes letters of credit hedged by derivative transactions and managed on a market risk basis, unfunded commitments related to institutional lending and commitments associated with the Firm’s membership in certain clearing houses. Additionally, includes unfunded commitments predominantly related to certain tax-oriented equity investments.
(g)For lending-related products, the carrying value represents the allowance for lending-related commitments and the guarantee liability; for derivative-related products, the carrying value represents the fair value.


Other unfunded commitments to extend credit
Other unfunded commitments to extend credit generally consist of commitmentscredit; $9.9 billion and $10.4 billion, respectively, for working capital and general corporate purposes, extensionsstandby letters 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 letterother financial guarantees; and $469 million and $405 million, respectively, for other letters of credit.
The Firm acts as a settlement and custody bank in In regulatory filings with the U.S. tri-party repurchase transaction market. In its role as settlement and custody bank, the Firm is exposed to the intra-day creditFederal Reserve these commitments are shown gross of risk of its cash borrower clients, usually broker-dealers. This exposure arises under secured
clearance advance facilities that the Firm extends 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 ofparticipations.
(d)At both March 31,September 30, 2018, and December 31, 2017, the secured clearance advance facility maximum outstanding commitmentU.S. portion of the contractual amount was$1.5 billion.
Standby letters of credit and other financial guarantees
Standby letters of credit and other financial guarantees are conditional lendingtotal wholesale lending-related 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 arrangements as of March 31,was 76%.
(e)At September 30, 2018, and December 31, 2017.
Standby letters of credit, other financial guarantees and other letters of credit
 March 31, 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
Investment-grade(a)
$28,048
 $2,101
 $28,492
 $2,646
Noninvestment-grade(a)
6,754
 854
 6,734
 1,066
Total contractual amount$34,802
 $2,955
 $35,226
 $3,712
        
Allowance for lending-related commitments$200
 $4
 $192
 $3
Guarantee liability519
 
 444
 
Total carrying value$719
 $4
 $636
 $3
        
Commitments with collateral$16,766
 $681
 $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, see Note 27 of JPMorgan Chase’s 2017, Annual Report.
The following table summarizes the derivatives qualifying as guarantees as of March 31, 2018, and December 31, 2017.
(in millions)March 31, 2018
 December 31, 2017
Notional amounts   
Derivative guarantees55,316
 57,174
Stable value contracts with contractually limited exposure28,453
 29,104
Maximum exposure of stable value contracts with contractually limited exposure2,945
 3,053
    
Fair value   
Derivative payables427
 304
Derivative receivables
 

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, see Note 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 mortgage loans and/or indemnify the loan purchaser if such representations and warranties are breached by the Firm. 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, see Note 27 of JPMorgan Chase’s 2017 Annual Report.
The liability related to repurchase demands associated with private label securitizations is separately evaluatedcollateral held by the Firm in establishing its litigation reserves. For additional information regarding litigation, see Note 22support of this Form 10-Qsecurities lending indemnification agreements was $214.3 billion and Note 29$188.7 billion, respectively. Securities lending collateral primarily consists of JPMorgan Chase’s 2017 Annual Report.
Guarantees of subsidiary
The Parent Company has guaranteed certain long-term debtcash and structured notes of its subsidiaries, including JPMorgan Chase Financial Company LLC (“JPMFC”), a 100%-owned finance subsidiary. All securities issued by JPMFCgovernments that are fullymembers of G7 and unconditionally guaranteedU.S. government agencies.
(f)
At September 30, 2018, and December 31, 2017, primarily includes letters of credit hedged by the Parent Company,derivative transactions and these guarantees rankmanaged on a paritymarket risk basis, unfunded commitments related to institutional lending and commitments associated with the Firm’s unsecuredmembership in certain clearing houses. Additionally, includes unfunded commitments predominantly related to certain tax-oriented equity investments.
(g)For lending-related products, the carrying value represents the allowance for lending-related commitments and unsubordinated indebtedness.






















Note 21 – Pledged assets and collateral
For a discussion of the Firm’s pledged assets and collateral, see Note 28 of JPMorgan Chase’s 2017 Annual Report.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 extended 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 December 31, 2017 the secured clearance advance facility maximum outstanding commitment amount was$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, 2018, and December 31, 2017.
Standby letters of credit, other financial guarantees and other letters of credit
 September 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
Investment-grade(a)
$25,038
 $2,507
 $28,492
 $2,646
Noninvestment-grade(a)
6,710
 1,076
 6,734
 1,066
Total contractual amount$31,748
 $3,583
 $35,226
 $3,712
        
Allowance for lending-related commitments$171
 $7
 $192
 $3
Guarantee liability414
 
 444
 
Total carrying value$585
 $7
 $636
 $3
        
Commitments with collateral$16,074
 $559
 $17,421
 $878
Pledged assets
(a)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. Certain of these pledged assets may be sold or repledged or otherwise used by the secured parties and are identified as financial instruments owned (pledged to various parties) on the Consolidated balance sheets.
The following table presents the Firm’s pledged assets.
(in billions)March 31, 2018
 December 31,
2017

Assets that may be sold or repledged or otherwise used by secured parties$143.7
 $129.6
Assets that may not be sold or repledged or otherwise used by secured parties72.4
 67.9
Assets pledged at Federal Reserve banks and FHLBs487.9
 493.7
Total assets pledged$704.0
 $691.2
Total assets pledged do not include assets of consolidated VIEs; these assets are used to settle the liabilities of those entities. See Note 13 for additional information on assets and liabilities of consolidated VIEs. For additional informationratings scale is based on the Firm’s securities financing activities, see Note 10. For additional information on the Firm’s long-term debt, see Note 19 of JPMorgan Chase’s 2017 Annual Report.
Collateral
The Firm accepts financial assetsinternal ratings which generally correspond to ratings as collateral that it is permitted to sell or repledge, deliver or otherwise use. This collateral is generally obtained under resale agreements, securities borrowing agreements, customer margin loansdefined by S&P and derivative agreements. Collateral is 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)March 31, 2018
 December 31,
2017

Collateral permitted to be sold or repledged, delivered, or otherwise used$1,093.6
 $968.8
Collateral sold, repledged, delivered or otherwise used873.5
 775.3


Note 22 – Litigation
Contingencies
As of MarchMoody’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, refer to Note27 of JPMorgan Chase’s 2017 Annual Report.
The following table summarizes the derivatives qualifying as guarantees as of September 30, 2018, and December 31, 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 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, refer to Note4.
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 mortgage loans and/or indemnify the loan purchaser if such representations and warranties are breached by the Firm. 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, refer to Note27 of JPMorgan Chase’s 2017 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, refer to Note22 of this Form 10-Q and Note 29 of JPMorgan Chase’s 2017 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 21 – Pledged assets and collateral
For a discussion of the Firm’s pledged assets and collateral, refer to Note28 of JPMorgan Chase’s 2017 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. Certain of these pledged assets may be sold or repledged or otherwise used by the secured parties and are parenthetically identified on the Consolidated balance sheets as assets pledged.
The following table presents the Firm’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

Total assets pledged do not include assets of consolidated VIEs; these assets are used to settle the liabilities of those entities. Refer to Note 13for additional information on assets and liabilities of consolidated VIEs. For additional information on the Firm’s securities financing activities, refer to Note10. For additional information on the Firm’s long-term debt, refer to Note 19 of JPMorgan Chase’s 2017 Annual Report.
Collateral
The Firm accepts financial assets as collateral that it is permitted to sell or repledge, deliver or otherwise use. This collateral is generally obtained under resale agreements, securities borrowing agreements, customer margin loans and derivative agreements. Collateral is 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.

Note 22 – Litigation
Contingencies
As of September 30, 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 $1.6 billion at September 30, 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:
the number, variety and varying stages of the proceedings, including the fact that many are in preliminary stages,
the existence in many such proceedings of multiple defendants, including the Firm, whose share of liability (if any) has yet to be determined,
the numerous yet-unresolved issues in many of the proceedings, including issues regarding class certification and the scope of many of the claims, and
the attendant uncertainty of the various potential outcomes of such proceedings, including where the Firm has made assumptions concerning future rulings by the court or other adjudicator, or about the behavior or incentives of adverse parties or regulatory authorities, and those assumptions prove to be incorrect.
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 and a term of probation ending in January 2020. The Department of Labor has granted the Firm a five-year exemption of disqualification 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 will need to reapply in due course for a further exemption 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 is conducting civil proceedings concerning that matter.
The Firm is also one of a number of foreign exchange dealers named 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. The Court granted final approval of

that settlement agreement in August 2018. Certain members of the 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 sought leave to replead their complaint. The consumer action and a second ERISA 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 sought 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, and in September 2018, the 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 parties have engaged in mediation concerning, among other things, the characterization and value of the remaining additional collateral, in light of the Bankruptcy Court’s ruling regarding the representative assets, as well as other issues, including the cross-claims. In September 2018, the Bankruptcy Court approved a schedule for continued proceedings concerning issues that the parties 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 settled the cases for a cash payment, a temporary reduction of credit card interchange, and modifications to certain credit card 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. In March 2017, the U.S. Supreme Court declined petitions seeking review of the decision of the Court of Appeals. The case was 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, 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. Commodity Futures Trading Commission (“CFTC”) and various state attorneys general, as well as the European Commission (“EC”), 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 investigations to the extent that they are ongoing. The Firm has recently reached a resolution with the CFTC concerning the CFTC’s U.S. dollar ISDAFIX-related 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, and that 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 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 these 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 putative class actions related to exchange-traded Eurodollar futures contracts, Swiss franc 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 further documentation and court approval.
In actions related to U.S. dollar 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 February 2018, as to those actions which the Firm has not agreed to settle, the District Court (i) granted class certification with respect to certain antitrust claims related to bonds and interest rate swaps sold directly by the defendants, (ii) denied class certification with respect to state common law claims brought by the holders of those bonds and swaps and (iii) denied class certification with respect to the putative class action related to 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. In April 2016, the Firm settled this litigation, along with certain other banks. Those settlements have been preliminarily approved by the Court.
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 $3.0 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 was dismissed in August 2018, but appellants have filed a motion for rehearing which remains pending.
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, with respect to the criminal proceedings. In January 2018, the Paris Court of 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 against JPMorgan Chase Bank, N.A. 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 expense/(benefit) was $20 million and $(107) million for the three months ended September 30, 2018 and 2017, respectively, and $90 million and $172 million for the nine months ended September 30, 2018 and 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 23 – 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, refer to Segment results below, and Note 31 of JPMorgan Chase’s 2017 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, 2018 and 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 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 $1.7 billion at March 31, 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:
the number, variety and varying stages of the proceedings, including the fact that many are in preliminary stages,
the existence in many such proceedings of multiple defendants, including the Firm, whose share of liability (if any) has yet to be determined,
the numerous yet-unresolved issues in many of the proceedings, including issues regarding class certification and the scope of many of the claims, and
the attendant uncertainty of the various potential outcomes of such proceedings, including where the Firm has made assumptions concerning future rulings by the court or other adjudicator, or about the behavior or incentives of adverse parties or regulatory authorities, and those assumptions prove to be incorrect.
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.
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 and a term of probation ending in January 2020. The Department of Labor has granted the Firm a five-year exemption of disqualification 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 will need to reapply in due course for a further exemption 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 is conducting civil proceedings concerning that matter.
The Firm is also one of a number of foreign exchange dealers defending 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. That agreement has been preliminarily approved by the Court and a final approval hearing is scheduled for May 2018. Certain members of the 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 plaintiffs have filed an appeal. The District Court has also dismissed the indirect purchaser action, and the plaintiffs have sought leave to replead their complaint. The consumer action and a second ERISA 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 seeking 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. 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 parties are engaged in mediation concerning, among other things, the characterization and value of the remaining additional collateral, in light of the Bankruptcy Court’s ruling regarding the representative assets, as well as other issues, including the cross-claims.
Hopper Estate Litigation. The Firm is a defendant in an action in connection with its role as an independent administrator 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. In light of legal limitations on the availability of damages, the plaintiffs moved for judgment in the total amount of approximately $91 million, including punitive damages. The Firm has entered into a settlement in principle with two of the plaintiffs. Pending before the Court is the remaining plaintiff’s request that the Court enter judgment for up to $14 million and the Firm’s request that the court enter judgment wholly in its favor or, alternatively, that it limit the award to less than $8 million.
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 settled 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 points of credit card interchange for a period of 8 months to be measured from a date within 60 days of the end of the opt-out period. The settlement also provided for modifications to each credit card network’s rules, including those that prohibit surcharging credit card transactions. In December 2013, the District Court granted final approval of the settlement.
A number of merchants appealed 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. In March 2017, the U.S. Supreme Court declined petitions seeking review of the decision of the Court of Appeals. The case has been remanded to the District Court for further proceedings consistent with the appellate decision. The parties are engaged in an ongoing mediation process.
In addition, certain merchants have filed individual actions raising similar allegations against Visa and 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. Commodity Futures Trading Commission (“CFTC”) and various state attorneys general, as well as the European Commission (“EC”), 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 discussions with the CFTC about resolving its U.S. dollar ISDAFIX-related investigation with respect to the Firm. There is no assurance that such discussions will result in a settlement. 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 with the European General Court.
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 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 these 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 a putative class action related to Swiss franc LIBOR, and that settlement remains subject to final court approval.   
In an action related to EURIBOR, 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 actions related to U.S. dollar 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 January 2018, the Firm agreed to settle a putative class action related to exchange-traded Eurodollar futures contracts. This settlement is subject to further documentation and court approval. In February 2018, the District Court (i) granted class certification with respect to certain antitrust claims related to bonds and interest rate swaps sold directly by the defendants, (ii) denied class certification with respect to state common law claims brought by the holders of those bonds and swaps and (iii) denied class certification with respect to two other putative class actions related to exchange-traded Eurodollar futures contracts and LIBOR-based loans held by plaintiff lending institutions. The Firm and another defendant have petitioned for leave to appeal the class certification of the antitrust claims related to bonds and swaps, and the two class plaintiffs whose class certification motions were denied have also petitioned for leave to appeal.
In an action related to the Singapore Interbank Offered Rate and the Singapore Swap Offer Rate, 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.
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. In April 2016, the Firm settled this litigation, along with certain other banks. Those settlements have been preliminarily approved by the Court.
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.
Issuer Litigation – Individual Purchaser Actions. 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 has resolved all of the actions brought by trustees and/or securities administrators of various MBS trusts on behalf of purchasers of securities issued by those trusts, and those settlements have been approved by the relevant courts.
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 was filed in California federal court in 2013. 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. The motion by the defendants to dismiss is pending.
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 $3.0 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 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 Court approval, which is pending.
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, with respect to the criminal proceedings. In January 2018, the Paris Court of Appeal issued a decision cancelling the mise en examen of JPMorgan Chase Bank, N.A. The Firm is requesting clarification from the Court of Cassation concerning the Court of Appeal’s decision before seeking direction on next steps in the criminal proceedings. In addition, a number of the managers have commenced civil proceedings against JPMorgan Chase Bank, N.A. 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 expense was $70 million and $218 million for the three months ended March 31, 2018 and 2017, respectively. 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, after consultation with counsel and after taking into account its current litigation reserves, that the 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 23 – 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, see Segment results below, and Note 31 of JPMorgan Chase’s 2017 Annual Report.
Segment results
The following table provides a summary of the Firm’s segment results as of or for the three months ended March 31, 2018 and 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 each of the
reportable business segments) on an 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. 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.
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 assesses the level of capital required for each line of business as well as the assumptions and methodologies 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 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 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 a result of the TCJA.
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 Management
2018
2017
 2018
2017
 2018
2017
 2018
2017
Noninterest revenue$4,176
$3,898
 $6,505
$6,119
 $576
$592
 $2,680
$2,617
Net interest income9,114
8,135
 2,300
2,496
 1,695
1,554
 879
855
Total net revenue13,290
12,033
 8,805
8,615
 2,271
2,146
 3,559
3,472
Provision for credit losses980
1,517
 (42)(26) (15)(47) 23
8
Noninterest expense6,982
6,495
 5,175
4,793
 853
800
 2,585
2,408
Income before income tax expense5,328
4,021
 3,672
3,848
 1,433
1,393
 951
1,056
Income tax expense1,242
1,468
 1,046
1,302
 344
512
 227
382
Net income$4,086
$2,553
 $2,626
$2,546
 $1,089
$881
 $724
$674
Average equity$51,000
$51,000
 $70,000
$70,000
 $20,000
$20,000
 $9,000
$9,000
Total assets560,432
537,459
 928,148
851,808
 217,194
220,064
 166,716
149,170
Return on equity31%19% 14%13% 21%17% 31%29%
Overhead ratio53
54
 59
56
 38
37
 73
69
As of or for the three months ended September 30,
(in millions, except ratios)
Corporate 
Reconciling Items(a)
 Total
2018
2017
 2018
2017
 2018
2017
Noninterest revenue$(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

(a)Segment managed results reflect revenue on an FTE basis with the corresponding income tax impact related to tax-exempt items is recorded within income tax expense.expense/(benefit). These adjustments have no impactare eliminated in reconciling items to arrive at the Firm’s reported U.S. GAAP results.

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 Management
2018
2017
 2018
2017
 2018
2017
 2018
2017
Noninterest revenue$12,063
$10,899
 $21,954
$19,598
 $1,758
$1,774
 $7,997
$7,677
Net interest income26,321
23,516
 7,257
7,541
 4,995
4,478
 2,640
2,520
Total net revenue38,384
34,415
 29,211
27,139
 6,753
6,252
 10,637
10,197
Provision for credit losses3,405
4,341
 (142)(175) 23
(214) 40
30
Noninterest expense20,770
19,390
 16,237
14,854
 2,541
2,415
 7,732
7,606
Income before income tax expense14,209
10,684
 13,116
12,460
 4,189
4,051
 2,865
2,561
Income tax expense3,385
3,920
 3,318
3,963
 988
1,469
 616
878
Net income$10,824
$6,764
 $9,798
$8,497
 $3,201
$2,582
 $2,249
$1,683
Average equity$51,000
$51,000
 $70,000
$70,000
 $20,000
$20,000
 $9,000
$9,000
Total assets560,432
537,459
 928,148
851,808
 217,194
220,064
 166,716
149,170
Return on equity27%17% 18%15% 20%16% 32%24%
Overhead ratio54
56
 56
55
 38
39
 73
75
As of or for the nine months ended September 30,
(in millions, except ratios)
Corporate 
Reconciling Items(a)
 Total
2018
2017
 2018
2017
 2018
2017
Noninterest revenue$(220)$963
 $(1,337)$(1,733) $42,215
$39,178
Net interest income(35)2
 (473)$(987) 40,705
37,070
Total net revenue(255)965
 (1,810)$(2,720) 82,920
76,248
Provision for credit losses(3)
 

 3,323
3,982
Noninterest expense394
355
 

 47,674
44,620
Income/(loss) before income tax expense/(benefit)(646)610
 (1,810)(2,720) 31,923
27,646
Income tax expense/(benefit)18
(73) (1,810)(2,720) 6,515
7,437
Net income/(loss)$(664)$683
 $
$
 $25,408
$20,209
Average equity$78,995
$79,937
 $
$
 $228,995
$229,937
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
59
(a)Segment managed results reflect revenue on net income as reported byan FTE basis with the Firm as a whole or by the lines of business.
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 assesses the level of capital required for each line of business as well as the assumptions and methodologies used to allocate capital. For additional information on business segment capital allocation, see Line of business equity on page 88 of JPMorgan Chase’s 2017 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, see Note1.
Net income in the first quarter of 2018 for the business segments reflects the favorable impact of the reduction in the U.S. federal statutorycorresponding income tax rate as a result ofimpact recorded within income tax expense/(benefit). These adjustments are eliminated in reconciling items to arrive at the TCJA.
Segment results and reconciliation(a)
As of or for the three months ended March 31,
(in millions, except ratios)
Consumer &
Community Banking
 Corporate &
Investment Bank
 Commercial Banking Asset & Wealth Management
2018
2017
 2018
2017
 2018
2017
 2018
2017
Noninterest revenue$4,139
$3,317
 $7,917
$6,999
 $549
$599
 $2,630
$2,469
Net interest income8,458
7,653
 2,566
2,600
 1,617
1,419
 876
819
Total net revenue12,597
10,970
 10,483
9,599
 2,166
2,018
 3,506
3,288
Provision for credit losses1,317
1,430
 (158)(96) (5)(37) 15
18
Noninterest expense6,909
6,395
 5,659
5,184
 844
825
 2,581
2,781
Income before income tax expense4,371
3,145
 4,982
4,511
 1,327
1,230
 910
489
Income tax expense1,045
1,157
 1,008
1,270
 302
431
 140
104
Net income$3,326
$1,988
 $3,974
$3,241
 $1,025
$799
 $770
$385
Average equity$51,000
$51,000
 $70,000
$70,000
 $20,000
$20,000
 $9,000
$9,000
Total assets540,659
524,770
 909,845
840,304
 220,880
217,348
 158,439
141,049
Return on equity25%15% 22%18% 20%15% 34%16%
Overhead ratio55
58
 54
54
 39
41
 74
85
As of or for the three months ended March 31,
(in millions, except ratios)
Corporate 
Reconciling Items(a)
 Total
2018
2017
 2018
2017
 2018
2017
Noninterest revenue$(185)$73
 $(455)$(582) $14,595
$12,875
Net interest income(47)(98) (158)$(329) 13,312
12,064
Total net revenue(232)(25) (613)$(911) 27,907
24,939
Provision for credit losses(4)
 

 1,165
1,315
Noninterest expense87
98
 

 16,080
15,283
Income/(loss) before income tax expense/(benefit)(315)(123) (613)(911) 10,662
8,341
Income tax expense/(benefit)68
(158) (613)(911) 1,950
1,893
Net income/(loss)$(383)$35
 $
$
 $8,712
$6,448
Average equity$77,615
$77,703
 $
$
 $227,615
$227,703
Total assets779,962
822,819
 NA
NA
 2,609,785
2,546,290
Return on equityNM
NM
 NM
NM
 15%11%
Overhead ratioNM
NM
 NM
NM
 58
61
Firm’s reported U.S. GAAP results.
(a)Segment managed results reflect revenue on an 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.



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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”) as of March 31,September 30, 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 the consolidated statements of changes in stockholders’ equity and of cash flows for the three-monthnine-month periods ended March 31,September 30, 2018 and 2017, including 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 for them to be in conformity with accounting principles generally accepted in the United States of America.
We have 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 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.

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May 2,October 31, 2018














































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


JPMorgan Chase & Co.
Consolidated average balance sheets, interest and rates
Consolidated average balance sheets, interest and rates (unaudited)Consolidated average balance sheets, interest and rates (unaudited)
(Taxable-equivalent interest and rates; in millions, except rates)
      
Three months ended March 31, 2018 Three months ended March 31, 2017Three months ended September 30, 2018 Three months ended September 30, 2017
Average
balance
Interest(f)
 Rate
(annualized)
 Average
balance
Interest(f)
 Rate
(annualized)
Average
balance
Interest(f)
 Rate
(annualized)
 Average
balance
Interest(f)
 Rate
(annualized)
Assets              
Deposits with banks$423,807
$1,321
 1.26% $423,746
$725
 0.69 % $408,595
$1,585
 1.54% $456,673
$1,259
 1.09 
Federal funds sold and securities purchased under resale agreements198,362
731
 1.49
 196,965
526
 1.08
 208,439
952
 1.81
 188,594
622
 1.31 
Securities borrowed109,733
62

0.23
 95,372
(44)
(g) 
(0.19) 117,057
200
 0.68
 95,597


 
Trading assets – debt instruments256,040
2,118
 3.35
 225,801
1,883
 3.38
 258,027
2,170
 3.34
 240,876
1,974
 3.25 
Taxable securities195,641
1,313
 2.72
 240,803
1,430
 2.41
 187,942
1,402
 2.96
 216,011
1,362
 2.50 
Nontaxable securities(a)
44,113
510
 4.69
 44,762
690
 6.25
 42,045
490
 4.62
 45,106
676
 5.95 
Total investment securities239,754
1,823
 3.08
(h) 
 285,565
2,120
 3.01
(h) 
229,987
1,892
 3.26
(g) 
 261,117
2,038
 3.10
(g) 
Loans926,548
11,117
 4.87
 891,904
9,823
 4.47
 951,724
12,250
 5.11
 909,580
10,591
 4.62 
All other interest-earning assets(b)
49,169
681
 5.61
 41,559
338
 3.30
 46,429
945
 8.07
 41,737
522
 4.96 
Total interest-earning assets2,203,413
17,853
 3.29
 2,160,912
15,371
 2.88
 2,220,258
19,994
 3.57
 2,194,174
17,006
 3.07 
Allowance for loan losses(13,482)    (13,723)    (13,207)    (13,290)  
Cash and due from banks22,173
    19,920
    21,101
    20,289
  
Trading assets – equity instruments107,688
    115,284
    102,962
    119,463
  
Trading assets – derivative receivables60,492
    61,400
    62,075
    59,839
  
Goodwill, MSRs and other intangible assets
54,702
    54,249
    54,652
    53,788
  
Other assets151,057
    135,120
    151,780
    134,968
  
Total assets$2,586,043
    $2,533,162
    $2,599,621
    $2,569,231
  
Liabilities              
Interest-bearing deposits$1,046,521
$1,060
 0.41% $986,015
$483
 0.20 % $1,057,262
$1,621
 0.61% $1,029,534
$837
 0.32 
Federal funds purchased and securities loaned or sold under repurchase agreements196,112
578
 1.20
 189,611
293
 0.63
 184,377
827
 1.78
 181,851
451
 0.98 
Short-term borrowings(c)
57,603
209
 1.47
 36,521
73
 0.79
 61,042
288
 1.87
 52,958
149
 1.12 
Trading liabilities – debt and other interest-bearing
liabilities
(d)(e)
171,488
660
 1.56
 176,824
405
 0.93
 177,091
1,018
 2.28
 168,738
570
 1.34 
Beneficial interests issued by consolidated VIEs23,561
123
 2.11
 38,775
135
 1.41
 19,921
122
 2.41
 29,832
123
 1.62 
Long-term debt279,005
1,753
 2.55
 292,224
1,589
 2.21
 275,979
2,056
 2.96
 294,626
1,759
 2.37 
Total interest-bearing liabilities1,774,290
4,383
 1.00
 1,719,970
2,978
 0.70
 1,775,672
5,932
 1.33
 1,757,539
3,889
 0.88 
Noninterest-bearing deposits399,487
    405,548
    395,600
    401,489
  
Trading liabilities – equity instruments(e)
28,631
    21,072
    36,309
    20,905
  
Trading liabilities – derivative payables41,745
    48,373
    44,810
    44,627
  
All other liabilities, including the allowance for lending-related commitments88,207
    84,428
    90,539
    86,742
  
Total liabilities2,332,360
    2,279,391
    2,342,930
    2,311,302
  
Stockholders’ equity              
Preferred stock26,068
    26,068
    26,252
    26,068
  
Common stockholders’ equity227,615
    227,703
    230,439
    231,861
  
Total stockholders’ equity253,683
    253,771
    256,691
    257,929
  
Total liabilities and stockholders’ equity$2,586,043
    $2,533,162
    $2,599,621
    $2,569,231
  
Interest rate spread  2.29%   2.18 %   2.24%   2.19 
Net interest income and net yield on interest-earning assets $13,470
 2.48
  $12,393
 2.33
  $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, seerefer 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, includedwhich 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 $98.0$106.4 billion and $94.1$89.4 billion for the three months ended March 31,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 (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.
(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 $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.liabilities
(h) For the three months ended March 31, 2018 and 2017, the annualized rates for securities, based on amortized cost, were 3.12% and 3.04%, respectively; this does not give effect to changes in fair value that are reflected in AOCI.


GLOSSARY OF TERMS AND ACRONYMS
2017 Annual Report or 2017 Form 10-K: Annual report on Form 10-K for year ended December 31, 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 equity 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
Free-standing derivatives: is a derivative contract entered into either separate and apart from any of the 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
 
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
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:A single agreement with a counterparty that permits multiple transactions governed by that agreement to be terminated or accelerated and settled through a single payment in a single currency in the event of a default (e.g., bankruptcy, failure to make a required payment or securities 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 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.
Interchange income:A fee paid to a credit card issuer in the clearing and settlement of a sales or cash advance transaction.
Reward costs: The cost to the Firm for points earned by cardholders enrolled in credit card reward 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 share-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 share-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 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 (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 approaches 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”)
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.
Home Lending Production and Home 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 Home 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 Home 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 Merchant Services businesses.
Card: is a business that primarily issues credit cards to consumers and small businesses.
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.
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 and pages 121-128 of JPMorgan Chase’s 2017 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 146 of JPMorgan Chase’s 2017 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 March 31,September 30, 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 2017 Annual Report on Form 10-K, seerefer to the discussion of the Firm’s material legal proceedings in Note 22 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 8–26 of JPMorgan Chase’s 2017 Annual Report on Form 10-K and Forward-Looking Statements on page 7385 of this Form 10-Q.
Supervision and regulation
For information on Supervision and Regulation, seerefer to Recent regulatory updatesdevelopments on page 3344 of this Form 10-Q and the Supervision and regulation section on pages 1–8 of JPMorgan Chase’s 2017 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 March 31, 2018, 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.September 30, 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 months ended March 31, 2018 and 2017. There were no warrants repurchased during the three months ended March 31, 2018 and 2017.
  Three months ended March 31,
(in millions) 2018
2017
Total shares of common stock repurchased 41.4
32.1
Aggregate common stock repurchases $4,671
$2,832
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.
The authorization to repurchase common equity will be utilized at management’s discretion,this Form 10-Q and the timingpages 82-91 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; maybe executed through open market purchases or privately negotiated transactions, or utilizing Rule 10b5-1 programs; and may be suspended at any time.JPMorgan Chase’s 2017 10-K.

Shares repurchased pursuant to the common equity repurchase program during the threenine months ended March 31,September 30, 2018, were as follows.
Three months ended March 31, 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)
 
January12,479,338
 $110.98
 $1,385
 $8,442
 
February14,798,888
 112.94
 1,671
 6,771
 
March14,140,809
 114.20
 1,615
 5,156
(b) 
First quarter41,419,035
 $112.78
 $4,671
 $5,156
(b) 
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 quarter41,419,035
 $112.78
 $4,671
 $5,156
(b) 
Second quarter45,299,370
 109.67
 4,968
 188
(c) 
July15,450,734
 107.83
 1,666
 19,059
 
August12,302,781
 115.67
 1,423
 17,636
 
September11,528,761
 115.07
 1,327
 16,309
 
Third quarter39,282,276
 112.41
 4,416
 16,309
 
Year-to-date126,000,681
 $111.55
 $14,055
 $16,309
 
(a)Excludes commissions cost.
(b)Represents the amount remaining under the $19.4 billion repurchase program that was authorized by the Board of Directors on June 28, 2017.
(c)The $188 million unused portion under the prior Board authorization was canceled when the $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 
   
31.1 
   
31.2 
   
32 
   
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 March 31,September 30, 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 March 31,September 30, 2018 and 2017, (ii) the Consolidated statements of comprehensive income (unaudited) for the three and nine months ended March 31,September 30, 2018 and 2017, (iii) the Consolidated balance sheets (unaudited) as of March 31,September 30, 2018, and December 31, 2017, (iv) the Consolidated statements of changes in stockholders’ equity (unaudited) for the threenine months ended March 31,September 30, 2018 and 2017, (v) the Consolidated statements of cash flows (unaudited) for the threenine months ended March 31,September 30, 2018 and 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:May 2,October 31, 2018












INDEX TO EXHIBITS






Exhibit No. Description of Exhibit
   
15 
   
31.1 
   
31.2 
   
32 
   
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.






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