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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
September 30, 20182019
number1-5805

JPMorgan Chase & Co.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 Park383 Madison Avenue, New York,
New York,10017New York10179
(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code: (212) (212) 270-6000

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stockJPMThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 5.45% Non-Cumulative Preferred Stock, Series PJPM PR AThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.125% Non-Cumulative Preferred Stock, Series YJPM PR FThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.10% Non-Cumulative Preferred Stock, Series AAJPM PR GThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.15% Non-Cumulative Preferred Stock, Series BBJPM PR HThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 5.75% Non-Cumulative Preferred Stock, Series DDJPM PR DThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.00% Non-Cumulative Preferred Stock, Series EEJPM PR CThe New York Stock Exchange
Alerian MLP Index ETNs due May 24, 2024AMJNYSE Arca, Inc.
Guarantee of Callable Step-Up Fixed Rate Notes due April 26, 2028 of JPMorgan Chase Financial Company LLCJPM/28The New York Stock Exchange
Guarantee of Cushing 30 MLP Index ETNs due June 15, 2037 of JPMorgan Chase Financial Company LLCPPLNNYSE Arca, Inc.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.☒Yes☐No
xYes
oNo

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
xYes
o☒Yes☐ No
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 filerx
☒

Accelerated filero☐
   
Non-accelerated filero
☐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).☐Yes☒No
oYes
xNo

 
Number of shares of common stock outstanding as of September 30, 2018: 3,325,410,7252019: 3,136,484,924
 


FORM 10-Q
TABLE OF CONTENTS
Part I – Financial information
Page
Item 1.
Financial Statements.
 
 
Consolidated Financial Statements – JPMorgan Chase & Co.:
 
 
Consolidated statements of income (unaudited) for the three and nine months ended September 30, 20182019 and 20172018
8680
 
Consolidated statements of comprehensive income (unaudited) for the three and nine months ended September 30, 20182019 and 20172018
8781
 
Consolidated balance sheets (unaudited) at September 30, 20182019 and December 31, 20172018
8882
 
Consolidated statements of changes in stockholders’ equity (unaudited) for the three and nine months ended September 30, 20182019 and 20172018
8983
 
Consolidated statements of cash flows (unaudited) for the nine months ended September 30, 20182019 and 20172018
9084
 
Notes to Consolidated Financial Statements (unaudited)
9185
 
Report of Independent Registered Public Accounting Firm
172165
 
Consolidated Average Balance Sheets, Interest and Rates (unaudited) for the three and nine months ended September 30, 20182019 and 20172018
173166
 
Glossary of Terms and Acronyms and Line of Business Metrics
175168
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
 
Consolidated Financial Highlights
3
 
Introduction
4
 
Executive Overview
5
 
Consolidated Results of Operations
810
 
Consolidated Balance Sheets and Cash Flows Analysis
1215
 
Off-Balance Sheet Arrangements
1518
 
Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures
1619
 
Business Segment Results
1921
 
Enterprise-Wide Risk Management
4244
 
Capital Risk Management
4445
 
Liquidity Risk Management
4950
 
Consumer Credit Portfolio
5756
 
Wholesale Credit Portfolio
6260
 
Investment Portfolio Risk Management
7269
 
Market Risk Management
7370
 
Country Risk Management
7875
 
Critical Accounting Estimates Used by the Firm
7976
 
Accounting and Reporting Developments
8278
 
Forward-Looking Statements
8579
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
183176
Item 4.
Controls and Procedures.
183176
Part II – Other information
 
Item 1.
Legal Proceedings.
183176
Item 1A.
Risk Factors.
183176
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
183176
Item 3.
Defaults Upon Senior Securities.
184177
Item 4.
Mine Safety Disclosures.
184177
Item 5.
Other Information.
184177
Item 6.
Exhibits.
184177


JPMorgan Chase & Co.
Consolidated financial highlights (unaudited)
(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, 
3Q18
2Q18
1Q18
4Q17
 3Q17
 2018
2017
 
Selected income statement data          
Total net revenue$27,260
$27,753
$27,907
$24,457
 $25,578
 $82,920
$76,248
 
Total noninterest expense15,623
15,971
16,080
14,895
 14,570
 47,674
44,620
 
Pre-provision profit11,637
11,782
11,827
9,562
 11,008
 35,246
31,628
 
Provision for credit losses948
1,210
1,165
1,308
 1,452
 3,323
3,982
 
Income before income tax expense10,689
10,572
10,662
8,254
 9,556
 31,923
27,646
 
Income tax expense2,309
2,256
1,950
4,022
 2,824
 6,515
7,437
 
Net income$8,380
$8,316
$8,712
$4,232
 $6,732
 $25,408
$20,209
 
Earnings per share data          
Net income:    Basic$2.35
$2.31
$2.38
$1.08
 $1.77
 $7.04
$5.26
 
 Diluted2.34
2.29
2.37
1.07
 1.76
 7.00
5.22
 
Average shares: Basic3,376.1
3,415.2
3,458.3
3,489.7
 3,534.7
 3,416.5
3,570.9
 
 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 data          
Market capitalization375,239
350,204
374,423
366,301
 331,393
 375,239
331,393
 
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)
          
High$119.24
$115.15
$119.33
$108.46
 $95.88
 $119.33
$95.88
 
Low102.20
103.11
103.98
94.96
 88.08
 102.20
81.64
 
Close112.84
104.20
109.97
106.94
 95.51
 112.84
95.51
 
Book value per share69.52
68.85
67.59
67.04
 66.95
 69.52
66.95
 
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 share0.80
0.56
0.56
0.56
 0.56
 1.92
1.56
 
Selected ratios and metrics          
Return on common equity (“ROE”) (c)
14%14%15%7% 11% 14%11% 
Return on tangible common equity (“ROTCE”)(b)(c)
17
17
19
8
 13
 18
14
 
Return on assets(c)
1.28
1.28
1.37
0.66
 1.04
 1.31
1.06
 
Overhead ratio57
58
58
61
 57
 57
59
 
Loans-to-deposits ratio65
65
63
64
 63
 65
63
 
Liquidity coverage ratio (“LCR”) (average)(d)
115
115
115
119
 120
 115
118
 
Common equity Tier 1 (“CET1”) capital ratio(e)
12.0
12.0
11.8
12.2
 12.5
(h)12.0
12.5
(h)
Tier 1 capital ratio(e)
13.6
13.6
13.5
13.9
 14.1
(h)13.6
14.1
(h)
Total capital ratio(e)
15.4
15.5
15.3
15.9
 16.1
 15.4
16.1
 
Tier 1 leverage ratio(e)
8.2
8.2
8.2
8.3
 8.4
 8.2
8.4
 
Supplementary leverage ratio (“SLR”)(f)
6.5
6.5
6.5
6.5
 6.6
 6.5
6.6
 
Selected balance sheet data (period-end)          
Trading assets$419,827
$418,799
$412,282
$381,844
 $420,418
 $419,827
$420,418
 
Investment securities231,398
233,015
238,188
249,958
 263,288
 231,398
263,288
 
Loans954,318
948,414
934,424
930,697
 913,761
 954,318
913,761
 
Core loans899,006
889,433
870,536
863,683
 843,432
 899,006
843,432
 
Average core loans894,279
877,640
861,089
850,166
 837,522
 877,774
822,611
 
Total assets2,615,183
2,590,050
2,609,785
2,533,600
 2,563,074
 2,615,183
2,563,074
 
Deposits1,458,762
1,452,122
1,486,961
1,443,982
 1,439,027
 1,458,762
1,439,027
 
Long-term debt270,124
273,114
274,449
284,080
 288,582
 270,124
288,582
 
Common stockholders’ equity231,192
231,390
230,133
229,625
 232,314
 231,192
232,314
 
Total stockholders’ equity258,956
257,458
256,201
255,693
 258,382
 258,956
258,382
 
Headcount255,313
252,942
253,707
252,539
 251,503
 255,313
251,503
 
Credit quality metrics          
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 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(g)
1.23
1.22
1.25
1.27
 1.29
 1.23
1.29
 
Nonperforming assets$5,034
$5,767
$6,364
$6,426
 $6,154
 $5,034
$6,154
 
Net charge-offs1,033
1,252
1,335
1,264
 1,265
 3,620
4,123
(i)
Net charge-off rate0.43%0.54%0.59%0.55% 0.56% 0.52%0.62%(i)
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
As of or for the period ended, (in millions, except per share, ratio, headcount data and where otherwise noted)

      Nine months ended Sept. 30,
3Q19
2Q19
1Q19
4Q18
3Q18
 2019
2018
Selected income statement data        
Total net revenue$29,341
$28,832
$29,123
$26,109
$27,260
 $87,296
$82,920
Total noninterest expense16,422
16,341
16,395
15,720
15,623
 49,158
47,674
Pre-provision profit12,919
12,491
12,728
10,389
11,637
 38,138
35,246
Provision for credit losses1,514
1,149
1,495
1,548
948
 4,158
3,323
Income before income tax expense11,405
11,342
11,233
8,841
10,689
 33,980
31,923
Income tax expense2,325
1,690
2,054
1,775
2,309
 6,069
6,515
Net income$9,080
$9,652
$9,179
$7,066
$8,380
 $27,911
$25,408
Earnings per share data        
Net income:        Basic$2.69
$2.83
$2.65
$1.99
$2.35
 $8.17
$7.04
        Diluted2.68
2.82
2.65
1.98
2.34
 8.15
7.00
Average shares: Basic3,198.5
3,250.6
3,298.0
3,335.8
3,376.1
 3,248.7
3,416.5
        Diluted3,207.2
3,259.7
3,308.2
3,347.3
3,394.3
 3,258.0
3,436.2
Market and per common share data        
Market capitalization369,133
357,479
328,387
319,780
375,239
 369,133
375,239
Common shares at period-end3,136.5
3,197.5
3,244.0
3,275.8
3,325.4
 3,136.5
3,325.4
Book value per share75.24
73.88
71.78
70.35
69.52
 75.24
69.52
Tangible book value per share (“TBVPS”)(a)
60.48
59.52
57.62
56.33
55.68
 60.48
55.68
Cash dividends declared per share0.90
0.80
0.80
0.80
0.80
 2.50
1.92
Selected ratios and metrics        
Return on common equity (“ROE”)(b)
15%16%16%12%14% 15%14%
Return on tangible common equity (“ROTCE”)(a)(b)
18
20
19
14
17
 19
18
Return on assets(b)
1.30
1.41
1.39
1.06
1.28
 1.37
1.31
Overhead ratio56
57
56
60
57
 56
57
Loans-to-deposits ratio62
63
64
67
65
 62
65
Liquidity coverage ratio (“LCR”) (average)115
113
111
113
115
 115
115
Common equity Tier 1 (“CET1”) capital ratio(c)
12.3
12.2
12.1
12.0
12.0
 12.3
12.0
Tier 1 capital ratio(c)
14.1
14.0
13.8
13.7
13.6
 14.1
13.6
Total capital ratio(c)
15.9
15.8
15.7
15.5
15.4
 15.9
15.4
Tier 1 leverage ratio(c)
7.9
8.0
8.1
8.1
8.2
 7.9
8.2
Supplementary leverage ratio (“SLR”)6.3
6.4
6.4
6.4
6.5
 6.3
6.5
Selected balance sheet data (period-end)        
Trading assets$495,875
$523,373
$533,402
$413,714
$419,827
 $495,875
$419,827
Investment securities394,251
307,264
267,365
261,828
231,398
 394,251
231,398
Loans945,218
956,889
956,245
984,554
954,318
 945,218
954,318
Core loans899,572
908,971
905,943
931,856
899,006
 899,572
899,006
Average core loans900,567
905,786
916,567
907,271
894,279
 907,581
877,774
Total assets2,764,661
2,727,379
2,737,188
2,622,532
2,615,183
 2,764,661
2,615,183
Deposits1,525,261
1,524,361
1,493,441
1,470,666
1,458,762
 1,525,261
1,458,762
Long-term debt296,472
288,869
290,893
282,031
270,124
 296,472
270,124
Common stockholders’ equity235,985
236,222
232,844
230,447
231,192
 235,985
231,192
Total stockholders’ equity264,348
263,215
259,837
256,515
258,956
 264,348
258,956
Headcount257,444
254,983
255,998
256,105
255,313
 257,444
255,313
Credit quality metrics        
Allowance for credit losses$14,400
$14,295
$14,591
$14,500
$14,225
 $14,400
$14,225
Allowance for loan losses to total retained loans1.42%1.39%1.43%1.39%1.39% 1.42%1.39%
Allowance for loan losses to retained loans excluding purchased credit-impaired loans(d)
1.32
1.28
1.28
1.23
1.23
 1.32
1.23
Nonperforming assets$5,343
$5,260
$5,616
$5,190
$5,034
 $5,343
$5,034
Net charge-offs1,371
1,403
1,361
1,236
1,033
 4,135
3,620
Net charge-off rate0.58%0.60%0.58%0.52%0.43% 0.59%0.52%
(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, referRefer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 16-18.19–20 for a further discussion of these measures.
(c)(b)Quarterly ratios are based upon annualized amounts.
(d)(c)ForThe Basel III capital rules became fully phased-in effective January 1, 2019. During 2018, the nine months endedrequired capital measures were subject to the transitional rules and as of December 31, 2018 and September 30, 2017,2018, were the percentage represents the Firm’s reported average LCR per the U.S. LCR public disclosure requirements effective April 1, 2017.  same on a fully phased-in and on a transitional basis. Refer to Key performance measures on page 59 and Capital Risk Management on pages 85-94 of JPMorgan Chase’s 2018 Form 10-K and pages 45–49 of this Form 10-Q for additional information on these measures.
(e)(d)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. Refer to Capital Risk Management on pages 44-48 for additional information on Basel III.
(f)Effective January 1, 2018, the SLR was fully phased-in under Basel III. The SLR is defined as Tier 1 capital divided by the Firm’s total leverage exposure. Ratios prior to March 31, 2018 were calculated under the Basel III Transitional rules.    
(g)ExcludedExcludes the impact of residential real estate purchased credit-impaired (“PCI”) loans, a non-GAAP financial measure. For a further discussion of these measures, referRefer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 16-18. For a further discussion, refer to19–20, and the Allowance for credit losses on pages 69–71.
(h)The prior period ratios have been revised to conform with the current period presentation.
(i)Excluding net charge-offs67–68 for a further discussion 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%.these measures.

INTRODUCTION
The following is management’sManagement’s discussion and analysis (“MD&A”) of the financial condition and results of operations (“MD&A”) of JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) for the third quarter of 2018.2019.
This Quarterly Report on Form 10-Q for the third quarter of 2019 (“Form 10-Q”) should be read together with JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, 20172018 (“2017 Annual Report” or “20172018 Form 10-K”), to which reference is hereby made, and which is referred to throughout this document.. Refer to the Glossary of terms and acronyms and line of business metrics on pages 175–182168–175 for definitions of terms and acronyms used throughout this Form 10-Q.
This Form 10-Qdocument 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 inRefer to Forward-looking Statements on page 79 of this Form 10-Q and Part I, Item 1A, Risk factors, on pages 7–28 of the forward-looking statements. For2018 Form 10-K 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, refer to Forward-looking Statements on page 85 of this Form 10-Q and Part I, Item 1A, Risk Factors, on pages 8–26 of JPMorgan Chase’s 2017 Annual Report.uncertainties.
JPMorgan Chase & Co. (NYSE: JPM),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 FirmJPMorgan Chase had $2.6$2.8 trillion in assets and $259.0$264.3 billion in stockholders’ equity as of September 30, 2018. 2019. The Firm is a leader in investment
banking, financial services for consumers and
small businesses, commercialbanking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S. and many of the world’s most prominent corporate, institutional and government clients.
JPMorgan Chase’s principal bank subsidiaries aresubsidiary is JPMorgan Chase Bank, National Association (“(“JPMorgan Chase Bank, N.A.”), a national banking association with U.S. branches in 23 32 states and Washington, D.C. 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.2019. JPMorgan Chase’s principal nonbank subsidiary is J.P. Morgan Securities LLC (“(“J.P. Morgan Securities”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, representative offices and representative offices.subsidiary foreign banks. 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 Consumer & Community Banking (“CCB”). The Firm’s wholesale business segments are Corporate & Investment Bank (“CIB”), Commercial Banking (“CB”), and Asset & Wealth Management (“AWM”). ForRefer to Note 31 of JPMorgan Chase’s 2018 Form 10-K 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.bases.




EXECUTIVE OVERVIEW
This executive overview of the MD&A highlights selected information and maydoes 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 the 20172018 Form 10-K should be read together and in their entirety.
Effective January 1, 2018, the Firm adopted several new accounting standards, of which the most significant to the Firm are the guidance related to revenue recognition, and recognition and measurement of financial assets. The revenue recognition guidance required gross presentation of certain costs that were previously offset against revenue. This change was adopted retrospectively and, accordingly, prior period amounts were revised, resulting in both total net revenue and total noninterest expense increasing with no impact to net income. The adoption of the recognition and measurement guidance resulted in $505 million of fair value gains, which were recorded in total net revenue in the first quarter of 2018, on certain equity investments that were previously held at cost. For additional information, refer to Note 1.
Financial performance of JPMorgan ChaseFinancial performance of JPMorgan Chase        Financial performance of JPMorgan Chase        
(unaudited)
As of or for the period ended,
(in millions, except per share data and ratios)
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
2018
 2017
 Change
 2018
 2017
 Change
2019
 2018
 Change
 2019
 2018
 Change
Selected income statement data                      
Total net revenue$27,260
 $25,578
 7 % $82,920
 $76,248
 9 %$29,341
 $27,260
 8% $87,296
 $82,920
 5%
Total noninterest expense15,623
 14,570
 7
 47,674
 44,620
 7
16,422
 15,623
 5
 49,158
 47,674
 3
Pre-provision profit11,637
 11,008
 6
 35,246
 31,628
 11
12,919
 11,637
 11
 38,138
 35,246
 8
Provision for credit losses948
 1,452
 (35) 3,323
 3,982
 (17)1,514
 948
 60
 4,158
 3,323
 25
Net income8,380
 6,732
 24
 25,408
 20,209
 26
9,080
 8,380
 8
 27,911
 25,408
 10
Diluted earnings per share$2.34
 $1.76
 33
 $7.00
 $5.22
 34
$2.68
 $2.34
 15
 $8.15
 $7.00
 16
Selected ratios and metrics                      
Return on common equity14% 11%   14% 11%  15% 14%   15% 14%  
Return on tangible common equity17
 13
   18
 14
  18
 17
   19
 18
  
Book value per share$69.52
 $66.95
 4
 $69.52
 $66.95
 4
$75.24
 $69.52
 8
 $75.24
 $69.52
 8
Tangible book value per share55.68
 54.03
 3
 55.68
 54.03
 3
60.48
 55.68
 9
 60.48
 55.68
 9
Capital ratios(a)
                      
CET1(b)
12.0% 12.5%   12.0% 12.5%  12.3% 12.0%   12.3% 12.0%  
Tier 1 capital(b)
13.6
 14.1
   13.6
 14.1
  14.1
 13.6
   14.1
 13.6
  
Total capital15.4
 16.1
   15.4
 16.1
  15.9
 15.4
   15.9
 15.4
  
(a)Ratios presented are calculated under theThe Basel III Transitional capital rules.rules became fully phased-in effective January 1, 2019. During 2018, the required capital measures were subject to the transitional rules and as of September 30, 2018, was the same on a fully phased-in and on a transitional basis. Refer to Key performance measures on page 59 and Capital Risk Management on pages 44-4885-94 of JPMorgan Chase’s 2018 Form 10-K and pages 45–49 of this Form 10-Q for additional information on Basel III.
(b)The prior period ratios have been revised to conform with the current period presentation.these measures.







Comparisons noted in the sections below are for the third quarter of 20182019 versus the third quarter of 2017,2018, unless otherwise specified.
Firmwide overview
JPMorgan Chase reported strong results in the current quarter of 2018, with record net income and EPS for a third quarter of $8.42019, with net income of $9.1 billion, or $2.34$2.68 per share, on record net revenue of $27.3$29.3 billion. Excluding the impact of the Tax Cuts & Jobs Acts (”TCJA”), net income and EPS were still records for a third quarter. The Firm reported ROE of 14%15% and ROTCE of 17%18%.
NetThe Firm had net income increased 24%of $9.1 billion, up 8%.
•
Total net revenue increased 8%. Net interest income was $14.2 billion, up 2%, driven by continued balance sheet growth and mix, largely offset by the impact of rates. Noninterest revenue was $15.1 billion, up 13%, and included approximately $350 million of gains related to certain loan sales in Home Lending. Excluding these gains, the increase in noninterest revenue was largely driven by results in Fixed Income Markets in the CIB, as well as Home Lending and Auto in CCB.
Noninterest expense was $16.4 billion, up 5%, reflectingdriven by higher net revenuevolume- and the impact of the lower U.S. federal statutory income tax rate as a result of the TCJA,revenue-related expenses and investments, including compensation and auto lease depreciation, partially offset by an increase in noninterest expense.
Total net revenue increased 7%. Net interest income was $13.9 billion, up 9%, driven by the net impact of higher rates, which includes lower Markets net interest income in CIB, as well as loan and deposit growth. Noninterest revenue was $13.4 billion, up 4%, largely driven by higher Markets noninterest revenue and auto lease income, partially offset by markdowns on certain legacy private equity investments of approximately $220 million.
Noninterest expense was $15.6 billion, up 7%, predominantly driven by investments in the business, including higher compensation expense on increased headcount, technology, marketing and real estate, and higher revenue-related costs, including auto lease depreciation.FDIC charges.
The provision for credit losses was $948 million, down from $1.5 billion, in the prior year. The decrease was driven by the consumer portfolio,up $566 million, largely reflectingas a result of net reduction toreductions in the allowance for credit losses in the current quarter, compared to aand net additionrecoveries in the prior year.
The total allowance for credit losses was $14.2$14.4 billion at September 30, 2018,2019, and the Firm had a loan loss coverage ratio of 1.42%, compared with 1.39% in the prior year; excluding the PCI portfolio, of 1.23%the equivalent ratio was 1.32%, compared with 1.29%1.23% in the prior year. The Firm’s nonperforming assets totaled $5.0$5.3 billion at September 30, 2018, a decrease2019, an increase from $6.2$5.0 billion in the prior year, reflecting increases in the wholesale portfolio related to select client downgrades, largely offset by improved credit performance in the consumer portfolio, and reductions in the wholesale portfolio including repayments and loan sales.portfolio.
Firmwide average coretotal loans increased 7%, andwere flat at $947 billion, or up 3% excluding CIB, core loans increased 6%.

the impact of certain loan sales in Home Lending.
 
Selected capital-related metrics
The Firm’s Basel III Fully Phased-In CET1 capital was $185$188 billion, and the Standardized and Advanced CET1 ratios were 12.0%12.3% and 12.9%13.1%, respectively.
The Firm’s Fully Phased-In SLRsupplementary leverage ratio (“SLR”) was 6.5%6.3% at September 30, 2018.2019.
The Firm continued to grow tangible book value per share (“TBVPS”), ending the third quarter of 20182019 at $55.68,$60.48, up 3%9%.
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, referRefer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key PerformancePerformance Measures on pages 16-18, and Capital Risk Management on pages 44-48.

19–20 for a further discussion of each of these measures.

Lines of businessBusiness segment highlights
Selected business metrics for each of the Firm’s four lines of business are presented below for the third quarter of 2018.2019.
CCB
ROE 31%32%
 
•
Average coreloans down 4%; Home Lending loans down 12% impacted by loan sales; credit card loans up 6%; average deposits of $674 billion up 4%8%
•
Client investment assets of $298 billion, up 14%13%; average deposits up 3%
•
Credit card sales volume up 12%10% and merchant processing volume up 14%11%
CIB
ROE 14%13%
 
•
Maintained #1 ranking for Global Investment Banking fees with 8.7%9.3% wallet share year-to-dateYTD
•
EquityTotal Markets revenue of $1.6$5.1 billion, up 17%
•
Treasury Services revenue up 12% and Securities Services revenue up 5%14%
CB
ROE 21%16%
•
Gross Investment Banking revenue of $700 million, up 20%
•
Average client deposits of $173 billion, up 3%
AWM
ROE 24%
 
•
Average loan balances up 4%
•
Strong credit quality with a net recovery of 3 bps
AWM
ROE 31%
•
Average loan balances up 12%7%
•
Assets under management (“AUM”)(AUM) of $2.1$2.2 trillion, up 7%8%
For a detailed discussion of results by line of business, referRefer to the Business Segment Results on pages 19-41.21–43 for a detailed discussion of results by business segment.
Credit provided and capital raised
JPMorgan Chase continues to support consumers, businesses and communities around the globe. The Firm provided new and renewed credit and raised capital of $1.9 trillion for wholesale and consumer clients during the first nine months of 2018:2019, consisting of:
$174 billion of credit for consumers
$16 billion of credit for U.S. small businesses
$682 billion of credit for corporations
$960 billion of capital raised for corporate clients and non-U.S. government entities
$41 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.
$1.7 trillionTotal credit provided and capital raised
$188
billion
Credit for consumers
$25
billion
Credit for U.S. small businesses
$630 billionCredit for corporations
$785 billionCapital raised for corporate clients and non-U.S. government entities
$53 billion
Credit and capital raised for nonprofit and U.S. government entities(a)
(a)Includes states, municipalities, hospitals and universities.

2018
2019 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. ForRefer to Forward-Looking Statements on page 79 of this Form 10-Q and Risk Factors on pages 7–28 of JPMorgan Chase’s 2018 Form 10-K for a further discussion of certain of those risks and uncertainties and the other factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties, refer to Forward-Looking Statements on page 85 of this Form 10-Q and Risk Factors on pages 8–26 of JPMorgan Chase’s 2017 Annual Report.uncertainties. There is no assurance that actual results forin the full year of 20182019 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 current outlook for the remainder of 20182019 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,business, economic, regulatory business and economiclegal environments in which it operates.
Firmwide
ForManagement expects full-year 2018, management expects2019 net interest income, on a managed basis, to be less than $57.5 billion, market dependent. This estimate is based on stable long-end rates and assumes no more federal funds rate cuts in 2019.
Management expects Firmwide adjusted expense for the full-year 2019 to be approximately $55.5 billion, depending on market conditions.$65.5 billion.
Management expects full-year 2018 noninterest revenue growth2019 net charge-offs to be approximately $5.5 billion.


Business Developments
Expected departure of 7-8% on a managed basis, depending on market conditions.the U.K. from the EU
The U.K.’s expected departure from the EU, which is commonly referred to as “Brexit,” is scheduled to occur not later than January 31, 2020.
The Firm continues to take a disciplined approachexecute the relevant elements of its Firmwide Brexit Implementation program with the objective of delivering the Firm’s capabilities to managing its expenses, while investing for growth and innovation. As a result, management expects full-year 2018 adjusted expenseEU clients on “day one” of approximately $63.5 billion (excluding Firmwide legal expense).any departure by the U.K. from the EU, whether or not an agreement has been reached to allow an orderly withdrawal.
Management estimates the full-year 2018 effective tax rateThe principal operational risks associated with Brexit continue to be approximately 20%, dependingthe potential for disruption caused by insufficient preparations by individual market participants or in the overall market ecosystem, and risks related to potential disruptions of connectivity among market participants. Although legislative and regulatory actions taken by the EU and the U.K. have mitigated some of the significant market-wide risks, there continues to be regulatory and legal uncertainty with respect to various matters including contract continuity and access by market participants to liquidity in certain products, such as products subject to potentially conflicting U.K. and EU regulatory requirements in relation to eligible trading venues, including certain cross-border derivative contracts and equities that are listed on both U.K. and EU exchanges.
As discussed in Business Developments on page 46 of the 2018 Form 10-K, the Firm is focused on the following key areas to ensure continuation of service to its EU clients: regulatory and legal entity readiness; client readiness; and business and operational readiness. Following are the significant updates from the matters discussed in the 2018 Form 10-K.
Regulatory and legal entity readiness
The Firm’s legal entities in Germany, Luxembourg and Ireland are now prepared and licensed to provide services to the Firm’s EU clients, including after any departure by the U.K. from the EU.
Client readiness
The agreements covering a significant proportion of the Firm’s EU client activity have been re-documented to other EU legal entities to help facilitate continuation of service. The Firm continues to actively engage with clients that have not completed re-documentation to ensure preparedness both in terms of documentation and any operational changes that may be required. The Firm may be negatively impacted by any operational disruption stemming from delays of or lapses in the readiness of other market participants or market infrastructures.
Business and operational readiness
The Firm relocated certain employees during the first quarter of 2019. During the second quarter of 2019, the Firm added specific employees to certain EU legal entities, where appropriate, to support the level of client activity that has been migrated. However, the Firm’s final staffing plan will depend upon several factors,the timing and terms of any withdrawal by the U.K. from the EU.
If Brexit is further delayed due to a transition deal or another mechanism, the Firm will continue to review the timing and extent of any further expansion of activities in its EU legal entities, as appropriate. The Firm continues to closely monitor legislative developments, and its implementation plan allows for flexibility given the continued uncertainties.
LIBOR transition
The Firm continues to develop and implement plans to appropriately mitigate the risks associated with the expected discontinuation of certain unsecured benchmark interest rates, including the geographic mixLondon Interbank Offered Rate (“LIBOR”) and other Interbank Offered Rates (“IBORs”). In particular, the Firm:
has implemented or is in the process of taxable incomeimplementing fallback language for LIBOR-linked syndicated loans, securitizations, floating rate notes and refinements to estimatesbi-lateral business loans based on the recommendations of the impactsAlternative Reference Rates Committee, and has started to introduce the Secured Overnight Financing Rate as a replacement benchmark rate for certain of these products;
continues to monitor the transition relief being considered by the Financial Accounting Standards Board (“FASB”) and International Accounting Standards Board (“IASB”) concerning the accounting for contract modifications and hedge accounting; and
continues to engage with regulators and clients as the transition from IBORs progresses.
Refer to Business Developments on page 47 of the TCJA.
Management expects average core loan growth, excluding CIB,2018 Form 10-K for a discussion of 6-7% for full-year 2018.

the Firm’s initiatives to address the expected discontinuation of LIBOR and other IBORs.

CONSOLIDATED RESULTS OF OPERATIONS
This section provides a comparative discussion of JPMorgan Chase’s Consolidated Results of Operations on a reported basis for the three and nine months ended September 30, 20182019 and 2017,2018, unless otherwise specified. Factors that relate primarily to a single business segment are discussed in more detail within that business segment. ForRefer to pages 76–77 of this Form 10-Q and pages 141-143 of JPMorgan Chase’s 2018 Form 10-K for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations, refer to pages 79–81 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, refer to Note 1.Operations.
Revenue                      
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 Change
 2018
 2017
 Change
2019
 2018
 Change
 2019
 2018
 Change
Investment banking fees$1,832
 $1,868
 (2)% $5,736
 $5,594
 3 %$1,967
 $1,832
 7 % $5,658
 $5,736
 (1)%
Principal transactions2,964
 2,721
 9
 10,698
 9,440
 13
3,449
 2,964
 16
 11,239
 10,698
 5
Lending- and deposit-related fees1,542
 1,497
 3
 4,514
 4,427
 2
1,626
 1,542
 5
 4,643
 4,514
 3
Asset management, administration and commissions4,310
 4,072
 6
 12,923
 11,996
 8
4,351
 4,310
 1
 12,818
 12,923
 (1)
Investment securities losses(46) (1) NM
 (371) (38) NM
Investment securities gains/(losses)78
 (46) NM
 135
 (371) NM
Mortgage fees and related income262
 429
 (39) 1,051
 1,239
 (15)887
 262
 239
 1,562
 1,051
 49
Card income1,328
 1,242
 7
 3,623
 3,323
 9
1,283
 1,328
 (3) 3,923
 3,623
 8
Other income(a)
1,160
 952
 22
 4,041
 3,197
 26
1,472
 1,160
 27
 4,239
 4,041
 5
Noninterest revenue13,352
 12,780
 4
 42,215
 39,178
 8
15,113
 13,352
 13
 44,217
 42,215
 5
Net interest income13,908
 12,798
 9
 40,705
 37,070
 10
14,228
 13,908
 2
 43,079
 40,705
 6
Total net revenue$27,260
 $25,578
 7 % $82,920
 $76,248
 9 %$29,341
 $27,260
 8 % $87,296
 $82,920
 5 %
(a)Included operating lease income of $1.2$1.4 billion and $928 million$1.2 billion for the three months ended ,September 30, 2019 and 2018, respectively and $3.3$4.0 billion and $2.6$3.3 billion for the nine months ended ,September 30, 2019 and 2018, respectively.
Quarterly results
Investment banking fees decreased slightly compared to a strong prior year, with overallincreased reflecting:
higher debt underwriting fees, on wallet share gains despite a decline in industry-wide fees, driven by participation in large acquisition financing deals and increased activity in investment-grade bonds
higher equity underwriting fees which were more thandriven by wallet share gains primarily in the IPO and convertible markets,
partially offset by
lower debt underwriting and advisory fees. The increase in equity underwriting fees was driven by a higher share of fees including a strong performance in the IPO market. The decrease in debt underwriting fees was driven by declinesdecline in industry-wide fee levels, and advisory fees declined compared towith a strong prior year. For additional information, refer
Refer to CIB segment results on pages 26-3128–33 and Note 5. for additional information.
Principal transactions revenue increased primarily reflecting reflecting:
higher revenue in CIB, primarily driven by:
higher Equity Markets revenue in derivatives and prime brokerage reflecting strong client activity, andby
•–
strong performance across products in Fixed Income Markets, higher revenueprimarily in Currencies & Emerging Markets on increased activity levels, as well as inRates, agency mortgage trading within Securitized Products, and Commodities, compared to a challengingwith the prior year. The increaseyear, which was partially offsetimpacted by less favorable market conditions,
partially offset by
–lower revenue in CreditEquity Markets, primarily in derivatives, driven by lower client activity and Securitized Products. For additional information, refer to CIB segment results on pages 26-31 ,less favorable market conditions, compared with a strong prior year, and Note 5.
The increase in CIB was partially offset by private equity losses reflecting markdownsCorporate, net gains on certain legacy private equity investments compared with net losses in Corporate.the prior year.
Principal transactions revenue in CIB may have offsets across other revenue lines, including net interest income. The Firm assesses its Markets business performance on a total revenue basis.
Refer to CIB, AWM and Corporate segment results on pages 28–33, pages 38–41 and pages 42–43, and Note 5 for additional information.
For information on lending-Lending- and deposit-related fees refer increased primarily due to thehigher deposit-related fees in CCB, reflecting growth in customer accounts and transactions.
Refer to CCB segment results for CCB on pages 21–25,22–27, CIB on pages 26-31,28–33 and CB on pages 32-3534–37, respectively, and Note 5. for additional information.
Asset management, administration and commissions revenue increased reflecting:
driven by higher asset management fees in AWM and CCB driven by higher market levels and net long-term product inflows, partially offset by fee compressionfrom growth in AWM, andclient investment assets.
higher brokerage commissions driven by higher volumes in CIB.
For additional information, referRefer to AWM, CCB and CIBAWM segment results on pages 36–39, 22–27 and pages 21–25 and pages 26-3138–41 , respectively, and Note 5. for additional information.
For further information on investmentInvestment securities gains/(losses) andprimarily reflect the impact of repositioning the investment securities portfolio, referportfolio. Refer to Corporate segment results on pages 40–4142–43 and Note 9. for additional information.
Mortgage fees and related income decreasedincreased driven by lower by:
higher net mortgage production revenue reflecting approximately $350 million of gains on the sale of certain loans, as well as higher production volumes and margins
net mortgage servicing revenue, which remained relatively flat, reflecting lower operating revenue driven by the impact of reclassifying certain loans to held-for-sale and faster prepayment speeds on lower rates, offset by favorable 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, referresults.

Refer to CCB segment results on pages 21–2522–27, Note 5 and Note 14. for further information.

Card income increased driven by:
lower new account origination costs, and
higher merchant processing fees on higher volumes,
largely offset by
lower net interchange incomedecreased reflecting higher rewards costs and partner payments, largelypredominantly offset by higher card salesinterchange income and merchant processing fees on higher volumes.
For further information, referRefer to CCB segment results on pages 21–2522–27 and Note 5. for further information.
Other income reflects increased reflecting:
higher operating lease income from growth in auto operating lease volume in CCB. For further information, referCCB
losses in the prior year on certain investments in CIB and Corporate,
partially offset by
lower other income in CIB associated with increased amortization on a higher level of alternative energy investments. The increased amortization was more than offset by the lower income tax expense from the associated tax credits.
Refer to Note 5. for further information.
Net interest income increased primarily due todriven by continued balance sheet growth and changes in mix, largely offset by the net impact of higher rates, which includes lower Markets net interest income in CIB, as well as loan and deposit growth.rates. The Firm’s average interest-earning assets were $2.2$2.4 trillion, up $26.1$162 billion, from the prior year, and the net interest yield on these assets, on a fully taxable equivalenttaxable-equivalent (“FTE”) basis, was 2.51%2.41%, an increasea decrease of 1412 basis points from the prior year.points. The net interest yield excluding CIB Markets was 3.30%3.23%, an increasea decrease of 407 basis points from the prior year.points. Net interest yield excluding CIB Marketsmarkets is a non-GAAP financial measure. For aRefer to the Consolidated average balance sheets, interest and rates schedule on pages 166–167 for further discussion of this measure, refer todetails; and the Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 16-18.19–20 for a further discussion of Net interest yield excluding CIB markets.
Year-to-date results
Investment banking fees increasedwere relatively flat reflecting:
higher equity underwritinglower advisory and advisory fees in CIB. The increase in equity underwriting fees was driven by a higherdecline in industry-wide fees despite wallet 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,gains,
partially offset by
lowerhigher debt underwriting fees primarilyon wallet share gains despite a decline in industry-wide fees, driven by declinesparticipation in industry-wide fee levels and a lower share in leveraged finance.large acquisition financing deals
Principal transactions revenue increased primarily reflecting reflecting:
higher revenue in CIB, which included a gain on the IPO of Tradeweb. Excluding this gain, the increase in CIB’s revenue was driven by:
–higher revenue in Fixed Income Markets, primarily in agency mortgage trading within Securitized Products, and Commodities, partially offset by Currencies & Emerging Markets
–favorable changes in funding spreads on derivatives in Credit Adjustments & Other,
strength across products in Equity Markets, primarily in derivatives and prime brokerage, reflecting strong client activity, and
in Fixed Income Markets, higher revenue in Commodities compared to a challenging prior year, and strong performance in Currencies & Emerging Markets, largelypartially offset by lower revenue in Credit.
The
–lower revenue in Equity Markets driven by lower client activity in derivatives
the net increase in CIB was partially offset by private equity losses reflecting markdowns
lower revenue in AWM, related to hedges on certain legacy private equity investments, compared withwhich was more than offset by higher valuation gains on the related investments reflected in the prior yearother income,
Corporate was relatively flat, reflecting
–losses on cash deployment transactions in Treasury and CIO, which were more than offset by the related net interest income earned on those transactions, and
–lower net valuation losses on certain legacy private equity investments.
Principal transactions revenue in Corporate.
CIB may have offsets across other revenue lines, including net interest income. The Firm assesses its Markets business performance on a total revenue basis.
Lending- and deposit-related fees increased primarily due to higher deposit-related fees in CCB, reflecting growth in customer accounts and transactions.
Asset management, administration and commissions revenue increasedwas relatively flat reflecting:
lower asset management fees in AWM driven by a shift in the mix toward lower fee products,
largely offset by
higher asset management fees in AWM and CCB driven by higher market levels and net long-term product inflows partially offset by fee compressionfrom growth 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 market levels.investment assets.
Investment securities lossesgains/(losses) increased due to sales related toprimarily reflect the impact of repositioning of the investment securities portfolio.
Mortgage fees and related income decreasedincreased driven by lowerby:
higher net mortgage production revenue reflecting lower production margins,gains on sales of certain loans, as well as lower net servicing revenue reflecting lower servicing revenue on a lower level of third-party loans serviced, higher mortgage production margins and volumes,
partially offset by higher MSR risk management results.
lower net mortgage servicing revenue driven by
–lower operating revenue reflecting faster prepayment speeds on lower rates and the impact of reclassifying certain loans to held-for-sale, as well as
–lower MSR risk management results reflecting updates to model inputs.
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. The rewards costs included anthe absence of the prior-year adjustment of approximately $330 million to the credit card rewards liability of approximately $330 million in the second quarter of 2018, driven by an increase in redemption rate assumptions.liability.
Other incomeincreased reflecting:
higher operating lease income from growth in auto operating lease volume in CCB, and
higher investment valuation gains in AWM, which were largely offset by the impact of the related hedges reflected in principal transactions revenue,
partially offset by

lower other income in CIB associated with increased amortization on a higher level of alternative energy investments. The increased amortization was more than offset by the lower income tax expense from the associated tax credits.
The prior year included:
$505 million of fair value gains of $505 million recognized in the first quarter of 2018 related to the adoption of the new recognition and measurement accounting guidance for certain equity investments previously held at cost
partially offset by
the absence of a legal benefit of $645 million that was recorded in the prior yearfirst quarter of 2018, and
losses on certain investments in Corporate related to a settlement with the FDIC receivership for Washington MutualCIB and with Deutsche Bank as trustee to certain Washington Mutual trusts.Corporate.
Net interest income increased primarily due to the net impact of higher rates, which includes lower Markets net interest incomedriven by continued balance sheet growth and changes in CIB, as well as loan and deposit growth.mix. The Firm’s average interest-earning assets were $2.2$2.3 trillion, up $37.9$136 billion, from the prior year, and the net interest yield on these assets, on an FTE basis, was 2.49%, an increasea decrease of 151 basis points from the prior year.point. The net interest yield excluding CIB Markets was 3.21%3.34%, an increase of 4013 basis points from the prior year.points. Net interest yield excluding CIB markets is a non-GAAP financial measure.

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

2018
 2017
 Change
 2018
 2017
 Change
2019
 2018
 Change
 2019
 2018
 Change
Consumer, excluding credit card$(242) $206
 NM
 $(152) $660
 NM
$(61) $(242) 75% $(265) $(152) (74)%
Credit card1,223
 1,319
 (7)% 3,557
 3,699
 (4)1,375
 1,223
 12
 4,017
 3,557
 13
Total consumer981
 1,525
 (36) 3,405
 4,359
 (22)1,314
 981
 34
 3,752
 3,405
 10
Wholesale(33) (73) 55
 (82) (377) 78
200
 (33) NM
 406
 (82) NM
Total provision for credit losses$948
 $1,452
 (35)% $3,323
 $3,982
 (17)%$1,514
 $948
 60% $4,158
 $3,323
 25 %
Quarterly results
The provision for credit losses decreased as a result of:increased driven by consumer and wholesale.
The total consumer provision reflects:
an increase in credit card due to
•–
a decreasehigher net charge-offs on loan growth, in the consumer provision in CCB due to
line with expectations, and
–
a $250$200 million addition to the allowance for loan losses reflecting higher loss rates, as newer vintages season and become a larger part of the portfolio, compared to a $150 million addition in the prior year
an increase in consumer, excluding credit card in CCB due to
–a $100 million reduction in the allowance for loan losses in the non credit-impaired residential real estate portfolio, compared to a $250 million reduction in the PCI residential real estate portfolio reflecting continued improvement in home pricesthe prior year, 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-offsrecoveries 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
benefited from a larger recovery on a loan sale
partially offset by
–
higher net charge-offs in the credit card portfolio due to seasoning of more recent vintages, as anticipated
•
the decrease in the consumer provision was partially offset by a lower net benefit in the wholesale provision in the current period, which includes net recoveries predominantly related to a loan sale in CIB.
For a more detailed discussion of the credit portfolio and the allowance for credit losses, refer to the segment discussions of CCB on pages 21–25, CIB on pages 26-31, CB on pages 32-35, the Allowance for Credit Losses on pages 69–71 and Note 12.
Year-to-date results
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$50 million reduction in the allowance for loan losses in the business banking portfolio.
The wholesale provision was largely driven by select Commercial & Industrial (“C&I”) client downgrades. The prior year was a net benefit which included net recoveries predominantly related to a loan sale in CIB.
Refer to CCB segment results on pages 22–27, CIB on pages 28–33, CB on pages 34–37, AWM on pages 38–41, the Allowance for Credit Losses on pages 67–68, and Note 12 for additional information on the credit portfolio and the allowance for credit losses.
Year-to-date results
The provision for credit losses increased driven by wholesale and consumer.
The wholesale provision was largely driven by select C&I client downgrades. The prior year was a 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 total consumer provision reflects:
an increase in credit card due to
–a $400 million addition to the allowance for loan losses reflecting higher loss rates, as newer vintages season and become a larger part of the portfolio and loan growth, compared to a $150 million addition in the prior year, and
–higher net charge-offs on loan growth, in line with expectations
partially offset by
a decrease in consumer, excluding credit card in CCB due to
–a $400 million reduction in the allowance for loan losses in the PCI residential real estate PCI portfolio, reflecting continued improvement in home prices and lower delinquencies, compared toand a $175$100 million reduction in the allowance for loan losses in the non credit-impaired residential real estate portfolio, compared to a $250 million reduction in the PCI residential real estate portfolio in the prior year,
partially offset by
–
higher net charge-offs in the credit card portfolio due to seasoning of more recent vintages, as anticipated
and
–
the prior year included a $218$50 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 creditloan losses in the Oil & Gas, Natural Gas Pipelines, and Metals and Mining portfolios. business banking portfolio
largely offset by
–lower net recoveries in the residential real estate portfolio as the prior year benefited from larger recoveries on loan sales.

Noninterest expenseNoninterest expense                     
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)

2018
 2017
 Change
 2018
 2017
 Change2019
 2018
 Change
 2019
 2018
 Change
Compensation expense$8,108
 $7,697
 5% $25,308
 $23,710
 7 %$8,583
 $8,108
 6 % $26,067
 $25,308
 3 %
Noncompensation expense:                      
Occupancy1,014
 930
 9
 2,883
 2,803
 3
1,110
 1,014
 9
 3,238
 2,883
 12
Technology, communications and equipment2,219
 1,972
 13
 6,441
 5,677
 13
2,494
 2,219
 12
 7,236
 6,441
 12
Professional and outside services2,086
 1,955
 7
 6,333
 5,646
 12
2,056
 2,086
 (1) 6,307
 6,333
 —
Marketing798
 710
 12
 2,396
 2,179
 10
945
 798
 18
 2,686
 2,396
 12
Other expense(a)(b)
1,398
 1,306
 7
 4,313
 4,605
 (6)1,234
 1,398
 (12) 3,624
 4,313
 (16)
Total noncompensation expense7,515
 6,873
 9
 22,366
 20,910
 7
7,839
 7,515
 4
 23,091
 22,366
 3
Total noninterest expense$15,623
 $14,570
 7% $47,674
 $44,620
 7 %$16,422
 $15,623
 5 % $49,158
 $47,674
 3 %
(a)
Included Firmwide legal expense/(benefit) of $20$10 million and $(107)$20 million for the three months ended September 30, 20182019 and 2017,2018, respectively and $90$(2) million and $172$90 million for the nine months ended September 30, 2019 and 2018, and 2017.
respectively.
(b)Included FDIC-related expense of $349$114 million and $353$349 million for the three months ended September 30, 2019 and 2018, respectively and 2017, respectively,$378 million and $1.1 billion for each of the nine months ended September 30, 2019 and 2018, and 2017.respectively.

Quarterly results
Compensation expense increased driven by investmentshigher revenue-related expense in headcountCIB and investments across the businesses, including bankers and advisors,front office hires, as well as technology and other support staff; and higher revenue-related compensation expense.staff.
Noncompensation expense increased as a result of:
higher investments across the businesses, including technology, real estate and marketing, and
higher volume-related expense, including depreciation expense due tofrom growth in auto operating lease volumeassets in CCB,
higher legal expense; the prior year was a net benefit
higher outside services and brokerage expense primarily due to higher volume-related transaction costsin certain businesses in CIB, and higher external fees on revenue growth in AWM
higher investments in technology,partially offset by
lower FDIC charges as a result of the elimination of the surcharge at the end of the third quarter of 2018, and
higher marketing expenselower other regulatory-related charges in CCB.
For a discussion of legal expense, refer to Note 22.CIB.

 
Year-to-date results
Compensation expense increased driven by investments in headcount across the businesses, including bankers and advisors,front office hires, as well as technology and other support staff, and higherpartially offset by lower revenue-related compensation expense largely in CIB.
Noncompensation expense increased as a result of:
higher outside services expense primarily due to investments across the businesses, including, technology, real estate and marketing
higher volume-related transaction costs in CIB and higher external fees on revenue growth in AWM
higherexpense, including depreciation expense due tofrom growth in auto operating lease volumeassets in CCB, and brokerage expense in certain businesses in CIB
contributions to the Firm’s Foundation, whereas all prior-year contributions were made in the fourth quarter, and
higher marketingpension costs due to changes to actuarial assumptions and estimates,
partially offset by
lower FDIC charges as a result of the elimination of the surcharge at the end of the third quarter of 2018
lower other regulatory-related charges in CIB
lower legal expense, and
lower distribution fees in CCBAWM.
The prior year included a loss of $174 million recorded in other expense in Corporate on the liquidation of a legal entity andin Corporate recorded in other expense.
higher investments in technology.
ForRefer to Note 19 for additional information on the liquidation of a legal entity, refer to Note 17.entity.

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

2018
 2017
 Change
 2018
 2017
 Change2019
 2018
 Change
 2019
 2018
 Change
Income before income tax expense$10,689
 $9,556
 12 % $31,923
 $27,646
 15 %$11,405
 $10,689
 7% $33,980
 $31,923
 6 %
Income tax expense2,309
 2,824
 (18) 6,515
 7,437
 (12)2,325
 2,309
 1
 6,069
 6,515
 (7)
Effective tax rate21.6% 29.6%   20.4% 26.9% 

20.4% 21.6%   17.9% 20.4%  
Quarterly results
The effective tax rate decreased due to the TCJA, includingrecognition of tax benefits related to the reductionresolution of certain tax audits and changes in the mix of income and expense subject to U.S. federal, statutory income tax rate as well asand state and local taxes. In addition, the prior year included a $132 million net tax benefit resulting from changes in the estimates under the Tax Cuts and Jobs Act (“TCJA”) related to the remeasurement of certain deferred taxes and the deemed repatriation tax on non-U.S. earnings.

Year-to-date results
The effective tax rate decreased due to the recognition of $1.0 billion of tax benefits related to the resolution of certain tax audits and changes in the mix of income and expense subject to U.S. federal, and state and local taxes. The decrease was partially offset by lower tax benefits related to the vesting of employee stock-based awards. In addition, the prior year included a $305 million net tax benefit resulting from changes in the estimates under the TCJA related to the remeasurement of certain deferred taxes and the deemed repatriation tax on non-U.S. earnings. These items that reducedRefer to Note 1 for additional information on the effective2019 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.benefits.
Year-to-date results
The effective tax rate decreased due to the TCJA, including the reduction in the U.S. federal statutory income tax rate as well as a $305 million net tax benefit recorded in the first nine months of 2018 resulting from changes in the estimates related to the remeasurement of certain deferred taxes and the deemed repatriation tax on non-U.S. earnings. These items that reduced the effective tax rate were partially offset by the impact of higher pre-tax income, and the change in mix of income and expense subject to U.S. federal, state and local taxes.


CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
Consolidated balance sheets analysis
The following is a discussion of the significant changes between September 30, 2018,2019, and December 31, 2017.2018.
Selected Consolidated balance sheets data
(in millions)Sep 30,
2018
 Dec 31,
2017
Change
September 30,
2019
 December 31,
2018
Change
Assets        
Cash and due from banks$23,225
 $25,898
(10)%$21,215
 $22,324
(5)%
Deposits with banks395,872
 405,406
(2)235,382
 256,469
(8)
Federal funds sold and securities purchased under resale agreements217,632
 198,422
10
257,391
 321,588
(20)
Securities borrowed122,434
 105,112
16
138,336
 111,995
24
Trading assets:    
Debt and equity instruments359,765
 325,321
11
Derivative receivables60,062
 56,523
6
Trading assets495,875
 413,714
20
Investment securities231,398
 249,958
(7)394,251
 261,828
51
Loans954,318
 930,697
3
945,218
 984,554
(4)
Allowance for loan losses(13,128) (13,604)(3)(13,235) (13,445)(2)
Loans, net of allowance for loan losses941,190
 917,093
3
931,983
 971,109
(4)
Accrued interest and accounts receivable78,792
 67,729
16
88,988
 73,200
22
Premises and equipment14,180
 14,159
—
25,117
 14,934
68
Goodwill, MSRs and other intangible assets54,697
 54,392
1
53,078
 54,349
(2)
Other assets115,936
 113,587
2
123,045
 121,022
2
Total assets$2,615,183
 $2,533,600
3 %$2,764,661
 $2,622,532
5 %
Cash and due from banks and deposits with banks decreased primarily as a result of net long-term debt maturities. Thea shift in the deployment of cash in Treasury and CIO to investment securities. Deposits with banks reflect the Firm’s placements of its excess cash is largely placed with various central banks, predominantlyincluding the Federal Reserve Banks.
Federal funds sold and securities purchased under resale agreements increased primarily duedecreased largely as a result of a shift in the deployment of cash in Treasury and CIO. Refer to higher client-driven market-making activities and higher demand for securities to cover short positions in CIB. For additional information on the Firm’s Liquidity Risk Management refer to on pages 49–50–54. and Note 10 for additional information.
Securities borrowedincreased in CIB driven by higher demand for securities to cover short positions related to client-driven market-making activities in CIB.Fixed Income Markets, and to cover customer short positions in prime brokerage. Refer to Liquidity Risk Management on pages 50–54 and Note 10 for additional information.
Trading assets-debt and equity instrumentsassets increased predominantly as a result ofdue to:
growth in client-driven market-making activities in CIB, primarily equity instruments in prime brokerage, and debt instruments in Fixed Income Markets, drivenand equity instruments in Equity Markets, including prime brokerage, and when compared with lower levels at year-end, and
in CCB, an increase in U.S. GSE MBS acquired as part of the proceeds of warehouse loan sales, and growth related to originations of mortgage warehouse loans, resulting from the favorable rate environment,
partially offset by higher client demand. For additional information, refer
a reduction in short-term instruments associated with cash deployment activities in Treasury and CIO.
Refer to Notes 2 and 4. for additional information.
Investment securities decreasedincreased primarily reflecting net sales, paydowns and maturitiespurchases of U.S. Treasuries and U.S. GSE and government agency mortgage-backed securities (“MBS”), commercial MBS in Treasury and obligations of U.S. statesCIO driven by interest rate risk management and municipalities. For additional information on Investment securities, referbroader balance sheet management. Refer to Corporate segment results on pages 40–41,42–43, Investment Portfolio Risk Management on page 72,69, and Notes 2 and 9. for additional information on Investment securities.
Loans increased reflecting:
higher wholesaledecreased reflecting loan sales in Home Lending, and lower loans across all lines of business, predominantlyin CIB, primarily driven by CIB, including loans to financial institutiona loan syndication and commercial and industrial clients, and in AWM due to an increase in loans to Wealth Management clients globally, and
higher consumer loans driven by retention of high-quality prime mortgages in CCB and AWM, predominantlynet pay downs, partially offset by lower home equity loans, run-off of PCI loans, lower auto loans,increases in CB and mortgage loan sales.AWM.
The allowance for loan losses decreased driven by:
•
a $250$550 million reduction in the CCB allowance for loan losses, which includes $400 million in the PCI residential real estate PCI portfolio, reflecting continued improvement in home prices and lower delinquencies,delinquencies; $100 million in the non credit-impaired residential real estate portfolio; and $50 million in the business banking portfolio; as well as a $151 million reduction 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 $132 million reduction in the wholesale allowance primarily driven by loan sales related to a single name in the Oil & Gas portfolio in the first quarterfor write-offs of 2018 and other net portfolio activity. PCI loans,
For largely offset by
a $400 million addition to the allowance for loan losses in the credit card portfolio reflecting higher loss rates, as newer vintages season and become a larger part of the portfolio and loan growth.
Refer to Credit and Investment Risk Management on pages 55–69, and Notes 2, 3, 11 and 12 for a more detailed discussion of loans and the allowance for loan losses, refer to Credit Risk Management on pages 55-72, and Notes 2, 3, 11 and 12.losses.
Accrued interest and accounts receivableincreased primarily reflecting higher client receivables related to client-driven activities in CIB.

Other assetsPremises and equipment increased reflecting higher auto operatingdue to the adoption of the new lease assets from growth in business volume in CCB.accounting guidance effective January 1, 2019. Refer to Note 16 for additional information.
 
For informationGoodwill, MSRs and other intangibles decreased reflecting lower MSRs as a result of faster prepayment speeds on Goodwill and MSRs, referlower rates, partially offset by an increase in goodwill associated with the acquisition of InstaMed. Refer to Note 14. for additional information.
Selected Consolidated balance sheets data (continued)Selected Consolidated balance sheets data (continued) Selected Consolidated balance sheets data (continued) 
(in millions)Sep 30,
2018
 Dec 31,
2017
Change
September 30,
2019
 December 31,
2018
Change
Liabilities        
Deposits$1,458,762
 $1,443,982
1 %$1,525,261
 $1,470,666
4 %
Federal funds purchased and securities loaned or sold under repurchase agreements181,608
 158,916
14
247,766
 182,320
36
Short-term borrowings64,635
 51,802
25
48,893
 69,276
(29)
Trading liabilities:    
Debt and equity instruments109,457
 85,886
27
Derivative payables41,693
 37,777
10
Trading liabilities138,343
 144,773
(4)
Accounts payable and other liabilities209,707
 189,383
11
225,063
 196,710
14
Beneficial interests issued by consolidated variable interest entities (“VIEs”)20,241
 26,081
(22)18,515
 20,241
(9)
Long-term debt270,124
 284,080
(5)296,472
 282,031
5
Total liabilities2,356,227
 2,277,907
3
2,500,313
 2,366,017
6
Stockholders’ equity258,956
 255,693
1
264,348
 256,515
3
Total liabilities and stockholders’ equity$2,615,183
 $2,533,600
3 %$2,764,661
 $2,622,532
5 %
Deposits increased reflecting:
growth in operating deposits in CIB and CCB, largely offset by decreases in AWM and CB.
The increase in CIB was predominantly driven by growth in client activity in Treasury Services and Securities Services, and an increase in net issuances of structured notes in Markets, and
in CCB, driven by the continuation ofpredominantly due to continued growth fromin 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,accounts, and in CB, primarily driven by the impact of seasonality and migration of non-operating deposits into higher-yielding investment products.growth from existing clients.
For more information, referRefer to the Liquidity Risk Management discussion on pages 49–50–54; and Notes 2
and 15. for additional information.
Federal funds purchased and securities loaned or sold under repurchase agreements increased reflecting driven by CIB and includes the Firm’s participation in the Federal Reserve’s open market operations, as well as higher secured financing of trading assets-debt and equity instruments and client-driven market-making activities in CIB.activities. Refer to Liquidity Risk Management on pages 50–54 and Note 10 for additional information.
Short-term borrowingsincreased due to the net issuance of decreased reflecting lower commercial paper and short-term advances from Federal Home Loan Banks (“FHLBs”FHLB”). For additional information, refer in Treasury and CIO, primarily driven by liquidity management. Refer to Liquidity Risk Management on pages 49–50–54. for additional information.
Trading liabilities–debt and equity instruments liabilitiesincreased predominantly decreased as a result of client-driven market-making activities in CIB, which resulted in lower levels of short positions primarily debt instruments in Fixed Income Markets, and equity instruments in prime brokerage. ForEquity Markets. Refer to Notes 2 and 4 for additional information, refer to Note 2 .information.
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 67–68, and Notes 2 and 4.
Accounts payable and other liabilities increased partly as a result of reflecting:
higher client payables related to prime brokerageclient-driven activities in CIB.CIB, and
the impact of the adoption of the new lease accounting guidance effective January 1, 2019.
Refer to Note 16 for additional information on Leases.
Beneficial interests issued by consolidated VIEsdecreased due to net to:
maturities of credit card securitizations. Forsecuritizations,
predominantly offset by
higher levels of Firm-administered multi-seller conduit commercial paper issued to third parties.
Refer to Off-Balance Sheet Arrangements on page 18 and Notes 13 and 22 for further information on Firm-sponsored VIEs and loan securitization trusts, refer to Off-Balance Sheet Arrangements on page 15 and Notes 13 and 20.trusts.
Long-term debt decreased primarily driven by lower FHLB advances, partially offset byincreased as a result of client-driven net issuanceissuances of structured notes in CIB. ForCIB’s Markets business.
Refer to Liquidity Risk Management on pages 50–54 for additional information on the Firm’s long-term debt activities, referactivities.
Refer to Liquidity Risk Management on pages 49–54.
Forpage 83 for information on changes in stockholders’ equity refer to page 89, and on the Firm’s capital actions, refer to Capital actions on pages 47-48.47–48.


Consolidated cash flows analysis
The following is a discussion of cash flow activities during the nine months ended September 30, 20182019 and 2017.2018.
(in millions) Nine months ended September 30, Nine months ended September 30,
2018
 2017
 2019
 2018
Net cash provided by/(used in)        
Operating activities $13,765
 $(23,381) $(77,039) $13,765
Investing activities (39,782) 47,706
 (38,181) (39,782)
Financing activities 16,319
 36,405
 96,006
 16,319
Effect of exchange rate changes on cash (2,509) 7,272
 (2,982) (2,509)
Net increase/(decrease) in cash and due from banks and deposits with banks $(12,207) $68,002
Net decrease in cash and due from banks and deposits with banks $(22,196) $(12,207)
Operating activities
In 2019, cash used primarily resulted from higher trading assets, securities borrowed, other assets and accrued interest and accounts receivable, partially offset by higher accounts payable and other liabilities, trading liabilities, and net proceeds from loans originated for sale.
In 2018, cash provided primarily reflectedresulted from net income, increased trading liabilities andhigher accounts payable and other liabilities, and trading liabilities, partially offset by increases inhigher trading assets and securities borrowed.
In 2017, cash used primarily reflected increases in trading assets, and decreases in trading liabilities, and accounts payable and other liabilities, partially offset by net income and a decrease in other assets.
 
Investing activities
In 2019, cash used primarily resulted from net purchases of investment securities and net loan originations, predominantly offset by lower securities purchased under resale agreements, and proceeds from the sale of loans held-for-investment.
In 2018, cash used reflectedresulted from higher net loan originations and an increase in securities purchased under resale agreements, partially offset by lowernet proceeds from investment securities.securities and sales of loans held-for- investment.
Financing activities
In 2017,2019, cash provided reflected a decrease inresulted from higher deposits, and securities purchasedloaned or sold under resalerepurchase agreements, and lower investment securities, partially offset by higher net loan originations.
Financing activitieslower short-term and long-term borrowings.
In 2018, cash provided reflectedresulted from 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 short-term borrowings, partially offset by a decrease in long-term borrowings.
Additionally, forFor both periods, cash was used for repurchases of common stock and cash dividends on common and preferred stock.
For* * *
Refer to Consolidated Balance Sheets Analysis on pages 15-16, Capital Risk Management on pages 45–49, and Liquidity Risk Management on pages 50–54 of this Form 10-Q, and pages 95–100 of JPMorgan Chase’s 2018 Form 10-K for a further discussion of the activities affecting the Firm’s cash flows, refer to Consolidated Balance Sheets Analysis on pages 12–14, Capital Risk Management on pages 44-48, and Liquidity Risk Management on pages 49–54 of this Form 10-Q, and pages 92–97 of JPMorgan Chase’s 2017 Annual Report.flows.


OFF-BALANCE SHEET ARRANGEMENTS
In the normal course of business, the Firm enters into various off-balance sheet arrangements and contractual obligations that may require future cash payments. Certain obligations are recognized on-balance sheet, while others are disclosed off-balance sheet under accounting principles generally accepted in the U.S. (“U.S. GAAP”).
Special-purpose entities
The Firm is involved withhas 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 transactionscontracts 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, refer 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 VIEsRefer to Note 13148-153139-144
Off-balance sheet lending-related financial instruments, guarantees, and other commitmentsRefer to Note 2022162-165156-159



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 usingin accordance with U.S. GAAP;GAAP and this presentation is referred to as “reported” basis; these financial statements appear on pages 86-9080–84. 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, managementthe Firm also reviews and uses certain non-GAAP financial measures at the Firmwide and segment level. These non-GAAP measures include:
Firmwide “managed” basis 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 includeswhich include 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. Thesesecurities (“FTE” basis)
 
financial measures allow management to assess the comparability of revenue from year-to-year arising from both taxableNet interest income and tax-exempt sources. The corresponding income tax impact related to tax-exempt itemsnet yield excluding CIB’s Markets businesses
Certain credit metrics and ratios, which exclude PCI loans
Tangible common equity (“TCE”), ROTCE, and TBVPS.
In addition, core loans is recorded within income tax expense. These adjustments have no impact on net income as reporteda key performance measure utilized by the Firm asand its investors and analysts in assessing actual growth in the loan portfolio.
Refer to Explanation and Reconciliation of the Firm’s Use Of Non-GAAP Financial Measures and Key Performance Measures on pages 57-59 of JPMorgan Chase’s 2018 Form 10-K for a whole or by the linesfurther discussion of business.
Management also uses certainmanagement’s use of 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 operationalkey 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, refer to Business Segment Results on pages 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.measures.
The following summary tables providetable provides a reconciliation from the Firm’s reported U.S. GAAP results to managed basis.
 Three 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$1,160
 $408
  $1,568
 $952
 $555
  $1,507
Total noninterest revenue13,352
 408
  13,760
 12,780
 555
  13,335
Net interest income13,908
 154
  14,062
 12,798
 319
  13,117
Total net revenue27,260
 562
  27,822
 25,578
 874
  26,452
Pre-provision profit11,637
 562
  12,199
 11,008
 874
  11,882
Income before income tax expense10,689
 562
  11,251
 9,556
 874
  10,430
Income tax expense$2,309
 $562
  $2,871
 $2,824
 $874
  $3,698
Overhead ratio57% 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, refer to Note 1.
 Three months ended September 30,
 2019 2018
(in millions, except ratios)Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis		 Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis
Other income$1,472
 $596
  $2,068
 $1,160
 $408
  $1,568
Total noninterest revenue15,113
 596
  15,709
 13,352
 408
  13,760
Net interest income14,228
 127
  14,355
 13,908
 154
  14,062
Total net revenue29,341
 723
  30,064
 27,260
 562
  27,822
Pre-provision profit12,919
 723
  13,642
 11,637
 562
  12,199
Income before income tax expense11,405
 723
  12,128
 10,689
 562
  11,251
Income tax expense$2,325
 $723
  $3,048
 $2,309
 $562
  $2,871
Overhead ratio56% NM
  55% 57% NM
  56%
              
 Nine months ended September 30,
 2019 2018
(in millions, except ratios)Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis		 Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis
Other income$4,239
 $1,777
  $6,016
 $4,041
 $1,337
  $5,378
Total noninterest revenue44,217
 1,777
  45,994
 42,215
 1,337
  43,552
Net interest income43,079
 408
  43,487
 40,705
 473
  41,178
Total net revenue87,296
 2,185
  89,481
 82,920
 1,810
  84,730
Pre-provision profit38,138
 2,185
  40,323
 35,246
 1,810
  37,056
Income before income tax expense33,980
 2,185
  36,165
 31,923
 1,810
  33,733
Income tax expense$6,069
 $2,185
  $8,254
 $6,515
 $1,810
  $8,325
Overhead ratio56% NM
  55% 57% NM
  56%
(a)Predominantly recognized in CIB, and CB business segments and Corporate.
(b)The decrease in fully taxable-equivalent adjustments in the three and nine months ended September 30, 2018, reflects the impact of the TCJA.












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



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

(in millions, except rates)
Three months ended September 30, Nine months ended September 30,
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%  

(in millions, except rates)
Three months ended September 30, Nine months ended September 30,
2019
2018
 Change
 20192018 Change
Net interest income – reported$14,228
$13,908
 2 % $43,079
$40,705
 6 %
Fully taxable-equivalent adjustments127
154
 (18) 408
473
 (14)
Net interest income – managed basis(a)
$14,355
$14,062
 2
 $43,487
$41,178
 6
Less: CIB Markets net interest income(b)
723
704
 3
 1,971
2,488
 (21)
Net interest income excluding CIB Markets(a)
$13,632
$13,358
 2
 $41,516
$38,690
 7
          
Average interest-earning assets(c)
$2,365,154
$2,203,305
 7
 $2,334,623
$2,198,909
 6
Less: Average CIB Markets interest-earning assets(b)(c)
690,593
596,784
 16
 671,236
589,185
 14
Average interest-earning assets excluding CIB Markets$1,674,561
$1,606,521
 4 % $1,663,387
$1,609,724
 3 %
Net interest yield on average interest-earning assets – managed basis(c)
2.41%2.53%   2.49%2.50%  
Net interest yield on average CIB Markets interest-earning assets(b)(c)
0.42
0.47
   0.39
0.56
  
Net interest yield on average interest-earning assets excluding CIB Markets3.23%3.30%   3.34%3.21%  
(a)Interest includes the effect of related hedges. Taxable-equivalent amounts are used where applicable.
(b)For a reconciliation of net interest incomeRefer to page 32 for further information on a reported and managed basis, refer to reconciliation from the Firm’s reported U.S. GAAP results to managed basis on page 16.CIB’s Markets businesses.
(c)For further information on CIB’s Markets businesses, referIn the second quarter of 2019, the Firm reclassified balances related to page 30.certain instruments from interest-earning to noninterest-earning assets, as the associated returns are recorded in principal transactions revenue and not in net interest income. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation.
The Firm also reviews adjusted expense, which is noninterest expense excluding Firmwide legal expense and is therefore a non-GAAP financial measure. Additionally, certain credit metrics and ratios disclosed by the Firm exclude PCI loans, and are therefore non-GAAP measures. Management believes these measures help investors
understand the effect of these items on reported results and provide an alternate presentation of the Firm’s performance. For additional information on credit metrics and ratios excluding PCI loans, refer to Credit and Investment Risk Management on pages 55-72.


Tangible common equity, ROTCE and TBVPS
Tangible common equity (“TCE”), ROTCE and TBVPS are each non-GAAP financial measures. TCE represents the Firm’s common stockholders’ equity (i.e., total stockholders’ equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. ROTCE measures the Firm’s net income
applicable to common equity as a percentage of average TCE. TBVPS represents the Firm’s TCE at period-end divided by common shares at period-end. TCE, ROTCE, and TBVPS are utilized by the Firm, as well as investors and analysts, in assessing the Firm’s use of equity.
The following summary table provides a reconciliation from the Firm’s common stockholders’ equity to TCE.
Period-end AveragePeriod-end Average
(in millions, except per share and ratio data)Sep 30,
2018
Dec 31,
2017
 Three months ended September 30, Nine months ended September 30,Sep 30,
2019
Dec 31,
2018
 Three months ended September 30,Nine months ended September 30,
2018
2017
 2018
2017
 2019
2018
2019
2018
Common stockholders’ equity$231,192
$229,625
 $230,439
$231,861
 $228,995
$229,937
$235,985
$230,447
 $235,613
$230,439
$232,917
$228,995
Less: Goodwill47,483
47,507
 47,490
47,309
 47,496
47,297
47,818
47,471
 47,707
47,490
47,552
47,496
Less: Other intangible assets781
855
 795
818
 820
836
841
748
 842
795
776
820
Add: Certain Deferred tax liabilities(b)(a)
2,239
2,204
 2,233
3,262
 2,221
3,243
2,371
2,280
 2,344
2,233
2,311
2,221
Tangible common equity$185,167
$183,467
 $184,387
$186,996
 $182,900
$185,047
$189,697
$184,508
 $189,408
$184,387
$186,900
$182,900
        
Return on tangible common equityNA
NA
 17%13% 18%14%NA
NA
 18%17%19%18%
Tangible book value per share$55.68
$53.56
 NA
NA
 NA
NA
$60.48
$56.33
 NA
NA
NA
NA
(a)Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating TCE.
(b)Amounts presented for December 31, 2017 and later periods include the effect from the revaluation of the Firm's net deferred tax liability as a result of the TCJA.
Key performance measures
The Firm considers the following to be key regulatory capital measures:
Capital, risk-weighted assets (“RWA”), and capital and leverage ratios presented under Basel III Standardized and Advanced Fully Phased-In rules, and
SLR calculated under Basel III Advanced Fully Phased-In rules.
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, refer to Capital Risk Management on pages 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 businessthe Firm’s Operating Committee. Segment results are presented on a managed basis. For a definition of managed basis, referRefer to Explanation and Reconciliation of the Firm’s use of Non-GAAP Financial Measures and Key Performance Measures on pages 16-18.19–20 for a definition of managed basis.
Description of business segment reporting methodology
Results of the business segments are intended to present each segment as if it were essentially a stand-alone business. The management reporting process that derives business segment results includes the allocation of certain
income and expense items. ForRefer to Line of business equity on page 47 for further information about line of business capital, refer to Line of business equity on page 47.capital. 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 in capital allocation are assessed and as a result, the capital allocated to allocate capital. Forlines of business may change. Refer to Line of business equity on page 91 of JPMorgan Chase’s 2018 Form 10-K 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.allocation.
For a further discussion of those methodologies, referRefer to Business Segment Results – Description of business segment reporting methodology on pages 55–5660–61 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for a further discussion of those methodologies.

Segment results – managed basis
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
Net income in 2018 for the business segments reflects the favorable impact of the reduction in the U.S. federal statutory income tax rate as a result of the TCJA.
The following tables summarize the businessFirm’s results by segment results for the periods indicated.
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
Consumer & Community Banking$13,290
$12,033
10 $6,982
$6,495
7 % $6,308
$5,538
14 %
Corporate & Investment Bank8,805
8,615
2 5,175
4,793
8
 3,630
3,822
(5)
Commercial Banking2,271
2,146
6 853
800
7
 1,418
1,346
5
Asset & Wealth Management3,559
3,472
3 2,585
2,408
7
 974
1,064
(8)
Corporate(103)186
NM 28
74
(62) (131)112
NM
Total$27,822
$26,452
5 $15,623
$14,570
7 % $12,199
$11,882
3 %
Three months ended September 30,Consumer & Community Banking Corporate & Investment Bank Commercial Banking
(in millions, except ratios)2019
2018
Change 2019
2018
Change 2019
2018
Change
Total net revenue$14,259
$13,290
7 $9,338
$8,805
6 $2,207
$2,271
(3)%
Total noninterest expense7,290
6,982
4 5,348
5,175
3 881
853
3
Pre-provision profit/(loss)6,969
6,308
10 3,990
3,630
10 1,326
1,418
(6)
Provision for credit losses1,311
980
34 92
(42)NM 67
(15)NM
Net income/(loss)4,273
4,086
5 2,809
2,626
7 937
1,089
(14)
Return on equity (“ROE”)32%31%  13%14%  16%21% 
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
Consumer & Community Banking$980
$1,517
(35)% $4,086
$2,553
60 31%19%
Corporate & Investment Bank(42)(26)(62) 2,626
2,546
3 14
13
Commercial Banking(15)(47)68
 1,089
881
24 21
17
Asset & Wealth Management23
8
188
 724
674
7 31
29
Corporate2
—
NM
 (145)78
NM NM
NM
Total$948
$1,452
(35)% $8,380
$6,732
24 14%11%
Three months ended September 30,Asset & Wealth Management Corporate Total
(in millions, except ratios)2019
2018
Change
 2019
2018
Change 2019
2018
Change
Total net revenue$3,568
$3,559
—
 $692
$(103)NM $30,064
$27,822
8
Total noninterest expense2,622
2,585
1
 281
28
NM 16,422
15,623
5
Pre-provision profit/(loss)946
974
(3) 411
(131)NM 13,642
12,199
12
Provision for credit losses44
23
91
 —
2
NM 1,514
948
60
Net income/(loss)668
724
(8) 393
(145)NM 9,080
8,380
8
ROE24%31%  NM
NM
  15%14% 
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,Consumer & Community Banking Corporate & Investment Bank Commercial Banking
(in millions, except ratios)2019
2018
Change 2019
2018
Change
 2019
2018
Change
Total net revenue$41,843
$38,384
9 $28,827
$29,211
(1)% $6,756
$6,753
—
Total noninterest expense21,663
20,770
4 16,288
16,237
—
 2,618
2,541
3
Pre-provision profit/(loss)20,180
17,614
15 12,539
12,974
(3) 4,138
4,212
(2)
Provision for credit losses3,745
3,405
10 179
(142)NM
 186
23
NM
Net income/(loss)12,410
10,824
15 8,995
9,798
(8) 2,986
3,201
(7)
ROE31%27%  14%18%  17%20% 
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%
Nine months ended September 30,Asset & Wealth Management Corporate Total
(in millions, except ratios)2019
2018
Change
 2019
2018
Change 2019
2018
Change
Total net revenue$10,616
$10,637
—
 $1,439
$(255)NM $89,481
$84,730
6%
Total noninterest expense7,865
7,732
2
 724
394
84 49,158
47,674
3
Pre-provision profit/(loss)2,751
2,905
(5) 715
(649)NM 40,323
37,056
9
Provision for credit losses48
40
20
 —
(3)NM 4,158
3,323
25
Net income/(loss)2,048
2,249
(9) 1,472
(664)NM 27,911
25,408
10
ROE25%32%  NM
NM
  15%14% 
The following sections provide a comparative discussion of businessthe Firm’s results by segment results as of or for the three and nine months ended September 30, 20182019 versus the corresponding periodperiods in the prior year, unless otherwise specified.



CONSUMER & COMMUNITY BANKING
ForRefer to pages 62–65 of JPMorgan Chase’s 2018 Form 10-K and Line of Business Metrics on page 173 for a discussion of the business profile of CCB, refer to pages 57-61 of JPMorgan Chase’s 2017 Annual Report and Line of Business Metrics on page 180.CCB.
Selected income statement dataSelected income statement data          Selected income statement data          
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions, except ratios)2018
 2017
 Change
 2018
 2017
 Change
2019
 2018
 Change
 2019
 2018
 Change
Revenue                      
Lending- and deposit-related fees$936
 $885
 6 % $2,668
 $2,547
 5 %$1,026
 $936
 10 % $2,827
 $2,668
 6 %
Asset management, administration and commissions626
 543
 15
 1,792
 1,644
 9
608
 626
 (3) 1,890
 1,792
 5
Mortgage fees and related income260
 428
 (39) 1,049
 1,235
 (15)886
 260
 241
 1,561
 1,049
 49
Card income1,219
 1,141
 7
 3,299
 3,019
 9
1,176
 1,219
 (4) 3,601
 3,299
 9
All other income1,135
 901
 26
 3,255
 2,454
 33
1,399
 1,135
 23
 3,989
 3,255
 23
Noninterest revenue4,176
 3,898
 7
 12,063
 10,899
 11
5,095
 4,176
 22
 13,868
 12,063
 15
Net interest income9,114
 8,135
 12
 26,321
 23,516
 12
9,164
 9,114
 1
 27,975
 26,321
 6
Total net revenue13,290
 12,033
 10
 38,384
 34,415
 12
14,259
 13,290
 7
 41,843
 38,384
 9
                      
Provision for credit losses980
 1,517
 (35) 3,405
 4,341
 (22)1,311
 980
 34
 3,745
 3,405
 10
                      
Noninterest expense                      
Compensation expense(a)
2,635
 2,548
 3
 7,916
 7,578
 4
2,683
 2,635
 2
 8,063
 7,916
 2
Noncompensation expense(b)(a)
4,347
 3,947
 10
 12,854
 11,812
 9
4,607
 4,347
 6
 13,600
 12,854
 6
Total noninterest expense6,982
 6,495
 7
 20,770
 19,390
 7
7,290
 6,982
 4
 21,663
 20,770
 4
Income before income tax expense5,328
 4,021
 33
 14,209
 10,684
 33
5,658
 5,328
 6
 16,435
 14,209
 16
Income tax expense1,242
 1,468
 (15) 3,385
 3,920
 (14)1,385
 1,242
 12
 4,025
 3,385
 19
Net income$4,086
 $2,553
 60
 $10,824
 $6,764
 60
$4,273
 $4,086
 5
 $12,410
 $10,824
 15
                      
Revenue by line of business                      
Consumer & Business Banking$6,385
 $5,408
 18
 $18,238
 $15,547
 17
$6,688
 $6,385
 5
 $20,053
 $18,238
 10
Home Lending1,306
 1,558
 (16) 4,162
 4,513
 (8)1,465
 1,306
 12
 3,929
 4,162
 (6)
Card, Merchant Services & Auto5,599
 5,067
 10
 15,984
 14,355
 11
6,106
 5,599
 9
 17,861
 15,984
 12
                      
Mortgage fees and related income details:                      
Net production revenue108
 158
 (32) 296
 451
 (34)738
 108
 NM
 1,291
 296
 336
Net mortgage servicing revenue(c)(b)
152
 270
 (44) 753
 784
 (4)148
 152
 (3) 270
 753
 (64)
Mortgage fees and related income$260
 $428
 (39)% $1,049
 $1,235
 (15)%$886
 $260
 241 % $1,561
 $1,049
 49 %
                      
Financial ratios                      
Return on equity31% 19%   27% 17%  32% 31%   31% 27%  
Overhead ratio53
 54
   54
 56
  51
 53
   52
 54
  
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 inIncluded operating lease depreciation expense of $1.0 billion and $862 million for the first quarter ofthree months ended September 30, 2019 and 2018, certain operations staff were transferred from CCB to CB. The prior period amounts have been revised to conform with the current period presentation. For a further discussion of this transfer, refer to CB segment results on page 32.respectively, and $3.0 billion and $2.5 billion for nine months ended September 30, 2019 and 2018, respectively.
(b)Included operating lease depreciation expenseMSR risk management results of $862$53 million and $688$(88) million for the three months ended September 30, 20182019 and 2017,2018, 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 $(88)$(200) million and $(23) million for the three months ended September 30, 2018 and 2017, respectively, and $(94) million and $(132) million for nine months ended September 30, 20182019 and 2017,2018, respectively.


Quarterly results
Net income was $4.1$4.3 billion, an increase of 60%5%.
Net revenue was $13.3$14.3 billion, an increase of 10%7%. Net production revenue included approximately $350 million of gains on the sale of certain mortgage loans that were predominantly offset by a charge in net interest income for the unwind of the related internal funding from Treasury and Chief Investment Office (“CIO”) associated with these loans. The charge reflects the net present value of that funding and is recognized as interest income in Treasury and CIO. Refer to Corporate on pages 42–43 of this Form 10-Q and Funds Transfer Pricing (“FTP”) on page 60 of the Firm’s 2018 Form 10-K for further information.
Net interest income was $9.1$9.2 billion, up 12%,1% and includes the charge from the loan sales mentioned above. Excluding this charge, net interest income increased, driven by:
higher deposit marginsloan balances and margin expansion in Card, as well as growth in deposit balances in CBB, as well as margin expansion and higher loan balancesdeposit margins in Card,CBB,
partially offset by
lower loan balances due to loan sales, as well as loan spread compression from higher rates in Home Lending and Auto.Lending.
Noninterest revenue was $4.2$5.1 billion, up 7%,22% and includes the gain from the loan sales mentioned above. Excluding this gain, noninterest revenue increased, driven by:
higher net mortgage production revenue reflecting higher production volumes and margins, and
higher auto lease volume
higher card income due to
–lower new account origination costs, and
–higher merchant processing fees on higher volumes
largely offset by
–lower net interchange reflecting higher rewards costs and partner payments, largely offset by higher card sales volumes
higher asset management fees reflecting an increase in client investment assets,
partially offset by
lower net mortgage servicing revenue, which remained relatively flat, reflecting lower operating revenue driven by the impact of reclassifying certain loans to held-for-sale and faster prepayment speeds on lower rates, offset by favorable 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 and volumes.results.
Refer to Note 14 for further information regarding changes in value of the MSR asset and related hedges, and mortgage fees and related income.
Noninterest expense was $7.0$7.3 billion, up 7%4%, predominantly driven by:
technology, marketing and other investments in technology and marketing, and
the business, as well as higher auto lease depreciation.depreciation,
partially offset by
expense efficiencies and lower FDIC charges.
The provision for credit losses was $980 million, a decrease$1.3 billion, an increase of 35% from the prior year,34%, reflecting:
a $250 million reductionan increase 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,
–higher net charge-offs on loan growth, in line with expectations, and
–a $200 million addition to the allowance for loan losses reflecting higher loss rates, as newer vintages season and become a larger part of the portfolio, compared to a $150 million addition in the prior year
an increase in consumer, excluding credit card due 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 $100 million reduction in the allowance for loan losses in the non credit-impaired residential real estate portfolio, compared to a $250 million reduction in the PCI residential real estate portfolio in the prior year, and
–lower net recoveries in the residential real estate portfolio as the prior year benefited from a larger recovery on a loan sale
partially offset by
–a $50 million reduction in the allowance for loan losses in the business banking portfolio.
higher net charge-offs in the credit card portfolio due to seasoning of more recent vintages, as anticipated.


Year-to-date results
Net income was $10.8$12.4 billion, an increase of 60%15%.
Net revenue was $38.4$41.8 billion, an increase of 12%9%. Net production revenue included gains on sales of certain mortgage loans that were predominantly offset by charges in net interest income for the unwind of the related internal funding from Treasury and CIO associated with these loans.
Net interest income was $26.3$28.0 billion, up 12%6%, and includes charges from the loan sales mentioned above. Excluding these charges, net interest income increased, driven by:
higher deposit margins and growth in deposit balances in CBB, as well as margin expansion and higher loan balances and margin expansion in Card,
partially offset by
lower loan balances due to loan sales, as well as loan spread compression from higher rates in Home Lending and Auto.Lending.
Noninterest revenue was $12.1$13.9 billion, up 11%15%, and includes gains from the loan sales mentioned above. Excluding these gains, noninterest revenue increased, driven by:
higher auto lease volume,
higher net mortgage production revenue reflecting higher production margins and volumes, and
the impact of the prior-year adjustment of approximately $330 million to the credit card incomerewards liability,
partially offset by
lower net mortgage servicing revenue driven by
–lower operating revenue reflecting faster prepayment speeds on lower rates and the impact of reclassifying certain loans to held-for-sale, as well as
–lower MSR risk management results reflecting updates to model inputs.
Noninterest expense was $21.7 billion, up 4%, driven by:
technology, marketing and other investments in the business, as well as higher auto lease depreciation,
partially offset by
expense efficiencies and lower FDIC charges.
The provision for credit losses was $3.7 billion, an increase of 10%, reflecting:
an increase in credit card due to
–lower new account origination costs,a $400 million addition to the allowance for loan losses reflecting higher loss rates, as newer vintages season and become a larger part of the portfolio and loan growth, compared to a $150 million addition in the prior year, and
–higher merchant processing feesnet charge-offs on higher volumesloan growth, in line with expectations
partially offset by
a decrease in consumer, excluding credit card due to
–a $400 million reduction in the allowance for loan losses in the PCI residential real estate portfolio, reflecting continued improvement in home prices and delinquencies, and a $100 million reduction in the allowance for loan losses in the non credit-impaired residential real estate portfolio, compared to a $250 million reduction in the PCI residential real estate portfolio in the prior year, and
–a $50 million reduction in the allowance for loan losses in the business banking portfolio
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 millionrecoveries in the second quarter of 2018, driven by an increase in redemption rate assumptionsresidential real estate portfolio as the prior year benefited from larger recoveries on loan sales.
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, 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.


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, refer to CB segment results on page 32.
(b)During the third quarter of 2018, approximately 1,200 employees transferred from CCB to CIB as part of the reorganization of the Commercial Card business.



Selected metrics          
 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
Credit data and quality statistics           
Nonaccrual loans(a)(b)
$3,520

$4,068

(13)%
$3,520

$4,068

(13)%
            
Net charge-offs/(recoveries)(c)
           
Consumer & Business Banking68
 71
 (4) 171
 184
 (7)
Home equity(12) 13
 NM
 (3) 67
 NM
Residential mortgage(105) (2) NM
 (252) (3) NM
Home Lending(117) 11
 NM
 (255) 64
 NM
Card1,073
 1,019
 5
 3,407
 3,049
 12
Auto56
 116
 (52) 182
 245
 (26)
Student—
 —
 —
 —
 498
(h) 
NM
Total net charge-offs/(recoveries)$1,080
 $1,217
(g) 
(11) $3,505
 $4,040
(h) 
(13)
            
Net charge-off/(recovery) rate(c)
           
Consumer & Business Banking1.02 % 1.12%   0.88% 0.99%  
Home equity(d)
(0.17) 0.15
   (0.01) 0.25
  
Residential mortgage(d)
(0.22) —
   (0.18) —
  
Home Lending(d)
(0.21) 0.02
   (0.16) 0.04
  
Card2.91
 2.87
   3.16
 2.94
  
Auto0.35
 0.71
   0.37
 0.50
  
Student—
 —
   —
 NM
  
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)
0.81% 1.03%   0.81% 1.03%  
Card1.75
 1.76
   1.75
 1.76
  
Auto0.82
 0.93
   0.82
 0.93
  
            
90+ day delinquency rate — Card0.85
 0.86
   0.85
 0.86
  
            
Allowance for loan losses           
Consumer & Business Banking$796
 $796
 —
 $796
 $796
 —
Home Lending, excluding PCI loans1,003
 1,153
 (13) 1,003
 1,153
 (13)
Home Lending — PCI loans(c)
1,824
 2,245
 (19) 1,824
 2,245
 (19)
Card5,034
 4,684
 7
 5,034
 4,684
 7
Auto464
 499
 (7) 464
 499
 (7)
Total allowance for loan losses(c)
$9,121
 $9,377
 (3)% $9,121
 $9,377
 (3)%
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)2019
 2018
 Change
 2019 2018 Change
Selected balance sheet data (period-end)           
Total assets$532,487
 $560,432
 (5)% $532,487
 $560,432
 (5)%
Loans:           
Consumer & Business Banking26,699
 26,451
 1
 26,699
 26,451
 1
Home equity31,552
 37,461
 (16) 31,552
 37,461
 (16)
Residential mortgage171,787
 205,389
 (16) 171,787
 205,389
 (16)
Home Lending203,339
 242,850
 (16) 203,339
 242,850
 (16)
Card159,571
 147,881
 8
 159,571
 147,881
 8
Auto61,410
 63,619
 (3) 61,410
 63,619
 (3)
Total loans451,019
 480,801
 (6) 451,019
 480,801
 (6)
Core loans405,662
 425,917
 (5) 405,662
 425,917
 (5)
Deposits701,170
 677,260
 4
 701,170
 677,260
 4
Equity52,000
 51,000
 2
 52,000
 51,000
 2
Selected balance sheet data (average)           
Total assets$538,500
 $551,080
 (2) $544,833
 $544,931
 —
Loans:           
Consumer & Business Banking26,550
 26,351
 1
 26,537
 26,104
 2
Home equity32,215
 38,211
 (16) 33,694
 39,951
 (16)
Residential mortgage181,157
 204,689
 (11) 191,881
 201,665
 (5)
Home Lending213,372
 242,900
 (12) 225,575
 241,616
 (7)
Card158,168
 146,272
 8
 154,375
 143,986
 7
Auto61,371
 64,060
 (4) 62,118
 65,096
 (5)
Total loans459,461
 479,583
 (4) 468,605
 476,802
 (2)
Core loans413,036
 422,582
 (2) 419,851
 415,662
 1
Deposits693,980
 674,211
 3
 688,676
 669,244
 3
Equity52,000
 51,000
 2
 52,000
 51,000
 2
            
Headcount127,687
 129,891
 (2)% 127,687
 129,891
 (2)%



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 ratio data)2019

2018
 Change
 2019 2018 Change
Credit data and quality statistics           
Nonaccrual loans(a)(b)
$3,099

$3,520

(12)%
$3,099

$3,520

(12)%
            
Net charge-offs/(recoveries)(c)
           
Consumer & Business Banking79
 68
 16
 204
 171
 19
Home equity(25) (12) (108) (41) (3) NM
Residential mortgage(17) (105) 84
 (34) (252) 87
Home Lending(42) (117) 64
 (75) (255) 71
Card1,175
 1,073
 10
 3,617
 3,407
 6
Auto49
 56
 (13) 149
 182
 (18)
Total net charge-offs/(recoveries)$1,261
 $1,080
 17
 $3,895
 $3,505
 11
            
Net charge-off/(recovery) rate(c)
           
Consumer & Business Banking1.18 % 1.02%   1.03 % 0.88%  
Home equity(d)
(0.41) (0.17)   (0.22) (0.01)  
Residential mortgage(d)
(0.04) (0.22)   (0.03) (0.18)  
Home Lending(d)
(0.09) (0.21)   (0.05) (0.16)  
Card2.95
 2.91
   3.13
 3.16
  
Auto0.32
 0.35
   0.32
 0.37
  
Total net charge-off/(recovery) rate(d)
1.16
 0.95
   1.17
 1.05
  
            
30+ day delinquency rate           
Home Lending(e)(f)
0.78 % 0.81%   0.78 % 0.81%  
Card1.84
 1.75
   1.84
 1.75
  
Auto0.88
 0.82
   0.88
 0.82
  
            
90+ day delinquency rate — Card0.90
 0.85
   0.90
 0.85
  
            
Allowance for loan losses           
Consumer & Business Banking$746
 $796
 (6) $746
 $796
 (6)
Home Lending, excluding PCI loans903
 1,003
 (10) 903
 1,003
 (10)
Home Lending — PCI loans(c)
1,256
 1,824
 (31) 1,256
 1,824
 (31)
Card5,583
 5,034
 11
 5,583
 5,034
 11
Auto465
 464
 —
 465
 464
 —
Total allowance for loan losses(c)
$8,953
 $9,121
 (2)% $8,953
 $9,121
 (2)%
(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 September 30, 20182019 and 2017,2018, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $2.9$1.6 billion and $4.0$2.9 billion, respectively. These amounts have been excluded based upon the government guarantee.
(c)Net charge-offs/(recoveries) and the net charge-off/(recovery) rates for the three months ended September 30, 2019 and 2018, and 2017, excluded $58$43 million and $20$58 million, respectively, and for nine months ended September 30, 2019 and 2018, and 2017, excluded $151$132 million and $66$151 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, referRefer to Summary of changes in the allowance for credit losses on page 70.68 for further information on PCI write-offs.
(d)Excludes the impact of PCI loans. For the three months ended September 30, 20182019 and 2017,2018, the net charge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of (0.12)(0.31)% and 0.11%(0.12)%, respectively; (2) residential mortgage of (0.20)(0.04)% and -%(0.20)%, respectively; (3) Home Lending of (0.19)(0.08)% and 0.02%(0.19)%, respectively; and (4) total CCB of 0.89%1.10% and 1.03%0.89%, respectively. For the nine months ended September 30, 20182019 and 2017,2018, the net charge-off/(recovery) rates including theincluded impact of PCI loans were as follows: (1) home equity of (0.01)(0.16)% and 0.19%(0.01)%, respectively; (2) residential mortgage of (0.17)(0.02)% and -%(0.17)%, respectively; (3) Home Lending of (0.14)(0.04)% and 0.04%(0.14)%, respectively; and (4) total CCB of 0.98%1.12% and 1.16%0.98%, respectively.
(e)At September 30, 20182019 and 2017,2018, excluded mortgage loans insured by U.S. government agencies of $4.5$2.7 billion and $5.9$4.5 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
(f)Excludes PCI loans. The 30+ day delinquency rate for PCI loans was 9.39%8.56% and 9.30%9.39% at September 30, 2019 and 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 nine months ended September 30, 2017 would have been 1.10%.


Selected metricsSelected metrics          Selected metrics          
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in billions, except ratios and where otherwise noted)2018
 2017
 Change
 2018
 2017
 Change
2019
 2018
 Change
 2019
 2018
 Change
Business Metrics                      
Number of branches5,066
 5,174
 (2)% 5,066
 5,174
 (2)%4,949
 5,066
 (2)% 4,949
 5,066
 (2)%
Active digital customers
(in thousands)(a)
48,664
 46,349
 5
 48,664
 46,349
 5
51,843
 48,664
 7
 51,843
 48,664
 7
Active mobile customers
(in thousands)(b)
32,538
 29,273
 11
 32,538
 29,273
 11
36,510
 32,538
 12
 36,510
 32,538
 12
Debit and credit card sales volume$259.0

$231.1

12
 $746.4

$671.8
 11
$282.2

$259.0

9
 $818.8

$746.4
 10
                      
Consumer & Business Banking                      
Average deposits$659.5
 $630.4
 5
 $655.3
 $621.7
 5
$678.3
 $659.5
 3
 $674.5
 $655.3
 3
Deposit margin2.43% 2.02%   2.33% 1.95%  2.47% 2.43%   2.56% 2.33%  
Business banking origination volume$1.6
 $1.7
 (2) $5.2
 $5.6
 (6)$1.6
 $1.6
 (5) $4.8
 $5.2
 (8)
Client investment assets298.4
 262.5
 14
 298.4
 262.5
 14
337.9
 298.4
 13
 337.9
 298.4
 13
                      
Home Lending                      
Mortgage origination volume by channel                      
Retail$10.6
 $10.6
 —
 $29.3
 $29.3
 —
$14.2
 $10.6
 34
 $34.6
 $29.3
 18
Correspondent11.9
 16.3
 (27) 32.9
 43.9
 (25)18.2
 11.9
 53
 37.3
 32.9
 13
Total mortgage origination volume(c)
$22.5
 $26.9
 (16) $62.2
 $73.2
 (15)$32.4
 $22.5
 44
 $71.9
 $62.2
 16
                      
Total loans serviced (period-end)$798.6
 $821.6
 (3) $798.6
 $821.6
 (3)$774.8
 $798.6
 (3) $774.8
 $798.6
 (3)
Third-party mortgage loans serviced (period-end)526.5
 556.9
 (5) 526.5
 556.9
 (5)535.8
 526.5
 2
 535.8
 526.5
 2
MSR carrying value (period-end)6.4
 5.7
 12
 6.4
 5.7
 12
4.4
 6.4
 (31) 4.4
 6.4
 (31)
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end)1.22% 1.02%   1.22% 1.02%  0.82% 1.22%   0.82% 1.22%  
                      
MSR revenue multiple(d)
3.49x 2.91x   3.49x 2.91x  2.41x 3.49x   2.34x 3.49x  
                      
Card, excluding Commercial Card                      
Credit card sales volume$176.0
 $157.7
 12
 $507.1
 $454.2
 12
$193.6
 $176.0
 10
 $558.6
 $507.1
 10
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%  11.40% 11.50%   11.50% 11.17%  
                      
Merchant Services                      
Merchant processing volume$343.8
 $301.6
 14
 $990.9
 $870.3
 14
$380.5
 $343.8
 11
 $1,108.6
 $990.9
 12
                      
Auto                      
Loan and lease origination volume$8.1
 $8.8
 (8) $24.8
 $25.1
 (1)$9.1
 $8.1
 12
 $25.5
 $24.8
 3
Average auto operating lease assets19.2
 15.6
 23 % 18.4
 14.7
 25 %21.8
 19.2
 14 % 21.3
 18.4
 16 %
(a)Users of all web and/or mobile platforms who have logged in within the past 90 days.
(b)Users of all mobile platforms who have logged in within the past 90 days.
(c)Firmwide mortgage origination volume was $24.5$35.8 billion and $29.2$24.5 billion for the three months ended September 30, 2019 and 2018, respectively, and 2017, respectively,$78.5 billion and $68.2 billion and $81.0 billion for the nine months ended September 30, 20182019 and 2017,2018, respectively.
(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
ForRefer to pages 66–70 of JPMorgan Chase’s 2018 Form 10-K and Line of Business Metrics on page 173 for a discussion of the business profile of CIB, refer to pages 62–66 of JPMorgan Chase’s 2017 Annual Report and Line of Business Metrics on CIB.page 180.
Effective January 1, 2018, the Firm adopted several new accounting standards; the guidance which had the most significant impact on the CIB segment results was revenue recognition, and recognition and measurement of financial assets. The revenue recognition guidance was applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
Selected income statement dataSelected income statement data        Selected income statement data        
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions, except ratios)2018 2017 Change 2018 2017 Change2019 2018 Change 2019 2018 Change
Revenue                      
Investment banking fees$1,823
 $1,844
 (1)% $5,658
 $5,558
 2 %$1,981
 $1,823
 9 % $5,671
 $5,658
 —
Principal transactions3,091
 2,673
 16
 10,786
 9,108
 18
3,418
 3,091
 11
 11,466
 10,786
 6
Lending- and deposit-related fees373
 374
 —
 1,136
 1,149
 (1)360
 373
 (3) 1,095
 1,136
 (4)
Asset management, administration and commissions1,130
 1,041
 9
 3,416
 3,161
 8
1,197
 1,130
 6
 3,447
 3,416
 1
All other income88
 187
 (53) 958
 622
 54
226
 88
 157
 649
 958
 (32)
Noninterest revenue6,505
 6,119
 6
 21,954
 19,598
 12
7,182
 6,505
 10
 22,328
 21,954
 2
Net interest income2,300
 2,496
 (8) 7,257
 7,541
 (4)2,156
 2,300
 (6) 6,499
 7,257
 (10)
Total net revenue(a)
8,805
 8,615
 2
 29,211
 27,139
 8
9,338
 8,805
 6
 28,827
 29,211
 (1)
                      
Provision for credit losses(42) (26) (62) (142) (175) 19
92
 (42) NM
 179
 (142) NM
                      
Noninterest expense                      
Compensation expense2,402
 2,284
 5
 8,158
 7,534
 8
2,734
 2,402
 14
 8,381
 8,158
 3
Noncompensation expense2,773
 2,509
 11
 8,079
 7,320
 10
2,614
 2,773
 (6) 7,907
 8,079
 (2)
Total noninterest expense5,175
 4,793
 8
 16,237
 14,854
 9
5,348
 5,175
 3
 16,288
 16,237
 —
Income before income tax expense3,672
 3,848
 (5) 13,116
 12,460
 5
3,898
 3,672
 6
 12,360
 13,116
 (6)
Income tax expense1,046
 1,302
 (20) 3,318
 3,963
 (16)1,089
 1,046
 4
 3,365
 3,318
 1
Net income$2,626
 $2,546
 3 % $9,798
 $8,497
 15 %$2,809
 $2,626
 7 % $8,995
 $9,798
 (8)%
Financial ratios                      
Return on equity14% 13%   18% 15%  13% 14%   14% 18%  
Overhead ratio59
 56
   56
 55
  57
 59
   57
 56
  
Compensation expense as percentage of total net revenue27
 27
   28
 28
  29
 27
   29
 28
  
(a)IncludedIncludes 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 $354$527 million and $505$354 million for the three months ended September 30, 20182019 and 2017,2018, respectively, and $1.2$1.6 billion and $1.6$1.2 billion for the nine months ended September 30, 20182019 and 2017,2018, respectively.
Selected income statement dataSelected income statement data        Selected income statement data        
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018 2017 Change 2018 2017 Change2019 2018 Change 2019 2018 Change
Revenue by business                      
Investment Banking$1,731
 $1,730
 —
 $5,267
 $5,175
 2 %$1,871
 $1,731
 8 % $5,392
 $5,267
 2 %
Treasury Services1,183
 1,058
 12
 3,480
 3,094
 12
1,101
 1,183
 (7) 3,383
 3,480
 (3)
Lending331
 331
 —
 954
 1,093
 (13)329
 331
 (1) 1,006
 954
 5
Total Banking3,245
 3,119
 4
 9,701
 9,362
 4
3,301
 3,245
 2
 9,781
 9,701
 1
Fixed Income Markets2,844
 3,164
 (10) 10,850
 10,595
 2
3,557
 2,844
 25
 10,972
 10,850
 1
Equity Markets1,595
 1,363
 17
 5,571
 4,555
 22
1,517
 1,595
 (5) 4,986
 5,571
 (11)
Securities Services1,057
 1,007
 5
 3,219
 2,905
 11
1,034
 1,057
 (2) 3,093
 3,219
 (4)
Credit Adjustments & Other(a)
64
 (38) NM
 (130) (278) 53
(71) 64
 NM
 (5) (130) 96
Total Markets & Investor Services5,560
 5,496
 1
 19,510
 17,777
 10
Total Markets & Securities Services6,037
 5,560
 9
 19,046
 19,510
 (2)
Total net revenue$8,805
 $8,615
 2 % $29,211
 $27,139
 8 %$9,338
 $8,805
 6 % $28,827
 $29,211
 (1)%
(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.
allocated to Fixed Income Markets and Equity Markets.


Quarterly results
Net income was $2.6$2.8 billion, up 3%7%.
Net revenue was $8.8$9.3 billion, up 6%.
Banking revenue was $3.3 billion, up 2%.
Banking revenue was $3.2 billion, up 4%. Investment Banking revenue was $1.7$1.9 billion, flat compared to a strong prior year,up 8%, driven by higher debt and equity underwriting fees, partially offset by lower debt underwriting and 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%
–Debt underwriting fees were $961 million, up 17%, reflecting wallet share gains despite a decline in industry-wide fees, driven by participation in large acquisition financing deals and increased activity in investment-grade bonds.
–Equity underwriting fees were $514 million, up 22%, driven by wallet share gains primarily in the IPO and convertible markets.
–Advisory fees were $506 million, down 13%, driven by a decline in industry-wide fees compared to a strong prior year.
Treasury Services revenue was $1.1 billion, down 7%, driven by adeposit margin compression partially offset by fee growth and higher share of fees including a strong performance in the IPO market. Advisory fees were $581balances.
Lending revenue was $329 million, down 6%1%.
Markets & Securities Services revenue was $6.0 billion, up 9%. Markets revenue was $5.1 billion, up 14%.
Fixed Income Markets revenue was $3.6 billion, up 25% compared to the prior year which reflected less favorable market conditions. The current quarter results were driven by strong client activity across products primarily in Rates, agency mortgage trading within Securitized Products and Commodities.
Equity Markets revenue was $1.5 billion, down 5% compared to a strong prior year. Debt underwriting feesThe current quarter results were $822 million, down 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, Creditderivatives reflecting lower client activity and Securitized Products as a result of compressed margins and tighter spreads in competitive markets. This decline wasless favorable market conditions which were partially offset by increased activity levelshigher revenue 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. Equities.
Securities Services revenue was $1.1$1.0 billion, up 5%down 2%, drivenwith deposit margin compression largely offset by higher interest rates and operating deposit growth, as well as higher asset-based fees driven by net client inflows.organic growth.
The provision for credit losses was $92 million, largely driven by a net addition to the allowance for credit losses related to select emerging market client downgrades. The prior year 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$5.3 billion, up 8%3%, predominantly due to a combination ofdriven by higher legal expense, highervolume- and revenue-related expenses and investments, including compensation expense, largely driven by investments in technology and bankers, and higher volume-related transaction costs.


offset
 
by lower legal expenses and FDIC charges.
Year-to-date results
Net income was $9.8$9.0 billion, up 15%down 8%.
Net revenue was $29.2$28.8 billion, up 8%down 1%.
Banking revenue was $9.7$9.8 billion, up 4%. 1% compared to the prior year.
Investment Banking revenue was $5.3$5.4 billion, up 2%, driven bywith higher equitydebt underwriting, and advisory fees, largelypredominantly offset by lower debtadvisory and equity 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.
–Debt underwriting fees were $2.7 billion, up 7%, reflecting wallet share gains despite a decline in industry-wide fees, driven by participation in large acquisition financing deals.
–Advisory fees were $1.7 billion, down 6%, and Equity underwriting fees were $1.3 billion, down 4%, driven by a decline in industry-wide fees despite wallet share gains.
Treasury Services revenue was $3.5$3.4 billion, down 3%, with deposit margin compression predominantly offset by fee growth and higher balances.
Lending revenue was $1.0 billion, up 12%5%, predominantly driven by the impact of higher interest rates and growth in operating deposits. Lending revenue was $954 million, down 13%, driven by lower net interest income primarily reflecting a changegrowth in the portfolio composition and overall spread tightening as well as higher gains in the prior year on securities received from restructurings.loan balances.
Markets & InvestorSecurities Services revenue was $19.5$19.0 billion, up 10%down 2%. TheMarkets revenue was $16.0 billion, down 3% which included a gain from the IPO of Tradeweb. In addition, prior year results included approximately $500 million of fair value gains related to the adoption in the first quarter of 2018 of the new recognition and measurement accounting guidance for certain equity investments previously held at cost, and a reduction of approximately $450 million in tax-equivalent adjustments as a result of the TCJA. cost.
Fixed Income Markets revenue was $10.9$11.0 billion, up 2%. Excluding the impact of these fair value gains1% reflecting higher revenue in agency mortgage trading within Securitized Products and tax-equivalent adjustments, Fixed Income Markets revenue remained up 2%, with strong performance in Currencies & Emerging Markets, and higher Commodities revenue compared to a challenging prior year, largelypartially offset by lower revenue in Rates and Credit. Currencies & Emerging Markets.
Equity Markets revenue was $5.6$5.0 billion, up 22%,down 11% compared to a strong prior year, predominantly driven by strength across derivatives, prime brokerage and Cash Equities, reflecting stronglower client activity. activity in derivatives.
Securities Services revenue was $3.2$3.1 billion, up 11%down 4%, predominantly driven by deposit margin compression and the impact of higher interest rates and operating deposit growth as well as higher asset-based fees drivena business exit partially offset by net client inflows and higher market levels.organic growth.
Credit Adjustments & Other was a loss of $5 million, compared with a loss of $130 million in the prior year.
The provision for credit losses was $179 million reflecting select C&I client downgrades including those in an emerging market. The prior year was a benefit of $142 million, 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 was a benefit of $175 million primarily driven by a reduction in the allowance for credit losses in the Oil & Gas and Metals & Mining portfolios.
Noninterest expense was $16.2$16.3 billion, up 9%, predominantly driven byflat compared to the prior year reflecting higher compensation expense including performance-related compensation expensevolume-related expenses and investments, in technology and bankers,including front office hires, as well as volume-related transaction coststechnology staff, predominantly offset by lower FDIC charges and legalrevenue-related compensation expense.

Selected metricsSelected metrics          Selected metrics          
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except headcount)2018 2017 Change 2018 2017 Change2019 2018 Change 2019 2018 Change
Selected balance sheet data (period-end)                      
Assets$928,148
 $851,808
 9 % $928,148
 $851,808
 9%$1,023,132
 $928,148
 10 % $1,023,132
 $928,148
 10 %
Loans:                      
Loans retained(a)
117,084
 106,955
 9
 117,084
 106,955
 9
118,290
 117,084
 1
 118,290
 117,084
 1
Loans held-for-sale and loans at fair value6,133
 3,514
 75
 6,133
 3,514
 75
8,324
 6,133
 36
 8,324
 6,133
 36
Total loans123,217
 110,469
 12
 123,217
 110,469
 12
126,614
 123,217
 3
 126,614
 123,217
 3
Core loans122,953
 110,133
 12
 122,953
 110,133
 12
126,445
 122,953
 3
 126,445
 122,953
 3
Equity70,000
 70,000
 —
 70,000
 70,000
 —
80,000
 70,000
 14
 80,000
 70,000
 14
Selected balance sheet data (average)                      
Assets$924,909
 $858,912
 8
 $924,145
 $853,948
 8
$1,003,395
 $924,909
 8
 $985,503
 $924,145
 7
Trading assets-debt and equity instruments349,390
 349,448
 —
 354,270
 343,232
 3
415,450
 349,390
 19
 406,304
 354,270
 15
Trading assets-derivative receivables62,025
 55,875
 11
 60,943
 56,575
 8
48,266
 62,025
 (22) 49,221
 60,943
 (19)
Loans:                      
Loans retained(a)
$115,390
 $107,829
 7
 $112,921
 $108,741
 4
$119,007
 $115,390
 3
 $123,368
 $112,921
 9
Loans held-for-sale and loans at fair value7,328
 4,674
 57
 6,263
 5,254
 19
8,344
 7,328
 14
 8,239
 6,263
 32
Total loans$122,718
 $112,503
 9
 $119,184
 $113,995
 5
$127,351
 $122,718
 4
 $131,607
 $119,184
 10
Core loans122,442
 112,168
 9
 118,877
 113,631
 5
127,187
 122,442
 4
 131,436
 118,877
 11
Equity70,000
 70,000
 —
 70,000
 70,000
 —
80,000
 70,000
 14
 80,000
 70,000
 14
Headcount(b)
54,052
 50,641
 7 % 54,052
 50,641
 7%55,873
 54,052
 3 % 55,873
 54,052
 3 %
(a)Loans retained includes credit portfolio loans, loans held by consolidated Firm-administered multi-seller conduits, trade finance loans, other held-for-investment loans and overdrafts.
(b)During the third quarter of 2018 approximately 1,200 employees transferred from CCB to CIB as part of the reorganization of the Commercial Card business.

Selected metrics                      
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except ratios)2018 2017 Change 2018 2017 Change2019 2018 Change 2019 2018 Change
Credit data and quality statistics                      
Net charge-offs/(recoveries)$(40) $20
 NM
 $94
 $49
 92 %$38
 $(40) NM
 $140
 $94
 49 %
Nonperforming assets:                      
Nonaccrual loans:                      
Nonaccrual loans retained(a)
$318
 $437
 (27)% $318
 $437
 (27)$712
 $318
 124 % $712
 $318
 124
Nonaccrual loans held-for-sale and loans at fair value
9
 2
 350
 9
 2
 350
262
 9
 NM
 262
 9
 NM
Total nonaccrual loans327
 439
 (26) 327
 439
 (26)974
 327
 198
 974
 327
 198
Derivative receivables90
 164
 (45) 90
 164
 (45)26
 90
 (71) 26
 90
 (71)
Assets acquired in loan satisfactions61
 92
 (34) 61
 92
 (34)75
 61
 23
 75
 61
 23
Total nonperforming assets$478
 $695
 (31) $478
 $695
 (31)$1,075
 $478
 125
 $1,075
 $478
 125
Allowance for credit losses:                      
Allowance for loan losses$1,068
 $1,253
 (15) $1,068
 $1,253
 (15)$1,171
 $1,068
 10
 $1,171
 $1,068
 10
Allowance for lending-related commitments802
 745
 8
 802
 745
 8
824
 802
 3
 824
 802
 3
Total allowance for credit losses$1,870
 $1,998
 (6)% $1,870
 $1,998
 (6)%$1,995
 $1,870
 7 % $1,995
 $1,870
 7 %
Net charge-off/(recovery) rate(b)
(0.14)% 0.07%   0.11% 0.06%  0.13% (0.14)%   0.15% 0.11%  
Allowance for loan losses to period-end loans retained0.91
 1.17
   0.91
 1.17
  0.99
 0.91
   0.99
 0.91
  
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(c)
1.27
 1.79
   1.27
 1.79
  1.33
 1.27
   1.33
 1.27
  
Allowance for loan losses to nonaccrual loans retained(a)
336
 287
   336
 287
  164
 336
   164
 336
  
Nonaccrual loans to total period-end loans0.27 % 0.40%   0.27% 0.40%  0.77% 0.27 %   0.77% 0.27%  
(a)Allowance for loan losses of $145$207 million and $177$145 million were held against these nonaccrual loans at September 30, 20182019 and 2017,2018, respectively.
(b)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.
(c)Management uses allowance for loan losses to period-end loans retained, excluding trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of CIB’s allowance coverage ratio.

Investment banking feesInvestment banking fees          Investment banking fees          
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018 2017 Change 2018 2017 Change2019 2018 Change 2019 2018 Change
Advisory$581
 $620
 (6)% $1,782
 $1,624
 10 %$506
 $581
 (13)% $1,675
 $1,782
 (6)%
Equity underwriting420
 300
 40
 1,336
 1,107
 21
514
 420
 22
 1,284
 1,336
 (4)
Debt underwriting(a)
822
 924
 (11) 2,540
 2,827
 (10)961
 822
 17
 2,712
 2,540
 7
Total investment banking fees$1,823
 $1,844
 (1)% $5,658
 $5,558
 2 %$1,981
 $1,823
 9 % $5,671
 $5,658
 —
(a)IncludesRepresents long-term debt and loan syndications.
League table results – wallet shareLeague table results – wallet share   League table results – wallet share          
Three months ended September 30, 2018 Full-year 2017Three months ended September 30, Nine months ended September 30, Full-year 2018
RankShare RankShare2019 2018 2019 2018 
Rank Share Rank Share Rank Share Rank Share Rank Share
Based on fees(a)
               
Long-term debt(b)
    
M&A(b)
           
Global#1
 7.4 #1
 7.8#2
 8.6 #2
 8.4 #2
 9.3 #2
 8.8 #2
 8.7%
U.S.2
 11.2 2
 11.14
 8.7 3
 7.0 2
 9.4 2
 9.3 2
 8.9
Equity and equity-related(c)
               
Global3
 9.2 2
 7.11
 11.9 1
 9.7 1
 10.3 3
 9.1 1
 9.0
U.S.1
 12.5 1
 11.61
 17.3 1
 13.2 1
 13.8 1
 12.5 1
 12.3
M&A(d)
    
Long-term debt(d)
           
Global2
 9.0 2
 8.41
 8.8 1
 7.8 1
 8.0 1
 7.4 1
 7.2
U.S.2
 9.4 2
 9.11
 13.7 1
 12.9 1
 12.2 1
 11.4 1
 11.2
Loan syndications               
Global1
 9.6 1
 9.31
 10.1 1
 10.8 1
 10.6 1
 9.9 1
 9.7
U.S.1
 12.2 1
 10.91
 13.0 1
 14.4 1
 13.2 1
 12.6 1
 12.3
Global investment banking fees(e)
#1
 8.7 #1
 8.1#1
 9.6 #1
 9.0 #1
 9.3 #1
 8.7 #1
 8.6%
(a)Source: Dealogic as of OctOctober 1, 2018.2019. Reflects the ranking of revenue wallet and market share.
(b)Global M&A excludes any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S.
(c)Global equity and equity-related ranking includes rights offerings and Chinese A-Shares.
(d)Long-term debt rankings include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”); and exclude money market, short-term debt, and U.S. municipal securities.
(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 revenue. ForRefer to Notes 5 and 6 for a description of the composition of these income statement line items, refer to Notes 5 and 6. For further information, referitems. Refer to Markets revenue on page 6569 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for further information.
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,Three months ended September 30, Three months ended September 30,
2018 20172019 2018

(in millions)
Fixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal MarketsFixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal Markets
Principal transactions$1,849
$1,252
$3,101
 $1,837
$948
$2,785
$2,292
$1,263
$3,555
 $1,849
$1,252
$3,101
Lending- and deposit-related fees51
1
52
 47
2
49
51
1
52
 51
1
52
Asset management, administration and commissions96
446
542
 93
397
490
110
472
582
 96
446
542
All other income33
7
40
 121
12
133
108
54
162
 33
7
40
Noninterest revenue2,029
1,706
3,735
 2,098
1,359
3,457
2,561
1,790
4,351
 2,029
1,706
3,735
Net interest income(a)
815
(111)704
 1,066
4
1,070
996
(273)723
 815
(111)704
Total net revenue$2,844
$1,595
$4,439
 $3,164
$1,363
$4,527
$3,557
$1,517
$5,074
 $2,844
$1,595
$4,439
Nine months ended September 30, Nine months ended September 30,Nine months ended September 30, Nine months ended September 30,
2018 20172019 2018

(in millions)
Fixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal MarketsFixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal Markets
Principal transactions$6,795
$4,528
$11,323
 $6,389
$3,066
$9,455
$7,205
$4,428
$11,633
 $6,795
$4,528
$11,323
Lending- and deposit-related fees147
4
151
 144
4
148
149
5
154
 147
4
151
Asset management, administration and commissions313
1,364
1,677
 300
1,230
1,530
310
1,359
1,669
 313
1,364
1,677
All other income764
18
782
 505
3
508
500
31
531
 764
18
782
Noninterest revenue8,019
5,914
13,933
 7,338
4,303
11,641
8,164
5,823
13,987
 8,019
5,914
13,933
Net interest income(a)
2,831
(343)2,488
 3,257
252
3,509
2,808
(837)1,971
 2,831
(343)2,488
Total net revenue$10,850
$5,571
$16,421
 $10,595
$4,555
$15,150
$10,972
$4,986
$15,958
 $10,850
$5,571
$16,421
(a)Declines in Markets net interest income were driven by higher funding costs.


Selected metrics                      
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except where otherwise noted)2018 2017 Change 2018 2017 Change2019 2018 Change 2019 2018 Change
Assets under custody (“AUC”) by asset class (period-end)
(in billions):
                      
Fixed Income$12,339

$12,878
 (4)% $12,339
 $12,878
 (4)%$13,349
 $12,339
 8% $13,349
 $12,339
 8%
Equity9,174

7,439
 23
 9,174
 7,439
 23
9,301
 9,174
 1
 9,301
 9,174
 1
Other(a)
2,890

2,421
 19
 2,890
 2,421
 19
3,045
 2,890
 5
 3,045
 2,890
 5
Total AUC$24,403

$22,738
 7
 $24,403
 $22,738
 7
$25,695

$24,403
 5
 $25,695
 $24,403
 5
Client deposits and other third party liabilities (average)(b)
$434,847

$421,588
 3 % $430,640
 $406,184
 6 %
Client deposits and other third-party liabilities (average)(b)
$471,291

$434,847
 8% $457,961
 $430,640
 6%
(a)Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts.
(b)Client deposits and other third partythird-party liabilities pertain to the Treasury Services and Securities Services businesses.
International metrics                      
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except where
otherwise noted)
2018 2017 Change 2018 2017 Change2019 
2018(c)
 Change 2019 
2018(c)
 Change
Total net revenue(a)
                      
Europe/Middle East/Africa$2,766
 $2,751
 1 % $9,842
 $8,974
 10 %$2,892
 $2,773
 4 % $8,955
 $9,936
 (10)%
Asia/Pacific1,242
 1,169
 6
 4,123
 3,442
 20
1,428
 1,234
 16
 4,143
 3,997
 4
Latin America/Caribbean321
 329
 (2) 1,064
 914
 16
404
 318
 27
 1,205
 1,123
 7
Total international net revenue4,329
 4,249
 2
 15,029
 13,330
 13
4,724
 4,325
 9
 14,303
 15,056
 (5)
North America4,476
 4,366
 3
 14,182
 13,809
 3
4,614
 4,480
 3
 14,524
 14,155
 3
Total net revenue$8,805
 $8,615
 2
 $29,211
 $27,139
 8
$9,338
 $8,805
 6
 $28,827
 $29,211
 (1)
                      
Loans retained (period-end)(a)
Loans retained (period-end)(a)
          
Loans retained (period-end)(a)
          
Europe/Middle East/Africa$25,941
 $25,677
 1
 $25,941
 $25,677
 1
$23,807
 $25,341
 (6) $23,807
 $25,341
 (6)
Asia/Pacific16,812
 13,398
 25
 16,812
 13,398
 25
14,402
 16,907
 (15) 14,402
 16,907
 (15)
Latin America/Caribbean4,896
 6,737
 (27) 4,896
 6,737
 (27)5,782
 6,097
 (5) 5,782
 6,097
 (5)
Total international loans47,649
 45,812
 4
 47,649
 45,812
 4
43,991
 48,345
 (9) 43,991
 48,345
 (9)
North America69,435
 61,143
 14
 69,435
 61,143
 14
74,299
 68,739
 8
 74,299
 68,739
 8
Total loans retained(a)
$117,084
 $106,955
 9
 $117,084
 $106,955
 9
$118,290
 $117,084
 1
 $118,290
 $117,084
 1
                      
Client deposits and other third-party liabilities (average)(a)(b)
           
Client deposits and other third-party liabilities (average)(b)
           
Europe/Middle East/Africa$162,060
 $160,778
 1
 $162,102
 $154,259
 5
$175,354
 $162,060
 8
 $171,601
 $162,102
 6
Asia/Pacific81,771
 78,334
 4
 82,272
 75,284
 9
91,556
 81,771
 12
 87,866
 82,272
 7
Latin America/Caribbean26,196
 25,236
 4
 26,477
 25,126
 5
30,165
 26,196
 15
 28,849
 26,477
 9
Total international$270,027
 $264,348
 2
 $270,851
 $254,669
 6
$297,075
 $270,027
 10
 $288,316
 $270,851
 6
North America164,820
 157,240
 5
 159,789
 151,515
 5
174,216
 164,820
 6
 169,645
 159,789
 6
Total client deposits and other third-party liabilities$434,847
 $421,588
 3
 $430,640
 $406,184
 6
$471,291
 $434,847
 8
 $457,961
 $430,640
 6
                      
AUC (period-end)(a)
(in billions)
           
AUC (period-end)(b)
(in billions)
           
North America$15,148
 $13,574
 12
 $15,148
 $13,574
 12
$16,146
 $15,148
 7
 $16,146
 $15,148
 7
All other regions9,255
 9,164
 1
 9,255
 9,164
 1
9,549
 9,255
 3
 9,549
 9,255
 3
Total AUC$24,403
 $22,738
 7 % $24,403
 $22,738
 7 %$25,695
 $24,403
 5 % $25,695
 $24,403
 5 %
(a)Total net revenue is based predominantly on the domicile of the client or location of the trading desk, as applicable. Loans outstandingand loans retained (excluding loans held-for-sale and loans at fair value), are based on the location of the trading desk, booking location, or domicile of the client, as applicable.
(b)Client deposits and other third-party liabilities pertaining to the Treasury Services and Securities Services businesses, and AUC, are based predominantly on the domicile of the client.
(b)(c)Client deposits and other third party liabilities pertainThe prior period amounts have been revised to conform with the Treasury Services and Securities Services businesses.current period presentation.

COMMERCIAL BANKING
ForRefer to pages 71-73 of JPMorgan Chase’s 2018 Form 10-K and Line of Business Metrics on page 174 for a discussion of the business profile of CB, refer to pages 67–69 of JPMorgan Chase’s 2017 Annual Report and Line of Business Metrics on page 181.CB.
Selected income statement dataSelected income statement data      Selected income statement data      
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 Change
 2018
 2017
 Change2019
 2018
 Change
 2019
 2018
 Change
Revenue                      
Lending- and deposit-related fees$216
 $223
 (3)% $666
 $690
 (3)%$221
 $216
 2 % $664
 $666
 — %
Asset management, administration and commissions18
 16
 13
 52
 50
 4
All other income(a)
342
 353
 (3) 1,040
 1,034
 1
378
 360
 5
 1,142
 1,092
 5
Noninterest revenue576
 592
 (3) 1,758
 1,774
 (1)599
 576
 4
 1,806
 1,758
 3
Net interest income1,695
 1,554
 9
 4,995
 4,478
 12
1,608
 1,695
 (5) 4,950
 4,995
 (1)
Total net revenue(b)
2,271
 2,146
 6
 6,753
 6,252
 8
2,207
 2,271
 (3) 6,756
 6,753
 —
                      
Provision for credit losses(15) (47) 68
 23
 (214) NM
67
 (15) NM
 186
 23
 NM
                      
Noninterest expense                      
Compensation expense(c)
432
 386
 12
 1,268
 1,156
 10
Noncompensation expense(c)
421
 414
 2
 1,273
 1,259
 1
Compensation expense454
 432
 5
 1,341
 1,268
 6
Noncompensation expense427
 421
 1
 1,277
 1,273
 —
Total noninterest expense853
 800
 7
 2,541
 2,415
 5
881
 853
 3
 2,618
 2,541
 3
                      
Income before income tax expense1,433
 1,393
 3
 4,189
 4,051
 3
1,259
 1,433
 (12) 3,952
 4,189
 (6)
Income tax expense344
 512
 (33) 988
 1,469
 (33)322
 344
 (6) 966
 988
 (2)
Net income$1,089
 $881
 24 % $3,201
 $2,582
 24 %$937
 $1,089
 (14)% $2,986
 $3,201
 (7)%
(a)IncludesEffective in the first quarter of 2019, includes revenue from investment banking products, and commercial card transactions.transactions and asset management fees. The prior period amounts have been revised to conform with the current period presentation.
(b)Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community
development entities that provide loans to qualified businesses in low-income communities, as well as tax-exempt income related to municipal financing activities of $114 million and $107 million for the three months ended September 30, 2019 and 2018, respectively and $308 million and $316 million for the nine months ended September 30, 2019 and 2018, respectively.
Quarterly results
Net income was $937 million, a decrease of 14%.
Net revenue was $2.2 billion, down 3%. Net interest income was $1.6 billion, down 5%, driven by lower deposit margins, partially offset by higher deposit balances. Noninterest revenue was $599 million, an increase of 4%, predominantly driven by strong investment banking performance due to increased equity underwriting and M&A activity.
Noninterest expense was $881 million, up 3%, predominantly driven by investments in the business, largely offset by lower FDIC charges.
The provision for credit losses was $67 million, compared with a benefit of $15 million in the prior year.
Year-to-date results
Net income was $3.0 billion, a decrease of 7%.
Net revenue of $6.8 billion was flat. Net interest income was $5.0 billion, a decrease of 1%, driven by lower loan spreads and lower deposit balances, largely offset by higher deposit margins. Noninterest revenue was $1.8 billion, up 3% driven by higher investment banking revenue, predominantly due to increased equity underwriting and M&A activity.
Noninterest expense was $2.6 billion, an increase of 3%, predominantly driven by continued investments in the business, largely offset by lower FDIC charges.
The provision for credit losses was $186 million, largely driven by a net addition to the allowance for credit losses related to select C&I client downgrades.

Selected income statement data (continued)      
 Three months ended September 30, Nine months ended September 30,
(in millions, except ratios)2019
 2018
 Change
 2019
 2018
 Change
Revenue by product           
Lending$1,006
 $1,027
 (2)% $3,030
 $3,052
 (1)%
Treasury services950
 1,021
 (7) 2,968
 3,019
 (2)
Investment banking(a)
226
 206
 10
 708
 644
 10
Other25
 17
 47
 50
 38
 32
Total Commercial Banking net revenue$2,207
 $2,271
 (3) $6,756
 $6,753
 —
            
Investment banking revenue, gross(b)
$700
 $581
 20
 $2,110
 $1,889
 12
            
Revenue by client segments           
Middle Market Banking$903
 $935
 (3) $2,793
 $2,749
 2
Corporate Client Banking739
 749
 (1) 2,264
 2,243
 1
Commercial Real Estate Banking(c)
547
 562
 (3) 1,632
 1,681
 (3)
Other(c)
18
 25
 (28) 67
 80
 (16)
Total Commercial Banking net revenue$2,207
 $2,271
 (3)% $6,756
 $6,753
 — %
            
Financial ratios           
Return on equity16% 21%   17% 20%  
Overhead ratio40
 38
   39
 38
  
(a)Includes CB’s share of revenue from investment banking products sold to qualified businesses in low-income communities, as well as tax-exempt income relatedCB clients through the CIB.
(b)Refer to municipal financing activitiespage 60 of $107 million and $143 millionthe 2018 Form 10-K for the three months ended September 30, 2018 and 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 impactdiscussion of TCJA.revenue sharing.
(c)Effective in the first quarter of 2018, certain Operations2019, client segment data includes Commercial Real Estate Banking which comprises the former Commercial Term Lending and Compliance staff were transferred from CCBReal Estate Banking client segments, 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 $1.1 billion, an increase of 24%.
Net revenue was $2.3 billion, an increase of 6%. Net interest income was $1.7 billion, an increase of 9%, driven by higher deposit margins, partially offset by lower deposit balances, largely due to non-operating deposits migrating to higher yielding investments. Noninterest revenue was $576 million, 3% lower than the prior year.
Noninterest expense was $853 million, an increase of 7%, predominantly driven by investments in banker coverage and technology.
The provision for credit losses was a benefit of $15 million driven by net recoveries. The prior year was a benefit of $47 million, driven by net reductions in the allowance for credit losses, largely in the Real Estate portfolio.
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, Natural Gas Pipelines and Metals & Mining portfolios.


Selected income statement data (continued)      
 Three months ended September 30, Nine months ended September 30,
(in millions, except ratios)2018
 2017
 Change
 2018
 2017
 Change
Revenue by product           
Lending$1,027
 $1,030
 — % $3,052
 $3,045
 —
Treasury services1,021
 873
 17
 3,019
 2,523
 20
Investment banking(a)
206
 196
 5
 644
 601
 7
Other17
 47
 (64) 38
 83
 (54)
Total Commercial Banking net revenue$2,271
 $2,146
 6
 $6,753
 $6,252
 8
            
Investment banking revenue, gross(b)
$581
 $578
 1
 $1,889
 $1,777
 6
            
Revenue by client segment           
Middle Market Banking$935
 $848
 10
 $2,749
 $2,471
 11
Corporate Client Banking749
 688
 9
 2,243
 2,016
 11
Commercial Term Lending339
 367
 (8) 1,035
 1,098
 (6)
Real Estate Banking175
 157
 11
 509
 438
 16
Other73
 86
 (15) 217
 229
 (5)
Total Commercial Banking net revenue$2,271
 $2,146
 6 % $6,753
 $6,252
 8 %
            
Financial ratios           
Return on equity21% 17%   20% 16%  
Overhead ratio38
 37
   38
 39
  
(a)Includes total Firm revenue from investment banking products sold to CB clients, netCommunity Development Banking (previously part of revenue sharing with the CIB.
(b)Represents total Firm revenue from investment banking products sold to CB clients. As a result of the adoption of the revenue recognition guidance, prior period amounts have been revised to conform with the current period presentation. For additional information, refer to Note 1.



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


Selected metrics      
 As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except headcount)2019
2018
Change
 20192018Change
Selected balance sheet data (period-end)       
Total assets$222,483
$217,194
2 % $222,483
$217,194
2 %
Loans:       
Loans retained209,448
205,177
2
 209,448
205,177
2
Loans held-for-sale and loans at fair value3,187
405
NM
 3,187
405
NM
Total loans$212,635
$205,582
3
 $212,635
$205,582
3
Core loans212,514
205,418
3
 212,514
205,418
3
Equity22,000
20,000
10
 22,000
20,000
10
        
Period-end loans by client segment       
Middle Market Banking$54,298
$57,324
(5) $54,298
$57,324
(5)
Corporate Client Banking55,976
46,890
19
 55,976
46,890
19
Commercial Real Estate Banking(a)
101,326
100,072
1
 101,326
100,072
1
Other(a)
1,035
1,296
(20) 1,035
1,296
(20)
Total Commercial Banking loans$212,635
$205,582
3
 $212,635
$205,582
3
        
Selected balance sheet data (average)       
Total assets$218,620
$219,232
—
 $218,560
$218,270
—
Loans:       
Loans retained207,286
205,603
1
 206,183
203,950
1
Loans held-for-sale and loans at fair value963
1,617
(40) 1,097
1,139
(4)
Total loans$208,249
$207,220
—
 $207,280
$205,089
1
Core loans208,125
207,052
1
 207,145
204,902
1
        
Average loans by client segment       
Middle Market Banking$54,806
$57,258
(4) $56,221
$57,121
(2)
Corporate Client Banking51,389
49,004
5
 49,407
47,650
4
Commercial Real Estate Banking(a)
101,044
99,627
1
 100,663
98,880
2
Other(a)
1,010
1,331
(24) 989
1,438
(31)
Total Commercial Banking loans$208,249
$207,220
—
 $207,280
$205,089
1
        
Client deposits and other third-party liabilities$172,714
$168,169
3
 $169,427
$171,483
(1)
Equity22,000
20,000
10
 22,000
20,000
10
        
Headcount11,501
10,937
5 % 11,501
10,937
5 %
(a)Effective in the first quarter of 2019, client segment data includes Commercial Real Estate Banking which comprises the former Commercial Term Lending and Real Estate Banking client segments, and Community Development Banking (previously part of Other). The prior period amounts have been revised to conform with the current period presentation.

Selected metrics (continued)Selected metrics (continued)        Selected metrics (continued)        
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except ratios)2018
2017
Change
 2018
 2017
 Change2019
2018
Change
 2019
 2018
 Change
Credit data and quality statistics                
Net charge-offs/(recoveries)$(18)$19
NM
 $16
 $17
 (6)%$45
$(18)NM
 $71
 $16
 344%
Nonperforming assets                
Nonaccrual loans:                
Nonaccrual loans retained(a)
$452
$744
(39)% $452
 $744
 (39)%$659
$452
46% $659
 $452
 46%
Nonaccrual loans held-for-sale and loans at fair value5
—
NM
 5
 —
 NM
—
5
NM
 —
 5
 NM
Total nonaccrual loans$457
$744
(39) $457
 $744
 (39)$659
$457
44
 $659
 $457
 44
Assets acquired in loan satisfactions2
3
(33) 2
 3
 (33)19
2
NM
 19
 2
 NM
Total nonperforming assets$459
$747
(39) $459
 $747
 (39)$678
$459
48
 $678
 $459
 48
Allowance for credit losses:                
Allowance for loan losses$2,619
$2,620
—
 $2,619
 $2,620
 —
$2,759
$2,619
5
 $2,759
 $2,619
 5
Allowance for lending-related commitments249
323
(23) 249
 323
 (23)293
249
18
 293
 249
 18
Total allowance for credit losses$2,868
$2,943
(3)% $2,868
 $2,943
 (3)%$3,052
$2,868
6% $3,052
 $2,868
 6%
Net charge-off/(recovery) rate(b)
(0.03)%0.04%  0.01% 0.01%  0.09%(0.03)%  0.05% 0.01%  
Allowance for loan losses to period-end loans retained
1.28
1.30
  1.28
 1.30
  1.32
1.28
  1.32
 1.28
  
Allowance for loan losses to nonaccrual loans retained(a)
579
352
  579
 352
  419
579
  419
 579
  
Nonaccrual loans to period-end total loans0.22
0.37
  0.22
 0.37
  0.31
0.22
  0.31
 0.22
  
(a)Allowance for loan losses of $105$119 million and $128$105 million was held against nonaccrual loans retained at September 30, 20182019 and 2017,2018, respectively.
(b)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.


ASSET & WEALTH MANAGEMENT
ForRefer to pages 74–76 of JPMorgan Chase’s 2018 Form 10-K and Line of Business Metrics on pages 174–175 for a discussion of the business profile of AWM, refer to AWM.pages 70–72 of JPMorgan Chase’s 2017 Annual Report and Line of Business Metrics on pages 181–182.
Effective January 1, 2018, the Firm adopted several new accounting standards; the guidance which had the most significant impact on the AWM segment results was revenue recognition. The revenue recognition guidance was applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
Selected income statement dataSelected income statement data   Selected income statement data   
(in millions, except ratios)Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
2018
2017
Change
 2018
2017
Change
2019
2018
Change
 2019
2018
Change
Revenue          
Asset management, administration and commissions$2,563
$2,466
4 % $7,623
$7,205
6 %$2,574
$2,563
— % $7,558
$7,623
(1)%
All other income117
151
(23) 374
472
(21)139
117
19
 431
374
15
Noninterest revenue2,680
2,617
2
 7,997
7,677
4
2,713
2,680
1
 7,989
7,997
—
Net interest income879
855
3
 2,640
2,520
5
855
879
(3) 2,627
2,640
—
Total net revenue3,559
3,472
3
 10,637
10,197
4
3,568
3,559
—
 10,616
10,637
—
          
Provision for credit losses23
8
188
 40
30
33
44
23
91
 48
40
20
          
Noninterest expense          
Compensation expense1,391
1,319
5
 4,112
3,928
5
1,391
1,391
—
 4,259
4,112
4
Noncompensation expense1,194
1,089
10
 3,620
3,678
(2)1,231
1,194
3
 3,606
3,620
—
Total noninterest expense2,585
2,408
7
 7,732
7,606
2
2,622
2,585
1
 7,865
7,732
2
          
Income before income tax expense951
1,056
(10) 2,865
2,561
12
902
951
(5) 2,703
2,865
(6)
Income tax expense227
382
(41) 616
878
(30)234
227
3
 655
616
6
Net income$724
$674
7
 $2,249
$1,683
34
$668
$724
(8) $2,048
$2,249
(9)
          
Revenue by line of business          
Asset Management$1,827
$1,814
1
 $5,440
$5,288
3
$1,816
$1,827
(1) $5,362
$5,440
(1)
Wealth Management1,732
1,658
4
 5,197
4,909
6
1,752
1,732
1
 5,254
5,197
1
Total net revenue$3,559
$3,472
3 % $10,637
$10,197
4 %$3,568
$3,559
— % $10,616
$10,637
— %
          
Financial ratios          
Return on equity31%29%  32%24% 24%31%  25%32% 
Overhead ratio73
69
  73
75
 73
73
  74
73
 
Pre-tax margin ratio:          
Asset Management27
29
  27
19
 25
27
  25
27
 
Wealth Management26
32
  27
31
 25
26
  26
27
 
Asset & Wealth Management27
30
  27
25
 25
27
  25
27
 
Quarterly results
Net income was $724$668 million, an increasea decrease of 7%8%.
Net revenue wasof $3.6 billion an increase of 3%.was flat. Net interest income was $879$855 million, updown 3%, driven by deposit margin expansioncompression, largely offset by deposit and loan growth. Noninterest revenue was $2.7 billion, up 2%1%, driven by higher management fees on higheraverage market levels andlevels.
The provision for credit losses was $44 million, driven by net long-term product inflows, partially offset by fee compression andcharge-offs, as well as net additions to the impact of lower market valuation gains, including on seed capital investments.allowance for loan losses predominantly due to loan growth.
Noninterest expense was $2.6 billion, up 7%an increase of 1%, largelypredominantly driven by continued investments in technology and advisors, partially offset by lower distribution and technology, as well as higher external fees on revenue growth.legal fees.
 
Year-to-date results
Net income was $2.2$2.0 billion, an increasea decrease of 34%9%.
Net revenue wasof $10.6 billion an increase of 4%.was flat. Net interest income wasof $2.6 billion up 5%, drivenwas flat, reflecting loan growth, offset by deposit margin expansion and loan growth.compression. Noninterest revenue wasof $8.0 billion up 4%,was flat, reflecting a shift in the mix toward lower fee products and lower brokerage activity, offset by higher net investment valuation gains.
The provision for credit losses was $48 million, driven by higher management fees on higher market levels and net long-term product inflows, partially offset by fee compression andcharge-offs, as well as net additions to the impact of lower market valuation gains, including on seed capital investments.allowance for loan losses predominantly due to loan growth.
Noninterest expense was $7.7$7.9 billion, an increase of 2%, predominantly driven by higher external fees on revenue growth andcontinued investments in technology and advisors, and technology,partially offset by higher legal expense in the prior year.lower distribution fees.


Selected metrics          
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except ranking data, headcount and ratios)2018
2017
Change
 2018
2017
Change
2019
2018
Change
 2019
2018
Change
% of JPM mutual fund assets rated as 4- or 5-star(a)
64%65%  64%65% 65%64%  65%64% 
% of JPM mutual fund assets ranked in 1st or 2nd quartile:(b)
          
1 year65
61
  65
61
 74
65
  74
65
 
3 years64
82
  64
82
 80
64
  80
64
 
5 years83
81
  83
81
 86
83
  86
83
 
          
Selected balance sheet data (period-end)          
Total assets$166,716
$149,170
12 % $166,716
$149,170
12 %$174,226
$166,716
5 % $174,226
$166,716
5 %
Loans143,162
128,038
12
 143,162
128,038
12
153,245
143,162
7
 153,245
143,162
7
Core loans143,162
128,038
12
 143,162
128,038
12
153,245
143,162
7
 153,245
143,162
7
Deposits130,497
141,409
(8) 130,497
141,409
(8)138,439
130,497
6
 138,439
130,497
6
Equity9,000
9,000
—
 9,000
9,000
—
10,500
9,000
17
 10,500
9,000
17
          
Selected balance sheet data (average)          
Total assets$161,982
$146,388
11
 $158,218
$142,541
11
$171,121
$161,982
6
 $168,688
$158,218
7
Loans140,558
125,445
12
 136,663
122,002
12
150,486
140,558
7
 147,481
136,663
8
Core loans140,558
125,445
12
 136,663
122,002
12
150,486
140,558
7
 147,481
136,663
8
Deposits133,021
144,496
(8) 138,885
151,311
(8)138,822
133,021
4
 139,127
138,885
—
Equity9,000
9,000
—
 9,000
9,000
—
10,500
9,000
17
 10,500
9,000
17
          
Headcount23,747
22,685
5
 23,747
22,685
5
24,228
23,747
2
 24,228
23,747
2
          
Number of Wealth Management client advisors2,808
2,581
9
 2,808
2,581
9
2,872
2,808
2
 2,872
2,808
2
          
Credit data and quality statistics          
Net charge-offs$11
$5
120
 $7
$10
(30)$26
$11
136
 $27
$7
286
Nonaccrual loans285
337
(15) 285
337
(15)176
285
(38) 176
285
(38)
Allowance for credit losses:          
Allowance for loan losses$317
$285
11
 $317
$285
11
$350
$317
10
 $350
$317
10
Allowance for lending-related commitments15
10
50
 15
10
50
16
15
7
 16
15
7
Total allowance for credit losses$332
$295
13 % $332
$295
13 %$366
$332
10 % $366
$332
10 %
Net charge-off rate0.03%0.02%  0.01%0.01% 0.07%0.03%  0.02%0.01% 
Allowance for loan losses to period-end loans0.22
0.22
  0.22
0.22
 0.23
0.22
  0.23
0.22
 
Allowance for loan losses to nonaccrual loans111
85
  111
85
 199
111
  199
111
 
Nonaccrual loans to period-end loans0.20
0.26
  0.20
0.26
 0.11
0.20
  0.11
0.20
 
(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 $2.9$3.1 trillion and assets under management of $2.1$2.2 trillion were both up 7%, and 8% respectively, predominantly driven by net inflows into long-term and liquidity products as well as higher market levels.levels globally.
Client assets    
September 30,September 30,
(in billions)2018
2017
Change
2019
2018
Change
Assets by asset class    
Liquidity$463
$441
5 %$505
$463
9 %
Fixed income457
461
(1)590
457
29
Equity452
405
12
437
452
(3)
Multi-asset and alternatives705
638
11
714
705
1
Total assets under management2,077
1,945
7
2,246
2,077
8
Custody/brokerage/administration/deposits790
733
8
815
790
3
Total client assets$2,867
$2,678
7
$3,061
$2,867
7
    
Memo:    
Alternatives client assets (a)
$172
$161
7
$183
$172
6
    
Assets by client segment    
Private Banking$576
$507
14
$636
$576
10
Institutional945
921
3
1,029
945
9
Retail556
517
8
581
556
4
Total assets under management$2,077
$1,945
7
$2,246
$2,077
8
    
Private Banking$1,339
$1,217
10
$1,424
$1,339
6
Institutional967
941
3
1,051
967
9
Retail561
520
8
586
561
4
Total client assets$2,867
$2,678
7 %$3,061
$2,867
7 %
(a)Represents assets under management, as well as client balances in brokerage accountaccounts
Client assets (continued)      


Three months ended
September 30,		Nine months ended
September 30,		Three months ended
September 30,		Nine months ended
September 30,
(in billions)2018
2017
 2018
2017
2019
2018
 2019
2018
Assets under management rollforward      
Beginning balance$2,028
$1,876
 $2,034
$1,771
$2,178
$2,028
 $1,987
$2,034
Net asset flows:      
Liquidity14
5
 10
(1)24
14
 23
10
Fixed income3
17
 (9)24
41
3
 97
(9)
Equity1
(5) 8
(12)(2)1
 (9)8
Multi-asset and alternatives4
9
 29
26
1
4
 (2)29
Market/performance/other impacts27
43
 5
137
4
27
 150
5
Ending balance, September 30$2,077
$1,945
 $2,077
$1,945
$2,246
$2,077
 $2,246
$2,077
      
Client assets rollforward      
Beginning balance$2,799
$2,598
 $2,789
$2,453
$2,998
$2,799
 $2,733
$2,789
Net asset flows33
25
 58
37
59
33
 120
58
Market/performance/other impacts35
55
 20
188
4
35
 208
20
Ending balance, September 30$2,867
$2,678
 $2,867
$2,678
$3,061
$2,867
 $3,061
$2,867






International metrics          
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions)2018
2017
Change
 2018
2017
Change
2019
2018
Change
 2019
2018
Change
Total net revenue (a)
          
Europe/Middle East/Africa$677
$697
(3)% $2,095
$1,975
6%$672
$677
(1)% $2,014
$2,095
(4)%
Asia/Pacific377
358
5
 1,161
1,018
14
376
377
—
 1,104
1,161
(5)
Latin America/Caribbean228
227
—
 689
628
10
218
228
(4) 658
689
(4)
Total international net revenue1,282
1,282
—
 3,945
3,621
9
1,266
1,282
(1) 3,776
3,945
(4)
North America2,277
2,190
4
 6,692
6,576
2
2,302
2,277
1
 6,840
6,692
2
Total net revenue(a)
$3,559
$3,472
3 % $10,637
$10,197
4%$3,568
$3,559
—
 $10,616
$10,637
— %
(a)Regional revenue is based on the domicile of the client.
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in billions)2018
2017
Change
 2018
2017
Change
2019
2018
Change
 2019
2018
Change
Assets under management          
Europe/Middle East/Africa$375
$357
5% $375
$357
5%$387
$375
3% $387
$375
3%
Asia/Pacific164
144
14
 164
144
14
183
164
12
 183
164
12
Latin America/Caribbean65
59
10
 65
59
10
70
65
8
 70
65
8
Total international assets under management604
560
8
 604
560
8
640
604
6
 640
604
6
North America1,473
1,385
6
 1,473
1,385
6
1,606
1,473
9
 1,606
1,473
9
Total assets under management$2,077
$1,945
7
 $2,077
$1,945
7
$2,246
$2,077
8
 $2,246
$2,077
8
          
Client assets          
Europe/Middle East/Africa$435
$411
6
 $435
$411
6
$455
$435
5
 $455
$435
5
Asia/Pacific228
206
11
 228
206
11
253
228
11
 253
228
11
Latin America/Caribbean162
157
3
 162
157
3
172
162
6
 172
162
6
Total international client assets825
774
7
 825
774
7
880
825
7
 880
825
7
North America2,042
1,904
7
 2,042
1,904
7
2,181
2,042
7
 2,181
2,042
7
Total client assets$2,867
$2,678
7% $2,867
$2,678
7%$3,061
$2,867
7% $3,061
$2,867
7%

CORPORATE
ForRefer to pages 77–78 of JPMorgan Chase’s 2018 Form 10-K for a discussion of Corporate, refer to pages 73–74 of JPMorgan Chase’s 2017 Annual Report.Corporate.
Selected income statement and balance sheet dataSelected income statement and balance sheet data      Selected income statement and balance sheet data      
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions, except headcount)2018
2017
 Change
 2018
 2017
 Change
2019
2018
 Change
 2019
 2018
 Change
Revenue                  
Principal transactions$(161)$(2) NM
 $(222) $161
 NM
$10
$(161) NM
 $(227) $(222) (2)%
Investment securities losses(46)—
 NM
 (371) (37) NM
All other income/(loss)(a)
30
111
 (73)% 373
 839
 (56)%
Investment securities gains/(losses)78
(46) NM
 135
 (371) NM
All other income32
30
 7% 95
 373
 (75)
Noninterest revenue(177)109
 NM
 (220) 963
 NM
120
(177) NM
 3
 (220) NM
Net interest income74
77
 (4)% (35) 2
 NM
572
74
 NM
 1,436
 (35) NM
Total net revenue(b)(a)
(103)186
 NM
 (255) 965
 NM
692
(103) NM
 1,439
 (255) NM
                  
Provision for credit losses2
—
 NM
 (3) —
 NM
—
2
 NM
 —
 (3) NM
                  
Noninterest expense(c)(b)
28
74
 (62)% 394
 355
 11 %281
28
 NM
 724
 394
 84
Income/(loss) before income tax expense/(benefit)(133)112
 NM
 (646) 610
 NM
411
(133) NM
 715
 (646) NM
Income tax expense/(benefit)12
34
 (65)% 18
 (73) NM
18
12
 50
 (757) 18
 NM
Net income/(loss)$(145)$78
 NM
 $(664) $683
 NM
$393
$(145) NM
 $1,472
 $(664) NM
Total net revenue                  
Treasury and CIO$186
$265
 (30)% $235
 $344
 (32)%$801
$186
 331
 $1,930
 $235
 NM
Other Corporate(289)(79) (266) (490) 621
 NM
(109)(289) 62
 (491) (490) —
Total net revenue$(103)$186
 NM
 $(255) $965
 NM
$692
$(103) NM
 $1,439
 $(255) NM
Net income/(loss)                  
Treasury and CIO$96
$75
 28 % $(244) $(6) NM
$576
$96
 500
 $1,372
 $(244) NM
Other Corporate(241)3
 NM
 (420) 689
 NM
(183)(241) 24
 100
 (420) NM
Total net income/(loss)$(145)$78
 NM
 $(664) $683
 NM
$393
$(145) NM
 $1,472
 $(664) NM
Total assets (period-end)$742,693
$804,573
 (8) $742,693
 $804,573
 (8)$812,333
$742,693
 9
 $812,333
 $742,693
 9
Loans (period-end)1,556
1,614
 (4) 1,556
 1,614
 (4)1,705
1,556
 10
 1,705
 1,556
 10
Core loans(d)(c)
1,556
1,614
 (4) 1,556
 1,614
 (4)1,706
1,556
 10
 1,706
 1,556
 10
Headcount(e)
36,686
34,012
 8 % 36,686
 34,012
 8 %38,155
36,686
 4% 38,155
 36,686
 4 %
(a)Included revenue related to a legal settlementtax-equivalent adjustments, driven by tax-exempt income from municipal bonds, of $645$74 million and $94 million for the three months ended September 30, 2019 and 2018, respectively, and $241 million and $287 million for the nine months ended September 30, 2017.2019 and 2018, respectively.
(b)Included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investmentsa net legal benefit of $94$(32) million and $216$(175) million for the three months ended September 30, 20182019 and 2017,2018, respectively, and $287$(189) million and $681$(225) million for the nine months ended September 30, 2019 and 2018, and 2017, respectively. The decrease in taxable-equivalent adjustments reflects the impact of the TCJA.
(c)Included legal expense/(benefit) of $(175) million and $(148) million for the three months ended September 30, 2018 and 2017, respectively, and $(225) million and $(360) million for nine months ended September 30, 2018 and 2017, respectively.
(d)Average core loans were $1.6$1.7 billion and $1.7$1.6 billion for the three months ended September 30, 20182019 and 2017,2018, respectively, and $1.7 billion and $1.6 billion for both the nine months ended September 30, 20182019 and 2017, respectively.
(e)Effective in the first quarter of 2018, certain Compliance staff were transferred from Corporate to CB. The prior period amounts have been revised to conform with the current period presentation. For a further discussion of this transfer, refer to CB segment results on page 32.2018.
Quarterly results
Net lossincome was $145$393 million, compared with a net incomeloss of $78$145 million in the prior year.
Net revenue was $692 million, compared with a net loss of $103 million largelyin the prior year, driven by markdownshigher net interest income and noninterest revenue. Net interest income was driven by balance sheet growth and changes in mix, partially offset by lower rates. Net interest income also includes income related to the unwind of the internal funding provided to CCB upon the sale of certain mortgage loans. The income reflects the net present value of that funding and is recognized as a charge to net interest income in CCB. Refer to CCB on pages 23–24 of this Form 10-Q and Funds Transfer Pricing (“FTP”) on page 60 of the Firm’s 2018 Form 10-K for further information.
Noninterest revenue increased reflecting small net gains on certain legacy private equity investments of approximately $220 million.compared to net losses in the prior year.
Noninterest expense of $281 million was $28up $253 million includingdue to higher investments in technology and a lower net legal benefit compared with the prior year.
The current period included tax benefits related to the resolution of certain tax audits as well as other tax adjustments, which were partially offset by higher real estate expense.
Current period incomechanges to certain tax expense reflectsreserves. The prior year reflected 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 werewas more than offset by changes to certain tax reserves as well asand other tax adjustments.
Year-to-date results
Net lossincome was $664 million,$1.5 billion, compared with a net incomeloss of $683$664 million in the prior year.
Net revenue was $1.4 billion, compared with a net loss of $255 million in the prior year driven by higher net interest income and noninterest revenue. Net interest income was

driven by balance sheet growth and changes in mix and includes the income related to the unwind of the internal funding, as mentioned above.
Noninterest revenue increased reflecting:
investment securities gains compared with a gain of $965 millionlosses in the prior-year. The current period includes investment securities losses relatedprior year due to the repositioning of the investment securities portfolio and
lower net valuation losses largely driven by markdowns on certain legacy private equity investments. investments,
partially offset by
losses on cash deployment transactions which were more than offset by the related net interest income earned on those transactions.
Noninterest expense of $724 million, was up $330 million reflecting:
higher investments in technology and real estate,
contributions to the Firm’s Foundation, whereas all prior-year contributions were made in the fourth quarter, and
higher pension costs due to changes to actuarial assumptions and estimates.
The prior year included a $645$174 million benefit fromloss on the liquidation of a legal settlement.entity.
IncomeThe current period included tax benefits of $957 million related to the resolution of certain tax audits, as well as other tax adjustments partially offset by changes in certain tax reserves. The prior year expense reflectsreflected changes to certain tax reserves, largely offset by 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 withas well as other tax adjustments, which were more than offset by changes to certain tax reserves.adjustments.

Treasury and CIO overview
At September 30, 2018,2019, 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). Refer to Note 9 for further information on the Firm’s investment securities portfolio.
ForRefer to Liquidity Risk Management on pages 50–54 for further information on liquidity and funding risk, referrisk. Refer to LiquidityMarket Risk Management on pages 49–54. For70–74 for information on interest rate, foreign exchange and other risks, refer to Market Risk Management on pages 73–77.
risks.
Selected income statement and balance sheet data      
 As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions)2018
 2017
 Change
 2018
 2017
 Change
Investment securities losses$(46) $—
 NM
 $(371) $(49) NM
Available-for-sale (“AFS”) investment securities (average)$197,230
 $212,633
 (7)% $200,569
 $224,094
 (10)%
Held-to-maturity (“HTM”) investment securities (average)31,232
 47,034
 (34) 31,842
 48,201
 (34)
Investment securities portfolio (average)$228,462
 $259,667
 (12) $232,411
 $272,295
 (15)
AFS investment securities (period-end)$198,523
 $214,257
 (7) $198,523
 $214,257
 (7)
HTM investment securities (period-end)31,368
 47,079
 (33) 31,368
 47,079
 (33)
Investment securities portfolio (period-end)$229,891
 $261,336
 (12)% $229,891
 $261,336
 (12)%
As permitted by the new hedge accounting guidance, the Firm elected to transfer certain investment securities from HTM to AFS in the first quarter of 2018. For additional information, refer to Notes 1 and 9.
Selected income statement and balance sheet data      
 As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,
(in millions)2019
 2018
 Change 2019
 2018
 Change
Investment securities gains/(losses)$78
 $(46) NM $135
 $(371) NM
Available-for-sale (“AFS”) investment securities (average)$305,894
 $197,230
 55 $260,661
 $200,569
 30
Held-to-maturity (“HTM”) investment securities (average)35,494
 31,232
 14 32,518
 31,842
 2
Investment securities portfolio (average)$341,388
 $228,462
 49 $293,179
 $232,411
 26
AFS investment securities (period-end)$351,599
 $198,523
 77 $351,599
 $198,523
 77
HTM investment securities (period-end)40,830
 31,368
 30 40,830
 31,368
 30
Investment securities portfolio (period-end)$392,429
 $229,891
 71 $392,429
 $229,891
 71


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 within each of the lines of business and Corporate; 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 governance and oversight framework involves understanding drivers of risks, risk types of risks, and impacts of risks.
Driversjpmcgovernancea03.jpg
Refer to pages 79-83 of JPMorgan Chase’s 2018 Form 10-K for a further discussion of Enterprise-wide risk include, but aremanagement governance and oversight.
Effective July 2019, the Board of Directors’ Risk Policy Committee (“DRPC”) was renamed the Risk Committee. The committee’s responsibilities were not limitedchanged. Refer to page 81 of JPMorgan Chase’s 2018 Form 10-K for a further discussion of the economic environment, regulatory or government policy, competitor or market evolution, business decisions, process or judgment error, deliberate wrongdoing, dysfunctional markets, and natural disasters.
The Firm’s risks are generally categorized in the following four risk types:
•
Strategic risk is the risk associated with the Firm’s current and future business plans and objectives, including capital risk, liquidity risk, and the impact to the Firm’s reputation.
•
Credit and investment risk is the risk associated with the default or change in credit profile of a client, counterparty or customer; or loss of principal or a reduction in expected returns on investments, including consumer credit risk, wholesale credit risk, and investment portfolio risk.
•
Market risk is the risk associated with the effect of changes in market factors, such as interest and foreign exchange rates, equity and commodity prices, credit spreads or implied volatilities, on the value of assets and liabilities held for both the short and long term.
•
Operational risk is the risk associated with inadequate or failed internal processes, people and systems, or from external events and includes compliance risk, conduct risk, legal risk, and estimations and model risk.
There may be many consequences of risks manifesting, including quantitative impacts such as reduction in earnings and capital, liquidity outflows, and fines or penalties, or qualitative impacts, such as reputation damage, loss of clients, and regulatory and enforcement actions.committee.

Governance and Oversight Functions

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 indexsections of where in this Form 10-Q and the 2018 Form 10-K discuss the risk governance and oversight functions in JPMorgan Chase’s 2017 Annual Report information aboutplace to manage the risks inherent in the Firm’s management of its key risks can be found.business activities.
Risk governance and oversight functionsForm 10-Q page referenceForm 10-K page reference
Strategic risk 84
Capital risk45–4985–94
Liquidity risk50–5495–100
Reputation risk 101
Consumer credit risk56–59106-111
Wholesale credit risk60–66112-119
Investment portfolio risk69123
Market risk70–74124-131
Country risk75132–133
Operational risk 134-136
Compliance risk 137
Conduct risk 138
Legal risk 139
Estimations and Model risk 140
Risk disclosuresForm 10-Q page referenceAnnual Report page reference
Enterprise-wide risk management42–4375–80
Strategic risk management 81
Capital risk management44–4882–91
Liquidity risk management49–5492–97
Reputation risk management 98
Consumer credit portfolio

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

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

CAPITAL RISK MANAGEMENT
Capital risk is the risk the Firm has an insufficient level and composition of capital to support the Firm’s business activities and associated risks during normal economic environments and under stressed conditions.
The Firm’s capital risk management strategy focuses on maintaining long-term stabilityRefer 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 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, refer to pages 82–9185-94 of JPMorgan Chase’s 2018 Form
2017 Annual Report,10-K, Note 1921 of this Form 10-Q and the Firm’s Pillar 3 Regulatory Capital Disclosures reports,
which are available on the Firm’s website (https://jpmorganchaseco.gcs-web.com/financial-information/basel-pillar-3-us-lcr-disclosures).
for a further discussion of the Firm’s Capital Risk Management, including capital planning and stress testing.
The capital rules under Basel III establish minimum capital ratios and overall capital adequacy standards for large and internationally active U.S. bank holding companies (“BHC”) and banks, including the Firm and its insured depository institution (“IDI”) subsidiaries, including JPMorgan Chase Bank, N.A. Two comprehensive approaches are subject to prescribed for calculating RWA: a standardized approach (“Basel III
Standardized”), and an advanced approach (“Basel III Advanced”). Effective January 1, 2019, the capital rules which include minimum capital ratio requirements that are subject to phase-in periods (“transitional period”) throughadequacy of the endFirm is evaluated against the fully phased-in measures under Basel III and represents the lower of 2018. Whilethe Standardized or Advanced approaches. During 2018, the required capital remainsmeasures were subject to the transitional rules duringand as of December 31, 2018 the Firm's capital ratios as of September 30, 2018calculations were equivalent whether calculated on a transitional basis orthe same on a fully phased-in and on a transitional 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 twoFirm’s Basel III Standardized risk-based ratios as calculated underare currently more binding than the Basel III approaches (Standardized or Advanced) . The Basel III Standardized Fully Phased-In CET1 ratio is the Firm’s current binding constraint,Advanced risk-based ratios, and the Firm expects that this will remain its binding constraintthe case for the foreseeable future.
The Firm and its IDI subsidiaries, as appropriate, are subject to minimum capital ratios under Basel III rules and well-capitalized ratios underalso includes a requirement for Advanced Approach banking organizations, including the regulations issued byFirm, to calculate the Federal Reserve and the Prompt Corrective Action (“PCA”) requirementsSLR. Refer to page 91 of the FDIC Improvement Act (“FDICIA”), respectively. ForJPMorgan Chase’s 2018 Form 10-K for additional information refer to Note 19.on SLR.


The following tables present the Firm’s Transitional and Fully Phased-In risk-based and leverage-based capital metricsmeasures under both the Basel III Standardized and Advanced Approaches. The Firm’s Basel III ratios exceeded both the Transitional and Fully Phased-In regulatory minimums as of September 30, 20182019 and December 31, 2017. For2018. Refer to Capital Risk Management on pages 85-94 of JPMorgan Chase’s 2018 Form 10-K 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.

metrics.
 Transitional Fully Phased-In 
September 30, 2018
(in millions, except ratios)
Standardized Advanced Minimum capital ratios Standardized Advanced Minimum capital ratios 
Risk-based capital metrics:            
CET1 capital$184,972
 $184,972
   $184,972
 $184,972
   
Tier 1 capital210,589
 210,589
   210,589
 210,589
   
Total capital238,303
 228,574
   238,303
 228,574
   
Risk-weighted assets1,545,326
 1,438,529
   1,545,326
 1,438,529
   
CET1 capital ratio12.0% 12.9% 9.0% 12.0% 12.9% 10.5% 
Tier 1 capital ratio13.6
 14.6
 10.5
 13.6
 14.6
 12.0
 
Total capital ratio15.4
 15.9
 12.5
 15.4
 15.9
 14.0
 
Leverage-based capital metrics:            
Adjusted average assets(a)
$2,552,612
 $2,552,612
   $2,552,612
 $2,552,612
   
Tier 1 leverage ratio8.2% 8.2% 4.0% 8.2% 8.2% 4.0% 
Total leverage exposureNA
 NA
   NA
 $3,235,518
   
SLR(b)
NA
 NA
 NA
 NA
 6.5% 5.0%
(b) 
Transitional Fully Phased-In September 30, 2019 December 31, 2018
December 31, 2017
(in millions, except ratios)		Standardized Advanced Minimum capital ratios Standardized Advanced Minimum capital ratios 
(in millions)Standardized Advanced Minimum capital ratios 
Standardized(b)
 
Advanced(b)
 Minimum capital ratios
Risk-based capital metrics:                       
CET1 capital$183,300
 $183,300
   $183,244
 $183,244
   $188,151
 $188,151
   $183,474
 $183,474
  
Tier 1 capital208,644
 208,644
   208,564
 208,564
   214,831
 214,831
   209,093
 209,093
  
Total capital238,395
 227,933
   237,960
 227,498
   243,500
 233,203
   237,511
 227,435
  
Risk-weighted assets1,499,506
 1,435,825
   1,509,762
 1,446,696
   1,527,762
 1,435,693
   1,528,916
 1,421,205
  
CET1 capital ratio12.2% 12.8% 7.5% 12.1% 12.7% 10.5% 12.3% 13.1% 10.5% 12.0% 12.9% 9.0%
Tier 1 capital ratio13.9
 14.5
 9.0
 13.8
 14.4
 12.0
 14.1
 15.0
 12.0
 13.7
 14.7
 10.5
Total capital ratio15.9
 15.9
 11.0
 15.8
 15.7
 14.0
 15.9
 16.2
 14.0
 15.5
 16.0
 12.5
Leverage-based capital metrics:                       
Adjusted average assets(a)
$2,514,270
 $2,514,270
   $2,514,822
 $2,514,822
   $2,717,852
 $2,717,852
   $2,589,887
 $2,589,887
  
Tier 1 leverage ratio8.3% 8.3% 4.0% 8.3% 8.3% 4.0% 7.9% 7.9% 4.0% 8.1% 8.1% 4.0%
Total leverage exposureNA
 $3,204,463
   NA
 $3,205,015
   NA
 $3,404,535
   NA
 $3,269,988
  
SLR(b)
NA
 6.5% NA
 NA
 6.5% 5.0%
(b) 
NA
 6.3% 5.0% NA
 6.4% 5.0%
(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,The Firm’s capital ratios as of December 31, 2018 the SLR waswere equivalent whether calculated on a transitional or fully phased-in under Basel III. The December 31, 2017 amounts were calculated under the Basel III Transitional rules.basis.




Capital components
The following table presents reconciliations of total stockholders’ equity to Basel III Fully Phased-In CET1 capital, Tier 1 capital and Total capital as of September 30, 20182019 and December 31, 2017.2018.
(in millions)September 30, 2018
December 31, 2017
September 30, 2019
December 31, 2018
Total stockholders’ equity$258,956
$255,693
$264,348
$256,515
Less: Preferred stock(a)
27,764
26,068
28,363
26,068
Common stockholders’ equity231,192
229,625
235,985
230,447
Less:  
Goodwill47,483
47,507
47,818
47,471
Other intangible assets781
855
841
748
Other CET1 capital adjustments1,546
1,034
Add:  
Deferred tax liabilities(b)
2,239
2,204
2,371
2,280
Less: Other CET1 capital adjustments195
223
Standardized/Advanced Fully
Phased-In CET1 capital
184,972
183,244
Standardized/Advanced CET1 capital188,151
183,474
Preferred stock(a)
27,764
26,068
28,363
26,068
Less: Other Tier 1 adjustments(a)
2,147
748
1,683
449
Standardized/Advanced Fully
Phased-In Tier 1 capital
$210,589
$208,564
Standardized/Advanced Tier 1 capital$214,831
$209,093
Long-term debt and other instruments qualifying as Tier 2 capital$13,342
$14,827
$14,145
$13,772
Qualifying allowance for credit losses14,225
14,672
14,400
14,500
Other147
(103)124
146
Standardized Fully Phased-In Tier 2 capital$27,714
$29,396
Standardized Fully Phased-In Total capital$238,303
$237,960
Standardized Tier 2 capital$28,669
$28,418
Standardized Total capital$243,500
$237,511
Adjustment in qualifying allowance for credit losses for Advanced Tier 2 capital(9,729)(10,462)(10,297)(10,076)
Advanced Fully Phased-In Tier 2 capital$17,985
$18,934
Advanced Fully Phased-In Total capital$228,574
$227,498
 
Advanced Tier 2 capital$18,372
$18,342
Advanced Total capital$233,203
$227,435
(a)
As of September 30, 2018, Preferred2019, preferred stock includesreflects the issuance of $1.7$2.25 billion of Series DDFF preferred stock and otherredemption of $880 million of Series W preferred stock. Other Tier 1 adjustments includes $1.7$1.37 billion of Series I preferred stock called for partial redemption on September 26, 2019 and subsequently redeemed on October 30, 2018.2019. Tier 1 capital as of September 30, 20182019 reflects both the issuance and the redemption.redemptions.
(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.CET1 capital.

 
Capital rollforward
The following table presents the changes in Basel III Fully Phased-In CET1 capital, Tier 1 capital and Tier 2 capital for the nine months ended September 30, 2018.2019.
Nine months ended September 30,
(in millions)		2018
2019
Standardized/Advanced CET1 capital at December 31, 2017$183,244
Standardized/Advanced CET1 capital at December 31, 2018$183,474
Net income applicable to common equity24,241
26,710
Dividends declared on common stock(6,554)(8,086)
Net purchase of treasury stock(12,385)(15,805)
Changes in additional paid-in capital(1,246)(650)
Changes related to AOCI(1,995)2,877
Adjustment related to DVA(a)
(148)287
Changes related to other CET1 capital adjustments(185)(656)
Change in Standardized/Advanced CET1 capital1,728
4,677
Standardized/Advanced CET1 capital at September 30, 2018$184,972
Standardized/Advanced CET1 capital at September 30, 2019$188,151
  
Standardized/Advanced Tier 1 capital at December 31, 2017$208,564
Standardized/Advanced Tier 1 capital at December 31, 2018$209,093
Change in CET1 capital1,728
4,677
Net issuance of noncumulative perpetual preferred stock(b)
—
925
Other297
136
Change in Standardized/Advanced Tier 1 capital2,025
5,738
Standardized/Advanced Tier 1 capital at September 30, 2018$210,589
Standardized/Advanced Tier 1 capital at September 30, 2019$214,831
  
Standardized Tier 2 capital at December 31, 2017$29,396
Standardized Tier 2 capital at December 31, 2018$28,418
Change in long-term debt and other instruments qualifying as Tier 2(1,485)373
Change in qualifying allowance for credit losses(448)(101)
Other251
(21)
Change in Standardized Tier 2 capital(1,682)251
Standardized Tier 2 capital at September 30, 2018$27,714
Standardized Total capital at September 30, 2018$238,303
Standardized Tier 2 capital at September 30, 2019$28,669
Standardized Total capital at September 30, 2019$243,500
  
Advanced Tier 2 capital at December 31, 2017$18,934
Advanced Tier 2 capital at December 31, 2018$18,342
Change in long-term debt and other instruments qualifying as Tier 2(1,485)373
Change in qualifying allowance for credit losses285
(322)
Other251
(21)
Change in Advanced Tier 2 capital(949)30
Advanced Tier 2 capital at September 30, 2018$17,985
Advanced Total capital at September 30, 2018$228,574
Advanced Tier 2 capital at September 30, 2019$18,372
Advanced Total capital at September 30, 2019$233,203
(a)Includes DVA related to structured notes recorded in AOCIAOCI.
(b)Includes the net effect of $1.7$2.25 billion and $1.85 billion of non-cumulative preferred stock that was issued on July 31, 2019 and January 24, 2019, respectively, and redemptions of non-cumulative preferred stock of $925 million and $880 million on March 1, 2019 and September 21, 2018 and $1.71, 2019, respectively, as well as $1.37 billion of non-cumulative preferred stock that was called for partial redemption on September 27, 201826, 2019 and subsequently redeemed on October 30, 2018.2019.


RWA rollforward
The following table presents changes in the components of RWA under Basel III Standardized and Advanced Fully Phased-In for the nine months ended September 30, 2018.2019. The amounts in the rollforward categories are estimates, based on the predominant driver of the change.
Standardized Advanced Standardized Advanced 
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
Nine months ended September 30, 2019
(in millions)		Credit risk RWAMarket risk RWATotal RWA Credit risk RWAMarket risk RWA
Operational risk
RWA
Total RWA
December 31, 2018$1,423,053
$105,863
$1,528,916
 $926,647
$105,976
$388,582
$1,421,205
Model & data changes(a)
(5,282)(3,550)(8,832) 4,446
(3,550)—
896
(3,406)(17,076)(20,482) (4,542)(17,076)—
(21,618)
Portfolio runoff(b)
(7,073)—
(7,073) (8,984)—
—
(8,984)(4,400)—
(4,400) (4,300)—
—
(4,300)
Movement in portfolio levels(c)
52,456
(987)51,469
 9,534
(1,014)(8,599)(79)24,711
(983)23,728
 44,408
(1,136)(2,866)40,406
Changes in RWA40,101
(4,537)35,564
 4,996
(4,564)(8,599)(8,167)16,905
(18,059)(1,154) 35,566
(18,212)(2,866)14,488
September 30, 2018$1,426,161
$119,165
$1,545,326
 $927,901
$119,227
$391,401
$1,438,529
September 30, 2019$1,439,958
$87,804
$1,527,762
 $962,213
$87,764
$385,716
$1,435,693
(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 (inclusive of rule changes) refers to: changes in book size, composition, credit quality, and market movements for credit risk RWA; changes in position and market movements for market risk RWA; and updates to cumulative losses for operational risk RWA.

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, referRefer to Capital Risk Management on page 88 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for additional information.
The following table presents the components of the Firm’s Fully Phased-In SLR as of September 30, 20182019 and December 31, 2017.2018.
(in millions, except ratio)September 30,
2018
December 31, 2017
September 30,
2019
December 31,
2018
Tier 1 capital$210,589
$208,564
$214,831
$209,093
Total average assets2,599,621
2,562,155
2,765,052
2,636,505
Less: Adjustments for deductions from Tier 1 capital47,009
47,333
47,200
46,618
Total adjusted average assets(a)
2,552,612
2,514,822
2,717,852
2,589,887
Off-balance sheet exposures(b)
682,906
690,193
686,683
680,101
Total leverage exposure$3,235,518
$3,205,015
$3,404,535
$3,269,988
SLR6.5%6.5%6.3%6.4%
(a)
Adjusted average assets, for purposes of calculating the SLR, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.
(b)Off-balance sheet exposures are calculated as the average of the three month-end spot balances during the quarter.
ForRefer to Note 21 for JPMorgan Chase Bank, N.A.’s and Chase Bank USA, N.A.’s SLR ratios, refer to Note 19.ratios.
Line of business equity
Each business segment is allocated capital by taking into consideration stand-alone peer comparisonsa variety of factors including capital levels of similarly rated peers and applicable regulatory capital requirements. For additional information, referEffective January 1, 2019, line of business capital allocations have increased due to a combination of changes in the relative weights, with greater emphasis on Standardized RWA and stress, a higher capitalization rate, updated stress simulations, and general business growth. Refer to page 8891 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for additional information.
 


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

(in billions)
September 30,
2018
 December 31,
2017
Consumer & Community Banking$51.0
 $51.0
Corporate & Investment Bank70.0
 70.0
Commercial Banking20.0
 20.0
Asset & Wealth Management9.0
 9.0
Corporate81.2
 79.6
Total common stockholders’ equity$231.2
 $229.6


(in billions)
September 30,
2019
 December 31,
2018
Consumer & Community Banking$52.0
 $51.0
Corporate & Investment Bank80.0
 70.0
Commercial Banking22.0
 20.0
Asset & Wealth Management10.5
 9.0
Corporate71.5
 80.4
Total common stockholders’ equity$236.0
 $230.4
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”CCAR”) capital adequacy and internal capital adequacy assessment processes, as well as its plans to make capital distributions, such as dividend payments or stock repurchases.
On June 28, 2018,27, 2019, the Federal Reserve informed the Firm that it did not object on either a quantitative or qualitative basis, to the Firm’s 20182019 capital plan.
Capital actions
Preferred stock
Preferred stock dividends declared were $379$423 million and $1.2 billion for the three and nine months ended September 30, 2018.2019.
On September 21, 2018,October 31, 2019, the Firm issued $1.7 billionannounced and priced an offering of fixed rate 5.75%depositary shares representing $900 million of 4.75% non-cumulative preferred stock, Series DD. GG. This issuance is expected to close on November 7, 2019. On November 1, 2019, the Firm announced that it will redeem all $900 million of its 5.45% non-cumulative preferred stock, SeriesP on December 1, 2019.
On October 30, 2018,2019, the Firm redeemed $1.7$1.37 billion of its Series I fixed-to-floating rate non-cumulative perpetual preferred stock.
On September 1, 2019, the Firm redeemed all $880 million of its 6.30% non-cumulative preferred stock, Series I. ForW.
On July 31, 2019, the Firm issued $2.25 billion of fixed-to-floating rate non-cumulative preferred stock, Series FF.

Refer to Note 17 of this Form 10-Q and Note 20 of JPMorgan Chase’s 2018 Form 10-K for additional information on the Firm’s preferred stock, refer to Note 20 of JPMorgan Chase’s 2017 Annual Report.stock.

Common stock dividends
On September 18, 2018,17, 2019, the Firm announced that its Board of Directors had declared a quarterly common stock dividend, ofwhich increased to $0.90 per share, from $0.80 per share effective with the dividend paid on October 31, 2018.2019. The Firm’s dividends are subject to the Board of Directors’ approval on a quarterly basis.
Common equity
Effective as of June 28, 2018, theThe Firm’s Board of Directors has authorized the repurchase of up to $20.7$29.4 billion of gross common equity (common stock and warrants) between July 1, 20182019 and June 30, 2019,2020 as part of itsthe Firm’s annual capital plan.
The following table sets forth the Firm’s repurchases of common equity, on a settlement-date basis, for the three and nine months ended September 30, 20182019 and 2017. There were no repurchases of warrants during the three and nine months ended September 30, 2018 and 2017.2018.

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

2018
2017
2019
2018

2019
2018
Total shares of common stock repurchased39.3
51.7

126.0
118.8
62.0
39.3

159.0
126.0
Aggregate common stock repurchases$4,416
$4,763

$14,055
$10,602
$6,949
$4,416

$17,250
$14,055
For additional information regarding repurchases of the Firm’s equity securities, referRefer 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 183pages 176-177 of this Form 10-Q and page 2830 of JPMorgan Chase’s 20172018 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.respectively, for additional information regarding repurchases of the Firm’s equity securities.

Other capital requirements
TLAC
The Federal Reserve’s TLAC rule requires the top-tier U.S. GSIB holding companies, including the Firm, to maintain minimum levels of external TLAC and eligible LTD effective January 1, 2019.
As of September 30, 2018, the Firm was compliant with the requirements of the rule to which it will be subject on January 1, 2019. For additional information, referRefer to page 9093 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for additional information.
The following table presents the eligible external TLAC and LTD amounts, as well as a representation of the amounts as a percentage of the Firm’s total RWA and total leverage exposure.
September 30, 2019 
(in billions, except ratio)
Eligible external TLAC(a)
Eligible LTD
Total eligible TLAC & LTD$387.8
$159.9
% of RWA25.4%10.5%
Minimum requirement23.0
9.5
Surplus/(shortfall)$36.4
$14.8
   
% of total leverage exposure11.4%4.7%
Minimum requirement9.5
4.5
Surplus/(shortfall)$64.3
$6.7
(a)As of September 30, 2019, total eligible external TLAC reflects the issuance of $2.25 billion of Series FF non-cumulative preferred stock, redemption of $880 million of Series W non-cumulative preferred stock, and redemption of $1.37 billion of Series I non-cumulative preferred stock called for partial redemption on September 26, 2019 and subsequently redeemed on October 30, 2019. 
Refer to Part I, Item 1A: Risk Factors on pages 7-28 of JPMorgan Chase’s 2018 Form 10-K for information on the financial consequences to holders of the Firm’s debt and equity securities in a resolution scenario.

Broker-dealer regulatory capital
J.P. Morgan Securities
JPMorgan Chase’s principal U.S. broker-dealer subsidiary is J.P. Morgan Securities. J.P. Morgan Securities is subject to Rule 15c3-1 under the Securities Exchange Act of 1934 (the “Net Capital Rule”). J.P. Morgan Securities is also registered as a futures commission merchant and subject to Rule 1.17 of the Commodity Futures Trading Commission (“CFTC”).
Refer to Capital risk management on pages 85-94 of JPMorgan Chase’s 2018 Form 10-K for a discussion on J.P. Morgan Securities has elected to compute its minimum netSecurities’ capital requirements under the “Alternative Net Capital Requirements” of the Net Capital Rule.
Under the market and credit risk standards of Appendix E of the Net Capital Rule, J.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. J.P. Morgan Securities is required to notify the Securities and Exchange Commission (“SEC”) in the event that tentative net capital is less than $5.0 billion. As of September 30, 2018, J.P. Morgan Securities maintained tentative net capital in excess of the minimum and notification requirements.
The following table presents J.P. Morgan Securities’ net capital information:capital:
September 30, 2018Net Capital
(in millions)Actual
Minimum
J.P. Morgan Securities$18,258
$2,903
September 30, 2019 
(in millions)Actual
Minimum
Net Capital$22,068
$3,746


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 RegulatoryRegulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”).
Refer to Capital risk management on pages 85-94 of JPMorgan Chase’s 2018 Form 10-K for a further discussion on J.P. Morgan Securities plc.
Effective January 1, 2019, the Bank of England requires, on a transitional basis, that U.K. banks, including U.K. regulated subsidiaries of overseas groups, maintain a minimum requirement for own funds and eligible liabilities (“MREL”). As of September 30, 2019, J.P. Morgan Securities plc is subjectwas compliant with the requirements of the MREL rule. Refer to the European Union Capital RequirementsSupervision and Regulation and the U.K. PRA capital rules, eachon pages 1-6 of which implemented Basel III and thereby subject J.P. Morgan Securities plc to its requirements.
JPMorgan Chase’s 2018 Form 10-K for additional information on MREL.

The following table presents J.P. Morgan Securities plc’s capital information:
metrics:
September 30, 2018Total capital CET1 ratio Total capital ratio
(in millions, except ratios)Estimated EstimatedMinimum EstimatedMinimum
J.P. Morgan Securities plc$41,284 16.8%4.5% 16.8%8.0%
September 30, 2019  
(in millions, except ratios)Estimated
Minimum ratios
Total capital$55,614
 
CET1 ratio16.9%4.5%
Total capital ratio21.5%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, referRefer to pages 92–9795–100 of JPMorgan Chase’s 2017 Annual Report2018 Form 10-K and the Firm’s US LCR Disclosure reports, which are available on the Firm’s website at: (https://jpmorganchaseco.gcs-web.com/financial-information/basel-pillar-3-us-lcr-disclosures).for a further discussion of the Firm’s Liquidity Risk Management.
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 qualityhigh-quality liquid securities as defined in the LCR rule. The LCR is required to be a minimum of 100%.
Under the LCR rule, the amount of HQLA held by JPMorgan Chase Bank N.A. and Chase Bank USA, N.A that areis in excess of each entity’sits standalone 100% minimum LCR requirement, and that areis not transferable to non-bank affiliates, must be excluded from the Firm’s reported HQLA.The LCR is required to be a minimum of 100%.
On August 22, 2018, the U.S. banking regulators published a final rule permitting investment-grade municipal obligations that meet certain criteria to qualify as HQLA for purposes of the U.S. LCR rule. The final rule went into effect on August 30, 2018, and did not have a material impact on the Firm’s HQLA or LCR for the three months ended September 30, 2018.
The following table summarizes the Firm’s average LCR for the three months ended September 30, 2018,2019, June 30, 20182019 and September 30, 20172018 based on the Firm’s current interpretation of the finalized LCR framework.
Three months endedThree months ended
Average amount
(in billions)
September 30, 2018June 30, 2018September 30, 2017
Average amount
(in millions)
September 30,
2019		June 30, 2019September 30,
2018
HQLA  
Eligible cash(a)
$345
$363
$390
$199,757
$219,838
$344,660
Eligible securities(b)(c)
190
166
179
337,704
317,439
190,349
Total HQLA(d)
$535
$529
$568
$537,461
$537,277
$535,009
Net cash outflows$467
$458
$475
$468,452
$477,442
$466,803
LCR115%115%120%115%113%115%
Net excess HQLA (d)
$68
$71
$93
$69,009
$59,835
$68,206
(a)
Represents cash on deposit at central banks, primarily the Federal Reserve Banks.
(b)Predominantly U.S. Treasuries, U.S. AgencyGSE and U.S. government agency MBS, and sovereign bonds net of applicable haircuts under the LCR rules.
(c)HQLA eligible securities may be reported in securities borrowed or purchased under resale agreements, trading assets, or investment securities on the Firm’s Consolidated balance sheets.
(d)Excludes average excess HQLA at JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. that are not transferable to non-bank affiliates.
The Firm’s average LCR was 115% for the three months ended September 30, 2018 and June 30, 2018.
The Firm’s average LCR decreasedincreased during the three months ended September 30, 2018,2019, compared with the prior yearthree-month period ended June 30, 2019, primarily due to a reductiondecline in the net cash primarily driven by long-term debt maturities and outflows from CIB client-driven markets activities.
The Firm’s average LCR may fluctuatefluctuates from period to period, due to changes in its HQLA and estimated net cash outflows under the LCR as a result of ongoing business activity. The Firm’s HQLA are expected to be available to meet its liquidity needs in a time of stress.

Other liquidity sources
As of September 30, 2018,2019, in addition to assets reported in the Firm’s HQLA, under the LCR rule, the Firm had approximately $225$312 billion of unencumbered marketable securities, such as equity securities and fixed income debt securities, available to raise liquidity, if required.liquidity. This includes HQLA-eligible securities included as part of the excess liquidity at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates.
As of September 30, 2018,2019, the Firm also had approximately $298.9 $313 billion of available borrowing capacity at various FHLBs, the discount windowswindow at the Federal Reserve BanksBank, 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 the Federal Reserve Bank discount windows.window. Although available, the Firm does not view thethis borrowing capacity at the Federal Reserve Bank discount windowswindow 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 franchisedeposits 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 by Treasury and CIO in the Firm’s investment securities portfolio or deployed in cash or other short-term liquid investments based on their interest rate and liquidity risk
characteristics.Securities borrowed or purchased under resale agreements and trading assets-debt and equity instruments are primarily funded by the Firm’s securities loaned or sold under agreements to repurchase, trading liabilities-debt and equity instruments, and a portion of the Firm’s long-term debt and stockholders’ equity. In addition to funding securities borrowed or purchased under resale agreements and trading assets-debt and Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance. Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance.equity instruments, proceeds from the Firm’s debt and equity issuances are used to fund certain loans and other financial and non-financial assets, or may be invested in the Firm’s investment securities portfolio. Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance.


Deposits
The table below summarizes, by line of business, the deposit balances as of September 30, 2018,2019, and December 31, 2017,2018, and the average deposit balances for the three and nine months ended September 30, 20182019 and 2017,2018, respectively.
September 30, 2018
December 31, 2017
 Three months ended September 30, Nine months ended
September 30,		September 30, 2019
December 31, 2018
 Three months ended September 30, Nine months ended September 30,
Deposits Average Average Average Average
(in millions) 2018
2017
 2018
2017
 2019
2018
 2019
2018
Consumer & Community Banking$677,260
$659,885
 $674,211
$645,732
 $669,244
$636,257
$701,170
$678,854
 $693,980
$674,211
 $688,676
$669,244
Corporate & Investment Bank482,490
455,883
 476,995
461,961
 472,879
444,064
510,403
482,084
 524,521
476,995
 509,775
472,879
Commercial Banking168,112
181,512
 168,102
176,095
 171,403
175,265
174,903
170,859
 172,653
168,102
 169,361
171,403
Asset & Wealth Management130,497
146,407
 133,021
144,496
 138,885
151,311
138,439
138,546
 138,822
133,021
 139,127
138,885
Corporate403
295
 533
2,739
 736
4,152
346
323
 904
533
 887
736
Total Firm$1,458,762
$1,443,982
 $1,452,862
$1,431,023
 $1,453,147
$1,411,049
$1,525,261
$1,470,666
 $1,530,880
$1,452,862
 $1,507,826
$1,453,147
A key strength of the Firm is its diversified deposit franchise, through each of its lines of business, whichprovidesDeposits provide a stable source of funding and limitsreduce the Firm’s reliance on the wholesale funding markets. A significant portion of the Firm’s deposits are consumer and wholesale operating deposits, which are both considered to be stable sources of liquidity. Wholesale operating deposits are considered to be stable sources of liquidity because they are generated from customers that maintain operating service relationships with the Firm.
The table below shows the loan and deposit balances, the loans-to-deposits ratios, and deposits as a percentage of total liabilities, as of September 30, 20182019 and December 31, 2017.2018.
(in billions except ratios)September 30, 2018
 December 31, 2017
September 30, 2019
 December 31, 2018
Deposits$1,458.8
 $1,444.0
$1,525.3
 $1,470.7
Deposits as a % of total liabilities62% 63%61% 62%
Loans$954.3
 $930.7
$945.2
 $984.6
Loans-to-deposits ratio65% 64%62% 67%
The Firm believes that average deposit balances are generally more representative of deposit trends than period-end deposit balances.
Average deposits increased for the three months ended September 30, 2018 in CCB and CIB, partially offset by declines in AWM, CB and Corporate.2019.
The increase in CCB reflects the continuation of growth from new customers, partially offset by balance migration into investment-related products, and in CIB reflects growthan increase in operating deposits predominantly in Treasury Services driven by
growth in client activity. 
activity, and an increase in the net issuances of structured notes in Markets. The declineincrease in CCB was driven by growth in new accounts. The increase in AWM was driven by balance migration predominantly into the Firm’s investment-related products, andgrowth in interest-bearing deposits on new client activity. The increase 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.growth from existing clients.
Average deposits increased for the nine months ended September 30, 20182019 in CCBCIB and CIB,CCB, partially offset by declinesa decline in CB. Balances in AWM CB and Corporate.were relatively flat.
The increase in CCB reflects the continuation of growth from new customers, partially offset by balance migration into investment-related products, and in CIB reflects growthan increase in operating deposits predominantly in Treasury Services and Securities Services driven by growth in client activity. 
activity, and an increase in the net issuances of structured notes in Markets. The declineincrease in AWMCCB was driven by balancegrowth in new accounts.
The decrease in CB was primarily driven by lower non operating deposits.
AWM balances were relatively flat with growth in interest-bearing deposits offset by migration predominantly into the Firm’s investment-related products, and in CB was primarily driven by the migration of non-operating deposits into higher-yielding investment products. The decline in Corporate was predominantly due to maturities of wholesale non-operating deposits, consistent with the Firm’s efforts to reduce such deposits.
For further information on deposit and liability balance trends, referRefer to the discussion of the Firm’s Business Segment Results and the Consolidated Balance Sheets Analysis on pages 19-4121–43 and pages 12–1415-16, respectively,, respectively. for further information on deposit and liability balance trends.

The following table summarizes short-term and long-term funding, excluding deposits, as of September 30, 2018,2019, and December 31, 2017,2018, and average balances for the three and nine months endedSeptember 30, 2019 and 2018, and 2017, respectively. For additional information, referRefer to the Consolidated Balance Sheets Analysis on pages 12–1415–17 and Note 10.10 for additional information.
September 30, 2018December 31, 2017 Three months ended September 30, Nine months ended September 30,September 30, 2019December 31, 2018 Three months ended September 30, Nine months ended September 30,
Sources of funds (excluding deposits)Average AverageAverage Average
(in millions)2018
2017
 2018
2017
2019
2018
 2019
2018
Commercial paper$29,313
$24,186
 $28,702
$23,022
 $27,289
$18,653
$19,620
$30,059
 $19,607
$28,702
 $24,756
$27,289
Other borrowed funds(a)
10,857
10,727
 11,172
10,469
 11,716
10,484
Other borrowed funds8,826
8,789
 10,537
11,172
 10,869
11,716
Total short-term unsecured funding(a)
$40,170
$34,913
 $39,874
$33,491
 $39,005
$29,137
$28,446
$38,848
 $30,144
$39,874
 $35,625
$39,005
Securities sold under agreements to repurchase(b)(a)
$168,450
$147,713
 $174,436
$169,638
 $178,929
$174,777
$235,968
$171,975
 $229,581
$174,436
 $215,148
$178,929
Securities loaned(b)(a)
12,357
9,211
 9,131
10,946
 10,900
13,370
9,739
9,481
 8,505
9,131
 9,117
10,900
Other borrowed funds(a)
24,465
16,889
 21,169
19,467
 21,336
15,136
Other borrowed funds(b)
20,447
30,428
 21,758
21,169
 28,343
21,336
Obligations of Firm-administered multi-seller conduits(c)
$4,304
$3,045
 $3,102
$2,947
 $3,070
$3,351
$10,514
$4,843
 $12,167
$3,102
 $10,987
$3,070
Total short-term secured funding(a)
$209,576
$176,858
 $207,838
$202,998
 $214,235
$206,634
$276,668
$216,727
 $272,011
$207,838
 $263,595
$214,235
          
Senior notes$155,099
$155,852
 $154,820
$159,270
 $152,046
$154,148
$173,550
$162,733
 $172,059
$154,820
 $167,495
$152,046
Trust preferred securities(d)
—
690
 517
2,336
 629
2,340
—
—
 —
517
 —
629
Subordinated debt(d)
16,426
16,553
 16,079
18,399
 16,106
20,029
18,043
16,743
 17,797
16,079
 17,196
16,106
Structured notes(e)(d)
52,187
45,727
 50,905
44,157
 48,874
42,025
70,687
53,090
 69,144
50,905
 62,984
48,874
Total long-term unsecured funding$223,712
$218,822
 $222,321
$224,162
 $217,655
$218,542
$262,280
$232,566
 $259,000
$222,321
 $247,675
$217,655
          
Credit card securitization(c)
$14,142
$21,278
 $15,052
$24,709
 $16,620
$27,041
$6,457
$13,404
 $7,394
$15,052
 $10,802
$16,620
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
FHLB advances29,642
44,455
 29,646
48,645
 35,998
54,378
Other long-term secured funding(e)
4,550
5,010
 4,558
5,013
 4,708
4,832
Total long-term secured funding$60,554
$86,536
 $68,710
$95,173
 $75,830
$103,584
$40,649
$62,869
 $41,598
$68,710
 $51,508
$75,830
          
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
Preferred stock(f)
$28,363
$26,068
 $28,241
$26,252
 $27,457
$26,130
Common stockholders’ equity(f)
$235,985
$230,447
 $235,613
$230,439
 $232,917
$228,995
(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.
(b)Includes FHLB advances with original maturities of less than one year of $2.6 billion and $11.4 billion as of September 30, 2019 and December 31, 2018, respectively.
(c)Included in beneficial interests issued by consolidated variable interest entities on the Firm’s Consolidated balance sheets.
(d)Subordinated debt includes $1.6 billion and $664 million of junior subordinated debentures distributed pro rata to the holders of trust preferred securities which were cancelled on December 18, 2017 and September 10, 2018, respectively. For further information refer to Note 19 of JPMorgan Chase’s 2017 Annual Report.
(e)Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
(f)Other securitizations include securitizations of student loans. The Firm deconsolidated the student loan securitization entities in the second quarter of 2017 as it no longer had a controlling financial interest in these entities as a result of the sale of the student loan portfolio. The Firm’s wholesale businesses also securitize loans for client-driven transactions, which are not considered to be a source of funding for the Firm and are not included in the table.
(g)(e)Includes long-term structured notes which are secured.
(h)(f)For additional information on preferred stock and common stockholders’ equity referRefer to Capital Risk Management on pages 44-48,45–49, Consolidated statements of changes in stockholders’ equity on page 83 of this Form 10-Q and Note 20 and Note 21 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for additional information on preferred stock and common stockholders’ equity.
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, U.S. GSE and government agency MBS, and constitute a significant portion of the federal funds purchased and securities loaned or sold under repurchase agreements on the Consolidated balance sheets. The increase at September 30, 2018,2019, from December 31, 2017, reflected 2018, was driven by CIB and includes the Firm’s participation in the Federal Reserve’s open market operations, as well as higher secured financing of trading assets-debt and equity instruments and client-driven market-making activities in CIB.
 
and client-driven activities.
The balances associated with securities loaned or sold under agreements to repurchase fluctuate over time due to customers’ investment and financing activities;activities, the Firm’s demand for financing;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 increasedecrease in commercial paper at September 30, 2019, from December 31, 2018, was due to higherlower net issuance.issuance primarily for short-term liquidity management.

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 has been revised to provide the notional value of thesummarizes long-term unsecured issuance and maturities or redemptions by the Parent Company and subsidiaries for the three and nine months ended September 30, 2019 and 2018. Refer to Liquidity Risk Management on pages 95-100 and Note 19 of JPMorgan Chase’s 2018 and 2017. ForForm 10-K for additional information on the IHC and long-term debt, refer to Liquidity Risk Management and Note 19 of JPMorgan Chase’s 2017 Annual Report.debt.
Long-term unsecured fundingLong-term unsecured funding       Long-term unsecured funding       
Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30, Three months ended September 30, Nine months ended September 30,
2018
2017
 2018
2017
 2018
2017
 2018
2017
2019
2018
 2019
2018
 2019
2018
 2019
2018
(Notional in millions)
Parent Company(b)
 
Subsidiaries(b)
Parent Company Subsidiaries
Issuance              
Senior notes issued in the U.S. market$6,000
$4,000
 $17,000
$18,750
 $1,250
$—
 $8,761
$—
$5,000
$6,000
 $13,250
$17,000
 $—
$1,250
 $1,750
$8,761
Senior notes issued in non-U.S. markets—
—
 1,175
2,220
 —
—
 —
—
1,672
—
 3,920
1,175
 —
—
 —
—
Total senior notes6,000
4,000
 18,175
20,970
 1,250
—
 8,761
—
6,672
6,000
 17,170
18,175
 —
1,250
 1,750
8,761
Subordinated debt—
—
 —
—
 —
—
 —
—
Structured notes(a)
387
337
 2,047
2,046
 5,934
6,250
 20,159
21,135
780
387
 2,596
2,047
 8,511
5,934
 23,643
20,159
Total long-term unsecured funding – issuance$6,387
$4,337
 $20,222
$23,016
 $7,184
$6,250
 $28,920
$21,135
$7,452
$6,387
 $19,766
$20,222
 $8,511
$7,184
 $25,393
$28,920
              
Maturities/redemptions              
Senior notes$646
$4,000
 $18,633
$16,826
 $1,503
$152
 $4,466
$1,368
$2,700
$646
 $10,607
$18,633
 $2,751
$1,503
 $4,567
$4,466
Subordinated debt15
395
 15
3,401
 —
500
 —
500
37
15
 183
15
 —
—
 —
—
Structured notes582
1,505
 2,465
4,785
 3,474
4,152
 12,104
13,245
477
582
 1,436
2,465
 4,540
3,474
 12,700
12,104
Total long-term unsecured funding – maturities/redemptions$1,243
$5,900
 $21,113
$25,012
 $4,977
$4,804
 $16,570
$15,113
$3,214
$1,243
 $12,226
$21,113
 $7,291
$4,977
 $17,267
$16,570
(a)Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
(b)The prior period amounts have been revised to conform with the current period presentation.

The Firmraises secured long-term funding through securitization of consumer credit card loans and advances from the FHLBs. The following table summarizes the securitization issuance and FHLB advances and their respective maturities or redemptions for the three and nine months ended September 30, 20182019 and 2017,2018, respectively.
Long-term secured fundingLong-term secured funding      Long-term secured funding      
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
Issuance Maturities/Redemptions Issuance Maturities/RedemptionsIssuance Maturities/Redemptions Issuance Maturities/Redemptions
(in millions)20182017 20182017 2018
2017
 2018
2017
20192018 20192018 2019
2018
 2019
2018
Credit card securitization$—
$—
 $2,375
$2,264
 $1,396
$1,545
 $8,500
$9,270
$—
$—
 $2,850
$2,375
 $—
$1,396
 $6,975
$8,500
Other securitizations(a)
—
—
 —
—
 —
—
 —
55
FHLB advances—
—
 10,704
4,694
 4,000
—
 23,157
15,748
—
—
 5
10,704
 —
4,000
 14,810
23,157
Other long-term secured funding(b)(c)
117
189
 139
516
 312
726
 161
640
Other long-term secured funding(a)
62
117
 180
139
 115
312
 633
161
Total long-term secured funding$117
$189
 $13,218
$7,474
 $5,708
$2,271
 $31,818
$25,713
$62
$117
 $3,035
$13,218
 $115
$5,708
 $22,418
$31,818
(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. ForRefer to Note 14 of JPMorgan Chase’s 2018 Form 10-K for further description of the client-driven loan securitizations, refer to Note 14 of JPMorgan Chase’s 2017 Annual Report.securitizations.

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.

 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.
 
Additionally, the Firm’s funding requirements for VIEs and other third-party commitments may be adversely affected by a decline in credit ratings. ForRefer to SPEs on page 18, and liquidity risk and credit-related contingent features in Note 4 for additional information on the impact of a credit ratings downgrade on the funding requirements for VIEs, and on derivatives and collateral agreements, refer to SPEs on page 15, and Liquidity risk and credit-related contingent features in Note 4.agreements.

The credit ratings of the Parent Company and the Firm’s principal bank and nonbanknon-bank subsidiaries as of September 30, 2018, except as noted below,2019, were as follows.
 JPMorgan Chase & Co. 
JPMorgan Chase Bank, N.A.
Chase Bank USA, N.A.(a)
 
J.P. Morgan Securities LLC
J.P. Morgan Securities plc
September 30, 20182019Long-term issuerShort-term issuerOutlook Long-term issuerShort-term issuerOutlook Long-term issuerShort-term issuerOutlook
Moody’s Investors Service(a)
A2P-1Stable Aa2P-1Stable Aa3P-1Stable
Standard & Poor’sA-A-2Stable A+A-1Stable A+A-1Stable
Fitch RatingsAA-F1+Stable AAF1+Stable AAF1+Stable
(a)Moody’s ratingsOn May 18, 2019, the Firm merged Chase Bank USA, N.A. with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A. as the surviving bank. The credit rating for JPMorgan Chase Bank, N.A. reflects the credit rating of October 25, 2018the merged entity.
On October 25,Refer to page 100 of JPMorgan Chase’s 2018 Moody’s upgradedForm 10-K for a discussion of the factors that could affect credit ratings of the Parent Company’s long-term issuer rating to A2 (previously A3)Company 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,principal bank 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.
non-bank subsidiaries.
Critical factors in maintaining high credit ratings include a stable and diverse earnings stream, strong capital and liquidity ratios, strong credit quality and risk management controls, and diverse funding sources. Rating agencies continue to evaluate economic and geopolitical trends, regulatory developments, future profitability, risk management practices, and litigation matters, as well as their broader ratings methodologies. Changes in any of these factors could lead to changes in the Firm’s credit ratings.


CREDIT AND INVESTMENT RISK MANAGEMENT
Credit and investment risk is the risk associated with the default or change in credit profile of a client, counterparty or customer; or loss of principal or a reduction in expected returns on investments. Forinvestments, including consumer credit risk,
wholesale credit risk, and investment portfolio risk. Refer to pages 55-68 for a further discussion of Credit Risk referRisk.
Refer to pages 55-72. Forpage 69 for a further discussion onof Investment Portfolio Risk. Refer to Credit and Investment Risk refer to page 72. ForManagement on pages 102-123 of JPMorgan Chase’s 2018 Form 10-K for a further discussion of the Firm’s Credit and Investment Risk Management framework and organization, and the identification, monitoring and management, refer to Credit and Investment Risk Management on pages 99–120 of JPMorgan Chase’s 2017 Annual Report.management.


CREDIT PORTFOLIO
Credit risk is the risk associated with the default or change in credit profile of a client, counterparty or customer.
In the following tables, reported loans include loans retained (i.e., held-for-investment); loans held-for-sale; and certain loans accounted for at fair value. The following tables do not include loans which the Firm accounts for at fair value and classifies as trading assets. Forassets; refer to Notes 2 and 3 for further information regarding these loans, referloans. Refer to Notes 211, 22, and 3. For4 for additional information on the Firm’s loans, lending-related commitments and derivative receivables, including the Firm’s accounting policies, referpolicies.
Refer to Notes 11, 20, and 4, respectively.
ForWholesale credit exposure – industry exposures on pages 62–64 for further information regarding the credit risk inherent in the Firm’s cash placed with banks,banks; refer to Wholesale credit exposure – industry exposures on pages 64–66;Note 9 of this Form 10-Q and Note 10 of JPMorgan Chase’s 2018 Form 10-K for information regarding the credit risk inherent in the Firm’s investment securities portfolio,portfolio; and refer to Note 910 of this Form 10-Q and Note 1011 of JPMorgan Chase’s 2017 Annual Report; and2018 Form 10-K for information regarding the credit risk inherent in the securities financing portfolio, referportfolio.
Refer to Consumer Credit Portfolio on pages 106–111 of JPMorgan Chase’s 2018 Form 10-K and Note 1011 of this Form 10-Q and Note 11 of JPMorgan Chase’s 2017 Annual Report.
Forfor a further discussion of the consumer credit environment and consumer loans, referloans. Refer to ConsumerWholesale Credit Portfolio on pages 102-107112–119 of JPMorgan Chase’s 2017 Annual Report2018 Form 10-K and Note 11 of this Form 10-Q. For10-Q for a further discussion of the wholesale credit environment and wholesale loans,loans.
refer to Wholesale Credit Portfolio on pages 108–116 of JPMorgan Chase’s 2017 Annual Report and Note 11 of this Form 10-Q.
Total credit portfolio    
 Credit exposure 
Nonperforming(d)(e)
(in millions)Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
Loans retained$928,887
$969,415
 $4,687
$4,611
Loans held-for-sale10,571
11,988
 88
—
Loans at fair value5,760
3,151
 176
220
Total loans–reported945,218
984,554
 4,951
4,831
Derivative receivables55,577
54,213
 26
60
Receivables from customers and other(a)
32,236
30,217
 —
—
Total credit-related assets1,033,031
1,068,984
 4,977
4,891
Assets acquired in loan satisfactions     
Real estate ownedNA
NA
 340
269
OtherNA
NA
 26
30
Total assets acquired in loan satisfactions
NA
NA
 366
299
Lending-related commitments1,095,090
1,039,258
 446
469
Total credit portfolio$2,128,121
$2,108,242
 $5,789
$5,659
Credit derivatives used
in credit portfolio management activities(b)
$(15,031)$(12,682) $—
$—
Liquid securities and other cash collateral held against derivatives(c)
(15,482)(15,322) NA
NA
 
Total credit portfolio    
 Credit exposure 
Nonperforming(d)(e)
(in millions)Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Loans retained$947,651
$924,838
 $4,630
$5,943
Loans held-for-sale3,680
3,351
 14
—
Loans at fair value2,987
2,508
 —
—
Total loans – reported954,318
930,697
 4,644
5,943
Derivative receivables60,062
56,523
 90
130
Receivables from customers and other(a)
26,137
26,272
 —
—
Total credit-related assets1,040,517
1,013,492
 4,734
6,073
Assets acquired in loan satisfactions     
Real estate ownedNA
NA
 268
311
OtherNA
NA
 32
42
Total assets acquired in loan satisfactions
NA
NA
 300
353
Lending-related commitments1,048,674
991,482
 252
731
Total credit portfolio$2,089,191
$2,004,974
 $5,286
$7,157
Credit derivatives used
in credit portfolio management activities(b)
$(14,206)$(17,609) $—
$—
Liquid securities and other cash collateral held against derivatives(c)
(16,943)(16,108) NA
NA
(in millions,
except ratios)
Three months ended
September 30,		 Nine months ended
September 30,
2019
2018
 2019
2018
Net charge-offs$1,371
$1,033
 $4,135
$3,620
Average retained loans     
Loans932,493
942,583
 944,666
931,766
Loans – reported, excluding
residential real estate PCI loans		910,753
916,205
 921,978
903,377
Net charge-off rates     
Loans0.58%0.43% 0.59%0.52%
Loans – excluding PCI0.60
0.45
 0.60
0.54
(in millions,
except ratios)
Three months ended
September 30,		 Nine months ended
September 30,
2018
2017
 2018
2017
Net charge-offs(f)
$1,033
$1,265
 $3,620
$4,123
Average retained loans     
Loans942,583
903,892
 931,766
894,170
Loans – excluding residential real estate PCI loans916,205
871,465
 903,377
860,443
Net charge-off rates(f)
     
Loans0.43%0.56% 0.52%0.62%
Loans – excluding PCI0.45
0.58
 0.54
0.64
(a)Receivables from customers and other primarily represents prime brokerage-related held-for-investment margin loans to brokerage customers.customer receivables.
(b)Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. For additional information, referRefer to Credit derivatives on page 6866 and Note 4.4 for additional information.
(c)Includes collateral related to derivative instruments where an appropriate legal opinion has not been either sought or obtained.
(d)Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the pools is performing.
(e)At September 30, 2018,2019, and December 31, 2017,2018, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $2.9$1.6 billion and $4.3$2.6 billion, respectively, and real estate owned (“REO”) insured by U.S. government agencies of $78$50 million and $95$75 million, respectively. These amounts have been excluded based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”).
(f)For the nine months ended September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio transfer, the net charge-off rate for Loans would have been 0.55% and for Loans – excluding PCI would have been 0.57%.

CONSUMER CREDIT PORTFOLIO
The Firm’s retained consumer portfolio consists primarily of residential real estate loans, credit card loans, auto loans, and business banking loans, as well as associated lending-related commitments. The Firm’s focus is on serving primarily the prime segment of the consumer credit market. For further information on consumer loans, referRefer to Note 11 of this Form
10-Q and Consumer Credit Portfolio on pages 102-107106–111 and Note 12 of JPMorgan Chase’s 2017 Annual Report. For2018 Form 10-K for further information on lending-related commitments, referconsumer loans. Refer to Note 2022 of this Form 10-Q and Note 27 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for further information on lending-related commitments.
The following table presents consumer credit-related information with respect to the credit portfolio held by CCB, scored prime mortgage and scored home equity loans held by AWM, and prime mortgage loans held by Corporate. ForRefer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for further information about the Firm’s nonaccrual and charge-off accounting policies, refer to Note 12 of JPMorgan Chase’s 2017 Annual Report.policies.
Consumer credit portfolioConsumer credit portfolio           Consumer credit portfolio           
    Three months ended September 30, Nine months ended September 30,     Three months ended September 30, Nine months ended September 30,

(in millions, except ratios)		Credit exposure 
Nonaccrual
loans(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)
Credit exposure 
Nonaccrual loans(f)(g)
 
Net charge-offs/(recoveries)(h)
 
Net charge-off/(recovery) rate(h)(i)
 
Net charge-offs/(recoveries)(h)
 
Net charge-off/(recovery) rate(h)(i)
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
 2018
2017
 2018
2017
 2018
2017
 2018
2017
Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
 2019
2018
 2019
2018
 2019
2018
 2019
2018
Consumer, excluding credit card                        
Loans, excluding PCI loans and loans held-for-sale                      
Residential mortgage$231,361
$216,496
 $1,880
$2,175
 $(105)$3
 (0.18)%0.01% $(256)$3
 (0.15)%—%$197,456
$231,078
 $1,629
$1,765
 $(15)$(105) (0.03)%(0.18)% $(31)$(256) (0.02)%(0.15)%
Home equity29,318
33,450
 1,382
1,610
 (12)13
 (0.16)0.15
 (2)71
 (0.01)0.26
24,954
28,340
 1,208
1,323
 (25)(12) (0.39)(0.16) (40)(2) (0.20)(0.01)
Auto(a)(b)
63,619
66,242
 137
141
 56
116
 0.35
0.71
 182
245
 0.37
0.50
61,410
63,573
 112
128
 49
56
 0.32
0.35
 149
182
 0.32
0.37
Consumer & Business Banking(b)(c)
26,451
25,789
 237
283
 68
71
 1.02
1.12
 171
184
 0.88
0.99
26,699
26,612
 268
245
 79
68
 1.18
1.02
 204
171
 1.03
0.88
Student(d)
—
—
 —
—
 —
—
 —
—
 —
498
 —
NM
Total loans, excluding PCI loans and loans held-for-sale350,749
341,977
 3,636
4,209
 7
203
 0.01
0.24
 95
1,001
 0.04
0.40
310,519
349,603
 3,217
3,461
 88
7
 0.11
0.01
 282
95
 0.11
0.04
Loans – PCI                        
Home equity9,393
10,799
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
7,753
8,963
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Prime mortgage4,931
6,479
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
4,164
4,690
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Subprime mortgage2,072
2,609
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
1,797
1,945
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Option ARMs(e)
8,813
10,689
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Option ARMs7,576
8,436
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – PCI25,209
30,576
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
21,290
24,034
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – retained375,958
372,553
 3,636
4,209
 7
203
 0.01
0.22
 95
1,001
 0.03
0.37
331,809
373,637
 3,217
3,461
 88
7
 0.10
0.01
 282
95
 0.11
0.03
Loans held-for-sale104
128
 —
—
 —
—
 —
—
 —
—
 —
—
4,821
95
 2
—
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total consumer, excluding credit card loans376,062
372,681
 3,636
4,209
 7
203
 0.01
0.22
 95
1,001
 0.03
0.37
336,630
373,732
 3,219
3,461
 88
7
 0.10
0.01
 282
95
 0.11
0.03
Lending-related commitments(f)
50,630
48,553
          
Receivables from customers(g)
155
133
          
Lending-related commitments(d)
53,591
46,066
          
Receivables from customers18
154
          
Total consumer exposure, excluding credit card426,847
421,367
          390,239
419,952
          
Credit card                      
Loans retained(h)
147,856
149,387
 —
—
 1,073
1,019
 2.91
2.87
 3,407
3,049
 3.16
2.94
Loans retained(e)
159,571
156,616
 —
—
 1,175
1,073
 2.95
2.91
 3,617
3,407
 3.13
3.16
Loans held-for-sale25
124
 —
—
 —
—
 —
—
 —
—
 —
—
—
16
 —
—
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total credit card loans147,881
149,511
 —
—
 1,073
1,019
 2.91
2.87
 3,407
3,049
 3.16
2.94
159,571
156,632
 —
—
 1,175
1,073
 2.95
2.91
 3,617
3,407
 3.13
3.16
Lending-related commitments(f)
600,728
572,831
          
Lending-related commitments(d)
645,880
605,379
          
Total credit card exposure748,609
722,342
          805,451
762,011
          
Total consumer credit portfolio$1,175,456
$1,143,709
 $3,636
$4,209
 $1,080
$1,222
 0.82 %0.95% $3,502
$4,050
 0.90 %1.07%$1,195,690
$1,181,963
 $3,219
$3,461
 $1,263
$1,080
 1.00 %0.82 % $3,899
$3,502
 1.02 %0.90 %
Memo: Total consumer credit portfolio, excluding PCI$1,150,247
$1,113,133
 $3,636
$4,209
 $1,080
$1,222
 0.86 %1.02% $3,502
$4,050
 0.96 %1.15%$1,174,400
$1,157,929
 $3,219
$3,461
 $1,263
$1,080
 1.05 %0.86 % $3,899
$3,502
 1.07 %0.96 %
(a)At September 30, 2018,2019, and December 31, 2017,2018, excluded operating lease assets of $19.6$22.1 billion and $17.1$20.5 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 relatesRefer 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.Note 16 for further information.
(b)Includes certain business banking and auto dealer risk-rated loans that apply the wholesale methodology for determining the allowance for loan losses; these loans are managed by CCB, and therefore, for consistency in presentation, are included within the consumer portfolio.
(c)Predominantly includes Business Banking loans.
(d)For the nine months ended September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio sale, the net charge-off rate for Total consumer, excluding credit card and PCI loans and loans held-for-sale would have been 0.22%; Total consumer – retained excluding credit card loans would have been 0.20%; Total consumer credit portfolio would have been 0.95%; and Total consumer credit portfolio, excluding PCI loans would have been 1.02%.
(e)At both September 30, 2018, and December 31, 2017, approximately 68% of the PCI option adjustable rate mortgage (“ARM”) portfolio has been modified into fixed-rate, fully amortizing loans.

(f)Credit card and home equity lending-related commitments represent the total available lines of credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit would be used at the same time. For credit card commitments, and if certain conditions are met, home equity commitments, the Firm can reduce or cancel these lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. For further information, referRefer to Note 20.22 for further information.
(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)(e)Includes billed interest and fees net of an allowance for uncollectible interest and fees.
(i)(f)At September 30, 20182019 and December 31, 2017,2018, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $2.9$1.6 billion and $4.3$2.6 billion, respectively. These amounts have been excluded from nonaccrual loans based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status, as permitted by regulatory guidance issued by the FFIEC.
(j)(g)Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the pools is performing.
(k)(h)Net charge-offscharge-offs/(recoveries) and the net charge-offcharge-off/(recovery) rates excluded write-offs in the PCI portfolio of $58$43 million and $20$58 million for the three months ended September 30, 20182019 and 2017,2018, respectively, and $151$132 million and $66$151 million for the nine months ended September 30, 20182019 and 2017,2018, respectively. These write-offs decreased the allowance for loan losses for PCI loans. Refer to Allowance for Credit Losses on pages 69–7167–68 for further information.
(l)Net charge-offs and net charge-off rates for the three months ended September 30, 2017 included $63 million of incremental charge-offs recorded in accordance with regulatory guidance regarding the timing of loss recognition for certain auto and residential real estate loans in bankruptcy and auto loans where assets were acquired in loan satisfaction.
(m)(i)Average consumer loans held-for-sale were $196 million$5.5 billion and $339$196 million for the three months ended September 30, 20182019 and 2017,2018, respectively, and $2.6 billion and $240 million and $1.9 billion for the nine months ended September 30, 20182019 and 2017,2018, respectively. These amounts were excluded when calculating net charge-offcharge-off/(recovery) rates.


Consumer, excluding credit card
Portfolio analysis
Consumer loanLoan balances increaseddecreased from December 31, 2017 predominantly2018 due to originationslower residential real estate loans, predominantly driven by loan sales. The credit performance of high-quality prime mortgage loans that have been retained on the balance sheet, largely offset by paydownsportfolio continues to benefit from a strong labor market and the charge-off or liquidation of delinquent loans.improvement in home prices.
PCI loans are excluded from theThe following discussions ofprovide information concerning individual loan products, andexcluding PCI loans which are addressed separately below. Forseparately. Refer to Note 11 of this Form 10-Q for further information about the Firm’s consumerthis portfolio, including information about delinquencies, loan modifications and other credit quality indicators, refer to Note 11 of this Form 10-Q.indicators.
Residential mortgage: The residential mortgage portfolio, including loans held-for-sale, predominantly consists of high-quality prime mortgage loans, with approximately 1% consisting of subprime mortgage loans. These subprime mortgage loans continue to run off and are performing in line with expectations. The residential mortgage portfolio including loans held-for-sale, increased from December 31, 2017 as the amount of retained originations of primarily high-quality prime mortgage loans exceeded paydowns. Residential mortgage 30+ day delinquencies decreased from December 31, 2017. Nonaccrual2018 driven by loan sales in Home Lending as well as paydowns, largely offset by originations of prime mortgage loans decreased from December 31, 2017 due to lower delinquencies.that have been retained on the balance sheet. Net recoveries for the three and nine months ended September 30, 2018 improved2019 were lower when compared with the same periodperiods in the prior year reflectingas the prior year benefited from larger recoveries on loan sales as well as continued improvement in home prices and lower delinquencies.sales.
At September 30, 2018,2019, and December 31, 2017,2018, the Firm’s residential mortgage portfolio included $21.3$21.8 billion and $20.2$21.6 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 onborrowers, predominantly in AWM. Performance of this portfolio generally have been consistentfor the three and nine months ended September 30, 2019 was in line with the performance of the broader residential mortgage portfolio. The Firm continues to monitorportfolio for the risks associated with these loans.same period.
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,
2019
December 31,
2018
Current$2,100
$2,884
30-89 days past due1,054
1,528
90 or more days past due1,602
2,600
Total government guaranteed loans$4,756
$7,012
(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, 20172018 primarily reflecting loan paydowns. The amount of 30+ day delinquencies decreased from December 31, 2017. Nonaccrual loans decreased from December 31, 2017 due to lower delinquencies. Net recoveries for the three and nine months ended September 30, 2018 improved when compared with the same period in the prior year, as a result of continued improvement in home prices and lower delinquencies.
At September 30, 2018,2019, approximately 90% of the Firm’s home equity portfolio consisted of home equity lines of credit (“HELOCs”) and the remainder consisted of home equity loans (“HELOANs”). The carrying value of HELOCs outstanding was $26$23 billion at September 30, 2018.2019. This amount included $12$10 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modified and $4 billion of interest-only balloon HELOCs, which primarily mature after 2030. The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are exhibiting a material deterioration in their credit risk profile.

The Firm monitors risks associated with junior lien loans where the borrower has a senior lien loan that is either delinquent or has been modified. These loans are considered “high-risk seconds” and are classified as nonaccrual as they are considered to pose a higher risk of default than other junior lien loans. The carrying value of high-risk seconds declined from December 31, 2017.
For further information on the Firm’s home equity portfolio, referRefer to Note 11 of this Form 10-Q and Consumer Credit Portfolio on pages 102-107106–111 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for further information on the Firm’s home equity portfolio.
Auto: The auto loan portfolio which predominantly consists of prime-quality loans,loans. The portfolio declined when compared with December 31, 2017,2018, as paydowns and the charge-offcharge-offs or liquidation of delinquent loans were predominantly offset by new originations. Nonaccrual loans decreased from December 31, 2017. Net charge-offs for the three and nine months endedSeptember 30, 2018 declined when compared with the same period in the prior year primarily as a result of an incremental $49 million recorded in the prior year in accordance with regulatory guidance regarding the timing of loss recognition for certain loans in bankruptcy and loans where assets were acquired in loan satisfaction.
Consumer & Business Banking: Consumer & Business Banking loans increasedwere flat when compared with December 31, 2017 due to higher2018 as loan originations predominantlywere offset by paydowns and charge-offs of delinquent loans. Nonaccrual loans decreased from December 31, 2017. Net charge-offs for the three and nine months endedSeptember 30, 2018 decreased2019 increased when compared with the same period in the prior year.year due primarily to higher deposit overdraft losses.
Purchased credit-impaired loans: PCI loans represent certain loans that were acquired and deemed to be credit-impaired on the acquisition date. PCI loans decreased from December 31, 20172018 due to portfolio run off and loan sales.off. As of September 30, 2018,2019, approximately 11%9% of the option ARM PCI loans were delinquent and approximately 68%71% of the portfolio had been modified into fixed-rate, fully amortizing loans. The borrowers for substantially all of the remaining option ARM loans are making amortizing payments, although such payments are not necessarily fully amortizing. This latter group of loans is subject to the risk of payment shock due to future payment recast. Default rates generally increase on option ARM loans when payment recast results in a payment increase. The expected increase in default rates is considered in the Firm’s quarterly impairment assessment.

The following table provides a summary of lifetime principal loss estimates included in either the nonaccretable difference or the allowance for loan losses.
Summary of PCI loans lifetime principal loss estimates
Lifetime loss
 estimates(a)
 
Life-to-date
liquidation losses(b)
Lifetime loss
 estimates(a)
 
Life-to-date
liquidation losses(b)
(in billions)Sep 30,
2018
 Dec 31,
2017
 Sep 30,
2018
 Dec 31,
2017
Sep 30,
2019
 Dec 31,
2018
 Sep 30,
2019
 Dec 31,
2018
Home equity$14.1
 $14.2
 $13.0
 $12.9
$13.9
 $14.1
 $13.0
 $13.0
Prime mortgage4.0
 4.0
 3.8
 3.8
4.1
 4.1
 3.9
 3.9
Subprime mortgage3.3
 3.3
 3.1
 3.1
3.3
 3.3
 3.2
 3.2
Option ARMs10.2
 10.0
 9.9
 9.7
10.3
 10.3
 10.0
 9.9
Total$31.6
 $31.5
 $29.8
 $29.5
$31.6
 $31.8
 $30.1
 $30.0
(a)Includes the original nonaccretable difference established in purchase accounting of $30.5 billion for principal losses plus additional principal losses recognized subsequent to acquisition through the provision and allowance for loan losses. The remaining nonaccretable difference for principal losses was $556$476 million and $842$512 million at September 30, 2018,2019, and December 31, 2017,2018, respectively.
(b)Represents both realization of loss upon loan resolution and any principal forgiven upon modification.
Geographic composition of residential real estate loans
ForRefer to Note 11 for information on the geographic composition of the Firm’s residential real estate loans, refer to Note 11.loans.
Current estimated loan-to-value ratio of residential real estate loans
Average current estimated loan-to-value (“LTV”) ratios have declined consistent with recent improvements in home prices, customer paydowns, and charge-offs or liquidations of higher LTV loans. For furtherRefer to Note 11 for information on current estimated LTVs onof the Firm’s residential real estate loans, refer to Note 11.loans.
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 ofPerformance metrics for modifications to the residential real estate portfolios as measured through cumulative redefault rates, were not materially different from December 31, 2017. For2018. Refer to Consumer Credit Portfolio on pages 106–111 of JPMorgan Chase’s 2018 Form 10-K for further information on the Firm’s cumulative redefault rates refer to Consumer Credit Portfolio on pages 102-107 of JPMorgan Chase’s 2017 Annual Report.rates.
Certain loans that were modified under the U.S. Government’s Home Affordable Modification Program (“HAMP”) and the Firm’s proprietary modification programsloans have interest rate reset provisions (“step-rate modifications”). Interest where the interest rates on these loans generally began to increase commencing in 2014 by 1% per year, and will continue to do so, until the rate reaches a specified cap. The cap on these loans is typically at a prevailing market interest rate for a fixed-rate mortgage loan as of the modification date. At September 30, 2018,2019, the carrying value of non-PCI loans and the unpaid principal balance of PCI loans modified in step-rate modifications, which have not yet met their specified caps, were $2$1.3 billion and $4$2.4 billion, respectively. The Firm continues to monitor this risk exposure and the impact of these potential interest rate

increases is considered in the Firm’s allowance for loan losses.
The following table presents information as of September 30, 2018,2019, and December 31, 2017,2018, relating to modified retained residential real estate loans for which concessions have been granted to borrowers experiencing financial difficulty. ForRefer to Note 11 for further information on modifications for the three and nine months ended September 30, 20182019 and 2017, refer to Note 11.2018.
Modified residential real estate loans
September 30, 2018 December 31, 2017September 30, 2019 December 31, 2018
(in millions)Retained loans
Non-accrual
retained loans(d)
 Retained loans
Non-accrual
retained loans(d)
Retained loans
Non-accrual
retained loans(d)
 Retained loans
Non-accrual
retained loans(d)
Modified residential real estate loans, excluding
PCI loans(a)(b)
      
Residential mortgage$4,722
$1,536
 $5,620
$1,743
$4,118
$1,376
 $4,565
$1,459
Home equity2,056
993
 2,118
1,032
1,961
981
 2,012
955
Total modified residential real estate loans, excluding PCI loans$6,778
$2,529
 $7,738
$2,775
$6,079
$2,357
 $6,577
$2,414
Modified PCI loans(c)
      
Home equity$2,135
NA
 $2,277
NA
$2,003
NA
 $2,086
NA
Prime mortgage3,296
NA
 4,490
NA
2,929
NA
 3,179
NA
Subprime mortgage2,162
NA
 2,678
NA
1,919
NA
 2,041
NA
Option ARMs6,660
NA
 8,276
NA
5,879
NA
 6,410
NA
Total modified PCI loans$14,253
NA
 $17,721
NA
$12,730
NA
 $13,716
NA
(a)Amounts represent the carrying value of modified residential real estate loans.
(b)At September 30, 2018,2019, and December 31, 2017, $4.0 billion2018, $16 million and $3.8$4.1 billion, respectively, of loans modified subsequent to repurchase from Ginnie Mae in accordance with the standards of the appropriate government agency (i.e., Federal Housing Administration (“FHA”), U.S. Department of Veterans Affairs (“VA”), Rural Housing Service of the U.S. Department of Agriculture (“RHS”)) are not included in the table above. When such loans perform subsequent to modification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure. ForRefer to Note 13 for additional information about sales of loans in securitization transactions with Ginnie Mae, refer to Note 13.Mae.
(c)Amounts represent the unpaid principal balance of modified PCI loans.
(d)At September 30, 2018,2019, and December 31, 2017,2018, nonaccrual loans included $2.0$1.9 billion and $2.2$2.0 billion, respectively, of troubled debt restructurings (“TDRs”) for which the borrowers were less than 90 days past due. ForRefer to Note 11 for additional information about loans modified in a TDR that are on nonaccrual status, refer to Note 11.status.

Nonperforming assets
The following table presents information as of September 30, 2018,2019, and December 31, 2017,2018, about consumer, excluding credit card, nonperforming assets.
Nonperforming assets(a)
      
(in millions)September 30,
2018
 December 31,
2017
September 30,
2019
 December 31,
2018
Nonaccrual loans(b)
      
Residential real estate$3,262
 $3,785
$2,839
 $3,088
Other consumer374
 424
380
 373
Total nonaccrual loans3,636
 4,209
3,219
 3,461
Assets acquired in loan satisfactions      
Real estate owned(c)205
 225
209
 196
Other32
 40
26
 30
Total assets acquired in loan satisfactions237
 265
235
 226
Total nonperforming assets$3,873
 $4,474
$3,454
 $3,687
(a)At September 30, 2018,2019, and December 31, 2017,2018, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $2.9$1.6 billion and $4.3$2.6 billion, respectively, and REO insured by U.S. government agencies of $78$50 million and $95$75 million, respectively. These amounts have been excluded based upon the government guarantee.
(b)Excludes PCI loans, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of individual loans within the pools, is not meaningful. The Firm is recognizing interest income on each pool of loans as each of the pools is performing.
(c)The prior period amount has been revised to conform with the current period presentation.
Nonaccrual loans in the residential real estate portfolio at September 30, 20182019 decreased to $3.3$2.8 billion from $3.8$3.1 billion at December 31, 2017,2018, of which 25%20% and 26%24% were greater than 150 days past due, respectively. In the aggregate, the unpaid principal balance of residential real estate loans greater than 150 days past due was charged down by approximately 33%31% and 40%32% to the estimated net realizable value of the collateral at September 30, 2018,2019, and December 31, 2017,2018, respectively.
Nonaccrual loans: The following table presents changes in consumer, excluding credit card, nonaccrual loans for the nine months ended September 30, 20182019 and 2017.2018.
Nonaccrual loan activity    
Nine months ended September 30,
(in millions)		 2018
2017
 2019
2018
Beginning balance $4,209
$4,820
 $3,461
$4,209
Additions 2,174
2,553
 1,674
2,174
Reductions:    
Principal payments and other(a)
 1,119
1,245
 766
1,119
Charge-offs 354
561
 301
354
Returned to performing status 1,057
1,121
 657
1,057
Foreclosures and other liquidations 217
285
 192
217
Total reductions 2,747
3,212
 1,916
2,747
Net changes (573)(659) (242)(573)
Ending balance $3,636
$4,161
 $3,219
$3,636
(a)Other reductions includes loan sales.
Active and suspended foreclosure: ForRefer to Note 11 for information on loans that were in the process of active or suspended foreclosure, refer to Note foreclosure.11.

Credit card
Total credit card loans decreasedincreased from December 31, 2017 due to2018 reflecting increased sales volumes from existing customers and new account growth, partially offset by the impact of seasonality. The September 30, 20182019 30+ day delinquency rate seasonally decreased to 1.75% from 1.80% at December 31, 2017, and the September 30, 2018 90+ day delinquency rate decreasedrates of 1.84% and 0.90%, respectively, were relatively flat compared to 0.85% from 0.92% atthe December 31, 2017, in line with expectations.2018 30+ and 90+ day delinquency rates of 1.83% and 0.92%, respectively. Net charge-offs increased for the three and nine months ended September 30, 20182019 when compared with the same periodsperiod in the prior year as expected, primarily due to the seasoning of more recent vintagesloan growth, in line with higher loss rates, as anticipated given underwriting standards at the time of origination.expectations.
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 toreduces interest income, for the estimated uncollectible portion of accrued and billed interest and fee income.
Geographic and FICO composition of credit card loans
ForRefer to Note 11 for information on the geographic and FICO composition of the Firm’s credit card loans, refer to Note 11.loans.
Modifications of credit card loans
At September 30, 20182019 and December 31, 2017,2018, the Firm had $1.3$1.4 billion and $1.2$1.3 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 backRefer to their pre-modification payment terms because the cardholder did not comply with the modified payment terms.
ForNote 11 for additional information about loan modification programs to borrowers, refer to Note 11.borrowers.

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 qualityperformance of the wholesale portfolio was stableremained favorable for the nine months ended September 30, 2018,2019, characterized by continued low levels of criticized exposure, nonaccrual loans and charge-offs. Refer to the industry discussion on pages 64–6662–64 for further information. Retained loans increased across all wholesale lines of business, predominantlyLoans held-for-sale decreased, driven by CIB, including loans to financial institution and commercial and industrial clients, anda loan syndication in AWM due to an increase in loans to Wealth Management clients globally.CIB. 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, andCorporate. It excludes all exposure managed by CCB.CCB, scored prime mortgage and scored home equity loans held in AWM and prime mortgage loans held in Corporate.
Wholesale credit portfolio
Credit exposure 
Nonperforming(c)
Credit exposure 
Nonperforming(c)
(in millions)Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
Loans retained$423,837
$402,898
 $994
$1,734
$437,507
$439,162
 $1,470
$1,150
Loans held-for-sale3,551
3,099
 14
—
5,750
11,877
 86
—
Loans at fair value2,987
2,508
 —
—
5,760
3,151
 176
220
Loans430,375
408,505
 1,008
1,734
Loans – reported449,017
454,190
 1,732
1,370
Derivative receivables60,062
56,523
 90
130
55,577
54,213
 26
60
Receivables from customers and other(a)
25,982
26,139
 —
—
32,218
30,063
 —
—
Total wholesale credit-related assets516,419
491,167
 1,098
1,864
536,812
538,466
 1,758
1,430
Lending-related commitments397,316
370,098
 252
731
395,619
387,813
 446
469
Total wholesale credit exposure$913,735
$861,265
 $1,350
$2,595
$932,431
$926,279
 $2,204
$1,899
Credit derivatives used in credit portfolio management activities(b)
$(14,206)$(17,609) $—
$—
$(15,031)$(12,682) $—
$—
Liquid securities and other cash collateral held against derivatives(16,943)(16,108) NA
NA
(15,482)(15,322) NA
NA
(a)Receivables from customers and other include $26.0$32.2 billion and $30.1 billion of prime brokerage-related held-for-investment margin loanscustomer receivables at both September 30, 2018,2019, and December 31, 2017,2018, respectively, to prime brokerage customers in CIB and AWM; these are classified in accrued interest and accounts receivable on the Consolidated balance sheets.
(b)Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. For additional information, referRefer to Credit derivatives on page 68,66 and Note 4.4 for additional information.
(c)Excludes assets acquired in loan satisfactions.

The following tables present the maturity and ratings profiles of the wholesale credit portfolio as of September 30, 2018,2019, and December 31, 2017.2018. 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. ForRefer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for additional information on wholesale loan portfolio risk ratings, refer to Note 12 of JPMorgan Chase’s 2017 Annual Report.ratings.
Wholesale credit exposure – maturity and ratings profileWholesale credit exposure – maturity and ratings profile     Wholesale credit exposure – maturity and ratings profile     
Maturity profile(d)
 Ratings profile
Maturity profile(d)
 Ratings profile
Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IGDue in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
September 30, 2018
(in millions, except ratios)
 AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below
September 30, 2019
(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$136,832
$184,166
$102,839
$423,837
 $324,343
 $99,494
$423,837
77% $337,298
 $100,209
Derivative receivables 60,062
    60,062
  55,577
    55,577
 
Less: Liquid securities and other cash collateral held against derivatives (16,943)    (16,943)  (15,482)    (15,482) 
Total derivative receivables, net of all collateral11,650
12,637
18,832
43,119
 34,602
 8,517
43,119
80
8,332
8,263
23,500
40,095
 32,535
 7,560
40,095
81
Lending-related commitments92,332
291,650
13,334
397,316
 297,286
 100,030
397,316
75
75,484
307,093
13,042
395,619
 291,144
 104,475
395,619
74
Subtotal240,814
488,453
135,005
864,272
 656,231
 208,041
864,272
76
216,704
515,233
141,284
873,221
 660,977
 212,244
873,221
76
Loans held-for-sale and loans at fair value(a)
 6,538
    6,538
  11,510
    11,510
 
Receivables from customers and other 25,982
    25,982
  32,218
    32,218
 
Total exposure – net of liquid securities and other cash collateral held against derivatives $896,792
    $896,792
  $916,949
    $916,949
 
Credit derivatives used in credit portfolio management activities(b)(c)
$(1,586)$(7,053)$(5,567)$(14,206) $(12,537) $(1,669)$(14,206)88%$(864)$(8,013)$(6,154)$(15,031) $(13,606) $(1,425)$(15,031)91%
Maturity profile(d)
 Ratings profile
Maturity profile(d)
 Ratings profile
Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IGDue in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
December 31, 2017
(in millions, except ratios)		 AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below
December 31, 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$121,643
$177,033
$104,222
$402,898
 $311,681
 $91,217
$402,898
77% $339,729
 $99,433
Derivative receivables 56,523
    56,523
  54,213
    54,213
 
Less: Liquid securities and other cash collateral held against derivatives (16,108)    (16,108)  (15,322)    (15,322) 
Total derivative receivables, net of all collateral9,882
10,463
20,070
40,415
 32,373
 8,042
40,415
80
11,038
9,169
18,684
38,891
 31,794
 7,097
38,891
82
Lending-related commitments80,273
275,317
14,508
370,098
 274,127
 95,971
370,098
74
79,400
294,855
13,558
387,813
 288,724
 99,089
387,813
74
Subtotal211,798
462,813
138,800
813,411
 618,181
 195,230
813,411
76
228,896
500,998
135,972
865,866
 660,247
 205,619
865,866
76
Loans held-for-sale and loans at fair value(a)
 5,607
    5,607
  15,028
    15,028
 
Receivables from customers and other 26,139
    26,139
  30,063
    30,063
 
Total exposure – net of liquid securities and other cash collateral held against derivatives $845,157
    $845,157
  $910,957
    $910,957
 
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%$(447)$(9,318)$(2,917)$(12,682) $(11,213) $(1,469)$(12,682)88%
(a)Represents loans held-for-sale, primarily related to syndicated loans and loans transferred from the retained portfolio, and loans at fair value.
(b)These derivatives do not qualify for hedge accounting under U.S. GAAP.
(c)The notional amounts are presented on a net basis by underlying reference entity and the ratings profile shown is based on the ratings of the reference entity on which protection has been purchased. Predominantly all of the credit derivatives entered into by the Firm where it has purchased protection used in credit portfolio management activities are executed with investment-grade counterparties.
(d)The maturity profile of retained loans, lending-related commitments and derivative receivables is based on the remaining contractual maturity. Derivative contracts that are in a receivable position at September 30, 2018,2019, may become payable prior to maturity based on their cash flow profile or changes in market conditions.


Wholesale credit exposure – industry exposures
The Firm focuses on the management and diversification of its industry exposures, and pays particular attention to industries with actual or potential credit concerns. Exposures deemed criticized align with the U.S. banking regulators’ definition of criticized exposures, which consist of the special mention, substandard and doubtful
 
categories. The total criticized component of the portfolio, excluding loans held-for-sale and loans at fair value, was $11.2$12.8 billion at September 30, 2018,2019, compared with $15.6$12.1 billion at December 31, 2017.2018. The decreaseincrease was largely driven by select names within Oil & Gas, includingclient downgrades across a loan sale.number of sectors.
Below are summaries of the Firm’s exposures as of September 30, 2018,2019, and December 31, 2017.2018. The industry of risk category is generally based on the client or counterparty’s primary business activity. ForRefer to Note 4 of JPMorgan Chase’s 2018 Form 10-K for additional information on industry concentrations, refer to Note 4 of JPMorgan Chase’s 2017 Annual Report.concentrations.

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(g)
Liquid securities
and other cash collateral held against derivative
receivables
  Noninvestment-grade  Noninvestment-grade
As of or for the nine months ended
Credit exposure(e)
Investment- grade Noncriticized Criticized performingCriticized nonperforming
Credit exposure(f)
Investment- grade Noncriticized Criticized performingCriticized nonperforming
September 30, 2018
September 30, 2019
(in millions)
Credit exposure(e)
Investment- grade Noncriticized Criticized performingCriticized nonperforming30 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables
Credit exposure(f)
Investment- grade Noncriticized Criticized performingCriticized nonperforming30 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(g)
Liquid securities
and other cash collateral held against derivative
receivables
Real Estate
Individuals and Individual Entities(b)
Consumer & Retail89,751
58,429
 29,438
 1,769
115
98,445
56,815
 39,387
 2,086
157
Technology, Media &
Telecommunications		74,286
48,676
 23,560
 2,005
45
57,127
33,754
 20,723
 2,509
141
Industrials57,810
38,374
 18,202
 1,052
182
118
—
(146)(24)57,085
38,511
 17,203
 1,222
149
158
30
(551)(17)
Banks & Finance Cos53,185
36,764
 15,979
 378
64
27
—
(832)(2,683)
Asset Managers50,119
44,006
 6,096
 4
13
26
—
—
(5,201)
Healthcare53,952
37,912
 15,223
 788
29
22
(4)—
(134)48,041
36,641
 10,422
 891
87
40
6
(230)(177)
Banks & Finance Cos52,194
37,491
 14,376
 323
4
27
—
(622)(3,794)
Oil & Gas45,205
24,985
 18,236
 1,641
343
—
33
(349)(5)44,007
23,882
 18,615
 635
875
9
43
(445)(12)
Asset Managers41,951
36,286
 5,646
 5
14
11
—
—
(5,752)
Utilities28,944
24,312
 4,321
 158
153
—
38
(199)(74)29,709
23,543
 5,806
 184
176
10
37
(387)(75)
State & Municipal Govt(b)
26,381
25,772
 609
 —
—
16
(1)(20)(16)
State & Municipal Govt(c)
26,806
26,287
 519
 —
—
13
—
—
(51)
Chemicals & Plastics16,870
11,311
 5,490
 69
—
1
—
(10)—
Central Govt18,935
18,778
 104
 53
—
3
—
(8,688)(1,972)16,685
16,264
 421
 —
—
1
—
(8,527)(2,836)
Automotive17,385
9,677
 7,398
 300
10
1
—
(226)—
16,430
10,053
 5,978
 399
—
6
—
(172)—
Chemicals & Plastics17,353
11,108
 6,227
 18
—
1
—
(25)—
Metals & Mining15,049
8,396
 6,280
 359
14
—
(1)(204)(8)
Transportation16,225
10,058
 5,622
 482
63
45
6
(32)(51)14,969
9,196
 5,356
 317
100
37
4
(36)(38)
Metals & Mining14,320
7,262
 6,768
 247
43
5
—
(278)(3)
Insurance13,704
10,323
 3,342
 —
39
—
—
(37)(2,513)13,365
10,517
 2,824
 19
5
—
—
(36)(2,062)
Financial Markets Infrastructure5,697
5,555
 142
 —
—
—
—
—
(26)5,775
5,640
 135
 —
—
—
—
—
(7)
Securities Firms4,599
3,129
 1,470
 —
—
—
—
(230)(674)4,418
2,789
 1,605
 24
—
—
—
(49)(387)
All other(c)
161,470
144,967
 16,124
 213
166
1,111
17
(2,379)(1,881)
All other(d)
73,510
70,286
 2,892
 330
2
20
7
(2,634)(1,087)
Subtotal$881,215
$670,864
 $199,120
 $9,895
$1,336
$1,478
$119
$(14,206)$(16,943)$888,703
$674,831
 $201,025
 $10,905
$1,942
$978
$236
$(15,031)$(15,482)
Loans held-for-sale and loans at fair value6,538
      11,510
      
Receivables from customers and other25,982
     32,218
     
Total(d)
$913,735
     
Total(e)
$932,431
     

(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(g)
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(f)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming
December 31, 2017
December 31, 2018
(in millions)
Credit exposure(e)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(f)
Liquid securities
and other cash collateral held against derivative
receivables
Credit exposure(f)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(g)
Liquid securities
and other cash collateral held against derivative
receivables
Real Estate
Individuals and Individual Entities(b)
Consumer & Retail87,679
55,737

29,619

1,791
532
94,815
60,678

31,901

2,033
203
Technology, Media & Telecommunications59,274
36,510
 20,453
 2,258
53
72,646
46,334
 24,081
 2,170
61
Industrials55,272
37,198

16,770

1,159
145
150
(1)(196)(21)58,528
38,487

18,594

1,311
136
171
20
(207)(29)
Banks & Finance Cos49,920
34,120
 15,496
 299
5
11
—
(575)(2,290)
Asset Managers42,807
36,722

6,067

4
14
10
—
—
(5,829)
Healthcare55,997
42,643
 12,731
 585
38
82
(1)—
(207)48,142
36,687

10,625

761
69
23
(5)(150)(133)
Banks & Finance Cos49,037
34,654

13,767

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

14,854

4,046
987
22
71
(747)(1)42,600
23,356

17,451

1,158
635
6
36
(248)—
Asset Managers32,531
28,029

4,484

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

4,383

227
221
—
11
(160)(56)28,172
23,558

4,326

138
150
—
38
(142)(60)
State & Municipal Govt(b)
28,633
27,977

656

—
—
12
5
(130)(524)
State & Municipal Govt(c)
27,351
26,746

603

2
—
18
(1)—
(42)
Chemicals & Plastics16,035
11,490

4,427

118
—
4
—
—
—
Central Govt19,182
18,741

376

65
—
4
—
(10,095)(2,520)18,456
18,251
 124
 81
—
4
—
(7,994)(2,130)
Automotive14,820
9,321
 5,278
 221
—
10
1
(284)—
17,339
9,637

7,310

392
—
1
—
(125)—
Chemicals & Plastics15,945
11,107

4,764

74
—
4
—
—
—
Metals & Mining15,359
8,188

6,767

385
19
1
—
(174)(22)
Transportation15,797
9,870

5,302

527
98
9
14
(32)(131)15,660
10,508

4,699

393
60
21
6
(31)(112)
Metals & Mining14,171
6,989

6,822

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

2,981

—
80
1
—
(157)(2,195)12,639
9,777

2,830

—
32
—
—
(36)(2,080)
Financial Markets Infrastructure5,036
4,775

261

—
—
—
—
—
(23)7,484
6,746

738

—
—
—
—
—
(26)
Securities Firms4,113
2,559

1,553

1
—
—
—
(274)(335)4,558
3,099

1,459

—
—
—
—
(158)(823)
All other(c)
147,900
134,110

13,283

260
247
901
8
(2,817)(1,600)
All other(d)
68,284
64,664

3,606

12
2
2
2
(1,581)(804)
Subtotal$829,519
$632,565

$181,349

$13,010
$2,595
$1,524
$119
$(17,609)$(16,108)$881,188
$673,617

$195,442

$10,450
$1,679
$1,096
$155
$(12,682)$(15,322)
Loans held-for-sale and loans at fair value5,607

















15,028

















Receivables from customers and other26,139


















30,063


















Total(d)
$861,265
     
Total(e)
$926,279
     
(a)The industry rankings presented in the table as of December 31, 2017,2018, are based on the industry rankings of the corresponding exposures at September 30, 2018,2019, not actual rankings of such exposures at December 31, 2017.2018.
(b)
Individuals and Individual Entities predominantly consists of Wealth Management clients within AWM and includes exposure to personal investment companies and personal and testamentary trusts.
(c)In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at September 30, 2018,2019, and December 31, 2017,2018, noted above, the Firm held: $9.5$6.9 billion and $9.8$7.8 billion, respectively, of trading securities; $38.1$31.1 billion and $32.3$37.7 billion, respectively, of AFS securities; and $4.8 billion and $14.4 billion, respectively,at both periods of held-to-maturity (“HTM”) securities, issued by U.S. state and municipal governments. For further information, referRefer to Note 2 and Note 9.
(c)All other includes: individuals (predominantly Wealth Management clients within AWM), SPEs, and private education and civic organizations, representing approximately 59%, 38%, and 3%, respectively, at September 30, 2018, and 59%, 37%, and 4%, respectively, at December 31, 2017.9 for further information.
(d)All other includes: SPEs and Private education and civic organizations, representing approximately 91% and 9%, respectively, at September 30, 2019, and 92% and 8%, respectively, at December 31, 2018.
(e)
Excludes cash placed with banks of $410.5 bi$248.8 billionllion and $421.0$268.1 billion, at September 30, 2018,2019, and December 31, 2017,2018, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.
(e)(f)Credit exposure is net of risk participations and excludes the benefit of credit derivatives used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables.
(f)(g)Represents the net notional amounts of protection purchased and sold through credit derivatives used to manage the credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. The All other category includes purchased credit protection on certain credit indices.


Real Estate
Presented below is additional information on the Real Estate industry, to which the Firm has significant exposure.
Real Estate exposure increased $1.6$4.1 billion to $141.1$147.5 billion duringfor the nine months ended September 30, 2018, while2019, and the investment-gradeinvestment grade percentage of the portfolio remained relatively flat at 83%. ForRefer to Note 11 for further information on Real Estate loans, refer to Note 11.loans.
September 30, 2018 September 30, 2019 
(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)
$85,410
 $14
 $85,424
 89% 93% $85,666
 $86
 $85,752
 91% 92% 
Other55,527
 102
 55,629
 75
 65
 60,968
 735
 61,703
 71
 59
 
Total Real Estate Exposure(b)
140,937
 116
 141,053
 83
 82
 146,634
 821
 147,455
 83
 79
 
                    
December 31, 2017 December 31, 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)
$84,635
 $34
 $84,669
 89% 92% $85,683
 $33
 $85,716
 89% 92% 
Other54,620
 120
 54,740
 74
 66
 57,469
 131
 57,600
 72
 63
 
Total Real Estate Exposure(b)
139,255
 154
 139,409
 83
 82
 143,152
 164
 143,316
 82
 81
 
(a)Multifamily exposure is largely in California.
(b)Real Estate exposure is predominantly secured; unsecured exposure is predominantly investment-grade.
(c)Represents drawn exposure as a percentage of credit exposure.
Loans
In the normal course of its wholesale business, the Firm provides loans to a variety of clients, ranging from large corporate and institutional clients to high-net-worth individuals. ForRefer to Note 11 for a further discussion on loans, including information on credit quality indicators and sales of loans, refer to Note 11.loans.
The following table presents the change in the nonaccrual loan portfolio for the nine months ended September 30, 20182019 and 2017.2018.
Wholesale nonaccrual loan activity
Nine months ended September 30,
(in millions)		 2018
2017
 2019
2018
Beginning balance $1,734
$2,063
 $1,370
$1,734
Additions 570
993
 1,907
570
Reductions:    
Paydowns and other 541
997
 1,097
541
Gross charge-offs 251
155
 235
251
Returned to performing status 217
184
 25
217
Sales 287
248
 188
287
Total reductions 1,296
1,584
 1,545
1,296
Net changes (726)(591) 362
(726)
Ending balance $1,008
$1,472
 $1,732
$1,008
 
The following table presents net charge-offs/recoveries, which are defined as gross charge-offs less recoveries, for the three and nine months ended September 30, 20182019 and 2017.2018. The amounts in the table below do not include gains or losses from sales of nonaccrual loans.
Wholesale net charge-offs/(recoveries)Wholesale net charge-offs/(recoveries)Wholesale net charge-offs/(recoveries)  
(in millions, except ratios)Three months ended
September 30,		 Nine months ended
September 30,		Three months ended
September 30,		 Nine months ended
September 30,
2018
2017
 2018
2017
2019
2018
 2019
2018
Loans – reported      
Average loans retained$420,597
$395,420
 $413,537
$390,062
$433,744
$420,597
 $434,434
$413,537
Gross charge-offs23
55
 264
154
120
23
 270
264
Gross recoveries(70)(12) (146)(81)(12)(70) (34)(146)
Net charge-offs/(recoveries)(47)43
 118
73
108
(47) 236
118
Net charge-off/(recovery) rate(0.04)%0.04% 0.04%0.03%0.10%(0.04)% 0.07%0.04%

Lending-related commitments
The Firm uses lending-related financial instruments, such as commitments (including revolving credit facilities) and guarantees, to address the financing needs of its clients. The contractual amounts of these financial instruments represent the maximum possible credit risk should the clients draw down on these commitments or the Firm fulfillsfulfill its obligations under these guarantees, and the clients subsequently fail to perform according to the terms of these contracts. Most of these commitments and guarantees are refinanced, extended, cancelled, or expire without being drawn upon or a default occurring. In the Firm’s view, the total contractual amount of these wholesale lending-related commitments is not representative of the Firm’s expected future credit exposure or funding requirements. ForRefer to Note 22 for further information on wholesale lending-related commitments, refer to Note 20 .commitments.
Derivative contracts
Derivatives enable clients and counterparties to manage risks including credit risk and risks arising from fluctuations in interest rates, foreign exchange, equities, and commodities. The Firm makes markets in derivatives in order to meet these needs and uses derivatives to manage certain risks associated with net open risk positions from its market-making activities, including the counterparty credit risk arising from derivative receivables. The Firm also uses derivative instruments to manage its own credit and other market risk exposure. ForRefer to Note 4 for a further discussion of derivative contracts, refer to Note 4.contracts.
The following table summarizes the net derivative receivables for the periods presented.
Derivative receivables  
(in millions)Derivative receivables
September 30,
2018
December 31,
2017
Interest rate$23,397
$24,673
Credit derivatives582
869
Foreign exchange17,043
16,151
Equity10,104
7,882
Commodity8,936
6,948
Total, net of cash collateral60,062
56,523
Liquid securities and other cash collateral held against derivative receivables(a)
(16,943)(16,108)
Total, net of collateral$43,119
$40,415
Derivative receivables  
(in millions)September 30,
2019
December 31,
2018
Total, net of cash collateral55,577
54,213
Liquid securities and other cash collateral held against derivative receivables(a)
(15,482)(15,322)
Total, net of collateral$40,095
$38,891
(a)Includes collateral related to derivative instruments where appropriate legal opinions have not been either sought or obtained with respect to master netting agreements.
 
The fair value of derivative receivables reported on the Consolidated balance sheets were $60.1$55.6 billion and $56.5$54.2 billion at September 30, 2018,2019, and December 31, 2017,2018, respectively. 
Derivative receivables represent the fair value of the derivative contracts after giving effect to legally enforceable master netting agreements and cash collateral held by the Firm. However, in management’s view, the appropriate measure of current credit risk should also take into consideration additional liquid securities (primarily U.S. government and agency securities and other group of seven nations (“G7”) government securities) and other cash collateral held by the Firm aggregating $16.9$15.5 billion and $16.1$15.3 billion at September 30, 2018,2019, and December 31, 2017,2018, 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-agencygovernment 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 transactionscontracts 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. ForRefer to Note 4 for additional information on the Firm’s use of collateral agreements, refer to Note 4.agreements.


















The following table summarizes the ratings profile of the Firm’s derivative receivables, including credit derivatives, net of all collateral, at the dates indicated. The ratings scale is based on the Firm’s internal ratings, which generally correspond to the ratings as assigned by S&P and Moody’s.
Ratings profile of derivative receivables          
September 30, 2018 December 31, 2017
Rating equivalent
(in millions, except ratios)
Exposure net of collateral% of exposure net of collateral Exposure net of collateral% of exposure net of collateral
Rating equivalent
September 30, 2019 December 31, 2018

(in millions, except ratios)
Exposure net of all collateral% of exposure net of all collateral Exposure net of all collateral% of exposure net of all collateral
AAA/Aaa to AA-/Aa3$13,208
31% $11,529
29%$10,663
27% $11,831
31%
A+/A1 to A-/A37,568
17
 6,919
17
6,106
15
 7,428
19
BBB+/Baa1 to BBB-/Baa313,826
32
 13,925
34
15,766
39
 12,536
32
BB+/Ba1 to B-/B37,744
18
 7,397
18
7,116
18
 6,373
16
CCC+/Caa1 and below773
2
 645
2
444
1
 723
2
Total$43,119
100% $40,415
100%$40,095
100% $38,891
100%

As previously noted, the Firm uses collateral agreements to mitigate counterparty credit risk. The percentage of the Firm’s over-the-counter derivatives transactionsderivative contracts subject to collateral agreements — excluding foreign exchange spot trades, which are not typically covered by collateral agreements due to their short maturity and centrally cleared trades that are settled daily — was approximately 90% at both September 30, 2018,2019, and December 31, 2017.2018.
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)September 30,
2018
 December 31,
2017
September 30,
2019
 December 31,
2018
Credit derivatives used to manage:      
Loans and lending-related commitments$1,060
 $1,867
$1,726
 $1,272
Derivative receivables13,146
 15,742
13,305
 11,410
Credit derivatives used in credit portfolio management activities$14,206
 $17,609
$15,031
 $12,682
(a)Amounts are presented net, considering the Firm’s net protection purchased or sold with respect to each underlying reference entity or index.
ForRefer to Credit derivatives in Note 4 of this Form 10-Q and Note 5 of JPMorgan Chase’s 2018 Form 10-K for further information on credit derivatives and derivatives used in credit portfolio management activities, refer to Credit derivatives in Note 4 of this Form 10-Q, and Note 5 of JPMorgan Chase’s 2017 Annual Report.activities.

ALLOWANCE FOR CREDIT LOSSES
The Firm’s allowance for credit losses covers the retained consumer and wholesale loan portfolios, as well as the Firm’s wholesale and certain consumer lending-related commitments.
ForRefer to Critical Accounting Estimates Used by the Firm on pages 76–77 and Note 12 of this Form 10-Q, and Critical Accounting Estimates Used by the Firm on pages 141-143 and Note 13 of JPMorgan Chase’s 2018 Form 10-K for further information on the components of the allowance for credit losses and related management judgments, refer to Critical Accounting Estimates Used by the Firm on pages 79–81 and Note 12 of this Form 10-Q, and Critical Accounting Estimates Used by the Firm on pages 138–140 and Note 13 of JPMorgan Chase’s 2017 Annual Report.judgments.
At least quarterly, the allowance for credit losses is reviewed by the CRO, the CFO and the Controller of the Firm. As of September 30, 2018,2019, JPMorgan Chase deemed the allowance for credit losses to be appropriate and sufficient to absorb probable credit losses inherent in the portfolio.





 
The consumer allowance for credit losses decreased compared with December 31, 2017 reflecting:2018, driven by:
•
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
a $550 million reduction in the CCB allowance for loan losses, which includes $400 million in the PCI residential real estate portfolio, reflecting continued improvement in home prices and delinquencies; $100 million in the non credit-impaired residential real estate portfolio; and $50 million in the business banking portfolio; as well as
a $132 million reduction for write-offs of PCI loans,
predominantly offset by
a $400 million addition to the allowance for loan losses in the credit card portfolio reflecting higher loss rates, as newer vintages season and become a larger part of the portfolio and loan growth; as well as
a $170 million addition in the credit card portfolio, due to loan growth and higher loss rates, as anticipated, and
a reduction in the wholesale allowance primarilyfor credit losses largely driven by loan sales relatedselect C&I client downgrades.
Refer to a single name in the Oil & Gas portfolio in the first quarter of 2018Consumer Credit Portfolio on pages 56–59, Wholesale Credit Portfolio on pages 60–66 and other net portfolio activity.
ForNote 11 for additional information on the consumer and wholesale credit portfolios, refer to Consumer Credit Portfolio on pages 57–61 and Note 11, and Wholesale Credit Portfolio on pages 62–68.portfolios.


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 20172019 2018
Nine months ended September 30,
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
(in millions, except ratios)  
Allowance for loan losses      
Beginning balance at January 1,$4,579
$4,884
$4,141
$13,604
 $5,198
$4,034
$4,544
$13,776
$4,146
$5,184
$4,115
$13,445
 $4,579
$4,884
$4,141
$13,604
Gross charge-offs776
3,777
264
4,817
 1,479
3,344
154
4,977
702
4,050
270
5,022
 776
3,777
264
4,817
Gross recoveries(681)(370)(146)(1,197) (478)(295)(81)(854)(420)(433)(34)(887) (681)(370)(146)(1,197)
Net charge-offs(a)
95
3,407
118
3,620
 1,001
3,049
73
4,123
282
3,617
236
4,135
 95
3,407
118
3,620
Write-offs of PCI loans(b)(a)
151
—
—
151
 66
—
—
66
132
—
—
132
 151
—
—
151
Provision for loan losses(152)3,557
(111)3,294
 653
3,699
(401)3,951
(265)4,017
296
4,048
 (152)3,557
(111)3,294
Other1
—
—
1
 (2)—
3
1
—
(1)10
9
 1
—
—
1
Ending balance at September 30,$4,182
$5,034
$3,912
$13,128
 $4,782
$4,684
$4,073
$13,539
$3,467
$5,583
$4,185
$13,235
 $4,182
$5,034
$3,912
$13,128
Impairment methodology      
Asset-specific(c)(b)
$204
$421
$280
$905
 $271
$376
$363
$1,010
$145
$488
$342
$975
 $204
$421
$280
$905
Formula-based2,154
4,613
3,632
10,399
 2,266
4,308
3,710
10,284
2,066
5,095
3,843
11,004
 2,154
4,613
3,632
10,399
PCI1,824
—
—
1,824
 2,245
—
—
2,245
1,256
—
—
1,256
 1,824
—
—
1,824
Total allowance for loan losses$4,182
$5,034
$3,912
$13,128
 $4,782
$4,684
$4,073
$13,539
$3,467
$5,583
$4,185
$13,235
 $4,182
$5,034
$3,912
$13,128
Allowance for lending-related commitments      
Beginning balance at January 1,$33
$—
$1,035
$1,068
 $26
$—
$1,052
$1,078
$33
$—
$1,022
$1,055
 $33
$—
$1,035
$1,068
Provision for lending-related commitments—
—
29
29
 7
—
24
31
—
—
110
110
 —
—
29
29
Other—
—
—
—
 —
—
—
—
—
—
—
—
 —
—
—
—
Ending balance at September 30,$33
$—
$1,064
$1,097
 $33
$—
$1,076
$1,109
$33
$—
$1,132
$1,165
 $33
$—
$1,064
$1,097
Impairment methodology      
Asset-specific$—
$—
$71
$71
 $—
$—
$220
$220
$—
$—
$135
$135
 $—
$—
$71
$71
Formula-based33
—
993
1,026
 33
—
856
889
33
—
997
1,030
 33
—
993
1,026
Total allowance for lending-related commitments(d)(c)
$33
$—
$1,064
$1,097
 $33
$—
$1,076
$1,109
$33
$—
$1,132
$1,165
 $33
$—
$1,064
$1,097
Total allowance for credit losses$4,215
$5,034
$4,976
$14,225
 $4,815
$4,684
$5,149
$14,648
$3,500
$5,583
$5,317
$14,400
 $4,215
$5,034
$4,976
$14,225
Memo:      
Retained loans, end of period$375,958
$147,856
$423,837
$947,651
 $369,413
$141,200
$398,569
$909,182
$331,809
$159,571
$437,507
$928,887
 $375,958
$147,856
$423,837
$947,651
Retained loans, average374,298
143,931
413,537
931,766
 365,359
138,749
390,062
894,170
355,865
154,367
434,434
944,666
 374,298
143,931
413,537
931,766
PCI loans, end of period25,209
—
3
25,212
 31,821
—
3
31,824
21,290
—
—
21,290
 25,209
—
3
25,212
Credit ratios      
Allowance for loan losses to retained loans1.11%3.40%0.92%1.39% 1.29%3.32%1.02%1.49%1.04%3.50%0.96%1.42% 1.11%3.40%0.92%1.39%
Allowance for loan losses to retained nonaccrual loans(e)
115
NM
394
284
 115
NM
277
241
Allowance for loan losses to retained nonaccrual loans(d)
108
NM
285
282
 115
NM
394
284
Allowance for loan losses to retained nonaccrual loans excluding credit card115
NM
394
175
 115
NM
277
157
108
NM
285
163
 115
NM
394
175
Net charge-off rates(a)
0.03
3.16
0.04
0.52
 0.37
2.94
0.03
0.62
0.11
3.13
0.07
0.59
 0.03
3.16
0.04
0.52
Credit ratios, excluding residential real estate PCI loans      
Allowance for loan losses to retained loans0.67
3.40
0.92
1.23
 0.75
3.32
1.02
1.29
0.71
3.50
0.96
1.32
 0.67
3.40
0.92
1.23
Allowance for loan losses to retained nonaccrual loans(e)
65
NM
394
244
 61
NM
277
201
Allowance for loan losses to retained nonaccrual loans(d)
69
NM
285
256
 65
NM
394
244
Allowance for loan losses to retained nonaccrual loans excluding credit card65
NM
394
135
 61
NM
277
117
69
NM
285
136
 65
NM
394
135
Net charge-off rates(a)
0.04%3.16%0.04%0.54% 0.40%2.94%0.03%0.64%0.11%3.13%0.07%0.60% 0.04%3.16%0.04%0.54%
Note: In the table above, the financial measures which exclude the impact of PCI loans are non-GAAP financial measures.
(a)For the nine months ended September 30, 2017, excluding net charge-offs of $467 million related to the student loan portfolio transfer, the net charge-off rate for Consumer, excluding credit card would have been 0.20%; total Firm would have been 0.55%; Consumer, excluding credit card and PCI loans would have been 0.22%; and total Firm, excluding PCI would have been 0.57%.
(b)Write-offs of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool.
(c)(b)Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a TDR. The asset-specific credit card allowance for loan losses modified in a TDR is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.
(d)(c)The allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets.
(e)(d)
(d)The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.


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





INVESTMENT PORTFOLIO RISK MANAGEMENT
Investment portfolio risk is the risk associated with the loss of principal or a reduction in expected returns on investments arising from the investment securities portfolio held predominantly by Treasury and CIO in connection with the Firm’s balance sheet or asset-liability management objectives or from principal investments managed in variousthe LOBs and Corporate 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 minimizedmitigated given that Treasury and CIO generallysubstantially invest in high-quality securities. At September 30, 2018,2019, the Treasury and CIO investment securities portfolio was $229.9$392.4 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). ForRefer to Corporate segment results on pages 42–43 and Note 9 for further information on the investment securities portfolio, referportfolio. Refer to Corporate segment resultsMarket Risk Management on pages 40–41 and Note 9. For70–74 for further information on the market risk inherent in the portfolio, referportfolio. Refer to MarketLiquidity Risk Management on pages 73–77. For50–54 for further information on related liquidity risk, refer to Liquidity Risk on pages 49–54.risk.

 
Principal investment risk
Principal investments are typically private non-traded financial instruments representing ownership or other forms of junior capital. Principal investments coverspan multiple asset classes and are made either in stand-alone investing businesses or as part of a broader business platform. Increasingly, In general, new principal investments areinclude tax-oriented investments, as well as investments made to enhance or accelerate LOB and Corporate strategic business initiatives. The Firm’s principal investments are managed by the various LOBs and Corporate and are reflected within thetheir respective LOB financial results. Effective January 1, 2018, the Firm adopted new accounting guidance related to the recognition and measurement of financial assets, which requires fair value adjustments upon observable price changes to certain equity investments previously held at cost in the principal investment portfolios. For additional information, refer to Note 2.
As of September 30, 20182019 and December 31, 2017,2018, the aggregate carrying values of the principal investment portfolios were $20.1$23.3 billion and $19.5$22.2 billion, respectively, which included tax-oriented investments (e.g., affordable housing and alternative energy investments) of $13.7$16.7 billion and $14.0$16.6 billion, respectively, and private equity, various debt and equity instruments,, and real assets of $6.4$6.6 billion and $5.5$5.6 billion, respectively.
ForRefer to page 123 of JPMorgan Chase’s 2018 Form 10-K for a discussion of the Firm’s Investment Portfolio Risk Management governance and oversight, refer to page 120 of JPMorgan Chase’s 2017 Annual Report.oversight.


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. ForRefer to Market Risk Management on pages 124–131 of JPMorgan Chase’s 2018 Form 10-K for a discussion of the Firm’s Market Risk Management organization, tools used to measuremarket risk measurement, risk monitoring and control, and risk identification and classification, referpredominant business activities that give rise to Market Risk Management on pages 121-128 of JPMorgan Chase’s 2017 Annual Report.market risk.
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 normalthe current market environment. The Firm has a single VaR framework used as a basis for calculating Risk Management VaR and Regulatory VaR.
As The Firm’s Risk Management VaR is based on historical data, it iscalculated assuming a one-day holding period and an imperfectexpected tail-loss methodology which approximates a 95% confidence level. For risk management purposes, the Firm believes this methodology provides a daily measure of risk that is closely aligned to risk management decisions made by the lines of business and Corporate and, along with other market risk exposure and potential futurelosses. In addition, based on their reliance on available historical data, limited time horizons, and other factors, VaR measures, are inherently limited in their abilityprovides the appropriate information needed to measure certain risks andrespond 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.events. The Firm uses proxiescalculates separately a daily aggregated VaR in accordance with regulatory rules (“Regulatory VaR”), which is used to estimatederive 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, refer to Other risk measures on pages 126-128 of JPMorgan Chase’s 2017 Annual Report.Firm’s regulatory VaR-based capital requirements under Basel III.
 
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, referRefer to Estimations and Model Risk Management on page 137140 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for information regarding model reviews and approvals.
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 measureRefer to page 126 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. ForJPMorgan Chase’s 2018 Form 10-K for further information regarding VaR, including the inherent limitations, and the key differences between Risk Management VaR and Regulatory VaR, referVaR. Refer to page 123 of JPMorgan Chase’s 2017 Annual Report. ForBasel III Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website at:
(http://investor.shareholder.com/jpmorganchase/basel.cfm) 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), refer. Refer to Other risk measures on pages 129-131 of JPMorgan Chase’s Basel III Pillar 3 Regulatory Capital Disclosures reports, which are available on2018 Form 10-K for further information regarding nonstatistical market risk measures used by the Firm’s website at:
(https://jpmorganchaseco.gcs-web.com/financial-information/basel-pillar-3-us-lcr-disclosures).Firm.


The table below shows the results of the Firm’s Risk Management VaR measure using a 95% confidence level. VaR can vary significantly as positions change, market volatility fluctuates, and diversification benefits change.
Total VaR                  

















Three months ended Three months ended
September 30, 2018 June 30, 2018 September 30, 2017 September 30, 2019
June 30, 2019
September 30, 2018
(in millions) Avg.MinMax  Avg.MinMax  Avg.MinMax
  Avg.MinMax
 Avg.MinMax
 Avg.MinMax

CIB trading VaR by risk type                  

















Fixed income$30
 $25
 $37
 $31
 $26
 $36
 $28
 $24
 $31
 $37

$31

$46


$39

$33

$45


$30

$25

$37

Foreign exchange5
 3
 11
 6
 4
 10
 13
 6
 20
 6

4

8


7

5

12


5

3

11

Equities16
 13
 19
 15
 13
 18
 12
 11
 14
 22

19

27


25

14

31


16

13

19

Commodities and other9
 7
 11
 7
 5
 9
 6
 4
 8
 8

7

9


9

7

10


9

7

11

Diversification benefit to CIB trading VaR(27)
(a) 
 NM
(b) 
 NM
(b) 
 (27)
(a) 
 NM
(b) 
 NM
(b) 
 (31)
(a) 
 NM
(b) 
 NM
(b) 
(34)
(a) 
 NM
(b) 
 NM
(b) 

(36)
(a) 
 NM
(b) 
 NM
(b) 

(27)
(a) 
NM
(b) 
NM
(b) 
CIB trading VaR33
 27
(b) 
41
(b) 
 32
 26
(b) 
42
(b) 
 28
 24
(b) 
32
(b) 
39

33
(b) 
47
(b) 

44

34
(b) 
55
(b) 

33

27
(b) 
41
(b) 
Credit portfolio VaR3
 3
 4
 4
 3
 4
 5
 5
 6
 5

4

7


5

4

7


3

3

4

Diversification benefit to CIB VaR(3)
(a) 
 NM
(b) 
 NM
(b) 
 (3)
(a) 
 NM
(b) 
 NM
(b) 
 (3)
(a) 
NM
(b) 
NM
(b) 
(6)
(a) 
 NM
(b) 
 NM
(b) 

(5)
(a) 
NM
(b) 
NM
(b) 

(3)
(a) 
NM
(b) 
NM
(b) 
CIB VaR33
 28
(b) 
42
(b) 
 33
 26
(b) 
42
(b) 
 30
 25
(b) 
33
(b) 
38

33
(b) 
46
(b) 

44

35
(b) 
55
(b) 

33

28
(b) 
42
(b) 
                  




























CCB VaR1
 1
 2
 1
 1
 3
 2
 1
 3
 6

2

11


4

2

7


1

1

2

Corporate VaR13
 12
 14
 12
 10
 13
 3
 1
 3
 10

9

11


10

9

10


13

12

14

Diversification benefit to other VaR(1)
(a) 
 NM
(b) 
 NM
(b) 
 (1)
(a) 
 NM
(b) 
 NM
(b) 
 (1)
(a) 
NM
(b) 
NM
(b) 
(5)
(a) 
 NM
(b) 
 NM
(b) 

(5)
(a) 
NM
(b) 
NM
(b) 

(1)
(a) 
NM
(b) 
NM
(b) 
Other VaR13
 12
(b) 
14
(b) 
 12
 10
(b) 
14
(b) 
 4
 3
(b) 
5
(b) 
11

9
(b) 
15
(b) 

9

8
(b) 
11
(b) 

13

12
(b) 
14
(b) 
Diversification benefit to CIB and other VaR(11)
(a) 
 NM
(b) 
 NM
(b) 
 (10)
(a) 
 NM
(b) 
 NM
(b) 
 (4)
(a) 
NM
(b) 
NM
(b) 
(10)
(a) 
 NM
(b) 
 NM
(b) 

(7)
(a) 
NM
(b) 
NM
(b) 

(11)
(a) 
NM
(b) 
NM
(b) 
Total VaR$35
 $30
(b) 
$43
(b) 
 $35
 $28
(b) 
$44
(b) 
 $30
 $26
(b) 
$34
(b) 
$39

$35
(b) 
$46
(b) 

$46

$36
(b) 
$57
(b) 

$35

$30
(b) 
$43
(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, Corporate, and risk types. The maximum and minimum VaR for each portfolio may have occurred on different trading days than the components and consequently diversification benefit is not meaningful.
Quarter over quarter results
Average total VaR remained unchangeddecreased by $7 million for the threemonths ended September 30, 20182019 as compared with the prior quarter. There wasThis reflects a modest increasereduction in Commodities, offset by reductions inrisk across the Fixed Income exposure withinand Foreign Exchange risk types, as well as a decrease in the Equities risk type driven by certain CIB Trading VaR.investments, including Tradeweb.


 
Year over year results
Average total VaR increased by $5$4 million for the threemonths ended September 30, 2018,2019, compared with the same period in the prior year. The increase in average total VaR is primarily due to increased exposure in the Fixed Income risk type, as well as an increase in the Equities risk type in CIB driven by the inclusion of a Corporate private equity position that became publicly tradedTradeweb following the IPO in the fourthsecond quarter of 2017 and certain investments in CIB VaR.2019.
In addition, average CCB VaR can vary significantly as positions change, market volatility fluctuates, and diversification benefits change.has increased by $5 million, driven by mortgage servicing rights risk management activities.


VaR back-testing
The Firm evaluates the effectiveness of itsperforms daily VaR methodology bymodel 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 nine months ended September 30, 2018.2019. 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 CIB’s covered positions. The chart shows that forFor the nine months ended September 30, 2018,2019, the Firm observed five VaR back-testing exceptions and posted market risk-related gains on 113116 of the 194 days. TheFor the three months ended September 30, 2019, the Firm observed nothree VaR back-testing exceptions and posted market risk-related gains on 3835 of the 65 days for the three months ended September 30, 2018.66 days.
Daily Market Risk-Related Gains and Losses
vs. Risk Management VaR (1-day, 95% Confidence level)
Nine months ended September 30, 20182019
 
Market Risk-Related Gains and Losses
 
Risk Management VaR
chart-cb8b4ee367505588bfd.jpgchart-62dd8fa2647b59ecb55.jpg
First Quarter 20182019Second Quarter 20182019Third Quarter 20182019


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. Thedebt as well as from the investment securities portfolio. Refer to the table on page 125 of JPMorgan Chase’s 2018 Form 10-K for a summary by line of business and Corporate, identifying positions included in earnings-at-risk.
One way the Firm evaluates its structural interest rate risk exposureis through earnings-at-risk, which measures the extent to which changes in interest rates will affectearnings-at-risk. Earnings-at-risk estimates the Firm’s net interest income andrate exposure for a given interest rate-sensitive fees. Forrate scenario. It is presented as a summary by line of business, identifying positions included in earnings-at-risk, refersensitivity to the table on page 122 of JPMorgan Chase’s 2017 Annual Report.
The Firm generates a baseline, forwhich includes net interest income and certain interest rate-sensitive fees,rate sensitive fees. The baseline uses market interest rates and thenin the case of deposits, pricing assumptions. The Firm conducts simulations of changes to this baseline for interest rate-sensitive assets and liabilities denominated in U.S. dollars and other currencies (“non-U.S. dollar” currencies). This simulationThese simulations primarily includesinclude retained loans, deposits, deposits with banks, investment securities, long term debt and any related interest rate hedges, and excludesexclude other positions in risk management VaR and other sensitivity-based measures as described on page 122125 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K.
Earnings-at-risk scenarios estimate the potential change in thisto a net interest income baseline, over the following 12 months utilizing multiple assumptions. These scenarios include a parallel shift involving changes to both short-term and long-term rates by an equal amount; a steeper yield curve involving holding short-term rates constant and increasing long-term rates or decreasing short-term rates and holding long-term rates constant; and a flatter yield curve involving increasing short-term rates and holding long-term rates constant or holding short-term rates constant and decreasing long-term rates. These scenarios consider themany different factors, including:
The impact on exposures as a result of instantaneous changes in interest rates from baseline rates, as well as pricing sensitivities of deposits, optionality and changes in product mix. The scenarios include forecastedrates.
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 scenariothe interest rates used in the scenarios compared with underlying contractual rates, the time since origination, and other factors which are updated periodically based on historical experience.
•
The pricing sensitivity of deposits, using normalized deposit betas over the cycle. These normalized deposit betas represent the amount by which deposit rates paid could change upon a given change in market interest
rates. The pricing sensitivity of deposits in the baseline and scenarios use assumeddeposit rates paid which mayin these scenarios differ from actual deposit rates paid, particularly for retail deposits, due to timingrepricing 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. While a relevant measure of the Firm’s interest rate exposure, the earnings at risk analysis does not represent a forecast of the Firm’s net interest income (Refer to 2019 Outlook on page 8 for additional information).
The Firm’s U.S. dollar sensitivities are presented in the table below.
JPMorgan Chase’s 12-month earnings-at-risk sensitivity profiles
U.S. dollarInstantaneous change in rates
(in billions)+200 bps+100 bps-100 bps-200 bps
September 30, 2018$1.7
 $0.8
 $(1.9) NA
(a) 
December 31, 2017$2.4
 $1.7
 $(3.6) NA
(a) 
(in billions)September 30, 2019
 December 31, 2018
Parallel shift:   
+100 bps shift in rates$0.7
 $0.9
-100 bps shift in rates(2.6) (2.1)
Steeper yield curve:   
+100 bps shift in long-term rates0.9
 0.5
-100 bps shift in short-term rates(0.9) (1.2)
Flatter yield curve:   
+100 bps shift in short-term rates(0.2) 0.4
-100 bps shift in long-term rates(1.6) (0.9)
(a)
Given the current market interest rate environment, these downward parallel earnings-at-risk scenarios are not considered to be reasonably possible in the near term.
The change in the Firm’s U.S. dollar sensitivities as of September 30, 2019 compared to December 31, 2018 reflected updating the Firm’s baseline for lower short-term and long-term rates as well as the impact of changes in the Firm’s balance sheet. The Firm’s sensitivity to short-term rates is largelydecreased as 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 decreased by approximately $700 million and $900 million, respectively, whilechanges in the Firm’s net U.S. dollar sensitivity to 100 basis points instantaneous decrease in rates decreasedbalance sheet primarily offset by $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 interestlower rates. As higher interestThe Firm’s sensitivity to long-term rates are reflected inincreased primarily as a result of updating the Firm’s baselines, sensitivitiesbaseline to changes inreflect lower rates are expectedand is more impactful to be less significant.the downward scenario due to the Firm’s sensitivity to mortgage prepayments.
The Firm’s non-U.S. dollar sensitivities for an instantaneous increaseare presented in rates by 200 and 100 basis pointsthe table below.
(in billions)September 30, 2019
 December 31, 2018
Parallel shift:   
+100 bps shift in rates$0.5
 $0.5
Flatter yield curve:   
+100 bps shift in short-term rates0.5
 0.5
The results in a 12-month benefit to net interest income of approximately $800 millionand $500 million, respectively, at both September 30, 2018 and December 31, 2017. Thethe non-U.S. dollar sensitivities for an instantaneous decrease in rates by 200 and 100 basis points are not material to the Firm’s earnings-at-risk at September 30, 2018 and December 31, 2017.
Separately, another U.S. dollar interest rate scenario used by the Firm — involving a steeper yield curve with long-term rates rising by 100 basis points and short-term rates staying at current levels — results in a 12-month benefit to net interest income of approximately $500 million and $700 million at September 30, 2018 and December 31, 2017, respectively. The increase in net interest income under this scenario reflects the Firm reinvesting at the higher long-term rates, with funding costs remaining unchanged. The results of the comparable non-U.S. dollar scenarios arewere not material to the FirmFirm’s earnings-at-risk at September 30, 20182019 and December 31, 2017.2018.



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. ForRefer to the table Predominant business activities
that give rise to market risk on page 125 of JPMorgan Chase’s 2018 Form 10-K 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.measures.
The table below represents the potential impact to net revenue or OCI for market risk-sensitive instruments that are not included in VaR or earnings-at-risk. Where appropriate, instruments used for hedging purposes are reported along with the positions being hedged. The sensitivities disclosed in the table below may not be representative of the actual gain or loss that would have been realized at September 30, 20182019 and December 31, 2017,2018, as the movement in market parameters across maturities may vary and are not intended to imply management’s expectation of future deterioration in these sensitivities.
Gain/(loss) (in millions)
 September 30, 2018
 December 31, 2017
 September 30, 2019
 December 31, 2018
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 $(147) $(110) Consists of seed capital and related hedges; and fund co-investments 10% decline in market value $(79) $(102)
Other investments Consists of privately held equity and other investments held at fair value 10% decline in market value (246) (338) Consists of privately held equity and other investments held at fair value 10% decline in market value (202) (218)
        
Funding activities        
Non-USD LTD cross-currency basis 
Represents the basis risk on derivatives used to hedge the foreign exchange risk on the non-USD LTD(b)
 1 basis point parallel tightening of cross currency basis (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 (15) (13)
Non-USD LTD hedges foreign currency (“FX”) exposure 
Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges(b)
 10% depreciation of currency 13
 (13) 
Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges(b)
 10% depreciation of currency 7
 17
Derivatives – funding spread risk Impact of changes in the spread related to derivatives FVA 1 basis point parallel increase in spread (4) (6) Impact of changes in the spread related to derivatives FVA 1 basis point parallel increase in spread (5) (4)
Fair value option elected liabilities – funding spread risk 
Impact of changes in the spread related to fair value option elected liabilities DVA(b)
 1 basis point parallel increase in spread 27
 22
 
Impact of changes in the spread related to fair value option elected liabilities DVA(b)
 1 basis point parallel increase in spread 28
 30
Fair value option elected liabilities – interest rate sensitivity 
Interest rate sensitivity on fair value option liabilities resulting from a change in the Firm’s own credit spread(b)
 1 basis point parallel increase in spread (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 athrough its lines of business and Corporate, may be exposed to country risk management framework for monitoring and assessing howresulting from financial, economic, political or other significant developments which adversely affect the value of the Firm’s exposures related to a particular country or set of countries. The Country Risk Management group actively monitors the various portfolios which may be impacted by these developments and measures the extent to ensurewhich 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 scenariosRefer to test vulnerabilities to individual countries or groupspages 132–133 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.
ForJPMorgan Chase’s 2018 Form 10-K for a further discussion of the Firm’s Country Risk Management organization; identification and measurement; stress testing; monitoring and control; and reporting, refer to pages 129–130 of JPMorgan Chase’s 2017 Annual Report.country risk management.
The following table presents the Firm’s top 20 exposures by country (excluding the U.S.) as of September 30, 2019 and their comparative exposures as of December 31, 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)

(in billions)		September 30, 2019 
December 31, 2018(e)
 
Lending and deposits(b)
Trading and investing(c)
Other(d)
Total exposure Total exposure
Germany$58.1
$6.2
$0.4
$64.7
 $62.1
United Kingdom28.8
10.0
3.7
42.5
 40.7
Japan23.3
4.2
0.3
27.8
 29.1
Switzerland10.7
1.0
7.6
19.3
 12.8
France11.3
4.8
1.5
17.6
 17.9
China9.3
6.7
1.4
17.4
 19.3
Canada12.0
1.5
—
13.5
 14.3
India5.0
4.8
2.8
12.6
 11.8
Luxembourg11.6
0.7
—
12.3
 11.0
Australia7.1
5.0
—
12.1
 13.0
Netherlands6.0
1.2
3.0
10.2
 5.8
Brazil4.0
4.9
—
8.9
 7.3
Singapore4.3
1.6
2.6
8.5
 6.8
Saudi Arabia7.2
0.9
—
8.1
 5.3
South Korea4.0
3.6
0.1
7.7
 7.6
Italy2.2
4.7
0.1
7.0
 6.4
Hong Kong3.4
1.5
1.7
6.6
 5.4
Spain3.3
3.3
—
6.6
 5.1
Mexico4.2
0.9
—
5.1
 5.5
Belgium3.6
0.5
—
4.1
 2.3
Top 20 country exposures (excluding the U.S.)(a)
 
  September 30, 2018

(in billions)
 
Lending and deposits(b)
Trading and investing(c)(d)
Other(e)
Total exposure
Germany $55.1
$11.1
$0.3
$66.5
United Kingdom 28.8
9.4
11.8
50.0
Japan 32.9
7.1
0.3
40.3
China 9.8
7.7
1.8
19.3
Switzerland 14.0
0.5
4.0
18.5
France 11.3
5.6
0.6
17.5
Canada 11.8
3.0
0.1
14.9
Australia 6.9
4.4
—
11.3
India 6.0
3.7
1.4
11.1
Luxembourg 9.5
0.5
—
10.0
Brazil 4.9
3.0
—
7.9
Netherlands 6.3
0.6
0.7
7.6
Spain 4.6
1.5
0.3
6.4
Italy 2.4
3.9
0.1
6.4
South Korea 4.1
2.0
0.1
6.2
Hong Kong 3.0
1.0
2.1
6.1
Saudi Arabia 5.3
0.5
—
5.8
Singapore 3.4
1.2
1.1
5.7
Mexico 4.1
1.0
—
5.1
United Arab Emirates 2.7
0.5
—
3.2
(a)CountryTop 20 country exposures presented in the table reflect 88%approximately 87% and 86% of total firmwide non-U.S. exposure.exposure, where exposure is attributed to a specific country, at September 30, 2019, and December 31, 2018 respectively.
(b)Lending and deposits includes loans and accrued interest receivable (net of eligible collateral and the allowance for loan losses), deposits with banks (including central banks), acceptances, other monetary assets, issued letters of credit net of participations, and unused commitments to extend credit. Excludes intra-day and operating exposures, such as those from settlement and clearing activities.
(c)Includes market-making inventory, AFS securities, and counterparty exposure on derivative and securities financings net of eligible collateral and hedging.
(d)Includes exposure from single reference entity (“single-name”), index and other multiple reference entity transactions for which one or more of the underlying reference entities is in a country listed in the above table.
(e)(d)Includes capital invested in local entities andPredominantly includes physical commodity inventory.

(e)The country rankings presented in the table as of December 31, 2018, are based on the country rankings of the corresponding exposures at September 30, 2019, not actual rankings of such exposures at December 31, 2018.

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’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. 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. ForRefer to pages 120–122, page 141 and Note 13 of JPMorgan Chase’s 2018 Form 10-K for further information on these components, areas of judgment and methodologies used in establishing the Firm’s allowance for credit losses, refer to pages 117–119, page 138 and Note 13 of JPMorgan Chase’s 2017 Annual Report;losses; and refer to Allowance for credit losses on pages 69–7167–68 and Note 12 of this Form 10-Q.
As noted in the discussion on page 138141 of JPMorgan Chase’s 2017 Annual Report,2018 Form 10-K, 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. Refer to Note 12 of this Form 10-Q for further discussion.information.
To illustrate the potential magnitude of certain alternate judgments, the Firm estimates that changes in the following inputs would have the following effects on the Firm’s
modeled credit loss estimates as of September 30, 2018, 2019,
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 levelsexpectations could imply:
◦an increase to modeled credit loss estimates of approximately $425$250 million for PCI loans.
◦an increase to modeled annual credit loss estimates of approximately $75$50 million for residential real estate loans, excluding PCI loans.
For credit card loans, a 100 basis point increase in unemployment rates from current levelsexpectations could imply an increase to modeled annual credit loss estimates of approximately $775$800 million.
An increase in probability of default (“PD”) factors consistent with a one-notch downgrade in the Firm’s internal risk ratings for its entire wholesale loan portfolio could imply an increase in the Firm’s modeled credit loss estimates of approximately $1.6$1.7 billion.
A 100 basis point increase in estimated loss given default (“LGD”) for the Firm’s entire wholesale loan portfolio could imply an increase in the Firm’s modeled credit loss estimates of approximately $175 million.
The purpose of these sensitivity analyses is to provide an indication of the isolated impacts of hypothetical alternative assumptions on modeled loss estimates. The changes in the inputs presented above are not intended to imply management’s expectation of future deterioration of those risk factors. In addition, these analyses are not intended to estimate changes in the overall allowance for loan losses, which would also be influenced by the judgment management applies to the modeled loss estimates to reflect the uncertainty and imprecision of these modeled loss estimates based on then-current circumstances and conditions.
It is difficult to estimate how potential changes in specific factors might affect the overall allowance for credit losses because management considers a variety of factors and inputs in estimating the allowance for credit losses. Changes in these factors and inputs may not occur at the same rate and may not be consistent across all geographies or product types, and changes in factors may be directionally inconsistent, such that improvement in one factor may offset deterioration in other factors. In addition, it is difficult to predict how changes in specific economic conditions or assumptions could affect borrower behavior or other factors considered by management in estimating the allowance for credit losses. Given the process the Firm follows and the judgments made in evaluating the risk factors related to its loss estimates, management believes that its current estimate of the allowance for credit losses is appropriate.

Fair value of financial instruments, MSRs and commodities inventory
Assets measured at fair value
The following table includes the Firm’s assets measured at fair value and the portion of such assets that are classified within level 3 of the valuation hierarchy. For further information, referRefer to Note 2. for further information.
September 30, 2018
(in billions, except ratios)
Total assets at fair value Total level 3 assets
September 30, 2019
(in billions, except ratios)
Total assets at fair value Total level 3 assets
Trading–debt and equity instruments$359.7
  $4.2
$440.2
  $4.4
Derivative receivables(a)
60.1
 7.1
55.6
 5.6
Trading assets419.8
 11.3
495.8
 10.0
AFS securities200.0
 0.1
353.4
 —
Loans3.0
 0.1
5.8
 —
MSRs6.4
 6.4
4.4
 4.4
Other28.5
 1.1
27.8
 0.7
Total assets measured at fair value on a recurring basis
$657.7
 $19.0
$887.2
 $15.1
Total assets measured at fair value on a nonrecurring basis1.8
 1.1
6.4
 1.0
Total assets measured at fair value
$659.5
 $20.1
$893.6
 $16.1
Total Firm assets$2,615.2
  $2,764.7
  
Level 3 assets as a percentage of total Firm assets(a)
  0.8%  0.6%
Level 3 assets as a percentage of total Firm assets at fair value(a)
  3.0%  1.8%
(a)For purposes of the table above, the derivative receivables total reflects the impact of netting adjustments; however, the $7.1$5.6 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. ForRefer to Note 2 for a further discussion of the valuation of level 3 instruments, including unobservable inputs used, refer to Note 2.used.
 
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. ForRefer to Note 2 for a further discussion of valuation adjustments applied by the Firm refer to Note 2.Firm.
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. ForRefer to Note 2 for a detailed discussion of the Firm’s valuation process and hierarchy, and its determination of fair value for individual financial instruments, refer to Note 2.instruments.
Goodwill impairment
Management applies significant judgment when testing goodwill for impairment. The goodwill associated with each business combination is allocated to the related reporting units for goodwill impairment testing. ForRefer to Goodwill impairment on page 142 of JPMorgan Chase’s 2018 Form 10-K for a description of the significant valuation judgments associated with goodwill impairment, referimpairment.
Refer to Goodwill impairmentNote 14 for additional information on pages 139–140 of JPMorgan Chase’s 2017 Annual Report.
For the three months ended September 30, 2018, the Firm reviewed current economic conditions, business performance, estimated market cost of equity, and prior projections of business performance for all its businesses. Based upon such reviews, the Firm concluded thatgoodwill, including the goodwill allocated to its reporting units was not impairedimpairment assessment as of 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, refer to Note 14.
2019.

Credit card rewards liability
JPMorgan Chase offersThe credit cards with various rewards programs which allow cardholders to earn rewards points based on their account activity and the terms and conditions of the rewards program. Generally, there are no limits on the points that an eligible cardholder can earn, nor do the points expire, and the points can be redeemed for a variety of rewards, including cash (predominantly in the form of account credits), gift cards and travel. The Firm maintains acard rewards liability which represents the estimated cost of rewards points earned and expected to be redeemed by cardholders. The rewards liability is sensitive to various assumptions, including cost per point and redemption rates for each of the various rewards programs, which are evaluated periodically. The liability is accrued as the cardholder earns the benefit and is reduced when the cardholder redeems points. This liability was $5.8$6.3 billion and $4.9$5.8 billion at September 30, 20182019 and December 31, 2017,2018, respectively, and is recorded in accounts payable and other liabilities on the Consolidated balance sheets. Refer to page 143 of JPMorgan Chase’s 2018 Form 10-K for a description of the significant assumptions and judgments associated with the Firm’s credit card rewards liability.
Income taxes
ForRefer to Income taxes on page 143 of JPMorgan Chase’s 2018 Form 10-K for a description of the significant assumptions, judgments and interpretations associated with the accounting for income taxes, refer to Note 1, and Income taxes on page 140 of JPMorgan Chase’s 2017 Annual Report.taxes.
Litigation reserves
ForRefer to Note 24 of this Form 10-Q, and Note 29 of JPMorgan Chase’s 2018 Form 10-K for a description of the significant estimates and judgments associated with establishing litigation reserves, refer to Note 22 of this Form 10-Q, and Note 29 of JPMorgan Chase’s 2017 Annual Report.reserves.

ACCOUNTING AND REPORTING DEVELOPMENTS
Financial Accounting Standards Board (“FASB”) Standards Adopted since January 1, 2018
StandardSummary of guidanceEffects 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, refer 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, refer 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
 • For further information, refer to Note 1.


FASB Standards Adopted since January 1, 2018 (continued)
StandardSummary of guidanceEffects 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 being applied prospectively. Subsequent to adoption, fewer transactions will be treated as acquisitions or dispositions of a business.
Presentation of net periodic pension cost and net periodic postretirement benefit cost
Issued March 2017

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

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


FASB Standards Issued but not yet Adopted2019
     
Standard Summary of guidance Effects on financial statements
     
Leases
Issued February 2016
 
 • Requires lessees to recognize all leases longer than twelve months on the Consolidated balance sheets as a lease liability with a corresponding right-of-use asset.
 • Requires lessees and lessors to classify most leases using principles similar to existing lease accounting, but eliminates the “bright line” classification tests.
 • Permits the Firm to generally account for its existing leases consistent with current guidance, except for the incremental balance sheet recognition.
 • Expands qualitative and quantitative leasing disclosures.
 • May be adopted using a modified cumulative effect approach wherein the guidance is applied only to existing contracts as of the date of initial application, and to new contracts transacted after that date, or a cumulative-effect adjustment to retained earnings at the effective date without revising prior comparative periods.
 
• Required effective date:Adopted January 1, 2019.(a)
•
The Firm is in the final stages of its implementation which includes implementing a new lease accounting software solution for its real estate leases, and updating processes and internal controls for its leasing activities. As a lessee, the Firm is finalizing its estimate of the right-of-use asset and lease liability, which is based on the present value of lease payments. The Firm expects to recognize a lease liability and a corresponding right-of-use asset (at their present value) related to predominantly all of the $10 billion of future minimum payments required under operating leases as disclosed in Note 28 of JPMorgan Chase’s 2017 Annual Report. However, the population of contracts subject to balance sheet recognition and their initial measurement remains under evaluation; final financial statement impacts will depend on the lease portfolio at the time of adoption. The Firm does not expect material changes to the recognition of operating lease expense in its Consolidated statements of income.
 • The Firm plans to adopt the new lease guidance on January 1, 2019 through a cumulative-effect adjustment without revising prior comparative periods and electelected the available practical expedients, which willexpedient to not require it to reassess whether an existing contract containscontracts contain a lease or whether classification or unamortized initial lease costs would be different under the new lease guidance. The Firm elected the modified retrospective transition method, through a cumulative-effect adjustment to retained earnings without revising prior periods.
 • Refer to Note 16 for further information.




FASB Standards Issued but not yet Adopted
StandardSummary of guidanceEffects on financial statements
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 anwith a corresponding increase in the carrying valuerecorded investment of the related loans.
 • Requires inclusion of expected recoveries, limited to the cumulative amount of prior write-offs, when estimating the allowance for credit losses for in scope financial assets (including collateral dependent assets).
 • Amends existing impairment guidance for AFS securities to incorporate an allowance, which will allow for reversals of credit impairments in the event that the credit of an issuer improves.
 • Requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption.

 
 • 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,test and is in the process of developing and implementingrefine its current expected credit loss models that satisfy the requirements of the new standard. Oversight and testing, as well as efforts to meet expanded disclosure requirements, will extend through the remainder of 2019.  
•
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, withportfolios. The Firm currently intends to estimate losses over a two-year forecast period using the most significant impact expected from the Firm’s credit card portfolio.weighted-average of a range of macroeconomic scenarios (established on a Firmwide basis), and then revert to longer term historical loss experience to estimate losses over more extended periods.
•
The extent ofFirm currently expects the increase in the allowance to be in the range of $4-6 billion, primarily driven by Card. This estimate is under evaluation, butsubject to further refinement based on continuing reviews and approvals of models, methodologies and judgments. The ultimate impact 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.date, and other management judgments.
•
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 appropriately address social and environmental concerns that may arise from its business activities;
Ability of the Firm to deal effectively with an economic slowdown or other economic or market disruption;disruption, including, but not limited to, in the interest rate environment;
Technology changes instituted by the Firm, its counterparties or competitors;
The effectiveness of the Firm’s control agenda;
Ability of the Firm to develop or discontinue products and services, and the extent to which products or services previously sold by the Firm (including but not limited to mortgages and asset-backed securities) require the Firm to incur liabilities or absorb losses not contemplated at their initiation or origination;
Acceptance of the Firm’s new and existing products and services by the marketplace and the ability of the Firm to innovate and to increase market share;
Ability of the Firm to attract and retain qualified employees;
Ability of the Firm to control expenses;
Competitive pressures;
Changes in the credit quality of the Firm’s 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 on2018 Form 10-K for the year ended December 31, 2017.10-K.
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 on10-Ks, Form 10-Q,10-Qs, 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,		 Three months ended
September 30,		 Nine months ended
September 30,
(in millions, except per share data) 2018
 2017
 2018
 2017
 2019
 2018
 2019
 2018
Revenue                
Investment banking fees $1,832
 $1,868
 $5,736
 $5,594
 $1,967
 $1,832
 $5,658
 $5,736
Principal transactions 2,964
 2,721
 10,698
 9,440
 3,449
 2,964
 11,239
 10,698
Lending- and deposit-related fees 1,542
 1,497
 4,514
 4,427
 1,626
 1,542
 4,643
 4,514
Asset management, administration and commissions 4,310
 4,072
 12,923
 11,996
 4,351
 4,310
 12,818
 12,923
Investment securities losses (46) (1) (371) (38)
Investment securities gains/(losses) 78
 (46) 135
 (371)
Mortgage fees and related income 262
 429
 1,051
 1,239
 887
 262
 1,562
 1,051
Card income 1,328
 1,242
 3,623
 3,323
 1,283
 1,328
 3,923
 3,623
Other income 1,160
 952
 4,041
 3,197
 1,472
 1,160
 4,239
 4,041
Noninterest revenue 13,352
 12,780
 42,215
 39,178
 15,113
 13,352
 44,217
 42,215
Interest income(a) 19,840
 16,687
 56,404
 47,379
 21,121
 19,439
 64,113
 55,499
Interest expense(a) 5,932
 3,889
 15,699
 10,309
 6,893
 5,531
 21,034
 14,794
Net interest income 13,908
 12,798
 40,705
 37,070
 14,228
 13,908
 43,079
 40,705
Total net revenue 27,260
 25,578
 82,920
 76,248
 29,341
 27,260
 87,296
 82,920
                
Provision for credit losses 948
 1,452
 3,323
 3,982
 1,514
 948
 4,158
 3,323
                
Noninterest expense                
Compensation expense 8,108
 7,697
 25,308
 23,710
 8,583
 8,108
 26,067
 25,308
Occupancy expense 1,014
 930
 2,883
 2,803
 1,110
 1,014
 3,238
 2,883
Technology, communications and equipment expense 2,219
 1,972
 6,441
 5,677
 2,494
 2,219
 7,236
 6,441
Professional and outside services 2,086
 1,955
 6,333
 5,646
 2,056
 2,086
 6,307
 6,333
Marketing 798
 710
 2,396
 2,179
 945
 798
 2,686
 2,396
Other expense 1,398
 1,306
 4,313
 4,605
 1,234
 1,398
 3,624
 4,313
Total noninterest expense 15,623
 14,570
 47,674
 44,620
 16,422
 15,623
 49,158
 47,674
Income before income tax expense 10,689
 9,556
 31,923
 27,646
 11,405
 10,689
 33,980
 31,923
Income tax expense 2,309
 2,824
 6,515
 7,437
 2,325
 2,309
 6,069
 6,515
Net income $8,380
 $6,732
 $25,408
 $20,209
 $9,080
 $8,380
 $27,911
 $25,408
Net income applicable to common stockholders $7,948
 $6,262
 $24,067
 $18,786
 $8,606
 $7,948
 $26,551
 $24,067
Net income per common share data                
Basic earnings per share $2.35
 $1.77
 $7.04
 $5.26
 $2.69
 $2.35
 $8.17
 $7.04
Diluted earnings per share 2.34
 1.76
 7.00
 5.22
 2.68
 2.34
 8.15
 7.00
                
Weighted-average basic shares 3,376.1
 3,534.7
 3,416.5
 3,570.9
 3,198.5
 3,376.1
 3,248.7
 3,416.5
Weighted-average diluted shares 3,394.3
 3,559.6
 3,436.2
 3,597.0
 3,207.2
 3,394.3
 3,258.0
 3,436.2
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.

(a)In the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income and interest expense, but had no effect on net interest income. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation. Refer to Note 6 for additional information.

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,		 Three months ended
September 30,		 Nine months ended
September 30,
(in millions) 2018
 2017
 2018
 2017
 2019
 2018
 2019
 2018
Net income $8,380
 $6,732
 $25,408
 $20,209
 $9,080
 $8,380
 $27,911
 $25,408
Other comprehensive income/(loss), after–tax                
Unrealized gains/(losses) on investment securities (819) 147
 (2,280) 842
 479
 (819) 2,986
 (2,280)
Translation adjustments, net of hedges (31) —
 84
 7
 (165) (31) (90) 84
Fair value hedges 34
 NA
 (74) NA
 (1) 34
 87
 (74)
Cash flow hedges (88) 26
 (327) 170
 195
 (88) 430
 (327)
Defined benefit pension and OPEB plans 19
 22
 78
 26
 46
 19
 123
 78
DVA on fair value option elected liabilities (402) (112) 125
 (179) 132
 (402) (229) 125
Total other comprehensive income/(loss), after–tax (1,287) 83
 (2,394) 866
 686
 (1,287) 3,307
 (2,394)
Comprehensive income $7,093
 $6,815
 $23,014
 $21,075
 $9,766
 $7,093
 $31,218
 $23,014

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, 2017September 30, 2019 December 31, 2018
Assets      
Cash and due from banks$23,225
 $25,898
$21,215
 $22,324
Deposits with banks395,872
 405,406
235,382
 256,469
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
Federal funds sold and securities purchased under resale agreements (included $13,705 and $13,235 at fair value)
257,391
 321,588
Securities borrowed (included $5,784 and $5,105 at fair value)
138,336
 111,995
Trading assets (included assets pledged of $138,827 and $89,073)
495,875
 413,714
Investment securities (included $353,421 and $230,394 at fair value and assets pledged of $12,518 and $11,432)
394,251
 261,828
Loans (included $5,760 and $3,151 at fair value)
945,218
 984,554
Allowance for loan losses(13,128) (13,604)(13,235) (13,445)
Loans, net of allowance for loan losses941,190
 917,093
931,983
 971,109
Accrued interest and accounts receivable78,792
 67,729
88,988
 73,200
Premises and equipment14,180
 14,159
25,117
 14,934
Goodwill, MSRs and other intangible assets54,697
 54,392
53,078
 54,349
Other assets (included $12,479 and $16,128 at fair value and assets pledged of $5,334 and $7,980)
115,936
 113,587
Other assets (included $8,916 and $9,630 at fair value and assets pledged of $2,834 and $3,457)
123,045
 121,022
Total assets(a)
$2,615,183
 $2,533,600
$2,764,661
 $2,622,532
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
Deposits (included $29,355 and $23,217 at fair value)
$1,525,261
 $1,470,666
Federal funds purchased and securities loaned or sold under repurchase agreements (included $933 and $935 at fair value)
247,766
 182,320
Short-term borrowings (included $6,497 and $7,130 at fair value)
48,893
 69,276
Trading liabilities151,150
 123,663
138,343
 144,773
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
Accounts payable and other liabilities (included $2,411 and $3,269 at fair value)
225,063
 196,710
Beneficial interests issued by consolidated VIEs (included $39 and $28 at fair value)
18,515
 20,241
Long-term debt (included $71,957 and $54,886 at fair value)
296,472
 282,031
Total liabilities(a)
2,356,227
 2,277,907
2,500,313
 2,366,017
Commitments and contingencies (refer to Notes 20, 21 and 22)


 


Commitments and contingencies (refer to Notes 22, 23 and 24)


 


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
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,836,250 and 2,606,750 shares)
28,363
 26,068
Common stock ($1 par value; authorized 9,000,000,000 shares; issued 4,104,933,895 shares)
4,105
 4,105
4,105
 4,105
Additional paid-in capital89,333
 90,579
88,512
 89,162
Retained earnings195,180
 177,676
217,888
 199,202
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)
Accumulated other comprehensive income/(loss)1,800
 (1,507)
Shares held in restricted stock units (“RSU”) Trust, at cost (472,953 shares)(21) (21)
Treasury stock, at cost (968,448,971 and 829,167,674 shares)
(76,299) (60,494)
Total stockholders’ equity258,956
 255,693
264,348
 256,515
Total liabilities and stockholders’ equity$2,615,183
 $2,533,600
$2,764,661
 $2,622,532

Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
(a)The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at September 30, 2018,2019, and December 31, 2017.2018. 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. ForRefer to Note 13 for a further discussion, refer to Note 13.discussion.
(in millions)Sep 30, 2018 Dec 31, 2017September 30, 2019 December 31, 2018
Assets      
Trading assets$1,567
 $1,449
$1,461
 $1,966
Loans57,114
 68,995
53,022
 59,456
All other assets2,407
 2,674
974
 1,013
Total assets$61,088
 $73,118
$55,457
 $62,435
Liabilities      
Beneficial interests issued by consolidated VIEs$20,241
 $26,081
$18,515
 $20,241
All other liabilities330
 349
301
 312
Total liabilities$20,571
 $26,430
$18,816
 $20,553
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, Three months ended September 30,  Nine months ended September 30, 
(in millions, except per share data) 2018
 2017
 2019
 2018
 2019
 2018
    
Preferred stock            
Balance at January 1 $26,068
 $26,068
Balance at the beginning of the period $26,993
 $26,068
 $26,068
 $26,068
Issuance 1,696
 —
 2,250
 1,696
 4,100
 1,696
Redemption (880) —
 (1,805) —
Balance at September 30 $27,764
 $26,068
 28,363
 27,764
 28,363
 27,764
            
Common stock            
Balance at January 1 and September 30 4,105
 4,105
Balance at the beginning and end of the period 4,105
 4,105
 4,105
 4,105
            
Additional paid-in capital            
Balance at January 1 90,579
 91,627
Balance at the beginning of the period 88,359
 89,392
 89,162
 90,579
Shares issued and commitments to issue common stock for employee shared-based compensation awards, and related tax effects (897) (680) 156
 179
 (604) (897)
Other (349) (250) (3) (238) (46) (349)
Balance at September 30 89,333
 90,697
 88,512
 89,333
 88,512
 89,333
            
Retained earnings            
Balance at January 1 177,676
 162,440
Balance at the beginning of the period 212,093
 189,881
 199,202
 177,676
Cumulative effect of changes in accounting principles (183) —
 —
 —
 62
 (183)
Net income 25,408
 20,209
 9,080
 8,380
 27,911
 25,408
Dividends declared:            
Preferred stock (1,167) (1,235) (423) (379) (1,201) (1,167)
Common stock ($1.92 and $1.56 per share)
 (6,554) (5,587)
Common stock ($0.90 and $0.80 per share and $2.50 and $1.92 per share, respectively)
 (2,862) (2,702) (8,086) (6,554)
Balance at September 30 195,180
 175,827
 217,888
 195,180
 217,888
 195,180
            
Accumulated other comprehensive income/(loss)            
Balance at January 1 (119) (1,175)
Balance at the beginning of the period 1,114
 (1,138) (1,507) (119)
Cumulative effect of changes in accounting principles 88
 —
 —
 —
 —
 88
Other comprehensive income/(loss) (2,394) 866
Other comprehensive income/(loss), after-tax 686
 (1,287) 3,307
 (2,394)
Balance at September 30 (2,425) (309) 1,800
 (2,425) 1,800
 (2,425)
            
Shares held in RSU Trust, at cost            
Balance at January 1 and September 30 (21) (21)
Balance at the beginning and end of the period (21) (21) (21) (21)
            
Treasury stock, at cost            
Balance at January 1 (42,595) (28,854)
Balance at the beginning of the period (69,428) (50,829) (60,494) (42,595)
Repurchase (14,055) (10,602) (6,949) (4,416) (17,250) (14,055)
Reissuance 1,670
 1,471
 78
 265
 1,445
 1,670
Balance at September 30 (54,980) (37,985) (76,299) (54,980) (76,299) (54,980)
            
Total stockholders’ equity $258,956
 $258,382
 $264,348
 $258,956
 $264,348
 $258,956

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,Nine months ended September 30,
(in millions)2018
 2017
2019
 2018
Operating activities      
Net income$25,408
 $20,209
$27,911
 $25,408
Adjustments to reconcile net income to net cash used in operating activities:      
Provision for credit losses3,323
 3,982
4,158
 3,323
Depreciation and amortization5,716
 4,547
6,229
 5,716
Deferred tax (benefit)/expense(323) (187)(440) (323)
Other2,179
 1,655
1,645
 2,179
Originations and purchases of loans held-for-sale(68,235) (75,907)(53,934) (68,235)
Proceeds from sales, securitizations and paydowns of loans held-for-sale68,214
 75,255
60,510
 68,214
Net change in:      
Trading assets(44,427) (31,189)(96,125) (44,427)
Securities borrowed(17,344) (5,191)(26,162) (17,344)
Accrued interest and accounts receivable(11,335) (9,795)(16,089) (11,335)
Other assets2,909
 18,668
(21,181) 2,909
Trading liabilities21,580
 (23,162)12,774
 21,580
Accounts payable and other liabilities26,677
 (10,124)19,661
 26,677
Other operating adjustments(577) 7,858
4,004
 (577)
Net cash provided by/(used in) operating activities13,765
 (23,381)(77,039) 13,765
Investing activities      
Net change in:      
Federal funds sold and securities purchased under resale agreements(19,259) 44,463
64,207
 (19,259)
Held-to-maturity securities:      
Proceeds from paydowns and maturities2,268
 3,508
2,239
 2,268
Purchases(8,613) (594)(11,682) (8,613)
Available-for-sale securities:      
Proceeds from paydowns and maturities29,618
 43,536
41,378
 29,618
Proceeds from sales34,322
 57,640
43,460
 34,322
Purchases(46,530) (73,717)(200,262) (46,530)
Proceeds from sales and securitizations of loans held-for-investment20,154
 11,600
52,739
 20,154
Other changes in loans, net(49,755) (39,385)(25,977) (49,755)
All other investing activities, net(1,987) 655
(4,283) (1,987)
Net cash provided by/(used in) investing activities(39,782) 47,706
Net cash (used in) investing activities(38,181) (39,782)
Financing activities      
Net change in:      
Deposits15,274
 51,352
77,147
 15,274
Federal funds purchased and securities loaned or sold under repurchase agreements22,719
 3,731
65,428
 22,719
Short-term borrowings12,974
 19,006
(20,577) 12,974
Beneficial interests issued by consolidated VIEs975
 (1,312)5,017
 975
Proceeds from long-term borrowings54,842
 46,311
45,155
 54,842
Payments of long-term borrowings(69,636) (65,932)(51,936) (69,636)
Proceeds from issuance of preferred stock1,655
 —
4,100
 1,655
Redemption of preferred stock(1,805) —
Treasury stock repurchased(14,055) (10,602)(17,250) (14,055)
Dividends paid(6,989) (6,478)(9,056) (6,989)
All other financing activities, net(1,440) 329
(217) (1,440)
Net cash provided by financing activities16,319
 36,405
96,006
 16,319
Effect of exchange rate changes on cash and due from banks and deposits with banks(2,509) 7,272
(2,982) (2,509)
Net increase/(decrease) in cash and due from banks and deposits with banks(12,207) 68,002
Net decrease in cash and due from banks and deposits with banks(22,196) (12,207)
Cash and due from banks and deposits with banks at the beginning of the period431,304
 391,154
278,793
 431,304
Cash and due from banks and deposits with banks at the end of the period$419,097
 $459,156
$256,597
 $419,097
Cash interest paid$15,144
 $10,294
$20,790
 $15,144
Cash income taxes paid, net2,197
 3,238
3,478
 2,197

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 175–179168–172 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. ForRefer to Note 25 for a further discussion of the Firm’s business segments, refer to Note 23.segments.
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.2018 Form 10-K.
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.
ForRefer to Notes 1 and 14 of JPMorgan Chase’s 2018 Form 10-K for a further description of JPMorgan Chase’s accounting policies regarding consolidation, refer to Notes1 and 14 of JPMorgan Chase’s 2017 Annual Report.consolidation.
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. ForRefer to Note 1 of JPMorgan Chase’s 2018 Form 10-K for further information on offsetting assets and liabilities, refer to Note1 of JPMorgan Chase’s 2017 Annual Report.liabilities.
Application of U.S. GAAP related to the Tax CutsIncome tax expense
The Firm’s effective tax rate was 20.4% 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 period17.9% 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, 2017,2019, respectively, with no impactand 21.6% and 20.4% in the respective 2018 periods. For the nine months ended September 30, 2019, the effective tax rate reflected the recognition of $1.0 billion in tax benefits related to net income.
Upon adoptionthe resolution 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, forcertain tax audits, which reduced 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 increasingeffective tax rate 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, refer3.0%. Refer to Note 2024 of JPMorgan Chase’s 2017 Annual Report.

2018 Form 10-K for further information.

Note 2 – Fair value measurement
ForRefer to Note 2 of JPMorgan Chase’s 2018 Form 10-K 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.hierarchy.


The following table presents the assets and liabilities reported at fair value as of September 30, 2018,2019, and December 31, 2017,2018, by major product category and fair value hierarchy.
Assets and liabilities measured at fair value on a recurring basisAssets and liabilities measured at fair value on a recurring basis




Assets and liabilities measured at fair value on a recurring basis





Fair value hierarchy
Derivative
netting
adjustments
Fair value hierarchy
Derivative
netting
adjustments(f)

          
September 30, 2018 (in millions)Level 1Level 2
Level 3
Total fair value
September 30, 2019 (in millions)Level 1Level 2
Level 3
Derivative
netting
adjustments(f)
Total fair value
Federal funds sold and securities purchased under resale agreements$—
$12,226

$—

$—
$12,226
$—
$13,705

$—

$13,705
Securities borrowed—
4,528

—

—
4,528
—
5,784

—

5,784
Trading assets:























Debt instruments:























Mortgage-backed securities:























U.S. government agencies(a)
—
46,252

529

—
46,781
U.S. GSEs and government agencies(a)
—
70,617

811

—
71,428
Residential – nonagency—
1,681

77

—
1,758
—
2,253

24

—
2,277
Commercial – nonagency—
1,420

13

—
1,433
—
1,613

5

—
1,618
Total mortgage-backed securities—
49,353

619

—
49,972
—
74,483

840

—
75,323
U.S. Treasury and government agencies(a)
40,815
7,443

—

—
48,258
U.S. Treasury, GSEs and government agencies(a)
76,953
9,446

—

—
86,399
Obligations of U.S. states and municipalities—
8,785

699

—
9,484
—
6,229

627

—
6,856
Certificates of deposit, bankers’ acceptances and commercial paper—
3,070
 —
 —
3,070
—
2,180
 —
 —
2,180
Non-U.S. government debt securities26,824
28,875
 164
 —
55,863
38,162
36,634
 146
 —
74,942
Corporate debt securities—
23,210
 395
 —
23,605
—
20,461
 484
 —
20,945
Loans(b)
—
40,051
 1,533
 —
41,584
—
43,308
 1,746
 —
45,054
Asset-backed securities—
2,779
 76
 —
2,855
—
2,996
 38
 —
3,034
Total debt instruments67,639
163,566
 3,486
 —
234,691
115,115
195,737
 3,881
 —
314,733
Equity securities104,701
405
 329
 —
105,435
100,829
249
 170
 —
101,248
Physical commodities(c)
3,727
1,256
 —
 —
4,983
7,690
3,075
 —
 —
10,765
Other—
14,188
 413
 —
14,601
—
13,172
 332
 —
13,504
Total debt and equity instruments(d)
176,067
179,415
 4,228
 —
359,710
223,634
212,233
 4,383
 —
440,250
Derivative receivables:          
Interest rate715
258,744
 2,000
 (238,062)23,397
1,312
372,834
 1,787
 (347,426)28,507
Credit—
22,553
 952
 (22,923)582
—
15,072
 645
 (14,879)838
Foreign exchange734
187,377
 773
 (171,841)17,043
3,681
158,893
 558
 (150,451)12,681
Equity—
43,791
 3,141
 (36,828)10,104
—
44,064
 2,314
 (38,969)7,409
Commodity—
22,129
 239
 (13,432)8,936
—
20,969
 269
 (15,096)6,142
Total derivative receivables(e)
1,449
534,594
 7,105
 (483,086)60,062
4,993
611,832
 5,573
 (566,821)55,577
Total trading assets(f)(e)
177,516
714,009
 11,333
 (483,086)419,772
228,627
824,065
 9,956
 (566,821)495,827
Available-for-sale securities:          
Mortgage-backed securities:          
U.S. government agencies(a)
—
63,110
 —
 —
63,110
U.S. GSEs and government agencies(a)
—
105,581
 —
 —
105,581
Residential – nonagency—
9,216
 1
 —
9,217
—
12,901
 1
 —
12,902
Commercial – nonagency—
7,048
 —
 —
7,048
—
5,324
 —
 —
5,324
Total mortgage-backed securities—
79,374
 1
 —
79,375
—
123,806
 1
 —
123,807
U.S. Treasury and government agencies27,816
—
 —
 —
27,816
141,529
—
 —
 —
141,529
Obligations of U.S. states and municipalities—
38,121
 —
 —
38,121
—
31,064
 —
 —
31,064
Certificates of deposit—
75
 —
 —
75
—
74
 —
 —
74
Non-U.S. government debt securities16,544
8,130
 —
 —
24,674
13,604
8,554
 —
 —
22,158
Corporate debt securities—
2,056
 —
 —
2,056
—
1,634
 —
 —
1,634
Asset-backed securities:          
Collateralized loan obligations—
20,048
 61
 —
20,109
—
27,908
 —
 —
27,908
Other—
7,804
 —
 —
7,804
—
5,247
 —
 —
5,247
Total available-for-sale securities44,360
155,608
 62
 —
200,030
155,133
198,287
 1
 —
353,421
Loans—
2,847
 140
 —
2,987
—
5,759
 1
 —
5,760
Mortgage servicing rights—
—
 6,433
 —
6,433
—
—
 4,419
 —
4,419
Other assets(g)(e)
10,684
20
 1,063
 —
11,767
7,467
37
 746
 —
8,250
Total assets measured at fair value on a recurring basis$232,560
$889,238
 $19,031
 $(483,086)$657,743
$391,227
$1,047,637
 $15,123
 $(566,821)$887,166
Deposits$—
$16,060
 $4,440
 $—
$20,500
$—
$25,719
 $3,636
 $—
$29,355
Federal funds purchased and securities loaned or sold under repurchase agreements—
1,059
 —
 —
1,059
—
933
 —
 —
933
Short-term borrowings—
5,914
 1,971
 —
7,885
—
4,496
 2,001
 —
6,497
Trading liabilities:     

     

Debt and equity instruments(d)
84,958
24,403
 96
 —
109,457
66,515
23,970
 68
 —
90,553
Derivative payables:     

     

Interest rate310
232,614
 1,309
 (227,142)7,091
1,206
335,401
 2,106
 (328,490)10,223
Credit


22,435
 925
 (21,908)1,452
—
16,100
 962
 (14,903)2,159
Foreign exchange880
175,664
 1,075
 (165,217)12,402
3,583
160,760
 1,399
 (150,726)15,016
Equity—
45,937
 5,418
 (39,377)11,978
—
45,109
 5,782
 (40,288)10,603
Commodity—
22,075
 764
 (14,069)8,770
—
25,495
 316
 (16,022)9,789
Total derivative payables(e)
1,190
498,725
 9,491
 (467,713)41,693
4,789
582,865
 10,565
 (550,429)47,790
Total trading liabilities86,148
523,128
 9,587
 (467,713)151,150
71,304
606,835
 10,633
 (550,429)138,343
Accounts payable and other liabilities5,127
20
 12
 —
5,159
2,355
37
 19
 —
2,411
Beneficial interests issued by consolidated VIEs—
16
 1
 —
17
—
39
 —
 —
39
Long-term debt—
34,074
 20,038
 —
54,112
—
49,608
 22,349
 —
71,957
Total liabilities measured at fair value on a recurring basis$91,275
$580,271
 $36,049
 $(467,713)$239,882
$73,659
$687,667
 $38,638
 $(550,429)$249,535



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

Level 3

 Total fair value
December 31, 2018 (in millions)Level 1Level 2
Level 3
Derivative
netting
adjustments(f)
 Total fair value
Federal funds sold and securities purchased under resale agreements$—
$14,732

$—

$—
 $14,732
$—
$13,235

$—

 $13,235
Securities borrowed—
3,049

—

—
 3,049
—
5,105

—

 5,105
Trading assets: 
 
    
 
   
Debt instruments: 
 
    
 
   
Mortgage-backed securities: 
 
    
 
   
U.S. government agencies(a)
—
41,515

307

—
 41,822
U.S. GSEs and government agencies(a)
—
76,249

549

—
 76,798
Residential – nonagency—
1,835

60

—
 1,895
—
1,798

64

—
 1,862
Commercial – nonagency—
1,645

11

—
 1,656
—
1,501

11

—
 1,512
Total mortgage-backed securities—
44,995

378

—
 45,373
—
79,548

624

—
 80,172
U.S. Treasury and government agencies(a)
30,758
6,475

1

—
 37,234
U.S. Treasury, GSEs and government agencies(a)
51,477
7,702

—

—
 59,179
Obligations of U.S. states and municipalities—
9,067

744

—
 9,811
—
7,121

689

—
 7,810
Certificates of deposit, bankers’ acceptances and commercial paper—
226

—

—
 226
—
1,214

—

—
 1,214
Non-U.S. government debt securities28,887
28,831

78

—
 57,796
27,878
27,056

155

—
 55,089
Corporate debt securities—
24,146

312

—
 24,458
—
18,655

334

—
 18,989
Loans(b)
—
35,242

2,719

—
 37,961
—
40,047

1,706

—
 41,753
Asset-backed securities—
3,284

153

—
 3,437
—
2,756

127

—
 2,883
Total debt instruments59,645
152,266

4,385

—
 216,296
79,355
184,099

3,635

—
 267,089
Equity securities87,346
197

295

—
 87,838
71,119
482

232

—
 71,833
Physical commodities(c)
4,924
1,322

—

—
 6,246
5,182
1,855

—

—
 7,037
Other—
14,197

690

—
 14,887
—
13,192

301

—
 13,493
Total debt and equity instruments(d)
151,915
167,982

5,370

—
 325,267
155,656
199,628

4,168

—
 359,452
Derivative receivables: 







 

 







 

Interest rate181
314,107

1,704

(291,319) 24,673
682
266,380

1,642

(245,490) 23,214
Credit—
21,995

1,209

(22,335) 869
—
19,235

860

(19,483) 612
Foreign exchange841
158,834

557

(144,081) 16,151
771
166,238

676

(154,235) 13,450
Equity—
37,722

2,318

(32,158) 7,882
—
46,777

2,508

(39,339) 9,946
Commodity—
19,875

210

(13,137) 6,948
—
20,339

131

(13,479) 6,991
Total derivative receivables(e)
1,022
552,533

5,998

(503,030) 56,523
1,453
518,969

5,817

(472,026) 54,213
Total trading assets(f)(e)
152,937
720,515

11,368

(503,030) 381,790
157,109
718,597

9,985

(472,026) 413,665
Available-for-sale securities: 







 

 







 

Mortgage-backed securities: 







 

 







 

U.S. government agencies(a)
—
70,280

—

—
 70,280
U.S. GSEs and government agencies(a)
—
68,646

—

—
 68,646
Residential – nonagency—
11,366

1

—
 11,367
—
8,519

1

—
 8,520
Commercial – nonagency—
5,025

—

—
 5,025
—
6,654

—

—
 6,654
Total mortgage-backed securities—
86,671

1

—
 86,672
—
83,819

1

—
 83,820
U.S. Treasury and government agencies22,745
—

—

—
 22,745
56,059
—

—

—
 56,059
Obligations of U.S. states and municipalities—
32,338

—

—
 32,338
—
37,723

—

—
 37,723
Certificates of deposit—
59

—

—
 59
—
75

—

—
 75
Non-U.S. government debt securities18,140
9,154

—

—
 27,294
15,313
8,789

—

—
 24,102
Corporate debt securities—
2,757

—

—
 2,757
—
1,918

—

—
 1,918
Asset-backed securities: 







 

 







 

Collateralized loan obligations—
20,720

276

—
 20,996
—
19,437

—

—
 19,437
Other—
8,817

—

—
 8,817
—
7,260

—

—
 7,260
Equity securities(g)
547
—

—

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

277

—
 202,225
71,372
159,021

1

—
 230,394
Loans—
2,232

276

—
 2,508
—
3,029

122

—
 3,151
Mortgage servicing rights—
—

6,030

—
 6,030
—
—

6,130

—
 6,130
Other assets(f)(g)
13,795
343

1,265

—
 15,403
Other assets(e)
7,810
195

927

—
 8,932
Total assets measured at fair value on a recurring basis$208,164
$901,387

$19,216

$(503,030) $625,737
$236,291
$899,182

$17,165

$(472,026) $680,612
Deposits$—
$17,179

$4,142

$—
 $21,321
$—
$19,048

$4,169

$—
 $23,217
Federal funds purchased and securities loaned or sold under repurchase agreements—
697

—

—
 697
—
935

—

—
 935
Short-term borrowings—
7,526

1,665

—
 9,191
—
5,607

1,523

—
 7,130
Trading liabilities: 
 


 

 
 


 

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

39

—
 85,886
80,199
22,755

50

—
 103,004
Derivative payables: 



    



   
Interest rate170
282,825

1,440

(277,306) 7,129
1,526
239,576

1,680

(234,998) 7,784
Credit—
22,009

1,244

(21,954) 1,299
—
19,309

967

(18,609) 1,667
Foreign exchange794
154,075

953

(143,349) 12,473
695
163,549

973

(152,432) 12,785
Equity—
39,668

5,727

(36,203) 9,192
—
46,462

4,733

(41,034) 10,161
Commodity—
21,017

884

(14,217) 7,684
—
21,158

1,260

(13,046) 9,372
Total derivative payables(e)
964
519,594

10,248

(493,029) 37,777
Total derivative payables2,221
490,054

9,613

(460,119) 41,769
Total trading liabilities65,628
540,777

10,287

(493,029) 123,663
82,420
512,809

9,663

(460,119) 144,773
Accounts payable and other liabilities9,074
121

13

—
 9,208
3,063
196

10

—
 3,269
Beneficial interests issued by consolidated VIEs—
6

39

—
 45
—
27

1

—
 28
Long-term debt—
31,394

16,125

—
 47,519
—
35,468

19,418

—
 54,886
Total liabilities measured at fair value on a recurring basis$74,702
$597,700

$32,271

$(493,029) $211,644
$85,483
$574,090

$34,784

$(460,119) $234,238
(a)At September 30, 2018,2019, and December 31, 2017,2018, included total U.S. government-sponsored enterpriseGSE obligations of $77.3$133.6 billion and $78.0$92.3 billion, respectively, which were predominantly mortgage-related.
(b)At September 30, 2018,2019, and December 31, 2017,2018, included within trading loans were $13.8$16.1 billion and $11.4$13.2 billion, respectively, of residential first-lien mortgages, and $2.6$4.2 billion and $4.2$2.3 billion, respectively, of commercial first-lien mortgages. Residential mortgage loans include conforming mortgage loans originated with the intent to sell to U.S. GSEs and government agencies of $9.2$10.3 billion and $5.7$7.6 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

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. ForRefer to Note 4 for a further discussion of the Firm’s hedge accounting relationships, refer to Note 4.relationships. 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, 2018,2019, and December 31, 2017,2018, the fair values of these investments, which include certain hedge funds, private equity funds, real estate and other funds, were $767$714 million and $779$747 million, respectively. Included in these balances at September 30, 2018,2019, and December 31, 2017,2018, were trading assets of $55$48 million and $54$49 million, respectively, and other assets of $712$666 million and $725$698 million, respectively.
(g)(f)
Effective January 1, 2018,As permitted under U.S. GAAP, the Firm adoptedhas elected to net derivative receivables and derivative payables and the recognitionrelated cash collateral received and measurement guidance. Equity securities thatpaid when a legally enforceable master netting agreement exists. The level 3 balances would be reduced if netting were previously reported as AFS securities were reclassified to other assets upon adoption.
applied, including the netting benefit associated with cash collateral.

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
ForRefer to Note 2 of JPMorgan Chase’s 2018 Form 10-K 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.instruments.
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, 2018,2019, 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 lowerupper end of the range. Prepayment speed inputs used in estimating the 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 the 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 and price inputs were concentrated towards the lower end of the range.


Level 3 inputs(a)
Level 3 inputs(a)
      
Level 3 inputs(a)
      
September 30, 2018      
September 30, 2019September 30, 2019      
Product/Instrument
Fair value
(in millions)
 Principal valuation technique
Unobservable inputs(g)
Range of input valuesWeighted average 
Fair value
(in millions)
 Principal valuation technique
Unobservable inputs(g)
Range of input valuesWeighted average 
Residential mortgage-backed securities and loans(b)
$823
 Discounted cash flowsYield0 %–28% 6%$1,132
 Discounted cash flowsYield0 %–19% 5%
 Prepayment speed0 %–39% 9%  Prepayment speed0 %–22% 14%
  Conditional default rate0 %–6% 1%  Conditional default rate0 %–4% 1%
  Loss severity0 %–100% 5%  Loss severity0 %–100% 2%
Commercial mortgage-backed securities and loans(c)
439
 Market comparablesPrice$4
–$101
 $93
147
 Market comparablesPrice$0
–$102
 $80
Obligations of U.S. states and municipalities699
 Market comparablesPrice$60
–$100
 $97
627
 Market comparablesPrice$68
–$100
 $97
Corporate debt securities395
 Market comparablesPrice$3
–$110
 $80
484
 Market comparablesPrice$4
–$116
 $79
Loans(d)
1,031
 Market comparablesPrice$3
–$102
 $79
194
 Discounted cash flowsYield5 %–22% 7%
1,115
 Market comparablesPrice$12
–$101
 $78
Asset-backed securities61
 Discounted cash flowsCredit spread219 bps 219 bps38
 Market comparablesPrice$1
–$100
 $53
  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 bps–38 bps (388) Option pricingInterest rate spread volatility20 bps–30 bps 
  Interest rate correlation(45)%–97%    Interest rate correlation(28)%–96%  
  IR-FX correlation55 %–60%    IR-FX correlation53 %–60%  
163
 Discounted cash flowsPrepayment speed0 %–30%  69
 Discounted cash flowsPrepayment speed4 %–30%  
Net credit derivatives26
 Discounted cash flowsCredit correlation35 %–60%  (353) Discounted cash flowsCredit correlation30 %–60%  
  Credit spread6 bps–1,543 bps  
  Recovery rate20 %–70%  
  Yield3 %–52%    Credit spread4 bps–1,315 bps  
  Prepayment speed5 %–17%    Recovery rate15 %–70%  
  Conditional default rate0 %–100%    Conditional default rate2 %–93%  
  Loss severity0 %–100%    Loss severity100%  
1
 Market comparablesPrice$10
–$98
  36
 Market comparablesPrice$1
–$115
  
Net foreign exchange derivatives(121) Option pricingIR-FX correlation(45)%–60%  (679) Option pricingIR-FX correlation(58)%–60%  
(181) Discounted cash flowsPrepayment speed8 %–9%  (162) Discounted cash flowsPrepayment speed9%  
Net equity derivatives(2,277) Option pricingEquity volatility10 %–60%  (3,468) Option pricingEquity volatility11 %–82%  
  Equity correlation10 %–95%    Equity correlation10 %–98%  
  Equity-FX correlation(75)%–60%    Equity-FX correlation(81)%–59%  
  Equity-IR correlation20 %–60%    Equity-IR correlation25 %–60%  
Net commodity derivatives(525) Option pricingForward commodity price$61
–$ 83 per barrel(47) Option pricingForward commodity price$30
–$ 61 per barrel
  Commodity volatility5 %–48%    Commodity volatility5 %–111%  
  Commodity correlation(52)%–95%    Commodity correlation(48)%–95%  
MSRs6,433
 Discounted cash flowsRefer to Note 14  4,419
 Discounted cash flowsRefer to Note 14  
Other assets322
 Discounted cash flowsCredit spread70 bps 70 bps303
 Discounted cash flowsCredit spread45 bps 45 bps
  Yield8 %–10% 8%  Yield12% 12%
1,154
 Market comparablesPrice$34
–$106
 $45
775
 Market comparablesPrice$18
–$115
 $36
  
EBITDA multiple

3.0x
–9.2x
 8.4x
Long-term debt, short-term borrowings, and deposits(e)
26,449
 Option pricingInterest rate spread volatility16 bps–38 bps 27,986
 Option pricingInterest rate spread volatility20 bps–30 bps 
 Interest rate correlation(45)%–97%    Interest rate correlation(28)%–96%  
 IR-FX correlation(45)%–60%    IR-FX correlation(58)%–60%  
 Equity correlation10 %–95%    Equity correlation10 %–98%  
 Equity-FX correlation(75)%–60%    Equity-FX correlation(81)%–59%  
 Equity-IR correlation20 %–60%    Equity-IR correlation25 %–60%  
Other level 3 assets and liabilities, net(f)
384
      229
      
(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)IncludesComprises U.S. GSEs and government agency securities of $502$811 million, nonagency securities of $78$24 million and trading loans of $243$297 million.
(c)Includes U.S. government agency securities of $27 million,Comprises nonagency securities of $13$5 million, trading loans of $259$141 million and non-trading loans of $140$1 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
ForRefer to Note 2 of JPMorgan Chase’s 2018 Form 10-K 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.positions.
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, 20182019 and 2017. 2018. When a determination is made to classify a financial instrument within level 3, the determination is based on the significance of the unobservable parametersinputs to the overall
 
the overall fair value measurement. However, level 3 financial instruments typically include, in addition to the unobservable or level 3 components, observable components (that is, components that are actively quoted and can be validated to external sources); accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology. Also, the Firm risk-manages the observable components of level 3 financial instruments using securities and derivative positions that are classified within level 1 or 2 of the fair value hierarchy; as these level 1 and level 2 risk management instruments are not included below, the gains or losses in the following tables do not reflect the effect of the Firm’s risk management activities related to such level 3 instruments.



Fair value measurements using significant unobservable inputs  Fair value measurements using significant unobservable inputs  
Three months ended
September 30, 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)
Three months ended
September 30, 2019
(in millions)		Fair value at
July 1,
2019		Total realized/unrealized gains/(losses) 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2019		Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2019
Purchases(f)
Sales 
Settlements(g)
Assets:(a)                    
Trading assets:                    
Debt instruments:                    
Mortgage-backed securities:                    
U.S. government agencies$478
 $2
 $14
$(28) $(17)$83
$(3) $529
 $—
 
U.S. GSEs and government agencies$617
 $(71) $424
$(104) $(45)$—
$(10) $811
 $(70) 
Residential – nonagency87
 1
 —
(6) (3)18
(20) 77
 1
 42
 —
 2
(3) —
—
(17) 24
 (1) 
Commercial – nonagency18
 (1) —
—
 —
9
(13) 13
 (1) 9
 —
 3
(5) —
—
(2) 5
 —
 
Total mortgage-backed securities583
 2
 14
(34) (20)110
(36) 619
 —
 668
 (71) 429
(112) (45)—
(29) 840
 (71) 
U.S. Treasury and government agencies
—
 —
 —
—
 —
—
—
 —
 —
 
U.S. Treasury, GSEs and government agencies
—
 —
 —
—
 —
—
—
 —
 —
 
Obligations of U.S. states and municipalities736
 8
 26
(70) (1)—
—
 699
 7
 680
 (2) 27
(77) (1)—
—
 627
 (2) 
Non-U.S. government debt securities183
 (9) 44
(29) (2)1
(24) 164
 (9) 190
 (1) 40
(74) —
3
(12) 146
 (1) 
Corporate debt securities274
 (2) 156
(87) (4)82
(24) 395
 (3) 562
 45
 56
(167) —
17
(29) 484
 3
 
Loans1,986
 17
 188
(146) (199)48
(361) 1,533
 3
 1,778
 (44) 152
(82) (132)211
(137) 1,746
 (46) 
Asset-backed securities87
 6
 5
(7) (13)5
(7) 76
 3
 33
 —
 11
(2) (2)3
(5) 38
 (2) 
Total debt instruments3,849
 22
 433
(373) (239)246
(452) 3,486
 1
 3,911
 (73) 715
(514) (180)234
(212) 3,881
 (119) 
Equity securities288
 20
 6
(48) —
82
(19) 329
 (18) 147
 (14) 10
(10) —
46
(9) 170
 (16) 
Other406
 30
 13
—
 (37)2
(1) 413
 10
 311
 18
 35
(15) (15)—
(2) 332
 23
 
Total trading assets – debt and equity instruments4,543
 72
(c) 
452
(421) (276)330
(472) 4,228
 (7)
(c) 
4,369
 (69)
(c) 
760
(539) (195)280
(223) 4,383
 (112)
(c) 
Net derivative receivables:(a)(b)
                    
Interest rate489
 236
 28
(22) (101)68
(7) 691
 216
 (544) 88
 39
(15) 53
10
50
 (319) (15) 
Credit(24) (19) 1
—
 47
6
16
 27
 (15) (232) (65) 3
(3) (23)3
—
 (317) (68) 
Foreign exchange(245) (56) 29
(7) (49)(2)28
 (302) (54) (193) (653) 2
(1) (1)6
(1) (841) (657) 
Equity(2,578) (94) 643
(635) 622
(251)16
 (2,277) (121) (2,560) (382) 174
(118) (377)(203)(2) (3,468) (362) 
Commodity(752) 318
 —
—
 (113)15
7
 (525) 138
 (908) 8
 22
(69) 6
18
876
 (47) 40
 
Total net derivative receivables(3,110) 385
(c) 
701
(664) 406
(164)60
 (2,386) 164
(c) 
(4,437) (1,004)
(c) 
240
(206) (342)(166)923
 (4,992) (1,062)
(c) 
Available-for-sale securities:                    
Mortgage-backed securities—
 —
 1
—
 —
—
—
 1
 —
 
Asset-backed securities147
 —
 —
—
 (86)—
—
 61
 —
 —
 —
 —
—
 —
—
—
 —
 —
 
Other1
 —
 —
—
 —
—
—
 1
 —
 
Total available-for-sale securities148
 —

—
—
 (86)—
—
 62
 —

—
 —

1
—
 —
—
—
 1
 —

Loans159
 (1)
(c) 
1
—
 (19)—
—
 140
 (1)
(c) 
5
 —

—
—
 (4)—
—
 1
 —

Mortgage servicing rights6,241
 98
(e) 
291
(2) (195)—
—
 6,433
 98
(e) 
5,093
 (447)
(d) 
388
(359) (256)—
—
 4,419
 (447)
(d) 
Other assets1,225
 (160)
(c) 
2
—
 (7)3
—
 1,063
 (160)
(c) 
861
 (56)
(c) 
19
(72) (6)—
—
 746
 (56)
(c) 
                    
Fair value measurements using significant unobservable inputs  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)
Three months ended
September 30, 2019
(in millions)		Fair value at
July 1, 2019		Total realized/unrealized (gains)/losses 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2019		Change in unrealized (gains)/
losses related
to financial instruments held at September 30, 2019
PurchasesSalesIssuances
Settlements(g)
Liabilities:(b)(a)
                    
Deposits$4,305
 $(84)
(c)(i) 
$—
$—
$517
$(170)$1
$(129) $4,440
 $(82)
(c)(i) 
$4,066
 $—

$—
$—
$153
$(188)$12
$(407) $3,636
 $16
(c)(e) 
Short-term borrowings2,209
 (47)
(c)(i) 
—
—
713
(885)6
(25) 1,971
 (31)
(c)(i) 
2,052
 24
(c)(e) 
—
—
949
(1,040)17
(1) 2,001
 28
(c)(e) 
Trading liabilities – debt and equity instruments43
 36
(c) 
(6)19
—
(2)7
(1) 96
 36
(c) 
45
 —

(5)25
—
1
2
—
 68
 —

Accounts payable and other liabilities8
 1
 —
—
—
—
3
—
 12
 1
 92
 (6)
(c) 
(71)4
—
—
—
—
 19
 (2)
(c) 
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) 
21,863
 187
(c)(e) 
—
—
2,230
(1,758)49
(222) 22,349
 89
(c)(e) 


Fair value measurements using significant unobservable inputs


 Fair value measurements using significant unobservable inputs

 
Three months ended
September 30, 2017
(in millions)		Fair
value
at July 1, 2017		Total realized/unrealized gains/(losses)
 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2017		Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2017
Purchases(f)
Sales
 
Settlements(g)
Three months ended
September 30, 2018
(in millions)		Fair value at
July 1,
2018		 Total realized/unrealized gains/(losses)
 

Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2018		Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2018
Purchases(f)
Sales
 
Settlements(g)
 
Assets:(a)


 

 









 


 


 








Trading assets:


 

 









 


 


 








Debt instruments:


 

 









 


 


 








Mortgage-backed securities:


 

 









 


 


 








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

$(2)
U.S. GSEs and government agencies$478
 $2

$14
$(28)
 $(17)
$83
$(3)
$529

$—

Residential – nonagency98
6

4
(4)
 (12)50
(35)
107

5

87
 1

—
(6)
 (3)
18
(20)
77

1

Commercial – nonagency65
3

10
(24)
 —
3
(30)
27

3

18
 (1)
—
—

 



9
(13)
13

(1)
Total mortgage-backed securities528
7

14
(43)
 (32)63
(80)
457

6

583
 2

14
(34)
 (20)
110
(36)
619

—

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

31
—

 —
—
—

715

3

736
 8

26
(70)
 (1)
—
—

699

7

Non-U.S. government debt securities37
—

252
(217)
 —
23
(15)
80

—

183
 (9)
44
(29)
 (2)
1
(24)
164

(9)
Corporate debt securities461
7

193
(327)
 (22)68
(19)
361

8

274
 (2)
156
(87)
 (4)
82
(24)
395

(3)
Loans4,488
131

564
(1,498)
 (421)246
(303)
3,207

71

1,986
 17

188
(146)
 (199)
48
(361)
1,533

3

Asset-backed securities83
5

170
(10)
 (8)36
(5)
271

4

87
 6

5
(7)
 (13)
5
(7)
76

3

Total debt instruments6,278
153

1,224
(2,095)
 (483)437
(422)
5,092

92

3,849
 22

433
(373)
 (239)
246
(452)
3,486

1

Equity securities284
6

29
(40)
 —
16
(7)
288

7

288
 20

6
(48)
 



82
(19)
329

(18)
Other731
20

5
(38)
 (25)—
(2)
691

16

406
 30

13
—

 (37)
2
(1)
413

10

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

115
(c) 
4,543
 72
(c) 
452
(421)
 (276)
330
(472)
4,228

(7)
(c) 
Net derivative receivables:(a)(b)










 

 










 







 


 








Interest rate712
101

16
(23)
 (182)21
19

664

(7)
489
 236

28
(22)
 (101)
68
(7)
691

216

Credit(45)(32)
—
(1)
 (2)40
4

(36)
(22)
(24) (19)
1
—

 47

6
16

27

(15)
Foreign exchange(686)16

9
(2)
 68
(39)95

(539)
37

(245) (56)
29
(7)
 (49)
(2)28

(302)
(54)
Equity(2,444)(10)
355
(184)
 (132)(1)41

(2,375)
82

(2,578) (94)
643
(635)
 622

(251)16

(2,277)
(121)
Commodity(58)(30)
—
—

 (3)(2)(7)
(100)
(51)
(752) 318

—
—

 (113)
15
7

(525)
138

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

(2,386)
39
(c) 
(3,110) 385
(c) 
701
(664)
 406

(164)60

(2,386)
164
(c) 
Available-for-sale securities: 
 
  
 
 
   
 
  
 
 
 
Mortgage-backed securities1
 —

—
—

 —

—
—

1

—

Asset-backed securities547
2

—
—

 (63)—
—

486

2

147
 —

—
—

 (86)
—
—

61

—

Other1
—

—
—

 —
—
—

1

—

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

 (63)—
—

487

2
(d) 
148
 —

—
—

 (86)
—
—

62

—

Loans305
8
(c) 
—
(26)
 (10)—
—

277

8
(c) 
159
 (1)
(c) 
1
—

 (19)
—
—

140

(1)
(c) 
Mortgage servicing rights5,753
(66)
(e) 
253
(2)
 (200)—
—

5,738

(66)
(e) 
6,241
 98
(d) 
291
(2)
 (195)
—
—

6,433

98
(d) 
Other assets1,934
18
(c) 
3
(2)  (82)—
—
 1,871
 16
(c) 
1,225
 (160)
(c) 
2
—
  (7) 3
—
 1,063
 (160)
(c) 
                        

Fair value measurements using significant unobservable inputs

Fair value measurements using significant unobservable inputs

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

 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2017		Change in unrealized (gains)/losses related
to financial instruments held at September 30, 2017
PurchasesSalesIssuances
Settlements(g)
Three months ended
September 30, 2018
(in millions)		Fair value at
July 1,
2018		 Total realized/unrealized (gains)/losses

 
 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2018		Change in unrealized (gains)/losses related
to financial instruments held at September 30, 2018
PurchasesSalesIssuances
Settlements(g)

Liabilities:(b)(a)



 

 








 


 

  







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

$27
(c) 
$4,305
 $(84)
(c)(e) 
$—
$—
$517
 $(170)
$1
$(129)
$4,440

$(82)
(c)(e) 
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) 
2,209
 (47)
(c)(e) 
—
—
713
 (885)
6
(25)
1,971

(31)
(c)(e) 
Trading liabilities – debt and equity instruments36
2
(c) 
(23)28
—
 —
—
—

43

3
(c) 
43
 36
(c) 
(6)19
—
 (2)
7
(1)
96

36
(c) 
Accounts payable and other liabilities10
—

—
—
—
 (1)—
—

9

—

8
 1
(c) 
—
—
—
 —

3
—

12

1
(c) 
Beneficial interests issued by consolidated VIEs1
—

—
39
—
 —
78
—

118

—

1
 —

—
—
—
 —

—
—

1

—

Long-term debt14,732
319
(c)(j) 
—
—
3,023
(j) 
(3,552)181
(209)
14,494
(j) 
242
(c)(j) 
17,632
(i) 
194
(c)(e) 
—
—
3,551
 (1,809)
59
(219)
19,408
(i) 
192
(c)(e) 


Fair value measurements using significant unobservable inputs  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)
Nine months ended
September 30, 2019
(in millions)		Fair value at
January 1,
2019		Total realized/unrealized gains/(losses)    
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2019		Change in unrealized gains/(losses) related
to financial instruments held at September 30, 2019
Purchases(f)
Sales  
Settlements(g)
 
Assets:(a)                        
Trading assets:                        
Debt instruments:                        
Mortgage-backed securities:                        
U.S. government agencies$307
 $5
 $348
$(126) $(56)$92
$(41) $529
 $3
 
U.S. GSEs and government agencies$549
 $(111) $747
$(272)  $(83) $1
$(20) $811
 $(116) 
Residential – nonagency60
 1
 45
(19) (6)58
(62) 77
 4
 64
 25
 83
(86)  (20) 15
(57) 24
 (1) 
Commercial – nonagency11
 2
 7
(8) (13)30
(16) 13
 (1) 11
 2
 19
(24)  (14) 15
(4) 5
 1
 
Total mortgage-backed securities378
 8
 400
(153) (75)180
(119) 619
 6
 624
 (84) 849
(382)  (117) 31
(81) 840
 (116) 
U.S. Treasury and government agencies
1
 —
 —
—
 —
—
(1) —
 —
 
U.S. Treasury, GSEs and government agencies
—
 —
 —
—
  —
 —
—
 —
 —
 
Obligations of U.S. states and municipalities744
 (3) 107
(70) (79)—
—
 699
 (3) 689
 12
 85
(152)  (7) —
—
 627
 13
 
Non-U.S. government debt securities78
 (19) 395
(213) (2)18
(93) 164
 (18) 155
 (2) 228
(231)  —
 14
(18) 146
 3
 
Corporate debt securities312
 (6) 297
(227) (15)249
(215) 395
 (1) 334
 74
 340
(236)  (53) 96
(71) 484
 15
 
Loans2,719
 58
 1,223
(1,680) (528)422
(681) 1,533
 (22) 1,706
 95
 609
(416)  (408) 509
(349) 1,746
 44
 
Asset-backed securities153
 15
 64
(29) (53)18
(92) 76
 8
 127
 —
 30
(81)  (39) 23
(22) 38
 (3) 
Total debt instruments4,385
 53
 2,486
(2,372) (752)887
(1,201) 3,486
 (30) 3,635
 95
 2,141
(1,498)  (624) 673
(541) 3,881
 (44) 
Equity securities295
 (1) 99
(108) (1)86
(41) 329
 11
 232
 (28) 33
(92)  (22) 142
(95) 170
 (21) 
Other690
 (209) 47
(40) (75)3
(3) 413
 (250) 301
 42
 50
(16)  (41) 1
(5) 332
 55
 
Total trading assets – debt and equity instruments5,370
 (157)
(c) 
2,632
(2,520) (828)976
(1,245) 4,228
 (269)
(c) 
4,168
 109
(c) 
2,224
(1,606)  (687) 816
(641) 4,383
 (10)
(c) 
Net derivative receivables:(a)(b)
                        
Interest rate264
 576
 83
(77) (234)40
39
 691
 498
 (38) (575) 86
(102)
(i) 
 174
(i) 
22
114
 (319) (694) 
Credit(35) 19
 3
(7) 22
5
20
 27
 7
 (107) (209) 16
(5)  (13) 7
(6) (317) (169) 
Foreign exchange(396) 184
 42
(15) (46)(114)43
 (302) 42
 (297) (840) 13
(18)  294
 (19)26
 (841) (815) 
Equity(3,409) 688
 1,467
(1,919) 1,043
(324)177
 (2,277) 31
 (2,225) 328
 335
(573)  (1,062) (418)147
 (3,468) (1,193) 
Commodity(674) 468
 —
—
 (287)7
(39) (525) 158
 (1,129) 370
 32
(240)  51
 2
867
 (47) 634
 
Total net derivative receivables(4,250) 1,935
(c) 
1,595
(2,018) 498
(386)240
 (2,386) 736
(c) 
(3,796) (926)
(c) 
482
(938)  (556) (406)1,148
 (4,992) (2,237)
(c) 
Available-for-sale securities:

                       
Mortgage-backed securities1
 —
 1
—
  (1) —
—
 1
 —
 
Asset-backed securities276
 1
 —
—
 (216)—
—
 61
 1
 —
 —
 —
—
  —
 —
—
 —
 —
 
Other1
 —
 —
—
 —
—
—
 1
 —
 
Total available-for-sale securities277
 1
(d) 
—
—
 (216)—
—
 62
 1
(d) 
1
 —
 1
—
  (1) —
—
 1
 —
 
Loans276
 (5)
(c) 
123
—
 (180)—
(74) 140
 (5)
(c) 
122
 4
(c) 
—
—
  (125) —
—
 1
 —
 
Mortgage servicing rights6,030
 576
(e) 
770
(401) (542)—
—
 6,433
 576
(e) 
6,130
 (1,572)
(d) 
1,250
(687)  (702) —
—
 4,419
 (1,572)
(d) 
Other assets1,265
 (210)
(c) 
49
(16) (28)4
(1) 1,063
 (217)
(c) 
927
 (152)
(c) 
170
(160)  (33) 1
(7) 746
 (145)
(c) 
                        
Fair value measurements using significant unobservable inputs  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)
Nine months ended
September 30, 2019
(in millions)		Fair value at
January 1, 2019		Total realized/unrealized (gains)/losses    
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
September 30, 2019		Change in unrealized (gains)/
losses related
to financial instruments held at September 30, 2019
PurchasesSales Issuances
Settlements(g)
 
Liabilities:(b)(a)
                        
Deposits$4,142
 $(125)
(c)(i) 
$—
$—
$1,272
$(425)$2
$(426) $4,440
 $(115)
(c)(i) 
$4,169
 $241
(c)(e) 
$—
$—
 $580
$(504) $12
$(862) $3,636
 $250
(c)(e) 
Short-term borrowings1,665
 (229)
(c)(i) 
—
—
2,783
(2,245)61
(64) 1,971
 26
(c)(i) 
1,523
 142
(c)(e) 
—
—
 2,637
(2,265) 85
(121) 2,001
 74
(c)(e) 
Trading liabilities – debt and equity instruments39
 28
(c) 
(68)95
—
(1)9
(6) 96
 11
(c) 
50
 —
 (12)41
 —
1
 9
(21) 68
 (1)
(c) 
Accounts payable and other liabilities13
 —
 (6)1
—
—
4
—
 12
 —
 10
 (7)
(c) 
(79)94
 —
—
 1
—
 19
 4
(c) 
Beneficial interests issued by consolidated VIEs39
 —
 —
—
—
(38)—
—
 1
 —
 1
 (1)
(c) 
—
—
 —
—
 —
—
 —
 —
 
Long-term debt16,125
 (396)
(c)(i) 
—
—
10,382
(6,155)653
(571) 20,038
 (576)
(c)(i) 
19,418
 1,915
(c)(e) 
—
—
 6,929
(5,675) 522
(760) 22,349
 2,010
(c)(e) 


Fair value measurements using significant unobservable inputs  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)
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:(a)                        
Trading assets:                        
Debt instruments:                        
Mortgage-backed securities:                        
U.S. government agencies$392
 $(9) $161
$(166)  $(55)$37
$(37) $323
 $(17) 
U.S. GSEs and government agencies$307
$5
 $348
$(126)  $(56) $92
$(41) $529
 $3
 
Residential – nonagency83
 14
 40
(24)  (21)111
(96) 107
 2
 60
1
 45
(19)  (6) 58
(62) 77
 4
 
Commercial – nonagency17
 5
 27
(38)  (5)63
(42) 27
 1
 11
2
 7
(8)  (13) 30
(16) 13
 (1) 
Total mortgage-backed securities492
 10
 228
(228)  (81)211
(175) 457
 (14) 378
8
 400
(153)  (75) 180
(119) 619
 6
 
U.S. Treasury and government agencies
—
 —
 —
—
  —
1
—
 1
 —
 
U.S. Treasury, GSEs and government agencies1
—
 —
—
  —
 —
(1) —
 —
 
Obligations of U.S. states and municipalities649
 15
 126
(70)  (5)—
—
 715
 15
 744
(3) 107
(70)  (79) —
—
 699
 (3) 
Non-U.S. government debt securities46
 3
 426
(395)  —
50
(50) 80
 —
 78
(19) 395
(213)  (2) 18
(93) 164
 (18) 
Corporate debt securities576
 —
 690
(473)  (398)128
(162) 361
 11
 312
(6) 297
(227)  (15) 249
(215) 395
 (1) 
Loans4,837
 309
 2,055
(2,565)  (1,186)564
(807) 3,207
 73
 2,719
58
 1,223
(1,680)  (528) 422
(681) 1,533
 (22) 
Asset-backed securities302
 27
 279
(178)  (44)50
(165) 271
 2
 153
15
 64
(29)  (53) 18
(92) 76
 8
 
Total debt instruments6,902
 364
 3,804
(3,909)  (1,714)1,004
(1,359) 5,092
 87
 4,385
53
 2,486
(2,372)  (752) 887
(1,201) 3,486
 (30) 
Equity securities231
 40
 142
(87)  —
18
(56) 288
 34
 295
(1) 99
(108)  (1) 86
(41) 329
 11
 
Other761
 85
 27
(45)  (137)10
(10) 691
 46
 690
(209) 47
(40)  (75) 3
(3) 413
 (250) 
Total trading assets – debt and equity instruments7,894
 489
(c) 
3,973
(4,041)  (1,851)1,032
(1,425) 6,071
 167
(c) 
5,370
(157)
(c) 
2,632
(2,520)  (828) 976
(1,245) 4,228
 (269)
(c) 
Net derivative receivables:(a)(b)
                        
Interest rate1,263
 182
 53
(76)  (833)55
20
 664
 (184) 264
576
 83
(77)  (234) 40
39
 691
 498
 
Credit98
 (126) 1
(4)  (64)57
2
 (36) (57) (35)19
 3
(7)  22
 5
20
 27
 7
 
Foreign exchange(1,384) 86
 13
(6)  633
(16)135
 (539) (12) (396)184
 42
(15)  (46) (114)43
 (302) 42
 
Equity(2,252) 24
 840
(312)  (660)(182)167
 (2,375) 76
 (3,409)688
 1,467
(1,919)  1,043
 (324)177
 (2,277) 31
 
Commodity(85) (34) —
—
  22
2
(5) (100) 27
 (674)468
 —
—
  (287) 7
(39) (525) 158
 
Total net derivative receivables(2,360) 132
(c) 
907
(398)  (902)(84)319
 (2,386) (150)
(c) 
(4,250)1,935
(c) 
1,595
(2,018)  498
 (386)240
 (2,386) 736
(c) 
Available-for-sale securities:                        
Mortgage-backed securities1
—
 —
—
  —
 —
—
 1
 —
 
Asset-backed securities663
 14
 —
(50)  (141)—
—
 486
 12
 276
1
 —
—
  (216) —
—
 61
 1
 
Other1
 —
 —
—
  —
—
—
 1
 —
 
Total available-for-sale securities664
 14
(d) 
—
(50)  (141)—
—
 487
 12
(d) 
277
1
(j) 
—
—
  (216) —
—
 62
 1
(j) 
Loans570
 32
(c) 
—
(26)  (299)—
—
 277
 8
(c) 
276
(5)
(c) 
123
—
  (180) —
(74) 140
 (5)
(c) 
Mortgage servicing rights6,096
 (223)
(e) 
624
(140)  (619)—
—
 5,738
 (224)
(e) 
6,030
576
(d) 
770
(401)  (542) —
—
 6,433
 576
(d) 
Other assets2,223
 248
(c) 
35
(157)  (478)—
—
 1,871
 126
(c) 
1,265
(210)
(c) 
49
(16)  (28) 4
(1) 1,063
 (217)
(c) 
                        
Fair value measurements using significant unobservable inputs  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)
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)(a)
                        
Deposits$2,117
 $39
(c) 
$—
$—
$2,510
 $(169)$—
$(659) $3,838
 $140
(c) 
$4,142
$(125)
(c)(e) 
$—
$—
$1,272
 $(425) $2
$(426) $4,440
 $(115)
(c)(e) 
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) 
1,665
(229)
(c)(e) 
—
—
2,783
 (2,245) 61
(64) 1,971
 26
(c)(e) 
Trading liabilities – debt and equity instruments43
 1
(c) 
(31)32
—
 1
3
(6) 43
 1
(c) 
39
28
(c) 
(68)95
—
 (1) 9
(6) 96
 11
(c) 
Accounts payable and other liabilities13
 —
 (1)—
—
 (3)—
—
 9
 —
 13
—
 (6)1
—
 —
 4
—
 12
 —
 
Beneficial interests issued by consolidated VIEs48
 3
 (44)39
—
 (6)78
—
 118
 —
 39
—
 —
—
—
 (38) —
—
 1
 —
 
Long-term debt12,850
 918
(c)(j) 
—
—
9,756
(j) 
(8,637)269
(662) 14,494
(j) 
996
(c)(j) 
16,125
(396)
(c)(e) 
—
—
9,792
(i) 
(6,195)
(i) 
653
(571) 19,408
(i) 
(576)
(c)(e) 

(a)All levelLevel 3 derivatives are presentedassets as a percentage of total Firm assets accounted for at fair value (including assets measured at fair value on a net basis, irrespective of the underlying counterparty.
(b)nonrecurring basis) were 2% and 3% at September 30, 2019 and December 31, 2018, respectively. Level 3 liabilities as a percentage of total Firm liabilities accounted for at fair value (including liabilities measured at fair value on a nonrecurring basis) were 15% at both September 30, 20182019 and December 31, 2017,2018, respectively.
(b)All level 3 derivatives are presented on a net basis, irrespective of the underlying counterparty.
(c)Predominantly reported in principal transactions revenue, except for changes in fair value for CCB mortgage loans and lending-related commitments originated with the intent to sell, and mortgage loan purchase commitments, which are reported in mortgage fees and related income.
(d)Realized gains/(losses) on AFS securities, as well as other-than-temporary impairment (“OTTI”) losses that are recordedChanges in earnings,fair value for MSRs are reported in investment securities losses. Unrealized gains/(losses)mortgage fees and related income.
(e)
Realized (gains)/losses due to DVA for fair value option elected liabilities are reported in OCI. Thereprincipal transactions revenue, and they were no realized gains/(losses) or foreign exchange hedge accounting adjustments recorded in income on AFS securitiesnot material for the three and nine months ended September 30, 20182019 and 2017,2018, respectively. Unrealized gains/(losses) recorded on AFS securities(gains)/losses are reported in OCI, and they were zero$(62) million and $2$123 million for the three months ended September 30, 20182019 and 2017,2018, respectively and $1 million and $14$108 million for the nine months ended September 30, 20182019 and 2017, respectively.
(e)Changes in fair valuewere 0t material for CCB MSRs are reported in mortgage fees and related income.the nine months ended September 30, 2018.
(f)Loan originations are included in purchases.
(g)Includes financial assets and liabilities that have matured, been partially or fully repaid, impacts of modifications, deconsolidationdeconsolidations associated with beneficial interests in VIEs and other items.
(h)All transfers into and/or out of level 3 are based on changes in the observability and/or significance of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur.
(i)Realized (gains)/losses due to DVA for fair value option elected liabilities are reported in principal transactions revenue. Unrealized (gains)/losses are reported in OCI. Unrealized (gains)/losses were $123 million for the three months ended September 30, 2018 and unrealized (gains)/losses were not material for the nine months ended September 30, 2018. There were no material realized (gains)/losses for the three and nine months ended September 30, 2018, respectively.
(j)The prior period amounts have been revised to conform with the current period presentation.
(j)Realized gains/(losses) on AFS securities, as well as other-than-temporary impairment (“OTTI”) losses that are recorded in earnings, are reported in investment securities gains/(losses). Unrealized gains/(losses) are reported in OCI. There were 0 realized gains/(losses) recorded in income on AFS securities for the three and nine months ended September 30, 2019 and 2018, respectively. Unrealized gains/(losses) recorded on AFS securities in OCI were 0 for both the three months ended September 30, 2019 and 2018, respectively and 0 and $1 million for the nine months ended September 30, 2019 and 2018, respectively.
Level 3 analysis
Consolidated balance sheets changes
Level 3 assets, (includingincluding assets measured at fair value on a nonrecurring basis)basis, were 0.8% 0.6% of total Firm assets at September 30, 2018. 2019. The following describes significant changes to level 3 assets since December 31, 2017, 2018, for those items measured at fair value on a recurring basis. ForRefer to Assets and liabilities measured at fair value on a nonrecurring basis on page 97 for further information on changes impacting items measured at fair value on a nonrecurring basis, referbasis.
Three and nine months ended September 30, 2019
Level 3 assets were $15.1 billion at September 30, 2019, reflecting a decrease of $1.4 billion and $2.0 billion from June 30, 2019 and December 31, 2018, respectively.
The decrease for the three months ended September 30, 2019 was predominantly driven by a reduction of $674 million in MSRs and a reduction of $619 million in gross equity derivative receivables due to Assetssettlements.
The decrease for the nine months ended September 30, 2019 was predominantly driven by a reduction of approximately $1.7 billion in MSRs. Refer to the Gains and liabilities measuredlosses section below for additional information.
Transfers between levels for instruments carried at fair value on a nonrecurringrecurring basis onpage 105.
ThreeFor both the three and nine months ended September 30, 20182019, there were no individually significant transfers from level 2 to level 3.
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.
NineFor the three and nine months ended September 30, 20182019, individually significant transfers from level 3 to level 2 included $906 million and $927 million, respectively of gross commodities derivative payables as a result of an increase in observability.
Level 3 assets atFor the three months ended September 30, 2018, decreasedthere were no individually significant transfers from level 2 to level 3.
For the nine months ended September 30, 2018, significant transfers from level 2 to level 3 included the following:
$1.0 billion of gross equity derivative payables as a result of a decrease in observability and an increase in the significance of unobservable inputs.
For the three months ended September 30, 2018, there were no individually significant transfers from level 3 to level 2.
For the nine months ended September 30, 2018, 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 $185 million from December 31, 2017 with no movements that were individually significant.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.
All transfers are based on changes in the observability and/or significance of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur.
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 theseThese amounts exclude any effects of the Firm’s risk management activities where the financial instruments referare classified as level 1 and 2 of the fair value hierarchy. Refer to Changes in level 3 recurring fair value measurements rollforward tables onpages 99–104.90–95 for further information on these instruments.

Three months ended September 30, 2019
$1.6 billion of net losses on assets, predominantly driven by net derivative receivables due to market movements and MSRs largely reflecting faster prepayment speeds on lower rates. Refer to Note 14 for information on MSRs.
$205 million of net losses on liabilities, none of which were individually significant.
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.
ThreeNine months ended September 30, 20172019
$186 million2.5 billion of net gainslosses on assets, driven by net derivative receivables due to market movements and $387 millionMSRs reflecting faster prepayment speeds on lower rates. Refer to Note 14 for information on MSRs.
$2.3 billion of net losses on liabilities, none of which were individually significant.predominantly driven by market movements in long-term debt.
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,Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
2019
 2018
 2019
 2018
Credit and funding adjustments:              
Derivatives CVA$66
 $245
 $223
 $715
$55
 $66
 $71
 $223
Derivatives FVA88
 (222) 102
 (289)(83) 88
 (20) 102

ForRefer to Note 2 of JPMorgan Chase’s 2018 Form 10-K 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.liabilities.


Assets and liabilities measured at fair value on a nonrecurring basis
The following tables present the assets still held as of September 30, 20182019 and 2017,2018, respectively, for which a nonrecurring fair value adjustment was recorded during the nine months ended September 30, 2019 and 2018, and 2017, respectively, by major product category and fair value hierarchy.
Fair value hierarchy Total fair valueFair value hierarchy Total fair value
September 30, 2018 (in millions)Level 1
Level 2
 Level 3
 
September 30, 2019 (in millions)Level 1
Level 2
 Level 3
 Total fair value
Loans$—
$492

$243
(a) 
$735
$—
$5,338
(b) 
$246
(c) 
Other assets(b)(a)
—
216
 826
 1,042
—
18
 775
 793
Total assets measured at fair value on a nonrecurring basis$—
$708
 $1,069

$1,777
$—
$5,356
 $1,021
 $6,377
Fair value hierarchy Total fair valueFair value hierarchy Total fair value
September 30, 2017 (in millions)Level 1
Level 2
 Level 3
 
September 30, 2018 (in millions)Level 1
Level 2
 Level 3
 Total fair value
Loans$—
$338
 $542
 $880
$—
$492
 $243
 
Other assets—
7
 245
 252
—
216
 826
 1,042
Total assets measured at fair value on a nonrecurring basis$—
$345
 $787
 $1,132
$—
$708
 $1,069
 $1,777
(a)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). Of the $243$775 million in level 3 assets measured at fair value on a nonrecurring basis as of September 30, 2018,2019, $638 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.
(b)Primarily includes certain mortgage loans that were reclassified to held-for-sale.
(c)Of the $246 million in level 3 assets measured at fair value on a nonrecurring basis as of September 30, 2019, $200 million related to residential real estate loans carried at the net realizable value of the underlying collateral (e.g., collateral-dependent loans and other loans charged off in accordance with regulatory guidance). These amounts are classified as level 3 as they are valued using ainformation from broker’s price opinionopinions, appraisals and automated valuation models and discounted based upon the Firm’s experience with actual liquidation values. These discounts to the broker price opinions ranged from 13%14% to 40%49% with a weighted average of 22%29%.
(b)Primarily includes equity securities without readily determinable fair values that were adjusted based on observable price changes in orderly transactions from an identical or similar investment of the same issuer (measurement alternative) as a result of the adoption of the recognition and measurement guidance. Of the $826 million in level 3 assets measured at fair value on a nonrecurring basis as of September 30, 2018, $724 million related to such equity securities. These equity securities are classified as level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.
There were no material liabilities measured at fair value on a nonrecurring basis at September 30, 20182019 and at September 30, 2017.2018.
Nonrecurring fair value changes
The following table presents the total change in value of assets and liabilities for which a fair value adjustment has been recognized for the three and nine months ended September 30, 20182019 and 2017,2018, related to financial instrumentsassets held at those dates.
 Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
Loans$(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)

 Three months ended September 30, Nine months ended September 30,
(in millions)2019
 2018
 2019
 2018
Loans$(142)
(b) 
$(22) $(232)
(b) 
$(36)
Other assets(a)
23
  
(117) 123
 383
Total nonrecurring fair value gains/(losses)$(119) $(139) $(109) $347
(a)Included $34 million and $(113) million for the three months ended September 30, 2019 and 2018, respectively and $132 million and $384 million for the three months and nine months ended September 30, 2019 and 2018, respectively, of fair value gains/(losses)net gains as a result of the measurement alternative.

(b)Primarily includes the impact of certain mortgage loans that were reclassified to held-for-sale.
 
ForRefer to Note 12 of JPMorgan Chase’s 2018 Form 10-K 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..


Equity securities without readily determinable fair values
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, 2019 and 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.
 Three months ended Nine months ended
 September 30, September 30,
As of or for the period ended,       
(in millions)2019 2018 2019 2018
Other assets       
Carrying value(a)
$2,771
 $1,801
 $2,771
 $1,801
Upward carrying value changes(b)
34
 14
 169
 540
Downward carrying value changes/impairment(c)
—
 (127) (37) (156)
(a)The carrying value as of December 31, 2018 was $1.5 billion.
(b)The cumulative upward carrying value changes between January 1, 2018 and September 30, 2019 were $479 million.
(c)The cumulative downward carrying value changes/impairment between January 1, 2018 and September 30, 2019 were $(197) million.
Included 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 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 1.6228 at September 30, 2019, and may be adjusted by Visa depending on developments related to the litigation matters.

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, 2018,2019, and December 31, 2017,2018, 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.
 September 30, 2019 December 31, 2018
  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$21.2
$21.2
$—
$—
$21.2
 $22.3
$22.3
$—
$—
$22.3
Deposits with banks235.4
235.4
—
—
235.4
 256.5
256.5
—
—
256.5
Accrued interest and accounts receivable87.9
—
87.9
—
87.9
 72.0
—
71.9
0.1
72.0
Federal funds sold and securities purchased under resale agreements243.7
—
243.7
—
243.7
 308.4
—
308.4
—
308.4
Securities borrowed132.6
—
132.6
—
132.6
 106.9
—
106.9
—
106.9
Investment securities, held-to-maturity40.8
—
42.4
—
42.4
 31.4
—
31.5
—
31.5
Loans, net of allowance for loan losses(a)
926.2
—
218.9
720.7
939.6
 968.0
—
241.5
728.5
970.0
Other60.6
—
59.8
0.9
60.7
 60.5
—
59.6
1.0
60.6
Financial liabilities           
Deposits$1,495.9
$—
$1,496.3
$—
$1,496.3
 $1,447.4
$—
$1,447.5
$—
$1,447.5
Federal funds purchased and securities loaned or sold under repurchase agreements246.8
—
246.8
—
246.8
 181.4
—
181.4
—
181.4
Short-term borrowings42.4
—
42.4
—
42.4
 62.1
—
62.1
—
62.1
Accounts payable and other liabilities181.5
0.7
177.0
3.4
181.1
 160.6
0.2
157.0
3.0
160.2
Beneficial interests issued by consolidated VIEs18.5
—
18.5
—
18.5
 20.2
—
20.2
—
20.2
Long-term debt and junior subordinated deferrable interest debentures224.3
—
223.5
3.4
226.9
 227.1
—
224.6
3.3
227.9
(a)Fair value is typically estimated using a discounted cash flow model that incorporates the characteristics of the underlying loans (including principal, contractual interest rate and contractual fees) and other key inputs, including expected lifetime credit losses, interest rates, prepayment rates, and primary origination or secondary market spreads. For certain loans, the fair value is measured based on the value of the underlying collateral. The difference between the estimated fair value and carrying value of a financial asset or liability is the result of the different methodologies used to determine fair value as compared with carrying value. For example, credit losses are estimated for a financial asset’s remaining life in a fair value calculation but are estimated for a loss emergence period in the allowance for loan 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, refer to 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.
September 30, 2018 December 31, 2017September 30, 2019 December 31, 2018
 Estimated fair value hierarchy Estimated fair value hierarchy  Estimated fair value hierarchy   Estimated fair value hierarchy 
(in billions)
Carrying value(a)
Level 1Level 2Level 3Total estimated fair value 
Carrying value(a)
Level 1Level 2Level 3Total estimated fair value
Carrying value(a)
Level 1Level 2Level 3Total estimated fair value 
Carrying value(a)
Level 1Level 2Level 3
Total estimated fair value(b)
Wholesale lending-related commitments$1.1$—$1.5 $1.1$—$1.6$1.1
$—
$—
$1.9
$1.9
 $1.0
$—
$—
$1.9
$1.9
(a)Excludes the current carrying values of the guarantee liability and the offsetting asset, each of which is recognized at fair value at the inception of the guarantees.

(b)The prior period amounts have been revised to conform with the current period presentation.
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. ForRefer to page 161 of JPMorgan Chase’s 2018 Form 10-K for a further discussion of the valuation of lending-related commitments, refer to page 157commitments. 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
ForRefer to Note 3 of JPMorgan Chase’s 2018 Form 10-K 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.relevant.
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, 20182019 and 2017,2018, 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,Three months ended September 30,

2018 20172019 2018
(in millions)Principal transactions
All other income
Total changes in fair
value recorded (e)
 Principal transactions All other income
Total changes in fair value recorded (e)
Principal transactions All other income
Total changes in fair
value recorded (e)
 Principal transactions All other income
Total changes in fair value recorded (e)
Federal funds sold and securities purchased under resale agreements$(23)
$—

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

(24)
 (10) —
 (10)99
 —
 99
 (24) —
 (24)
Trading assets: 
 



                 
Debt and equity instruments, excluding loans(45)
5
(c) 
(40)
 412
 —
 412
546
 —
 546
 (45) 5
(c) 
(40)
Loans reported as trading assets: 
 



                 
Changes in instrument-specific credit risk122

1
(c) 
123

 139
 (2)
(c) 
137
111
 (4)
(c) 
107
 122
 1
(c) 
123
Other changes in fair value(6)
49
(c) 
43

 111
 249
(c) 
360
74
 320
(c) 
394
 (6) 49
(c) 
43
Loans: 
 



                 
Changes in instrument-specific credit risk(1)
—

(1)
 —
 —
 —
(4) —
 (4) (1) —
 (1)
Other changes in fair value1

—

1

 3
 —
 3
—
 —
 —
 1
 —
 1
Other assets2

16
(d) 
18

 3
 (4)
(d) 
(1)(6) —
 (6) 2
 16
(d) 
18
Deposits(a)
32

—

32

 (117) —
 (117)(397) —
 (397) 32
 —
 32
Federal funds purchased and securities loaned or sold under repurchase agreements8

—

8

 2
 —
 2
2
 —
 2
 8
 —
 8
Short-term borrowings(a)
(25)
—

(25)
 (54) —
 (54)173
 —
 173
 (25) —
 (25)
Trading liabilities2

—

2

 (3) —
 (3)—
 —
 —
 2
 —
 2
Other liabilities1
 —
 1
 —
 —
 —
Long-term debt(a)(b)
259

—

259

 (793) —
 (793)(614) —
 (614) 259
 —
 259


























Nine months ended September 30,Nine months ended September 30,
2018 20172019 2018
(in millions)Principal transactions All other income
Total changes in fair value recorded(e)
 Principal transactions All other income
Total changes in fair value recorded(e)
Principal transactions All other income
Total changes in fair
value recorded (e)
 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)$10
 $—
 $10
 $(49) $—
 $(49)
Securities borrowed(22) —
 (22) 80
 —
 80
179
 —
 179
 (22) —
 (22)
Trading assets:  —
                   
Debt and equity instruments, excluding loans(490) 6
(c) 
(484) 1,107
 2
(c) 
1,109
2,104
 —
 2,104
 (490) 6
(c) 
(484)
Loans reported as trading assets:  —
                   
Changes in instrument-specific credit risk458
 5
(c) 
463
 382
 13
(c) 
395
558
 1
(c) 
559
 458
 5
(c) 
463
Other changes in fair value64
 24
(c) 
88
 188
 601
(c) 
789
274
 885
(c) 
1,159
 64
 24
(c) 
88
Loans:                      
Changes in instrument-specific credit risk(2) —
 (2) (1) —
 (1)(12) —
 (12) (2) —
 (2)
Other changes in fair value(1) 


 (1) 4
 3
(c) 
7
1
 —
 1
 (1) —
 (1)
Other assets4
 6
(d) 
10
 10
 (26)
(d) 
(16)(3) 3
(d) 
—
 4
 6
(d) 
10
Deposits(a)
371
 —
 371
 (362) —
 (362)(1,589) —
 (1,589) 371
 —
 371
Federal funds purchased and securities loaned or sold under repurchase agreements27
 —
 27
 4
 —
 4
(18) —
 (18) 27
 —
 27
Other borrowed funds(a)
86
 —
 86
 (485) —
 (485)
Short-term borrowings(a)
(601) —
 (601) 86
 —
 86
Trading liabilities1
 —
 1
 (4) —
 (4)5
 —
 5
 1
 —
 1
Other liabilities(7) —
 (7) —
 —
 —
Long-term debt(a)(b)
1,486
 —
 1,486
 (1,716) —
 (1,716)(5,220) —
 (5,220) 1,486
 —
 1,486
(a)Unrealized gains/(losses) due to instrument-specific credit risk (DVA) for liabilities for which the fair value option has been elected is recorded in OCI, while realized gains/(losses) are recorded in principal transactions revenue. Realized gains/(losses) due to instrument-specific credit risk recorded in principal transactions revenue were not material for the three and nine months ended September 30, 20182019 and 2017,2018, 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. ForRefer to Note 6 for further information regarding interest income and interest expense, refer to Note 6.expense.



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, 2018,2019, and December 31, 2017,2018, for loans, long-term debt and long-term beneficial interests for which the fair value option has been elected.
September 30, 2018 December 31, 2017September 30, 2019 December 31, 2018
(in millions)Contractual principal outstanding
Fair valueFair value over/(under) contractual principal outstanding Contractual principal outstanding Fair valueFair value over/(under) contractual principal outstandingContractual principal outstanding
Fair valueFair value over/(under) contractual principal outstanding Contractual principal outstanding Fair valueFair value over/(under) contractual principal outstanding
Loans(a)







    






    
Nonaccrual loans






    






    
Loans reported as trading assets$4,171

$1,189
$(2,982) $4,219
 $1,371
$(2,848)$3,884

$1,151
$(2,733) $4,240
 $1,350
$(2,890)
Loans—

—
—
 39
 —
(39)181

151
(30) 39
 —
(39)
Subtotal4,171

1,189
(2,982) 4,258
 1,371
(2,887)4,065

1,302
(2,763) 4,279
 1,350
(2,929)
All other performing loans






    






    
Loans reported as trading assets41,986

40,395
(1,591) 38,157
 36,590
(1,567)45,315

43,903
(1,412) 42,215
 40,403
(1,812)
Loans3,039

2,987
(52) 2,539
 2,508
(31)5,686

5,609
(77) 3,186
 3,151
(35)
Total loans$49,196

$44,571
$(4,625) $44,954
 $40,469
$(4,485)$55,066

$50,814
$(4,252) $49,680
 $44,904
$(4,776)
Long-term debt






    






    
Principal-protected debt$31,858
(c) 
$27,518
$(4,340) $26,297
(c) 
$23,848
$(2,449)$40,750
(c) 
$37,635
$(3,115) $32,674
(c) 
$28,718
$(3,956)
Nonprincipal-protected debt(b)
NA

26,594
NA
 NA
 23,671
NA
NA

34,322
NA
 NA
 26,168
NA
Total long-term debtNA

$54,112
NA
 NA
 $47,519
NA
NA

$71,957
NA
 NA
 $54,886
NA
Long-term beneficial interests   

           
Nonprincipal-protected debtNA

$17
NA
 NA
 $45
NA
Nonprincipal-protected debt(b)
NA

$39
NA
 NA
 $28
NA
Total long-term beneficial interestsNA

$17
NA
 NA
 $45
NA
NA

$39
NA
 NA
 $28
NA
(a)There were no0 performing loans that were ninety days or more past due as of September 30, 2018,2019, and December 31, 2017,2018, respectively.
(b)Remaining contractual principal is not applicable to nonprincipal-protected notes.structured notes and long-term beneficial interests. Unlike principal-protected structured notes and long-term beneficial interests, for which the Firm is obligated to return a stated amount of principal at the maturity, of the note, nonprincipal-protected structured notes and long-term beneficial interests do not obligate the Firm to return a stated amount of principal at maturity, but for structured notes to return an amount based on the performance of an underlying variable or derivative feature embedded in the note. However, investors are exposed to the credit risk of the Firm as issuer for both nonprincipal-protected and principal-protected notes.
(c)Where the Firm issues principal-protected zero-coupon or discount notes, the balance reflects the contractual principal payment at maturity or, if applicable, the contractual principal payment at the Firm’s next call date.
At September 30, 2018,2019, and December 31, 2017,2018, the contractual amount of lending-related commitments for which the fair value option was elected was $9.1$6.5 billion and $7.4$6.9 billion, respectively, with a corresponding fair value of $(53)$(91) million and $(76)$(82) million, respectively. ForRefer to Note 27 of JPMorgan Chase’s 2018 Form 10-K, and Note 22 of this Form 10-Q 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.instruments.
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, 2017September 30, 2019 December 31, 2018
(in millions)Long-term debtShort-term borrowingsDepositsTotal
Long-term debtShort-term borrowingsDepositsTotalLong-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
$33,402
$54
$17,547
$51,003
 $24,137
$62
$12,372
$36,571
Credit3,771
483
—
4,254

4,329
1,312
—
5,641
5,207
817
—
6,024
 4,009
995
—
5,004
Foreign exchange2,930
96
37
3,063

2,841
147
38
3,026
3,570
45
8
3,623
 3,169
157
38
3,364
Equity21,950
6,258
7,330
35,538

17,581
7,106
6,548
31,235
27,644
5,565
8,190
41,399
 21,382
5,422
7,368
34,172
Commodity355
7
1,715
2,077

230
15
4,468
4,713
504
7
1,352
1,863
 372
34
1,207
1,613
Total structured notes$52,339
$7,460
$18,351
$78,150

$47,037
$8,649
$19,112
$74,798
$70,327
$6,488
$27,097
$103,912
 $53,069
$6,670
$20,985
$80,724




Note 4 – Derivative instruments
JPMorgan Chase makes markets in derivatives for clients and also uses derivatives to hedge or manage its own risk exposures. ForRefer to Note 5 of JPMorgan Chase’s 2018 Form 10-K 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.instruments.
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 hedgeCorporate118-119109-110
•
 • Interest rate
Hedge floating-rate assets and liabilitiesCash flow hedgeCorporate120111
•
 • Foreign exchange
Hedge foreign currency-denominated assets and liabilitiesFair value hedgeCorporate118-119109-110
•
 • Foreign exchange
Hedge foreign currency-denominated forecasted revenue and expenseCash flow hedgeCorporate120111
•
 • Foreign exchange
Hedge the value of the Firm’s investments in non-U.S. dollar functional currency entitiesNet investment hedgeCorporate121112
•
 • Commodity
Hedge commodity inventoryFair value hedgeCIB118-119109-110
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 managementCCB121112
•
 • Credit
Manage the credit risk of wholesale lending exposuresSpecified risk managementCIB121112
•
 • Interest rate and
foreign exchange
Manage the risk of certain other specified assets and liabilitiesSpecified risk managementCorporate121112
Market-making derivatives and other activities:   
•
 • Various
Market-making and related risk managementMarket-making and otherCIB121112
•
 • Various
Other derivativesMarket-making and otherCIB, AWM, Corporate121112


Notional amount of derivative contracts
The following table summarizes the notional amount of derivative contracts outstanding as of September 30, 2018,2019, and December 31, 2017.2018.
Notional amounts(b)
Notional amounts(b)
(in billions)September 30, 2018
December 31, 2017
September 30, 2019
December 31, 2018
Interest rate contracts  
Swaps$25,236
$21,043
$25,099
$21,763
Futures and forwards7,326
4,904
4,887
3,562
Written options4,718
3,576
4,290
3,997
Purchased options5,233
3,987
4,697
4,322
Total interest rate contracts42,513
33,510
38,973
33,644
Credit derivatives(a)
1,603
1,522
1,365
1,501
Foreign exchange contracts  
Cross-currency swaps3,893
3,953
3,886
3,548
Spot, futures and forwards6,812
5,923
7,111
5,871
Written options961
786
832
835
Purchased options956
776
852
830
Total foreign exchange contracts12,622
11,438
12,681
11,084
Equity contracts  
Swaps402
367
389
346
Futures and forwards106
90
131
101
Written options596
531
692
528
Purchased options543
453
632
490
Total equity contracts1,647
1,441
1,844
1,465
Commodity contracts  
Swaps140
116
148
134
Spot, futures and forwards164
168
218
156
Written options157
98
166
135
Purchased options134
93
153
120
Total commodity contracts595
475
685
545
Total derivative notional amounts$58,980
$48,386
$55,548
$48,239
(a)ForRefer to the Credit derivatives discussion on page 113 for more information on volumes and types of credit derivative contracts, refer to the Credit derivatives discussion on page 122.contracts.
(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,contracts, 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, 2018,2019, and December 31, 2017,2018, 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)
Free-standing derivative receivables and payables(a)
          
Free-standing derivative receivables and payables(a)
          
Gross derivative receivables   Gross derivative payables  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)
September 30, 2019
(in millions)		Not designated as hedges Designated as hedges Total derivative receivables 
Net derivative receivables(b)
 Not designated as hedges 
Designated
as hedges
 Total derivative payables 
Net derivative payables(b)
Trading assets and liabilities                              
Interest rate$260,636
 $823
 $261,459
 $23,397
 $234,232
 $1
 $234,233
 $7,091
$375,082
 $851
 $375,933
 $28,507
 $338,711
 $2
 $338,713
 $10,223
Credit23,505
 —
 23,505
 582
 23,360
 —
 23,360
 1,452
15,717
 —
 15,717
 838
 17,062
 —
 17,062
 2,159
Foreign exchange188,261
 623
 188,884
 17,043
 176,771
 848
 177,619
 12,402
162,364
 768
 163,132
 12,681
 164,583
 1,159
 165,742
 15,016
Equity46,932
 —
 46,932
 10,104
 51,355
 —
 51,355
 11,978
46,378
 —
 46,378
 7,409
 50,891
 —
 50,891
 10,603
Commodity22,175
 193
 22,368
 8,936
 22,749
 90
 22,839
 8,770
20,985
 253
 21,238
 6,142
 25,470
 341
 25,811
 9,789
Total fair value of trading assets and liabilities$541,509
 $1,639
 $543,148
 $60,062
 $508,467
 $939
 $509,406
 $41,693
$620,526
 $1,872
 $622,398
 $55,577
 $596,717
 $1,502
 $598,219
 $47,790
                              
Gross derivative receivables   Gross derivative payables  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)
December 31, 2018
(in millions)		Not designated as hedges Designated as hedges Total derivative receivables 
Net derivative receivables(b)
 Not designated as hedges Designated
as hedges		 Total derivative payables 
Net derivative payables(b)
Trading assets and liabilities                              
Interest rate$314,962
(c) 
$1,030
(c) 
$315,992
 $24,673
 $284,433
(c) 
$3
(c) 
$284,436
 $7,129
$267,871
 $833
 $268,704
 $23,214
 $242,782
 $—
 $242,782
 $7,784
Credit23,205
 —
 23,205
 869
 23,252
 —
 23,252
 1,299
20,095
 —
 20,095
 612
 20,276
 —
 20,276
 1,667
Foreign exchange159,740
 491
 160,231
 16,151
 154,601
 1,221
 155,822
 12,473
167,057
 628
 167,685
 13,450
 164,392
 825
 165,217
 12,785
Equity40,040
 —
 40,040
 7,882
 45,395
 —
 45,395
 9,192
49,285
 —
 49,285
 9,946
 51,195
 —
 51,195
 10,161
Commodity20,066
 19
 20,085
 6,948
 21,498
 403
 21,901
 7,684
20,223
 247
 20,470
 6,991
 22,297
 121
 22,418
 9,372
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
$524,531
 $1,708
 $526,239
 $54,213
 $500,942
 $946
 $501,888
 $41,769

(a)Balances exclude structured notes for which the fair value option has been elected. Refer to Note 3 for further information.
(b)As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral receivables and payables when a legally enforceable master netting agreement exists.
(c)The prior period amounts have been revised to conform with the current period presentation.


Derivatives netting
The following tables present, as of September 30, 2018,2019, and December 31, 2017,2018, 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 partythird-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.
September 30, 2018 December 31, 2017 September 30, 2019 December 31, 2018
(in millions)(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(in millions)Gross derivative receivablesAmounts netted on the Consolidated balance sheetsNet derivative receivables Gross derivative receivables Amounts netted on the Consolidated balance sheetsNet derivative receivables
U.S. GAAP nettable derivative receivablesU.S. GAAP nettable derivative receivables          U.S. GAAP nettable derivative receivables           
Interest rate contracts:Interest rate contracts:         Interest rate contracts:          
Over-the-counter (“OTC”)Over-the-counter (“OTC”)$250,181
$(230,533) $19,648
 $305,569
 $(284,917) $20,652
Over-the-counter (“OTC”)$356,075
$(332,566) $23,509
 $258,227
 $(239,498) $18,729
 
OTC–clearedOTC–cleared7,512
(7,374) 138
 6,531
 (6,318) 213
OTC–cleared14,438
(14,343) 95
 6,404
 (5,856) 548
 
Exchange-traded(a)
Exchange-traded(a)
300
(155) 145
 185
 (84) 101
Exchange-traded(a)
577
(517) 60
 322
 (136) 186
 
Total interest rate contractsTotal interest rate contracts257,993
(238,062) 19,931
 312,285
 (291,319) 20,966
Total interest rate contracts371,090
(347,426) 23,664
 264,953
 (245,490) 19,463
 
Credit contracts:Credit contracts:         Credit contracts:          
OTCOTC12,502
(12,153) 349
 15,390
 (15,165) 225
OTC11,168
(10,682) 486
 12,648
 (12,261) 387
 
OTC–clearedOTC–cleared10,806
(10,770) 36
 7,225
 (7,170) 55
OTC–cleared4,321
(4,197) 124
 7,267
 (7,222) 45
 
Total credit contractsTotal credit contracts23,308
(22,923) 385
 22,615
 (22,335) 280
Total credit contracts15,489
(14,879) 610
 19,915
 (19,483) 432
 
Foreign exchange contracts:Foreign exchange contracts:         Foreign exchange contracts:          
OTCOTC184,421
(171,163) 13,258
 155,289
 (142,420) 12,869
OTC160,181
(150,271) 9,910
 163,862
 (153,988) 9,874
 
OTC–clearedOTC–cleared676
(659) 17
 1,696
 (1,654) 42
OTC–cleared176
(174) 2
 235
 (226) 9
 
Exchange-traded(a)
Exchange-traded(a)
42
(19) 23
 141
 (7) 134
Exchange-traded(a)
20
(6) 14
 32
 (21) 11
 
Total foreign exchange contractsTotal foreign exchange contracts185,139
(171,841) 13,298
 157,126
 (144,081) 13,045
Total foreign exchange contracts160,377
(150,451) 9,926
 164,129
 (154,235) 9,894
 
Equity contracts:Equity contracts:         Equity contracts:          
OTCOTC25,197
(22,380) 2,817
 22,024
 (19,917) 2,107
OTC22,195
(20,281) 1,914
 26,178
 (23,879) 2,299
 
Exchange-traded(a)
Exchange-traded(a)
16,789
(14,448) 2,341
 14,188
 (12,241) 1,947
Exchange-traded(a)
21,678
(18,688) 2,990
 18,876
 (15,460) 3,416
 
Total equity contractsTotal equity contracts41,986
(36,828) 5,158
 36,212
 (32,158) 4,054
Total equity contracts43,873
(38,969) 4,904
 45,054
 (39,339) 5,715
 
Commodity contracts:Commodity contracts:         Commodity contracts:          
OTCOTC12,497
(4,916) 7,581
 10,903
 (4,436) 6,467
OTC7,714
(5,954) 1,760
 7,448
 (5,261) 2,187
 
OTC–clearedOTC–cleared26
(25) 1
 —
 —
 —
 
Exchange-traded(a)
Exchange-traded(a)
9,198
(8,516) 682
 8,854
 (8,701) 153
Exchange-traded(a)
9,151
(9,117) 34
 8,815
 (8,218) 597
 
Total commodity contractsTotal commodity contracts21,695
(13,432) 8,263
 19,757
 (13,137) 6,620
Total commodity contracts16,891
(15,096) 1,795
 16,263
 (13,479) 2,784
 
Derivative receivables with appropriate legal opinionDerivative receivables with appropriate legal opinion530,121
(483,086)
(b) 
47,035
 547,995
 (503,030)
(b) 
44,965
Derivative receivables with appropriate legal opinion607,720
(566,821) 40,899
(d) 
510,314
 (472,026) 38,288
(d) 
Derivative receivables where an appropriate legal opinion has not been either sought or obtainedDerivative receivables where an appropriate legal opinion has not been either sought or obtained13,027
  13,027
 11,558
   11,558
Derivative receivables where an appropriate legal opinion has not been either sought or obtained14,678
  14,678
 15,925
   15,925
 
Total derivative receivables recognized on the Consolidated balance sheetsTotal derivative receivables recognized on the Consolidated balance sheets$543,148
  $60,062
 $559,553
   $56,523
Total derivative receivables recognized on the Consolidated balance sheets$622,398
  $55,577
 $526,239
   $54,213
 
Collateral not nettable on the Consolidated balance sheets(c)(d)
  (13,826)     (13,363)
Collateral not nettable on the Consolidated balance sheets(b)(c)
Collateral not nettable on the Consolidated balance sheets(b)(c)
  (13,224)     (13,046) 
Net amountsNet amounts  $46,236
     $43,160
Net amounts  $42,353
     $41,167
 


September 30, 2018 December 31, 2017 September 30, 2019 December 31, 2018
(in millions)(in millions)Gross derivative payablesAmounts netted on the Consolidated balance sheetsNet derivative payables Gross derivative payables 
Amounts netted
on the Consolidated balance sheets
Net derivative payables(in millions)Gross derivative payablesAmounts netted on the Consolidated balance sheetsNet derivative payables Gross derivative payables Amounts netted on the Consolidated balance sheetsNet derivative payables
U.S. GAAP nettable derivative payablesU.S. GAAP nettable derivative payables         U.S. GAAP nettable derivative payables          
Interest rate contracts:Interest rate contracts:         Interest rate contracts:          
OTCOTC$225,999
$(220,369) $5,630
 $276,960
 $(271,294) $5,666
OTC$321,553
$(313,017) $8,536
 $233,404
 $(228,369) $5,035
 
OTC–clearedOTC–cleared6,650
(6,618) 32
 6,004
 (5,928) 76
OTC–cleared15,176
(14,960) 216
 7,163
 (6,494) 669
 
Exchange-traded(a)
Exchange-traded(a)
172
(155) 17
 127
 (84) 43
Exchange-traded(a)
585
(513) 72
 210
 (135) 75
 
Total interest rate contractsTotal interest rate contracts232,821
(227,142) 5,679
 283,091
 (277,306) 5,785
Total interest rate contracts337,314
(328,490) 8,824
 240,777
 (234,998) 5,779
 
Credit contracts:Credit contracts:         Credit contracts:          
OTCOTC13,133
(11,852) 1,281
 16,194
 (15,170) 1,024
OTC13,130
(11,254) 1,876
 13,412
 (11,895) 1,517
 
OTC–clearedOTC–cleared10,062
(10,056) 6
 6,801
 (6,784) 17
OTC–cleared3,797
(3,649) 148
 6,716
 (6,714) 2
 
Total credit contractsTotal credit contracts23,195
(21,908) 1,287
 22,995
 (21,954) 1,041
Total credit contracts16,927
(14,903) 2,024
 20,128
 (18,609) 1,519
 
Foreign exchange contracts:Foreign exchange contracts:         Foreign exchange contracts:          
OTCOTC173,389
(164,557) 8,832
 150,966
 (141,789) 9,177
OTC162,336
(150,537) 11,799
 160,930
 (152,161) 8,769
 
OTC–clearedOTC–cleared679
(654) 25
 1,555
 (1,553) 2
OTC–cleared190
(185) 5
 274
 (268) 6
 
Exchange-traded(a)
Exchange-traded(a)
25
(6) 19
 98
 (7) 91
Exchange-traded(a)
14
(4) 10
 16
 (3) 13
 
Total foreign exchange contractsTotal foreign exchange contracts174,093
(165,217) 8,876
 152,619
 (143,349) 9,270
Total foreign exchange contracts162,540
(150,726) 11,814
 161,220
 (152,432) 8,788
 
Equity contracts:Equity contracts:         Equity contracts:          
OTCOTC28,618
(24,869) 3,749
 28,193
 (23,969) 4,224
OTC27,010
(21,600) 5,410
 29,437
 (25,544) 3,893
 
Exchange-traded(a)
Exchange-traded(a)
16,234
(14,508) 1,726
 12,720
 (12,234) 486
Exchange-traded(a)
20,365
(18,688) 1,677
 16,285
 (15,490) 795
 
Total equity contractsTotal equity contracts44,852
(39,377) 5,475
 40,913
 (36,203) 4,710
Total equity contracts47,375
(40,288) 7,087
 45,722
 (41,034) 4,688
 
Commodity contracts:Commodity contracts:         Commodity contracts:          
OTCOTC13,607
(5,600) 8,007
 12,645
 (5,508) 7,137
OTC10,450
(6,874) 3,576
 8,930
 (4,838) 4,092
 
OTC–clearedOTC–cleared25
(25) —
 —
 —
 —
 
Exchange-traded(a)
Exchange-traded(a)
8,558
(8,469) 89
 8,870
 (8,709) 161
Exchange-traded(a)
10,004
(9,123) 881
 8,259
 (8,208) 51
 
Total commodity contractsTotal commodity contracts22,165
(14,069) 8,096
 21,515
 (14,217) 7,298
Total commodity contracts20,479
(16,022) 4,457
 17,189
 (13,046) 4,143
 
Derivative payables with appropriate legal opinionDerivative payables with appropriate legal opinion497,126
(467,713)
(b) 
29,413
 521,133
 (493,029)
(b) 
28,104
Derivative payables with appropriate legal opinion584,635
(550,429) 34,206
(d) 
485,036
 (460,119) 24,917
(d) 
Derivative payables where an appropriate legal opinion has not been either sought or obtainedDerivative payables where an appropriate legal opinion has not been either sought or obtained12,280
  12,280
 9,673
   9,673
Derivative payables where an appropriate legal opinion has not been either sought or obtained13,584
  13,584
 16,852
   16,852
 
Total derivative payables recognized on the Consolidated balance sheetsTotal derivative payables recognized on the Consolidated balance sheets$509,406
  $41,693
 $530,806
   $37,777
Total derivative payables recognized on the Consolidated balance sheets$598,219
  $47,790
 $501,888
   $41,769
 
Collateral not nettable on the Consolidated balance sheets(c)(d)
  (3,566)     (4,180)
Collateral not nettable on the Consolidated balance sheets(b)(c)
Collateral not nettable on the Consolidated balance sheets(b)(c)
  (9,236)     (4,449) 
Net amountsNet amounts  $38,127
     $33,597
Net amounts  $38,554
     $37,320
 
(a)Exchange-traded derivative balances that relate to futures contracts are settled daily.
(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 September 30, 2018, and December 31, 2017, respectively.
(c)Represents liquid security collateral as well as cash collateral held at third partythird-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)(c)Derivative collateral relates only to OTC and OTC-cleared derivative instruments.
(d)Net derivatives receivable included cash collateral netted of $78.8 billion and $55.2 billion at September 30, 2019, and December 31, 2018, respectively. Net derivatives payable included cash collateral netted of $62.4 billion and $43.3 billion at September 30, 2019, and December 31, 2018, respectively. Derivative cash collateral relates to OTC and OTC-cleared derivative instruments.


Liquidity risk and credit-related contingent features
ForRefer to Note 5 of JPMorgan Chase’s 2018 Form 10-K 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.contracts.
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, 2018,2019, and
December 31, 2017.
2018.
OTC and OTC-cleared derivative payables containing downgrade triggers
(in millions)September 30, 2018
December 31, 2017
September 30, 2019  December 31, 2018 
Aggregate fair value of net derivative payables$10,103
$11,916
 $15,466
 $9,396
Collateral posted8,926
9,973
 14,388
 8,907




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, 2018,2019, and December 31, 2017,2018, related to OTC and OTC-cleared derivative contracts with contingent collateral or termination features that may be triggered upon a ratings downgrade. Derivatives contracts generally require additional collateral to be posted or terminations to be triggered when the predefined threshold rating is breached. A downgrade by a single rating agency that does not result in a rating lower than a preexisting corresponding rating provided by another major rating agency will generally not result in additional collateral, (except in certain instances in which additional initial margin may be required upon a ratings downgrade), nor in termination payments requirements. The liquidity impact in the table is calculated based upon a downgrade below the lowest current rating of the rating agencies referred to in the derivative contract.
Liquidity impact of downgrade triggers on OTC and OTC-cleared derivativesLiquidity impact of downgrade triggers on OTC and OTC-cleared derivatives   Liquidity impact of downgrade triggers on OTC and OTC-cleared derivatives   
September 30, 2018 December 31, 2017September 30, 2019 December 31, 2018
(in millions)Single-notch downgradeTwo-notch downgrade Single-notch downgradeTwo-notch downgradeSingle-notch downgradeTwo-notch downgrade Single-notch downgradeTwo-notch downgrade
Amount of additional collateral to be posted upon downgrade(a)
$116
$2,046
 $79
$1,989
$223
$1,420
 $76
$947
Amount required to settle contracts with termination triggers upon downgrade(b)
317
861
 320
650
184
1,475
 172
764
(a)Includes the additional collateral to be posted for initial margin.
(b)Amounts represent fair values of derivative payables, and do not reflect collateral posted.
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 September 30, 2018 was not material at both September 30, 2019 and there were no such transfers at December 31, 2017.2018.


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 and nine months ended September 30, 20182019 and 2017,2018, 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 impactGains/(losses) recorded in income 
Income statement impact of
excluded components(e)
 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)
Three months ended September 30, 2019
(in millions)		DerivativesHedged itemsIncome statement impact Amortization approachChanges in fair value 
Derivatives - Gains/(losses) recorded in OCI(f)
Contract type          
Interest rate(a)(b)
$(870)$1,032
$162
 $—
$160
 $—
$1,770
$(1,550)$220
 $—
$228
 $—
Foreign exchange(c)
277
(165)112
 (137)112
 45
(167)293
126
 (224)126
 (1)
Commodity(d)
454
(461)(7) —
(5) —
278
(232)46
 —
49
 —
Total$(139)$406
$267
 $(137)$267
 $45
$1,881
$(1,489)$392
 $(224)$403
 $(1)
Gains/(losses) recorded in income Income statement impact due to: Gains/(losses) recorded in income 
Income statement impact of
excluded components(e)

 OCI impact
Three months ended September 30, 2017
(in millions)		DerivativesHedged itemsIncome statement impact 
Hedge ineffectiveness(e)
Excluded components(f)
 
Three months ended September 30, 2018
(in millions)		DerivativesHedged itemsIncome statement impact Amortization approachChanges in fair value 
Derivatives - Gains/(losses) recorded in OCI(f)
Contract type         
Interest rate(a)(b)
$22
$182
$204
 $(2)$206
 $(870)$1,032
$162
 $—
$160
 $—
Foreign exchange(c)
(982)1,002
20
 —
20
 277
(165)112
 (137)112
 45
Commodity(d)
(457)461
4
 4
—
 454
(461)(7) —
(5) —
Total$(1,417)$1,645
$228
 $2
$226
 $(139)$406
$267
 $(137)$267
 $45
Gains/(losses) recorded in income 
Income statement impact of
excluded components(f)
 OCI impactGains/(losses) recorded in income 
Income statement impact of
excluded components(e)
 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)
Nine months ended September 30, 2019
(in millions)		DerivativesHedged itemsIncome statement impact Amortization approachChanges in fair value 
Derivatives - Gains/(losses) recorded in OCI(f)
Contract type          
Interest rate(a)(b)
$(2,747)$3,214
$467
 $—
$459
 $—
$4,996
$(4,399)$597
 $—
$596
 $—
Foreign exchange(c)
797
(452)345
 (404)345
 (96)(31)401
370
 (675)370
 114
Commodity(d)
649
(626)23
 —
29
 —
(164)237
73
 —
67
 —
Total$(1,301)$2,136
$835
 $(404)$833
 $(96)$4,801
$(3,761)$1,040
 $(675)$1,033
 $114
 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
  

 Gains/(losses) recorded in income 
Income statement impact of
excluded components(e)
 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(f)
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)
(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, theThe 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)(f)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, 2019 and December 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 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:

 
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
September 30, 2019
(in millions)		 
Carrying amount of the hedged items(a)(b)
 Active hedging relationships
Discontinued hedging relationships(d)
Total
Assets      
Investment securities - AFS

 $47,896
(c) 
$(2,292)$438
$(1,854) $123,914
(c) 
$3,664
$261
$3,925
Liabilities        
Long-term debt $135,239
 $(2,693)$(5)$(2,698) $163,494
 $9,957
$125
$10,082
Beneficial interests issued by consolidated VIEs 6,976
 —
(42)(42) 2,362
 —
(11)(11)
    
 
Carrying amount of the hedged items(a)(b)
 Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items:
December 31, 2018
(in millions)		 Active hedging relationships
Discontinued hedging relationships(d)
Total
Assets    
Investment securities - AFS
 $55,313
(c) 
$(1,105)$381
$(724)
Liabilities    
Long-term debt $139,915
 $141
$8
$149
Beneficial interests issued by consolidated VIEs 6,987
 —
(33)(33)
(a)Excludes physical commodities with a carrying value of $4.6$10.3 billion and $6.8 billion at September 30, 2019 and December 31, 2018, respectively, to which the Firm applies fair value hedge accounting. As a result of the application of hedge accounting, these inventories are carried at fair value, thus recognizing unrealized gains and losses in current periods. 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. TheAt September 30, 2019 and December 31, 2018, the carrying amount excluded for available-for-sale securities is $14.7$15.3 billion and $14.6 billion, respectively, and for long-term debt is $7.2 billion.$4.1 billion and $7.3 billion, respectively.
(c)Carrying amount represents the amortized cost.
(d)Represents hedged items no longer designated in qualifying fair value hedging relationships for which an associated basis adjustment exists at the balance sheet date.

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, 20182019 and 2017,2018, 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 itemitem..
Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended September 30, 2019
(in millions)		Amounts reclassified from AOCI to incomeAmounts recorded in OCITotal change
in OCI
for period
Contract type 
Interest rate(a)
$(16)$290
$306
Foreign exchange(b)
(21)(68)(47)
Total$(37)$222
$259
 
Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended September 30, 2018
(in millions)		Amounts reclassified from AOCI to incomeAmounts recorded in OCITotal change
in OCI
for period		Amounts reclassified from AOCI to incomeAmounts recorded in OCITotal change
in OCI
for period
Contract type  
Interest rate(a)
$10
$(30)$(40)$10
$(30)$(40)
Foreign exchange(b)
(19)(92)(73)(19)(92)(73)
Total$(9)$(122)$(113)$(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)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
Nine months ended September 30, 2019
(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)$(12)$501
$513
Foreign exchange(b)
26
(224)(250)(90)(37)53
Total$62
$(365)$(427)$(102)$464
$566
 
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
 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)
(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, 20182019 and 2017.2018.
Over the next 12 months, the Firm expects that approximately $(118)$(130) million (after-tax) of net losses recorded in AOCI at September 30, 2018, 2019, related to cash flow hedges will be recognized in income. For terminated cash flow hedges that have been terminated, the maximum length of time over which the derivative results recorded in AOCI will be recognized in earnings is approximately five years, corresponding to the timing of the originally hedged forecasted cash flows.
 
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 sixseven 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, 20182019 and 2017.2018.
Gains/(losses) recorded in income and other comprehensive income/(loss)
2018 20172019 2018
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)
Amounts recorded in
income(a)(b)
Amounts recorded in OCI 
Amounts recorded in
income(a)(b)
Amounts recorded in OCI
Foreign exchange derivatives $2
 $311
 $(39) $(286) $17
 $866
 $2
 $311
                
2018 2017Gains/(losses) recorded in income and other comprehensive income/(loss)
2019 2018
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)
Amounts recorded in
income(a)(b)
Amounts recorded in OCI 
Amounts recorded in
income(a)(b)(c)
Amounts recorded in OCI
Foreign exchange derivatives $(5) $1,126
 $(150) $(1,161) $65
 $705
 $(8) $1,126
(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, referDuring the nine months ended September 30, 2019, the Firm reclassified net pre-tax gains of $5 million to Note 17.other income related to the liquidation of certain legal entities. During the nine months ended September 30, 2018, the Firm reclassified net pre-tax losses of $23 million to other expense related to the liquidation of a legal entity.
(c)The prior period amount has been revised to conform with the current period presentation.

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
Derivatives gains/(losses)
recorded in income
 
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30, 
(in millions)20182017 2018201720192018 20192018 
Contract type       
Interest rate(a)
$(42)$97
 $(277)$318
$769
$(42) $1,718
$(277) 
Credit(b)
(7)(18) (17)(70)(21)(7) (33)(17) 
Foreign exchange(c)
52
(18) 152
(52)40
52
 15
167
(d) 
Total$3
$61
 $(142)$196
$788
$3
 $1,700
$(127)
(d) 

(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.
(d)The prior period amounts have been revised to conform with the current period presentation.
 
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. Refer to Note 5 for information on principal transactions revenue.

Credit derivatives
ForRefer to Note 5 of JPMorgan Chase’s 2018 Form 10-K for a more detailed discussion of credit derivatives, refer to Note5 of JPMorgan Chase’s 2017 Annual Report.derivatives. The Firm does not use notional amounts of credit derivatives as the primary measure of risk management for such derivatives, because the notional amount does not take into account the probability of the occurrence of a credit event, the recovery value of the reference obligation, or related cash instruments and economic hedges, each of which reduces, in the Firm’s view, the risks associated with such derivatives.
Total credit derivatives and credit-related notes
Maximum payout/Notional amountMaximum payout/Notional amount
September 30, 2018 (in millions)Protection sold
Protection
purchased with
identical underlyings(b)
Net protection (sold)/purchased(c)
 
Other protection purchased(d)
September 30, 2019 (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
$(610,946) $623,709
$12,763
 $3,630
Other credit derivatives(a)
(38,928) 45,393
6,465
 11,563
(55,919) 61,847
5,928
 8,503
Total credit derivatives(785,123) 800,282
15,159
 17,904
(666,865) 685,556
18,691
 12,133
Credit-related notes(18) —
(18) 7,653
—
 —
—
 9,297
Total$(785,141) $800,282
$15,141
 $25,557
$(666,865) $685,556
$18,691
 $21,430
          
Maximum payout/Notional amountMaximum 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)
December 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$(690,224) $702,098
$11,874
 $5,045
$(697,220) $707,282
$10,062
 $4,053
Other credit derivatives(a)
(54,157) 59,158
5,001
 11,747
(41,244) 42,484
1,240
 8,488
Total credit derivatives(744,381) 761,256
16,875
 16,792
(738,464) 749,766
11,302
 12,541
Credit-related notes(18) —
(18) 7,915
—
 —
—
 8,425
Total$(744,399) $761,256
$16,857
 $24,707
$(738,464) $749,766
$11,302
 $20,966
(a)Other credit derivatives largely consistspredominantly consist of credit swap options.options and total return swaps.
(b)Represents the total notional amount of protection purchased where the underlying reference instrument is identical to the reference instrument on protection sold; the notional amount of protection purchased for each individual identical underlying reference instrument may be greater or lower than the notional amount of protection sold.
(c)Does not take into account the fair value of the reference obligation at the time of settlement, which would generally reduce the amount the seller of protection pays to the buyer of protection in determining settlement value.
(d)Represents protection purchased by the Firm on referenced instruments (single-name, portfolio or index) where the Firm has not sold any protection on the identical reference instrument.
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, 2018,2019, and December 31, 2017,2018, where JPMorgan Chase is the seller of protection. The maturity profile is based on the remaining contractual maturity of the credit derivative contracts. The ratings profile is based on the rating of the reference entity on which the credit derivative contract is based. The ratings and maturity profile of credit derivatives and credit-related notes where JPMorgan Chase is the purchaser of protection are comparable to the profile reflected below.
Protection sold — credit derivatives and credit-related notes ratings(a)/maturity profile
Protection sold — credit derivatives and credit-related notes ratings(a)/maturity profile
   
Protection sold — credit derivatives and credit-related notes ratings(a)/maturity profile
   
September 30, 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
September 30, 2019
(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
$(106,698) $(316,946) $(75,615) $(499,259) $5,621
 $(1,260) $4,361
Noninvestment-grade(53,103) (147,117) (32,295) (232,515) 8,337
 (4,519) 3,818
(39,180) (103,249) (25,177) (167,606) 4,699
 (3,415) 1,284
Total$(170,033) $(511,587) $(103,521) $(785,141) $16,380
 $(6,378) $10,002
$(145,878) $(420,195) $(100,792) $(666,865) $10,320
 $(4,675) $5,645
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
December 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$(159,286) $(319,726) $(39,429) $(518,441) $8,516
 $(1,134) $7,382
$(115,443) $(402,325) $(43,611) $(561,379) $5,720
 $(2,791) $2,929
Noninvestment-grade(73,394) (134,125) (18,439) (225,958) 7,407
 (5,313) 2,094
(45,897) (119,348) (11,840) (177,085) 4,719
 (5,660) (941)
Total$(232,680) $(453,851) $(57,868) $(744,399) $15,923
 $(6,447) $9,476
$(161,340) $(521,673) $(55,451) $(738,464) $10,439
 $(8,451) $1,988

(a)The ratings scale is primarily based on external credit ratings defined by S&P and Moody’s.
(b)Amounts are shown on a gross basis, before the benefit of legally enforceable master netting agreements and cash collateral received by the Firm.

Note 5 – Noninterest revenue and noninterest
expense
Noninterest revenue
ForRefer to Note 6 of JPMorgan Chase’s 2018 Form 10-K 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.revenue.
Investment banking fees
The following table presents the components of investment banking fees.

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

2018
20172019
 2018

2019
2018
Underwriting













Equity$417

$302

$1,342

$1,105
$517

$417

$1,293

$1,342
Debt836

945

2,596

2,873
955

836

2,720

2,596
Total underwriting1,253

1,247

3,938

3,978
1,472

1,253

4,013

3,938
Advisory579

621

1,798

1,616
495

579

1,645

1,798
Total investment banking fees$1,832

$1,868

$5,736

$5,594
$1,967

$1,832

$5,658

$5,736

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.activities in CIB and cash deployment activities in Treasury and CIO. 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.business.
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 20172019
 2018
 2019 2018
Trading revenue by instrument type              
Interest rate$338
 $649
 $1,784
 $2,032
$835
 $338
 $1,901
 $1,784
Credit202
 330
 1,230
 1,288
328
 202
 1,375
 1,230
Foreign exchange937
 681
 2,706
 2,363
892
 937
 2,509
 2,706
Equity1,363
 915
 4,376
 3,153
1,003
 1,363
 4,530
 4,376
Commodity277
 156
 800
 461
372
 277
 982
 800
Total trading revenue3,117
 2,731
 10,896
 9,297
3,430
 3,117
 11,297
 10,896
Private equity gains/(losses)(a)
(153) (10) (198) 143
19
 (153) (58) (198)
Principal transactions$2,964
 $2,721
 $10,698
 $9,440
$3,449
 $2,964
 $11,239
 $10,698

(a)The third quarter of 2018 included markdowns of approximately $220 million on certain private equity investments in Corporate, with $170 million recorded within principal transactions revenue and $50 million in other income.

Lending- and deposit-related fees
The following table presents the components of lending- and deposit-related fees.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 20172019
 2018
 2019
 2018
Lending-related fees$284
 $280
 $838
 $824
$286
 $284
 $861
 $838
Deposit-related fees1,258
 1,217
 3,676
 3,603
1,340
 1,258
 3,782
 3,676
Total lending- and deposit-related fees$1,542
 $1,497
 $4,514
 $4,427
$1,626
 $1,542
 $4,643
 $4,514

Asset management, administration and commissions
The following table presents the components of Firmwide asset management, administration and commissions.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018 20172019
 2018
 2019 2018
Asset management fees              
Investment management fees(a)
$2,716
 $2,636
 $8,081
 $7,603
$2,738
 $2,716
 $8,013
 $8,081
All other asset management fees(b)
79
 63
 211
 226
82
 79
 229
 211
Total asset management fees2,795
 2,699
 8,292
 7,829
2,820
 2,795
 8,242
 8,292
              
Total administration fees(c)
533
 514
 1,651
 1,500
567
 533
 1,646
 1,651
              
Commission and other fees       
Commissions and other fees       
Brokerage commissions604
 546
 1,887
 1,691
634
 604
 1,861
 1,887
All other commissions and fees378
 313
 1,093
 976
330
 378
 1,069
 1,093
Total commissions and fees982
 859
 2,980
 2,667
964
 982
 2,930
 2,980
Total asset management, administration and commissions$4,310
 $4,072
 $12,923
 $11,996
$4,351
 $4,310
 $12,818
 $12,923
(a)Represents fees earned from managing assets on behalf of the Firm’s clients, including investors in Firm-sponsored funds and owners of separately managed investment accounts.
(b)Represents fees for services that are ancillary to investment management services, such as commissions earned on the sales or distribution of mutual funds to clients.
(c)Predominantly includes fees for custody, securities lending, funds services and securities clearance.

Card income
The following table presents the components of card income:
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
2019
 2018
 2019
 2018
Interchange and merchant processing income$4,781
 $4,342
 $13,863
 $12,557
$5,127
 $4,781
 $15,032
 $13,863
Rewards costs and partner payments(a)(3,276) (2,727) (9,687)
(b) 
(7,941)(3,669) (3,276) (10,515) (9,687)
Other card income(a)(b)
(177) (373) (553) (1,293)(175) (177) (594) (553)
Total card income$1,328
 $1,242
 $3,623
 $3,323
$1,283
 $1,328
 $3,923
 $3,623
(a)The three and nine months ended September 30, 2018, included an adjustment to the credit card rewards liability of approximately $330 million.
(b)Predominantly represents annual fees and new account origination costs, which are deferred and recognized on a straight-line basis over a 12-month period.
(b)Includes an adjustment to the credit card rewards liability of approximately $330 million, recorded in the second quarter of 2018.
Other income    
Other income
Refer to Note 14 Goodwill and MSRs for information on the Firm’s Consolidated statements ofmortgage fees and related income.
Refer to Note 16 Leases for information on operating lease 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

within other income.
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,Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
2019
 2018
 2019
 2018
Legal expense$20
 $(107) $90
 $172
Legal expense/(benefit)$10
 $20
 $(2) $90
FDIC-related expense349
 353
 1,100
 1,110
114
 349
 378
 1,100


 
Note 6 – Interest income and Interest expense
ForRefer to Note 7 of JPMorgan Chase’s 2018 Form 10-K 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.expense.
The following table presents the components of interest income and interest expense.

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

2017

2018

2017
2019

2018
 2019
 2018
Interest income










       
Loans(a)
$12,207

$10,519

$34,915

$30,265
$12,586

$12,207
 $38,192
 $34,915
Taxable securities1,402

1,362

4,098

4,202
2,132

1,402
 5,712
 4,098
Non-taxable securities(b)
394

456

1,199

1,393
318

394
 1,021
 1,199
Total investment securities(a)
1,796

1,818

5,297

5,595
2,450

1,796
 6,733
 5,297
Trading assets2,155

1,947

6,369

5,611
Trading assets - debt instruments2,659

2,155
 8,343
 6,369
Federal funds sold and securities purchased under resale agreements952

622

2,490

1,676
1,542

952
 4,865
 2,490
Securities borrowed(c)
200

—

410

(65)434

248
 1,298
 549
Deposits with banks1,585

1,259

4,449

3,002
898

1,585
 3,200
 4,449
All other interest-earning assets(d)
945

522

2,474

1,295
All other interest-earning assets(c)(d)
552

496
 1,482
 1,430
Total interest income(c)19,840

16,687

56,404

47,379
21,121

19,439
 64,113
 55,499
Interest expense










       
Interest-bearing deposits1,621

837

4,021

1,949
2,409
 1,621
 7,010
 4,021
Federal funds purchased and securities loaned or sold under repurchase agreements827

451

2,164

1,131
1,241
 827
 3,577
 2,164
Short-term borrowings(e)
288

149

757

318
261
 288
 1,051
 757
Trading liabilities – debt and all other interest-bearing liabilities(f)
1,018

570

2,579

1,490
Trading liabilities – debt and all other interest-bearing liabilities(c)(f)
660
 617
 2,141
 1,674
Long-term debt2,056
 1,759
 5,812
 5,035
2,188
 2,056
 6,796
 5,812
Beneficial interest issued by consolidated VIEs122

123

366

386
134
 122
 459
 366
Total interest expense(c)5,932

3,889

15,699

10,309
6,893
 5,531
 21,034
 14,794
Net interest income13,908

12,798

40,705

37,070
14,228
 13,908
 43,079
 40,705
Provision for credit losses948

1,452

3,323

3,982
1,514
 948
 4,158
 3,323
Net interest income after provision for credit losses$12,960

$11,346

$37,382

$33,088
$12,714
 $12,960
 $38,921
 $37,382
(a)Includes the amortization/accretion of unearned income (e.g., purchase premiums/discounts, net deferred fees/costs, etc.).
(b)Represents securities which are tax-exempt for U.S. federal income tax purposes.
(c)NegativeIn the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income isand interest expense, but had no effect on net interest income. These changes were made to align the accounting treatment between the balance sheet and the related to client-driven demandinterest income or expense, primarily by offsetting interest income and expense for certain securities combinedprime brokerage-related held-for-investment customer receivables and payables that are currently presented as a single margin account on the balance sheet. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the 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.current presentation.
(d)Includes prime brokerage-related held-for-investment margin loans,customer receivables, 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.
(e)Includes commercial paper.
(f)Other interest-bearing liabilities include brokerageprime brokerage-related customer payables.


Note 7 – Pension and other postretirement employee benefit plans
ForRefer to Note 8 of JPMorgan Chase’s 2018 Form 10-K for a discussion of JPMorgan Chase’s pension and OPEB plans, refer to Note8 of JPMorgan Chase’s 2017 Annual Report.plans.
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,Three months ended September 30, Nine months ended September 30,
20182017 20182017 20182017 2018201720192018 20192018 20192018 20192018
Defined benefit pension plans OPEB plans  Defined benefit pension plans OPEB plansPension plans OPEB plans Pension plans OPEB plans
Components of net periodic benefit cost              
Benefits earned during the period$88
$83
 $—
$—
 $267
$247
 $—
$—
$88
$88
 $—
$—
 $266
$267
 $—
$—
Interest cost on benefit obligations139
148
 6
7
 417
447
 18
21
148
139
 6
6
 447
417
 18
18
Expected return on plan assets(246)(242) (25)(24) (741)(725) (77)(72)(227)(246) (28)(25) (686)(741) (84)(77)
Amortization:        
        
Net (gain)/loss26
63
 —
—
 78
187
 —
—
42
26
 —
—
 125
78
 —
—
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
Prior service (credit)/cost—
(7) —
—
 2
(19) —
—
Net periodic defined benefit cost51
—
 (22)(19) 154
2
 (66)(59)
Other defined benefit pension plans(a)
7
6
 NA
NA
 20
21
 NA
NA
Total defined benefit plans6
49
 (19)(17) 23
142
 (59)(51)58
6
 (22)(19) 174
23
 (66)(59)
Total defined contribution plans229
221
 NA
NA
 661
617
 NA
NA
255
229
 NA
NA
 718
661
 NA
NA
Total pension and OPEB cost included in noninterest expense$235
$270
 $(19)$(17) $684
$759
 $(59)$(51)$313
$235
 $(22)$(19) $892
$684
 $(66)$(59)
(a)Effective January 1, 2018, benefits earned during the period are reported in compensation expense; all other components of net periodic defined benefit costs are reported within other expense in the Consolidated statements of income.
(b)Includes various defined benefit pension plans which are individually immaterial.
The following table presents the fair values of plan assets for the U.S. defined benefit pension and OPEB plans and for the material non-U.S. defined benefit pension plans.
(in billions)September 30,
2018
 December 31, 2017
September 30,
2019
 December 31, 2018
Fair value of plan assets      
Defined benefit pension plans$19.2
 $19.6
$20.1
 $18.1
OPEB plans2.8
 2.8
2.9
 2.6

There are no0 expected contributions to the U.S. defined benefit pension plan for 2018.2019.

Note 8 – Employee share-based incentives
ForRefer to Note 9 of JPMorgan Chase’s 2018 Form 10-K 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.incentives.
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,		Three months ended
September 30,		 Nine months ended
September 30,
(in millions)2018
 2017
 2018
 2017
2019
 2018
 2019
 2018
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
Cost of prior grants of RSUs, performance share units (“PSUs”) and stock appreciation rights (“SARs”) that are amortized over their applicable vesting periods$265
 $282
 $882
 $956
Accrual of estimated costs of share-based awards to be granted in future periods including those to full-career eligible employees240
 224
 852
 750
294
 240
 900
 852
Total noncash compensation expense related to employee share-based incentive plans$522
 $491
 $1,808
 $1,617
$559
 $522
 $1,782
 $1,808

In the first quarter of 2018,2019, in connection with its annual incentive grant for the 20172018 performance year, the Firm granted 1721 million RSUs and 516630 thousand PSUs with weighted-average grant date fair values of $111.17$98.98 per RSU and $110.46$98.96 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. 2. 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, 2019, the investment securities portfolio consisted of debt securities with an average credit rating of AA+ (based(based upon external ratings where available,
and where not available, based primarily upon internal ratings which correspond to ratings as defined by S&P and Moody’s). ForRefer to Note 10 of JPMorgan Chase’s 2018 Form 10-K for additional information regarding the investment securities portfolio, refer to Note10 of JPMorgan Chase’s 2017 Annual Report.portfolio.
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, 2019 December 31, 2018
(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. GSEs and government agencies(a)
$103,086
$2,556
$61
 $105,581
 $69,026
$594
$974
 $68,646
Residential:           
U.S.10,083
273
6
 10,350
 5,877
79
31
 5,925
Non-U.S.2,490
64
2
 2,552
 2,529
72
6
 2,595
Commercial5,228
100
4
 5,324
 6,758
43
147
 6,654
Total mortgage-backed securities120,887
2,993
73
 123,807
 84,190
788
1,158
 83,820
U.S. Treasury and government agencies141,646
376
493
 141,529
 55,771
366
78
 56,059
Obligations of U.S. states and municipalities28,871
2,193
—
 31,064
 36,221
1,582
80
 37,723
Certificates of deposit74
—
—
 74
 75
—
—
 75
Non-U.S. government debt securities21,644
524
10
 22,158
 23,771
351
20
 24,102
Corporate debt securities1,596
39
1
 1,634
 1,904
23
9
 1,918
Asset-backed securities:           
Collateralized loan obligations27,942
18
52
 27,908
 19,612
1
176
 19,437
Other5,199
57
9
 5,247
 7,225
57
22
 7,260
Total available-for-sale securities347,859
6,200
638
 353,421
 228,769
3,168
1,543
 230,394
Held-to-maturity securities           
Mortgage-backed securities:           
U.S. GSEs and government agencies(a)
35,976
1,250
20
 37,206
 26,610
134
200
 26,544
Total mortgage-backed securities35,976
1,250
20
 37,206
 26,610
134
200
 26,544
U.S. Treasury and government agencies

51
—
—
 51
 —
—
—
 —
Obligations of U.S. states and municipalities4,803
317
—
 5,120
 4,824
105
15
 4,914
Total held-to-maturity securities40,830
1,567
20
 42,377
 31,434
239
215
 31,458
Total investment securities$388,689
$7,767
$658
 $395,798
 $260,203
$3,407
$1,758
 $261,852
 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 totalAFS U.S. government-sponsored enterpriseGSE obligations with fair values of $44.2$78.8 billion and $45.8$50.7 billion, at 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.
(c)Included totalHTM U.S. government-sponsored enterpriseGSE obligations with amortized cost of $20.6$30.8 billion and $22.0$20.9 billion, at September 30, 2018,2019, and December 31, 2017,2018, respectively. As of September 30, 2019, mortgage-backed securities issued by Fannie Mae and Freddie Mac each exceeded 10% of JPMorgan Chase’s total stockholders’ equity; the amortized cost and fair value of such securities was $69.8 billion and $72.0 billion, and $37.8 billion and $38.8 billion, respectively.


Investment securities impairment
The following tables present the fair value and gross unrealized losses for investment securities by aging category at September 30, 2018,2019, and December 31, 2017.2018.
Investment securities with gross unrealized lossesInvestment securities with gross unrealized losses
Less than 12 months 12 months or more Less than 12 months 12 months or more 
September 30, 2018 (in millions)Fair value
Gross
unrealized losses
 Fair value
Gross
unrealized losses
Total fair valueTotal gross unrealized losses
September 30, 2019 (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
U.S. GSEs and government agencies$8,505
$37
 $2,952
$24
$11,457
$61
Residential:      
U.S.
1,343
20
 860
16
2,203
36
—
—
 558
6
558
6
Non-U.S.635
2
 180
1
815
3
47
—
 472
2
519
2
Commercial914
11
 3,018
171
3,932
182
752
4
 165
—
917
4
Total mortgage-backed securities40,001
1,021
 14,550
708
54,551
1,729
9,304
41
 4,147
32
13,451
73
U.S. Treasury and government agencies4,556
100
 1,416
96
5,972
196
84,152
489
 540
4
84,692
493
Obligations of U.S. states and municipalities4,171
63
 1,291
55
5,462
118
41
—
 23
—
64
—
Certificates of deposit—
—
 —
—
—
—
74
—
 —
—
74
—
Non-U.S. government debt securities4,237
16
 1,798
29
6,035
45
3,189
6
 1,357
4
4,546
10
Corporate debt securities—
—
 38
1
38
1
83
—
 36
1
119
1
Asset-backed securities:      
Collateralized loan obligations10,267
42
 —
—
10,267
42
7,086
8
 6,684
44
13,770
52
Other2,018
6
 2,545
21
4,563
27
506
3
 1,598
6
2,104
9
Total available-for-sale securities65,250
1,248
 21,638
910
86,888
2,158
104,435
547
 14,385
91
118,820
638
Held-to-maturity securities      
Mortgage-backed securities      
U.S. government agencies22,131
356
 2,595
137
24,726
493
Commercial—
—
 —
—
—
—
U.S. GSEs and government agencies2,240
20
 86
—
2,326
20
Total mortgage-backed securities22,131
356
 2,595
137
24,726
493
2,240
20
 86
—
2,326
20
U.S. Treasury and government agencies

51
—
 —
—
51
—
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
2,291
20
 86
—
2,377
20
Total investment securities
with gross unrealized losses
$88,234
$1,614
 $24,910
$1,068
$113,144
$2,682
$106,726
$567
 $14,471
$91
$121,197
$658


Investment securities with gross unrealized lossesInvestment securities with gross unrealized losses
Less than 12 months 12 months or more Less than 12 months 12 months or more 
December 31, 2017 (in millions)Fair value
Gross
unrealized losses
 Fair value
Gross
unrealized losses
Total fair valueTotal gross unrealized losses
December 31, 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$36,037
$139
 $7,711
$196
$43,748
$335
U.S. GSEs and government agencies$17,656
$318
 $22,728
$656
$40,384
$974
Residential:      
U.S.1,112
5
 596
9
$1,708
14
623
4
 1,445
27
2,068
31
Non-U.S.—
—
 266
1
266
1
907
5
 165
1
1,072
6
Commercial528
4
 335
1
863
5
974
6
 3,172
141
4,146
147
Total mortgage-backed securities37,677
148
 8,908
207
46,585
355
20,160
333
 27,510
825
47,670
1,158
U.S. Treasury and government agencies1,834
11
 373
20
2,207
31
4,792
7
 2,391
71
7,183
78
Obligations of U.S. states and municipalities949
7
 1,652
26
2,601
33
1,808
15
 2,477
65
4,285
80
Certificates of deposit—
—
 —
—
—
—
75
—
 —
—
75
—
Non-U.S. government debt securities6,500
15
 811
17
7,311
32
3,123
5
 1,937
15
5,060
20
Corporate debt securities—
—
 52
1
52
1
478
8
 37
1
515
9
Asset-backed securities:      
Collateralized loan obligations—
—
 276
1
276
1
18,681
176
 —
—
18,681
176
Other3,521
20
 720
4
4,241
24
1,208
6
 2,354
16
3,562
22
Total available-for-sale securities50,481
201
 12,792
276
63,273
477
50,325
550
 36,706
993
87,031
1,543
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
U.S. GSEs and government agencies4,385
23
 7,082
177
11,467
200
Total mortgage-backed securities7,776
79
 2,087
35
9,863
114
4,385
23
 7,082
177
11,467
200
U.S. Treasury and government agencies

—
—
 —
—
—
—
Obligations of U.S. states and municipalities584
9
 2,131
71
2,715
80
12
—
 1,114
15
1,126
15
Total held-to-maturity securities8,360
88
 4,218
106
12,578
194
4,397
23
 8,196
192
12,593
215
Total investment securities with gross unrealized losses$58,841
$289
 $17,010
$382
$75,851
$671
$54,722
$573
 $44,902
$1,185
$99,624
$1,758

Gross unrealized lossesOther-than-temporary impairment
The Firm has recognizedrecognizes 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, 2018,2019, 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,Further, the Firm did not recognize any credit-related OTTI losses during the nine months ended September 30, 2019 and 2018. Accordingly, the Firm believes that the investment securities with an unrealized loss in AOCI as of September 30, 2018,2019, are not other-than-temporarily impaired. ForRefer to Note 10 of JPMorgan Chase’s 2018 Form 10-K for additional information on other-than-temporary impairment, refer to Note10 of the JPMorgan Chase’s 2017 Annual Report.impairment.
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)
 Three months ended September 30,  Nine months ended September 30,
(in millions)2019
2018
  2019
2018
Realized gains$78
$58
  $454
$137
Realized losses—
(103)  (319)(507)
OTTI losses(a)
—
(1)  —
(1)
Net investment securities gains/(losses)$78
$(46)  $135
$(371)

(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.
(a) Represents OTTI losses recognized in income on investment securities the Firm intends to sell. Excludes realized losses on securities sold of $21 million for the nine months ended September 30, 2018 that had been previously reported as an OTTI loss due to the intention to sell the securities.

Changes in the credit loss component of credit-impaired debt securities
The cumulative credit loss component, including any changes therein, of OTTI losses that have been recognized in income related to AFS securities that the Firm does not intend to sell was not material as of and during the nine month periods ended September 30, 20182019 and 2017.2018.

Contractual maturities and yields
The following table presents the amortized cost and estimated fair value at September 30, 2018,2019, 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
By remaining maturity
September 30, 2019 (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(b)
 Total
Available-for-sale securities      
Mortgage-backed securities(a)
      
Amortized cost$258
$377
$5,746
$74,034
 $80,415
$14
$59
$10,230
$110,584
 $120,887
Fair value260
379
5,827
72,909
 79,375
14
60
10,476
113,257
 123,807
Average yield(b)
1.84%2.45%3.44%3.48% 3.46%
Average yield(a)
3.59%2.73%2.92%3.45% 3.40%
U.S. Treasury and government agencies







  







  
Amortized cost$84
$8,565
$13,644
$5,233
 $27,526
$10,904
$95,139
$25,557
$10,046
 $141,646
Fair value85
8,673
13,533
5,525
 27,816
10,901
95,231
25,659
9,738
 141,529
Average yield(b)
2.12%2.70%2.53%2.91% 2.66%
Average yield(a)
1.99%1.96%2.02%2.04% 1.98%
Obligations of U.S. states and municipalities







  







  
Amortized cost$103
$715
$2,783
$33,058
 $36,659
$170
$228
$1,089
$27,384
 $28,871
Fair value104
728
2,872
34,417
 38,121
172
236
1,135
29,521
 31,064
Average yield(b)
2.07%3.89%5.05%5.01% 4.98%
Average yield(a)
3.32%4.00%5.60%4.94% 4.95%
Certificates of deposit







  







  
Amortized cost$75
$—
$—
$—
 $75
$74
$—
$—
$—
 $74
Fair value75
—
—
—
 75
74
—
—
—
 74
Average yield(b)
0.49%—%—%—% 0.49%
Average yield(a)
0.49%—%—%—% 0.49%
Non-U.S. government debt securities







  







  
Amortized cost$4,289
$14,711
$5,398
$—
 $24,398
$6,342
$11,580
$3,416
$306
 $21,644
Fair value4,289
14,886
5,499
—
 24,674
6,350
11,870
3,633
305
 22,158
Average yield(b)
3.00%1.86%1.30%—% 1.94%
Average yield(a)
2.23%1.99%1.34%1.67% 1.95%
Corporate debt securities







  







  
Amortized cost$70
$914
$872
$137
 $1,993
$216
$718
$662
$—
 $1,596
Fair value70
936
905
145
 2,056
218
737
679
—
 1,634
Average yield(b)
4.04%4.40%4.57%4.73% 4.48%
Average yield(a)
4.83%3.91%3.78%—% 3.98%
Asset-backed securities







  







  
Amortized cost$—
$3,537
$5,345
$19,018
 $27,900
$—
$1,873
$9,411
$21,857
 $33,141
Fair value—
3,515
5,347
19,051
 27,913
—
1,876
9,412
21,867
 33,155
Average yield(b)
—%2.83%3.19%3.04% 3.04%
Average yield(a)
—%2.94%3.17%3.03% 3.06%
Total available-for-sale securities







  







  
Amortized cost$4,879
$28,819
$33,788
$131,480
 $198,966
$17,720
$109,597
$50,365
$170,177
 $347,859
Fair value4,883
29,117
33,983
132,047
 200,030
17,729
110,010
50,994
174,688
 353,421
Average yield(b)
2.88%2.37%2.85%3.78% 3.39%
Average yield(a)
2.12%2.00%2.47%3.55% 2.83%
Held-to-maturity securities







  







  
Mortgage-backed securities(a)








  







  
Amortized cost$—
$—
$2,765
$23,772
 $26,537
$—
$—
$4,655
$31,321
 $35,976
Fair value—
—
2,725
23,324
 26,049
—
—
5,049
32,157
 37,206
Average yield(b)(a)
—%—%3.52%3.33% 3.35%—%—%3.29%3.12% 3.14%
U.S. Treasury and government agencies

   
Amortized cost

$—
$51
$—
$—
 $51
Fair value

—
51
—
—
 51
Average yield(a)

—%1.47%—%—% 1.47%
Obligations of U.S. states and municipalities







  







  
Amortized cost$—
$—
$20
$4,811
 $4,831
$—
$—
$55
$4,748
 $4,803
Fair value—
—
20
4,849
 4,869
—
—
58
5,062
 5,120
Average yield(b)
—%—%3.90%4.11% 4.11%
Average yield(b)(a)
—%—%3.89%4.02% 4.02%
Total held-to-maturity securities







  







  
Amortized cost$—
$—
$2,785
$28,583
 $31,368
$—
$51
$4,710
$36,069
 $40,830
Fair value—
—
2,745
28,173
 30,918
—
51
5,107
37,219
 42,377
Average yield(b)(a)
—%—%3.53%3.46% 3.47%
Average yield(a)
—%1.47%3.30%3.24% 3.24%
(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, respectively.
(b)Average yield is computed using the effective yield of each security owned at the end of the period, weighted based on the amortized cost of each security. The effective yield considers the contractual coupon, amortization of premiums and accretion of discounts, and the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable. The effective yield excludes unscheduled principal prepayments; and accordingly, actual maturities of securities may differ from their contractual or expected maturities as certain securities may be prepaid.
(c)(b)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 75 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
ForRefer to Note 11 of JPMorgan Chase’s 2018 Form 10-K for a discussion of accounting policies relating to securities financing activities, referactivities. Refer to Note 11 of JPMorgan Chase’s 2017 Annual Report. For3 for further information regarding securities borrowed and securities lending agreements for which the fair value option has been elected, referelected. Refer to Note 3. For23 for further information regarding assets pledged and collateral received in securities financing agreements, refer to Note 21.agreements.
The table below summarizes the gross and net amounts of the Firm’s securities financing agreements as of September 30, 20182019 and December 31, 2017.2018. When the Firm has obtained an appropriate legal opinion with respect to thea 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
 
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 reducescounterparty to reduce the economic exposure with the counterparty, but such collateral is not eligible for net Consolidated balance sheet presentation. Where the Firm has obtained an appropriate legal opinion with respect to the counterparty master netting agreement, such collateral, along with securities financing balances that do not meet all these relevant netting criteria under U.S. GAAP, is presented in the counterparty.table below as “Amounts not nettable on the Consolidated balance sheets,” and reduces the “Net amounts” presented. 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 below.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, 2018September 30, 2019
(in millions)Gross amountsAmounts netted on the Consolidated balance sheets
Amounts presented on the Consolidated balance sheets(b)
Amounts not nettable on the Consolidated balance sheets(c)
Net
amounts(d)
Gross amountsAmounts netted on the Consolidated balance sheets
Amounts presented on the Consolidated balance sheets(b)
Amounts not nettable on the Consolidated balance sheets(c)
Net
amounts(d)
Assets      
Securities purchased under resale agreements$521,732
$(304,110)$217,622
$(205,345) $12,277
$630,033
$(372,650)$257,383
$(244,241) $13,142
Securities borrowed143,644
(21,210)122,434
(89,771) 32,663
160,304
(21,968)138,336
(104,517) 33,819
Liabilities      
Securities sold under repurchase agreements$472,560
$(304,110)$168,450
$(154,335) $14,115
$608,618
$(372,650)$235,968
$(213,150) $22,818
Securities loaned and other(a)
38,720
(21,210)17,510
(17,146) 364
34,104
(21,968)12,136
(11,878) 258
December 31, 2017December 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)
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
$691,116
$(369,612)$321,504
$(308,854)
$12,650
Securities borrowed113,926
(8,814)105,112
(76,805) 28,307
132,955
(20,960)111,995
(79,747) 32,248
Liabilities      
Securities sold under repurchase agreements$398,218
$(250,505)$147,713
$(129,178)
$18,535
$541,587
$(369,612)$171,975
$(149,125)
$22,850
Securities loaned and other(a)
27,228
(8,814)18,414
(18,151) 263
33,700
(20,960)12,740
(12,358) 382
(a)Includes securities-for-securities lending transactionsagreements of $5.2$2.4 billion and $9.2$3.3 billion at September 30, 20182019 and December 31, 2017,2018, respectively, accounted for at fair value, where the Firm is acting as lender. These amounts are presented within other liabilities inIn the Consolidated balance sheets.sheets, the Firm recognizes the securities received at fair value within other assets and the obligation to return those securities within accounts payable and other liabilities.
(b)Includes securities financing agreements accounted for at fair value. At September 30, 20182019 and December 31, 2017,2018, included securities purchased under resale agreements of $12.2$13.7 billion and $14.7$13.2 billion, respectively andrespectively; securities sold under repurchase agreements to repurchase of $1.1$933 million and $935 million, respectively; and securities borrowed of $5.8 billion and $697 million,$5.1 billion, respectively. There were $4.5 billion and $3.0 billion of securities borrowed at September 30, 2018 and December 31, 2017, respectively. There were no0 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 net asset or liability with that counterparty.
(d)Includes securities financing agreements that provide collateral rights, but where an appropriate legal opinion with respect to the master netting agreement has not been either sought or obtained. At September 30, 20182019 and December 31, 2017,2018, included $6.4$9.1 billion and $7.5$7.9 billion, respectively, of securities purchased under resale agreements; $29.7$30.6 billion and $25.5$30.3 billion, respectively, of securities borrowed; $13.2$21.9 billion and $16.5$21.5 billion, respectively, of securities sold under agreements to repurchase;repurchase agreements; and $45$96 million and $29$25 million, respectively, of securities loaned and other.

The tables below present as of September 30, 2018,2019, and December 31, 20172018 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
 Gross liability balance
 September 30, 2019 December 31, 2018
 (in millions)Securities sold under repurchase agreements Securities loaned and other Securities sold under repurchase agreements Securities loaned and other
Mortgage-backed securities       
U.S. GSEs and government agencies$33,399
 $—
 $34,311
(a) 
$—
Residential - nonagency1,804
 —
 2,165
 —
Commercial - nonagency1,778
 —
 1,390
 —
U.S. Treasury, GSEs and government agencies366,820
 8
 317,578
(a) 
69
Obligations of U.S. states and municipalities1,400
 —
 1,150
 —
Non-U.S. government debt165,568
 1,769
 154,900
 4,313
Corporate debt securities13,067
 1,361
 13,898
 428
Asset-backed securities1,746
 —
 3,867
 —
Equity securities23,036
 30,966
 12,328
 28,890
Total$608,618
 $34,104
 $541,587
 $33,700
(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.
(b)The prior period amounts have been revised to conform with the current period presentation.
 Remaining contractual maturity of the agreements
 Overnight and continuous    
Greater than
90 days
 
September 30, 2019 (in millions) Up to 30 days 30 – 90 daysTotal
Total securities sold under repurchase agreements$336,082
 $132,662
 $53,504
$86,370
$608,618
Total securities loaned and other30,172
 231
 748
2,953
34,104
 Remaining contractual maturity of the agreements
 Overnight and continuous    
Greater than
90 days
 
December 31, 2018 (in millions) Up to 30 days 30 – 90 daysTotal
Total securities sold under repurchase agreements$247,579
 $174,971
 $71,637
$47,400
$541,587
Total securities loaned and other28,402
 997
 2,132
2,169
33,700
Transfers not qualifying for sale accounting
At September 30, 2018,2019, and December 31, 2017,2018, the Firm held $1.6 billion$654 million and $1.5$2.1 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. The prior period amount has been revised to conform with the current period presentation.

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
 
ForRefer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for a detailed discussion of loans, including accounting policies, refer to Note12 of JPMorgan Chase’s 2017 Annual Report. policies. 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.
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 agenciesGovernments & Agencies
• Other(g)
(a)Includes loans held in CCB, scored prime mortgage and scored home equity loans held in AWM and prime mortgage loans held in Corporate.
(b)Predominantly includes prime loans (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 scored prime mortgage and scored 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 and individual entities (predominantly consists of Wealth Management clients within AWM)AWM and includes exposure to personal investment companies and personal and testamentary trusts), SPEs and privatePrivate education and civic organizations. For more information on SPEs, referRefer to Note 14 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for more information on SPEs.
The following tables summarize the Firm’s loan balances by portfolio segment.
September 30, 2018Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
September 30, 2019Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
(in millions)Consumer, excluding credit card 
Credit card(a)
 Wholesale Total  
Retained
(b) 
$331,809
 $159,571
 $437,507
 $928,887
(b) 
Held-for-sale104
 25
 3,551
 3,680
 4,821
 —
 5,750
 10,571
 
At fair value—
 —
 2,987
 2,987
 —
 —
 5,760
 5,760
 
Total$376,062
 $147,881
 $430,375
 $954,318
 $336,630
 $159,571
 $449,017
 $945,218
 
                
December 31, 2017Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
December 31, 2018Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
(in millions)Consumer, excluding credit card 
Credit card(a)
 Wholesale Total  
Retained
(b) 
$373,637
 $156,616
 $439,162
 $969,415
(b) 
Held-for-sale128
 124
 3,099
 3,351
 95
 16
 11,877
 11,988
 
At fair value—
 —
 2,508
 2,508
 —
 —
 3,151
 3,151
 
Total$372,681
 $149,511
 $408,505
 $930,697
 $373,732
 $156,632
 $454,190
 $984,554
 
(a)Includes accrued interest and fees net of an allowance for the uncollectible portion of accrued interest and fee income.
(b)Loans (other than PCI loans and 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 September 30, 2018,2019, and December 31, 2017.2018.


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 
2019 2018
Three months ended September 30,
(in millions)		 
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
Purchases 
$561
(a)(b) 
$—
$285
$846
 $711
(a)(b) 
$—
$479
$1,190
 
$259
(a)(b) 
$—
$453
$712
 $561
(a)(b) 
$—
$285
$846
Sales 
1,789

—
4,197
5,986
 672
 —
3,342
4,014
 
14,970

—
5,559
20,529
 1,789
 —
4,197
5,986
Retained loans reclassified to held-for-sale 
—
 —
666
666
 —

—
367
367
 
3,889
 —
359
4,248
 —

—
666
666
                
 2018 2017 2019 2018
Nine months ended September 30,
(in millions)		 
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal 
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
 $1,044
(a)(b) 
$—
$1,041
$2,085
 $2,164
(a)(b) 
$—
$1,915
$4,079
Sales 4,661
 —
12,829
17,490
 2,025
 —
8,166
10,191
 30,484
 —
16,404
46,888
 4,661
 —
12,829
17,490
Retained loans reclassified to held-for-sale 36
 —
1,926
1,962
 6,340
(c) 
—
961
7,301
 8,950
 —
1,784
10,734
 36
 —
1,926
1,962

(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 $4.7 billion and $5.6 billionand $6.9 billionfor the three months ended September 30, 20182019 and 2017, 2018, respectively, and $14.5$12.2 billion and $18.2$14.5 billion for the nine months ended September 30, 2019 and 2018, and 2017, respectively.
(c)Includes the Firm’s student loan portfolio which was sold in 2017.

Gains and losses on sales of loans
Gains and lossesNet gains on sales of loans (including adjustments to record loans held-for-sale at the lower of cost or fair value) recognized in other incomenoninterest revenue were not material to the Firm$254 million and $433 million, for the three and nine months ended September 30, 20182019, respectively. Gains and 2017.losses on sales of loans were 0t material for the three and nine months ended September 30, 2018. 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
September 30,
2019
December 31,
2018
Residential real estate – excluding PCI  
Residential mortgage$231,361
$216,496
$197,456
$231,078
Home equity29,318
33,450
24,954
28,340
Other consumer loans  
Auto63,619
66,242
61,410
63,573
Consumer & Business Banking26,451
25,789
26,699
26,612
Residential real estate – PCI  
Home equity9,393
10,799
7,753
8,963
Prime mortgage4,931
6,479
4,164
4,690
Subprime mortgage2,072
2,609
1,797
1,945
Option ARMs8,813
10,689
7,576
8,436
Total retained loans$375,958
$372,553
$331,809
$373,637

ForRefer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for further information on consumer credit quality indicators, refer to Note12 of JPMorgan Chase’s 2017 Annual Report.indicators.

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 loansResidential real estate – excluding PCI loans   Residential real estate – excluding PCI loans   
(in millions, except ratios)Residential mortgage Home equity Total residential real estate – excluding PCIResidential 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
Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
Loan delinquency(a)
          
Current$225,799
$208,713
 $28,554
$32,391
 $254,353
$241,104
$196,354
$225,899
 $24,398
$27,611
 $220,752
$253,510
30–149 days past due2,825
4,234
 470
671
 3,295
4,905
691
2,763
 355
453
 1,046
3,216
150 or more days past due2,737
3,549
  294
388
 3,031
3,937
411
2,416
  201
276
 612
2,692
Total retained loans$231,361
$216,496
 $29,318
$33,450
 $260,679
$249,946
$197,456
$231,078
 $24,954
$28,340
 $222,410
$259,418
% of 30+ days past due to total retained loans(b)
0.51%0.77% 2.61%3.17% 0.75%1.09%0.53%0.48% 2.23%2.57% 0.72%0.71%
90 or more days past due and government guaranteed(c)
$2,828
$4,172
 $—
$—
 $2,828
$4,172
$40
$2,541
 $—
$—
 $40
$2,541
Nonaccrual loans1,880
2,175
 1,382
1,610
 3,262
3,785
1,629
1,765
 1,208
1,323
 2,837
3,088
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
$25
$25
 $4
$6
 $29
$31
Less than 66030
19
 1
3
 31
22
20
13
 2
1
 22
14
101% to 125% and refreshed FICO scores:     

     

Equal to or greater than 66020
36
 138
296
 158
332
22
37
 68
111
 90
148
Less than 66060
88
 46
95
 106
183
35
53
 23
38
 58
91
80% to 100% and refreshed FICO scores:     

     
Equal to or greater than 6603,606
4,369
 1,059
1,676
 4,665
6,045
4,650
3,977
 697
986
 5,347
4,963
Less than 660314
483
 359
569
 673
1,052
212
281
 214
326
 426
607
Less than 80% and refreshed FICO scores:     

     

Equal to or greater than 660212,585
194,758
 22,851
25,262
 235,436
220,020
185,438
212,505
 20,394
22,632
 205,832
235,137
Less than 6606,734
6,952
 3,501
3,850
 10,235
10,802
6,035
6,457
 2,842
3,355
 8,877
9,812
No FICO/LTV available888
1,259
 1,357
1,689
 2,245
2,948
952
813
 710
885
 1,662
1,698
U.S. government-guaranteed7,096
8,495
 —
—
 7,096
8,495
67
6,917
 —
—
 67
6,917
Total retained loans$231,361
$216,496
 $29,318
$33,450
 $260,679
$249,946
$197,456
$231,078
 $24,954
$28,340
 $222,410
$259,418
Geographic region(f)            
California$74,324
$68,855
 $5,852
$6,582
 $80,176
$75,437
$66,166
$74,759
 $5,074
$5,695
 $71,240
$80,454
New York29,146
27,473
 6,016
6,866
 35,162
34,339
25,442
28,847
 5,074
5,769
 30,516
34,616
Illinois15,242
14,501
 2,208
2,521
 17,450
17,022
13,304
15,249
 1,868
2,131
 15,172
17,380
Texas13,926
12,508
 1,843
2,021
 15,769
14,529
12,345
13,769
 1,640
1,819
 13,985
15,588
Florida10,624
9,598
 1,619
1,847
 12,243
11,445
10,195
10,704
 1,366
1,575
 11,561
12,279
New Jersey7,448
7,142
 1,702
1,957
 9,150
9,099
Washington8,057
6,962
 904
1,026
 8,961
7,988
7,638
8,304
 762
869
 8,400
9,173
Colorado8,131
7,335
 525
632
 8,656
7,967
7,577
8,140
 458
521
 8,035
8,661
New Jersey5,749
7,302
 1,447
1,642
 7,196
8,944
Massachusetts6,545
6,323
 246
295
 6,791
6,618
5,610
6,574
 208
236
 5,818
6,810
Arizona4,519
4,109
 1,211
1,439
 5,730
5,548
3,862
4,434
 986
1,158
 4,848
5,592
All other(f)(g)
53,399
51,690
  7,192
8,264
 60,591
59,954
39,568
52,996
  6,071
6,925
 45,639
59,921
Total retained loans$231,361
$216,496
 $29,318
$33,450
 $260,679
$249,946
$197,456
$231,078
 $24,954
$28,340
 $222,410
$259,418
(a)Individual delinquency classifications include mortgage loans insured by U.S. government agencies as follows: current included $2.7 billion$20 million and $2.4$2.8 billion; 30–149 days past due included $2.2 billion$16 million and $3.2$2.1 billion; and 150 or more days past due included $2.2 billion$31 million and $2.9$2.0 billion at September 30, 2018,2019, and December 31, 2017,2018, respectively.
(b)At September 30, 2018,2019, and December 31, 2017,2018, residential mortgage loans excluded mortgage loans insured by U.S. government agencies of $4.4 billion$47 million and $6.1$4.1 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
(c)These balances, which are 90 days or more past due, were excluded from nonaccrual loans as the loans are guaranteed by U.S government agencies. Typically the principal balance of the loans is insured and interest is guaranteed at a specified reimbursement rate subject to meeting agreed-upon servicing guidelines. At September 30, 2018,2019, and December 31, 2017,2018, these balances included $1.3 billion$38 million and $1.5 billion,$999 million, respectively, of loans that are no longer accruing interest based on the agreed-upon servicing guidelines. For the remaining balance, interest is being accrued at the guaranteed reimbursement rate. There were no0 loans that were not guaranteed by U.S. government agencies that are 90 or more days past due and still accruing interest at September 30, 2018,2019, and December 31, 2017.2018.
(d)Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates. Current estimated combined LTV for junior lien home equity loans considers all available lien positions, as well as unused lines, related to the property.
(e)Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.
(f)The geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at September 30, 2019.
(g)At September 30, 2018,2019, and December 31, 2017,2018, included mortgage loans insured by U.S. government agencies of $7.1 billion$67 million and $8.5$6.9 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 representsprovides the Firm’s delinquency statistics for junior lien home equity loans and lines of credit as of September 30, 2018,2019, and December 31, 2017.2018.
Total loans Total 30+ day delinquency rateTotal loans Total 30+ day delinquency rate
(in millions, except ratios)Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
HELOCs:(a)
      
Within the revolving period(b)
$5,482
$6,363
 0.22%0.50%$5,625
$5,608
 0.37%0.25%
Beyond the revolving period11,982
13,532
 2.78
3.56
9,283
11,286
 2.47
2.80
HELOANs1,104
1,371
 2.99
3.50
827
1,030
 2.42
2.82
Total$18,568
$21,266
 2.04%2.64%$15,735
$17,924
 1.72%2.00%
(a)These HELOCs are predominantly revolving loans for a 10-year period, after which time the HELOC converts to a loan with a 20-year amortization period, but also include HELOCs that allow interest-only payments beyond the revolving period.
(b)The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are experiencing financial difficulty.
 
HELOCs beyond the revolving period and HELOANs have higher delinquency rates than HELOCs within the revolving period.That is primarily because the fully-amortizing payment that is generally required for thoseproducts is higher than the minimum payment optionsavailable for HELOCs within the revolving period. The higher delinquency rates associated with amortizing HELOCs and HELOANs are factored into the Firm’s allowance for loan losses.






Impaired loans
The table below sets forth information about the Firm’s residential real estate impaired loans, excluding PCI loans. These loans are considered to be impaired as they have been modified in a TDR. All impaired loans are evaluated for an asset-specific allowance as described in Note 13 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K.

(in millions)		Residential mortgage Home equity Total residential real estate – excluding PCIResidential 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
Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
Impaired loans          
With an allowance$3,558
$4,407
 $1,177
$1,236
 $4,735
$5,643
$2,958
$3,381
 $1,062
$1,142
 $4,020
$4,523
Without an allowance(a)
1,164
1,213
 879
882
 2,043
2,095
1,160
1,184
 899
870
 2,059
2,054
Total impaired loans(b)(c)
$4,722
$5,620
 $2,056
$2,118
 $6,778
$7,738
$4,118
$4,565
 $1,961
$2,012
 $6,079
$6,577
Allowance for loan losses related to impaired loans$97
$62
 $42
$111
 $139
$173
$63
$88
 $14
$45
 $77
$133
Unpaid principal balance of impaired loans(d)
6,439
7,741
 3,537
3,701
 9,976
11,442
5,578
6,207
 3,355
3,466
 8,933
9,673
Impaired loans on nonaccrual status(e)
1,536
1,743
 993
1,032
 2,529
2,775
1,376
1,459
 981
955
 2,357
2,414
(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, 2018,2019, Chapter 7 residential real estate loans included approximately 13%12% of residential mortgages and 9%7% of home equity that were 30 days or more past due.
(b)At September 30, 2018,2019, and December 31, 2017, $4.0 billion2018, $16 million and $3.8$4.1 billion, respectively, of loans modified subsequent to repurchase from Ginnie Mae in accordance with the standards of the appropriate government agency (i.e., FHA, VA, RHS) are not included in the table above. When such loans perform subsequent to modification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure.
(c)Predominantly all residential real estate impaired loans excluding PCI loans,in the table above are in the U.S.
(d)Represents the contractual amount of principal owed at September 30, 2018,2019, and December 31, 2017.2018. The unpaid principal balance differs from the impaired loan balances due to various factors including charge-offs, net deferred loan fees or costs, and unamortized discounts or premiums on purchased loans.
(e)At September 30, 20182019 and December 31, 2017,2018, nonaccrual loans included $2.0$1.9 billion and $2.2$2.0 billion, respectively, of TDRs for which the borrowers were less than 90 days past due. ForRefer to the Loan accounting framework in Note 12 of JPMorgan Chase’s 2018 Form 10-K 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.status.

The following tables present average impaired loans and the related interest income reported by the Firm.
Three months ended September 30,
(in millions)		Average impaired loans 
Interest income on
impaired loans(a)
 
Interest income on impaired
loans on a cash basis(a)
Average impaired loans 
Interest income on
impaired loans(a)
 
Interest income on impaired
loans on a cash basis(a)
2018
2017
 2018
2017
 2018
2017
2019
2018
 2019
2018
 2019
2018
Residential mortgage$4,872
$5,743
 $61
$71
 $19
$19
$4,200
$4,872
 $55
$61
 $17
$19
Home equity2,065
2,150
 33
32
 21
20
1,938
2,065
 33
33
 21
21
Total residential real estate – excluding PCI$6,937
$7,893
 $94
$103
 $40
$39
$6,138
$6,937
 $88
$94
 $38
$40
          
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
Nine months ended September 30,
(in millions)		Average impaired loans 
Interest income on
impaired loans(a)
 
Interest income on impaired
loans on a cash basis(a)
2019
2018
 2019
2018
 2019
2018
Residential mortgage$5,242
$5,861
 $197
$217
 $58
$57
$4,390
$5,242
 $171
$197
 $52
$58
Home equity2,092
2,213
 98
95
 63
60
1,973
2,092
 99
98
 62
63
Total residential real estate – excluding PCI$7,334
$8,074
 $295
$312
 $121
$117
$6,363
$7,334
 $270
$295
 $114
$121
(a)Generally, interest income on loans modified in TDRs is recognized on a cash basis until the borrower has made a minimum of six6 payments under the new terms, unless the loan is deemed to be collateral-dependent.

Loan modifications
Modifications of residential real estate loans, excluding PCI loans, are generally accounted for and reported as TDRs. There were no additional commitments to lend to borrowers whose residential real estate loans, excluding PCI loans, have been modified in TDRs.
 
The following table presents new TDRs reported by the Firm.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018
2017
 2018
2017
2019
2018
 2019
2018
Residential mortgage$67
$57
 $314
$225
$50
$67
 $181
$314
Home equity55
82
 241
232
100
55
 214
241
Total residential real estate – excluding PCI$122
$139
 $555
$457
$150
$122
 $395
$555



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’s loss mitigation programs described above during the periods presented. These tables exclude Chapter 7 loans where the sole concession granted is the discharge of debtdebt..
Three months ended September 30, 
Total residential
real estate –
excluding PCI
 
Total residential
real estate –
excluding PCI
Residential mortgage Home equity Residential mortgage Home equity 
2018
2017
 2018
2017
 2018
2017
2019
2018
 2019
2018
 2019
2018
Number of loans approved for a trial modification513
206
 586
536
 1,099
742
365
513
 854
586
 1,219
1,099
Number of loans permanently modified719
510
 939
1,228
 1,658
1,738
307
719
 855
939
 1,162
1,658
Concession granted:(a)
          
Interest rate reduction58%64% 77%60% 69%61%78%58% 93%77% 89%69%
Term or payment extension83
80
 88
66
 86
70
94
83
 59
88
 68
86
Principal and/or interest deferred30
22
 11
8
 19
12
21
30
 6
11
 10
19
Principal forgiveness9
17
 7
19
 8
19
7
9
 4
7
 5
8
Other(b)
36
15
 58
32
 49
27
53
36
 85
58
 76
49
          
Nine months ended September 30, Total residential
real estate –
excluding PCI		 Total residential
real estate –
excluding PCI
Residential mortgage Home equity Residential mortgage Home equity 
2018
2017
 2018
2017
 2018
2017
2019
2018
 2019
2018
 2019
2018
Number of loans approved for a trial modification1,789
1,052
 1,895
1,844
 3,684
2,896
1,603
1,789
 1,786
1,895
 3,389
3,684
Number of loans permanently modified2,374
1,952
 4,005
4,028
 6,379
5,980
1,178
2,374
 2,778
4,005
 3,956
6,379
Concession granted:(a)
          
Interest rate reduction36%73% 57%68% 49%69%65%36% 83%57% 78%49%
Term or payment extension49
84
 62
78
 57
80
91
49
 64
62
 72
57
Principal and/or interest deferred47
16
 22
12
 31
13
26
47
 7
22
 13
31
Principal forgiveness7
18
 7
12
 7
14
6
7
 5
7
 5
7
Other(b)
40
24
 58
19
 52
21
44
40
 71
58
 63
52
(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, 2019 and 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 doesdo 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 PCIResidential mortgage Home equity Total residential real estate – excluding PCI
2018
2017
 2018
2017
 2018
2017
2019
2018
 2019
2018
 2019
2018
Weighted-average interest rate of loans with interest rate reductions – before TDR6.13%4.92% 5.69%5.26% 5.89%5.06%5.68%6.13% 5.50%5.69% 5.57%5.89%
Weighted-average interest rate of loans with interest rate reductions – after TDR4.23
2.89
 3.83
2.96
 4.01
2.92
3.99
4.23
 3.30
3.83
 3.58
4.01
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR22
24
 18
18
 21
22
21
22
 19
18
 20
21
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR39
38
 39
38
 39
38
39
39
 39
39
 39
39
Charge-offs recognized upon permanent modification$—
$—
 $—
$—
 $—
$—
$—
$—
 $—
$—
 $—
$—
Principal deferred7
3
 2
1
 9
4
5
7
 1
2
 6
9
Principal forgiven3
5
 1
4
 4
9
1
3
 1
1
 2
4
Balance of loans that redefaulted within one year of permanent modification(a)
$27
$32
 $19
$17
 $46
$49
$36
$27
 $17
$19
 $53
$46
          
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
Nine months ended September 30,
(in millions, except weighted-average data)		Residential mortgage Home equity Total residential real estate – excluding PCI
2019
2018
 2019
2018
 2019
2018
Weighted-average interest rate of loans with interest rate reductions – before TDR5.45%5.16% 5.34%4.92% 5.39%5.06%6.08%5.45% 5.56%5.34% 5.77%5.39%
Weighted-average interest rate of loans with interest rate reductions – after TDR3.64
2.97
 3.39
2.55
 3.49
2.79
4.36
3.64
 3.60
3.39
 3.90
3.49
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR24
24
 18
22
 22
23
21
24
 20
18
 20
22
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR38
38
 39
39
 38
38
39
38
 40
39
 39
38
Charge-offs recognized upon permanent modification$—
$1
 $1
$1
 $1
$2
$1
$—
 $—
$1
 $1
$1
Principal deferred17
10
 7
8
 24
18
13
17
 4
7
 17
24
Principal forgiven9
16
 5
9
 14
25
3
9
 3
5
 6
14
Balance of loans that redefaulted within one year of permanent modification(a)
$69
$86
 $49
$36
 $118
$122
$87
$69
 $45
$49
 $132
$118
(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 two2 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, 2018,2019, 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, 2018,2019, and December 31, 2017,2018, the Firm had non-PCI residential real estate loans, excluding those insured by U.S. government agencies, with a carrying value of $719$546 million and $787$653 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 consumerAuto 
Consumer &
Business Banking
 Total other consumer
Sep 30, 2018
Dec 31, 2017
 Sep 30, 2018
Dec 31, 2017
 Sep 30, 2018
Dec 31, 2017
Sep 30, 2019
Dec 31, 2018
 Sep 30, 2019
Dec 31, 2018
 Sep 30, 2019
Dec 31, 2018
Loan delinquency          
Current$63,095
$65,651
 $26,170
$25,454
 $89,265
$91,105
$60,872
$62,984
 $26,346
$26,249
 $87,218
$89,233
30–119 days past due517
584
 183
213
 700
797
534
589
 231
252
 765
841
120 or more days past due7
7
 98
122
 105
129
4
—
 122
111
 126
111
Total retained loans$63,619
$66,242
 $26,451
$25,789
 $90,070
$92,031
$61,410
$63,573
 $26,699
$26,612
 $88,109
$90,185
% of 30+ days past due to total retained loans0.82%0.89% 1.06%1.30% 0.89%1.01%0.88%0.93% 1.32%1.36% 1.01%1.06%
Nonaccrual loans(a)
137
141
 237
283
 374
424
112
128
 268
245
 380
373
Geographic region(b)          
California$8,382
$8,445
 $5,375
$5,032
 $13,757
$13,477
$8,016
$8,330
 $5,744
$5,520
 $13,760
$13,850
Texas6,497
7,013
 3,002
2,916
 9,499
9,929
6,644
6,531
 3,042
2,993
 9,686
9,524
New York3,843
4,023
 4,218
4,195
 8,061
8,218
3,627
3,863
 4,339
4,381
 7,966
8,244
Illinois3,667
3,916
 2,045
2,017
 5,712
5,933
3,438
3,716
 1,737
2,046
 5,175
5,762
Florida3,332
3,350
 1,484
1,424
 4,816
4,774
3,280
3,256
 1,565
1,502
 4,845
4,758
Arizona2,061
2,221
 1,451
1,383
 3,512
3,604
1,990
2,084
 1,268
1,491
 3,258
3,575
Ohio1,987
2,105
 1,346
1,380
 3,333
3,485
1,900
1,973
 1,189
1,305
 3,089
3,278
New Jersey1,990
2,044
 738
721
 2,728
2,765
1,920
1,981
 805
723
 2,725
2,704
Michigan1,378
1,418
 1,332
1,357
 2,710
2,775
1,279
1,357
 1,264
1,329
 2,543
2,686
Louisiana1,570
1,656
 860
849
 2,430
2,505
1,598
1,587
 768
860
 2,366
2,447
All other28,912
30,051
 4,600
4,515
 33,512
34,566
27,718
28,895
 4,978
4,462
 32,696
33,357
Total retained loans$63,619
$66,242
 $26,451
$25,789
 $90,070
$92,031
$61,410
$63,573
 $26,699
$26,612
 $88,109
$90,185
Loans by risk ratings(b)(c)
          
Noncriticized$14,193
$15,604
 $18,644
$17,938
 $32,837
$33,542
$13,823
$15,749
 $18,738
$18,743
 $32,561
$34,492
Criticized performing337
93
 760
791
 1,097
884
394
273
 747
751
 1,141
1,024
Criticized nonaccrual3
9
 195
213
 198
222
—
—
 218
191
 218
191
(a)There were no0 loans that were 90 or more days past due and still accruing interest at September 30, 2018,2019, and December 31, 2017.2018.
(b)The geographic regions presented in this table are ordered based on the magnitude of the corresponding loan balances at September 30, 2019.
(c)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
September 30,
2019
 December 31,
2018
Impaired loans      
With an allowance$227
 $272
$242
 $222
Without an allowance(a)
41
 26
20
 29
Total impaired loans(b)(c)
$268
 $298
$262
 $251
Allowance for loan losses related to impaired loans$65
 $73
$68
 $63
Unpaid principal balance of impaired loans(d)
372
 402
357
 355
Impaired loans on nonaccrual status244
 268
240
 229
(a)When discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged off and/or there have been interest payments received and applied to the loan balance.
(b)Predominantly all other consumer impaired loans are in the U.S.
(c)Other consumer average impaired loans were $271$254 million and $366$271 million for the three months ended September 30, 20182019 and 2017,2018, respectively, and $281$248 million and $459$281 million for the nine months ended September 30, 20182019 and 2017,2018, 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, 20182019 and 2017.2018.
(d)Represents the contractual amount of principal owed at September 30, 2018,2019, and December 31, 2017.2018. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs, interest payments received and applied to the principal balance, net deferred loan fees or costs, and unamortized discounts or premiums on purchased loans.
 
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 Note 12 of JPMorgan Chase’s 2017 Annual Report2018 Form 10-K for further information on other consumer loans modified in TDRs.
At September 30, 20182019 and December 31, 2017,2018, other consumer loans modified in TDRs were $90$77 million and $102$79 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, 20182019 and 2017.2018. Additional commitments to lend to borrowers whose loans have been modified in TDRs as of September 30, 20182019 and December 31, 20172018 were not material. TDRs on nonaccrual status were $66$55 million and $72$57 million at September 30, 20182019 and December 31, 2017,2018, respectively.

Purchased credit-impaired loans
ForRefer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for a detailed discussion of PCI loans, including the related accounting policies, refer to Note12 of JPMorgan Chase’s 2017 Annual Report.policies.
Residential real estate – PCI loans
The table below sets forth information about the Firm’s consumer, excluding credit card, PCI loans.

(in millions, except ratios)		Home equity
Prime mortgage
Subprime mortgage
Option ARMs
Total PCIHome equity
Prime mortgage
Subprime mortgage
Option ARMs
Total PCI
Sep 30,
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,
2019
Dec 31,
2018

Sep 30,
2019
Dec 31,
2018

Sep 30,
2019
Dec 31,
2018

Sep 30,
2019
Dec 31,
2018

Sep 30,
2019
Dec 31,
2018
Carrying value(a)
$9,393
$10,799

$4,931
$6,479

$2,072
$2,609

$8,813
$10,689

$25,209
$30,576
$7,753
$8,963

$4,164
$4,690

$1,797
$1,945

$7,576
$8,436

$21,290
$24,034
Loan delinquency (based on unpaid principal balance)Loan delinquency (based on unpaid principal balance)



















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
$7,543
$8,624

$3,759
$4,226

$1,915
$2,033

$6,876
$7,592

$20,093
$22,475
30–149 days past due257
356

269
336

297
381

427
547

1,250
1,620
234
278

241
259

247
286

362
398

1,084
1,221
150 or more days past due263
392

257
327

143
176

526
689

1,189
1,584
165
242

183
223

99
123

350
457

797
1,045
Total loans$9,567
$11,020

$4,955
$6,502

$2,592
$3,197

$8,857
$10,898

$25,971
$31,617
$7,942
$9,144

$4,183
$4,708

$2,261
$2,442

$7,588
$8,447

$21,974
$24,741
% 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%5.02%5.69%
10.14%10.24%
15.30%16.75%
9.38%10.12%
8.56%9.16%
Current estimated LTV ratios (based on unpaid principal balance)(b)(c)
Current estimated LTV ratios (based on unpaid principal balance)(b)(c)

















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

















Greater than 125% and refreshed FICO scores:















































Equal to or greater than 660$17
$33

$1
$4

$—
$2

$3
$6

$21
$45
$13
$17

$2
$1

$—
$—

$3
$3

$18
$21
Less than 66015
21

10
16

12
20

8
9

45
66
10
13

6
7

7
9

5
7

28
36
101% to 125% and refreshed FICO scores:















































Equal to or greater than 660153
274

7
16

8
20

24
43

192
353
96
135

6
6

7
4

18
17

127
162
Less than 66073
132

24
42

38
75

46
71

181
320
46
65

19
22

24
35

18
33

107
155
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
643
805

58
75

52
54

102
119

855
1,053
Less than 660394
559

132
230

192
309

220
371

938
1,469
271
388

71
112

109
161

128
190

579
851
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
5,031
5,548

2,559
2,689

809
739

4,932
5,111

13,331
14,087
Less than 6601,940
2,095

1,649
2,103

1,403
1,608

2,792
3,499

7,784
9,305
1,613
1,908

1,283
1,568

1,155
1,327

2,093
2,622

6,144
7,425
No FICO/LTV available502
577

249
319

124
149

384
470

1,259
1,515
219
265

179
228

98
113

289
345

785
951
Total unpaid principal balance$9,567
$11,020

$4,955
$6,502

$2,592
$3,197

$8,857
$10,898

$25,971
$31,617
$7,942
$9,144

$4,183
$4,708

$2,261
$2,442

$7,588
$8,447

$21,974
$24,741
Geographic region (based on unpaid principal balance)(d)Geographic region (based on unpaid principal balance)(d)



















Geographic region (based on unpaid principal balance)(d)



















California$5,678
$6,555

$2,706
$3,716

$627
$797

$4,966
$6,225

$13,977
$17,293
$4,704
$5,420

$2,280
$2,578

$549
$593

$4,355
$4,798

$11,888
$13,389
Florida1,014
1,137

351
428

249
296

753
878

2,367
2,739
865
976

295
332

218
234

630
713

2,008
2,255
New York543
607

383
457

282
330

538
628

1,746
2,022
469
525

338
365

249
268

452
502

1,508
1,660
Illinois207
233
 139
154
 115
123
 181
199
 642
709
Washington442
532

103
135

46
61

185
238

776
966
348
419

85
98

38
44

155
177

626
738
Illinois242
273

164
200

131
161

211
249

748
883
New Jersey217
242

145
178

94
110

283
336

739
866
184
210

117
134

81
88

222
258

604
690
Massachusetts67
79

118
149

78
98

252
307

515
633
56
65

103
113

69
73

216
240

444
491
Maryland51
57

104
129

106
132

188
232

449
550
43
48

89
95

90
96

160
178

382
417
Virginia56
66

94
123

39
51

234
280

423
520
47
54

82
91

35
37

190
211

354
393
Arizona175
203

70
106

45
60

121
156

411
525
138
165

60
69

39
43

99
112

336
389
All other1,082
1,269

717
881

895
1,101

1,126
1,369

3,820
4,620
881
1,029

595
679

778
843

928
1,059

3,182
3,610
Total unpaid principal balance$9,567
$11,020

$4,955
$6,502

$2,592
$3,197

$8,857
$10,898

$25,971
$31,617
$7,942
$9,144

$4,183
$4,708

$2,261
$2,442

$7,588
$8,447

$21,974
$24,741
(a)Carrying value includes the effect of fair value adjustments that were applied to the consumer PCI portfolio at the date of acquisition.
(b)Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates. Current estimated combined LTV for junior lien home equity loans considers all available lien positions, as well as unused lines, related to the property.
(c)Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.
(d)The geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at September 30, 2019.

Approximately 25%26% 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, 2018,2019, and December 31, 2017.2018.
Total loans Total 30+ day delinquency rateTotal loans Total 30+ day delinquency rate
(in millions, except ratios)Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
HELOCs:(a)
   
Within the revolving period(b)
$6
$51
 —%1.96%
Beyond the revolving period(c)
6,837
7,875
 3.79
4.63
HELOCs(a)(b)
5,623
6,531
 3.66%4.00%
HELOANs296
360
 3.38
5.28
234
280
 2.99
3.57
Total$7,139
$8,286
 3.77%4.65%$5,857
$6,811
 3.64%3.98%
(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. Substantially all HELOCs are beyond the revolving period.
(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 forthpresents the accretable yield activity for the Firm’s PCI consumer loans for the three and nine months endedSeptember 30, 20182019 and 2017,2018, and represents the Firm’s estimate of gross interest income expected to be earned over the remaining life of the PCI loan portfolios. The table excludes the cost to fund the PCI portfolios, and therefore the accretable yield does not represent net interest income expected to be earned on these portfolios.
Total PCITotal PCI
(in millions, except ratios)Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
20182017 2018201720192018 20192018
Beginning balance$8,722
$12,639
 $11,159
$11,768
$7,699
$8,722
 $8,422
$11,159
Accretion into interest income(303)(345) (958)(1,061)(272)(303) (841)(958)
Changes in interest rates on variable-rate loans37
51
 (231)218
(308)37
 (402)(231)
Other changes in expected cash flows(a)
46
(1,333) (1,468)87
255
46
 195
(1,468)
Balance at September 30$8,502
$11,012
 $8,502
$11,012
$7,374
$8,502
 $7,374
$8,502
Accretable yield percentage4.95%4.54% 4.88%4.48%5.27%4.95% 5.32%4.88%
(a)Other changes in expected cash flows may vary from period to period as the Firm continues to refine its cash flow model, for example cash flows expected to be collected due to the impact of modifications and changes in prepayment assumptions.
Active and suspended foreclosure
At September 30, 2018,2019, and December 31, 2017,2018, the Firm had PCI residential real estate loans with an unpaid principal balance of $1.1 billion$776 million and $1.3 billion, $964 million, respectively,that were not included in REO, but were in the process of active or suspended foreclosure.


 
Credit card loan portfolio
ForRefer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for further information on the credit card loan portfolio, including credit quality indicators, refer to Note 12 of JPMorgan Chase’s 2017 Annual Report.indicators.
The table below sets forth information about the Firm’s credit card loans.
(in millions, except ratios)September 30,
2018
December 31,
2017
September 30,
2019
December 31,
2018
Loan delinquency  
Current and less than 30 days
past due and still accruing
$145,271
$146,704
$156,629
$153,746
30–89 days past due and still accruing1,323
1,305
1,500
1,426
90 or more days past due and still accruing1,262
1,378
1,442
1,444
Total retained credit card loans$147,856
$149,387
Total retained loans$159,571
$156,616
Loan delinquency ratios  
% of 30+ days past due to total retained loans1.75%1.80%1.84%1.83%
% of 90+ days past due to total retained loans0.85
0.92
0.90
0.92
Credit card loans by geographic region 
Geographic region(a)
 
California$22,166
$22,245
$24,313
$23,757
Texas14,171
14,200
15,790
15,085
New York12,908
13,021
13,940
13,601
Florida9,064
9,138
10,101
9,770
Illinois8,482
8,585
9,125
8,938
New Jersey6,345
6,506
6,821
6,739
Ohio4,803
4,997
5,093
5,094
Pennsylvania4,677
4,883
4,918
4,996
Colorado4,090
4,006
4,543
4,309
Michigan3,710
3,826
3,942
3,912
All other57,440
57,980
60,985
60,415
Total retained credit card loans$147,856
$149,387
Total retained loans$159,571
$156,616
Percentage of portfolio based on carrying value with estimated refreshed FICO scores  
Equal to or greater than 66083.7%84.0%83.6%84.2%
Less than 66014.9
14.6
15.6
15.0
No FICO available1.4
1.4
0.8
0.8



(a)The geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at September 30, 2019.

Credit card impaired loans and loan modifications
ForRefer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for a detailed discussion of impaired credit card loans, including credit card loan modifications, refer to Note12 of JPMorgan Chase’s 2017 Annual Report.modifications.
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
September 30,
2019
December 31,
2018
Impaired credit card loans with an allowance(b)(c)
 $1,423
$1,319
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
488
440
(a)The carrying value and the unpaid principal balance are the same for credit card impaired loans.
(b)There were no impaired loans without an allowance.
(c)Represents credit card loans outstanding to borrowers enrolled in a credit card modification program as of the date presented.
(d)Represents credit card loans that were modified in TDRs but that have subsequently reverted back to the loans’ pre-modification payment terms.
At September 30, 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 credit card loans are in the U.S.
The following table presents average balances of impaired credit card loans and interest income recognized on those loans.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018
2017
 2018
2017
2019
2018
 2019
2018
Average impaired credit card loans$1,267
$1,205
 $1,245
$1,215
$1,406
$1,267
 $1,371
$1,245
Interest income on impaired credit card loans17
15
 48
44
18
17
 53
48

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 thesethe credit card loans have been modified under long-term programs for borrowers who are experiencing financial difficulties. Modifications under long-term programsThese modifications involve placing the customer on a fixed payment plan, generally for 60 months.months, and typically include reducing the interest rate on the credit card. Substantially all modifications are considered to be TDRs. New enrollments in these loan modification programs were $242 million and $215 million and $191 million for the three months ended September 30, 2019 and 2018, respectively, and 2017, respectively,$717 million and $640 million and $552 million for the nine months ended September 30, 20182019 and 2017,2018, respectively. For all periods disclosed, new enrollments were less than 1% of total retained credit card loans.
ForRefer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for additional information about credit card loan modifications, refer to Note12 of JPMorgan Chase’s 2017 Annual Report.modifications.
Financial effects of modifications and redefaults
The following table provides information about the financial effects of the concessions granted on credit card loans modified in TDRs and redefaults for the periods presented.
(in millions, except
weighted-average data)
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
2018
2017
 2018
2017
2019
2018
 2019
2018
Weighted-average interest rate of loans –
before TDR
18.25%16.84% 17.82%16.52%19.18%18.25% 19.23%17.82%
Weighted-average interest rate of loans –
after TDR
5.10
4.95
 5.12
4.84
4.65
5.10
 4.80
5.12
Loans that redefaulted within one year of modification(a)
$31
$27
 $82
$72
$42
$31
 $108
$82
(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%34.30% and 31.54%33.38% as of September 30, 2018,2019, and December 31, 20172018, 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. ForRefer to Note 12 and Note 13 of JPMorgan Chase’s 2018 Form 10-K for further information on these risk ratings, refer to Note12and Note13 of JPMorgan Chase’s 2017 Annual Report.ratings.

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
Commercial
 and industrial
 Real estate Financial
institutions		Governments & 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		Sep 30,
2019		Dec 31,
2018		 Sep 30,
2019		Dec 31,
2018		 Sep 30,
2019		Dec 31,
2018		Sep 30,
2019		Dec 31,
2018		 Sep 30,
2019		Dec 31,
2018		Sep 30,
2019		Dec 31,
2018
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
$61,709
$73,497
 $101,379
$100,107
 $39,492
$32,178
$12,905
$13,984
 $121,813
$119,963
$337,298
$339,729
Noninvestment-grade:              
Noncriticized51,758
46,558
 14,526
14,335
 14,374
13,071
168
369
 13,288
9,988
94,114
84,321
52,484
51,720
 13,574
14,876
 16,123
15,316
206
201
 11,059
11,478
93,446
93,591
Criticized performing3,429
3,983
 604
710
 142
210
—
—
 211
259
4,386
5,162
3,743
3,738
 808
620
 202
150
—
2
 540
182
5,293
4,692
Criticized nonaccrual696
1,357
 130
136
 2
2
—
—
 166
239
994
1,734
1,291
851
 65
134
 22
4
—
—
 92
161
1,470
1,150
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
57,518
56,309
 14,447
15,630
 16,347
15,470
206
203
 11,691
11,821
100,209
99,433
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
$119,227
$129,806
 $115,826
$115,737
 $55,839
$47,648
$13,111
$14,187
 $133,504
$131,784
$437,507
$439,162
% 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%4.22%3.54% 0.75%0.65% 0.40%0.32%—%0.01% 0.47%0.26%1.55%1.33%
% of criticized nonaccrual
to total retained loans
0.57
1.13
 0.11
0.12
 —
—
—
—
 0.13
0.21
0.23
0.43
1.08
0.66
 0.06
0.12
 0.04
0.01
—
—
 0.07
0.12
0.34
0.26
              
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
$28,850
$29,572
 $3,202
$2,967
 $17,112
$18,524
$2,699
$3,150
 $48,394
$48,433
$100,257
$102,646
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
90,377
100,234
 112,624
112,770
 38,727
29,124
10,412
11,037
 85,110
83,351
337,250
336,516
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
$119,227
$129,806
 $115,826
$115,737
 $55,839
$47,648
$13,111
$14,187
 $133,504
$131,784
$437,507
$439,162
              
       
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
$117,621
$128,678
 $115,733
$115,533
 $55,764
$47,622
$13,097
$14,165
 $132,844
$130,918
$435,059
$436,916
30–89 days past due
and still accruing
211
216
 52
242
 38
15
15
12
 1,110
898
1,426
1,383
279
109
 22
67
 51
12
13
18
 568
702
933
908
90 or more days
past due and
still accruing(c)
31
108
 16
12
 1
15
3
4
 2
2
53
141
36
168
 6
3
 2
10
1
4
 —
3
45
188
Criticized nonaccrual696
1,357
 130
136
 2
2
—
—
 166
239
994
1,734
1,291
851
 65
134
 22
4
—
—
 92
161
1,470
1,150
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
$119,227
$129,806
 $115,826
$115,737
 $55,839
$47,648
$13,111
$14,187
 $133,504
$131,784
$437,507
$439,162
(a)The U.S. and non-U.S. distribution is determined based predominantly on the domicile of the borrower.
(b)The credit quality of wholesale loans is assessed primarily through ongoing review and monitoring of an obligor’s ability to meet contractual obligations rather than relying on the past due status, which is generally a lagging indicator of credit quality. For a further discussion, referRefer to Note 12 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for a further discussion.
(c)Represents loans that are considered well-collateralized and therefore still accruing interest.
(d)Other includes individuals and individual entities (predominantly consists of Wealth Management clients within AWM)AWM and includes exposure to personal investment companies and personal and testamentary trusts), SPEs and privatePrivate education and civic organizations. For more information on SPEs, referRefer to Note 14 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for more information on SPEs.

The following table presents additional information on the real estate class of loans within the Wholesale portfolio for the periods indicated. ForRefer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for further information on real estate loans, refer to Note12 of JPMorgan Chase’s 2017 Annual Report.loans.

(in millions, except ratios)
Multifamily Other commercial Total real estate loansMultifamily Other commercial Total real estate loans
Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
 Sep 30,
2018
Dec 31,
2017
Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
Real estate retained loans$79,112
$77,597
 $36,184
$36,051
 $115,296
$113,648
$79,169
$79,184
 $36,657
$36,553
 $115,826
$115,737
Criticized exposure383
491
 351
355
 734
846
533
388
 340
366
 873
754
% of total criticized exposure to total real estate retained loans0.48%0.63% 0.97%0.98% 0.64%0.74%0.67%0.49% 0.93%1.00% 0.75%0.65%
Criticized nonaccrual$47
$44
 $83
$92
 $130
$136
$34
$57
 $31
$77
 $65
$134
% of criticized nonaccrual loans to total real estate retained loans0.06%0.06% 0.23%0.26% 0.11%0.12%0.04%0.07% 0.08%0.21% 0.06%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 Note 13 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K.
The table below sets forth information about the Firm’s wholesale impaired retained loans.

(in millions)
Commercial
and industrial
 Real estate 
Financial
institutions
 
Government
 agencies
 Other 
Total
retained loans
 
Commercial
and industrial
 Real estate 
Financial
institutions
 
Governments &
 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		 Sep 30,
2019		Dec 31,
2018		 Sep 30,
2019		Dec 31,
2018		 Sep 30,
2019		Dec 31,
2018		 Sep 30,
2019		Dec 31,
2018		 Sep 30,
2019		Dec 31,
2018		 Sep 30,
2019		 Dec 31,
2018		 
Impaired loans                            
With an allowance$658
$1,170
 $78
$78
 $2
$93
 $—
$—
 $151
$168
 $889
 $1,509
 $1,068
$807
 $46
$107
 $22
$4
 $—
$—
 $96
$152
 $1,232
 $1,070
 
Without an allowance(a)
84
228
 53
60
 —
—
 —
—
 25
70
 162
 358
 279
140
 21
27
 —
—
 —
—
 4
13
 304
 180
 
Total impaired loans
$742
$1,398
 $131
$138
 $2
$93
 $—
$—
 $176
$238
 $1,051
(c) 
$1,867
(c) 
$1,347
$947
 $67
$134
 $22
$4
 $—
$—
 $100
$165
 $1,536
(c) 
$1,250
(c) 
Allowance for loan losses related to impaired loans$243
$404
 $15
$11
 $1
$4
 $—
$—
 $21
$42
 $280
 $461
 $320
$252
 $13
$25
 $7
$1
 $—
$—
 $2
$19
 $342
 $297
 
Unpaid principal balance of impaired loans(b)
846
1,604
 198
201
 2
94
 —
—
 387
255
 1,433
 2,154
 1,532
1,043
 104
203
 23
4
 —
—
 336
473
 1,995
 1,723
 
(a)When the discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged-off and/or there have been interest payments received and applied to the loan balance.
(b)Represents the contractual amount of principal owed at September 30, 2018,2019, and December 31, 2017.2018. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs; interest payments received and applied to the carrying value; net deferred loan fees or costs; and unamortized discount or premiums on purchased loans.
(c)Based upon the domicile of the borrower, largely consists of loans in the U.S.
The following table presents the Firm’s average impaired retained loans for the periods indicated.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018
2017
 2018
2017
2019
2018
 2019
2018
Commercial and industrial$838
$1,207
 $1,095
$1,277
$1,073
$838
 $1,082
$1,095
Real estate134
167
 138
175
80
134
 105
138
Financial institutions45
70
 76
38
9
45
 11
76
Government agencies—
—
 —
—
Governments & Agencies—
—
 —
—
Other202
231
 214
246
123
202
 207
214
Total(b)(a)
$1,219
$1,675
 $1,523
$1,736
$1,285
$1,219
 $1,405
$1,523
(a)The related interest income on accruing impaired loans and interest income recognized on a cash basis were not material for the three and nine months ended September 30, 20182019 and 2017.
(b)The prior period amounts have been revised to conform with the current period presentation.2018.
 
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$498 million and $614$576 million as of September 30, 2018,2019, and December 31, 2017,2018, 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, 2019 and 2018.


Note 12 – Allowance for credit losses
ForRefer to Note 13 of JPMorgan Chase’s 2018 Form 10-K 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.policies.
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 2019 2018 
Nine months ended September 30,
(in millions)
Consumer, excluding
credit card
Credit card WholesaleTotal Consumer, excluding credit card Credit card WholesaleTotal 
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
 $4,146
$5,184
 $4,115
$13,445
 $4,579
 $4,884
 $4,141
$13,604
 
Gross charge-offs776
3,777
 264
4,817
 1,479
 3,344
 154
4,977
 702
4,050
 270
5,022
 776
 3,777
 264
4,817
 
Gross recoveries(681)(370) (146)(1,197) (478) (295) (81)(854) (420)(433) (34)(887) (681) (370) (146)(1,197) 
Net charge-offs95
3,407
 118
3,620
 1,001
 3,049
 73
4,123
 282
3,617
 236
4,135
 95
 3,407
 118
3,620
 
Write-offs of PCI loans(a)
151
—
 —
151
 66
 —
 —
66
 132
—
 —
132
 151
 —
 —
151
 
Provision for loan losses(152)3,557
 (111)3,294
 653
 3,699
 (401)3,951
 (265)4,017
 296
4,048
 (152) 3,557
 (111)3,294
 
Other1
—
 —
1
 (2) —
 3
1
 —
(1) 10
9
 1
 —
 —
1
 
Ending balance at September 30,$4,182
$5,034
 $3,912
$13,128
 $4,782
 $4,684
 $4,073
$13,539
 $3,467
$5,583
 $4,185
$13,235
 $4,182
 $5,034
 $3,912
$13,128
 
                    
Allowance for loan losses by impairment methodology                    
Asset-specific(b)
$204
$421
(c) 
$280
$905
 $271
 $376
(c) 
$363
$1,010
 $145
$488
(c) 
$342
$975
 $204
 $421
(c) 
$280
$905
 
Formula-based2,154
4,613
 3,632
10,399
 2,266
 4,308
 3,710
10,284
 2,066
5,095
 3,843
11,004
 2,154
 4,613
 3,632
10,399
 
PCI1,824
—
 —
1,824
 2,245
 —
 —
2,245
 1,256
—
 —
1,256
 1,824
 —
 —
1,824
 
Total allowance for loan losses$4,182
$5,034
 $3,912
$13,128
 $4,782
 $4,684
 $4,073
$13,539
 $3,467
$5,583
 $4,185
$13,235
 $4,182
 $5,034
 $3,912
$13,128
 
                    
Loans by impairment methodology                    
Asset-specific$7,046
$1,284
 $1,051
$9,381
 $8,147
 $1,206
 $1,638
$10,991
 $6,341
$1,423
 $1,536
$9,300
 $7,046
 $1,284
 $1,051
$9,381
 
Formula-based343,703
146,572
 422,783
913,058
 329,445
 139,994
 396,928
866,367
 304,178
158,148
 435,971
898,297
 343,703
 146,572
 422,783
913,058
 
PCI25,209
—
 3
25,212
 31,821
 —
 3
31,824
 21,290
—
 —
21,290
 25,209
 —
 3
25,212
 
Total retained loans$375,958
$147,856
 $423,837
$947,651
 $369,413
 $141,200
 $398,569
$909,182
 $331,809
$159,571
 $437,507
$928,887
 $375,958
 $147,856
 $423,837
$947,651
 
                    
Impaired collateral-dependent loans                    
Net charge-offs$15
$—
 $—
$15
 $47
 $—
 $30
$77
 $28
$—
 $23
$51
 $15
 $—
 $—
$15
 
Loans measured at fair value of collateral less cost to sell2,077
—
 258
2,335
 2,198
 —
 250
2,448
 2,083
—
 113
2,196
 2,077
 —
 258
2,335
 
                    
Allowance for lending-related commitments                    
Beginning balance at January 1,$33
$—
 $1,035
$1,068
 $26
 $—
 $1,052
$1,078
 $33
$—
 $1,022
$1,055
 $33
 $—
 $1,035
$1,068
 
Provision for lending-related commitments—
—
 29
29
 7
 —
 24
31
 —
—
 110
110
 —
 —
 29
29
 
Other—
—
 —
—
 —
 —
 —
—
 —
—
 —
—
 —
 —
 —
—
 
Ending balance at September 30,$33
$—
 $1,064
$1,097
 $33
 $—
 $1,076
$1,109
 $33
$—
 $1,132
$1,165
 $33
 $—
 $1,064
$1,097
 
                    
Allowance for lending-related commitments by impairment methodology                    
Asset-specific$—
$—
 $71
$71
 $—
 $—
 $220
$220
 $—
$—
 $135
$135
 $—
 $—
 $71
$71
 
Formula-based33
—
 993
1,026
 33
 —
 856
889
 33
—
 997
1,030
 33
 —
 993
1,026
 
Total allowance for lending-related commitments$33
$—
 $1,064
$1,097
 $33
 $—
 $1,076
$1,109
 $33
$—
 $1,132
$1,165
 $33
 $—
 $1,064
$1,097
 
                    
Lending-related commitments by impairment methodology                    
Asset-specific$—
$—
 $252
$252
 $—
 $—
 $764
$764
 $—
$—
 $446
$446
 $—
 $—
 $252
$252
 
Formula-based50,630
600,728
 397,064
1,048,422
 52,796
(d) 
574,641
 371,616
999,053
(d) 
53,591
645,880
 395,173
1,094,644
 50,630
 600,728
 397,064
1,048,422
 
Total lending-related commitments$50,630
$600,728
 $397,316
$1,048,674
 $52,796
(d) 
$574,641
 $372,380
$999,817
(d) 
$53,591
$645,880
 $395,619
$1,095,090
 $50,630
 $600,728
 $397,316
$1,048,674
 

(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
ForRefer to Note 1 of JPMorgan Chase’s 2018 Form 10-K for a further description of JPMorgan Chase’s accounting policies regarding consolidation of VIEs, refer to Note1of JPMorgan Chase’s 2017 Annual Report.VIEs.
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 receivables148139
 Mortgage securitization trustsServicing and securitization of both originated and purchased residential mortgages148-150139-141
CIBMortgage and other securitization trustsSecuritization of both originated and purchased residential and commercial mortgages, and other consumer loans148-150139-141
 Multi-seller conduitsAssist clients in accessing the financial markets in a cost-efficient manner and structures transactions to meet investor needs150141
 Municipal bond vehiclesFinancing of municipal bond investments150141

The Firm also invests in and provides financing and other services to VIEs sponsored by third parties. Refer to pages 151-152142–143 of this Note for more information on the VIEs sponsored by third parties.
Significant Firm-sponsored VIEs
Credit card securitizations
ForRefer to Note 14 of JPMorgan Chase’s 2018 Form 10-K 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.securitizations.
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 151142 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.
ForRefer to Note 14 of JPMorgan Chase’s 2018 Form 10-K 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.trusts.

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.contracts. In certain instances, the Firm’s only continuing involvement is servicing the loans. Refer to Securitization activity onpage 152143 of this Note for further information regarding the Firm’s cash flows associated with and interests retained in nonconsolidated VIEs, andpages 152-153143–144 of this Note for information on the Firm’s loan sales and securitization activity related to U.S. GSEs andgovernment agencies.
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
September 30, 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
September 30, 2019 (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
$61,480
$2,966
$49,826
 $522
$728
$—
$1,250
Subprime17,278
19
15,950
 55
—
—
55
15,156
—
14,085
 16
—
—
16
Commercial and other(b)
102,603
—
77,494
 497
869
216
1,582
101,624
—
86,302
 919
708
234
1,861
Total$185,362
$3,333
$145,358
 $1,159
$1,573
$216
$2,948
$178,260
$2,966
$150,213
 $1,457
$1,436
$234
$3,127
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
December 31, 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
December 31, 2018 (in millions)Total assets held by securitization VIEs
Assets
held in consolidated securitization VIEs
Assets held in nonconsolidated securitization VIEs with continuing involvement Trading assets Investment 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
$63,350
$3,237
$50,679
 $623
$647
$—
$1,270
Subprime18,984
7
17,612
 93
—
—
93
16,729
32
15,434
 53
—
—
53
Commercial and other(b)
94,905
63
63,411
 745
1,133
157
2,035
102,961
—
79,387
 783
801
210
1,794
Total$182,763
$3,685
$133,303
 $1,248
$2,076
$157
$3,481
$183,040
$3,269
$145,500
 $1,459
$1,448
$210
$3,117
(a)Excludes U.S. GSEs and government agency securitizations and re-securitizations, which are not Firm-sponsored. Refer to pages 152-153143–144 of this Note for information on the Firm’s loan sales and securitization activity related to U.S. GSEs and government agencies.
(b)Consists of securities backed by commercial loans (predominantly real estate)estate loans 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 and securitization activity related to U.S. GSEs and government agencies; interest rate and foreign exchange derivatives primarily used to manage interest rate and foreign exchange risks of securitization entities (Refer to Note 4 for further information on derivatives); senior and subordinated securities of $75$168 million and $111$69 million, respectively, at September 30, 2018,2019, and $88$87 million and $48$28 million, respectively, at December 31, 2017,2018, which the Firm purchased in connection with CIB’s secondary market-making activities.
(d)Includes interests held in re-securitization transactions.
(e)As of September 30, 2018,2019, and December 31, 2017, 66%2018, 67% and 61%60%, respectively, of the Firm’s retained securitization interests, which are predominantly carried at fair value and include amounts required to be held pursuant to credit risk retention rules, were risk-rated “A” or better, on an S&P-equivalent basis. The retained interests in prime residential mortgages consisted of $1.2 billion and $1.3 billion of investment-grade, at both September 30, 2018 and December 31, 2017, and $34$55 million and $48$16 million of noninvestment-grade at September 30, 2018,2019, and December 31, 2017,2018, respectively. The retained interests in commercial and other securitizations trusts consisted of $1.2$1.3 billion and $1.6$1.2 billion of investment-grade retained interests at September 30, 2019 and $410December 31, 2018, and $567 million and $412$623 million of noninvestment-grade retained interests at September 30, 2018,2019, and December 31, 2017,2018, 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. ForCIB. Refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K for a more detailed description of the Firm’s involvement with residential mortgage securitizations, refer to Note14 of JPMorgan Chase’s 2017 Annual Report. securitizations. Refer to the table onpage 151142 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 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. ForRefer to Note 14 of JPMorgan Chase’s 2018 Form 10-K 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. securitizations. Refer to the table onpage 151142 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
ForRefer to Note 14 of JPMorgan Chase’s 2018 Form 10-K 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.transactions.
The following table presents the principal amount of securities transferred to re-securitization VIEs.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
2019
 2018
 2019
 2018
Transfers of securities to VIEs              
Agency$2,540
 $1,477
 $11,321
 $6,163
U.S. GSEs and government agencies$5,377
 $2,540
 $12,444
 $11,321
The following table presents information on nonconsolidated re-securitization VIEs.
Nonconsolidated
re-securitization VIEs
Nonconsolidated
re-securitization VIEs
(in millions)September 30, 2018 December 31, 2017September 30, 2019
 December 31, 2018
Firm-sponsored private-label      
Assets held in VIEs with continuing involvement(a)
$198
 $783
$21
 $118
Interest in VIEs10
 29
—
 10
Agency   
U.S. GSEs and government agencies   
Interest in VIEs2,263
 2,250
2,097
 3,058
(a)Represents the principal amount and includes the notional amount of interest-only securities.
As of September 30, 2018,2019, and December 31, 2017,2018, the Firm did not consolidate any U.S. GSE and government agency re-securitization VIEs
or any Firm-sponsored private-label re-securitization VIEs.
Multi-seller conduits
ForRefer to Note 14 of JPMorgan Chase’s 2018 Form 10-K for a more detailed description of JPMorgan Chase’s principal involvement with Firm-administered Firm-administered multi-seller conduits, refer to Note14 of JPMorgan Chase’s 2017 Annual Report.conduits.
In the normal course of business, JPMorgan Chase makes markets in and invests in commercial paper issued by the Firm-administeredFirm-administered multi-seller conduits. The Firm held $18.7 $12.6 billion and $20.4$20.1 billionof the commercial paper issued by the Firm-administeredFirm-administered multi-seller conduits atSeptember 30, 2018,2019, and December 31, 2017,2018, respectively, which have been eliminated in consolidation. The Firm’s investments reflect the Firm’s funding needs and capacity and were not driven by market illiquidity.Other than the amounts required to be held pursuant to credit risk retention rules, the Firm is not obligated under any agreement to purchase the commercial paper issued by the Firm-administeredFirm-administered multi-seller conduits.
Deal-specific liquidity facilities, program-wide liquidity and credit enhancement provided by the Firm have been eliminated in consolidation. The Firm or the Firm-administered multi-seller conduits provide lending-related commitments to certain clients of the Firm-administered multi-seller conduits. The unfunded commitments were $9.2 $8.5 billion and $8.8$8.0 billion at September 30, 2018,2019, and December 31, 2017,2018, respectively, and are reported as off-balance sheet lending-related commitments. Forcommitments in other unfunded commitments to extend credit. Refer to Note 22 for more information on off-balance sheet lending-related commitments, refer to Note20.commitments.
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 Customercustomer TOB trusts and Non-Customernon-customer TOB trusts. Customer TOB trusts are sponsored by a third party;party, refer topages 151-152142–143 of this Note for further information.
The Firm serves as sponsor for all Non-Customernon-customer TOB transactions. ForRefer to Note 14 of JPMorgan Chase’s 2018 Form 10-K 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.vehicles.
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, 2018,2019, and December 31, 2017.2018.
Assets LiabilitiesAssets Liabilities
September 30, 2018 (in millions)Trading assetsLoans
Other(b) 
 Total
assets(c)
 
Beneficial interests in
VIE assets(d)
Other(e)
Total
liabilities
September 30, 2019 (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
$—
$27,377
$370
$27,747
 $6,457
$6
$6,463
Firm-administered multi-seller conduits1
22,797
129
22,927
 4,304
30
4,334
3
22,708
334
23,045
 10,514
35
10,549
Municipal bond vehicles1,370
—
4
1,374
 1,344
2
1,346
1,280
—
3
1,283
 1,249
2
1,251
Mortgage securitization entities(a)
62
3,368
37
3,467
 304
171
475
70
2,937
58
3,065
 295
137
432
Other134
—
1,733
1,867
 147
115
262
108
—
209
317
 —
121
121
Total$1,567
$57,114
$2,407
$61,088
 $20,241
$330
$20,571
$1,461
$53,022
$974
$55,457
 $18,515
$301
$18,816
      
Assets LiabilitiesAssets Liabilities
December 31, 2017 (in millions)Trading assetsLoans
Other(b) 
 Total
assets(c)
 
Beneficial interests in
VIE assets(d)
Other(e)
Total
liabilities
December 31, 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$—
$41,923
$652
$42,575
 $21,278
$16
$21,294
$—
$31,760
$491
$32,251
 $13,404
$12
$13,416
Firm-administered multi-seller conduits—
23,411
48
23,459
 3,045
28
3,073
—
24,411
300
24,711
 4,842
33
4,875
Municipal bond vehicles1,278
—
3
1,281
 1,265
2
1,267
1,779
—
4
1,783
 1,685
3
1,688
Mortgage securitization entities(a)
66
3,661
55
3,782
 359
199
558
53
3,285
40
3,378
 308
161
469
Other105
—
1,916
2,021
 134
104
238
134
—
178
312
 2
103
105
Total$1,449
$68,995
$2,674
$73,118
 $26,081
$349
$26,430
$1,966
$59,456
$1,013
$62,435
 $20,241
$312
$20,553
(a)Includes residential and commercial mortgage securitizations.
(b)Includes assets classified as cash and other assets on the Consolidated balance sheets.
(c)The assets of the consolidated VIEs included in the program types above are used to settle the liabilities of those entities. The assets and liabilities include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation.
(d)The interest-bearing beneficial interest liabilities issued by consolidated VIEs are classified in the line item on the Consolidated balance sheets titled, “Beneficial interests issued by consolidated variable interest entities.” The holders of these beneficial interests generally do not have recourse to the general credit of JPMorgan Chase. For conduits program-wide credit enhancements, referRefer to note 14 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for conduits program-wide credit enhancements. Included in beneficial interests in VIE assets are long-term beneficial interests of $14.6$6.8 billion and $21.8$13.7 billion at September 30, 2018,2019, and December 31, 2017, respectively.2018.
(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 $17.0 billion and $13.4$16.5 billion, of which $3.2 $4.8 billion and $4.0 billion was unfunded at both September 30, 20182019 and December 31, 2017, 2018, 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 qualifies for tax credits. ForRefer to Note 24 of JPMorgan Chase’s 2018 Form 10-K for further information on affordable housing tax credits, refercredits. Refer to Note24 22 of JPMorgan Chase’s 2017 Annual Report. Forthis Form 10-Q for more information on off-balance sheet lending-related commitments, refer to Note20 of this Form 10-Q.commitments.
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 partythird-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, 20182019 and
 
December 31, 20172018 was $5.0$5.3 billion and $5.3$4.8 billion, respectively. The fair value of assets held by such VIEs at September 30, 20182019 and December 31, 2017,2018, was $8.0$8.6 billion and $9.2 million, $7.7 billion, respectively. ForRefer to Note 22 for more information on off-balance sheet lending-related commitments, refer to Note20.commitments.
Loan securitizations
The Firm has securitized and sold a variety of loans, including residential mortgage, credit card, and commercial mortgage.For Refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K for afurther description of the Firm’s accounting policies regarding securitizations, refer to Note14securitizations.
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, 2019 and 2018, and 2017, related to assets held in Firm-sponsoredFirm-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,Three months ended September 30, Nine months ended September 30,
2018 2017 2018 20172019 2018 2019 2018
(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)
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
$3,225
$1,477
 $1,513
$3,533
 $7,132
$4,215
 $5,972
$8,705
All cash flows during the period(a):
              
Proceeds received from loan sales as financial instruments(b)(c)
$1,524
$3,558
 $1,053
$4,419
 $5,984
$8,745
 $3,136
$7,796
$3,327
$1,506
 $1,524
$3,558
 $7,337
$4,329
 $5,984
$8,745
Servicing fees collected(c)(d)
43
1
 49
1
 134
1
 151
3
70
—
 80
1
 220
1
 240
1
Purchases of previously transferred financial assets (or the underlying collateral)(d)
—
—
 —
—
 —
—
 1
—
Cash flows received on interests99
99
 125
287
 328
230
 384
828
115
34
 99
99
 314
183
 328
230
(a)Excludes re-securitization transactions.
(b)Predominantly includes Level 2 assets.
(c)The carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale.
(d)The prior period amounts have been revised to conform with the current period presentation.
(d)Includes cash paid by the Firm to reacquire assets from off–balance sheet, nonconsolidated entities – for example, loan repurchases due to representation and warranties and servicer “clean-up” calls.
(e)Includes prime Alt-A, subprime, and option ARMs.mortgages only. Excludes loan securitization transactions entered into with Ginnie Mae, Fannie Maeactivity related to U.S. GSEs and Freddie Mac.government agencies.
(f)Includes commercial mortgage and other consumer loans.

Loans and excess MSRs sold to U.S. government-sponsored
enterprises, and 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”).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 2022 of this Form 10-Q, and Note 27 of JPMorgan Chase’s 2017 Annual Report2018 Form 10-K for additional information
bout about the Firm’s loan sales- and securitization-related indemnifications. Refer to Note14for additional information about the impact of the Firm’sFirm’s sale of certain excess MSRs. about the Firm’s loan sales- and securitization-related indemnifications. Refer to Note14for additional information about the impact of the Firm’s sale of certain excess MSRs.

The following table summarizes the activities related to loans sold to the U.S. GSEs, and loans in securitization transactions pursuant to Ginnie Mae guidelines, and other third-party-sponsored securitization entities.guidelines.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018
2017
 201820172019
2018
 20192018
Carrying value of loans sold$11,968
$15,402
 $28,804
$44,282
$35,556
$11,968
 $73,873
$28,804
Proceeds received from loan sales as cash1
104
 1
117
3
1
 73
1
Proceeds from loan sales as securities(a)(b)
11,713
15,093
 28,291
43,682
35,512
11,713
 73,172
28,291
Total proceeds received from loan sales(b)(c)
$11,714
$15,197
 $28,292
$43,799
$35,515
$11,714
 $73,245
$28,292
Gains on loan sales(d)(e)
$9
$41
 $32
$114
$342
$9
 $495
$32
(a)Predominantly includesIncludes securities from U.S. GSEs and Ginnie Mae that are generally sold shortly after receipt.receipt or retained as part of the Firm’s Investment securities portfolio.
(b)Included in level 2 assets.
(c)Excludes the value of MSRs retained upon the sale of loans.
(c)(d)Gains on loan sales include the value of MSRs.
(d)(e)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, 22, the Firm also has the option to repurchase delinquent loans that it services for Ginnie Mae loan pools, as well as for other U.S. government
 
agencies under certain arrangements.arrangements. The Firm typically elects to repurchase delinquent loans from Ginnie Mae loan pools as it continues to service them and/or manage the foreclosure process in accordance with the applicable requirements, and such loans continue to be insured or guaranteed. When the Firm’s repurchase option becomes exercisable, such loans must be reported on the Consolidated balance sheets as a loan with a corresponding liability. For additional information, referRefer to Note 11. for additional information.
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, 20182019 and December 31, 2017. 2018. 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
Sep 30,
2019
Dec 31,
2018
Loans repurchased or option to repurchase(a)
$7,207
$8,629
$4,761
$7,021
Real estate owned78
95
50
75
Foreclosed government-guaranteed residential mortgage loans(b)
404
527
241
361
(a)Predominantly all of these amounts relate to loans that have been repurchased from Ginnie Mae loan pools.
(b)Relates to voluntary repurchases of loans, which are included in accrued interest and accounts receivable.

Loan delinquencies and liquidation losses
The table below includes information about components of nonconsolidated securitized financial assets held in Firm-sponsored Firm-sponsored private-label securitization entities, in which the Firm has continuing involvement, and delinquencies as of September 30, 2018,2019, and December 31, 2017.2018.
    
Net liquidation losses(a)
    
Net liquidation losses(a)
Securitized assets 90 days past due Three months ended September 30, Nine months ended September 30,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
Sep 30,
2019
Dec 31,
2018
 Sep 30,
2019
Dec 31,
2018
 2019
2018
 2019
2018
Securitized loans              
Residential mortgage:              
Prime / Alt-A & option ARMs$51,914
$52,280
 $3,612
$4,870
 $182
$184
 $453
$622
$49,826
$50,679
 $2,679
$3,354
 $146
$182
 $474
$453
Subprime15,950
17,612
 2,637
3,276
 155
153
 (307)529
14,085
15,434
 1,962
2,478
 145
155
 456
(307)
Commercial and other77,494
63,411
 526
957
 71
2
 119
59
86,302
79,387
 153
225
 118
71
 283
119
Total loans securitized$145,358
$133,303
 $6,775
$9,103
 $408
$339
 $265
$1,210
$150,213
$145,500
 $4,794
$6,057
 $409
$408
 $1,213
$265

(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.



Note 14 – Goodwill and Mortgage servicing rights
ForRefer to Note 15 of JPMorgan Chase’s 2018 Form 10-K for a discussion of the accounting policies related to goodwill and mortgage servicing rights, refer to Note15 of JPMorgan Chase’s 2017 Annual Report.rights.
Goodwill
The following table presents goodwill attributed to the business segments.
(in millions)September 30,
2018
December 31,
2017
September 30,
2019
December 31,
2018
Consumer & Community Banking$30,995
$31,013
$31,038
$30,984
Corporate & Investment Bank6,771
6,776
6,941
6,770
Commercial Banking2,860
2,860
2,982
2,860
Asset & Wealth Management6,857
6,858
6,857
6,857
Total goodwill$47,483
$47,507
$47,818
$47,471

The following table presents changes in the carrying amount of goodwill.
Three months ended September 30, Nine months ended September 30,Three months ended September 30, Nine months ended September 30,
(in millions)2018
 2017
 2018
 2017
2019
 2018
 2019
 2018
Balance at beginning
of period
$47,488
 $47,300
 $47,507
 $47,288
$47,477
 $47,488
 $47,471
 $47,507
Changes during the period from:              
Other(a)
(5) 9
 (24) 21
Business combinations(a)
348
 —
 348
 —
Other(b)
(7) (5) (1) (24)
Balance at September 30,$47,483
 $47,309
 $47,483
 $47,309
$47,818
 $47,483
 $47,818
 $47,483
(a)IncludesFor the three and nine months periods ended September 30, 2019, represents goodwill associated with the July 24, 2019 acquisition of InstaMed. This goodwill was allocated to CIB, CB and CCB.
(b)Primarily relates to foreign currency remeasurement and other adjustments.
 
Goodwill impairment testing
Refer to Impairment testing
For on pages 252–253 of JPMorgan Chase’s 2018 Form 10-K 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, refertest.
The Firm reviewed current economic conditions, estimated market cost of equity, as well as actual and projections of business performance for all its businesses. Based upon such reviews, the Firm concluded that the goodwill allocated to Impairment testing on pages 244–245 of JPMorgan Chase’s 2017 Annual Report.
Goodwillits reporting units was not impaired atas of September 30, 2018,2019 or December 31, 2017,2018, nor was goodwill written off due to impairment during the nine months ended September 30, 20182019 or 2017.2018.
Declines in business performance, increases in credit losses, increases in equity capital requirements, as well as deterioration in economic or market conditions, adverse regulatory or legislative changes or increases in the estimated market cost of equity, could cause the estimated fair values of the Firm’s reporting units or their associated goodwill to decline in the future, which could result in a material impairment charge to earnings in a future period related to some portion of the associated goodwill.

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. ForRefer to Notes 2 and 15 of JPMorgan Chase’s 2018 Form 10-K 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.MSRs.
The following table summarizes MSR activity for the three and nine months endedSeptember 30, 20182019 and 2017.2018.
As of or for the three months
ended September 30,		 As of or for the nine months
ended September 30,		 As of or for the three months
ended September 30,		As of or for the nine months
ended September 30,
(in millions, except where otherwise noted)2018
 2017
 2018
 2017
 2019
2018
2019
 2018
Fair value at beginning of period$6,241
 $5,753
 $6,030
 $6,096
 $5,093
$6,241
$6,130
 $6,030
MSR activity:           
Originations of MSRs278
 253
 611
 624
 390
278
1,146
 611
Purchase of MSRs13
 —
 159
 —
 (2)13
104
 159
Disposition of MSRs(a)
(2) (2) (401) (140) (359)(2)(687) (401)
Net additions/(dispositions)289
 251
 369
 484
 29
289
563
 369
           
Changes due to collection/realization of expected cash flows(195) (200) (542) (619) (256)(195)(702) (542)
           
Changes in valuation due to inputs and assumptions:           
Changes due to market interest rates and other(b)
150
 (67) 635
 (188) (433)150
(1,274) 635
Changes in valuation due to other inputs and assumptions:           
Projected cash flows (e.g., cost to service)14
 (116) 14
 (102) 17
14
(333)
(e) 
14
Discount rates—
 —
 24
 (19) —
—
153
 24
Prepayment model changes and other(c)
(66) 117
 (97) 86
 (31)(66)(118) (97)
Total changes in valuation due to other inputs and assumptions(52) 1
 (59) (35) (14)(52)(298) (59)
Total changes in valuation due to inputs and assumptions98
 (66) 576
 (223) (447)98
(1,572) 576
Fair value at September 30,$6,433
 $5,738
 $6,433
 $5,738
 $4,419
$6,433
$4,419
 $6,433
           
Change in unrealized gains/(losses) included in income related to MSRs held at September 30,$98
 $(66) $576
 $(223) $(447)$98
$(1,572) $576
Contractual service fees, late fees and other ancillary fees included in income428
 463
 1,339
 1,427
 397
428
1,254
 1,339
Third-party mortgage loans serviced at September 30, (in billions)528
 558
 528
 558
 537
528
537
 528
Net servicer advances at September 30, (in billions)(d)
3.1
 3.9
 3.1
 3.9
 
Servicer advances, net of an allowance for uncollectible amounts, at September 30, (in billions)(d)
2.0
3.1
2.0
 3.1
(a)Includes excess MSRs transferred to agency-sponsored trusts in exchange for stripped mortgage backed securities (“SMBS”). In each transaction, a portion of the SMBS was acquired by third parties at the transaction date; the Firm acquired the remaining balance of those SMBS as trading securities.
(b)Represents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments.
(c)Represents changes in prepayments other than those attributable to changes in market interest rates.
(d)Represents amounts the Firm pays as the servicer (e.g., scheduled principal and interest, taxes and insurance), which will generally be reimbursed within a short period of time after the advance from future cash flows from the trust or the underlying loans. The Firm’s credit risk associated with these servicer advances is minimal because reimbursement of the advances is typically senior to all cash payments to investors. In addition, the Firm maintains the right to stop payment to investors if the collateral is insufficient to cover the advance. However, certain of these servicer advances may not be recoverable if they were not made in accordance with applicable rules and agreements.
(e)The decrease in projected cash flows was largely related to default servicing assumption updates.

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, 20182019 and 2017.2018.
 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
 2019
 2018
 2019
 2018
CCB mortgage fees and related income                
                
Net production revenue $108
 $158
 $296
 $451
 $738
 $108
 $1,291
 $296
                
Net mortgage servicing revenue:                
Operating revenue:                
Loan servicing revenue 435
 493
 1,389
 1,533
 351
 435
 1,172
 1,389
Changes in MSR asset fair value due to collection/realization of expected cash flows (195) (200) (542) (617) (256) (195) (702) (542)
Total operating revenue 240
 293
 847
 916
 95
 240
 470
 847
Risk management:                
Changes in MSR asset fair value due to market interest rates and other(a)
 150
 (67) 636
 (188) (433) 150
 (1,274) 636
Other changes in MSR asset fair value due to other inputs and assumptions
in model(b)
 (52) 1
 (59) (35) (14) (52) (298) (59)
Change in derivative fair value and other (186) 43
 (671) 91
 500
 (186) 1,372
 (671)
Total risk management (88) (23) (94) (132) 53
 (88) (200) (94)
Total net mortgage servicing revenue 152
 270
 753
 784
 148
 152
 270
 753
                
Total CCB mortgage fees and related income 260
 428
 1,049
 1,235
 886
 260
 1,561
 1,049
                
All other 2
 1
 2
 4
 1
 2
 1
 2
Mortgage fees and related income $262
 $429
 $1,051
 $1,239
 $887
 $262
 $1,562
 $1,051
(a)Represents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments.
(b)Represents the aggregate impact of changes in model inputs and assumptions such as projected cash flows (e.g., cost to service), discount rates and changes in prepayments other than those attributable to changes in market interest rates (e.g., changes in prepayments due to changes in home prices).
The table below outlines the key economic assumptions used to determine the fair value of the Firm’s MSRs at September 30, 2018,2019, and December 31, 2017,2018, and outlines hypothetical sensitivities of those fair values to immediate adverse changes in those assumptions, as defined below.
(in millions, except rates)Sep 30,
2019
 Dec 31,
2018
Weighted-average prepayment speed assumption (constant prepayment rate)13.81% 8.78%
Impact on fair value of 10% adverse change$(206) $(205)
Impact on fair value of 20% adverse change(393) (397)
Weighted-average option adjusted spread(a)(b)
8.26% 7.87%
Impact on fair value of a 100 basis point adverse change$(150) $(235)
Impact on fair value of a 200 basis point adverse change(289) (452)

(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.
(a)Includes the impact of operational risk and regulatory capital.
(b)The prior period amount has been revised to conform with the current period presentation.
 
Changes in fair value based on variationvariations 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
ForRefer to Note 17 of JPMorgan Chase’s 2018 Form 10-K for further information on deposits, refer to Note17 of JPMorgan Chase’s 2017 Annual Report.deposits.
At September 30, 2018,2019, and December 31, 2017,2018, noninterest-bearing and interest-bearing deposits were as follows.
(in millions)September 30,
2018
 December 31, 2017
September 30,
2019
 December 31, 2018
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
Noninterest-bearing (included $23,225 and $17,204 at fair value)(a)(b)
$393,522
 $386,709
Interest-bearing (included $2,523 and $2,487 at fair value)(a)(b)
844,137
 813,881
Total deposits in U.S. offices1,189,591
 1,187,263
1,237,659
 1,200,590
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
Noninterest-bearing (included $2,289 and $2,367 at fair value)(a)(b)
21,455
 21,459
Interest-bearing (included $1,318 and $1,159 at fair value)(a)(b)
266,147
 248,617
Total deposits in non-U.S. offices269,171
 256,719
287,602
 270,076
Total deposits$1,458,762
 $1,443,982
$1,525,261
 $1,470,666
(a)Includes structured notes classified as deposits for which the fair value option has been elected. For a further discussion, referRefer to Note 3 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for a further discussion.
(b)In the second quarter of 2019, the Firm reclassified balances related to certain structured notes from interest-bearing to noninterest-bearing deposits as the associated returns are recorded in principal transactions revenue and not in net interest income. This change was applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation.

 
Note 16 – Leases
Lease commitments
Effective January 1, 2019, the Firm adopted new guidance that requires lessees to recognize on the Consolidated balance sheets all leases with lease terms greater than twelve months as a lease liability with a corresponding right-of-use (“ROU”) asset. Accordingly, the Firm recognized operating lease liabilities and ROU assets of $8.2 billion and $8.1 billion, respectively. The adoption of the new lease guidance did not have a material impact on the Firm’s Consolidated statements of income. The change in accounting due to the adoption of the new lease guidance did not result in a material change to the future net minimum rental payments/receivables or to the net rental expense when compared to December 31, 2018.
Firm as lessee
At September 30, 2019, JPMorgan Chase and its subsidiaries were obligated under a number of noncancelable leases, predominantly operating leases for premises and equipment used primarily for business purposes. These leases generally have terms of 20 years or less, determined based on the contractual maturity of the lease, and include periods covered by options to extend or terminate the lease when the Firm is reasonably certain that it will exercise those options. None of these lease agreements impose restrictions on the Firm’s ability to pay dividends, engage in debt or equity financing transactions or enter into further lease agreements. Certain of these leases contain escalation clauses that will increase rental payments based on maintenance, utility and tax increases, which are non-lease components. The Firm elected not to separate lease and non-lease components of a contract for its real estate leases. As such, real estate lease payments represent payments on both lease and non-lease components.
Operating lease liabilities and ROU assets are recognized at the lease commencement date based on the present value of the future minimum lease payments over the lease term. The future lease payments are discounted at a rate that represents the Firm’s collateralized borrowing rate for financing instruments of a similar term and are included in accounts payable and other liabilities. The operating lease ROU asset, included in premises and equipment, also includes any lease prepayments made, plus initial direct costs incurred, less any lease incentives received. Rental expense associated with operating leases is recognized on a straight-line basis over the lease term, and generally included in occupancy expense in the Consolidated statements of income.

The following tables provide information related to the Firm’s operating leases:
As of September 30,
(in millions, except where otherwise noted)
 
2019
Right-of-use assets$8,160
Lease liabilities8,425
  
Weighted average remaining lease term (in years)8.7
Weighted average discount rate3.73%
  
Supplemental cash flow information 
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows$1,177
Supplemental non-cash information 
Right-of-use assets obtained in exchange for operating lease obligations$990
  


(in millions)
Three months ended September 30, 2019Nine months ended September 30, 2019
Rental expense  
Gross rental expense$517
$1,537
Sublease rental income(49)(137)
Net rental expense$468
$1,400

The following table presents future payments under operating leases as of September 30, 2019:
Year ended December 31, (in millions) 
2019 (excluding nine months ended September 30, 2019)$394
20201,569
20211,394
20221,198
20231,027
After 20234,442
Total future minimum lease payments10,024
Less: Imputed interest(1,599)
Total$8,425

In addition to the table above, as of September 30, 2019, the Firm had additional future operating lease commitments of $1.3 billion that were signed but had not yet commenced. These operating leases will commence between 2019 and 2022 with lease terms up to 25 years.
Firm as lessor
The Firm provides auto and equipment lease financing to its customers through lease arrangements with lease terms that may contain renewal, termination and/or purchase options. Generally, the Firm’s lease financings are operating leases. These assets are recognized in other assets on the Firm’s Consolidated balance sheets and are depreciated on a straight-line basis over the lease term to reduce the asset to its estimated residual value. Depreciation expense is included in technology, communications and equipment
expense in the Consolidated statements of income. The Firm’s lease income is generally recognized on a straight-line basis over the lease term and is included in other income in the Consolidated statements of income.
On a periodic basis, the Firm assesses leased assets for impairment, and if the carrying amount of the leased asset exceeds the undiscounted cash flows from the lease payments and the estimated residual value upon disposition of the leased asset, an impairment loss is recognized.
The risk of loss on auto and equipment leased assets relating to the residual value of the leased assets is monitored through projections of the asset residual values at lease origination and periodic review of residual values, and is mitigated through arrangements with certain manufacturers or lessees. 
The following table presents the carrying value of assets subject to leases reported on the Consolidated balance sheets:
(in millions) September 30, 2019December 31, 2018
Carrying value of assets subject to operating leases, net of accumulated depreciation $22,953
$21,428
Accumulated depreciation 5,848
5,303

The following table presents the Firm’s operating lease income and the related depreciation expense on the Consolidated statements of income:
  Three months ended September 30,Nine months ended September 30,

(in millions)
 2019
2018
2019
2018
Operating lease income $1,384
$1,157
$4,027
$3,316
Depreciation expense 1,053
901
3,038
2,564

The following table presents future receipts under operating leases as of September 30, 2019:
Year ended December 31, (in millions) 
2019 (excluding nine months ended September 30, 2019)$1,121
20203,785
20212,303
2022660
202374
After 2023137
Total future minimum lease payments$8,080



Note 17 - Preferred stock
Refer to Note 20 of JPMorgan Chase’s 2018 Form 10-K for a further discussion on preferred stock.
The following is a summary of JPMorgan Chase’s non-cumulative preferred stock outstanding as of September 30, 2019 and December 31, 2018, and the quarterly dividend declarations for the three and nine months ended September 30, 2019 and 2018.
 Shares
Carrying value
 (in millions)
 Contractual rate in effect at September 30, 2019
Earliest redemption date(b)
Floating annualized rate of three-month LIBOR/Term SOFR plus:
Dividend declared per share(c)
 
 
September 30, 2019(a)
December 31, 2018(a)
September 30, 2019December 31, 2018Issue dateThree months ended September 30,Nine months ended September 30, 
 2019201820192018 
Fixed-rate:             
Series P90,000
90,000
$900
$900
2/5/20135.450%3/1/2018NA$136.25
$136.25$408.75
$408.75 
Series T—
92,500
—
925
1/30/2014—
3/1/2019NANA167.50167.50502.50 
Series W—
88,000
—
880
6/23/2014—
9/1/2019NANA157.50472.50472.50 
Series Y143,000
143,000
1,430
1,430
2/12/20156.125
3/1/2020NA153.13
153.13459.39459.39 
Series AA142,500
142,500
1,425
1,425
6/4/20156.100
9/1/2020NA152.50
152.50457.50457.50 
Series BB115,000
115,000
1,150
1,150
7/29/20156.150
9/1/2020NA153.75
153.75461.25461.25 
Series DD169,625
169,625
1,696
1,696
9/21/20185.750
12/1/2023NA143.75
NA431.25NA 
Series EE185,000
—
1,850
—
1/24/20196.000
3/1/2024NA150.00
NA361.67NA 
              
Fixed-to-floating-rate:             
Series I430,375
430,375
$4,304
$4,304
4/23/2008LIBOR + 3.47%
4/30/2018LIBOR + 3.47%$146.58
$148.45$455.09
$493.29
(d) 
Series Q150,000
150,000
1,500
1,500
4/23/20135.150
5/1/2023LIBOR + 3.25128.75
128.75386.25386.25 
Series R150,000
150,000
1,500
1,500
7/29/20136.000
8/1/2023LIBOR + 3.30150.00
150.00450.00450.00 
Series S200,000
200,000
2,000
2,000
1/22/20146.750
2/1/2024LIBOR + 3.78168.75
168.75506.25506.25 
Series U100,000
100,000
1,000
1,000
3/10/20146.125
4/30/2024LIBOR + 3.33153.13
153.13459.38459.38 
Series V250,000
250,000
2,500
2,500
6/9/2014LIBOR + 3.32%
7/1/2019LIBOR + 3.32144.11
125.00394.11375.00
(e) 
Series X160,000
160,000
1,600
1,600
9/23/20146.100
10/1/2024LIBOR + 3.33152.50
152.50457.50457.50 
Series Z200,000
200,000
2,000
2,000
4/21/20155.300
5/1/2020LIBOR + 3.80132.50
132.50397.50397.50 
Series CC125,750
125,750
1,258
1,258
10/20/20174.625
11/1/2022LIBOR + 2.58115.63
115.63346.88346.88 
Series FF225,000
—
2,250
—
7/31/20195.000
8/1/2024SOFR + 3.38126.39
NA126.39NA
(f) 
Total preferred stock2,836,250
2,606,750
$28,363
$26,068
         
(a)Represented by depositary shares.
(b)Fixed-to-floating rate notes convert to a floating rate at the earliest redemption date.
(c)Dividends are declared quarterly. Dividends are payable quarterly on fixed-rate preferred stock. Dividends are payable semiannually on fixed-to-floating-rate preferred stock while at a fixed rate, and payable quarterly after converting to a floating rate.
(d)Prior to April 30, 2018, the dividend rate was fixed at 7.90%.
(e)Prior to July 1, 2019, the dividend rate was fixed at 5%.
(f)Dividends in the amount of $126.39 per share were declared on September 9, 2019 and include dividends from the original issue date of July 31, 2019 through October 31, 2019.

On October 31, 2019, the Firm announced and priced an offering of depositary shares representing $900 million of 4.75% non-cumulative preferred stock, Series GG. This issuance is expected to close on November 7, 2019. On November 1, 2019, the Firm announced that it will redeem all $900 million of its 5.45% non-cumulative preferred stock, Series P on December 1, 2019.
On October 30, 2019, the Firm redeemed $1.37 billion of its Series I fixed-to-floating rate non-cumulative perpetual preferred stock.
On September 1, 2019, the Firm redeemed all $880 million of its 6.3% non-cumulative preferred stock, series W.
On July 31, 2019, the Firm issued $2.25 billion of fixed-to-floating rate non-cumulative preferred stock, Series FF.
On January 24, 2019, the Firm issued $1.85 billion of 6.00% non-cumulative preferred stock, Series EE, and on March 1, 2019, the Firm redeemed all $925 million of its 6.70% non-cumulative preferred stock, Series T.



Note 18 – Earnings per share
ForRefer to Note 22 of JPMorgan Chase’s 2018 Form 10-K 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, 20182019 and 2017.2018.
(in millions, except per share amounts)Three months ended
September 30,		 Nine months ended
September 30,		Three months ended
September 30,		 Nine months ended
September 30,
2018
2017
 2018
2017
2019
2018
 2019
2018
Basic earnings per share      
Net income$8,380
$6,732
 $25,408
$20,209
$9,080
$8,380
 $27,911
$25,408
Less: Preferred stock dividends379
412
 1,167
1,235
423
379
 1,201
1,167
Net income applicable to common equity8,001
6,320
 24,241
18,974
8,657
8,001
 26,710
24,241
Less: Dividends and undistributed earnings allocated to participating securities53
58
 174
188
51
53
 159
174
Net income applicable to common stockholders$7,948
$6,262
 $24,067
$18,786
$8,606
$7,948
 $26,551
$24,067
      
Total weighted-average basic shares
outstanding
3,376.1
3,534.7
 3,416.5
3,570.9
3,198.5
3,376.1
 3,248.7
3,416.5
Net income per share$2.35
$1.77
 $7.04
$5.26
$2.69
$2.35
 $8.17
$7.04
      
Diluted earnings per share      
Net income applicable to common stockholders$7,948
$6,262
 $24,067
$18,786
$8,606
$7,948
 $26,551
$24,067
Total weighted-average basic shares
outstanding
3,376.1
3,534.7
 3,416.5
3,570.9
3,198.5
3,376.1
 3,248.7
3,416.5
Add: Employee stock options, SARs, warrants and unvested PSUs18.2
24.9
 19.7
26.1
8.7
18.2
 9.3
19.7
Total weighted-average diluted shares outstanding3,394.3
3,559.6
 3,436.2
3,597.0
3,207.2
3,394.3
 3,258.0
3,436.2
Net income per share$2.34
$1.76
 $7.00
$5.22
$2.68
$2.34
 $8.15
$7.00



Note 1719 – 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.plans, and on fair value option-elected liabilities arising from changes in the Firm’s own credit risk (DVA).
 As of or for the three months ended
September 30, 2018
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges 
Fair value hedges(b)
Cash flow hedges Defined benefit
pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at July 1, 2018 $1,599
   $(632)  $(162) $(147)   $(1,876)  $80
  $(1,138) 
 Net change (819)   (31)  34
 (88)   19
  (402)  (1,287) 
 Balance at September 30, 2018 $780
   $(663)  $(128) $(235)   $(1,857)  $(322)  $(2,425) 
                        
 As of or for the three months ended
September 30, 2017
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at July 1, 2017 $2,219
   $(157)  NA
 $44
   $(2,255)  $(243)  $(392) 
 Net change 147
   —
  NA
 26
   22
  (112)  83
 
 Balance at September 30, 2017 $2,366
   $(157)  NA
 $70
   $(2,233)  $(355)  $(309) 
                        
 As of or for the nine months ended
September 30, 2018
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit
pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at January 1, 2018 $2,164
   $(470)  $—
 $76
   $(1,521)  $(368)  $(119) 
 
Cumulative effect of changes in accounting principles(a):
                      
 Premium amortization on purchased callable debt securities 261
   —
  —
 —
   —
  —
  261
 
 Hedge accounting 169
   —
  (54) —
   —
  —
  115
 
 Reclassification of certain tax effects from AOCI 466
   (277)  —
 16
   (414)  (79)  (288) 
 Net change (2,280)   84
  (74) (327)   78
  125
  (2,394) 
 Balance at September 30, 2018 $780
   $(663)  $(128) $(235)   $(1,857)  $(322)  $(2,425) 
                        
 As of or for the nine months ended
September 30, 2017
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at January 1, 2017 $1,524
   $(164)  NA
 $(100)   $(2,259)  $(176)  $(1,175) 
 Net change 842
   7
  NA
 170
   26
  (179)  866
 
 Balance at September 30, 2017 $2,366
   $(157)  NA
 $70
   $(2,233)  $(355)  $(309) 
 As of or for the three months ended
September 30, 2019
(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, 2019 $3,709
   $(652)  $(73) $126
   $(2,231)  $235
  $1,114
 
 Net change 479
   (165)  (1) 195
   46
  132
  686
 
 Balance at September 30, 2019 $4,188
   $(817)  $(74) $321
   $(2,185)  $367
  $1,800
 
                        
 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 hedgesCash 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 nine months ended
September 30, 2019
(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, 2019 $1,202
   $(727)  $(161) $(109)   $(2,308)  $596
  $(1,507) 
 Net change 2,986
   (90)  87
 430
   123
  (229)  3,307
 
 Balance at September 30, 2019 $4,188
   $(817)  $(74) $321
   $(2,185)  $367
  $1,800
 
                        
 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)
 896
   (277)  $(54) 16
   (414)  (79)  88
 
 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) 

(a)Represents the adjustment to AOCI as a result of the new accounting standards adopted in the first quarter of 2018.2018, refer to Note 1 of JPMorgan Chase’s 2018 Form 10-K.
(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.



The following table presents the pre-tax and after-tax changes in the components of OCI.
2018 20172019 2018
Three months ended September 30, (in millions)Pre-tax Tax effect After-tax Pre-tax Tax effect After-taxPre-tax Tax effect After-tax Pre-tax Tax effect After-tax
Unrealized gains/(losses) on investment securities:                      
Net unrealized gains/(losses) arising during the period$(1,117) $262
 $(855) $232
 $(86) $146
$708
 $(169) $539
 $(1,117) $262
 $(855)
Reclassification adjustment for realized (gains)/losses included in net income(a)
46
 (10) 36
 1
 —
 1
(78) 18
 (60) 46
 (10) 36
Net change(1,071) 252
 (819) 233
 (86) 147
630
 (151) 479
 (1,071) 252
 (819)
Translation adjustments:                      
Translation(314) 45
 (269) 286
 (106) 180
(861) 40
 (821) (314) 45
 (269)
Hedges311
 (73) 238
 (286) 106
 (180)866
 (210) 656
 311
 (73) 238
Net change(3) (28) (31) —
 —
 —
5
 (170) (165) (3) (28) (31)
Fair value hedges, net change(b):

45
 (11) 34
 NA
 NA
 NA
(1) —
 (1) 45
 (11) 34
Cash flow hedges:                      
Net unrealized gains/(losses) arising during the period(122) 27
 (95) 29
 (11) 18
222
 (55) 167
 (122) 27
 (95)
Reclassification adjustment for realized (gains)/losses included in net income(c)
9
 (2) 7
 10
 (2) 8
37
 (9) 28
 9
 (2) 7
Net change(113) 25
 (88) 39
 (13) 26
259
 (64) 195
 (113) 25
 (88)
Defined benefit pension and OPEB plans:                      
Net gains/(losses) arising during the period—
 —
 —
 —
 —
 —
Net gain/(loss) arising during the period—
 —
 —
 —
 —
 —
Reclassification adjustments included in net income(d):
                      
Amortization of net loss26
 (6) 20
 63
 (23) 40
42
 (10) 32
 26
 (6) 20
Prior service costs/(credits)(7) 2
 (5) (9) 3
 (6)
Amortization of prior service cost/(credit)—
 —
 —
 (7) 2
 (5)
Foreign exchange and other7
 (3) 4
 (19) 7
 (12)18
 (4) 14
 7
 (3) 4
Net change26
 (7) 19
 35
 (13) 22
60
 (14) 46
 26
 (7) 19
DVA on fair value option elected liabilities, net change:(527) 125
 (402) (178) 66
 (112)173
 (41) 132
 (527) 125
 (402)
Total other comprehensive income/(loss)$(1,643) $356
 $(1,287) $129
 $(46) $83
$1,126
 $(440) $686
 $(1,643) $356
 $(1,287)
                      
2018 20172019 2018
Nine months ended September 30, (in millions)Pre-tax Tax effect After-tax Pre-tax Tax effect After-taxPre-tax Tax effect After-tax Pre-tax Tax effect After-tax
Unrealized gains/(losses) on investment securities:                      
Net unrealized gains/(losses) arising during the period$(3,351) $787
 $(2,564) $1,294
 $(476) $818
$4,074
 $(985) $3,089
 $(3,351) $787
 $(2,564)
Reclassification adjustment for realized (gains)/losses included in net income(a)
371
 (87) 284
 38
 (14) 24
(135) 32
 (103) 371
 (87) 284
Net change(2,980) 700
 (2,280) 1,332
 (490) 842
3,939
 (953) 2,986
 (2,980) 700
 (2,280)
Translation adjustments(e):
           
Translation adjustments(e):
           
Translation(981) 188
 (793) 1,185
 (448) 737
(697) 76
 (621) (981) 188
 (793)
Hedges1,149
 (272) 877
 (1,161) 431
 (730)700
 (169) 531
 1,149
 (272) 877
Net change168
 (84) 84
 24
 (17) 7
3
 (93) (90) 168
 (84) 84
Fair value hedges, net change(b):
(96) 22
 (74) NA
 NA
 NA
114
 (27) 87
 (96) 22
 (74)
Cash flow hedges:                      
Net unrealized gains/(losses) arising during the period(365) 85
 (280) 111
 (42) 69
464
 (112) 352
 (365) 85
 (280)
Reclassification adjustment for realized (gains)/losses included in net income(c)
(62) 15
 (47) 160
 (59) 101
102
 (24) 78
 (62) 15
 (47)
Net change(427) 100
 (327) 271
 (101) 170
566
 (136) 430
 (427) 100
 (327)
Defined benefit pension and OPEB plans:                      
Net gains/(losses) arising during the period25
 (6) 19
 (52) 19
 (33)
Net gain/(loss) arising during the period2
 (2) —
 25
 (6) 19
Reclassification adjustments included in net income(d):
                      
Amortization of net loss78
 (18) 60
 187
 (69) 118
125
 (26) 99
 78
 (18) 60
Prior service costs/(credits)(19) 5
 (14) (27) 10
 (17)
Amortization of prior service cost/(credit)2
 (1) 1
 (19) 5
 (14)
Settlement (gain)/loss

—
 —
 —
 (3) 1
 (2)—
 —
 —
 —
 —
 —
Foreign exchange and other19
 (6) 13
 (51) 11
 (40)19
 4
 23
 19
 (6) 13
Net change103
 (25) 78
 54
 (28) 26
148
 (25) 123
 103
 (25) 78
DVA on fair value option elected liabilities, net change:$163
 $(38) $125
 $(283) $104
 $(179)$(296) $67
 $(229) $163
 $(38) $125
Total other comprehensive income/(loss)$(3,069) $675
 $(2,394) $1,398
 $(532) $866
$4,474
 $(1,167) $3,307
 $(3,069) $675
 $(2,394)
(a)The pre-tax amount is reported in investmentInvestment securities lossesgains/(losses) in the Consolidated statements of income.
(b)Represents changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads, which are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income. The initial cost of cross-currency basis spreads is recognized in earnings as part of the accrual of interest on the cross currency swap.
(c)The pre-tax amounts are predominantly recorded in noninterest revenue, net interest income and compensation expense in the Consolidated statements of income.
(d)The pre-tax amount is reported in other expense in the Consolidated statements of income.
(e)Reclassifications of pre-tax realized gains/(losses) on translation adjustments and related hedges are reported in other income/expense in the Consolidated statements of income. During the nine months ended September 30, 2019, the Firm reclassified net pre-tax gains of $6 million to other income and $1 million to other expense, respectively. These amounts, which related to the liquidation of certain legal entities, are comprised of $5 million related to net investment hedge gains and $2 million related to cumulative translation adjustments. 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 1820 – Restricted cash and other restricted
assets
ForRefer to Note 25 of JPMorgan Chase’s 2018 Form 10-K 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.assets.
As a resultCertain of the adoptionFirm’s cash and other assets are restricted as to withdrawal or usage. These restrictions are imposed by various regulatory authorities based on the particular activities of the restrictedFirm’s subsidiaries.
The Firm is also subject to rules and regulations established by other U.S. and non U.S. regulators. As part of its compliance with the respective regulatory requirements, the Firm’s broker-dealer activities are subject to certain restrictions on 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.other assets.
The following table presents the components of the Firm’s restricted cash:
(in billions)September 30,
2018
December 31, 2017
September 30,
2019
December 31, 2018
Cash reserves – Federal Reserve Banks$23.6
$25.7
$26.7
$22.1
Segregated for the benefit of securities and futures brokerage customers15.3
16.8
16.8
14.6
Cash reserves at non-U.S. central banks and held for other general purposes3.3
3.3
3.6
4.1
Total restricted cash(a)
$42.2
$45.8
$47.1
$40.8
(a)Comprises $40.7$45.9 billion and $44.8$39.6 billion in deposits with banks as of September 30, 2019 and $1.5 billionDecember 31, 2018, respectively, and $1.0$1.2 billion in cash and due from banks as of September 30, 2019 and December 31, 2018, on the Consolidated balance sheets as of September 30, 2018 and December 31, 2017, respectively.sheets.

Also, as of September 30, 20182019 and December 31, 2017,2018, the Firm had:had the following other restricted assets:
Cash and securities pledged with clearing organizations for the benefit of customers of $18.8$23.6 billion and $18.0$20.6 billion, respectively.
Securities with a fair value of $2.2$13.1 billion and $3.5$9.7 billion, respectively, were also restricted in relation to customer activity.


 
Note 1921 – Regulatory capital
For a detailed discussion on regulatory capital, referRefer to Note 26 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for a detailed discussion on regulatory capital.
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.
Effective January 1, 2019, the capital adequacy of the Firm and JPMorgan Chase Bank, USA, N.A. is evaluated against the fully phased-in measures under Basel III and represents the lower of the Standardized or Advanced approaches. During 2018, the required capital measures were subject to the transitional rules and as of December 31, 2018 were the same on a fully phased-in and on a transitional basis.
Under the risk-based capital and leverage-based 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 September 30, 2018.2019.
Minimum capital ratios Well-capitalized ratiosMinimum capital ratios Well-capitalized ratios
BHC(a)(e)(f)

IDI(b)(e)(f)

 
BHC(c) 

IDI(d)

BHC(a)(e)(f)

IDI(b)(e)(f)

 
BHC(c) 
IDI(d)

Capital ratios      
CET19.0%6.375% —%6.5%10.5%7.0% N/A6.5%
Tier 110.5
7.875
 6.0
8.0
12.0
8.5
 6.08.0
Total12.5
9.875
 10.0
10.0
14.0
10.5
 10.010.0
Tier 1 leverage4.0
4.0
 5.0
5.0
4.0
4.0
 N/A5.0
SLR5.0
6.0
 —
6.0
5.0
6.0
 N/A6.0
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 September 30, 2018. At September 30, 2018, theIII. The CET1 minimum capital ratio includes 1.875% resulting from the phase in of the Firm’s 2.5%a capital conservation buffer of 2.5% and 2.625% resulting from the phase inGSIB surcharge of the Firm’s 3.5% GSIB surcharge.as calculated under Method 2.
(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%a capital conservation buffer of 2.5% that is applicable to the IDI subsidiaries. The IDI subsidiaries are not subject to the GSIB surcharge.
(c)
Represents requirements for bank holding companies pursuant to regulations issued by the Federal Reserve.
(d)
Represents requirements for IDI subsidiaries pursuant to regulations issued under the FDIC Improvement Act.
(e)For the period ended December 31, 2017,2018, the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm were 7.5%, 9.0%, 11.0%10.5%, 12.5%, 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%6.375%, 7.25%7.875%, 9.25%9.875%, 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 subsidiariesJPMorgan Chase Bank, N.A. under both the Basel III Standardized and Basel III Advanced Approaches. As of September 30, 20182019 and December 31, 2017, 2018, JPMorgan Chase and all of its IDI subsidiariesJPMorgan Chase Bank, N.A. 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.
September 30, 2019
(in millions, except ratios)		Basel III Standardized Fully Phased-In Basel III Advanced Fully Phased-In
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
 
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
Regulatory capital      
CET1 capital$184,972
$188,608
$23,136
 $184,972
$188,608
$23,136
$188,151
$205,347
 $188,151
$205,347
Tier 1 capital210,589
188,608
23,136
 210,589
188,608
23,136
214,831
205,347
 214,831
205,347
Total capital238,303
199,634
28,026
 228,574
193,613
26,636
243,500
223,038
 233,203
212,919
      
Assets      
Risk-weighted1,545,326
1,362,039
109,138
 1,438,529
1,211,473
182,177
1,527,762
1,445,648
 1,435,693
1,302,749
Adjusted average(a)
2,552,612
2,141,332
116,411
 2,552,612
2,141,332
116,411
2,717,852
2,339,858
 2,717,852
2,339,858
      
Capital ratios(b)
      
CET112.0%13.8%21.2% 12.9%15.6%12.7%12.3%14.2% 13.1%15.8%
Tier 113.6
13.8
21.2
 14.6
15.6
12.7
14.1
14.2
 15.0
15.8
Total15.4
14.7
25.7
 15.9
16.0
14.6
15.9
15.4
 16.2
16.3
Tier 1 leverage(c)
8.2
8.8
19.9
 8.2
8.8
19.9
7.9
8.8
 7.9
8.8
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.
December 31, 2018
(in millions, except ratios)		Basel III Standardized Transitional Basel III Advanced Transitional
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.(d)
 
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.(d)
Regulatory capital          
CET1 capital$183,300
$184,375
 $21,600
 $183,300
$184,375
 $21,600
$183,474
$211,671
 $183,474
$211,671
Tier 1 capital208,644
184,375
 21,600
 208,644
184,375
 21,600
209,093
211,671
 209,093
211,671
Total capital238,395
195,839
 27,691
 227,933
189,510
(d) 
26,250
237,511
229,952
 227,435
220,025
          
Assets          
Risk-weighted1,499,506
1,338,970
(d) 
113,108
 1,435,825
1,241,916
(d) 
190,523
1,528,916
1,446,529
 1,421,205
1,283,146
Adjusted average(a)
2,514,270
2,116,031
 126,517
 2,514,270
2,116,031
 126,517
2,589,887
2,250,480
 2,589,887
2,250,480
          
Capital ratios(b)
          
CET112.2%13.8% 19.1% 12.8%14.8%
(d) 
11.3%12.0%14.6% 12.9%16.5%
Tier 113.9
13.8
 19.1
 14.5
14.8
(d) 
11.3
13.7
14.6
 14.7
16.5
Total15.9
14.6
(d) 
24.5
 15.9
15.3
(d) 
13.8
15.5
15.9
 16.0
17.1
Tier 1 leverage(c)
8.3
8.7
 17.1
 8.3
8.7
 17.1
8.1
9.4
 8.1
9.4
(a)
Adjusted average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.
(b)
For each of the risk-based capital ratios, the capital adequacy of the Firm and its IDI subsidiariesJPMorgan Chase Bank, N.A. is evaluated against the lower of the two ratios as calculated under Basel III approaches (Standardized or Advanced).
(c)
The Tier 1 leverage ratio is not a risk-based measure of capital.
(d)On May 18, 2019, Chase Bank USA, N.A. merged with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A as the surviving entity. The prior periodDecember 31, 2018 amounts have been revised to conform withreported for JPMorgan Chase Bank, N.A. retrospectively reflect the current period presentation.impact of the merger.

 September 30, 2019 December 31, 2018
 Basel III Advanced Fully Phased-In Basel III Advanced Fully Phased-In
(in millions, except ratios)
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
 
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.(a)
Total leverage exposure$3,404,535
$3,007,280
 $3,269,988
$2,915,541
SLR6.3%6.8% 6.4%7.3%
 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,On May 18, 2019, Chase Bank USA, N.A. merged with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A as the SLR was fully phased-in under Basel III.surviving entity. The December 31, 20172018 amounts were calculated underreported for JPMorgan Chase Bank, N.A. retrospectively reflect the Basel III Transitional rules.impact of the merger.

Note 2022 – 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. ForRefer to Note 27 of JPMorgan Chase’s 2018 Form 10-K 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.policies.
 
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 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 September 30, 2018,2019, and December 31, 2017.2018. The amounts in the table below for credit card and home equity lending-related commitments represent the total available credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit for these products will be utilized at the same time. The Firm can reduce or cancel credit card lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. In addition, the Firm typically closes credit card lines when the borrower is 60 days or more past due. The Firm may reduce or close HELOCs when there are significant decreases in the value of the underlying property, or when there has been a demonstrable decline in the creditworthiness of the borrower.

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

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

September 30, 2018
Dec 31,
2017

Sep 30,
2018
Dec 31,
2017
September 30, 2019
Dec 31,
2018

Sep 30,
2019
Dec 31,
2018
By remaining maturity
(in millions)		Expires in 1 year or lessExpires after
1 year through
3 years		Expires after
3 years through
5 years		Expires after 5 yearsTotal
Total

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

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

$20,360

$12
$12
$597
$1,156
$2,353
$17,077
$21,183
 $20,901
 $12
$12
Residential mortgage(a)
6,955
—
—
12
6,967

5,736

—
—
10,904
—
—
12
10,916
 5,481
 —
—
Auto7,911
1,430
200
89
9,630

9,255

2
2
8,062
1,238
118
49
9,467
 8,011
 2
2
Consumer & Business Banking12,127
647
111
487
13,372

13,202

19
19
10,324
643
106
952
12,025
 11,673
 19
19
Total consumer, excluding credit card27,909
3,187
2,004
17,530
50,630

48,553

33
33
29,887
3,037
2,577
18,090
53,591
 46,066
 33
33
Credit card600,728
—
—
—
600,728

572,831

—
—
645,880
—
—
—
645,880
 605,379
 —
—
Total consumer(b)
628,637
3,187
2,004
17,530
651,358

621,384

33
33
675,767
3,037
2,577
18,090
699,471
 651,445
 33
33
Wholesale:          
Other unfunded commitments to extend credit(c)
74,427
128,149
148,414
10,995
361,985

331,160

886
840
55,258
128,911
161,963
11,200
357,332
 351,490
 912
852
Standby letters of credit and other financial guarantees(c)
14,561
9,810
5,038
2,339
31,748

35,226

585
636
16,373
10,525
5,349
1,842
34,089
 33,498
 605
521
Other letters of credit(c)
3,344
137
102
—
3,583

3,712

7
3
3,853
305
40
—
4,198
 2,825
 5
3
Total wholesale(d)(b)
92,332
138,096
153,554
13,334
397,316

370,098

1,478
1,479
75,484
139,741
167,352
13,042
395,619
 387,813
 1,522
1,376
Total lending-related$720,969
$141,283
$155,558
$30,864
$1,048,674

$991,482

$1,511
$1,512
$751,251
$142,778
$169,929
$31,132
$1,095,090
 $1,039,258
 $1,555
$1,409
Other guarantees and commitments

















     
Securities lending indemnification agreements and guarantees(e)(d)
$202,622
$—
$—
$—
$202,622

$179,490

$—
$—
$214,338
$—
$—
$—
$214,338
 $186,077
 $—
$—
Derivatives qualifying as guarantees2,800
361
12,384
40,349
55,894

57,174

370
304
1,772
196
12,081
40,369
54,418
 55,271
 231
367
Unsettled reverse repurchase and securities borrowing agreements119,762
—
—
—
119,762

76,859

—
—
Unsettled repurchase and securities lending agreements92,115
—
—
—
92,115

44,205

—
—
Unsettled resale and securities borrowed agreements122,946
1,125
66
—
124,137
 102,008
 —
—
Unsettled repurchase and securities loaned agreements120,679
670
—
—
121,349
 57,732
 —
—
Loan sale and securitization-related indemnifications:

















     
Mortgage repurchase liabilityNA
NA
NA
NA
NA

NA

89
111
NA
NA
NA
NA
NA
 NA
 61
89
Loans sold with recourseNA
NA
NA
NA
1,066

1,169

33
38
NA
NA
NA
NA
1,001
 1,019
 27
30
Exchange & clearing house guarantees and commitments(e)
161,580
—
—
—
161,580
 58,960
 —
—
Other guarantees and commitments(f)
10,091
1,443
384
2,641
14,559

11,867

(53)(76)4,098
590
260
2,832
7,780
 8,183
 (89)(73)
(a)Includes certain commitments to purchase loans from correspondents.
(b)Predominantly all consumer and wholesale lending-related commitments are in the U.S.
(c)At September 30, 2018,2019, and December 31, 2017,2018, reflected the contractual amount net of risk participations totaling $287$198 million and $334$282 million respectively, for other unfunded commitments to extend credit; $9.9$9.7 billion and $10.4 billion, respectively, for standby letters of credit and other financial guarantees; and $469$705 million and $405$385 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.
(d)At both September 30, 2018,2019, and December 31, 2017, the U.S. portion of the contractual amount of total wholesale lending-related commitments was 76%.
(e)At September 30, 2018, and December 31, 2017, collateral held by the Firm in support of securities lending indemnification agreements was $214.3$226.5 billion and $188.7$195.6 billion, respectively. Securities lending collateral primarily consists of cash, G7 government securities, and securities issued by governments that are members of G7U.S. GSEs and U.S. government agencies.
(f)(e)
At September 30, 2018, 2019, and December 31, 2017, 2018, includes guarantees to the Fixed Income Clearing Corporation under the sponsored member repo program and commitments and guarantees associated with the Firm’s membership in certain clearing houses.
(f)At September 30, 2019, and December 31, 2018, primarily includes letters of credit hedged by derivative transactions and managed on a market risk basis, and unfunded commitments related to institutional lending and commitments associated with the Firm’s membership in certain clearing houses.lending. Additionally, includes unfunded commitments predominantly related to certain tax-oriented equity investments.
(g)For lending-related products, the carrying value represents the allowance for lending-related commitments and the guarantee liability; for derivative-related products, the carrying value represents the fair value.


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 contractual amount and carrying value of standby letters of credit and other financial guarantees and other letters of credit arrangementsas of September 30, 2018,2019, and December 31, 2017.2018.
Standby letters of credit, other financial guarantees and other letters of credit
September 30, 2018 December 31, 2017September 30, 2019 December 31, 2018
(in millions)Standby letters of
credit and other financial guarantees		 
Other letters
of credit
 Standby letters of
credit and other financial guarantees		 
Other letters
of credit
Standby letters of
credit and other financial guarantees		 
Other letters
of credit
 Standby letters of
credit and other financial guarantees		 
Other letters
of credit
Investment-grade(a)
$25,038
 $2,507
 $28,492
 $2,646
$27,131
 $3,249
 $26,420
 $2,079
Noninvestment-grade(a)
6,710
 1,076
 6,734
 1,066
6,958
 949
 7,078
 746
Total contractual amount$31,748
 $3,583
 $35,226
 $3,712
$34,089
 $4,198
 $33,498
 $2,825
              
Allowance for lending-related commitments$171
 $7
 $192
 $3
$215
 $5
 $167
 $3
Guarantee liability414
 —
 444
 —
390
 —
 354
 —
Total carrying value$585
 $7
 $636
 $3
$605
 $5
 $521
 $3
              
Commitments with collateral$16,074
 $559
 $17,421
 $878
$17,690
 $877
 $17,400
 $583
(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 in certain derivative contracts that have the characteristics of a guarantee under U.S. GAAP. ForRefer to Note 27 of JPMorgan Chase’s 2018 Form 10-K for further information on these derivatives, refer to Note27 of JPMorgan Chase’s 2017 Annual Report.derivatives.
The following table summarizes the derivatives qualifying as guarantees as of September 30, 20182019, and December 31, 2017.2018.
(in millions)September 30, 2018
 December 31, 2017
September 30, 2019
 December 31, 2018
Notional amounts      
Derivative guarantees$55,894
 $57,174
$54,418
 $55,271
Stable value contracts with contractually limited exposure28,574
 29,104
28,886
 28,637
Maximum exposure of stable value contracts with contractually limited exposure2,954
 3,053
2,960
 2,963
      
Fair value      
Derivative payables370
 304
231
 367
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. ForRefer to Note 4 for a further discussion of credit derivatives, refer to Note4.derivatives.
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, referRefer to Note27 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for additional information.

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, referRefer to Note22 24 of this Form 10-Q and Note 29 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for additional information regarding litigation.

Sponsored member repo program
In 2018 the Firm commenced the sponsored member repo program, wherein the Firm acts as a sponsoring member to clear eligible overnight resale and repurchase agreements through the Government Securities Division of the Fixed Income Clearing Corporation (“FICC”) on behalf of clients that become sponsored members under the FICC’s rules. The Firm also guarantees to the FICC the prompt and full payment and performance of its sponsored member clients’ respective obligations under the FICC’s rules. The Firm minimizes its liability under these overnight guarantees by obtaining a security interest in the cash or high-quality securities collateral that the clients place with the clearing house therefore the Firm expects the risk of loss to be remote. The Firm’s maximum possible exposure, without taking into consideration the associated collateral, is included in the Exchange & clearing house guarantees and commitments line on page 157. Refer to Note 11 of JPMorgan Chase’s 2018 Form 10-K for additional information on credit risk mitigation practices on resale agreements and the types of collateral pledged under repurchase agreements.
Guarantees of subsidiarysubsidiaries
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 theseCompany. These guarantees, which rank on a parity with the Firm’s unsecured and unsubordinated indebtedness.indebtedness, are not included in the table on page 157 of this Note. Refer to Note 19 of JPMorgan Chase’s 2018 Form 10-K for additional information.


 
Note 2123 – Pledged assets and collateral
ForRefer to Note 28 of JPMorgan Chase’s 2018 Form 10-K for a discussion of the Firm’s pledged assets and collateral, refer to Note28 of JPMorgan Chase’s 2017 Annual Report.collateral.
Pledged assets
The Firm may pledge financial assets that it owns to maintain potential borrowing capacity at discount windows with Federal Reserve banks, various other central banks and FHLBs. Additionally, pledged assets are used for other purposes, including to secure borrowings and public deposits, collateralize repurchase and other securities financing agreements, andto cover customer short sales. and to collateralize derivative contracts and deposits. 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’sFirm’s pledged assets.
(in billions)September 30, 2018
 December 31, 2017
September 30, 2019
 December 31, 2018
Assets that may be sold or repledged or otherwise used by secured parties$130.7
 $135.8
$154.2
 $104.0
Assets that may not be sold or repledged or otherwise used by secured parties76.2
 68.1
94.5
 83.7
Assets pledged at Federal Reserve banks and FHLBs488.9
 493.7
487.1
 475.3
Total assets pledged$695.8
 $697.6
$735.8
 $663.0

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. ForRefer to Note 10 for additional information on the Firm’sFirm’s securities financing activities, referactivities. Refer to Note10. For additional information on the Firm’s long-term debt, refer to Note 19 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for additional information on the Firm’s long-term debt.
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 and other securities financing agreements, securities borrowing agreements,prime brokerage-related held-for-investment customer margin loansreceivables and derivative agreements.contracts. Collateral is generally used under repurchase agreements,and other securities lendingfinancing agreements, or to cover customer short sales and to collateralize depositsderivative contracts and derivative agreements.deposits.
The following table presents the fair value of collateral accepted.
(in billions)September 30, 2018
 December 31, 2017
September 30, 2019
 December 31, 2018
Collateral permitted to be sold or repledged, delivered, or otherwise used$1,114.1
 $968.8
$1,264.1
 $1,245.3
Collateral sold, repledged, delivered or otherwise used927.5
 771.0
1,017.3
 998.3

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 2224 – Litigation
Contingencies
As of September 30, 2018,2019, the Firm and its subsidiaries and affiliates are defendants, or putative defendants or respondents 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 several 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$1.3 billion at September 30, 2018.2019. This estimated aggregate range of reasonably possible losses was based upon currentlyinformation available informationas of that date 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.Federal Republic of Nigeria Litigation. JPMorgan Chase Bank, N.A. operated an escrow and depository account for the Federal Government of Nigeria (“FGN”) and two major international oil companies. The Staff of the U.S. Securities and Exchange Commission’s Enforcement Division has been investigating depositary banks and broker-dealers, including the Firm,account held approximately $1.1 billion in connection with activity relatinga dispute among the clients over rights to pre-released American Depositary Receipts.an oil field. Following the settlement of the dispute, JPMorgan Chase Bank, N.A. paid out the monies in the account in 2011 and 2013 in accordance with directions received from its clients. In November 2017, the Federal Republic of Nigeria (“FRN”) commenced a claim in the English High Court for approximately $875 million in payments made out of the accounts. The Staff’s investigation focusesFRN, claiming to be the same entity as the FGN, alleges that the payments were instructed as part of a complex fraud not involving JPMorgan Chase Bank, N.A., but that JPMorgan Chase Bank, N.A. was or should have been on notice that the period of 2011 to 2015.payments may be fraudulent. JPMorgan Chase Bank, N.A. applied for summary judgment and was unsuccessful. The Firm continues to cooperate with this investigationclaim is ongoing and is currently engaged in settlement discussions. There is no assurance that such discussions will result in a settlement.trial date has been set.
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. In addition, the Firm has paid fines totaling approximately $265 million in connection with the settlement of FX-related investigations conducted by the European Commission and the Swiss Competition Commission which were announced in May 2019 and June 2019, respectively. 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 inIn August 2018, the United States District Court for the Southern District of New York granted final approval to the Firm’s settlement of a consolidated class action brought by U.S.-based plaintiffs, which principally allegingalleged 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 numberand also sought damages on behalf of additional putative class actions were filed seeking damages for persons who transacted in FX futures and options on futuresfutures. Certain members of the settlement class filed requests to the Court to be excluded from the class, and certain of them filed a complaint against the Firm and a number of other foreign exchange dealers in November 2018 (the “exchanged-based actions”“opt-out action”),. The 2 FX-related actions brought by participants or beneficiaries of qualified ERISA plans have been dismissed. Putative class actions on behalf of 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 addition, some FX related individual and putative class actions have been filed outside the U.S., including in the U.K., Israel 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 invalidAustralia, which are 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.similar alleged underlying conduct.
Interchange Litigation. A group of merchants and retail associations filed a series of class action complaints alleging that Visa and MasterCard,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 two2 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. ThisPursuant to this settlement, provides for the defendants to contributehave collectively contributed an additional $900 million to the approximately $5.3 billion currentlypreviously held in escrow from the original settlement. Upon preliminary approvalIn January 2019, the amended agreement was preliminarily approved by the District Court, $600 millionand formal notice 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 banksclass settlement has been completed 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, whichthe District Court’s order. A fairness hearing is scheduled before the District Court 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.November 2019. 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 RatesRate (“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 filedrelated to benchmarks, including U.S. dollar LIBOR during the period that it was administered by the BBA and, in various United States District Courts.a separate consolidated putative class action, during the period that it was administered by ICE Benchmark Administration. 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 mattersactions 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 during the period that it was administered by the BBA, 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 certain claims to proceed, including antitrust, claims, claims underCommodity Exchange Act, Section 10(b) of the CommoditySecurities Exchange Act and common law claims to proceed.claims. 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, theThe District Court (i) granted class certification with respect to certainof antitrust claims related to bonds and interest rate swaps sold directly by the defendants (ii)and denied class certification with respectmotions filed by other plaintiffs. The Firm has agreed to state common law claims brought bysettle putative class

actions related to Swiss franc LIBOR, the holdersSingapore Interbank Offered Rate, the Singapore Swap Offer Rate and the Australian Bank Bill Swap Reference Rate, as well as certain of those bonds and swaps and (iii) denied class certification with respect to the putative class actionactions related to LIBOR-based loans held byU.S. dollar LIBOR. The District Court declined to grant preliminary approval to the settlement involving the Singapore Interbank Offered Rate and the Singapore Swap Offer Rate and instead dismissed the litigation after concluding that the plaintiff lending institutions.
lacked standing. Plaintiff’s appeal of the District Court’s decision is pending. The remaining settlements are all subject to further documentation and court approval.
Metals Investigations and Litigation. Various authorities, including the Department of Justice’s Criminal Division, are conducting investigations relating to trading practices in the metals markets and related conduct. The Firm is oneresponding to and cooperating with these investigations. Several putative class action complaints have been filed in the United States District Court for the Southern District of New York against the Firm and certain former employees, alleging a precious metals futures and options price manipulation scheme in violation of the defendants in a numberCommodity Exchange Act. Some of the complaints also allege unjust enrichment and deceptive acts or practices under the General Business Law of the State of New York. The Court consolidated these putative class actions alleging thatin February 2019. The Firm is also a defendant banks and ICAP conspired to manipulatein a consolidated action filed in the U.S. dollar ISDAFIX rates. In April 2016,United States District Court for 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 inSouthern District of New York and Alabama courts against the Firm relating to certain Jefferson County, Alabama (the “County”) warrant underwritings and swap transactions. The claimsalleging monopolization of silver futures 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 confirmationviolation 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.Sherman Act.
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. TheIn September 2018, the Court of Cassation, France’s highest court, 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. In June 2019, the Court of Appeal declined to consider JPMorgan Chase Bank, N.A.’s application for the annulment ofannul the ordonnance de renvoireferring JPMorgan Chase Bank, N.A. to the French tribunal correctionnel., and the Firm has reapplied to the Court of Cassation for a determination as to whether the Court of Appeal’s decision is consistent with the Court of Cassation’s September 2018 ruling. 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$10 million and $(107)$20 million for the three months ended September 30, 20182019 and 2017,2018, respectively, and $90$(2) million and $172$90 million for the nine months ended September 30, 2019 and 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 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 2325 – Business segments
The Firm is managed on a line of business basis. There are four4 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 businessthe Firm’s Operating Committee. Segment results are presented on a managed basis. ForRefer to Segment results below, and Note 31 of JPMorgan Chase’s 2018 Form 10-K 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.segments.
Segment results
The following table providestables provide a summary of the Firm’s segment results as of or for the three and nine months ended September 30, 20182019 and 2017,2018, on a managed basis. The Firm’s definition of managed basis starts with the
reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm
(and (and each of the reportable business segments) on 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 Refer to assessNote 31 of JPMorgan Chase’s 2018 Form 10-K for additional information on 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.Firm’s managed basis.
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 in capital allocation are assessed and as a result, the capital allocated to allocate capital. Forlines of business may change. Refer to Line of business equity on page 91 of JPMorgan Chase’s 2018 Form 10-K 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.allocation.
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)
Segment results and reconciliation(a)
Segment results and reconciliation(a)
As of or for the three months ended September 30,
(in millions, except ratios)		Consumer &
Community Banking		 Corporate &
Investment Bank		 Commercial Banking Asset & Wealth ManagementConsumer &
Community Banking		 Corporate &
Investment Bank		 Commercial Banking Asset & Wealth Management
2018
2017
 2018
2017
 2018
2017
 2018
2017
2019
2018
 2019
2018
 2019
2018
 2019
2018
Noninterest revenue$4,176
$3,898
 $6,505
$6,119
 $576
$592
 $2,680
$2,617
$5,095
$4,176
 $7,182
$6,505
 $599
$576
 $2,713
$2,680
Net interest income9,114
8,135
 2,300
2,496
 1,695
1,554
 879
855
9,164
9,114
 2,156
2,300
 1,608
1,695
 855
879
Total net revenue13,290
12,033
 8,805
8,615
 2,271
2,146
 3,559
3,472
14,259
13,290
 9,338
8,805
 2,207
2,271
 3,568
3,559
Provision for credit losses980
1,517
 (42)(26) (15)(47) 23
8
1,311
980
 92
(42) 67
(15) 44
23
Noninterest expense6,982
6,495
 5,175
4,793
 853
800
 2,585
2,408
7,290
6,982
 5,348
5,175
 881
853
 2,622
2,585
Income before income tax expense5,328
4,021
 3,672
3,848
 1,433
1,393
 951
1,056
5,658
5,328
 3,898
3,672
 1,259
1,433
 902
951
Income tax expense1,242
1,468
 1,046
1,302
 344
512
 227
382
1,385
1,242
 1,089
1,046
 322
344
 234
227
Net income$4,086
$2,553
 $2,626
$2,546
 $1,089
$881
 $724
$674
$4,273
$4,086
 $2,809
$2,626
 $937
$1,089
 $668
$724
Average equity$51,000
$51,000
 $70,000
$70,000
 $20,000
$20,000
 $9,000
$9,000
$52,000
$51,000
 $80,000
$70,000
 $22,000
$20,000
 $10,500
$9,000
Total assets560,432
537,459
 928,148
851,808
 217,194
220,064
 166,716
149,170
532,487
560,432
 1,023,132
928,148
 222,483
217,194
 174,226
166,716
Return on equity31%19% 14%13% 21%17% 31%29%
ROE32%31% 13%14% 16%21% 24%31%
Overhead ratio53
54
 59
56
 38
37
 73
69
51
53
 57
59
 40
38
 73
73
As of or for the three months ended September 30,
(in millions, except ratios)		Corporate 
Reconciling Items(a)
 TotalCorporate 
Reconciling Items(a)
 Total
2018
2017
 2018
2017
 2018
2017
2019
2018
 2019
2018
 2019
2018
Noninterest revenue$(177)$109
 $(408)$(555) $13,352
$12,780
$120
$(177) $(596)$(408) $15,113
$13,352
Net interest income74
77
 (154)$(319) 13,908
12,798
572
74
 (127)(154) 14,228
13,908
Total net revenue(103)186
 (562)$(874) 27,260
25,578
692
(103) (723)(562) 29,341
27,260
Provision for credit losses2
—
 —
—
 948
1,452
—
2
 —
—
 1,514
948
Noninterest expense28
74
 —
—
 15,623
14,570
281
28
 —
—
 16,422
15,623
Income/(loss) before income tax expense/(benefit)(133)112
 (562)(874) 10,689
9,556
411
(133) (723)(562) 11,405
10,689
Income tax expense/(benefit)12
34
 (562)(874) 2,309
2,824
18
12
 (723)(562) 2,325
2,309
Net income/(loss)$(145)$78
 $—
$—
 $8,380
$6,732
$393
$(145) $—
$—
 $9,080
$8,380
Average equity$80,439
$81,861
 $—
$—
 $230,439
$231,861
$71,113
$80,439
 $—
$—
 $235,613
$230,439
Total assets742,693
804,573
 NA
NA
 2,615,183
2,563,074
812,333
742,693
 NA
NA
 2,764,661
2,615,183
Return on equityNM
NM
 NM
NM
 14%11%
ROENM
NM
 NM
NM
 15%14%
Overhead ratioNM
NM
 NM
NM
 57
57
NM
NM
 NM
NM
 56
57

(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.








Segment results and reconciliation(a)
Segment results and reconciliation(a)
Segment results and reconciliation(a)
As of or for the nine months ended September 30,
(in millions, except ratios)		Consumer &
Community Banking		 Corporate &
Investment Bank		 Commercial Banking Asset & Wealth ManagementConsumer &
Community Banking		 Corporate &
Investment Bank		 Commercial Banking Asset & Wealth Management
2018
2017
 2018
2017
 2018
2017
 2018
2017
2019
2018
 2019
2018
 2019
2018
 2019
2018
Noninterest revenue$12,063
$10,899
 $21,954
$19,598
 $1,758
$1,774
 $7,997
$7,677
$13,868
$12,063
 $22,328
$21,954
 $1,806
$1,758
 $7,989
$7,997
Net interest income26,321
23,516
 7,257
7,541
 4,995
4,478
 2,640
2,520
27,975
26,321
 6,499
7,257
 4,950
4,995
 2,627
2,640
Total net revenue38,384
34,415
 29,211
27,139
 6,753
6,252
 10,637
10,197
41,843
38,384
 28,827
29,211
 6,756
6,753
 10,616
10,637
Provision for credit losses3,405
4,341
 (142)(175) 23
(214) 40
30
3,745
3,405
 179
(142) 186
23
 48
40
Noninterest expense20,770
19,390
 16,237
14,854
 2,541
2,415
 7,732
7,606
21,663
20,770
 16,288
16,237
 2,618
2,541
 7,865
7,732
Income before income tax expense14,209
10,684
 13,116
12,460
 4,189
4,051
 2,865
2,561
16,435
14,209
 12,360
13,116
 3,952
4,189
 2,703
2,865
Income tax expense3,385
3,920
 3,318
3,963
 988
1,469
 616
878
4,025
3,385
 3,365
3,318
 966
988
 655
616
Net income$10,824
$6,764
 $9,798
$8,497
 $3,201
$2,582
 $2,249
$1,683
$12,410
$10,824
 $8,995
$9,798
 $2,986
$3,201
 $2,048
$2,249
Average equity$51,000
$51,000
 $70,000
$70,000
 $20,000
$20,000
 $9,000
$9,000
$52,000
$51,000
 $80,000
$70,000
 $22,000
$20,000
 $10,500
$9,000
Total assets560,432
537,459
 928,148
851,808
 217,194
220,064
 166,716
149,170
532,487
560,432
 1,023,132
928,148
 222,483
217,194
 174,226
166,716
Return on equity27%17% 18%15% 20%16% 32%24%31%27% 14%18% 17%20% 25%32%
Overhead ratio54
56
 56
55
 38
39
 73
75
52
54
 57
56
 39
38
 74
73
As of or for the nine months ended September 30,
(in millions, except ratios)		Corporate 
Reconciling Items(a)
 TotalCorporate 
Reconciling Items(a)
 Total
2018
2017
 2018
2017
 2018
2017
2019
2018
 2019
2018
 2019
2018
Noninterest revenue$(220)$963
 $(1,337)$(1,733) $42,215
$39,178
$3
$(220) $(1,777)$(1,337) $44,217
$42,215
Net interest income(35)2
 (473)$(987) 40,705
37,070
1,436
(35) (408)(473) 43,079
40,705
Total net revenue(255)965
 (1,810)$(2,720) 82,920
76,248
1,439
(255) (2,185)(1,810) 87,296
82,920
Provision for credit losses(3)—
 —
—
 3,323
3,982
—
(3) —
—
 4,158
3,323
Noninterest expense394
355
 —
—
 47,674
44,620
724
394
 —
—
 49,158
47,674
Income/(loss) before income tax expense/(benefit)(646)610
 (1,810)(2,720) 31,923
27,646
715
(646) (2,185)(1,810) 33,980
31,923
Income tax expense/(benefit)18
(73) (1,810)(2,720) 6,515
7,437
(757)18
 (2,185)(1,810) 6,069
6,515
Net income/(loss)$(664)$683
 $—
$—
 $25,408
$20,209
$1,472
$(664) $—
$—
 $27,911
$25,408
Average equity$78,995
$79,937
 $—
$—
 $228,995
$229,937
$68,417
$78,995
 $—
$—
 $232,917
$228,995
Total assets742,693
804,573
 NA
NA
 2,615,183
2,563,074
812,333
742,693
 NA
NA
 2,764,661
2,615,183
Return on equityNM
NM
 NM
NM
 14%11%NM
NM
 NM
NM
 15%14%
Overhead ratioNM
NM
 NM
NM
 57
59
NM
NM
 NM
NM
 56
57
(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.


pwclogobwaa06.jpg
Report of Independent Registered Public Accounting Firm


To the Board of Directors and StockholdersShareholders of JPMorgan Chase & Co.:
Results of Review of Interim Financial Statements
We have reviewed the accompanying consolidated balance sheet of JPMorgan Chase & Co. and its subsidiaries (the “Firm”) as of September 30, 2018,2019, and the related consolidated statements of income, and comprehensive income, and changes in stockholders’ equity for the three-month and nine-month periods ended September 30, 20182019 and 20172018 and the consolidated statements of changes in stockholders’ equity and of cash flows for the nine-month periods ended September 30, 20182019 and 2017,2018, 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, 2017,2018, 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, 2018,26, 2019, 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, 2017,2018, 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.
pwcsig3q2019a01.jpg

October 31, 2018November 4, 2019
























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

JPMorgan Chase & Co.Consolidated average balance sheets, interest and rates (unaudited)(Taxable-equivalent interest and rates; in millions, except rates)
      
Three months ended September 30, 2018 Three months ended September 30, 2017Three months ended September 30, 2019 Three months ended September 30, 2018
Average
balance
Interest(f)
 Rate
(annualized)		 Average
balance
Interest(f)
 Rate
(annualized)		Average
balance
Interest(g)
 Rate
(annualized)		 Average
balance
Interest(g)
 Rate
(annualized)
Assets            
Deposits with banks$408,595
$1,585
 1.54% $456,673
$1,259
 1.09 $267,578
$898
 1.33% $408,595
$1,585
 1.54 
Federal funds sold and securities purchased under resale agreements208,439
952
 1.81
 188,594
622
 1.31 276,721
1,542
 2.21
 208,439
952
 1.81 
Securities borrowed(a)117,057
200
 0.68
 95,597
—

— 139,939
434
 1.23
 117,057
248

0.84 
Trading assets – debt instruments(a)258,027
2,170
 3.34
 240,876
1,974
 3.25 339,198
2,671
 3.12
 241,074
2,170
 3.57 
Taxable securities187,942
1,402
 2.96
 216,011
1,362
 2.50 308,619
2,132
 2.74
 187,942
1,402
 2.96 
Nontaxable securities(a)(b)
42,045
490
 4.62
 45,106
676
 5.95 34,515
396
 4.55
 42,045
490
 4.62 
Total investment securities229,987
1,892
 3.26
(g) 
 261,117
2,038
 3.10
(g) 
343,134
2,528
 2.92
(h) 
 229,987
1,892
 3.26
(h) 
Loans951,724
12,250
 5.11
 909,580
10,591
 4.62 947,280
12,623
 5.29
 951,724
12,250
 5.11 
All other interest-earning assets(b)(c)
46,429
945
 8.07
 41,737
522
 4.96 51,304
552
 4.27
 46,429
496
 4.23 
Total interest-earning assets(a)2,220,258
19,994
 3.57
 2,194,174
17,006
 3.07 2,365,154
21,248
 3.56
 2,203,305
19,593
 3.53 
Allowance for loan losses(13,207)    (13,290)  (13,142)    (13,207)  
Cash and due from banks21,101
    20,289
  20,375
    21,101
  
Trading assets – equity instruments102,962
    119,463
  
Trading assets – equity and other instruments(a)
113,980
    119,915
  
Trading assets – derivative receivables62,075
    59,839
  57,062
    62,075
  
Goodwill, MSRs and other intangible assets
54,652
    53,788
  53,125
    54,652
  
Other assets151,780
    134,968
  
All other noninterest-earning assets168,498
    151,780
  
Total assets$2,599,621
    $2,569,231
  $2,765,052
    $2,599,621
  
Liabilities            
Interest-bearing deposits(a)$1,057,262
$1,621
 0.61% $1,029,534
$837
 0.32 $1,123,452
$2,409
 0.85% $1,041,896
$1,621
 0.62 
Federal funds purchased and securities loaned or sold under repurchase agreements184,377
827
 1.78
 181,851
451
 0.98 239,698
1,241
 2.05
 184,377
827
 1.78 
Short-term borrowings(c)(d)
61,042
288
 1.87
 52,958
149
 1.12 44,814
261
 2.31
 52,779
288
 2.17 
Trading liabilities – debt and other interest-bearing
liabilities(d)(e)
177,091
1,018
 2.28
 168,738
570
 1.34 
Trading liabilities – debt and all other interest-bearing
liabilities(a)(e)(f)
183,369
660
 1.43
 176,795
617
 1.39 
Beneficial interests issued by consolidated VIEs19,921
122
 2.41
 29,832
123
 1.62 21,123
134
 2.53
 19,921
122
 2.41 
Long-term debt(a)275,979
2,056
 2.96
 294,626
1,759
 2.37 248,985
2,188
 3.49
 241,878
2,056
 3.37 
Total interest-bearing liabilities(a)1,775,672
5,932
 1.33
 1,757,539
3,889
 0.88 1,861,441
6,893
 1.47
 1,717,646
5,531
 1.28 
Noninterest-bearing deposits(a)395,600
    401,489
  407,428
    410,966
  
Trading liabilities – equity instruments(e)
36,309
    20,905
  
Trading liabilities – equity and other instruments(a)(f)
31,310
    36,605
  
Trading liabilities – derivative payables44,810
    44,627
  45,987
    44,810
  
All other liabilities, including the allowance for lending-related commitments(a)90,539
    86,742
  155,032
    132,903
  
Total liabilities2,342,930
    2,311,302
  2,501,198
    2,342,930
  
Stockholders’ equity            
Preferred stock26,252
    26,068
  28,241
    26,252
  
Common stockholders’ equity230,439
    231,861
  235,613
    230,439
  
Total stockholders’ equity256,691
    257,929
  263,854
    256,691
  
Total liabilities and stockholders’ equity$2,599,621
    $2,569,231
  $2,765,052
    $2,599,621
  
Interest rate spread(a)  2.24%   2.19   2.09%   2.25 
Net interest income and net yield on interest-earning assets(a) $14,062
 2.51
  $13,117
 2.37  $14,355
 2.41
  $14,062
 2.53 
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively and, accordingly, prior period amounts were revised. For additional information, refer to Note 1.
(a) Represents securities which are tax-exempt for U.S. federal income tax purposes.
(b) Includes held-for-investment margin loans, which are classified in accrued interest and accounts receivable, and all other interest-earning assets, which are classified in other assets on the Consolidated balance sheets.
(c) Includes commercial paper.
(d) Other interest-bearing liabilities include brokerage customer payables.
(e) The combined balance of trading liabilities – debt and equity instruments were $106.4 billion and $89.4 billion for the three months ended September 30, 2018 and 2017, respectively.
(f) Interest includes the effect of certain related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(g) For the three months ended September 30, 2018 and 2017, the annualized rates for securities, based on amortized cost, were 3.29% and 3.14%, respectively; this does not give effect to changes in fair value that are reflected in AOCI.

(a)In the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income and interest expense, but had no effect on net interest income. These changes were made to align the accounting treatment between the balance sheet and the related interest income or expense, primarily by offsetting interest income and expense for certain prime brokerage-related held-for-investment customer receivables and payables that are currently presented as a single margin account on the balance sheet. In addition, the Firm reclassified balances related to certain instruments and structured notes from interest-earning/bearing to noninterest-earning/bearing assets and liabilities as the associated returns are recorded in principal transactions revenue and not in net interest income. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation.
(b)Represents securities which are tax-exempt for U.S. federal income tax purposes.
(c)Includes prime brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets, which are classified in other assets on the Consolidated Balance Sheets.
(d)Includes commercial paper.
(e)Other interest-bearing liabilities include prime brokerage-related customer payables.
(f)The combined balance of trading liabilities – debt and equity instruments were $102.3 billion and $106.4 billion for the three months ended September 30, 2019 and 2018, respectively.
(g)Interest includes the effect of certain related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(h)The annualized rate for securities based on amortized cost was 2.97% and 3.29% for the three months ended September 30, 2019 and 2018, respectively, and 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, 2017Nine months ended September 30, 2019 Nine months ended September 30, 2018
Average
balance
Interest(f)
 Rate
(annualized)		 Average
balance
Interest(f)
 Rate
(annualized)		Average
balance
Interest(g)
 Rate
(annualized)		 Average
balance
Interest(g)
 Rate
(annualized)
Assets              
Deposits with banks$419,392
$4,449
 1.42% $439,974
$3,002
 0.91 % $282,483
$3,200
 1.51% $419,392
$4,449
 1.42 
Federal funds sold and securities purchased under resale agreements203,969
2,490
 1.63
 192,922
1,676
 1.16
 284,616
4,865
 2.29
 203,969
2,490
 1.63 
Securities borrowed(a)113,112
410
 0.49
 93,708
(65)
(h) 
(0.09) 129,915
1,298
 1.34
 113,112
549
 0.65 
Trading assets – debt instruments(a)256,872
6,415
 3.34
 233,884
5,691
 3.25
 337,879
8,380
 3.32
 240,404
6,415
 3.57 
Taxable securities190,970
4,098
 2.87
 228,580
4,202
 2.46
 258,406
5,712
 2.96
 190,970
4,098
 2.87 
Nontaxable securities(a)(b)
42,911
1,494
 4.65
 45,123
2,086
 6.18
 36,490
1,271
 4.66
 42,911
1,494
 4.65 
Total investment securities233,881
5,592
 3.20
(g) 
 273,703
6,288
 3.07
(g) 
294,896
6,983
 3.17
(h) 
 233,881
5,592
 3.20
(h) 
Loans939,408
35,047
 4.99
 902,216
30,479
 4.52
 956,641
38,313
 5.35
 939,408
35,047
 4.99 
All other interest-earning assets(b)(c)
48,743
2,474
 6.79
 41,113
1,295
 4.21
 48,193
1,482
 4.11
 48,743
1,430
 3.92 
Total interest-earning assets(a)2,215,377
56,877
 3.43
 2,177,520
48,366
 2.97
 2,334,623
64,521
 3.69
 2,198,909
55,972
 3.40 
Allowance for loan losses(13,303)    (13,453)    (13,366)    (13,303)  
Cash and due from banks21,771
    20,003
    20,824
    21,771
  
Trading assets – equity instruments107,580
    120,307
    
Trading assets – equity and other instruments(a)
114,394
    124,048
  
Trading assets – derivative receivables61,188
    59,824
    54,098
    61,188
  
Goodwill, MSRs and other intangible assets
54,656
    53,978
    53,853
    54,656
  
Other assets152,325
    135,830
    
All other noninterest-earning assets165,475
    152,325
  
Total assets$2,599,594
    $2,554,009
    $2,729,901
    $2,599,594
  
Liabilities              
Interest-bearing deposits(a)$1,054,419
$4,021
 0.51% $1,007,345
$1,949
 0.26 % $1,102,751
$7,010
 0.85% $1,039,646
$4,021
 0.52 
Federal funds purchased and securities loaned or sold under repurchase agreements190,832
2,164
 1.52
 189,236
1,131
 0.80
 225,471
3,577
 2.12
 190,832
2,164
 1.52 
Short-term borrowings(c)(d)
60,341
757
 1.68
 44,273
318
 0.96
 56,635
1,051
 2.48
 51,349
757
 1.97 
Trading liabilities – debt and other interest-bearing
liabilities(d)(e)
176,507
2,579
 1.95
 172,949
1,490
 1.15
 
Trading liabilities – debt and all other interest-bearing liabilities(a)(e)(f)
186,167
2,141
 1.54
 176,104
1,674
 1.27 
Beneficial interests issued by consolidated VIEs21,449
366
 2.28
 34,197
386
 1.51
 23,549
459
 2.61
 21,449
366
 2.28 
Long-term debt(a)276,865
5,812
 2.81
 294,248
5,035
 2.29
 247,782
6,796
 3.67
 244,307
5,812
 3.18 
Total interest-bearing liabilities(a)1,780,413
15,699
 1.18
 1,742,248
10,309
 0.79
 1,842,355
21,034
 1.53
 1,723,687
14,794
 1.15 
Noninterest-bearing deposits(a)398,728
    403,704
    405,075
    413,501
  
Trading liabilities – equity instruments(e)
33,206
    20,441
    
Trading liabilities – equity and other instruments(a)(f)
32,059
    33,607
  
Trading liabilities – derivative payables42,919
    45,900
    41,952
    42,919
  
All other liabilities, including the allowance for lending-related commitments(a)89,203
    85,711
    148,086
    130,755
  
Total liabilities2,344,469
    2,298,004
    2,469,527
    2,344,469
  
Stockholders’ equity              
Preferred stock26,130
    26,068
    27,457
    26,130
  
Common stockholders’ equity228,995
    229,937
    232,917
    228,995
  
Total stockholders’ equity255,125
    256,005
    260,374
    255,125
  
Total liabilities and stockholders’ equity$2,599,594
    $2,554,009
    $2,729,901
    $2,599,594
  
Interest rate spread(a)  2.25%   2.18 %   2.16%   2.25 
Net interest income and net yield on interest-earning assets(a) $41,178
 2.49
  $38,057
 2.34
  $43,487
 2.49
  $41,178
 2.50 
Effective January 1, 2018, the Firm adopted several new accounting standards. Certain of the new accounting standards were applied retrospectively
(a)
In the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income and interest expense, but had no effect on net interest income. These changes were made to align the accounting treatment between the balance sheet and the related interest income or expense, primarily by offsetting interest income and expense for certain prime brokerage-related held-for-investment customer receivables and payables that are currently presented as a single margin account on the balance sheet. In addition, the Firm reclassified balances related to certain instruments and structured notes from interest-earning/bearing to noninterest-earning/bearing assets and 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 as the associated returns are recorded in principal transactions revenue and not in net interest income. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation.
(b)Represents securities which are tax-exempt for U.S. federal income tax purposes.
(c)Includes prime brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets, which are classified in other assets on the Consolidated Balance Sheets.
(d)Includes commercial paper.
(e)Other interest-bearing liabilities include prime brokerage-related customer payables.
(f)The combined balance of trading liabilities – debt and equity instruments were $106.8 billion and $105.1 billion for the nine months ended September 30, 2019 and 2018, respectively.
(g)Interest includes the effect of certain related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(h)The annualized rate for securities based on amortized cost was 3.20% and 3.23% for the nine months ended September 30, 2019 and 2018, respectively, and does not give effect to changes in fair value that are reflected in AOCI.

GLOSSARY OF TERMS AND ACRONYMS
2017 Annual Report or 20172018 Form 10-K: Annual report on Form 10-K for year ended December 31, 2017,2018, filed with the U.S. Securities and Exchange Commission.
ABS: 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 retained loans: represents period-end allowance for loan losses divided by retained loans.
AOCI: AOCI: Accumulated other comprehensive income/(loss)
ARM(s): Adjustable rate mortgage(s)
AWM: Asset & Wealth Management
Beneficial interests issued by consolidated VIEs:VIEs: represents the interest of third-party holders of debt, equity securities, or other obligations, issued by VIEs that JPMorgan Chase consolidates.
Benefit obligation: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”CDS 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: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 partythird-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:CLTV Collateralized loan obligations
CLTV: : Combined loan-to-value
Collateral-dependent: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 excludeexcludes loans classified as trading assets, runoff portfolios, discontinued portfolios and portfolios the Firm has an intent to exit.
Credit derivatives:derivatives: Financial instruments whose value is derived from the credit risk associated with the debt of a third partythird-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: 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 adjustment
DFAST:DVA: 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
EC: 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:Mae: Federal National Mortgage Association
FASB: FASB: Financial Accounting Standards Board

FCA:FCA: Financial Conduct Authority
FCC:FDIC 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: FHA: Federal Housing Administration
FHLB: 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: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: FX: Foreign exchange
G7: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: Securities issued by the government of one of the G7 nations.
Ginnie Mae:Mae: Government National Mortgage Association
GSE: GSIB:Fannie Mae and Freddie Mac
GSIB: Global systemically important banks
HAMP: HELOANHome 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: HELOC: Home equity line of credit
Home equity – senior lien:lien: represents loans and commitments where JPMorgan Chase holds the first security interest on the property.
Home equity – junior lien:lien: represents loans and commitments where JPMorgan Chase holds a security interest that is subordinate in rank to other liens.
HQLA: High qualityHigh-quality liquid assets
HTM: HTM: Held-to-maturity
IDI: IDI: Insured depository institutions
IHC: JPMorgan Chase Holdings LLC, an intermediate holding company
Impaired loan: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:IPO: Initial public offering
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: ISDA: International Swaps and Derivatives Association
JPMorgan Chase: JPMorgan Chase & Co.
JPMorgan Chase Bank, N.A.: JPMorgan Chase Bank, National Association
J.P. Morgan Securities: J.P. Morgan Securities LLC
LCR: Liquidity coverage ratio
LGD: Loss given default
LIBOR:LIBOR: London Interbank Offered Rate
LLC:LLC: Limited Liability Company
LOB: 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.
Managed basis: A non-GAAP presentation of Firmwide financial results that includes reclassifications to present revenue on a fully taxable-equivalent basis. Management also uses this financial measure at the segment level, because it believes this provides information to enable investors to understand the underlying operational performance and trends of the particular business segment

and facilitates a comparison of the business segment with the performance of competitors.
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: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
Moody’s: Moody’s: Moody’s Investor Services
Mortgage product types: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
PrimePrime 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: MSR: Mortgage servicing rights
NA: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:income: Fees earned by credit and debit card issuers on sales transactions.
•
Rewards costscosts:: The cost to the Firm for points earned by cardholders enrolled in credit card rewards programs.
•
Partner paymentspayments:: 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:NM: Not meaningful
NOL:Nonaccrual loans: 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.
OCC: OCC: Office of the Comptroller of the Currency
OCI: OCI: Other comprehensive income/(loss)
OEP: OPEBOne Equity Partners
OIS: Overnight index swap
OPEB: : Other postretirement employee benefit
OTC: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: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: 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: PCIPrompt corrective action
PCI:: “Purchased credit-impaired” loans represents 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 RegulatoryRegulation 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: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 toprime brokerage-related held-for-investment customer receivables from 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: 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:RHS: Rural Housing Service of the U.S. Department of Agriculture
ROE: Return on equity
ROTCE: Return on tangible common equity
ROU assets: Right-of-use assets
RSU(s): Restricted stock units
RWA: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: S&PU.S.: Standard and Poors
SAR(s): Stock appreciation rights
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.
Shelf Deals: Shelf offerings are SEC provisions that allow issuers to register for new securities without selling the entire issuance at once. Since these issuances are filed with the SEC but are not yet priced in the market, they are not included in the league tables until the actual securities are issued.
Single-name: Single-name: Single reference-entities
SLR: SLR: Supplementary leverage ratio
SMBS: Stripped mortgage-backed securities
SPEs: SOFR: Secured Overnight Financing Rate
SPEs: Special purpose entities
Structural interest rate risk: represents interest rate risk of the non-trading assets and liabilities of the Firm.
Structured notes:notes: Structured notes are financial instruments whose 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. Contractual cash flows for principal, interest, or both can vary in amount and timing throughout the life of the note based on non-traditional indexes or non-traditional uses of traditional interest rates or indexes.
Suspended foreclosures: Loans referred to foreclosure where formal foreclosure proceedings have started but are currently on hold, whic
hwhich 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:TDR: “Troubled“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: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:government agencies: U.S. government agencies include, but are not limited to, agencies such as Ginnie Mae and FHA, and do not include Fannie Mae and Freddie Mac which are U.S. government-sponsored enterprises (“U.S. GSEs”). In general, obligations of U.S. government agencies are fully and explicitly guaranteed as to the timely payment of principal and interest by the full faith and credit of the U.S. government in the event of a default.
U.S. GAAP: Accounting principles generally accepted in the United States of America.
U.S. GSE(s): “U.S.“U.S. government-sponsored enterprises”:In the U.S., GSEs are quasi-governmental, privately-held entities established or chartered by the U.S. government to serve public purposes as specified by the U.S. 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.or FHA. 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:Treasury: U.S. Department of the Treasury
VA: 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: VIEs: Variable interest entities
Warehouse loans: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:Includes
a) Operatingoperating 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; andwhich is recognized over the period in
The changewhich the service is provided, changes in the fair value of
MSRs, the MSR asset due to the collection or realizationimpact 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
associated with derivativesMSRs and other instruments used in thosegains and losses on securitization of excess mortgage servicing. Net mortgage servicing revenue also includes gains and losses on sales and lower of cost or fair value adjustments of certain loans insured by U.S. government agencies.
Net production revenue: Includes fees and income
recognized as earned on mortgage loans originated with the
intent to sell; the impact of risk management activities.activities
associated with the mortgage pipeline and warehouse
loans; and changes in the fair value of any residual interests
held from mortgage securitizations. Net production revenue
also includes gains and losses on sales and lower of cost or fair value adjustments on mortgage loans (excluding certain loans insured by U.S. government agencies) held-for-sale and changes in fair value on mortgage loans originated with the intent to sell and measured at fair value under the fair value option.
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 Credit Card and Merchant Services businesses.
Credit 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 brokerage.
Securities Services: primarily includes 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 businessbusinesses which provides broker-dealer clearing and custody services, including tri-party repo transactions,provide 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 fourCommercial Banking provides comprehensive financial solutions, including lending, treasury services, investment banking and asset management products across three primary client segments: Middle Market Banking, Corporate Client Banking and Commercial Term Lending, and Real Estate Banking.Banking. Other includes amounts not aligned with a primary client segment.
Middle Market Banking: covers corporate, municipalsmall business and midsized corporations, local governments and nonprofit clients, with annual revenue generally ranging between $20 million and $500 million.clients.
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.large corporations.
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 coversinvestors, developers, and developersowners of institutional-grade real estate investmentmultifamily, office, retail, industrial and affordable housing 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, referRefer to the Market Risk Management section of Management’s discussion and analysis and pages 121-128124–131 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for a discussion of the quantitative and qualitative disclosures about market risk.
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. Refer 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, referRefer to “Management’s report on internal control over financial reporting” on page 146148 of JPMorgan Chase’s 2017 Annual Report.2018 Form 10-K for further information. There was no change in the Firm’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during the three months ended September 30, 2018,2019, 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.
ForRefer to the discussion of the Firm’s material legal proceedings in Note 24 of this Form 10-Q for information that updates the disclosures set forth under Part I, Item 3: Legal Proceedings, in JPMorgan Chase’s 2017 Annual Report on2018 Form 10-K, refer to the discussion of the Firm’s material legal proceedings in Note 22 of this Form 10-Q.10-K.
Item 1A. Risk Factors.
ForRefer to Part I, Item 1A: Risk Factors on pages 7–28 of JPMorgan Chase’s 2018 Form 10-K and Forward-Looking Statements on page 79 of this Form 10-Q for a discussion of certain risk factors affecting the Firm, refer 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 85 of this Form 10-Q.Firm.
Supervision and regulation
For information on Supervision and Regulation, referRefer to Recent regulatory developments on page 44 of this Form 10-Q and the Supervision and regulation section on pages 1–86 of JPMorgan Chase’s 20172018 Form 10-K.10-K for information on Supervision and Regulation.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.
The Firm did not have any unregistered sale of equity securities during the three months ended September 30, 2018.2019.
Repurchases under the common equity repurchase program
ForRefer to Capital Risk Management on pages 45–49 of this Form 10-Q and pages 85-94 of JPMorgan Chase’s 2018 Form 10-K for information regarding repurchases under the Firm’s common equity repurchase program, refer to Capital Risk Management on pages 44-48 of this Form 10-Q and pages 82-91 of JPMorgan Chase’s 2017 10-K.program.

Shares repurchased, on a settlement-date basis, pursuant to the common equity repurchase program during the nine months ended September 30, 2018,2019, were as follows.
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)
 
Nine months ended September 30, 2019Total 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) 
49,534,646
 $102.78
 $5,091
 $5,290
 
Second quarter45,299,370
 109.67
 4,968
 188
(c) 
47,434,255
 109.83
 5,210
 80
(b) 
July15,450,734
 107.83
 1,666
 19,059
 16,285,176
 114.39
 1,863
 27,537
 
August12,302,781
 115.67
 1,423
 17,636
 29,005,310
 108.78
 3,155
 24,382
 
September11,528,761
 115.07
 1,327
 16,309
 16,720,914
 115.53
 1,931
 22,451
(c) 
Third quarter39,282,276
 112.41
 4,416
 16,309
 62,011,400
 112.07
 6,949
 22,451
(c) 
Year-to-date126,000,681
 $111.55
 $14,055
 $16,309
 158,980,301
 $108.51
 $17,250
 $22,451
(c) 
(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$80 million unused portion under the prior Board authorization was canceled when the $20.7$29.4 billion repurchase program was authorized.authorized by the Board of Directors on June 27, 2019.

(c)Represents the amount remaining under the $29.4 billion repurchase program.
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
10.1
Employee Stock Purchase Plan of JPMorgan Chase & Co., as amended and restated effective as of January 1, 2019.(a)
   
15 
Letter re: Unaudited Interim Financial Information. (a)
   
31.1 
Certification. (a)
   
31.2 
Certification. (a)
   
32 
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b)
   
101.INS 
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inlineInline XBRL document.(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)
104Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).
(a)Filed herewith.
(b)Furnished herewith. This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
(c)Pursuant to Rule 405 of Regulation S-T, includes the following financial information included in the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018,2019, formatted in XBRL (eXtensible Business Reporting Language) interactive data files: (i) the Consolidated statements of income (unaudited) for the three and nine months ended September 30, 20182019 and 2017,2018, (ii) the Consolidated statements of comprehensive income (unaudited) for the three and nine months ended September 30, 20182019 and 2017,2018, (iii) the Consolidated balance sheets (unaudited) as of September 30, 2018,2019, and December 31, 2017,2018, (iv) the Consolidated statements of changes in stockholders’ equity (unaudited) for the three and nine months ended September 30, 20182019 and 2017,2018, (v) the Consolidated statements of cash flows (unaudited) for the nine months ended September 30, 20182019 and 2017,2018, 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 CorporateFirmwide Controller
 (Principal Accounting Officer)


Date:October 31, 2018November 4, 2019






INDEX TO EXHIBITS



Exhibit No. Description of Exhibit
10.1
Employee Stock Purchase Plan of JPMorgan Chase & Co., as amended and restated effective as of January 1, 2019.
   
15 
Letter re: Unaudited Interim Financial Information.
   
31.1 
Certification.
   
31.2 
Certification.
   
32 
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†
   
101.INS The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inlineInline 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.
104Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).
   
† 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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