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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 ended	Commission file
~~September 30, 2019~~March 31, 2020	number	1-5805

JPMorgan Chase & Co.

(Exact name of registrant as specified in its charter)



Delaware		13-2624428
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)

383 Madison Avenue,
New York,	New York	10179
(Address of principal executive offices)		(Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	JPM	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of ~~5.45% Non-Cumulative Preferred Stock, Series P~~	~~JPM PR A~~	~~The New York Stock Exchange~~
~~Depositary Shares, each representing a one-four hundredth interest in a share of 6.125% Non-Cumulative Preferred Stock, Series Y~~	~~JPM PR F~~	~~The New York Stock Exchange~~
~~Depositary Shares, each representing a one-four hundredth interest in a share of~~ 6.10% Non-Cumulative Preferred Stock, Series AA	JPM PR G	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.15% Non-Cumulative Preferred Stock, Series BB	JPM PR H	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 5.75% Non-Cumulative Preferred Stock, Series DD	JPM PR D	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.00% Non-Cumulative Preferred Stock, Series EE	JPM PR C	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.75% Non-Cumulative Preferred Stock, Series GG	JPM PR J	The New York Stock Exchange
Alerian MLP Index ETNs due May 24, 2024	AMJ	NYSE Arca, Inc.
Guarantee of Callable Step-Up Fixed Rate Notes due April 26, 2028 of JPMorgan Chase Financial Company LLC	JPM/28	The New York Stock Exchange
~~Guarantee of Cushing 30 MLP Index ETNs due June 15, 2037 of JPMorgan Chase Financial Company LLC~~	~~PPLN~~	~~NYSE 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

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). ☒ 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 filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Number of shares of common stock outstanding as of ~~September 30, 2019: 3,136,484,924~~March 31, 2020: 3,047,022,877

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,~~March 31, 2020 and 2019 ~~and 2018~~	80
	Consolidated statements of comprehensive income (unaudited) for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~	81
	Consolidated balance sheets (unaudited) at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019	82
	Consolidated statements of changes in stockholders’ equity (unaudited) for the three ended March 31, 2020 and ~~nine months ended September 30,~~ 2019 ~~and 2018~~	83
	Consolidated statements of cash flows (unaudited) for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~	84
	Notes to Consolidated Financial Statements (unaudited)	85
	Report of Independent Registered Public Accounting Firm	~~165~~169
	Consolidated Average Balance Sheets, Interest and Rates (unaudited) for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018~~	~~166~~170
	Glossary of Terms and Acronyms and Line of Business Metrics	~~168~~171
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	1012
	Consolidated Balance Sheets and Cash Flows Analysis	15
	Off-Balance Sheet Arrangements	18
	Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures ~~and Key Performance Measures~~	19
	Business Segment Results	21
	~~Enterprise-Wide~~Firmwide Risk Management	4438
	Capital Risk Management	4539
	Liquidity Risk Management	5045
	Consumer Credit Portfolio	5652
	Wholesale Credit Portfolio	6056
	Investment Portfolio Risk Management	6966
	Market Risk Management	7067
	Country Risk Management	7572
	Operational Risk Management	73
	Estimations and Model Risk Management	74
	Critical Accounting Estimates Used by the Firm	7675
	Accounting and Reporting Developments	78
	Forward-Looking Statements	79
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	~~176~~180
Item 4.	Controls and Procedures.	~~176~~180
Part II – Other information
Item 1.	Legal Proceedings.	~~176~~180
Item 1A.	Risk Factors.	~~176~~180
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	~~176~~181
Item 3.	Defaults Upon Senior Securities.	~~177~~182
Item 4.	Mine Safety Disclosures.	~~177~~182
Item 5.	Other Information.	~~177~~182
Item 6.	Exhibits.	~~177~~182

JPMorgan Chase & Co.

Consolidated financial highlights (unaudited)


As of or for the period ended, (in millions, except per share, ratio, headcount data and where otherwise noted)	As of or for the period ended, (in millions, except per share, ratio, headcount data and where otherwise noted)																Nine months ended Sept. 30,						As of or for the period ended, (in millions, except per share, ratio, headcount data and where otherwise noted)
		3Q19			2Q19			1Q19			4Q18			3Q18			2019			2018				1Q20			4Q19			3Q19			2Q19			1Q19
Selected income statement data	Selected income statement data																						Selected income statement data
Total net revenue	Total net revenue	$	29,341		$	28,832		$	29,123		$	26,109		$	27,260		$	87,296		$	82,920		Total net revenue	$	28,251		$	28,331		$	29,341		$	28,832		$	29,123
Total noninterest expense	Total noninterest expense	16,422			16,341			16,395			15,720			15,623			49,158			47,674			Total noninterest expense	16,850			16,339			16,422			16,341			16,395
Pre-provision profit(a)	Pre-provision profit(a)	12,919			12,491			12,728			10,389			11,637			38,138			35,246			Pre-provision profit(a)	11,401			11,992			12,919			12,491			12,728
Provision for credit losses	Provision for credit losses	1,514			1,149			1,495			1,548			948			4,158			3,323			Provision for credit losses	8,285			1,427			1,514			1,149			1,495
Income before income tax expense	Income before income tax expense	11,405			11,342			11,233			8,841			10,689			33,980			31,923			Income before income tax expense	3,116			10,565			11,405			11,342			11,233
Income tax expense	Income tax expense	2,325			1,690			2,054			1,775			2,309			6,069			6,515			Income tax expense	251			2,045			2,325			1,690			2,054
Net income	Net income	$	9,080		$	9,652		$	9,179		$	7,066		$	8,380		$	27,911		$	25,408		Net income	$	2,865		$	8,520		$	9,080		$	9,652		$	9,179

Earnings per share data	Earnings per share data																						Earnings per share data
Net income: Basic	Net income: Basic	$	2.69		$	2.83		$	2.65		$	1.99		$	2.35		$	8.17		$	7.04		Net income: Basic	$	0.79		$	2.58		$	2.69		$	2.83		$	2.65
Diluted	Diluted	2.68			2.82			2.65			1.98			2.34			8.15			7.00			Diluted	0.78			2.57			2.68			2.82			2.65
Average shares: Basic	Average shares: Basic	3,198.5			3,250.6			3,298.0			3,335.8			3,376.1			3,248.7			3,416.5			Average shares: Basic	3,095.8			3,140.7			3,198.5			3,250.6			3,298.0
Diluted	Diluted	3,207.2			3,259.7			3,308.2			3,347.3			3,394.3			3,258.0			3,436.2			Diluted	3,100.7			3,148.5			3,207.2			3,259.7			3,308.2

Market and per common share data	Market and per common share data																						Market and per common share data
Market capitalization	Market capitalization	369,133			357,479			328,387			319,780			375,239			369,133			375,239			Market capitalization	274,323			429,913			369,133			357,479			328,387
Common shares at period-end	Common shares at period-end	3,136.5			3,197.5			3,244.0			3,275.8			3,325.4			3,136.5			3,325.4			Common shares at period-end	3,047.0			3,084.0			3,136.5			3,197.5			3,244.0
Book value per share	Book value per share	75.24			73.88			71.78			70.35			69.52			75.24			69.52			Book value per share	75.88			75.98			75.24			73.88			71.78
Tangible book value per share (“TBVPS”)^(a)	Tangible book value per share (“TBVPS”)^(a)	60.48			59.52			57.62			56.33			55.68			60.48			55.68			Tangible book value per share (“TBVPS”)^(a)	60.71			60.98			60.48			59.52			57.62
Cash dividends declared per share	Cash dividends declared per share	0.90			0.80			0.80			0.80			0.80			2.50			1.92			Cash dividends declared per share	0.90			0.90			0.90			0.80			0.80

Selected ratios and metrics	Selected ratios and metrics																						Selected ratios and metrics
Return on common equity (“ROE”)^(b)	Return on common equity (“ROE”)^(b)	15		%	16		%	16		%	12		%	14		%	15		%	14		%	Return on common equity (“ROE”)^(b)	4		%	14		%	15		%	16		%	16		%
Return on tangible common equity (“ROTCE”)^(a)(b)	Return on tangible common equity (“ROTCE”)^(a)(b)	18			20			19			14			17			19			18			Return on tangible common equity (“ROTCE”)^(a)(b)	5			17			18			20			19
Return on assets^(b)	Return on assets^(b)	1.30			1.41			1.39			1.06			1.28			1.37			1.31			Return on assets^(b)	0.40			1.22			1.30			1.41			1.39
Overhead ratio	Overhead ratio	56			57			56			60			57			56			57			Overhead ratio	60			58			56			57			56
Loans-to-deposits ratio	Loans-to-deposits ratio	62			63			64			67			65			62			65			Loans-to-deposits ratio	55			61			62			63			64
Liquidity coverage ratio (“LCR”) (average)	Liquidity coverage ratio (“LCR”) (average)	115			113			111			113			115			115			115			Liquidity coverage ratio (“LCR”) (average)	114			116			115			113			111
Common equity Tier 1 (“CET1”) capital ratio^(c)	Common equity Tier 1 (“CET1”) capital ratio^(c)	12.3			12.2			12.1			12.0			12.0			12.3			12.0			Common equity Tier 1 (“CET1”) capital ratio^(c)	11.5			12.4			12.3			12.2			12.1
Tier 1 capital ratio^(c)	Tier 1 capital ratio^(c)	14.1			14.0			13.8			13.7			13.6			14.1			13.6			Tier 1 capital ratio^(c)	13.3			14.1			14.1			14.0			13.8
Total capital ratio^(c)	Total capital ratio^(c)	15.9			15.8			15.7			15.5			15.4			15.9			15.4			Total capital ratio^(c)	15.5			16.0			15.9			15.8			15.7
Tier 1 leverage ratio^(c)	Tier 1 leverage ratio^(c)	7.9			8.0			8.1			8.1			8.2			7.9			8.2			Tier 1 leverage ratio^(c)	7.5			7.9			7.9			8.0			8.1
Supplementary leverage ratio (“SLR”)		6.3			6.4			6.4			6.4			6.5			6.3			6.5
Supplementary leverage ratio (“SLR”)^(c)																							Supplementary leverage ratio (“SLR”)^(c)	6.0			6.3			6.3			6.4			6.4

Selected balance sheet data (period-end)	Selected balance sheet data (period-end)																						Selected balance sheet data (period-end)
Trading assets	Trading assets	$	495,875		$	523,373		$	533,402		$	413,714		$	419,827		$	495,875		$	419,827		Trading assets	$	548,580		$	411,103		$	495,875		$	523,373		$	533,402
Investment securities		394,251			307,264			267,365			261,828			231,398			394,251			231,398
Investment securities, net of allowance for credit losses																							Investment securities, net of allowance for credit losses	471,144			398,239			394,251			307,264			267,365
Loans	Loans	945,218			956,889			956,245			984,554			954,318			945,218			954,318			Loans	1,015,375			959,769			945,218			956,889			956,245
Core loans		899,572			908,971			905,943			931,856			899,006			899,572			899,006
Average core loans		900,567			905,786			916,567			907,271			894,279			907,581			877,774
Total assets	Total assets	2,764,661			2,727,379			2,737,188			2,622,532			2,615,183			2,764,661			2,615,183			Total assets	3,139,431			2,687,379			2,764,661			2,727,379			2,737,188
Deposits	Deposits	1,525,261			1,524,361			1,493,441			1,470,666			1,458,762			1,525,261			1,458,762			Deposits	1,836,009			1,562,431			1,525,261			1,524,361			1,493,441
Long-term debt	Long-term debt	296,472			288,869			290,893			282,031			270,124			296,472			270,124			Long-term debt	299,344			291,498			296,472			288,869			290,893
Common stockholders’ equity	Common stockholders’ equity	235,985			236,222			232,844			230,447			231,192			235,985			231,192			Common stockholders’ equity	231,199			234,337			235,985			236,222			232,844
Total stockholders’ equity	Total stockholders’ equity	264,348			263,215			259,837			256,515			258,956			264,348			258,956			Total stockholders’ equity	261,262			261,330			264,348			263,215			259,837
Headcount	Headcount	257,444			254,983			255,998			256,105			255,313			257,444			255,313			Headcount	256,720			256,981			257,444			254,983			255,998

Credit quality metrics	Credit quality metrics																						Credit quality metrics
Allowance for credit losses		$	14,400		$	14,295		$	14,591		$	14,500		$	14,225		$	14,400		$	14,225
Allowances for loan losses and lending-related commitments																							Allowances for loan losses and lending-related commitments	$	25,391		$	14,314		$	14,400		$	14,295		$	14,591
Allowance for loan losses to total retained loans	Allowance for loan losses to total retained loans	1.42		%	1.39		%	1.43		%	1.39		%	1.39		%	1.42		%	1.39		%	Allowance for loan losses to total retained loans	2.32		%	1.39		%	1.42		%	1.39		%	1.43		%
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	Nonperforming assets	$	5,343		$	5,260		$	5,616		$	5,190		$	5,034		$	5,343		$	5,034		Nonperforming assets	$	6,421		$	4,497		$	5,343		$	5,260		$	5,616
Net charge-offs	Net charge-offs	1,371			1,403			1,361			1,236			1,033			4,135			3,620			Net charge-offs	1,469			1,494			1,371			1,403			1,361
Net charge-off rate	Net charge-off rate	0.58		%	0.60		%	0.58		%	0.52		%	0.43		%	0.59		%	0.52		%	Net charge-off rate	0.62		%	0.63		%	0.58		%	0.60		%	0.58		%

Effective January 1, 2020, the Firm adopted the Financial Instruments – Credit Losses (“CECL”) accounting guidance. Refer to Note 1 for further information.


(a)	Pre-provision profit, TBVPS and ROTCE are each non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial ~~Measures and Key Performance~~ Measures on pages 19–20 for a further discussion of these measures.


(b)	Quarterly ratios are based upon annualized amounts.

(c)

~~The Basel III capital rules became fully phased-in effective January 1, 2019. During 2018,~~As of March 31, 2020, the ~~required~~ capital measures ~~were subject to~~reflect the ~~transitional rules and as of December 31, 2018 and September 30, 2018, were the same on a fully phased-in and on a transitional basis.~~CECL capital transition provisions. Refer to ~~Key performance measures on page 59 and~~ Capital Risk Management on pages ~~85-94~~85-92 of JPMorgan Chase’s ~~2018~~2019 Form 10-K and pages ~~45–49~~39–44 of this Form 10-Q for additional information on these measures.


~~(d)~~	Excludes the impact of residential real estate purchased credit-impaired (“PCI”) loans, a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 19–20, and the Allowance for credit losses on pages 67–68 for a further discussion of these measures.



INTRODUCTION

The following is Management’s discussion and analysis of the financial condition and results of operations (“MD&A”) of JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) for the ~~third~~first quarter of ~~2019.~~2020.

This Quarterly Report on Form 10-Q for the ~~third~~first quarter of ~~2019~~2020 (“Form 10-Q”) should be read together with JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (“~~2018~~2019 Form 10-K”). Refer to the Glossary of terms and acronyms and line of business (“LOB”) metrics on pages ~~168–175~~171–179 for definitions of terms and acronyms used throughout this Form 10-Q.

This document contains forward-looking statements ~~that are forward-looking~~ within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q and are subject to significant risks and uncertainties. ~~Refer 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 2018 Form 10-K for~~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.~~uncertainties, refer to Forward-looking Statements on page 79 of this Form 10-Q, Part II, Item 1A, Risk Factors on pages 180-181 of this Form 10-Q and Part I, Item 1A, Risk factors, on pages 6-28 of the 2019 Form 10-K.

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; JPMorgan Chase had ~~$2.8~~$3.1 trillion in assets and ~~$264.3~~$261.3 billion in stockholders’

equity as of ~~September 30, 2019.~~March 31, 2020. The Firm is a leader in investment banking, financial services for consumers and

small businesses, commercial banking, 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 subsidiary is JPMorgan Chase Bank, National Association (“JPMorgan Chase Bank N.A.”), a national banking association with U.S. branches in 3238 states and Washington, D.C. as of ~~September 30, 2019.~~March 31, 2020. JPMorgan Chase’s principal ~~nonbank~~non-bank subsidiary is J.P. Morgan Securities LLC (“J.P. Morgan Securities”), a U.S. broker-dealer. The bank and non-bank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Firm’s principal operating subsidiary inoutside the ~~United Kingdom (~~“~~U.K.~~”)U.S. is J.P. Morgan Securities plc, a U.K.-based 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”). ~~Refer to Note 31 of JPMorgan Chase’s 2018 Form 10-K for~~For a description of the Firm’s business segments and the products and services they provide to their respective

client ~~bases.~~

bases, refer to Note 26 of this Form 10-Q and Note 32 of JPMorgan Chase’s 2019 Form 10-K.



EXECUTIVE OVERVIEW

This executive overview of the MD&A highlights selected information and does 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,~~LOBs, this Form 10-Q and the ~~2018~~2019 Form 10-K should be read together and in their entirety.

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.


Financial performance of JPMorgan Chase	Financial 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 March 31,
	2019			2018			Change		2019			2018			Change		2020			2019			Change
Selected income statement data
Total net revenue	$	29,341		$	27,260		8	%	$	87,296		$	82,920		5	%	$	28,251		$	29,123		(3	)%
Total noninterest expense	16,422			15,623			5		49,158			47,674			3		16,850			16,395			3
Pre-provision profit	12,919			11,637			11		38,138			35,246			8		11,401			12,728			(10	)
Provision for credit losses	1,514			948			60		4,158			3,323			25		8,285			1,495			454
Net income	9,080			8,380			8		27,911			25,408			10		2,865			9,179			(69	)
Diluted earnings per share	$	2.68		$	2.34		15		$	8.15		$	7.00		16		$	0.78		$	2.65		(71	)
Selected ratios and metrics
Return on common equity	15		%	14		%			15		%	14		%			4		%	16		%
Return on tangible common equity	18			17					19			18					5			19
Book value per share	$	75.24		$	69.52		8		$	75.24		$	69.52		8		$	75.88		$	71.78		6
Tangible book value per share	60.48			55.68			9		60.48			55.68			9		60.71			57.62			5
Capital ratios^(a)
CET1	12.3		%	12.0		%			12.3		%	12.0		%			11.5		%	12.1		%
Tier 1 capital	14.1			13.6					14.1			13.6					13.3			13.8
Total capital	15.9			15.4					15.9			15.4					15.5			15.7

(a)

~~The Basel III capital rules became fully phased-in effective January 1, 2019. During 2018,~~As of March 31, 2020, the ~~required~~ capital measures ~~were subject to~~reflect the ~~transitional rules and as of September 30, 2018, was the same on a fully phased-in and on a transitional basis.~~CECL capital transition provisions. Refer to ~~Key performance measures on page 59 and~~ Capital Risk Management on pages ~~85-94~~85-92 of JPMorgan Chase’s ~~2018~~2019 Form 10-K and pages ~~45–49~~39–44 of this Form 10-Q for additional information on these measures.

Comparisons noted in the sections below are for the ~~third~~first quarter of 2020 versus the first quarter of 2019, ~~versus the third quarter of 2018,~~ unless otherwise specified.

Firmwide overview

JPMorgan Chase reported ~~strong results in the third quarter of 2019, with~~ net income of ~~$9.1~~$2.9 billion for the first quarter of 2020, or ~~$2.68~~$0.78 per share, on ~~record~~ net revenue of ~~$29.3~~$28.3 billion. The Firm reported ROE of ~~15%~~4% and ROTCE of ~~18%~~5%.

The Firm ~~had~~recorded a number of significant items in the first quarter of 2020, including an addition to the allowance for credit losses of $6.8 billion, a $951 million loss in Credit Adjustments & Other in CIB predominantly driven by funding spread widening on derivatives, and $896 million of markdowns on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio in CIB and CB.

Net income was down 69%, predominantly driven by an increase in the provision for credit losses across the Firm reflecting deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic and continued pressure on oil prices.

Total net revenue decreased 3%. Net interest income was $14.4 billion, flat versus the prior year, with the impact of ~~$9.1~~lower rates offset by balance sheet growth and mix, as

well as higher net interest income in CIB Markets. Noninterest revenue was $13.8 billion, down 6%. The reduction in revenue included a $951 million loss in Credit Adjustments & Other in CIB predominantly driven by funding spread widening on derivatives and $896 million of markdowns on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio in CIB and CB; these items were partially offset by higher CIB Markets noninterest revenue.

Noninterest expense was $16.9 billion, up ~~8%.~~3%, driven by higher volume- and revenue-related expense and investments, as well as higher legal expense, partially offset by lower structural expense.

•

~~Total net revenue increased 8%. Net interest income~~The provision for credit losses was ~~$14.2~~$8.3 billion, up ~~2%,~~$6.8 billion from the prior year driven by ~~continued balance sheet growth and mix, largely offset by~~ the ~~impact of rates.~~ additions to the allowance for credit losses.~~Noninterest revenue wa~~s $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%, driven by higher volume- and revenue-related expenses and investments, including compensation and auto lease depreciation, partially offset by lower FDIC charges.

~~The provision for credit losses was $1.5 billion, up $566 million, largely as a result of net reductions in the allowance for credit losses and net recoveries in the prior year.~~

The total allowance for credit losses was ~~$14.4~~$25.4 billion at ~~September 30, 2019,~~March 31, 2020, and the Firm had a loan loss coverage ratio of ~~1.42%~~2.32%, compared with ~~1.39%~~1.43% in the prior ~~year; excluding~~year, driven by the ~~PCI portfolio,~~additions to allowance for credit losses and the ~~equivalent ratio was 1.32%, compared with 1.23% in the prior year.~~adoption of CECL. The Firm’s nonperforming assets totaled ~~$5.3~~$6.4 billion at ~~September 30, 2019,~~March 31, 2020, an increase from ~~$5.0~~$5.6 billion in the prior year, ~~reflecting increases~~driven by the inclusion of purchased credit deteriorated loans in the ~~wholesale~~mortgage portfolio, ~~related~~which are subject to ~~select client downgrades, largely offset by improved credit performance in~~nonaccrual loan treatment following the ~~consumer portfolio.~~adoption of CECL.

Firmwide ~~average total~~end-of-period (“EOP”) loans of $1.0 trillion were ~~flat at $947 billion, or~~ up ~~3% excluding~~6% driven by drawdowns on committed revolving credit facilities in March within the wholesale LOBs. Excluding the impact of certain loan sales in Home ~~Lending.~~

Lending, EOP loans would have been up 9%. Firmwide average loans were $963 billion, down 1%. Excluding the impact of certain loan sales in Home Lending, average loans would have been up 3%.

On March 15, 2020, in response to the COVID-19 pandemic, the Firm temporarily suspended share repurchases through the second quarter of 2020.

Selected capital-related metrics

The Firm’s CET1 capital was ~~$188~~$184 billion, and the Standardized and Advanced CET1 ratios were ~~12.3%~~11.5% and ~~13.1%~~12.3%, respectively.

The Firm’s ~~supplementary leverage ratio (“SLR”)~~SLR was ~~6.3% at September 30, 2019.~~6.0%.

The Firm ~~continued to grow tangible book value per share (“TBVPS”),~~grew TBVPS, ending the ~~third~~first quarter of ~~2019~~2020 at ~~$60.48,~~$60.71, up ~~9%.~~5% versus the prior year.

ROTCE and TBVPS are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures ~~and Key Performance Measures~~ on pages 19–20 forfor a further discussion of each of these measures.

Business segment highlights

Selected business metrics for each of the Firm’s four ~~lines of business~~LOBs are presented below for the ~~third~~first quarter of ~~2019.~~2020.



CCB ROE ~~32%~~ 1%		• ~~Average~~EOP loans down 4%7%; Home Lending loans down ~~12%~~15% impacted by loan sales; credit card loans up 8%2% • ~~Client~~EOP Deposits up 10%; client investment assets up ~~13%~~3%; ~~average deposits~~credit card sales volume up 3%4% • ~~Credit card sales volume up 10% and merchant processing volume up 11%~~Provision for credit losses of $5.8 billion, including an addition to the allowance for credit losses of $4.5 billion
CIB ROE ~~13%~~ 9%		• ~~Maintained~~ #1 ranking for Global Investment Banking fees with ~~9.3%~~9.1% wallet share ~~YTD~~in 1Q20 • Total Markets revenue of ~~$5.1~~$7.2 billion, up ~~14%~~32% • EOP loans up 30%; deposits up 37% • Provision for credit losses of $1.4 billion, including an addition to the allowance for credit losses of $1.3 billion
CB ROE ~~16%~~ 2%		• Gross Investment Banking revenue of ~~$700~~$686 million, ~~up 20%~~down 16% • ~~Average client~~EOP loans up 14%; deposits up 39% • Provision for credit losses of ~~$173~~$1.0 billion, ~~up 3%~~including an addition to the allowance for credit losses of approximately $900 million
AWM ROE ~~24%~~25%		• ~~Average loan balances up 7%~~ • Assets under management (AUM) of $2.2 trillion, up 8%7% • EOP loans up 16%; deposits up 18% • Provision for credit losses of $94 million driven by an addition to the allowance for credit losses

Refer to the Business Segment Results on pages 21–4337 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 for wholesale and consumer clients during the first ~~nine~~three months of ~~2019,~~2020, consisting of:



$~~1.7 trillion~~638 billion		Total credit provided and capital raised

$~~188~~63 billion		Credit for consumers

$258 billion		Credit for U.S. small businesses

$~~630~~213 billion		Credit for corporations

$~~785~~334 billion		Capital raised for corporate clients and non-U.S. government entities

$5320 billion		Credit and capital raised for nonprofit and U.S. government entities^(a)


(a)	Includes states, municipalities, hospitals and universities.

~~2019~~2020 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, speak only as of the date of this Form 10-Q, and are subject to significant risks and uncertainties. Refer to Forward-Looking Statements on page 79 and Risk Factors on page 180 of this Form 10-Q ~~and Risk Factors on~~and pages 7–6–28 of JPMorgan Chase’s ~~2018~~2019 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. There is no assurance that actual results in the full year of ~~2019~~2020 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 ~~2019~~2020 should be viewed against the backdrop of the global and U.S. economies, the COVID-19 pandemic, 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 factors will affect the performance of the Firm and its ~~lines of business.~~LOBs. The Firm ~~expects that it~~ will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the business, economic, regulatory and legal environments in which it operates.The outlook information contained in the 2019 Form 10-K, in the Firm’s Current Report on Form 8-K dated February 25, 2020, containing copies of the slides furnished at the Firm’s 2020 Investor Day, and in the Firm’s Current Reports on Form 8-K dated April 14, 2020, to review 2020 first quarter earnings, is superseded by the information contained in this

Form 10-Q.

Firmwide

Management expects ~~full-year 2019~~second quarter 2020 net interest income, on a managed basis, to be ~~less than $57.5~~approximately $14 billion, market dependent. ~~This estimate is based~~For the full-year 2020, management expects net interest income, on ~~stable long-end rates and assumes no more federal funds rate cuts in 2019.~~a managed basis, to be approximately $56 billion, market dependent.

Management expects ~~Firmwide~~ adjusted expense for the full-year ~~2019~~2020 to be ~~approximately $65.5~~below $65 billion.

Management expects ~~full-year 2019 net charge-offs~~additions to the allowance for credit losses in the second quarter of 2020. Depending on the extent of the deterioration in macroeconomic conditions, the additions to the Firm’s allowance for credit losses could be ~~approximately $5.5 billion.~~meaningfully higher in aggregate over the next several quarters versus the additions in the first quarter of 2020.

Business Developments

~~Expected departure~~COVID-19 Pandemic

In response to the COVID-19 pandemic, the Firm established a corporate crisis team (“CCT”) along with crisis response teams that are connected across countries, regions and globally. The CCT includes representation from each LOB and critical functions including Human Resources, Risk and Compliance, Legal, Security and Technology, and it engages directly with the Firm’s Operating Committee on a frequent basis. The CCT provides a central point for the gathering of data which allows for rapid identification and prioritization of issues. The CCT also monitors key operational metrics, risks and concerns on an ongoing basis.

The Firm invoked resiliency plans to allow its businesses to remain operational, utilizing disaster recovery sites and implementing alternative work arrangements globally. The Firm now has more than 180,000 employees globally working from home from every LOB and corporate function, including traders, bankers, portfolio managers, operations, finance, risk and compliance, legal and call center teams globally. The Firm is monitoring the status of work-from-home arrangements and has been updating relevant local authorities as appropriate. Management continues to monitor key operational metrics as well as thematic cross-business risks and concerns.

In addition, the Firm implemented strategies and procedures designed to help it respond to increased market volatility, client demand for credit and liquidity, distress in certain industries/sectors and the ongoing impacts to consumers and small businesses.

Supporting clients and customers

The Firm has continued to support its clients and customers as they navigate the challenging conditions caused by the COVID-19 pandemic by providing liquidity and advice. In March 2020, the Firm extended more than $100 billion of new and renewed credit to its clients and customers.

In the wholesale businesses, clients drew more than $50 billion on their committed revolving credit facilities, and the Firm approved over $25 billion of new credit extensions for clients most impacted by the COVID-19 pandemic, during the first quarter

In the consumer businesses, the Firm extended approximately $20 billion in new credit across Home Lending, Credit Card and Auto.

The Firm is actively participating in the Small Business Association’s (“SBA”) Paycheck Protection Program (“PPP”) and as of May 4^th the Firm has funded approximately $29 billion under the program.

For customers that are experiencing financial hardships as a result of the COVID-19 pandemic, the Firm developed a payment assistance program to allow mortgage, auto and card customers to delay payments for three months, as well as waiving or refunding certain fees.

Three-quarters of the Firm’s branch network continues to operate, ATMs remain accessible and the Firm continues to

provide a wide range of banking services accessible to customers online.

Protecting and supporting employees

In addition to widespread work-from-home arrangements, the Firm has taken further actions to protect and support its employees including;

For employees with jobs that can only be performed on-site, modified business operations, implemented staggered shifts, changed seating arrangements, closed buildings to nonessential visitors and intensified and increased frequency of cleaning of all offices and branches worldwide

Ensured that all branch employees are being paid for their regularly scheduled hours even if those hours are reduced or their branch is temporarily closed

Continued to pay employees who are at home due to potential exposure to the virus or whose health is at higher risk as well as provided paid medical leave to affected employees

Deployed clinical staff internally to support employees

Granted a special payment of up to $1,000 to full- and part-time employees whose jobs require them to continue working on-site and whose annual cash compensation is less than $60,000

Provided all employees with up to five additional paid days off to manage personal needs, which may include dependent care, child care or other issues, as well as offering free COVID-19 related medical treatment for all of the Firm’s U.S. employees and their dependents.

Giving to communities

The Firm has taken steps to help address immediate humanitarian needs and long-term economic challenges posed by the COVID-19 pandemic on the communities in which it operates. To help the most vulnerable and hardest hit communities, the Firm has announced a $150 million loan program to deploy capital to underserved small businesses and nonprofits, as well as a $50 million philanthropic commitment. An initial $15 million commitment is intended to:

Provide immediate healthcare, food and other humanitarian relief globally

Help existing nonprofit partners around the world that are responding in their communities to the COVID-19 pandemic

Assist small businesses that are vulnerable to economic hardships.

Regulatory actions and programs

Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 10-11 for information concerning relevant regulatory actions and the significant financing programs in which the Firm is participating in order to support its customers and clients.

The impact of the COVID-19 pandemic on the Firm’s results and operations are discussed throughout this document.

Departure of 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 execute ~~the relevant elements of~~on its Firmwide Brexit Implementation program with the objective of delivering the Firm’s capabilities to its EU clients on “day one” of any departure by the U.K. from the EU, whether or not an agreement has been reached to allow an orderly withdrawal.

The principal operational risks associated with Brexit continue to be the 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~~remains 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~~However, 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~~COVID-19 pandemic has added incremental risk to the ~~Firm’s EU~~program due to the potential impact on execution of changes such as relocation of employees given travel restrictions, or the ability of clients ~~including after any departure by~~to be operationally ready to the ~~U.K. from~~extent that they have diverted resources to address the ~~EU.~~

~~Client readiness~~

~~The agreements covering a significant proportion~~effects of the ~~Firm’s EU client activity have been re-documented~~pandemic. It has also slowed down the political process to ~~other EU~~finalize the legal ~~entities~~and regulatory framework that will be in place after the transition period that is scheduled to ~~help facilitate continuation~~expire on December 31, 2020, thus lengthening the period of ~~service.~~planning uncertainty.

Interbank Offered Rate (“IBOR”) transition

On March 12, 2020, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update providing optional expedients and exceptions for applying generally accepted accounting principles to contracts and hedge relationships affected by benchmark reform. The Firm expects to apply certain of the practical expedients and is evaluating the timing and application of those elections. Refer to Accounting and Reporting Developments on page 78 for additional information. The Firm continues to ~~actively engage with clients that have not completed re-documentation to ensure preparedness both in terms~~monitor the transition relief being considered by the International Accounting Standards Board (“IASB”) and U.S. Treasury Department regarding accounting and tax implications 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~~reference rate reform.

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 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~~also continues to develop and implement plans to appropriately mitigate the risks associated with the expected discontinuation of certain unsecured benchmark interest rates, including the London Interbank Offered Rate (“LIBOR”) and other Interbank Offered Rates (“IBORs”). In particular, the Firm:

has implemented or is in the process of implementing fallback language for LIBOR-linked syndicated loans, securitizations, floating rate notes and bi-lateral business loans based on the recommendations of the Alternative 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.~~

IBOR discontinuation. Refer to Business Developments on page 47 of the ~~2018~~2019 Form 10-K for a discussion of the Firm’s initiatives to address the expected discontinuation of ~~LIBOR~~the London Interbank Offered Rate (“LIBOR”) and other IBORs.

Regulatory Developments Relating to the COVID-19 Pandemic

Beginning in March 2020, the U.S. government as well as central banks around the world have taken a series of actions to help individuals, households and businesses that have been adversely affected by the economic disruption caused by the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was signed into law on March 27, 2020, provides, among other things, funding to support loan facilities to assist consumers and businesses. Set forth below is a summary as of the date of this Form 10-Q of U.S. government actions currently impacting the Firm and U.S. government programs in which the Firm is participating to support individuals, businesses, and the broader economy. The Firm will continue to assess ongoing developments in government actions in response to the COVID-19 pandemic.

U.S. government actions

Eligible retained income definition. On March 17, 2020, the Office of the Comptroller of the Currency (“OCC”), the Board of Governors of the Federal Reserve System (“Federal Reserve”), and the Federal Deposit Insurance Corporation (“FDIC”), collectively the “federal banking agencies,” issued an interim final rule that revised the definition of “eligible retained income” in the regulatory capital rules that apply to all U.S. banking organizations. On March 23, 2020, the Federal Reserve issued an interim final rule that revised the definition of “eligible retained income” for purposes of the total loss-absorbing capacity (“TLAC”) buffer requirements that apply to global systemically important banking organizations. The revised definition of eligible retained income makes any automatic limitations on payout distributions that could apply under the agencies’ capital rules or TLAC rule take effect on a more graduated basis in the event that a banking organization’s capital, leverage and TLAC ratios were to decline below regulatory requirements (including buffers). The March 17 interim final rule was issued, in conjunction with an interagency statement encouraging banking organizations to use their capital and liquidity buffers, to further support banking organizations’ abilities to lend to households and businesses affected by the COVID-19 pandemic.

Reserve requirements. On March 26, 2020, the Federal Reserve reduced reserve requirement ratios to zero percent, effectively eliminating the reserve requirement for all depository institutions, an action that frees up liquidity in the banking system to support lending to households and businesses.

Refer to Liquidity Risk Management on pages 45–49 and Note 21 for additional information on the reduction to the reserve requirement.

Regulatory Capital - Current Expected Credit Losses (“CECL”) transition delay. On March 31, 2020, the federal banking agencies issued an interim final rule that provided the option to temporarily delay the effects of CECL on

regulatory capital for two years, followed by a three-year transition period (“CECL capital transition provisions”). The Firm elected to apply the CECL capital transition provisions.

Refer to Capital Risk Management on pages 39–44 and Note 22 on pages 159-160 for additional information on the CECL capital transition provisions and the impact to the Firm’s capital measures.

Supplementary leverage ratio (“SLR”) temporary revision. On April 1, 2020, the Federal Reserve issued an interim final rule that revises, on a temporary basis, the calculation of total leverage exposure for purposes of calculating the SLR for bank holding companies, to exclude the on-balance sheet amounts of U.S. Treasury securities and deposits at Federal Reserve Banks. These exclusions will allow the Firm to continue to support U.S. Treasury markets and to serve as financial intermediaries for households and businesses. This exclusion is effective April 1, 2020, and will remain in effect through March 31, 2021.

Refer to Capital Risk Management on pages 39–44 for additional information on the Firm’s SLR.

Loan modifications. On April 7, 2020, the federal banking agencies along with the National Credit Union Administration, and the Consumer Financial Protection Bureau, in consultation with the state financial regulators, issued an interagency statement revising a March 22, 2020 interagency statement on loan modifications and the reporting for financial institutions working with customers affected by the COVID-19 pandemic (the “IA Statement”). The IA Statement reconfirmed that efforts to work with borrowers where the loans are prudently underwritten, and not considered past due or carried on nonaccrual status, should not result in the loans automatically being considered modified in a troubled debt restructuring (“TDR”) for accounting and financial reporting purposes, or for purposes of their respective risk-based capital rules, which would otherwise require financial institutions subject to the capital rules to hold more capital. The IA Statement also clarifies the interaction between its previous guidance and Section 4013 of the CARES Act, which provides certain financial institutions the option to suspend the application of accounting guidance for TDRs for a limited period of time for loan modifications made to address the effects of the COVID-19 pandemic. The special considerations addressed in the IA Statement and Section 4013 of the CARES Act, if applied, would have had no impact on the accounting for the Firm’s modification activities in the three months ended March 31, 2020 but may be relevant for modifications offered in the future.

Refer to Credit Portfolio on pages 50-51 and Note 12 for additional information on the Firm’s loan modification activities.

U.S. government facilities and programs. Beginning in March 2020, the Federal Reserve announced a suite of facilities using its emergency lending powers under section 13(3) of

the Federal Reserve Act to support the flow of credit to individuals, households and businesses adversely affected by the COVID-19 pandemic and to support the broader economy. These facilities include the Money Market Mutual Fund Liquidity Facility (“MMLF”), Primary Dealer Credit Facility (“PDCF”) and Commercial Paper Funding Facility (“CPFF”). The Firm is currently participating in the MMLF and PDCF to support the broader economy by providing liquidity to money market mutual funds and supporting the functioning of the secured financing market, respectively. Under the CPFF, the Firm is acting as a dealer to purchase eligible commercial paper. In addition, beginning April 3, 2020, the PPP, established by the CARES Act and administered by the SBA, authorized eligible lenders to provide nonrecourse loans to small businesses to provide an incentive for these businesses to keep their workers on their payroll. The Firm is currently participating in the PPP to support its small business clients.

Refer to Capital Risk Management on pages 39–44, Liquidity Risk Management on pages 45–49 and Note 22 for additional information of the Firm’s participation in the MMLF. Refer to Liquidity Risk Management on pages 45–49 for additional information of the Firm’s participation in the PDCF. Refer to Business Developments on pages 8-9 for additional information on the Firm’s participation in the PPP.



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,~~March 31, 2020 and 2019, ~~and 2018,~~ unless otherwise specified. Factors that relate primarily to a single business segment are discussed in more detail within that business segment. Refer to pages ~~76–~~75–77 of this Form 10-Q and pages ~~141-143~~136–138 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations.



Revenue
	Three months ended March 31,
(in millions)	2020		2019		Change
Investment banking fees	$	1,866	$	1,840	1	%
Principal transactions	2,937		4,076		(28	)
Lending- and deposit-related fees^(a)	1,706		1,559		9
Asset management, administration and commissions^(a)	4,540		4,037		12
Investment securities gains	233		13		NM
Mortgage fees and related income	320		396		(19	)
Card income	1,054		1,274		(17	)
Other income^(b)	1,156		1,475		(22	)
Noninterest revenue	13,812		14,670		(6	)
Net interest income	14,439		14,453		—
Total net revenue	$	28,251	$	29,123	(3	)%

Revenue
Three months ended September 30, Nine months ended September 30,
(in millions) 2019
2018
Change
2019
2018
Change
Investment banking fees $ 1,967
$ 1,832
7 % $ 5,658
$ 5,736
(1 )%
Principal transactions 3,449
2,964
16
11,239
10,698
5
Lending- and deposit-related fees 1,626
1,542
5
4,643
4,514
3
Asset management, administration and commissions 4,351
4,310
1
12,818
12,923
(1 )
Investment securities gains/(losses) 78
(46 ) NM
135
(371 ) NM
Mortgage fees and related income 887
262
239
1,562
1,051
49
Card income 1,283
1,328
(3 ) 3,923
3,623
8
Other income^(a)
1,472
1,160
27
4,239
4,041
5
Noninterest revenue 15,113
13,352
13
44,217
42,215
5
Net interest income 14,228
13,908
2
43,079
40,705
6
Total net revenue $ 29,341
$ 27,260
8 % $ 87,296
$ 82,920
5 %


~~(a)~~	Included operating lease income of $1.4 billion and $1.2 billion for the three months ended September 30, 2019 and 2018, respectively and $4.0 billion and $3.3 billion for the nine months ended September 30, 2019 and 2018, respectively.

~~Quarterly results~~(a) In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts were revised to conform with the current presentation.

(b) Included operating lease income of $1.4 billion and $1.3 billion for the three months ended March 31, 2020 and 2019.

Investment banking fees increased, driven by CIB, reflecting:

higher debt underwriting fees ondriven by both increased industry-wide fees and 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, particularly in March, as clients sought to access liquidity,

higher equity underwriting fees driven by ~~wallet share gains~~increased industry-wide fees primarily in the IPO market, with strong activity in January and ~~convertible markets,~~February, compared to a weak prior year,

~~partially~~largely offset by

lower advisory fees compared to a strong prior year, driven by a ~~decline~~lower number of completed transactions, as well as the impact of delays in ~~industry-wide fees compared with a strong prior year.~~regulatory approvals.

Refer to CIB segment results on pages ~~28–33~~26–30 and Note 56 for additional information.

Principal transactions revenue ~~increased reflecting:~~decreased reflecting two significant items:

~~higher revenue~~a $951 million loss in CIB’s Credit Adjustments & Other predominantly driven by funding spread widening on derivatives, and

$896 million of markdowns on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio in CIB ~~primarily~~and CB, as high-yield spreads widened significantly.

Excluding these two items, principal transactions revenue increased driven by


–	~~strong performance across products~~ in Fixed Income Markets on strong client activity, primarily ~~in Rates, agency mortgage trading within Securitized Products, and Commodities, compared with the prior year, which was impacted by less favorable market conditions,~~

~~partially offset by~~


–	~~lower revenue in Equity Markets, primarily in derivatives, driven by lower client activity and less favorable market conditions, compared with a strong prior year, and~~

in ~~Corporate, net gains~~Rates and Currencies & Emerging Markets, as a result of higher trading volume, and in Equity Markets on ~~certain legacy private equity investments compared with net losses~~strong client activity in ~~the prior year.~~derivatives, particularly in March for both businesses.

Principal transactions revenue in CIB may in certain cases have offsets across other revenue lines, including net interest income. The Firm assesses its CIB Markets business performance on a total revenue basis.

Refer to CIB, ~~AWM~~CB and Corporate segment results on pages ~~28–33,~~26–30, pages ~~38–41~~34–36 and ~~pages 42–43,~~page 37, and Note 56 for additional information.

Lending- and deposit-related fees increased primarily due to higher deposit-related fees in CCB, reflecting growth in customer accounts and transactions, and in CIB and CB from an increase in cash management transactions.

Refer to CCB segment results on pages ~~22–27,~~23–25, CIB on pages ~~28–33~~26–30 and CB on pages ~~34–37,~~31–33, respectively, and Note 56 for additional information.

Asset management, administration and commissions revenue increased driven by by:

higher brokerage commissions in CIB and AWM on higher client-driven volume particularly in March, and

higher asset management fees in AWM and CCB ~~from growth~~as a result of higher asset values at the beginning of 2020, driven by higher average market levels and strong net inflows into long-term products over the past year, despite the impact of market volatility in ~~client investment assets.~~March.

Refer to CCB, CIB and AWM segment results on pages ~~22–27~~23–25, pages 26–30 and pages ~~38–41~~34–36 , respectively, and Note 56 for additional information.

Investment securities ~~gains/(losses)~~ gains~~primarily reflect~~ in both periods reflected the impact of repositioning the investment securities portfolio. Refer to Corporate segment results on ~~pages 42–43~~page 37 and Note 910 for additional information.

Mortgage fees and related income ~~increased driven by:~~decreased due to:

lower net mortgage servicing revenue reflecting faster prepayment speeds on lower rates and a lower level of third-party loans serviced, as well as lower MSR risk management results,

largely offset 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~~ and the ~~impact~~absence of ~~reclassifying certain loans to held-for-sale and faster prepayment speeds~~a gain on ~~lower rates, offset by favorable MSR risk management results.~~a loan sale in the prior year.

Refer to CCB segment results on pages ~~22–27,~~23–25, Note 56 and 1415 for further information.

Card income decreased driven by lower net interchange income reflecting higher rewards costs and partner payments, ~~predominantly~~partially offset by higher ~~interchange income and merchant processing fees on higher volumes.~~card sales volume, despite a decline in March.

Refer to CCB segment results on pages ~~22–27~~23–25 and Note 56 for further information.

Other income decreased reflecting:

losses on certain equity investments in CIB

net valuation losses on certain investments in AWM, compared with gains in the prior year

higher amortization on a higher level of alternative energy investments in CIB. The increased ~~reflecting:~~amortization is more than offset by lower income tax expense from the associated tax credits.

largely offset by

higher operating lease income from growth in auto operating lease volume in CCB

~~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 56 for further information.

Net interest income ~~increased driven~~was flat as the impact of lower rates was offset by ~~continued~~ balance sheet growth and ~~changes in~~ mix, ~~largely offset by the~~as well as higher CIB Markets net ~~impact of rates.~~ interest income.

The Firm’s average interest-earning assets were ~~$2.4~~$2.5 trillion, up ~~$162~~$167 billion, and the yield was 3.14%, down 66 bps. The net ~~interest~~ yield on these assets, on ~~a fully taxable-equivalent (“FTE”)~~an FTE basis, was ~~2.41%~~2.37%, a decrease of ~~12 basis points.~~20 bps. The net ~~interest~~ yield excluding CIB Markets was ~~3.23%~~3.01%, ~~a decrease of 7 basis points.~~ down 42bps.

Net ~~interest~~ yield excluding CIB ~~markets~~Markets is a non-GAAP financial measure. Refer to the Consolidated average balance sheets, interest and rates schedule on ~~pages 166–167~~page 170 for further details; and the Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures ~~and Key Performance Measures~~ on pages 19–20 for a further discussion of Net interest yield excluding CIB markets.

~~Year-to-date results~~

~~Investment banking fees~~ ~~were relatively flat reflecting:~~

~~lower advisory and equity underwriting fees driven by a decline in industry-wide fees despite wallet share gains,~~

~~offset by~~

~~higher debt underwriting fees on wallet share gains despite a decline in industry-wide fees, driven by participation in large acquisition financing deals~~

~~Principal transactions revenue~~ ~~increased 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,~~

~~partially offset by~~


–	~~lower revenue in Equity Markets driven by lower client activity in derivatives~~

~~the net increase in CIB was partially offset by~~

~~lower revenue in AWM, related to hedges on certain investments, which was more than offset by higher valuation gains on the related investments reflected in other 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 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~~ ~~was 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 CCB from growth in client investment assets.~~

~~Investment securities gains/(losses)~~ ~~primarily reflect the impact of repositioning the investment securities portfolio.~~

~~Mortgage fees and related income~~ ~~increased driven by:~~

~~higher net mortgage production revenue reflecting gains on sales of certain loans, as well as higher mortgage production margins and volumes,~~

~~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.~~

~~Card income~~ ~~increased reflecting the absence of the prior-year adjustment of approximately $330 million to the credit card rewards liability.~~

~~Other income~~ ~~increased 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~~

~~The prior year included:~~

~~$505 million of fair value gains related to the adoption of the recognition and measurement accounting guidance for certain equity investments previously held at cost in the first quarter of 2018, and~~

~~losses on certain investments in CIB and Corporate.~~

~~Net interest income~~ ~~increased driven by continued balance sheet growth~~



Provision for credit losses
	Three months ended March 31,
(in millions)	2020		2019		Change
Consumer, excluding credit card	$	619	$	120	416	%
Credit card	5,063		1,202		321
Total consumer	5,682		1,322		330
Wholesale	2,594		173		NM
Investment securities	9		NA		NM
Total provision for credit losses	$	8,285	$	1,495	454	%

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and ~~changes~~lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied in ~~mix. The Firm’s average interest-earning assets were $2.3 trillion, up $136 billion, and~~determining the ~~net interest yield on these assets, on an FTE basis, was 2.49%, a decrease of~~allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 ~~basis point. The net interest yield excluding CIB Markets was 3.34%, an increase of 13 basis points. Net interest yield excluding CIB markets is a non-GAAP financial measure.~~

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

2019
2018
Change
2019
2018
Change
Consumer, excluding credit card $ (61 ) $ (242 ) 75 % $ (265 ) $ (152 ) (74 )%
Credit card 1,375
1,223
12
4,017
3,557
13
Total consumer 1,314
981
34
3,752
3,405
10
Wholesale 200
(33 ) NM
406
(82 ) NM
Total provision for credit losses $ 1,514
$ 948
60 % $ 4,158
$ 3,323
25 %

~~Quarterly results~~for further information.

The provision for credit losses increased driven by additions to both the consumer and ~~wholesale.~~wholesale allowance for credit losses.

The increase in total consumer ~~provision reflects:~~was driven by:

anadditions of $4.4 billion to the allowance for credit losses, reflecting the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic, consisting of $3.8 billion for Card, $300 million for Home Lending, $235 million for Auto, and $80 million for CBB;

net charge-offs were flat reflecting higher net charge-offs in Card on loan growth, in line with prior expectations, offset by higher recoveries in Home Lending on a current period loan sale.

The increase in ~~credit card due to~~


–	~~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 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 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.~~

~~The~~ wholesale ~~provision~~reflects a net addition of $2.4 billion to the allowance for credit losses across the LOBs. The net addition was ~~largely~~predominantly driven by ~~select Commercial~~the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic across multiple sectors, and continued pressure on oil prices, with the largest impacts in the Oil & ~~Industrial (“C&I”) client downgrades. The prior year was a net benefit which included net recoveries predominantly related to a loan sale in CIB.~~Gas, Real Estate, and Consumer & Retail industries.

Refer to CCB segment results on pages ~~22–27,~~23–25, CIB on pages ~~28–33,~~26–30, CB on pages ~~34–37,~~31–33, AWM on pages ~~38–41,~~34–36, the Allowance for Credit Losses on pages ~~67–68,~~64–65, and Note 1213 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 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 recoveries in the residential real estate portfolio as the prior year benefited from larger recoveries on loan sales.~~


Noninterest expense
	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(in millions)	2019		2018		Change		2019		2018		Change		2020		2019		Change
Compensation expense	$	8,583	$	8,108	6	%	$	26,067	$	25,308	3	%	$	8,895	$	8,937	—
Noncompensation expense:
Occupancy	1,110		1,014		9		3,238		2,883		12		1,066		1,068		—
Technology, communications and equipment	2,494		2,219		12		7,236		6,441		12		2,578		2,364		9
Professional and outside services	2,056		2,086		(1	)	6,307		6,333		—		2,028		2,039		(1	)
Marketing	945		798		18		2,686		2,396		12		859		879		(2	)
Other expense^(a)(b)	1,234		1,398		(12	)	3,624		4,313		(16	)	1,424		1,108		29
Total noncompensation expense	7,839		7,515		4		23,091		22,366		3		7,955		7,458		7
Total noninterest expense	$	16,422	$	15,623	5	%	$	49,158	$	47,674	3	%	$	16,850	$	16,395	3	%


(a)	Included Firmwide legal expense/(benefit) of ~~$10~~$197 million and ~~$20~~$(81) million for the three months ended ~~September 30, 2019~~March 31, 2020 and ~~2018, respectively and $(2) million and $90 million for the nine months ended September 30, 2019 and 2018, respectively.~~2019.


(b)	Included FDIC-related expense of ~~$114~~$99 million and ~~$349~~$143 million for the three months ended ~~September 30, 2019~~March 31, 2020 and ~~2018, respectively and $378 million and $1.1 billion for the nine months ended September 30, 2019 and 2018, respectively.~~2019.

~~Quarterly results~~

Compensation expense ~~increased driven by higher revenue-related~~was flat as efficiencies in several businesses and lower compensation expense in CIB ~~and~~was offset by investments ~~across the businesses, including front office hires, as well as technology staff.~~in new hires.

Noncompensation expense increased as a result of:

higher ~~investments across the businesses, including technology, real estate~~legal expense in CIB and ~~marketing, and~~Corporate

higher volume-related expense, including depreciation from growth in auto ~~operating~~ lease assets in CCB, and brokerage expense in ~~certain businesses in~~ CIB

~~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~~

~~lower other regulatory-related charges in CIB.~~

~~Year-to-date results~~

~~Compensation expense~~ ~~increased driven by investments across the businesses, including front office hires, as well as technology staff, partially offset by lower revenue-related expense in CIB.~~

~~Noncompensation expense~~ ~~increased as a result of:~~

higher investments across the businesses, including technology, ~~real estate and marketing~~

~~higher volume-related expense, including depreciation from growth in auto operating lease assets 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 pension 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 AWM.~~

~~The prior year included a loss of $174 million on the liquidation of a legal entity in Corporate recorded in other~~structural expense.

~~Refer to Note 19 for additional information on the liquidation of a legal entity.~~

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

2019
2018
Change
2019
2018
Change
Income before income tax expense $ 11,405
$ 10,689
7 % $ 33,980
$ 31,923
6 %
Income tax expense 2,325
2,309
1
6,069
6,515
(7 )
Effective tax rate 20.4 % 21.6 % 17.9 % 20.4 %

~~Quarterly results~~



Income tax expense
	Three months ended March 31,
(in millions)	2020			2019			Change
Income before income tax expense	$	3,116		$	11,233		(72	)%
Income tax expense	251			2,054			(88	)
Effective tax rate	8.1		%	18.3		%

The effective tax rate decreased ~~due to the recognition of tax benefits related to the resolution of certain tax audits and~~driven by changes in the level and mix of income and ~~expense~~expenses subject to U.S. federal, and state and local ~~taxes. In addition,~~taxes, as well as 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~~more significant effect of certain tax ~~audits and changes in the mix~~benefits on a lower level 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. Refer to Note 1 for additional information on the 2019 tax benefits.pre-tax income.



CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.

Consolidated balance sheets analysis

The following is a discussion of the significant changes between ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018.~~2019.

																	Selected Consolidated balance sheets data
(in millions)	September 30, 2019			December 31, 2018			Change		March 31, 2020			December 31, 2019			Change
Assets
Cash and due from banks	$	21,215		$	22,324		(5	)%	$	24,001		$	21,704		11	%
Deposits with banks	235,382			256,469			(8	)	343,533			241,927			42
Federal funds sold and securities purchased under resale agreements	257,391			321,588			(20	)	248,580			249,157			—
Securities borrowed	138,336			111,995			24		139,839			139,758			—
Trading assets	495,875			413,714			20		548,580			411,103			33
Investment securities	394,251			261,828			51
Available-for-sale securities									399,944			350,699			14
Held-to-maturity securities, net of allowance for credit losses									71,200			47,540			50
Investment securities, net of allowance for credit losses									471,144			398,239			18
Loans	945,218			984,554			(4	)	1,015,375			959,769			6
Allowance for loan losses	(13,235		)	(13,445		)	(2	)	(23,244		)	(13,123		)	77
Loans, net of allowance for loan losses	931,983			971,109			(4	)	992,131			946,646			5
Accrued interest and accounts receivable	88,988			73,200			22		122,064			72,861			68
Premises and equipment	25,117			14,934			68		25,882			25,813			—
Goodwill, MSRs and other intangible assets	53,078			54,349			(2	)	51,867			53,341			(3	)
Other assets	123,045			121,022			2		171,810			126,830			35
Total assets	$	2,764,661		$	2,622,532		5	%	$	3,139,431		$	2,687,379		17	%

Cash and due from banks and deposits with banks ~~decreased~~increased primarily as a result of ~~a shift in~~significant deposit inflows, which also funded asset growth across the ~~deployment of cash in Treasury and CIO to investment securities.~~Firm. Deposits with banks reflect the Firm’s placements of its excess cash with various central banks, including the Federal Reserve Banks.

Federal funds sold and securities purchased under resale agreements ~~decreased largely~~was flat as ~~a result of a shift~~the reduction in the deployment of cash in Treasury and ~~CIO.~~CIO was offset by an increase in client-driven market-making activities and higher collateral requirements as a result of changes in market conditions in March, as well as higher demand for securities to cover short positions when compared with lower levels at year-end in CIB. Refer to Liquidity Risk Management on pages ~~50–54~~45–49 and Note ~~10 for additional information.~~

~~Securities borrowed~~ increased in CIB driven by higher demand for securities related to client-driven market-making activities in Fixed Income Markets, and to cover customer short positions in prime brokerage. Refer to Liquidity Risk Management on pages 50–54 and Note 1011 for additional information.

Trading assets increased, ~~due to:~~

reflecting growth in client-driven market-making activities in CIB, ~~primarily~~predominantly debt instruments in Fixed Income Markets ~~and equity instruments in Equity Markets, including prime brokerage,~~ and when compared with lower levels at year-end, ~~and~~

as well as higher derivative receivables in ~~CCB, an increase in U.S. GSE MBS acquired~~CIB as ~~part~~a result of market movements, including the impact 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~~

~~a reduction in short-term instruments associated with cash deployment activities in Treasury and CIO.~~COVID-19 pandemic.

Refer to Notes 2 and 45 for additional information.

Investment securities increased, ~~primarily reflecting~~reflecting:

in the available-for-sale (“AFS”) portfolio, net purchases of ~~U.S. Treasuries and~~ U.S. GSE and government agency MBS ~~in Treasury~~ and ~~CIO~~U.S. Treasuries driven by interest rate risk management activities, partially offset by a non-cash transfer of $26.1 billion of U.S. GSE and ~~broader balance sheet management.~~ government agency MBS from the AFS to the held-to-maturity (“HTM”) portfolio, resulting in a comparable increase in HTM.

Refer to Corporate segment results on ~~pages 42–43,~~page 37, Investment Portfolio Risk Management on page ~~69,~~66, and Notes 2 and 910 for additional information on Investment securities.

Loans ~~decreased~~increased predominantly reflecting ~~loan sales~~drawdowns on committed revolving credit facilities in ~~Home Lending, and lower loans~~March in CIB, ~~primarily driven by a loan syndication~~CB and ~~net pay downs,~~AWM, partially offset by ~~increases~~a reduction in CBCard due to seasonality and ~~AWM.~~a decline in sales volume in March as a result of the COVID-19 pandemic.

The allowance for loan losses ~~decreased~~increased driven by:

additions of $5.9 billion, consisting of


•–	$4.4 billion in consumer, predominantly in Credit Card, reflecting the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic, and

–

a ~~$550 million reduction~~net $1.6 billion in wholesale, primarily reflecting the deterioration in the ~~CCB allowance for loan losses, which includes $400 million~~macroeconomic environment as a result of the impact of the COVID-19 pandemic across multiple sectors, and continued pressure on oil prices, with the largest impacts in the ~~PCI residential real estate portfolio, reflecting continued improvement in home prices~~Oil & Gas, Real Estate, and ~~delinquencies; $100 million in the non credit-impaired residential real estate portfolio;~~Consumer & Retail industries, and ~~$50 million in the business banking portfolio; as well as~~


•	a ~~$132 million reduction for write-offs~~net $4.2 billion addition as a result of ~~PCI loans,~~the adoption of CECL.

~~largely offset by~~

~~a $400 million addition~~There were also additions to the allowance for ~~loan losses~~lending-related commitments, which is included in other liabilities on the ~~credit card portfolio reflecting higher loss rates, as newer vintages season and become a larger part~~consolidated balance sheets, of $858 million related to the impact of the ~~portfolio~~COVID-19 pandemic and ~~loan growth.~~continued pressure on oil prices, and $98 million related to the adoption of CECL, resulting in total additions to the allowance for credit losses of $6.8 billion and $4.3 billion, respectively, as of March 31, 2020.

Refer to Credit and Investment Risk Management on pages ~~55–69,~~50–66, and Notes 1, 2, 3, 1112 and 1213 for a more detailed discussion of loans and the allowance for loan losses.

Accrued interest and accounts receivable increased ~~reflecting~~predominantly driven by higher client receivables ~~related to client-driven activities~~ in ~~CIB.~~CIB during a period of heightened market volatility.

~~Premises and equipment~~ ~~increased due to the adoption of the new lease accounting guidance effective January 1, 2019. Refer to Note 16 for additional information.~~

Goodwill, MSRs and other intangibles decreased reflecting lower MSRs as a result of faster prepayment speeds on lower rates and the realization of expected cash flows, partially offset by ~~an increase in goodwill associated with~~net additions to the ~~acquisition of InstaMed.~~MSRs. Refer to Note 1415 for additional information.

Other assets increased reflecting higher cash collateral placed with central counterparties during a period of heightened market volatility, and the Firm’s participation in the Federal Reserve Bank of Boston’s (“FRBB”) MMLF. The assets purchased from money market mutual fund clients related to the MMLF were funded by nonrecourse advances from the FRBB, which are recorded in short-term borrowings. Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 10-11 and Liquidity Risk Management on pages 45–49 for additional information.


Selected Consolidated balance sheets data (continued)	Selected Consolidated balance sheets data (continued)						Selected Consolidated balance sheets data (continued)
(in millions)	September 30, 2019		December 31, 2018		Change		March 31, 2020		December 31, 2019		Change
Liabilities
Deposits	$	1,525,261	$	1,470,666	4	%	$	1,836,009	$	1,562,431	18	%
Federal funds purchased and securities loaned or sold under repurchase agreements	247,766		182,320		36		233,207		183,675		27
Short-term borrowings	48,893		69,276		(29	)	51,909		40,920		27
Trading liabilities	138,343		144,773		(4	)	184,196		119,277		54
Accounts payable and other liabilities	225,063		196,710		14		253,874		210,407		21
Beneficial interests issued by consolidated variable interest entities (“VIEs”)	18,515		20,241		(9	)	19,630		17,841		10
Long-term debt	296,472		282,031		5		299,344		291,498		3
Total liabilities	2,500,313		2,366,017		6		2,878,169		2,426,049		19
Stockholders’ equity	264,348		256,515		3		261,262		261,330		—
Total liabilities and stockholders’ equity	$	2,764,661	$	2,622,532	5	%	$	3,139,431	$	2,687,379	17	%

Deposits increased ~~reflecting:~~

driven by significant inflows in CIB, CB and AWM as clients focused on increasing their cash balances as a result of changes in market conditions driven by the COVID-19 pandemic. Deposits also increased in CCB due to seasonal growth in ~~operating deposits in CIB driven by client activity in Treasury Services~~existing and ~~Securities Services, and an increase in net issuances of structured notes in Markets, and~~

~~in CCB, predominantly due to continued growth in~~ new ~~accounts, and in CB, growth from existing clients.~~accounts.

Refer to Liquidity Risk Management on pages ~~50–54~~45–49 and Notes 2 and 1516 for additional information.

Federal funds purchased and securities loaned or sold under repurchase agreements increased ~~driven by CIB~~from client-driven market-making activities as a result of changes in market conditions in March and ~~includes the Firm’s participation in the Federal Reserve’s open market operations, as well as~~ higher ~~secured~~ financing of trading assets-debt instruments ~~and client-driven activities.~~when compared with lower levels at year-end in CIB. Refer to Liquidity Risk Management on pages ~~50–54~~45–49 and Note 1011 for additional information.

Short-term borrowings ~~decreased reflecting lower commercial paper and short-term~~ increased driven by the Firm’s participation in the FRBB’s MMLF. The nonrecourse advances from ~~Federal Home Loan Banks (“FHLB”)~~the FRBB funded the assets purchased from money market mutual fund clients related to the MMLF, which are recorded in ~~Treasury and CIO, primarily driven by liquidity management.~~other assets. Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 10-11 and Liquidity Risk Management on pages ~~50–54~~45–49 for additional information.

Trading liabilities ~~decreased as a result of~~increased due to client-driven market-making activities in CIB, which resulted in ~~lower~~higher levels of short positions ~~primarily~~ in both debt and equity instruments in ~~Equity Markets.~~Markets, as well as higher derivative payables as a result of market movements, including the impact of the COVID-19 pandemic. Refer to Notes 2 and 45 for additional information.

Accounts payable and other liabilities increased ~~reflecting:~~

reflecting higher client payables related to client-driven activities in CIB ~~and~~during a period of heightened market volatility.

~~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 VIEs ~~decreased~~increased due ~~to:~~

~~maturities of credit card securitizations,~~

~~predominantly offset by~~

to higher levels of Firm-administered multi-seller conduit commercial paper issued to third ~~parties.~~parties, partially offset by activity in municipal bond vehicles.

Refer to Off-Balance Sheet Arrangements on page 18 and Notes 1314 and 2223 for further information on Firm-sponsored VIEs and loan securitization trusts.

Long-term debt increased as a result of ~~client-driven~~

higher FHLB advances and an increase in senior debt reflecting fair value hedge accounting adjustments related to lower interest rates, partially offset by net ~~issuances~~maturities in Treasury and CIO,

partially offset by

a decrease in the fair value of structured notes in ~~CIB’s Markets business.~~CIB related to market movements in March.

Refer to Liquidity Risk Management on pages ~~50–54~~45–49 for additional information on the Firm’s long-term debt activities.

Stockholders’ equity was flat reflecting the net impact of capital actions, net income, the adoption of CECL and an increase in accumulated other comprehensive income (“AOCI”). The increase in AOCI was driven by higher valuation of interest rate cash flow hedges, debit valuation adjustment on fair value option-elected liabilities, and net unrealized gains on AFS securities. Refer to page 83 for information on changes in stockholders’ equity and Capital actions on pages ~~47–48.~~42–43.

Consolidated cash flows analysis

The following is a discussion of cash flow activities during the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.


(in millions)	Nine months ended September 30,						Three months ended March 31,
(in millions)	2019			2018			2020			2019
Net cash provided by/(used in)
Operating activities	$	(77,039	)	$	13,765		$	(120,772	)	$	(80,880	)
Investing activities	(38,181		)	(39,782		)	(135,150		)	36,301
Financing activities	96,006			16,319			362,305			69,435
Effect of exchange rate changes on cash	(2,982		)	(2,509		)	(2,480		)	(1,045		)
Net decrease in cash and due from banks and deposits with banks	$	(22,196	)	$	(12,207	)
Net increase in cash and due from banks and deposits with banks							$	103,903		$	23,811

Operating activities

In ~~2019,~~2020, cash used primarily resulted from higher trading assets, ~~securities borrowed,~~ other assets and accrued interest and accounts receivable, partially offset by higher trading liabilities and accounts payable and other liabilities.

In 2019, cash used primarily resulted from higher trading assets-debt and equity instruments and securities borrowed, partially offset by increased trading liabilities ~~trading~~and accounts payable and other liabilities, and net proceeds from loans ~~originated for sale.~~

~~In 2018, cash provided primarily resulted from net income, higher accounts payable and other liabilities, and trading liabilities, partially offset by higher trading assets and securities borrowed.~~held-for-sale.

Investing activities

In ~~2019,~~2020, 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 resulted from higher~~ net loan originations and ~~an increase in securities purchased~~purchases of assets from money market mutual fund clients pursuant to nonrecourse advances provided by the FRBB under ~~resale agreements, partially offset by net proceeds from investment securities and sales of loans held-for- investment.~~

~~Financing activities~~the MMLF.

In 2019, cash provided resulted from a decrease in securities purchased under resale agreements, and net proceeds from sales of loans held-for-investment.

Financing activities

In 2020, cash provided resulted from higher deposits, federal funds purchased and securities loaned or sold under repurchase agreements, ~~partially offset~~and net proceeds from long- and short-term borrowings, which included the non-recourse advances provided by ~~lower short-term and long-term borrowings.~~the FRBB.

In ~~2018,~~2019, cash provided resulted from higher securities loaned or sold under repurchase agreements ~~deposits~~ and ~~short-term borrowings, partially offset by a decrease in long-term borrowings.~~higher deposits.

For both periods, cash was used for repurchases of common stock and cash dividends on common and preferred stock. On March 15, 2020, in response to the COVID-19 pandemic, the Firm temporarily suspended share repurchases through the second quarter of 2020.

* * *

Refer to Consolidated Balance Sheets Analysis on pages 15-16, Capital Risk Management on pages ~~45–49,~~39–44, and Liquidity Risk Management on pages ~~50–54~~45–49 of this Form 10-Q, and pages ~~95–100~~93–98 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further discussion of the activities affecting the Firm’s cash 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 as off-balance sheet under accounting principles generally accepted in the U.S. (“U.S. GAAP”).

Special-purpose entities

The Firm has 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 appropriate, against all SPE-related transactions and related exposures, such as derivative contracts 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~~Refer to Note 1 for additional information about the Firm’s consolidation policies.



Type of off-balance sheet arrangement	Location of disclosure	Page references
Special-purpose entities: variable interests and other obligations, including contingent obligations, arising from variable interests in nonconsolidated VIEs	Refer to Note 1314	~~139-144~~145-150
Off-balance sheet lending-related financial instruments, guarantees, and other commitments	Refer to Note 2223	~~156-159~~161-164

EXPLANATION AND RECONCILIATION OF THE FIRM’S USE OF NON-GAAP FINANCIAL ~~MEASURES AND KEY PERFORMANCE~~ MEASURES

The Firm prepares its Consolidated Financial Statements in accordance with U.S. GAAP and this presentation is referred to as “reported” basis; these financial statements appear on pages 80–84.

In addition to analyzing the Firm’s results on a reported basis, the 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, which include certain reclassifications to present total net revenue from investments that receive tax credits and tax-exempt securities on a basis comparable to taxable investments and securities (“FTE” basis)

Pre-provision profit, which represents total net revenue less noninterest expense

Net interest income and net yield excluding CIB’s Markets businesses

~~Certain credit metrics and ratios, which exclude PCI loans~~

Tangible common equity (“TCE”), ROTCE, and ~~TBVPS.~~TBVPS

~~In addition, core~~Allowance for loan losses to period-end loans ~~is a key performance measure utilized by the Firm~~retained, excluding trade finance and ~~its investors and analysts in assessing actual growth in the loan portfolio.~~conduits.

Refer to Explanation and Reconciliation of the Firm’s Use Of Non-GAAP Financial Measures and Key Performance Measures on pages ~~57-59~~57–59 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further discussion of management’s use of non-GAAP financial ~~measures and key performance~~ measures.

The following summary table provides a reconciliation from the Firm’s reported U.S. GAAP results to managed basis.


	Three months ended September 30,																Three months ended March 31,
	2019								2018								2020								2019
(in millions, except ratios)	Reported results			Fully taxable-equivalent adjustments^(a)		Managed basis			Reported results			Fully taxable-equivalent adjustments^(a)		Managed basis			Reported			Fully taxable-equivalent adjustments^(a)		Managed basis			Reported			Fully taxable-equivalent adjustments^(a)		Managed basis
Other income	$	1,472		$	596	$	2,068		$	1,160		$	408	$	1,568		$	1,156		$	708	$	1,864		$	1,475		$	585	$	2,060
Total noninterest revenue	15,113			596		15,709			13,352			408		13,760			13,812			708		14,520			14,670			585		15,255
Net interest income	14,228			127		14,355			13,908			154		14,062			14,439			110		14,549			14,453			143		14,596
Total net revenue	29,341			723		30,064			27,260			562		27,822			28,251			818		29,069			29,123			728		29,851
Total noninterest expense																	16,850			NA		16,850			16,395			NA		16,395
Pre-provision profit	12,919			723		13,642			11,637			562		12,199			11,401			818		12,219			12,728			728		13,456
Provision for credit losses																	8,285			NA		8,285			1,495			NA		1,495
Income before income tax expense	11,405			723		12,128			10,689			562		11,251			3,116			818		3,934			11,233			728		11,961
Income tax expense	$	2,325		$	723	$	3,048		$	2,309		$	562	$	2,871		251			818		1,069			2,054			728		2,782
Net income																	$	2,865		NA		$	2,865		$	9,179		NA		$	9,179

Overhead ratio	56		%	NM		55		%	57		%	NM		56		%	60		%	NM		58		%	56		%	NM		55		%

	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 revenue	44,217			1,777		45,994			42,215			1,337		43,552
Net interest income	43,079			408		43,487			40,705			473		41,178
Total net revenue	87,296			2,185		89,481			82,920			1,810		84,730
Pre-provision profit	38,138			2,185		40,323			35,246			1,810		37,056
Income before income tax expense	33,980			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 ratio	56		%	NM		55		%	57		%	NM		56		%


(a)	Predominantly recognized in CIB, CB and Corporate.

The following table provides information on net interest income and net yield excluding CIB’s Markets businesses.


(in millions, except rates)	Three months ended September 30,								Nine months ended September 30,								Three months ended March 31,
(in millions, except rates)	2019			2018			Change		2019			2018			Change		2020			2019			Change
Net interest income – reported	$	14,228		$	13,908		2	%	$	43,079		$	40,705		6	%	$	14,439		$	14,453		—	%
Fully taxable-equivalent adjustments	127			154			(18	)	408			473			(14	)	110			143			(23	)
Net interest income – managed basis^(a)	$	14,355		$	14,062		2		$	43,487		$	41,178		6		$	14,549		$	14,596		—
Less: CIB Markets net interest income^(b)	723			704			3		1,971			2,488			(21	)	1,596			624			156
Net interest income excluding CIB Markets^(a)	$	13,632		$	13,358		2		$	41,516		$	38,690		7		$	12,953		$	13,972		(7	)

Average interest-earning assets^(c)	$	2,365,154		$	2,203,305		7		$	2,334,623		$	2,198,909		6		$	2,465,732		$	2,298,894		7
Less: Average CIB Markets interest-earning assets^(c)(b)	690,593			596,784			16		671,236			589,185			14		736,035			649,180			13
Average interest-earning assets excluding CIB Markets	$	1,674,561		$	1,606,521		4	%	$	1,663,387		$	1,609,724		3	%	$	1,729,697		$	1,649,714		5	%
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 Markets	3.23		%	3.30		%			3.34		%	3.21		%
Net yield on average interest-earning assets – managed basis																	2.37		%	2.57		%
Net yield on average CIB Markets interest-earning assets^(b)																	0.87			0.39
Net yield on average interest-earning assets excluding CIB Markets																	3.01		%	3.43		%


(a)	Interest includes the effect of related hedges. Taxable-equivalent amounts are used where applicable.


(b)	Refer to page 3229 for further information on CIB’s Markets businesses.


~~(c)~~	In the second quarter of 2019, the Firm reclassified balances related to certain instruments from interest-earning to noninterest-earning assets, as the associated returns are recorded in principal transactions revenue and not in net interest income. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation.

The following summary table provides a reconciliation from the Firm’s common stockholders’ equity to TCE.


	Period-end				Average												Period-end				Average
(in millions, except per share and ratio data)	Sep 30, 2019		Dec 31, 2018		Three months ended September 30,						Nine months ended September 30,						Mar 31, 2020		Dec 31, 2019		Three months ended March 31,
					2019			2018			2019			2018							2020			2019
Common stockholders’ equity	$	235,985	$	230,447	$	235,613		$	230,439		$	232,917		$	228,995		$	231,199	$	234,337	$	234,530		$	230,051
Less: Goodwill	47,818		47,471		47,707			47,490			47,552			47,496			47,800		47,823		47,812			47,475
Less: Other intangible assets	841		748		842			795			776			820			800		819		812			744
Add: Certain Deferred tax liabilities^(a)	2,371		2,280		2,344			2,233			2,311			2,221			2,389		2,381		2,385			2,287
Tangible common equity	$	189,697	$	184,508	$	189,408		$	184,387		$	186,900		$	182,900		$	184,988	$	188,076	$	188,291		$	184,119

Return on tangible common equity	NA		NA		18		%	17		%	19		%	18		%	NA		NA		5		%	19		%
Tangible book value per share	$	60.48	$	56.33	NA			NA			NA			NA			$	60.71	$	60.98	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.



BUSINESS SEGMENT RESULTS

The Firm is managed on ~~a line of business~~an LOB 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 the Firm’s Operating Committee. Segment results are presented on a managed basis. Refer to Explanation and Reconciliation of the Firm’s use of Non-GAAP Financial Measures ~~and Key Performance Measures~~ on pages 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. ~~Refer to Line of business equity on page 47 for further information about line of business capital.~~ The Firm periodically assesses the assumptions, methodologies and reporting classifications used for segment reporting, and further refinements may be implemented in future periods.

Revenue sharing

When business segments join efforts to sell products and services to the Firm’s clients, the participating business segments may agree to share revenue from those transactions. Revenue and expense are generally recognized in the segment responsible for the related product or service, with allocations to the other segment(s) involved in the transaction. The segment results reflect these revenue-sharing agreements.

Business segment capital allocation

The amount of capital assigned to each business is referred to as equity. ~~On at least an annual basis,~~Periodically, the assumptions and methodologies used into allocate capital ~~allocation~~ are assessed and as a result, the capital allocated to ~~lines of business~~the LOBs may change. Refer to Line of business equity on page 9190 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional information on business segment capital allocation.

Refer to Business Segment Results – Description of business segment reporting methodology on pages 60–61 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further discussion of those methodologies.

Business segment changes

In the first quarter of 2020, the Firm began reporting a Wholesale Payments business unit within CIB following a realignment of the Firm’s wholesale payments businesses. The Wholesale Payments business comprises:

Merchant Services, which was realigned from CCB to CIB

Treasury Services and Trade Finance in CIB. Trade Finance was previously reported in Lending in CIB.

In connection with the alignment of Wholesale Payments, the assets, liabilities and headcount associated with the Merchant Services business were realigned to CIB from CCB, and the revenue and expenses of the Merchant Services business is reported across CCB, CIB and CB based primarily on client relationships. Prior periods have been revised to reflect this realignment and revised allocation methodology.

JPMorgan Chase

Consumer Businesses

Wholesale Businesses

Consumer & Community Banking

Corporate & Investment Bank

Commercial Banking

Asset & Wealth Management

Consumer &
Business Banking

Home Lending

Card & Auto

Banking

Markets &
Securities Services

• Middle Market Banking

• Asset Management

• Consumer Banking/Chase Wealth Management

• Business Banking

• Home Lending Production

• Home Lending Servicing

• Real Estate Portfolios

• Credit Card

• Auto

• Investment Banking

• Wholesale Payments

• Lending

• Fixed Income Markets

• Corporate Client Banking

• Wealth Management

• Equity Markets

• Securities Services

• Credit Adjustments & Other

• Commercial Real Estate Banking

Segment results – managed basis

The following tables summarize the Firm’s results by segment for the periods indicated.


Three months ended September 30,	Consumer & Community Banking							Corporate & Investment Bank							Commercial Banking
Three months ended March 31,																							Consumer & Community Banking								Corporate & Investment Bank								Commercial Banking
(in millions, except ratios)	2019			2018			Change	2019			2018			Change	2019			2018			Change		2020			2019			Change		2020			2019			Change		2020			2019			Change
Total net revenue	$	14,259		$	13,290		7	$	9,338		$	8,805		6	$	2,207		$	2,271		(3	)%	$	13,171		$	13,490		(2	)%	$	9,948		$	10,034		(1	)%	$	2,178		$	2,413		(10	)%
Total noninterest expense	7,290			6,982			4	5,348			5,175			3	881			853			3		7,161			6,970			3		5,896			5,629			5		988			938			5
Pre-provision profit/(loss)	6,969			6,308			10	3,990			3,630			10	1,326			1,418			(6	)	6,010			6,520			(8	)	4,052			4,405			(8	)	1,190			1,475			(19	)
Provision for credit losses	1,311			980			34	92			(42		)	NM	67			(15		)	NM		5,772			1,314			339		1,401			87			NM		1,010			90			NM
Net income/(loss)	4,273			4,086			5	2,809			2,626			7	937			1,089			(14	)	191			3,947			(95	)	1,988			3,260			(39	)	147			1,060			(86	)
Return on equity (“ROE”)	32		%	31		%		13		%	14		%		16		%	21		%			1		%	30		%			9		%	16		%			2		%	19		%


Three months ended September 30,	Asset & Wealth Management								Corporate						Total
Three months ended March 31,																						Asset & Wealth Management							Corporate							Total
(in millions, except ratios)	2019			2018			Change		2019		2018			Change	2019			2018			Change	2020			2019			Change	2020			2019		Change		2020			2019			Change
Total net revenue	$	3,568		$	3,559		—		$	692	$	(103	)	NM	$	30,064		$	27,822		8	$	3,606		$	3,489		3	$	166		$	425	(61	)%	$	29,069		$	29,851		(3	)%
Total noninterest expense	2,622			2,585			1		281		28			NM	16,422			15,623			5	2,659			2,647			—	146			211		(31	)	16,850			16,395			3
Pre-provision profit/(loss)	946			974			(3	)	411		(131		)	NM	13,642			12,199			12	947			842			12	20			214		(91	)	12,219			13,456			(9	)
Provision for credit losses	44			23			91		—		2			NM	1,514			948			60	94			2			NM	8			2		300		8,285			1,495			454
Net income/(loss)	668			724			(8	)	393		(145		)	NM	9,080			8,380			8	664			661			—	(125		)	251		NM		2,865			9,179			(69	)
ROE	24		%	31		%			NM		NM				15		%	14		%		25		%	25		%		NM			NM				4		%	16		%

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 expense 21,663
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 losses 3,745
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 )
ROE 31 % 27 % 14 % 18 % 17 % 20 %

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 expense 7,865
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 losses 48
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
ROE 25 % 32 % NM
NM
15 % 14 %
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation.

The following sections provide a comparative discussion of the Firm’s results by segment as of or for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 versus the corresponding periods in the prior year, unless otherwise specified.



CONSUMER & COMMUNITY BANKING

Consumer & Community Banking offers services to consumers and businesses through bank branches, ATMs, digital (including mobile and online) and telephone banking. CCB is organized into Consumer & Business Banking (including Consumer Banking/Chase Wealth Management and Business Banking), Home Lending (including Home Lending Production, Home Lending Servicing and Real Estate Portfolios) and Card & Auto. Consumer & Business Banking offers deposit and investment products and services to consumers, and lending, deposit, and cash management and payment solutions to small businesses. Home Lending includes mortgage origination and servicing activities, as well as portfolios consisting of residential mortgages and home equity loans. Card & Auto issues credit cards to consumers and small businesses and originates and services auto loans and leases.

Refer to ~~pages 62–65 of JPMorgan Chase’s 2018 Form 10-K and~~ Line of Business Metrics on page ~~173~~177 for a discussion of the business profile of CCB.



Selected income statement data
	Three months ended March 31,
(in millions, except ratios)	2020			2019			Change
Revenue
Lending- and deposit-related fees^(a)	$	972		$	909		7	%
Asset management, administration and commissions^(a)	585			581			1
Mortgage fees and related income	320			396			(19	)
Card income	768			909			(16	)
All other income	1,373			1,290			6
Noninterest revenue	4,018			4,085			(2	)
Net interest income	9,153			9,405			(3	)
Total net revenue	13,171			13,490			(2	)

Provision for credit losses	5,772			1,314			339

Noninterest expense
Compensation expense	2,597			2,566			1
Noncompensation expense^(b)	4,564			4,404			4
Total noninterest expense	7,161			6,970			3
Income before income tax expense	238			5,206			(95	)
Income tax expense	47			1,259			(96	)
Net income	$	191		$	3,947		(95	)

Revenue by line of business
Consumer & Business Banking	$	6,091		$	6,661		(9	)
Home Lending	1,161			1,346			(14	)
Card & Auto	5,919			5,483			8

Mortgage fees and related income details:
Net production revenue	319			200			60
Net mortgage servicing revenue^(c)	1			196			(99	)
Mortgage fees and related income	$	320		$	396		(19	)%

Financial ratios
Return on equity	1		%	30		%
Overhead ratio	54			52

Selected income statement data
Three months ended September 30, Nine months ended September 30,
(in millions, except ratios) 2019
2018
Change
2019
2018
Change
Revenue
Lending- and deposit-related fees $ 1,026
$ 936
10 % $ 2,827
$ 2,668
6 %
Asset management, administration and commissions 608
626
(3 ) 1,890
1,792
5
Mortgage fees and related income 886
260
241
1,561
1,049
49
Card income 1,176
1,219
(4 ) 3,601
3,299
9
All other income 1,399
1,135
23
3,989
3,255
23
Noninterest revenue 5,095
4,176
22
13,868
12,063
15
Net interest income 9,164
9,114
1
27,975
26,321
6
Total net revenue 14,259
13,290
7
41,843
38,384
9

Provision for credit losses 1,311
980
34
3,745
3,405
10

Noninterest expense
Compensation expense 2,683
2,635
2
8,063
7,916
2
Noncompensation expense^(a)
4,607
4,347
6
13,600
12,854
6
Total noninterest expense 7,290
6,982
4
21,663
20,770
4
Income before income tax expense 5,658
5,328
6
16,435
14,209
16
Income tax expense 1,385
1,242
12
4,025
3,385
19
Net income $ 4,273
$ 4,086
5
$ 12,410
$ 10,824
15

Revenue by line of business
Consumer & Business Banking $ 6,688
$ 6,385
5
$ 20,053
$ 18,238
10
Home Lending 1,465
1,306
12
3,929
4,162
(6 )
Card, Merchant Services & Auto 6,106
5,599
9
17,861
15,984
12

Mortgage fees and related income details:
Net production revenue 738
108
NM
1,291
296
336
Net mortgage servicing revenue^(b)
148
152
(3 ) 270
753
(64 )
Mortgage fees and related income $ 886
$ 260
241 % $ 1,561
$ 1,049
49 %

Financial ratios
Return on equity 32 % 31 % 31 % 27 %
Overhead ratio 51
53
52
54

~~Note:~~ In the ~~discussion and~~first quarter of 2020, the ~~tables which follow,~~Merchant Services business was realigned from CCB ~~presents certain financial measures which exclude~~to CIB as part of the ~~impact of PCI loans; these are non-GAAP financial measures.~~Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation.

(a)

~~Included operating lease depreciation expense~~In the first quarter of ~~$1.0 billion~~2020, the Firm reclassified certain fees from asset management, administration and ~~$862 million for~~commissions to lending- and deposit-related fees. The prior-period amounts were revised to conform with the ~~three months ended September 30, 2019 and 2018, respectively, and $3.0 billion and $2.5 billion for nine months ended September 30, 2019 and 2018, respectively.~~current presentation.


(b)	Included ~~MSR risk management results~~depreciation expense on leased assets of ~~$53 million~~$1.1 billion and ~~$(88)~~$967 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively and $(200)~~respectively.


(c)	Included MSR risk management results of $(90) million and ~~$(94)~~$(9) million for ~~nine~~the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively.

Quarterly results

Net income was ~~$4.3 billion,~~$191 million, a decrease of 95%, predominantly driven by an increase ~~of 5%.~~in the provision for credit losses.

Net revenue was ~~$14.3~~$13.2 billion, ~~an increase~~a decrease of 7%2%. 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 $9.2 billion, ~~up 1%~~down 3%, driven by:

the impact of deposit margin compression, partially offset by growth in deposit balances in CBB, and ~~includes the charge from the~~

lower loan balances in Home Lending predominantly due to prior year loan sales, ~~mentioned above. Excluding this charge, net interest income increased, driven by:~~

largely offset by

higher loan balances and margin expansion in ~~Card, as well as growth in deposit balances and higher deposit margins in CBB,~~

~~partially offset by~~

~~lower loan balances due to loan sales, as well as loan spread compression in Home Lending.~~Card.

Noninterest revenue was ~~$5.1~~$4.0 billion, ~~up 22%~~down 2%, driven by:

lower card income due to lower net interchange income reflecting higher rewards costs and ~~includes the gain from the loan~~partner payments, partially offset by higher card sales ~~mentioned above. Excluding this gain, noninterest~~volume, despite a decline in March, and

lower net mortgage servicing revenue ~~increased, driven by:~~reflecting faster prepayment speeds on lower rates and a lower level of third-party loans serviced, as well as lower MSR risk management results,

predominantly offset by

higher net mortgage production revenue reflecting higher production volumes and margins, and the absence of a gain on a loan sale in the prior year,

higher auto lease volume, and

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.higher deposit-related fees.

Refer to Note 1415 for further information regarding changes in value of the MSR asset and related hedges, and mortgage fees and related income.

Noninterest expense was ~~$7.3~~$7.2 billion, up 4%3%, ~~predominantly~~ driven by:

~~technology, marketing~~higher volume- and ~~other~~revenue-related expense, including depreciation on auto lease assets, and investments in the business, ~~as well as higher auto lease depreciation,~~

partially offset by

~~expense efficiencies and~~ lower ~~FDIC charges.~~structural expense.

The provision for credit losses was ~~$1.3~~$5.8 billion, an increase of ~~34%, reflecting:~~

~~an increase~~$4.5 billion, driven by additions to the allowance for credit losses reflecting deterioration in ~~credit card due to~~


–	~~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~~the macroeconomic environment as a result of ~~the portfolio, compared to a $150 million addition in the prior year~~

~~an increase in consumer, excluding credit card 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 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.~~

~~Year-to-date results~~

~~Net income was $12.4 billion, an increase of 15%.~~

Net revenue was $41.8 billion, an increase of 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 $28.0 billion, up 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 higher loan balances and margin expansion in Card,~~

~~partially offset by~~

~~lower loan balances due to loan sales, as well as loan spread compression in Home Lending.~~

~~Noninterest revenue was $13.9 billion, up 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~~COVID-19 pandemic, consisting of:

$3.8 billion for Card, $300 million for Home Lending, $250 million for Auto and $159 million in CBB

net charge-offs were flat reflecting higher net charge-offs in Card on loan growth, in line with prior expectations, offset by higher recoveries in Home Lending on a current period loan sale.

Refer to Credit and Investment Risk Management on pages 50–66 and Allowance for Credit Losses on pages 64–65 for further discussions of ~~approximately $330 million to~~ the credit ~~card rewards 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~~portfolios and ~~other investments in~~ the ~~business, as well as higher auto lease depreciation,~~

~~partially offset by~~

~~expense efficiencies and lower FDIC charges.~~allowance for credit losses.



Selected metrics
	As of or for the three months ended March 31,
(in millions, except headcount)	2020		2019		Change
Selected balance sheet data (period-end)
Total assets	$	506,147	$	539,127	(6	)%
Loans:
Consumer & Business Banking	27,709		26,492		5
Home Lending	196,401		230,599		(15	)
Card	154,021		150,527		2
Auto	61,468		62,786		(2	)
Total loans	439,599		470,404		(7	)
Deposits	775,068		702,587		10
Equity	52,000		52,000		—
Selected balance sheet data (average)
Total assets	$	517,213	$	546,042	(5	)
Loans:
Consumer & Business Banking	27,261		26,488		3
Home Lending	198,042		238,949		(17	)
Card	162,660		151,134		8
Auto	60,893		62,763		(3	)
Total loans	448,856		479,334		(6	)
Deposits	733,648		681,013		8
Equity	52,000		52,000		—

Headcount	122,081		124,305		(2	)%

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The ~~provision for credit losses was $3.7 billion, an increase of 10%, reflecting:~~

~~an increase in credit card due~~prior-period amounts were revised 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~~

conform with the current presentation, including 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 recoveries in the residential real estate portfolio as the prior year benefited from larger recoveries on loan sales.~~

period-end assets and headcount of $13.4 billion and 4,114, respectively, as of March 31, 2019.



Selected metrics
	As of or for the three months ended March 31,
(in millions, except ratio data)	2020			2019			Change
Credit data and quality statistics
Nonaccrual loans^(a)(b)	$	4,008		$	3,265		23	%

Net charge-offs/(recoveries)
Consumer & Business Banking	74			59			25
Home Lending	(122		)	(5		)	NM
Card	1,313			1,202			9
Auto	48			58			(17	)
Total net charge-offs/(recoveries)	$	1,313		$	1,314		—

Net charge-off/(recovery) rate
Consumer & Business Banking	1.09		%	0.90		%
Home Lending	(0.25		)	(0.01		)
Card	3.25			3.23
Auto	0.32			0.37
Total net charge-off/(recovery) rate	1.18		%	1.11		%

30+ day delinquency rate
Home Lending^(c)(d)	1.48		%	1.62		%
Card	1.96			1.85
Auto	0.89			0.63

90+ day delinquency rate — Card	1.02		%	0.97		%

Allowance for loan losses
Consumer & Business Banking	$	882		$	796		11
Home Lending	2,137			2,741			(22	)
Card	14,950			5,183			188
Auto	732			465			57
Total allowance for loan losses	$	18,701		$	9,185		104	%

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 Banking 26,699
26,451
1
26,699
26,451
1
Home equity 31,552
37,461
(16 ) 31,552
37,461
(16 )
Residential mortgage 171,787
205,389
(16 ) 171,787
205,389
(16 )
Home Lending 203,339
242,850
(16 ) 203,339
242,850
(16 )
Card 159,571
147,881
8
159,571
147,881
8
Auto 61,410
63,619
(3 ) 61,410
63,619
(3 )
Total loans 451,019
480,801
(6 ) 451,019
480,801
(6 )
Core loans 405,662
425,917
(5 ) 405,662
425,917
(5 )
Deposits 701,170
677,260
4
701,170
677,260
4
Equity 52,000
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 Banking 26,550
26,351
1
26,537
26,104
2
Home equity 32,215
38,211
(16 ) 33,694
39,951
(16 )
Residential mortgage 181,157
204,689
(11 ) 191,881
201,665
(5 )
Home Lending 213,372
242,900
(12 ) 225,575
241,616
(7 )
Card 158,168
146,272
8
154,375
143,986
7
Auto 61,371
64,060
(4 ) 62,118
65,096
(5 )
Total loans 459,461
479,583
(4 ) 468,605
476,802
(2 )
Core loans 413,036
422,582
(2 ) 419,851
415,662
1
Deposits 693,980
674,211
3
688,676
669,244
3
Equity 52,000
51,000
2
52,000
51,000
2

Headcount 127,687
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 Banking 79
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
Card 1,175
1,073
10
3,617
3,407
6
Auto 49
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 Banking 1.18 % 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 )
Card 2.95
2.91
3.13
3.16

Auto 0.32
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 %
Card 1.84
1.75
1.84
1.75

Auto 0.88
0.82
0.88
0.82

90+ day delinquency rate — Card 0.90
0.85
0.90
0.85

Allowance for loan losses
Consumer & Business Banking $ 746
$ 796
(6 ) $ 746
$ 796
(6 )
Home Lending, excluding PCI loans 903
1,003
(10 ) 903
1,003
(10 )
Home Lending — PCI loans^(c)
1,256
1,824
(31 ) 1,256
1,824
(31 )
Card 5,583
5,034
11
5,583
5,034
11
Auto 465
464
—
465
464
—
Total allowance for loan losses^(c)
$ 8,953
$ 9,121
(2 )% $ 8,953
$ 9,121
(2 )%
Effective January 1, 2020, the Firm adopted the CECL accounting guidance. The adoption resulted in a change in the accounting for PCI loans, which are considered purchased credit deteriorated (“PCD”) loans under CECL. Refer to Note 1 for further information.


(a)	~~Excludes~~At March 31, 2020, nonaccrual loans included $970 million of PCD loans. Prior to the adoption of CECL, nonaccrual loans excluded PCI ~~loans. The~~loans as the Firm ~~is recognizing~~recognized interest income on each pool of PCI loans as each of the pools iswas performing.


(b)	At ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of ~~$1.6 billion~~$616 million and ~~$2.9~~$2.2 billion, respectively. These amounts have been excluded based upon the government guarantee.

(c)

~~Net charge-offs/(recoveries) and~~At March 31, 2020, the ~~net charge-off/(recovery)~~30+ day delinquency rates ~~for~~included PCD loans. The rate prior to January 1, 2020 was revised to include the three months ended September 30, 2019 and 2018, excluded $43 million and $58 million, respectively, and for nine months ended September 30, 2019 and 2018, excluded $132 million and $151 million, respectively,impact of ~~write-offs in the PCI portfolio. These write-offs decreased the allowance for loan losses for~~ PCI loans. ~~Refer to Summary of changes in the allowance for credit losses on page 68 for further information on PCI write-offs.~~

(d)

~~Excludes the impact of PCI loans. For the three months ended September 30,~~At March 31, 2020 and 2019, and 2018, the net charge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of (0.31)% and (0.12)%, respectively; (2) residential mortgage of (0.04)% and (0.20)%, respectively; (3) Home Lending of (0.08)% and (0.19)%, respectively; and (4) total CCB of 1.10% and 0.89%, respectively. For nine months ended September 30, 2019 and 2018, the net charge-off/(recovery) rates included impact of PCI loans were as follows: (1) home equity of (0.16)% and (0.01)%, respectively; (2) residential mortgage of (0.02)% and (0.17)%, respectively; (3) Home Lending of (0.04)% and (0.14)%, respectively; and (4) total CCB of 1.12% and 0.98%, respectively.


~~(e)~~	~~At September 30, 2019 and 2018,~~ excluded mortgage loans insured by U.S. government agencies of ~~$2.7~~$1.0 billion and ~~$4.5~~$3.2 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.


~~(f)~~	~~Excludes PCI loans. The 30+ day delinquency rate for PCI loans was 8.56% and 9.39% at September 30, 2019 and 2018, respectively.~~



Selected metrics
	As of or for the three months ended March 31,
(in billions, except ratios and where otherwise noted)	2020			2019			Change
Business Metrics
Number of branches	4,967			5,028			(1	)%
Active digital customers (in thousands)^(a)	53,799			50,651			6
Active mobile customers (in thousands)^(b)	38,236			34,371			11
Debit and credit card sales volume	$	266.0		$	255.1		4

Consumer & Business Banking
Average deposits	$	718.9		$	668.5		8
Deposit margin	2.06		%	2.62		%
Business banking origination volume	$	1.5		$	1.5		1
Client investment assets	323.0			312.3			3

Home Lending
Mortgage origination volume by channel
Retail	$	14.1		$	7.9		78
Correspondent	14.0			7.1			97
Total mortgage origination volume^(c)	$	28.1		$	15.0		87

Total loans serviced (period-end)	$	737.8		$	791.5		(7	)
Third-party mortgage loans serviced (period-end)	505.0			529.6			(5	)
MSR carrying value (period-end)	3.3			6.0			(45	)
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end)	0.65		%	1.13		%

MSR revenue multiple^(d)	2.10		x	3.32		x

Credit Card
Credit card sales volume, excluding Commercial Card	$	179.1		$	172.5		4
Net revenue rate	10.68		%	10.68		%

Auto
Loan and lease origination volume	$	8.3		$	7.9		5
Average auto operating lease assets	23.1			20.8			11	%

Selected metrics
As of or for the three months
ended September 30, As of or for the nine months
ended September 30,
(in billions, except ratios and where otherwise noted) 2019
2018
Change
2019
2018
Change
Business Metrics
Number of branches 4,949
5,066
(2 )% 4,949
5,066
(2 )%
Active digital customers
(in thousands)^(a)
51,843
48,664
7
51,843
48,664
7
Active mobile customers
(in thousands)^(b)
36,510
32,538
12
36,510
32,538
12
Debit and credit card sales volume $ 282.2

$ 259.0

9
$ 818.8

$ 746.4
10

Consumer & Business Banking
Average deposits $ 678.3
$ 659.5
3
$ 674.5
$ 655.3
3
Deposit margin 2.47 % 2.43 % 2.56 % 2.33 %
Business banking origination volume $ 1.6
$ 1.6
(5 ) $ 4.8
$ 5.2
(8 )
Client investment assets 337.9
298.4
13
337.9
298.4
13

Home Lending
Mortgage origination volume by channel
Retail $ 14.2
$ 10.6
34
$ 34.6
$ 29.3
18
Correspondent 18.2
11.9
53
37.3
32.9
13
Total mortgage origination volume^(c)
$ 32.4
$ 22.5
44
$ 71.9
$ 62.2
16

Total loans serviced (period-end) $ 774.8
$ 798.6
(3 ) $ 774.8
$ 798.6
(3 )
Third-party mortgage loans serviced (period-end) 535.8
526.5
2
535.8
526.5
2
MSR carrying value (period-end) 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) 0.82 % 1.22 % 0.82 % 1.22 %

MSR revenue multiple^(d)
2.41 x 3.49 x 2.34 x 3.49 x

Card, excluding Commercial Card
Credit card sales volume $ 193.6
$ 176.0
10
$ 558.6
$ 507.1
10

Card Services
Net revenue rate 11.40 % 11.50 % 11.50 % 11.17 %

Merchant Services
Merchant processing volume $ 380.5
$ 343.8
11
$ 1,108.6
$ 990.9
12

Auto
Loan and lease origination volume $ 9.1
$ 8.1
12
$ 25.5
$ 24.8
3
Average auto operating lease assets 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 ~~$35.8~~$31.9 billion and ~~$24.5~~$16.4 billion for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $78.5 billion and $68.2 billion for nine months ended September 30, 2019 and 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

The Corporate & Investment Bank, which consists of Banking and Markets & Securities Services, offers a broad suite of investment banking, market-making, prime brokerage, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, merchants, government and municipal entities. Banking offers a full range of investment banking products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity and debt markets, as well as loan origination and syndication. Banking also includes Wholesale Payments, which provides payments services enabling clients to manage payments and receipts globally, and cross-border financing. Markets & Securities Services includes Markets, a global market-maker in cash securities and derivative instruments, which also offers sophisticated risk management solutions, prime brokerage, and research. Markets & Securities Services also includes Securities Services, a leading global custodian which provides custody, fund accounting and administration, and securities lending products principally for asset managers, insurance companies and public and private investment funds.

Refer to ~~pages 66–70 of JPMorgan Chase’s 2018 Form 10-K and~~ Line of Business Metrics on page ~~173~~177 for a discussion of the business profile of CIB.

Selected income statement data
Three months ended September 30, Nine months ended September 30,
(in millions, except ratios) 2019 2018 Change 2019 2018 Change
Revenue
Investment banking fees $ 1,981
$ 1,823
9 % $ 5,671
$ 5,658
—
Principal transactions 3,418
3,091
11
11,466
10,786
6
Lending- and deposit-related fees 360
373
(3 ) 1,095
1,136
(4 )
Asset management, administration and commissions 1,197
1,130
6
3,447
3,416
1
All other income 226
88
157
649
958
(32 )
Noninterest revenue 7,182
6,505
10
22,328
21,954
2
Net interest income 2,156
2,300
(6 ) 6,499
7,257
(10 )
Total net revenue^(a)
9,338
8,805
6
28,827
29,211
(1 )

Provision for credit losses 92
(42 ) NM
179
(142 ) NM

Noninterest expense
Compensation expense 2,734
2,402
14
8,381
8,158
3
Noncompensation expense 2,614
2,773
(6 ) 7,907
8,079
(2 )
Total noninterest expense 5,348
5,175
3
16,288
16,237
—
Income before income tax expense 3,898
3,672
6
12,360
13,116
(6 )
Income tax expense 1,089
1,046
4
3,365
3,318
1
Net income $ 2,809
$ 2,626
7 % $ 8,995
$ 9,798
(8 )%
Financial ratios
Return on equity 13 % 14 % 14 % 18 %
Overhead ratio 57
59
57
56

Compensation expense as percentage of total net revenue 29
27
29
28



Selected income statement data
	Three months ended March 31,
(in millions, except ratios)	2020			2019			Change
Revenue
Investment banking fees	$	1,907		$	1,844		3	%
Principal transactions	3,188			4,164			(23	)
Lending- and deposit-related fees^(a)	450			396			14
Asset management, administration and commissions^(a)	1,261			1,067			18
All other income	35			365			(90	)
Noninterest revenue	6,841			7,836			(13	)
Net interest income	3,107			2,198			41
Total net revenue^(b)	9,948			10,034			(1	)

Provision for credit losses	1,401			87			NM

Noninterest expense
Compensation expense	3,006			3,091			(3	)
Noncompensation expense	2,890			2,538			14
Total noninterest expense	5,896			5,629			5
Income before income tax expense	2,651			4,318			(39	)
Income tax expense	663			1,058			(37	)
Net income	$	1,988		$	3,260		(39	)%
Financial ratios
Return on equity	9		%	16		%
Overhead ratio	59			56
Compensation expense as percentage of total net revenue	30			31

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation.


(a)	In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts were revised to conform with the current presentation.

(b)

Includes tax-equivalent adjustments, predominantly due to income tax credits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; and tax-exempt income from municipal bonds of ~~$527~~$667 million and ~~$354~~$539 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $1.6 billion and $1.2 billion for the nine months ended September 30, 2019 and 2018,~~ respectively.

Selected income statement data
Three months ended September 30, Nine months ended September 30,
(in millions) 2019 2018 Change 2019 2018 Change
Revenue by business
Investment Banking $ 1,871
$ 1,731
8 % $ 5,392
$ 5,267
2 %
Treasury Services 1,101
1,183
(7 ) 3,383
3,480
(3 )
Lending 329
331
(1 ) 1,006
954
5
Total Banking 3,301
3,245
2
9,781
9,701
1
Fixed Income Markets 3,557
2,844
25
10,972
10,850
1
Equity Markets 1,517
1,595
(5 ) 4,986
5,571
(11 )
Securities Services 1,034
1,057
(2 ) 3,093
3,219
(4 )
Credit Adjustments & Other^(a)
(71 ) 64
NM
(5 ) (130 ) 96
Total Markets & Securities Services 6,037
5,560
9
19,046
19,510
(2 )
Total net revenue $ 9,338
$ 8,805
6 % $ 28,827
$ 29,211
(1 )%



Selected income statement data
	Three months ended March 31,
(in millions)	2020			2019		Change
Revenue by business
Investment Banking	$	886		$	1,745	(49	)%
Wholesale Payments	1,359			1,415		(4	)
Lending	350			258		36
Total Banking	2,595			3,418		(24	)
Fixed Income Markets	4,993			3,725		34
Equity Markets	2,237			1,741		28
Securities Services	1,074			1,014		6
Credit Adjustments & Other^(a)	(951		)	136		NM
Total Markets & Securities Services	7,353			6,616		11
Total net revenue	$	9,948		$	10,034	(1	)%

(a)

~~Consists primarily of~~Includes credit valuation adjustments (“CVA”) managed centrally within CIB and funding valuation adjustments (“FVA”) on ~~derivatives. Results~~derivatives and certain components of fair value option elected liabilities, which are primarily reported in principal transactions revenue. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets.

~~allocated to Fixed Income Markets and Equity Markets.~~

Quarterly results

Net income was ~~$2.8~~$2.0 billion, ~~up 7%.~~down 39%, predominantly driven by an increase in the provision for credit losses.

Net revenue was ~~$9.3~~$9.9 billion, ~~up 6%~~down 1%.

Banking revenue was ~~$3.3~~$2.6 billion, ~~up 2%~~down 24%.

Investment Banking revenue was ~~$1.9 billion, up 8%~~$886 million, down 49%, predominantly driven by ~~higher debt and equity underwriting fees,~~$820 million of markdowns on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio as high-yield spreads widened significantly. The decline was partially offset by ~~lower advisory fees.~~higher Investment Banking fees, up 3%. The Firm maintained its #1 ranking for Global Investment Banking fees, ~~with overall share gains,~~ according to Dealogic.


–	Debt underwriting fees were ~~$961 million,~~$1.1 billion, up ~~17%~~15%, ~~reflecting~~driven by both increased industry-wide fees and 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.~~bonds, particularly in March as clients sought to access liquidity.


–	Equity underwriting fees were ~~$514~~$331 million, up ~~22%~~25%, driven by ~~wallet share gains~~increased industry-wide fees primarily in the IPO market, with strong activity in January and ~~convertible markets.~~February, compared to a weak prior year.


–	Advisory fees were ~~$506~~$503 million, down ~~13%~~22%, ~~driven by a decline in industry-wide fees~~ compared to a strong prior ~~year.~~year, driven by a lower number of completed transactions as well as the impact of delays in regulatory approvals.

~~Treasury Services~~Wholesale Payments revenue was ~~$1.1~~$1.4 billion, down 7%4%, driven by a reporting re-classification for certain expenses which are now reported as contra revenue in Merchant Services. In addition, deposit margin

compression ~~partially~~was offset by higher balances and fee ~~growth and higher balances.~~growth.

Lending revenue was ~~$329~~$350 million, ~~down 1%.~~up 36%, predominantly driven by fair value gains on hedges of accrual loans.

Markets & Securities Services revenue was ~~$6.0~~$7.4 billion, up 9%11%. Markets revenue was ~~$5.1~~$7.2 billion, up ~~14%~~32%.

Fixed Income Markets revenue was ~~$3.6~~$5.0 billion, up ~~25% compared to the prior year which reflected less favorable market conditions. The current quarter results were~~34%, driven by strong client activity across products primarily in Rates ~~agency mortgage~~and Currencies & Emerging Markets reflecting higher trading ~~within Securitized Products and Commodities.~~volume particularly in March.

Equity Markets revenue was ~~$1.5~~$2.2 billion, ~~down 5% compared to a strong prior year. The current quarter results were~~up 28%, driven by ~~lower revenue~~strong client activity in derivatives ~~reflecting lower client activity~~ and ~~less favorable market conditions which were partially offset by~~ higher revenue in Cash ~~Equities.~~Equities, particularly in March.

Securities Services revenue was ~~$1.0 billion, down 2%, with deposit margin compression largely offset by 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.

~~Noninterest expense was $5.3~~$1.1 billion, up ~~3%, driven by higher volume- and revenue-related expenses and investments, including compensation expense, largely offset~~

~~by lower legal expenses and FDIC charges.~~

~~Year-to-date results~~

~~Net income was $9.0 billion, down 8%.~~

~~Net revenue was $28.8 billion, down 1%.~~

~~Banking revenue was $9.8 billion, up 1% compared to the prior year.~~

Investment Banking revenue was $5.4 billion, up 2%, with higher debt underwriting, predominantly offset by lower advisory and equity underwriting fees. The Firm maintained its #1 ranking for Global Investment Banking fees with overall share gains, according to Dealogic.


–	~~Debt underwriting fees were $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 $3.4 billion, down 3%, with deposit margin compression predominantly offset by fee growth and higher balances.~~

~~Lending revenue was $1.0 billion, up 5%~~, predominantly driven by ~~higher net interest income reflecting~~deposit balance and fee growth ~~in loan balances.~~

Markets & Securities Services revenue was $19.0 billion, down 2%. Markets 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 of the recognition and measurement accounting guidance for certain equity investments previously held at cost.

~~Fixed Income Markets revenue was $11.0 billion, up 1% reflecting higher revenue in agency mortgage trading within Securitized Products and Commodities~~ partially offset by ~~lower revenue in Currencies & Emerging Markets.~~

~~Equity Markets revenue was $5.0 billion, down 11% compared to a strong prior year, predominantly driven by lower client activity in derivatives.~~

~~Securities Services revenue was $3.1 billion, down 4%, driven by~~ deposit margin ~~compression and the impact of a business exit partially offset by organic growth.~~compression.

Credit Adjustments & Other was a loss of $5$951 million, ~~compared with a loss of $130 million~~predominantly driven by funding spread widening on derivatives.

Noninterest expense was $5.9 billion, up 5%, driven by higher legal expense, volume- and revenue-related expenses and investments in the ~~prior year.~~business, partially offset by lower structural expense.

The provision for credit losses was ~~$179~~$1.4 billion, compared with $87 million ~~reflecting select C&I client downgrades including those~~ in ~~an emerging market.~~the prior year. The ~~prior year~~increase was ~~a benefit of $142 million, primarily~~predominantly driven by ~~loan sales~~additions to the allowance for credit losses from the impact of the COVID-19 pandemic across multiple sectors and ~~other activity related to a single name~~continued pressure on oil prices, with the largest impact in the Oil & Gas ~~portfolio, partially offset by other net portfolio activity.~~ and Consumer & Retail industries.

~~Noninterest expense was $16.3 billion, flat compared~~Refer to Credit and Investment Risk Management on pages 50–66 and Allowance for Credit Losses on pages 64–65 for further discussions of the ~~prior year reflecting higher volume-related expenses~~credit portfolios and ~~investments, including front office hires, as well as technology staff, predominantly offset by lower FDIC charges and revenue-related compensation expense.~~the allowance for credit losses.



Selected metrics
	As of or for the three months ended March 31,
(in millions, except headcount)	2020		2019		Change
Selected balance sheet data (period-end)
Assets	$	1,217,459	$	1,019,470	19	%
Loans:
Loans retained^(a)	165,376		127,086		30
Loans held-for-sale and loans at fair value	9,326		7,783		20
Total loans	174,702		134,869		30
Equity	80,000		80,000		—
Selected balance sheet data (average)
Assets	$	1,082,820	$	967,632	12
Trading assets-debt and equity instruments	427,316		381,312		12
Trading assets-derivative receivables	55,133		50,609		9
Loans:
Loans retained^(a)	$	128,838	$	126,990	1
Loans held-for-sale and loans at fair value	9,818		8,615		14
Total loans	$	138,656	$	135,605	2
Equity	80,000		80,000		—
Headcount	60,245		58,811		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 headcount) 2019 2018 Change 2019 2018 Change
Selected balance sheet data (period-end)
Assets $ 1,023,132
$ 928,148
10 % $ 1,023,132
$ 928,148
10 %
Loans:
Loans retained^(a)
118,290
117,084
1
118,290
117,084
1
Loans held-for-sale and loans at fair value 8,324
6,133
36
8,324
6,133
36
Total loans 126,614
123,217
3
126,614
123,217
3
Core loans 126,445
122,953
3
126,445
122,953
3
Equity 80,000
70,000
14
80,000
70,000
14
Selected balance sheet data (average)
Assets $ 1,003,395
$ 924,909
8
$ 985,503
$ 924,145
7
Trading assets-debt and equity instruments 415,450
349,390
19
406,304
354,270
15
Trading assets-derivative receivables 48,266
62,025
(22 ) 49,221
60,943
(19 )
Loans:
Loans retained^(a)
$ 119,007
$ 115,390
3
$ 123,368
$ 112,921
9
Loans held-for-sale and loans at fair value 8,344
7,328
14
8,239
6,263
32
Total loans $ 127,351
$ 122,718
4
$ 131,607
$ 119,184
10
Core loans 127,187
122,442
4
131,436
118,877
11
Equity 80,000
70,000
14
80,000
70,000
14
Headcount 55,873
54,052
3 % 55,873
54,052
3 %
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation, including an increase to period-end assets and headcount of $13.4 billion and 4,114, respectively, as of March 31, 2019.


(a)	Loans retained includes credit portfolio loans, loans held by consolidated Firm-administered multi-seller conduits, trade finance loans, other held-for-investment loans and overdrafts.



Selected metrics
	As of or for the three months ended March 31,
(in millions, except ratios)	2020			2019			Change
Credit data and quality statistics
Net charge-offs/(recoveries)	$	55		$	30		83	%
Nonperforming assets:
Nonaccrual loans:
Nonaccrual loans retained^(a)	$	689		$	812		(15	)%
Nonaccrual loansheld-for-sale and loans at fair value	138			313			(56	)
Total nonaccrual loans	827			1,125			(26	)
Derivative receivables	85			44			94
Assets acquired in loan satisfactions	43			58			(26	)
Total nonperforming assets	$	955		$	1,227		(22	)
Allowance for credit losses:
Allowance for loan losses	$	1,422		$	1,252		14
Allowance for lending-related commitments	1,468			758			94
Total allowance for credit losses	$	2,890		$	2,010		44	%
Net charge-off/(recovery) rate^(b)	0.17		%	0.10		%
Allowance for loan losses to period-end loans retained	0.86			0.99
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits^(c)	1.11			1.34
Allowance for loan losses to nonaccrual loans retained^(a)	206			154
Nonaccrual loans to total period-end loans	0.47		%	0.83		%

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 ratios) 2019 2018 Change 2019 2018 Change
Credit data and quality statistics
Net charge-offs/(recoveries) $ 38
$ (40 ) NM
$ 140
$ 94
49 %
Nonperforming assets:
Nonaccrual loans:
Nonaccrual loans retained^(a)
$ 712
$ 318
124 % $ 712
$ 318
124
Nonaccrual loansheld-for-sale and loans at fair value
262
9
NM
262
9
NM
Total nonaccrual loans 974
327
198
974
327
198
Derivative receivables 26
90
(71 ) 26
90
(71 )
Assets acquired in loan satisfactions 75
61
23
75
61
23
Total nonperforming assets $ 1,075
$ 478
125
$ 1,075
$ 478
125
Allowance for credit losses:
Allowance for loan losses $ 1,171
$ 1,068
10
$ 1,171
$ 1,068
10
Allowance for lending-related commitments 824
802
3
824
802
3
Total allowance for credit losses $ 1,995
$ 1,870
7 % $ 1,995
$ 1,870
7 %
Net charge-off/(recovery) rate^(b)
0.13 % (0.14 )% 0.15 % 0.11 %
Allowance for loan losses to period-end loans retained 0.99
0.91
0.99
0.91

Allowance for loan losses to period-end loans retained, excluding trade finance and conduits^(c)
1.33
1.27
1.33
1.27

Allowance for loan losses to nonaccrual loans retained^(a)
164
336
164
336

Nonaccrual loans to total period-end loans 0.77 % 0.27 % 0.77 % 0.27 %


(a)	Allowance for loan losses of ~~$207~~$317 million and ~~$145~~$252 million were held against these nonaccrual loans at ~~September 30,~~March 31, 2020 and 2019, ~~and 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 fees	Investment banking fees												Investment banking fees
	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(in millions)	2019		2018		Change		2019		2018		Change		2020		2019		Change
Advisory	$	506	$	581	(13	)%	$	1,675	$	1,782	(6	)%	$	503	$	644	(22	)%
Equity underwriting	514		420		22		1,284		1,336		(4	)	331		265		25
Debt underwriting^(a)	961		822		17		2,712		2,540		7		1,073		935		15
Total investment banking fees	$	1,981	$	1,823	9	%	$	5,671	$	5,658	—		$	1,907	$	1,844	3	%


(a)	Represents long-term debt and loan syndications.


League table results – wallet share	League table results – wallet share																League table results – wallet share
	Three months ended September 30,						Nine months ended September 30,						Full-year 2018				Three months ended March 31,						Full-year 2019
	2019			2018			2019			2018							2020			2019
	Rank		Share	Rank		Share	Rank		Share	Rank		Share	Rank		Share		Rank		Share	Rank		Share	Rank		Share
Based on fees^(a)																	Based on fees^(a)
M&A^(b)
Global	#	2	8.6	#	2	8.4	#	2	9.3	#	2	8.8	#	2	8.7	%	#	2	8.6	#	2	9.8	#	2	9.0	%
U.S.	4		8.7	3		7.0	2		9.4	2		9.3	2		8.9		2		9.0	2		10.1	2		9.3
Equity and equity-related^(c)
Global	1		11.9	1		9.7	1		10.3	3		9.1	1		9.0		2		8.8	3		8.7	1		9.3
U.S.	1		17.3	1		13.2	1		13.8	1		12.5	1		12.3		2		12.5	1		12.4	1		13.3
Long-term debt^(d)
Global	1		8.8	1		7.8	1		8.0	1		7.4	1		7.2		1		9.5	1		7.8	1		7.8
U.S.	1		13.7	1		12.9	1		12.2	1		11.4	1		11.2		1		12.8	1		11.8	1		12.0
Loan syndications
Global	1		10.1	1		10.8	1		10.6	1		9.9	1		9.7		1		9.8	1		13.0	1		10.2
U.S.	1		13.0	1		14.4	1		13.2	1		12.6	1		12.3		2		9.1	1		16.4	1		12.5
Global investment banking fees^(e)	#	1	9.6	#	1	9.0	#	1	9.3	#	1	8.7	#	1	8.6	%	#	1	9.1	#	1	9.6	#	1	8.9	%


(a)	Source: Dealogic as of ~~October~~April 1, ~~2019.~~2020. Reflects the ranking of revenue wallet and market share.


(b)	Global M&A excludes any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S.


(c)	Global equity and equity-related ranking includes rights offerings and Chinese A-Shares.


(d)	Long-term debt rankings include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”); and exclude money market, short-term debt, and U.S. municipal securities.


(e)	Global investment banking fees exclude money market, short-term debt and shelf deals.

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. Refer to Notes 56 and 67 for a description of the composition of these income statement line items. Refer to Markets revenue on page 69 of JPMorgan Chase’s ~~2018~~2019 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 March 31,							Three months ended March 31,
	2019							2018							2020							2019
(in millions)	Fixed Income Markets		Equity Markets			Total Markets		Fixed Income Markets		Equity Markets			Total Markets		Fixed Income Markets		Equity Markets			Total Markets		Fixed Income Markets		Equity Markets			Total Markets
Principal transactions	$	2,292	$	1,263		$	3,555	$	1,849	$	1,252		$	3,101	$	3,143	$	1,723		$	4,866	$	2,482	$	1,557		$	4,039
Lending- and deposit-related fees	51		1			52		51		1			52		47		2			49		49		2			51
Asset management, administration and commissions	110		472			582		96		446			542		111		608			719		103		434			537
All other income	108		54			162		33		7			40		1		(1		)	—		219		(4		)	215
Noninterest revenue	2,561		1,790			4,351		2,029		1,706			3,735		3,302		2,332			5,634		2,853		1,989			4,842
Net interest income	996		(273		)	723		815		(111		)	704		1,691		(95		)	1,596		872		(248		)	624
Total net revenue	$	3,557	$	1,517		$	5,074	$	2,844	$	1,595		$	4,439	$	4,993	$	2,237		$	7,230	$	3,725	$	1,741		$	5,466

Nine months ended September 30, Nine months ended September 30,
2019 2018

(in millions) Fixed Income Markets Equity Markets Total Markets Fixed Income Markets Equity Markets Total Markets
Principal transactions $ 7,205
$ 4,428
$ 11,633
$ 6,795
$ 4,528
$ 11,323
Lending- and deposit-related fees 149
5
154
147
4
151
Asset management, administration and commissions 310
1,359
1,669
313
1,364
1,677
All other income 500
31
531
764
18
782
Noninterest revenue 8,164
5,823
13,987
8,019
5,914
13,933
Net interest income^(a)
2,808
(837 ) 1,971
2,831
(343 ) 2,488
Total net revenue $ 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.~~

In the first quarter of 2020, CIB Markets had two loss days. Loss days represent the number of days for which CIB Markets, which consists of Fixed Income Markets and Equity Markets, posted losses to total net revenue. The loss days determined under this measure differ from the measure used to determine backtesting gains and losses. Daily backtesting gains and losses include positions in the Firm’s Risk Management value-at-risk (“VaR”) measure and exclude select components of total net revenue, which may more than offset backtesting gains or losses on a particular day. For more information on daily backtesting gains and losses, refer to the VaR discussion on pages 67–69.



Selected metrics
	As of or for the three months ended March 31,
(in millions, except where otherwise noted)	2020		2019		Change
Assets under custody (“AUC”) by asset class (period-end) (in billions):
Fixed Income	$	13,572	$	12,772	6	%
Equity	7,819		9,028		(13	)
Other^(a)	3,018		2,916		3
Total AUC	$	24,409	$	24,716	(1	)
Merchant processing volume (in billions)^(b)	$	374.8	$	356.5	5
Client deposits and other third-party liabilities (average)^(c)	$	514,464	$	444,055	16	%

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

Fixed Income $ 13,349
$ 12,339
8 % $ 13,349
$ 12,339
8 %
Equity 9,301
9,174
1
9,301
9,174
1
Other^(a)
3,045
2,890
5
3,045
2,890
5
Total AUC $ 25,695

$ 24,403
5
$ 25,695
$ 24,403
5
Client deposits and other third-party liabilities (average)^(b)
$ 471,291

$ 434,847
8 % $ 457,961
$ 430,640
6 %
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation.


(a)	Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts.


(b)	Represents total merchant processing volume across CIB, CCB and CB.


(c)	Client deposits and other third-party liabilities pertain to the ~~Treasury Services~~Wholesale Payments and Securities Services businesses.



International metrics
	As of or for the three months ended March 31,
(in millions, except where otherwise noted)	2020		2019^(c)		Change
Total net revenue^(a)
Europe/Middle East/Africa	$	2,590	$	3,180	(19	)%
Asia-Pacific	1,776		1,407		26
Latin America/Caribbean	507		406		25
Total international net revenue	4,873		4,993		(2	)
North America	5,075		5,041		1
Total net revenue	$	9,948	$	10,034	(1	)

Loans retained (period-end)^(a)
Europe/Middle East/Africa	$	29,184	$	26,329	11
Asia-Pacific	16,822		18,006		(7	)
Latin America/Caribbean	8,197		7,397		11
Total international loans	54,203		51,732		5
North America	111,173		75,354		48
Total loans retained	$	165,376	$	127,086	30

Client deposits and other third-party liabilities (average)^(b)
Europe/Middle East/Africa	$	190,976	$	164,138	16
Asia-Pacific	103,792		85,082		22
Latin America/Caribbean	30,849		27,482		12
Total international	$	325,617	$	276,702	18
North America	188,847		167,353		13
Total client deposits and other third-party liabilities	$	514,464	$	444,055	16

AUC (period-end)^(b) (in billions)
North America	$	15,590	$	15,352	2
All other regions	8,819		9,364		(6	)
Total AUC	$	24,409	$	24,716	(1	)%

International metrics
As of or for the three months
ended September 30, As of or for the nine months
ended September 30,
(in millions, except where
otherwise noted)
2019
2018^(c)
Change 2019
2018^(c)
Change
Total net revenue^(a)

Europe/Middle East/Africa $ 2,892
$ 2,773
4 % $ 8,955
$ 9,936
(10 )%
Asia/Pacific 1,428
1,234
16
4,143
3,997
4
Latin America/Caribbean 404
318
27
1,205
1,123
7
Total international net revenue 4,724
4,325
9
14,303
15,056
(5 )
North America 4,614
4,480
3
14,524
14,155
3
Total net revenue $ 9,338
$ 8,805
6
$ 28,827
$ 29,211
(1 )

Loans retained (period-end)^(a)

Europe/Middle East/Africa $ 23,807
$ 25,341
(6 ) $ 23,807
$ 25,341
(6 )
Asia/Pacific 14,402
16,907
(15 ) 14,402
16,907
(15 )
Latin America/Caribbean 5,782
6,097
(5 ) 5,782
6,097
(5 )
Total international loans 43,991
48,345
(9 ) 43,991
48,345
(9 )
North America 74,299
68,739
8
74,299
68,739
8
Total loans retained $ 118,290
$ 117,084
1
$ 118,290
$ 117,084
1

Client deposits and other third-party liabilities (average)^(b)

Europe/Middle East/Africa $ 175,354
$ 162,060
8
$ 171,601
$ 162,102
6
Asia/Pacific 91,556
81,771
12
87,866
82,272
7
Latin America/Caribbean 30,165
26,196
15
28,849
26,477
9
Total international $ 297,075
$ 270,027
10
$ 288,316
$ 270,851
6
North America 174,216
164,820
6
169,645
159,789
6
Total client deposits and other third-party liabilities $ 471,291
$ 434,847
8
$ 457,961
$ 430,640
6

AUC (period-end)^(b)
(in billions)

North America $ 16,146
$ 15,148
7
$ 16,146
$ 15,148
7
All other regions 9,549
9,255
3
9,549
9,255
3
Total AUC $ 25,695
$ 24,403
5 % $ 25,695
$ 24,403
5 %
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation.


(a)	Total net revenue and loans retained (excluding loans held-for-sale and loans at fair value) are based on the location of the trading desk, booking location, or domicile of the client, as applicable.


(b)	Client deposits and other third-party liabilities pertaining to the ~~Treasury Services~~Wholesale Payments and Securities Services businesses, and AUC, are based on the domicile of the client.


(c)	The ~~prior period~~prior-period amounts have been revised to conform with the current period presentation.



COMMERCIAL BANKING

Commercial Banking provides comprehensive financial solutions, including lending, wholesale payments, investment banking and asset management products across three primary client segments: Middle Market Banking, Corporate Client Banking and Commercial Real Estate Banking. Other includes amounts not aligned with a primary client segment.

Middle Market Banking covers small business and midsized corporations, local governments and nonprofit clients.

Corporate Client Banking covers large corporations.

Commercial Real Estate Banking covers investors, developers, and owners of multifamily, office, retail, industrial and affordable housing properties.

Refer to ~~pages 71-73 of JPMorgan Chase’s 2018 Form 10-K and~~ Line of Business Metrics on page ~~174~~178 for a discussion of the business profile of CB.


Selected income statement data	Selected income statement data													Selected income statement data
	Three months ended September 30,							Nine months ended September 30,						Three months ended March 31,
(in millions)	2019		2018			Change		2019		2018		Change		2020		2019		Change
Revenue
Lending- and deposit-related fees(a)	$	221	$	216		2	%	$	664	$	666	—	%	$	261	$	233	12	%
All other income^(a)	378		360			5		1,142		1,092		5		360		500		(28	)
Noninterest revenue	599		576			4		1,806		1,758		3		621		733		(15	)
Net interest income	1,608		1,695			(5	)	4,950		4,995		(1	)	1,557		1,680		(7	)
Total net revenue^(b)	2,207		2,271			(3	)	6,756		6,753		—		2,178		2,413		(10	)

Provision for credit losses	67		(15		)	NM		186		23		NM		1,010		90		NM

Noninterest expense
Compensation expense	454		432			5		1,341		1,268		6		472		449		5
Noncompensation expense	427		421			1		1,277		1,273		—		513		489		5
Amortization of intangibles														3		—		NM
Total noninterest expense	881		853			3		2,618		2,541		3		988		938		5

Income before income tax expense	1,259		1,433			(12	)	3,952		4,189		(6	)	180		1,385		(87	)
Income tax expense	322		344			(6	)	966		988		(2	)	33		325		(90	)
Net income	$	937	$	1,089		(14	)%	$	2,986	$	3,201	(7	)%	$	147	$	1,060	(86	)%

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB and the revenue and expense of the business is reported across CCB, CIB and CB based primarily on client relationship. In conjunction with this realignment, treasury services product revenue has been renamed wholesale payments. Prior period revenue and expense amounts were revised to conform with the current presentation.

(a)

~~Effective in~~In the first quarter of ~~2019, includes revenue~~2020, the Firm reclassified certain fees from ~~investment banking products, commercial card transactions and~~ asset management, administration and commissions (which are included in all other income) to lending- and deposit-related fees. ~~The prior period~~Prior-period amounts ~~have been~~were 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~~and in ~~low-income communities,~~entities established for rehabilitation of historic properties, as well as tax-exempt income related to municipal financing activities of ~~$114~~$81 million and ~~$107~~$94 million for the three months ended ~~September 30,~~March 31, 2020 and 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~~$147 million, a decrease of ~~14%.~~86%, predominantly driven by an increase in the provision for credit losses.

Net revenue was $2.2 billion, down 3%10%. Net interest income was $1.6 billion, down 5%7%, driven by lower deposit margins, partially offset by higher deposit balances. Noninterest revenue was ~~$599~~$621 million, ~~an increase~~a decrease of 4%15%, ~~predominantly~~ driven by ~~strong~~markdowns on held-for-sale positions, including unfunded commitments in the bridge financing portfolio, and lower investment banking ~~performance due to increased equity underwriting and M&A activity.~~revenue, partially offset by higher deposit-related fees.

Noninterest expense was ~~$881~~$988 million, up 3%5%, 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.~~business.

The provision for credit losses was ~~$186~~$1.0 billion, compared with $90 million ~~largely~~in the prior year. The increase was predominantly driven by ~~a net addition~~additions to the allowance for credit losses ~~related~~from the impact of the COVID-19 pandemic across multiple sectors and continued pressure on oil prices, with the largest impacts in the Oil & Gas, Real Estate, and Consumer & Retail industries.

Refer to ~~select C&I client downgrades.~~

Credit and Investment Risk Management on pages 50–66 and Allowance for Credit Losses on pages 64–65 for further discussions of the credit portfolios and the allowance for credit losses.

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 services 950
1,021
(7 ) 2,968
3,019
(2 )
Investment banking^(a)
226
206
10
708
644
10
Other 25
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 Banking 739
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 equity 16 % 21 % 17 % 20 %
Overhead ratio 40
38
39
38



CB product revenue consists of the following:
Lending includes a variety of financing alternatives, which are primarily provided on a secured basis; collateral includes receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures, leases, and standby letters of credit.
Wholesale payments includes revenue from a broad range of products and services that enable CB clients to manage payments and receipts, as well as invest and manage funds.
Investment banking includes revenue from a range of products providing CB clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through advisory, equity underwriting, and loan syndications. Revenue from Fixed Income and Equity Markets products used by CB clients is also included.
Other product revenue primarily includes tax-equivalent adjustments generated from Community Development Banking activities and certain income derived from principal transactions.



Selected income statement data (continued)
	Three months ended March 31,
(in millions, except ratios)	2020			2019			Change
Revenue by product
Lending	$	954		$	1,012		(6	)%
Wholesale payments	991			1,104			(10	)
Investment banking^(a)	235			289			(19	)
Other	(2		)	8			NM
Total Commercial Banking net revenue	$	2,178		$	2,413		(10	)

Investment banking revenue, gross^(b)	$	686		$	818		(16	)

Revenue by client segments
Middle Market Banking	$	946		$	974		(3	)
Corporate Client Banking	681			851			(20	)
Commercial Real Estate Banking	541			547			(1	)
Other	10			41			(76	)
Total Commercial Banking net revenue	$	2,178		$	2,413		(10	)%

Financial ratios
Return on equity	2		%	19		%
Overhead ratio	45			39


(a)	Includes CB’s share of revenue from investment banking products sold to CB clients through the CIB.


(b)	Refer to Business Segment Results on page ~~60 of the 2018 Form 10-K~~21 for discussion of revenue sharing.


~~(c)~~	Effective in the first quarter of 2019, client segment data includes Commercial Real Estate Banking which comprises the former Commercial Term Lending and Real Estate Banking client segments, and Community Development Banking (previously part of Other). The prior period amounts have been revised to conform with the current period presentation.



Selected metrics
	As of or for the three months ended March 31,
(in millions, except headcount)	2020		2019		Change
Selected balance sheet data (period-end)
Total assets	$	247,786	$	216,111	15	%
Loans:
Loans retained	232,254		204,927		13
Loans held-for-sale and loans at fair value	1,112		410		171
Total loans	$	233,366	$	205,337	14
Equity	22,000		22,000		—

Period-end loans by client segment
Middle Market Banking	$	60,317	$	56,846	6
Corporate Client Banking	69,540		46,897		48
Commercial Real Estate Banking	102,799		100,622		2
Other	710		972		(27	)
Total Commercial Banking loans	$	233,366	$	205,337	14

Selected balance sheet data (average)
Total assets	$	226,071	$	218,297	4
Loans:
Loans retained	209,988		204,462		3
Loans held-for-sale and loans at fair value	1,831		1,634		12
Total loans	$	211,819	$	206,096	3

Average loans by client segment
Middle Market Banking	$	56,045	$	56,723	(1	)
Corporate Client Banking	53,032		48,141		10
Commercial Real Estate Banking	101,526		100,264		1
Other	1,216		968		26
Total Commercial Banking loans	$	211,819	$	206,096	3

Client deposits and other third-party liabilities	$	188,808	$	167,260	13
Equity	22,000		22,000		—

Headcount	11,779		11,033		7	%

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 $ 222,483
$ 217,194
2 % $ 222,483
$ 217,194
2 %
Loans:
Loans retained 209,448
205,177
2
209,448
205,177
2
Loans held-for-sale and loans at fair value 3,187
405
NM
3,187
405
NM
Total loans $ 212,635
$ 205,582
3
$ 212,635
$ 205,582
3
Core loans 212,514
205,418
3
212,514
205,418
3
Equity 22,000
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 Banking 55,976
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 retained 207,286
205,603
1
206,183
203,950
1
Loans held-for-sale and loans at fair value 963
1,617
(40 ) 1,097
1,139
(4 )
Total loans $ 208,249
$ 207,220
—
$ 207,280
$ 205,089
1
Core loans 208,125
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 Banking 51,389
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 )
Equity 22,000
20,000
10
22,000
20,000
10

Headcount 11,501
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)
	As of or for the three months ended March 31,
(in millions, except ratios)	2020			2019			Change
Credit data and quality statistics
Net charge-offs/(recoveries)	$	100		$	11		NM
Nonperforming assets
Nonaccrual loans:
Nonaccrual loans retained^(a)	$	793		$	544		46	%
Nonaccrual loans held-for-sale and loans at fair value	—			—			—
Total nonaccrual loans	$	793		$	544		46
Assets acquired in loan satisfactions	24			—			NM
Total nonperforming assets	$	817		$	544		50
Allowance for credit losses:
Allowance for loan losses	$	2,680		$	2,766		(3	)
Allowance for lending-related commitments	505			250			102
Total allowance for credit losses	$	3,185		$	3,016		6	%
Net charge-off/(recovery) rate^(b)	0.19		%	0.02		%
Allowance for loan losses to period-end loansretained	1.15			1.35
Allowance for loan losses to nonaccrual loans retained^(a)	338			508
Nonaccrual loans to period-end total loans	0.34			0.26

Selected metrics (continued)
As of or for the three months
ended September 30, As of or for the nine months
ended September 30,
(in millions, except ratios) 2019
2018
Change
2019
2018
Change
Credit data and quality statistics
Net charge-offs/(recoveries) $ 45
$ (18 ) NM
$ 71
$ 16
344 %
Nonperforming assets
Nonaccrual loans:
Nonaccrual loans retained^(a)
$ 659
$ 452
46 % $ 659
$ 452
46 %
Nonaccrual loans held-for-sale and loans at fair value —
5
NM
—
5
NM
Total nonaccrual loans $ 659
$ 457
44
$ 659
$ 457
44
Assets acquired in loan satisfactions 19
2
NM
19
2
NM
Total nonperforming assets $ 678
$ 459
48
$ 678
$ 459
48
Allowance for credit losses:
Allowance for loan losses $ 2,759
$ 2,619
5
$ 2,759
$ 2,619
5
Allowance for lending-related commitments 293
249
18
293
249
18
Total allowance for credit losses $ 3,052
$ 2,868
6 % $ 3,052
$ 2,868
6 %
Net charge-off/(recovery) rate^(b)
0.09 % (0.03 )% 0.05 % 0.01 %
Allowance for loan losses to period-end loansretained
1.32
1.28
1.32
1.28

Allowance for loan losses to nonaccrual loans retained^(a)
419
579
419
579

Nonaccrual loans to period-end total loans 0.31
0.22
0.31
0.22


(a)	Allowance for loan losses of ~~$119~~$175 million and ~~$105~~$132 million was held against nonaccrual loans retained at ~~September 30,~~March 31, 2020 and 2019, ~~and 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

Refer to pages 74–76 of JPMorgan Chase’s ~~2018~~2019 Form 10-K and Line of Business Metrics on pages ~~174–175~~178–179 for a discussion of the business profile of AWM.



Selected income statement data
(in millions, except ratios)	Three months ended March 31,
	2020			2019			Change
Revenue
Asset management, administration and commissions	$	2,706		$	2,416		12	%
All other income	3			177			(98	)
Noninterest revenue	2,709			2,593			4
Net interest income	897			896			—
Total net revenue	3,606			3,489			3

Provision for credit losses	94			2			NM

Noninterest expense
Compensation expense	1,411			1,462			(3	)
Noncompensation expense	1,248			1,185			5
Total noninterest expense	2,659			2,647			—

Income before income tax expense	853			840			2
Income tax expense	189			179			6
Net income	$	664		$	661		—

Revenue by line of business
Asset Management	$	1,740		$	1,761		(1	)
Wealth Management	1,866			1,728			8
Total net revenue	$	3,606		$	3,489		3	%

Financial ratios
Return on equity	25		%	25		%
Overhead ratio	74			76
Pre-tax margin ratio:
Asset Management	24			23
Wealth Management	24			25
Asset & Wealth Management	24			24

Selected income statement data
(in millions, except ratios) Three months ended September 30, Nine months ended September 30,
2019
2018
Change
2019
2018
Change
Revenue
Asset management, administration and commissions $ 2,574
$ 2,563
— % $ 7,558
$ 7,623
(1 )%
All other income 139
117
19
431
374
15
Noninterest revenue 2,713
2,680
1
7,989
7,997
—
Net interest income 855
879
(3 ) 2,627
2,640
—
Total net revenue 3,568
3,559
—
10,616
10,637
—

Provision for credit losses 44
23
91
48
40
20

Noninterest expense
Compensation expense 1,391
1,391
—
4,259
4,112
4
Noncompensation expense 1,231
1,194
3
3,606
3,620
—
Total noninterest expense 2,622
2,585
1
7,865
7,732
2

Income before income tax expense 902
951
(5 ) 2,703
2,865
(6 )
Income tax expense 234
227
3
655
616
6
Net income $ 668
$ 724
(8 ) $ 2,048
$ 2,249
(9 )

Revenue by line of business
Asset Management $ 1,816
$ 1,827
(1 ) $ 5,362
$ 5,440
(1 )
Wealth Management 1,752
1,732
1
5,254
5,197
1
Total net revenue $ 3,568
$ 3,559
— % $ 10,616
$ 10,637
— %

Financial ratios
Return on equity 24 % 31 % 25 % 32 %
Overhead ratio 73
73
74
73

Pre-tax margin ratio:
Asset Management 25
27
25
27

Wealth Management 25
26
26
27

Asset & Wealth Management 25
27
25
27

Quarterly results

Net income was ~~$668~~$664 million, ~~a decrease of 8%.~~flat versus the prior year.

Net revenue of $3.6 billion was ~~flat. Net interest income was $855 million, down~~up 3%~~, driven by deposit margin compression, largely offset by deposit and loan growth. Noninterest revenue was $2.7 billion, up 1%, driven by higher average market levels.~~

~~The provision for credit losses was $44 million, driven by net charge-offs, as well as net additions to the allowance for loan losses predominantly due to loan growth.~~

~~Noninterest expense was $2.6 billion, an increase of 1%, predominantly driven by continued investments in technology and advisors, partially offset by lower distribution and legal fees.~~

~~Year-to-date results~~

~~Net income was $2.0 billion, a decrease of 9%~~.

~~Net revenue of $10.6 billion was flat.~~ Net interest income of ~~$2.6 billion~~$897 million was flat, reflecting deposit and loan growth, offset by deposit margin compression. Noninterest revenue was $2.7 billion, up 4%, largely driven by:

higher asset management fees as a result of ~~$8.0~~higher asset values at the beginning of 2020 driven by higher average market levels, and strong net inflows into long-term products over the past year despite the impact of market volatility in March, and

increased brokerage commissions on higher client-driven volume particularly in March,

largely offset by

net valuation losses on certain investments, compared with gains in the prior year.

Revenue from Asset Management was $1.7 billion, down 1%, driven by:

net valuation losses on certain investments, compared with gains in the prior year,

largely offset by

higher asset management fees as a result of higher average market levels, despite the impact of market volatility in March.

Revenue from Wealth Management was $1.9 billion, up 8%, predominantly driven by:

increased brokerage commissions on higher client-driven volume particularly in March,

deposit and loan growth, and

higher asset management fees as a result of higher average market levels and strong net inflows into long-term products over the past year, despite the impact of market volatility in March,

partially offset by

deposit margin compression.

Noninterest expense of $2.7 billion was flat, ~~reflecting a shift in the mix toward lower fee products~~as higher investments and ~~lower brokerage activity,~~volume-and revenue-related expense, were predominantly offset by ~~higher net investment valuation gains.~~lower structural expense.

The provision for credit losses was ~~$48~~$94 million, driven by ~~net charge-offs, as well as net~~ additions to the allowance for ~~loan~~credit losses ~~predominantly due to~~from the impact of the COVID-19 pandemic, as well as loan growth.

~~Noninterest expense was $7.9 billion, an increase~~Refer to Credit and Investment Risk Management on pages 50–66 and Allowance for Credit Losses on pages 64–65 for further discussions of ~~2%, predominantly driven by continued investments in technology~~the credit portfolios and ~~advisors, partially offset by lower distribution fees.~~the allowance for credit losses.



Selected metrics
	As of or for the three months ended March 31,
(in millions, except ranking data, headcount and ratios)	2020			2019			Change
% of JPM mutual fund assets rated as 4- or 5-star^(a)	62		%	60		%
% of JPM mutual fund assets ranked in 1^st or 2^nd quartile:^(b)
1 year	69			72
3 years	74			78
5 years	78			86

Selected balance sheet data (period-end)^(c)
Total assets	$	186,102		$	165,865		12	%
Loans	166,058			143,750			16
Deposits	168,561			143,348			18
Equity	10,500			10,500			—

Selected balance sheet data (average)^(c)
Total assets	$	183,316		$	167,358		10
Loans	161,823			145,406			11
Deposits	150,631			138,235			9
Equity	10,500			10,500			—

Headcount	23,830			24,347			(2	)

Number of Wealth Management client advisors	2,878			2,877			—

Credit data and quality statistics^(c)
Net charge-offs	$	2		$	4		(50	)
Nonaccrual loans	304			285			7
Allowance for credit losses:
Allowance for loan losses	$	438		$	325		35
Allowance for lending-related commitments	14			18			(22	)
Total allowance for credit losses	$	452		$	343		32	%
Net charge-off rate	—			0.01		%
Allowance for loan losses to period-end loans	0.26			0.23
Allowance for loan losses to nonaccrual loans	144			114
Nonaccrual loans to period-end loans	0.18			0.20

Selected metrics
As of or for the three months
ended September 30, As of or for the nine months
ended September 30,
(in millions, except ranking data, headcount and ratios) 2019
2018
Change
2019
2018
Change
% of JPM mutual fund assets rated as 4- or 5-star^(a)
65 % 64 % 65 % 64 %
% of JPM mutual fund assets ranked in 1^st or 2^nd quartile:^(b)

1 year 74
65
74
65

3 years 80
64
80
64

5 years 86
83
86
83

Selected balance sheet data (period-end)
Total assets $ 174,226
$ 166,716
5 % $ 174,226
$ 166,716
5 %
Loans 153,245
143,162
7
153,245
143,162
7
Core loans 153,245
143,162
7
153,245
143,162
7
Deposits 138,439
130,497
6
138,439
130,497
6
Equity 10,500
9,000
17
10,500
9,000
17

Selected balance sheet data (average)
Total assets $ 171,121
$ 161,982
6
$ 168,688
$ 158,218
7
Loans 150,486
140,558
7
147,481
136,663
8
Core loans 150,486
140,558
7
147,481
136,663
8
Deposits 138,822
133,021
4
139,127
138,885
—
Equity 10,500
9,000
17
10,500
9,000
17

Headcount 24,228
23,747
2
24,228
23,747
2

Number of Wealth Management client advisors 2,872
2,808
2
2,872
2,808
2

Credit data and quality statistics
Net charge-offs $ 26
$ 11
136
$ 27
$ 7
286
Nonaccrual loans 176
285
(38 ) 176
285
(38 )
Allowance for credit losses:
Allowance for loan losses $ 350
$ 317
10
$ 350
$ 317
10
Allowance for lending-related commitments 16
15
7
16
15
7
Total allowance for credit losses $ 366
$ 332
10 % $ 366
$ 332
10 %
Net charge-off rate 0.07 % 0.03 % 0.02 % 0.01 %
Allowance for loan losses to period-end loans 0.23
0.22
0.23
0.22

Allowance for loan losses to nonaccrual loans 199
111
199
111

Nonaccrual loans to period-end loans 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 and Morningstar for all other domiciled funds. Includes only Asset Management retail open-ended mutual funds that have a rating. Excludes money market funds, Undiscovered Managers Fund, and Brazil ~~and India~~ domiciled funds.

(b)

Quartile ranking sourced ~~from:~~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.~~based on country of domicile. Includes only Asset Management retail open-ended mutual funds that are ranked by the aforementioned sources. Excludes money market funds, Undiscovered Managers Fund, and Brazil ~~and India~~ domiciled funds.


(c)	Loans, deposits and related credit data and quality statistics relate to the Wealth Management business.

Client assets

Client assets of ~~$3.1~~$3.0 trillion and assets under management of $2.2 trillion were up 4% and 7% ~~and 8%~~ respectively, ~~predominantly~~ driven by cumulative net inflows, ~~into long-term and liquidity products as well as higher~~partially offset by the impact of lower market levels ~~globally.~~at the end of the quarter.


Client assets
	September 30,						As of March 31,
(in billions)	2019		2018		Change		2020		2019		Change
Assets by asset class
Liquidity	$	505	$	463	9	%	$	618	$	476	30	%
Fixed income	590		457		29		586		495		18
Equity	437		452		(3	)	369		427		(14	)
Multi-asset and alternatives	714		705		1		666		698		(5	)
Total assets under management	2,246		2,077		8		2,239		2,096		7
Custody/brokerage/administration/deposits	815		790		3		763		801		(5	)
Total client assets	$	3,061	$	2,867	7		$	3,002	$	2,897	4

Memo:
Alternatives client assets ^(a)	$	183	$	172	6		$	188	$	172	9

Assets by client segment
Private Banking	$	636	$	576	10		$	617	$	597	3
Institutional	1,029		945		9		1,097		943		16
Retail	581		556		4		525		556		(6	)
Total assets under management	$	2,246	$	2,077	8		$	2,239	$	2,096	7

Private Banking	$	1,424	$	1,339	6		$	1,355	$	1,371	(1	)
Institutional	1,051		967		9		1,118		965		16
Retail	586		561		4		529		561		(6	)
Total client assets	$	3,061	$	2,867	7	%	$	3,002	$	2,897	4	%


(a)	Represents assets under management, as well as client balances in brokerage accounts



Client assets (continued)
	Three months ended March 31,
(in billions)	2020			2019
Assets under management rollforward
Beginning balance	$	2,364		$	1,987
Net asset flows:
Liquidity	75			(5		)
Fixed income	1			19
Equity	(1		)	(6		)
Multi-asset and alternatives	(2		)	(3		)
Market/performance/other impacts	(198		)	104
Ending balance, March 31	$	2,239		$	2,096

Client assets rollforward
Beginning balance	$	3,226		$	2,733
Net asset flows	85			9
Market/performance/other impacts	(309		)	155
Ending balance, March 31	$	3,002		$	2,897

Client assets (continued)

Three months ended
September 30, Nine months ended
September 30,
(in billions) 2019
2018
2019
2018
Assets under management rollforward
Beginning balance $ 2,178
$ 2,028
$ 1,987
$ 2,034
Net asset flows:
Liquidity 24
14
23
10
Fixed income 41
3
97
(9 )
Equity (2 ) 1
(9 ) 8
Multi-asset and alternatives 1
4
(2 ) 29
Market/performance/other impacts 4
27
150
5
Ending balance, September 30 $ 2,246
$ 2,077
$ 2,246
$ 2,077

Client assets rollforward
Beginning balance $ 2,998
$ 2,799
$ 2,733
$ 2,789
Net asset flows 59
33
120
58
Market/performance/other impacts 4
35
208
20
Ending balance, September 30 $ 3,061
$ 2,867
$ 3,061
$ 2,867



International metrics
	Three months ended March 31,
(in millions)	2020		2019		Change
Total net revenue ^(a)
Europe/Middle East/Africa	$	623	$	695	(10	)%
Asia-Pacific	400		364		10
Latin America/Caribbean	188		182		3
Total international net revenue	1,211		1,241		(2	)
North America	2,395		2,248		7
Total net revenue^(a)	$	3,606	$	3,489	3	%

International metrics
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
Total net revenue ^(a)

Europe/Middle East/Africa $ 672
$ 677
(1 )% $ 2,014
$ 2,095
(4 )%
Asia/Pacific 376
377
—
1,104
1,161
(5 )
Latin America/Caribbean 218
228
(4 ) 658
689
(4 )
Total international net revenue 1,266
1,282
(1 ) 3,776
3,945
(4 )
North America 2,302
2,277
1
6,840
6,692
2
Total net revenue^(a)
$ 3,568
$ 3,559
—
$ 10,616
$ 10,637
— %


(a)	Regional revenue is based on the domicile of the client.



	As of March 31,
(in billions)	2020		2019		Change
Assets under management
Europe/Middle East/Africa	$	395	$	378	4	%
Asia-Pacific	174		178		(2	)
Latin America/Caribbean	56		54		4
Total international assets under management	625		610		2
North America	1,614		1,486		9
Total assets under management	$	2,239	$	2,096	7

Client assets
Europe/Middle East/Africa	$	479	$	461	4
Asia-Pacific	248		247		—
Latin America/Caribbean	134		132		2
Total international client assets	861		840		2
North America	2,141		2,057		4
Total client assets	$	3,002	$	2,897	4	%

As of or for the three months
ended September 30, As of or for the nine months
ended September 30,
(in billions) 2019
2018
Change
2019
2018
Change
Assets under management
Europe/Middle East/Africa $ 387
$ 375
3 % $ 387
$ 375
3 %
Asia/Pacific 183
164
12
183
164
12
Latin America/Caribbean 70
65
8
70
65
8
Total international assets under management 640
604
6
640
604
6
North America 1,606
1,473
9
1,606
1,473
9
Total assets under management $ 2,246
$ 2,077
8
$ 2,246
$ 2,077
8

Client assets
Europe/Middle East/Africa $ 455
$ 435
5
$ 455
$ 435
5
Asia/Pacific 253
228
11
253
228
11
Latin America/Caribbean 172
162
6
172
162
6
Total international client assets 880
825
7
880
825
7
North America 2,181
2,042
7
2,181
2,042
7
Total client assets $ 3,061
$ 2,867
7 % $ 3,061
$ 2,867
7 %



CORPORATE

Refer to pages 77–78 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a discussion of Corporate.


Selected income statement and balance sheet data	Selected 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 March 31,
(in millions, except headcount)	2019			2018			Change		2019			2018			Change		2020			2019			Change
Revenue
Principal transactions	$	10		$	(161	)	NM		$	(227	)	$	(222	)	(2	)%	$	(113	)	$	(62	)	(82	)%
Investment securities gains/(losses)	78			(46		)	NM		135			(371		)	NM
Investment securities gains																	233			13			NM
All other income	32			30			7	%	95			373			(75)		211			57			270	%
Noninterest revenue	120			(177		)	NM		3			(220		)	NM		331			8			NM
Net interest income	572			74			NM		1,436			(35		)	NM		(165		)	417			NM
Total net revenue^(a)	692			(103		)	NM		1,439			(255		)	NM		166			425			(61	)%

Provision for credit losses	—			2			NM		—			(3		)	NM		8			2			300	%

Noninterest expense^(b)	281			28			NM		724			394			84		146			211			(31	)%
Income/(loss) before income tax expense/(benefit)	411			(133		)	NM		715			(646		)	NM
Income before income tax expense/(benefit)																	12			212			(94	)%
Income tax expense/(benefit)	18			12			50		(757		)	18			NM		137			(39		)	NM
Net income/(loss)	$	393		$	(145	)	NM		$	1,472		$	(664	)	NM		$	(125	)	$	251		NM
Total net revenue
Treasury and CIO	$	801		$	186		331		$	1,930		$	235		NM		$	169		$	511		(67	)
Other Corporate	(109		)	(289		)	62		(491		)	(490		)	—		(3		)	(86		)	97
Total net revenue	$	692		$	(103	)	NM		$	1,439		$	(255	)	NM		$	166		$	425		(61	)
Net income/(loss)
Treasury and CIO	$	576		$	96		500		$	1,372		$	(244	)	NM		$	83		$	334		(75	)
Other Corporate	(183		)	(241		)	24		100			(420		)	NM		(208		)	(83		)	(151	)
Total net income/(loss)	$	393		$	(145	)	NM		$	1,472		$	(664	)	NM		$	(125	)	$	251		NM
Total assets (period-end)	$	812,333		$	742,693		9		$	812,333		$	742,693		9		$	981,937		$	796,615		23
Loans (period-end)	1,705			1,556			10		1,705			1,556			10		1,650			1,885			(12	)
Core loans^(c)	1,706			1,556			10		1,706			1,556			10
Headcount	38,155			36,686			4	%	38,155			36,686			4	%	38,785			37,502			3	%


(a)	Included tax-equivalent adjustments, driven by tax-exempt income from municipal bonds, of ~~$74~~$61 million and ~~$94~~$86 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $241 million and $287 million for the nine months ended September 30, 2019 and 2018,~~ respectively.


(b)	Included a net legal benefit of ~~$(32)~~$(20) million and ~~$(175)~~$(90) million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $(189) million and $(225) million for the nine months ended September 30, 2019 and 2018,~~ respectively.


~~(c)~~	~~Average core loans were $1.7 billion and $1.6 billion for the three months ended September 30, 2019 and 2018, respectively, and $1.7 billion for both the nine months ended September 30, 2019 and 2018.~~

Quarterly results

Net ~~income~~loss was ~~$393~~$125 million compared with a net ~~loss~~income of ~~$145~~$251 million in the prior year.

Net revenue was ~~$692~~$166 million, compared with ~~a net loss of $103~~$425 million in the prior ~~year,~~year. The decrease was driven by ~~higher~~lower net interest income ~~and noninterest revenue. Net interest income was driven by balance sheet growth and changes in mix, partially~~on lower rates, largely offset by ~~lower rates. Net interest income also includes income related~~higher noninterest revenue primarily due to higher net investment securities gains reflecting the ~~unwind~~impact of repositioning the ~~internal funding provided to CCB upon the sale of certain mortgage loans. The income reflects the net present value of that funding~~investment securities portfolio, 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~~market-driven impacts on certain ~~legacy private equity investments compared to net losses in the prior year.~~Corporate investments.

Noninterest expense of ~~$281~~$146 million was ~~up $253~~down $65 million due to ~~higher investments in technology and~~lower structural expense, largely offset by a lower net legal benefit compared ~~with~~to the prior year.

The current period ~~included~~income tax ~~benefits related~~expense was driven by the change in the level and mix of income and expenses subject to U.S. federal, and state and local taxes and more specifically, the impact of the Firm’s estimated full-year expected tax rate relative to the ~~resolution~~level of certain tax audits as well as other tax adjustments, which were partially offset by changes to certain tax reserves. The prior year reflected a net benefit of $132 million resulting from changes in estimates underpretax income for the TCJA related to the remeasurement of certain deferred taxes and the deemed repatriation tax on non-U.S. earnings, which was more than offset by changes to certain tax reserves and other tax adjustments.

~~Year-to-date results~~

~~Net income was $1.5 billion, compared with a net loss of $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 losses in the prior year due to the repositioning of the investment securities portfolio~~

~~lower net valuation losses on certain legacy private equity investments,~~

~~partially offset by~~

~~losses on cash deployment transactions which were more than offset by the related net interest income earned on those transactions.~~quarter.

~~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 $174 million loss on the liquidation of a legal entity.~~

The 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 reflected 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 as well as other tax adjustments.

Treasury and CIO overview

At ~~September 30, 2019,~~March 31, 2020, 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)~~risk ratings). Refer to Note 910 for further information on the Firm’s investment securities ~~portfolio.~~portfolio and internal risk ratings.

Refer to Liquidity Risk Management on pages ~~50–54~~45–49 for further information on liquidity and funding risk. Refer to Market Risk Management on pages ~~70–74~~67–71 for information on interest rate, foreign exchange and other 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) 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



Selected income statement and balance sheet data
	As of or for the three months ended March 31,
(in millions)	2020		2019		Change
Investment securities gains	$	233	$	13	NM
Available-for-sale securities (average)	$	372,954	$	226,605	65
Held-to-maturity securities (average)	46,673		31,082		50
Investment securities portfolio (average)	$	419,627	$	257,687	63
Available-for-sale securities (period-end)	$	397,891	$	234,832	69
Held-to-maturity securities, net of allowance for credit losses (period-end)^(a)(b)	71,200		30,849		131
Investment securities portfolio, net of allowance for credit losses (period-end)^(a)	$	469,091	$	265,681	77


(a)	At March 31, 2020, the allowance for credit losses on HTM securities was $19 million.


(b)	During the first quarter of 2020, the Firm transferred $26.1 billion of U.S. GSE and government agency MBS from AFS to HTM for capital management purposes.

Refer to Note 10 for further information.



~~ENTERPRISE-WIDE~~FIRMWIDE RISK MANAGEMENT

Risk is an inherent part of JPMorgan Chase’s business activities. When the Firm extends a consumer or wholesale loan, advises customers and clients 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:~~requires, among other things:

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~~LOBs and Corporate; and

Firmwide structures for risk governance.

The Firm strives for continual improvement ~~through~~in its 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 oversight by the Board ~~oversight.~~of Directors (the “Board”). The impact of risk and control issues ~~are~~is carefully considered in the Firm’s performance evaluation and incentive compensation processes.

~~Firmwide~~ Risk ~~Management is overseen~~governance and ~~managed on an enterprise-wide basis.~~ oversight framework

The Firm’s risk management governance and oversight framework involves understanding drivers of risks, types of risks, and impacts of risks.

Refer to pages 79-83 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further discussion of ~~Enterprise-wide~~Firmwide risk management 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 changed. Refer to page 81 of JPMorgan Chase’s 2018 Form 10-K for a further discussion of the committee.

~~Governance~~governance and ~~Oversight Functions~~oversight functions

The following sections of this Form 10-Q and the ~~2018~~2019 Form 10-K discuss the risk governance and oversight functions in place to manage the risks inherent in the Firm’s business activities.


Risk governance and oversight functions	Form 10-Q page reference	Form 10-K page reference	Form 10-Q page reference	Form 10-K page reference
Strategic risk		84		84
Capital risk	45–49	85–94	39–44	85–92
Liquidity risk	50–54	95–100	45–49	93–98
Reputation risk		101		99
Consumer credit risk	56–59	106-111	52–55	103–107
Wholesale credit risk	60–66	112-119	56–63	108–115
Investment portfolio risk	69	123	66	118
Market risk	70–74	124-131	67–71	119–126
Country risk	75	132–133	72	127–128
Operational risk		134-136	45	129–135
Compliance risk		137		132
Conduct risk		138		133
Legal risk		139		134
Estimations and Model risk		140	74	135



CAPITAL RISK MANAGEMENT

Capital risk is the risk the Firm has an insufficient level ~~and~~or composition of capital to support the Firm’s business activities and associated risks during normal economic environments and under stressed conditions.

Refer to pages ~~85-94~~85–92 of JPMorgan Chase’s ~~2018~~2019 Form

10-K, Note 2122 of this Form 10-Q and the Firm’s Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website, for a further discussion of the Firm’s Capital Risk Management, including capital planning and stress testing.

COVID-19 Pandemic

The Firm remains well-capitalized, but has been impacted by recent market events as a result of the COVID-19 pandemic. The continuation or further deterioration of the current macroeconomic environment could result in additional impacts to the Firms capital and leverage position.

Basel III Overview

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. The minimum amount of regulatory capital that must be held by BHCs and banks is determined by calculating risk-weighted assets (“RWA”), which are on-balance sheet assets and off-balance sheet exposures, weighted according to risk. Two comprehensive approaches are prescribed for calculating RWA: a standardized approach (“Basel III

Standardized”), and an advanced approach (“Basel III Advanced”). ~~Effective January 1, 2019,~~For each of the risk-based capital ratios, the capital adequacy of the Firm 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 the calculations were the same on a fully phased-in and on a transitional basis.~~

The Firm’s Basel III ~~Standardized risk-based~~Standardized-risk-based ratios are currently more binding than the Basel III ~~Advanced risk-based ratios, and the Firm expects that this will remain the case for the foreseeable future.~~Advanced-risk-based ratios.

Basel III also includes a requirement for Advanced Approach banking organizations, including the Firm, to calculate the SLR. Refer to SLR on page 9190 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional information.

Key Regulatory Developments

Current Expected Credit Losses. As disclosed in the Firm’s 2019 Form 10-K, the Firm initially elected to phase-in the January 1, 2020 (“day 1”) CECL adoption impact to retained earnings of $2.7 billion to CET1 capital, at 25% per year in each of 2020 to 2023. As part of their response to the impact of the COVID-19 pandemic, on March 31, 2020, the federal banking agencies issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period (“CECL capital transition provisions”).

The interim final rule provides a uniform approach for estimating the effects of CECL compared to the legacy incurred loss model during the first two years of the transition period (the “day 2” transition amount), whereby the Firm may exclude from CET1 capital 25% of the change in the allowance for credit losses (excluding allowances on PCD loans). The cumulative day 2 transition amount as at December 31, 2021 that is not recognized in CET1 capital as well as the $2.7 billion day 1 impact, will be phased into CET1 capital at 25% per year beginning January 1, 2022. The Firm has elected to apply the CECL capital transition provisions, and accordingly, for the period ended March 31, 2020, the capital measures of the Firm exclude $4.3 billion, which is the $2.7 billion day 1 impact to retained earnings and 25% of the $6.8 billion increase in the allowance for credit losses (excluding allowances on PCD loans).

The impacts of the CECL capital transition provisions on Tier 2 capital, adjusted average assets, and total leverage exposure have also been incorporated into the Firm’s capital measures. Refer to Note 1 for further information on ~~SLR.~~the CECL accounting guidance.

Money Market Mutual Fund Liquidity Facility. On March 18, 2020, the Federal Reserve established a facility, authorized through September 30, 2020, to enhance the liquidity and functioning of money markets. Under the MMLF, the FRBB makes nonrecourse advances to participating financial institutions to purchase certain types of assets from eligible money market mutual fund clients. These assets, which are reflected in other assets on the Firm’s Consolidated balance sheets, are pledged to the FRBB as collateral. On March 23, 2020, the federal banking agencies issued an interim final rule to neutralize the effects of purchasing assets through the program on risk-based and leverage-based capital ratios. As of March 31, 2020 the Firm excluded assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF in the amount of $12.0 billion from its RWA and $1.2 billion from adjusted average assets and total leverage exposure.

Refer to Regulatory Developments Relating to the COVID-19 pandemic on pages 10-11 for additional information on regulatory actions and significant financing programs that the U.S. government and regulators have introduced to address the effects of the COVID-19 pandemic.

Stress Capital Buffer. On March 4, 2020, the Federal Reserve issued the final rule introducing a stress capital buffer (“SCB”) framework for the Basel III Standardized approach that is designed to more closely integrate the results of the quantitative assessment in CCAR with the ongoing minimum capital requirements for BHCs under the U.S. Basel III rules. The final rule replaces the static 2.5% CET1 capital conservation buffer in the Standardized approach with a dynamic institution-specific SCB. The final rule does not apply to the Advanced approach capital requirements. The SCB requirement for BHCs will be effective on October 1 of each year and is expected to remain in effect until September 30 of the following year. The Firm anticipates that the Federal Reserve will disclose the Firm’s SCB requirement and summary information regarding the Firm’s stress test results by June 30, 2020. Starting on October 1, 2020, the SCB will take effect based on the 2020 CCAR submission and will be integrated into the Firm’s ongoing minimum capital requirements.

The following tables present the Firm’s risk-based and leverage-based capital measures under both the Basel III Standardized and Advanced Approaches. ~~The Firm’s Basel III ratios exceeded regulatory minimums as of September 30, 2019 and December 31, 2018.~~ Refer to Capital Risk Management on pages ~~85-94~~85–92 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further discussion of these capital metrics.


	September 30, 2019								December 31, 2018								March 31, 2020^(b)(c)						December 31, 2019
(in millions)	Standardized			Advanced			Minimum capital ratios		Standardized^(b)			Advanced^(b)			Minimum capital ratios
(in millions, except ratios)																	Standardized			Advanced			Standardized			Advanced			Minimum capital ratios^(d)
Risk-based capital metrics:
CET1 capital	$	188,151		$	188,151				$	183,474		$	183,474				$	183,591		$	183,591		$	187,753		$	187,753
Tier 1 capital	214,831			214,831					209,093			209,093					213,406			213,406			214,432			214,432
Total capital	243,500			233,203					237,511			227,435					247,541			234,434			242,589			232,112
Risk-weighted assets	1,527,762			1,435,693					1,528,916			1,421,205					1,598,828			1,489,134			1,515,869			1,397,878
CET1 capital ratio	12.3		%	13.1		%	10.5	%	12.0		%	12.9		%	9.0	%	11.5		%	12.3		%	12.4		%	13.4		%	10.5	%
Tier 1 capital ratio	14.1			15.0			12.0		13.7			14.7			10.5		13.3			14.3			14.1			15.3			12.0
Total capital ratio	15.9			16.2			14.0		15.5			16.0			12.5		15.5			15.7			16.0			16.6			14.0
Leverage-based capital metrics:
Adjusted average assets^(a)	$	2,717,852		$	2,717,852				$	2,589,887		$	2,589,887				$	2,842,244		$	2,842,244		$	2,730,239		$	2,730,239
Tier 1 leverage ratio	7.9		%	7.9		%	4.0	%	8.1		%	8.1		%	4.0	%	7.5		%	7.5		%	7.9		%	7.9		%	4.0	%
Total leverage exposure	NA			$	3,404,535				NA			$	3,269,988				NA			$	3,535,822		NA			$	3,423,431
SLR	NA			6.3		%	5.0	%	NA			6.4		%	5.0	%	NA			6.0		%	NA			6.3		%	5.0	%


(a)	Adjusted average assets, for purposes of calculating the ~~Tier 1~~ leverage ~~ratio,~~ratios, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.


(b)	~~The Firm’s~~As of March 31, 2020, the capital ~~ratios as~~measures reflect the CECL capital transition provisions.


(c)	As of ~~December~~March 31, ~~2018 were equivalent whether calculated on a transitional or fully phased-in basis.~~2020, the capital measures reflect the exclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF.


(d)	Represents minimum requirements and regulatory buffers applicable to the Firm. Refer to Note 22 for additional information.

Capital components

The following table presents reconciliations of total stockholders’ equity to Basel III CET1 capital, Tier 1 capital and Total capital as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018.~~2019.


(in millions)	September 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Total stockholders’ equity	$	264,348		$	256,515		$	261,262		$	261,330
Less: Preferred stock^(a)	28,363			26,068			30,063			26,993
Common stockholders’ equity	235,985			230,447			231,199			234,337
Add:
Certain deferred tax liabilities^(a)							2,389			2,381
Less:
Goodwill	47,818			47,471			47,800			47,823
Other intangible assets	841			748			800			819
Other CET1 capital adjustments	1,546			1,034
Add:
Deferred tax liabilities^(b)	2,371			2,280
Other CET1 capital adjustments^(b)							1,397			323
Standardized/Advanced CET1 capital	188,151			183,474			183,591			187,753
Preferred stock^(a)	28,363			26,068			30,063			26,993
Less: Other Tier 1 adjustments^(a)	1,683			449			248			314
Standardized/Advanced Tier 1 capital	$	214,831		$	209,093		$	213,406		$	214,432
Long-term debt and other instruments qualifying as Tier 2 capital	$	14,145		$	13,772		$	15,264		$	13,733
Qualifying allowance for credit losses(c)	14,400			14,500			18,748			14,314
Other	124			146			123			110
Standardized Tier 2 capital	$	28,669		$	28,418		$	34,135		$	28,157
Standardized Total capital	$	243,500		$	237,511		$	247,541		$	242,589
Adjustment in qualifying allowance for credit losses for Advanced Tier 2 capital(d)	(10,297		)	(10,076		)	(13,107		)	(10,477		)
Advanced Tier 2 capital	$	18,372		$	18,342		$	21,028		$	17,680
Advanced Total capital	$	233,203		$	227,435		$	234,434		$	232,112

(a)

As of September 30, 2019, preferred stock reflects the issuance of $2.25 billion of Series FF preferred stock and redemption of $880 million of Series W preferred stock. Other Tier 1 adjustments includes $1.37 billion of Series I preferred stock called for partial redemption on September 26, 2019 and subsequently redeemed on October 30, 2019. Tier 1 capital as of September 30, 2019 reflects the issuance and redemptions.


~~(b)~~	Represents ~~certain~~ deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating CET1 capital.


(b)	As of March 31, 2020, the impact of the CECL capital transition provision was an increase in CET1 capital of $4.3 billion.


(c)	Represents the allowance for credit losses eligible for inclusion in Tier 2 capital up to 1.25% of credit risk RWA, including the impact of the CECL capital transition provision with any excess deducted from RWA.


(d)	Represents an adjustment to qualifying allowance for credit losses for the excess of eligible credit reserves over expected credit losses up to 0.6% of credit risk RWA, including the impact of the CECL capital transition provision with any excess deducted from RWA.

Capital rollforward

The following table presents the changes in Basel III CET1 capital, Tier 1 capital and Tier 2 capital for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020.


Nine months ended September 30, (in millions)	2019
Standardized/Advanced CET1 capital at December 31, 2018	$	183,474
Three months ended March 31, (in millions)				2020
Standardized/Advanced CET1 capital at December 31, 2019				$	187,753
Net income applicable to common equity	26,710			2,444
Dividends declared on common stock	(8,086		)	(2,779		)
Net purchase of treasury stock	(15,805		)	(5,337		)
Changes in additional paid-in capital	(650		)	(665		)
Changes related to AOCI	2,877			5,849
Adjustment related to DVA^(a)	287
Adjustment related to AOCI^(a)				(4,939		)
Changes related to other CET1 capital adjustments(b)	(656		)	1,265
Change in Standardized/Advanced CET1 capital	4,677			(4,162		)
Standardized/Advanced CET1 capital at September 30, 2019	$	188,151
Standardized/Advanced CET1 capital at March 31, 2020				$	183,591

Standardized/Advanced Tier 1 capital at December 31, 2018	$	209,093
Standardized/Advanced Tier 1 capital at December 31, 2019				$	214,432
Change in CET1 capital(b)	4,677			(4,162		)
Net issuance of noncumulative perpetual preferred stock^(b)	925			3,070
Other	136			66
Change in Standardized/Advanced Tier 1 capital	5,738			(1,026		)
Standardized/Advanced Tier 1 capital at September 30, 2019	$	214,831
Standardized/Advanced Tier 1 capital at March 31, 2020				$	213,406

Standardized Tier 2 capital at December 31, 2018	$	28,418
Standardized Tier 2 capital at December 31, 2019				$	28,157
Change in long-term debt and other instruments qualifying as Tier 2	373			1,531
Change in qualifying allowance for credit losses	(101		)
Change in qualifying allowance for credit losses^(b)				4,434
Other	(21		)	13
Change in Standardized Tier 2 capital	251			5,978
Standardized Tier 2 capital at September 30, 2019	$	28,669
Standardized Total capital at September 30, 2019	$	243,500
Standardized Tier 2 capital at March 31, 2020				$	34,135
Standardized Total capital at March 31, 2020				$	247,541

Advanced Tier 2 capital at December 31, 2018	$	18,342
Advanced Tier 2 capital at December 31, 2019				$	17,680
Change in long-term debt and other instruments qualifying as Tier 2	373			1,531
Change in qualifying allowance for credit losses	(322		)
Change in qualifying allowance for credit losses^(b)				1,804
Other	(21		)	13
Change in Advanced Tier 2 capital	30			3,348
Advanced Tier 2 capital at September 30, 2019	$	18,372
Advanced Total capital at September 30, 2019	$	233,203
Advanced Tier 2 capital at March 31, 2020				$	21,028
Advanced Total capital at March 31, 2020				$	234,434


(a)	Includes cash flow hedges and DVA related to structured notes recorded in AOCI.

(b)

Includes the ~~net effect~~impact of $2.25 billion and $1.85 billion of non-cumulative preferred stock 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 1, 2019, respectively, as well as $1.37 billion of non-cumulative preferred stock that was called for partial redemption on September 26, 2019 and subsequently redeemed on October 30, 2019.the CECL capital transition provisions.

RWA rollforward

The following table presents changes in the components of RWA under Basel III Standardized and Advanced approaches for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. 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, 2019 (in millions)	Credit risk RWA			Market risk RWA			Total RWA			Credit risk RWA			Market 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
Three months ended March 31, 2020 (in millions)																						Credit risk RWA			Market risk RWA			Total RWA			Credit risk RWA			Market risk RWA			Operational risk RWA		Total RWA
December 31, 2019																						$	1,440,220		$	75,649		$	1,515,869		$	932,948		$	75,652		$	389,278	$	1,397,878
Model & data changes^(a)	(3,406		)	(17,076		)	(20,482		)	(4,542		)	(17,076		)	—			(21,618		)	1,800			(8,200		)	(6,400		)	1,600			(8,200		)	—		(6,600		)
Portfolio runoff^(b)	(4,400		)	—			(4,400		)	(4,300		)	—			—			(4,300		)	(1,300		)	—			(1,300		)	(1,300		)	—			—		(1,300		)
Movement in portfolio levels^(c)	24,711			(983		)	23,728			44,408			(1,136		)	(2,866		)	40,406			58,238			32,421			90,659			65,535			32,424			1,197		99,156
Changes in RWA	16,905			(18,059		)	(1,154		)	35,566			(18,212		)	(2,866		)	14,488			58,738			24,221			82,959			65,835			24,224			1,197		91,256
September 30, 2019	$	1,439,958		$	87,804		$	1,527,762		$	962,213		$	87,764		$	385,716		$	1,435,693
March 31, 2020																						$	1,498,958		$	99,870		$	1,598,828		$	998,783		$	99,876		$	390,475	$	1,489,134


(a)	Model & data changes refer to material movements in levels of RWA as a result of revised methodologies and/or treatment per regulatory guidance (exclusive of rule changes).


(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.~~RWA; and deductions to credit risk RWA for excess eligible credit reserves not eligible for inclusion in Tier 2 capital.

Supplementary leverage ratio

Refer to ~~Capital Risk Management~~Supplementary Leverage Ratio on ~~page 88~~pages 87-88 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional information.

The following table presents the components of the Firm’s ~~SLR as of September 30, 2019 and December 31, 2018.~~SLR.


(in millions, except ratio)	September 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Tier 1 capital	$	214,831		$	209,093		$	213,406		$	214,432
Total average assets	2,765,052			2,636,505			2,890,232			2,777,270
Less: Adjustments for deductions from Tier 1 capital	47,200			46,618
Less: Regulatory capital adjustments^(a)							47,988			47,031
Total adjusted average assets^(a)	2,717,852			2,589,887			2,842,244			2,730,239
Off-balance sheet exposures^(b)	686,683			680,101
Add: Off-balance sheet exposures^(b)							693,578			693,192
Total leverage exposure	$	3,404,535		$	3,269,988		$	3,535,822		$	3,423,431
SLR	6.3		%	6.4		%	6.0		%	6.3		%

(a)

~~Adjusted average assets, for~~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. As of March 31, 2020, includes adjustments for the CECL capital transition provisions and the exclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF.


(b)	Off-balance sheet exposures are calculated as the average of the three month-end spot balances during the reporting quarter.

Refer to Note 2122 for JPMorgan Chase Bank, N.A.’s SLR ratios.

Line of business equity

Each business segment is allocated capital by taking into consideration a variety of factors including capital levels of similarly rated peers and applicable regulatory capital requirements. ~~Effective January 1, 2019,~~Refer to line of business ~~capital allocations have increased due to a combination of changes in the relative weights, with greater emphasis~~equity on ~~Standardized RWA and stress, a higher capitalization rate, updated stress simulations, and general business growth. Refer to~~ page 9190 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional ~~information.~~information on capital allocation.

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


(in billions)	September 30, 2019		December 31, 2018		March 31, 2020			December 31, 2019
Consumer & Community Banking	$	52.0	$	51.0	$	52.0		$	52.0
Corporate & Investment Bank	80.0		70.0		80.0			80.0
Commercial Banking	22.0		20.0		22.0			22.0
Asset & Wealth Management	10.5		9.0		10.5			10.5
Corporate	71.5		80.4		66.7		^(a)	69.8
Total common stockholders’ equity	$	236.0	$	230.4	$	231.2		$	234.3


(a)	Includes the $2.7 billion (after-tax) impact to retained earnings upon the adoption of CECL on January 1, 2020.

Planning and stress testing

Comprehensive Capital Analysis and Review (“CCAR”)

On ~~June 27, 2019,~~April 6, 2020, the Firm submitted its 2020 Capital Plan to the Federal Reserve ~~informed~~under the Federal Reserve’s 2020 CCAR process. The Firm anticipates that ~~it did not object to~~the Federal Reserve will disclose the Firm’s SCB requirement and summary information regarding the Firm’s stress test results by June 30, 2020.

Refer to Stress Capital Buffer regulatory developments on page 40 of this Form 10-Q and capital planning and stress testing on pages 85-86 of JPMorgan Chase’s 2019 ~~capital plan.~~Form 10-K for additional information.

Capital actions

Preferred stock

Preferred stock dividends declared were ~~$423~~$421 million ~~and $1.2 billion~~ for the three ~~and nine~~ months ended ~~September 30, 2019.~~March 31, 2020.

~~On October~~During the three months ended March 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,~~2020, the Firm redeemed ~~$1.37 billion~~and issued several series 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 W.~~

~~On July 31, 2019, the Firm issued $2.25 billion of fixed-to-floating rate non-cumulative preferred stock, Series FF.~~

stock. Refer to Note 1718 of this Form 10-Q and Note 2021 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional information on the Firm’s preferred ~~stock.~~stock, including issuances and redemptions.

Common stock dividends

~~On September 17, 2019, the Firm announced that its Board of Directors had declared a~~The Firm’s quarterly common stock dividend ~~which increased to~~is currently $0.90 per ~~share, from $0.80 per share effective with the dividend paid on October 31, 2019.~~share. The Firm’s dividends are subject to the Board of Directors’ approval on a quarterly basis.

Common equity

The Firm’s Board of Directors has authorized the repurchase of up to $29.4 billion of gross common equity between July 1, 2019 and June 30, 2020 as part of the Firm’s annual capital plan.

On March 15, 2020, in response to the COVID-19 pandemic, the Firm temporarily suspended through the second quarter of 2020 repurchases of its common equity. The decision to suspend these repurchases is consistent with the Firm’s objective to use its capital and liquidity to provide support to individuals, small businesses, and the broader economy through lending and other services.

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, 2019~~March 31, 2020 and ~~2018.~~2019.

Three months ended
September 30,
Nine months ended
September 30,
(in millions) 2019
2018

2019
2018
Total shares of common stock repurchased 62.0
39.3

159.0
126.0
Aggregate common stock repurchases $ 6,949
$ 4,416

$ 17,250
$ 14,055

Refer 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 pages ~~176-177~~181-182 of this Form 10-Q and page 30 of JPMorgan Chase’s ~~2018~~2019 Form 10-K, respectively, for additional information regarding repurchases of the Firm’s equity securities.

Other capital requirements

~~TLAC~~Total Loss-Absorbing Capacity (“TLAC”)

The Federal Reserve’s TLAC rule requires the ~~top-tier~~ U.S. ~~GSIB~~global systemically important bank (“GSIB”) top-tier holding companies, including the Firm, to maintain minimum levels of external TLAC and eligible ~~LTD effective January 1, 2019.~~long-term debt (“eligible LTD”).

Refer to other capital requirements on page 9391 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional ~~information.~~information on TLAC.

The following table presents the TLAC and external long-term debt minimum requirements including applicable regulatory buffers, as of March 31, 2020 and December 31, 2019.



	Minimum Requirements
TLAC to RWA	23.0	%
TLAC to leverage exposure	9.5
External long-term debt to RWA	9.5
External long-term debt to leverage	4.5

The following table presents the eligible external TLAC and eligible LTD amounts, as well as a representation of the amounts as a percentage of the Firm’s total RWA and total leverage ~~exposure.~~exposure applying the impact of the CECL capital transition provisions as of March 31, 2020.


September 30, 2019
							March 31, 2020						December 31, 2019
(in billions, except ratio)	Eligible external TLAC^(a)			Eligible LTD			Eligible external TLAC			Eligible LTD			Eligible external TLAC			Eligible LTD
Total eligible TLAC & LTD	$	387.8		$	159.9		$	387.4		$	165.0		$	386.4		$	161.8
% of RWA	25.4		%	10.5		%	24.2		%	10.3		%	25.5		%	10.7		%
Minimum requirement	23.0			9.5
Surplus/(shortfall)	$	36.4		$	14.8		$	19.6		$	13.1		$	37.7		$	17.8

% of total leverage exposure	11.4		%	4.7		%	11.0		%	4.7		%	11.3		%	4.7		%
Minimum requirement	9.5			4.5
Surplus/(shortfall)	$	64.3		$	6.7		$	51.5		$	5.9		$	61.2		$	7.8


~~(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~~6–28 of JPMorgan Chase’s ~~2018~~2019 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~~the Rules of the Commodity Futures Trading Commission (“CFTC”).

Refer to Capital risk management on pages ~~85-94~~85–92 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a discussion on J.P. Morgan Securities’ capital requirements.

The following table presents J.P. Morgan Securities’ net capital:


September 30, 2019
March 31, 2020
(in millions)	Actual		Minimum		Actual^(a)		Minimum
Net Capital	$	22,068	$	3,746	$	17,288	$	5,945


(a)	Net capital reflects the exclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF.

J.P. Morgan Securities plc

J.P. Morgan Securities plc is a wholly-owned subsidiary of JPMorgan Chase Bank, N.A. and 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 Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”).

Refer to Capital risk management on pages ~~85-94~~85–92 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further discussion on J.P. Morgan Securities plc.

~~Effective January 1, 2019, the~~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,~~March 31, 2020, J.P. Morgan Securities plc was compliant with the requirements of the MREL rule. Refer to Supervision and Regulation on pages ~~1-6~~1–6 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional information on MREL.

The following table presents J.P. Morgan Securities plc’s capital metrics:


September 30, 2019
March 31, 2020
(in millions, except ratios)	Estimated			Minimum ratios		Estimated			Minimum ratios
Total capital	$	55,614				$	53,654
CET1 ratio	16.9		%	4.5	%	16.6		%	4.5	%
Total capital ratio	21.5		%	8.0	%	21.3		%	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. Refer to pages ~~95–100~~93–98 of JPMorgan Chase’s ~~2018~~2019 Form 10-K and the Firm’s USU.S. LCR Disclosure reports, which are available on the Firm’s website for a further discussion of the Firm’s Liquidity Risk Management.

LCR and HQLA

The LCR rule requires that the Firm to maintain an amount of unencumbered ~~HQLA~~High Quality Liquid Assets (“HQLA”) that is sufficient to meet its estimated total net cash outflows over a prospective 30 calendar-day period of significant stress. HQLA is the amount of liquid assets that qualify for inclusion in the LCR. HQLA primarily consist of unencumbered cash and certain high-quality liquid securities as defined in the LCR rule. 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. that is in excess of its ~~standalone~~stand-alone 100% minimum LCR requirement, and that is 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%. For additional information on HQLA and net cash outflows, refer to page 94 of JPMorgan Chase’s 2019 Form 10-K and the Firm’s U.S. LCR Disclosure reports.

The following table summarizes the Firm’s average LCR for the three months ended ~~September 30, 2019, June 30,~~March 31, 2020, December 31, 2019 and ~~September 30, 2018~~March 31, 2019 based on the Firm’s interpretation of the finalized LCR framework.


	Three months ended									Three months ended
Average amount (in millions)	September 30, 2019			June 30, 2019			September 30, 2018			March 31, 2020			December 31, 2019			March 31, 2019
HQLA
Eligible cash^(a)	$	199,757		$	219,838		$	344,660		$	205,027		$	203,296		$	216,787
Eligible securities^(b)(c)	337,704			317,439			190,349			343,124			341,990			303,249
Total HQLA^(d)	$	537,461		$	537,277		$	535,009		$	548,151		$	545,286		$	520,036
Net cash outflows	$	468,452		$	477,442		$	466,803		$	482,372		$	469,402		$	467,329
LCR	115		%	113		%	115		%	114		%	116		%	111		%
Net excess HQLA^(d)	$	69,009		$	59,835		$	68,206		$	65,779		$	75,884		$	52,707


(a)	Represents cash on deposit at central banks, primarily the Federal Reserve Banks.


(b)	Predominantly U.S. Treasuries, U.S. GSE and ~~U.S.~~ government agency MBS, and sovereign bonds net of applicable haircuts under the LCR ~~rules.~~rule.


(c)	HQLA eligible securities may be reported in securities borrowed or purchased under resale agreements, trading assets, or investment securities on the Firm’s Consolidated balance sheets.


(d)	Excludes average excess HQLA at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates.

The Firm’s average LCR decreased during the three months ended March 31, 2020, compared with the three-month period ended December 31, 2019, primarily due to an increase in CIB market activities and long-term debt maturities. Liquidity in JPMorgan Chase Bank, N.A. increased during the quarter primarily due to deposits net of loan growth. Deposits increased in March as a result of market conditions driven by the COVID-19 pandemic. Additionally, effective March 26, 2020, the Federal Reserve, in response to the COVID-19 pandemic, reduced reserve requirements to zero percent, which increased JPMorgan

Chase Bank, N.A.’s HQLA by approximately $25 billion. However, these increases in excess liquidity in JPMorgan Chase Bank, N.A. are excluded from the Firm’s reported LCR under the LCR rule. Refer to Note 21 for additional information.

The ~~Firm’s~~Firm's average LCR increased during the three months ended ~~September 30, 2019,~~March 31, 2020, compared with the ~~three-month~~prior year period, ~~ended June 30, 2019,~~ primarily ~~due to a decline~~from an increase in the ~~net~~average amount of reportable HQLA as a result of increased cash ~~outflows~~ from ~~CIB activities.~~unsecured long-term debt issuances.

The Firm’s average LCR fluctuates from period to period, due to changes in its HQLA and estimated net cash outflows as a result of ongoing business activity.

Other liquidity sources

~~As of September 30, 2019, in~~In addition to the assets reported in the Firm’s HQLA above, the Firm had ~~approximately $312 billion of~~ unencumbered marketable securities, such as equity securities and fixed income debt securities, that the Firm believes would be available to raise liquidity. This includes ~~HQLA-eligible~~ securities included as part of the excess ~~liquidity~~HQLA at JPMorgan Chase Bank, N.A. that are not transferable to non-bank ~~affiliates.~~affiliates, as described above. The fair value of these securities was approximately $432 billion and $315 billion as of March 31, 2020 and December 31, 2019, respectively, however, the amount of liquidity that could be raised would be dependent on prevailing market conditions. The fair value increased compared to December 31, 2019, due to an increase in excess HQLA at JPMorgan Chase Bank, N.A. and an increase in CIB trading assets during the quarter.

~~As of September 30, 2019, the~~The Firm also had ~~approximately $313 billion of~~ available borrowing capacity at FHLBs and the discount window at the Federal Reserve Bank ~~and other central banks~~ as a result of collateral pledged by the Firm to such ~~banks.~~banks of approximately $317 billion and $322 billion as of March 31, 2020 and December 31, 2019, respectively. This borrowing capacity excludes the benefit of cash and securities reported in the Firm’s HQLA or other unencumbered securities that are currently pledged at the Federal Reserve Bank discount ~~window.~~ window and other central banks. Although available, the Firm does not view this borrowing capacity at the Federal Reserve Bank discount window and the 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 stable deposits, ~~as well as~~ secured and unsecured funding in the capital ~~markets. The Firm’s loan portfolio is funded with a portion~~markets and stockholders’ equity. Deposits are the primary funding source for JPMorgan Chase Bank, N.A. Additionally, JPMorgan Chase Bank, N.A. may also access funding through short- or long-term secured borrowings, through the issuance of ~~the Firm’s deposits, through securitizations and, with respect to a portion of the Firm’s real estate-related loans, with secured~~

unsecured long-term debt, or from borrowings from the ~~FHLBs. Deposits in excess of~~Parent company or the ~~amount utilized to fund loans~~Intermediate Holding Company (“IHC”). The Firm’s non-bank subsidiaries are primarily funded from long-term unsecured borrowings and short-term secured borrowings, primarily securities loaned or sold under repurchase agreements. Excess funding is 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 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,~~LOB, the deposit balances as of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, and the average deposit balances for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively.


	September 30, 2019		December 31, 2018		Three months ended September 30,				Nine months ended September 30,				March 31, 2020		December 31, 2019			Three months ended March 31,
Deposits					Average				Average									Average
(in millions)					2019		2018		2019		2018							2020		2019
Consumer & Community Banking	$	701,170	$	678,854	$	693,980	$	674,211	$	688,676	$	669,244	$	775,068	$	718,354	^(a)	$	733,648	$	681,013
Corporate & Investment Bank	510,403		482,084		524,521		476,995		509,775		472,879		667,622		511,905		^(a)	562,226		492,354
Commercial Banking	174,903		170,859		172,653		168,102		169,361		171,403		224,198		184,115			188,683		167,177
Asset & Wealth Management	138,439		138,546		138,822		133,021		139,127		138,885		168,561		147,804			150,631		138,235
Corporate	346		323		904		533		887		736		560		253			998		963
Total Firm	$	1,525,261	$	1,470,666	$	1,530,880	$	1,452,862	$	1,507,826	$	1,453,147	$	1,836,009	$	1,562,431		$	1,636,186	$	1,479,742


(a)	In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior- period amounts were revised to conform with the current presentation.

Deposits provide a stable source of funding and reduce the Firm’s reliance on the wholesale funding markets. A significant portion of the Firm’s deposits are consumer deposits 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, 2019~~March 31, 2020 and December 31, ~~2018.~~2019.



(in billions except ratios)	March 31, 2020			December 31, 2019
Deposits	$	1,836.0		$	1,562.4
Deposits as a % of total liabilities	64		%	64		%
Loans	$	1,015.4		$	959.8
Loans-to-deposits ratio	55		%	61		%

(in billions except ratios) September 30, 2019
December 31, 2018
Deposits $ 1,525.3
$ 1,470.7
Deposits as a % of total liabilities 61 % 62 %
Loans $ 945.2
$ 984.6
Loans-to-deposits ratio 62 % 67 %

The Firm believes that average deposit balances are generally more representative of deposit trends than period-end deposit ~~balances.~~balances, over time. However, during periods of market disruption those trends could be affected.

Average deposits across the Firm increased for the three months ended ~~September 30, 2019.~~

~~The increase in~~March 31, 2020. CIB ~~reflects an increase in operating~~ deposits ~~predominantly in Treasury Services~~increased largely driven by

continued growth in client ~~activity, and an increase in the net issuances of structured notes in Markets. The increase in CCB was driven by growth in new accounts. The increase in AWM was~~activity. CB deposits increased predominantly driven by growth in interest-bearing ~~deposits on new client activity. The increase in CB was primarily driven by growth from existing clients.~~

~~Average~~deposits. AWM deposits increased ~~for the nine months ended September 30, 2019 in CIB and CCB, partially offset by a decline in CB. Balances in AWM were relatively flat.~~

~~The increase in CIB reflects an increase in operating deposits predominantly in Treasury Services~~largely driven by growth in ~~client activity,~~time deposits. Average balances for CIB, CB and ~~an increase~~AWM were also impacted by net inflows in the ~~net issuances~~month of ~~structured notes in Markets. The increase in~~March as a result of market conditions driven by COVID-19 pandemic concerns. CCB ~~was~~deposits increased driven by continued growth 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.~~

Refer to the discussion of the Firm’s Business Segment Results and the Consolidated Balance Sheets Analysis on pages 21–4337 and pages 15-16, 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, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, and average balances for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. Refer to the Consolidated Balance Sheets Analysis on pages ~~15–17~~15-16 and Note 1011 for additional information.


	September 30, 2019		December 31, 2018		Three months ended September 30,				Nine months ended September 30,				March 31, 2020		December 31, 2019		Three months ended March 31,
Sources of funds (excluding deposits)					Average				Average								Average
(in millions)					2019		2018		2019		2018						2020		2019
Commercial paper	$	19,620	$	30,059	$	19,607	$	28,702	$	24,756	$	27,289	$	13,770	$	14,754	$	13,974	$	28,731
Other borrowed funds	8,826		8,789		10,537		11,172		10,869		11,716		8,774		7,544		9,093		10,247
Total short-term unsecured funding	$	28,446	$	38,848	$	30,144	$	39,874	$	35,625	$	39,005	$	22,544	$	22,298	$	23,067	$	38,978
Securities sold under agreements to repurchase^(a)	$	235,968	$	171,975	$	229,581	$	174,436	$	215,148	$	178,929	$	223,913	$	175,709	$	234,394	$	197,454
Securities loaned^(a)	9,739		9,481		8,505		9,131		9,117		10,900		6,677		5,983		7,349		10,781
Other borrowed funds^(b)	20,447		30,428		21,758		21,169		28,343		21,336		29,365		18,622		19,761		35,583
Obligations of Firm-administered multi-seller conduits^(c)	$	10,514	$	4,843	$	12,167	$	3,102	$	10,987	$	3,070	$	12,174	$	9,223	$	9,898	$	7,386
Total short-term secured funding	$	276,668	$	216,727	$	272,011	$	207,838	$	263,595	$	214,235	$	272,129	$	209,537	$	271,402	$	251,204

Senior notes	$	173,550	$	162,733	$	172,059	$	154,820	$	167,495	$	152,046	$	171,939	$	166,185	$	165,741	$	162,952
Trust preferred securities	—		—		—		517		—		629		—		—		—		—
Subordinated debt	18,043		16,743		17,797		16,079		17,196		16,106		19,267		17,591		18,155		16,722
Structured notes^(d)	70,687		53,090		69,144		50,905		62,984		48,874		67,689		74,724		72,848		57,395
Total long-term unsecured funding	$	262,280	$	232,566	$	259,000	$	222,321	$	247,675	$	217,655	$	258,895	$	258,500	$	256,744	$	237,069

Credit card securitization^(c)	$	6,457	$	13,404	$	7,394	$	15,052	$	10,802	$	16,620	$	6,562	$	6,461	$	6,171	$	13,409
FHLB advances	29,642		44,455		29,646		48,645		35,998		54,378		36,131		28,635		27,128		43,965
Other long-term secured funding^(e)	4,550		5,010		4,558		5,013		4,708		4,832		4,318		4,363		4,408		4,891
Total long-term secured funding	$	40,649	$	62,869	$	41,598	$	68,710	$	51,508	$	75,830	$	47,011	$	39,459	$	37,707	$	62,265

Preferred stock^(f)	$	28,363	$	26,068	$	28,241	$	26,252	$	27,457	$	26,130	$	30,063	$	26,993	$	29,406	$	27,126
Common stockholders’ equity^(f)	$	235,985	$	230,447	$	235,613	$	230,439	$	232,917	$	228,995	$	231,199	$	234,337	$	234,530	$	230,051


(a)	Primarily consists of short-term securities loaned or sold under agreements to repurchase.


(b)	~~Includes FHLB~~At March 31, 2020 includes nonrecourse 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.~~provided under the MMLF.


(c)	Included in beneficial interests issued by consolidated variable interest entities on the Firm’s Consolidated balance sheets.


(d)	Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.


(e)	Includes long-term structured notes which are secured.


(f)	Refer to Capital Risk Management on pages ~~45–49,~~39–44 and Consolidated statements of changes in stockholders’ equity on page 83 of this Form 10-Q, and Note 2021 and Note 2122 of JPMorgan Chase’s ~~2018~~2019 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 and U.S. GSE and government agency ~~MBS, and constitute a significant portion of the federal funds purchased and securities~~MBS. Securities loaned or sold under agreements to repurchase ~~agreements on the Consolidated balance sheets. The increase~~increased at ~~September 30,~~March 31, 2020, compared with December 31, 2019, from ~~December 31, 2018, was driven by CIB~~client-driven market-making activities as a result of changes in market conditions in March and ~~includes the Firm’s participation in the Federal Reserve’s open market operations, as well as~~ higher ~~secured~~ financing of trading assets-debt instruments

~~and client-driven activities.~~ when compared with lower levels at year-end in CIB.

The balances associated with securities loaned or sold under agreements to repurchase fluctuate over time due to customers’ investment and financing activities, the Firm’s demand for financing, the ongoing management of the mix of the Firm’s liabilities, including its secured and unsecured financing (for both the investment securities and market-making portfolios), and other market and portfolio factors.

As of March 31, 2020, the Firm has participated in several of the U.S. government facilities, including the MMLF. The secured nonrecourse advances under the MMLF are included

in other borrowed funds. Refer to Capital Risk Management on pages 39-44 for additional information on the MMLF.

In addition, the Firm is participating in the PDCF established by the Federal Reserve on March 20, 2020, which allows primary dealers to support smooth market functioning by facilitating the availability of credit to businesses and households. Under the PDCF, the Federal Reserve Bank of New York (“FRBNY”) provides collateralized financing on a term basis to primary dealers. At March 31, 2020, these financing transactions were reported as securities sold under agreements to repurchase. The PDCF will remain available to primary dealers for at least six months, or longer if conditions warrant.

The Firm also continues to participate in the Federal Reserve’s open market operations.

The Firm’s sources of short-term unsecured funding primarily consist of issuance of wholesale commercial paper. The decrease in commercial paper at ~~September 30, 2019,~~March 31, 2020, from December 31, ~~2018,~~2019, was due to lower net 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. 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~~non-bank subsidiary funding needs. The Parent Company advances substantially all net funding proceeds to its subsidiary, the ~~Intermediate Holding Company (“IHC”).~~IHC. The IHC does not issue debt to external counterparties. The following table summarizes long-term unsecured issuance and maturities or redemptions for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019. Refer to Liquidity Risk Management on pages ~~95-100~~93–98 and Note 1920 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional information on the IHC and long-term debt.


Long-term unsecured funding	Long-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 March 31,
	2019		2018		2019		2018		2019		2018		2019		2018		2020		2019		2020		2019
(Notional in millions)	Parent Company								Subsidiaries								Parent Company				Subsidiaries
Issuance
Senior notes issued in the U.S. market	$	5,000	$	6,000	$	13,250	$	17,000	$	—	$	1,250	$	1,750	$	8,761	$	5,250	$	4,250	$	—	$	1,750
Senior notes issued in non-U.S. markets	1,672		—		3,920		1,175		—		—		—		—		1,355		2,248		—		—
Total senior notes	6,672		6,000		17,170		18,175		—		1,250		1,750		8,761		6,605		6,498		—		1,750
Structured notes^(a)	780		387		2,596		2,047		8,511		5,934		23,643		20,159		2,782		1,185		9,252		6,116
Total long-term unsecured funding – issuance	$	7,452	$	6,387	$	19,766	$	20,222	$	8,511	$	7,184	$	25,393	$	28,920	$	9,387	$	7,683	$	9,252	$	7,866

Maturities/redemptions
Senior notes	$	2,700	$	646	$	10,607	$	18,633	$	2,751	$	1,503	$	4,567	$	4,466	$	5,466	$	3,750	$	4,065	$	1,815
Subordinated debt	37		15		183		15		—		—		—		—		—		146		—		—
Structured notes	477		582		1,436		2,465		4,540		3,474		12,700		12,104		1,525		628		9,382		3,833
Total long-term unsecured funding – maturities/redemptions	$	3,214	$	1,243	$	12,226	$	21,113	$	7,291	$	4,977	$	17,267	$	16,570	$	6,991	$	4,524	$	13,447	$	5,648


(a)	Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.

The Firm ~~raises~~can also raise secured long-term funding through securitization of consumer credit card loans and ~~advances from the FHLBs.~~FHLB advances. 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,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively.



Long-term secured funding
	Three months ended March 31,
	Issuance				Maturities/Redemptions
(in millions)	2020		2019		2020		2019
Credit card securitization	$	1,000	$	—	$	900	$	—
FHLB advances	15,000		—		7,503		2,001
Other long-term secured funding^(a)	234		35		205		246
Total long-term secured funding	$	16,234	$	35	$	8,608	$	2,247

Long-term secured funding
Three months ended September 30, Nine months ended September 30,
Issuance Maturities/Redemptions Issuance Maturities/Redemptions
(in millions) 2019 2018 2019 2018 2019
2018
2019
2018
Credit card securitization $ —
$ —
$ 2,850
$ 2,375
$ —
$ 1,396
$ 6,975
$ 8,500
FHLB advances —
—
5
10,704
—
4,000
14,810
23,157
Other long-term secured funding^(a)
62
117
180
139
115
312
633
161
Total long-term secured funding $ 62
$ 117
$ 3,035
$ 13,218
$ 115
$ 5,708
$ 22,418
$ 31,818


(a)	Includes long-term structured notes which are secured.

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. Refer to Note 14 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for further description of the client-driven loan 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. Refer to SPEs on page 18, and liquidity risk and credit-related contingent features in Note 45 for additional information on the impact of a credit ratings downgrade on the funding requirements for VIEs, and on derivatives and collateral agreements.

The credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries as of ~~September 30, 2019,~~March 31, 2020, except as noted below, were as ~~follows.~~follows:



	JPMorgan Chase & Co.			JPMorgan Chase Bank, N.A.^(a)			J.P. Morgan Securities LLC J.P. Morgan Securities plc
~~September 30, 2019~~March 31, 2020	Long-term issuer	Short-term issuer	Outlook	Long-term issuer	Short-term issuer	Outlook	Long-term issuer	Short-term issuer	Outlook
Moody’s Investors Service	A2	P-1	Stable	Aa2	P-1	Stable	Aa3	P-1	Stable
Standard & Poor’s	A-	A-2	Stable	A+	A-1	Stable	A+	A-1	Stable
Fitch Ratings^(a)	AA-	F1+	~~Stable~~Negative	AA	F1+	~~Stable~~Negative	AA	F1+	~~Stable~~Negative


~~(a)~~	On 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 the merged entity.

(a) On April 18, 2020, Fitch affirmed the credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries but revised the outlook on the credit ratings from stable to negative given expectations that credit fundamentals will deteriorate as a result of the COVID-19 pandemic.

Refer to page ~~100~~98 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a discussion of the factors that could affect credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries.



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, including consumer credit risk,

wholesale credit risk, and investment portfolio risk. Refer to pages ~~55-68~~50–65 for a further discussion of Credit Risk.

Refer to page 6966 for a further discussion of Investment Portfolio Risk. Refer to Credit and Investment Risk Management on pages ~~102-123~~100–118 of JPMorgan Chase’s ~~2018~~2019 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.~~framework.



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; refer to Notes 2 and 3 for further information regarding these loans. Refer to Notes ~~11, 22,~~12, 23, and 45 for additional information on the Firm’s loans, lending-related commitments and derivative receivables, including the Firm’s accounting policies.

Refer to Wholesale credit exposure – industry exposures on pages 62–64 for further information regarding the credit risk inherent in the Firm’s cash placed with banks; refer to 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; and refer to Note ~~10 of this Form 10-Q and Note~~ 11 ~~of JPMorgan Chase’s 2018 Form 10-K~~ for information regarding the credit risk inherent in the securities financing portfolio.

Refer to Consumer Credit Portfolio on pages ~~106–111 of JPMorgan Chase’s 2018 Form 10-K~~52-55 and Note ~~11 of this Form 10-Q~~12 for a further ~~discussion~~discussions of the consumer credit environment and consumer loans. Refer to Wholesale Credit Portfolio on pages ~~112–119 of JPMorgan Chase’s 2018 Form 10-K~~56-63 and Note ~~11 of this Form 10-Q for a further discussion of~~12 as well as the wholesale credit environment and wholesale loans.

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. The adoption resulted in a change in the accounting for PCI loans, which are considered PCD loans under CECL. In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.

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-sale 10,571
11,988
88
—
Loans at fair value 5,760
3,151
176
220
Total loans–reported 945,218
984,554
4,951
4,831
Derivative receivables 55,577
54,213
26
60
Receivables from customers and other^(a)
32,236
30,217
—
—
Total credit-related assets 1,033,031
1,068,984
4,977
4,891
Assets acquired in loan satisfactions
Real estate owned NA
NA
340
269
Other NA
NA
26
30
Total assets acquired in loan satisfactions
NA
NA
366
299
Lending-related commitments 1,095,090
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

On April 7, 2020, the federal banking agencies along with the National Credit Union Administration and the Consumer Financial Protection Bureau, in consultation with the state

financial regulators, issued an interagency statement revising a March 22, 2020 interagency statement on loan modifications and the reporting for financial institutions working with customers affected by the COVID-19 pandemic (the “IA Statement”). The IA Statement reconfirmed that supervised institutions will not be directed to automatically categorize all COVID-19 related loan modifications as troubled debt restructurings (“TDRs”), including short-term and other insignificant modifications such as payment delays, fee waivers and extensions of repayment terms, and modifications or other programs mandated by the federal or state governments. The IA Statement also provides that loans that were current prior to these modifications should generally not be reported as past due or nonaccrual. Additionally, the IA Statement outlines accounting and reporting considerations for eligible loan modifications for which a financial institution elects to apply the CARES Act and forgo TDR accounting.

(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
Loans 932,493
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
Loans 0.58 % 0.43 % 0.59 % 0.52 %
Loans – excluding PCI 0.60
0.45
0.60
0.54
The Firm’s initial response to many borrowers impacted by the COVID-19 pandemic included offering loan modifications, such as 90-day payment delays and waiving or refunding certain fees. These modifications are intended to mitigate adverse affects on borrowers due to the COVID-19 pandemic. Instances of these modifications will likely rise over the course of the second quarter of 2020. The effectiveness of the Firm’s actions in helping borrowers recover and mitigating credit losses remains uncertain in light of the unpredictable nature and duration of the COVID-19 pandemic. The impact of the Firm’s initial short-term payment delays and other insignificant modifications was not material to the performance of and credit-related information for the consumer and wholesale credit portfolios during the quarter ended March 31, 2020.



Total credit portfolio
	Credit exposure						Nonperforming^(d)(e)
(in millions)	Mar 31, 2020			Dec 31, 2019			Mar 31, 2020		Dec 31, 2019
Loans retained	$	1,003,089		$	945,601		$	5,834	$	3,983
Loans held-for-sale	6,072			7,064			48		7
Loans at fair value	6,214			7,104			90		90
Total loans–reported	1,015,375			959,769			5,972		4,080
Derivative receivables	81,648			49,766			85		30
Receivables from customers and other^(a)	33,376			33,706			—		—
Total credit-related assets	1,130,399			1,043,241			6,057		4,110
Assets acquired in loan satisfactions
Real estate owned	NA			NA			342		344
Other	NA			NA			22		43
Total assets acquired in loan satisfactions	NA			NA			364		387
Lending-related commitments	1,081,462			1,104,199			619		474
Total credit portfolio	$	2,211,861		$	2,147,440		$	7,040	$	4,971
Credit derivatives used in credit portfolio management activities^(b)	$	(20,773	)	$	(18,030	)	$	—	$	—
Liquid securities and other cash collateral held against derivatives^(c)	(26,178		)	(16,009		)	NA		NA



(in millions, except ratios)	Three months ended March 31,
(in millions, except ratios)	2020			2019
Net charge-offs	$	1,469		$	1,361
Average retained loans	948,635			956,557
Net charge-off rates	0.62		%	0.58		%


(a)	Receivables from customers and other primarily represents ~~prime~~ brokerage-related held-for-investment customer receivables.


(b)	Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. Refer to Credit derivatives on page 6663 and Note 45 for additional information.


(c)	Includes collateral related to derivative instruments where an appropriate legal ~~opinion has~~opinions have not been either sought or ~~obtained.~~obtained with respect to master netting agreements.


(d)	~~Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the pools is performing.~~

~~(e)~~

At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of ~~$1.6 billion~~$616 million and ~~$2.6 billion,~~$961 million, respectively, and real estate owned (“REO”) insured by U.S. government agencies of ~~$50~~$29 million and ~~$75~~$41 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”).


(e)	At March 31, 2020, nonperforming loans included $970 million of PCD loans on nonaccrual status. Prior to the adoption of CECL, nonaccrual loans excluded PCI loans as the Firm recognized interest income on each pool of PCI loans as each of the pools was performing.



CONSUMER CREDIT PORTFOLIO

The Firm’s retained consumer portfolio consists primarily of residential real estate loans, credit card loans, scored 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. Refer to Note ~~11 of this Form 10-Q and Consumer Credit Portfolio on pages 106–111 and Note~~ 12 ~~of JPMorgan Chase’s 2018 Form 10-K~~ for further information on consumer ~~loans.~~loans, as well as the Firm’s nonaccrual and charge-off accounting policies. Refer to Note ~~22 of this Form 10-Q and Note~~ 27 ~~of JPMorgan Chase’s 2018 Form 10-K~~23 for further information on lending-related commitments.

Recent deterioration in the macroeconomic environment driven by the impacts of the COVID-19 pandemic, resulted in an increase in the allowance for credit losses. As of March 31, 2020, the impacts of the macroeconomic environment have had only a limited impact to consumer credit performance. The continuation or worsening of the effects of the COVID-19 pandemic on the macroeconomic environment could result in further impacts to credit quality metrics, including delinquencies, nonaccrual loans and charge-offs.

The following table presents consumer credit-related information with respect to the scored credit ~~portfolio~~portfolios held byin CCB, ~~scored prime mortgage and scored home equity loans held by~~ AWM and ~~prime mortgage loans held by~~ Corporate. ~~Refer to Note~~ 12 ~~of JPMorgan Chase’s 2018 Form 10-K for further information about the Firm’s nonaccrual and charge-off accounting policies.~~

Consumer credit portfolio
Three months ended September 30, Nine months ended September 30,

(in millions, except ratios) 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,
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 $ 197,456
$ 231,078
$ 1,629
$ 1,765
$ (15 ) $ (105 ) (0.03 )% (0.18 )% $ (31 ) $ (256 ) (0.02 )% (0.15 )%
Home equity 24,954
28,340
1,208
1,323
(25 ) (12 ) (0.39 ) (0.16 ) (40 ) (2 ) (0.20 ) (0.01 )
Auto^(a)(b)
61,410
63,573
112
128
49
56
0.32
0.35
149
182
0.32
0.37
Consumer & Business Banking^(b)(c)
26,699
26,612
268
245
79
68
1.18
1.02
204
171
1.03
0.88
Total loans, excluding PCI loans and loans held-for-sale 310,519
349,603
3,217
3,461
88
7
0.11
0.01
282
95
0.11
0.04
Loans – PCI
Home equity 7,753
8,963
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Prime mortgage 4,164
4,690
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Subprime mortgage 1,797
1,945
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Option ARMs 7,576
8,436
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Total loans – PCI 21,290
24,034
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Total loans – retained 331,809
373,637
3,217
3,461
88
7
0.10
0.01
282
95
0.11
0.03
Loans held-for-sale 4,821
95
2
—
NA
NA
NA
NA
NA
NA
NA
NA
Total consumer, excluding credit card loans 336,630
373,732
3,219
3,461
88
7
0.10
0.01
282
95
0.11
0.03
Lending-related commitments^(d)
53,591
46,066

Receivables from customers 18
154

Total consumer exposure, excluding credit card 390,239
419,952

Credit card
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-sale —
16
—
—
NA
NA
NA
NA
NA
NA
NA
NA
Total credit card loans 159,571
156,632
—
—
1,175
1,073
2.95
2.91
3,617
3,407
3.13
3.16
Lending-related commitments^(d)
645,880
605,379

Total credit card exposure 805,451
762,011

Total consumer credit portfolio $ 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 $ 1,174,400
$ 1,157,929
$ 3,219
$ 3,461
$ 1,263
$ 1,080
1.05 % 0.86 % $ 3,899
$ 3,502
1.07 % 0.96 %



Consumer credit portfolio
									Three months ended March 31,
(in millions, except ratios)	Credit exposure				Nonaccrual loans^(g)(h)				Net charge-offs/(recoveries)						Net charge-off/(recovery) rate⁽ⁱ⁾
	Mar 31, 2020		Dec 31, 2019		Mar 31, 2020		Dec 31, 2019		2020			2019			2020		2019
Consumer, excluding credit card
Residential real estate^(a)	$	242,349	$	243,317	$	3,730	$	2,780	(120		)	(2		)	(0.20	)	—
Auto and other^(b)(c)	51,430		51,682		147		146		114			109			0.89		0.85
Total loans – retained	293,779		294,999		3,877		2,926		(6		)	107			(0.01	)	0.13
Loans held-for-sale	1,848		3,002		—		2		NA			NA			NA		NA
Total consumer, excluding credit card loans	295,627		298,001		3,877		2,928		(6		)	107			(0.01	)	0.13
Lending-related commitments^(d)	41,535		40,169
Total consumer exposure, excluding credit card	337,162		338,170
Credit card
Loans retained^(e)	154,021		168,924		—		—		1,313			1,202			3.25		3.23
Loans held-for-sale	—		—		—		—		NA			NA			NA		NA
Total credit card loans	154,021		168,924		—		—		1,313			1,202			3.25		3.23
Lending-related commitments^(d)(f)	681,442		650,720
Total credit card exposure^(f)	835,463		819,644
Total consumer credit portfolio^(f)	$	1,172,625	$	1,157,814	$	3,877	$	2,928	$	1,307		$	1,309		1.15	%	1.10	%


(a)	Includes scored mortgage and home equity loans held in CCB and AWM, and scored mortgage loans held in Corporate.


(b)	At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, excluded operating lease assets of ~~$22.1~~$23.1 billion and ~~$20.5~~$22.8 billion, respectively. These operating lease assets are included in other assets on the Firm’s Consolidated balance sheets. Refer to Note 1617 for further information.


~~(b)~~(c)	Includes ~~certain~~scored auto and business banking loans 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.~~overdrafts.

(d)

Credit card, ~~and~~ home equity and certain business banking 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 and certain business banking commitments, the Firm can reduce or cancel these lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. Refer to Note 2223 for further information.


(e)	Includes billed interest and ~~fees net of an allowance for uncollectible interest and~~ fees.


(f)	Also includes commercial card lending-related commitments primarily in CB and CIB.

(g)

At ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of ~~$1.6 billion~~$616 million and ~~$2.6 billion,~~$961 million, respectively. These amounts have been excluded from nonaccrual loans based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status, as permitted by regulatory guidance issued by the FFIEC.


~~(g)~~(h)	~~Excludes~~At March 31, 2020, nonaccrual loans included $970 million of PCD loans. Prior to the adoption of CECL, nonaccrual loans excluded PCI ~~loans. The~~loans as the Firm ~~is recognizing~~recognized interest income on each pool of PCI loans as each of the pools iswas performing.

~~(h)~~

Net charge-offs/(recoveries) and the net charge-off/(recovery) rates excluded write-offs in the PCI portfolio of $43 million and $58 million for the three months ended September 30, 2019 and 2018, respectively, and $132 million and $151 million for the nine months ended September 30, 2019 and 2018, respectively. These write-offs decreased the allowance for loan losses for PCI loans. Refer to Allowance for Credit Losses on pages 67–68 for further information.


(i)	Average consumer loans held-for-sale were ~~$5.5~~$2.5 billion and ~~$196 million~~$1.2 billion for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $2.6 billion and $240 million for the nine months ended September 30, 2019 and 2018,~~ respectively. These amounts were excluded when calculating net charge-off/(recovery) rates.

Consumer, excluding credit card

Portfolio analysis

Loan balances decreased from December 31, ~~2018~~2019 due to lower residential real estate loans, predominantly driven by loan sales. ~~The credit performance of the portfolio continues to benefit from a strong labor market and improvement in home prices.~~

The following discussions provide information concerning individual loan products, excluding PCI loans which are addressed separately. Refer to Note 11 of this Form 10-Q for further information about this portfolio, including information about delinquencies, loan modifications and other credit quality indicators.

Residential ~~mortgage:~~real estate: The residential ~~mortgage~~real estate portfolio, including loans held-for-sale, predominantly consists of prime mortgage ~~loans.~~loans and home equity lines of credit. The portfolio decreased from December 31, ~~2018~~2019 driven by paydowns and loan sales in Home Lending, ~~as well as paydowns,~~ largely offset by originations of prime mortgage loans that have been retained on the balance sheet. Net recoveries for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 were ~~lower~~higher when compared with the same ~~periods~~period in the prior year as the ~~prior year~~current quarter benefited from ~~larger recoveries~~a recovery on a loan ~~sales.~~sale.

The carrying value of home equity lines of credit outstanding was $27.9 billion at March 31, 2020. This amount included $10.6 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modified and $9.0 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.

At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, the ~~Firm’s~~carrying value of interest-only residential mortgage ~~portfolio included $21.8~~loans was $22.8 billion and ~~$21.6~~$22.5 billion, ~~respectively, of interest-only loans.~~respectively. 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, predominantly in AWM. Performance of this portfolio for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 was in line with the performance of the broader residential mortgage portfolio for the 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		March 31, 2020		December 31, 2019
Current	$	2,100	$	2,884	$	883	$	1,280
30-89 days past due	1,054		1,528		402		695
90 or more days past due	1,602		2,600		616		961
Total government guaranteed loans	$	4,756	$	7,012	$	1,901	$	2,936

~~Home equity:~~Auto and other: The ~~home equity portfolio declined from December 31, 2018 primarily reflecting loan paydowns.~~

~~At September 30, 2019, approximately 90% of the Firm’s home equity portfolio consisted of home equity lines of credit (“HELOCs”)~~auto and the remainder consisted of home equity loans (“HELOANs”). The carrying value of HELOCs outstanding was $23 billion at September 30, 2019. This amount included $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.

~~Refer to Note 11 of this Form 10-Q and Consumer Credit Portfolio on pages 106–111 of JPMorgan Chase’s 2018 Form 10-K for further information on the Firm’s home equity portfolio.~~

~~Auto:~~ ~~The auto~~other loan portfolio predominantly consists of prime-quality ~~loans.~~scored auto and business banking loans, as well as overdrafts. The portfolio ~~declined~~was relatively flat when compared with December 31, ~~2018,~~2019, as paydowns and charge-offs or liquidation of delinquent loans were predominantly offset by new originations.

~~Consumer & Business Banking:~~ ~~Consumer & Business Banking loans~~ The scored auto portfolio net charge-off rates were ~~flat when compared with December 31, 2018 as loan originations were offset by paydowns~~0.41% and ~~charge-offs of delinquent loans. Net charge-offs~~0.50% for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~increased when compared with the same period in the prior year due primarily to higher deposit overdraft losses.~~respectively.

~~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, 2018 due to portfolio run off. As of September 30, 2019, approximately 9% of the option ARM PCI loans were delinquent and approximately 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)
(in billions) Sep 30,
2019
Dec 31,
2018
Sep 30,
2019
Dec 31,
2018
Home equity $ 13.9
$ 14.1
$ 13.0
$ 13.0
Prime mortgage 4.1
4.1
3.9
3.9
Subprime mortgage 3.3
3.3
3.2
3.2
Option ARMs 10.3
10.3
10.0
9.9
Total $ 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 $476 million and $512 million at September 30, 2019, and December 31, 2018, respectively.


~~(b)~~	~~Represents both realization of loss upon loan resolution and any principal forgiven upon modification.~~

Geographic composition and current estimated loan-to-value ratio of residential real estate loans

Refer to Note 1112 for information on the geographic composition ~~of the Firm’s residential real estate 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. Refer to Note 11 for information on~~ current estimated LTVs of the Firm’s residential real estate loans.

~~Loan modification activities for~~Modified 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. Performance metrics for modifications to the residential real estate portfolios as measured through redefault rates, were not materially different from December 31, 2018. Refer to Consumer Credit Portfolio on pages 106–111 of JPMorgan Chase’s 2018 Form 10-K for further information on the Firm’s redefault rates.

Certain modified loans have interest rate reset provisions (“step-rate modifications”) 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, 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 $1.3 billion and $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, 2019, and December 31, 2018,~~ relating to modified retained residential real estate loans for which concessions have been granted to borrowers experiencing financial ~~difficulty.~~difficulty, which include both TDRs and modified loans accounted for as PCI loans prior to the adoption of CECL. The following table does not include loans with short-term or other insignificant modifications that are not considered concessions and, therefore, are not TDRs. Refer to Note 1112 for further information on modifications for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.

Modified residential real estate loans
September 30, 2019 December 31, 2018
(in millions) Retained loans
Non-accrual
retained loans^(d)
Retained loans
Non-accrual
retained loans^(d)
Modified residential real estate loans, excluding
PCI loans^(a)(b)

Residential mortgage $ 4,118
$ 1,376
$ 4,565
$ 1,459
Home equity 1,961
981
2,012
955
Total modified residential real estate loans, excluding PCI loans $ 6,079
$ 2,357
$ 6,577
$ 2,414
Modified PCI loans^(c)

Home equity $ 2,003
NA
$ 2,086
NA
Prime mortgage 2,929
NA
3,179
NA
Subprime mortgage 1,919
NA
2,041
NA
Option ARMs 5,879
NA
6,410
NA
Total modified PCI loans $ 12,730
NA
$ 13,716
NA



(in millions)	March 31, 2020	December 31, 2019
Retained loans^(a)	16,717	5,926
PCI loans	NA	12,372	^(d)
Nonaccrual retained loans^(b)(c)	3,040	2,332


(a)	~~Amounts represent the carrying value of modified residential real estate loans.~~

~~(b)~~

At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018, $16~~2019, $11 million and ~~$4.1 billion,~~$14 million, respectively, of loans modified subsequent to repurchase from Ginnie Mae in accordance with the standards of the appropriate government agency (i.e., Federal Housing Administration (“FHA”), U.S. Department of Veterans Affairs (“VA”), Rural Housing Service of the U.S. Department of Agriculture (“RHS”)) are not included in the table above. When such loans perform subsequent to modification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure. Refer to Note 1314 for additional information about sales of loans in securitization transactions with Ginnie Mae.


~~(c)~~	~~Amounts represent the unpaid principal balance of modified PCI loans.~~


~~(d)~~(b)	At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, nonaccrual loans included ~~$1.9~~$2.0 billion and ~~$2.0~~$1.9 billion, respectively, of troubled debt restructurings (“TDRs”) for which the borrowers were less than 90 days past due. Refer to Note 1112 for additional information about loans modified in a TDR that are on nonaccrual status.


(c)	At March 31, 2020, nonaccrual loans included $725 million of PCD loans. Prior to the adoption of CECL, nonaccrual loans excluded PCI loans as the Firm recognized interest income on each pool of PCI loans as each of the pools was performing.


(d)	Amount represents the unpaid principal balance of modified PCI loans at December 31, 2019.

Nonperforming assets

The following table presents information as of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, about consumer, excluding credit card, nonperforming assets.


Nonperforming assets^(a)
(in millions)	September 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Nonaccrual loans^(b)
Residential real estate(b)	$	2,839	$	3,088	$	3,730	$	2,782
Other consumer	380		373
Auto and other					147		146
Total nonaccrual loans	3,219		3,461		3,877		2,928
Assets acquired in loan satisfactions
Real estate owned^(c)	209		196		231		208
Other	26		30		22		24
Total assets acquired in loan satisfactions	235		226		253		232
Total nonperforming assets	$	3,454	$	3,687	$	4,130	$	3,160

(a)

(b)

~~Excludes~~

At March 31, 2020, nonaccrual loans included $970 million of PCD loans. Prior to the adoption of CECL, nonaccrual loans excluded 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~~recognized interest income on each pool of PCI loans as each of the pools iswas 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, 2019 decreased to $2.8 billion from $3.1 billion at December 31, 2018, of which 20% and 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 31% and 32% to the estimated net realizable value of the collateral at September 30, 2019, and December 31, 2018, respectively.

~~Nonaccrual loans:~~ The following table presents changes in consumer, excluding credit card, nonaccrual loans for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.


Nonaccrual loan activity
Nine months ended September 30, (in millions)	2019			2018
Three months ended March 31, (in millions)							2020		2019
Beginning balance	$	3,461		$	4,209		$	2,928	$	3,244
Additions	1,674			2,174

Additions:
PCD loans, upon adoption of CECL							708		NA
Other additions							784		513
Total additions							1,492		513

Reductions:
Principal payments and other^(a)	766			1,119			206		203
Charge-offs	301			354			97		97
Returned to performing status	657			1,057			147		207
Foreclosures and other liquidations	192			217			93		70
Total reductions	1,916			2,747			543		577

Net changes	(242		)	(573		)	949		(64		)
Ending balance	$	3,219		$	3,636		$	3,877	$	3,180


(a)	Other reductions includes loan sales.

Active and suspended foreclosure: Refer to Note 1112 for information on loans that were in the process of active or suspended foreclosure.

Refer to Note 12 for further information about the consumer credit portfolio, including information about delinquencies, loan modifications and other credit quality indicators.

Purchased credit deteriorated (“PCD”) loans

The following tables provide credit-related information for PCD loans, which were accounted for as PCI loans prior to the adoption of CECL. PCI loans are considered PCD loans under CECL and are subject to the Firm’s nonaccrual and charge-off policies. PCD loans are now reported in the consumer, excluding credit card portfolio’s residential real estate class. Refer to Note 1 for further information.



(in millions, except ratios)	March 31, 2020			December 31, 2019
Loan delinquency
Current	$	17,983		$	18,571
30-149 days past due	942			970
150 or more days past due	593			822
Total retained PCD loans	19,518			20,363
Held-for-sale PCD loans	—			NA
Total PCD loans	$	19,518		$	20,363

% of 30+ days past due to total retained PCD loans	7.86		%	8.80		%
Nonaccrual loans	970			NA



(in millions, except ratios)	Three months ended March 31, 2020
Net charge-offs	$	6
Net charge-off rate	0.12		%

Credit card

Total credit card loans ~~increased~~decreased from December 31, ~~2018 reflecting~~2019 due to seasonality and a decline in sales volume in March as a result of the COVID-19 pandemic. The March 31, 2020 30+ and 90+ day delinquency rates of 1.96% and 1.02%, respectively, increased ~~sales volumes from existing customers and new account growth, partially offset by~~compared to the ~~impact of seasonality. The September 30,~~December 31, 2019 30+ and 90+ day delinquency rates of ~~1.84%~~1.87% and ~~0.90%~~0.95%, respectively ~~were relatively flat compared~~due to the ~~December 31, 2018 30+ and 90+ day delinquency rates of 1.83% and 0.92%, respectively.~~decline in credit card loans noted above. Net charge-offs increased for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 when compared with the same period in the prior year due to loan growth, in line with prior expectations.

Consistent with the Firm’s policy, all credit card loans typically remain on accrual status until charged off. However, the ~~Firm establishes an~~Firm’s allowance ~~which is offset against loans and reduces interest income,~~ for loan losses includes the estimated uncollectible portion of accrued and billed interest and fee income. Refer to Note 12 for further information about this portfolio, including information about delinquencies.

Geographic and FICO composition of credit card loans

Refer to Note 1112 for information on the geographic and FICO composition of the Firm’s credit card loans.

Modifications of credit card loans

At ~~September 30, 2019~~both March 31, 2020 and December 31, ~~2018,~~2019, the Firm had ~~$1.4~~$1.5 billion ~~and $1.3 billion, respectively,~~ of credit card loans outstanding that have been modified in TDRs, which does not include loans with short-term or other insignificant modifications that are not considered TDRs. Refer to Note 1112 for additional information about loan modification programs to 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 performance of the wholesale portfolio remained favorable for the nine months ended September 30, 2019, characterized by continued low levels of criticized exposure, nonaccrual loans and charge-offs. Refer to the industry discussion on pages 62–64 for further information. Loans held-for-sale decreased, driven by a loan syndication in 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.

Refer to the industry discussion on pages 58–61 for further information.

~~In the following tables, the~~The Firm’s wholesale credit portfolio includes exposure held in CIB, CB, AWM and ~~Corporate. It excludes all exposure managed by CCB, scored prime mortgage~~Corporate as well as risk-rated business banking and ~~scored home equity loans~~auto dealer exposures held in ~~AWM~~CCB for which the wholesale methodology is applied for determining the allowance for credit losses.

Recent deterioration in the macroeconomic environment driven by the impacts of the COVID-19 pandemic and ~~prime mortgage~~pressure on oil prices resulted in an increase in the allowance for credit losses with the largest impacts in the Oil & Gas, Real Estate and Consumer and Retail industries. As of March 31, 2020, the impacts of the macroeconomic environment have had only a limited impact to the overall credit profile, with the investment-grade percentage at 73% versus 74% at December 31, 2019. However, criticized exposure increased $6.6 billion from December 31, 2019 to $21.7 billion at March 31, 2020, but remains at relatively low levels compared to the overall size of the portfolio. The increase was largely driven by downgrades in Oil & Gas resulting from lower oil prices and impacts from the COVID-19 pandemic, and in Consumer & Retail primarily due to impacts from the COVID-19 pandemic. The continuation or worsening of the effects of the COVID-19 pandemic on the macroeconomic environment could result in further impacts to credit quality metrics, including investment-grade percentages, as well as to criticized and nonperforming exposures and charge-offs.

Retained loans ~~held~~increased by $73.6 billion in ~~Corporate.~~the three months ended March 31, 2020, predominantly driven by the CIB and CB, largely to commercial and industrial clients, and predominantly driven by drawdowns on committed revolving credit facilities, which resulted in a corresponding decrease in unfunded lending-related commitments. These drawdowns, which were driven by increased activity in March that returned to more normalized levels in April, were largely made by investment-grade clients, and can be broadly attributed to:

companies in industries directly and immediately impacted by the COVID-19 pandemic;

stress in the commercial paper funding markets, and

preemptive drawdowns by companies concerned about the potential longer term impact of the COVID-19 pandemic on their cash flows and access to liquidity.

																					Wholesale credit portfolio
	Credit exposure						Nonperforming^(c)				Credit exposure						Nonperforming
(in millions)	Sep 30, 2019			Dec 31, 2018			Sep 30, 2019		Dec 31, 2018		Mar 31, 2020			Dec 31, 2019			Mar 31, 2020		Dec 31, 2019
Loans retained	$	437,507		$	439,162		$	1,470	$	1,150	$	555,289		$	481,678		$	1,957	$	1,057
Loans held-for-sale	5,750			11,877			86		—		4,224			4,062			48		5
Loans at fair value	5,760			3,151			176		220		6,214			7,104			90		90
Loans – reported	449,017			454,190			1,732		1,370		565,727			492,844			2,095		1,152
Derivative receivables	55,577			54,213			26		60		81,648			49,766			85		30
Receivables from customers and other^(a)	32,218			30,063			—		—		33,376			33,706			—		—
Total wholesale credit-related assets	536,812			538,466			1,758		1,430		680,751			576,316			2,180		1,182
Assets acquired in loan satisfactions
Real estate owned											NA			NA			111		136
Other											NA			NA			—		19
Total assets acquired in loan satisfactions											NA			NA			111		155
Lending-related commitments	395,619			387,813			446		469		358,485			413,310			619		474
Total wholesale credit exposure	$	932,431		$	926,279		$	2,204	$	1,899
Total wholesale credit portfolio											$	1,039,236		$	989,626		$	2,910	$	1,811
Credit derivatives used in credit portfolio management activities^(b)	$	(15,031	)	$	(12,682	)	$	—	$	—	$	(20,773	)	$	(18,030	)	$	—	$	—
Liquid securities and other cash collateral held against derivatives	(15,482		)	(15,322		)	NA		NA		(26,178		)	(16,009		)	NA		NA


(a)	Receivables from customers and other include ~~$32.2~~$33.4 billion and ~~$30.1~~$33.7 billion of ~~prime~~ brokerage-related held-for-investment customer receivables at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, respectively, to ~~customers~~clients in CIB and AWM; these are classified in accrued interest and accounts receivable on the Consolidated balance sheets.


(b)	Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. Refer to Credit derivatives on page 6663 and Note 45 for additional information.


~~(c)~~	~~Excludes assets acquired in loan satisfactions.~~

The following tables present the maturity and internal risk ratings profiles of the wholesale credit portfolio as of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018.~~2019. The Firm considers internal ratings ~~scale is based on the Firm’s internal risk ratings, which generally correspond~~equivalent to ~~the ratings assigned by S&P and Moody’s.~~BBB-/Baa3 or higher as investment grade. Refer to Note 12 ~~of JPMorgan Chase’s 2018 Form 10-K~~ for ~~additional~~further information on ~~wholesale loan portfolio~~internal risk ratings.


Wholesale credit exposure – maturity and ratings profile	Wholesale 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 less			Due after 1 year through 5 years			Due after 5 years			Total			Investment-grade			Noninvestment-grade			Total			Total % of IG		Due in 1 year or less			Due after 1 year through 5 years			Due after 5 years			Total			Investment-grade			Noninvestment-grade			Total			Total % of IG
September 30, 2019 (in millions, except ratios)													AAA/Aaa to BBB-/Baa3			BB+/Ba1 & below
March 31, 2020 (in millions, except ratios)																								Due in 1 year or less			Due after 1 year through 5 years			Due after 5 years			Total			Investment-grade			Noninvestment-grade			Total			Total % of IG
Loans retained	$	132,888		$	199,877		$	104,742		$	437,507		$	337,298		$	100,209		$	437,507		77	%
Derivative receivables										55,577									55,577														81,648									81,648
Less: Liquid securities and other cash collateral held against derivatives										(15,482		)							(15,482		)												(26,178		)							(26,178		)
Total derivative receivables, net of all collateral	8,332			8,263			23,500			40,095			32,535			7,560			40,095			81		17,069			11,637			26,764			55,470			43,263			12,207			55,470			78
Lending-related commitments	75,484			307,093			13,042			395,619			291,144			104,475			395,619			74		92,209			254,173			12,103			358,485			260,218			98,267			358,485			73
Subtotal	216,704			515,233			141,284			873,221			660,977			212,244			873,221			76		273,578			533,198			162,468			969,244			710,804			258,440			969,244			73
Loans held-for-sale and loans at fair value^(a)										11,510									11,510														10,438									10,438
Receivables from customers and other										32,218									32,218														33,376									33,376
Total exposure – net of liquid securities and other cash collateral held against derivatives										$	916,949								$	916,949													$	1,013,058								$	1,013,058
Credit derivatives used in credit portfolio management activities^(b)(c)	$	(864	)	$	(8,013	)	$	(6,154	)	$	(15,031	)	$	(13,606	)	$	(1,425	)	$	(15,031	)	91	%	$	(4,011	)	$	(9,078	)	$	(7,684	)	$	(20,773	)	$	(17,477	)	$	(3,296	)	$	(20,773	)	84	%


	Maturity profile^(d)												Ratings profile											Maturity profile^(d)												Ratings profile
	Due in 1 year or less			Due after 1 year through 5 years			Due after 5 years			Total			Investment-grade			Noninvestment-grade			Total			Total % of IG		Due in 1 year or less			Due after 1 year through 5 years			Due after 5 years			Total			Investment-grade			Noninvestment-grade			Total			Total % of IG
December 31, 2018 (in millions, except ratios)													AAA/Aaa to BBB-/Baa3			BB+/Ba1 & below
December 31, 2019 (in millions, except ratios)																								Due in 1 year or less			Due after 1 year through 5 years			Due after 5 years			Total			Investment-grade			Noninvestment-grade			Total			Total % of IG
Loans retained	$	138,458		$	196,974		$	103,730		$	439,162		$	339,729		$	99,433		$	439,162		77	%
Derivative receivables										54,213									54,213														49,766									49,766
Less: Liquid securities and other cash collateral held against derivatives										(15,322		)							(15,322		)												(16,009		)							(16,009		)
Total derivative receivables, net of all collateral	11,038			9,169			18,684			38,891			31,794			7,097			38,891			82		6,561			6,960			20,236			33,757			26,966			6,791			33,757			80
Lending-related commitments	79,400			294,855			13,558			387,813			288,724			99,089			387,813			74		83,821			316,328			13,161			413,310			294,317			118,993			413,310			71
Subtotal	228,896			500,998			135,972			865,866			660,247			205,619			865,866			76		232,002			541,611			155,132			928,745			684,727			244,018			928,745			74
Loans held-for-sale and loans at fair value^(a)										15,028									15,028														11,166									11,166
Receivables from customers and other										30,063									30,063														33,706									33,706
Total exposure – net of liquid securities and other cash collateral held against derivatives										$	910,957								$	910,957													$	973,617								$	973,617
Credit derivatives used in credit portfolio management activities^(b)(c)	$	(447	)	$	(9,318	)	$	(2,917	)	$	(12,682	)	$	(11,213	)	$	(1,469	)	$	(12,682	)	88	%	$	(4,912	)	$	(10,031	)	$	(3,087	)	$	(18,030	)	$	(16,276	)	$	(1,754	)	$	(18,030	)	90	%


(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, 2019,~~March 31, 2020, 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.

~~categories.~~ The total criticized component of the portfolio, excluding loans held-for-sale and loans at fair value, was ~~$12.8~~$21.7 billion at ~~September 30, 2019,~~March 31, 2020, compared with ~~$12.1~~$15.1 billion at December 31, ~~2018.~~2019. The increase was largely driven by ~~select client~~ downgrades ~~across a number of sectors.~~in Oil & Gas resulting from lower oil prices and impacts from the COVID-19 pandemic, and downgrades in Consumer & Retail primarily due to impacts from the COVID-19 pandemic.

Below are summaries of the Firm’s exposures as of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018.~~2019. The industry of risk category is generally based on the client or counterparty’s primary business activity. ~~Refer to Note 4 of JPMorgan Chase’s 2018 Form 10-K for additional information on industry 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^(g)			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^(f)		Investment- grade		Noncriticized		Criticized performing		Criticized nonperforming
September 30, 2019
As of or for the three months ended																						Credit exposure^(f)		Investment- grade		Noncriticized		Criticized performing		Criticized nonperforming
March 31, 2020																																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
(in millions)	Credit exposure^(f)		Investment- grade		Noncriticized		Criticized performing		Criticized nonperforming		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
Real Estate																						$	148,246	$	122,686	$	24,036	$	1,464	$	60
Consumer & Retail																						110,669		57,486		49,240		3,657		286
Individuals and Individual Entities^(b)	99,653		88,477		10,815		269		92													108,180		94,220		12,808		970		182
Consumer & Retail	98,445		56,815		39,387		2,086		157
Industrials																						68,864		44,260		22,998		1,412		194		168		20			(691		)	(69		)
Asset Managers																						65,880		57,006		8,814		37		23		14		—			—			(9,731		)
Technology, Media & Telecommunications	57,127		33,754		20,723		2,509		141		9		23			(612		)	(17		)	60,184		32,917		24,144		2,967		156		13		—			(651		)	(14		)
Industrials	57,085		38,511		17,203		1,222		149		158		30			(551		)	(17		)
Banks & Finance Cos	53,185		36,764		15,979		378		64		27		—			(832		)	(2,683		)	55,786		38,250		16,826		704		6		7		—			(1,137		)	(3,290		)
Asset Managers	50,119		44,006		6,096		4		13		26		—			—			(5,201		)
Healthcare	48,041		36,641		10,422		891		87		40		6			(230		)	(177		)	53,250		39,639		12,155		1,261		195		49		51			(392		)	(183		)
Oil & Gas	44,007		23,882		18,615		635		875		9		43			(445		)	(12		)	42,754		22,273		16,252		3,274		955		—		59			(527		)	—
Automotive																						36,060		24,614		10,287		1,156		3		29		—			(348		)	—
Utilities	29,709		23,543		5,806		184		176		10		37			(387		)	(75		)	33,112		24,057		8,645		407		3		1		4			(437		)	(84		)
State & Municipal Govt^(c)	26,806		26,287		519		—		—		13		—			—			(51		)	30,529		30,026		500		—		3		55		—			—			(201		)
Transportation																						18,624		9,247		8,690		535		152		30		10			(239		)	(48		)
Chemicals & Plastics	16,870		11,311		5,490		69		—		1		—			(10		)	—			17,430		11,742		5,364		322		2		2		—			(12		)	—
Central Govt	16,685		16,264		421		—		—		1		—			(8,527		)	(2,836		)	16,519		16,169		350		—		—		—		—			(8,380		)	(2,883		)
Automotive	16,430		10,053		5,978		399		—		6		—			(172		)	—
Metals & Mining	15,049		8,396		6,280		359		14		—		(1		)	(204		)	(8		)	15,797		6,999		8,045		673		80		3		10			(136		)	(12		)
Transportation	14,969		9,196		5,356		317		100		37		4			(36		)	(38		)
Insurance	13,365		10,517		2,824		19		5		—		—			(36		)	(2,062		)	14,522		10,806		3,693		18		5		—		—			(76		)	(3,209		)
Financial Markets Infrastructure	5,775		5,640		135		—		—		—		—			—			(7		)	9,767		9,607		160		—		—		—		—			—			(46		)
Securities Firms	4,418		2,789		1,605		24		—		—		—			(49		)	(387		)	8,045		5,905		2,114		1		25		—		—			(49		)	(3,281		)
All other^(d)	73,510		70,286		2,892		330		2		20		7			(2,634		)	(1,087		)	81,204		75,365		5,365		143		331		45		(8		)	(7,237		)	(1,478		)
Subtotal	$	888,703	$	674,831	$	201,025	$	10,905	$	1,942	$	978	$	236		$	(15,031	)	$	(15,482	)	$	995,422	$	733,274	$	240,486	$	19,001	$	2,661	$	1,208	$	162		$	(20,773	)	$	(26,178	)
Loans held-for-sale and loans at fair value	11,510																					10,438
Receivables from customers and other	32,218																					33,376
Total^(e)	$	932,431																				$	1,039,236


(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^(g)			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^(f)		Investment- grade		Noncriticized		Criticized performing		Criticized nonperforming													Credit exposure^(f)		Investment- grade		Noncriticized		Criticized performing		Criticized nonperforming
December 31, 2018
December 31, 2019
(in millions)	Credit exposure^(f)		Investment- grade		Noncriticized		Criticized performing		Criticized nonperforming		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			Credit exposure^(f)		Investment- grade		Noncriticized		Criticized performing		Criticized nonperforming		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
Real Estate
Consumer & Retail
Individuals and Individual Entities^(b)	97,077		86,581		10,164		174		158													105,018		93,172		11,617		192		37
Consumer & Retail	94,815		60,678		31,901		2,033		203
Industrials																						62,483		39,434		21,673		1,157		219		172		48			(746		)	(9		)
Asset Managers																						51,856		45,249		6,588		6		13		18		—			—			(4,785		)
Technology, Media & Telecommunications	72,646		46,334		24,081		2,170		61		8		12			(1,011		)	(12		)	60,033		35,878		21,066		2,953		136		27		27			(658		)	(17		)
Industrials	58,528		38,487		18,594		1,311		136		171		20			(207		)	(29		)
Banks & Finance Cos	49,920		34,120		15,496		299		5		11		—			(575		)	(2,290		)	50,786		34,941		15,031		808		6		—		—			(834		)	(2,112		)
Asset Managers	42,807		36,722		6,067		4		14		10		—			—			(5,829		)
Healthcare	48,142		36,687		10,625		761		69		23		(5		)	(150		)	(133		)	50,824		36,988		12,544		1,141		151		108		14			(405		)	(145		)
Oil & Gas	42,600		23,356		17,451		1,158		635		6		36			(248		)	—			41,641		22,244		17,823		995		579		—		98			(429		)	(10		)
Automotive																						35,118		24,255		10,246		615		2		8		1			(194		)	—
Utilities	28,172		23,558		4,326		138		150		—		38			(142		)	(60		)	34,843		22,213		12,316		301		13		2		39			(414		)	(50		)
State & Municipal Govt^(c)	27,351		26,746		603		2		—		18		(1		)	—			(42		)	30,095		29,586		509		—		—		33		7			—			(46		)
Transportation																						14,497		8,734		5,336		353		74		30		8			(37		)	(37		)
Chemicals & Plastics	16,035		11,490		4,427		118		—		4		—			—			—			17,499		12,033		5,243		221		2		5		—			(10		)	(13		)
Central Govt	18,456		18,251		124		81		—		4		—			(7,994		)	(2,130		)	14,865		14,524		341		—		—		—		—			(9,018		)	(1,963		)
Automotive	17,339		9,637		7,310		392		—		1		—			(125		)	—
Metals & Mining	15,359		8,188		6,767		385		19		1		—			(174		)	(22		)	15,586		7,095		7,789		661		41		2		(1		)	(33		)	(6		)
Transportation	15,660		10,508		4,699		393		60		21		6			(31		)	(112		)
Insurance	12,639		9,777		2,830		—		32		—		—			(36		)	(2,080		)	12,348		9,458		2,867		19		4		3		—			(36		)	(1,998		)
Financial Markets Infrastructure	7,484		6,746		738		—		—		—		—			—			(26		)	4,121		3,969		152		—		—		—		—			—			(6		)
Securities Firms	4,558		3,099		1,459		—		—		—		—			(158		)	(823		)	7,344		5,973		1,344		27		—		—		—			(48		)	(3,201		)
All other^(d)	68,284		64,664		3,606		12		2		2		2			(1,581		)	(804		)	78,006		73,453		4,130		412		11		4		4			(4,833		)	(959		)
Subtotal	$	881,188	$	673,617	$	195,442	$	10,450	$	1,679	$	1,096	$	155		$	(12,682	)	$	(15,322	)	$	944,754	$	699,510	$	230,104	$	13,579	$	1,561	$	1,022	$	415		$	(18,030	)	$	(16,009	)
Loans held-for-sale and loans at fair value	15,028																					11,166
Receivables from customers and other	30,063																					33,706
Total^(e)	$	926,279																				$	989,626


(a)	The industry rankings presented in the table as of December 31, ~~2018,~~2019, are based on the industry rankings of the corresponding exposures at ~~September 30, 2019,~~March 31, 2020, not actual rankings of such exposures at December 31, ~~2018.~~2019.


(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, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, noted above, the Firm held: ~~$6.9~~$6.5 billion at both periods of trading assets; $30.5 billion and ~~$7.8 billion, respectively, of trading securities; $31.1 billion and $37.7~~$29.8 billion, respectively, of AFS securities; and $4.8 billion at both periods of ~~held-to-maturity (“HTM”)~~HTM securities, issued by U.S. state and municipal governments. Refer to Note 2 and Note 910 for further information.


(d)	All other includes: SPEs and Private education and civic organizations, representing approximately ~~91%~~90% and 9%10%, respectively, at ~~September 30, 2019,~~both March 31, 2020 and ~~92% and 8%, respectively, at~~ December 31, ~~2018.~~2019.


(e)	Excludes cash placed with banks of ~~$248.8~~$354.4 billion and ~~$268.1~~$254.0 billion, at ~~September 30, 2019,~~March 31, 2020 and December 31, ~~2018,~~2019, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.


(f)	Credit exposure is net of risk participations and excludes the benefit of credit derivatives used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables.


(g)	Represents the net notional amounts of protection purchased and sold through credit derivatives used to manage the credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. The All other category includes purchased credit protection on certain credit indices.

~~Real Estate~~

Presented below is additional ~~information~~detail on certain of the Firm’s largest industry exposures and/or certain industries which present potential heightened credit concerns.

Real Estate ~~industry, to which the Firm has significant exposure.~~

Real Estate exposure ~~increased $4.1~~was $148.2 billion ~~to $147.5 billion for~~as of March 31, 2020, largely driven by multifamily lending as shown in the ~~nine~~table below. During the three months ended ~~September 30, 2019, and~~March 31, 2020 the ~~investment grade percentage~~investment-grade portion of the portfolio ~~remained relatively flat at~~increased from 81% to 83%, while the drawn percentage increased from 78% to 83%. ~~Refer to Note 11 for further information on~~Retail-related Real Estate ~~loans.~~and Lodging exposure within Other in the table below was $15.1 billion as of March 31, 2020 of which 74% was investment-grade; noninvestment-grade Retail and Lodging exposure is largely secured.


	September 30, 2019										March 31, 2020
(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)	$	85,666	$	86	$	85,752	91	%	92	%	$	86,630	$	125	$	86,755	90	%	92	%
Other	60,968		735		61,703		71		59		60,322		1,169		61,491		73		71
Total Real Estate Exposure^(b)	146,634		821		147,455		83		79		146,952		1,294		148,246		83		83

	December 31, 2018										December 31, 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)	$	85,683	$	33	$	85,716	89	%	92	%	$	86,381	$	58	$	86,439	91	%	92	%
Other	57,469		131		57,600		72		63		63,805		561		64,366		67		59
Total Real Estate Exposure^(b)	143,152		164		143,316		82		81		150,186		619		150,805		81		78


(a)	Multifamily exposure is largely in California.


(b)	Real Estate exposure is predominantly secured; unsecured exposure as of March 31, 2020 is predominantly investment-grade.


(c)	Represents drawn exposure as a percentage of credit exposure.

Consumer & Retail

Consumer & Retail exposure was $110.7 billion as of March 31, 2020, and predominantly includes Retail, Food and Beverage, and Business and Consumer Services as shown in the table below. During the three months ended March 31, 2020, the investment-grade portion of the Consumer & Retail portfolio decreased from 55% to 52% and the drawn percentage of this portfolio increased from 35% to 49%, both driven primarily by impacts from the COVID-19 pandemic. Additionally, criticized exposure increased by approximately $1.4 billion from $2.5 billion at December 31, 2019 to $3.9 billion at March 31, 2020, also primarily driven by impacts from the COVID-19 pandemic.



	March 31, 2020
(in millions, except ratios)	Loans and Lending-related Commitments		Derivative Receivables		Credit exposure		% Investment-grade		% Drawn^(d)
Retail^(a)	$	31,487	$	333	$	31,820	52	%	51	%
Food and Beverage	28,401		1,192		29,593		63		46
Business and Consumer Services	23,423		722		24,145		52		51
Consumer Hard Goods	12,667		183		12,850		60		55
Leisure^(b)	11,867		394		12,261		16		41
Total Consumer & Retail^(c)	107,845		2,824		110,669		52		49

	December 31, 2019
(in millions, except ratios)	Loans and Lending-related Commitments		Derivative Receivables		Credit exposure		% Investment- grade		% Drawn^(d)
Retail^(a)	$	29,290	$	294	$	29,584	54	%	37	%
Food and Beverage	27,956		625		28,581		67		36
Business and Consumer Services	24,242		249		24,491		51		37
Consumer Hard Goods	13,144		109		13,253		65		35
Leisure^(b)	10,930		147		11,077		21		19
Total Consumer & Retail^(c)	105,562		1,424		106,986		55		35


(a)	Retail consists of Home Improvement & Specialty Retailers, Restaurants, Supermarkets, Discount & Drug Stores, Specialty Apparel and Department Stores.


(b)	Leisure consists of Gaming, Arts & Culture, Travel Services and Sports & Recreation. Approximately 90% of the noninvestment-grade Leisure portfolio is secured.


(c)	Approximately 75% of the noninvestment-grade portfolio is secured.


(d)	Represents drawn exposure as a percent of credit exposure.

Oil & Gas

Oil & Gas exposure was $42.8 billion as of March 31, 2020, including $21.5 billion of Exploration & Production and Oilfield Services as shown in the table below. During thethree months ended March 31, 2020, the investment-grade portion of the Oil & Gas portfolio decreased from 53% to 52%, and the drawn percentage of this portfolio increased from 31% to 37%, both driven by lower oil prices and impacts from the COVID-19 pandemic. Additionally, criticized exposure increased by $2.6 billion from $1.6 billion at December 31, 2019 to $4.2 billion at March 31, 2020, also driven by lower oil prices and impacts from the COVID-19 pandemic.



	March 31, 2020
(in millions, except ratios)	Loans and Lending-related Commitments		Derivative Receivables		Credit exposure		% Investment-grade		% Drawn^(c)
Exploration & Production ("E&P") and Oil field Services	$	21,280	$	213	$	21,493	33	%	44	%
Other Oil & Gas^(a)	20,637		624		21,261		72		30
Total Oil & Gas^(b)	41,917		837		42,754		52		37

	December 31, 2019
(in millions, except ratios)	Loans and Lending-related Commitments		Derivative Receivables		Credit exposure		% Investment- grade		% Drawn^(c)
Exploration & Production ("E&P") and Oil field Services	$	22,543	$	646	$	23,189	38	%	38	%
Other Oil & Gas^(a)	18,246		206		18,452		73		23
Total Oil & Gas^(b)	40,789		852		41,641		53		31


(a)	Other Oil & Gas includes Integrated Oil & Gas companies, Midstream/Oil Pipeline companies and refineries.


(b)	Secured lending was $15.5 billion and $15.7 billion at March 31, 2020 and December 31, 2019, respectively, approximately half of which is reserve-based lending to the Exploration & Production sub-sector; unsecured exposure is largely investment-grade.


(c)	Represents drawn exposure as a percent of credit exposure.

Loans

In ~~the normal course of~~ its wholesale ~~business,~~businesses, the Firm provides loans to a variety of clients, ranging from large corporate and institutional clients to high-net-worth individuals. Refer to Note 1112 for a further discussion on loans, including information onabout delinquencies, loan modifications and other credit quality ~~indicators and sales of loans.~~indicators.

The following table presents the change in the nonaccrual loan portfolio for the ~~nine~~three months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019. The increase in nonaccrual loans in the first quarter of 2020 reflects select downgrades across a number of sectors, including Oil & Gas.

										Wholesale nonaccrual loan activity
Nine months ended September 30, (in millions)	2019		2018
Three months ended March 31, (in millions)						2020		2019
Beginning balance	$	1,370	$	1,734		$	1,152	$	1,587
Additions	1,907		570			1,333		841
Reductions:
Paydowns and other	1,097		541			171		213
Gross charge-offs	235		251			181		60
Returned to performing status	25		217			24		58
Sales	188		287			14		5
Total reductions	1,545		1,296			390		336
Net changes	362		(726		)	943		505
Ending balance	$	1,732	$	1,008		$	2,095	$	2,092

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, 2019~~March 31, 2020 and ~~2018.~~2019. 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 March 31,
	2019			2018			2019			2018			2020			2019
Loans – reported
Average loans retained	$	433,744		$	420,597		$	434,434		$	413,537		$	491,819		$	471,957
Gross charge-offs	120			23			270			264			181			64
Gross recoveries	(12		)	(70		)	(34		)	(146		)
Gross recoveries collected													(19		)	(12		)
Net charge-offs/(recoveries)	108			(47		)	236			118			162			52
Net charge-off/(recovery) rate	0.10		%	(0.04		)%	0.07		%	0.04		%	0.13		%	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 when the Firm ~~fulfill~~fulfills its obligations under these guarantees, and the clients subsequently fail to perform according to the terms of these contracts. Most of these commitments and guarantees ~~are~~have historically been refinanced, extended, cancelled, or ~~expire~~expired without being drawn upon or a default occurring. InAs a result, the ~~Firm’s view,~~Firm does not believe that the total contractual amount of these wholesale lending-related commitments is ~~not~~ representative of the Firm’s expected future credit exposure or funding requirements. Refer to Note 2223 for further information on wholesale lending-related commitments.

Receivables from Customers

Receivables from customers primarily represent held-for-investment margin loans to brokerage clients in CIB and AWM that are collateralized by assets maintained in the clients’ brokerage accounts (e.g., cash on deposit, liquid and readily marketable debt or equity securities), as such no allowance for credit losses is held against these receivables. To manage its credit risk the Firm establishes margin requirements and monitors the required margin levels on an ongoing basis, and requires clients to deposit additional cash or other collateral, or to reduce positions, when appropriate. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.

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. Refer to Note 45 for a further discussion of derivative contracts.

The following table summarizes the net derivative receivables for the periods presented.


Derivative receivables
(in millions)	September 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Total, net of cash collateral	55,577			54,213			81,648			49,766
Liquid securities and other cash collateral held against derivative receivables^(a)	(15,482		)	(15,322		)	(26,178		)	(16,009		)
Total, net of collateral	$	40,095		$	38,891		$	55,470		$	33,757


(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 ~~$55.6~~$81.6 billion and ~~$54.2~~$49.8 billion at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018, respectively.~~2019, respectively, with increases in CIB resulting from market movements, including the impact of the COVID-19 pandemic. 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 ~~$15.5~~$26.2 billion and ~~$15.3~~$16.0 billion at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, 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~~The Firm also holds additional collateral (primarily cash, G7 government securities, other liquid government agency and guaranteed securities, and corporate debt and equity securities) delivered by clients at the initiation of transactions, as well as collateral related to contracts that have a non-daily call frequency and collateral that the Firm has agreed to return but has not yet settled as of the reporting date. Although this collateral does not reduce the balances and is not included in the table above, it is available as security against potential exposure that could arise should the fair value of the client’s derivative contracts 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. Refer to Note 45 for additional information on the Firm’s use of collateral 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~~Firm considers internal ratings ~~which generally correspond~~equivalent to ~~the ratings~~BBB-/Baa3 or higher as ~~assigned by S&P and Moody’s.~~investment grade. Refer to Note 12 for further information on internal risk ratings.

Ratings profile of derivative receivables
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 $ 10,663
27 % $ 11,831
31 %
A+/A1 to A-/A3 6,106
15
7,428
19
BBB+/Baa1 to BBB-/Baa3 15,766
39
12,536
32
BB+/Ba1 to B-/B3 7,116
18
6,373
16
CCC+/Caa1 and below 444
1
723
2
Total $ 40,095
100 % $ 38,891
100 %



Ratings profile of derivative receivables
Internal rating equivalent	March 31, 2020				December 31, 2019
(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	$	16,318	29	%	$	8,347	25	%
A+/A1 to A-/A3	8,297		15		5,471		16
BBB+/Baa1 to BBB-/Baa3	18,648		34		13,148		39
BB+/Ba1 to B-/B3	10,904		20		6,225		18
CCC+/Caa1 and below	1,303		2		566		2
Total	$	55,470	100	%	$	33,757	100	%

As previously noted, the Firm uses collateral agreements to mitigate counterparty credit risk. The percentage of the Firm’s over-the-counter derivative 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 86% and 90% at ~~both September 30, 2019,~~March 31, 2020, and December 31, ~~2018.~~2019, respectively.

Credit derivatives

The Firm uses credit derivatives for two primary purposes: first, in its capacity as a market-maker, and second, as an end-user, to manage the Firm’s own credit risk associated with various exposures.

Credit portfolio management activities

Included in the Firm’s end-user activities are credit derivatives used to mitigate the credit risk associated with traditional lending activities (loans and unfunded commitments) and derivatives counterparty exposure in the Firm’s wholesale businesses (collectively, “credit portfolio management” activities). Information on credit portfolio management activities is provided in the table below.

									Credit derivatives used in credit portfolio management activities
	Notional amount of protection purchased and sold^(a)				Notional amount of protection purchased and sold^(a)
(in millions)	September 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Credit derivatives used to manage:
Loans and lending-related commitments	$	1,726	$	1,272	$	3,511	$	2,047
Derivative receivables	13,305		11,410		17,262		15,983
Credit derivatives used in credit portfolio management activities	$	15,031	$	12,682	$	20,773	$	18,030


(a)	Amounts are presented net, considering the Firm’s net protection purchased or sold with respect to each underlying reference entity or index.

Refer to Credit derivatives in Note 45 of this Form 10-Q and Note 5 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for further information on credit derivatives and derivatives used in credit portfolio management activities.



ALLOWANCE FOR CREDIT LOSSES

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. The adoption of this guidance established a single allowance framework for all financial assets measured at amortized cost and certain off-balance sheet credit exposures. This framework requires that management’s estimate reflects credit losses over the instrument’s remaining expected life and considers expected future changes in macroeconomic conditions. Refer to Note 1 for further information.

The Firm’s allowance for credit losses comprises:

the allowance for loan losses, which covers the Firm’s retained ~~consumer and wholesale~~ loan portfolios (scored and risk-rated) and is presented separately on the balance sheet,

the allowance for lending-related commitments, which is presented on the balance sheet in accounts payable and other liabilities, and

the allowance for credit losses on investment securities, which covers the Firm’s HTM and AFS securities and is recognized within Investment Securities on the balance sheet.

Refer to Note 13 and Note 10 for a description of the policies, methodologies and judgments used to determine the Firm’s allowances for credit losses on loans, lending-related commitments, and investment securities.

The allowance for credit losses increased compared with December 31, 2019, reflecting:

additions of $6.8 billion associated with the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic and continued pressure on oil prices including:


–	$4.4 billion in consumer, predominantly in Credit Card, reflecting the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic, and


–	a net $2.4 billion in wholesale, primarily reflecting the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic across multiple sectors, and continued pressure on oil prices, with the largest impacts in the Oil & Gas, Real Estate, and Consumer & Retail industries, and

a net $4.3 billion addition as a result of the adoption of CECL.

In light of the rapidly evolving economic conditions and forecasts during March 2020, management updated its macroeconomic forecast near the end of its credit loss estimation process in early April. This macroeconomic forecast included a decline in the U.S. real GDP of approximately 25% and an increase in the U.S. unemployment rate to above 10%, both in the second quarter, followed by a solid recovery in the second half of 2020. In addition, the allowances for loan losses and lending-related commitments reflect the estimated impact of the Firm’s payment relief actions as well as the ~~Firm’s wholesale~~federal government’s stimulus programs related to the COVID-19 pandemic. Subsequent changes to this forecast and ~~certain consumer lending-related commitments.~~related estimates will be reflected in the provision for credit losses in future periods.

Refer to Critical Accounting Estimates Used by the Firm on pages ~~76–~~75–77 ~~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.

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, 2019, JPMorgan Chase deemed the allowance for credit losses to be appropriate and sufficient to absorb probable credit losses inherent in the portfolio.

~~The allowance for credit losses decreased compared with December 31, 2018, driven by:~~

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 wholesale allowance for credit losses largely driven by select C&I client downgrades.~~

Refer to Consumer Credit Portfolio on pages ~~56–59,~~52–55, Wholesale Credit Portfolio on pages ~~60–66~~56–63 and Note 1112 for additional information on the consumer and wholesale credit portfolios.

The adoption of the CECL accounting guidance resulted in a change in the accounting for PCI loans, which are considered PCD loans. In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.

Summary of changes in the allowance for credit losses
2019 2018
Nine months ended September 30,
Consumer, excluding
credit card
Credit card Wholesale Total
Consumer, excluding
credit card
Credit card Wholesale Total
(in millions, except ratios)
Allowance for loan losses
Beginning balance at January 1, $ 4,146
$ 5,184
$ 4,115
$ 13,445
$ 4,579
$ 4,884
$ 4,141
$ 13,604
Gross charge-offs 702
4,050
270
5,022
776
3,777
264
4,817
Gross recoveries (420 ) (433 ) (34 ) (887 ) (681 ) (370 ) (146 ) (1,197 )
Net charge-offs 282
3,617
236
4,135
95
3,407
118
3,620
Write-offs of PCI loans^(a)
132
—
—
132
151
—
—
151
Provision for loan losses (265 ) 4,017
296
4,048
(152 ) 3,557
(111 ) 3,294
Other —
(1 ) 10
9
1
—
—
1
Ending balance at September 30, $ 3,467
$ 5,583
$ 4,185
$ 13,235
$ 4,182
$ 5,034
$ 3,912
$ 13,128
Impairment methodology
Asset-specific^(b)
$ 145
$ 488
$ 342
$ 975
$ 204
$ 421
$ 280
$ 905
Formula-based 2,066
5,095
3,843
11,004
2,154
4,613
3,632
10,399
PCI 1,256
—
—
1,256
1,824
—
—
1,824
Total allowance for loan losses $ 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
$ —
$ 1,022
$ 1,055
$ 33
$ —
$ 1,035
$ 1,068
Provision for lending-related commitments —
—
110
110
—
—
29
29
Other —
—
—
—
—
—
—
—
Ending balance at September 30, $ 33
$ —
$ 1,132
$ 1,165
$ 33
$ —
$ 1,064
$ 1,097
Impairment methodology
Asset-specific $ —
$ —
$ 135
$ 135
$ —
$ —
$ 71
$ 71
Formula-based 33
—
997
1,030
33
—
993
1,026
Total allowance for lending-related commitments^(c)
$ 33
$ —
$ 1,132
$ 1,165
$ 33
$ —
$ 1,064
$ 1,097
Total allowance for credit losses $ 3,500
$ 5,583
$ 5,317
$ 14,400
$ 4,215
$ 5,034
$ 4,976
$ 14,225
Memo:
Retained loans, end of period $ 331,809
$ 159,571
$ 437,507
$ 928,887
$ 375,958
$ 147,856
$ 423,837
$ 947,651
Retained loans, average 355,865
154,367
434,434
944,666
374,298
143,931
413,537
931,766
PCI loans, end of period 21,290
—
—
21,290
25,209
—
3
25,212
Credit ratios
Allowance for loan losses to retained loans 1.04 % 3.50 % 0.96 % 1.42 % 1.11 % 3.40 % 0.92 % 1.39 %
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 card 108
NM
285
163
115
NM
394
175
Net charge-off rates 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 loans 0.71
3.50
0.96
1.32
0.67
3.40
0.92
1.23
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 card 69
NM
285
136
65
NM
394
135
Net charge-off rates 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.~~



Allowance for credit losses and related information
	2020^(d)												2019
Three months ended March 31,	Consumer, excluding credit card			Credit card			Wholesale			Total			Consumer, excluding credit card			Credit card			Wholesale			Total
(in millions, except ratios)
Allowance for loan losses
Beginning balance at January 1,	$	2,538		$	5,683		$	4,902		$	13,123		$	3,434		$	5,184		$	4,827		$	13,445
Cumulative effect of a change in accounting principle	297			5,517			(1,642		)	4,172			NA			NA			NA			NA
Gross charge-offs	233			1,488			181			1,902			234			1,344			64			1,642
Gross recoveries collected	(239		)	(175		)	(19		)	(433		)	(127		)	(142		)	(12		)	(281		)
Net charge-offs	(6		)	1,313			162			1,469			107			1,202			52			1,361
Write-offs of PCI loans^(a)	NA			NA			NA			NA			50			—			—			50
Provision for loan losses	613			5,063			1,742			7,418			120			1,202			170			1,492
Other	—			—			—			—			2			(1		)	6			7
Ending balance at March 31,	$	3,454		$	14,950		$	4,840		$	23,244		$	3,399		$	5,183		$	4,951		$	13,533

Allowance for lending-related commitments
Beginning balance at January 1,	$	12		$	—		$	1,179		$	1,191		$	12		$	—		$	1,043		$	1,055
Cumulative effect of a change in accounting principle	133			—			(35		)	98			NA			NA			NA			NA
Provision for lending-related commitments	6			—			852			858			—			—			3			3
Other	—			—			—			—			—			—			—			—
Ending balance at March 31,	$	151		$	—		$	1,996		$	2,147		$	12		$	—		$	1,046		$	1,058

Impairment methodology
Asset-specific^(b)	$	223		$	530		$	556		$	1,309		$	89		$	461		$	479		$	1,029
Portfolio-based	3,231			14,420			4,284			21,935			1,572			4,722			4,472			10,766
PCI	NA			NA			NA			NA			1,738			—			—			1,738
Total allowance for loan losses	$	3,454		$	14,950		$	4,840		$	23,244		$	3,399		$	5,183		$	4,951		$	13,533

Impairment methodology
Asset-specific	$	—		$	—		$	187		$	187		$	—		$	—		$	114		$	114
Portfolio-based	151			—			1,809			1,960			12			—			932			944
Total allowance for lending-related commitments	$	151		$	—		$	1,996		$	2,147		$	12		$	—		$	1,046		$	1,058

Total allowance for credit losses	$	3,605		$	14,950		$	6,836		$	25,391		$	3,411		$	5,183		$	5,997		$	14,591

Memo:
Retained loans, end of period	$	293,779		$	154,021		$	555,289		$	1,003,089		$	322,208		$	150,515		$	471,118		$	943,841
Retained loans, average	294,156			162,660			491,819			948,635			333,480			151,120			471,957			956,557
Credit ratios
Allowance for loan losses to retained loans	1.18		%	9.71		%	0.87		%	2.32		%	1.05		%	3.44		%	1.05		%	1.43		%
Allowance for loan losses to retained nonaccrual loans^(c)	89			NM			247			398			107			NM			278			273
Allowance for loan losses to retained nonaccrual loans excluding credit card	89			NM			247			142			107			NM			278			168
Net charge-off rates	(0.01		)	3.25			0.13			0.62			0.13			3.23			0.04			0.58


(a)	~~Write-offs~~Prior to the adoption of CECL, write-offs of PCI loans ~~are~~were recorded against the allowance for loan losses when actual losses for a pool ~~exceed~~exceeded estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan iswas recognized when the underlying loan iswas removed from a pool.

(b)

Includes modified PCD loans and loans that have been modified or are reasonably expected to be modified in a TDR. Also includes risk-rated loans that have been placed on nonaccrual status ~~and loans that have been modified in a TDR.~~for the wholesale portfolio segment. The asset-specific credit card allowance for loan losses modified or reasonably expected to be modified in a TDR is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.


(c)	The ~~allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets.~~


~~(d)~~


~~(d)~~	~~The~~ Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.


(d)	Excludes HTM securities, which had an allowance for credit losses of $19 million and a provision for credit losses of $9 million as of and for the three months ended March 31, 2020.



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 or from principal investments. The investment securities portfolio is predominantly held ~~predominantly~~ by Treasury and CIO in connection with the Firm’s balance sheet or asset-liability management ~~objectives or from principal~~objectives. Principal investments are predominantly privately-held financial instruments and are managed in the LOBs and ~~Corporate in predominantly privately-held financial instruments.~~Corporate. 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 mitigated given that the investment securities portfolio held by Treasury and CIO ~~substantially invest~~is predominantly invested in high-quality securities. At ~~September 30, 2019,~~March 31, 2020, the Treasury and CIO investment securities portfolio, net of allowance for credit losses, was ~~$392.4~~$469.1 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)~~risk ratings). Refer to Corporate segment results on ~~pages 42–43~~page 37 and Note 910 for further information on the investment securities ~~portfolio.~~portfolio and internal risk ratings. Refer to Market Risk Management on pages ~~70–74~~67–71 for further information on the market risk inherent in the portfolio. Refer to Liquidity Risk Management on pages ~~50–54~~45–49 for further information on related liquidity risk.

Principal investment risk

Principal investments are typically private non-traded financial instruments representing ownership or other forms of junior capital. Principal investments span multiple asset classes and are made either in stand-alone investing businesses or as part of a broader business platform. In general, new principal investments include 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 LOBs and Corporate and are reflected within their respective financial results. The carrying values of the principal investment portfolios have not been significantly affected by recent market events as a result of the COVID-19 pandemic. However, in the event that deterioration of the macroeconomic environment accelerates and/or economic recovery becomes delayed, certain principal investments could be subject to impairments, write-downs, or other negative impacts.

As of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the aggregate carrying values of the principal investment portfolios were ~~$23.3~~$23.8 billion and ~~$22.2~~$24.2 billion, respectively, which included tax-oriented investments (e.g., affordable housing and alternative energy investments) of ~~$16.7~~$18.2 billion ~~and $16.6 billion, respectively,~~at the end of both periods, and private equity, various debt and equity instruments, and real assets of ~~$6.6~~$5.6 billion and ~~$5.6~~$6.0 billion, respectively.

Refer to page ~~123~~118 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a discussion of the Firm’s Investment Portfolio Risk Management governance and 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. Refer to Market Risk Management on pages ~~124–131~~119–126 of JPMorgan Chase’s ~~2018~~ 2019 Form 10-K for a discussion of the Firm’s Market Risk Management organization, market risk measurement, risk monitoring and control, and predominant business activities that give rise to market risk.

COVID-19 Pandemic

Market Risk Management is actively monitoring the impact of the COVID-19 pandemic on market risk exposures by leveraging existing risk measures and controls.

Models used to measure market risk are inherently imprecise and may be limited in their ability to measure certain risks or to predict losses. This imprecision may be heightened when sudden or severe shifts in market conditions occur, such as those observed during the COVID-19 pandemic. For additional discussion on model uncertainty refer to Estimations and Model Risk Management on page 74.

Market Risk Management periodically reviews the Firm’s existing market risk measures to identify opportunities for enhancement, and to the extent appropriate, will calibrate those measures accordingly over time. This is increasingly important in periods of sustained, heightened market volatility.

Value-at-risk

JPMorgan Chase utilizes value-at-risk (“VaR”), a statistical risk measure, to estimate the potential loss from adverse market moves in the current market environment. The Firm has a single VaR framework used as a basis for calculating Risk Management VaR and Regulatory VaR.

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 daily measure of risk that is closely aligned to risk management decisions made by the ~~lines of business~~LOBs and Corporate and, along with other market risk measures, provides the appropriate information needed to respond to risk events. 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.

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. Refer to Estimations and Model Risk Management on page ~~140~~135 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for information regarding model reviews and approvals.

Refer to page ~~126~~121 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for further information regarding VaR, including the inherent limitations, and the key differences between Risk Management VaR and Regulatory VaR. Refer to JPMorgan Chase’s Basel 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 to Other risk measures on pages ~~129-131~~124-126 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for further information regarding nonstatistical market risk measures used by the 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, 2019										June 30, 2019										September 30, 2018										March 31, 2020										December 31, 2019										March 31, 2019
(in millions)	Avg.				Min			Max			Avg.				Min			Max			Avg.				Min			Max			Avg.				Min			Max			Avg.				Min			Max			Avg.				Min			Max
CIB trading VaR by risk type
Fixed income	$	37			$	31		$	46		$	39			$	33		$	45		$	30			$	25		$	37		$	60			$	30		$	156		$	39			$	33		$	48		$	44			$	38		$	50
Foreign exchange	6				4			8			7				5			12			5				3			11			7				4			11			5				4			8			9				4			15
Equities	22				19			27			25				14			31			16				13			19			20				13			41			18				13			27			16				13			22
Commodities and other	8				7			9			9				7			10			9				7			11			10				7			24			7				6			9			10				9			12
Diversification benefit to CIB trading VaR	(34		)	^(a)	NM		^(b)	NM		^(b)	(36		)	^(a)	NM		^(b)	NM		^(b)	(27		)	^(a)	NM		^(b)	NM		^(b)	(40		)	^(a)	NM		^(b)	NM		^(b)	(32		)	^(a)	NM		^(b)	NM		^(b)	(32		)	^(a)	NM		^(b)	NM		^(b)
CIB trading VaR	39				33		^(b)	47		^(b)	44				34		^(b)	55		^(b)	33				27		^(b)	41		^(b)	57				27		^(b)	160		^(b)	37				29		^(b)	55		^(b)	47				36		^(b)	61		^(b)
Credit portfolio VaR	5				4			7			5				4			7			3				3			4			9				3			25			5				3			7			5				4			6
Diversification benefit to CIB VaR	(6		)	^(a)	NM		^(b)	NM		^(b)	(5		)	^(a)	NM		^(b)	NM		^(b)	(3		)	^(a)	NM		^(b)	NM		^(b)	(8		)	^(a)	NM		^(b)	NM		^(b)	(5		)	^(a)	NM		^(b)	NM		^(b)	(4		)	^(a)	NM		^(b)	NM		^(b)
CIB VaR	38				33		^(b)	46		^(b)	44				35		^(b)	55		^(b)	33				28		^(b)	42		^(b)	58				27		^(b)	162		^(b)	37				29		^(b)	52		^(b)	48				37		^(b)	63		^(b)

CCB VaR	6				2			11			4				2			7			1				1			2			7				3			11			8				3			11			2				1			3
Corporate VaR	10				9			11			10				9			10			13				12			14
Corporate and other LOB VaR																															11				9			14			11				9			13			10				9			12
Diversification benefit to other VaR	(5		)	^(a)	NM		^(b)	NM		^(b)	(5		)	^(a)	NM		^(b)	NM		^(b)	(1		)	^(a)	NM		^(b)	NM		^(b)	(5		)	^(a)	NM		^(b)	NM		^(b)	(6		)	^(a)	NM		^(b)	NM		^(b)	(2		)	^(a)	NM		^(b)	NM		^(b)
Other VaR	11				9		^(b)	15		^(b)	9				8		^(b)	11		^(b)	13				12		^(b)	14		^(b)	13				10		^(b)	16		^(b)	13				10		^(b)	17		^(b)	10				9		^(b)	11		^(b)
Diversification benefit to CIB and other VaR	(10		)	^(a)	NM		^(b)	NM		^(b)	(7		)	^(a)	NM		^(b)	NM		^(b)	(11		)	^(a)	NM		^(b)	NM		^(b)	(12		)	^(a)	NM		^(b)	NM		^(b)	(13		)	^(a)	NM		^(b)	NM		^(b)	(6		)	^(a)	NM		^(b)	NM		^(b)
Total VaR	$	39			$	35	^(b)	$	46	^(b)	$	46			$	36	^(b)	$	57	^(b)	$	35			$	30	^(b)	$	43	^(b)	$	59			$	27	^(b)	$	164	^(b)	$	37			$	30	^(b)	$	52	^(b)	$	52			$	40	^(b)	$	65	^(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,~~LOBs, Corporate, and risk types. The maximum and minimum VaR for each portfolio may have occurred on different trading days than the components and consequently diversification benefit is not meaningful.

Average VaR across the risk types and LOBs were generally higher due to increased volatility as a result of the COVID-19 pandemic.

Quarter over quarter results

Average total VaR ~~decreased~~increased by $7$22 million for the three months ended ~~September 30, 2019~~March 31, 2020 as compared with the prior quarter. This reflects ~~a reduction~~substantial increases in volatility which occurred towards the end of the quarter, affecting the fixed income risk ~~across~~type. Maximum VaR for the ~~Fixed Income and Foreign Exchange risk types, as well as a decrease in the Equities risk type~~quarter was $164 million, also driven by ~~certain CIB investments, including Tradeweb.~~the increased volatility.

Year over year results

Average total VaR increased by $4$7 million for the three months ended ~~September 30, 2019,~~March 31, 2020, compared with the same period in the prior year. ~~The~~This reflects an increase in ~~average total VaR is primarily due to~~the fixed income risk type driven by substantial increases in volatility, and increased exposure in the ~~Fixed Income~~equities risk type ~~as well as an increase in the Equities risk type in CIB driven by~~due to the inclusion of Tradeweb following ~~the~~its IPO in the second quarter of ~~2019.~~2019, partially offset by the exit of certain CIB investments. The fixed income and equities risk type increases were partially offset by reduced exposure in the foreign exchange risk type.

In addition, average CCB VaR has increased by $5 million, driven by ~~mortgage servicing rights~~MSR risk management activities.

Effective January 1, 2020, the Firm refined the scope of VaR to exclude positions related to the risk management of interest rate exposure from changes in the Firm’s own credit spread on fair value option elected liabilities, and included these positions in other sensitivity-based measures. This change was made to more appropriately align the risk from changes in the Firm’s own credit spread on fair value option elected liabilities in a single market risk measure. In the absence of this refinement, the average Total VaR for the three months ended March 31, 2020 would have been higher by $6 million and each of the components would have been higher by the amounts reported in the following table:



(in millions)	Amount by which reported VaR would have been higher for the three months ended March 31, 2020
CIB fixed income VaR		$	4
CIB trading VaR		5
CIB VaR		6

VaR ~~back-testing~~backtesting

The Firm performs daily VaR model ~~back-testing,~~backtesting, which compares the daily Risk Management VaR results with the daily gains and losses ~~actually recognized on market-risk related revenue.~~

that are utilized for VaR backtesting purposes. The ~~Firm’s definition of market risk-related~~ gains and losses ~~is consistent~~in the chart below do not reflect the Firm’s revenue results as they exclude select components of total net revenue, such as those associated with the ~~definition used by the banking regulators under Basel III. Under this definition market risk-related gains~~execution of new transactions (i.e., intraday client-driven trading and ~~losses are defined as: gains and losses on the positions included in the Firm’s Risk Management VaR excluding~~intraday risk management activities), fees, commissions, certain valuation adjustments and net interest ~~income, and~~income. These excluded components of total net revenue may more than offset backtesting gains and losses ~~arising from intraday trading.~~on a particular day. The definition of backtesting gains and losses above is consistent with the requirements for backtesting under Basel III capital rules.

The following chart compares ~~actual~~Firmwide daily ~~market risk-related~~backtesting gains and losses with the Firm’s Risk Management VaR for the ~~nine~~12 months ended ~~September 30, 2019. As the chart presents market risk-related gains and losses related to those positions included in the Firm’s Risk Management VaR, the~~March 31, 2020. The results in the ~~table~~chart below differ from the results of ~~back-testing~~backtesting 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~~the Firm’s covered positions.

For the ~~nine~~12 months ended ~~September 30, 2019,~~March 31, 2020, the Firm observed ~~five~~15 VaR ~~back-testing~~backtesting exceptions and posted ~~market risk-related~~backtesting gains on ~~116~~140 of the ~~194~~260 days. ~~For~~The Firm observed eight VaR backtesting exceptions, due to volatility resulting from the COVID-19 pandemic, and posted backtesting gains on 44 of the 64 days, for three months ended ~~September 30, 2019,~~March 31, 2020. The number of VaR backtesting exceptions observed can differ from the ~~Firm observed three~~statistically expected number of backtesting exceptions if the current level of market volatility is materially different from the level of market volatility during the 12 months of historical data used in the VaR ~~back-testing exceptions~~calculation. Firmwide backtesting loss days differ from the two loss days for which Fixed Income Markets and Equity Markets posted ~~market risk-related~~losses, as disclosed in the CIB Markets revenue results, as the population of positions which compose each metric are different and due to the exclusion of select components of total net revenue in backtesting gains and losses as described above. For more information on ~~35 of the 66 days.~~CIB Markets revenue results, refer to page 29.

Daily ~~Market Risk-Related Gains and Losses~~

~~vs.~~ Risk Management VaR ~~(1-day, 95% Confidence level)~~Backtesting Results

~~Nine~~12 months ended ~~September 30, 2019~~March 31, 2020

~~Market Risk-Related~~Backtesting Gains and Losses

Risk Management VaR(1-day, 95% Confidence level)



Second Quarter 2019	Third Quarter 2019	Fourth Quarter 2019	First Quarter ~~2019~~	~~Second Quarter 2019~~	~~Third Quarter 2019~~ 2020

Earnings-at-risk

The effect of interest rate exposure on the Firm’s reported net income is 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 as well as from the investment securities portfolio. Refer to the table on page ~~125~~120 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a summary by ~~line of business~~LOB and Corporate, identifying positions included in earnings-at-risk.

One way the Firm evaluates its structural interest rate risk is through earnings-at-risk. Earnings-at-risk estimates the Firm’s interest rate exposure for a given interest rate scenario. It is presented as a sensitivity to a baseline, which includes net interest income and certain interest rate sensitive fees. The baseline uses market interest rates and in 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). These simulations primarily include retained loans, deposits, deposits with banks, investment securities, long term debt and any related interest rate hedges, and exclude other positions in risk management VaR and other sensitivity-based measures as described on page ~~125~~120 of JPMorgan Chase’s ~~2018~~2019 Form 10-K.

Earnings-at-risk scenarios estimate the potential change to 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;~~rates; 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.~~constant. These scenarios consider many different factors, including:

The impact on exposures as a result of instantaneous changes in interest rates from baseline rates.

Forecasted balance sheet, as well as modeled prepayment and reinvestment behavior, but do not include assumptions about actions that could be taken by the Firm in response to any such instantaneous rate changes. Mortgage prepayment assumptions are based on the interest rates used in the scenarios compared with underlying contractual rates, the time since origination, and other factors which are updated periodically based on historical experience.


•	The pricing sensitivity of deposits, using normalized deposit betas which represent the amount by which deposit rates paid could change upon a given change in market interest rates over the cycle. ~~These normalized deposit betas represent the amount by which deposit rates paid could change upon a given change in market interest~~

~~rates.~~ The deposit rates paid in these scenarios differ from actual deposit rates paid, particularly for retail deposits, due to repricing lags and other factors.

The Firm’s earnings-at-risk scenarios are periodically 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~~2020 Outlook on page 87 for additional information).

The Firm’s U.S. dollar sensitivities are presented in the table below.


(in billions)	September 30, 2019			December 31, 2018			March 31, 2020		December 31, 2019
Parallel shift:
+100 bps shift in rates	$	0.7		$	0.9		$	2.8	$	0.3
-100 bps shift in rates	(2.6		)	(2.1		)
Steeper yield curve:
+100 bps shift in long-term rates	0.9			0.5			1.5		1.2
-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			1.4		(0.9		)
-100 bps shift in long-term rates	(1.6		)	(0.9		)

The change in the Firm’s U.S. dollar sensitivities as of ~~September 30, 2019~~March 31, 2020 compared to December 31, ~~2018~~2019 reflected ~~updating~~updates to 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 an upward shift in short-term and long-term rates ~~decreased as a result of changes in the Firm’s balance sheet primarily offset by updating~~reflected updates to the Firm’s baseline ~~to reflect~~for lower rates. ~~The Firm’s sensitivity to long-term~~

Based upon current and implied market rates ~~increased primarily~~ as ~~a result~~ of ~~updating the Firm’s baseline to reflect~~March 31, 2020, scenarios reflecting lower rates could result in negative interest rates. The U.S. has never experienced an interest rate environment where the Federal Reserve has a negative interest rate policy. In a negative rate environment, the modeling assumptions used for certain assets and ~~is more impactful to the downward scenario due to the Firm’s sensitivity to mortgage prepayments.~~liabilities require additional management judgment.

The Firm’s non-U.S. dollar sensitivities are presented in the table below.


(in billions)	September 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Parallel shift:
+100 bps shift in rates	$	0.5	$	0.5	$	0.4	$	0.5
Flatter yield curve:
+100 bps shift in short-term rates	0.5		0.5		0.4		0.5

The results of the non-U.S. dollar interest rate scenario involving a steeper yield curve with long-term rates rising by 100 basis points and short-term rates staying at current levels were not material to the Firm’s earnings-at-risk at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018.~~2019.

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~~other comprehensive income (“OCI”) due to changes in relevant market variables. Refer to the table Predominant business activities

that give rise to market risk on page ~~125~~120 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional information on the positions captured in other sensitivity-based 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, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, as the movement in market parameters across maturities may vary and are not intended to imply management’s expectation of future ~~deterioration~~changes in these sensitivities.


Gain/(loss) (in millions)			September 30, 2019			December 31, 2018					March 31, 2020			December 31, 2019
Activity	Description	Sensitivity measure	September 30, 2019			December 31, 2018			Description	Sensitivity measure	March 31, 2020			December 31, 2019

Investment activities^(a)
Investment management activities	Consists of seed capital and related hedges; and fund co-investments	10% decline in market value	$	(79	)	$	(102	)	Consists of seed capital and related hedges; and fund co-investments	10% decline in market value	$	(67	)	$	(68	)
Other investments	Consists of privately held equity and other investments held at fair value	10% decline in market value	(202		)	(218		)	Consists of privately held equity and other investments held at fair value	10% decline in market value	(156		)	(192		)

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	(15		)	(13		)	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	(16		)	(17		)
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	7			17			Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges^(b)	10% depreciation of currency	—			15
Derivatives – funding spread risk	Impact of changes in the spread related to derivatives FVA	1 basis point parallel increase in spread	(5		)	(4		)	Impact of changes in the spread related to derivatives FVA	1 basis point parallel increase in spread	(5		)	(5		)
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	28			30			Impact of changes in the spread related to fair value option elected liabilities DVA^(b)	1 basis point parallel increase in spread	34			29
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	6			(2		)
Fair value option elected liabilities – interest rate sensitivity									Interest rate sensitivity related to risk management of changes in the Firm’s own credit spread on fair value option liabilities^(c)	1 basis point parallel increase in spread	(6		)	2


(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.


(c)	Refer to Total VaR on page 68 for additional information.



COUNTRY RISK MANAGEMENT

The Firm, through its ~~lines of business~~LOBs and Corporate, may be exposed to country risk resulting 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 which the Firm’s exposures are diversified given the Firm’s strategy and risk tolerance relative to a country.

Refer to pages ~~132–133~~127–128 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further discussion of the Firm’s country risk management.

COVID-19 Pandemic

Country Risk Management is actively monitoring the impact of the COVID-19 pandemic on countries to which the Firm has exposure, leveraging existing stress testing, exposure reporting, controls and tailored analysis.

Risk Reporting

The following table presents the Firm’s top 20 exposures by country (excluding the U.S.) as of ~~September 30, 2019~~March 31, 2020 and their comparative exposures as of December 31, ~~2018.~~2019. 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.

The overall increase in top 20 exposures was largely driven by client activity and demand for liquidity, relative to the period ending December 31, 2019. This resulted in an increase in cash placements primarily with the central banks of Germany, the United Kingdom and Australia. In addition, the Firm held a larger inventory in Brazilian government bonds.


Top 20 country exposures (excluding the U.S.)^(a)	Top 20 country exposures (excluding the U.S.)^(a)										Top 20 country exposures (excluding the U.S.)^(a)
(in billions)	September 30, 2019								December 31, 2018^(e)		March 31, 2020								December 31, 2019^(e)
	Lending and deposits^(b)		Trading and investing^(c)		Other^(d)		Total exposure		Total exposure		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	$	67.9	$	7.6	$	0.5	$	76.0	$	51.6
United Kingdom	28.8		10.0		3.7		42.5		40.7		38.2		12.3		2.1		52.6		42.4
Japan	23.3		4.2		0.3		27.8		29.1		37.6		9.3		0.3		47.2		43.8
China											10.3		12.6		1.4		24.3		19.2
France											13.0		8.0		1.4		22.4		18.1
Australia											14.8		5.9		—		20.7		11.7
Switzerland	10.7		1.0		7.6		19.3		12.8		13.3		0.9		4.9		19.1		18.3
France	11.3		4.8		1.5		17.6		17.9
China	9.3		6.7		1.4		17.4		19.3
Canada	12.0		1.5		—		13.5		14.3		11.7		2.5		0.1		14.3		13.2
Brazil											4.8		9.2		—		14.0		7.2
India	5.0		4.8		2.8		12.6		11.8		4.5		6.0		3.1		13.6		11.3
Luxembourg	11.6		0.7		—		12.3		11.0		11.4		0.7		—		12.1		12.9
Australia	7.1		5.0		—		12.1		13.0
Netherlands	6.0		1.2		3.0		10.2		5.8		5.4		1.1		3.4		9.9		9.0
Brazil	4.0		4.9		—		8.9		7.3
South Korea											4.9		4.4		0.5		9.8		6.4
Singapore	4.3		1.6		2.6		8.5		6.8		4.5		2.7		1.2		8.4		6.8
Italy											2.5		4.7		0.3		7.5		6.8
Hong Kong SAR											3.3		1.9		1.6		6.8		5.1
Spain											3.4		2.4		—		5.8		5.8
Saudi Arabia	7.2		0.9		—		8.1		5.3		4.4		1.4		—		5.8		5.2
South Korea	4.0		3.6		0.1		7.7		7.6
Italy	2.2		4.7		0.1		7.0		6.4
Hong Kong	3.4		1.5		1.7		6.6		5.4
Spain	3.3		3.3		—		6.6		5.1
Thailand											3.7		1.1		0.3		5.1		1.5
Mexico	4.2		0.9		—		5.1		5.5		3.9		0.7		—		4.6		4.7
Belgium	3.6		0.5		—		4.1		2.3


(a)	~~Top 20 country~~Country exposures presented in the table reflect ~~approximately~~ 87% ~~and 86%~~ of total firmwide non-U.S. exposure, where exposure is attributed to a specific country at ~~September 30, 2019,~~both March 31, 2020, and December 31, ~~2018 respectively.~~2019.

(b)

Lending and deposits includes loans and accrued interest receivable (net of eligible collateral and the allowance for loan losses), deposits with banks (including central banks), acceptances, other monetary assets, issued letters of credit net of participations, and unused commitments to extend credit. Excludes intra-day and operating exposures, such as those from settlement and clearing activities.


(c)	Includes market-making inventory, AFS securities, and counterparty exposure on derivative and securities financings net of eligible collateral and hedging. Includes exposure from single reference entity (“single-name”), index and other multiple reference entity transactions for which one or more of the underlying reference entities is in a country listed in the above table.


(d)	Predominantly includes physical commodity inventory.


(e)	The country rankings presented in the table as of December 31, ~~2018,~~2019, are based on the country rankings of the corresponding exposures at ~~September 30, 2019,~~March 31, 2020, not actual rankings of such exposures at December 31, ~~2018.~~2019.



OPERATIONAL RISK MANAGEMENT

Operational risk is the risk associated with an adverse outcome resulting from inadequate or failed internal processes or systems; human factors; or external events impacting the Firm’s processes or systems; it includes compliance, conduct, legal, and estimations and model risk. Operational risk is inherent in the Firm’s activities and can manifest itself in various ways, including fraudulent acts, business interruptions, cybersecurity attacks, inappropriate employee behavior, failure to comply with applicable laws and regulations or failure of vendors to perform in accordance with their agreements. Operational Risk Management attempts to manage operational risk at appropriate levels in light of the Firm’s financial position, the characteristics of its businesses, and the markets and regulatory environments in which it operates. Refer to Operational Risk Management on pages 129-131 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the Firm’s Operational Risk Management.

Subcategories and examples of operational risks

Operational risk can manifest itself in various ways. Operational risk subcategories such as Compliance risk, Conduct risk, Legal risk, and Estimations and Model risk as well as other operational risks, can lead to losses which are captured through the Firm’s operational risk measurement processes. Refer to Compliance Risk Management on page 132, Conduct Risk Management on page 133, Legal Risk Management on page 134 and Estimations and Model Risk Management on page 135 of JPMorgan Chase’s 2019 Form 10-K for more information. Details on other select examples of operational risks are provided below.

Business and Technology Resiliency Risk

Business disruptions can occur due to forces beyond the Firm’s control such as severe weather, power or telecommunications loss, accidents, failure of a third party to provide expected services, cyberattack, flooding, transit strikes, terrorism, health emergencies, the spread of infectious diseases or pandemics. The safety of the Firm’s employees and customers is of the highest priority. The Firmwide resiliency program is intended to enable the Firm to recover its critical business functions and supporting assets (i.e., staff, technology and facilities) in the event of a business interruption. The program includes governance, awareness training, and testing of recovery strategies, as well as strategic and tactical initiatives to identify, assess, and manage business interruption and public safety risks. The strength and proficiency of the Firmwide resiliency program has played an integral role in maintaining the Firm’s business operations during and after various events.

COVID-19 Pandemic

The Firm’s Technology and Cybersecurity operations continue to monitor the Firm’s systems 24 hours a day, seven days a week including responding to threat activity using COVID-19 themes in phishing and other social engineering campaigns.

The Technology function is actively supporting the Firm’s response to the impacts of the COVID-19 pandemic, including the Firm’s expanded use of remote collaboration tools and platforms. Technology diligently monitors the operational performance of the Firm’s infrastructure to support increased market volumes as a result of the COVID-19 pandemic.

ESTIMATIONS AND MODEL RISK MANAGEMENT

Estimations and Model risk, a subcategory of operational risk, is the potential for adverse consequences from decisions based on incorrect or misused estimation outputs.

The Firm uses models and other analytical and judgment based estimations across various businesses and functions. The estimation methods are of varying levels of sophistication and are used for many purposes, such as the valuation of positions, measurement of risk, sizing the allowance for credit losses, assessing regulatory capital requirements, conducting stress testing, and making business decisions.

While models are inherently imprecise, the degree of imprecision or uncertainty can be heightened by the market or economic environment. This is particularly true when the current and forecasted environment is significantly different from the historical macroeconomic environments upon which the models were calibrated, as the Firm has experienced during the COVID-19 pandemic. This uncertainty may necessitate a greater degree of judgment and analytics to inform adjustments to model outputs than in typical periods.

Refer to Critical Accounting Estimates Used by the Firm on pages 75–77 and Note 2 of this Form 10-Q, and Estimations and Model Risk Management section on page 135 of JPMorgan Chase’s 2019 Form 10-K for a summary of model-based valuations and other valuation techniques.



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

The Firm’s allowance for credit losses ~~covers~~represents management’s estimate of expected credit losses over the ~~retained consumer and wholesale loan portfolios, as well as~~remaining expected life of the Firm’s ~~wholesale~~financial assets measured at amortized cost, certain off-balance sheet lending-related commitments and ~~certain consumer lending-related commitments.~~ investment securities. The allowance for credit losses comprises:

The allowance for loan losses, ~~is intended to adjust the carrying value of~~which covers the Firm’s retained loan ~~assets to reflect probable credit losses inherent in the loan portfolio as of the balance sheet date. Similarly, the~~portfolios (scored and risk-rated),

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.~~and

The allowance for credit losses ~~includes a formula-based component, an asset-specific component,~~on investment securities, which covers the Firm’s HTM and ~~a component related to PCI loans.~~ AFS securities.

The ~~determination of each of these components~~allowance for credit losses involves significant judgment on a number of matters. Refer to ~~pages 120–122, page 141~~Note 10 and Note 13 ~~of JPMorgan Chase’s 2018 Form 10-K~~ for further information on ~~these components, areas of judgment~~the Firm’s policies, methodologies, and ~~methodologies~~judgments used ~~in establishing~~to determine the Firm’s allowance for credit ~~losses; and refer to Allowance for credit losses on pages 67–68 and Note 12~~losses.

One of ~~this Form 10-Q.~~

~~As noted~~the most significant judgments involved in ~~the discussion on page 141 of JPMorgan Chase’s 2018 Form 10-K,~~estimating the Firm’s allowance for credit losses ~~is sensitive~~relates to ~~numerous factors, which may differ depending on~~ the ~~portfolio. Changes in~~macroeconomic forecasts used to estimate credit losses over the eight-quarter forecast period within the Firm’s methodology. In light of the rapidly evolving economic conditions orand forecasts during March 2020, management updated its macroeconomic forecast near the end of its credit loss estimation process in early April. However, changes in the Firm’s assumptions and estimates regarding economic conditions could significantly affect its estimate of ~~probable~~expected credit losses ~~inherent~~ in the portfolio at the balance sheet ~~date. The Firm uses its best judgment~~date or lead 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 for further information.

~~To illustrate the potential magnitude of certain alternate judgments, the Firm estimates that~~significant changes in the ~~following inputs would have~~estimate from one reporting period to the ~~following effects on~~next.

The COVID-19 pandemic has resulted in a weak labor market and weak overall economic conditions that will affect borrowers across the Firm’s ~~modeled credit loss estimates as~~consumer and wholesale lending portfolios, and significant judgment is required to estimate the severity and duration of ~~September 30, 2019,~~the current economic

~~without consideration of any offsetting or correlated effects of other inputs in~~downturn, as well as its potential impact on borrower defaults and loss severities. In particular, macroeconomic conditions and forecasts regarding the ~~Firm’s allowance for loan losses:~~

~~A combined 5% decline in housing prices~~duration and ~~a 100 basis point increase in unemployment rates from expectations could imply:~~


◦	~~an increase to modeled credit loss estimates of approximately $250 million for PCI loans.~~


◦	~~an increase to modeled annual credit loss estimates of approximately $50 million for residential real estate loans, excluding PCI loans.~~

~~For credit card loans, a 100 basis point increase in unemployment rates from expectations could imply an increase to modeled annual credit loss estimates of approximately $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 $1.7 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~~severity of the ~~isolated impacts of hypothetical alternative assumptions on modeled loss estimates. The~~economic downturn caused by the COVID-19 pandemic have been rapidly changing and remain highly uncertain, and it is difficult to predict exactly how borrower behavior will be impacted by these changes in economic conditions. The effectiveness of government support, customer relief and enhanced unemployment benefits should act as mitigants to credit losses, but the ~~inputs presented above are not intended to imply management’s expectation~~extent 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.mitigation impact remains uncertain.

It is difficult to estimate how potential changes in ~~specific factors~~any one factor or input might affect the overall allowance for credit losses because management considers a wide variety of factors and inputs in estimating the allowance for credit losses. Changes in ~~these~~the factors and inputs considered may not occur at the same rate and may not be consistent across all geographies or product types, and changes in factors and input may be directionally inconsistent, such that improvement in one factor or input may offset deterioration in ~~other factors. In addition, it is difficult~~others.

However, to ~~predict how changes~~consider the impact of a hypothetical alternate macroeconomic forecast, the Firm compared the modeled credit losses determined using two of the five different macroeconomic scenarios considered in ~~specific economic conditions or assumptions could affect borrower behavior or other factors considered by management~~the quantitative calculations used in estimating the ~~allowance~~allowances for ~~credit losses. Given~~loan losses and lending-related commitments. Each scenario included a full suite of macroeconomic variables, but differed in the ~~process~~levels, paths and peaks of those variables over the ~~Firm follows~~eight-quarter forecast period. The maximum difference in macroeconomic variables between the two scenarios over the eight-quarter forecast period was represented by an approximate 3.5% deterioration in U.S. real GDP, an approximate 250 basis point increase in the U.S. unemployment rate, and an approximate 10.5% deterioration in the ~~judgments made~~national house price index.

This analysis is not intended to estimate expected future changes in ~~evaluating the risk factors related to its loss estimates, management believes that its current estimate of~~ the allowance for credit losses, for a number of reasons, including:

the changes in the macroeconomic variables are not intended to imply management’s expectation of the extent or nature of future deterioration in macroeconomic variables

the impacts of changes in many macroeconomic variables are both interrelated and nonlinear, so the results of this analysis cannot be simply extrapolated for more severe changes in macroeconomic variables

the COVID-19 pandemic has stressed many macroeconomic variables at a speed and to degrees not seen in recent history, adding increased uncertainty around credit loss estimates

significant changes in the expected severity and duration of the economic downturn caused by the COVID-19 pandemic, the effects of government support and

customer relief, and the speed of the subsequent recovery could significantly affect the Firm’s estimate of expected credit losses irrespective of the estimated sensitivities described below

To demonstrate the sensitivity of credit loss estimates to macroeconomic forecasts, the difference between these two scenarios would have generated the following effects on the Firm’s modeled credit loss estimates as of March 31, 2020, without considering any offsetting or correlated effects in other components of the Firm’s allowance for credit losses for these lending exposures:

An increase of approximately $0.9 billion for residential real estate loans and lending-related commitments

An increase of approximately $1.5 billion for credit card loans

An increase of approximately $0.8 billion for wholesale loans and lending-related commitments

This analysis relates only to the modeled credit loss estimates and is ~~appropriate.~~not intended to estimate changes in the overall allowance for credit losses as they do not reflect any potential changes in the adjustment to the quantitative calculation, which would also be influenced by the judgment management applies to the modeled lifetime loss estimates to reflect the uncertainty and imprecision of these modeled lifetime loss estimates based on then-current circumstances and conditions.

Recognizing that forecasts of macroeconomic conditions are inherently uncertain, particularly in light of the recent economic conditions, the Firm believes that its process to consider the available information and associated risks and uncertainties is appropriately governed and that its estimates of expected credit losses were reasonable and appropriate for the period ended March 31, 2020.

Fair value

JPMorgan Chase carries a portion of its assets and liabilities at fair value. The majority of such assets and liabilities are measured at fair value on a recurring basis, including, derivatives, structured note products and certain securities financing agreements. Certain assets and liabilities are measured at fair value on a nonrecurring basis, including certain mortgage, home equity and other loans, where the carrying value is based on the fair value of the underlying collateral.

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. Refer to Note 2 for further information.


September 30, 2019 (in billions, except ratios)	Total assets at fair value		Total level 3 assets
March 31, 2020 (in billions, except ratios)						Total assets at fair value		Total level 3 assets
Federal funds sold and securities purchased under resale agreements						$	235.9	$	—
Securities borrowed						51.6		—
Trading assets:
Trading–debt and equity instruments	$	440.2	$	4.4		$	466.9	$	5.5
Derivative receivables^(a)	55.6		5.6			81.6		9.7
Trading assets	495.8		10.0
Total trading assets						548.5		15.2
AFS securities	353.4		—			399.9		—
Loans	5.8		—			6.2		0.3
MSRs	4.4		4.4			3.3		3.3
Other	27.8		0.7			307.6		0.4
Total assets measured at fair value on a recurring basis	$	887.2	$	15.1		1,265.5		19.2
Total assets measured at fair value on a nonrecurring basis	6.4		1.0			3.2		0.9
Total assets measured at fair value	$	893.6	$	16.1		$	1,268.7	$	20.1
Total Firm assets	$	2,764.7				$	3,139.4
Level 3 assets as a percentage of total Firm assets^(a)			0.6		%			0.6		%
Level 3 assets as a percentage of total Firm assets at fair value^(a)			1.8		%			1.6		%

(a)

For purposes of the table above, the derivative receivables total reflects the impact of netting adjustments; however, the ~~$5.6~~$9.7 billion of derivative receivables classified as level 3 does not reflect the netting adjustment as such netting is not relevant to a presentation based on the transparency of inputs to the valuation of an asset. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.

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. Refer to Note 2 for a further discussion of the valuation of level 3 instruments, including unobservable inputs 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. In periods of heightened market volatility and uncertainty, as was experienced in the period ended March 31, 2020, judgments are further affected by the wider variation of reasonable valuation estimates, particularly for positions that are less liquid. Refer to Note 2 for a further discussion of valuation adjustments applied by the 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. Refer 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.

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. Refer to Goodwill impairment on page ~~142~~137 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a description of the significant valuation judgments associated with goodwill impairment.

Refer to Note 1415 for additional information on goodwill, including the goodwill impairment assessment as of ~~September 30, 2019.~~March 31, 2020.

Credit card rewards liability

The credit card rewards liability was ~~$6.3~~$6.7 billion and ~~$5.8~~$6.4 billion at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively, and is recorded in accounts payable and other liabilities on the Consolidated balance sheets. Refer to ~~page 143~~pages 137-138 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a description of the significant assumptions and judgments associated with the Firm’s credit card rewards liability.

Income taxes

Refer to Income taxes on page ~~143~~138 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a description of the significant assumptions, judgments and interpretations associated with the accounting for income taxes.

Litigation reserves

Refer to Note 2425 of this Form 10-Q, and Note 2930 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a description of the significant estimates and judgments associated with establishing litigation reserves.



ACCOUNTING AND REPORTING DEVELOPMENTS



Financial Accounting Standards Board (“FASB”) Standards Adopted since January 1, ~~2019~~

~~Standard~~	~~Summary of guidance~~	~~Effects on financial statements~~

~~Leases~~ ~~Issued February 2016~~	~~• Requires lessees to recognize all leases longer than twelve months on the Consolidated balance sheets as a lease liability with a corresponding right-of-use asset.~~ ~~• Requires lessees and lessors to classify most leases using principles similar to existing lease accounting, but eliminates the “bright line” classification tests.~~ ~~• Expands qualitative and quantitative leasing disclosures.~~	~~• Adopted January 1, 2019.~~ • The Firm elected the available practical expedient to not reassess whether existing contracts contain a lease or whether classification or unamortized initial lease costs would be different under the new lease guidance. The Firm elected the modified retrospective transition method, through a cumulative-effect adjustment to retained earnings without revising prior periods. ~~• Refer to Note 16 for further information.~~



~~FASB Standards Issued but not yet Adopted~~2020

Standard	Summary of guidance	Effects on financial statements

Financial ~~instruments~~Instruments – ~~credit losses~~Credit Losses (“CECL”) Issued June 2016	• ~~Replaces existing incurred loss impairment guidance and establishes~~Establishes a single allowance framework for all financial assets ~~carried~~measured at amortized cost ~~which will reflect~~and certain off-balance sheet credit exposures. This framework requires that management’s estimate ofreflects credit losses over the ~~full~~instrument’s remaining expected life ~~of the financial assets~~ and ~~will consider~~considers expected future changes in macroeconomic conditions. • Eliminates existing guidance for PCI loans, and requires recognition of the nonaccretable difference as an increase to the allowance for expected credit losses on financial assets purchased with more than insignificant credit deterioration since origination, with a corresponding increase in the ~~recorded investment~~amortized cost 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~~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:~~Adopted January 1, 2020.^(a) • The Firm has established a Firmwide, cross-discipline governance structure, which provides implementation oversight. The Firm continues to test and refine 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. The Firm currently intends to estimate losses over a two-year forecast period using the 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 Firm currently expects the increase in the allowance~~Refer to ~~be in the range of $4-6 billion, primarily driven by Card. This estimate is subject to~~Note 1 for 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, the macroeconomic conditions and forecasts at that date, and other management judgments. • ~~The Firm plans to adopt the new guidance on January 1, 2020.~~information.
Goodwill Issued January 2017	• Requires recognition of 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~~requirement 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:~~Adopted January 1, 2020. • ^(a)No impact upon adoption as the guidance is to be applied prospectively. • Refer to Note 15 for further information.
Reference Rate Reform Issued March 2020	• Provides optional expedients and exceptions to current accounting guidance when financial instruments, hedging relationships, and other transactions are amended due to reference rate reform. • ~~Based on current impairment test results,~~Provides an election to account for certain contract amendments related to reference rate reform as modifications rather than extinguishments without the ~~Firm does not expect a material effect on~~requirement to assess the ~~Consolidated Financial Statements. However, the impact~~significance of the ~~new~~amendments. • Allows for changes in critical terms of a hedging relationship without automatic termination of that relationship. Provides various practical expedients and elections designed to allow hedge accounting ~~guidance will depend on~~to continue uninterrupted during the ~~performance~~transition period. • Provides a one-time election to transfer securities out of the ~~reporting units~~held-to-maturity classification if certain criteria are met.	• Issued and ~~the market conditions at the time of adoption.~~effective March 12, 2020. • ~~After adoption, the guidance may result in more frequent goodwill impairment losses due~~ The Firm expects to ~~the removal~~apply certain of the ~~second condition.~~practical expedients related to contract modifications and hedge accounting relationships and is evaluating the timing and application of those elections. ~~• 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:

Economic, financial and other impacts of the COVID-19 pandemic;

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 and sustainability concerns that may arise from its business activities;

Ability of the Firm to deal effectively with an economic slowdown or other economic or market disruption, including, but not limited to, in the interest rate environment;

Technology changes instituted by the Firm, its counterparties or competitors;

The effectiveness of the Firm’s control agenda;

Ability of the Firm to develop or discontinue products and services, and the extent to which products or services previously sold by the Firm (including but not limited to mortgages and asset-backed securities) require the Firm to incur liabilities or absorb losses not contemplated at their initiation or origination;

Acceptance of the Firm’s new and existing products and services by the marketplace and the ability of the Firm to innovate and to increase market share;

Ability of the Firm to attract and retain qualified employees;

Ability of the Firm to control expenses;

Competitive pressures;

Changes in the credit quality of the Firm’s clients, customers and counterparties;

Adequacy of the Firm’s risk management framework, disclosure controls and procedures and internal control over financial reporting;

Adverse judicial or regulatory proceedings;

Changes in applicable accounting policies, including the introduction of new accounting standards;

Ability of the Firm to determine accurate values of certain assets and liabilities;

Occurrence of natural or man-made disasters or calamities, including health emergencies, the spread of infectious diseases, pandemics or ~~conflicts~~outbreaks of hostilities, or the effects of climate change, and the Firm’s ability to deal effectively with disruptions caused by the foregoing;

Ability of the Firm to maintain the security of its financial, accounting, technology, data processing and other operational systems and facilities;

Ability of the Firm to withstand disruptions that may be caused by any failure of its operational systems or those of third parties;

Ability of the Firm to effectively defend itself against cyberattacks and other attempts by unauthorized parties to access information of the Firm or its customers or to disrupt the Firm’s systems; and

The other risks and uncertainties detailed in Part I,II,

Item 1A: Risk Factors in this form 10-Q and Part I, Item 1A: Risk Factors in JPMorgan Chase’s ~~2018~~2019 Form 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 Form 10-Ks, Quarterly Reports on Form 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 March 31,
(in millions, except per share data)	2019		2018			2019		2018			2020		2019
Revenue
Investment banking fees	$	1,967	$	1,832		$	5,658	$	5,736		$	1,866	$	1,840
Principal transactions	3,449		2,964			11,239		10,698			2,937		4,076
Lending- and deposit-related fees(a)	1,626		1,542			4,643		4,514			1,706		1,559
Asset management, administration and commissions(a)	4,351		4,310			12,818		12,923			4,540		4,037
Investment securities gains/(losses)	78		(46		)	135		(371		)
Investment securities gains											233		13
Mortgage fees and related income	887		262			1,562		1,051			320		396
Card income	1,283		1,328			3,923		3,623			1,054		1,274
Other income	1,472		1,160			4,239		4,041			1,156		1,475
Noninterest revenue	15,113		13,352			44,217		42,215			13,812		14,670
Interest income ^(a)	21,121		19,439			64,113		55,499			19,161		21,389
Interest expense ^(a)	6,893		5,531			21,034		14,794			4,722		6,936
Net interest income	14,228		13,908			43,079		40,705			14,439		14,453
Total net revenue	29,341		27,260			87,296		82,920			28,251		29,123

Provision for credit losses	1,514		948			4,158		3,323			8,285		1,495

Noninterest expense
Compensation expense	8,583		8,108			26,067		25,308			8,895		8,937
Occupancy expense	1,110		1,014			3,238		2,883			1,066		1,068
Technology, communications and equipment expense	2,494		2,219			7,236		6,441			2,578		2,364
Professional and outside services	2,056		2,086			6,307		6,333			2,028		2,039
Marketing	945		798			2,686		2,396			859		879
Other expense	1,234		1,398			3,624		4,313			1,424		1,108
Total noninterest expense	16,422		15,623			49,158		47,674			16,850		16,395
Income before income tax expense	11,405		10,689			33,980		31,923			3,116		11,233
Income tax expense	2,325		2,309			6,069		6,515			251		2,054
Net income	$	9,080	$	8,380		$	27,911	$	25,408		$	2,865	$	9,179
Net income applicable to common stockholders	$	8,606	$	7,948		$	26,551	$	24,067		$	2,431	$	8,753
Net income per common share data
Basic earnings per share	$	2.69	$	2.35		$	8.17	$	7.04		$	0.79	$	2.65
Diluted earnings per share	2.68		2.34			8.15		7.00			0.78		2.65

Weighted-average basic shares	3,198.5		3,376.1			3,248.7		3,416.5			3,095.8		3,298.0
Weighted-average diluted shares	3,207.2		3,394.3			3,258.0		3,436.2			3,100.7		3,308.2

~~(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(a) In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. 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 March 31,
(in millions)	2019			2018			2019			2018			2020			2019
Net income	$	9,080		$	8,380		$	27,911		$	25,408		$	2,865		$	9,179
Other comprehensive income/(loss), after–tax
Unrealized gains/(losses) on investment securities	479			(819		)	2,986			(2,280		)	1,119			1,414
Translation adjustments, net of hedges	(165		)	(31		)	(90		)	84			(330		)	(24		)
Fair value hedges	(1		)	34			87			(74		)	88			2
Cash flow hedges	195			(88		)	430			(327		)	2,465			138
Defined benefit pension and OPEB plans	46			19			123			78			33			36
DVA on fair value option elected liabilities	132			(402		)	(229		)	125			2,474			(617		)
Total other comprehensive income/(loss), after–tax	686			(1,287		)	3,307			(2,394		)	5,849			949
Comprehensive income	$	9,766		$	7,093		$	31,218		$	23,014		$	8,714		$	10,128

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)	September 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Assets
Cash and due from banks	$	21,215		$	22,324		$	24,001		$	21,704
Deposits with banks	235,382			256,469			343,533			241,927
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
Federal funds sold and securities purchased under resale agreements (included $235,859 and $14,561 at fair value)							248,580			249,157
Securities borrowed (included $51,576 and $6,237 at fair value)							139,839			139,758
Trading assets (included assets pledged of $143,900 and $111,522)							548,580			411,103
Available-for-sale securities (amortized cost of $394,104 and $345,306; included assets pledged of $16,964 and $10,325)							399,944			350,699
Held-to-maturity securities (net of allowance for credit losses of $19)							71,200			47,540
Investment securities, net of allowance for credit losses							471,144			398,239
Loans (included $6,214 and $7,104 at fair value)							1,015,375			959,769
Allowance for loan losses	(13,235		)	(13,445		)	(23,244		)	(13,123		)
Loans, net of allowance for loan losses	931,983			971,109			992,131			946,646
Accrued interest and accounts receivable	88,988			73,200			122,064			72,861
Premises and equipment	25,117			14,934			25,882			25,813
Goodwill, MSRs and other intangible assets	53,078			54,349			51,867			53,341
Other assets (included $8,916 and $9,630 at fair value and assets pledged of $2,834 and $3,457)	123,045			121,022
Other assets (included $20,675 and $9,111 at fair value and assets pledged of $3,762 and $3,349)							171,810			126,830
Total assets^(a)	$	2,764,661		$	2,622,532		$	3,139,431		$	2,687,379
Liabilities
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
Deposits (included $22,609 and $28,589 at fair value)							$	1,836,009		$	1,562,431
Federal funds purchased and securities loaned or sold under repurchase agreements (included $194,690 and $549 at fair value)							233,207			183,675
Short-term borrowings (included $24,320 and $5,920 at fair value)							51,909			40,920
Trading liabilities	138,343			144,773			184,196			119,277
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
Accounts payable and other liabilities (included $4,131 and $3,728 at fair value)							253,874			210,407
Beneficial interests issued by consolidated VIEs (included $77 and $36 at fair value)							19,630			17,841
Long-term debt (included $68,617 and $75,745 at fair value)							299,344			291,498
Total liabilities^(a)	2,500,313			2,366,017			2,878,169			2,426,049
Commitments and contingencies (refer to Notes 22, 23 and 24)
Commitments and contingencies (refer to Notes 23, 24 and 25)
Stockholders’ equity
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,836,250 and 2,606,750 shares)	28,363			26,068
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 3,006,250 and 2,699,250 shares)							30,063			26,993
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 capital	88,512			89,162			87,857			88,522
Retained earnings	217,888			199,202			220,226			223,211
Accumulated other comprehensive income/(loss)	1,800			(1,507		)	7,418			1,569
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		)
Shares held in restricted stock units (“RSU”) Trust, at cost (472,953 shares)							(21		)	(21		)
Treasury stock, at cost (1,057,911,018 and 1,020,912,567 shares)							(88,386		)	(83,049		)
Total stockholders’ equity	264,348			256,515			261,262			261,330
Total liabilities and stockholders’ equity	$	2,764,661		$	2,622,532		$	3,139,431		$	2,687,379

~~(a)~~

The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at September 30, 2019, and December 31, 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. Refer to Note 13 for a further discussion.

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.

The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at March 31, 2020, and December 31, 2019. 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. Refer to Note 14 for a further discussion.


(in millions)	September 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Assets
Trading assets	$	1,461	$	1,966	$	1,935	$	2,633
Loans	53,022		59,456		42,471		42,931
All other assets	974		1,013		991		881
Total assets	$	55,457	$	62,435	$	45,397	$	46,445
Liabilities
Beneficial interests issued by consolidated VIEs	$	18,515	$	20,241	$	19,630	$	17,841
All other liabilities	301		312		316		447
Total liabilities	$	18,816	$	20,553	$	19,946	$	18,288

The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

JPMorgan Chase & Co.

Consolidated statements of changes in stockholders’ equity (unaudited)


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(in millions, except per share data)	2019			2018			2019			2018			2020			2019
Preferred stock
Balance at the beginning of the period	$	26,993		$	26,068		$	26,068		$	26,068		$	26,993		$	26,068
Issuance	2,250			1,696			4,100			1,696			4,500			1,850
Redemption	(880		)	—			(1,805		)	—			(1,430		)	(925		)
Balance at September 30	28,363			27,764			28,363			27,764
Balance at March 31													30,063			26,993

Common stock
Balance at the beginning and end of the period	4,105			4,105			4,105			4,105			4,105			4,105

Additional paid-in capital
Balance at the beginning of the period	88,359			89,392			89,162			90,579			88,522			89,162
Shares issued and commitments to issue common stock for employee shared-based compensation awards, and related tax effects	156			179			(604		)	(897		)	(660		)	(949		)
Other	(3		)	(238		)	(46		)	(349		)	(5		)	(43		)
Balance at September 30	88,512			89,333			88,512			89,333
Balance at March 31													87,857			88,170

Retained earnings
Balance at the beginning of the period	212,093			189,881			199,202			177,676			223,211			199,202
Cumulative effect of changes in accounting principles	—			—			62			(183		)
Cumulative effect of changes in accounting principle													(2,650		)	62
Net income	9,080			8,380			27,911			25,408			2,865			9,179
Dividends declared:
Preferred stock	(423		)	(379		)	(1,201		)	(1,167		)	(421		)	(374		)
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	217,888			195,180			217,888			195,180
Common stock ($0.90 and $0.80 per share)													(2,779		)	(2,632		)
Balance at March 31													220,226			205,437

Accumulated other comprehensive income/(loss)
Balance at the beginning of the period	1,114			(1,138		)	(1,507		)	(119		)	1,569			(1,507		)
Cumulative effect of changes in accounting principles	—			—			—			88
Other comprehensive income/(loss), after-tax	686			(1,287		)	3,307			(2,394		)	5,849			949
Balance at September 30	1,800			(2,425		)	1,800			(2,425		)
Balance at March 31													7,418			(558		)

Shares held in RSU Trust, at cost
Balance at the beginning and end of the period	(21		)	(21		)	(21		)	(21		)	(21		)	(21		)

Treasury stock, at cost
Balance at the beginning of the period	(69,428		)	(50,829		)	(60,494		)	(42,595		)	(83,049		)	(60,494		)
Repurchase	(6,949		)	(4,416		)	(17,250		)	(14,055		)	(6,397		)	(5,091		)
Reissuance	78			265			1,445			1,670			1,060			1,296
Balance at September 30	(76,299		)	(54,980		)	(76,299		)	(54,980		)
Balance at March 31													(88,386		)	(64,289		)

Total stockholders’ equity	$	264,348		$	258,956		$	264,348		$	258,956		$	261,262		$	259,837

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.

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,						Three months ended March 31,
(in millions)	2019			2018			2020			2019
Operating activities
Net income	$	27,911		$	25,408		$	2,865		$	9,179
Adjustments to reconcile net income to net cash used in operating activities:
Provision for credit losses	4,158			3,323			8,285			1,495
Depreciation and amortization	6,229			5,716			2,197			2,038
Deferred tax (benefit)/expense	(440		)	(323		)	(1,329		)	233
Other	1,645			2,179			411			640
Originations and purchases of loans held-for-sale	(53,934		)	(68,235		)	(18,552		)	(15,611		)
Proceeds from sales, securitizations and paydowns of loans held-for-sale	60,510			68,214			18,013			23,528
Net change in:
Trading assets	(96,125		)	(44,427		)	(164,339		)	(123,064		)
Securities borrowed	(26,162		)	(17,344		)	145			(11,154		)
Accrued interest and accounts receivable	(16,089		)	(11,335		)	(49,323		)	869
Other assets	(21,181		)	2,909			(61,893		)	2,292
Trading liabilities	12,774			21,580			97,078			13,353
Accounts payable and other liabilities	19,661			26,677			45,019			10,705
Other operating adjustments	4,004			(577		)	651			4,617
Net cash provided by/(used in) operating activities	(77,039		)	13,765
Net cash (used in) operating activities							(120,772		)	(80,880		)
Investing activities
Net change in:
Federal funds sold and securities purchased under resale agreements	64,207			(19,259		)	1,120			22,459
Held-to-maturity securities:
Proceeds from paydowns and maturities	2,239			2,268			2,599			570
Purchases	(11,682		)	(8,613		)	(205		)	—
Available-for-sale securities:
Proceeds from paydowns and maturities	41,378			29,618			12,420			7,613
Proceeds from sales	43,460			34,322			50,990			22,289
Purchases	(200,262		)	(46,530		)	(131,605		)	(33,244		)
Proceeds from sales and securitizations of loans held-for-investment	52,739			20,154			7,564			14,584
Other changes in loans, net	(25,977		)	(49,755		)	(64,925		)	3,799
Purchases of assets pursuant to nonrecourse advances provided by the FRBB under the MMLF							(11,985		)	—
All other investing activities, net	(4,283		)	(1,987		)	(1,123		)	(1,769		)
Net cash (used in) investing activities	(38,181		)	(39,782		)
Net cash provided by/(used in) investing activities							(135,150		)	36,301
Financing activities
Net change in:
Deposits	77,147			15,274			297,976			26,799
Federal funds purchased and securities loaned or sold under repurchase agreements	65,428			22,719			49,273			40,352
Short-term borrowings	(20,577		)	12,974			12,455			1,455
Beneficial interests issued by consolidated VIEs	5,017			975			1,613			5,671
Proceeds from long-term borrowings	45,155			54,842			34,851			15,560
Payments of long-term borrowings	(51,936		)	(69,636		)	(29,057		)	(12,425		)
Proceeds from issuance of preferred stock	4,100			1,655			4,500			1,850
Redemption of preferred stock	(1,805		)	—			(1,430		)	(925		)
Treasury stock repurchased	(17,250		)	(14,055		)	(6,517		)	(5,091		)
Dividends paid	(9,056		)	(6,989		)	(3,188		)	(3,033		)
All other financing activities, net	(217		)	(1,440		)	1,829			(778		)
Net cash provided by financing activities	96,006			16,319			362,305			69,435
Effect of exchange rate changes on cash and due from banks and deposits with banks	(2,982		)	(2,509		)	(2,480		)	(1,045		)
Net decrease in cash and due from banks and deposits with banks	(22,196		)	(12,207		)
Net increase in cash and due from banks and deposits with banks							103,903			23,811
Cash and due from banks and deposits with banks at the beginning of the period	278,793			431,304			263,631			278,793
Cash and due from banks and deposits with banks at the end of the period	$	256,597		$	419,097		$	367,534		$	302,604
Cash interest paid	$	20,790		$	15,144		$	4,374		$	7,336
Cash income taxes paid, net	3,478			2,197			763			534

The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

Refer to the Glossary of Terms and Acronyms on pages ~~168–172~~171–176 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. Refer to Note 2526 for a further discussion of the Firm’s business 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 ~~2018~~2019 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.

Refer to Notes 1 and 14 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further description of JPMorgan Chase’s accounting policies regarding 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. Refer to Note 1 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for further information on offsetting assets and liabilities.

~~Income tax expense~~

Accounting standard adopted January 1, 2020

Financial Instruments – Credit Losses (“CECL”)

The adoption of this guidance established a single allowance framework for all financial assets measured at amortized cost and certain off-balance sheet credit exposures. This framework requires that management’s estimate reflects credit losses over the instrument’s remaining expected life and considers expected future changes in macroeconomic conditions. Refer to Note 13 for further information.

The following table presents the impacts to the allowance for credit losses and retained earnings upon adoption of this guidance on January 1, 2020:



(in billions)	December 31, 2019		CECL adoption impact			January 1, 2020
Allowance for credit losses
Consumer, excluding credit card^(a)	$	2.6	$	0.4		$	3.0
Credit card	5.7		5.5			11.2
Wholesale^(a)	6.0		(1.6		)	4.4
Firmwide	$	14.3	$	4.3		$	18.6

Retained earnings
Firmwide allowance increase			$	4.3
Balance sheet reclassification^(b)			(0.8		)
Total pre-tax impact			3.5
Tax effect			(0.8		)
Decrease to retained earnings			$	2.7

(a)

In conjunction with the adoption of CECL, the Firm reclassified risk-rated business banking and auto dealer loans and lending-related commitments held in CCB from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Accordingly, $0.6 billion of the allowance for credit losses at December 31, 2019 and $(0.2) billion of the CECL adoption impact were reclassified.


(b)	Represents the recognition of the nonaccretable difference on purchased credit deteriorated loans and the Firm's election to recognize the reserve for uncollectible accrued interest on credit card loans in the allowance, both of which resulted in a corresponding increase to loans.

Securities Financing Agreements

As permitted by the guidance, the Firm elected the fair value option for certain securities financing agreements. The difference between their carrying amount and fair value was immaterial and was recorded as part of the Firm’s ~~effective tax rate was 20.4% and 17.9%~~cumulative-effect adjustment. Refer to Note 11 for further information.

Investment securities

Upon adoption, HTM securities are presented net of an allowance for credit losses. The guidance also amended the previous other-than-temporary impairment (“OTTI”) model for AFS securities to incorporate an allowance. Refer to Note 10 for further information.

Credit quality disclosures

As a result of the adoption of this guidance, the Firm expanded credit quality disclosures for financial assets measured at amortized cost particularly within the retained loan portfolios. Refer to Note 12 for further information.

PCD loans

The adoption resulted in a change in the ~~three and nine months ended September 30, 2019, respectively, and 21.6% and 20.4%~~accounting for PCI loans, which are considered purchased credit deteriorated (“PCD”) loans under CECL. Upon adoption, the Firm recognized the nonaccretable difference on PCD loans in the ~~respective 2018 periods. For the nine months ended September 30, 2019, the effective tax rate reflected the recognition of $1.0 billion~~allowance, which resulted in ~~tax benefits related~~a corresponding increase to loans. PCD loans are subject to the ~~resolution~~Firm’s nonaccrual and charge-off policies and are now reported in the consumer, excluding credit card portfolio’s residential real estate loan class. Refer to Note 12 for further information.

Changes in credit portfolio segments and classes

In conjunction with the adoption of ~~certain tax audits, which reduced~~CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer excluding credit card portfolio segment to the wholesale portoflio segment, to align with the methodology applied in determining the allowance. The Firm also revised its loan classes. Prior- period amounts have been revised to conform with the current presentation. Refer to Note 12 for further information.

Accrued interest receivables

As permitted by the guidance, the Firm elected to continue classifying accrued interest on loans, including accrued but unbilled interest on credit card loans, and investment securities in accrued interest and accounts receivables on the Consolidated balance sheets. For credit card loans, accrued interest is recognized in the loan balances as it is billed, with the related allowance recorded in the allowance for credit losses. Changes in the allowance for credit losses on accrued interest on credit card loans are recognized in the provision for credit losses and charge-offs are recognized by reversing interest income. For other loans and securities, the Firm generally does not recognize an allowance for credit losses on accrued interest receivables, consistent with its policy to write them off no later than 90 days past due by reversing interest income.

Capital transition provisions

As disclosed in the Firm’s ~~effective tax rate~~2019 Form 10-K, the Firm initially elected to phase-in the January 1, 2020 (“day 1”) CECL adoption impact to retained earnings of $2.7 billion to CET1 capital, at 25% per year in each of 2020 to 2023. As part of their response to the impact of the COVID-19 pandemic, on March 31, 2020, the federal banking agencies issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by ~~3.0%~~a three-year transition period (“CECL capital transition provisions”). Refer to Note ~~24 of JPMorgan Chase’s 2018 Form 10-K~~22 for further information.

Note 2 – Fair value measurement

Refer to Note 2 of JPMorgan Chase’s ~~2018~~2019 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.

The following table presents the assets and liabilities reported at fair value as of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, by major product category and fair value hierarchy.


Assets and liabilities measured at fair value on a recurring basis	Assets 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^(f)					Fair value hierarchy						Derivative netting adjustments^(f)

September 30, 2019 (in millions)	Level 1		Level 2		Level 3					Total fair value
March 31, 2020 (in millions)												Level 1		Level 2		Level 3					Derivative netting adjustments^(f)		Total fair value
Federal funds sold and securities purchased under resale agreements	$	—	$	13,705	$	—	$	—		$	13,705	$	—	$	235,859	$	—	$	235,859
Securities borrowed	—		5,784		—		—			5,784		—		51,576		—		51,576
Trading assets:
Debt instruments:
Mortgage-backed securities:
U.S. GSEs and government agencies^(a)	—		70,617		811		—			71,428		—		87,669		519		—			88,188
Residential – nonagency	—		2,253		24		—			2,277		—		2,665		24		—			2,689
Commercial – nonagency	—		1,613		5		—			1,618		—		2,250		3		—			2,253
Total mortgage-backed securities	—		74,483		840		—			75,323		—		92,584		546		—			93,130
U.S. Treasury, GSEs and government agencies^(a)	76,953		9,446		—		—			86,399		91,922		12,722		—		—			104,644
Obligations of U.S. states and municipalities	—		6,229		627		—			6,856		—		6,489		9		—			6,498
Certificates of deposit, bankers’ acceptances and commercial paper	—		2,180		—		—			2,180		—		3,769		—		—			3,769
Non-U.S. government debt securities	38,162		36,634		146		—			74,942		37,860		47,058		175		—			85,093
Corporate debt securities	—		20,461		484		—			20,945		—		22,192		953		—			23,145
Loans^(b)	—		43,308		1,746		—			45,054		—		42,754		3,354		—			46,108
Asset-backed securities	—		2,996		38		—			3,034		—		2,739		52		—			2,791
Total debt instruments	115,115		195,737		3,881		—			314,733		129,782		230,307		5,089		—			365,178
Equity securities	100,829		249		170		—			101,248		82,500		97		213		—			82,810
Physical commodities^(c)	7,690		3,075		—		—			10,765		4,684		2,498		—		—			7,182
Other	—		13,172		332		—			13,504		—		11,494		221		—			11,715
Total debt and equity instruments^(d)	223,634		212,233		4,383		—			440,250		216,966		244,396		5,523		—			466,885
Derivative receivables:
Interest rate	1,312		372,834		1,787		(347,426		)	28,507		7,333		392,863		2,307		(365,602		)	36,901
Credit	—		15,072		645		(14,879		)	838		—		19,252		828		(18,895		)	1,185
Foreign exchange	3,681		158,893		558		(150,451		)	12,681		288		242,180		1,054		(224,539		)	18,983
Equity	—		44,064		2,314		(38,969		)	7,409		—		91,010		5,135		(82,930		)	13,215
Commodity	—		20,969		269		(15,096		)	6,142		—		37,309		346		(26,291		)	11,364
Total derivative receivables	4,993		611,832		5,573		(566,821		)	55,577		7,621		782,614		9,670		(718,257		)	81,648
Total trading assets^(e)	228,627		824,065		9,956		(566,821		)	495,827		224,587		1,027,010		15,193		(718,257		)	548,533
Available-for-sale securities:
Mortgage-backed securities:
U.S. GSEs and government agencies^(a)	—		105,581		—		—			105,581		—		135,620		—		—			135,620
Residential – nonagency	—		12,901		1		—			12,902		—		15,443		—		—			15,443
Commercial – nonagency	—		5,324		—		—			5,324		—		6,313		—		—			6,313
Total mortgage-backed securities	—		123,806		1		—			123,807		—		157,376		—		—			157,376
U.S. Treasury and government agencies	141,529		—		—		—			141,529		150,235		—		—		—			150,235
Obligations of U.S. states and municipalities	—		31,064		—		—			31,064		—		30,545		—		—			30,545
Certificates of deposit	—		74		—		—			74		—		76		—		—			76
Non-U.S. government debt securities	13,604		8,554		—		—			22,158		13,192		9,569		—		—			22,761
Corporate debt securities	—		1,634		—		—			1,634		—		802		—		—			802
Asset-backed securities:
Collateralized loan obligations	—		27,908		—		—			27,908		—		30,975		—		—			30,975
Other	—		5,247		—		—			5,247		—		7,174		—		—			7,174
Total available-for-sale securities	155,133		198,287		1		—			353,421		163,427		236,517		—		—			399,944
Loans	—		5,759		1		—			5,760		—		5,931		283		—			6,214
Mortgage servicing rights	—		—		4,419		—			4,419		—		—		3,267		—			3,267
Other assets^(e)	7,467		37		746		—			8,250		6,923		12,724		416		—			20,063
Total assets measured at fair value on a recurring basis	$	391,227	$	1,047,637	$	15,123	$	(566,821	)	$	887,166	$	394,937	$	1,569,617	$	19,159	$	(718,257	)	$	1,265,456
Deposits	$	—	$	25,719	$	3,636	$	—		$	29,355	$	—	$	19,430	$	3,179	$	—		$	22,609
Federal funds purchased and securities loaned or sold under repurchase agreements	—		933		—		—			933		—		194,690		—		—			194,690
Short-term borrowings	—		4,496		2,001		—			6,497		—		22,281		2,039		—			24,320
Trading liabilities:
Debt and equity instruments^(d)	66,515		23,970		68		—			90,553		95,909		23,139		61		—			119,109
Derivative payables:
Interest rate	1,206		335,401		2,106		(328,490		)	10,223		8,752		353,858		2,443		(351,654		)	13,399
Credit	—		16,100		962		(14,903		)	2,159		—		19,939		939		(18,766		)	2,112
Foreign exchange	3,583		160,760		1,399		(150,726		)	15,016		283		253,779		1,981		(232,749		)	23,294
Equity	—		45,109		5,782		(40,288		)	10,603		—		88,241		5,961		(82,165		)	12,037
Commodity	—		25,495		316		(16,022		)	9,789		—		39,229		771		(25,755		)	14,245
Total derivative payables	4,789		582,865		10,565		(550,429		)	47,790		9,035		755,046		12,095		(711,089		)	65,087
Total trading liabilities	71,304		606,835		10,633		(550,429		)	138,343		104,944		778,185		12,156		(711,089		)	184,196
Accounts payable and other liabilities	2,355		37		19		—			2,411		3,407		709		15		—			4,131
Beneficial interests issued by consolidated VIEs	—		39		—		—			39		—		77		—		—			77
Long-term debt	—		49,608		22,349		—			71,957		—		48,476		20,141		—			68,617
Total liabilities measured at fair value on a recurring basis	$	73,659	$	687,667	$	38,638	$	(550,429	)	$	249,535	$	108,351	$	1,063,848	$	37,530	$	(711,089	)	$	498,640


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

December 31, 2018 (in millions)	Level 1		Level 2		Level 3					Total fair value
December 31, 2019 (in millions)													Level 1			Level 2			Level 3						Derivative netting adjustments^(f)				Total fair value
Federal funds sold and securities purchased under resale agreements	$	—	$	13,235	$	—		$	—		$	13,235		$	—		$	14,561		$	—			$				14,561
Securities borrowed	—		5,105		—		—			5,105			—			6,237			—				6,237
Trading assets:
Debt instruments:
Mortgage-backed securities:
U.S. GSEs and government agencies^(a)	—		76,249		549		—			76,798			—			44,510			797			—				45,307
Residential – nonagency	—		1,798		64		—			1,862			—			1,977			23			—				2,000
Commercial – nonagency	—		1,501		11		—			1,512			—			1,486			4			—				1,490
Total mortgage-backed securities	—		79,548		624		—			80,172			—			47,973			824			—				48,797
U.S. Treasury, GSEs and government agencies^(a)	51,477		7,702		—		—			59,179			78,289			10,295			—			—				88,584
Obligations of U.S. states and municipalities	—		7,121		689		—			7,810			—			6,468			10			—				6,478
Certificates of deposit, bankers’ acceptances and commercial paper	—		1,214		—		—			1,214			—			252			—			—				252
Non-U.S. government debt securities	27,878		27,056		155		—			55,089			26,600			27,169			155			—				53,924
Corporate debt securities	—		18,655		334		—			18,989			—			17,956			558			—				18,514
Loans^(b)	—		40,047		1,706		—			41,753			—			47,047			1,382			—				48,429
Asset-backed securities	—		2,756		127		—			2,883			—			2,593			37			—				2,630
Total debt instruments	79,355		184,099		3,635		—			267,089			104,889			159,753			2,966			—				267,608
Equity securities	71,119		482		232		—			71,833			71,890			244			196			—				72,330
Physical commodities^(c)	5,182		1,855		—		—			7,037			3,638			3,579			—			—				7,217
Other	—		13,192		301		—			13,493			—			13,896			232			—				14,128
Total debt and equity instruments^(d)	155,656		199,628		4,168		—			359,452			180,417			177,472			3,394			—				361,283
Derivative receivables:
Interest rate	682		266,380		1,642		(245,490		)	23,214			721			311,173			1,400			(285,873		)		27,421
Credit	—		19,235		860		(19,483		)	612			—			14,252			624			(14,175		)		701
Foreign exchange	771		166,238		676		(154,235		)	13,450			117			137,938			432			(129,482		)		9,005
Equity	—		46,777		2,508		(39,339		)	9,946			—			43,642			2,085			(39,250		)		6,477
Commodity	—		20,339		131		(13,479		)	6,991			—			17,058			184			(11,080		)		6,162
Total derivative receivables	1,453		518,969		5,817		(472,026		)	54,213			838			524,063			4,725			(479,860		)		49,766
Total trading assets^(e)	157,109		718,597		9,985		(472,026		)	413,665			181,255			701,535			8,119			(479,860		)		411,049
Available-for-sale securities:
Mortgage-backed securities:
U.S. GSEs and government agencies^(a)	—		68,646		—		—			68,646			—			110,117			—			—				110,117
Residential – nonagency	—		8,519		1		—			8,520			—			12,989			1			—				12,990
Commercial – nonagency	—		6,654		—		—			6,654			—			5,188			—			—				5,188
Total mortgage-backed securities	—		83,819		1		—			83,820			—			128,294			1			—				128,295
U.S. Treasury and government agencies	56,059		—		—		—			56,059			139,436			—			—			—				139,436
Obligations of U.S. states and municipalities	—		37,723		—		—			37,723			—			29,810			—			—				29,810
Certificates of deposit	—		75		—		—			75			—			77			—			—				77
Non-U.S. government debt securities	15,313		8,789		—		—			24,102			12,966			8,821			—			—				21,787
Corporate debt securities	—		1,918		—		—			1,918			—			845			—			—				845
Asset-backed securities:
Collateralized loan obligations	—		19,437		—		—			19,437			—			24,991			—			—				24,991
Other	—		7,260		—		—			7,260			—			5,458			—			—				5,458
Total available-for-sale securities	71,372		159,021		1		—			230,394			152,402			198,296			1			—				350,699
Loans	—		3,029		122		—			3,151			—			7,104			—			—				7,104
Mortgage servicing rights	—		—		6,130		—			6,130			—			—			4,699			—				4,699
Other assets^(e)	7,810		195		927		—			8,932			7,305			452			724			—				8,481
Total assets measured at fair value on a recurring basis	$	236,291	$	899,182	$	17,165	$	(472,026	)	$	680,612		$	340,962		$	928,185		$	13,543		$	(479,860	)		$	802,830
Deposits	$	—	$	19,048	$	4,169	$	—		$	23,217		$	—		$	25,229		$	3,360		$	—			$	28,589
Federal funds purchased and securities loaned or sold under repurchase agreements	—		935		—		—			935			—			549			—			—				549
Short-term borrowings	—		5,607		1,523		—			7,130			—			4,246			1,674			—				5,920
Trading liabilities:
Debt and equity instruments^(d)	80,199		22,755		50		—			103,004			59,047			16,481			41			—				75,569
Derivative payables:
Interest rate	1,526		239,576		1,680		(234,998		)	7,784			795			276,746			1,732			(270,670		)		8,603
Credit	—		19,309		967		(18,609		)	1,667			—			14,358			763			(13,469		)		1,652
Foreign exchange	695		163,549		973		(152,432		)	12,785			109			143,960			1,039			(131,950		)		13,158
Equity	—		46,462		4,733		(41,034		)	10,161			—			47,261			5,480			(40,204		)		12,537
Commodity	—		21,158		1,260		(13,046		)	9,372			—			19,685			200			(12,127		)		7,758
Total derivative payables	2,221		490,054		9,613		(460,119		)	41,769			904			502,010			9,214			(468,420		)		43,708
Total trading liabilities	82,420		512,809		9,663		(460,119		)	144,773			59,951			518,491			9,255			(468,420		)		119,277
Accounts payable and other liabilities	3,063		196		10		—			3,269			3,231			452			45			—				3,728
Beneficial interests issued by consolidated VIEs	—		27		1		—			28			—			36			—			—				36
Long-term debt	—		35,468		19,418		—			54,886			—			52,406			23,339			—				75,745
Total liabilities measured at fair value on a recurring basis	$	85,483	$	574,090	$	34,784	$	(460,119	)	$	234,238		$	63,182		$	601,409		$	37,673		$	(468,420	)		$	233,844


(a)	At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, included total U.S. GSE obligations of ~~$133.6~~$161.2 billion and ~~$92.3~~$104.5 billion, respectively, which were mortgage-related.

(b)

At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, included within trading loans were ~~$16.1~~$15.9 billion and ~~$13.2~~$19.8 billion, respectively, of residential first-lien mortgages, and ~~$4.2~~$3.0 billion and ~~$2.3~~$3.4 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 ~~$10.3~~$8.9 billion and ~~$7.6~~$13.6 billion, respectively.

(c)

Physical commodities inventories are generally accounted for at the lower of cost or net realizable value. “Net realizable value” is a term defined in U.S. GAAP as not exceeding fair value less costs to sell (“transaction costs”). Transaction costs for the Firm’s physical commodities inventories are either not applicable or immaterial to the value of the inventory. Therefore, net realizable value approximates fair value for the Firm’s physical commodities

inventories. When fair value hedging has been applied (or when net realizable value is below cost), the carrying value of physical commodities approximates fair value, because under fair value hedge accounting, the cost basis is adjusted for changes in fair value. Refer to Note 45 for a further discussion of the Firm’s hedge accounting 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)

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, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, the fair values of these investments, which include certain hedge funds, private equity funds, real estate and other funds, were ~~$714~~$659 million and ~~$747~~$684 million, respectively. Included in these balances at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, were trading assets of ~~$48~~$47 million and ~~$49~~$54 million, respectively, and other assets of ~~$666~~$612 million and ~~$698~~$630 million, respectively.


(f)	As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral received and paid when a legally enforceable master netting agreement exists. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.

Level 3 valuations

Refer to Note 2 of JPMorgan Chase’s ~~2018~~2019 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.

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 or arithmetic 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, weighted and ~~the weighted~~arithmetic average ~~value~~values 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, 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 upper 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 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 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, 2019
March 31, 2020																		March 31, 2020
Product/Instrument	Fair value (in millions)			Principal valuation technique	Unobservable inputs^(g)	Range of input values							Weighted average					Fair value (in millions)			Principal valuation technique	Unobservable inputs^(g)	Range of input values			Average⁽ⁱ⁾
Residential mortgage-backed securities and loans^(b)	$	1,132		Discounted cash flows	Yield	0		%	–	19		%			5		%	$	1,142		Discounted cash flows	Yield	1%	–	25%		5%
					Prepayment speed	0		%	–	22		%			14		%					Prepayment speed	0%	–	39%		11%
					Conditional default rate	0		%	–	4		%			1		%					Conditional default rate	0%	–	30%		14%
					Loss severity	0		%	–	100		%			2		%					Loss severity	0%	–	100%		8%
Commercial mortgage-backed securities and loans^(c)	147			Market comparables	Price	$	0		–	$	102				$	80		509			Market comparables	Price	$0	–	$106		$92
Obligations of U.S. states and municipalities	627			Market comparables	Price	$	68		–	$	100				$	97		9			Market comparables	Price	$78	–	$100		$97
Corporate debt securities	484			Market comparables	Price	$	4		–	$	116				$	79		953			Market comparables	Price	$4	–	$104		$71
Loans^(d)	194			Discounted cash flows	Yield	5		%	–	22		%			7		%	167			Discounted cash flows	Yield	4%	–	30%		7%
	1,115			Market comparables	Price	$	12		–	$	101				$	78		2,365			Market comparables	Price	$5	–	$100		$73
Asset-backed securities	38			Market comparables	Price	$	1		–	$	100				$	53		52			Market comparables	Price	$1	–	$94		$61
Net interest rate derivatives	(388		)	Option pricing	Interest rate spread volatility	20		bps	–	30				bps				(192		)	Option pricing	Interest rate volatility	6%	–	91%		21%
					Interest rate correlation	(28		)%	–	96		%										Interest rate spread volatility	16 bps	–	30 bps		23 bps
					IR-FX correlation	53		%	–	60		%										Interest rate correlation	(65)%	–	94%		38%
	69			Discounted cash flows	Prepayment speed	4		%	–	30		%										IR-FX correlation	(50)%	–	35%		1%
																		56			Discounted cash flows	Prepayment speed	4%	–	30%		3%
Net credit derivatives	(353		)	Discounted cash flows	Credit correlation	30		%	–	60		%						(147		)	Discounted cash flows	Credit correlation	37%	–	77%		50%
					Credit spread	4		bps	–	1,315		bps										Credit spread	8 bps	–	2,230 bps		516 bps
					Recovery rate	15		%	–	70		%										Recovery rate	1%	–	70%		50%
					Conditional default rate	2		%	–	93		%										Conditional default rate	2%	–	23%		11%
					Loss severity	100%																Loss severity	100%				100%
	36			Market comparables	Price	$	1		–	$	115							36			Market comparables	Price	$1	–	$115		$60
Net foreign exchange derivatives	(679		)	Option pricing	IR-FX correlation	(58		)%	–	60		%						(784		)	Option pricing	IR-FX correlation	(58)%	–	70%		33%
	(162		)	Discounted cash flows	Prepayment speed	9%												(143		)	Discounted cash flows	Prepayment speed	9%				9%
Net equity derivatives	(3,468		)	Option pricing	Equity volatility	11		%	–	82		%						(826		)	Option pricing	Forward equity price^(h)	54%	–	106%		98%
					Equity correlation	10		%	–	98		%										Equity volatility	4%	–	179%		40%
					Equity-FX correlation	(81		)%	–	59		%										Equity correlation	25%	–	100%		78%
					Equity-IR correlation	25		%	–	60		%										Equity-FX correlation	(77)%	–	40%		(17)%
																						Equity-IR correlation	20%	–	35%		28%
Net commodity derivatives	(47		)	Option pricing	Forward commodity price	$	30		–	$ 61 per barrel								(425		)	Option pricing	Forward industrial metal price	$ 1,166 / MT	–	$ 15,357 / MT		$ 6,159 / MT
																						Forward power price	$ 12 /MWH	–	$ 53 /MWH		$ 22 /MWH
					Commodity volatility	5		%	–	111		%										Commodity volatility	3%	–	236%		29%
					Commodity correlation	(48		)%	–	95		%										Commodity correlation	(45)%	–	95%		31%
MSRs	4,419			Discounted cash flows	Refer to Note 14													3,267			Discounted cash flows	Refer to Note 15
Other assets	303			Discounted cash flows	Credit spread	45						bps			45		bps	242			Discounted cash flows	Credit spread	45 bps				45 bps
					Yield	12%									12		%					Yield	12%				12%
	775			Market comparables	Price	$	18		–	$	115				$	36		395			Market comparables	Price	$16	–	$119		$37
Long-term debt, short-term borrowings, and deposits^(e)	27,986			Option pricing	Interest rate spread volatility	20		bps	–	30				bps				25,359			Option pricing	Interest rate volatility	6%	–	91%		21%
					Interest rate correlation	(28		)%	–	96		%										Interest rate correlation	(65)%	–	94%		38%
					IR-FX correlation	(58		)%	–	60		%										IR-FX correlation	(50)%	–	35%		1%
					Equity correlation	10		%	–	98		%										Equity correlation	25%	–	100%		78%
					Equity-FX correlation	(81		)%	–	59		%										Equity-FX correlation	(77)%	–	40%		(17)%
					Equity-IR correlation	25		%	–	60		%										Equity-IR correlation	20%	–	35%		28%
Other level 3 assets and liabilities, net^(f)	229																	312


(a)	The categories presented in the table have been aggregated based upon the product type, which may differ from their classification on the Consolidated balance sheets. Furthermore, the inputs presented for each valuation technique in the table are, in some cases, not applicable to every instrument valued using the technique as the characteristics of the instruments can differ.


(b)	Comprises U.S. GSEs and government agency securities of ~~$811~~$519 million, nonagency securities of $24 million and trading loans of ~~$297~~$599 million.


(c)	Comprises nonagency securities of $5$3 million, trading loans of ~~$141~~$223 million and non-trading loans of $1$283 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.


(h)	Forward equity price is expressed as a percentage of the current equity price.


(i)	Amounts represent weighted averages except for derivative related inputs where arithmetic averages are used.

Changes in and ranges of unobservable inputs

Refer to Note 2 of JPMorgan Chase’s ~~2018~~2019 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.

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, 2019~~March 31, 2020 and ~~2018.~~2019. When a determination is made to classify a financial instrument within level 3, the determination is based on the significance of the unobservable inputs to the overall

fair value measurement. However, level 3 financial instruments

typically include, in addition to the unobservable or level 3 components, observable components (that is, components that are actively quoted and can be validated to external sources); accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology. Also, the Firm risk-manages the observable components of level 3 financial instruments using securities and derivative positions that are classified within level 1 or 2 of the fair value hierarchy; as these level 1 and level 2 risk management instruments are not included below, the gains or losses in the following tables do not reflect the effect of the Firm’s risk management activities related to such level 3 instruments.


	Fair value measurements using significant unobservable inputs																																Fair value measurements using significant unobservable inputs
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)
Three months ended March 31, 2020 (in millions)																																	Fair value at Jan 1, 2020			Total realized/unrealized gains/(losses)															Transfers into level 3^(h)			Transfers (out of) level 3^(h)			Fair value at March 31, 2020				Change in unrealized gains/(losses) related to financial instruments held at March 31, 2020
																																								Purchases^(f)			Sales					Settlements^(g)
Assets:^(a)
Trading assets:
Debt instruments:
Mortgage-backed securities:
U.S. GSEs and government agencies	$	617		$	(71	)		$	424		$	(104	)			$	(45	)	$	—		$	(10	)		$	811		$	(70	)		$	797		$	(139	)		$	19		$	(116	)			$	(42	)	$	—		$	—			$	519		$	(131	)
Residential – nonagency	42			—				2			(3		)			—			—			(17		)		24			(1		)		23			(1		)		2			—					—			—			—				24			(1		)
Commercial – nonagency	9			—				3			(5		)			—			—			(2		)		5			—				4			—				1			—					(1		)	1			(2		)		3			—
Total mortgage-backed securities	668			(71		)		429			(112		)			(45		)	—			(29		)		840			(71		)		824			(140		)		22			(116		)			(43		)	1			(2		)		546			(132		)
U.S. Treasury, GSEs and government agencies	—			—				—			—					—			—			—				—			—
Obligations of U.S. states and municipalities	680			(2		)		27			(77		)			(1		)	—			—				627			(2		)		10			—				—			(1		)			—			—			—				9			—
Non-U.S. government debt securities	190			(1		)		40			(74		)			—			3			(12		)		146			(1		)		155			(12		)		90			(57		)			—			—			(1		)		175			(10		)
Corporate debt securities	562			45				56			(167		)			—			17			(29		)		484			3				558			(55		)		292			(42		)			—			227			(27		)		953			(50		)
Loans	1,778			(44		)		152			(82		)			(132		)	211			(137		)		1,746			(46		)		1,382			(161		)		699			(162		)			(53		)	1,788			(139		)		3,354			(190		)
Asset-backed securities	33			—				11			(2		)			(2		)	3			(5		)		38			(2		)		37			(2		)		36			(15		)			(1		)	—			(3		)		52			(1		)
Total debt instruments	3,911			(73		)		715			(514		)			(180		)	234			(212		)		3,881			(119		)		2,966			(370		)		1,139			(393		)			(97		)	2,016			(172		)		5,089			(383		)
Equity securities	147			(14		)		10			(10		)			—			46			(9		)		170			(16		)		196			(38		)		10			(4		)			—			82			(33		)		213			(39		)
Other	311			18				35			(15		)			(15		)	—			(2		)		332			23				232			(1		)		9			(5		)			(12		)	—			(2		)		221			2
Total trading assets – debt and equity instruments	4,369			(69		)	^(c)	760			(539		)			(195		)	280			(223		)		4,383			(112		)	^(c)	3,394			(409		)	^(c)	1,158			(402		)			(109		)	2,098			(207		)		5,523			(420		)	^(c)
Net derivative receivables:^(b)
Interest rate	(544		)	88				39			(15		)			53			10			50				(319		)	(15		)		(332		)	642				66			(50		)			(241		)	(172		)	(49		)		(136		)	282
Credit	(232		)	(65		)		3			(3		)			(23		)	3			—				(317		)	(68		)		(139		)	108				18			(128		)			(33		)	60			3				(111		)	65
Foreign exchange	(193		)	(653		)		2			(1		)			(1		)	6			(1		)		(841		)	(657		)		(607		)	(339		)		38			(4		)			(14		)	—			(1		)		(927		)	(508		)
Equity	(2,560		)	(382		)		174			(118		)			(377		)	(203		)	(2		)		(3,468		)	(362		)		(3,395		)	3,037				59			(548		)			583			(656		)	94				(826		)	3,707
Commodity	(908		)	8				22			(69		)			6			18			876				(47		)	40				(16		)	(403		)		4			(15		)			9			(6		)	2				(425		)	(399		)
Total net derivative receivables	(4,437		)	(1,004		)	^(c)	240			(206		)			(342		)	(166		)	923				(4,992		)	(1,062		)	^(c)	(4,489		)	3,045			^(c)	185			(745		)			304			(774		)	49				(2,425		)	3,147			^(c)
Available-for-sale securities:
Mortgage-backed securities	—			—				1			—					—			—			—				1			—				1			—				—			—					(1		)	—			—				—			—
Asset-backed securities	—			—				—			—					—			—			—				—			—
Total available-for-sale securities	—			—				1			—					—			—			—				1			—				1			—				—			—					(1		)	—			—				—			—
Loans	5			—				—			—					(4		)	—			—				1			—				—			(11		)	^(c)	—			—					—			294			—				283			(10		)	^(c)
Mortgage servicing rights	5,093			(447		)	^(d)	388			(359		)			(256		)	—			—				4,419			(447		)	^(d)	4,699			(1,382		)	^(d)	273			(75		)			(248		)	—			—				3,267			(1,382		)	^(d)
Other assets	861			(56		)	^(c)	19			(72		)			(6		)	—			—				746			(56		)	^(c)	724			(82		)	^(c)	2			(28		)			(200		)	—			—				416			(81		)	^(c)

	Fair value measurements using significant unobservable inputs																																Fair value measurements using significant unobservable inputs
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			Sales			Issuances		Settlements^(g)
Three months ended March 31, 2020 (in millions)																																	Fair value at Jan 1, 2020			Total realized/unrealized (gains)/losses															Transfers into level 3^(h)			Transfers (out of) level 3^(h)			Fair value at March 31, 2020				Change in unrealized (gains)/losses related to financial instruments held at March 31, 2020
																																								Purchases			Sales			Issuances		Settlements^(g)
Liabilities:^(a)
Deposits	$	4,066		$	—			$	—		$	—		$	153	$	(188	)	$	12		$	(407	)		$	3,636		$	16		^(c)(e)	$	3,360		$	(149	)	^(c)(e)	$	—		$	—		$	386	$	(172	)	$	4		$	(250	)		$	3,179		$	(135	)	^(c)(e)
Short-term borrowings	2,052			24			^(c)(e)	—			—			949		(1,040		)	17			(1		)		2,001			28			^(c)(e)	1,674			(345		)	^(c)(e)	—			—			1,615		(929		)	40			(16		)		2,039			(409		)	^(c)(e)
Trading liabilities – debt and equity instruments	45			—				(5		)	25			—		1			2			—				68			—				41			3			^(c)	(75		)	7			—		—			86			(1		)		61			6			^(c)
Accounts payable and other liabilities	92			(6		)	^(c)	(71		)	4			—		—			—			—				19			(2		)	^(c)	45			(8		)	^(c)	(23		)	1			—		—			—			—				15			(7		)	^(c)
Beneficial interests issued by consolidated VIEs	—			—				—			—			—		—			—			—				—			—				—			—				—			—			—		—			—			—				—			—
Long-term debt	21,863			187			^(c)(e)	—			—			2,230		(1,758		)	49			(222		)		22,349			89			^(c)(e)	23,339			(4,110		)	^(c)(e)	—			—			4,607		(3,549		)	370			(516		)		20,141			(3,984		)	^(c)(e)


	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 March 31, 2019 (in millions)																																			Fair value at Jan 1, 2019			Total realized/unrealized gains/(losses)																	Transfers into level 3^(h)			Transfers (out of) level 3^(h)			Fair value at March 31, 2019				Change in unrealized gains/(losses) related to financial instruments held at March 31, 2019
																																										Purchases^(f)			Sales						Settlements^(g)
Assets:^(a)
Trading assets:
Debt instruments:
Mortgage-backed securities:
U.S. GSEs and government agencies	$	478			$	2			$	14		$	(28	)			$	(17	)	$	83		$	(3	)		$	529			$	—			$	549		$	(15	)		$	5		$	(100	)				$	(18	)		$	1		$	(10	)		$	412		$	(16	)
Residential – nonagency	87				1				—			(6		)			(3		)	18			(20		)		77				1				64			24				70			(69		)				(1		)		15			(18		)		85			1
Commercial – nonagency	18				(1		)		—			—								9			(13		)		13				(1		)		11			2				12			(19		)				(2		)		15			(2		)		17			1
Total mortgage-backed securities	583				2				14			(34		)			(20		)	110			(36		)		619				—				624			11				87			(188		)				(21		)		31			(30		)		514			(14		)
U.S. Treasury, GSEs and government agencies	—				—				—			—					—			—			—				—				—
Obligations of U.S. states and municipalities	736				8				26			(70		)			(1		)	—			—				699				7				689			13				1			(74		)				(6		)		—			—				623			14
Non-U.S. government debt securities	183				(9		)		44			(29		)			(2		)	1			(24		)		164				(9		)		155			(1		)		71			(54		)				—				2			(3		)		170			(1		)
Corporate debt securities	274				(2		)		156			(87		)			(4		)	82			(24		)		395				(3		)		334			22				223			(7		)				—				28			(32		)		568			39
Loans	1,986				17				188			(146		)			(199		)	48			(361		)		1,533				3				1,706			83				72			(118		)				(120		)		159			(41		)		1,741			83
Asset-backed securities	87				6				5			(7		)			(13		)	5			(7		)		76				3				127			(2		)		17			(21		)				(7		)		20			(15		)		119			(4		)
Total debt instruments	3,849				22				433			(373		)			(239		)	246			(452		)		3,486				1				3,635			126				471			(462		)				(154		)		240			(121		)		3,735			117
Equity securities	288				20				6			(48		)						82			(19		)		329				(18		)		232			(2		)		15			(79		)				(22		)		75			(17		)		202			(2		)
Other	406				30				13			—					(37		)	2			(1		)		413				10				301			4				12			(1		)				(11		)		1			(2		)		304			13
Total trading assets – debt and equity instruments	4,543				72			^(c)	452			(421		)			(276		)	330			(472		)		4,228				(7		)	^(c)	4,168			128			^(c)	498			(542		)				(187		)		316			(140		)		4,241			128			^(c)
Net derivative receivables:^(b)
Interest rate	489				236				28			(22		)			(101		)	68			(7		)		691				216				(38		)	(322		)		19			(27		)	⁽ⁱ⁾			178			⁽ⁱ⁾	18			25				(147		)	(376		)
Credit	(24		)		(19		)		1			—					47			6			16				27				(15		)		(107		)	(17		)		—			(1		)				6				3			1				(115		)	(21		)
Foreign exchange	(245		)		(56		)		29			(7		)			(49		)	(2		)	28				(302		)		(54		)		(297		)	(245		)		1			(9		)				181				(8		)	21				(356		)	(220		)
Equity	(2,578		)		(94		)		643			(635		)			622			(251		)	16				(2,277		)		(121		)		(2,225		)	731				127			(297		)				(401		)		(67		)	66				(2,066		)	226
Commodity	(752		)		318				—			—					(113		)	15			7				(525		)		138				(1,129		)	533				3			(88		)				24				1			(9		)		(665		)	507
Total net derivative receivables	(3,110		)		385			^(c)	701			(664		)			406			(164		)	60				(2,386		)		164			^(c)	(3,796		)	680			^(c)	150			(422		)				(12		)		(53		)	104				(3,349		)	116			^(c)
Available-for-sale securities:
Mortgage-backed securities	1				—				—			—					—			—			—				1				—				1			—				—			—						(1		)		—			—				—			—
Asset-backed securities	147				—				—			—					(86		)	—			—				61				—
Total available-for-sale securities	148				—				—			—					(86		)	—			—				62				—				1			—				—			—						(1		)		—			—				—			—
Loans	159				(1		)	^(c)	1			—					(19		)	—			—				140				(1		)	^(c)	122			3			^(c)	—			—						(2		)		—			—				123			3			^(c)
Mortgage servicing rights	6,241				98			^(d)	291			(2		)			(195		)	—			—				6,433				98			^(d)	6,130			(299		)	^(d)	436			(111		)				(199		)		—			—				5,957			(299		)	^(d)
Other assets	1,225				(160		)	^(c)	2			—					(7		)	3			—				1,063				(160		)	^(c)	927			(7		)	^(c)	9			(80		)				(1		)		—			(7		)		841			(10		)	^(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
									Purchases			Sales			Issuances		Settlements^(g)
Three months ended March 31, 2019 (in millions)																																			Fair value at Jan 1, 2019			Total realized/unrealized (gains)/losses																	Transfers into level 3^(h)			Transfers (out of) level 3^(h)			Fair value at March 31, 2019				Change in unrealized (gains)/losses related to financial instruments held at March 31, 2019
																																										Purchases			Sales				Issuances		Settlements^(g)
Liabilities:^(a)
Deposits	$	4,305			$	(84	)	^(c)(e)	$	—		$	—		$	517	$	(170	)	$	1		$	(129	)		$	4,440			$	(82	)	^(c)(e)	$	4,169		$	152		^(c)(e)	$	—		$	—			$	335	$	(24	)		$	—		$	(104	)		$	4,528		$	144		^(c)(e)
Short-term borrowings	2,209				(47		)	^(c)(e)	—			—			713		(885		)	6			(25		)		1,971				(31		)	^(c)(e)	1,523			46			^(c)(e)	—			—				651		(601		)		1			(118		)		1,502			80			^(c)(e)
Trading liabilities – debt and equity instruments	43				36			^(c)	(6		)	19			—		(2		)	7			(1		)		96				36			^(c)	50			—				(2		)	11				—		—				3			(10		)		52			1			^(c)
Accounts payable and other liabilities	8				1			^(c)	—			—			—		—			3			—				12				1			^(c)	10			—				(5		)	10				—		—				—			—				15			—
Beneficial interests issued by consolidated VIEs	1				—				—			—			—		—			—			—				1				—				1			(1		)	^(c)	—			—				—		—				—			—				—			—
Long-term debt	17,632			⁽ⁱ⁾	194			^(c)(e)	—			—			3,551		(1,809		)	59			(219		)		19,408			⁽ⁱ⁾	192			^(c)(e)	19,418			1,273			^(c)(e)	—			—				2,051		(1,188		)		273			(172		)		21,655			1,625			^(c)(e)

Fair value measurements using significant unobservable inputs
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. GSEs and government agencies $ 549
$ (111 ) $ 747
$ (272 ) $ (83 ) $ 1
$ (20 ) $ 811
$ (116 )
Residential – nonagency 64
25
83
(86 ) (20 ) 15
(57 ) 24
(1 )
Commercial – nonagency 11
2
19
(24 ) (14 ) 15
(4 ) 5
1

Total mortgage-backed securities 624
(84 ) 849
(382 ) (117 ) 31
(81 ) 840
(116 )
U.S. Treasury, GSEs and government agencies
—
—
—
—
—
—
—
—
—

Obligations of U.S. states and municipalities 689
12
85
(152 ) (7 ) —
—
627
13

Non-U.S. government debt securities 155
(2 ) 228
(231 ) —
14
(18 ) 146
3

Corporate debt securities 334
74
340
(236 ) (53 ) 96
(71 ) 484
15

Loans 1,706
95
609
(416 ) (408 ) 509
(349 ) 1,746
44

Asset-backed securities 127
—
30
(81 ) (39 ) 23
(22 ) 38
(3 )
Total debt instruments 3,635
95
2,141
(1,498 ) (624 ) 673
(541 ) 3,881
(44 )
Equity securities 232
(28 ) 33
(92 ) (22 ) 142
(95 ) 170
(21 )
Other 301
42
50
(16 ) (41 ) 1
(5 ) 332
55

Total trading assets – debt and equity instruments 4,168
109
^(c)
2,224
(1,606 ) (687 ) 816
(641 ) 4,383
(10 )
^(c)
Net derivative receivables:^(b)

Interest rate (38 ) (575 ) 86
(102 )
⁽ⁱ⁾
174
⁽ⁱ⁾
22
114
(319 ) (694 )
Credit (107 ) (209 ) 16
(5 ) (13 ) 7
(6 ) (317 ) (169 )
Foreign exchange (297 ) (840 ) 13
(18 ) 294
(19 ) 26
(841 ) (815 )
Equity (2,225 ) 328
335
(573 ) (1,062 ) (418 ) 147
(3,468 ) (1,193 )
Commodity (1,129 ) 370
32
(240 ) 51
2
867
(47 ) 634

Total net derivative receivables (3,796 ) (926 )
^(c)
482
(938 ) (556 ) (406 ) 1,148
(4,992 ) (2,237 )
^(c)
Available-for-sale securities:
Mortgage-backed securities 1
—
1
—
(1 ) —
—
1
—

Asset-backed securities —
—
—
—
—
—
—
—
—

Total available-for-sale securities 1
—
1
—
(1 ) —
—
1
—

Loans 122
4
^(c)
—
—
(125 ) —
—
1
—

Mortgage servicing rights 6,130
(1,572 )
^(d)
1,250
(687 ) (702 ) —
—
4,419
(1,572 )
^(d)
Other assets 927
(152 )
^(c)
170
(160 ) (33 ) 1
(7 ) 746
(145 )
^(c)

Fair value measurements using significant unobservable inputs
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 Sales Issuances
Settlements^(g)

Liabilities:^(a)

Deposits $ 4,169
$ 241
^(c)(e)
$ —
$ —
$ 580
$ (504 ) $ 12
$ (862 ) $ 3,636
$ 250
^(c)(e)
Short-term borrowings 1,523
142
^(c)(e)
—
—
2,637
(2,265 ) 85
(121 ) 2,001
74
^(c)(e)
Trading liabilities – debt and equity instruments 50
—
(12 ) 41
—
1
9
(21 ) 68
(1 )
^(c)
Accounts payable and other liabilities 10
(7 )
^(c)
(79 ) 94
—
—
1
—
19
4
^(c)
Beneficial interests issued by consolidated VIEs 1
(1 )
^(c)
—
—
—
—
—
—
—
—

Long-term debt 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

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. GSEs and government agencies $ 307
$ 5
$ 348
$ (126 ) $ (56 ) $ 92
$ (41 ) $ 529
$ 3

Residential – nonagency 60
1
45
(19 ) (6 ) 58
(62 ) 77
4

Commercial – nonagency 11
2
7
(8 ) (13 ) 30
(16 ) 13
(1 )
Total mortgage-backed securities 378
8
400
(153 ) (75 ) 180
(119 ) 619
6

U.S. Treasury, GSEs and government agencies 1
—
—
—
—
—
(1 ) —
—

Obligations of U.S. states and municipalities 744
(3 ) 107
(70 ) (79 ) —
—
699
(3 )
Non-U.S. government debt securities 78
(19 ) 395
(213 ) (2 ) 18
(93 ) 164
(18 )
Corporate debt securities 312
(6 ) 297
(227 ) (15 ) 249
(215 ) 395
(1 )
Loans 2,719
58
1,223
(1,680 ) (528 ) 422
(681 ) 1,533
(22 )
Asset-backed securities 153
15
64
(29 ) (53 ) 18
(92 ) 76
8

Total debt instruments 4,385
53
2,486
(2,372 ) (752 ) 887
(1,201 ) 3,486
(30 )
Equity securities 295
(1 ) 99
(108 ) (1 ) 86
(41 ) 329
11

Other 690
(209 ) 47
(40 ) (75 ) 3
(3 ) 413
(250 )
Total trading assets – debt and equity instruments 5,370
(157 )
^(c)
2,632
(2,520 ) (828 ) 976
(1,245 ) 4,228
(269 )
^(c)
Net derivative receivables:^(b)

Interest rate 264
576
83
(77 ) (234 ) 40
39
691
498

Credit (35 ) 19
3
(7 ) 22
5
20
27
7

Foreign exchange (396 ) 184
42
(15 ) (46 ) (114 ) 43
(302 ) 42

Equity (3,409 ) 688
1,467
(1,919 ) 1,043
(324 ) 177
(2,277 ) 31

Commodity (674 ) 468
—
—
(287 ) 7
(39 ) (525 ) 158

Total net derivative receivables (4,250 ) 1,935
^(c)
1,595
(2,018 ) 498
(386 ) 240
(2,386 ) 736
^(c)
Available-for-sale securities:
Mortgage-backed securities 1
—
—
—
—
—
—
1
—

Asset-backed securities 276
1
—
—
(216 ) —
—
61
1

Total available-for-sale securities 277
1
^(j)
—
—
(216 ) —
—
62
1
^(j)
Loans 276
(5 )
^(c)
123
—
(180 ) —
(74 ) 140
(5 )
^(c)
Mortgage servicing rights 6,030
576
^(d)
770
(401 ) (542 ) —
—
6,433
576
^(d)
Other assets 1,265
(210 )
^(c)
49
(16 ) (28 ) 4
(1 ) 1,063
(217 )
^(c)

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

Liabilities:^(a)

Deposits $ 4,142
$ (125 )
^(c)(e)
$ —
$ —
$ 1,272
$ (425 ) $ 2
$ (426 ) $ 4,440
$ (115 )
^(c)(e)
Short-term borrowings 1,665
(229 )
^(c)(e)
—
—
2,783
(2,245 ) 61
(64 ) 1,971
26
^(c)(e)
Trading liabilities – debt and equity instruments 39
28
^(c)
(68 ) 95
—
(1 ) 9
(6 ) 96
11
^(c)
Accounts payable and other liabilities 13
—
(6 ) 1
—
—
4
—
12
—

Beneficial interests issued by consolidated VIEs 39
—
—
—
—
(38 ) —
—
1
—

Long-term debt 16,125
(396 )
^(c)(e)
—
—
9,792
⁽ⁱ⁾
(6,195 )
⁽ⁱ⁾
653
(571 ) 19,408
⁽ⁱ⁾
(576 )
^(c)(e)

(a)

Level 3 assets as a percentage of total Firm assets accounted for at fair value (including assets measured at fair value on a nonrecurring basis) were 2% ~~and 3%~~ at ~~September 30, 2019~~both March 31, 2020 and December 31, ~~2018,~~2019, 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%~~8% and 16%, at ~~both September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, 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)	Changes in fair value for MSRs are reported in mortgage fees and related income.

(e)

Realized (gains)/losses due to DVA for fair value option elected liabilities are reported in principal transactions revenue, and ~~they~~ were not material for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively. Unrealized (gains)/losses are reported in OCI, and they were ~~$(62) million~~$(1.1) billion and $~~123~~176 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively and $108 million for the nine months ended September 30, 2019 and were 0t material for the nine months ended September 30, 2018.~~respectively.


(f)	Loan originations are included in purchases.


(g)	Includes financial assets and liabilities that have matured, been partially or fully repaid, impacts of modifications, deconsolidations 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)	The ~~prior period~~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, including assets measured at fair value on a nonrecurring basis, were 0.6% of total Firm assets at ~~September 30, 2019.~~March 31, 2020. The following describes significant changes to level 3 assets since December 31, ~~2018,~~2019, for those items measured at fair value on a recurring basis. Refer to Assets and liabilities measured at fair value on a nonrecurring basis on page 9796 for further information on changes impacting items measured at fair value on a nonrecurring basis.

Three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020

Level 3 assets were ~~$15.1~~$19.2 billion at ~~September 30, 2019,~~March 31, 2020, reflecting ~~a decrease~~an increase of ~~$1.4 billion and $2.0~~$5.6 billion from ~~June 30, 2019 and~~ December 31, ~~2018, respectively.~~2019 reflective of heightened market volatility and net transfers largely due to:

~~The decrease for the three months ended September 30, 2019 was predominantly driven by a reduction of $674 million~~$2.0 billion increase in ~~MSRs and a reduction of $619 million~~trading loans.

$3.1 billion increase in gross equity derivative ~~receivables due to settlements.~~receivables.

~~The~~$1.4 billion 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 losses section~~sections below for additional information.

Transfers between levels for instruments carried at fair value on a recurring basis

For ~~both~~ the three ~~and nine~~ months ended ~~September 30, 2019, there were no individually~~March 31, 2020, significant transfers from level 2 ~~to level 3.~~

For the three and nine months ended September 30, 2019, 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.

~~For the three months ended September 30, 2018, there 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~~into level 3 included the following:

$2.1 billion of total debt and equity instruments, predominantly trading loans, driven by a decrease in observability.

$1.0 billion of gross equity derivative receivables and $1.7 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,~~March 31, 2020, there were no ~~individually~~ significant transfers from level 3 tointo level 2.

For the ~~nine~~three months ended ~~September 30, 2018,~~March 31, 2019, there were no significant transfers from level 2 into level 3 toor from 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.3 into level 2.

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. These amounts exclude any effects of the Firm’s risk management activities where the financial instruments are classified as level 1 and 2 of the fair value hierarchy. Refer to Changes in level 3 recurring fair value measurements rollforward tables on pages ~~90–~~92–95 for further information on these instruments.

Three months ended ~~September 30, 2019~~March 31, 2020

$~~1.6~~1.2 billion of net ~~losses~~gains on assets, ~~predominantly~~ driven by gains in net equity 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~~offset by 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.~~

~~Nine months ended September 30, 2019~~

~~$2.5 billion of net losses on assets, driven by net derivative receivables due to market movements and~~in MSRs reflecting faster prepayment speeds on lower rates. Refer to Note 1415 for information on MSRs.

$~~2.3~~4.6 billion of net gains on liabilities, predominantly driven by market movements in long-term debt.

Three months ended March 31, 2019

$505 million of net gains on assets, none of which were individually significant.

$1.5 billion of net losses on liabilities 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.~~

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 March 31,
(in millions)	2019			2018		2019			2018		2020			2019
Credit and funding adjustments:
Derivatives CVA	$	55		$	66	$	71		$	223	$	(924	)	$	60
Derivatives FVA	(83		)	88		(20		)	102		(1,021		)	152

Refer to Note 2 of JPMorgan Chase’s ~~2018~~2019 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.

Assets and liabilities measured at fair value on a nonrecurring basis

The following tables present the assets and liabilities held as of ~~September 30,~~March 31, 2020 and 2019 ~~and 2018,~~, respectively, for which a nonrecurring fair value ~~adjustment was~~adjustments were recorded during the ~~nine~~three months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018,~~, respectively, by major product category and fair value hierarchy.


	Fair value hierarchy								Total fair value		Fair value hierarchy								Total fair value
September 30, 2019 (in millions)	Level 1		Level 2			Level 3			Total fair value										Total fair value
March 31, 2020 (in millions)											Level 1		Level 2			Level 3			Total fair value
Loans	$	—	$	5,338	^(b)	$	246	^(c)	$	5,584	$	—	$	2,336	^(c)	$	559	^(d)	Total fair value
Other assets^(a)	—		18			775			793		—		11			334			345
Total assets measured at fair value on a nonrecurring basis	$	—	$	5,356		$	1,021		$	6,377	$	—	$	2,347		$	893		$	3,240
Accounts payable and other liabilities^(b)											—		—			775			775
Total liabilities measured at fair value on a nonrecurring basis											$	—	$	—		$	775		$	775


	Fair value hierarchy						Total fair value		Fair value hierarchy						Total fair value
September 30, 2018 (in millions)	Level 1		Level 2		Level 3		Total fair value								Total fair value
March 31, 2019 (in millions)									Level 1		Level 2		Level 3		Total fair value
Loans	$	—	$	492	$	243	$	735	$	—	$	441	$	84	Total fair value
Other assets	—		216		826		1,042		—		11		456		467
Total assets measured at fair value on a nonrecurring basis	$	—	$	708	$	1,069	$	1,777	$	—	$	452	$	540	$	992

(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 ~~$775~~$334 million in level 3 assets measured at fair value on a nonrecurring basis as of ~~September 30, 2019, $638~~March 31, 2020, $194 million related to ~~such~~ equity ~~securities.~~securities adjusted based on the measurement alternative. These equity securities are classified as level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.


(b)	Represents at March 31, 2020 the markdowns associated with $9.4 billion of held-for-sale positions related to unfunded commitments in the bridge financing portfolio. There were 0 liabilities measured at fair value on a nonrecurring basis at March 31, 2019.


(c)	Primarily includes certain mortgage loans that were reclassified to held-for-sale.

~~(c)~~(d)

Of the ~~$246~~$559 million in level 3 assets measured at fair value on a nonrecurring basis as of ~~September 30, 2019, $200~~March 31, 2020, $294 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)~~loans). These amounts are classified as level 3 as they are valued using information from broker’s price opinions, appraisals and automated valuation models and discounted based upon the Firm’s experience with actual liquidation values. These discounts ranged from ~~14%~~16% to ~~49%~~46% with a weighted average of ~~29%~~28%.

~~There were no material liabilities measured at fair value on a nonrecurring basis at September 30, 2019 and 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~~adjustments have been recognized for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019 ~~and 2018,~~, related to assets and liabilities held at those dates.


	Three months ended September 30,							Nine months ended September 30,							Three months ended March 31,
(in millions)	2019				2018			2019				2018			2020				2019
Loans	$	(142	)	^(b)	$	(22	)	$	(232	)	^(b)	$	(36	)	$	(267	)	^(b)	$	(21	)
Other assets^(a)	23				(117		)	123				383			(169		)		71
Accounts payable and other liabilities															(775		)	^(c)	—
Total nonrecurring fair value gains/(losses)	$	(119	)		$	(139	)	$	(109	)		$	347		$	(1,211	)		$	50


(a)	Included ~~$34~~$(154) million and ~~$(113)~~$78 million for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively and $132 million and $384 million for the nine months ended September 30, 2019 and 2018,~~ respectively of net (losses)/gains as a result of the measurement alternative.


(b)	~~Primarily includes~~Includes the impact of certain mortgage loans that were reclassified to held-for-sale.


(c)	Represents markdowns on held-for-sale positions related to unfunded commitments in the bridge financing portfolio.

Refer 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).~~loans.

Equity securities without readily determinable fair values

The Firm measures certain 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.~~other income.

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,~~March 31, 2020 and 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						Three months ended
	September 30,					September 30,						March 31
As of or for the period ended,
(in millions)	2019		2018			2019			2018			2020			2019
Other assets
Carrying value^(a)	$	2,771	$	1,801		$	2,771		$	1,801		$	2,560		$	1,819
Upward carrying value changes^(b)	34		14			169			540			9			84
Downward carrying value changes/impairment^(c)	—		(127		)	(37		)	(156		)	(162		)	(6		)


(a)	The carrying value as of December 31, ~~2018~~2019 was ~~$1.5~~$2.4 billion.


(b)	The cumulative upward carrying value changes between January 1, 2018 and ~~September 30, 2019~~March 31, 2020 were ~~$479~~$524 million.


(c)	The cumulative downward carrying value changes/impairment between January 1, 2018 and ~~September 30, 2019~~March 31, 2020 were ~~$(197)~~$(360) 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,~~March 31, 2020, 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, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, 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.



	March 31, 2020										December 31, 2019
			Estimated fair value hierarchy										Estimated fair value hierarchy
(in billions)	Carrying value		Level 1		Level 2		Level 3		Total estimated fair value		Carrying value		Level 1		Level 2		Level 3		Total estimated fair value
Financial assets
Cash and due from banks	$	24.0	$	24.0	$	—	$	—	$	24.0	$	21.7	$	21.7	$	—	$	—	$	21.7
Deposits with banks	343.5		343.5		—		—		343.5		241.9		241.9		—		—		241.9
Accrued interest and accounts receivable	121.3		—		121.3		—		121.3		71.3		—		71.2		0.1		71.3
Federal funds sold and securities purchased under resale agreements	12.7		—		12.7		—		12.7		234.6		—		234.6		—		234.6
Securities borrowed	88.3		—		88.3		—		88.3		133.5		—		133.5		—		133.5
Investment securities, held-to-maturity	71.2		0.1		73.4		—		73.5		47.5		0.1		48.8		—		48.9
Loans, net of allowance for loan losses^(a)	985.9		—		217.4		778.6		996.0		939.5		—		214.1		734.9		949.0
Other	93.5		—		92.9		0.8		93.7		61.3		—		60.6		0.8		61.4
Financial liabilities
Deposits	$	1,813.4	$	—	$	1,813.7	$	—	$	1,813.7	$	1,533.8	$	—	$	1,534.1	$	—	$	1,534.1
Federal funds purchased and securities loaned or sold under repurchase agreements	38.5		—		38.5		—		38.5		183.1		—		183.1		—		183.1
Short-term borrowings	27.6		—		27.6		—		27.6		35.0		—		35.0		—		35.0
Accounts payable and other liabilities	211.3		0.5		206.2		4.2		210.9		164.0		0.1		160.0		3.5		163.6
Beneficial interests issued by consolidated VIEs	19.6		—		19.6		—		19.6		17.8		—		17.9		—		17.9
Long-term debt	230.5		—		219.8		3.5		223.3		215.5		—		218.3		3.5		221.8

September 30, 2019 December 31, 2018
Estimated fair value hierarchy Estimated fair value hierarchy
(in billions)
Carrying
value
Level 1 Level 2 Level 3
Total estimated
fair value

Carrying
value
Level 1 Level 2 Level 3
Total estimated
fair value
Financial assets
Cash and due from banks $ 21.2
$ 21.2
$ —
$ —
$ 21.2
$ 22.3
$ 22.3
$ —
$ —
$ 22.3
Deposits with banks 235.4
235.4
—
—
235.4
256.5
256.5
—
—
256.5
Accrued interest and accounts receivable 87.9
—
87.9
—
87.9
72.0
—
71.9
0.1
72.0
Federal funds sold and securities purchased under resale agreements 243.7
—
243.7
—
243.7
308.4
—
308.4
—
308.4
Securities borrowed 132.6
—
132.6
—
132.6
106.9
—
106.9
—
106.9
Investment securities, held-to-maturity 40.8
—
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
Other 60.6
—
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 agreements 246.8
—
246.8
—
246.8
181.4
—
181.4
—
181.4
Short-term borrowings 42.4
—
42.4
—
42.4
62.1
—
62.1
—
62.1
Accounts payable and other liabilities 181.5
0.7
177.0
3.4
181.1
160.6
0.2
157.0
3.0
160.2
Beneficial interests issued by consolidated VIEs 18.5
—
18.5
—
18.5
20.2
—
20.2
—
20.2
Long-term debt and junior subordinated deferrable interest debentures 224.3
—
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. Carrying value of the loan takes into account the loan’s allowance for loan losses, which represents the loan’s expected credit losses over its remaining expected life. The difference between the estimated fair value and carrying value of a ~~financial asset or liability~~loan is ~~the result of the different methodologies used~~generally attributable to ~~determine~~changes in market interest rates, including credit spreads, market liquidity premiums and other factors that affect the fair value ~~as compared with~~of a loan but do not affect its 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.

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, 2019										December 31, 2018										March 31, 2020										December 31, 2019
			Estimated fair value hierarchy										Estimated fair value hierarchy										Estimated fair value hierarchy										Estimated fair value hierarchy
(in billions)	Carrying value^(a)		Level 1		Level 2		Level 3		Total estimated fair value		Carrying value^(a)		Level 1		Level 2		Level 3		Total estimated fair value^(b)		Carrying value^{(a) (b)}		Level 1		Level 2		Level 3		Total estimated fair value		Carrying value^(a)		Level 1		Level 2		Level 3		Total estimated fair value
Wholesale lending-related commitments	$	1.1	$	—	$	—	$	1.9	$	1.9	$	1.0	$	—	$	—	$	1.9	$	1.9	$	2.8	$	—	$	—	$	3.3	$	3.3	$	1.2	$	—	$	—	$	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~~Includes the wholesale allowance for lending-related commitments and markdowns associated with held-for-sale positions related to ~~conform with~~unfunded commitments in the ~~current period presentation.~~bridge financing portfolio.

The Firm does not estimate the fair value of consumer off-balance sheet 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. Refer to page ~~161~~156 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further discussion of the valuation of lending-related commitments.

Note 3 – Fair value option

~~Refer to Note 3 of JPMorgan Chase’s 2018 Form 10-K for a discussion of the primary financial instruments for which the~~The fair value option ~~was~~provides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, unrecognized firm commitments, and written loan commitments.

The Firm has elected to measure certain instruments at fair value for several reasons including to mitigate income statement volatility caused by the differences between the measurement basis of elected instruments (e.g., certain instruments that otherwise would be accounted for ~~those elections~~on an accrual basis) and the ~~determination~~associated risk management arrangements that are accounted for on a fair value basis, as well as to better reflect those instruments that are managed on a fair value basis.

The Firm’s election of ~~instrument-specific~~fair value includes the following instruments:

Loans purchased or originated as part of securitization warehousing activity, subject to bifurcation accounting, or managed on a fair value basis, including lending-related commitments

Certain securities financing agreements

Owned beneficial interests in securitized financial assets that contain embedded credit ~~risk,~~derivatives, which would otherwise be required to be separately accounted for as a derivative instrument

Structured notes, which are predominantly financial instruments that contain embedded derivatives, that are issued as part of client-driven activities

Certain long-term beneficial interests issued by CIB’s consolidated securitization trusts where ~~relevant.~~the underlying assets are carried at fair value

Changes in fair value under the fair value option election

The following table presents the changes in fair value included in the Consolidated statements of income for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 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 March 31,
	2019										2018									2020										2019
(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	)	$	(23	)	$	—		$	(23	)	$	543		$	—			$	543		$	11		$	—		$	11
Securities borrowed	99			—				99			(24		)	—			(24		)	226			—				226			37			—			37
Trading assets:
Debt and equity instruments, excluding loans	546			—				546			(45		)	5		^(c)	(40		)	(2,438		)	(1		)	^(c)	(2,439		)	1,354			—			1,354
Loans reported as trading assets:
Changes in instrument-specific credit risk	111			(4		)	^(c)	107			122			1		^(c)	123			(589		)	(23		)	^(c)	(612		)	248			3		^(c)	251
Other changes in fair value	74			320			^(c)	394			(6		)	49		^(c)	43			275			741			^(c)	1,016			80			237		^(c)	317
Loans:
Changes in instrument-specific credit risk	(4		)	—				(4		)	(1		)	—			(1		)	(4		)	—				(4		)	5			—			5
Other changes in fair value	—			—				—			1			—			1			19			—				19			—			—			—
Other assets	(6		)	—				(6		)	2			16		^(d)	18			61			(17		)	^(d)	44			1			—			1
Deposits^(a)	(397		)	—				(397		)	32			—			32			(103		)	—				(103		)	(496		)	—			(496		)
Federal funds purchased and securities loaned or sold under repurchase agreements	2			—				2			8			—			8			(259		)	—				(259		)	(5		)	—			(5		)
Short-term borrowings^(a)	173			—				173			(25		)	—			(25		)	1,720			—				1,720			(704		)	—			(704		)
Trading liabilities	—			—				—			2			—			2			—			—				—			3			—			3
Other liabilities	1			—				1			—			—			—			(35		)	—				(35		)	(4		)	—			(4		)
Long-term debt^(a)(b)	(614		)	—				(614		)	259			—			259			4,181			5			^(c)	4,186			(2,836		)	—			(2,836		)

Nine months ended September 30,
2019 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)
Federal funds sold and securities purchased under resale agreements $ 10
$ —
$ 10
$ (49 ) $ —
$ (49 )
Securities borrowed 179
—
179
(22 ) —
(22 )
Trading assets:
Debt and equity instruments, excluding loans 2,104
—
2,104
(490 ) 6
^(c)
(484 )
Loans reported as trading assets:
Changes in instrument-specific credit risk 558
1
^(c)
559
458
5
^(c)
463
Other changes in fair value 274
885
^(c)
1,159
64
24
^(c)
88
Loans:
Changes in instrument-specific credit risk (12 ) —
(12 ) (2 ) —
(2 )
Other changes in fair value 1
—
1
(1 ) —
(1 )
Other assets (3 ) 3
^(d)
—
4
6
^(d)
10
Deposits^(a)
(1,589 ) —
(1,589 ) 371
—
371
Federal funds purchased and securities loaned or sold under repurchase agreements (18 ) —
(18 ) 27
—
27
Short-term borrowings^(a)
(601 ) —
(601 ) 86
—
86
Trading liabilities 5
—
5
1
—
1
Other liabilities (7 ) —
(7 ) —
—
—
Long-term debt^(a)(b)
(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 isare 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~~$(2) million for the three months ended March 31, 2020 and were 0t material for the three ~~and nine~~ months ended ~~September 30, 2019 and 2018, respectively.~~March, 31, 2019.


(b)	Long-term debt measured at fair value predominantly relates to structured notes. Although the risk associated with the structured notes is actively managed, the gains/(losses) reported in this table do not include the income statement impact of the risk management instruments used to manage such risk.


(c)	Reported in mortgage fees and related income.


(d)	Reported in other income.


(e)	Changes in fair value exclude contractual interest, which is included in interest income and interest expense for all instruments other than hybrid financial instruments. Refer to Note 67 for further information regarding interest income and interest 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, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, for loans, long-term debt and long-term beneficial interests for which the fair value option has been elected.


	September 30, 2019								December 31, 2018								March 31, 2020								December 31, 2019
(in millions)	Contractual principal outstanding			Fair value		Fair value over/(under) contractual principal outstanding			Contractual principal outstanding			Fair value		Fair value over/(under) contractual principal outstanding			Contractual principal outstanding			Fair value		Fair value over/(under) contractual principal outstanding			Contractual principal outstanding			Fair value		Fair value over/(under) contractual principal outstanding
Loans^(a)
Nonaccrual loans
Loans reported as trading assets	$	3,884		$	1,151	$	(2,733	)	$	4,240		$	1,350	$	(2,890	)	$	3,610		$	1,092	$	(2,518	)	$	3,717		$	1,111	$	(2,606	)
Loans	181			151		(30		)	39			—		(39		)	274			238		(36		)	178			139		(39		)
Subtotal	4,065			1,302		(2,763		)	4,279			1,350		(2,929		)	3,884			1,330		(2,554		)	3,895			1,250		(2,645		)
All other performing loans
Loans reported as trading assets	45,315			43,903		(1,412		)	42,215			40,403		(1,812		)	47,193			45,016		(2,177		)	48,570			47,318		(1,252		)
Loans	5,686			5,609		(77		)	3,186			3,151		(35		)	6,047			5,976		(71		)	7,046			6,965		(81		)
Total loans	$	55,066		$	50,814	$	(4,252	)	$	49,680		$	44,904	$	(4,776	)	$	57,124		$	52,322	$	(4,802	)	$	59,511		$	55,533	$	(3,978	)
Long-term debt
Principal-protected debt	$	40,750	^(c)	$	37,635	$	(3,115	)	$	32,674	^(c)	$	28,718	$	(3,956	)	$	40,994	^(c)	$	37,947	$	(3,047	)	$	40,124	^(c)	$	39,246	$	(878	)
Nonprincipal-protected debt^(b)	NA			34,322		NA			NA			26,168		NA			NA			30,670		NA			NA			36,499		NA
Total long-term debt	NA			$	71,957	NA			NA			$	54,886	NA			NA			$	68,617	NA			NA			$	75,745	NA
Long-term beneficial interests
Nonprincipal-protected debt^(b)	NA			$	39	NA			NA			$	28	NA			NA			$	77	NA			NA			$	36	NA
Total long-term beneficial interests	NA			$	39	NA			NA			$	28	NA			NA			$	77	NA			NA			$	36	NA


(a)	There were 0 performing loans that were ninety days or more past due as of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, respectively.

(b)

Remaining contractual principal is not applicable to nonprincipal-protected structured notes and long-term beneficial interests. Unlike principal-protected structured notes and long-term beneficial interests, for which the Firm is obligated to return a stated amount of principal at maturity, nonprincipal-protected structured notes and long-term beneficial interests do not obligate the Firm to return a stated amount of principal at maturity, but for structured notes to return an amount based on the performance of an underlying variable or derivative feature embedded in the note. However, investors are exposed to the credit risk of the Firm as issuer for both nonprincipal-protected and principal-protected notes.


(c)	Where the Firm issues principal-protected zero-coupon or discount notes, the balance reflects the contractual principal payment at maturity or, if applicable, the contractual principal payment at the Firm’s next call date.

At ~~September 30, 2019,~~ March 31, 2020, and December 31, ~~2018,~~2019, the contractual amount of lending-related commitments for which the fair value option was elected was ~~$6.5~~$7.3 billion and ~~$6.9~~$6.5 billion, respectively, with a corresponding fair value of ~~$(91)~~$(97) million and ~~$(82)~~$(94) million, respectively. Refer to Note 2728 of JPMorgan Chase’s ~~2018~~2019 Form 10-K, and Note 2223 of this Form 10-Q for further information regarding off-balance sheet lending-related financial instruments. The prior period amount has been revised to conform with the current period presentation.

Structured note products by balance sheet classification and risk component

The following table presents the fair value of structured notes, by balance sheet classification and the primary risk type.


	September 30, 2019								December 31, 2018								March 31, 2020								December 31, 2019
(in millions)	Long-term debt		Short-term borrowings		Deposits		Total		Long-term debt		Short-term borrowings		Deposits		Total		Long-term debt		Short-term borrowings		Deposits		Total		Long-term debt		Short-term borrowings		Deposits		Total
Risk exposure
Interest rate	$	33,402	$	54	$	17,547	$	51,003	$	24,137	$	62	$	12,372	$	36,571	$	35,203	$	38	$	11,699	$	46,940	$	35,470	$	34	$	16,692	$	52,196
Credit	5,207		817		—		6,024		4,009		995		—		5,004		4,749		771		—		5,520		5,715		875		—		6,590
Foreign exchange	3,570		45		8		3,623		3,169		157		38		3,364		3,596		67		54		3,717		3,862		48		5		3,915
Equity	27,644		5,565		8,190		41,399		21,382		5,422		7,368		34,172		23,983		4,177		7,455		35,615		29,294		4,852		8,177		42,323
Commodity	504		7		1,352		1,863		372		34		1,207		1,613		419		25		1,140		1,584		472		32		1,454		1,958
Total structured notes	$	70,327	$	6,488	$	27,097	$	103,912	$	53,069	$	6,670	$	20,985	$	80,724	$	67,950	$	5,078	$	20,348	$	93,376	$	74,813	$	5,841	$	26,328	$	106,982

Note 4 – Credit risk concentrations

Concentrations of credit risk arise when a number of clients, counterparties or customers are engaged in similar business activities or activities in the same geographic region, or when they have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions.

JPMorgan Chase regularly monitors various segments of its credit portfolios to assess potential credit risk concentrations and to obtain additional collateral when deemed necessary and permitted under the Firm’s agreements. Senior management is significantly involved in the credit approval and review process, and risk levels are adjusted as needed to reflect the Firm’s risk appetite.

In the Firm’s consumer portfolio, concentrations are managed primarily by product and by U.S. geographic region, with a key focus on trends and concentrations at the portfolio level, where potential credit risk concentrations can be remedied through changes in underwriting policies and portfolio guidelines. Refer to Note 12 for additional information on the geographic composition of the Firm’s consumer loan portfolios. In the wholesale portfolio, credit risk concentrations are evaluated primarily by industry and monitored regularly on both an aggregate portfolio level and on an individual client or counterparty basis.

The Firm’s wholesale exposure is managed through loan syndications and participations, loan sales, securitizations, credit derivatives, master netting agreements, collateral and other risk-reduction techniques. Refer to Note 12 for additional information on loans.

The Firm does not believe that its exposure to any particular loan product or industry segment (e.g., real estate), or its exposure to residential real estate loans with high LTV ratios, results in a significant concentration of credit risk.

Terms of loan products and collateral coverage are included in the Firm’s assessment when extending credit and establishing its allowance for loan losses.

The table below presents both on–balance sheet and off–balance sheet consumer and wholesale-related credit exposure by the Firm’s 3 credit portfolio segments as of March 31, 2020 and December 31, 2019. The wholesale industry of risk category is generally based on the client or counterparty’s primary business activity.

In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.



	March 31, 2020								December 31, 2019
	Credit exposure^(h)		On-balance sheet				Off-balance sheet⁽ⁱ⁾		Credit exposure^(h)		On-balance sheet				Off-balance sheet⁽ⁱ⁾
(in millions)			Loans		Derivatives						Loans		Derivatives
Consumer, excluding credit card	$	337,162	$	295,627	$	—	$	41,535	$	338,170	$	298,001	$	—	$	40,169
Credit card^(a)	835,463		154,021		—		681,442		819,644		168,924		—		650,720
Total consumer-related^(a)	1,172,625		449,648		—		722,977		1,157,814		466,925		—		690,889
Wholesale-related^(b)
Real Estate	148,246		123,667		1,294		23,285		150,805		117,709		619		32,477
Consumer & Retail	110,669		54,207		2,824		53,638		106,986		36,985		1,424		68,577
Individuals and Individual Entities^(c)	108,180		97,020		1,864		9,296		105,018		94,616		694		9,708
Industrials	68,864		29,941		2,062		36,861		62,483		22,063		878		39,542
Asset Managers	65,880		29,134		17,395		19,351		51,856		24,008		7,160		20,688
Technology, Media & Telecommunications	60,184		20,363		2,827		36,994		60,033		15,322		2,766		41,945
Banks & Finance Cos	55,786		34,760		7,617		13,409		50,786		31,191		5,165		14,430
Healthcare	53,250		20,628		2,806		29,816		50,824		17,607		2,078		31,139
Oil & Gas	42,754		15,734		837		26,183		41,641		13,101		852		27,688
Automotive	36,060		22,644		1,076		12,340		35,118		18,844		368		15,906
Utilities	33,112		7,813		3,734		21,565		34,843		5,157		2,573		27,113
State & Municipal Govt^(d)	30,529		14,686		2,670		13,173		30,095		13,271		2,000		14,824
Transportation	18,624		8,584		2,305		7,735		14,497		5,253		715		8,529
Chemicals & Plastics	17,430		6,445		752		10,233		17,499		4,864		459		12,176
Central Govt	16,519		3,223		12,107		1,189		14,865		2,840		10,477		1,548
Metals & Mining	15,797		6,479		998		8,320		15,586		5,364		402		9,820
Insurance	14,522		2,213		3,675		8,634		12,348		1,356		2,282		8,710
Financial Markets Infrastructure	9,767		409		7,597		1,761		4,121		13		2,482		1,626
Securities Firms	8,045		663		4,718		2,664		7,344		757		4,507		2,080
All other^(e)	81,204		56,676		2,490		22,038		78,006		51,357		1,865		24,784
Subtotal	995,422		555,289		81,648		358,485		944,754		481,678		49,766		413,310
Loans held-for-sale and loans at fair value	10,438		10,438		—		—		11,166		11,166		—		—
Receivables from customers and other^(f)	33,376		—		—		—		33,706		—		—		—
Total wholesale-related	1,039,236		565,727		81,648		358,485		989,626		492,844		49,766		413,310
Total exposure^(g)(h)	$	2,211,861	$	1,015,375	$	81,648	$	1,081,462	$	2,147,440	$	959,769	$	49,766	$	1,104,199


(a)	Also includes commercial card lending-related commitments primarily in CB and CIB.


(b)	The industry rankings presented in the table as of December 31, 2019, are based on the industry rankings of the corresponding exposures at March 31, 2020, not actual rankings of such exposures at December 31, 2019.


(c)	Individuals and Individual Entities predominantly consists of Wealth Management clients within AWM and includes exposure to personal investment companies and personal and testamentary trusts.

(d)

In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at March 31, 2020 and December 31, 2019, noted above, the Firm held: $6.5 billion at both periods of trading assets; $30.5 billion and $29.8 billion, respectively, of AFS securities; and $4.8 billion at both periods of HTM securities, issued by U.S. state and municipal governments. Refer to Note 2 and Note 10 for further information.


(e)	All other includes: SPEs and Private education and civic organizations, representing approximately 90% and 10%, respectively, at both March 31, 2020 and December 31, 2019. Refer to Note 14 for more information on exposures to SPEs.

(f)

Receivables from customers primarily represent held-for-investment margin loans to brokerage clients in CIB and AWM that are collateralized by assets maintained in the clients’ brokerage accounts (e.g., cash on deposit, liquid and readily marketable debt or equity securities), as such no allowance is held against these receivables. To manage its credit risk the Firm establishes margin requirements and monitors the required margin levels on an ongoing basis, and requires clients to deposit additional cash or other collateral, or to reduce positions, when appropriate. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.


(g)	Excludes cash placed with banks of $354.4 billion and $254.0 billion, at March 31, 2020 and December 31, 2019, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.


(h)	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.


(i)	Represents lending-related financial instruments.

Note 5 – Derivative instruments

JPMorgan Chase makes markets in derivatives for clients and also uses derivatives to hedge or manage its own risk exposures. Refer to Note 5 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further discussion of the Firm’s use of and accounting policies regarding derivative 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 orand liabilities (“specified risk management” positions) as well as derivatives used in the Firm’s market-making businesses or for other purposes.

The following table outlines the Firm’s primary uses of derivatives and the related hedge accounting designation or disclosure category.



Type of Derivative	Use of Derivative	Designation 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 liabilities	Fair value hedge	Corporate	109-110
• Interest rate	Hedge floating-rate assets and liabilities	Cash flow hedge	Corporate	111
• Foreign exchange	Hedge foreign currency-denominated assets and liabilities	Fair value hedge	Corporate	109-110
• Foreign exchange	Hedge foreign currency-denominated forecasted revenue and expense	Cash flow hedge	Corporate	111
• Foreign exchange	Hedge the value of the Firm’s investments in non-U.S. dollar functional currency entities	Net investment hedge	Corporate	112
• Commodity	Hedge commodity inventory	Fair value hedge	CIB	109-110
Manage specifically identified risk exposures not designated in qualifying hedge accounting relationships:
• Interest rate	Manage the risk ~~of the~~associated with mortgage ~~pipeline,~~commitments, warehouse loans and MSRs	Specified risk management	CCB	112
• Credit	Manage the credit risk ofassociated with wholesale lending exposures	Specified risk management	CIB	112
• Interest rate and foreign exchange	Manage the risk ofassociated with certain other specified assets and liabilities	Specified risk management	Corporate	112
Market-making derivatives and other activities:
• Various	Market-making and related risk management	Market-making and other	CIB	112
• Various	Other derivatives	Market-making and other	CIB, AWM, Corporate	112

Notional amount of derivative contracts

The following table summarizes the notional amount of derivative contracts outstanding as of ~~September 30, 2019,~~ March 31, 2020, and December 31, ~~2018.~~2019.


	Notional amounts^(b)				Notional amounts^(b)
(in billions)	September 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Interest rate contracts
Swaps	$	25,099	$	21,763	$	27,659	$	21,228
Futures and forwards	4,887		3,562		7,504		3,152
Written options	4,290		3,997		3,889		3,938
Purchased options	4,697		4,322		4,277		4,361
Total interest rate contracts	38,973		33,644		43,329		32,679
Credit derivatives^(a)	1,365		1,501		1,560		1,242
Foreign exchange contracts
Cross-currency swaps	3,886		3,548		3,604		3,604
Spot, futures and forwards	7,111		5,871		7,518		5,577
Written options	832		835		838		700
Purchased options	852		830		821		718
Total foreign exchange contracts	12,681		11,084		12,781		10,599
Equity contracts
Swaps	389		346		330		406
Futures and forwards	131		101		122		142
Written options	692		528		720		646
Purchased options	632		490		683		611
Total equity contracts	1,844		1,465		1,855		1,805
Commodity contracts
Swaps	148		134		139		147
Spot, futures and forwards	218		156		219		211
Written options	166		135		169		135
Purchased options	153		120		155		124
Total commodity contracts	685		545		682		617
Total derivative notional amounts	$	55,548	$	48,239	$	60,207	$	46,942


(a)	Refer to the Credit derivatives discussion on page 113 for more information on volumes and types of credit derivative contracts.


(b)	Represents the sum of gross long and gross short third-party notional derivative contracts.

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 contracts, the notional amount is not exchanged; it is ~~used~~ simply as a reference amount used 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, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, 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, 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)
March 31, 2020 (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	$	375,082	$	851	$	375,933	$	28,507	$	338,711	$	2	$	338,713	$	10,223	$	401,677	$	826	$	402,503	$	36,901	$	365,052	$	1	$	365,053	$	13,399
Credit	15,717		—		15,717		838		17,062		—		17,062		2,159		20,080		—		20,080		1,185		20,878		—		20,878		2,112
Foreign exchange	162,364		768		163,132		12,681		164,583		1,159		165,742		15,016		241,466		2,056		243,522		18,983		255,304		739		256,043		23,294
Equity	46,378		—		46,378		7,409		50,891		—		50,891		10,603		96,145		—		96,145		13,215		94,202		—		94,202		12,037
Commodity	20,985		253		21,238		6,142		25,470		341		25,811		9,789		35,960		1,695		37,655		11,364		39,069		931		40,000		14,245
Total fair value of trading assets and liabilities	$	620,526	$	1,872	$	622,398	$	55,577	$	596,717	$	1,502	$	598,219	$	47,790	$	795,328	$	4,577	$	799,905	$	81,648	$	774,505	$	1,671	$	776,176	$	65,087

	Gross derivative receivables								Gross derivative payables								Gross derivative receivables								Gross derivative payables
December 31, 2018 (in millions)	Not designated as hedges		Designated as hedges		Total derivative receivables		Net derivative receivables^(b)		Not designated as hedges		Designated as hedges		Total derivative payables		Net derivative payables^(b)
December 31, 2019 (in millions)																	Not designated as hedges		Designated as hedges		Total derivative receivables		Net derivative receivables^(b)		Not designated as hedges		Designated as hedges		Total derivative payables		Net derivative payables^(b)
Trading assets and liabilities
Interest rate	$	267,871	$	833	$	268,704	$	23,214	$	242,782	$	—	$	242,782	$	7,784	$	312,451	$	843	$	313,294	$	27,421	$	279,272	$	1	$	279,273	$	8,603
Credit	20,095		—		20,095		612		20,276		—		20,276		1,667		14,876		—		14,876		701		15,121		—		15,121		1,652
Foreign exchange	167,057		628		167,685		13,450		164,392		825		165,217		12,785		138,179		308		138,487		9,005		144,125		983		145,108		13,158
Equity	49,285		—		49,285		9,946		51,195		—		51,195		10,161		45,727		—		45,727		6,477		52,741		—		52,741		12,537
Commodity	20,223		247		20,470		6,991		22,297		121		22,418		9,372		16,914		328		17,242		6,162		19,736		149		19,885		7,758
Total fair value of trading assets and liabilities	$	524,531	$	1,708	$	526,239	$	54,213	$	500,942	$	946	$	501,888	$	41,769	$	528,147	$	1,479	$	529,626	$	49,766	$	510,995	$	1,133	$	512,128	$	43,708


(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.

Derivatives netting

The following tables present, as of ~~September 30, 2019,~~ March 31, 2020, and December 31, ~~2018,~~ 2019, gross and net derivative receivables and payables by contract and settlement type. Derivative receivables and payables, as well as the related cash collateral from the same counterparty have been netted on the Consolidated balance sheets where the Firm has obtained an appropriate legal opinion with respect to the master netting agreement. Where such a legal opinion has not been either sought or obtained, amounts are not eligible for netting on the Consolidated balance sheets, and those derivative receivables and payables are shown separately in the tables below.

In addition to the cash collateral received and transferred that is presented on a net basis with derivative receivables and payables, the Firm receives and transfers additional collateral (financial instruments and cash). These amounts mitigate counterparty credit risk associated with the Firm’s derivative instruments, but are not eligible for net presentation:


•	collateral that consists of non-cash financial instruments (generally U.S. government and agency securities and other G7 government securities) and cash collateral held at third-party custodians, which are shown separately as “Collateral not nettable on the Consolidated balance sheets” in the tables below, up to the fair value exposure ~~amount.~~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, 2019									December 31, 2018										March 31, 2020									December 31, 2019
(in millions)	(in millions)	Gross derivative receivables		Amounts netted on the Consolidated balance sheets			Net derivative receivables				Gross derivative receivables		Amounts netted on the Consolidated balance sheets			Net derivative receivables				(in millions)	Gross derivative receivables		Amounts netted on the Consolidated balance sheets			Net derivative receivables				Gross derivative receivables		Amounts netted on the Consolidated balance sheets			Net derivative receivables
U.S. GAAP nettable derivative receivables	U.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”)	$	356,075	$	(332,566	)	$	23,509			$	258,227	$	(239,498	)	$	18,729			Over-the-counter (“OTC”)	$	378,111	$	(348,926	)	$	29,185			$	299,205	$	(276,255	)	$	22,950
OTC–cleared	OTC–cleared	14,438		(14,343		)	95				6,404		(5,856		)	548				OTC–cleared	15,768		(15,527		)	241				9,442		(9,360		)	82
Exchange-traded^(a)	Exchange-traded^(a)	577		(517		)	60				322		(136		)	186				Exchange-traded^(a)	1,381		(1,149		)	232				347		(258		)	89
Total interest rate contracts	Total interest rate contracts	371,090		(347,426		)	23,664				264,953		(245,490		)	19,463				Total interest rate contracts	395,260		(365,602		)	29,658				308,994		(285,873		)	23,121
Credit contracts:	Credit contracts:																			Credit contracts:
OTC	OTC	11,168		(10,682		)	486				12,648		(12,261		)	387				OTC	16,918		(16,106		)	812				10,743		(10,317		)	426
OTC–cleared	OTC–cleared	4,321		(4,197		)	124				7,267		(7,222		)	45				OTC–cleared	2,828		(2,789		)	39				3,864		(3,858		)	6
Total credit contracts	Total credit contracts	15,489		(14,879		)	610				19,915		(19,483		)	432				Total credit contracts	19,746		(18,895		)	851				14,607		(14,175		)	432
Foreign exchange contracts:	Foreign exchange contracts:																			Foreign exchange contracts:
OTC	OTC	160,181		(150,271		)	9,910				163,862		(153,988		)	9,874				OTC	236,738		(223,245		)	13,493				136,252		(129,324		)	6,928
OTC–cleared	OTC–cleared	176		(174		)	2				235		(226		)	9				OTC–cleared	1,363		(1,287		)	76				185		(152		)	33
Exchange-traded^(a)	Exchange-traded^(a)	20		(6		)	14				32		(21		)	11				Exchange-traded^(a)	70		(7		)	63				10		(6		)	4
Total foreign exchange contracts	Total foreign exchange contracts	160,377		(150,451		)	9,926				164,129		(154,235		)	9,894				Total foreign exchange contracts	238,171		(224,539		)	13,632				136,447		(129,482		)	6,965
Equity contracts:	Equity contracts:																			Equity contracts:
OTC	OTC	22,195		(20,281		)	1,914				26,178		(23,879		)	2,299				OTC	48,813		(44,174		)	4,639				23,106		(20,820		)	2,286
Exchange-traded^(a)	Exchange-traded^(a)	21,678		(18,688		)	2,990				18,876		(15,460		)	3,416				Exchange-traded^(a)	43,646		(38,756		)	4,890				19,654		(18,430		)	1,224
Total equity contracts	Total equity contracts	43,873		(38,969		)	4,904				45,054		(39,339		)	5,715				Total equity contracts	92,459		(82,930		)	9,529				42,760		(39,250		)	3,510
Commodity contracts:	Commodity contracts:																			Commodity contracts:
OTC	OTC	7,714		(5,954		)	1,760				7,448		(5,261		)	2,187				OTC	16,410		(11,590		)	4,820				7,093		(5,149		)	1,944
OTC–cleared	OTC–cleared	26		(25		)	1				—		—			—				OTC–cleared	34		(34		)	—				28		(28		)	—
Exchange-traded^(a)	Exchange-traded^(a)	9,151		(9,117		)	34				8,815		(8,218		)	597				Exchange-traded^(a)	15,075		(14,667		)	408				6,154		(5,903		)	251
Total commodity contracts	Total commodity contracts	16,891		(15,096		)	1,795				16,263		(13,479		)	2,784				Total commodity contracts	31,519		(26,291		)	5,228				13,275		(11,080		)	2,195
Derivative receivables with appropriate legal opinion	Derivative receivables with appropriate legal opinion	607,720		(566,821		)	40,899			^(d)	510,314		(472,026		)	38,288			^(d)	Derivative receivables with appropriate legal opinion	777,155		(718,257		)	58,898			^(d)	516,083		(479,860		)	36,223			^(d)
Derivative receivables where an appropriate legal opinion has not been either sought or obtained	Derivative receivables where an appropriate legal opinion has not been either sought or obtained	14,678					14,678				15,925					15,925				Derivative receivables where an appropriate legal opinion has not been either sought or obtained	22,750					22,750				13,543					13,543
Total derivative receivables recognized on the Consolidated balance sheets	Total derivative receivables recognized on the Consolidated balance sheets	$	622,398				$	55,577			$	526,239				$	54,213			Total derivative receivables recognized on the Consolidated balance sheets	$	799,905				$	81,648			$	529,626				$	49,766
Collateral not nettable on the Consolidated balance sheets^(b)(c)	Collateral not nettable on the Consolidated balance sheets^(b)(c)						(13,224		)							(13,046		)		Collateral not nettable on the Consolidated balance sheets^(b)(c)						(22,623		)							(14,226		)
Net amounts	Net amounts						$	42,353								$	41,167			Net amounts						$	59,025								$	35,540


		September 30, 2019									December 31, 2018										March 31, 2020									December 31, 2019
(in millions)	(in millions)	Gross derivative payables		Amounts netted on the Consolidated balance sheets			Net derivative payables				Gross derivative payables		Amounts netted on the Consolidated balance sheets			Net derivative payables				(in millions)	Gross derivative payables		Amounts netted on the Consolidated balance sheets			Net derivative payables				Gross derivative payables		Amounts netted on the Consolidated balance sheets			Net derivative payables
U.S. GAAP nettable derivative payables	U.S. GAAP nettable derivative payables																			U.S. GAAP nettable derivative payables
Interest rate contracts:	Interest rate contracts:																			Interest rate contracts:
OTC	OTC	$	321,553	$	(313,017	)	$	8,536			$	233,404	$	(228,369	)	$	5,035			OTC	$	343,787	$	(334,453	)	$	9,334			$	267,311	$	(260,229	)	$	7,082
OTC–cleared	OTC–cleared	15,176		(14,960		)	216				7,163		(6,494		)	669				OTC–cleared	16,701		(16,051		)	650				10,217		(10,138		)	79
Exchange-traded^(a)	Exchange-traded^(a)	585		(513		)	72				210		(135		)	75				Exchange-traded^(a)	1,410		(1,150		)	260				365		(303		)	62
Total interest rate contracts	Total interest rate contracts	337,314		(328,490		)	8,824				240,777		(234,998		)	5,779				Total interest rate contracts	361,898		(351,654		)	10,244				277,893		(270,670		)	7,223
Credit contracts:	Credit contracts:																			Credit contracts:
OTC	OTC	13,130		(11,254		)	1,876				13,412		(11,895		)	1,517				OTC	17,731		(16,080		)	1,651				11,570		(10,080		)	1,490
OTC–cleared	OTC–cleared	3,797		(3,649		)	148				6,716		(6,714		)	2				OTC–cleared	2,691		(2,686		)	5				3,390		(3,389		)	1
Total credit contracts	Total credit contracts	16,927		(14,903		)	2,024				20,128		(18,609		)	1,519				Total credit contracts	20,422		(18,766		)	1,656				14,960		(13,469		)	1,491
Foreign exchange contracts:	Foreign exchange contracts:																			Foreign exchange contracts:
OTC	OTC	162,336		(150,537		)	11,799				160,930		(152,161		)	8,769				OTC	249,340		(231,457		)	17,883				142,360		(131,792		)	10,568
OTC–cleared	OTC–cleared	190		(185		)	5				274		(268		)	6				OTC–cleared	1,369		(1,273		)	96				186		(152		)	34
Exchange-traded^(a)	Exchange-traded^(a)	14		(4		)	10				16		(3		)	13				Exchange-traded^(a)	42		(19		)	23				12		(6		)	6
Total foreign exchange contracts	Total foreign exchange contracts	162,540		(150,726		)	11,814				161,220		(152,432		)	8,788				Total foreign exchange contracts	250,751		(232,749		)	18,002				142,558		(131,950		)	10,608
Equity contracts:	Equity contracts:																			Equity contracts:
OTC	OTC	27,010		(21,600		)	5,410				29,437		(25,544		)	3,893				OTC	50,264		(43,401		)	6,863				27,594		(21,778		)	5,816
Exchange-traded^(a)	Exchange-traded^(a)	20,365		(18,688		)	1,677				16,285		(15,490		)	795				Exchange-traded^(a)	39,581		(38,764		)	817				20,216		(18,426		)	1,790
Total equity contracts	Total equity contracts	47,375		(40,288		)	7,087				45,722		(41,034		)	4,688				Total equity contracts	89,845		(82,165		)	7,680				47,810		(40,204		)	7,606
Commodity contracts:	Commodity contracts:																			Commodity contracts:
OTC	OTC	10,450		(6,874		)	3,576				8,930		(4,838		)	4,092				OTC	19,040		(11,070		)	7,970				8,714		(6,235		)	2,479
OTC–cleared	OTC–cleared	25		(25		)	—				—		—			—				OTC–cleared	39		(39		)	—				30		(30		)	—
Exchange-traded^(a)	Exchange-traded^(a)	10,004		(9,123		)	881				8,259		(8,208		)	51				Exchange-traded^(a)	14,838		(14,646		)	192				6,012		(5,862		)	150
Total commodity contracts	Total commodity contracts	20,479		(16,022		)	4,457				17,189		(13,046		)	4,143				Total commodity contracts	33,917		(25,755		)	8,162				14,756		(12,127		)	2,629
Derivative payables with appropriate legal opinion	Derivative payables with appropriate legal opinion	584,635		(550,429		)	34,206			^(d)	485,036		(460,119		)	24,917			^(d)	Derivative payables with appropriate legal opinion	756,833		(711,089		)	45,744			^(d)	497,977		(468,420		)	29,557			^(d)
Derivative payables where an appropriate legal opinion has not been either sought or obtained	Derivative payables where an appropriate legal opinion has not been either sought or obtained	13,584					13,584				16,852					16,852				Derivative payables where an appropriate legal opinion has not been either sought or obtained	19,343					19,343				14,151					14,151
Total derivative payables recognized on the Consolidated balance sheets	Total derivative payables recognized on the Consolidated balance sheets	$	598,219				$	47,790			$	501,888				$	41,769			Total derivative payables recognized on the Consolidated balance sheets	$	776,176				$	65,087			$	512,128				$	43,708
Collateral not nettable on the Consolidated balance sheets^(b)(c)	Collateral not nettable on the Consolidated balance sheets^(b)(c)						(9,236		)							(4,449		)		Collateral not nettable on the Consolidated balance sheets^(b)(c)						(10,960		)							(7,896		)
Net amounts	Net amounts						$	38,554								$	37,320			Net amounts						$	54,127								$	35,812


(a)	Exchange-traded derivative balances that relate to futures contracts are settled daily.

(b)

Represents liquid security collateral as well as cash collateral held at third-party custodians related to derivative instruments where an appropriate legal opinion has been obtained. For some counterparties, the collateral amounts of financial instruments may exceed the derivative receivables and derivative payables balances. Where this is the case, the total amount reported is limited to the net derivative receivables and net derivative payables balances with that counterparty.


(c)	Derivative collateral relates only to OTC and OTC-cleared derivative instruments.

(d)

Net derivatives receivable included cash collateral netted of ~~$78.8~~$90.9 billion and ~~$55.2~~$65.9 billion at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, respectively. Net derivatives payable included cash collateral netted of ~~$62.4~~$83.7 billion and ~~$43.3~~$54.4 billion at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, respectively. Derivative cash collateral relates to OTC and OTC-cleared derivative instruments.

Liquidity risk and credit-related contingent features

Refer to Note 5 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a more detailed discussion of liquidity risk and credit-related contingent features related to the Firm’s derivative 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, 2019,~~March 31, 2020, and December 31, ~~2018.~~2019.

													OTC and OTC-cleared derivative payables containing downgrade triggers
(in millions)	September 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Aggregate fair value of net derivative payables		$	15,466		$	9,396		$	29,521		$	14,819
Collateral posted		14,388			8,907			28,184			13,329

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, N.A., at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~ 2019, related to OTC and OTC-cleared derivative contracts with contingent collateral or termination features that may be triggered upon a ratings downgrade. Derivatives contracts generally require additional collateral to be posted or terminations to be triggered when the predefined threshold rating is breached. A downgrade by a single rating agency that does not result in a rating lower than a preexisting corresponding rating provided by another major rating agency will generally not result in additional collateral (except in certain instances in which additional initial margin may be required upon a ratings downgrade), nor in termination payments requirements. The liquidity impact in the table is calculated based upon a downgrade below the lowest current rating of the rating agencies referred to in the derivative contract.


Liquidity impact of downgrade triggers on OTC and OTC-cleared derivatives	Liquidity impact of downgrade triggers on OTC and OTC-cleared derivatives								Liquidity impact of downgrade triggers on OTC and OTC-cleared derivatives
	September 30, 2019				December 31, 2018				March 31, 2020				December 31, 2019
(in millions)	Single-notch downgrade		Two-notch downgrade		Single-notch downgrade		Two-notch downgrade		Single-notch downgrade		Two-notch downgrade		Single-notch downgrade		Two-notch downgrade
Amount of additional collateral to be posted upon downgrade^(a)	$	223	$	1,420	$	76	$	947	$	180	$	1,286	$	189	$	1,467
Amount required to settle contracts with termination triggers upon downgrade^(b)	184		1,475		172		764		191		2,749		104		1,398


(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,~~11, 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 was not material at ~~both September 30, 2019~~March 31, 2020 and December 31, ~~2018.~~2019.

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,~~March 31, 2020 and 2019, ~~and 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^(e)					OCI impact			Gains/(losses) recorded in income							Income statement impact of excluded components^(e)					OCI impact
Three months ended September 30, 2019 (in millions)	Derivatives			Hedged items			Income statement impact		Amortization approach			Changes in fair value		Derivatives - Gains/(losses) recorded in OCI^(f)
Three months ended March 31, 2020 (in millions)																	Derivatives		Hedged items			Income statement impact		Amortization approach			Changes in fair value		Derivatives - Gains/(losses) recorded in OCI^(f)
Contract type
Interest rate^(a)(b)	$	1,770		$	(1,550	)	$	220	$	—		$	228	$	—		$	4,087	$	(3,788	)	$	299	$	—		$	214	$	—
Foreign exchange^(c)	(167		)	293			126		(224		)	126		(1		)	576		(488		)	88		(179		)	88		115
Commodity^(d)	278			(232		)	46		—			49		—			1,528		(1,482		)	46		—			49		—
Total	$	1,881		$	(1,489	)	$	392	$	(224	)	$	403	$	(1	)	$	6,191	$	(5,758	)	$	433	$	(179	)	$	351	$	115

Gains/(losses) recorded in income
Income statement impact of
excluded components^(e)

OCI impact
Three months ended September 30, 2018
(in millions) Derivatives Hedged items Income statement impact Amortization approach Changes in fair value
Derivatives - Gains/(losses) recorded in OCI^(f)
Contract type
Interest rate^(a)(b)
$ (870 ) $ 1,032
$ 162
$ —
$ 160
$ —
Foreign exchange^(c)
277
(165 ) 112
(137 ) 112
45
Commodity^(d)
454
(461 ) (7 ) —
(5 ) —
Total $ (139 ) $ 406
$ 267
$ (137 ) $ 267
$ 45

Gains/(losses) recorded in income
Income statement impact of
excluded components^(e)
OCI impact
Nine months ended September 30, 2019
(in millions) Derivatives Hedged items Income statement impact Amortization approach Changes in fair value
Derivatives - Gains/(losses) recorded in OCI^(f)
Contract type
Interest rate^(a)(b)
$ 4,996
$ (4,399 ) $ 597
$ —
$ 596
$ —
Foreign exchange^(c)
(31 ) 401
370
(675 ) 370
114
Commodity^(d)
(164 ) 237
73
—
67
—
Total $ 4,801
$ (3,761 ) $ 1,040
$ (675 ) $ 1,033
$ 114


	Gains/(losses) recorded in income								Income statement impact of excluded components^(e)					OCI impact			Gains/(losses) recorded in income								Income statement impact of excluded components^(e)					OCI impact
Nine months ended September 30, 2018 (in millions)	Derivatives			Hedged items			Income statement impact		Amortization approach			Changes in fair value		Derivatives - Gains/(losses) recorded in OCI^(f)
Three months ended March 31, 2019 (in millions)																	Derivatives			Hedged items			Income statement impact		Amortization approach			Changes in fair value		Derivatives - Gains/(losses) recorded in OCI^(f)
Contract type
Interest rate^(a)(b)	$	(2,747	)	$	3,214		$	467	$	—		$	459	$	—		$	1,464		$	(1,293	)	$	171	$	—		$	172	$	—
Foreign exchange^(c)	797			(452		)	345		(404		)	345		(96		)	(290		)	409			119		(222		)	119		3
Commodity^(d)	649			(626		)	23		—			29		—			(288		)	294			6		—			1		—
Total	$	(1,301	)	$	2,136		$	835	$	(404	)	$	833	$	(96	)	$	886		$	(590	)	$	296	$	(222	)	$	292	$	3


(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)

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. ~~The~~Excluded components may impact earnings either through amortization of the initial amount ~~of the excluded components may be amortized into income~~ over the life of the derivative, or ~~changes in~~through fair value ~~may be~~changes recognized in the current ~~period earnings.~~period.


(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~~March 31, 2020 and December 31, ~~2018,~~ 2019, 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, 2019 (in millions)			Active hedging relationships			Discontinued hedging relationships^(d)			Total
March 31, 2020 (in millions)													Carrying amount of the hedged items^(a)(b)		Carrying amount of the hedged items^(a)(b)				Active hedging relationships			Discontinued hedging relationships^(d)(e)			Total
Assets	Carrying amount of the hedged items^(a)(b)
Investment securities - AFS	$	123,914	^(c)	$	3,664		$	261		$	3,925		$	125,652	Carrying amount of the hedged items^(a)(b)			^(c)	$	8,214		$	246		$	8,460
Liabilities
Long-term debt	$	163,494		$	9,957		$	125		$	10,082		$	172,446		$	17,138		$	747		$	17,885
Beneficial interests issued by consolidated VIEs	2,362			—			(11		)	(11		)	2,368			—			(6		)	(6		)

	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:
December 31, 2018 (in millions)			Active hedging relationships			Discontinued hedging relationships^(d)			Total
December 31, 2019 (in millions)													Carrying amount of the hedged items^(a)(b)		Carrying amount of the hedged items^(a)(b)				Active hedging relationships			Discontinued hedging relationships^(d)(e)			Total
Assets	Carrying amount of the hedged items^(a)(b)
Investment securities - AFS	$	55,313	^(c)	$	(1,105	)	$	381		$	(724	)	$	125,860	Carrying amount of the hedged items^(a)(b)			^(c)	$	2,110		$	278		$	2,388
Liabilities
Long-term debt	$	139,915		$	141		$	8		$	149		$	157,545		$	6,719		$	161		$	6,880
Beneficial interests issued by consolidated VIEs	6,987			—			(33		)	(33		)	2,365			—			(8		)	(8		)

(a)

Excludes physical commodities with a carrying value of ~~$10.3~~$6.7 billion and ~~$6.8~~$6.5 billion at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, 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~~Since the Firm exits these positions at fair value, there is no incremental impact to net income in future periods.

(b)

Excludes hedged items where only foreign currency risk is the designated hedged risk, as basis adjustments related to foreign currency hedges will not reverse through the income statement in future periods. At ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the carrying amount excluded for ~~available-for-sale~~AFS securities is ~~$15.3~~$16.7 billion and ~~$14.6~~$14.9 billion, respectively, and for long-term debt is ~~$4.1~~$1.9 billion and ~~$7.3~~$2.8 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.


(e)	Positive amounts related to assets represent cumulative fair value hedge basis adjustments that will reduce net interest income in future periods. Positive (negative) amounts related to liabilities represent cumulative fair value hedge basis adjustments that will increase (reduce) net interest income in future periods.

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,~~March 31, 2020 and 2019, ~~and 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 item.

Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended September 30, 2019
(in millions) Amounts reclassified from AOCI to income Amounts recorded in OCI Total 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)
Three months ended September 30, 2018
(in millions) Amounts reclassified from AOCI to income Amounts recorded in OCI Total change
in OCI
for period
Contract type
Interest rate^(a)
$ 10
$ (30 ) $ (40 )
Foreign exchange^(b)
(19 ) (92 ) (73 )
Total $ (9 ) $ (122 ) $ (113 )

Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Nine months ended September 30, 2019
(in millions) Amounts reclassified from AOCI to income Amounts recorded in OCI
Total change
in OCI
for period
Contract type
Interest rate^(a)
$ (12 ) $ 501
$ 513
Foreign exchange^(b)
(90 ) (37 ) 53
Total $ (102 ) $ 464
$ 566


	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 income		Amounts recorded in OCI			Total change in OCI for period
Three months ended March 31, 2020 (in millions)									Amounts reclassified from AOCI to income			Amounts recorded in OCI			Total change in OCI for period
Contract type
Interest rate^(a)	$	36	$	(141	)	$	(177	)	$	(9	)	$	3,461		$	3,470
Foreign exchange^(b)	26		(224		)	(250		)	17			(210		)	(227		)
Total	$	62	$	(365	)	$	(427	)	$	8		$	3,251		$	3,243

									Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended March 31, 2019 (in millions)									Amounts reclassified from AOCI to income			Amounts recorded in OCI			Total change in OCI for period
Contract type
Interest rate^(a)									$	2		$	56		$	54
Foreign exchange^(b)									(41		)	85			126
Total									$	(39	)	$	141		$	180


(a)	Primarily consists of hedges of LIBOR-indexed floating-rate assets and floating-rate liabilities. Gains and losses were recorded in net interest income.


(b)	Primarily consists of hedges of the foreign currency risk of non-U.S. dollar-denominated revenue and expense. The income statement classification of gains and losses follows the hedged item – primarily noninterest revenue and compensation expense.

The Firm did not experience any forecasted transactions that failed to occur for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.

Over the next 12 months, the Firm expects that approximately ~~$(130)~~ $57 million (after-tax) of net ~~losses~~gains recorded in AOCI at ~~September 30, 2019,~~March 31, 2020, related to cash flow hedges will be recognized in income. For 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~~ten years, corresponding to the timing of the originally hedged forecasted cash flows.

For open cash flow hedges, the maximum length of time over which forecasted transactions are hedged is approximately seven years. The Firm’s longer-dated forecasted transactions relate to core lending and borrowing activities.

Net investment hedge gains and losses

The following table presents hedging instruments, by contract type, that were used in net investment hedge accounting relationships, and the pre-tax gains/(losses) recorded on such instruments for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.


	Gains/(losses) recorded in income and other comprehensive income/(loss)											Gains/(losses) recorded in income and other comprehensive income/(loss)
	2019					2018						2020					2019
Three months ended September 30, (in millions)	Amounts recorded in income^(a)(b)			Amounts recorded in OCI		Amounts recorded in income^(a)(b)				Amounts recorded in OCI
Three months ended March 31, (in millions)												Amounts recorded in income^(a)(b)			Amounts recorded in OCI		Amounts recorded in income^(a)(b)			Amounts recorded in OCI
Foreign exchange derivatives		$	17	$	866		$	2		$	311		$	10	$	1,589		$	21	$	(38	)

	Gains/(losses) recorded in income and other comprehensive income/(loss)
	2019					2018
Nine months ended September 30, (in millions)	Amounts recorded in income^(a)(b)			Amounts recorded in OCI		Amounts recorded in income^(a)(b)(c)				Amounts recorded in OCI
Foreign exchange derivatives		$	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)

Excludes amounts reclassified from AOCI to income on the sale or liquidation of hedged entities. ~~During~~There were no sales or liquidations of legal entities that resulted in reclassifications in the nine months ended September 30, 2019, the Firm reclassified net pre-tax gains of $5 million to 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.~~periods presented.

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,~~commitments, 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 March 31,
(in millions)	2019			2018			2019			2018				2020		2019
Contract type
Interest rate^(a)	$	769		$	(42	)	$	1,718		$	(277	)		$	1,292	$	292
Credit^(b)	(21		)	(7		)	(33		)	(17		)		61		(10		)
Foreign exchange^(c)	40			52			15			167			^(d)	106		50
Total	$	788		$	3		$	1,700		$	(127	)	^(d)	$	1,459	$	332


(a)	Primarily represents interest rate derivatives used to hedge the interest rate risk inherent in ~~the~~ mortgage ~~pipeline,~~commitments, warehouse loans and MSRs, as well as written commitments to originate warehouse loans. Gains and losses were recorded predominantly in mortgage fees and related income.

(b)

Relates to credit derivatives used to mitigate credit risk associated with lending exposures in the Firm’s wholesale businesses. These derivatives do not include credit derivatives used to mitigate counterparty credit risk arising from derivative receivables, which is included in gains and losses on derivatives related to market-making activities and other derivatives. Gains and losses were recorded in principal transactions revenue.


(c)	Primarily relates to derivatives used to mitigate foreign exchange risk of specified foreign currency-denominated assets and liabilities. Gains and losses were recorded in principal transactions revenue.


~~(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 6 for information on principal transactions revenue.

Credit derivatives

Refer to Note 5 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a more detailed discussion of credit derivatives. The following tables present a summary of the notional amounts of credit derivatives and credit-related notes the Firm sold and purchased as of March 31, 2020 and December 31, 2019. The Firm does not use notional amounts of credit derivatives as the primary measure of risk management for such derivatives, because the notional amount does not take into account the probability of the occurrence of a credit event, the recovery value of the reference obligation, or related cash instruments and economic hedges, each of which reduces, in the Firm’s view, the risks associated with such derivatives.

Total credit derivatives and credit-related notes


	Maximum payout/Notional amount										Maximum payout/Notional amount
September 30, 2019 (in millions)	Protection sold			Protection purchased with identical underlyings^(b)			Net protection (sold)/purchased^(c)		Other protection purchased^(d)
March 31, 2020 (in millions)											Protection sold			Protection purchased with identical underlyings^(b)			Net protection (sold)/purchased^(c)		Other protection purchased^(d)
Credit derivatives
Credit default swaps	$	(610,946	)		$	623,709	$	12,763	$	3,630	$	(705,723	)		$	721,125	$	15,402	$	4,454
Other credit derivatives^(a)	(55,919		)		61,847		5,928		8,503		(59,153		)		61,245		2,092		7,800
Total credit derivatives	(666,865		)		685,556		18,691		12,133		(764,876		)		782,370		17,494		12,254
Credit-related notes	—				—		—		9,297		—				—		—		9,002
Total	$	(666,865	)		$	685,556	$	18,691	$	21,430	$	(764,876	)		$	782,370	$	17,494	$	21,256

	Maximum payout/Notional amount										Maximum payout/Notional amount
December 31, 2018 (in millions)	Protection sold			Protection purchased with identical underlyings^(b)			Net protection (sold)/purchased^(c)		Other protection purchased^(d)
December 31, 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	$	(697,220	)		$	707,282	$	10,062	$	4,053	$	(562,338	)		$	571,892	$	9,554	$	3,936
Other credit derivatives^(a)	(41,244		)		42,484		1,240		8,488		(44,929		)		52,007		7,078		7,364
Total credit derivatives	(738,464		)		749,766		11,302		12,541		(607,267		)		623,899		16,632		11,300
Credit-related notes	—				—		—		8,425		—				—		—		9,606
Total	$	(738,464	)		$	749,766	$	11,302	$	20,966	$	(607,267	)		$	623,899	$	16,632	$	20,906


(a)	Other credit derivatives predominantly consist of credit swap options and total return swaps.


(b)	Represents the total notional amount of protection purchased where the underlying reference instrument is identical to the reference instrument on protection sold; the notional amount of protection purchased for each individual identical underlying reference instrument may be greater or lower than the notional amount of protection sold.


(c)	Does not take into account the fair value of the reference obligation at the time of settlement, which would generally reduce the amount the seller of protection pays to the buyer of protection in determining settlement value.


(d)	Represents protection purchased by the Firm on referenced instruments (single-name, portfolio or index) where the Firm has not sold any protection on the identical reference instrument.

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, 2019,~~ March 31, 2020, and December 31, ~~2018,~~ 2019, 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, 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
March 31, 2020 (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	$	(106,698	)	$	(316,946	)	$	(75,615	)	$	(499,259	)	$	5,621	$	(1,260	)	$	4,361	$	(119,850	)	$	(377,563	)	$	(84,443	)	$	(581,856	)	$	2,735	$	(4,961	)	$	(2,226	)
Noninvestment-grade	(39,180		)	(103,249		)	(25,177		)	(167,606		)	4,699		(3,415		)	1,284		(40,423		)	(115,600		)	(26,997		)	(183,020		)	1,837		(9,104		)	(7,267		)
Total	$	(145,878	)	$	(420,195	)	$	(100,792	)	$	(666,865	)	$	10,320	$	(4,675	)	$	5,645	$	(160,273	)	$	(493,163	)	$	(111,440	)	$	(764,876	)	$	4,572	$	(14,065	)	$	(9,493	)


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
December 31, 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	$	(115,443	)	$	(402,325	)	$	(43,611	)	$	(561,379	)	$	5,720	$	(2,791	)	$	2,929		$	(114,460	)	$	(311,407	)	$	(42,129	)	$	(467,996	)	$	6,153	$	(911	)	$	5,242
Noninvestment-grade	(45,897		)	(119,348		)	(11,840		)	(177,085		)	4,719		(5,660		)	(941		)	(41,661		)	(87,769		)	(9,841		)	(139,271		)	4,281		(2,882		)	1,399
Total	$	(161,340	)	$	(521,673	)	$	(55,451	)	$	(738,464	)	$	10,439	$	(8,451	)	$	1,988		$	(156,121	)	$	(399,176	)	$	(51,970	)	$	(607,267	)	$	10,434	$	(3,793	)	$	6,641


(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 56 – Noninterest revenue and noninterest expense

Noninterest revenue

Refer to Note 6 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a discussion of the components of and accounting policies for the Firm’s noninterest 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 March 31,
(in millions)	2019		2018		2019		2018		2020		2019
Underwriting
Equity	$	517	$	417	$	1,293	$	1,342	$	327	$	261
Debt	955		836		2,720		2,596		1,044		945
Total underwriting	1,472		1,253		4,013		3,938		1,371		1,206
Advisory	495		579		1,645		1,798		495		634
Total investment banking fees	$	1,967	$	1,832	$	5,658	$	5,736	$	1,866	$	1,840

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 in CIB and cash deployment activities in Treasury and CIO. Refer to Note 67 for further information on interest income and interest expense.

Trading revenue is presented primarily by instrument type. The Firm’s client-driven market-making businesses generally utilize a variety of instrument types in connection with their market-making and related risk-management activities; accordingly, the trading revenue presented in the table below is not representative of the total revenue of any individual ~~line of business.~~LOB.


	Three months ended September 30,					Nine months ended September 30,						Three months ended March 31,
(in millions)	2019		2018			2019			2018			2020				2019
Trading revenue by instrument type
Interest rate(a)	$	835	$	338		$	1,901		$	1,784		$	452			$	799	^(d)
Credit(b)	328		202			1,375			1,230			(702		)	^(c)	619		^(d)
Foreign exchange	892		937			2,509			2,706			1,467				888
Equity	1,003		1,363			4,530			4,376			1,348				1,361		^(d)
Commodity	372		277			982			800			437				383
Total trading revenue	3,430		3,117			11,297			10,896			3,002				4,050
Private equity gains/(losses)^(a)	19		(153		)	(58		)	(198		)	(65		)		26
Principal transactions	$	3,449	$	2,964		$	11,239		$	10,698		$	2,937			$	4,076


(a)	~~The third quarter~~Includes the impact of ~~2018 included~~changes in funding valuation adjustments on derivatives.


(b)	Includes the impact of changes in credit valuation adjustments on derivatives, net of the associated hedging activities.


(c)	Includes markdowns ~~of approximately $220 million~~ on ~~certain private equity investments~~held-for-sale positions, including unfunded commitments, in ~~Corporate,~~the bridge financing portfolio.


(d)	Prior-period amounts were revised to conform with ~~$170 million recorded within principal transactions revenue and $50 million in other income.~~the current presentation.

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 March 31,
(in millions)	2019		2018		2019		2018		2020		2019
Lending-related fees	$	286	$	284	$	861	$	838	$	291	$	290
Deposit-related fees(a)	1,340		1,258		3,782		3,676		1,415		1,269
Total lending- and deposit-related fees	$	1,626	$	1,542	$	4,643	$	4,514	$	1,706	$	1,559


(a)	In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts were revised to conform with the current presentation.

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 March 31,
(in millions)	2019		2018		2019		2018		2020		2019
Asset management fees
Investment management fees^(a)	$	2,738	$	2,716	$	8,013	$	8,081	$	2,785	$	2,577
All other asset management fees^(b)	82		79		229		211		93		69
Total asset management fees	2,820		2,795		8,242		8,292		2,878		2,646

Total administration fees^(c)	567		533		1,646		1,651		554		535

Commissions and other fees
Brokerage commissions(d)	634		604		1,861		1,887		864		586
All other commissions and fees(e)	330		378		1,069		1,093		244		270
Total commissions and fees	964		982		2,930		2,980		1,108		856
Total asset management, administration and commissions	$	4,351	$	4,310	$	12,818	$	12,923	$	4,540	$	4,037


(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.


(d)	Represents commissions earned when the Firm acts as a broker, by facilitating its clients’ purchases and sales of securities and other financial instruments.


(e)	In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts were revised to conform with the current presentation.

Card income

The following table presents the components of card income:


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(in millions)	2019			2018			2019			2018			2020			2019
Interchange and merchant processing income	$	5,127		$	4,781		$	15,032		$	13,863		$	4,782		$	4,721
Rewards costs and partner payments^(a)	(3,669		)	(3,276		)	(10,515		)	(9,687		)	(3,523		)	(3,236		)
Other card income^(b)(a)	(175		)	(177		)	(594		)	(553		)	(205		)	(211		)
Total card income	$	1,283		$	1,328		$	3,923		$	3,623		$	1,054		$	1,274


(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~~the amortization of account origination costs ~~which are deferred~~ and ~~recognized on a straight-line basis over a 12-month period.~~annual fees.

Refer to Note 1415 Goodwill and MSRs for information on mortgage fees and related income.

Refer to Note ~~16 Leases~~17 for information on operating lease income included 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 March 31,
(in millions)	2019		2018		2019			2018		2020		2019
Legal expense/(benefit)	$	10	$	20	$	(2	)	$	90	$	197	$	(81	)
FDIC-related expense	114		349		378			1,100		99		143

Note 67 – Interest income and Interest expense

Refer to Note 7 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a description of JPMorgan Chase’s accounting policies regarding interest income and interest 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 March 31,
(in millions)	2019		2018		2019		2018		2020		2019
Interest income
Loans^(a)	$	12,586	$	12,207	$	38,192	$	34,915	$	11,932	$	12,880
Taxable securities	2,132		1,402		5,712		4,098		2,233		1,705
Non-taxable securities^(b)	318		394		1,021		1,199		300		363
Total investment securities^(a)	2,450		1,796		6,733		5,297		2,533		2,068
Trading assets - debt instruments	2,659		2,155		8,343		6,369		2,461		2,769
Federal funds sold and securities purchased under resale agreements	1,542		952		4,865		2,490		1,095		1,647
Securities borrowed^(c)	434		248		1,298		549		152		397
Deposits with banks	898		1,585		3,200		4,449		569		1,170
All other interest-earning assets^(d)(c)	552		496		1,482		1,430		419		458
Total interest income^(c)	21,121		19,439		64,113		55,499		19,161		21,389
Interest expense
Interest-bearing deposits	2,409		1,621		7,010		4,021		1,575		2,188
Federal funds purchased and securities loaned or sold under repurchase agreements	1,241		827		3,577		2,164		787		1,110
Short-term borrowings^(e)(d)	261		288		1,051		757		151		427
Trading liabilities – debt and all other interest-bearing liabilities^(f)(e)	660		617		2,141		1,674		372		719
Long-term debt	2,188		2,056		6,796		5,812		1,747		2,342
Beneficial interest issued by consolidated VIEs	134		122		459		366		90		150
Total interest expense^(c)	6,893		5,531		21,034		14,794		4,722		6,936
Net interest income	14,228		13,908		43,079		40,705		14,439		14,453
Provision for credit losses	1,514		948		4,158		3,323		8,285		1,495
Net interest income after provision for credit losses	$	12,714	$	12,960	$	38,921	$	37,382	$	6,154	$	12,958


(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)

~~In the second quarter of 2019, the Firm implemented certain presentation changes that impacted~~Includes interest ~~income and interest expense, but had no effect~~earned on net interest income. These changes were made to align the accounting treatment between the balance sheet and the related interest income or expense, primarily by offsetting interest income and expense for certain prime brokerage-related held-for-investment customer receivables and payables that are currently presented as a single margin account on the balance sheet. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation.


~~(d)~~	~~Includes~~ prime brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets which are classified in other assets on the Consolidated balance sheets.


~~(e)~~(d)	Includes commercial paper.


~~(f)~~(e)	Other interest-bearing liabilities ~~include~~includes interest expense on prime brokerage-related customer payables.

Note 78 – Pension and other postretirement employee benefit plans

Refer to Note 8 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a discussion of JPMorgan Chase’s pension and OPEB 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 March 31,
	2019			2018			2019			2018			2019			2018			2019			2018			2020			2019			2020			2019
	Pension plans						OPEB plans						Pension plans						OPEB plans						Pension plans						OPEB plans
Components of net periodic benefit cost
Benefits earned during the period	$	88		$	88		$	—		$	—		$	266		$	267		$	—		$	—		$	8		$	89		$	—		$	—
Interest cost on benefit obligations	148			139			6			6			447			417			18			18			119			150			5			6
Expected return on plan assets	(227		)	(246		)	(28		)	(25		)	(686		)	(741		)	(84		)	(77		)	(191		)	(230		)	(27		)	(28		)
Amortization:
Net (gain)/loss	42			26			—			—			125			78			—			—			4			42			—			—
Prior service (credit)/cost	—			(7		)	—			—			2			(19		)	—			—			1			1			—			—
Net periodic defined benefit cost	51			—			(22		)	(19		)	154			2			(66		)	(59		)	(59		)	52			(22		)	(22		)
Other defined benefit pension plans^(a)	7			6			NA			NA			20			21			NA			NA			9			6			NA			NA
Total defined benefit plans	58			6			(22		)	(19		)	174			23			(66		)	(59		)	(50		)	58			(22		)	(22		)
Total defined contribution plans	255			229			NA			NA			718			661			NA			NA			299			220			NA			NA
Total pension and OPEB cost included in noninterest expense	$	313		$	235		$	(22	)	$	(19	)	$	892		$	684		$	(66	)	$	(59	)	$	249		$	278		$	(22	)	$	(22	)


(a)	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, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Fair value of plan assets
Defined benefit pension plans	$	20.1	$	18.1	$	19.3	$	20.4
OPEB plans	2.9		2.6		2.7		3.0

There are 0 expected contributions to the U.S. defined benefit pension plan for ~~2019.~~2020.

Note 89 – Employee share-based incentives

Refer to Note 9 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a discussion of the accounting policies and other information relating to employee share-based 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 March 31,
(in millions)	2019		2018		2019		2018		2020		2019
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
Cost of prior grants of RSUs, performance share units (“PSUs”), stock appreciation rights (“SARs”) and employee stock options that are amortized over their applicable vesting periods									$	334	$	339
Accrual of estimated costs of share-based awards to be granted in future periods including those to full-career eligible employees	294		240		900		852		310		314
Total noncash compensation expense related to employee share-based incentive plans	$	559	$	522	$	1,782	$	1,808	$	644	$	653

In the first quarter of ~~2019,~~ 2020, in connection with its annual incentive grant for the ~~2018~~2019 performance year, the Firm granted 2115 million RSUs and ~~630~~496 thousand PSUs with weighted-average grant date fair values of ~~$98.98~~$135.64 per RSU and ~~$98.96~~$135.30 per PSU.

Note 910 – Investment securities

Investment securities consist of debt securities that are classified as AFS or HTM. Debt securities classified as trading assets are discussed in Note 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, 2019, the investment securities portfolio consisted of debt securities with an average credit rating of~~ ~~AA+~~ ~~(based upon external ratings where available,~~

~~and where not available, based primarily upon internal ratings which correspond to ratings as defined by S&P and Moody’s).~~ Refer to Note 10 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional information regarding the investment securities portfolio.

Effective January 1, 2020, the Firm adopted the CECL accounting guidance, which also amended the AFS

securities impairment guidance. Refer to Note 1 for further information.

During the first quarter of 2020, the Firm transferred $26.1 billion of U.S. GSE and government agency MBS from AFS to HTM for capital management purposes. These securities were transferred at fair value in a non-cash transaction. AOCI included pretax unrealized gains of $1.0 billion on the securities at the date of transfer.

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								March 31, 2020								December 31, 2019
(in millions)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value		Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value		Amortized cost^(e)		Gross unrealized gains		Gross unrealized losses		Fair value		Amortized cost^(e)		Gross unrealized gains		Gross unrealized losses		Fair 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	$	131,141	$	4,673	$	194	$	135,620	$	107,811	$	2,395	$	89	$	110,117
Residential:
U.S.	10,083		273		6		10,350		5,877		79		31		5,925		12,241		162		199		12,204		10,223		233		6		10,450
Non-U.S.	2,490		64		2		2,552		2,529		72		6		2,595		3,364		29		154		3,239		2,477		64		1		2,540
Commercial	5,228		100		4		5,324		6,758		43		147		6,654		6,428		39		154		6,313		5,137		64		13		5,188
Total mortgage-backed securities	120,887		2,993		73		123,807		84,190		788		1,158		83,820		153,174		4,903		701		157,376		125,648		2,756		109		128,295
U.S. Treasury and government agencies	141,646		376		493		141,529		55,771		366		78		56,059		148,476		2,514		755		150,235		139,162		449		175		139,436
Obligations of U.S. states and municipalities	28,871		2,193		—		31,064		36,221		1,582		80		37,723		28,886		1,712		53		30,545		27,693		2,118		1		29,810
Certificates of deposit	74		—		—		74		75		—		—		75		76		—		—		76		77		—		—		77
Non-U.S. government debt securities	21,644		524		10		22,158		23,771		351		20		24,102		22,369		400		8		22,761		21,427		377		17		21,787
Corporate debt securities	1,596		39		1		1,634		1,904		23		9		1,918		838		—		36		802		823		22		—		845
Asset-backed securities:
Collateralized loan obligations	27,942		18		52		27,908		19,612		1		176		19,437		33,022		—		2,047		30,975		25,038		9		56		24,991
Other	5,199		57		9		5,247		7,225		57		22		7,260		7,263		24		113		7,174		5,438		40		20		5,458
Total available-for-sale securities(b)	347,859		6,200		638		353,421		228,769		3,168		1,543		230,394		394,104		9,553		3,713		399,944		345,306		5,771		378		350,699
Held-to-maturity securities(c)
Mortgage-backed securities:
U.S. GSEs and government agencies^(a)	35,976		1,250		20		37,206		26,610		134		200		26,544		61,513		2,253		88		63,678		36,523		1,165		62		37,626
Commercial																	107		12		—		120		—		—		—		—
Total mortgage-backed securities	35,976		1,250		20		37,206		26,610		134		200		26,544		61,620		2,265		88		63,798		36,523		1,165		62		37,626
U.S. Treasury and government agencies	51		—		—		51		—		—		—		—		51		2		—		53		51		—		1		50
Obligations of U.S. states and municipalities	4,803		317		—		5,120		4,824		105		15		4,914		4,842		307		—		5,167		4,797		299		—		5,096
Total held-to-maturity securities	40,830		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
Asset-backed securities:
Collateralized loan obligations																	4,687		—		181		4,506		6,169		—		—		6,169
Total held-to-maturity securities, net of allowance for credit losses^(d)																	71,200		2,574		269		73,524		47,540		1,464		63		48,941
Total investment securities, net of allowance for credit losses^(d)																	$	465,304	$	12,127	$	3,982	$	473,468	$	392,846	$	7,235	$	441	$	399,640

(a)

Includes AFS U.S. GSE obligations with fair values of ~~$78.8~~$86.1 billion and ~~$50.7~~$78.5 billion, and HTM U.S. GSE obligations with amortized cost of ~~$30.8~~$51.9 billion and ~~$20.9~~$31.6 billion, at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, respectively. As of ~~September 30, 2019,~~March 31, 2020, 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~~were $83.9 billion and ~~$72.0~~$87.3 billion, and ~~$37.8~~$51.0 billion and ~~$38.8~~$52.7 billion, respectively.


(b)	There was 0 allowance for credit losses on AFS securities at March 31, 2020.


(c)	The Firm purchased $205 million of HTM securities for the three months ended March 31, 2020; there were 0 purchases of HTM securities for the three months ended March 31, 2019.


(d)	HTM securities measured at amortized cost are reported net of allowance for credit losses of $19 million at March 31, 2020.


(e)	Excludes $2.1 billion and $1.9 billion of accrued interest receivables at March 31, 2020 and December 31, 2019, respectively. The Firm did 0t reverse through interest income any accrued interest receivables for the three months ended March 31, 2020 and 2019.

At March 31, 2020, the investment securities portfolio consisted of debt securities with an average credit rating of AA+ (based upon external ratings where available, and where not available, based primarily upon internal risk ratings). Risk ratings are used to identify the credit quality of securities and differentiate risk within the portfolio. The Firm’s internal risk ratings generally align with the qualitative characteristics (e.g., borrower capacity to meet financial commitments and vulnerability to changes in the

~~Investment~~

economic environment) defined by S&P and Moody’s, however the quantitative characteristics (e.g., PDs and LGDs) may differ as they reflect internal historical experiences and assumptions.Risk ratings are assigned at acquisition, are reviewed on a regular and ongoing basis by Credit Risk Management and are adjusted as necessary over the life of the investment for updated information affecting the issuer’s ability to fulfill its obligations.

AFS securities impairment

The following tables present the fair value and gross unrealized losses ~~for investment securities~~ by aging category for AFS securities at ~~September 30, 2019,~~March 31, 2020 and December 31, ~~2018.~~2019. The tables exclude U.S. Treasury and government agency securities and U.S. GSE and government agency MBS with unrealized losses of $949 million and $264 million, at March 31, 2020 and December 31, 2019, respectively; changes in the value of these securities are generally driven by changes in interest rates rather than changes in their credit profile given the explicit or implicit guarantees provided by the U.S. government.

Investment securities with gross unrealized losses
Less than 12 months 12 months or more
September 30, 2019 (in millions) Fair value
Gross
unrealized losses
Fair value
Gross
unrealized losses
Total fair value Total gross unrealized losses
Available-for-sale securities
Mortgage-backed securities:
U.S. GSEs and government agencies $ 8,505
$ 37
$ 2,952
$ 24
$ 11,457
$ 61
Residential:
U.S.
—
—
558
6
558
6
Non-U.S. 47
—
472
2
519
2
Commercial 752
4
165
—
917
4
Total mortgage-backed securities 9,304
41
4,147
32
13,451
73
U.S. Treasury and government agencies 84,152
489
540
4
84,692
493
Obligations of U.S. states and municipalities 41
—
23
—
64
—
Certificates of deposit 74
—
—
—
74
—
Non-U.S. government debt securities 3,189
6
1,357
4
4,546
10
Corporate debt securities 83
—
36
1
119
1
Asset-backed securities:
Collateralized loan obligations 7,086
8
6,684
44
13,770
52
Other 506
3
1,598
6
2,104
9
Total available-for-sale securities 104,435
547
14,385
91
118,820
638
Held-to-maturity securities
Mortgage-backed securities
U.S. GSEs and government agencies 2,240
20
86
—
2,326
20
Total mortgage-backed securities 2,240
20
86
—
2,326
20
U.S. Treasury and government agencies

51
—
—
—
51
—
Obligations of U.S. states and municipalities —
—
—
—
—
—
Total held-to-maturity securities 2,291
20
86
—
2,377
20
Total investment securities
with gross unrealized losses
$ 106,726
$ 567
$ 14,471
$ 91
$ 121,197
$ 658



	Available-for-sale securities with gross unrealized losses
	Less than 12 months		12 months or more
March 31, 2020 (in millions)	Fair value	Gross unrealized losses	Fair value	Gross unrealized losses	Total fair value	Total gross unrealized losses
Available-for-sale securities
Mortgage-backed securities:
Residential:
U.S.	5,847	188	320	11	6,167	199
Non-U.S.	2,354	150	259	4	2,613	154
Commercial	4,136	136	191	18	4,327	154
Total mortgage-backed securities	12,337	474	770	33	13,107	507
Obligations of U.S. states and municipalities	1,059	53	—	—	1,059	53
Certificates of deposit	76	—	—	—	76	—
Non-U.S. government debt securities	2,303	5	347	3	2,650	8
Corporate debt securities	760	36	—	—	760	36
Asset-backed securities:
Collateralized loan obligations	25,589	1,670	5,357	377	30,946	2,047
Other	4,897	71	840	42	5,737	113
Total available-for-sale securities with gross unrealized losses	47,021	2,309	7,314	455	54,335	2,764


	Investment securities with gross unrealized losses												Available-for-sale securities with gross unrealized losses
	Less than 12 months				12 months or more								Less than 12 months		12 months or more
December 31, 2018 (in millions)	Fair value		Gross unrealized losses		Fair value		Gross unrealized losses		Total fair value		Total gross unrealized losses
December 31, 2019 (in millions)													Fair value	Gross unrealized losses	Fair value	Gross unrealized losses	Total fair value	Total gross unrealized losses
Available-for-sale securities
Mortgage-backed securities:
U.S. GSEs and government agencies	$	17,656	$	318	$	22,728	$	656	$	40,384	$	974
Residential:
U.S.	623		4		1,445		27		2,068		31		1,072	3	423	3	1,495	6
Non-U.S.	907		5		165		1		1,072		6		13	—	420	1	433	1
Commercial	974		6		3,172		141		4,146		147		1,287	12	199	1	1,486	13
Total mortgage-backed securities	20,160		333		27,510		825		47,670		1,158		2,372	15	1,042	5	3,414	20
U.S. Treasury and government agencies	4,792		7		2,391		71		7,183		78
Obligations of U.S. states and municipalities	1,808		15		2,477		65		4,285		80		186	1	—	—	186	1
Certificates of deposit	75		—		—		—		75		—		77	—	—	—	77	—
Non-U.S. government debt securities	3,123		5		1,937		15		5,060		20		3,970	13	1,406	4	5,376	17
Corporate debt securities	478		8		37		1		515		9		—	—	—	—	—	—
Asset-backed securities:
Collateralized loan obligations	18,681		176		—		—		18,681		176		10,364	11	7,756	45	18,120	56
Other	1,208		6		2,354		16		3,562		22		1,639	9	753	11	2,392	20
Total available-for-sale securities	50,325		550		36,706		993		87,031		1,543
Held-to-maturity securities
Mortgage-backed securities
U.S. GSEs and government agencies	4,385		23		7,082		177		11,467		200
Total mortgage-backed securities	4,385		23		7,082		177		11,467		200
U.S. Treasury and government agencies	—		—		—		—		—		—
Obligations of U.S. states and municipalities	12		—		1,114		15		1,126		15
Total held-to-maturity securities	4,397		23		8,196		192		12,593		215
Total investment securities with gross unrealized losses	$	54,722	$	573	$	44,902	$	1,185	$	99,624	$	1,758
Total available-for-sale securities with gross unrealized losses													18,608	49	10,957	65	29,565	114

~~Other-than-temporary~~

As a result of the adoption of the amended AFS securities impairment guidance, an allowance for credit losses on AFS securities is required for impaired securities if a credit loss exists.

AFS securities are considered impaired if the fair value is less than the amortized cost (excluding accrued interest receivable).

The Firm recognizes ~~unrealized~~impairment losses ~~on investment securities that it intends~~in earnings if the Firm has the intent 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, 2019, and~~debt security, or if it is more likely than not ~~likely~~ that the Firm will be required to sell ~~these securities~~the debt security before recovery of ~~their~~its amortized cost. In these circumstances the impairment loss recognized in earnings is equal to the full difference between the amortized cost ~~basis. Further,~~(excluding accrued interest receivable and net of allowance if applicable) and the fair value of the securities.

For impaired debt securities that the Firm has the intent and ability to hold, the securities are evaluated to determine if a credit loss exists. If it is determined that a credit loss exists, that loss is recognized as an allowance for credit losses through the provision for credit losses in the Consolidated Statements of Income, limited by the amount of impairment. Any impairment not due to credit losses is recorded in OCI.

Factors considered in evaluating credit losses include adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a security; and payment structure of the security.

When assessing securities issued in a securitization for credit losses, the Firm estimates cash flows considering relevant market and economic data, underlying loan-level data, and structural features of the securitization, such as subordination, excess spread, overcollateralization or other forms of credit enhancement, and compares the losses projected for the underlying collateral (“pool losses”) against the level of credit enhancement in the securitization structure to determine whether these features are sufficient to absorb the pool losses, or whether a credit loss exists.

For beneficial interests in securitizations that are rated below “AA” at their acquisition, or that can be contractually prepaid or otherwise settled in such a way that the Firm would not recover substantially all of its recorded investment, the Firm evaluates impairment for credit losses when there is an adverse change in expected cash flows.

Unrealized losses on AFS securities increased during the first quarter of 2020 due to credit spread widening amid volatile financial markets in connection with the COVID-19 pandemic. The increase was largely related to collateralized loan obligations which had gross unrealized losses of $2.0 billion as of March 31, 2020. Over 99% of these collateralized loan obligations are rated “AAA”, and the average credit enhancement was 37%. Credit enhancement in collateralized loan obligations is primarily in the form of overcollateralization, which is the excess of the par amount of collateral over the par amount of securities. Management assessed the projected collateral performance and the structural protections of these securities including underlying loan defaults and loss severity to determine if a credit loss exists. Based on this assessment, the Firm believes the unrealized losses on collateralized loan obligations are not due to credit losses.

Allowance for credit losses

Based on its assessment, the Firm did not recognize ~~any credit-related OTTI~~an allowance for credit losses ~~during~~on impaired AFS securities as of January 1 or March 31, 2020.

HTM securities – credit risk

The adoption of the ~~nine months ended September 30, 2019~~CECL accounting guidance requires management to estimate expected credit losses on HTM securities over the remaining expected life and ~~2018. Accordingly,~~recognize this estimate as an allowance for credit losses. As a result of the adoption of this guidance, the Firm ~~believes that the investment securities with~~recognized an ~~unrealized loss in AOCI~~allowance for credit losses on HTM obligations of U.S. states and municipalities of $10 million as a cumulative-effect adjustment to retained earnings as of ~~September 30, 2019,~~January 1, 2020.

Credit quality indicator

The primary credit quality indicator for HTM securities is the risk rating assigned to each security. At March 31, 2020, all HTM securities were rated investment grade and were current and accruing, with approximately 92% rated AAA.

Allowance for credit losses

The allowance for credit losses on HTM obligations of U.S. states and municipalities and commercial mortgage-backed securities is calculated by applying statistical credit loss factors (estimated PD and LGD) to the amortized cost (excluding accrued interest receivable). The credit loss factors are ~~not other-than-temporarily impaired.~~derived using a weighted average of five internally developed eight-quarter macroeconomic scenarios, followed by a single year straight-line interpolation to revert to long run historical information for periods beyond the forecast period. Refer to Note ~~10 of JPMorgan Chase’s 2018 Form 10-K~~13 for ~~additional~~further information on ~~other-than-temporary impairment.~~the eight-quarter macroeconomic forecast.

The allowance for credit losses on HTM collateralized loan obligations is calculated as the difference between the amortized cost (excluding accrued interest receivable) and the present value of the cash flows expected to be collected, discounted at the security’s effective interest rate. These cash flow estimates are developed based on expectations of underlying collateral performance derived using the eight-quarter macroeconomic forecast and the single year straight-line interpolation, as well as considering the structural features of the security.

The use of different inputs, estimates or methodologies could change the amount of the allowance for credit losses estimated by the Firm.

The application of different inputs and assumptions into the calculation of the allowance for credit losses is subject to significant management judgment, and emphasizing one input or assumption over another, or considering other inputs or assumptions, could affect the estimate of the allowance for credit losses on HTM securities.

The allowance for credit losses on HTM securities was $19 million as of March 31, 2020, reflecting $9 million recognized in the provision for credit losses for the three months ended March 31, 2020.

~~Investment~~Selected impacts of investment securities ~~gains and losses~~

~~The following table presents realized gains and losses and OTTI from AFS securities that were recognized in income.~~on the Consolidated statements of income


	Three months ended September 30,					Nine months ended September 30,						Three months ended March 31,
(in millions)	2019		2018			2019			2018			2020			2019
Realized gains	$	78	$	58		$	454		$	137		$	1,095		$	261
Realized losses	—		(103		)	(319		)	(507		)	(862		)	(248		)
OTTI losses^(a)	—		(1		)	—			(1		)
Net investment securities gains/(losses)	$	78	$	(46	)	$	135		$	(371	)
Net investment securities gains												$	233		$	13

Provision for credit losses												$	9		NA

~~(a) Represents OTTI losses recognized in income on investment securities the~~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~~did not intend to sell any impaired AFS securities in the ~~securities.~~periods presented.

~~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 was not material as of and during the nine month periods ended September 30, 2019 and 2018.

Contractual maturities and yields

The following table presents the amortized cost and estimated fair value at ~~September 30, 2019,~~March 31, 2020, of JPMorgan Chase’s investment securities portfolio by contractual maturity.


By remaining maturity September 30, 2019 (in millions)	Due in one year or less			Due after one year through five years			Due after five years through 10 years			Due after 10 years^(b)			Total
By remaining maturity March 31, 2020 (in millions)																Due in one year or less			Due after one year through five years			Due after five years through 10 years			Due after 10 years^(b)			Total
Available-for-sale securities
Mortgage-backed securities
Amortized cost	$	14		$	59		$	10,230		$	110,584		$	120,887		$	2		$	381		$	11,827		$	140,964		$	153,174
Fair value	14			60			10,476			113,257			123,807			2			388			12,066			144,920			157,376
Average yield^(a)	3.59		%	2.73		%	2.92		%	3.45		%	3.40		%	2.08		%	1.97		%	2.51		%	3.28		%	3.22		%
U.S. Treasury and government agencies
Amortized cost	$	10,904		$	95,139		$	25,557		$	10,046		$	141,646		$	7,529		$	95,419		$	30,655		$	14,873		$	148,476
Fair value	10,901			95,231			25,659			9,738			141,529			7,557			96,795			31,748			14,135			150,235
Average yield^(a)	1.99		%	1.96		%	2.02		%	2.04		%	1.98		%	0.64		%	0.95		%	1.73		%	1.40		%	1.14		%
Obligations of U.S. states and municipalities
Amortized cost	$	170		$	228		$	1,089		$	27,384		$	28,871		$	123		$	209		$	1,024		$	27,530		$	28,886
Fair value	172			236			1,135			29,521			31,064			123			217			1,080			29,125			30,545
Average yield^(a)	3.32		%	4.00		%	5.60		%	4.94		%	4.95		%	4.11		%	4.43		%	4.91		%	4.66		%	4.67		%
Certificates of deposit
Amortized cost	$	74		$	—		$	—		$	—		$	74		$	76		$	—		$	—		$	—		$	76
Fair value	74			—			—			—			74			76			—			—			—			76
Average yield^(a)	0.49		%	—		%	—		%	—		%	0.49		%	0.49		%	—		%	—		%	—		%	0.49		%
Non-U.S. government debt securities
Amortized cost	$	6,342		$	11,580		$	3,416		$	306		$	21,644		$	6,755		$	11,028		$	4,080		$	506		$	22,369
Fair value	6,350			11,870			3,633			305			22,158			6,774			11,270			4,195			522			22,761
Average yield^(a)	2.23		%	1.99		%	1.34		%	1.67		%	1.95		%	2.34		%	1.80		%	0.85		%	1.41		%	1.78		%
Corporate debt securities
Amortized cost	$	216		$	718		$	662		$	—		$	1,596		$	201		$	334		$	303		$	—		$	838
Fair value	218			737			679			—			1,634			200			313			289			—			802
Average yield^(a)	4.83		%	3.91		%	3.78		%	—		%	3.98		%	5.32		%	3.75		%	3.15		%	—		%	3.91		%
Asset-backed securities
Amortized cost	$	—		$	1,873		$	9,411		$	21,857		$	33,141		$	112		$	3,047		$	11,901		$	25,225		$	40,285
Fair value	—			1,876			9,412			21,867			33,155			112			3,022			11,360			23,655			38,149
Average yield^(a)	—		%	2.94		%	3.17		%	3.03		%	3.06		%	1.67		%	2.44		%	2.69		%	2.44		%	2.51		%
Total available-for-sale securities
Amortized cost	$	17,720		$	109,597		$	50,365		$	170,177		$	347,859		$	14,798		$	110,418		$	59,790		$	209,098		$	394,104
Fair value	17,729			110,010			50,994			174,688			353,421			14,844			112,005			60,738			212,357			399,944
Average yield^(a)	2.12		%	2.00		%	2.47		%	3.55		%	2.83		%	1.52		%	1.10		%	2.08		%	3.22		%	2.39		%
Held-to-maturity securities
Mortgage-backed securities
Amortized cost	$	—		$	—		$	4,655		$	31,321		$	35,976		$	—		$	—		$	5,782		$	55,838		$	61,620
Fair value	—			—			5,049			32,157			37,206			—			—			6,402			57,396			63,798
Average yield^(a)	—		%	—		%	3.29		%	3.12		%	3.14		%	—		%	—		%	3.05		%	3.06		%	3.06		%
U.S. Treasury and government agencies
Amortized cost	$	—		$	51		$	—		$	—		$	51		$	—		$	51		$	—		$	—		$	51
Fair value	—			51			—			—			51			—			53			—			—			53
Average yield^(a)	—		%	1.47		%	—		%	—		%	1.47		%	—		%	1.44		%	—		%	—		%	1.44		%
Obligations of U.S. states and municipalities
Amortized cost	$	—		$	—		$	55		$	4,748		$	4,803		$	—		$	36		$	164		$	4,661		$	4,861
Fair value	—			—			58			5,062			5,120			—			37			175			4,955			5,167
Average yield^(a)	—		%	—		%	3.89		%	4.02		%	4.02		%	—		%	3.64		%	3.79		%	3.94		%	3.93		%
Asset-backed securities
Amortized cost																$	—		$	—		$	4,054		$	633		$	4,687
Fair value																—			—			3,901			605			4,506
Average yield^(a)																—		%	—		%	2.97		%	2.99		%	2.97		%
Total held-to-maturity securities
Amortized cost	$	—		$	51		$	4,710		$	36,069		$	40,830		$	—		$	87		$	10,000		$	61,132		$	71,219
Fair value	—			51			5,107			37,219			42,377			—			90			10,478			62,956			73,524
Average yield^(a)	—		%	1.47		%	3.30		%	3.24		%	3.24		%	—		%	2.35		%	3.03		%	3.13		%	3.11		%

(a)

Average yield is computed using the effective yield of each security owned at the end of the period, weighted based on the amortized cost of each security. The effective yield considers the contractual coupon, amortization of premiums and accretion of discounts, and the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable. The effective yield excludes unscheduled principal prepayments; and accordingly, actual maturities of securities may differ from their contractual or expected maturities as certain securities may be prepaid.

(b)

Substantially all of the Firm’s U.S. residential MBS and collateralized mortgage obligations are due in 10 years or more, based on contractual maturity. The estimated weighted-average life, which reflects anticipated future prepayments, is approximately 54 years for agency residential MBS, 3 years for agency residential collateralized mortgage obligations and 3 years for nonagency residential collateralized mortgage obligations.

Note 1011 – Securities financing activities

JPMorgan Chase enters into resale, repurchase, securities borrowed and securities loaned agreements (collectively, “securities financing agreements”) primarily to finance the Firm’s inventory positions, acquire securities to cover short sales, accommodate customers’ financing needs, settle other securities obligations and to deploy the Firm’s excess cash.

Securities financing agreements are treated as collateralized financings on the Firm’s Consolidated balance sheets. Where appropriate under applicable accounting guidance, securities financing agreements with the same counterparty are reported on a net basis. Refer to Note ~~11 of JPMorgan Chase’s 2018 Form 10-K~~1 for afurther discussion of ~~accounting policies relating to~~the offsetting of assets and liabilities. Fees received and paid in connection with securities financing ~~activities.~~agreements are recorded over the life of the agreement in interest income and interest expense on the Consolidated statements of income.

The Firm has elected the fair value option for certain securities financing agreements. Refer to Note 3 for further information regarding the fair value option. The securities ~~borrowed and securities lending~~financing agreements for which the fair value option has been ~~elected.~~elected are reported within securities purchased under resale agreements, securities loaned or sold under repurchase agreements, and securities borrowed on the Consolidated balance sheets. Generally, for agreements carried at fair value, current-period interest accruals are recorded within interest income and interest expense, with changes in fair value reported in principal transactions revenue. However, for financial instruments containing embedded derivatives that would be separately accounted for in accordance with accounting guidance for hybrid instruments, all changes in fair value, including any interest elements, are reported in principal transactions revenue.

Securities financing agreements not elected under the fair value option are measured at amortized cost. As a result of the Firm’s credit risk mitigation practices described below, the Firm did not hold any allowance for credit losses with respect to resale and securities borrowed arrangements as of March 31, 2020 and December 31, 2019.

Credit risk mitigation practices

Securities financing agreements expose the Firm primarily to credit and liquidity risk. To manage these risks, the Firm monitors the value of the underlying securities (predominantly high-quality securities collateral, including government-issued debt and U.S. GSEs and government agencies MBS) that it has received from or provided to its counterparties compared to the value of cash proceeds and exchanged collateral, and either requests additional collateral or returns securities or collateral when appropriate. Margin levels are initially established based upon the counterparty, the type of underlying securities, and the permissible collateral, and are monitored on an ongoing basis.

In resale and securities borrowed agreements, the Firm is exposed to credit risk to the extent that the value of the securities received is less than initial cash principal advanced and any collateral amounts exchanged. In repurchase and securities loaned agreements, credit risk exposure arises to the extent that the value of underlying securities advanced exceeds the value of the initial cash principal received, and any collateral amounts exchanged.

Additionally, the Firm typically enters into master netting agreements and other similar arrangements with its counterparties, which provide for the right to liquidate the underlying securities and any collateral amounts exchanged in the event of a counterparty default. It is also the Firm’s policy to take possession, where possible, of the securities underlying resale and securities borrowed agreements. Refer to Note 2324 for further information regarding assets pledged and collateral received in securities financing agreements.

The table below summarizes the gross and net amounts of the Firm’s securities financing agreements as of ~~September 30, 2019~~ March 31, 2020 and December 31, ~~2018.~~ 2019. When the Firm has obtained an appropriate legal opinion with respect to a master netting agreement with a counterparty and where other relevant netting criteria under U.S. GAAP are met, the Firm nets, on the Consolidated balance sheets, the

balances outstanding under its securities financing agreements with the same counterparty. In addition, the Firm exchanges securities and/or cash collateral with its counterparty 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 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.


	September 30, 2019													March 31, 2020
(in millions)	Gross amounts		Amounts 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 amounts		Amounts netted on the Consolidated balance sheets			Amounts presented on the Consolidated balance sheets		Amounts not nettable on the Consolidated balance sheets^(b)			Net amounts^(c)
Assets
Securities purchased under resale agreements	$	630,033	$	(372,650	)	$	257,383	$	(244,241	)		$	13,142	$	687,109	$	(438,559	)	$	248,550	$	(233,013	)		$	15,537
Securities borrowed	160,304		(21,968		)	138,336		(104,517		)		33,819		152,908		(13,069		)	139,839		(101,374		)		38,465
Liabilities
Securities sold under repurchase agreements	$	608,618	$	(372,650	)	$	235,968	$	(213,150	)		$	22,818	$	662,472	$	(438,559	)	$	223,913	$	(193,881	)		$	30,032
Securities loaned and other^(a)	34,104		(21,968		)	12,136		(11,878		)		258		23,830		(13,069		)	10,761		(10,582		)		179


	December 31, 2018													December 31, 2019
(in millions)	Gross amounts		Amounts 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 amounts		Amounts netted on the Consolidated balance sheets			Amounts presented on the Consolidated balance sheets		Amounts not nettable on the Consolidated balance sheets^(b)			Net amounts^(c)
Assets
Securities purchased under resale agreements	$	691,116	$	(369,612	)	$	321,504	$	(308,854	)		$	12,650	$	628,609	$	(379,463	)	$	249,146	$	(233,818	)		$	15,328
Securities borrowed	132,955		(20,960		)	111,995		(79,747		)		32,248		166,718		(26,960		)	139,758		(104,990		)		34,768
Liabilities
Securities sold under repurchase agreements	$	541,587	$	(369,612	)	$	171,975	$	(149,125	)		$	22,850	$	555,172	$	(379,463	)	$	175,709	$	(151,566	)		$	24,143
Securities loaned and other^(a)	33,700		(20,960		)	12,740		(12,358		)		382		36,649		(26,960		)	9,689		(9,654		)		35

(a)

Includes securities-for-securities lending agreements of ~~$2.4~~$4.1 billion and ~~$3.3~~$3.7 billion at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively, accounted for at fair value, where the Firm is acting as lender. In the Consolidated balance sheets, the Firm recognizes the securities received at fair value within other assets and the obligation to return those securities within accounts payable and other liabilities.

(b)

Includes securities financing agreements accounted for at fair value. At September 30, 2019 and December 31, 2018, included securities purchased under resale agreements of $13.7 billion and $13.2 billion, respectively; securities sold under repurchase agreements of $933 million and $935 million, respectively; and securities borrowed of $5.8 billion and $5.1 billion, respectively. There were 0 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)~~(c)

Includes securities financing agreements that provide collateral rights, but where an appropriate legal opinion with respect to the master netting agreement has not been either sought or obtained. At ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, included ~~$9.1~~$12.3 billion and ~~$7.9~~$11.0 billion, respectively, of securities purchased under resale agreements; ~~$30.6~~$34.9 billion and ~~$30.3~~$31.9 billion, respectively, of securities borrowed; ~~$21.9~~$28.5 billion and ~~$21.5~~$22.7 billion, respectively, of securities sold under repurchase agreements; and ~~$96~~$9 million and ~~$25~~$7 million, respectively, of securities loaned and other.

The tables below present as of ~~September 30, 2019,~~ March 31, 2020, and December 31, ~~2018~~ 2019 the types of financial assets pledged in securities financing agreements and the remaining contractual maturity of the securities financing agreements.


	Gross liability balance									Gross liability balance
	September 30, 2019				December 31, 2018					March 31, 2020				December 31, 2019
(in millions)	Securities sold under repurchase agreements		Securities loaned and other		Securities sold under repurchase agreements			Securities loaned and other		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)	$	—	$	60,742	$	—	$	34,119	$	—
Residential - nonagency	1,804		—		2,165			—		1,860		—		1,239		—
Commercial - nonagency	1,778		—		1,390			—		1,931		—		1,612		—
U.S. Treasury, GSEs and government agencies	366,820		8		317,578		^(a)	69		390,151		92		334,398		29
Obligations of U.S. states and municipalities	1,400		—		1,150			—		1,793		—		1,181		—
Non-U.S. government debt	165,568		1,769		154,900			4,313		165,715		1,559		145,548		1,528
Corporate debt securities	13,067		1,361		13,898			428		21,855		1,582		13,826		1,580
Asset-backed securities	1,746		—		3,867			—		3,074		—		1,794		—
Equity securities	23,036		30,966		12,328			28,890		15,351		20,597		21,455		33,512
Total	$	608,618	$	34,104	$	541,587		$	33,700	$	662,472	$	23,830	$	555,172	$	36,649



	Remaining contractual maturity of the agreements
	Overnight and continuous						Greater than 90 days
March 31, 2020 (in millions)	Overnight and continuous		Up to 30 days		30 – 90 days		Greater than 90 days		Total
Total securities sold under repurchase agreements	$	276,704	$	222,320	$	91,030	$	72,418	$	662,472
Total securities loaned and other	20,610		100		697		2,423		23,830



	Remaining contractual maturity of the agreements
	Overnight and continuous								Greater than 90 days
December 31, 2019 (in millions)	Overnight and continuous		Up to 30 days			30 – 90 days			Greater than 90 days			Total
Total securities sold under repurchase agreements	$	225,134	$	195,816	^(a)	$	56,020	^(a)	$	78,202	^(a)	$	555,172
Total securities loaned and other	32,028		1,706			937			1,978			36,649


(a)	The ~~prior period~~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 days Total
Total securities sold under repurchase agreements $ 336,082
$ 132,662
$ 53,504
$ 86,370
$ 608,618
Total securities loaned and other 30,172
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 days Total
Total securities sold under repurchase agreements $ 247,579
$ 174,971
$ 71,637
$ 47,400
$ 541,587
Total securities loaned and other 28,402
997
2,132
2,169
33,700

Transfers not qualifying for sale accounting

At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, the Firm held ~~$654~~$581 million and ~~$2.1 billion,~~$743 million, 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 1112 – 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.~~loan. 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~~Effective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.

The following provides a detailed accounting discussion of these loan categories:

Loans held-for-investment

Originated or purchased loans held-for-investment are recorded at the principal amount outstanding, net of the following: charge-offs; interest applied to principal (for loans accounted for on the cost recovery method); unamortized discounts and premiums; and net deferred loan fees or costs. Credit card loans also include billed finance charges and fees.

Interest income

Interest income on performing loans held-for-investment is accrued and recognized as interest income at the contractual rate of interest. Purchase price discounts or premiums, as well as net deferred loan fees or costs, are amortized into interest income over the contractual life of the loan as an adjustment of yield.

The Firm classifies accrued interest on loans, including accrued but unbilled interest on credit card loans, in accrued interest and accounts receivables on the Consolidated balance sheets. For credit card loans, accrued interest is recognized in the loan balances as it is billed, with the related allowance recorded in the allowance for credit losses. Changes in the allowance for credit losses on accrued interest on credit card loans are recognized in the provision for credit losses and charge-offs are recognized by reversing interest income. For other loans, the Firm generally does not recognize an allowance for credit losses on accrued interest receivables, consistent with its policy to write them off no later than 90 days past due by reversing interest income.

Nonaccrual loans

Nonaccrual loans are those on which the accrual of interest has been suspended. Loans (other than credit card loans and certain consumer loans insured by U.S. government agencies) are placed on nonaccrual status and considered nonperforming 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. A loan is determined to be past due when the minimum payment is not received from the borrower by the contractually specified due date or for

certain loans (e.g., residential real estate loans), when a monthly payment is due and unpaid for 30 days or more. Finally, collateral-dependent loans are typically maintained on nonaccrual status.

On the date a loan is placed on nonaccrual status, all interest accrued but not collected is reversed against interest income. In addition, the amortization of deferred amounts is suspended. Interest income on nonaccrual loans may be recognized as cash interest payments are received (i.e., on a cash basis) if the recorded loan balance is deemed fully collectible; however, if there is doubt regarding the ultimate collectibility of the recorded loan balance, all interest cash receipts are applied to reduce the carrying value of the loan (the cost recovery method). For consumer loans, application of this policy typically results in the Firm recognizing interest income on nonaccrual consumer loans on a cash basis.

A loan may be returned to accrual status when repayment is reasonably assured and there has been demonstrated performance under the terms of the loan or, if applicable, the terms of the restructured loan.

As permitted by regulatory guidance, credit card loans are generally exempt from being placed on nonaccrual status; accordingly, interest and fees related to credit card loans continue to accrue until the loan is charged off or paid in full.

Allowance for loan losses

The allowance for loan losses represents the estimated expected credit losses in the held-for-investment loan portfolio at the balance sheet date and is recognized on the balance sheet as a contra asset, which brings the amortized cost to the net carrying value. Changes in the allowance for loan losses are recorded in the provision for credit losses on the Firm’s Consolidated statements of income. Refer to Note 1213 for further information on the Firm’s accounting policies for the allowance for loan losses.

Charge-offs

Consumer loans are generally charged off or charged down to the net realizable value of ~~JPMorgan Chase’s 2018 Form 10-K~~the underlying collateral (i.e., fair value less estimated costs to sell), with an offset to the allowance for loan losses, upon reaching specified stages of delinquency in accordance with standards established by the FFIEC. Residential real estate loans, unmodified credit card loans and scored business banking loans are generally charged off no later than 180 days past due. Scored auto and modified credit card loans are charged off no later than 120 days past due.

Certain consumer loans are charged off or charged down to their net realizable value earlier than the FFIEC charge-off standards in certain circumstances as follows:

Loans modified in a ~~detailed discussion~~TDR that are determined to be collateral-dependent.

Loans to borrowers who have experienced an event that suggests a loss is either known or highly certain are subject to accelerated charge-off standards (e.g., residential real estate and auto loans are charged off within 60 days of receiving notification of a bankruptcy filing).

Auto loans upon repossession of the automobile.

Other than in certain limited circumstances, the Firm typically does not recognize charge-offs on the government-guaranteed portion of loans.

Wholesale loans are charged off when it is highly certain that a loss has been realized. The determination of whether to recognize a charge-off includes many factors, including ~~accounting~~the prioritization of the Firm’s claim in bankruptcy, expectations of the workout/restructuring of the loan and valuation of the borrower’s equity or the loan collateral.

When a loan is charged down to the estimated net realizable value, the determination of the fair value of the collateral depends on the type of collateral (e.g., securities, real estate). In cases where the collateral is in the form of liquid securities, the fair value is based on quoted market prices or broker quotes. For illiquid securities or other financial assets, the fair value of the collateral is generally estimated using a discounted cash flow model.

For residential real estate loans, collateral values are based upon external valuation sources. When it becomes likely that a borrower is either unable or unwilling to pay, the Firm utilizes a broker’s price opinion, appraisal and/or an automated valuation model of the home based on an exterior-only valuation (“exterior opinions”), which is then updated at least every twelve months, or more frequently depending on various market factors. As soon as practicable after the Firm receives the property in satisfaction of a debt (e.g., by taking legal title or physical possession), the Firm generally obtains an appraisal based on an inspection that includes the interior of the home (“interior appraisals”). Exterior opinions and interior appraisals are discounted based upon the Firm’s experience with actual liquidation values as compared with the estimated values provided by exterior opinions and interior appraisals, considering state-specific factors.

For commercial real estate loans, collateral values are generally based on appraisals from internal and external valuation sources. Collateral values are typically updated every six to twelve months, either by obtaining a new appraisal or by performing an internal analysis, in accordance with the Firm’s policies. The Firm also considers both borrower- and market-specific factors, which may result in obtaining appraisal updates or broker price opinions at more frequent intervals.

Loans held-for-sale

Loans held-for-sale are measured at the lower of cost or fair value, with valuation changes recorded in noninterest revenue. For consumer loans, the valuation is performed on a portfolio basis. For wholesale loans, the valuation is performed on an individual loan basis.

Interest income on loans held-for-sale is accrued and recognized based on the contractual rate of interest.

Loan origination fees or costs and purchase price discounts or premiums are deferred in a contra loan account until the related loan is sold. The deferred fees or costs and discounts or premiums are an adjustment to the basis of the loan and therefore are included in the periodic determination of the lower of cost or fair value adjustments and/or the gain or loss recognized at the time of sale.

Because these loans are recognized at the lower of cost or fair value, the Firm’s allowance for loan losses and charge-off policies do not apply to these loans. However, loans held-for-sale are subject to the nonaccrual policies described above.

Loans at fair value

Loans used in a market-making strategy or risk managed on a fair value basis are measured at fair value, with changes in fair value recorded in noninterest revenue.

Interest income on these loans is accrued and recognized based on the contractual rate of interest. Changes in fair value are recognized in noninterest revenue. Loan origination fees are recognized upfront in noninterest revenue. Loan origination costs are recognized in the associated expense category as incurred.

Because these loans are recognized at fair value, the Firm’s allowance for loan losses and charge-off policies do not apply to these loans. However, loans at fair value are subject to the nonaccrual policies described above.

Refer to Note 3 ~~of this Form 10-Q~~ for further information on the Firm’s elections of fair value accounting under the fair value option. Refer to Note 2 ~~of this Form 10-Q~~and Note 3 for further information on loans carried at fair value and classified as trading assets.

Loan classification changes

Loans in the held-for-investment portfolio that management decides to sell are transferred to the held-for-sale portfolio at the lower of cost or fair value on the date of transfer. Credit-related losses are charged against the allowance for loan losses; non-credit related losses such as those due to changes in interest rates or foreign currency exchange rates are recognized in noninterest revenue.

In the event that management decides to retain a loan in the held-for-sale portfolio, the loan is transferred to the held-for-investment portfolio at the lower of cost or fair value on the date of transfer. These loans are subsequently assessed for impairment based on the Firm’s allowance methodology. Refer to Note 13 for a further discussion of the methodologies used in establishing the Firm’s allowance for loan losses.

Loan modifications

The Firm seeks to modify certain loans in conjunction with its loss mitigation activities. Through the modification, JPMorgan Chase grants one or more concessions to a borrower who is experiencing financial difficulty in order to minimize the Firm’s economic loss and avoid foreclosure or repossession of the collateral, and to ultimately maximize payments received by the Firm from the borrower. The concessions granted vary by program and by borrower-specific characteristics, and may include interest rate reductions, term extensions, payment delays, principal forgiveness, or the acceptance of equity or other assets in lieu of payments. Such modifications are accounted for and reported as TDRs. Loans with short-term and other insignificant modifications that are not considered concessions are not TDRs.

The Firm’s initial response to many borrowers impacted by the COVID-19 pandemic included offering loan modifications, such as 90-day payment delays and waiving or refunding certain fees. These initial short-term and other insignificant modifications were not considered concessions and, therefore, do not result in the related loans being considered TDRs.

Loans, except for credit card loans, modified in a TDR are generally placed on nonaccrual status, although in many cases such loans were already on nonaccrual status prior to modification. These loans may be returned to performing status (the accrual of interest is resumed) if the following criteria are met: (i) the borrower has performed under the modified terms for a minimum of six months and/or 6 payments, and (ii) the Firm has an expectation that repayment of the modified loan is reasonably assured based on, for example, the borrower’s debt capacity and level of future earnings, collateral values, LTV ratios, and other current market considerations. In certain limited and well-defined circumstances in which the loan is current at the modification date, such loans are not placed on nonaccrual status at the time of modification.

Loans modified in TDRs are generally measured for impairment using the Firm’s established asset-specific

allowance methodology, which considers the expected re-default rates for the modified loans. A loan modified in a TDR generally remains subject tothe asset-specific component of the allowance throughout its remaining life, regardless of whether the loan is performing and has been returned to accrual status. Refer to Note 13 for further discussion of the methodology used to estimate the Firm’s asset-specific allowance.

Foreclosed property

The Firm acquires property from borrowers through loan restructurings, workouts, and foreclosures. Property acquired may include real property (e.g., residential real estate, land, and buildings) and commercial and personal property (e.g., automobiles, aircraft, railcars, and ships).

The Firm recognizes foreclosed property upon receiving assets in satisfaction of a loan (e.g., by taking legal title or physical possession). For loans collateralized by real property, the Firm generally recognizes the asset received at foreclosure sale or upon the execution of a deed in lieu of foreclosure transaction with the borrower. Foreclosed assets are reported in other assets on the Consolidated balance sheets and initially recognized at fair value less estimated costs to sell. Each quarter the fair value of the acquired property is reviewed and adjusted, if necessary, to the lower of cost or fair value. Subsequent adjustments to fair value are charged/credited to noninterest revenue. Operating expense, such as real estate taxes and maintenance, are charged to other expense.

Loan portfolio

The Firm’s loan portfolio is divided into ~~three~~3 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.

In conjunction with the adoption of CECL, the Firm revised its classes of loans. Prior-period amounts have been revised to conform with the current presentation:

The consumer, excluding credit card portfolio segment’s residential mortgage and home equity loans and lending-related commitments have been combined into a residential real estate class.

Upon adoption of CECL, the Firm elected to discontinue the pool-level accounting for PCI loans and to account for these loans on an individual loan basis. PCI loans are considered PCD loans under CECL and are subject to the Firm’s nonaccrual and charge-off policies. PCD loans are now reported in the consumer, excluding credit card portfolio segment’s residential real estate class.

Risk-rated business banking and auto dealer loans and lending-related commitments held in CCB were reclassified from the consumer, excluding credit card portfolio segment, to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. The remaining scored auto and business banking loans and lending-related commitments have been combined into an auto and other class.

The wholesale portfolio segment’s classes, previously based on the borrower’s primary business activity, have been revised to align with the loan classifications as defined by the bank regulatory agencies, based on the loan’s collateral, purpose, and type of borrower.



Consumer, excluding credit card^(a)	Credit card	Wholesale^(f)(c)
• Residential real estate ~~– excluding PCI~~ ~~• Residential mortgage~~^(b)(a) • ~~Home equity~~Auto and other^(c)(b) ~~Other consumer loans~~^(d) ~~• Auto~~ ~~• Consumer & Business Banking~~^(e) ~~Residential real estate – PCI~~ ~~• Home equity~~ ~~• Prime mortgage~~ ~~• Subprime mortgage~~ ~~• Option ARMs~~	• Credit card loans	• Secured by real estate • Commercial and industrial ~~• Real estate~~ ~~• Financial institutions~~ ~~• Governments & Agencies~~ • Other^(g)(d)


(a)	Includes ~~loans held in CCB,~~ scored ~~prime~~ mortgage and ~~scored~~ home equity loans held in ~~AWM~~CCB and ~~prime~~AWM,and scored mortgage loans held in Corporate.


(b)	~~Predominantly includes prime~~Includes scored auto and business banking loans ~~(including option ARMs).~~and overdrafts.


(c)	Includes ~~senior~~loans held in CIB, CB, AWM, Corporate as well as risk-rated business banking and ~~junior lien home equity loans.~~auto dealer loans held in CCB for which the wholesale methodology is applied for determining the allowance for loan losses.

(d)

Includes ~~certain business banking~~loans to financial institutions, states and ~~auto dealer risk-rated~~political subdivisions, SPEs, nonprofits, personal investment companies and trusts, as well as 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:~~to individuals and individual entities (predominantly ~~consists of~~ Wealth Management clients within ~~AWM and includes exposure to personal investment companies and personal and testamentary trusts), SPEs and Private education and civic organizations.~~AWM). Refer to Note 14 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for more information on SPEs.

The following tables summarize the Firm’s loan balances by portfolio segment.


September 30, 2019	Consumer, excluding credit card		Credit card^(a)		Wholesale		Total
March 31, 2020										Consumer, excluding credit card		Credit card		Wholesale		Total^(a)
(in millions)	Consumer, excluding credit card		Credit card^(a)		Wholesale		Total
Retained									^(b)	$	293,779	$	154,021	$	555,289	$	1,003,089	^(b)
Held-for-sale	4,821		—		5,750		10,571			1,848		—		4,224		6,072
At fair value	—		—		5,760		5,760			—		—		6,214		6,214
Total	$	336,630	$	159,571	$	449,017	$	945,218		$	295,627	$	154,021	$	565,727	$	1,015,375

December 31, 2018	Consumer, excluding credit card		Credit card^(a)		Wholesale		Total
December 31, 2019										Consumer, excluding credit card		Credit card		Wholesale		Total^(a)
(in millions)	Consumer, excluding credit card		Credit card^(a)		Wholesale		Total
Retained									^(b)	$	294,999	$	168,924	$	481,678	$	945,601	^(b)
Held-for-sale	95		16		11,877		11,988			3,002		—		4,062		7,064
At fair value	—		—		3,151		3,151			—		—		7,104		7,104
Total	$	373,732	$	156,632	$	454,190	$	984,554		$	298,001	$	168,924	$	492,844	$	959,769


(a)	~~Includes accrued interest and fees net of an allowance for the uncollectible portion~~Excludes $2.9 billion of accrued interest receivables at both March 31, 2020 and ~~fee income.~~December 31, 2019, respectively. Accrued interest receivables of $14 million and $12 million were written off for the three months ended March 31, 2020 and 2019, respectively.


(b)	Loans (other than ~~PCI loans and loans~~those for which the fair value option has been elected) are presented net of unamortized discounts and premiums and net deferred loan fees or costs. These amounts were not material as of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018.~~2019.

The following ~~tables provide~~table provides 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.


	2019									2018									2020									2019
Three months ended September 30, (in millions)	Consumer, excluding credit card			Credit card		Wholesale		Total		Consumer, excluding credit card			Credit card		Wholesale		Total
Three months ended March 31, (in millions)																			Consumer, excluding credit card			Credit card		Wholesale		Total		Consumer, excluding credit card			Credit card		Wholesale		Total
Purchases	$	259	^(a)(b)	$	—	$	453	$	712	$	561	^(a)(b)	$	—	$	285	$	846	$	1,172	^(b)(c)	$	—	$	386	$	1,558	$	551	^(b)(c)	$	—	$	229	$	780
Sales	14,970			—		5,559		20,529		1,789			—		4,197		5,986		324			—		5,452		5,776		8,658			—		5,445		14,103
Retained loans reclassified to held-for-sale(a)	3,889			—		359		4,248		—			—		666		666		148			—		469		617		4,113			—		501		4,614

	2019									2018
Nine months ended September 30, (in millions)	Consumer, excluding credit card			Credit card		Wholesale		Total		Consumer, excluding credit card			Credit card		Wholesale		Total
Purchases	$	1,044	^(a)(b)	$	—	$	1,041	$	2,085	$	2,164	^(a)(b)	$	—	$	1,915	$	4,079
Sales	30,484			—		16,404		46,888		4,661			—		12,829		17,490
Retained loans reclassified to held-for-sale	8,950			—		1,784		10,734		36			—		1,926		1,962


(a)	~~Purchases predominantly represent~~Reclassifications of loans to held-for-sale are non-cash transactions.

(b)

Predominantly includes purchases of residential real estate loans, including the Firm’s voluntary ~~repurchase~~repurchases of certain delinquent loans from loan pools as permitted by Government National Mortgage Association (“Ginnie Mae”) ~~guidelines.~~guidelines for the three months ended March 31, 2020 and 2019. 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)~~(c)

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~~$3.6 billion and ~~$5.6~~$3.2 billion for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018, respectively, and $12.2 billion and $14.5 billion for the nine months ended September 30, 2019 and 2018,~~ respectively.

Gains and losses on sales of loans

Net ~~gains~~losses on sales of loans and lending-related commitments (including adjustments to record loans and lending-related commitments held-for-sale at the lower of cost or fair value) recognized in noninterest revenue were ~~$254~~$913 million ~~and $433~~of which $142 million related to loans for the three ~~and nine~~ months ended ~~September 30, 2019, respectively.~~March 31, 2020. Gains and losses on sales of loans were 0t material for the three ~~and nine~~ months ended ~~September 30, 2018.~~March 31, 2019 . 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 scored 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 millions) September 30,
2019
December 31,
2018
Residential real estate – excluding PCI
Residential mortgage $ 197,456
$ 231,078
Home equity 24,954
28,340
Other consumer loans
Auto 61,410
63,573
Consumer & Business Banking 26,699
26,612
Residential real estate – PCI
Home equity 7,753
8,963
Prime mortgage 4,164
4,690
Subprime mortgage 1,797
1,945
Option ARMs 7,576
8,436
Total retained loans $ 331,809
$ 373,637



(in millions)	March 31, 2020		December 31, 2019
Residential real estate	$	242,349	$	243,317
Auto and other	51,430		51,682
Total retained loans	$	293,779	$	294,999

~~Refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for further information on consumer~~

Delinquency rates are the primary credit quality ~~indicators.~~indicator for consumer loans. Loans that are more than 30 days past due provide an early warning of borrowers who may be experiencing financial difficulties and/or who may be unable or unwilling to repay the loan. As the loan continues to age, it becomes more clear whether the borrower is likely either unable or unwilling to pay. In the case of residential real estate loans, late-stage delinquencies (greater than 150 days past due) are a strong indicator of loans that will ultimately result in a foreclosure or similar liquidation transaction. In addition to delinquency rates, other credit quality indicators for consumer loans vary based on the class of loan, as follows:

For residential real estate loans, the current estimated LTV ratio, or the combined LTV ratio in the case of junior lien loans, is an indicator of the potential loss severity in the event of default. Additionally, LTV or combined LTV ratios can provide insight into a borrower’s continued willingness to pay, as the delinquency rate of high-LTV loans tends to be greater than that for loans where the borrower has equity in the collateral. The geographic distribution of the loan collateral also provides insight as to the credit quality of the portfolio, as factors such as the regional economy, home price changes and specific events such as natural disasters, will affect credit quality. The borrower’s current or “refreshed” FICO score is a secondary credit quality indicator for certain loans, as FICO scores are an indication of the borrower’s credit payment history. Thus, a loan to a borrower with a low FICO score (less than 660 ) is considered to be of higher risk than a loan to a borrower with a higher FICO score. Further, a loan to a borrower with a high LTV ratio and a low FICO score is at greater risk of default than a loan to a borrower that has both a high LTV ratio and a high FICO score.

For scored auto and business banking loans, geographic distribution is an indicator of the credit performance of the portfolio. Similar to residential real estate loans, geographic distribution provides insights into the portfolio performance based on regional economic activity and events.

Residential real estate ~~– excluding PCI loans~~

The following table provides information ~~by class~~on delinquency, which is the primary credit quality indicator for retained residential real estate ~~– excluding PCI~~ loans.

Residential real estate – excluding PCI loans
(in millions, except ratios) Residential mortgage Home equity Total residential real estate – excluding PCI
Sep 30,
2019
Dec 31,
2018
Sep 30,
2019
Dec 31,
2018
Sep 30,
2019
Dec 31,
2018
Loan delinquency^(a)

Current $ 196,354
$ 225,899
$ 24,398
$ 27,611
$ 220,752
$ 253,510
30–149 days past due 691
2,763
355
453
1,046
3,216
150 or more days past due 411
2,416
201
276
612
2,692
Total retained loans $ 197,456
$ 231,078
$ 24,954
$ 28,340
$ 222,410
$ 259,418
% of 30+ days past due to total retained loans^(b)
0.53 % 0.48 % 2.23 % 2.57 % 0.72 % 0.71 %
90 or more days past due and government guaranteed^(c)
$ 40
$ 2,541
$ —
$ —
$ 40
$ 2,541
Nonaccrual loans 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 $ 25
$ 25
$ 4
$ 6
$ 29
$ 31
Less than 660 20
13
2
1
22
14
101% to 125% and refreshed FICO scores:

Equal to or greater than 660 22
37
68
111
90
148
Less than 660 35
53
23
38
58
91
80% to 100% and refreshed FICO scores:
Equal to or greater than 660 4,650
3,977
697
986
5,347
4,963
Less than 660 212
281
214
326
426
607
Less than 80% and refreshed FICO scores:

Equal to or greater than 660 185,438
212,505
20,394
22,632
205,832
235,137
Less than 660 6,035
6,457
2,842
3,355
8,877
9,812
No FICO/LTV available 952
813
710
885
1,662
1,698
U.S. government-guaranteed 67
6,917
—
—
67
6,917
Total retained loans $ 197,456
$ 231,078
$ 24,954
$ 28,340
$ 222,410
$ 259,418
Geographic region^(f)

California $ 66,166
$ 74,759
$ 5,074
$ 5,695
$ 71,240
$ 80,454
New York 25,442
28,847
5,074
5,769
30,516
34,616
Illinois 13,304
15,249
1,868
2,131
15,172
17,380
Texas 12,345
13,769
1,640
1,819
13,985
15,588
Florida 10,195
10,704
1,366
1,575
11,561
12,279
Washington 7,638
8,304
762
869
8,400
9,173
Colorado 7,577
8,140
458
521
8,035
8,661
New Jersey 5,749
7,302
1,447
1,642
7,196
8,944
Massachusetts 5,610
6,574
208
236
5,818
6,810
Arizona 3,862
4,434
986
1,158
4,848
5,592
All other^(g)
39,568
52,996
6,071
6,925
45,639
59,921
Total retained loans $ 197,456
$ 231,078
$ 24,954
$ 28,340
$ 222,410
$ 259,418



(in millions, except ratios)	March 31, 2020																											December 31, 2019
	Term loans by origination year																		Revolving loans						Total			Total
	2020			2019			2018			2017			2016			Prior to 2016			Within the revolving period			Converted to term loans			Total			Total
Loan delinquency^(a)
Current	$	10,590		$	42,800		$	21,088		$	30,504		$	39,809		$	67,311		$	8,213		$	18,927		$	239,242		$	239,979
30–149 days past due	—			7			11			33			57			1,368			7			444			1,927			1,910
150 or more days past due	—			—			10			11			9			877			13			260			1,180			1,428
Total retained loans	$	10,590		$	42,807		$	21,109		$	30,548		$	39,875		$	69,556		$	8,233		$	19,631		$	242,349		$	243,317
% of 30+ days past due to total retained loans^(b)	—		%	0.02		%	0.10		%	0.14		%	0.17		%	3.17		%	0.24		%	3.59		%	1.27		%	1.35		%

(a)

Individual delinquency classifications include mortgage loans insured by U.S. government agencies as follows: current included ~~$20~~$15 million and ~~$2.8 billion;~~$17 million; 30–149 days past due included ~~$16~~$13 million and ~~$2.1 billion;~~$20 million; and 150 or more days past due included ~~$31~~$25 million and ~~$2.0 billion~~$26 million at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, respectively.


(b)	At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, residential ~~mortgage~~real estate loans excluded mortgage loans insured by U.S. government agencies of ~~$47~~$38 million and ~~$4.1 billion,~~$46 million, 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, 2019, and December 31, 2018, these balances included $38 million and $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 0 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, 2019, and December 31, 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, 2019, and December 31, 2018, included mortgage loans insured by U.S. government agencies of $67 million and $6.9 billion, respectively. These amounts have been excluded from the geographic regions presented based upon the government guarantee.

Approximately ~~37%~~33% of the ~~home equity portfolio~~total revolving loans are senior lien loans; the remaining balance are junior lien ~~HELOANs or HELOCs.~~loans. The ~~following table provides~~lien position the Firm holds is considered in the Firm’s ~~delinquency statistics~~allowance for ~~junior lien home equity~~loan losses. Revolving loans ~~and lines of credit as of September 30, 2019, and December 31, 2018.~~

Total loans Total 30+ day delinquency rate
(in millions, except ratios) Sep 30,
2019
Dec 31,
2018
Sep 30,
2019
Dec 31,
2018

HELOCs:^(a)

Within the revolving period^(b)
$ 5,625
$ 5,608
0.37 % 0.25 %
Beyond the revolving period 9,283
11,286
2.47
2.80
HELOANs 827
1,030
2.42
2.82
Total $ 15,735
$ 17,924
1.72 % 2.00 %


~~(a)~~	~~These HELOCs are predominantly revolving~~that have been converted to term 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~~those that are still within the revolving period. That is primarily because the fully-amortizing payment that is generally required for those products is higher than the minimum payment options available for ~~HELOCs~~revolving loans within the revolving period. ~~The higher delinquency rates associated with amortizing HELOCs and HELOANs are factored into the Firm’s allowance for loan losses.~~

Nonaccrual loans and other credit quality indicators

~~Impaired loans~~

The following table ~~below sets forth~~provides information ~~about~~ ~~the Firm’s~~ on nonaccrual and other credit quality indicators for retained 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 2018 Form 10-K.~~

(in millions) Residential mortgage Home equity Total residential real estate – excluding PCI
Sep 30,
2019
Dec 31,
2018
Sep 30,
2019
Dec 31,
2018
Sep 30,
2019
Dec 31,
2018
Impaired loans
With an allowance $ 2,958
$ 3,381
$ 1,062
$ 1,142
$ 4,020
$ 4,523
Without an allowance^(a)
1,160
1,184
899
870
2,059
2,054
Total impaired loans^(b)(c)
$ 4,118
$ 4,565
$ 1,961
$ 2,012
$ 6,079
$ 6,577
Allowance for loan losses related to impaired loans $ 63
$ 88
$ 14
$ 45
$ 77
$ 133
Unpaid principal balance of impaired loans^(d)
5,578
6,207
3,355
3,466
8,933
9,673
Impaired loans on nonaccrual status^(e)
1,376
1,459
981
955
2,357
2,414



(in millions, except weighted-average data)	March 31, 2020			December 31, 2019
Nonaccrual loans^(a)(b)(c)(d)	$	3,730		$	2,780
90 or more days past due and government guaranteed^(e)	32			38

Current estimated LTV ratios^(f)(g)
Greater than 125% and refreshed FICO scores:
Equal to or greater than 660	$	31		$	31
Less than 660	28			38
101% to 125% and refreshed FICO scores:
Equal to or greater than 660	148			134
Less than 660	119			132
80% to 100% and refreshed FICO scores:
Equal to or greater than 660	5,310			5,953
Less than 660	758			764
Less than 80% and refreshed FICO scores:
Equal to or greater than 660	219,395			219,469
Less than 660	14,545			14,681
No FICO/LTV available	1,962			2,052
U.S. government-guaranteed	53			63
Total retained loans	$	242,349		$	243,317

Weighted average LTV ratio^(f)(h)	54		%	55		%
Weighted average FICO^(g)(h)	759			758

Geographic region⁽ⁱ⁾
California	$	81,783		$	82,147
New York	32,121			31,996
Illinois	15,246			15,587
Texas	14,567			14,474
Florida	13,755			13,668
Washington	8,915			8,990
Colorado	8,437			8,447
New Jersey	7,736			7,752
Massachusetts	6,129			6,210
Arizona	5,129			5,171
All other^(j)	48,531			48,875
Total retained loans	$	242,349		$	243,317

(a)

~~Represents~~Includes 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, 2019,~~March 31, 2020, approximately 8% of Chapter 7 residential real estate loans ~~included approximately 12% of residential mortgages and 7% of home equity that~~ were 30 days or more past ~~due.~~due, respectively.

(b)

At ~~September 30, 2019, and December~~March 31, ~~2018, $16~~2020, nonaccrual loans included $970 million ~~and $4.1 billion, respectively,~~ of PCD loans. Prior to the adoption of CECL, nonaccrual loans ~~modified subsequent to repurchase from Ginnie Mae in accordance with~~excluded PCI loans as the ~~standards~~Firm recognized interest income on each pool of PCI loans as each 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.pools was performing.

(c)

~~Predominantly~~Generally, all ~~impaired~~consumer nonaccrual loans inhave an allowance. In accordance with regulatory guidance, certain nonaccrual loans that are considered collateral-dependent have been charged off to the ~~table above are in~~fair value of their underlying collateral less costs to sell. If the ~~U.S.~~value of the underlying collateral has subsequently improved, the related allowance may be negative.

(d)

~~Represents~~The related interest income on nonaccrual loans recorded on a cash basis was $43 million and $42 million for the ~~contractual amount of principal owed at September 30,~~three months ended March 31, 2020 and 2019, and December 31, 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.respectively.

(e)

These balances are excluded from nonaccrual loans as the loans are guaranteed by U.S government agencies. Typically the principal balance of the loans is insured and interest is guaranteed at a specified reimbursement rate subject to meeting agreed-upon servicing guidelines. At ~~September 30, 2019~~March 31, 2020, and December 31, ~~2018, nonaccrual loans~~2019, these balances included ~~$1.9 billion~~$31 million and ~~$2.0 billion,~~$34 million, respectively, of ~~TDRs for which~~loans that are no longer accruing interest based on the ~~borrowers~~agreed-upon servicing guidelines. For the remaining balance, interest is being accrued at the guaranteed reimbursement rate. There were ~~less than~~0 loans that were not guaranteed by U.S. government agencies that are 90 or more days past ~~due. Refer 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.~~due and still accruing interest at March 31, 2020, and December 31, 2019.

~~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)
2019
2018
2019
2018
2019
2018
Residential mortgage $ 4,200
$ 4,872
$ 55
$ 61
$ 17
$ 19
Home equity 1,938
2,065
33
33
21
21
Total residential real estate – excluding PCI $ 6,138
$ 6,937
$ 88
$ 94
$ 38
$ 40

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 $ 4,390
$ 5,242
$ 171
$ 197
$ 52
$ 58
Home equity 1,973
2,092
99
98
62
63
Total residential real estate – excluding PCI $ 6,363
$ 7,334
$ 270
$ 295
$ 114
$ 121

~~(a)~~(f)

~~Generally, interest income on~~Represents the aggregate unpaid principal balance of loans ~~modified in TDRs is recognized on a cash basis until~~divided by the ~~borrower has made~~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. Current estimated combined LTV for junior lien home equity loans considers all available lien positions, as well as unused lines, related to the property.


(g)	Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.


(h)	Excludes loans with no FICO and/or LTV data available.


(i)	The geographic regions presented in the table are ordered based on the magnitude of ~~6 payments under~~ the ~~new terms, unless~~corresponding loan balances at March 31, 2020.


(j)	At March 31, 2020, and December 31, 2019, included mortgage loans insured by U.S. government agencies of $53 million and $63 million, respectively. These amounts have been excluded from the ~~loan is deemed to be collateral-dependent.~~geographic regions presented based upon the government guarantee.

Loan modifications

Modifications of residential real estate loans ~~excluding PCI loans,~~where the Firm grants concessions to borrowers who are experiencing financial difficulty are generally accounted for and reported as TDRs. Loans with short-term or other insignificant modifications that are not considered concessions are not TDRs. The carrying value of new TDRs was $142 million and $150 million for the three months ended March 31, 2020 and 2019, respectively. There were no additional commitments to lend to borrowers whose residential real estate loans ~~excluding PCI loans,~~ have been modified in TDRs.

~~The following table presents new TDRs reported by~~ ~~the Firm.~~

Three months ended September 30, Nine months ended September 30,
(in millions) 2019
2018
2019
2018
Residential mortgage $ 50
$ 67
$ 181
$ 314
Home equity 100
55
214
241
Total residential real estate – excluding PCI $ 150
$ 122
$ 395
$ 555

Nature and extent of modifications

The ~~U.S. Treasury’s Making Home Affordable~~Firm’s proprietary modification programs as well as ~~the Firm’s~~ ~~proprietary modification~~ government programs, including U.S. GSEs, generally provide various concessions to financially troubled borrowers including, but not limited to, interest rate reductions, term or payment extensions and ~~deferral~~delays of principal and/or interest payments that would otherwise have been required under the terms of the original agreement.

The following ~~tables provide~~ table provides 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~~ This table excludes Chapter 7 loans where the sole concession granted is the discharge of debt.


Three months ended September 30,									Total residential real estate – excluding PCI
	Residential mortgage				Home equity				Total residential real estate – excluding PCI
	2019		2018		2019		2018		2019		2018
													Three months ended March 31,
													2020		2019
Number of loans approved for a trial modification	365		513		854		586		1,219		1,099		1,996		1,942
Number of loans permanently modified	307		719		855		939		1,162		1,658		1,481		1,550
Concession granted:^(a)
Interest rate reduction	78	%	58	%	93	%	77	%	89	%	69	%	79	%	78	%
Term or payment extension	94		83		59		88		68		86		81		68
Principal and/or interest deferred	21		30		6		11		10		19		11		12
Principal forgiveness	7		9		4		7		5		8		4		6
Other^(b)	53		36		85		58		76		49		55		60

Nine months ended September 30,									Total residential real estate – excluding PCI
	Residential mortgage				Home equity				Total residential real estate – excluding PCI
	2019		2018		2019		2018		2019		2018
Number of loans approved for a trial modification	1,603		1,789		1,786		1,895		3,389		3,684
Number of loans permanently modified	1,178		2,374		2,778		4,005		3,956		6,379
Concession granted:^(a)
Interest rate reduction	65	%	36	%	83	%	57	%	78	%	49	%
Term or payment extension	91		49		64		62		72		57
Principal and/or interest deferred	26		47		7		22		13		31
Principal forgiveness	6		7		5		7		5		7
Other^(b)	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 and ~~forbearances~~payment delays that meet the definition of a TDR for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018. Forbearances suspend or reduce monthly payments for a specific period of time to address a temporary hardship.~~2019.

Financial effects of modifications and redefaults

The following ~~tables provide~~table provides information about the financial effects of the various concessions granted in modifications of residential real estate ~~loans, excluding PCI~~ loans under the loss mitigation programs described above and about redefaults of certain loans modified in TDRs for the periods presented. The following ~~tables present~~table presents only the financial effects of permanent modifications and do not include temporary concessions offered through trial modifications. ~~These tables~~This table also ~~exclude~~excludes Chapter 7 loans where the sole concession granted is the discharge of debt.


Three months ended September 30, (in millions, except weighted-average data)	Residential mortgage						Home equity						Total residential real estate – excluding PCI
	2019			2018			2019			2018			2019			2018
(in millions, except weighted-average data)																			Three months ended March 31,
																			2020			2019
Weighted-average interest rate of loans with interest rate reductions – before TDR	5.68		%	6.13		%	5.50		%	5.69		%	5.57		%	5.89		%	5.20		%	5.94		%
Weighted-average interest rate of loans with interest rate reductions – after TDR	3.99			4.23			3.30			3.83			3.58			4.01			3.48			4.00
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR	21			22			19			18			20			21			22			20
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR	39			39			39			39			39			39			39			38
Charge-offs recognized upon permanent modification	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Principal deferred	5			7			1			2			6			9			5			4
Principal forgiven	1			3			1			1			2			4			2			2
Balance of loans that redefaulted within one year of permanent modification^(a)	$	36		$	27		$	17		$	19		$	53		$	46		$	70		$	56

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 TDR	6.08		%	5.45		%	5.56		%	5.34		%	5.77		%	5.39		%
Weighted-average interest rate of loans with interest rate reductions – after TDR	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 TDR	21			24			20			18			20			22
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR	39			38			40			39			39			38
Charge-offs recognized upon permanent modification	$	1		$	—		$	—		$	1		$	1		$	1
Principal deferred	13			17			4			7			17			24
Principal forgiven	3			9			3			5			6			14
Balance of loans that redefaulted within one year of permanent modification^(a)	$	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 2 contractual payments past due. In the event that a modified loan redefaults, it ~~is probable that the loan~~ will ~~ultimately~~generally 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, 2019,~~ March 31, 2020, 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.~~ 6 years. 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, 2019,~~ March 31, 2020, and December 31, ~~2018,~~2019, the Firm had ~~non-PCI~~ residential real estate loans, excluding those insured by U.S. government agencies, with a carrying value of ~~$546 million~~$1.1 billion and ~~$653 million~~,$1.2 billion, respectively, that were not included in REO, but were in the process of active or suspended foreclosure.

~~Other consumer loans~~Auto and other

The following table ~~below~~ provides information on delinquency, which is the primary credit quality indicator for retained auto and other consumer loans.



	March 31, 2020																											December 31, 2019
(in millions, except ratios)	Term Loans by origination year																		Revolving loans
(in millions, except ratios)	2020			2019			2018			2017			2016			Prior to 2016			Within the revolving period			Converted to term loans			Total			Total
Loan delinquency
Current	$	5,354		$	17,455		$	10,841		$	7,478		$	4,173		$	2,056		$	3,268		$	181		$	50,806		$	51,005
30–119 days past due	47			134			124			100			90			70			26			17			608			667
120 or more days past due	—			—			—			1			—			1			4			10			16			10
Total retained loans	$	5,401		$	17,589		$	10,965		$	7,579		$	4,263		$	2,127		$	3,298		$	208		$	51,430		$	51,682
% of 30+ days past due to total retained loans	0.87		%	0.76		%	1.13		%	1.33		%	2.11		%	3.34		%	0.91		%	12.98		%	1.21		%	1.31		%

Nonaccrual and other credit quality indicator

The following table provides information on nonaccrual and other credit quality indicator for retained ~~loan classes, including~~ auto and ~~business banking~~other consumer loans.


(in millions, except ratios)	Auto						Consumer & Business Banking						Total other consumer						Total Auto and other
	Sep 30, 2019			Dec 31, 2018			Sep 30, 2019			Dec 31, 2018			Sep 30, 2019			Dec 31, 2018			Mar 31, 2020		Dec 31, 2019
Loan delinquency
Current	$	60,872		$	62,984		$	26,346		$	26,249		$	87,218		$	89,233
30–119 days past due	534			589			231			252			765			841
120 or more days past due	4			—			122			111			126			111
Total retained loans	$	61,410		$	63,573		$	26,699		$	26,612		$	88,109		$	90,185
% of 30+ days past due to total retained loans	0.88		%	0.93		%	1.32		%	1.36		%	1.01		%	1.06		%
Nonaccrual loans^(a)	112			128			268			245			380			373
Geographic region^(b)
Nonaccrual loans^(a)(b)(c)																			147		146

Geographic region^(d)
California	$	8,016		$	8,330		$	5,744		$	5,520		$	13,760		$	13,850		$	7,867	$	7,795
Texas	6,644			6,531			3,042			2,993			9,686			9,524			5,485		5,457
New York	3,627			3,863			4,339			4,381			7,966			8,244			3,692		3,706
Florida																			3,060		3,025
Illinois	3,438			3,716			1,737			2,046			5,175			5,762			2,396		2,443
Florida	3,280			3,256			1,565			1,502			4,845			4,758
New Jersey																			1,778		1,798
Pennsylvania																			1,662		1,721
Ohio																			1,453		1,490
Arizona	1,990			2,084			1,268			1,491			3,258			3,575			1,344		1,347
Ohio	1,900			1,973			1,189			1,305			3,089			3,278
New Jersey	1,920			1,981			805			723			2,725			2,704
Michigan	1,279			1,357			1,264			1,329			2,543			2,686
Louisiana	1,598			1,587			768			860			2,366			2,447			1,304		1,297
All other	27,718			28,895			4,978			4,462			32,696			33,357			21,389		21,603
Total retained loans	$	61,410		$	63,573		$	26,699		$	26,612		$	88,109		$	90,185		$	51,430	$	51,682
Loans by risk ratings^(c)
Noncriticized	$	13,823		$	15,749		$	18,738		$	18,743		$	32,561		$	34,492
Criticized performing	394			273			747			751			1,141			1,024
Criticized nonaccrual	—			—			218			191			218			191


(a)	There were 0 loans that were 90 or more days past due and still accruing interest at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018.~~2019.


(b)	All nonaccrual auto and other consumer loans generally have an allowance.


(c)	Interest income on nonaccrual loans recognized on a cash basis was not material for the three months ended March 31, 2020 and 2019.


(d)	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,
2019
December 31,
2018
Impaired loans
With an allowance $ 242
$ 222
Without an allowance^(a)
20
29
Total impaired loans^(b)(c)
$ 262
$ 251
Allowance for loan losses related to impaired loans $ 68
$ 63
Unpaid principal balance of impaired loans^(d)
357
355
Impaired loans on nonaccrual status 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 $254 million and $271 million for the three months ended September 30, 2019 and 2018, respectively, and $248 million and $281 million for the nine months ended September 30, 2019 and 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, 2019 and 2018.


~~(d)~~	~~Represents the contractual amount of principal owed at September 30, 2019, and December~~March 31, 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.2020.

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~~Loans with short-term or other insignificant modifications that are ~~reported as impaired loans. Refer to Note~~ ~~12 of JPMorgan Chase’s 2018 Form 10-K~~ ~~for further information on other consumer loans modified in~~not considered concessions are not TDRs.

At ~~September 30, 2019 and December 31, 2018,~~ ~~other consumer loans modified in TDRs were~~ ~~$77 million and $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, 2019~~March 31, 2020 and ~~2018.~~ 2019. Additional commitments to lend to borrowers whose loans have been modified in TDRs as of ~~September 30, 2019~~ March 31, 2020 and December 31, ~~2018~~ 2019 were not material. ~~TDRs on nonaccrual status were~~ ~~$55 million and $57 million at September 30, 2019 and December 31, 2018,~~ ~~respectively.~~

~~Purchased credit-impaired loans~~

~~Refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for a detailed discussion of PCI loans, including the related accounting 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 PCI
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)
$ 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)

Current $ 7,543
$ 8,624

$ 3,759
$ 4,226

$ 1,915
$ 2,033

$ 6,876
$ 7,592

$ 20,093
$ 22,475
30–149 days past due 234
278

241
259

247
286

362
398

1,084
1,221
150 or more days past due 165
242

183
223

99
123

350
457

797
1,045
Total loans $ 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 loans 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)

Greater than 125% and refreshed FICO scores:

Equal to or greater than 660 $ 13
$ 17

$ 2
$ 1

$ —
$ —

$ 3
$ 3

$ 18
$ 21
Less than 660 10
13

6
7

7
9

5
7

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

Equal to or greater than 660 96
135

6
6

7
4

18
17

127
162
Less than 660 46
65

19
22

24
35

18
33

107
155
80% to 100% and refreshed FICO scores:

Equal to or greater than 660 643
805

58
75

52
54

102
119

855
1,053
Less than 660 271
388

71
112

109
161

128
190

579
851
Lower than 80% and refreshed FICO scores:

Equal to or greater than 660 5,031
5,548

2,559
2,689

809
739

4,932
5,111

13,331
14,087
Less than 660 1,613
1,908

1,283
1,568

1,155
1,327

2,093
2,622

6,144
7,425
No FICO/LTV available 219
265

179
228

98
113

289
345

785
951
Total unpaid principal balance $ 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)

California $ 4,704
$ 5,420

$ 2,280
$ 2,578

$ 549
$ 593

$ 4,355
$ 4,798

$ 11,888
$ 13,389
Florida 865
976

295
332

218
234

630
713

2,008
2,255
New York 469
525

338
365

249
268

452
502

1,508
1,660
Illinois 207
233
139
154
115
123
181
199
642
709
Washington 348
419

85
98

38
44

155
177

626
738
New Jersey 184
210

117
134

81
88

222
258

604
690
Massachusetts 56
65

103
113

69
73

216
240

444
491
Maryland 43
48

89
95

90
96

160
178

382
417
Virginia 47
54

82
91

35
37

190
211

354
393
Arizona 138
165

60
69

39
43

99
112

336
389
All other 881
1,029

595
679

778
843

928
1,059

3,182
3,610
Total unpaid principal balance $ 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)~~


~~(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~~ ~~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, 2019, and December 31, 2018.~~

Total loans Total 30+ day delinquency rate
(in millions, except ratios) Sep 30,
2019
Dec 31,
2018
Sep 30,
2019
Dec 31,
2018

HELOCs^(a)(b)
5,623
6,531
3.66 % 4.00 %
HELOANs 234
280
2.99
3.57
Total $ 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)~~	~~Includes loans modified into fixed rate amortizing loans.~~

~~The table below presents the accretable yield activity for the Firm’s~~ ~~PCI consumer loans for the~~ ~~three and nine months ended September 30, 2019 and 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 PCI
(in millions, except ratios) Three months ended September 30, Nine months ended September 30,
2019 2018 2019 2018
Beginning balance $ 7,699
$ 8,722
$ 8,422
$ 11,159
Accretion into interest income (272 ) (303 ) (841 ) (958 )
Changes in interest rates on variable-rate loans (308 ) 37
(402 ) (231 )
Other changes in expected cash flows^(a)
255
46
195
(1,468 )
Balance at September 30 $ 7,374
$ 8,502
$ 7,374
$ 8,502
Accretable yield percentage 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, 2019, and December 31, 2018, the Firm~~ ~~had PCI residential real estate loans with an unpaid principal balance of~~ ~~$776 million and $964 million, respectively, that were not included in REO, but were in the process of active or suspended foreclosure.~~

Credit card loan portfolio

~~Refer~~

The credit card portfolio segment includes credit card loans originated and purchased by the Firm. Delinquency rates are the primary credit quality indicator for credit card loans as they provide an early warning that borrowers may be experiencing difficulties (30 days past due); information on those borrowers that have been delinquent for a longer period of time (90 days past due) is also considered. In addition to ~~Note 12~~delinquency rates, the geographic distribution of ~~JPMorgan Chase’s 2018 Form 10-K~~the loans provides insight as to the credit quality of the portfolio based on the regional economy.

While the borrower’s credit score is another general indicator of credit quality, the Firm does not view credit scores as a primary indicator of credit quality because the borrower’s credit score tends to be a lagging indicator. The

distribution of such scores provides a general indicator of credit quality trends within the portfolio; however, the score does not capture all factors that would be predictive of future credit performance. Refreshed FICO score information, which is obtained at least quarterly, for ~~further information on~~a statistically significant random sample of the credit card ~~loan~~ portfolio ~~including~~is indicated in the following table. FICO is considered to be the industry benchmark for credit scores.

The Firm generally originates new card accounts to prime consumer borrowers. However, certain cardholders’ FICO scores may decrease over time, depending on the performance of the cardholder and changes in the credit score calculation.

The following table provides information on delinquency, which is the primary credit quality ~~indicators.~~

~~The table below sets forth information about the Firm’s~~ indicator for retained credit card loans.



(in millions, except ratios)	March 31, 2020									December 31, 2019
	Within the revolving period			Converted to term loans			Total			Total
Loan delinquency
Current and less than 30 days past due and still accruing	$	149,689		$	1,314		$	151,003		$	165,767
30–89 days past due and still accruing	1,325			126			1,451			1,550
90 or more days past due and still accruing	1,502			65			1,567			1,607
Total retained loans	$	152,516		$	1,505		$	154,021		$	168,924
Loan delinquency ratios
% of 30+ days past due to total retained loans	1.85		%	12.69		%	1.96		%	1.87		%
% of 90+ days past due to total retained loans	0.98			4.32			1.02			0.95

(in millions, except ratios) September 30,
2019
December 31,
2018
Loan delinquency
Current and less than 30 days
past due and still accruing
$ 156,629
$ 153,746
30–89 days past due and still accruing 1,500
1,426
90 or more days past due and still accruing 1,442
1,444
Total retained loans $ 159,571
$ 156,616
Loan delinquency ratios
% of 30+ days past due
to total retained loans
1.84 % 1.83 %
% of 90+ days past due
to total retained loans
0.90
0.92
Geographic region^(a)

California $ 24,313
$ 23,757
Texas 15,790
15,085
New York 13,940
13,601
Florida 10,101
9,770
Illinois 9,125
8,938
New Jersey 6,821
6,739
Ohio 5,093
5,094
Pennsylvania 4,918
4,996
Colorado 4,543
4,309
Michigan 3,942
3,912
All other 60,985
60,415
Total retained loans $ 159,571
$ 156,616
Percentage of portfolio based on carrying value with estimated refreshed FICO scores
Equal to or greater than 660 83.6 % 84.2 %
Less than 660 15.6
15.0
No FICO available 0.8
0.8
Other credit quality indicators

The following table provides information on other credit quality indicators for retained credit card loans.



(in millions, except ratios)	March 31, 2020			December 31, 2019
Geographic region^(a)
California	$	23,199		$	25,783
Texas	15,517			16,728
New York	13,264			14,544
Florida	10,146			10,830
Illinois	8,607			9,579
New Jersey	6,424			7,165
Ohio	4,874			5,406
Pennsylvania	4,709			5,245
Colorado	4,304			4,763
Michigan	3,788			4,164
All other	59,189			64,717
Total retained loans	$	154,021		$	168,924
Percentage of portfolio based on carrying value with estimated refreshed FICO scores
Equal to or greater than 660	82.3		%	84.0		%
Less than 660	16.6			15.4
No FICO available	1.1			0.6


(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~~

~~Refer 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.~~

~~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,
2019
December 31,
2018
Impaired credit card loans with an allowance^(a)(b)(c)
$ 1,423
$ 1,319
Allowance for loan losses related to impaired credit card loans 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)~~	~~Predominantly all impaired credit card loans are in the U.S.~~March 31, 2020.

~~The following table presents average balances of impaired credit card loans and interest income recognized on those loans.~~

Three months ended September 30, Nine months ended September 30,
(in millions) 2019
2018
2019
2018
Average impaired credit card loans $ 1,406
$ 1,267
$ 1,371
$ 1,245
Interest income on impaired credit card loans 18
17
53
48

Loan modifications

The Firm may offer one of a number of loan modification programs granting concessions to credit card borrowers who are experiencing financial difficulty. ~~Most~~The Firm grants concessions for most of the credit card loans ~~have been modified~~ under long-term ~~programs for borrowers who are experiencing financial difficulties.~~programs. These modifications involve placing the customer on a fixed payment plan, generally for 60 months, and typically include reducing the interest rate on the credit card. Substantially all modifications under the Firm’s long-term programs are considered to be TDRs. New enrollments in these loan modification programs were $242 million and $215 million for the three months ended September 30, 2019 and 2018, respectively, and $717 million and $640 million for the nine months ended September 30, 2019 and 2018, respectively. For all periods disclosed, new enrollments were less than 1% of total retained credit card loans.

~~Refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for additional information about credit card loan modifications.~~Loans with short-term or other insignificant modifications that are not considered concessions are not TDRs.

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. For all periods disclosed, new enrollments were less than 1% of total retained credit card loans.


(in millions, except weighted-average data)	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
	2019			2018			2019			2018			2020			2019
Balance of new TDRs^(a)													$	277		$	249
Weighted-average interest rate of loans – before TDR	19.18		%	18.25		%	19.23		%	17.82		%	18.82		%	19.13		%
Weighted-average interest rate of loans – after TDR	4.65			5.10			4.80			5.12			4.02			5.03
Loans that redefaulted within one year of modification^(a)	$	42		$	31		$	108		$	82
Balance of loans that redefaulted within one year of modification^(b)													$	36		$	34


(a)	Represents the outstanding balance prior to modification.


(b)	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~~2 consecutive contractual payments. A substantial portion of these loans are expected to be ~~charged-off~~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 ~~34.30%~~35.15% and ~~33.38%~~32.89% as of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018~~,2019, 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 internal risk rating assigned to each loan. Risk ratings are used to identify the credit quality of loans and differentiate risk within the portfolio. Risk ratings on loans consider the PD and the LGD. The PD is the likelihood that a loan will default. The LGD is the estimated loss on the loan that would be realized upon the default of the borrower and takes into consideration collateral and structural support for each credit facility.

Management considers several factors to determine an appropriate internal risk rating, including the obligor’s debt capacity and financial flexibility, the level of the obligor’s earnings, the amount and sources for repayment, the level and nature of contingencies, management strength, and the industry and geography in which the obligor operates. The Firm’s internal risk ratings generally align with the qualitative characteristics (e.g., borrower capacity to meet financial commitments and vulnerability to changes in the economic environment) defined by S&P and Moody’s, however the quantitative characteristics (e.g., PDs and LGDs) may differ as they reflect internal historical experiences and assumptions. The Firm considers internal ratings equivalent to BBB-/Baa3 or higher as investment grade, and these ratings have a lower PD and/or lower LGD than non-investment grade ratings.

Noninvestment-grade ratings are further classified as noncriticized and criticized, and the criticized portion is further subdivided into performing and nonaccrual loans, representing management’s assessment of the collectibility of principal and interest. Criticized loans have a higher PD than noncriticized loans. The Firm’s definition of criticized aligns with the U.S. banking regulatory definition of criticized exposures, which consist of special mention, substandard and doubtful categories.

~~each loan.~~Risk ratings are reviewed on a regular and ongoing basis by Credit Risk Management and are adjusted as necessary for updated information affecting the obligor’s ability to fulfill its obligations.

As noted above, the risk rating of a loan considers the industry in which the obligor conducts its operations. As part of the overall credit risk management framework, the Firm focuses on the management and diversification of its industry and client exposures, with particular attention paid to industries with actual or potential credit concern. Refer to Note 12 ~~and Note~~ ~~13 of JPMorgan Chase’s 2018 Form 10-K~~4 for further ~~information~~detail on ~~these risk ratings.~~industry concentrations.

The ~~table below provides~~following tables provide information ~~by class of receivable~~on internal risk rating, which is the primary credit quality indicator for ~~the~~ retained ~~loans in the Wholesale portfolio segment.~~wholesale loans.


	Commercial and industrial						Real estate						Financial institutions						Governments & Agencies						Other^(d)						Total retained loans						Secured by real estate						Commercial and industrial						Other						Total retained loans
(in millions, except ratios)	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			Mar 31, 2020			Dec 31, 2019			Mar 31, 2020			Dec 31, 2019			Mar 31, 2020			Dec 31, 2019			Mar 31, 2020			Dec 31, 2019
Loans by risk ratings
Investment-grade	$	61,709		$	73,497		$	101,379		$	100,107		$	39,492		$	32,178		$	12,905		$	13,984		$	121,813		$	119,963		$	337,298		$	339,729		$	96,786		$	96,611		$	106,902		$	80,489		$	203,635		$	186,344		$	407,323		$	363,444
Noninvestment-grade:
Noncriticized	52,484			51,720			13,574			14,876			16,123			15,316			206			201			11,059			11,478			93,446			93,591			23,334			22,493			80,210			60,437			31,231			27,591			134,775			110,521
Criticized performing	3,743			3,738			808			620			202			150			—			2			540			182			5,293			4,692			1,339			1,131			8,459			4,399			1,436			1,126			11,234			6,656
Criticized nonaccrual	1,291			851			65			134			22			4			—			—			92			161			1,470			1,150			254			183			1,278			844			425			30			1,957			1,057
Total noninvestment- grade	57,518			56,309			14,447			15,630			16,347			15,470			206			203			11,691			11,821			100,209			99,433			24,927			23,807			89,947			65,680			$	33,092		28,747			147,966			118,234
Total retained loans	$	119,227		$	129,806		$	115,826		$	115,737		$	55,839		$	47,648		$	13,111		$	14,187		$	133,504		$	131,784		$	437,507		$	439,162		$	121,713		$	120,418		$	196,849		$	146,169		$	236,727		$	215,091		$	555,289		$	481,678
% of total criticized exposure to total retained loans	4.22		%	3.54		%	0.75		%	0.65		%	0.40		%	0.32		%	—		%	0.01		%	0.47		%	0.26		%	1.55		%	1.33		%
% of investment-grade to total retained loans																																					79.52		%	80.23		%	54.31		%	55.07		%	86.02		%	86.63		%	73.35		%	75.45		%
% of total criticized to total retained loans																																					1.31			1.09			4.95			3.59			0.79			0.54			2.38			1.60
% of criticized nonaccrual to total retained loans	1.08			0.66			0.06			0.12			0.04			0.01			—			—			0.07			0.12			0.34			0.26			0.21			0.15			0.65			0.58			0.18			0.01			0.35			0.22

Loans by geographic distribution^(a)
Total non-U.S.	$	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.	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	$	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	$	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	279			109			22			67			51			12			13			18			568			702			933			908
90 or more days past due and still accruing^(c)	36			168			6			3			2			10			1			4			—			3			45			188
Criticized nonaccrual	1,291			851			65			134			22			4			—			—			92			161			1,470			1,150
Total retained loans	$	119,227		$	129,806		$	115,826		$	115,737		$	55,839		$	47,648		$	13,111		$	14,187		$	133,504		$	131,784		$	437,507		$	439,162



	Secured by real estate
(in millions)	March 31, 2020																		December 31, 2019
	Term loans by origination year												Revolving loans
	2020		2019		2018		2017		2016		Prior to 2016		Within the revolving period		Converted to term loans		Total		Total
Loans by risk ratings
Investment-grade	$	5,211	$	21,611	$	15,099	$	14,485	$	16,839	$	22,148	$	1,392	$	1	$	96,786	$	96,611
Noninvestment-grade	659		2,944		3,498		2,492		2,611		12,030		692		1		24,927		23,807
Total retained loans	$	5,870	$	24,555	$	18,597	$	16,977	$	19,450	$	34,178	$	2,084	$	2	$	121,713	$	120,418



	Commercial and industrial
(in millions)	March 31, 2020																		December 31, 2019
	Term loans by origination year												Revolving loans
	2020		2019		2018		2017		2016		Prior to 2016		Within the revolving period		Converted to term loans		Total		Total
Loans by risk ratings
Investment-grade	$	10,837	$	11,781	$	5,349	$	4,054	$	1,435	$	1,662	$	71,780	$	4	$	106,902	$	80,489
Noninvestment-grade	6,192		11,346		6,785		2,998		970		3,079		58,486		91		89,947		65,680
Total retained loans	$	17,029	$	23,127	$	12,134	$	7,052	$	2,405	$	4,741	$	130,266	$	95	$	196,849	$	146,169



	Other^(a)
(in millions)	March 31, 2020																		December 31, 2019
	Term loans by origination year												Revolving loans
	2020		2019		2018		2017		2016		Prior to 2016		Within the revolving period		Converted to term loans		Total		Total
Loans by risk ratings
Investment-grade	$	11,434	$	14,841	$	10,247	$	7,719	$	4,660	$	14,835	$	139,618	$	281	$	203,635	$	186,344
Noninvestment-grade	2,692		3,346		2,447		743		180		686		22,958		40		33,092		28,747
Total retained loans	$	14,126	$	18,187	$	12,694	$	8,462	$	4,840	$	15,521	$	162,576	$	321	$	236,727	$	215,091


(a)	Includes loans to financial institutions, states and political subdivisions, SPEs, nonprofits, personal investment companies and trusts, as well as loans to individuals and individual entities (predominantly Wealth Management clients within AWM). Refer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for more information on SPEs.

The following table presents additional information on retained loans secured by real estate, which consists of loans secured wholly or substantially by a lien or liens on real property at origination.



(in millions, except ratios)	Multifamily						Other commercial						Total retained loans secured by real estate
(in millions, except ratios)	Mar 31, 2020			Dec 31, 2019			Mar 31, 2020			Dec 31, 2019			Mar 31, 2020			Dec 31, 2019
Retained loans secured by real estate	$	74,494		$	73,840		$	47,219		$	46,578		$	121,713		$	120,418
Criticized	342			340			1,251			974			1,593			1,314
% of total criticized to total retained loans secured by real estate	0.46		%	0.46		%	2.65		%	2.09		%	1.31		%	1.09		%
Criticized nonaccrual	$	28		$	28		$	226		$	155		$	254		$	183
% of criticized nonaccrual loans to total retained loans secured by real estate	0.04		%	0.04		%	0.48		%	0.33		%	0.21		%	0.15		%

Geographic distribution and delinquency

The following table provides information on the geographic distribution and delinquency for retained wholesale loans.



	Secured by real estate				Commercial and industrial				Other				Total retained loans
(in millions, except ratios)	Mar 31, 2020		Dec 31, 2019		Mar 31, 2020		Dec 31, 2019		Mar 31, 2020		Dec 31, 2019		Mar 31, 2020		Dec 31, 2019
Loans by geographic distribution^(a)
Total non-U.S.	$	2,466	$	2,582	$	44,606	$	34,215	$	67,738	$	64,579	$	114,810	$	101,376
Total U.S.	119,247		117,836		152,243		111,954		168,989		150,512		440,479		380,302
Total retained loans	$	121,713	$	120,418	$	196,849	$	146,169	$	236,727	$	215,091	$	555,289	$	481,678
Loan delinquency^(b)
Current and less than 30 days past due and still accruing	$	121,173	$	120,119	$	195,210	$	144,839	$	235,741	$	214,641	$	552,124	$	479,599
30–89 days past due and still accruing	286		115		329		449		538		415		1,153		979
90 or more days past due and still accruing^(c)	—		1		32		37		23		5		55		43
Criticized nonaccrual	254		183		1,278		844		425		30		1,957		1,057
Total retained loans	$	121,713	$	120,418	$	196,849	$	146,169	$	236,727	$	215,091	$	555,289	$	481,678


(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. ~~Refer to Note 12 of JPMorgan Chase’s 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 and includes exposure to personal investment companies and personal and testamentary trusts), SPEs and Private education and civic organizations. Refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K for more information on SPEs.

Nonaccrual loans

The following table ~~presents additional~~provides information on ~~the real estate class of loans within the Wholesale portfolio for the periods indicated. Refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for further information on real estate~~retained wholesale nonaccrual loans.

(in millions, except ratios)
Multifamily Other commercial Total real estate loans
Sep 30,
2019
Dec 31,
2018
Sep 30,
2019
Dec 31,
2018
Sep 30,
2019
Dec 31,
2018
Real estate retained loans $ 79,169
$ 79,184
$ 36,657
$ 36,553
$ 115,826
$ 115,737
Criticized exposure 533
388
340
366
873
754
% of total criticized exposure to total real estate retained loans 0.67 % 0.49 % 0.93 % 1.00 % 0.75 % 0.65 %
Criticized nonaccrual $ 34
$ 57
$ 31
$ 77
$ 65
$ 134
% of criticized nonaccrual loans to total real estate retained loans 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 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

Governments &
Agencies
Other
Total
retained loans

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 $ 1,068
$ 807
$ 46
$ 107
$ 22
$ 4
$ —
$ —
$ 96
$ 152
$ 1,232
$ 1,070

Without an allowance^(a)
279
140
21
27
—
—
—
—
4
13
304
180

Total impaired loans
$ 1,347
$ 947
$ 67
$ 134
$ 22
$ 4
$ —
$ —
$ 100
$ 165
$ 1,536
^(c)
$ 1,250
^(c)
Allowance for loan losses related to impaired loans $ 320
$ 252
$ 13
$ 25
$ 7
$ 1
$ —
$ —
$ 2
$ 19
$ 342
$ 297

Unpaid principal balance of impaired loans^(b)
1,532
1,043
104
203
23
4
—
—
336
473
1,995
1,723



(in millions)	Secured by real estate				Commercial and industrial				Other				Total retained loans
(in millions)	Mar 31, 2020		Dec 31, 2019		Mar 31, 2020		Dec 31, 2019		Mar 31, 2020		Dec 31, 2019		Mar 31, 2020		Dec 31, 2019
Nonaccrual loans
With an allowance	$	232	$	169	$	1,157	$	688	$	345	$	28	$	1,734	$	885
Without an allowance^(a)	22		14		121		156		80		2		223		172
Total nonaccrual loans^(b)	$	254	$	183	$	1,278	$	844	$	425	$	30	$	1,957	$	1,057


(a)	When the discounted cash flows, collateral value or market price equals or exceeds the ~~recorded investment in~~amortized cost of the loan, the loan does not require an allowance. This typically occurs when the ~~impaired~~ loans have been partially ~~charged-off~~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, 2019, and December 31, 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,
(in millions) 2019
2018
2019
2018
Commercial and industrial $ 1,073
$ 838
$ 1,082
$ 1,095
Real estate 80
134
105
138
Financial institutions 9
45
11
76
Governments & Agencies —
—
—
—
Other 123
202
207
214
Total^(a)
$ 1,285
$ 1,219
$ 1,405
$ 1,523


~~(a)~~	~~The related interest~~Interest income on ~~accruing impaired~~nonaccrual loans ~~and interest income~~ recognized on a cash basis ~~were~~was not material for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.

Loan modifications

Certain loan modifications are considered to be TDRs as they provide various concessions to borrowers who are experiencing financial difficulty. ~~All TDRs~~Loans with short-term or other insignificant modifications that are ~~reported as impaired loans in the tables above. TDRs were $498 million and $576 million as of September 30, 2019, and December 31, 2018, respectively.~~not considered concessions are not TDRs. The impact of these modifications, as well as new TDRs, ~~were~~was not material to the Firm for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~

2019.

Note 1213 – Allowance for credit losses

JPMorgan Chase’s ~~2018 Form 10-K~~allowance for ~~a detailed discussion~~credit losses comprises:

the allowance for loan losses, which covers the Firm’s retained loan portfolios (scored and risk-rated) and is presented separately on the balance sheet,

the allowance for lending-related commitments, which is presented on the balance sheet in accounts payable and other liabilities, and

the allowance for credit losses on investment securities, which covers the Firm’s HTM and AFS securities and is recognized within Investment Securities on the balance sheet.

The income statement effect of all changes in the allowance for credit losses is recognized in the provision for credit losses.

Determining the appropriateness of the allowance for credit losses is complex and requires significant judgment by management about the effect of matters that are inherently uncertain. At least quarterly, the allowance for credit losses is reviewed by the CRO, the CFO and the Controller of the Firm. Subsequent evaluations of credit exposures, considering the macroeconomic conditions, forecasts and other factors then prevailing, may result in significant changes in the allowance for credit losses in future periods.

The Firm’s policies used to determine its allowance for loan losses and its allowance for lending-related commitments are described in the following paragraphs. Refer to Note 10 for a description of the policies used to determine the allowance for credit losses on investment securities.

Methodology for allowances for loan losses and lending-related commitments

The allowance for loan losses and allowance for lending-related commitments represents expected credit losses over the remaining expected life of retained loans and lending-related commitments that are not unconditionally cancellable. The Firm does not record an allowance for future draws on unconditionally cancellable lending-related commitments (e.g., credit cards). Expected losses related ~~accounting policies.~~to accrued interest on credit card loans are included in the Firm’s allowance for loan losses. However, the Firm does not record an allowance on other accrued interest receivables, due to its policy to write them off no later than 90 days past due by reversing interest income.

The expected life of each instrument is determined by considering its contractual term, expected prepayments, cancellation features, and certain extension and call options. The expected life of funded credit card loans is generally estimated by considering expected future payments on the

credit card account, and determining how much of those amounts should be allocated to repayments of the funded loan balance (as of the balance sheet date) versus other account activity. This allocation is made using an approach that incorporates the payment application requirements of the Credit Card Accountability Responsibility and Disclosure Act of 2009, generally paying down the highest interest rate balances first.

The estimate of expected credit losses includes expected recoveries of amounts previously charged off or expected to be charged off, even if such recoveries result in a negative allowance.

Collective and Individual Assessments

When calculating the allowance for loan losses and the allowance for lending-related commitments, the Firm assesses whether exposures share similar risk characteristics. If similar risk characteristics exist, the Firm estimates expected credit losses collectively, considering the risk associated with a particular pool and the probability that the exposures within the pool will deteriorate or default.

Relevant risk characteristics for the consumer portfolio include product type, delinquency status, current FICO scores, geographic distribution, and, for collateralized loans, current LTV ratios. Relevant risk characteristics for the wholesale portfolio include LOB, geography, risk rating, delinquency status, level and type of collateral, industry sector, credit enhancement, product type, facility purpose, tenor, and payment terms. The assessment of risk characteristics is subject to significant management judgment. Emphasizing one characteristic over another or considering additional characteristics could affect the allowance.

The majority of the Firm’s credit exposures share risk characteristics with other similar exposures, and as a result are collectively assessed for impairment (“portfolio-based component”). The portfolio-based component covers consumer loans, performing risk-rated loans and certain lending-related commitments.

If an exposure does not share risk characteristics with other exposures, the Firm generally estimates expected credit losses on an individual basis, considering expected repayment and conditions impacting that individual exposure (“asset-specific component”). The asset-specific component covers modified PCD loans, loans modified or reasonably expected to be modified in a TDR, collateral-dependent loans, as well as, risk-rated loans that have been placed on nonaccrual status.

Portfolio-based component

The portfolio-based component begins with a quantitative calculation that considers the likelihood of the borrower changing delinquency status or moving from one risk rating to another. The quantitative calculation covers expected credit losses over an instrument’s expected life and is estimated by applying credit loss factors to the Firm’s estimated exposure at default.

The credit loss factors incorporate the probability of borrower default as well as loss severity in the event of default. They are derived using a weighted average of five internally developed macroeconomic scenarios over an eight-quarter

forecast period, followed by a single year straight-line interpolation to revert to long run historical information for periods beyond the eight-quarter forecast period. The eight-quarter forecast incorporates hundreds of macroeconomic variables that are relevant for exposures across the Firm, with modeled credit losses being driven primarily by a subset of less than twenty variables, including U.S. real gross domestic product (“GDP”), U.S. unemployment rates and initial jobless claims, short- and long-term interest rates, U.S. equity prices, corporate credit spreads, housing prices, and oil prices. The specific variables that have the greatest effect on the modeled losses of each portfolio vary by portfolio and geography. The five macroeconomic scenarios consist of a central, relative adverse, extreme adverse, relative upside and extreme upside scenario, and are updated by the Firm’s central forecasting team. The scenarios take into consideration the Firm’s overarching economic outlook, internal perspectives from subject matter experts across the Firm, and market consensus and involve a governed process that incorporates feedback from senior management across LOBs, Corporate Finance and Risk Management.

In light of the rapidly evolving economic conditions and forecasts during March 2020, management updated its macroeconomic forecast near the end of its credit loss estimation process in early April. This macroeconomic forecast was used to generate an updated credit loss estimate that was the primary driver of the Firm’s provision for credit losses for the three months ended March 31, 2020. Subsequent changes to this forecast and related estimates will be reflected in the provision for credit losses in future periods.

The quantitative calculation is adjusted to take into consideration model imprecision, emerging risk assessments, trends and other subjective factors that are not yet reflected in the calculation; these adjustments are accomplished in part by analyzing the historical loss experience, including during stressed periods, for each major product segment. However, it is difficult to predict whether historical loss experience is indicative of future loss levels. In particular, the COVID-19 pandemic has stressed many macroeconomic variables to degrees not seen nor experienced in recent history, which creates additional challenges in the use of modeled credit loss estimates.

Management applies significant judgment in making this adjustment, taking into account uncertainties associated with various factors not already considered in the quantitative calculation, including current economic and political conditions, quality of underwriting standards, borrower behavior, credit concentrations or deterioration within an industry, product or portfolio, as well as other relevant internal and external factors affecting the credit quality of the portfolio. In certain instances, the interrelationships between these factors create further uncertainties.

The application of different inputs into the quantitative calculation, and the assumptions used by management to adjust the quantitative calculation, are subject to significant management judgment, and emphasizing one input or assumption over another, or considering other inputs or assumptions, could affect the estimate of the allowance for

loan losses and the allowance for lending-related commitments.

Asset-specific component

To determine the asset-specific component of the allowance, collateral-dependent loans (including those loans for which foreclosure is probable) and larger, nonaccrual risk-rated loans in the wholesale portfolio segment are generally evaluated individually, while smaller loans (both scored and risk-rated) are aggregated for evaluation using factors relevant for the respective class of assets.

The Firm generally measures the asset-specific allowance as the difference between the amortized cost of the loan and the present value of the cash flows expected to be collected, discounted at the loan’s original effective interest rate. Subsequent changes in impairment are generally recognized as an adjustment to the allowance for loan losses. For collateral-dependent loans, the fair value of collateral less estimated costs to sell is used to determine the charge-off amount for declines in value (to reduce the amortized cost of the loan to the fair value of collateral) or the amount of negative allowance that should be recognized (for recoveries of prior charge-offs associated with improvements in the fair value of collateral).

The asset-specific component of the allowance for loan losses that have been or are expected to be modified in TDRs incorporates the effect of the modification on the loan’s expected cash flows (including forgone interest, principal forgiveness, as well as other concessions), and also the potential for redefault. For residential real estate loans modified in or expected to be modified in TDRs, the Firm develops product-specific probability of default estimates, which are applied at a loan level to compute expected losses. In developing these probabilities of default, the Firm considers the relationship between the credit quality characteristics of the underlying loans and certain assumptions about housing prices and unemployment, based upon industry-wide data. The Firm also considers its own historical loss experience to-date based on actual redefaulted modified loans. For credit card loans modified in or expected to be modified in TDRs, expected losses incorporate projected redefaults based on the Firm’s historical experience by type of modification program. For wholesale loans modified or expected to be modified in TDRs, expected losses incorporate management’s expectation of the borrower’s ability to repay under the modified terms.

Estimating the timing and amounts of future cash flows is highly judgmental as these cash flow projections rely upon estimates such as loss severities, asset valuations, default rates (including redefault rates on modified loans), the amounts and timing of interest or principal payments (including any expected prepayments) or other factors that are reflective of current and expected market conditions. These estimates are, in turn, dependent on factors such as the duration of current overall economic conditions, industry-, portfolio-, or borrower-specific factors, the expected outcome of insolvency proceedings as well as, in certain circumstances, other economic factors. All of these estimates and assumptions require significant management judgment and certain assumptions are highly subjective.

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. Refer to Note 10 for further information on the allowance for credit losses on investment securities.


	2019													2018													2020^(e)												2019
Nine months ended September 30, (in millions)	Consumer, excluding credit card			Credit card				Wholesale			Total			Consumer, excluding credit card			Credit card				Wholesale			Total
Three months ended March 31, (in millions)																											Consumer, excluding credit card			Credit card			Wholesale			Total			Consumer, excluding credit card			Credit card			Wholesale			Total
Allowance for loan losses
Beginning balance at January 1,	$	4,146		$	5,184			$	4,115		$	13,445		$	4,579		$	4,884			$	4,141		$	13,604		$	2,538		$	5,683		$	4,902		$	13,123		$	3,434		$	5,184		$	4,827		$	13,445
Cumulative effect of a change in accounting principle																											297			5,517			(1,642		)	4,172			NA			NA			NA			NA
Gross charge-offs	702			4,050				270			5,022			776			3,777				264			4,817			233			1,488			181			1,902			234			1,344			64			1,642
Gross recoveries	(420		)	(433		)		(34		)	(887		)	(681		)	(370		)		(146		)	(1,197		)
Gross recoveries collected																											(239		)	(175		)	(19		)	(433		)	(127		)	(142		)	(12		)	(281		)
Net charge-offs	282			3,617				236			4,135			95			3,407				118			3,620			(6		)	1,313			162			1,469			107			1,202			52			1,361
Write-offs of PCI loans^(a)	132			—				—			132			151			—				—			151			NA			NA			NA			NA			50			—			—			50
Provision for loan losses	(265		)	4,017				296			4,048			(152		)	3,557				(111		)	3,294			613			5,063			1,742			7,418			120			1,202			170			1,492
Other	—			(1		)		10			9			1			—				—			1			—			—			—			—			2			(1		)	6			7
Ending balance at September 30,	$	3,467		$	5,583			$	4,185		$	13,235		$	4,182		$	5,034			$	3,912		$	13,128
Ending balance at March 31,																											$	3,454		$	14,950		$	4,840		$	23,244		$	3,399		$	5,183		$	4,951		$	13,533

Allowance for lending-related commitments
Beginning balance at January 1,																											$	12		$	—		$	1,179		$	1,191		$	12		$	—		$	1,043		$	1,055
Cumulative effect of a change in accounting principle																											133			—			(35		)	98			NA			NA			NA			NA
Provision for lending-related commitments																											6			—			852			858			—			—			3			3
Other																											—			—			—			—			—			—			—			—
Ending balance at March 31,																											$	151		$	—		$	1,996		$	2,147		$	12		$	—		$	1,046		$	1,058

Allowance for loan losses by impairment methodology
Asset-specific^(b)	$	145		$	488		^(c)	$	342		$	975		$	204		$	421		^(c)	$	280		$	905		$	223		$	530		$	556		$	1,309		$	89		$	461		$	479		$	1,029
Formula-based	2,066			5,095				3,843			11,004			2,154			4,613				3,632			10,399
Portfolio-based																											3,231			14,420			4,284			21,935			1,572			4,722			4,472			10,766
PCI	1,256			—				—			1,256			1,824			—				—			1,824			NA			NA			NA			NA			1,738			—			—			1,738
Total allowance for loan losses	$	3,467		$	5,583			$	4,185		$	13,235		$	4,182		$	5,034			$	3,912		$	13,128		$	3,454		$	14,950		$	4,840		$	23,244		$	3,399		$	5,183		$	4,951		$	13,533

Loans by impairment methodology
Asset-specific	$	6,341		$	1,423			$	1,536		$	9,300		$	7,046		$	1,284			$	1,051		$	9,381
Formula-based	304,178			158,148				435,971			898,297			343,703			146,572				422,783			913,058
Asset-specific^(b)																											$	17,036		$	1,505		$	2,021		$	20,562		$	6,536		$	1,365		$	1,860		$	9,761
Portfolio-based																											276,743			152,516			553,268			982,527			292,465			149,150			469,258			910,873
PCI	21,290			—				—			21,290			25,209			—				3			25,212			NA			NA			NA			NA			23,207			—			—			23,207
Total retained loans	$	331,809		$	159,571			$	437,507		$	928,887		$	375,958		$	147,856			$	423,837		$	947,651		$	293,779		$	154,021		$	555,289		$	1,003,089		$	322,208		$	150,515		$	471,118		$	943,841

Impaired collateral-dependent loans
Collateral-dependent loans
Net charge-offs	$	28		$	—			$	23		$	51		$	15		$	—			$	—		$	15		$	29		$	—		$	17		$	46		$	9		$	—		$	11		$	20
Loans measured at fair value of collateral less cost to sell	2,083			—				113			2,196			2,077			—				258			2,335			2,941			—			94			3,035			2,098			—			154			2,252

Allowance for lending-related commitments
Beginning balance at January 1,	$	33		$	—			$	1,022		$	1,055		$	33		$	—			$	1,035		$	1,068
Provision for lending-related commitments	—			—				110			110			—			—				29			29
Other	—			—				—			—			—			—				—			—
Ending balance at September 30,	$	33		$	—			$	1,132		$	1,165		$	33		$	—			$	1,064		$	1,097

Allowance for lending-related commitments by impairment methodology
Asset-specific	$	—		$	—			$	135		$	135		$	—		$	—			$	71		$	71		$	—		$	—		$	187		$	187		$	—		$	—		$	114		$	114
Formula-based	33			—				997			1,030			33			—				993			1,026
Total allowance for lending-related commitments	$	33		$	—			$	1,132		$	1,165		$	33		$	—			$	1,064		$	1,097
Portfolio-based																											151			—			1,809			1,960			12			—			932			944
Total allowance for lending-related commitments^(c)																											$	151		$	—		$	1,996		$	2,147		$	12		$	—		$	1,046		$	1,058

Lending-related commitments by impairment methodology
Asset-specific	$	—		$	—			$	446		$	446		$	—		$	—			$	252		$	252		$	—		$	—		$	619		$	619		$	—		$	—		$	455		$	455
Formula-based	53,591			645,880				395,173			1,094,644			50,630			600,728				397,064			1,048,422
Portfolio-based^(d)																											33,498			—			357,866			391,364			28,666			—			393,555			422,221
Total lending-related commitments	$	53,591		$	645,880			$	395,619		$	1,095,090		$	50,630		$	600,728			$	397,316		$	1,048,674		$	33,498		$	—		$	358,485		$	391,983		$	28,666		$	—		$	394,010		$	422,676


(a)	~~Write-offs~~Prior to the adoption of CECL, write-offs of PCI loans ~~are~~were recorded against the allowance for loan losses when actual losses for a pool ~~exceed~~exceeded estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan iswas recognized when the underlying loan iswas removed from a pool.


(b)	Includes modified PCD loans and loans that have been modified or are reasonably expected to be modified in a TDR. Also includes risk-rated loans that have been placed on nonaccrual status ~~and loans that have been modified in a TDR.~~


~~(c)~~	for the wholesale portfolio segment. The asset-specific credit card allowance for ~~loan losses is related~~loans modified, or reasonably expected to ~~loans that have been~~be modified, in a ~~TDR; such allowance~~TDR is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.


(c)	The allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets.


(d)	At March 31, 2020 and 2019, lending-related commitments excluded $8.0 billion and $9.3 billion, respectively, for the consumer, excluding credit card portfolio segment; and $681.4 billion and $626.9 billion, respectively, for the credit card portfolio segment, which were not subject to the allowance for lending-related commitments.


(e)	Excludes HTM securities, which had an allowance for credit losses of $19 million and a provision for credit losses of $9 million as of and for the three months ended March 31, 2020.

Discussion of current period changes

The increase in the allowances for loan losses and lending-related commitments in the first quarter of 2020 was primarily

driven by an increase in the provision for credit losses, reflecting deterioration in the macroeconomic environment as a result

of the impact of the COVID-19 pandemic and continued pressure on oil prices. In light of the rapidly evolving economic conditions and forecasts during March 2020, management updated its macroeconomic forecast near the end of its credit loss estimation process in early April. This macroeconomic forecast included a decline in the U.S. real GDP of approximately 25% and an increase in the U.S. unemployment rate to above 10%, both in the second quarter, followed by a solid recovery in the second half of 2020. In addition, the allowances for loan losses and lending-related commitments reflect the estimated impact of the Firm’s payment relief actions as well as the federal government’s stimulus programs related to the COVID-19 pandemic. Subsequent changes to this forecast and related estimates will be reflected in the provision for credit losses in future periods.

Note 1314 – Variable interest entities

Refer to Note 1 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further description of JPMorgan Chase’s accounting policies regarding consolidation of VIEs.

The following table summarizes the most significant types of Firm-sponsored VIEs by business segment.



Line of Business	Transaction Type	Activity	Form 10-Q page reference
CCB	Credit card securitization trusts	Securitization of originated credit card receivables	~~139~~145
	Mortgage securitization trusts	Servicing and securitization of both originated and purchased residential mortgages	~~139-141~~145-147
CIB	Mortgage and other securitization trusts	Securitization of both originated and purchased residential and commercial mortgages, and other consumer loans	~~139-141~~145-147
	Multi-seller conduits	Assist clients in accessing the financial markets in a cost-efficient manner and structures transactions to meet investor needs	~~141~~147
	Municipal bond vehicles	Financing of municipal bond investments	~~141~~147

The Firm also invests in and provides financing and other services to VIEs sponsored by third parties. Refer to pages ~~142–143~~148–149 of this Note for more information on the VIEs sponsored by third parties.

Significant Firm-sponsored VIEs

Credit card securitizations

Refer to Note 14 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a more detailed discussion of JPMorgan Chase’s involvement with credit card 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,~~trust, the Chase Issuance Trust. Refer to the table on page ~~142~~148 of this Note for further information on consolidated VIE assets and liabilities.

Firm-sponsored mortgage and other securitization trusts

The Firm securitizes (or has securitized) originated and purchased residential mortgages, commercial mortgages and other consumer loans primarily in its CCB and CIB businesses. Depending on the particular transaction, as well as the respective business involved, the Firm may act as the servicer of the loans and/or retain certain beneficial interests in the securitization trusts.

Refer to Note 14 of JPMorgan Chase’s ~~2018~~2019 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.

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 contracts. In certain instances, the Firm’s only continuing involvement is servicing the loans. The Firm’s maximum loss exposure from retained and purchased interests is the carrying value of these interests. Refer to Securitization activity on page ~~143~~149 of this Note for further information regarding the Firm’s cash flows associated with and interests retained in nonconsolidated VIEs, and pages ~~143–144~~149–150 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, 2019 (in millions)	Total assets held by securitization VIEs		Assets held in consolidated securitization VIEs		Assets held in nonconsolidated securitization VIEs with continuing involvement		Trading assets		Investment securities		Other financial assets		Total interests held by JPMorgan Chase
March 31, 2020 (in millions)															Total assets held by securitization VIEs		Assets held in consolidated securitization VIEs		Assets held in nonconsolidated securitization VIEs with continuing involvement		Trading assets		Investment securities		Other financial assets		Total interests held by JPMorgan Chase
Securitization-related^(a)
Residential mortgage:
Prime/Alt-A and option ARMs	$	61,480	$	2,966	$	49,826	$	522	$	728	$	—	$	1,250	$	59,615	$	2,657	$	48,743	$	588	$	1,127	$	—	$	1,715
Subprime	15,156		—		14,085		16		—		—		16		14,198		51		13,024		9		—		—		9
Commercial and other^(b)	101,624		—		86,302		919		708		234		1,861		114,032		—		94,361		989		1,197		273		2,459
Total	$	178,260	$	2,966	$	150,213	$	1,457	$	1,436	$	234	$	3,127	$	187,845	$	2,708	$	156,128	$	1,586	$	2,324	$	273	$	4,183


	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, 2018 (in millions)	Total assets held by securitization VIEs		Assets held in consolidated securitization VIEs		Assets held in nonconsolidated securitization VIEs with continuing involvement		Trading assets		Investment securities		Other financial assets		Total interests held by JPMorgan Chase
December 31, 2019 (in millions)															Total assets held by securitization VIEs		Assets held in consolidated securitization VIEs		Assets held in nonconsolidated securitization VIEs with continuing involvement		Trading assets		Investment securities		Other financial assets		Total interests held by JPMorgan Chase
Securitization-related^(a)
Residential mortgage:
Prime/Alt-A and option ARMs	$	63,350	$	3,237	$	50,679	$	623	$	647	$	—	$	1,270	$	60,348	$	2,796	$	48,734	$	535	$	625	$	—	$	1,160
Subprime	16,729		32		15,434		53		—		—		53		14,661		—		13,490		7		—		—		7
Commercial and other^(b)	102,961		—		79,387		783		801		210		1,794		111,903		—		80,878		785		773		241		1,799
Total	$	183,040	$	3,269	$	145,500	$	1,459	$	1,448	$	210	$	3,117	$	186,912	$	2,796	$	143,102	$	1,327	$	1,398	$	241	$	2,966


(a)	Excludes U.S. GSEs and government agency securitizations and re-securitizations, which are not Firm-sponsored. Refer to pages ~~143–144~~149–150 of this Note for information on the Firm’s loan sales and securitization activity related to U.S. GSEs and government agencies.


(b)	Consists of securities backed by commercial real estate loans and non-mortgage-related consumer receivables purchased from third parties.

(c)

Excludes the following: retained servicing (refer to Note 1415 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~~(refer to Note 45 for further information on derivatives); senior and subordinated securities of ~~$168~~$525 million and ~~$69~~$184 million, respectively, at ~~September 30, 2019,~~March 31, 2020, and ~~$87~~$106 million and ~~$28~~$94 million, respectively, at December 31, ~~2018,~~2019, 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, 2019,~~March 31, 2020, and December 31, ~~2018, 67%~~2019, 64% and ~~60%~~63%, 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~~$1.7 billion and ~~$1.3~~$1.1 billion of investment-grade retained interests, and ~~$55~~$61 million and ~~$16~~$72 million of noninvestment-grade retained interests at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, respectively. The retained interests in commercial and other securitizations trusts consisted of ~~$1.3~~$1.6 billion and $1.2 billion of investment-grade retained interests, ~~at September 30, 2019~~ and ~~December 31, 2018, and $567~~$881 million and ~~$623~~$575 million of noninvestment-grade retained interests at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, 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. Refer to Note 14 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a more detailed description of the Firm’s involvement with residential mortgage securitizations. Refer to the table on page ~~142~~148 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. Refer to Note 14 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a more detailed description of the Firm’s involvement with commercial mortgage and other consumer securitizations. Refer to the table on page ~~142~~148 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

Refer to Note 14 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a more detailed description of JPMorgan Chase’s participation in certain re-securitization transactions.

The following table presents the principal amount of securities transferred to re-securitization VIEs.



	Three months ended March 31,
(in millions)	2020		2019
Transfers of securities to VIEs
U.S. GSEs and government agencies	$	2,717	$	4,503

Three months ended September 30, Nine months ended September 30,
(in millions) 2019
2018
2019
2018
Transfers of securities to VIEs
U.S. GSEs and government agencies $ 5,377
$ 2,540
$ 12,444
$ 11,321
The Firm did not transfer any private label securities to re-securitization VIEs during the first three months of 2020 and 2019, respectively, and retained interests in any such Firm-sponsored VIEs as of March 31, 2020 and December 31, 2019 were immaterial.

The following table presents information on nonconsolidated re-securitization VIEs.



	Nonconsolidated re-securitization VIEs
(in millions)	March 31, 2020		December 31, 2019
U.S. GSEs and government agencies
Interest in VIEs	$	3,162	$	2,928

Nonconsolidated
re-securitization VIEs
(in millions) September 30, 2019
December 31, 2018
Firm-sponsored private-label
Assets held in VIEs with continuing involvement^(a)
$ 21
$ 118
Interest in VIEs —
10
U.S. GSEs and government agencies
Interest in VIEs 2,097
3,058


~~(a)~~	~~Represents the principal amount and includes the notional amount of interest-only securities.~~

As of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, 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

Refer to Note 14 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a more detailed description of JPMorgan Chase’s principal involvement with Firm-administered multi-seller conduits.

In the normal course of business, JPMorgan Chase makes markets in and invests in commercial paper issued by the Firm-administered multi-seller conduits. The Firm held ~~$12.6~~$14.7 billion and ~~$20.1~~$16.3 billion of the commercial paper issued by the Firm-administered multi-seller conduits at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, respectively, which have been eliminated in consolidation. The Firm’s investments reflect the Firm’s funding needs and capacity and were not driven by market illiquidity. Other than the amounts required to be held pursuant to credit risk retention rules, the Firm is not obligated under any agreement to purchase the commercial paper issued by the Firm-administered multi-seller conduits.

Deal-specific liquidity facilities, program-wide liquidity and credit enhancement provided by the Firm have been eliminated in consolidation. The Firm or the Firm-administered multi-seller conduits provide lending-related commitments to certain clients of the Firm-administered multi-seller conduits. The unfunded commitments were ~~$8.5~~$7.1 billion and ~~$8.0~~$8.9 billion at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, respectively, and are reported as off-balance sheet lending-related commitments in other unfunded commitments to extend credit. Refer to Note 2223 for more information on off-balance sheet lending-related 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 customer TOB trusts and non-customer TOB trusts. Customer TOB trusts are sponsored by a third party, refer to pages ~~142–143~~148–149 of this Note for further information.

The Firm serves as sponsor for all non-customer TOB transactions. Refer to Note 14 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a more detailed description of JPMorgan Chase’s 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, 2019,~~March 31, 2020, and December 31, ~~2018.~~2019.


	Assets								Liabilities						Assets								Liabilities
September 30, 2019 (in millions)	Trading assets		Loans		Other^(b)		Total assets^(c)		Beneficial interests in VIE assets^(d)		Other^(e)		Total liabilities
March 31, 2020 (in millions)															Trading assets		Loans		Other^(b)		Total assets^(c)		Beneficial interests in VIE assets^(d)		Other^(e)		Total liabilities
VIE program type
Firm-sponsored credit card trusts	$	—	$	27,377	$	370	$	27,747	$	6,457	$	6	$	6,463	$	—	$	13,202	$	265	$	13,467	$	6,562	$	4	$	6,566
Firm-administered multi-seller conduits	3		22,708		334		23,045		10,514		35		10,549		1		26,661		348		27,010		12,174		36		12,210
Municipal bond vehicles	1,280		—		3		1,283		1,249		2		1,251		1,778		—		7		1,785		589		4		593
Mortgage securitization entities^(a)	70		2,937		58		3,065		295		137		432		110		2,608		76		2,794		305		125		430
Other	108		—		209		317		—		121		121		46		—		295		341		—		147		147
Total	$	1,461	$	53,022	$	974	$	55,457	$	18,515	$	301	$	18,816	$	1,935	$	42,471	$	991	$	45,397	$	19,630	$	316	$	19,946

	Assets								Liabilities						Assets								Liabilities
December 31, 2018 (in millions)	Trading assets		Loans		Other^(b)		Total assets^(c)		Beneficial interests in VIE assets^(d)		Other^(e)		Total liabilities
December 31, 2019 (in millions)															Trading assets		Loans		Other^(b)		Total assets^(c)		Beneficial interests in VIE assets^(d)		Other^(e)		Total liabilities
VIE program type
Firm-sponsored credit card trusts	$	—	$	31,760	$	491	$	32,251	$	13,404	$	12	$	13,416	$	—	$	14,986	$	266	$	15,252	$	6,461	$	6	$	6,467
Firm-administered multi-seller conduits	—		24,411		300		24,711		4,842		33		4,875		1		25,183		355		25,539		9,223		36		9,259
Municipal bond vehicles	1,779		—		4		1,783		1,685		3		1,688		1,903		—		4		1,907		1,881		3		1,884
Mortgage securitization entities^(a)	53		3,285		40		3,378		308		161		469		66		2,762		64		2,892		276		130		406
Other	134		—		178		312		2		103		105		663		—		192		855		—		272		272
Total	$	1,966	$	59,456	$	1,013	$	62,435	$	20,241	$	312	$	20,553	$	2,633	$	42,931	$	881	$	46,445	$	17,841	$	447	$	18,288


(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. Refer to ~~note~~Note 14 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for conduits program-wide credit enhancements. Included in beneficial interests in VIE assets are long-term beneficial interests of ~~$6.8~~$6.9 billion and ~~$13.7~~$6.7 billion at ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018.~~2019, respectively.


(e)	Includes liabilities classified as accounts payable and other liabilities on the Consolidated balance sheets.

VIEs sponsored by third parties

The Firm enters into transactions with VIEs structured by other parties. These include, for example, acting as a derivative counterparty, liquidity provider, investor, underwriter, placement agent, remarketing agent, trustee or custodian. These transactions are conducted at arm’s-length, and individual credit decisions are based on the analysis of the specific VIE, taking into consideration the quality of the underlying assets. Where the Firm does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, or a variable interest that could potentially be significant, the Firm generally does not consolidate the VIE, but it records and reports these positions on its Consolidated balance sheets in the same manner it would record and report positions in respect of any other third-party transaction.

Tax credit vehicles

The Firm holds investments in unconsolidated tax credit vehicles, which are limited partnerships and similar entities that ~~construct,~~ own and operate affordable housing, ~~wind, solar~~energy, 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 ~~$17.0~~$19.2 billion and ~~$16.5~~$19.1 billion, of which ~~$4.8~~$5.4 billion and ~~$4.0~~$5.5 billion was unfunded at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively. In order to reduce the risk of loss, the Firm assesses each project and withholds varying amounts of its capital investment until the project qualifies for tax credits. Refer to Note 2425 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for further information on affordable housing tax credits. Refer to Note 2223 of this Form 10-Q for more information on off-balance sheet lending-related commitments.

Customer municipal bond vehicles (TOB trusts)

The Firm may provide various services to ~~Customer~~customer TOB trusts, including remarketing agent, liquidity or tender option provider. In certain ~~Customer~~customer TOB transactions, the

Firm, as liquidity provider, has entered into a reimbursement agreement with the Residual holder.

In those transactions, upon the termination of the vehicle, the Firm has recourse to the third-party Residual holders for any shortfall. The Firm does not have any intent to protect Residual holders from potential losses on any of the underlying municipal bonds. The Firm does not consolidate ~~Customer~~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~~customer TOB trusts at ~~September 30, 2019~~March 31, 2020 and

December 31, ~~2018~~2019 was $5.3 billion and ~~$4.8~~$5.5 billion, respectively. The fair value of assets held by such VIEs at ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, was ~~$8.6~~$8.1 billion and ~~$7.7~~$8.6 billion, respectively. Refer to Note 2223 for more information on off-balance sheet lending-related commitments.

Loan securitizations

The Firm has securitized and sold a variety of loans, including residential mortgage, credit card, and commercial mortgage. Refer to Note 14 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further description of the Firm’s accounting policies regarding securitizations.

Securitization activity

The following table provides information related to the Firm’s securitization activities for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ related to assets held in Firm-sponsored securitization entities that were not consolidated by the Firm, and where sale accounting was achieved at the time of the securitization.


	Three months ended September 30,								Nine months ended September 30,								Three months ended March 31,
	2019				2018				2019				2018				2020				2019
(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^(d)		Commercial and other^(e)		Residential mortgage^(d)		Commercial and other^(e)
Principal securitized	$	3,225	$	1,477	$	1,513	$	3,533	$	7,132	$	4,215	$	5,972	$	8,705	$	3,064	$	3,188	$	1,782	$	764
All cash flows during the period^(a):
All cash flows during the period:^(a)
Proceeds received from loan sales as financial instruments^(b)(c)	$	3,327	$	1,506	$	1,524	$	3,558	$	7,337	$	4,329	$	5,984	$	8,745	$	3,136	$	3,273	$	1,822	$	782
Servicing fees collected^(d)	70		—		80		1		220		1		240		1		62		—		77		—
Cash flows received on interests	115		34		99		99		314		183		328		230		117		29		85		51


(a)	Excludes re-securitization transactions.


(b)	Predominantly includes Level 2 assets.


(c)	The carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale.


(d)	~~The prior period amounts have been revised to conform with the current period presentation.~~


~~(e)~~	Includes prime mortgages only. Excludes loan securitization activity related to U.S. GSEs and government agencies.


~~(f)~~(e)	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

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. 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 2223 of this Form 10-Q, and Note 2728 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional information about the Firm’s loan sales- and securitization-related indemnifications. Refer to Note 1415 for additional information about the impact of the Firm’s sale of certain excess MSRs.

The following table summarizes the activities related to loans sold to the U.S. GSEs, and loans in securitization transactions pursuant to Ginnie Mae guidelines.


	Three months ended September 30,				Nine months ended September 30,				Three months ended March 31,
(in millions)	2019		2018		2019		2018		2020		2019
Carrying value of loans sold	$	35,556	$	11,968	$	73,873	$	28,804	$	24,935	$	15,179
Proceeds received from loan sales as cash	3		1		73		1		9		68
Proceeds from loan sales as securities^(a)(b)	35,512		11,713		73,172		28,291		24,663		14,837
Total proceeds received from loan sales^(c)	$	35,515	$	11,714	$	73,245	$	28,292	$	24,672	$	14,905
Gains on loan sales^(d)(e)	$	342	$	9	$	495	$	32
Gains/(losses) on loan sales^(d)(e)									$	4	$	49


(a)	Includes securities from U.S. GSEs and Ginnie Mae that are generally sold shortly after receipt or retained as part of the Firm’s ~~Investment~~investment securities portfolio.


(b)	Included in level 2 assets.


(c)	Excludes the value of MSRs retained upon the sale of loans.


(d)	~~Gains~~Gains/(losses) on loan sales include the value of MSRs.


(e)	The carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale.

Options to repurchase delinquent loans

In addition to the Firm’s obligation to repurchase certain loans due to material breaches of representations and warranties as discussed in Note ~~22,~~23, the Firm also has the option to repurchase delinquent loans that it services for Ginnie Mae loan pools, as well as for other U.S. government

agencies under certain arrangements. The Firm typically elects to repurchase delinquent loans from Ginnie Mae loan

pools as it continues to service them and/or manage the foreclosure process in accordance with the applicable requirements, and such loans continue to be insured or guaranteed. When the Firm’s repurchase option becomes exercisable, such loans must be reported on the Consolidated balance sheets as a loan with a corresponding liability. Refer to Note 1112 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, 2019~~March 31, 2020 and December 31, ~~2018.~~2019. Substantially all of these loans and real estate are insured or guaranteed by U.S. government agencies.


(in millions)	Sep 30, 2019		Dec 31, 2018		Mar 31, 2020		Dec 31, 2019
Loans repurchased or option to repurchase^(a)	$	4,761	$	7,021	$	1,906	$	2,941
Real estate owned	50		75		29		41
Foreclosed government-guaranteed residential mortgage loans^(b)	241		361		138		198


(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 and delinquencies related to nonconsolidated securitized financial assets held in Firm-sponsored private-label securitization entities, in which the Firm has continuing involvement ~~and delinquencies~~ as of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018.~~2019.


									Net liquidation losses^(a)																	Net liquidation losses
	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 March 31,
(in millions)	Sep 30, 2019		Dec 31, 2018		Sep 30, 2019		Dec 31, 2018		2019		2018		2019		2018			Mar 31, 2020		Dec 31, 2019		Mar 31, 2020		Dec 31, 2019		2020		2019
Securitized loans
Residential mortgage:
Prime / Alt-A & option ARMs	$	49,826	$	50,679	$	2,679	$	3,354	$	146	$	182	$	474	$	453		$	48,743	$	48,734	$	2,312	$	2,449	$	99	$	157
Subprime	14,085		15,434		1,962		2,478		145		155		456		(307		)	13,024		13,490		1,654		1,813		86		144
Commercial and other	86,302		79,387		153		225		118		71		283		119			94,361		80,878		223		187		10		141
Total loans securitized	$	150,213	$	145,500	$	4,794	$	6,057	$	409	$	408	$	1,213	$	265		$	156,128	$	143,102	$	4,189	$	4,449	$	195	$	442


~~(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 1415 – Goodwill and Mortgage servicing rights

Refer to Note 15 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a discussion of the accounting policies related to goodwill and mortgage servicing rights.

Goodwill

The following table presents goodwill attributed to the business segments.


(in millions)	September 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Consumer & Community Banking(a)	$	31,038	$	30,984	$	30,083	$	30,082
Corporate & Investment Bank(a)	6,941		6,770		7,876		7,901
Commercial Banking	2,982		2,860		2,986		2,982
Asset & Wealth Management	6,857		6,857		6,855		6,858
Total goodwill	$	47,818	$	47,471	$	47,800	$	47,823


(a)	In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB, including the associated Goodwill of $959 million. Prior periods have been revised to conform with current period presentation.

The following table presents changes in the carrying amount of goodwill.


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(in millions)	2019			2018			2019			2018			2020			2019
Balance at beginning of period	$	47,477		$	47,488		$	47,471		$	47,507		$	47,823		$	47,471
Changes during the period from:
Business combinations^(a)	348			—			348			—
Other^(b)	(7		)	(5		)	(1		)	(24		)
Balance at September 30,	$	47,818		$	47,483		$	47,818		$	47,483
Other^(a)													(23		)	3
Balance at March 31,													$	47,800		$	47,474


(a)	~~For 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 adjustments.

Goodwill impairment testing

Effective January 1, 2020, the Firm adopted new accounting guidance related to goodwill impairment testing. The adoption of the guidance requires recognition of an impairment loss when the estimated fair value of a reporting unit falls below its carrying value. It eliminated the requirement that an impairment loss be recognized only if the estimated implied fair value of the goodwill is below its carrying value. Refer to ~~Impairment testing on pages 252–253~~Note 15 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further ~~description~~discussion 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.

~~The Firm reviewed current economic conditions, estimated market cost of equity, as well as actual and projections of business performance~~Goodwill is tested for all its businesses. Based upon such reviews, the Firm concluded that the goodwill allocated to its reporting units was not impaired as of September 30, 2019 or December 31, 2018, nor was goodwill written off due to impairment during the ~~nine months ended September 30, 2019~~fourth quarter of each fiscal year, or ~~2018.~~more often if events or circumstances, such as adverse changes in the business climate, indicate that there may be an impairment.

~~Declines~~Unanticipated declines in business performance, increases in credit losses, increases in 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.

As of March 31, 2020, the Firm reviewed current economic conditions, including the potential impacts of the COVID-19 pandemic on business performance, estimated market cost of equity, and also reviewed actual and projections of business performance for all its reporting units. The Firm has concluded that the goodwill allocated to its reporting units was 0t impaired as of March 31, 2020, or December 31, 2019, nor was goodwill written off due to impairment during the three months ended March 31, 2020 or 2019.

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. Refer to Notes 2 and 15 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further description of the MSR asset, interest rate risk management, and the valuation of MSRs.

The following table summarizes MSR activity for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.


	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 March 31,
(in millions, except where otherwise noted)	2019			2018			2019				2018			2020			2019
Fair value at beginning of period	$	5,093		$	6,241		$	6,130			$	6,030		$	4,699		$	6,130
MSR activity:
Originations of MSRs	390			278			1,146				611			271			332
Purchase of MSRs	(2		)	13			104				159			2			104
Disposition of MSRs^(a)	(359		)	(2		)	(687		)		(401		)	(75		)	(111		)
Net additions/(dispositions)	29			289			563				369			198			325

Changes due to collection/realization of expected cash flows	(256		)	(195		)	(702		)		(542		)	(248		)	(199		)

Changes in valuation due to inputs and assumptions:
Changes due to market interest rates and other^(b)	(433		)	150			(1,274		)		635			(1,370		)	(301		)
Changes in valuation due to other inputs and assumptions:
Projected cash flows (e.g., cost to service)	17			14			(333		)	^(e)	14			(1		)	—
Discount rates	—			—			153				24			—			—
Prepayment model changes and other^(c)	(31		)	(66		)	(118		)		(97		)	(11		)	2
Total changes in valuation due to other inputs and assumptions	(14		)	(52		)	(298		)		(59		)	(12		)	2
Total changes in valuation due to inputs and assumptions	(447		)	98			(1,572		)		576			(1,382		)	(299		)
Fair value at September 30,	$	4,419		$	6,433		$	4,419			$	6,433
Fair value at March 31,														$	3,267		$	5,957

Change in unrealized gains/(losses) included in income related to MSRs held at September 30,	$	(447	)	$	98		$	(1,572	)		$	576
Change in unrealized gains/(losses) included in income related to MSRs held at March 31,														$	(1,382	)	$	(299	)
Contractual service fees, late fees and other ancillary fees included in income	397			428			1,254				1,339			364			420
Third-party mortgage loans serviced at September 30, (in billions)	537			528			537				528
Servicer advances, net of an allowance for uncollectible amounts, at September 30, (in billions)^(d)	2.0			3.1			2.0				3.1
Third-party mortgage loans serviced at March 31, (in billions)														506			530
Servicer advances, net of an allowance for uncollectible amounts, at March 31, (in billions)^(d)														1.7			2.6


(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, 2019~~March 31, 2020 and ~~2018.~~2019.


	Three months ended September 30,						Nine months ended September 30,						Three months ended March 31,
(in millions)	2019			2018			2019			2018			2020			2019
CCB mortgage fees and related income

Net production revenue	$	738		$	108		$	1,291		$	296		$	319		$	200

Net mortgage servicing revenue:
Operating revenue:
Loan servicing revenue	351			435			1,172			1,389			339			404
Changes in MSR asset fair value due to collection/realization of expected cash flows	(256		)	(195		)	(702		)	(542		)	(248		)	(199		)
Total operating revenue	95			240			470			847			91			205
Risk management:
Changes in MSR asset fair value due to market interest rates and other^(a)	(433		)	150			(1,274		)	636			(1,370		)	(301		)
Other changes in MSR asset fair value due to other inputs and assumptions in model^(b)	(14		)	(52		)	(298		)	(59		)	(12		)	2
Change in derivative fair value and other	500			(186		)	1,372			(671		)	1,292			290
Total risk management	53			(88		)	(200		)	(94		)	(90		)	(9		)
Total net mortgage servicing revenue	148			152			270			753			1			196

Total CCB mortgage fees and related income	886			260			1,561			1,049

All other	1			2			1			2
Mortgage fees and related income	$	887		$	262		$	1,562		$	1,051		$	320		$	396


(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, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, and outlines hypothetical sensitivities of those fair values to immediate adverse changes in those assumptions, as defined below.


(in millions, except rates)	(in millions, except rates)	Sep 30, 2019			Dec 31, 2018			(in millions, except rates)	Mar 31, 2020			Dec 31, 2019
Weighted-average prepayment speed assumption (constant prepayment rate)	Weighted-average prepayment speed assumption (constant prepayment rate)	13.81		%	8.78		%	Weighted-average prepayment speed assumption (constant prepayment rate)	19.12		%	11.67		%
Impact on fair value of 10% adverse change	Impact on fair value of 10% adverse change	$	(206	)	$	(205	)	Impact on fair value of 10% adverse change	$	(206	)	$	(200	)
Impact on fair value of 20% adverse change	Impact on fair value of 20% adverse change	(393		)	(397		)	Impact on fair value of 20% adverse change	(391		)	(384		)
Weighted-average option adjusted spread^(b)(a)	Weighted-average option adjusted spread^(b)(a)	8.26		%	7.87		%	Weighted-average option adjusted spread^(b)(a)	8.95		%	7.93		%
Impact on fair value of a 100 basis point adverse change	Impact on fair value of a 100 basis point adverse change	$	(150	)	$	(235	)	Impact on fair value of a 100 basis point adverse change	$	(103	)	$	(169	)
Impact on fair value of a 200 basis point adverse change	Impact on fair value of a 200 basis point adverse change	(289		)	(452		)	Impact on fair value of a 200 basis point adverse change	(200		)	(326		)


(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 variations 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 1516 – Deposits

Refer to Note 17 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for further information on deposits.

At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~ 2019, noninterest-bearing and interest-bearing deposits were as follows.


(in millions)	September 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
U.S. offices
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
Noninterest-bearing (included $17,046 and $22,637 at fair value)^(a)					$	448,195	$	395,667
Interest-bearing (included $2,631 and $2,534 at fair value)^(a)					1,026,603		876,156
Total deposits in U.S. offices	1,237,659		1,200,590		1,474,798		1,271,823
Non-U.S. offices
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
Noninterest-bearing (included $1,784 and $1,980 at fair value)^(a)					22,192		20,087
Interest-bearing (included $1,148 and $1,438 at fair value)^(a)					339,019		270,521
Total deposits in non-U.S. offices	287,602		270,076		361,211		290,608
Total deposits	$	1,525,261	$	1,470,666	$	1,836,009	$	1,562,431


(a)	Includes structured notes classified as deposits for which the fair value option has been elected. Refer to Note 3 ~~of JPMorgan Chase’s 2018 Form 10-K~~ for a further ~~discussion.~~information.


~~(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 1617 – Leases

~~Lease commitments~~

~~Effective January 1,~~Refer to Note 18 of JPMorgan Chase’s 2019 ~~the Firm adopted new guidance that requires lessees to recognize~~Form 10-K for a further discussion 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.leases.

Firm as lessee

At ~~September 30, 2019,~~March 31, 2020, JPMorgan Chase and its subsidiaries were obligated under a number of ~~noncancelable~~noncancellable 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~~table provides 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 liabilities 8,425

Weighted average remaining lease term (in years) 8.7
Weighted average discount rate 3.73 %

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



(in millions)	March 31, 2020		December 31, 2019
Right-of-use assets	$	8,240	$	8,190
Lease liabilities	8,516		8,505

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
2020 1,569
2021 1,394
2022 1,198
2023 1,027
After 2023 4,442
Total future minimum lease payments 10,024
Less: Imputed interest (1,599 )
Total $ 8,425

~~In addition to~~Firm’s net rental expense was $475 million and $468 million for the ~~table above, as of September 30,~~three months ended March 31, 2020 and 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.respectively.

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 generally operating ~~leases. These assets~~leases and are ~~recognized~~included 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, 2019 December 31, 2018
Carrying value of assets subject to operating leases, net of accumulated depreciation $ 22,953
$ 21,428
Accumulated depreciation 5,848
5,303

sheets.

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,				Three months ended March 31,
(in millions)	2019		2018		2019		2018		2020		2019
Operating lease income	$	1,384	$	1,157	$	4,027	$	3,316	$	1,413	$	1,316
Depreciation expense	1,053		901		3,038		2,564		1,140		997

~~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
2020 3,785
2021 2,303
2022 660
2023 74
After 2023 137
Total future minimum lease payments $ 8,080

Note 1718 - Preferred stock

Refer to Note 2021 of JPMorgan Chase’s ~~2018~~2019 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~~March 31, 2020 and December 31, ~~2018,~~2019, and the quarterly dividend declarations for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.



	Shares		Carrying value (in millions)					Contractual rate in effect at March 31, 2020		Earliest redemption date	Floating annualized rate of three-month LIBOR/Term SOFR plus:	Dividend declared per share
	March 31, 2020	December 31, 2019	March 31, 2020		December 31, 2019		Issue date					Three months ended March 31,
	March 31, 2020	December 31, 2019	March 31, 2020		December 31, 2019		Issue date					2020	2019
Fixed-rate:
Series P	—	—	$	—	$	—	2/5/2013	—	%	3/1/2018	NA	$—	$136.25
Series T	—	—	—		—		1/30/2014	—		3/1/2019	NA	—	167.50
Series W	—	—	—		—		6/23/2014	—		9/1/2019	NA	—	157.50
Series Y	—	143,000	—		1,430		2/12/2015	—		3/1/2020	NA	153.13	153.13
Series AA	142,500	142,500	1,425		1,425		6/4/2015	6.100		9/1/2020	NA	152.50	152.50
Series BB	115,000	115,000	1,150		1,150		7/29/2015	6.150		9/1/2020	NA	153.75	153.75
Series DD	169,625	169,625	1,696		1,696		9/21/2018	5.750		12/1/2023	NA	143.75	143.75
Series EE	185,000	185,000	1,850		1,850		1/24/2019	6.000		3/1/2024	NA	150.00	NA
Series GG	90,000	90,000	900		900		11/7/2019	4.750		12/1/2024	NA	150.42	NA
Fixed-to-floating-rate:
Series I	293,375	293,375	$	2,934	$	2,934	4/23/2008	LIBOR + 3.47%		4/30/2018	LIBOR + 3.47%	$132.44	$155.51
Series Q	150,000	150,000	1,500		1,500		4/23/2013	5.150		5/1/2023	LIBOR + 3.25	128.75	128.75
Series R	150,000	150,000	1,500		1,500		7/29/2013	6.000		8/1/2023	LIBOR + 3.30	150.00	150.00
Series S	200,000	200,000	2,000		2,000		1/22/2014	6.750		2/1/2024	LIBOR + 3.78	168.75	168.75
Series U	100,000	100,000	1,000		1,000		3/10/2014	6.125		4/30/2024	LIBOR + 3.33	153.13	153.13
Series V	250,000	250,000	2,500		2,500		6/9/2014	LIBOR + 3.32%		7/1/2019	LIBOR + 3.32	130.73	125.00	^(a)
Series X	160,000	160,000	1,600		1,600		9/23/2014	6.100		10/1/2024	LIBOR + 3.33	152.50	152.50
Series Z	200,000	200,000	2,000		2,000		4/21/2015	5.300		5/1/2020	LIBOR + 3.80	132.50	132.50
Series CC	125,750	125,750	1,258		1,258		10/20/2017	4.625		11/1/2022	LIBOR + 2.58	115.63	115.63
Series FF	225,000	225,000	2,250		2,250		7/31/2019	5.000		8/1/2024	SOFR + 3.38	125.00	NA
Series HH	300,000	—	3,000		—		1/23/2020	4.600		2/1/2025	SOFR + 3.125	125.22	NA	^(b)
Series II	150,000	—	1,500		—		2/24/2020	4.000		4/1/2025	SOFR + 2.745	—	NA	^(c)
Total preferred stock	3,006,250	2,699,250	$	30,063	$	26,993

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, 2019 December 31, 2018 Issue date Three months ended September 30, Nine months ended September 30,
2019 2018 2019 2018
Fixed-rate:
Series P 90,000
90,000
$ 900
$ 900
2/5/2013 5.450 % 3/1/2018 NA $ 136.25
$136.25 $ 408.75
$408.75
Series T —
92,500
—
925
1/30/2014 —
3/1/2019 NA NA 167.50 167.50 502.50
Series W —
88,000
—
880
6/23/2014 —
9/1/2019 NA NA 157.50 472.50 472.50
Series Y 143,000
143,000
1,430
1,430
2/12/2015 6.125
3/1/2020 NA 153.13
153.13 459.39 459.39
Series AA 142,500
142,500
1,425
1,425
6/4/2015 6.100
9/1/2020 NA 152.50
152.50 457.50 457.50
Series BB 115,000
115,000
1,150
1,150
7/29/2015 6.150
9/1/2020 NA 153.75
153.75 461.25 461.25
Series DD 169,625
169,625
1,696
1,696
9/21/2018 5.750
12/1/2023 NA 143.75
NA 431.25 NA
Series EE 185,000
—
1,850
—
1/24/2019 6.000
3/1/2024 NA 150.00
NA 361.67 NA

Fixed-to-floating-rate:
Series I 430,375
430,375
$ 4,304
$ 4,304
4/23/2008 LIBOR + 3.47%
4/30/2018 LIBOR + 3.47% $ 146.58
$148.45 $ 455.09
$493.29
^(d)
Series Q 150,000
150,000
1,500
1,500
4/23/2013 5.150
5/1/2023 LIBOR + 3.25 128.75
128.75 386.25 386.25
Series R 150,000
150,000
1,500
1,500
7/29/2013 6.000
8/1/2023 LIBOR + 3.30 150.00
150.00 450.00 450.00
Series S 200,000
200,000
2,000
2,000
1/22/2014 6.750
2/1/2024 LIBOR + 3.78 168.75
168.75 506.25 506.25
Series U 100,000
100,000
1,000
1,000
3/10/2014 6.125
4/30/2024 LIBOR + 3.33 153.13
153.13 459.38 459.38
Series V 250,000
250,000
2,500
2,500
6/9/2014 LIBOR + 3.32%
7/1/2019 LIBOR + 3.32 144.11
125.00 394.11 375.00
^(e)
Series X 160,000
160,000
1,600
1,600
9/23/2014 6.100
10/1/2024 LIBOR + 3.33 152.50
152.50 457.50 457.50
Series Z 200,000
200,000
2,000
2,000
4/21/2015 5.300
5/1/2020 LIBOR + 3.80 132.50
132.50 397.50 397.50
Series CC 125,750
125,750
1,258
1,258
10/20/2017 4.625
11/1/2022 LIBOR + 2.58 115.63
115.63 346.88 346.88
Series FF 225,000
—
2,250
—
7/31/2019 5.000
8/1/2024 SOFR + 3.38 126.39
NA 126.39 NA
^(f)
Total preferred stock 2,836,250
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)~~(b)	Dividends in the amount of ~~$126.39~~$125.22 per share were declared on ~~September 9, 2019~~March 13, 2020 and include dividends from the original issue date of ~~July~~January 23, 2020 through March 31, ~~2019~~2020.


(c)	From the original issue date of February 24, 2020 through ~~October~~March 31, ~~2019.~~2020, dividends have yet to be declared for Series II.

Each series of preferred stock has a liquidation value and redemption price per share of $10,000, plus accrued but unpaid dividends. The aggregate liquidation value was $30.5 billion at March 31, 2020.

Redemptions

On ~~October 31, 2019,~~March 1, 2020, the Firm ~~announced and priced an offering~~redeemed all $1.43 billion of ~~depositary shares representing $900 million of 4.75% non-cumulative~~its 6.125% preferred stock, Series ~~GG. This issuance is expected to close on November 7, 2019.~~ Y.

On ~~November~~December 1, 2019, the Firm ~~announced that it will redeem~~redeemed all $900 million of its 5.45% ~~non-cumulative~~ preferred stock, Series ~~P on December 1, 2019.~~P.

On October 30, 2019, the Firm redeemed $1.37 billion of its ~~Series I~~ fixed-to-floating rate ~~non-cumulative~~ perpetual preferred ~~stock.~~stock, Series I.

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~~6.30% preferred stock, Series ~~FF.~~W.

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 1819 – Earnings per share

Refer to Note 2223 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a discussion of the computation of basic and diluted earnings per share (“EPS”). The following table presents the calculation of basic and diluted EPS for the three ~~and nine~~ months ended ~~September 30, 2019~~March 31, 2020 and ~~2018.~~2019.


(in millions, except per share amounts)	Three months ended September 30,				Nine months ended September 30,				Three months ended March 31,
(in millions, except per share amounts)	2019		2018		2019		2018		2020		2019
Basic earnings per share
Net income	$	9,080	$	8,380	$	27,911	$	25,408	$	2,865	$	9,179
Less: Preferred stock dividends	423		379		1,201		1,167		421		374
Net income applicable to common equity	8,657		8,001		26,710		24,241		2,444		8,805
Less: Dividends and undistributed earnings allocated to participating securities	51		53		159		174		13		52
Net income applicable to common stockholders	$	8,606	$	7,948	$	26,551	$	24,067	$	2,431	$	8,753

Total weighted-average basic shares outstanding	3,198.5		3,376.1		3,248.7		3,416.5		3,095.8		3,298.0
Net income per share	$	2.69	$	2.35	$	8.17	$	7.04	$	0.79	$	2.65

Diluted earnings per share
Net income applicable to common stockholders	$	8,606	$	7,948	$	26,551	$	24,067	$	2,431	$	8,753
Total weighted-average basic shares outstanding	3,198.5		3,376.1		3,248.7		3,416.5		3,095.8		3,298.0
Add: Employee stock options, SARs, warrants and unvested PSUs	8.7		18.2		9.3		19.7
Add: Dilutive impact of SARs and employee stock options, unvested PSUs and nondividend-earning RSUs									4.9		10.2
Total weighted-average diluted shares outstanding	3,207.2		3,394.3		3,258.0		3,436.2		3,100.7		3,308.2
Net income per share	$	2.68	$	2.34	$	8.15	$	7.00	$	0.78	$	2.65

Note 1920 – 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, 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, 2019
(in millions) Unrealized
gains/(losses)
on investment securities Translation adjustments, net of hedges Fair value hedges Cash flow hedges Defined benefit
pension and
OPEB plans DVA on fair value option elected liabilities Accumulated other comprehensive income/(loss)

Balance at 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 hedges Cash flow hedges Defined benefit pension and
OPEB plans DVA on fair value option elected liabilities Accumulated 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 hedges Cash flow hedges Defined benefit
pension and
OPEB plans DVA on fair value option elected liabilities Accumulated 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 hedges Cash flow hedges Defined benefit pension and
OPEB plans DVA on fair value option elected liabilities Accumulated 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 )



As of or for the three months ended March 31, 2020 (in millions)	Unrealized gains/(losses) on investment securities				Translation adjustments, net of hedges				Fair value hedges			Cash flow hedges				Defined benefit pension and OPEB plans				DVA on fair value option elected liabilities				Accumulated other comprehensive income/(loss)
	Unrealized gains/(losses) on investment securities				Translation adjustments, net of hedges				Fair value hedges			Cash flow hedges				Defined benefit pension and OPEB plans				DVA on fair value option elected liabilities				Accumulated other comprehensive income/(loss)
Balance at January 1, 2020		$	4,057			$	(707	)	$	(131	)		$	63			$	(1,344	)		$	(369	)		$	1,569
Net change		1,119				(330		)	88				2,465				33				2,474				5,849
Balance at March 31, 2020		$	5,176	^(a)		$	(1,037	)	$	(43	)		$	2,528			$	(1,311	)		$	2,105			$	7,418

As of or for the three months ended March 31, 2019 (in millions)	Unrealized gains/(losses) on investment securities				Translation adjustments, net of hedges				Fair value hedges			Cash flow hedges				Defined benefit pension and OPEB plans				DVA on fair value option elected liabilities				Accumulated other comprehensive income/(loss)
	Unrealized gains/(losses) on investment securities				Translation adjustments, net of hedges				Fair value hedges			Cash flow hedges				Defined benefit pension and OPEB plans				DVA on fair value option elected liabilities				Accumulated other comprehensive income/(loss)
Balance at January 1, 2019		$	1,202			$	(727	)	(161		)		$	(109	)		$	(2,308	)		$	596			$	(1,507	)
Net change		1,414				(24		)	2				138				36				(617		)		949
Balance at March 31, 2019		$	2,616			$	(751	)	$	(159	)		$	29			$	(2,272	)		$	(21	)		$	(558	)


(a)	~~Represents the adjustment~~Includes after-tax net unamortized unrealized gains of $737 million related to ~~AOCI as a result of the accounting standards adopted in the first quarter of 2018, refer~~AFS securities that have been transferred to ~~Note 1 of JPMorgan Chase’s 2018 Form 10-K.~~HTM.

The following table presents the pre-tax and after-tax changes in the components of OCI.


	2019									2018									2020									2019
Three months ended September 30, (in millions)	Pre-tax			Tax effect			After-tax			Pre-tax			Tax effect			After-tax
Three months ended March 31, (in millions)																			Pre-tax			Tax effect			After-tax			Pre-tax			Tax effect			After-tax
Unrealized gains/(losses) on investment securities:
Net unrealized gains/(losses) arising during the period	$	708		$	(169	)	$	539		$	(1,117	)	$	262		$	(855	)	$	1,709		$	(413	)	$	1,296		$	1,875		$	(451	)	$	1,424
Reclassification adjustment for realized (gains)/losses included in net income^(a)	(78		)	18			(60		)	46			(10		)	36			(233		)	56			(177		)	(13		)	3			(10		)
Net change	630			(151		)	479			(1,071		)	252			(819		)	1,476			(357		)	1,119			1,862			(448		)	1,414
Translation adjustments:
Translation adjustments^(b):
Translation	(861		)	40			(821		)	(314		)	45			(269		)	(1,592		)	55			(1,537		)	41			(36		)	5
Hedges	866			(210		)	656			311			(73		)	238			1,589			(382		)	1,207			(38		)	9			(29		)
Net change	5			(170		)	(165		)	(3		)	(28		)	(31		)	(3		)	(327		)	(330		)	3			(27		)	(24		)
Fair value hedges, net change^(b):	(1		)	—			(1		)	45			(11		)	34
Fair value hedges, net change^(c):																			115			(27		)	88			3			(1		)	2
Cash flow hedges:
Net unrealized gains/(losses) arising during the period	222			(55		)	167			(122		)	27			(95		)	3,251			(780		)	2,471			141			(33		)	108
Reclassification adjustment for realized (gains)/losses included in net income^(c)	37			(9		)	28			9			(2		)	7
Reclassification adjustment for realized (gains)/losses included in net income^(d)																			(8		)	2			(6		)	39			(9		)	30
Net change	259			(64		)	195			(113		)	25			(88		)	3,243			(778		)	2,465			180			(42		)	138
Defined benefit pension and OPEB plans:
Net gain/(loss) arising during the period	—			—			—			—			—			—			9			(2		)	7			3			(2		)	1
Reclassification adjustments included in net income^(d):
Reclassification adjustments included in net income^(e):
Amortization of net loss	42			(10		)	32			26			(6		)	20			4			(1		)	3			42			(9		)	33
Amortization of prior service cost/(credit)	—			—			—			(7		)	2			(5		)	1			—			1			1			—			1
Foreign exchange and other	18			(4		)	14			7			(3		)	4			31			(9		)	22			(8		)	9			1
Net change	60			(14		)	46			26			(7		)	19			45			(12		)	33			38			(2		)	36
DVA on fair value option elected liabilities, net change:	173			(41		)	132			(527		)	125			(402		)	3,255			(781		)	2,474			(807		)	190			(617		)
Total other comprehensive income/(loss)	$	1,126		$	(440	)	$	686		$	(1,643	)	$	356		$	(1,287	)	$	8,131		$	(2,282	)	$	5,849		$	1,279		$	(330	)	$	949

	2019									2018
Nine months ended September 30, (in millions)	Pre-tax			Tax effect			After-tax			Pre-tax			Tax effect			After-tax
Unrealized gains/(losses) on investment securities:
Net unrealized gains/(losses) arising during the period	$	4,074		$	(985	)	$	3,089		$	(3,351	)	$	787		$	(2,564	)
Reclassification adjustment for realized (gains)/losses included in net income^(a)	(135		)	32			(103		)	371			(87		)	284
Net change	3,939			(953		)	2,986			(2,980		)	700			(2,280		)
Translation adjustments^(e):
Translation	(697		)	76			(621		)	(981		)	188			(793		)
Hedges	700			(169		)	531			1,149			(272		)	877
Net change	3			(93		)	(90		)	168			(84		)	84
Fair value hedges, net change^(b):	114			(27		)	87			(96		)	22			(74		)
Cash flow hedges:
Net unrealized gains/(losses) arising during the period	464			(112		)	352			(365		)	85			(280		)
Reclassification adjustment for realized (gains)/losses included in net income^(c)	102			(24		)	78			(62		)	15			(47		)
Net change	566			(136		)	430			(427		)	100			(327		)
Defined benefit pension and OPEB plans:
Net gain/(loss) arising during the period	2			(2		)	—			25			(6		)	19
Reclassification adjustments included in net income^(d):
Amortization of net loss	125			(26		)	99			78			(18		)	60
Amortization of prior service cost/(credit)	2			(1		)	1			(19		)	5			(14		)
Settlement (gain)/loss	—			—			—			—			—			—
Foreign exchange and other	19			4			23			19			(6		)	13
Net change	148			(25		)	123			103			(25		)	78
DVA on fair value option elected liabilities, net change:	$	(296	)	$	67		$	(229	)	$	163		$	(38	)	$	125
Total other comprehensive income/(loss)	$	4,474		$	(1,167	)	$	3,307		$	(3,069	)	$	675		$	(2,394	)


(a)	The pre-tax amount is reported in Investment securities ~~gains/(losses)~~gains in the Consolidated statements of income.


(b)	Reclassifications of pre-tax realized gains/(losses) on translation adjustments and related hedges are reported in other income/expense in the Consolidated statements of income. There were no sales or liquidations of legal entities that resulted in reclassifications in the periods presented.


(c)	Represents changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads, which are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income. The initial cost of cross-currency basis spreads is recognized in earnings as part of the accrual of interest on the cross currency swap.


~~(c)~~(d)	The pre-tax amounts are ~~predominantly~~primarily recorded in noninterest revenue, net interest income and compensation expense in the Consolidated statements of income.


~~(d)~~(e)	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.

Note 2021 – Restricted cash and other restricted

assets

Refer to Note 2526 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a detailed discussion of the Firm’s restricted cash and other restricted assets.

Certain of the Firm’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 Firm’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 and other assets.

The following table presents the components of the Firm’s restricted cash:


(in billions)	September 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Cash reserves – Federal Reserve Banks(a)	$	26.7	$	22.1	$	—	$	26.6
Segregated for the benefit of securities and futures brokerage customers	16.8		14.6
Segregated for the benefit of securities and cleared derivative customers					19.7		16.0
Cash reserves at non-U.S. central banks and held for other general purposes	3.6		4.1		3.8		3.9
Total restricted cash^(a)(b)	$	47.1	$	40.8	$	23.5	$	46.5


(a)	Effective March 26, 2020, the Federal Reserve temporarily eliminated reserve requirements for depository institutions.


(b)	Comprises ~~$45.9~~$22.2 billion and ~~$39.6~~$45.3 billion in deposits with banks, ~~as of September 30, 2019~~ and ~~December 31, 2018, respectively,~~$1.3 billion and $1.2 billion in cash and due from banks ~~as of September 30, 2019 and December 31, 2018,~~ on the Consolidated balance ~~sheets.~~sheet as of March 31, 2020 and December 31, 2019, respectively.

Also, as of ~~September 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the Firm had the following other restricted assets:

Cash and securities pledged with clearing organizations for the benefit of customers of ~~$23.6~~$40.0 billion and ~~$20.6~~$24.7 billion, respectively.

Securities with a fair value of ~~$13.1~~$12.8 billion and ~~$9.7~~$8.8 billion, respectively, were also restricted in relation to customer activity.

Note 2122 – Regulatory capital

Refer to Note 2627 of JPMorgan Chase’s ~~2018~~2019 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”),~~IDI subsidiaries, including JPMorgan Chase Bank, N.A.

Effective January 1, 2019, the capital adequacy of the Firm and JPMorgan Chase Bank, 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 capital, Tier 1 capital, Total capital, 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~~presents the minimum and well-capitalized ratios to which the Firm and its IDI subsidiaries were subject as of ~~September 30,~~March 31, 2020 and December 31, 2019.


	Minimum capital ratios				Well-capitalized ratios			Minimum capital ratios		Well-capitalized ratios
	BHC^(a)(e)(f)		IDI^(b)(e)(f)		BHC^(c)	IDI^(d)		BHC^(a)(e)	IDI^(b)(e)	BHC^(c)	IDI^(d)
Capital ratios
CET1	10.5	%	7.0	%	N/A	6.5	%
Tier 1	12.0		8.5		6.0	8.0
Total	14.0		10.5		10.0	10.0
CET1 capital								10.5	7.0	N/A	6.5	%
Tier 1 capital								12.0	8.5	6.0	8.0
Total capital								14.0	10.5	10.0	10.0
Tier 1 leverage	4.0		4.0		N/A	5.0		4.0		N/A	5.0
SLR	5.0		6.0		N/A	6.0		5.0	6.0	N/A	6.0

Note: The table above is as defined by the regulations issued by the Federal Reserve, OCC and FDIC and to which the Firm and its IDI subsidiaries are subject.


(a)	Represents the minimum capital ratios applicable to the Firm under Basel III. The CET1, Tier 1 and Total capital minimum capital ~~ratio includes~~ratios include a capital conservation buffer requirement of 2.5% and GSIB surcharge of 3.5% as calculated under Method 2.


(b)	Represents requirements for JPMorgan Chase’s IDI subsidiaries. The CET1, Tier 1 and Total capital minimum capital ~~ratio includes~~ratios include a capital conservation buffer requirement 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, 2018, the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm were 9.0%, 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 6.375%, 7.875%, 9.875%, and 4.0%, respectively.


~~(f)~~	Represents minimum SLR requirement of 3.0%, as well as supplementary leverage ~~buffers~~buffer requirements of 2.0% and 3.0% for BHC and IDI, respectively.

Current Expected Credit Losses

As disclosed in the Firm’s 2019 Form 10-K, the Firm initially elected to phase-in the January 1, 2020 (“day 1”) CECL adoption impact to retained earnings of $2.7 billion to CET1 capital, at 25% per year in each of 2020 to 2023. As part of their response to the impact of the COVID-19 pandemic, on March 31, 2020, the federal banking agencies issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period.

provisions, and accordingly, for the period ended March 31, 2020, the capital measures of the Firm exclude $4.3 billion, which is the $2.7 billion day 1 impact to retained earnings and 25% of the $6.8 billion increase in the allowance for credit losses (excluding allowances on PCD loans).

The following tables present the risk-based and leverage-based capital metrics for JPMorgan Chase and JPMorgan Chase Bank, N.A. under both the Basel III Standardized and Basel III Advanced Approaches. As of ~~September 30, 2019~~March 31, 2020, the capital measures are presented applying the CECL capital transition provisions. As of March 31, 2020 and December 31, ~~2018,~~2019, JPMorgan Chase and JPMorgan Chase Bank, N.A. were well-capitalized and met all capital requirements to which each was subject.



March 31, 2020 (in millions, except ratios)	Basel III Standardized						Basel III Advanced
	JPMorgan Chase & Co.^(c)			JPMorgan Chase Bank, N.A.			JPMorgan Chase & Co.^(c)			JPMorgan Chase Bank, N.A.
Risk-based capital metrics:^(a)
CET1 capital	$	183,591		$	204,679		$	183,591		$	204,679
Tier 1 capital	213,406			204,691			213,406			204,691
Total capital	247,541			222,994			234,434			210,271
Risk-weighted assets	1,598,828			1,527,914			1,489,134			1,361,789
CET1 capital ratio	11.5		%	13.4		%	12.3		%	15.0		%
Tier 1 capital ratio	13.3			13.4			14.3			15.0
Total capital ratio	15.5			14.6			15.7			15.4
Leverage-based capital metrics:
Adjusted average assets^(b)	$	2,842,244		$	2,439,720		$	2,842,244		$	2,439,720
Tier 1 leverage ratio	7.5		%	8.4		%	7.5		%	8.4		%
Total leverage exposure	NA			NA			$	3,535,822		$	3,118,192
SLR	NA			NA			6.0		%	6.6		%

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 $ 188,151
$ 205,347
$ 188,151
$ 205,347
Tier 1 capital 214,831
205,347
214,831
205,347
Total capital 243,500
223,038
233,203
212,919

Assets
Risk-weighted 1,527,762
1,445,648
1,435,693
1,302,749
Adjusted average^(a)
2,717,852
2,339,858
2,717,852
2,339,858

Capital ratios^(b)

CET1 12.3 % 14.2 % 13.1 % 15.8 %
Tier 1 14.1
14.2
15.0
15.8
Total 15.9
15.4
16.2
16.3
Tier 1 leverage^(c)
7.9
8.8
7.9
8.8

December 31, 2018
(in millions, except ratios) Basel III Standardized Transitional Basel III Advanced Transitional
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.^(d)

JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.^(d)
Regulatory capital
CET1 capital $ 183,474
$ 211,671
$ 183,474
$ 211,671
Tier 1 capital 209,093
211,671
209,093
211,671
Total capital 237,511
229,952
227,435
220,025

Assets
Risk-weighted 1,528,916
1,446,529
1,421,205
1,283,146
Adjusted average^(a)
2,589,887
2,250,480
2,589,887
2,250,480

Capital ratios^(b)

CET1 12.0 % 14.6 % 12.9 % 16.5 %
Tier 1 13.7
14.6
14.7
16.5
Total 15.5
15.9
16.0
17.1
Tier 1 leverage^(c)
8.1
9.4
8.1
9.4



December 31, 2019 (in millions, except ratios)	Basel III Standardized						Basel III Advanced
	JPMorgan Chase & Co.			JPMorgan Chase Bank, N.A.			JPMorgan Chase & Co.			JPMorgan Chase Bank, N.A.
Risk-based capital metrics:^(a)
CET1 capital	$	187,753		$	206,848		$	187,753		$	206,848
Tier 1 capital	214,432			206,851			214,432			206,851
Total capital	242,589			224,390			232,112			214,091
Risk-weighted assets	1,515,869			1,457,689			1,397,878			1,269,991
CET1 capital ratio	12.4		%	14.2		%	13.4		%	16.3		%
Tier 1 capital ratio	14.1			14.2			15.3			16.3
Total capital ratio	16.0			15.4			16.6			16.9
Leverage-based capital metrics:
Adjusted average assets^(b)	$	2,730,239		$	2,353,432		$	2,730,239		$	2,353,432
Tier 1 leverage ratio	7.9		%	8.8		%	7.9		%	8.8		%
Total leverage exposure	NA			NA			$	3,423,431		$	3,044,509
SLR	NA			NA			6.3		%	6.8		%


(a)	The capital adequacy of the Firm and JPMorgan Chase Bank, N.A. is evaluated against the lower of the two ratios as calculated under Basel III approaches (Standardized or Advanced).


(b)	Adjusted average assets, for purposes of calculating the ~~Tier 1~~ leverage ratio, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.


~~(b)~~(c)	~~For each~~As of ~~the risk-based capital ratios,~~March 31, 2020, the capital ~~adequacy of the Firm and JPMorgan Chase Bank, N.A. is evaluated against the lower of the two ratios as calculated under Basel III approaches (Standardized or Advanced).~~


~~(c)~~	~~The Tier 1 leverage ratio is not a risk-based measure of capital.~~


~~(d)~~	On May 18, 2019, Chase Bank USA, N.A. merged with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A as the surviving entity. The December 31, 2018 amounts reported for JPMorgan Chase Bank, N.A. retrospectivelymeasures reflect the ~~impact~~exclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under 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
SLR 6.3 % 6.8 % 6.4 % 7.3 %


~~(a)~~	On May 18, 2019, Chase Bank USA, N.A. merged with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A as the surviving entity. The December 31, 2018 amounts reported for JPMorgan Chase Bank, N.A. retrospectively reflect the impact of the merger.MMLF.

Note 2223 – 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~~have historically been refinanced, extended, cancelled, or ~~expire~~expired 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. Refer to Note 2728 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for a further discussion of lending-related commitments and guarantees, and the Firm’s related accounting policies.

To provide for ~~probable~~ expectedcredit 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 13 for further information regarding the allowance for credit losses on lending-related ~~commitments.~~commitments, including the impact of the Firm’s adoption of the CECL accounting guidance on January 1, 2020.

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, 2019,~~ March 31, 2020, and December 31, ~~2018.~~ 2019. The amounts in the table below for credit card, ~~and~~ home equity and certain scored business banking 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 and certain scored business banking lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. In addition, the Firm typically closes credit card lines when the borrower is 60 days or more past due. The Firm may reduce or close HELOCs when there are significant decreases in the value of the underlying property, or when there has been a demonstrable decline in the creditworthiness of the borrower.


Off–balance sheet lending-related financial instruments, guarantees and other commitments	Off–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⁽ⁱ⁾
	September 30, 2019										Dec 31, 2018		Sep 30, 2019			Dec 31, 2018			March 31, 2020										Dec 31, 2019			Mar 31, 2020			Dec 31, 2019
By remaining maturity (in millions)	Expires in 1 year or less		Expires after 1 year through 3 years		Expires after 3 years through 5 years		Expires after 5 years		Total		Total								Expires in 1 year or less		Expires after 1 year through 3 years		Expires after 3 years through 5 years		Expires after 5 years		Total
Lending-related
Consumer, excluding credit card:
Home equity	$	597	$	1,156	$	2,353	$	17,077	$	21,183	$	20,901	$	12		$	12
Residential mortgage^(a)	10,904		—		—		12		10,916		5,481		—			—
Auto	8,062		1,238		118		49		9,467		8,011		2			2
Consumer & Business Banking	10,324		643		106		952		12,025		11,673		19			19
Residential real estate^(a)																			$	13,109	$	1,194	$	2,743	$	16,279	$	33,325	$	30,217		$	150		$	12
Auto and other																			7,549		1		39		621		8,210		9,952			1			—
Total consumer, excluding credit card	29,887		3,037		2,577		18,090		53,591		46,066		33			33			20,658		1,195		2,782		16,900		41,535		40,169			151			12
Credit card	645,880		—		—		—		645,880		605,379		—			—
Total consumer^(b)	675,767		3,037		2,577		18,090		699,471		651,445		33			33
Credit card^(b)																			681,442		—		—		—		681,442		650,720			—			—
Total consumer^(b)(c)																			702,100		1,195		2,782		16,900		722,977		690,889			151			12
Wholesale:
Other unfunded commitments to extend credit^(c)	55,258		128,911		161,963		11,200		357,332		351,490		912			852
Standby letters of credit and other financial guarantees^(c)	16,373		10,525		5,349		1,842		34,089		33,498		605			521
Other letters of credit^(c)	3,853		305		40		—		4,198		2,825		5			3
Total wholesale^(b)	75,484		139,741		167,352		13,042		395,619		387,813		1,522			1,376
Other unfunded commitments to extend credit^(d)																			73,560		107,538		131,902		10,383		323,383		376,107			2,708			959
Standby letters of credit and other financial guarantees^(d)																			15,527		9,944		4,630		1,720		31,821		34,242			434			618
Other letters of credit^(d)																			3,122		128		31		—		3,281		2,961			8			4
Total wholesale^(c)																			92,209		117,610		136,563		12,103		358,485		413,310			3,150			1,581
Total lending-related	$	751,251	$	142,778	$	169,929	$	31,132	$	1,095,090	$	1,039,258	$	1,555		$	1,409		$	794,309	$	118,805	$	139,345	$	29,003	$	1,081,462	$	1,104,199		$	3,301		$	1,593
Other guarantees and commitments
Securities lending indemnification agreements and guarantees^(d)	$	214,338	$	—	$	—	$	—	$	214,338	$	186,077	$	—		$	—
Securities lending indemnification agreements and guarantees^(e)																			$	215,875	$	—	$	—	$	—	$	215,875	$	204,827		$	—		$	—
Derivatives qualifying as guarantees	1,772		196		12,081		40,369		54,418		55,271		231			367			1,242		118		10,899		40,365		52,624		53,089			661			159
Unsettled resale and securities borrowed agreements	122,946		1,125		66		—		124,137		102,008		—			—			137,948		901		—		—		138,849		117,951			30			—
Unsettled repurchase and securities loaned agreements	120,679		670		—		—		121,349		57,732		—			—			107,979		707		—		—		108,686		73,351			7			—
Loan sale and securitization-related indemnifications:
Mortgage repurchase liability	NA		NA		NA		NA		NA		NA		61			89			NA		NA		NA		NA		NA		NA			84			59
Loans sold with recourse	NA		NA		NA		NA		1,001		1,019		27			30			NA		NA		NA		NA		932		944			28			27
Exchange & clearing house guarantees and commitments^(e)	161,580		—		—		—		161,580		58,960		—			—
Other guarantees and commitments^(f)	4,098		590		260		2,832		7,780		8,183		(89		)	(73		)
Exchange & clearing house guarantees and commitments^(f)																			177,587		—		—		—		177,587		206,432			—			—
Other guarantees and commitments^(g)																			4,861		1,123		272		3,026		9,282		9,083		^(h)	(83		)	(73		)


(a)	Includes certain commitments to purchase loans from correspondents.


(b)	Also includes commercial card lending-related commitments primarily in CB and CIB.


(c)	Predominantly all consumer and wholesale lending-related commitments are in the U.S.

~~(c)~~(d)

At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, reflected the contractual amount net of risk participations totaling ~~$198~~$88 million and ~~$282~~$76 million, respectively, for other unfunded commitments to extend credit; ~~$9.7~~$9.3 billion and ~~$10.4~~$9.8 billion, respectively, for standby letters of credit and other financial guarantees; and ~~$705~~$267 million and ~~$385~~$546 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.


~~(d)~~(e)	At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, collateral held by the Firm in support of securities lending indemnification agreements was ~~$226.5~~$229.4 billion and ~~$195.6~~$216.2 billion, respectively. Securities lending collateral primarily consists of cash, G7 government securities, and securities issued by U.S. GSEs and government agencies.


~~(e)~~(f)	At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, 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)~~(g)	At ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018,~~2019, primarily includes letters of credit hedged by derivative transactions and managed on a market risk basis, and unfunded commitments related to institutional lending. Additionally, includes unfunded commitments predominantly related to certain tax-oriented equity investments.


~~(g)~~(h)	The prior period amount has been revised to conform with the current period presentation.

(i)

For lending-related products, the carrying value represents the allowance for lending-related commitments and the guarantee liability; for derivative-related products, and lending-related commitments for which the fair value option was elected, the carrying value represents the fair value. At March 31, 2020, includes markdowns on held-for-sale positions related to unfunded commitments in the bridge financing portfolio.

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.

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 arrangements as of ~~September 30, 2019,~~March 31, 2020, and December 31, ~~2018.~~2019.

Standby letters of credit, other financial guarantees and other letters of credit


	September 30, 2019				December 31, 2018				March 31, 2020				December 31, 2019
(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)	$	27,131	$	3,249	$	26,420	$	2,079	$	24,642	$	2,454	$	26,880	$	2,137
Noninvestment-grade^(a)	6,958		949		7,078		746		7,179		827		7,362		824
Total contractual amount	$	34,089	$	4,198	$	33,498	$	2,825	$	31,821	$	3,281	$	34,242	$	2,961

Allowance for lending-related commitments	$	215	$	5	$	167	$	3	$	55	$	8	$	216	$	4
Guarantee liability	390		—		354		—		379		—		402		—
Total carrying value	$	605	$	5	$	521	$	3	$	434	$	8	$	618	$	4

Commitments with collateral	$	17,690	$	877	$	17,400	$	583	$	17,006	$	710	$	17,853	$	728


(a)	The ratings scale is based on the Firm’s internal ~~ratings which generally correspond~~risk ratings. Refer to ~~ratings as defined by S&P and Moody’s.~~Note 12 for further information on internal risk ratings.

Derivatives qualifying as guarantees

The Firm transacts in certain derivative contracts that have the characteristics of a guarantee under U.S. GAAP. Refer to Note 2728 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for further information on these derivatives.

The following table summarizes the derivatives qualifying as guarantees as of ~~September 30, 2019~~, March 31, 2020, and December 31, ~~2018.~~2019.


(in millions)	September 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Notional amounts
Derivative guarantees	$	54,418	$	55,271	$	52,624	$	53,089
Stable value contracts with contractually limited exposure	28,886		28,637		28,984		28,877
Maximum exposure of stable value contracts with contractually limited exposure	2,960		2,963		2,977		2,967

Fair value
Derivative payables	231		367		661		159
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. Refer to Note 45 for a further discussion of credit derivatives.

Merchant charge-backs

Under the rules of payment networks, the Firm, in its role as a merchant acquirer, retains a contingent liability for disputed processed credit and debit card transactions that result in a charge-back to the merchant. If a dispute is resolved in the cardholder’s favor, Merchant Services will (through the cardholder’s issuing bank) credit or refund the amount to the cardholder and will charge back the transaction to the merchant. If Merchant Services is unable to collect the amount from the merchant, Merchant Services will bear the loss for the amount credited or refunded to the cardholder. Merchant Services mitigates this risk by withholding future settlements, retaining cash reserve accounts or obtaining other collateral. In addition, Merchant Services recognizes a valuation allowance that covers the payment or performance risk to the Firm related to charge-backs. The carrying value of the valuation allowance was $74 million and $11 million at March 31, 2020 and December 31, 2019, respectively.

Loan sales- and securitization-related indemnifications

In connection with the Firm’s mortgage loan sale and securitization activities with GSEs 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. Refer to Note 2728 of JPMorgan Chase’s ~~2018~~2019 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. Refer to Note 2425 of this Form 10-Q and Note 2930 of JPMorgan Chase’s ~~2018~~2019 Form 10-K for additional information regarding litigation.



Summary of PCI loans lifetime principal loss estimates
	Lifetime loss estimates^(a)				Life-to-date liquidation losses^(b)
(in billions)	Sep 30, 2019		Dec 31, 2018		Sep 30, 2019		Dec 31, 2018
Home equity	$	13.9	$	14.1	$	13.0	$	13.0
Prime mortgage	4.1		4.1		3.9		3.9
Subprime mortgage	3.3		3.3		3.2		3.2
Option ARMs	10.3		10.3		10.0		9.9
Total	$	31.6	$	31.8	$	30.1	$	30.0



Modified residential real estate loans
	September 30, 2019				December 31, 2018
(in millions)	Retained loans		Non-accrual retained loans^(d)		Retained loans		Non-accrual retained loans^(d)
Modified residential real estate loans, excluding PCI loans^(a)(b)
Residential mortgage	$	4,118	$	1,376	$	4,565	$	1,459
Home equity	1,961		981		2,012		955
Total modified residential real estate loans, excluding PCI loans	$	6,079	$	2,357	$	6,577	$	2,414
Modified PCI loans^(c)
Home equity	$	2,003	NA		$	2,086	NA
Prime mortgage	2,929		NA		3,179		NA
Subprime mortgage	1,919		NA		2,041		NA
Option ARMs	5,879		NA		6,410		NA
Total modified PCI loans	$	12,730	NA		$	13,716	NA



Ratings profile of derivative receivables
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	$	10,663	27	%	$	11,831	31	%
A+/A1 to A-/A3	6,106		15		7,428		19
BBB+/Baa1 to BBB-/Baa3	15,766		39		12,536		32
BB+/Ba1 to B-/B3	7,116		18		6,373		16
CCC+/Caa1 and below	444		1		723		2
Total	$	40,095	100	%	$	38,891	100	%



	Fair value measurements using significant unobservable inputs
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. GSEs and government agencies	$	549		$	(111	)		$	747		$	(272	)				$	(83	)		$	1		$	(20	)		$	811		$	(116	)
Residential – nonagency	64			25				83			(86		)				(20		)		15			(57		)		24			(1		)
Commercial – nonagency	11			2				19			(24		)				(14		)		15			(4		)		5			1
Total mortgage-backed securities	624			(84		)		849			(382		)				(117		)		31			(81		)		840			(116		)
U.S. Treasury, GSEs and government agencies	—			—				—			—						—				—			—				—			—
Obligations of U.S. states and municipalities	689			12				85			(152		)				(7		)		—			—				627			13
Non-U.S. government debt securities	155			(2		)		228			(231		)				—				14			(18		)		146			3
Corporate debt securities	334			74				340			(236		)				(53		)		96			(71		)		484			15
Loans	1,706			95				609			(416		)				(408		)		509			(349		)		1,746			44
Asset-backed securities	127			—				30			(81		)				(39		)		23			(22		)		38			(3		)
Total debt instruments	3,635			95				2,141			(1,498		)				(624		)		673			(541		)		3,881			(44		)
Equity securities	232			(28		)		33			(92		)				(22		)		142			(95		)		170			(21		)
Other	301			42				50			(16		)				(41		)		1			(5		)		332			55
Total trading assets – debt and equity instruments	4,168			109			^(c)	2,224			(1,606		)				(687		)		816			(641		)		4,383			(10		)	^(c)
Net derivative receivables:^(b)
Interest rate	(38		)	(575		)		86			(102		)	⁽ⁱ⁾			174			⁽ⁱ⁾	22			114				(319		)	(694		)
Credit	(107		)	(209		)		16			(5		)				(13		)		7			(6		)		(317		)	(169		)
Foreign exchange	(297		)	(840		)		13			(18		)				294				(19		)	26				(841		)	(815		)
Equity	(2,225		)	328				335			(573		)				(1,062		)		(418		)	147				(3,468		)	(1,193		)
Commodity	(1,129		)	370				32			(240		)				51				2			867				(47		)	634
Total net derivative receivables	(3,796		)	(926		)	^(c)	482			(938		)				(556		)		(406		)	1,148				(4,992		)	(2,237		)	^(c)
Available-for-sale securities:
Mortgage-backed securities	1			—				1			—						(1		)		—			—				1			—
Asset-backed securities	—			—				—			—						—				—			—				—			—
Total available-for-sale securities	1			—				1			—						(1		)		—			—				1			—
Loans	122			4			^(c)	—			—						(125		)		—			—				1			—
Mortgage servicing rights	6,130			(1,572		)	^(d)	1,250			(687		)				(702		)		—			—				4,419			(1,572		)	^(d)
Other assets	927			(152		)	^(c)	170			(160		)				(33		)		1			(7		)		746			(145		)	^(c)

	Fair value measurements using significant unobservable inputs
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			Sales				Issuances		Settlements^(g)
Liabilities:^(a)
Deposits	$	4,169		$	241		^(c)(e)	$	—		$	—			$	580	$	(504	)		$	12		$	(862	)		$	3,636		$	250		^(c)(e)
Short-term borrowings	1,523			142			^(c)(e)	—			—				2,637		(2,265		)		85			(121		)		2,001			74			^(c)(e)
Trading liabilities – debt and equity instruments	50			—				(12		)	41				—		1				9			(21		)		68			(1		)	^(c)
Accounts payable and other liabilities	10			(7		)	^(c)	(79		)	94				—		—				1			—				19			4			^(c)
Beneficial interests issued by consolidated VIEs	1			(1		)	^(c)	—			—				—		—				—			—				—			—
Long-term debt	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
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. GSEs and government agencies	$	307		$	5			$	348		$	(126	)				$	(56	)		$	92		$	(41	)		$	529			$	3
Residential – nonagency	60			1				45			(19		)				(6		)		58			(62		)		77				4
Commercial – nonagency	11			2				7			(8		)				(13		)		30			(16		)		13				(1		)
Total mortgage-backed securities	378			8				400			(153		)				(75		)		180			(119		)		619				6
U.S. Treasury, GSEs and government agencies	1			—				—			—						—				—			(1		)		—				—
Obligations of U.S. states and municipalities	744			(3		)		107			(70		)				(79		)		—			—				699				(3		)
Non-U.S. government debt securities	78			(19		)		395			(213		)				(2		)		18			(93		)		164				(18		)
Corporate debt securities	312			(6		)		297			(227		)				(15		)		249			(215		)		395				(1		)
Loans	2,719			58				1,223			(1,680		)				(528		)		422			(681		)		1,533				(22		)
Asset-backed securities	153			15				64			(29		)				(53		)		18			(92		)		76				8
Total debt instruments	4,385			53				2,486			(2,372		)				(752		)		887			(1,201		)		3,486				(30		)
Equity securities	295			(1		)		99			(108		)				(1		)		86			(41		)		329				11
Other	690			(209		)		47			(40		)				(75		)		3			(3		)		413				(250		)
Total trading assets – debt and equity instruments	5,370			(157		)	^(c)	2,632			(2,520		)				(828		)		976			(1,245		)		4,228				(269		)	^(c)
Net derivative receivables:^(b)
Interest rate	264			576				83			(77		)				(234		)		40			39				691				498
Credit	(35		)	19				3			(7		)				22				5			20				27				7
Foreign exchange	(396		)	184				42			(15		)				(46		)		(114		)	43				(302		)		42
Equity	(3,409		)	688				1,467			(1,919		)				1,043				(324		)	177				(2,277		)		31
Commodity	(674		)	468				—			—						(287		)		7			(39		)		(525		)		158
Total net derivative receivables	(4,250		)	1,935			^(c)	1,595			(2,018		)				498				(386		)	240				(2,386		)		736			^(c)
Available-for-sale securities:
Mortgage-backed securities	1			—				—			—						—				—			—				1				—
Asset-backed securities	276			1				—			—						(216		)		—			—				61				1
Total available-for-sale securities	277			1			^(j)	—			—						(216		)		—			—				62				1			^(j)
Loans	276			(5		)	^(c)	123			—						(180		)		—			(74		)		140				(5		)	^(c)
Mortgage servicing rights	6,030			576			^(d)	770			(401		)				(542		)		—			—				6,433				576			^(d)
Other assets	1,265			(210		)	^(c)	49			(16		)				(28		)		4			(1		)		1,063				(217		)	^(c)

	Fair value measurements using significant unobservable inputs
Nine months ended September 30, 2018 (in millions)	Fair value at January 1, 2018			Total realized/unrealized (gains)/losses																	Transfers into level 3^(h)			Transfers (out of) level 3^(h)			Fair value at September 30, 2018					Change in unrealized (gains)/losses related to financial instruments held at September 30, 2018
								Purchases			Sales			Issuances			Settlements^(g)
Liabilities:^(a)
Deposits	$	4,142		$	(125	)	^(c)(e)	$	—		$	—		$	1,272		$	(425	)		$	2		$	(426	)		$	4,440			$	(115	)	^(c)(e)
Short-term borrowings	1,665			(229		)	^(c)(e)	—			—			2,783			(2,245		)		61			(64		)		1,971				26			^(c)(e)
Trading liabilities – debt and equity instruments	39			28			^(c)	(68		)	95			—			(1		)		9			(6		)		96				11			^(c)
Accounts payable and other liabilities	13			—				(6		)	1			—			—				4			—				12				—
Beneficial interests issued by consolidated VIEs	39			—				—			—			—			(38		)		—			—				1				—
Long-term debt	16,125			(396		)	^(c)(e)	—			—			9,792		⁽ⁱ⁾	(6,195		)	⁽ⁱ⁾	653			(571		)		19,408			⁽ⁱ⁾	(576		)	^(c)(e)



	Total loans				Total 30+ day delinquency rate
(in millions, except ratios)	Sep 30, 2019		Dec 31, 2018		Sep 30, 2019		Dec 31, 2018
(in millions, except ratios)	Sep 30, 2019		Dec 31, 2018		Sep 30, 2019		Dec 31, 2018
HELOCs:^(a)
Within the revolving period^(b)	$	5,625	$	5,608	0.37	%	0.25	%
Beyond the revolving period	9,283		11,286		2.47		2.80
HELOANs	827		1,030		2.42		2.82
Total	$	15,735	$	17,924	1.72	%	2.00	%



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)
Three months ended September 30, (in millions)	2019		2018		2019		2018		2019		2018
Residential mortgage	$	4,200	$	4,872	$	55	$	61	$	17	$	19
Home equity	1,938		2,065		33		33		21		21
Total residential real estate – excluding PCI	$	6,138	$	6,937	$	88	$	94	$	38	$	40

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)
Nine months ended September 30, (in millions)	2019		2018		2019		2018		2019		2018
Residential mortgage	$	4,390	$	5,242	$	171	$	197	$	52	$	58
Home equity	1,973		2,092		99		98		62		63
Total residential real estate – excluding PCI	$	6,363	$	7,334	$	270	$	295	$	114	$	121



	Total PCI
(in millions, except ratios)	Three months ended September 30,						Nine months ended September 30,
(in millions, except ratios)	2019			2018			2019			2018
Beginning balance	$	7,699		$	8,722		$	8,422		$	11,159
Accretion into interest income	(272		)	(303		)	(841		)	(958		)
Changes in interest rates on variable-rate loans	(308		)	37			(402		)	(231		)
Other changes in expected cash flows^(a)	255			46			195			(1,468		)
Balance at September 30	$	7,374		$	8,502		$	7,374		$	8,502
Accretable yield percentage	5.27		%	4.95		%	5.32		%	4.88		%



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



Year ended December 31, (in millions)
2019 (excluding nine months ended September 30, 2019)	$	394
2020	1,569
2021	1,394
2022	1,198
2023	1,027
After 2023	4,442
Total future minimum lease payments	10,024
Less: Imputed interest	(1,599		)
Total	$	8,425



Year ended December 31, (in millions)
2019 (excluding nine months ended September 30, 2019)	$	1,121
2020	3,785
2021	2,303
2022	660
2023	74
After 2023	137
Total future minimum lease payments	$	8,080



	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, 2019		December 31, 2018		Issue date					Three months ended September 30,			Nine months ended September 30,
	September 30, 2019^(a)	December 31, 2018^(a)	September 30, 2019		December 31, 2018		Issue date					2019		2018	2019		2018
Fixed-rate:
Series P	90,000	90,000	$	900	$	900	2/5/2013	5.450	%	3/1/2018	NA	$	136.25	$136.25	$	408.75	$408.75
Series T	—	92,500	—		925		1/30/2014	—		3/1/2019	NA	NA		167.50	167.50		502.50
Series W	—	88,000	—		880		6/23/2014	—		9/1/2019	NA	NA		157.50	472.50		472.50
Series Y	143,000	143,000	1,430		1,430		2/12/2015	6.125		3/1/2020	NA	153.13		153.13	459.39		459.39
Series AA	142,500	142,500	1,425		1,425		6/4/2015	6.100		9/1/2020	NA	152.50		152.50	457.50		457.50
Series BB	115,000	115,000	1,150		1,150		7/29/2015	6.150		9/1/2020	NA	153.75		153.75	461.25		461.25
Series DD	169,625	169,625	1,696		1,696		9/21/2018	5.750		12/1/2023	NA	143.75		NA	431.25		NA
Series EE	185,000	—	1,850		—		1/24/2019	6.000		3/1/2024	NA	150.00		NA	361.67		NA

Fixed-to-floating-rate:
Series I	430,375	430,375	$	4,304	$	4,304	4/23/2008	LIBOR + 3.47%		4/30/2018	LIBOR + 3.47%	$	146.58	$148.45	$	455.09	$493.29	^(d)
Series Q	150,000	150,000	1,500		1,500		4/23/2013	5.150		5/1/2023	LIBOR + 3.25	128.75		128.75	386.25		386.25
Series R	150,000	150,000	1,500		1,500		7/29/2013	6.000		8/1/2023	LIBOR + 3.30	150.00		150.00	450.00		450.00
Series S	200,000	200,000	2,000		2,000		1/22/2014	6.750		2/1/2024	LIBOR + 3.78	168.75		168.75	506.25		506.25
Series U	100,000	100,000	1,000		1,000		3/10/2014	6.125		4/30/2024	LIBOR + 3.33	153.13		153.13	459.38		459.38
Series V	250,000	250,000	2,500		2,500		6/9/2014	LIBOR + 3.32%		7/1/2019	LIBOR + 3.32	144.11		125.00	394.11		375.00	^(e)
Series X	160,000	160,000	1,600		1,600		9/23/2014	6.100		10/1/2024	LIBOR + 3.33	152.50		152.50	457.50		457.50
Series Z	200,000	200,000	2,000		2,000		4/21/2015	5.300		5/1/2020	LIBOR + 3.80	132.50		132.50	397.50		397.50
Series CC	125,750	125,750	1,258		1,258		10/20/2017	4.625		11/1/2022	LIBOR + 2.58	115.63		115.63	346.88		346.88
Series FF	225,000	—	2,250		—		7/31/2019	5.000		8/1/2024	SOFR + 3.38	126.39		NA	126.39		NA	^(f)
Total preferred stock	2,836,250	2,606,750	$	28,363	$	26,068



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	$	188,151		$	205,347		$	188,151		$	205,347
Tier 1 capital	214,831			205,347			214,831			205,347
Total capital	243,500			223,038			233,203			212,919

Assets
Risk-weighted	1,527,762			1,445,648			1,435,693			1,302,749
Adjusted average^(a)	2,717,852			2,339,858			2,717,852			2,339,858

Capital ratios^(b)
CET1	12.3		%	14.2		%	13.1		%	15.8		%
Tier 1	14.1			14.2			15.0			15.8
Total	15.9			15.4			16.2			16.3
Tier 1 leverage^(c)	7.9			8.8			7.9			8.8



December 31, 2018 (in millions, except ratios)	Basel III Standardized Transitional						Basel III Advanced Transitional
	JPMorgan Chase & Co.			JPMorgan Chase Bank, N.A.^(d)			JPMorgan Chase & Co.			JPMorgan Chase Bank, N.A.^(d)
Regulatory capital
CET1 capital	$	183,474		$	211,671		$	183,474		$	211,671
Tier 1 capital	209,093			211,671			209,093			211,671
Total capital	237,511			229,952			227,435			220,025

Assets
Risk-weighted	1,528,916			1,446,529			1,421,205			1,283,146
Adjusted average^(a)	2,589,887			2,250,480			2,589,887			2,250,480

Capital ratios^(b)
CET1	12.0		%	14.6		%	12.9		%	16.5		%
Tier 1	13.7			14.6			14.7			16.5
Total	15.5			15.9			16.0			17.1
Tier 1 leverage^(c)	8.1			9.4			8.1			9.4


(a)	Includes assets pledged to the Federal Reserve under the MMLF, PDCF and the Federal Reserve’s open market operations.


(a)	Includes collateral repledged to the Federal Reserve under the Federal Reserve’s open market operations and PDCF.


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 Management
	2019			2018			2019			2018			2019			2018			2019			2018
As of or for the three months ended March 31, (in millions, except ratios)																									Consumer & Community Banking						Corporate & Investment Bank						Commercial Banking						Asset & Wealth Management
																									2020			2019			2020			2019			2020			2019			2020			2019
Noninterest revenue	$	5,095		$	4,176		$	7,182		$	6,505		$	599		$	576		$	2,713		$	2,680		$	4,018		$	4,085		$	6,841		$	7,836		$	621		$	733		$	2,709		$	2,593
Net interest income	9,164			9,114			2,156			2,300			1,608			1,695			855			879			9,153			9,405			3,107			2,198			1,557			1,680			897			896
Total net revenue	14,259			13,290			9,338			8,805			2,207			2,271			3,568			3,559			13,171			13,490			9,948			10,034			2,178			2,413			3,606			3,489
Provision for credit losses	1,311			980			92			(42		)	67			(15		)	44			23			5,772			1,314			1,401			87			1,010			90			94			2
Noninterest expense	7,290			6,982			5,348			5,175			881			853			2,622			2,585			7,161			6,970			5,896			5,629			988			938			2,659			2,647
Income before income tax expense	5,658			5,328			3,898			3,672			1,259			1,433			902			951			238			5,206			2,651			4,318			180			1,385			853			840
Income tax expense	1,385			1,242			1,089			1,046			322			344			234			227			47			1,259			663			1,058			33			325			189			179
Net income	$	4,273		$	4,086		$	2,809		$	2,626		$	937		$	1,089		$	668		$	724		$	191		$	3,947		$	1,988		$	3,260		$	147		$	1,060		$	664		$	661
Average equity	$	52,000		$	51,000		$	80,000		$	70,000		$	22,000		$	20,000		$	10,500		$	9,000		$	52,000		$	52,000		$	80,000		$	80,000		$	22,000		$	22,000		$	10,500		$	10,500
Total assets	532,487			560,432			1,023,132			928,148			222,483			217,194			174,226			166,716			506,147			539,127			1,217,459			1,019,470			247,786			216,111			186,102			165,865
ROE	32		%	31		%	13		%	14		%	16		%	21		%	24		%	31		%	1		%	30		%	9		%	16		%	2		%	19		%	25		%	25		%
Overhead ratio	51			53			57			59			40			38			73			73			54			52			59			56			45			39			74			76


As of or for the three months ended September 30, (in millions, except ratios)	Corporate					Reconciling Items^(a)						Total
	2019		2018			2019			2018			2019			2018
As of or for the three months ended March 31, (in millions, except ratios)																		Corporate						Reconciling Items^(a)						Total
																		2020			2019			2020			2019			2020			2019
Noninterest revenue	$	120	$	(177	)	$	(596	)	$	(408	)	$	15,113		$	13,352		$	331		$	8		$	(708	)	$	(585	)	$	13,812		$	14,670
Net interest income	572		74			(127		)	(154		)	14,228			13,908			(165		)	417			(110		)	(143		)	14,439			14,453
Total net revenue	692		(103		)	(723		)	(562		)	29,341			27,260			166			425			(818		)	(728		)	28,251			29,123
Provision for credit losses	—		2			—			—			1,514			948			8			2			—			—			8,285			1,495
Noninterest expense	281		28			—			—			16,422			15,623			146			211			—			—			16,850			16,395
Income/(loss) before income tax expense/(benefit)	411		(133		)	(723		)	(562		)	11,405			10,689			12			212			(818		)	(728		)	3,116			11,233
Income tax expense/(benefit)	18		12			(723		)	(562		)	2,325			2,309			137			(39		)	(818		)	(728		)	251			2,054
Net income/(loss)	$	393	$	(145	)	$	—		$	—		$	9,080		$	8,380		$	(125	)	$	251		$	—		$	—		$	2,865		$	9,179
Average equity	$	71,113	$	80,439		$	—		$	—		$	235,613		$	230,439		$	70,030		$	65,551		$	—		$	—		$	234,530		$	230,051
Total assets	812,333		742,693			NA			NA			2,764,661			2,615,183			981,937			796,615			NA			NA			3,139,431			2,737,188
ROE	NM		NM			NM			NM			15		%	14		%	NM			NM			NM			NM			4		%	16		%
Overhead ratio	NM		NM			NM			NM			56			57			NM			NM			NM			NM			60			56


(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)
As of or for the nine months ended September 30, (in millions, except ratios)	Consumer & Community Banking						Corporate & Investment Bank						Commercial Banking						Asset & Wealth Management
	2019			2018			2019			2018			2019			2018			2019			2018
Noninterest revenue	$	13,868		$	12,063		$	22,328		$	21,954		$	1,806		$	1,758		$	7,989		$	7,997
Net interest income	27,975			26,321			6,499			7,257			4,950			4,995			2,627			2,640
Total net revenue	41,843			38,384			28,827			29,211			6,756			6,753			10,616			10,637
Provision for credit losses	3,745			3,405			179			(142		)	186			23			48			40
Noninterest expense	21,663			20,770			16,288			16,237			2,618			2,541			7,865			7,732
Income before income tax expense	16,435			14,209			12,360			13,116			3,952			4,189			2,703			2,865
Income tax expense	4,025			3,385			3,365			3,318			966			988			655			616
Net income	$	12,410		$	10,824		$	8,995		$	9,798		$	2,986		$	3,201		$	2,048		$	2,249
Average equity	$	52,000		$	51,000		$	80,000		$	70,000		$	22,000		$	20,000		$	10,500		$	9,000
Total assets	532,487			560,432			1,023,132			928,148			222,483			217,194			174,226			166,716
Return on equity	31		%	27		%	14		%	18		%	17		%	20		%	25		%	32		%
Overhead ratio	52			54			57			56			39			38			74			73

																															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, 2019								Three months ended September 30, 2018							Three months ended March 31, 2020								Three months ended March 31, 2019
	Average balance			Interest^(g)		Rate (annualized)			Average balance			Interest^(g)		Rate (annualized)		Average balance			Interest^(f)		Rate (annualized)			Average balance			Interest^(f)		Rate (annualized)
Assets
Deposits with banks	$	267,578		$	898	1.33	%		$	408,595		$	1,585	1.54		$	279,748		$	569	0.82	%		$	290,281		$	1,170	1.64
Federal funds sold and securities purchased under resale agreements	276,721			1,542		2.21			208,439			952		1.81		253,403			1,095		1.74			288,478			1,647		2.32
Securities borrowed^(a)	139,939			434		1.23			117,057			248		0.84		136,127			152		0.45			123,467			397		1.30
Trading assets – debt instruments^(a)	339,198			2,671		3.12			241,074			2,170		3.57		346,911			2,472		2.87			322,541			2,782		3.50
Taxable securities	308,619			2,132		2.74			187,942			1,402		2.96		388,223			2,233		2.31			220,817			1,705		3.13
Nontaxable securities^(b)(a)	34,515			396		4.55			42,045			490		4.62		33,306			365		4.41			38,583			453		4.76
Total investment securities	343,134			2,528		2.92		^(h)	229,987			1,892		3.26	^(h)	421,529			2,598		2.48		^(g)	259,400			2,158		3.37	^(g)
Loans	947,280			12,623		5.29			951,724			12,250		5.11		962,820			11,966		5.00			968,019			12,920		5.41
All other interest-earning assets^(c)(b)	51,304			552		4.27			46,429			496		4.23		65,194			419		2.58			46,708			458		3.98
Total interest-earning assets^(a)	2,365,154			21,248		3.56			2,203,305			19,593		3.53		2,465,732			19,271		3.14			2,298,894			21,532		3.80
Allowance for loan losses	(13,142		)						(13,207		)					(17,357		)						(13,532		)
Cash and due from banks	20,375								21,101							21,668								21,458
Trading assets – equity and other instruments^(a)	113,980								119,915							114,479								108,598
Trading assets – derivative receivables	57,062								62,075							66,309								52,522
Goodwill, MSRs and other intangible assets	53,125								54,652							52,690								54,302
All other noninterest-earning assets	168,498								151,780							186,711								162,472
Total assets	$	2,765,052							$	2,599,621						$	2,890,232							$	2,684,714
Liabilities
Interest-bearing deposits^(a)	$	1,123,452		$	2,409	0.85	%		$	1,041,896		$	1,621	0.62		$	1,216,555		$	1,575	0.52	%		$	1,080,274		$	2,188	0.82
Federal funds purchased and securities loaned or sold under repurchase agreements	239,698			1,241		2.05			184,377			827		1.78		243,922			787		1.30			209,065			1,110		2.15
Short-term borrowings^(d)(c)	44,814			261		2.31			52,779			288		2.17		37,288			151		1.63			67,074			427		2.59
Trading liabilities – debt and all other interest-bearing liabilities^(f)(e)	183,369			660		1.43			176,795			617		1.39		192,950			372		0.77			183,478			719		1.59
Beneficial interests issued by consolidated VIEs	21,123			134		2.53			19,921			122		2.41		18,048			90		2.02			22,829			150		2.66
Long-term debt^(a)	248,985			2,188		3.49			241,878			2,056		3.37		243,996			1,747		2.88			248,302			2,342		3.82
Total interest-bearing liabilities^(a)	1,861,441			6,893		1.47			1,717,646			5,531		1.28		1,952,759			4,722		0.97			1,811,022			6,936		1.55
Noninterest-bearing deposits^(a)	407,428								410,966							419,631								399,468
Trading liabilities – equity and other instruments^(f)(e)	31,310								36,605							30,721								34,734
Trading liabilities – derivative payables	45,987								44,810							54,990								39,567
All other liabilities, including the allowance for lending-related commitments^(a)	155,032								132,903							168,195								142,746
Total liabilities	2,501,198								2,342,930							2,626,296								2,427,537
Stockholders’ equity
Preferred stock	28,241								26,252							29,406								27,126
Common stockholders’ equity	235,613								230,439							234,530								230,051
Total stockholders’ equity	263,854								256,691							263,936								257,177
Total liabilities and stockholders’ equity	$	2,765,052							$	2,599,621						$	2,890,232							$	2,684,714
Interest rate spread^(a)						2.09	%							2.25							2.17	%							2.25
Net interest income and net yield on interest-earning assets^(a)				$	14,355	2.41						$	14,062	2.53					$	14,549	2.37						$	14,596	2.57


~~(c)~~(b)	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.


~~(e)~~(d)	~~Other~~All other interest-bearing liabilities include prime brokerage-related customer payables.


~~(f)~~(e)	The combined balance of trading liabilities – debt and equity instruments ~~were $102.3~~was $101.1 billion and ~~$106.4~~$107.0 billion for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively.


~~(g)~~(f)	Interest includes the effect of certain related hedging derivatives. Taxable-equivalent amounts are used where applicable.


~~(h)~~(g)	The annualized rate for securities based on amortized cost was ~~2.97%~~2.52% and ~~3.29%~~3.40% for the three months ended ~~September 30,~~March 31, 2020 and 2019, ~~and 2018,~~ respectively, and does not give effect to changes in fair value that are reflected in AOCI.


~~(b)~~	~~Represents securities which are tax-exempt for U.S. federal income tax purposes.~~


~~(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.~~

Three months ended
March 31,

(in millions)

Total number of shares of common stock repurchased

Aggregate purchase price of common stock repurchases