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JPM JPMorgan Chase & Co.

Filed: 1 Nov 20, 7:00pm
0000019617jpm:LoansChangesinInstrumentsSpecificCreditRiskMember2019-07-012019-09-300000019617us-gaap:SubprimeMemberjpm:OtherFinancialAssetsMemberus-gaap:ResidentialMortgageBackedSecuritiesMemberus-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2020-09-30


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period endedCommission file
September 30, 2020number1-5805
JPMorgan Chase & Co.
(Exact name of registrant as specified in its charter)
Delaware13-2624428
(State or other jurisdiction of
incorporation or organization)
(I.R.S. employer
identification no.)
383 Madison Avenue,
New York,New York10179
(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 classTrading Symbol(s)Name of each exchange on which registered
Common stockJPMThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.10% Non-Cumulative Preferred Stock, Series AAJPM PR GThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.15% Non-Cumulative Preferred Stock, Series BBJPM PR HThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 5.75% Non-Cumulative Preferred Stock, Series DDJPM PR DThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.00% Non-Cumulative Preferred Stock, Series EEJPM PR CThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.75% Non-Cumulative Preferred Stock, Series GGJPM PR JThe New York Stock Exchange
Alerian MLP Index ETNs due May 24, 2024AMJNYSE Arca, Inc.
Guarantee of Callable Step-Up Fixed Rate Notes due April 26, 2028 of JPMorgan Chase Financial Company LLCJPM/28The New York Stock Exchange
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 filerSmaller 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, 2020: 3,048,203,063



FORM 10-Q
TABLE OF CONTENTS
Page
Item 1.
93
94
95
96
97
98
189
190
192
Item 2.
3
4
5
13
18
21
22
24
48
49
55
62
67
79
80
85
86
87
88
91
92
Item 3.201
Item 4.201
Item 1.201
Item 1A.201
Item 2.202
Item 3.202
Item 4.202
Item 5.202
Item 6.203

2


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)

Nine months ended Sept 30,
3Q202Q201Q204Q193Q1920202019
Selected income statement data
Total net revenue(a)
$29,147 $32,980 $28,192 $28,285 $29,291 $90,319 $87,114 
Total noninterest expense(a)
16,875 16,942 16,791 16,293 16,372 50,608 48,976 
Pre-provision profit(b)
12,272 16,038 11,401 11,992 12,919 39,711 38,138 
Provision for credit losses611 10,473 8,285 1,427 1,514 19,369 4,158 
Income before income tax expense11,661 5,565 3,116 10,565 11,405 20,342 33,980 
Income tax expense2,218 878 251 2,045 2,325 3,347 6,069 
Net income$9,443 $4,687 $2,865 $8,520 $9,080 $16,995 $27,911 
Earnings per share data
Net income:     Basic$2.93 $1.39 $0.79 $2.58 $2.69 $5.10 $8.17 
         Diluted2.92 1.38 0.78 2.57 2.68 5.09 8.15 
Average shares: Basic3,077.8 3,076.3 3,095.8 3,140.7 3,198.5 3,083.3 3,248.7 
         Diluted3,082.8 3,081.0 3,100.7 3,148.5 3,207.2 3,088.1 3,258.0 
Market and per common share data
Market capitalization293,451 286,658 274,323 429,913 369,133 293,451 369,133 
Common shares at period-end3,048.2 3,047.6 3,047.0 3,084.0 3,136.5 3,048.2 3,136.5 
Book value per share79.08 76.91 75.88 75.98 75.24 79.08 75.24 
Tangible book value per share (“TBVPS”)(b)
63.93 61.76 60.71 60.98 60.48 63.93 60.48 
Cash dividends declared per share0.90 0.90 0.90 0.90 0.90 2.70 2.50 
Selected ratios and metrics
Return on common equity (“ROE”)(c)
15 %%%14 %15 %9 %15 %
Return on tangible common equity (“ROTCE”)(b)(c)
19 17 18 11 19 
Return on assets(b)
1.14 0.58 0.40 1.22 1.30 0.72 1.37 
Overhead ratio58 51 60 58 56 56 56 
Loans-to-deposits ratio(d)
49 52 57 64 64 49 64 
Liquidity coverage ratio (“LCR”) (average)114 117 114 116 115 114 115 
Common equity Tier 1 (“CET1”) capital ratio(e)
13.1 12.4 11.5 12.4 12.3 13.1 12.3 
Tier 1 capital ratio(e)
15.0 14.3 13.3 14.1 14.1 15.0 14.1 
Total capital ratio(e)
17.3 16.7 15.5 16.0 15.9 17.3 15.9 
Tier 1 leverage ratio(e)
7.0 6.9 7.5 7.9 7.9 7.0 7.9 
Supplementary leverage ratio (“SLR”)(e)
7.0 6.8 6.0 6.3 6.3 7.0 6.3 
Selected balance sheet data (period-end)
Trading assets(d)
$505,822 $491,716 $510,923 $369,687 $457,274 $505,822 $457,274 
Investment securities, net of allowance for credit losses531,136 558,791 471,144 398,239 394,251 531,136 394,251 
Loans(d)
989,740 1,009,382 1,049,610 997,620 980,019 989,740 980,019 
Total assets3,246,076 3,213,616 3,139,431 2,687,379 2,764,661 3,246,076 2,764,661 
Deposits2,001,416 1,931,029 1,836,009 1,562,431 1,525,261 2,001,416 1,525,261 
Long-term debt279,175 317,003 299,344 291,498 296,472 279,175 296,472 
Common stockholders’ equity241,050 234,403 231,199 234,337 235,985 241,050 235,985 
Total stockholders’ equity271,113 264,466 261,262 261,330 264,348 271,113 264,348 
Headcount256,358 256,710 256,720 256,981 257,444 256,358 257,444 
Credit quality metrics
Allowances for loan losses and lending-related commitments$33,637 $34,301 $25,391 $14,314 $14,400 $33,637 $14,400 
Allowance for loan losses to total retained loans3.26 %3.27 %(f)2.32 %1.39 %1.42 %3.26 %1.42 %
Nonperforming assets(d)
$11,462 $9,715 $7,062 $5,054 $5,993 $11,462 $5,993 
Net charge-offs1,180 1,560 1,469 1,494 1,371 4,209 4,135 
Net charge-off rate0.49 %0.64 %0.62 %0.63 %0.58 %0.58 %0.59 %
Effective January 1, 2020, the Firm adopted the Financial Instruments – Credit Losses (“CECL”) accounting guidance. Refer to Note 1 for further information.
(a)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(b)Pre-provision profit, TBVPS and ROTCE are each non-GAAP financial measures. Tangible common equity (“TCE”) is also a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 22-23 for a further discussion of these measures.
(c)Quarterly ratios are based upon annualized amounts.
(d)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans and other assets. Prior-period amounts have been revised to conform with the current presentation.
(e)Reflects the relief provided by the Federal Reserve Board in response to the COVID-19 pandemic, including the CECL capital transition provisions that became effective in the first quarter of 2020. Effective in the second quarter of 2020, the SLR reflects the temporary exclusions of U.S. Treasury securities and deposits at Federal Reserve Banks. Refer to��Regulatory Developments Relating to the COVID-19 Pandemic on pages 11-12 and Capital Risk Management on pages 49-54 of this Form 10-Q for additional information. Refer to Capital Risk Management on pages 85-92 of JPMorgan Chase’s 2019 Form 10-K for additional information on the Firm’s capital metrics.
(f)Prior-period amounts have been revised to conform with the current presentation.
3


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 quarter of 2020.
This Quarterly Report on Form 10-Q for the third quarter of 2020 (“Form 10-Q”) should be read together with JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”). Refer to the Glossary of terms and acronyms and line of business (“LOB”) metrics on pages 192-200 for definitions of terms and acronyms used throughout this Form 10-Q.
This document contains forward-looking statements 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. For a discussion of certain of those risks and uncertainties and the factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties, refer to Forward-looking Statements on page 92 of this Form 10-Q, Part II, Item 1A, Risk Factors on pages 201-202 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 $3.2 trillion in assets and $271.1 billion in stockholders’ equity as of September 30, 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 38 states and Washington, D.C. as of September 30, 2020. JPMorgan Chase’s principal 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 outside the 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). For a description of the Firm’s business segments and the products and services they provide to their respective
client bases, refer to Note 26 of this Form 10-Q and Note 32 of JPMorgan Chase’s 2019 Form 10-K.
The Firm's website is www.jpmorganchase.com. JPMorgan Chase makes available on its website, free of charge, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files or furnishes such material to the U.S. Securities and Exchange Commission (the “SEC”) at www.sec.gov. JPMorgan Chase also makes important information about the Firm available on the Investor Relations section of its website at https://www.jpmorganchase.com/corporate/investor-relations/investor-relations.htm.

4


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 LOBs, this Form 10-Q and the 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
(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,
20202019Change20202019Change
Selected income statement data
Total net revenue(a)
$29,147$29,291— %$90,319$87,114%
Total noninterest expense(a)
16,87516,37250,60848,976
Pre-provision profit12,27212,919(5)39,71138,138
Provision for credit losses6111,514(60)19,3694,158366 
Net income9,4439,08016,99527,911(39)
Diluted earnings per share$2.92$2.68$5.09$8.15(38)
Selected ratios and metrics
Return on common equity15%15%9%15%
Return on tangible common equity19181119
Book value per share$79.08$75.24$79.08$75.24
Tangible book value per share63.9360.4863.9360.48
Capital ratios(b)
CET113.1%12.3%13.1%12.3%
Tier 1 capital15.014.115.014.1
Total capital17.315.917.315.9
(a)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(b)Reflects the relief provided by the Federal Reserve Board in response to the COVID-19 pandemic, including the CECL capital transition provisions that became effective in the first quarter of 2020. Refer to Regulatory Developments relating to the COVID-19 Pandemic on pages 11-12 and Capital Risk Management on pages 49-54 of this Form 10-Q for additional information. Refer to Capital Risk Management on pages 85-92 of JPMorgan Chase’s 2019 Form 10-K for additional information on the Firm’s capital metrics.

Comparisons noted in the sections below are for the third quarter of 2020 versus the third quarter of 2019, unless otherwise specified.
Firmwide overview
JPMorgan Chase reported net income of $9.4 billion for the third quarter of 2020, or $2.92 per share, on net revenue of $29.1 billion. The Firm reported ROE of 15% and ROTCE of 19%. The Firm's results for the third quarter of 2020 included firmwide legal expense of $524 million.
The Firm had net income of $9.4 billion, up 4%.
Total net revenue was flat. Net interest income was $13.0 billion, down 9%, predominantly driven by the impact of lower rates largely offset by higher net interest income in CIB Markets as well as balance sheet growth. Noninterest revenue was $16.1 billion, up 7%, predominantly driven by higher Investment Banking fees, Markets revenue, and Credit Adjustments & Other in the CIB, and higher net investment securities gains in Corporate.
Noninterest expense was $16.9 billion, up 3%, primarily driven by higher legal expense predominantly in CIB and an impairment on a legacy investment in Corporate, partially offset by lower marketing expense in CCB.

5


The provision for credit losses was $611 million, down $903 million from the prior year. Net charge-offs of $1.2 billion were down $191 million from the prior year, predominantly driven by Card, which reflected lower charge-offs and higher recoveries, and benefited from the effect of payment assistance and government stimulus programs. The current quarter included a net reduction to the allowance for credit losses that was largely driven by paydowns in the Home Lending portfolio and changes in wholesale loan balances, partially offset by an addition to the allowance for the investment securities portfolio due to the transfer of certain securities from available-for-sale to held-to-maturity. The prior year included net additions to the allowance for credit losses across both the Consumer and Wholesale portfolios.
The total allowance for credit losses was $33.8 billion at September 30, 2020. The Firm had an allowance for loan losses to retained loans coverage ratio of 3.26%, compared with 3.27% in the second quarter of 2020, and 1.42% in the prior year; the increase from the prior year was driven by the additions to the allowance for credit losses and the adoption of CECL.
The Firm’s nonperforming assets totaled $11.5 billion at September 30, 2020, an increase of $1.7 billion from the second quarter of 2020, driven by customers that have exited COVID-19 payment deferral programs and were 90 or more days past due in Home Lending in CCB, and downgrades in the wholesale portfolio across multiple industries on client credit deterioration. Nonperforming assets increased from $6.0 billion in the prior year due to downgrades in the wholesale portfolio, as well as from the adoption of CECL, as the purchased credit deteriorated loans in the mortgage portfolio became subject to nonaccrual loan treatment.
Firmwide average loans of $991 billion were up 1%, largely reflecting higher loan balances in AWM, as well as loans originated under the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”), offset by lower loan balances in Home Lending and Card.
Firmwide average deposits of $2.0 trillion were up 30%, reflecting significant inflows across the Firm, primarily driven by the COVID-19 pandemic and the related effect of certain government actions.
As of September 30, 2020 the Firm had average High Quality Liquid Assets (“HQLA”) of approximately $670 billion and unencumbered marketable securities with a fair value of approximately $660 billion, resulting in approximately $1.3 trillion of liquidity sources. Refer to Liquidity Risk Management on pages 55–59 for additional information.
Selected capital-related metrics
The Firm’s CET1 capital was $198 billion, and the Standardized and Advanced CET1 ratios were 13.1% and 13.8%, respectively.
The Firm’s SLR was 7.0%. The SLR reflects the temporary exclusions of U.S. Treasury securities and deposits at Federal Reserve Banks, as required by the Federal Reserve’s interim final rule issued on April 1, 2020. The Firm’s SLR excluding the temporary relief was 5.8%.
The Firm grew TBVPS, ending the third quarter of 2020 at $63.93, up 6% 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 on pages 22-23 for a further discussion of each of these measures.
6


Business segment highlights
Selected business metrics for each of the Firm’s four LOBs are presented below for the third quarter of 2020.
CCB
ROE
29%
Average deposits up 28%; client investment assets up 11%
Average loans down 7%; credit card sales volume down 8%
Active mobile customers up 10%
CIB
ROE
21%
$2.2 billion of Global Investment Banking fees, up 9%
#1 ranking for Global Investment Banking fees with 9.4% wallet share year-to-date
Total Markets revenue of $6.6 billion, up 30%, with Fixed Income Markets up 29% and Equity Markets up 32%
CB
ROE
19%
Gross Investment Banking revenue of $840 million, up 20%
Average loans up 5%; average deposits up 44%
AWM
ROE
32%
Assets under management (AUM) of $2.6 trillion, up 16%
Average loans up 13%; average deposits up 23%
Refer to the Business Segment Results on pages 24-47 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 months of 2020, consisting of:
$1.8 trillion
Total credit provided and capital raised (including loans and commitments)(a)
$164
billion
Credit for consumers
$14
billion
Credit for U.S. small businesses
$611 billionCredit for corporations
$885 billionCapital raised for corporate clients and non-U.S. government entities
$82
billion
Credit and capital raised for nonprofit and U.S. government entities(b)
$28 billionLoans under the Small Business Administration’s Paycheck Protection
Program
(a)Excludes loans under the SBA’s PPP.
(b)Includes states, municipalities, hospitals and universities.

7


Recent events
On October 28, 2020, JPMorgan Chase announced the election of Phebe N. Novakovic as a member of the Firm's Board of Directors, effective December 7, 2020. Ms. Novakovic is Chairman and Chief Executive Officer of General Dynamics Corporation.
On October 8, 2020, JPMorgan Chase announced a long-term $30 billion commitment to advance racial equity.
On October 6, 2020, JPMorgan Chase announced a financing strategy that is aligned to the goals of the Paris Agreement. As part of its strategy, the Firm will work with clients in key sectors to reduce their greenhouse gas emissions intensity and expand investment in low- and zero-carbon energy sources and technologies.
On September 15, 2020, JPMorgan Chase expanded its Operating Committee to include the heads of several of the Firm's largest businesses in the LOBs. The current business roles and reporting lines of the new members remained unchanged. The Firm also announced that its two Co-Presidents and Co-Chief Operating Officers, Daniel Pinto and Gordon Smith, will be taking on additional responsibility across all of the Firm’s businesses.
On September 15, 2020, the Board of Directors of JPMorgan Chase announced that the independent directors of the Board have appointed Stephen B. Burke as Lead Independent Director, effective January 1, 2021, succeeding Lee Raymond in that role.
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 92 and Risk Factors on page 201 of this Form 10-Q and pages 6–28 of JPMorgan Chase’s 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 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 2020 and for 2021 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 LOBs. The Firm 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 this Form 10-Q supersedes all outlook information furnished by the Firm in its periodic reports filed with the SEC prior to the date of this Form 10-Q.
Firmwide
On a managed basis, management expects full-year 2020 net interest income to be approximately $55 billion, and full-year 2021 net interest income to be approximately $54 billion, market dependent.
Management expects adjusted expense for the full-year 2020 to be approximately $66 billion.
8


Business Developments
COVID-19 Pandemic
In response to the COVID-19 pandemic, the Firm has 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 businesses.
The Firm remains focused on serving its customers, clients and communities, as well as the well-being of its employees during the COVID-19 pandemic. The Firm continues to actively monitor the dynamic health and safety situations at local and regional levels, and plans remain flexible to adapt as these situations evolve.
Supporting clients and customers
Since March 2020 the Firm has provided assistance to clients and customers primarily in the form of payment deferrals on loans and auto leases.
Refer to Credit Portfolio on pages 60-61 for information on assistance granted to customers and clients. Refer to Consumer Credit portfolio on pages 62-66 and Wholesale Credit Portfolio on pages 67-76 for information on retained loans under payment deferral.
The Firm has gradually re-opened its branches since April, with nearly 90% of its branches returning to full service as of the third quarter of 2020. Additionally, the Firm continues to make a wide range of banking services accessible to clients and customers through mobile and other digital channels.
Protecting and supporting employees
At the onset of the pandemic, the Firm implemented alternative work arrangements, with the vast majority of its global workforce working from home.
While the majority of the Firm’s employees globally continue to work from home, the Firm continues to return employees to the office.
Supporting communities
Since March, the Firm has committed $250 million to help address humanitarian needs and long-term economic challenges posed by the COVID-19 pandemic on the communities in which the Firm operates. As of September 30, 2020 nearly half of this commitment has been funded.
Departure of the U.K. from the EU
The Firm continues to execute on its Firmwide Brexit Implementation program and 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.
The Firm is preparing for the possibility that the U.K. will complete its departure from the EU without having agreed the terms of their future relationship, which is commonly referred to as “hard Brexit.” The Firm is therefore preparing to finalize and implement the various components of its Brexit readiness plan by year-end, including completion of the relocation of approximately 200 front office roles from the U.K. to EU locations, and the migration of remaining EU clients and certain positions to EU entities by the end of the year. A key factor in that plan will be to secure client engagement; any delays may impact the Firm’s ability to continue servicing EU clients, as the Firm’s U.K.-based legal entities are expected to lose their ability to transact business from the U.K. with EU clients at the end of the year.
The COVID-19 pandemic has introduced additional risk to the Firm’s Brexit Implementation program. Infection rates and travel restrictions are increasing and lock-downs have been introduced across various U.K. and EU locations. As a result, the risk that clients may not be operationally ready and that the Firm may not be able to relocate employees by year-end is rising. Unless some official-sector solution is forthcoming, the Firm’s ability to continue servicing EU clients may be adversely affected.

9


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 accounting relationships affected by reference rate reform. These optional expedients are intended to simplify the operational impact of applying U.S. GAAP to transactions impacted by reference rate reform. The Firm elected to apply certain of these expedients beginning in the third quarter of 2020. On August 27, 2020, the International Accounting Standards Board (“IASB”) issued guidance that provides similar relief for entities reporting under International Financial Reporting Standards ("IFRS"). Refer to Accounting and Reporting Developments on page 91 for additional information. The Firm continues to monitor the transition relief being considered by the U.S. Treasury Department regarding the tax implications of reference rate reform.
The Firm also continues to develop and implement plans to appropriately mitigate the risks associated with IBOR discontinuation. Refer to Business Developments on page 47 of the 2019 Form 10-K for a discussion of the Firm’s initiatives to address the expected discontinuation of the London Interbank Offered Rate (“LIBOR”) and other IBORs.

10


Regulatory Developments Relating to the COVID-19 Pandemic
Since March 2020, the U.S. government as well as central banks and banking authorities around the world have taken and continue to take actions to help individuals, households and businesses that have been adversely affected by the economic disruption caused by the COVID-19 pandemic. The 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, 2020 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. On August 26, 2020, the federal banking agencies issued the final rule consistent with the interim final rules published on March 17, 2020 and March 23, 2020.
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 freed up liquidity in the banking system to support lending to households and businesses.
Refer to 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 (issued as final on
August 26, 2020) that provided banking organizations with the option to 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 49-54 and Note 22 on pages 177–178 for additional information on the CECL capital transition provisions and the impact to the Firm’s capital metrics.
Supplementary leverage ratio (“SLR”) temporary revision. On April 1, 2020, the Federal Reserve issued an interim final rule that requires, 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 became effective April 1, 2020, and will remain in effect through March 31, 2021.
Refer to Capital Risk Management on pages 49-54 and Note 22 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 clarified the interaction between its previous guidance and Section 4013 of the CARES Act, which provides certain financial institutions with 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 Firm has granted various forms of assistance to customers and clients impacted by the COVID-19 pandemic, including payment deferrals and covenant modifications. The majority of the Firm’s COVID-19 related loan modifications have not been considered TDRs as:
they represent short-term or other insignificant modifications, whether under the Firm’s regular loan modification assessments or the IA Statement guidance, or
the Firm has elected to apply the option to suspend the application of accounting guidance for TDRs as provided under section 4013 of the CARES Act.
11


To the extent that certain modifications do not meet any of the above criteria, the Firm accounts for them as TDRs. Refer to Credit Portfolio on pages 60-61 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. 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 eligible borrowers until August 8, 2020 to provide an incentive for these businesses to keep their workers on their payroll. The Firm has participated and is participating in certain of these facilities and programs, as needed, to assist its clients and customers or to support the broader economy.
Refer to Capital Risk Management on pages 49-54, Liquidity Risk Management on pages 55–59 and Note 22 for additional information on the Firm’s participation in these facilities. Refer to Capital Risk Management on pages 49-54, Credit Portfolio on pages 60-61 and Note 22 for additional information on the Firm’s participation in the PPP.

12


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, 2020 and 2019, unless otherwise specified. Factors that relate primarily to a single business segment are discussed in more detail within that business segment. Refer to pages 88–90 of this Form 10-Q and pages 136–138 of JPMorgan Chase’s 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 September 30,Nine months ended September 30,
(in millions)20202019Change20202019Change
Investment banking fees$2,187 $1,967 11 %$6,903 $5,658 22 %
Principal transactions4,142 3,449 20 14,700 11,239 31 
Lending- and deposit-related fees(a)
1,647 1,671 (1)4,784 4,854 (1)
Asset management, administration and commissions(a)
4,470 4,306 13,276 12,607 
Investment securities gains473 78 NM732 135 442 
Mortgage fees and related income1,087 887 23 2,324 1,562 49 
Card income(b)
1,169 1,233 (5)3,138 3,741 (16)
Other income(c)
959 1,472 (35)3,157 4,239 (26)
Noninterest revenue16,134 15,063 49,014 44,035 11 
Net interest income13,013 14,228 (9)41,305 43,079 (4)
Total net revenue$29,147 $29,291 — %$90,319 $87,114 %
(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 have been revised to conform with the current presentation.
(b) In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(c) Included operating lease income of $1.4 billion for each of the three months ended September 30, 2020 and 2019, and $4.2 billion and $4.0 billion for the nine months ended September 30, 2020 and 2019, respectively.
Quarterly results
Investment banking fees increased, driven by CIB, reflecting:
higher equity underwriting fees primarily in follow-on offerings and IPO markets due to increased industry-wide fees
higher debt underwriting fees due to wallet share gains despite decreased industry-wide fees,
partially offset by
lower advisory fees driven by a lower number of completed transactions associated in part with the lower level of announced deal volumes in the first half of the year.
Refer to CIB segment results on pages 31-37 and Note 6 for additional information.
Principal transactions revenue increased, primarily in CIB, reflecting:
higher revenue in both Fixed Income and Equity Markets driven by strong performance in Commodities and Credit, as well as Cash Equities, respectively, and
a $169 million gain in Credit Adjustments & Other largely driven by funding and credit spread tightening on derivatives, compared with a $71 million loss in the prior year.
The increase in principal transactions revenue also reflected net gains on certain legacy private equity investments in Corporate.
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 and Corporate segment results on pages 31-37 and pages 46-47, and Note 6 for additional information.
Lending- and deposit-related fees was relatively flat as the lower deposit-related fees in CCB, reflecting lower transaction activity and the impact of fee refunds related to the COVID-19 pandemic, was offset by higher cash management fees, as well as higher lending-related fees, in particular, loan commitment fees in CIB and CB. Refer to CCB segment results on pages 26-30, CIB on pages 31-37 and CB on pages 38-41, respectively, and Note 6 for additional information.
Asset management, administration and commissions revenue increased, reflecting higher asset management fees as a result of cumulative net inflows into liquidity and long-term products in AWM.
For information on asset management, administration and commissions revenue, refer to CCB, CIB and AWM segment results on pages 26-30, pages 31-37 and pages 42-45, respectively, and Note 6.
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Investment securities gains increased due to the repositioning of the investment securities portfolio, including sales of U.S. GSE and government agency mortgage-backed securities.
Refer to Corporate segment results on pages 46-47 and Note 10 for information on investment securities gains.
Mortgage fees and related income increased due to:
higher net mortgage servicing revenue reflecting
higher MSR risk management results driven by updates to model inputs, and
higher operating revenue reflecting the absence of losses in the prior year from reclassifying certain loans to held-for-sale, predominantly offset by lower revenue on a lower level of third-party loans serviced
higher net mortgage production revenue reflecting higher production margins and volumes; the prior year included approximately $350 million of gains on the sale of certain loans.
Refer to CCB segment results on pages 26-30, Note 6 and 15 for further information.
Card income decreased due to lower net interchange income reflecting lower card sales volumes as a result of the COVID-19 pandemic, largely offset by lower acquisition costs and higher annual fees.
Refer to CCB segment results on pages 26-30, and Note 6 for further information.
Other income decreased, reflecting:
net losses related to derivatives in Other Corporate, as well as the costs of hedging certain non-U.S. dollar-denominated net investment exposures in Treasury and CIO
losses related to the early termination of certain of the Firm's long-term debt in Treasury and CIO
increased amortization on higher levels of alternative energy investments in CIB. The increased amortization was more than offset by lower income tax expense from the associated tax credits.
Net interest income decreased due to the impact of lower rates, largely offset by higher net interest income in CIB Markets, as well as balance sheet growth.
The Firm’s average interest-earning assets were $2.9 trillion, up $510 billion, and the yield was 2.05%, down 151 basis points ("bps"), primarily due to lower rates. The net yield on these assets, on an FTE basis, was 1.82%, a decrease of 59 bps. The net yield excluding CIB Markets was 2.05%, down 118 bps.
Net yield excluding CIB Markets is a non-GAAP financial measure. Refer to the Consolidated average balance sheets, interest and rates schedule on pages 190–191 for further details; and the Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 22-23 for a further discussion of Net interest yield excluding CIB Markets.


Year-to-date results
Investment banking fees increased, driven by CIB, reflecting:
higher equity underwriting fees primarily in follow-on offerings and convertible securities markets due to increased industry-wide fees
higher debt underwriting fees due to increased industry-wide fees and wallet share gains in investment-grade and high-yield bonds. The increased activity resulted in part from clients seeking liquidity in the first half of the year as a result of the COVID-19 pandemic,
partially offset by
lower advisory fees driven by a lower number of completed transactions.
Principal transactions revenue increased, primarily in CIB, reflecting:
higher revenue in both Fixed Income and Equity Markets driven by strong performance in Rates, Currencies & Emerging Markets, Credit and Commodities, as well as in Cash Equities and equity derivatives, respectively,
partially offset by
a $272 million net loss in Credit Adjustments & Other driven by losses on certain components of fair value option elected liabilities, as well as the impact of funding spread widening on derivatives.
The increase in principal transactions revenue also reflected net gains on certain legacy private equity investments in Corporate, compared with net losses in the prior year.
Lending- and deposit-related fees was relatively flat as the lower deposit-related fees in CCB, reflecting lower transaction activity and the impact of fee refunds related to the COVID-19 pandemic, was offset by higher cash management fees in CIB and CB, as well as higher lending-related fees, in particular, loan commitment fees in CIB.
Asset management, administration and commissions revenue increased driven by:
higher asset management fees in AWM as a result of cumulative net inflows into liquidity and long-term products, and in CCB related to a higher level of investment assets
higher brokerage commissions in CIB and AWM on higher client-driven volume,
partially offset by
lower volume of annuity sales in CCB.
14


Investment securities gains increased due to the repositioning of the investment securities portfolio, including sales of U.S. GSE and government agency mortgage-backed securities in the first and third quarters of 2020.
Mortgage fees and related income increased due to:
higher net mortgage production revenue reflecting higher mortgage production volumes and margins; the prior year included gains on the sales of certain loans
higher net mortgage servicing revenue reflecting
higher MSR risk management results; the prior year included losses resulting from updates to model inputs,
partially offset by
lower operating revenue reflecting a lower level of third-party loans serviced; the prior year included losses from reclassifying certain loans to held-for-sale.
Card income decreased due to lower net interchange income reflecting lower card sales volumes that began in March as a result of the COVID-19 pandemic, partially offset by higher annual fees and lower acquisition costs.
Other income decreased reflecting:
net losses related to derivatives in Other Corporate, as well as the costs of hedging certain non-U.S. dollar-denominated net investment exposures in Treasury and CIO
net losses on certain equity investments in CIB, compared with net gains in the prior year
increased amortization on higher levels of alternative energy investments in CIB. The increased amortization is more than offset by lower income tax expense from the associated tax credits
lower net valuation gains on certain investments in AWM
losses related to the early termination of certain of the Firm's long-term debt in Treasury and CIO,
partially offset by
higher operating lease income from growth in auto operating lease volume in CCB.
Refer to Note 17 for further information.
Net interest income decreased due to the impact of lower rates, predominantly offset by higher net interest income in CIB Markets, as well as balance sheet growth.
The Firm’s average interest-earning assets were $2.7 trillion, up $386 billion, and the yield was 2.47%, down 123 bps, primarily due to lower rates. The net yield on these assets, on an FTE basis, was 2.04%, a decrease of 45 bps. The net yield excluding CIB Markets was 2.41%, down 93 bps.
15


Provision for credit losses
Three months ended September 30,Nine months ended September 30,
(in millions)20202019Change20202019Change
Consumer, excluding credit card$(336)$19 NM$1,874 $(227)NM
Credit card1,028 1,375 (25)10,119 4,017 152 
Total consumer692 1,394 (50)11,993 3,790 216 
Wholesale(178)120 NM7,266 368 NM
Investment securities97 NANM110 NANM
Total provision for credit losses$611 $1,514 (60)%$19,369 $4,158 366 %
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 lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied when determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.

Quarterly results
The provision for credit losses decreased driven by both the consumer and wholesale portfolios.
The decrease in consumer reflected:
a $300 million reduction in the allowance for credit losses in Home Lending due to paydowns; a $100 million reduction in the allowance in the Business Banking consumer portfolio, which was offset by an addition to the allowance in the Business Banking wholesale portfolio; resulting in no change to CBB’s overall allowance for credit losses, and
lower net charge-offs in Card, which reflected lower charge-offs and higher recoveries, and benefited from the effect of payment assistance and government stimulus programs.
The prior year included a $138 million net addition to the allowance for credit losses.
The wholesale provision was a net benefit as a result of reductions in the allowance for credit losses across CIB, CB and AWM, driven by changes in loan balances, partially offset by an addition to the allowance in CCB Business Banking as noted above. The prior year provision was largely driven by select Commercial & Industrial ("C&I") client downgrades.
The investment securities provision was predominantly driven by the transfer of certain securities from available-for-sale ("AFS") to held-to-maturity ("HTM").
Refer to CCB segment results on pages 26-30, CIB on pages 31-37, CB on pages 38-41, AWM on pages 42-45, the Allowance for Credit Losses on pages 77–78, and Note 10 and 13 for additional information on the credit portfolio and the allowance for credit losses.

Year-to-date results
The provision for credit losses increased primarily driven by the deterioration and uncertainty in the macroeconomic environment as a result of the impact of the COVID-19 pandemic in consumer and wholesale.
The increase in consumer reflected:
net additions of $8.3 billion to the allowance for credit losses, consisting of $6.6 billion for Card, $900 million for Home Lending, $520 million for Auto, and $252 million for Business Banking,
partially offset by
lower net charge-offs largely in Card, which reflected higher recoveries, and in Home Lending, reflecting higher recoveries on a loan sale in the first quarter of 2020.
The prior year included an $83 million net reduction in the allowance for credit losses.
The increase in wholesale reflected a net addition of $6.7 billion to the allowance for credit losses across the LOBs impacting multiple industry sectors.
The investment securities provision was predominantly driven by the transfer of certain securities from AFS to HTM.
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Noninterest expense
(in millions)Three months ended September 30,Nine months ended September 30,
20202019Change20202019Change
Compensation expense$8,630 $8,583 %$27,034 $26,067 %
Noncompensation expense:
Occupancy1,142 1,110 3,288 3,238 
Technology, communications and equipment2,564 2,494 7,732 7,236 
Professional and outside services2,178 2,056 6,205 6,307 (2)
Marketing(a)
470 895 (47)1,751 2,504 (30)
Other expense(b)(c)
1,891 1,234 53 4,598 3,624 27 
Total noncompensation expense8,245 7,789 23,574 22,909 
Total noninterest expense$16,875 $16,372 %$50,608 $48,976 %
(a)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(b)Included Firmwide legal expense/(benefit) of $524 million and $10 million for the three months ended September 30, 2020 and 2019, respectively, and $839 million and $(2) million for the nine months ended September 30, 2020 and 2019, respectively.
(c)Included FDIC-related expense of $186 million and $114 million for the three months ended September 30, 2020 and 2019, respectively, and $503 million and $378 million for the nine months ended September 30, 2020 and 2019, respectively.
Quarterly results
Compensation expense increased driven by investments in new hires, predominantly offset by lower revenue-related expense in CIB.
Noncompensation expense increased as a result of:
higher legal expense predominantly in CIB
an impairment on a legacy investment in Corporate
higher volume-related expense, in particular brokerage expense in CIB,
partially offset by
lower marketing expense in CCB as a result of lower investments in marketing campaigns and travel-related benefits, and
lower structural expense, including lower travel and entertainment across the businesses.
Year-to-date results
Compensation expense increased driven by higher revenue-related expense in CIB.
Noncompensation expense increased as a result of:
higher legal expense predominantly in CIB and from a lower net legal benefit in Corporate
higher volume-related expense, in particular brokerage expense in CIB and depreciation from growth in auto lease assets in CCB
an impairment on a legacy investment in Corporate,
partially offset by
lower marketing expense in CCB as a result of lower investments in marketing campaigns and travel-related benefits, and
lower structural expense, including lower travel and entertainment across the businesses.
Income tax expense
(in millions)Three months ended September 30,Nine months ended September 30,
20202019Change20202019Change
Income before income tax expense$11,661 $11,405 %$20,342 $33,980 (40)%
Income tax expense2,218 2,325 (5)3,347 6,069 (45)
Effective tax rate19.0 %20.4 %16.5 %17.9 %
Quarterly results
The effective tax rate decreased due to changes in the level and mix of income and expenses subject to U.S. federal, and state and local taxes, as well as prior-year adjustments. The decrease was partially offset by the absence of tax benefits recorded in the prior year related to the resolution of certain tax audits.
Year-to-date results
The effective tax rate decreased due to changes in the level and mix of income and expenses subject to U.S. federal, and state and local taxes, as well as prior-year adjustments and the more significant effect of certain tax benefits on a lower level of pre-tax income. The decrease was largely offset by the recognition of $1.0 billion of tax benefits recorded in the prior year related to the resolution of certain tax audits.
17


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, 2020, and December 31, 2019.
Selected Consolidated balance sheets data
(in millions)September 30,
2020
December 31,
2019
Change
Assets
Cash and due from banks$20,816 $21,704 (4)%
Deposits with banks466,706 241,927 93 
Federal funds sold and securities purchased under resale agreements319,849 249,157 28 
Securities borrowed142,441 139,758 
Trading assets(a)
505,822 369,687 37 
Available-for-sale securities389,583 350,699 11 
Held-to-maturity securities, net of allowance for credit losses141,553 47,540 198 
Investment securities, net of allowance for credit losses531,136 398,239 33 
Loans(a)
989,740 997,620 (1)
Allowance for loan losses(30,814)(13,123)135 
Loans, net of allowance for loan losses958,926 984,497 (3)
Accrued interest and accounts receivable76,945 72,861 
Premises and equipment26,672 25,813 
Goodwill, MSRs and other intangible assets51,594 53,341 (3)
Other assets(a)
145,169 130,395 11 
Total assets$3,246,076 $2,687,379 21 %
(a) In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans and other assets. Prior-period amounts have been revised to conform with the current presentation.
Cash and due from banks and deposits with banks increased primarily as a result of significant deposit inflows, which also funded asset growth across the Firm, including in investment securities and securities purchased under resale agreements. 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 increased predominantly as a result of higher deployment of cash in Treasury and CIO, as well as the impact of client activity and higher demand for securities to cover short positions in CIB. Refer to Liquidity Risk Management on pages 55–59 and Note 11 for additional information.
Trading assets increased compared with lower levels at year-end due to client-driven market-making activities in debt and equity instruments in CIB Markets, as well as higher derivative receivables as a result of market movements, also in CIB. Refer to Notes 2 and 5 for additional information.
Investment securities increased, reflecting net purchases of U.S. Treasuries and U.S. GSE and government agency MBS in the available-for-sale (“AFS”) portfolio, driven by interest rate risk management activities and cash deployment, partially offset by a non-cash transfer of $100.5 billion of AFS securities to the held-to-maturity (“HTM”) portfolio, resulting in a comparable increase in HTM; the transfer was made for capital management purposes.
Refer to Corporate segment results on pages 46-47, Investment Portfolio Risk Management on page 79, and
Notes 2 and 10 for additional information on Investment securities.
Loans decreased, reflecting:
lower loans in Card due to the decline in sales volume that began in March as a result of the COVID-19 pandemic, as well as the impact of seasonality; and lower loans in Home Lending primarily due to paydowns and loan sales, net of originations,
partially offset by
the impact of the PPP loans in CBB and CB, as well as growth in wholesale loans and mortgages in AWM.
The allowance for loan losses increased primarily reflecting the deterioration and uncertainty in the macroeconomic environment as a result of the impact of the COVID-19 pandemic, consisting of:
a net $8.3 billion addition in consumer, predominantly in the credit card and residential real estate portfolios
a net $5.2 billion addition in wholesale, across the LOBs impacting multiple industry sectors, and
a net $4.2 billion addition as a result of the adoption of CECL.
There were also additions to the allowance for lending-related commitments, which is included in other liabilities on the consolidated balance sheets, of $1.5 billion related to the impact of the COVID-19 pandemic, and $98 million related to the adoption of CECL, resulting in total additions to the allowance for credit losses of $15.0 billion and $4.3 billion, respectively, as of September 30, 2020.
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Refer to Credit and Investment Risk Management on pages 60-79, and Notes 1, 2, 3, 12 and 13 for a more detailed discussion of loans and the allowance for loan losses.
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 net additions to the MSRs. Refer to Note 15 for additional information.
Other assets increased reflecting higher cash collateral placed with central counterparties in CIB. Refer to Liquidity Risk Management on pages 55–59 for additional information.
Selected Consolidated balance sheets data (continued)
(in millions)September 30,
2020
December 31,
2019
Change
Liabilities
Deposits$2,001,416 $1,562,431 28 %
Federal funds purchased and securities loaned or sold under repurchase agreements236,440 183,675 29 
Short-term borrowings41,992 40,920 
Trading liabilities162,493 119,277 36 
Accounts payable and other liabilities234,256 210,407 11 
Beneficial interests issued by consolidated variable interest entities (“VIEs”)19,191 17,841 
Long-term debt279,175 291,498 (4)
Total liabilities2,974,963 2,426,049 23 
Stockholders’ equity271,113 261,330 
Total liabilities and stockholders’ equity$3,246,076 $2,687,379 21 %
Deposits increased reflecting significant inflows across the LOBs primarily driven by the COVID-19 pandemic and the related effect of certain government actions
in the wholesale businesses, the inflows principally occurred in March as clients looked to remain liquid as a result of market conditions; in general, balances remained elevated through the third quarter, and
in CCB, the increase was driven by lower spending and higher cash balances across both consumer and small business customers, as well as growth from existing and new accounts.
Refer to Liquidity Risk Management on pages 55–59 and Notes 2 and 16 for additional information.
Federal funds purchased and securities loaned or sold under repurchase agreements increased reflecting:
in CIB, higher secured financing of trading assets, partially offset by a decline in client-driven market-making activities, and the Firm's nonparticipation in the Federal Reserve's open market operations, and
in Treasury and CIO, higher secured financing of AFS investment securities. Refer to Liquidity Risk Management on pages 55–59 and Note 11 for additional information.
For information on short-term borrowings, refer to Liquidity Risk Management on pages 55–59 .
Trading liabilities increased as a result of client-driven market-making activities in CIB, which resulted in higher levels of short positions predominantly in debt instruments in Fixed Income Markets, as well as higher derivative payables as a result of market movements. Refer to Notes 2 and 5 for additional information.
Accounts payable and other liabilities increased reflecting higher client payables related to client-driven activities in CIB.
Beneficial interests issued by consolidated VIEs increased primarily reflecting higher levels of Firm-administered multi-seller conduit commercial paper held by third parties.
Refer to Off-Balance Sheet Arrangements on page 21 and Notes 14 and 23 for further information on Firm-sponsored VIEs and loan securitization trusts.
Long-term debt decreased as a result of maturities of FHLB advances; net maturities of senior debt, which included the early termination of certain of the Firm's debt; partially offset by an issuance of subordinated debt, and higher fair value hedge accounting adjustments related to lower interest rates. The decrease was also due to a lower level of structured notes in CIB. Refer to Liquidity Risk Management on pages 55–59 for additional information on the Firm’s long-term debt activities.
Stockholders’ equity increased reflecting the combined impact of net income, capital actions, the adoption of CECL and an increase in accumulated other comprehensive income (“AOCI”). The increase in AOCI was driven by net unrealized gains on AFS securities, and higher valuation of interest rate cash flow hedges. Refer to page 96 for information on changes in stockholders’ equity, Capital actions on page 53, and Note 20 for additional information on AOCI.
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Consolidated cash flows analysis
The following is a discussion of cash flow activities during the nine months ended September 30, 2020 and 2019.
(in millions)Nine months ended September 30,
20202019
Net cash provided by/(used in)
Operating activities(a)
$(51,858)$(78,719)
Investing activities(a)
(198,206)(36,501)
Financing activities470,687 96,006 
Effect of exchange rate changes on cash3,268 (2,982)
Net increase/(decrease) in cash and due from banks and deposits with banks$223,891 $(22,196)
(a) In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans and other assets. Prior-period amounts have been revised to conform with the current presentation.
Operating activities
In 2020, cash used resulted from higher trading assets and other assets, partially offset by higher trading liabilities, accounts payable and other liabilities, and net proceeds from loans held for sale.
In 2019, cash used primarily resulted from higher trading assets and securities borrowed, partially offset by increased accounts payable and other liabilities, trading liabilities, and net proceeds from loans held-for-sale.
Investing activities
In 2020, cash used reflected net purchases of investment securities and higher securities purchased under resale agreements, partially offset by net proceeds from sales and securitizations of loans held-for-investment.
In 2019, cash used resulted from net purchases of investment securities, partially offset by higher securities purchased under resale agreements, and net proceeds from sales and securitizations of loans held-for-investment.
Financing activities
In 2020, cash provided reflected higher deposits and securities loaned or sold under repurchase agreements, partially offset by net payments of long term borrowings.
In 2019, cash provided resulted from higher deposits and securities loaned or sold under repurchase agreements.
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 repurchases of its common equity. Subsequently, the Federal Reserve directed all large bank holding companies, including the Firm, to discontinue net share repurchases through the end of the fourth quarter of 2020.
* * *
Refer to Consolidated Balance Sheets Analysis on pages 18-19, Capital Risk Management on pages 49-54, and Liquidity Risk Management on pages 55–59 of this Form 10-Q, and pages 93–98 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of the activities affecting the Firm’s cash flows.
20


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.
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. Refer to Note 1 for additional information about the Firm’s consolidation policies.
Type of off-balance sheet arrangementLocation of disclosurePage references
Special-purpose entities: variable interests and other obligations, including contingent obligations, arising from variable interests in nonconsolidated VIEsRefer to Note 14163-168
Off-balance sheet lending-related financial instruments, guarantees, and other commitmentsRefer to Note 23179-182


21


EXPLANATION AND RECONCILIATION OF THE FIRM’S USE OF NON-GAAP FINANCIAL 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 93-97.
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 Markets
Tangible common equity (“TCE”), ROTCE, and TBVPS
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits.
Refer to Explanation and Reconciliation of the Firm’s Use Of Non-GAAP Financial Measures and Key Performance Measures on pages 57–59 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of management’s use of non-GAAP financial measures.
The following summary tables provide a reconciliation from the Firm’s reported U.S. GAAP results to managed basis.
Three months ended September 30,
20202019
(in millions, except ratios)Reported
Fully taxable-equivalent adjustments(b)
Managed
basis
Reported
Fully taxable-equivalent adjustments(b)
Managed
basis
Other income$959 $690 $1,649 $1,472 $596 $2,068 
Total noninterest revenue(a)
16,134 690 16,824 15,063 596 15,659 
Net interest income13,013 104 13,117 14,228 127 14,355 
Total net revenue29,147 794 29,941 29,291 723 30,014 
Total noninterest expense(a)
16,875 NA16,875 16,372 NA16,372 
Pre-provision profit12,272 794 13,066 12,919 723 13,642 
Provision for credit losses611 NA611 1,514 NA1,514 
Income before income tax expense11,661 794 12,455 11,405 723 12,128 
Income tax expense2,218 794 3,012 2,325 723 3,048 
Net income$9,443 NA$9,443 $9,080 NA$9,080 
Overhead ratio58 %NM56 %56 %NM55 %
Nine months ended September 30,
20202019
(in millions, except ratios)Reported
Fully taxable-equivalent adjustments(b)
Managed
basis
Reported
Fully taxable-equivalent adjustments(b)
Managed
basis
Other income$3,157 $2,128 $5,285 $4,239 $1,777 $6,016 
Total noninterest revenue(a)
49,014 2,128 51,142 44,035 1,777 45,812 
Net interest income41,305 321 41,626 43,079 408 43,487 
Total net revenue90,319 2,449 92,768 87,114 2,185 89,299 
Total noninterest expense(a)
50,608 NA50,608 48,976 NA48,976 
Pre-provision profit39,711 2,449 42,160 38,138 2,185 40,323 
Provision for credit losses19,369 NA19,369 4,158 NA4,158 
Income before income tax expense20,342 2,449 22,791 33,980 2,185 36,165 
Income tax expense3,347 $2,449 5,796 6,069 2,185 8,254 
Net Income$16,995 NA$16,995 $27,911 NA$27,911 
Overhead ratio56 %NM55 %56 %NM55 %
(a)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(b)Predominantly recognized in CIB, CB and Corporate.
22


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

(in millions, except rates)
Three months ended September 30,Nine months ended September 30,
20202019Change20202019Change
Net interest income – reported$13,013 $14,228 (9)%$41,305 $43,079 (4)%
Fully taxable-equivalent adjustments104 127 (18)321 408 (21)
Net interest income – managed basis(a)
$13,117 $14,355 (9)$41,626 $43,487 (4)
Less: CIB Markets net interest income(b)
2,076 723 187 6,208 1,971 215 
Net interest income excluding CIB Markets(a)
$11,041 $13,632 (19)$35,418 $41,516 (15)
Average interest-earning assets(c)
$2,874,974 $2,364,951 22 $2,720,636 $2,334,406 17 
Less: Average CIB Markets interest-earning assets(b)(c)
730,141 690,390 753,748 671,019 12 
Average interest-earning assets excluding CIB Markets$2,144,833 $1,674,561 28%$1,966,888 $1,663,387 18%
Net yield on average interest-earning assets – managed basis1.82 %2.41 %2.04 %2.49 %
Net yield on average CIB Markets interest-earning assets(b)
1.13 0.42 1.10 0.39 
Net yield on average interest-earning assets excluding CIB Markets2.05 %3.23 %2.41 %3.34 %
(a)Interest includes the effect of related hedges. Taxable-equivalent amounts are used where applicable.
(b)Refer to page 36 for further information on CIB Markets.
(c)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans. Prior-period amounts have been revised to conform with the current presentation.
The following summary table provides a reconciliation from the Firm’s common stockholders’ equity to TCE.
Period-endAverage
(in millions, except per share and ratio data)Sep 30,
2020
Dec 31,
2019
Three months ended September 30,Nine months ended September 30,
2020201920202019
Common stockholders’ equity$241,050 $234,337 $236,797 $235,613 $235,251 $232,917 
Less: Goodwill47,819 47,823 47,820 47,707 47,812 47,552 
Less: Other intangible assets759 819 769 842 791 776 
Add: Certain deferred tax liabilities(a)
2,405 2,381 2,401 2,344 2,393 2,311 
Tangible common equity$194,877 $188,076 $190,609 $189,408 $189,041 $186,900 
Return on tangible common equityNANA19 %18 %11 %19 %
Tangible book value per share$63.93 $60.98 NANAN/AN/A
(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.
23


BUSINESS SEGMENT RESULTS
The Firm is managed on 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 on pages 22-23 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 a stand-alone business. The management reporting process that derives business segment results includes the allocation of certain income and expense items. The Firm periodically assesses the assumptions, methodologies and reporting classifications used for segment reporting, and further refinements may be implemented in future periods. The Firm’s LOBs also provide various business metrics which are utilized by the Firm and its investors and analysts in assessing performance.
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. Periodically, the assumptions and methodologies used to allocate capital are assessed and as a result, the capital allocated to the LOBs may change. Refer to Line of business equity on page 90 of JPMorgan Chase’s 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 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 are reported across CCB, CIB and CB based primarily on client relationships. Prior-period amounts have been revised to reflect this realignment and revised allocation methodology.
JPMorgan Chase
Consumer BusinessesWholesale Businesses
Consumer & Community BankingCorporate & Investment BankCommercial BankingAsset & Wealth Management
Consumer &
Business Banking
Home LendingCard & AutoBankingMarkets &
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
 • Equity Markets
 • Securities Services
 • Credit Adjustments & Other
 • Corporate Client Banking
• Wealth Management

 • Commercial Real Estate Banking
24


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(a)
Corporate & Investment BankCommercial Banking
(in millions, except ratios)20202019Change20202019Change20202019Change
Total net revenue$12,755 $13,958 (9)%$11,503 $9,522 21 %$2,285 $2,274 — %
Total noninterest expense6,770 7,025 (4)5,797 5,504 966 940 
Pre-provision profit/(loss)5,985 6,933 (14)5,706 4,018 42 1,319 1,334 (1)
Provision for credit losses794 1,311 (39)(81)92 NM(147)67 NM
Net income/(loss)3,873 4,245 (9)4,304 2,831 52 1,088 943 15 
Return on equity (“ROE”)29 %31 %21 %13 %19 %16 %
Three months ended September 30,Asset & Wealth ManagementCorporate
Total(a)
(in millions, except ratios)20202019Change20202019Change20202019Change
Total net revenue$3,737 $3,568 %$(339)$692 NM$29,941 $30,014 — %
Total noninterest expense2,623 2,622 — 719 281 156 16,875 16,372 
Pre-provision profit/(loss)1,114 946 18 (1,058)411 NM13,066 13,642 (4)
Provision for credit losses(51)44 NM96 — NM611 1,514 (60)
Net income/(loss)877 668 31 (699)393 NM9,443 9,080 
ROE32 %24 %NMNM15 %15 %
Nine months ended September 30,
Consumer & Community Banking(a)
Corporate & Investment BankCommercial Banking
(in millions, except ratios)20202019Change20202019Change20202019Change
Total net revenue$38,084 $40,885 (7)%$37,803 $29,387 29 %$6,855 $6,972 (2)%
Total noninterest expense20,498 20,784 (1)18,457 16,794 10 2,853 2,809 
Pre-provision profit/(loss)17,586 20,101 (13)19,346 12,593 54 4,002 4,163 (4)
Provision for credit losses12,394 3,745 231 3,307 179 NM3,294 186 NM
Net income/(loss)3,888 12,349 (69)11,756 9,037 30 544 3,005 (82)
ROE9 %31 %19 %14 %2 %17 %
Nine months ended September 30,Asset & Wealth ManagementCorporate
Total(a)
(in millions, except ratios)20202019Change20202019Change20202019Change
Total net revenue$10,953 $10,616 %$(927)$1,439 NM$92,768 $89,299 %
Total noninterest expense7,788 7,865 (1)1,012724 40 50,608 48,976 
Pre-provision profit/(loss)3,165 2,751 15 (1,939)715 NM42,160 40,323 
Provision for credit losses266 48 454 108— NM19,369 4,158 366 
Net income/(loss)2,199 2,048 (1,392)1,472 NM16,995 27,911 (39)
ROE27 %25 %NMNM9 %15 %
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. Prior-period amounts have been revised to conform with the current presentation.
(a)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been 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, 2020 versus the corresponding periods in the prior year, unless otherwise specified.
25


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 Line of Business Metrics on page 198 for a further discussion of the business profile of CCB.
Selected income statement data
Three months ended September 30,Nine months ended September 30,
(in millions, except ratios)20202019Change20202019Change
Revenue
Lending- and deposit-related fees(a)
$771 $1,026 (25)%$2,360 $2,906 (19)%
Asset management, administration and commissions(a)
596 606 (2)1,717 1,807 (5)
Mortgage fees and related income1,076 886 21 2,313 1,561 48 
Card income(b)
890 905 (2)2,332 2,680 (13)
All other income1,425 1,383 4,111 3,994 
Noninterest revenue4,758 4,806 (1)12,833 12,948 (1)
Net interest income7,997 9,152 (13)25,251 27,937 (10)
Total net revenue12,755 13,958 (9)38,084 40,885 (7)
Provision for credit losses794 1,311 (39)12,394 3,745 231 
Noninterest expense
Compensation expense2,679 2,544 7,833 7,641 
Noncompensation expense(b)(c)
4,091 4,481 (9)12,665 13,143 (4)
Total noninterest expense6,770 7,025 (4)20,498 20,784 (1)
Income before income tax expense5,191 5,622 (8)5,192 16,356 (68)
Income tax expense1,318 1,377 (4)1,304 4,007 (67)
Net income$3,873 $4,245 (9)$3,888 $12,349 (69)
Revenue by line of business
Consumer & Business Banking$5,557 $6,782 (18)$16,755 $20,340 (18)
Home Lending1,714 1,465 17 4,562 3,929 16 
Card & Auto(b)
5,484 5,711 (4)16,767 16,616 
Mortgage fees and related income details:
Net production revenue765 738 1,826 1,291 41 
Net mortgage servicing revenue(d)
311 148 110 487 270 80 
Mortgage fees and related income$1,076 $886 21 %$2,313 $1,561 48 %
Financial ratios
Return on equity29 %31 %9 %31 %
Overhead ratio53505451
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. Prior-period amounts have been 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 have been revised to conform with the current presentation.
(b)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(c)Included depreciation expense on leased assets of $1.0 billion for both of the three months ended September 30, 2020 and 2019, and $3.2 billion and $2.9 billion for nine months ended September 30, 2020 and 2019, respectively.
(d)Included MSR risk management results of $145 million and $53 million for the three months ended September 30, 2020 and 2019, respectively, and $134 million and $(200) million for nine months ended September 30, 2020 and 2019, respectively.
26


Quarterly results
Net income was $3.9 billion, a decrease of 9%.
Net revenue was $12.8 billion, a decrease of 9%.
Net interest income was $8.0 billion, down 13%, driven by:
the impact of deposit margin compression in CBB and lower loans in Card due to the decline in sales volume as a result of the COVID-19 pandemic,
largely offset by
growth in deposits in CBB, and loan margin expansion in Card; the prior year included a charge for the unwind of the internal funding from Treasury and CIO associated with the sale of certain mortgage loans.
Noninterest revenue was $4.8 billion, flat, reflecting:
lower deposit-related fees due to lower transaction activity and the impact of fee refunds related to the COVID-19 pandemic, and
lower card income due to lower net interchange income reflecting lower card sales volumes as a result of the COVID-19 pandemic, offset by lower acquisition costs and higher annual fees,
offset by
higher net mortgage servicing revenue reflecting:
higher MSR risk management results driven by updates to model inputs, and
higher operating revenue reflecting the absence of losses in the prior year from reclassifying certain loans to held-for-sale, predominantly offset by lower revenue on a lower level of third-party loans serviced
higher net mortgage production revenue reflecting higher production margins and volumes; the prior year included approximately $350 million of gains on the sale of certain mortgage loans.
Refer to Note 15 for further information regarding changes in the value of the MSR asset and related hedges, and mortgage fees and related income.
Noninterest expense was $6.8 billion, down 4%, driven by lower marketing expense as a result of lower investments in marketing campaigns and travel-related benefits.
The provision for credit losses was $794 million, a decrease of $517 million from the prior year, driven by:
a $300 million reduction in the allowance for credit losses in Home Lending due to paydowns, and
lower net charge-offs in Card, which reflected lower charge-offs and higher recoveries, and benefited from the effect of payment assistance and government stimulus programs.
The prior year included a $50 million net addition in the allowance for credit losses.
Refer to Credit and Investment Risk Management on pages 60-79 and Allowance for Credit Losses on pages 77–78 for further discussions of the credit portfolios and the allowance for credit losses.
Year-to-date results
Net income was $3.9 billion, a decrease of 69%, predominantly driven by an increase in the provision for credit losses.
Net revenue was $38.1 billion, a decrease of 7%.
Net interest income was $25.3 billion, down 10%, driven by:
the impact of deposit margin compression in CBB, and lower loans in Home Lending predominantly due to prior year loan sales,
partially offset by
growth in deposits in CBB, and loan margin expansion in Card; the prior year included charges for the unwind of the internal funding from Treasury and CIO associated with the sales of certain mortgage loans.
Noninterest revenue was $12.8 billion, flat, reflecting:
lower deposit-related fees due to lower transaction activity and the impact of fee refunds related to the COVID-19 pandemic, and
lower card income due to lower net interchange income reflecting lower card sales volumes that began in March as a result of the COVID-19 pandemic, partially offset by higher annual fees and lower acquisition costs,
offset by
higher net mortgage production revenue reflecting higher mortgage production volumes and margins; the prior year included gains on the sales of certain mortgage loans
higher net mortgage servicing revenue driven by
higher MSR risk management results; the prior year included losses resulting from updates to model inputs,
partially offset by
lower operating revenue reflecting a lower level of third-party loans serviced; the prior year included losses from reclassifying certain loans to held-for-sale
higher auto lease volume.
Noninterest expense was $20.5 billion, down 1%, compared to the prior year, reflecting:
lower marketing expense as a result of lower investments in marketing campaigns and travel-related benefits, and
lower structural expenses, including lower payment processing costs,
largely offset by
higher volume- and revenue-related expense, including depreciation on auto lease assets, and investments in the business.
The provision for credit losses was $12.4 billion, an increase of $8.6 billion from the prior year, driven by:
additions to the allowance for credit losses as a result of the impact of the COVID-19 pandemic, consisting of: $6.6 billion for Card, $900 million for Home Lending, $649 million for CBB, and $560 million for Auto,
partially offset by
lower net charge-offs largely in Card, which reflected higher recoveries, and in Home Lending, reflecting higher recoveries on a loan sale in the first quarter of 2020.
The prior year included a $150 million net reduction in the allowance for credit losses.
27


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)20202019Change20202019Change
Selected balance sheet data (period-end)
Total assets$480,325 $525,223 (9)%$480,325 $525,223 (9)%
Loans:
Consumer & Business Banking47,077 (e)26,699 76 47,077 (e)26,699 76 
Home Lending(a)(b)
188,561 213,901 (12)188,561 213,901 (12)
Card140,377 159,571 (12)140,377 159,571 (12)
Auto62,304 61,410 62,304 61,410 
Total loans438,319 461,581 (5)438,319 461,581 (5)
Deposits900,920 701,111 28 900,920 701,111 28 
Equity52,000 52,000 — 52,000 52,000 — 
Selected balance sheet data (average)
Total assets$483,478 $530,649 (9)$499,551 $537,044 (7)
Loans:
Consumer & Business Banking47,102 26,550 77 38,552 26,537 45 
Home Lending(a)(c)
192,172 226,139 (15)200,980 235,292 (15)
Card140,386 158,168 (11)148,445 154,375 (4)
Auto60,345 61,371 (2)60,514 62,118 (3)
Total loans440,005 472,228 (7)448,491 478,322 (6)
Deposits887,138 693,943 28 817,848 688,663 19 
Equity52,000 52,000 — 52,000 52,000 — 
Headcount(d)
121,959 123,532 (1)%121,959 123,532 (1)%
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. Prior-period amounts have been revised to conform with the current presentation, including a decrease to period-end assets and headcount of $7.3 billion and 4,155, respectively, as of September 30, 2019.
(a)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans. Prior-period amounts have been revised to conform with the current presentation.
(b)At September 30, 2020 and 2019, Home Lending loans held-for-sale and loans at fair value were $10.0 billion and $15.4 billion, respectively.
(c)Average Home Lending loans held-for sale and loans at fair value were $9.2 billion and $18.2 billion for the three months ended September 30, 2020 and 2019, respectively, and were $11.2 billion and $12.3 billion for the nine months ended September 30, 2020 and 2019, respectively.
(d)During the second and third quarter of 2020, certain technology and support functions, comprising approximately 850 and 800 staff, respectively, were transferred from AWM to CCB as part of the ongoing reorganization of the U.S. Wealth Management business.
(e)At September 30, 2020, included $20.3 billion of loans in Business Banking under the PPP. Refer to Credit Portfolio on pages 60-61 for a further discussion of the PPP.
28


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)20202019Change20202019Change
Credit data and quality statistics
Nonaccrual loans(a)(b)(c)
$5,159 (f)$3,109 66 %$5,159 (f)$3,109 66 %
Net charge-offs/(recoveries)
Consumer & Business Banking53 79 (33)187 204 (8)
Home Lending8 (42)NM(119)(75)(59)
Card1,028 1,175 (13)3,519 3,617 (3)
Auto5 49 (90)98 149 (34)
Total net charge-offs/(recoveries)$1,094 $1,261 (13)$3,685 $3,895 (5)
Net charge-off/(recovery) rate
Consumer & Business Banking0.45 %(g)1.18 %0.65 %(g)1.03 %
Home Lending0.02(0.08)(0.08)(0.04)
Card2.92 2.953.17 3.13
Auto0.03 0.320.22 0.32
Total net charge-off/(recovery) rate1.01 %1.10 %1.13 1.12
30+ day delinquency rate
Home Lending(d)(e)
1.62 %(h)1.63 %1.62 %(h)1.63 %
Card1.57 (h)1.84 1.57 (h)1.84 
Auto0.54 (h)0.88 0.54 (h)0.88 
90+ day delinquency rate — Card0.69 %(h)0.90 %0.69 %(h)0.90 %
Allowance for loan losses
Consumer & Business Banking$1,370 $746 84 $1,370 $746 84 
Home Lending2,685 2,159 24 2,685 2,159 24 
Card17,800 5,583 219 17,800 5,583 219 
Auto1,044 465 125 1,044 465 125 
Total allowance for loan losses$22,899 $8,953 156 %$22,899 $8,953 156 %
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)At September 30, 2020, nonaccrual loans included $1.5 billion 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.
(b)At September 30, 2020 and 2019, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $851 million and $1.6 billion, respectively. Prior-period amount has been revised to conform with the current presentation, refer to footnote (c) below for additional information. These amounts have been excluded based upon the government guarantee.
(c)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans. Prior-period amounts have been revised to conform with the current presentation.
(d)At September 30, 2020, the 30+ day delinquency rates included PCD loans. The rate prior to January 1, 2020 was revised to include the impact of PCI loans.
(e)At September 30, 2020 and 2019, excluded mortgage loans insured by U.S. government agencies of $1.1 billion and $2.7 billion, respectively, that are 30 or more days past due. Prior-period amount has been revised to conform with the current presentation, refer to footnote (c) above for additional information. These amounts have been excluded based upon the government guarantee.
(f)Generally excludes loans under payment deferral programs offered in response to the COVID-19 pandemic. Refer to Consumer Credit Portfolio on pages 62-66 for further information on consumer payment assistance activity. Includes loans to customers that have exited COVID-19 payment deferral programs and are 90 or more days past due, predominantly all of which were considered collateral-dependent and charged down to the lower of amortized cost or fair value of the underlying collateral less costs to sell.
(g)At September 30, 2020, included $20.3 billion of loans in Business Banking under the PPP. Given that PPP loans are guaranteed by the SBA, the Firm does not expect to realize material credit losses on these loans. Refer to Credit Portfolio on pages 60-61 for a further discussion of the PPP.
(h)At September 30, 2020, the principal balance of loans in Home Lending, Card and Auto under payment deferral programs offered in response to the COVID-19 pandemic were $10.2 billion, $368 million and $411 million, respectively. Loans that are performing according to their modified terms are generally not considered delinquent. Refer to Consumer Credit Portfolio on pages 62-66 for further information on consumer payment assistance activity.
29


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)20202019Change20202019Change
Business Metrics
Number of branches4,960 4,949 — %4,960 4,949 — %
Active digital customers (in thousands)(a)
54,745 51,843 54,745 51,843 
Active mobile customers (in thousands)(b)
40,143 36,510 10 40,143 36,510 10 
Debit and credit card sales volume$278.2 $282.2 (1)$781.8 $818.8 (5)
Consumer & Business Banking
Average deposits$865.9 $678.3 28 $799.6 $674.5 19 
Deposit margin1.43 %2.47 %1.65 %2.56 %
Business banking origination volume$1.4 (f)$1.6 (13)$25.9 (f)$4.8 443 
Client investment assets376.1 337.9 11 376.1 337.9 11 
Home Lending
Mortgage origination volume by channel
Retail$20.7 $14.2��46 $52.8 $34.6 53 
Correspondent8.3 18.2 (54)28.5 37.3 (24)
Total mortgage origination volume(c)
$29.0 $32.4 (10)$81.3 $71.9 13 
Total loans serviced (period-end)$654.0 $774.8 (16)$654.0 $774.8 (16)
Third-party mortgage loans serviced (period-end)454.8 535.8 (15)454.8 535.8 (15)
MSR carrying value (period-end)3.0 4.4 (32)3.0 4.4 (32)
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end)0.66 %0.82 %0.66 %0.82 %
MSR revenue multiple(d)
2.28 x2.41 x2.28 x2.34 x
Credit Card
Credit card sales volume, excluding Commercial Card$178.1 $193.6 (8)$505.7 $558.6 (9)
Net revenue rate(e)
10.96 %10.40 %10.82 %10.42 %
Auto
Loan and lease origination volume$11.4 $9.1 25 $27.4 $25.5 
Average auto operating lease assets21.7 21.8 — %22.4 21.3 %
(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 $36.2 billion and $35.8 billion for the three months ended September 30, 2020 and 2019, respectively, and $96.4 billion and $78.5 billion for the nine months ended September 30, 2020 and 2019, 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).
(e)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(f)Included $396 million and $21.9 billion of origination volume under the PPP for the three and nine months ended September 30, 2020, respectively. Refer to Credit Portfolio on pages 60-61 for a further discussion of the PPP.
30



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 Line of Business Metrics on page 198 for a further 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)20202019Change20202019Change
Revenue
Investment banking fees$2,165 $1,981 %$6,919 $5,671 22 %
Principal transactions3,990 3,418 17 14,578 11,467 27 
Lending- and deposit-related fees(a)
546 398 37 1,496 1,206 24 
Asset management, administration and commissions(a)
1,086 1,160 (6)3,493 3,339 
All other income288 397 (27)703 1,167 (40)
Noninterest revenue8,075 7,354 10 27,189 22,850 19 
Net interest income3,428 2,168 58 10,614 6,537 62 
Total net revenue(b)
11,503 9,522 21 37,803 29,387 29 
Provision for credit losses(81)92 NM3,307 179 NM
Noninterest expense
Compensation expense2,651 2,873 (8)9,654 8,803 10 
Noncompensation expense3,146 2,631 20 8,803 7,991 10 
Total noninterest expense5,797 5,504 18,457 16,794 10 
Income before income tax expense5,787 3,926 47 16,039 12,414 29 
Income tax expense1,483 1,095 35 4,283 3,377 27 
Net income$4,304 $2,831 52 %$11,756 $9,037 30 %
Financial ratios
Return on equity21 %13 %19 %14 %
Overhead ratio50 58 49 57 
Compensation expense as percentage of total net revenue23 30 26 30 
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. Prior-period amounts have been 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 have been 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 $641 million and $527 million for the three months ended September 30, 2020 and 2019, respectively, and $2.0 billion and $1.6 billion for the nine months ended September 30, 2020 and 2019, respectively.
31



Selected income statement data
Three months ended September 30,Nine months ended September 30,
(in millions)20202019Change20202019Change
Revenue by business
Investment Banking$2,087 $1,871 12 %$6,374 $5,392 18 %
Wholesale Payments1,289 1,361 (5)4,004 4,178 (4)
Lending333 253 32 953 771 24 
Total Banking3,709 3,485 11,331 10,341 10 
Fixed Income Markets4,597 3,557 29 16,928 10,972 54 
Equity Markets1,999 1,517 32 6,616 4,986 33 
Securities Services1,029 1,034 — 3,200 3,093 
Credit Adjustments & Other(a)
169 (71)NM(272)(5)NM
Total Markets & Securities Services7,794 6,037 29 26,472 19,046 39 
Total net revenue$11,503 $9,522 21 %$37,803 $29,387 29 %
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. Prior-period amounts have been revised to conform with the current presentation.
(a)Includes credit valuation adjustments (“CVA”) managed centrally within CIB and funding valuation adjustments (“FVA”) on 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.
Quarterly results
Net income was $4.3 billion, up 52%.
Net revenue was $11.5 billion, up 21%.
Banking revenue was $3.7 billion, up 6%.
Investment Banking revenue was $2.1 billion, up 12%, predominantly driven by higher Investment Banking fees, up 9%, reflecting higher equity and debt underwriting fees, partially offset by lower advisory fees. The Firm maintained its #1 ranking for Global Investment Banking fees, according to Dealogic.
Equity underwriting fees were $732 million, up 42%, primarily in the follow-on offerings and IPO markets due to increased industry-wide fees.
Debt underwriting fees were $1.0 billion, up 5%, driven by wallet share gains despite decreased industry-wide fees.
Advisory fees were $428 million, down 15%, driven by a lower number of completed transactions associated in part with the lower level of announced deal volumes in the first half of the year.
Wholesale Payments revenue was $1.3 billion, down 5%, predominantly driven by deposit margin compression and a reporting reclassification for certain expenses which are now reported as a reduction of revenue in Merchant Services, largely offset by the impact of higher deposit balances.
Lending revenue was $333 million, up 32%, predominantly driven by higher net interest income reflecting overall spread widening and higher loan balances.
Markets & Securities Services revenue was $7.8 billion, up 29%. Markets revenue was $6.6 billion, up 30%.
Fixed Income Markets revenue was $4.6 billion, up 29%, driven by strong performance across products, primarily in Commodities, Credit, and Securitized Products.
Equity Markets revenue was $2.0 billion, up 32%, driven by strong performance across products.
Securities Services revenue was $1.0 billion, flat compared to the prior year, as deposit margin compression was offset by balance growth.
Credit Adjustments & Other was a gain of $169 million, largely driven by funding and credit spread tightening on derivatives.
Noninterest expense was $5.8 billion, up 5%, predominantly driven by higher legal expense and volume-related expense, largely offset by lower revenue-related compensation expense and structural expense.
The provision for credit losses was a net benefit of $81 million, driven by a reduction in the allowance for credit losses across multiple sectors, compared with an expense of $92 million in the prior year.
Year-to-date results
Net income was $11.8 billion, up 30%.
Net revenue was $37.8 billion, up 29%.
Banking revenue was $11.3 billion, up 10%.
Investment Banking revenue was $6.4 billion, up 18%, driven by higher Investment Banking fees, up 22%, reflecting higher equity and debt underwriting fees, partially offset by lower advisory fees. The Firm maintained its #1 ranking for Global Investment Banking fees, according to Dealogic.
Equity underwriting fees were $2.0 billion, up 59%, primarily in follow-on offerings and convertible securities markets due to increased industry-wide fees.
Debt underwriting fees were $3.3 billion, up 23%, driven by increased industry-wide fees and wallet share gains in investment-grade and high-yield bonds. The increased activity resulted in part from clients seeking liquidity in the first half of the year as a result of the COVID-19 pandemic.
32



Advisory fees of $1.5 billion were down 8%, driven by a lower number of completed transactions.
Wholesale payments revenue was $4.0 billion, down 4%, predominantly driven by a reporting reclassification for certain expenses which are now reported as a reduction of revenue in Merchant Services. In addition, the impact of deposit margin compression was predominantly offset by higher deposit balances.
Lending revenue was $953 million, up 24%, predominantly driven by higher net interest income reflecting overall spread widening and higher loan balances.
Markets & Securities Services revenue was $26.5 billion, up 39%. Markets revenue was $23.5 billion, up 48%.
Fixed Income Markets revenue was $16.9 billion, up 54%, driven by strong client activity across products primarily in Rates, Credit, Currencies & Emerging Markets, and Securitized Products.
Equity Markets revenue was $6.6 billion, up 33%, driven by strong client activity across products.
Securities Services revenue was $3.2 billion, up 3%, predominantly driven by deposit balance and fee growth largely offset by deposit margin compression.
Credit Adjustments & Other was a net loss of $272 million, driven by losses on certain components of fair value option elected liabilities, as well as the impact of funding spread widening on derivatives.
Noninterest expense was $18.5 billion, up 10%, predominantly driven by higher revenue-related compensation expense and legal expense.
The provision for credit losses was $3.3 billion, compared with $179 million in the prior year. The increase was driven by net additions to the allowance for credit losses as a result of the impact of the COVID-19 pandemic across multiple industry sectors.
Refer to Credit and Investment Risk Management on pages 60-79 and Allowance for Credit Losses on pages 77–78 for further discussions of the credit portfolios and the allowance for credit losses.
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)20202019Change20202019Change
Selected balance sheet data (period-end)
Assets$1,089,293 $1,030,396 %$1,089,293 $1,030,396 %
Loans:
Loans retained(a)
126,841 118,290 126,841 118,290 
Loans held-for-sale and loans at fair value(b)
33,046 32,563 33,046 32,563 
Total loans159,887 150,853 159,887 150,853 
Equity80,000 80,000 — 80,000 80,000 — 
Selected balance sheet data (average)
Assets$1,100,657 $1,011,246 $1,117,035 $993,292 12 
Trading assets-debt and equity instruments(b)
425,789 387,377 10 415,453 377,976 10 
Trading assets-derivative receivables78,339 48,266 62 70,091 49,221 42 
Loans:
Loans retained(a)
$131,187 $119,007 10 $137,996 $123,368 12 
Loans held-for-sale and loans at fair value(b)
30,205 32,545 (7)32,974 32,611 
Total loans$161,392 $151,552 $170,970 $155,979 10 
Equity80,000 80,000 — 80,000 80,000 — 
Headcount61,830 60,028 %61,830 60,028 %
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. Prior-period amounts have been revised to conform with the current presentation, including an increase to period-end assets and headcount of $7.3 billion and 4,155, respectively, as of September 30, 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.
(b) In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans and other assets. Prior-period amounts have been revised to conform with the current presentation.
33



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)20202019Change20202019Change
Credit data and quality statistics
Net charge-offs/(recoveries)$23 $38 (39)%$282 $140 101 %
Nonperforming assets:
Nonaccrual loans:
Nonaccrual loans retained(a)
$1,178 $712 65 %$1,178 $712 65 
Nonaccrual loans held-for-sale and loans at fair value(b)(c)
2,111 902 134 2,111 902 134 
Total nonaccrual loans3,289 1,614 104 3,289 1,614 104 
Derivative receivables140 26 438 140 26 438 
Assets acquired in loan satisfactions88 75 17 88 75 17 
Total nonperforming assets$3,517 $1,715 105 $3,517 $1,715 105 
Allowance for credit losses:
Allowance for loan losses$2,863 $1,171 144 $2,863 $1,171 144 
Allowance for lending-related commitments1,706 824 107 1,706 824 107 
Total allowance for credit losses$4,569 $1,995 129 %$4,569 $1,995 129 %
Net charge-off/(recovery) rate(d)
0.07 %0.13 %0.27 %0.15 %
Allowance for loan losses to period-end loans retained2.26 0.99 2.26 0.99 
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(e)
3.15 1.33 3.15 1.33 
Allowance for loan losses to nonaccrual loans retained(a)
243 164 243 164 
Nonaccrual loans to total period-end loans(b)
2.06 %1.07 %2.06 %1.07 %
(a)Allowance for loan losses of $320 million and $207 million were held against these nonaccrual loans at September 30, 2020 and 2019, respectively.
(b)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans. Prior-period amounts have been revised to conform with the current presentation.
(c)At September 30, 2020 and 2019, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $297 million and $116 million, respectively. These amounts have been excluded based upon the government guarantee.
(d)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.
(e)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.

34



Investment banking fees
Three months ended September 30,Nine months ended September 30,
(in millions)20202019Change20202019Change
Advisory$428 $506 (15)%$1,533 $1,675 (8)%
Equity underwriting732 514 42 2,040 1,284 59 
Debt underwriting(a)
1,005 961 3,346 2,712 23 
Total investment banking fees$2,165 $1,981 %$6,919 $5,671 22 %
(a)Represents long-term debt and loan syndications.
League table results – wallet share
Three months ended September 30,Nine months ended September 30,Full-year 2019
2020201920202019
RankShareRankShareRankShareRankShareRankShare
Based on fees(a)
M&A(b)
Global#1 9.2 %#8.0 %#2 9.1 %#8.8 %#9.0 %
U.S.1 11.4 8.3 2 9.4 9.0 9.2 
Equity and equity-related(c)
Global3 7.7 12.0 2 9.5 10.2 9.3 
U.S.2 10.4 17.5 2 11.8 13.6 13.2 
Long-term debt(d)
Global1 8.3 8.7 1 9.1 7.9 7.8 
U.S.1 11.6 13.8 1 12.6 12.3 12.0 
Loan syndications
Global1 13.5 9.7 1 11.3 10.6 10.1 
U.S.1 18.3 12.0 1 12.8 12.9 12.5 
Global investment banking fees(e)
#1 8.7 %#9.2 %#1 9.4 %#9.1 %#8.9 %
(a)Source: Dealogic as of October 1, 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, 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.
35



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 6 and 7 for a description of the composition of these income statement line items. Refer to Markets revenue on page 69 of JPMorgan Chase’s 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,
20202019

(in millions)
Fixed Income MarketsEquity
Markets
Total
Markets
Fixed Income MarketsEquity
Markets
Total
Markets
Principal transactions$2,411 $1,402 $3,813 $2,292 $1,263 $3,555 
Lending- and deposit-related fees62 3 65 51 52 
Asset management, administration and commissions100 437 537 110 472 582 
All other income138 (33)105 108 54 162 
Noninterest revenue2,711 1,809 4,520 2,561 1,790 4,351 
Net interest income1,886 190 2,076 996 (273)723 
Total net revenue$4,597 $1,999 $6,596 $3,557 $1,517 $5,074 
Nine months ended September 30,Nine months ended September 30,
20202019

(in millions)
Fixed Income MarketsEquity
Markets
Total
Markets
Fixed Income MarketsEquity
Markets
Total
Markets
Principal transactions$10,205 $4,862 $15,067 $7,205 $4,428 $11,633 
Lending- and deposit-related fees157 7 164 149 154 
Asset management, administration and commissions304 1,542 1,846 310 1,359 1,669 
All other income315 (56)259 500 31 531 
Noninterest revenue10,981 6,355 17,336 8,164 5,823 13,987 
Net interest income5,947 261 6,208 2,808 (837)1,971 
Total net revenue$16,928 $6,616 $23,544 $10,972 $4,986 $15,958 
CIB Markets had no loss days in the third quarter of 2020 and three loss days for the nine months ended September 30, 2020. 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 80–82.
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)20202019Change20202019Change
Assets under custody (“AUC”) by asset class (period-end)
(in billions):
Fixed Income$15,360 $13,349 15 %$15,360 $13,349 15 %
Equity9,914 9,301 9,914 9,301 
Other(a)
3,354 3,045 10 3,354 3,045 10 
Total AUC$28,628 $25,695 11 $28,628 $25,695 11 
Merchant processing volume (in billions)(b)
$406.1 $380.5 $1,152.8 $1,108.6 
Client deposits and other third-party liabilities (average)(c)
$634,961 $471,328 35 %$585,955 $457,973 28 %
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. Prior-period amounts have been 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 Wholesale Payments and Securities Services businesses.
36



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)
2020
2019(c)
Change2020
2019(c)
Change
Total net revenue(a)
Europe/Middle East/Africa$3,126 $2,873 %$10,692 $8,951 19 %
Asia-Pacific1,909 1,389 37 5,881 4,072 44 
Latin America/Caribbean423 399 1,517 1,184 28 
Total international net revenue5,458 4,661 17 18,090 14,207 27 
North America6,045 4,861 24 19,713 15,180 30 
Total net revenue$11,503 $9,522 21 $37,803 $29,387 29 
Loans retained (period-end)(a)
Europe/Middle East/Africa$26,945 $27,234 (1)$26,945 $27,234 (1)
Asia-Pacific12,734 14,402 (12)12,734 14,402 (12)
Latin America/Caribbean6,306 5,782 6,306 5,782 
Total international loans45,985 47,418 (3)45,985 47,418 (3)
North America80,856 70,872 14 80,856 70,872 14 
Total loans retained$126,841 $118,290 $126,841 $118,290 
Client deposits and other third-party liabilities (average)(b)
Europe/Middle East/Africa$212,635 $175,354 21 $206,629 $171,601 20 
Asia-Pacific128,519 91,556 40 119,417 87,868 36 
Latin America/Caribbean39,674 30,164 32 35,638 28,845 24 
Total international$380,828 $297,074 28 $361,684 $288,314 25 
North America254,133 174,254 46 224,271 169,659 32 
Total client deposits and other third-party liabilities$634,961 $471,328 35 $585,955 $457,973 28 
AUC (period-end)(b)
(in billions)
North America$18,534 $16,146 15 $18,534 $16,146 15 
All other regions10,094 9,549 10,094 9,549 
Total AUC$28,628 $25,695 11 %$28,628 $25,695 11 %
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. Prior-period amounts have been 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 Wholesale Payments and Securities Services businesses, and AUC, are based on the domicile of the client.
(c)Prior-period amounts have been revised to conform with the current presentation.
37



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 and midsized companies, 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 Line of Business Metrics on page 199 for a discussion of the business profile of CB.
Selected income statement data
Three months ended September 30,Nine months ended September 30,
(in millions)20202019Change20202019Change
Revenue
Lending- and deposit-related fees(a)
$304 $228 33 %$862 $685 26 %
All other income(a)
457 438 1,335 1,337 — 
Noninterest revenue761 666 14 2,197 2,022 
Net interest income1,524 1,608 (5)4,658 4,950 (6)
Total net revenue(b)
2,285 2,274 — 6,855 6,972 (2)
Provision for credit losses(147)67 NM3,294 186 NM
Noninterest expense
Compensation expense492 454 1,394 1,341 
Noncompensation expense474 486 (2)1,459 1,468 (1)
Total noninterest expense966 940 2,853 2,809 
Income/(loss) before income tax expense/(benefit)1,466 1,267 16 708 3,977 (82)
Income tax expense/(benefit)378 324 17 164 972 (83)
Net income/(loss)$1,088 $943 15 %$544 $3,005 (82)%
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 have been 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 (which are included in all other income) to lending- and deposit-related fees. Prior-period amounts have been revised to conform with the current presentation.
(b)Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities and in entities established for rehabilitation of historic properties, as well as tax-exempt income related to municipal financing activities of $82 million and $114 million for the three months ended September 30, 2020 and 2019, respectively, and $243 million and $308 million for the nine months ended September 30, 2020 and 2019, respectively.
Quarterly results
Net income was $1.1 billion, up 15%.
Net revenue was $2.3 billion, flat compared to the prior year. Net interest income was $1.5 billion, down 5%, driven by deposit margin compression, predominantly offset by higher deposit balances and lending revenue. Noninterest revenue was $761 million, up 14%, driven by higher deposit related fees and investment banking income.
Noninterest expense was $966 million, up 3%, driven by higher compensation expense.
The provision for credit losses was a net benefit of $147 million, driven by net reductions in the allowance for credit losses across multiple sectors, compared with an expense of $67 million in the prior year.
Year-to-date results
Net income was $544 million, down 82%, driven by an increase in the provision for credit losses.
Net revenue was $6.9 billion, down 2%. Net interest income was $4.7 billion, down 6%, driven by deposit margin compression, largely offset by higher deposit balances and lending revenue. Noninterest revenue was $2.2 billion, up 9%, driven by higher deposit related fees and a gain on a strategic investment. The increase was partially offset by lower card income primarily due to lower volumes as a result of the COVID-19 pandemic and a $57 million markdown of a held-for-sale position.
Noninterest expense was $2.9 billion, up 2%, driven by higher compensation expense.
38



The provision for credit losses was $3.3 billion, compared with $186 million in the prior year. The increase was driven by net additions to the allowance for credit losses as a result of the impact of the COVID-19 pandemic across multiple industry sectors.
Refer to Credit and Investment Risk Management on pages 60-79 and Allowance for Credit Losses on pages 77–78 for further discussions of the credit portfolios and the allowance for credit losses.
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 September 30,Nine months ended September 30,
(in millions, except ratios)20202019Change20202019Change
Revenue by product
Lending$1,138 $1,006 13 %$3,219 $3,030 %
Wholesale payments867 1,017 (15)2,775 3,184 (13)
Investment banking(a)
260 226 15 751 708 
Other20 25 (20)110 50 120 
Total Commercial Banking net revenue$2,285 $2,274 — $6,855 $6,972 (2)
Investment banking revenue, gross(b)
$840 $700 20 $2,377 $2,110 13 
Revenue by client segments
Middle Market Banking$877 $925 (5)$2,689 $2,860 (6)
Corporate Client Banking807 767 2,347 2,362 (1)
Commercial Real Estate Banking576 547 1,683 1,632 
Other25 35 (29)136 118 15 
Total Commercial Banking net revenue$2,285 $2,274 — %$6,855 $6,972 (2)%
Financial ratios
Return on equity19 %16 %2 %17 %
Overhead ratio42 41 42 40 
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 have been revised to conform with the current presentation.
(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 24 for discussion of revenue sharing.
39



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)20202019Change20202019Change
Selected balance sheet data (period-end)
Total assets$228,587 $222,483 %$228,587 $222,483 %
Loans:
Loans retained214,352 209,448 214,352 209,448 
Loans held-for-sale and loans at fair value349 3,187 (89)349 3,187 (89)
Total loans$214,701 $212,635 $214,701 $212,635 
Equity22,000 22,000 — 22,000 22,000 — 
Period-end loans by client segment
Middle Market Banking$61,812 (a)$54,298 14 $61,812 (a)$54,298 14 
Corporate Client Banking49,857 55,976 (11)49,857 55,976 (11)
Commercial Real Estate Banking102,484 101,326 102,484 101,326 
Other548 1,035 (47)548 1,035 (47)
Total Commercial Banking loans$214,701 (a)$212,635 $214,701 (a)$212,635 
Selected balance sheet data (average)
Total assets$231,691 $218,620 $235,079 $218,560 
Loans:
Loans retained217,498 207,286 220,167 206,183 
Loans held-for-sale and loans at fair value629 963 (35)986 1,097 (10)
Total loans$218,127 $208,249 $221,153 $207,280 
Average loans by client segment
Middle Market Banking$63,029 $54,806 15 $61,789 $56,221 10 
Corporate Client Banking51,608 51,389 — 55,967 49,407 13 
Commercial Real Estate Banking102,905 101,044 102,650 100,663 
Other585 1,010 (42)747 989 (24)
Total Commercial Banking loans$218,127 $208,249 $221,153 $207,280 
Client deposits and other third-party liabilities$248,289 $172,714 44 $224,774 $169,427 33 
Equity22,000 22,000 — 22,000 22,000 — 
Headcount11,704 11,501 %11,704 11,501 %
(a)At September 30, 2020, total loans included $6.6 billion of loans under the PPP, of which $6.4 billion were in Middle Market Banking. Refer to Credit Portfolio on pages 60-61 for a further discussion of the PPP.
40



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)20202019Change20202019Change
Credit data and quality statistics
Net charge-offs/(recoveries)$60 $45 33 %$239 $71 237 %
Nonperforming assets
Nonaccrual loans:
Nonaccrual loans retained(a)
$1,468 $659 123 %$1,468 $659 123 %
Nonaccrual loans held-for-sale and loans at fair value85 — NM85 — NM
Total nonaccrual loans$1,553 $659 136 $1,553 $659 136 
Assets acquired in loan satisfactions24 19 26 24 19 26 
Total nonperforming assets$1,577 $678 133 $1,577 $678 133 
Allowance for credit losses:
Allowance for loan losses$4,466 $2,759 62 $4,466 $2,759 62 
Allowance for lending-related commitments864 293 195 864 293 195 
Total allowance for credit losses$5,330 $3,052 75 %$5,330 $3,052 75 %
Net charge-off/(recovery) rate(b)
0.11 %0.09 %0.15 %0.05 %
Allowance for loan losses to period-end loans retained2.08 1.32 2.08 1.32 
Allowance for loan losses to nonaccrual loans retained(a)
304 419 304 419 
Nonaccrual loans to period-end total loans0.72 0.31 0.72 0.31 
(a)Allowance for loan losses of $367 million and $119 million was held against nonaccrual loans retained at September 30, 2020 and 2019, respectively.
(b)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.

41



ASSET & WEALTH MANAGEMENT
Refer to pages 74–76 of JPMorgan Chase’s 2019 Form 10-K and Line of Business Metrics on pages 199-200 for a discussion of the business profile of AWM.
Selected income statement data
(in millions, except ratios)Three months ended September 30,Nine months ended September 30,
20202019Change20202019Change
Revenue
Asset management, administration and commissions$2,753 $2,574 %$8,048 $7,558 %
All other income134 139 (4)268 431 (38)
Noninterest revenue2,887 2,713 8,316 7,989 
Net interest income850 855 (1)2,637 2,627 — 
Total net revenue3,737 3,568 10,953 10,616 
Provision for credit losses(51)44 NM266 48 454 
Noninterest expense
Compensation expense1,357 1,391 (2)4,083 4,259 (4)
Noncompensation expense1,266 1,231 3,705 3,606 
Total noninterest expense2,623 2,622 — 7,788 7,865 (1)
Income before income tax expense1,165 902 29 2,899 2,703 
Income tax expense288 234 23 700 655 
Net income$877 $668 31 $2,199 $2,048 
Revenue by line of business
Asset Management$1,924 $1,816 $5,444 $5,362 
Wealth Management1,813 1,752 5,509 5,254 
Total net revenue$3,737 $3,568 %$10,953 $10,616 %
Financial ratios
Return on equity32 %24 %27 %25 %
Overhead ratio70737174
Pre-tax margin ratio:
Asset Management30252725
Wealth Management33252626
Asset & Wealth Management31252625
Quarterly results
Net income was $877 million, up 31%.
Net revenue was $3.7 billion, up 5%. Net interest income of $850 million was relatively flat, as deposit margin compression was predominantly offset by growth in average deposit and loan balances. Noninterest revenue was $2.9 billion, up 6%, predominantly driven by higher asset management fees due to strong cumulative net inflows into liquidity and long-term products and increased brokerage commissions on higher client-driven volume.
Revenue from Asset Management was $1.9 billion, up 6%, predominantly driven by asset management fees due to strong cumulative net inflows into liquidity products.
Revenue from Wealth Management was $1.8 billion, up 3%, predominantly driven by higher deposit and loan balances, increased brokerage commissions on higher client-driven volume, and higher asset management fees due to cumulative net inflows across all products, largely offset by deposit margin compression.
Noninterest expense of $2.6 billion was flat.
The provision for credit losses was a benefit of $51 million, driven by a reduction in the allowance for credit losses.
Refer to Credit and Investment Risk Management on pages 60-79 and Allowance for Credit Losses on pages 77–78 for further discussions of the credit portfolios and the allowance for credit losses.
Year-to-date results
Net income was $2.2 billion, an increase of 7%.
Net revenue was $11.0 billion, an increase of 3%. Net interest income of $2.6 billion, was flat reflecting higher deposit and loan balances, offset by deposit margin compression. Noninterest revenue was $8.3 billion, up 4%, predominantly driven by higher asset management fees as a result of cumulative net inflows into liquidity and long-term products as well as increased brokerage commissions on higher client-driven volume, partially offset by net valuation losses on certain investments, compared with gains in the prior year.
42



Revenue from Asset Management was $5.4 billion, up 2%, driven by higher asset management fees as a result of cumulative net inflows into liquidity products, largely offset by lower investment valuation gains.
Revenue from Wealth Management was $5.5 billion, up 5%, predominantly driven by higher deposit and loan balances as well as increased brokerage commissions on higher client-driven volume and higher asset management fees, largely offset by deposit margin compression.
Noninterest expense was $7.8 billion, a decrease of 1%, driven by lower structural expense, predominantly offset by higher investments, legal expense and volume- and revenue-related expense.
The provision for credit losses was $266 million, driven by additions to the allowance for credit losses predominantly as a result of the impact of the COVID-19 pandemic.
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)20202019Change20202019Change
% of JPM mutual fund assets rated as 4- or 5-star(a)
54 %65 %54 %65 %
% of JPM mutual fund assets ranked in 1st or 2nd quartile:(b)
1 year50 74 50 74 
3 years68 80 68 80 
5 years68 86 68 86 
Selected balance sheet data (period-end)(c)
Total assets$194,596 $174,226 12 %$194,596 $174,226 12 %
Loans175,264 153,245 14 175,264 153,245 14 
Deposits174,327 138,439 26 174,327 138,439 26 
Equity10,500 10,500 — 10,500 10,500 — 
Selected balance sheet data (average)(c)
Total assets$188,466 $171,121 10 $184,714 $168,688 10 
Loans170,139 150,486 13 165,152 147,481 12 
Deposits170,986 138,822 23 163,424 139,127 17 
Equity10,500 10,500 — 10,500 10,500 — 
Headcount(d)
22,004 24,228 (9)22,004 24,228 (9)
Number of Wealth Management client advisors2,968 2,872 2,968 2,872 
Credit data and quality statistics(c)
Net charge-offs/(recoveries)$2 $26 (92)$2 $27 (93)
Nonaccrual loans959 176 445 959 176 445 
Allowance for credit losses:
Allowance for loan losses$582 $350 66 $582 $350 66 
Allowance for lending-related commitments41 16 156 41 16 156 
Total allowance for credit losses$623 $366 70 %$623 $366 70 %
Net charge-off rate %0.07 % %0.02 %
Allowance for loan losses to period-end loans0.33 0.23 0.33 0.23 
Allowance for loan losses to nonaccrual loans61 199 61 199 
Nonaccrual loans to period-end loans0.55 0.11 0.55 0.11 
(a)Represents the Nomura “star rating” for Japan domiciled funds and Morningstar for all other domiciled funds. Includes only Asset Management retail open-ended mutual funds that have a rating. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds.
(b)Quartile ranking sourced from Lipper, Morningstar, Nomura and Fund Doctor based on country of domicile. Includes only Asset Management retail open-ended mutual funds that are ranked by the aforementioned sources. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds.
(c)Loans, deposits and related credit data and quality statistics relate to the Wealth Management business.
(d)During the second and third quarter of 2020, certain technology and support functions, comprising approximately 850 and 800 staff, respectively, were transferred from AWM to CCB as part of the ongoing reorganization of the U.S. Wealth Management business.
43



Client assets
Client assets of $3.5 trillion and assets under management of $2.6 trillion were up 15% and 16%, respectively, driven by cumulative net inflows into liquidity and long term products as well as higher market levels.
Client assets
As of September 30,
(in billions)20202019Change
Assets by asset class
Liquidity$674 $505 33 %
Fixed income663 590 12 
Equity509 437 16 
Multi-asset and alternatives749 714 
Total assets under management2,595 2,246 16 
Custody/brokerage/administration/deposits917 815 13 
Total client assets$3,512 $3,061 15 
Memo:
Alternatives client assets (a)
$195 $183 
Assets by client segment
Private Banking$698 $636 10 
Institutional1,233 1,029 20 
Retail664 581 14 
Total assets under management$2,595 $2,246 16 
Private Banking$1,577 $1,424 11 
Institutional1,266 1,051 20 
Retail669 586 14 
Total client assets$3,512 $3,061 15 %
(a)Represents assets under management, as well as client balances in brokerage accounts
Client assets (continued)

Three months ended
September 30,
Nine months ended
September 30,
(in billions)2020201920202019
Assets under management rollforward
Beginning balance$2,511 $2,178 $2,364 $1,987 
Net asset flows:
Liquidity(33)24 137 23 
Fixed income24 41 42 97 
Equity9 (2)19 (9)
Multi-asset and alternatives1  (2)
Market/performance/other impacts83 33 150 
Ending balance, September 30$2,595 $2,246 $2,595 $2,246 
Client assets rollforward
Beginning balance$3,370 $2,998 $3,226 $2,733 
Net asset flows17 59 240 120 
Market/performance/other impacts125 46 208 
Ending balance, September 30$3,512 $3,061 $3,512 $3,061 
44



International metrics
Three months ended September 30,Nine months ended September 30,
(in millions)20202019Change20202019Change
Total net revenue (a)
Europe/Middle East/Africa$755 $704 %$2,097 $2,113 (1)%
Asia-Pacific413 382 1,191 1,122 
Latin America/Caribbean199 180 11 585 541 
Total international net revenue1,367 1,266 3,873 3,776 
North America2,370 2,302 7,080 6,840 
Total net revenue(a)
$3,737 $3,568 %$10,953 $10,616 %
(a)Regional revenue is based on the domicile of the client.
As of September 30,As of September 30,
(in billions)20202019Change20202019Change
Assets under management
Europe/Middle East/Africa$481 $398 21 %$481 $398 21 %
Asia-Pacific203 184 10 203 184 10 
Latin America/Caribbean67 58 16 67 58 16 
Total international assets under management751 640 17 751 640 17 
North America1,844 1,606 15 1,844 1,606 15 
Total assets under management$2,595 $2,246 16 $2,595 $2,246 16 
Client assets
Europe/Middle East/Africa$578 $484 19 $578 $484 19 
Asia-Pacific295 258 14 295 258 14 
Latin America/Caribbean153 138 11 153 138 11 
Total international client assets1,026 880 17 1,026 880 17 
North America2,486 2,181 14 2,486 2,181 14 
Total client assets$3,512 $3,061 15 %$3,512 $3,061 15 %

45



CORPORATE
Refer to pages 77–78 of JPMorgan Chase’s 2019 Form 10-K for a discussion of Corporate.
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, except headcount)20202019Change20202019Change
Revenue
Principal transactions$87 $10 NM$(28)$(227)88 %
Investment securities gains466 78 497 %725 135 437 %
All other income(210)32 NM(90)95 NM
Noninterest revenue343 120 186 %607 NM
Net interest income(682)572 NM(1,534)1,436 NM
Total net revenue(a)
(339)692 NM(927)1,439 NM
Provision for credit losses96 — NM108 — NM
Noninterest expense(b)
719 281 156 %1,012 724 40 
Income/(loss) before income tax expense/(benefit)(1,154)411 NM(2,047)715 NM
Income tax expense/(benefit)(455)18 NM(655)(757)13 %
Net income/(loss)$(699)$393 NM$(1,392)$1,472 NM
Total net revenue
Treasury and CIO$(243)$801 NM$(745)$1,930 NM
Other Corporate(96)(109)12 (182)(491)63 
Total net revenue$(339)$692 NM$(927)$1,439 NM
Net income/(loss)
Treasury and CIO$(349)$576 NM$(816)$1,372 NM
Other Corporate(350)(183)(91)(576)100 NM
Total net income/(loss)$(699)$393 NM$(1,392)$1,472 NM
Total assets (period-end)$1,253,275 $812,333 54 $1,253,275 $812,333 54 
Loans (period-end)1,569 1,705 (8)1,569 1,705 (8)
Headcount38,861 38,155 %38,861 38,155 %
(a)Included tax-equivalent adjustments, driven by tax-exempt income from municipal bonds, of $62 million and $74 million for the three months ended September 30, 2020 and 2019, respectively, and $186 million and $241 million for the nine months ended September 30, 2020 and 2019, respectively.
(b)Included a net legal benefit of $(6) million and $(32) million for the three months ended September 30, 2020 and 2019, respectively, and $(38) million and $(189) million for the nine months ended September 30, 2020 and 2019, respectively.
Quarterly results
Net loss was $699 million compared with net income of $393 million in the prior year.
Net revenue was a loss of $339 million, down $1.0 billion, driven by lower net interest income, largely on lower rates, including the impact of faster prepayments on mortgage-backed securities. The prior year included income related to the unwind of the internal funding provided to CCB upon the sale of certain mortgage loans.
Noninterest revenue increased, reflecting:
higher investment securities gains due to the repositioning of the investment securities portfolio, including sales of U.S. GSE and government agency mortgage-backed securities, and
net gains on certain legacy private equity investments,
largely offset by
net losses related to derivatives in Other Corporate, as well as the costs of hedging certain non-U.S. dollar-denominated net investment exposures in Treasury and CIO, and
losses related to the early termination of certain of the Firm’s long-term debt in Treasury and CIO.
Noninterest expense of $719 million was up $438 million predominantly driven by an impairment on a legacy investment.
The provision for credit losses was predominantly driven by the transfer of certain securities from AFS to HTM.
Refer to Note 10 and Note 13 for additional information on the investment securities portfolio and the allowance for credit losses.
The current period income tax benefit was driven by the change in the level and mix of income and expenses subject to U.S. federal, and state and local taxes as well as the impact of the Firm’s estimated full-year expected tax rate relative to the level of year-to-date pretax income. The prior period included tax benefits related to the resolution of certain tax audits.
46



Year-to-date results
Net loss was $1.4 billion compared with net income of $1.5 billion in the prior year.
Net revenue was a loss of $927 million, compared with income of $1.4 billion in the prior year driven by lower net interest income on lower rates. The prior year included income related to the unwind of the internal funding provided to CCB upon the sale of certain mortgage loans.
Noninterest revenue increased primarily due to
higher net investment securities gains due to the repositioning of the investment securities portfolio, including sales of U.S. GSE and government agency mortgage-backed securities in the first and third quarters of 2020, and
net gains on certain legacy private equity investments, compared with net losses in the prior year,
largely offset by
net losses related to derivatives in Other Corporate, as well as the costs of hedging certain non-U.S. dollar-denominated net investment exposures in Treasury and CIO, and
losses related to the early termination of certain of the Firm’s long-term debt in Treasury and CIO.
Noninterest expense of $1.0 billion was up $288 million driven by an impairment on a legacy investment, and a lower net legal benefit, partially offset by lower structural expense.
The provision for credit losses was predominantly driven by the transfer of certain securities from AFS to HTM.
The current period income tax benefit was predominantly driven by the change in the level and mix of income and expenses subject to U.S. federal, and state and local taxes. The prior period included tax benefits of $957 million related to the resolution of certain tax audits.
Treasury and CIO overview
At September 30, 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 risk ratings). Refer to Note 10 for further information on the Firm’s investment securities portfolio and internal risk ratings.
Refer to Liquidity Risk Management on pages 55–59 for further information on liquidity and funding risk. Refer to Market Risk Management on pages 80–84 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)20202019Change20202019Change
Investment securities gains$466 $78 497 %$725 $135 437 %
Available-for-sale securities (average)$442,943 $305,894 45 %$414,228 $260,661 59 %
Held-to-maturity securities (average)103,596 35,494 192 74,102 32,518 128 
Investment securities portfolio (average)$546,539 $341,388 60 $488,330 $293,179 67 
Available-for-sale securities (period-end)$387,663 $351,599 10 $387,663 $351,599 10 
Held-to-maturity securities, net of allowance for credit losses (period-end)(a)(b)
141,553 40,830 247 141,553 40,830 247 
Investment securities portfolio, net of allowance for credit losses (period-end)(a)
$529,216 $392,429 35 %$529,216 $392,429 35 %
(a)At September 30, 2020, the allowance for credit losses on HTM securities was $120 million.
(b)During the nine months ended September 30, 2020, the Firm transferred $100.5 billion of investment securities, consisting of $74.4 billion in the third quarter of 2020 and $26.1 billion in the first quarter of 2020, from AFS to HTM for capital management purposes.
Refer to Note 10 for further information.

47



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, 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 LOBs and Corporate; and
Firmwide structures for risk governance.
The Firm strives for continual improvement 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 of Directors (the “Board”). The impact of risk and control issues is carefully considered in the Firm’s performance evaluation and incentive compensation processes.
Risk governance and oversight framework
The Firm’s risk management governance and oversight framework involves understanding drivers of risks, types of risks, and impacts of risks.
jpm-20200930_g1.jpg
Refer to pages 79-83 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of Firmwide risk management governance and oversight.
Risk governance and oversight functions
The following sections of this Form 10-Q and the 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 functionsForm 10-Q page referenceForm 10-K page reference
Strategic risk84
Capital risk49-5485–92
Liquidity risk55-5993–98
Reputation risk99
Consumer credit risk62-66103–107
Wholesale credit risk67-76108–115
Investment portfolio risk79118
Market risk80-84119–126
Country risk85127–128
Operational risk86129–135
Compliance risk132
Conduct risk133
Legal risk134
Estimations and Model risk87135
48



CAPITAL RISK MANAGEMENT
Capital risk is the risk the Firm has an insufficient level 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 85–92 of JPMorgan Chase’s 2019 Form
10-K, Note 22 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 has been impacted by recent market events as a result of the COVID-19 pandemic, but remains well-capitalized. However, the continuation or further deterioration of the current macroeconomic environment could result in impacts to the Firm’s capital and leverage.
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”). For each of the risk-based capital ratios, the capital adequacy of the Firm is evaluated against the lower of the Standardized or Advanced approaches.
The Firm’s Basel III Standardized-risk-based ratios are currently more binding than the Basel III 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 90 of JPMorgan Chase’s 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 (issued as final on August 26, 2020) that provided the option to delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period (“CECL capital transition provisions”).
The 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 September 30, 2020, the capital metrics of the Firm exclude $6.4 billion, which is the $2.7 billion day 1 impact to retained earnings and 25% of the $15.2 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 metrics. Refer to Note 1 for further information on the CECL accounting guidance.
Money Market Mutual Fund Liquidity Facility ("MMLF"). On March 18, 2020, the Federal Reserve established the MMLF facility, authorized through September 30, 2020, to enhance the liquidity and functioning of money markets. On July 28, 2020, the Federal Reserve announced that it was extending the MMLF through December 31, 2020. 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 (issued as final on September 29, 2020) to neutralize the effects of purchasing assets through the program on risk-based and leverage-based capital ratios. As of September 30, 2020, the Firm excluded assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF in the amount of $932 million from its RWA and $2.2 billion from adjusted average assets and total leverage exposure.
Supplementary leverage ratio temporary revision. On April 1, 2020, the Federal Reserve issued an interim final rule that requires, 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 became effective April 1, 2020, and will remain in effect through March 31, 2021.
On June 1, 2020, the Federal Reserve, OCC and FDIC issued an interim final rule that provides IDI subsidiaries with an option to apply this temporary exclusion subject to certain
49



restrictions. As of September 30, 2020, JPMorgan Chase Bank, N.A. has not elected to apply this exclusion.
Paycheck Protection Program. On April 13, 2020, the federal banking agencies issued an interim final rule (issued as final on September 29, 2020) to neutralize the regulatory capital effects of participating in the PPP on risk-based capital ratios by applying a zero percent risk weight to loans originated under the program. Given that PPP loans are guaranteed by the SBA, the Firm does not expect to realize material credit losses on these loans. As of September 30, 2020, the Firm had approximately $28 billion of loans under the program.
The rule also provides that if the PPP loan is pledged as collateral for a non-recourse loan under the Federal Reserve’s Paycheck Protection Program Lending (“PPPL”) Facility, the PPP loans can be excluded from leverage-based capital ratios. As of September 30, 2020, the Firm had not participated in the PPPL Facility.
Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 11-12 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 ("SCB"). On March 4, 2020, the Federal Reserve issued the final rule introducing the SCB framework
for the Basel III Standardized approach that is designed to more closely integrate the results of the quantitative assessment in the annual 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.
TLAC Holdings rule. On October 20, 2020, the federal banking agencies issued a final rule prescribing the regulatory capital treatment for holdings of TLAC debt instruments by certain large banking organizations, such as the Firm and JPMorgan Chase Bank, N.A. This rule expands the scope of the existing capital deductions rule around the holdings of capital instruments of financial institutions to also include TLAC debt instruments issued by systemically important banking organizations. The rule is intended to limit interconnectedness within the financial system and reduce systemic risk. The final rule will become effective on April 1, 2021.
The following tables present the Firm’s risk-based and leverage-based capital metrics under both the Basel III Standardized and Advanced Approaches. Refer to Capital Risk Management on pages 85–92 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of these capital metrics.
September 30, 2020(c)(d)
December 31, 2019
(in millions, except ratios)StandardizedAdvancedStandardizedAdvanced
Minimum capital ratios(e)
Risk-based capital metrics:
CET1 capital$197,719 $197,719 $187,753 $187,753 
Tier 1 capital227,486 227,486 214,432 214,432 
Total capital262,397 249,947 242,589 232,112 
Risk-weighted assets1,514,509 1,429,334 1,515,869 1,397,878 
CET1 capital ratio13.1 %13.8 %12.4 %13.4 %10.5 %
Tier 1 capital ratio15.0 15.9 14.1 15.3 12.0 
Total capital ratio17.3 17.5 16.0 16.6 14.0 
Leverage-based capital metrics:
Adjusted average assets(a)
$3,243,290 $3,243,290 $2,730,239 $2,730,239 
Tier 1 leverage ratio7.0 %7.0 %7.9 %7.9 %4.0 %
Total leverage exposure(b)
NA$3,247,392 NA$3,423,431 
SLR(b)
NA7.0 %NA6.3 %5.0 %
(a)Adjusted average assets, for purposes of calculating the leverage 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)As of September 30, 2020, total leverage exposure for purposes of calculating the SLR excludes U.S. Treasury securities and deposits at Federal Reserve Banks, as provided by the interim final rule issued by the Federal Reserve on April 1, 2020.
(c)As of September 30, 2020, the capital metrics reflect the CECL capital transition provisions.
(d)As of September 30, 2020, the capital metrics reflect the exclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF. Additionally, loans originated under the PPP receive a zero percent risk weight.
(e)Represents minimum requirements and regulatory buffers applicable to the Firm. Refer to Note 22 for additional information.
50



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, 2020 and December 31, 2019.
(in millions)September 30,
2020
December 31, 2019
Total stockholders’ equity$271,113 $261,330 
Less: Preferred stock30,063 26,993 
Common stockholders’ equity241,050 234,337 
Add:
Certain deferred tax liabilities(a)
2,405 2,381 
Less:
Goodwill47,819 47,823 
Other intangible assets759 819 
Other CET1 capital adjustments(b)
(2,842)323 
Standardized/Advanced CET1 capital197,719 187,753 
Preferred stock30,063 26,993 
Less: Other Tier 1 adjustments296 314 
Standardized/Advanced Tier 1 capital$227,486 $214,432 
Long-term debt and other instruments qualifying as Tier 2 capital$16,965 $13,733 
Qualifying allowance for credit losses(c)
17,855 14,314 
Other91 110 
Standardized Tier 2 capital$34,911 $28,157 
Standardized Total capital$262,397 $242,589 
Adjustment in qualifying allowance for credit losses for Advanced