For the fiscal year ended
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Commission file
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December 31, 2012
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number 1-5805
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Delaware
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13-2624428
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. employer
identification no.)
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270 Park Avenue, New York, New York
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10017
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(Address of principal executive offices)
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(Zip code)
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Title of each class
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Name of each exchange on which registered
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Common stock
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The New York Stock Exchange
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The London Stock Exchange
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The Tokyo Stock Exchange
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Warrants, each to purchase one share of Common Stock
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The New York Stock Exchange
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Depositary Shares, each representing a one-four hundredth interest in a share of 8.625% Non-Cumulative Preferred Stock, Series J
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The New York Stock Exchange
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Depositary Shares, each representing a one-four hundredth interest in a share of 5.50% Non-Cumulative Preferred Stock, Series O
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The New York Stock Exchange
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Guarantee of 7.00% Capital Securities, Series J, of J.P. Morgan Chase Capital X
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The New York Stock Exchange
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Guarantee of 5.875% Capital Securities, Series K, of J.P. Morgan Chase Capital XI
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The New York Stock Exchange
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Guarantee of 6.25% Capital Securities, Series L, of J.P. Morgan Chase Capital XII
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The New York Stock Exchange
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Guarantee of 6.20% Capital Securities, Series N, of JPMorgan Chase Capital XIV
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The New York Stock Exchange
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Guarantee of 6.35% Capital Securities, Series P, of JPMorgan Chase Capital XVI
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The New York Stock Exchange
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Guarantee of 6.625% Capital Securities, Series S, of JPMorgan Chase Capital XIX
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The New York Stock Exchange
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Guarantee of 6.875% Capital Securities, Series X, of JPMorgan Chase Capital XXIV
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The New York Stock Exchange
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Guarantee of 6.70% Capital Securities, Series CC, of JPMorgan Chase Capital XXIX
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The New York Stock Exchange
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Guarantee of 7.20% Preferred Securities of BANK ONE Capital VI
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The New York Stock Exchange
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KEYnotes Exchange Traded Notes Linked to the First Trust Enhanced 130/30 Large Cap Index
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The New York Stock Exchange
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Alerian MLP Index ETNs due May 24, 2024
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NYSE Arca, Inc.
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JPMorgan Double Short US 10 Year Treasury Futures ETNs due September 30, 2025
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NYSE Arca, Inc.
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JPMorgan Double Short US Long Bond Treasury Futures ETNs due September 30, 2025
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NYSE Arca, Inc.
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x
Large accelerated filer
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o
Accelerated filer
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o
Non-accelerated filer
(Do not check if a smaller reporting company)
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o
Smaller reporting company
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Page
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1
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1
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1
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1
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1-8
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336-340
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62, 331, 336
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341
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134-159, 250-275, 342-347
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159-162, 276-279, 348-349
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296, 350
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351
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8-21
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21
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21-22
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22
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22
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22-23
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23
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23
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23
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23
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24
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25
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26
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26
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26
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26
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26-29
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1
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•
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Comprehensive Capital Analysis and Review (“CCAR”) and stress testing
. In December 2011, the Federal Reserve issued final rules regarding the submission of capital plans by bank holding companies with total assets of $50 billion or more. Pursuant to these rules, the Federal Reserve requires the Firm to submit a capital plan on an annual basis. In October 2012, the Federal Reserve and OCC issued rules requiring the Firm and certain of its bank subsidiaries to perform stress tests under one stress scenario created by the Firm as well as three scenarios (baseline, adverse and severely adverse) mandated by the Federal Reserve. If the Federal Reserve objects to the Firm’s capital plan, the Firm will be unable to make any capital distributions unless approved by the Federal Reserve. For more information, see “CCAR and stress testing” on pages
5–6
.
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•
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Resolution plan.
In September 2011, the FDIC and the Federal Reserve issued, pursuant to the Dodd-Frank Act, a final rule that requires bank holding companies with assets of $50 billion or more and companies designated as systemically important by the FSOC to submit periodically to the Federal Reserve and the FDIC a plan for resolution under the Bankruptcy Code in the event of material distress or failure (a “resolution plan”). In January 2012, the FDIC also issued a final rule that requires insured depository institutions with assets of $50 billion or more to submit periodically to the FDIC a plan for resolution under the Federal Deposit Insurance Act in the event of failure. The timing of initial, annual and interim resolution plan submissions under both rules is the same. The Firm’s initial resolution plan submissions were filed by July 1, 2012, and annual updates will be due by July 1 each year.
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•
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Derivatives
. Under the Dodd-Frank Act, the Firm will be subject to comprehensive regulation of its derivatives business (including capital and margin requirements, central clearing of standardized over-the-counter derivatives and the requirement that they be traded on regulated trading platforms) and heightened supervision. Further, some of the rules for derivatives will apply extraterritorially to U.S. firms doing business with clients outside of the United States. The Dodd-Frank Act also requires banking entities, such as JPMorgan Chase, to significantly restructure their derivatives businesses, including changing the legal entities through which derivatives activities are conducted.
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•
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Volcker Rule
. The Firm will also be affected by the requirements of Section 619 of the Dodd-Frank Act, and specifically the provisions prohibiting proprietary trading and restricting the activities involving private equity and hedge funds (the “Volcker Rule”). On October 11, 2011, regulators proposed regulations to implement the Volcker Rule. These are currently expected to be finalized in 2013. Under the proposed rules, “proprietary trading” is defined as the trading of securities, derivatives, or futures (or options on any of the foregoing) as principal, where such trading is principally for the purpose of short-term resale, benefiting from actual or expected short-term price movements and realizing short-term arbitrage profits. The proposed rule’s definition of proprietary trading specifically excludes market-making-related activity, certain government issued securities trading and certain risk management activities. The Firm ceased some prohibited proprietary trading activities during 2010 and has since exited substantially all such activities.
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•
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Money Market Fund Reform
. In November 2012, the FSOC and the Financial Stability Board (the “FSB”) issued separate proposals regarding money market fund reform. Pursuant to Section 120 of the Dodd-Frank Act, the FSOC published proposed recommendations that the SEC proceed with structural reforms of money market funds, including, among other possibilities, requiring that money market funds adopt a floating net asset value, mandating a capital buffer and requiring a hold-back on redemptions for certain shareholders. On January 15, 2013, the FSOC announced that it had extended the comment period for the proposed recommendations at the request of the Chairman of the SEC. It is expected that the SEC will issue its own rule proposal on money market fund reform in the near future. The FSB endorsed and published for public consultation 15 policy recommendations proposed by the International Organization of Securities Commissions (“IOSCO”), including requiring money market funds to adopt a floating net asset value. The FSB has stated that it expects to publish final recommendations in September 2013 and, thereafter, work on procedures for the
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2
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•
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Capital
. The treatment of trust preferred securities as Tier 1 capital for regulatory capital purposes will be phased out over a three year period, beginning in 2013. In addition, in June 2011, the Basel Committee and the FSB announced that certain global systemically important banks (“GSIBs”) would be required to maintain additional capital, above the Basel III Tier 1 common equity minimum, in amounts ranging from 1% to 2.5%, depending upon the bank’s systemic importance. In June 2012, the Federal Reserve, the OCC and FDIC issued final rules for implementing ratings alternatives for the computation of risk-based capital for market risk exposures, which will result in significantly higher capital requirements for many securitization exposures. For more information, see “Capital requirements” on pages
4–5
.
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•
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FDIC Deposit Insurance Fund Assessments.
In February 2011, the FDIC issued a final rule changing the assessment base and the method for calculating the deposit insurance assessment rate. These changes became effective on April 1, 2011, and resulted in a substantial increase in the assessments that the Firm’s bank subsidiaries pay annually to the FDIC. For example, in 2011, these changes resulted in an increase of approximately $600 million in assessments. For more information, see “Deposit insurance” on page
6
.
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•
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Bureau of Consumer Financial Protection
. The Dodd-Frank Act established the CFPB as a new regulatory agency. The CFPB has authority to regulate providers of credit, payment and other consumer financial products and services. The CFPB has examination authority over large banks, such as JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A., with respect to the banks’ consumer financial products and services. The CFPB issued final regulations regarding mortgages, which will become effective in January 2014. For more information, see “CFPB regulations regarding mortgages” on page
7
and “Other supervision and regulation” on pages
7–8
.
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•
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Heightened prudential standards for systemically important financial institutions
. The Dodd-Frank Act creates a structure to regulate systemically important financial companies, and subjects them to heightened prudential standards. For more information, see “Systemically important financial institutions” below.
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•
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Debit interchange.
On October 1, 2011, the Federal Reserve adopted final rules implementing the “Durbin Amendment” provisions of the Dodd-Frank Act, which limit the amount the Firm can charge for each debit card transaction it processes.
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•
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Risk management standards.
The proposal would require oversight of enterprise-wide risk management by a stand-alone risk committee of the board of directors and a chief risk officer. Among other things, the risk committee of the board of directors of a bank holding company would be required to review and approve the liquidity costs, benefits, and risk of each significant new line of business and product.
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•
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Liquidity stress testing.
The proposal would require a company to conduct a liquidity stress test at least monthly.
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Stress tests.
Stress tests would be conducted annually by the Federal Reserve, and semi-annually by the company.
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•
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Single Counterparty Exposure Limits.
The proposal would limit net credit exposure of a bank holding company to a single counterparty as a percentage of regulatory capital. There would be a two-tier counterparty credit limit: (1) a general limit that prohibits a bank holding company (including its subsidiaries) from having aggregate net credit exposure to any single unaffiliated counterparty (including its subsidiaries) in excess of 25% of the company’s capital stock and surplus; and (2) a more stringent limit between a bank holding company with over $500 billion in total assets, and all its subsidiaries, and any counterparty with over $500 billion in total assets, and all of its subsidiaries, of 10% of the company’s capital stock and surplus.
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3
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4
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5
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•
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to transfer any assets and liabilities to a new obligor without the approval of the institution’s creditors;
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•
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to enforce the institution’s contracts pursuant to their terms; or
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•
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to repudiate or disaffirm any contract or lease to which the institution is a party.
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6
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7
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8
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9
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10
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11
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12
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13
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14
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15
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16
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17
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18
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19
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20
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21
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22
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Common stock
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Warrants
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||||||||||||||
Year ended December 31, 2012
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Total shares of common stock repurchased
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Average price paid per share of common stock
(b)
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Total warrants
repurchased
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Average price
paid per warrant
(b)
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Aggregate repurchases of common equity (in millions)
(b)
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Dollar value
of remaining
authorized
repurchase
(in millions)
(c)
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Repurchases under the prior $15.0 billion program
(a)
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2,604,500
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$
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33.10
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—
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$
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—
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$
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86
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$
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6,050
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(d)
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Repurchases under the new $15.0 billion program
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2,867,870
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45.29
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—
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—
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130
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14,870
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First quarter
(a)
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5,472,370
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39.49
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—
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—
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216
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14,870
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Second quarter
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28,070,715
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42.72
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18,471,300
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12.90
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1,437
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13,433
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Third quarter
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—
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—
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—
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—
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—
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13,433
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October
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—
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—
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—
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—
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—
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13,433
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November
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—
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—
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—
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—
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—
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13,433
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December
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—
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—
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—
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—
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—
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13,433
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||||
Fourth quarter
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—
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—
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—
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—
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—
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13,433
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||||
Year-to-date
(a)
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33,543,085
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$
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42.19
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18,471,300
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$
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12.90
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$
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1,653
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$
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13,433
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(a)
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Includes
$86 million
of repurchases in December 2011, which settled in early January 2012.
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(b)
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Excludes commissions cost.
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(c)
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The amount authorized by the Board of Directors excludes commissions cost.
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(d)
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The unused portion of the prior
$15.0 billion
program was canceled when the
$15.0 billion
2012 program was authorized.
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Year ended
December 31, 2012 |
Total shares of common stock
repurchased
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Average price
paid per share of common stock
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First quarter
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406
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$
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45.81
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Second quarter
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32
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39.72
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Third quarter
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28
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35.98
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October
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—
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—
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November
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154,125
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41.10
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December
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—
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—
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Fourth quarter
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154,125
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41.10
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Year-to-date
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154,591
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$
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41.11
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23
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24
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(a)
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On January 1, 2013, Ms. Lake was named Chief Financial Officer and appointed to the Operating Committee. At that date, Mr. Braunstein became Vice Chairman of JPMorgan Chase and retired from the Operating Commit
tee; he is no longer an executive officer of the registrant.
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(b)
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As of February 1, 2013, Mr. Hogan is on a leave of absence.
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25
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December 31, 2012
|
Number of shares to be issued upon exercise of outstanding options/SARs
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Weighted-average exercise price of outstanding options/SARs
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Number of shares remaining available for future issuance under stock compensation plans
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|||||
Plan category
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||||
Employee stock-based incentive plans approved by shareholders
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111,710,849
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$
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42.82
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283,322,413
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(a)
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Employee stock-based incentive plans not approved by shareholders
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4,194,767
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32.36
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—
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Total
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115,905,616
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$
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42.44
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283,322,413
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(a)
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Represents future shares available under the shareholder-approved Long-Term Incentive Plan, as amended and restated effective May 17, 2011.
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1
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Financial statements
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The Consolidated Financial Statements, the Notes thereto and the report of the Independent Registered Public Accounting Firm thereon listed in Item 8 are set forth commencing on page 187.
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2
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Financial statement schedules
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3
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Exhibits
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3.1
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Restated Certificate of Incorporation of JPMorgan Chase & Co., effective April 5, 2006 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed April 7, 2006).
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3.2
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Certificate of Designations of Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series I (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed April 24, 2008).
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26
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3.3
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Certificate of Designations of 8.625% Non-Cumulative Preferred Stock, Series J (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K/A of JPMorgan Chase & Co. (File No. 1-5805) filed September 17, 2008).
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3.4
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Certificate of Designations of 5.50% Non-Cumulative Preferred Stock, Series O (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed August 27, 2012).
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3.5
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By-laws of JPMorgan Chase & Co., effective January 19, 2010 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed January 25, 2010).
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4.1
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Indenture, dated as of October 21, 2010, between JPMorgan Chase & Co. and Deutsche Bank Trust Company Americas, as Trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No.1-5805) filed October 21, 2010).
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4.2
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Indenture, dated as of October 21, 2010, between JPMorgan Chase & Co. and U.S. Bank Trust National Association, as Trustee (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No.1-5805) filed October 21, 2010).
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4.3
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Indenture, dated as of May 25, 2001, between JPMorgan Chase & Co. and Bankers Trust Company (succeeded by Deutsche Bank Trust Company Americas), as Trustee (incorporated by reference to Exhibit 4(a)(1) to the Registration Statement on Form S-3 of JPMorgan Chase & Co. (File No. 333-52826) filed June 13, 2001).
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4.4
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Form of Deposit Agreement (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed April 24, 2008).
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4.5
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Form of Deposit Agreement (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed August 21, 2008).
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4.6
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Deposit Agreement, dated August 27, 2012, among JPMorgan Chase & Co., Computershare Shareowner Services LLC, as depositary, and the holders from time to time of Depositary Receipts relating to the 5.50% Non-Cumulative Preferred Stock, Series O (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of JPMorgan Chase & Co. (File No. 1-5805) filed August 27, 2012).
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4.7
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Form of Warrant to purchase common stock (incorporated by reference to Exhibit 4.2 to the Form 8-A of JPMorgan Chase & Co. (File No. 1-5805) filed December 11, 2009).
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27
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10.9
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Executive Retirement Plan of JPMorgan Chase & Co., as amended and restated December 31, 2008 (incorporated by reference to Exhibit 10.9 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2008).
(a)
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10.10
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Amendment to Bank One Corporation Director Stock Plan, as amended and restated effective February 1, 2003 (incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2008).
(a)
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10.11
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Summary of Bank One Corporation Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.19 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2005).
(a)
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10.12
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Bank One Corporation Stock Performance Plan, as amended and restated effective February 20, 2001 (incorporated by reference to Exhibit 10.12 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2008).
(a)
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10.13
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Bank One Corporation Supplemental Savings and Investment Plan, as amended and restated effective December 31, 2008 (incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2008).
(a)
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|
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10.14
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Revised and Restated Banc One Corporation 1989 Stock Incentive Plan, effective January 18, 1989 (incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2008).
(a)
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|
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10.15
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Banc One Corporation Revised and Restated 1995 Stock Incentive Plan, effective April 17, 1995 (incorporated by reference to Exhibit 10.15 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2008).
(a)
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10.16
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Form of JPMorgan Chase & Co. Long-Term Incentive Plan Award Agreement of January 22, 2008 stock appreciation rights (incorporated by reference to Exhibit 10.25 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2007).
(a)
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10.17
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Form of JPMorgan Chase & Co. Long-Term Incentive Plan Award Agreement of January 22, 2008 stock appreciation rights for James Dimon (incorporated by reference to Exhibit 10.27 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2007).
(a)
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10.18
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Form of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for stock appreciation rights, dated as of January 20, 2009 (incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2008).
(a)
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10.19
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Form of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for Operating Committee member stock appreciation rights, dated as of January 20, 2009 (incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2008).
(a)
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10.20
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Form of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for Operating Committee member stock appreciation rights, dated as of February 3, 2010 (incorporated by reference to Exhibit 10.23 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2009).
(a)
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10.21
|
|
Forms of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for stock appreciation rights and restricted stock units, dated as of January 19, 2011 and February 16, 2011 (incorporated by reference to Exhibit 10.24 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2011).
(a)
|
|
|
|
10.22
|
|
Forms of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for stock appreciation rights and restricted stock units, dated as of January 18, 2012 (incorporated by reference to Exhibit 10.25 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2011).
(a)
|
|
|
|
10.23
|
|
Forms of JPMorgan Chase & Co. Long-Term Incentive Plan Terms and Conditions for stock appreciation rights and restricted stock units for Operating Committee members, dated as of January 17, 2013.
(a)(b)
|
|
|
|
10.24
|
|
Form of JPMorgan Chase & Co. Performance-Based Incentive Compensation Plan, effective as of January 1, 2006, as amended (incorporated by reference to Exhibit 10.27 to the Annual Report on Form 10-K of JPMorgan Chase & Co. (File No. 1-5805) for the year ended December 31, 2009).
(a)
|
|
|
|
12.1
|
|
Computation of ratio of earnings to fixed charges.
(b)
|
|
|
|
12.2
|
|
Computation of ratio of earnings to fixed charges and preferred stock dividend requirements.
(b)
|
|
|
|
28
|
|
|
21
|
|
List of subsidiaries of JPMorgan Chase & Co.
(b)
|
|
|
|
22.1
|
|
Annual Report on Form 11-K of The JPMorgan Chase 401(k) Savings Plan for the year ended December 31, 2012 (to be filed pursuant to Rule 15d-21 under the Securities Exchange Act of 1934).
|
|
|
|
23
|
|
Consent of independent registered public accounting firm.
(b)
|
|
|
|
31.1
|
|
Certification.
(b)
|
|
|
|
31.2
|
|
Certification.
(b)
|
|
|
|
32
|
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(c)
|
|
|
|
101.INS
|
|
XBRL Instance Document.
(b)(d)
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
(b)
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
(b)
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
(b)
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
(b)
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
(b)
|
(a)
|
This exhibit is a management contract or compensatory plan or arrangement.
|
(b)
|
Filed herewith.
|
(c)
|
Furnished herewith. This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
|
(d)
|
Pursuant to Rule 405 of Regulation S-T, includes the following financial information included in the Firm’s Annual Report on Form 10-K for the year ended
December 31, 2012
, formatted in XBRL (eXtensible Business Reporting Language) interactive data files: (i) the Consolidated statements of income for the years ended
December 31, 2012
,
2011
and
2010
, (ii) the Consolidated statements of comprehensive income for the years ended
December 31, 2012
,
2011
and
2010
, (iii) the Consolidated balance sheets as of
December 31, 2012
and
2011
, (iv) the Consolidated statements of changes in stockholders’ equity for the years ended
December 31, 2012
,
2011
and
2010
, (v) the Consolidated statements of cash flows for the years ended
December 31, 2012
,
2011
and
2010
, and (vi) the Notes to consolidated financial statements.
|
|
|
29
|
|
|
|
|
|||
|
|
|
|
|
|
|
62
|
|
|
Audited financial statements:
|
|||
|
|
|
|
|
|
|
63
|
|
|
186
|
|
||
|
|
|
|
|
|
|
|
187
|
|
||||
|
|
|
|
|
|
|
64
|
|
|
188
|
|
||
|
|
|
|
|
|
|
66
|
|
|
193
|
|
||
|
|
|
|
|
|
|
72
|
|
|
|
|||
|
|
|
|
|
|
|
76
|
|
|
Supplementary information:
|
|||
|
|
|
|
|
|
|
78
|
|
|
331
|
|
||
|
|
|
|
|
|
|
105
|
|
|
333
|
|
||
|
|
|
|
|
|
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
175
|
|
|
|
|
|
|
|
|
|
|
|
|
|
177
|
|
Legal, Fiduciary and
Reputation Risk Management
|
|
|
|
|
|
|
|
|
|
|
|
178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
61
|
(unaudited)
As of or for the year ended December 31,
|
|
|
|
|
|
|
||||||||||
(in millions, except per share, ratio and headcount data)
|
|
2012
|
2011
|
2010
|
2009
|
2008
(b)
|
||||||||||
Selected income statement data
|
|
|
|
|
|
|
||||||||||
Total net revenue
|
|
$
|
97,031
|
|
$
|
97,234
|
|
$
|
102,694
|
|
$
|
100,434
|
|
$
|
67,252
|
|
Total noninterest expense
|
|
64,729
|
|
62,911
|
|
61,196
|
|
52,352
|
|
43,500
|
|
|||||
Pre-provision profit
|
|
32,302
|
|
34,323
|
|
41,498
|
|
48,082
|
|
23,752
|
|
|||||
Provision for credit losses
|
|
3,385
|
|
7,574
|
|
16,639
|
|
32,015
|
|
19,445
|
|
|||||
Provision for credit losses - accounting conformity
(a)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,534
|
|
|||||
Income before income tax expense/(benefit) and extraordinary gain
|
|
28,917
|
|
26,749
|
|
24,859
|
|
16,067
|
|
2,773
|
|
|||||
Income tax expense/(benefit)
|
|
7,633
|
|
7,773
|
|
7,489
|
|
4,415
|
|
(926
|
)
|
|||||
Income before extraordinary gain
|
|
21,284
|
|
18,976
|
|
17,370
|
|
11,652
|
|
3,699
|
|
|||||
Extraordinary gain
(b)
|
|
—
|
|
—
|
|
—
|
|
76
|
|
1,906
|
|
|||||
Net income
|
|
$
|
21,284
|
|
$
|
18,976
|
|
$
|
17,370
|
|
$
|
11,728
|
|
$
|
5,605
|
|
Per common share data
|
|
|
|
|
|
|
||||||||||
Basic earnings
|
|
|
|
|
|
|
||||||||||
Income before extraordinary gain
|
|
$
|
5.22
|
|
$
|
4.50
|
|
$
|
3.98
|
|
$
|
2.25
|
|
$
|
0.81
|
|
Net income
|
|
5.22
|
|
4.50
|
|
3.98
|
|
2.27
|
|
1.35
|
|
|||||
Diluted earnings
(c)
|
|
|
|
|
|
|
||||||||||
Income before extraordinary gain
|
|
$
|
5.20
|
|
$
|
4.48
|
|
$
|
3.96
|
|
$
|
2.24
|
|
$
|
0.81
|
|
Net income
|
|
5.20
|
|
4.48
|
|
3.96
|
|
2.26
|
|
1.35
|
|
|||||
Cash dividends declared per share
|
|
1.20
|
|
1.00
|
|
0.20
|
|
0.20
|
|
1.52
|
|
|||||
Book value per share
|
|
51.27
|
|
46.59
|
|
43.04
|
|
39.88
|
|
36.15
|
|
|||||
Tangible book value per share
(d)
|
|
38.75
|
|
33.69
|
|
30.18
|
|
27.09
|
|
22.52
|
|
|||||
Common shares outstanding
|
|
|
|
|
|
|
||||||||||
Average: Basic
|
|
3,809.4
|
|
3,900.4
|
|
3,956.3
|
|
3,862.8
|
|
3,501.1
|
|
|||||
Diluted
|
|
3,822.2
|
|
3,920.3
|
|
3,976.9
|
|
3,879.7
|
|
3,521.8
|
|
|||||
Common shares at period-end
|
|
3,804.0
|
|
3,772.7
|
|
3,910.3
|
|
3,942.0
|
|
3,732.8
|
|
|||||
Share price
(e)
|
|
|
|
|
|
|
||||||||||
High
|
|
$
|
46.49
|
|
$
|
48.36
|
|
$
|
48.20
|
|
$
|
47.47
|
|
$
|
50.63
|
|
Low
|
|
30.83
|
|
27.85
|
|
35.16
|
|
14.96
|
|
19.69
|
|
|||||
Close
|
|
43.97
|
|
33.25
|
|
42.42
|
|
41.67
|
|
31.53
|
|
|||||
Market capitalization
|
|
167,260
|
|
125,442
|
|
165,875
|
|
164,261
|
|
117,695
|
|
|||||
Selected ratios
|
|
|
|
|
|
|
||||||||||
Return on common equity (“ROE”)
(c)
|
|
|
|
|
|
|
||||||||||
Income before extraordinary gain
|
|
11
|
%
|
11
|
%
|
10
|
%
|
6
|
%
|
2
|
%
|
|||||
Net income
|
|
11
|
|
11
|
|
10
|
|
6
|
|
4
|
|
|||||
Return on tangible common equity (“ROTCE”)
(c)(d)
|
|
|
|
|
|
|
||||||||||
Income before extraordinary gain
|
|
15
|
|
15
|
|
15
|
|
10
|
|
4
|
|
|||||
Net income
|
|
15
|
|
15
|
|
15
|
|
10
|
|
6
|
|
|||||
Return on assets (“ROA”)
|
|
|
|
|
|
|
||||||||||
Income before extraordinary gain
|
|
0.94
|
|
0.86
|
|
0.85
|
|
0.58
|
|
0.21
|
|
|||||
Net income
|
|
0.94
|
|
0.86
|
|
0.85
|
|
0.58
|
|
0.31
|
|
|||||
Return on risk-weighted assets
(f)
|
|
|
|
|
|
|
||||||||||
Income before extraordinary gain
|
|
1.65
|
|
1.58
|
|
1.50
|
|
0.95
|
|
0.32
|
|
|||||
Net income
|
|
1.65
|
|
1.58
|
|
1.50
|
|
0.95
|
|
0.49
|
|
|||||
Overhead ratio
|
|
67
|
|
65
|
|
60
|
|
52
|
|
65
|
|
|||||
Deposits-to-loans ratio
|
|
163
|
|
156
|
|
134
|
|
148
|
|
135
|
|
|||||
Tier 1 capital ratio
(g)
|
|
12.6
|
|
12.3
|
|
12.1
|
|
11.1
|
|
10.9
|
|
|||||
Total capital ratio
|
|
15.3
|
|
15.4
|
|
15.5
|
|
14.8
|
|
14.8
|
|
|||||
Tier 1 leverage ratio
|
|
7.1
|
|
6.8
|
|
7.0
|
|
6.9
|
|
6.9
|
|
|||||
Tier 1 common capital ratio
(h)
|
|
11.0
|
|
10.1
|
|
9.8
|
|
8.8
|
|
7.0
|
|
|||||
Selected balance sheet data (period-end)
(g)
|
|
|
|
|
|
|
||||||||||
Trading assets
|
|
$
|
450,028
|
|
$
|
443,963
|
|
$
|
489,892
|
|
$
|
411,128
|
|
$
|
509,983
|
|
Securities
|
|
371,152
|
|
364,793
|
|
316,336
|
|
360,390
|
|
205,943
|
|
|||||
Loans
|
|
733,796
|
|
723,720
|
|
692,927
|
|
633,458
|
|
744,898
|
|
|||||
Total assets
|
|
2,359,141
|
|
2,265,792
|
|
2,117,605
|
|
2,031,989
|
|
2,175,052
|
|
|||||
Deposits
|
|
1,193,593
|
|
1,127,806
|
|
930,369
|
|
938,367
|
|
1,009,277
|
|
|||||
Long-term debt
|
|
249,024
|
|
256,775
|
|
270,653
|
|
289,165
|
|
302,959
|
|
|||||
Common stockholders’ equity
|
|
195,011
|
|
175,773
|
|
168,306
|
|
157,213
|
|
134,945
|
|
|||||
Total stockholders’ equity
|
|
204,069
|
|
183,573
|
|
176,106
|
|
165,365
|
|
166,884
|
|
|||||
Headcount
|
|
258,965
|
|
260,157
|
|
239,831
|
|
222,316
|
|
224,961
|
|
|||||
Credit quality metrics
|
|
|
|
|
|
|
||||||||||
Allowance for credit losses
|
|
$
|
22,604
|
|
$
|
28,282
|
|
$
|
32,983
|
|
$
|
32,541
|
|
$
|
23,823
|
|
Allowance for loan losses to total retained loans
|
|
3.02
|
%
|
3.84
|
%
|
4.71
|
%
|
5.04
|
%
|
3.18
|
%
|
|||||
Allowance for loan losses to retained loans excluding purchased credit-impaired loans
(i)
|
|
2.43
|
|
3.35
|
|
4.46
|
|
5.51
|
|
3.62
|
|
|||||
Nonperforming assets
|
|
$
|
11,734
|
|
$
|
11,315
|
|
$
|
16,682
|
|
$
|
19,948
|
|
$
|
12,780
|
|
Net charge-offs
|
|
9,063
|
|
12,237
|
|
23,673
|
|
22,965
|
|
9,835
|
|
|||||
Net charge-off rate
|
|
1.26
|
%
|
1.78
|
%
|
3.39
|
%
|
3.42
|
%
|
1.73
|
%
|
62
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(a)
|
Results for 2008 included a conforming loan loss provision related to the acquisition of Washington Mutual Bank’s (“Washington Mutual”) banking operations.
|
(b)
|
On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual. The acquisition resulted in negative goodwill, and accordingly, the Firm recorded an extraordinary gain. A preliminary gain of $1.9 billion was recognized at December 31, 2008. The final total extraordinary gain that resulted from the Washington Mutual transaction was $2.0 billion.
|
(c)
|
The calculation of 2009 earnings per share (“EPS”) and net income applicable to common equity includes a one-time, noncash reduction of
$1.1 billion
, or
$0.27
per share, resulting from repayment of U.S. Troubled Asset Relief Program (“TARP”) preferred capital in the second quarter of 2009. Excluding this reduction, the adjusted ROE and ROTCE were
7%
and 11%, respectively, for 2009. The Firm views the adjusted ROE and ROTCE, both non-GAAP financial measures, as meaningful because they enable the comparability to prior periods.
|
(d)
|
Tangible book value per share and ROTCE are non-GAAP financial measures. Tangible book value per share represents the Firm’s tangible common equity divided by period-end common shares. ROTCE measures the Firm’s annualized earnings as a percentage of tangible common equity. For further discussion of these measures, see Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages
76–77
of this Annual Report.
|
(e)
|
Share prices shown for JPMorgan Chase’s common stock are from the New York Stock Exchange. JPMorgan Chase’s common stock is also listed and traded on the London Stock Exchange and the Tokyo Stock Exchange.
|
(f)
|
Return on Basel I risk-weighted assets is the annualized earnings of the Firm divided by its average risk-weighted assets.
|
(g)
|
Effective January 1, 2010, the Firm adopted accounting guidance that amended the accounting for the transfer of financial assets and the consolidation of variable interest entities (“VIEs”). Upon adoption of the guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related, adding $87.7 billion and $92.2 billion of assets and liabilities, respectively, and decreasing stockholders’ equity and the Tier 1 capital ratio by $4.5 billion and 34 basis points, respectively. The reduction to stockholders’ equity was driven by the establishment of an allowance for loan losses of $7.5 billion (pretax) primarily related to receivables held in credit card securitization trusts that were consolidated at the adoption date.
|
(h)
|
Basel I Tier 1 common capital ratio (“Tier 1 common ratio”) is Tier 1 common capital (“Tier 1 common”) divided by risk-weighted assets. The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. For further discussion of the Tier 1 common capital ratio, see Regulatory capital on pages
117–120
of this Annual Report.
|
(i)
|
Excludes the impact of residential real estate purchased credit-impaired (“PCI”) loans. For further discussion, see Allowance for credit losses on pages
159–162
of this Annual Report.
|
December 31,
(in dollars)
|
2007
|
2008
|
2009
|
2010
|
2011
|
2012
|
||||||||||||
JPMorgan Chase
|
$
|
100.00
|
|
$
|
74.87
|
|
$
|
100.59
|
|
$
|
102.91
|
|
$
|
82.36
|
|
$
|
112.15
|
|
KBW Bank Index
|
100.00
|
|
52.45
|
|
51.53
|
|
63.56
|
|
48.83
|
|
64.97
|
|
||||||
S&P Financial Index
|
100.00
|
|
44.73
|
|
52.44
|
|
58.82
|
|
48.81
|
|
62.92
|
|
||||||
S&P 500 Index
|
100.00
|
|
63.00
|
|
79.68
|
|
91.68
|
|
93.61
|
|
108.59
|
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
63
|
INTRODUCTION
|
64
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
65
|
EXECUTIVE OVERVIEW
|
Financial performance of JPMorgan Chase
|
|
|
||||||||
Year ended December 31,
|
|
|||||||||
(in millions, except per share data and ratios)
|
2012
|
|
2011
|
|
Change
|
|||||
Selected income statement data
|
|
|
|
|
|
|||||
Total net revenue
|
$
|
97,031
|
|
|
$
|
97,234
|
|
|
—
|
%
|
Total noninterest expense
|
64,729
|
|
|
62,911
|
|
|
3
|
|
||
Pre-provision profit
|
32,302
|
|
|
34,323
|
|
|
(6
|
)
|
||
Provision for credit losses
|
3,385
|
|
|
7,574
|
|
|
(55
|
)
|
||
Net income
|
21,284
|
|
|
18,976
|
|
|
12
|
|
||
Diluted earnings per share
|
5.20
|
|
|
4.48
|
|
|
16
|
|
||
Return on common equity
|
11
|
%
|
|
11
|
%
|
|
|
|||
Capital ratios
|
|
|
|
|
|
|||||
Tier 1 capital
|
12.6
|
|
|
12.3
|
|
|
|
|||
Tier 1 common
|
11.0
|
|
|
10.1
|
|
|
|
66
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
67
|
68
|
|
JPMorgan Chase & Co./2012 Annual Report
|
•
|
revamping the governance, mandate and reporting and control processes of CIO;
|
•
|
implementing numerous risk management changes, including improvements in model governance and market risk; and
|
•
|
effecting a series of changes to the Risk function’s governance, organizational structure and interaction with the Board.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
69
|
•
|
better focused and clearer reporting of presentations to the Board’s Risk Policy Committee, with particular emphasis on the key risks for each line of business, identification of significant future changes to the business and its risk profile, and adequacy of staffing, technology and other resources;
|
•
|
clarifying to management the Board’s expectations regarding the capabilities, stature, and independence of the Firm’s risk management personnel;
|
•
|
more systematic reporting to the Risk Policy Committee on significant model risk, model approval and model governance, on setting of significant risk limits and responses to significant limit excessions, and with respect to regulatory matters requiring attention;
|
•
|
further clarification of the Risk Policy Committee’s role and responsibilities, and more coordination of matters presented to the Risk Policy Committee and the Audit Committee;
|
•
|
concurrence by the Risk Policy Committee in the hiring or firing of the Chief Risk Officer and that it be consulted with respect to the setting of such Chief Risk Officer’s compensation; and
|
•
|
staff with appropriate risk expertise be added to the Firm’s Internal Audit function and that Internal Audit more systematically include the risk management function in its audits.
|
70
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
71
|
CONSOLIDATED RESULTS OF OPERATIONS
|
Revenue
|
|
|
|
|
|
||||||
Year ended December 31,
|
|
|
|
|
|
||||||
(in millions)
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Investment banking fees
|
$
|
5,808
|
|
|
$
|
5,911
|
|
|
$
|
6,190
|
|
Principal transactions
|
5,536
|
|
|
10,005
|
|
|
10,894
|
|
|||
Lending- and deposit-related fees
|
6,196
|
|
|
6,458
|
|
|
6,340
|
|
|||
Asset management, administration and commissions
|
13,868
|
|
|
14,094
|
|
|
13,499
|
|
|||
Securities gains
|
2,110
|
|
|
1,593
|
|
|
2,965
|
|
|||
Mortgage fees and related income
|
8,687
|
|
|
2,721
|
|
|
3,870
|
|
|||
Card income
|
5,658
|
|
|
6,158
|
|
|
5,891
|
|
|||
Other income
(a)
|
4,258
|
|
|
2,605
|
|
|
2,044
|
|
|||
Noninterest revenue
|
52,121
|
|
|
49,545
|
|
|
51,693
|
|
|||
Net interest income
|
44,910
|
|
|
47,689
|
|
|
51,001
|
|
|||
Total net revenue
|
$
|
97,031
|
|
|
$
|
97,234
|
|
|
$
|
102,694
|
|
(a)
|
Included operating lease income of
$1.3 billion
,
$1.2 billion
and
$971 million
for the years ended
December 31, 2012
,
2011
and
2010
, respectively.
|
72
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
73
|
Provision for credit losses
|
|
|
|
|
|||||||
Year ended December 31,
|
|
|
|
|
|
||||||
(in millions)
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Consumer, excluding credit card
|
$
|
302
|
|
|
$
|
4,672
|
|
|
$
|
9,452
|
|
Credit card
|
3,444
|
|
|
2,925
|
|
|
8,037
|
|
|||
Total consumer
|
3,746
|
|
|
7,597
|
|
|
17,489
|
|
|||
Wholesale
|
(361
|
)
|
|
(23
|
)
|
|
(850
|
)
|
|||
Total provision for credit losses
|
$
|
3,385
|
|
|
$
|
7,574
|
|
|
$
|
16,639
|
|
Noninterest expense
|
|
|
|
|
|||||||
Year ended December 31,
|
|
||||||||||
(in millions)
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Compensation expense
|
$
|
30,585
|
|
|
$
|
29,037
|
|
|
$
|
28,124
|
|
Noncompensation expense:
|
|
|
|
|
|
||||||
Occupancy
|
3,925
|
|
|
3,895
|
|
|
3,681
|
|
|||
Technology, communications and equipment
|
5,224
|
|
|
4,947
|
|
|
4,684
|
|
|||
Professional and outside services
|
7,429
|
|
|
7,482
|
|
|
6,767
|
|
|||
Marketing
|
2,577
|
|
|
3,143
|
|
|
2,446
|
|
|||
Other
(a)(b)
|
14,032
|
|
|
13,559
|
|
|
14,558
|
|
|||
Amortization of intangibles
|
957
|
|
|
848
|
|
|
936
|
|
|||
Total noncompensation expense
|
34,144
|
|
|
33,874
|
|
|
33,072
|
|
|||
Total noninterest expense
|
$
|
64,729
|
|
|
$
|
62,911
|
|
|
$
|
61,196
|
|
(a)
|
Included litigation expense of
$5.0 billion
,
$4.9 billion
and
$7.4 billion
for the years ended December 31, 2012, 2011 and 2010, respectively.
|
(b)
|
Included FDIC-related expense of
$1.7 billion
,
$1.5 billion
and
$899 million
for the years ended December 31, 2012, 2011 and 2010, respectively.
|
74
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Income tax expense
|
|
|
|
|
|
||||||
Year ended December 31,
(in millions, except rate)
|
|
|
|
|
|
||||||
2012
|
|
2011
|
|
2010
|
|||||||
Income before income tax expense
|
$
|
28,917
|
|
|
$
|
26,749
|
|
|
$
|
24,859
|
|
Income tax expense
|
7,633
|
|
|
7,773
|
|
|
7,489
|
|
|||
Effective tax rate
|
26.4
|
%
|
|
29.1
|
%
|
|
30.1
|
%
|
JPMorgan Chase & Co./2012 Annual Report
|
|
75
|
EXPLANATION AND RECONCILIATION OF THE FIRM’S USE OF NON-GAAP FINANCIAL MEASURES
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||||||||||||||||||
Year ended
December 31,
(in millions, except ratios)
|
Reported
Results
|
|
Fully tax-equivalent adjustments
(a)
|
|
Managed
basis
|
|
Reported
Results
|
|
Fully tax-equivalent adjustments
(a)
|
|
Managed
basis
|
|
Reported
Results
|
|
|
Fully tax-equivalent adjustments
(a)
|
|
Managed
basis
|
||||||||||||||||||
Other income
|
$
|
4,258
|
|
|
$
|
2,116
|
|
|
$
|
6,374
|
|
|
$
|
2,605
|
|
|
$
|
2,003
|
|
|
$
|
4,608
|
|
|
$
|
2,044
|
|
|
|
$
|
1,745
|
|
|
$
|
3,789
|
|
Total noninterest revenue
|
52,121
|
|
|
2,116
|
|
|
54,237
|
|
|
49,545
|
|
|
2,003
|
|
|
51,548
|
|
|
51,693
|
|
|
|
1,745
|
|
|
53,438
|
|
|||||||||
Net interest income
|
44,910
|
|
|
743
|
|
|
45,653
|
|
|
47,689
|
|
|
530
|
|
|
48,219
|
|
|
51,001
|
|
|
|
403
|
|
|
51,404
|
|
|||||||||
Total net revenue
|
97,031
|
|
|
2,859
|
|
|
99,890
|
|
|
97,234
|
|
|
2,533
|
|
|
99,767
|
|
|
102,694
|
|
|
|
2,148
|
|
|
104,842
|
|
|||||||||
Pre-provision profit
|
32,302
|
|
|
2,859
|
|
|
35,161
|
|
|
34,323
|
|
|
2,533
|
|
|
36,856
|
|
|
41,498
|
|
|
|
2,148
|
|
|
43,646
|
|
|||||||||
Income before income tax expense
|
28,917
|
|
|
2,859
|
|
|
31,776
|
|
|
26,749
|
|
|
2,533
|
|
|
29,282
|
|
|
24,859
|
|
|
|
2,148
|
|
|
27,007
|
|
|||||||||
Income tax expense
|
7,633
|
|
|
2,859
|
|
|
10,492
|
|
|
7,773
|
|
|
2,533
|
|
|
10,306
|
|
|
7,489
|
|
|
|
2,148
|
|
|
9,637
|
|
|||||||||
Overhead ratio
|
67
|
%
|
|
NM
|
|
|
65
|
%
|
|
65
|
%
|
|
NM
|
|
|
63
|
%
|
|
60
|
%
|
|
|
NM
|
|
|
58
|
%
|
Calculation of certain U.S. GAAP and non-GAAP metrics
|
||||
The table below reflects the formulas used to calculate both the
following U.S. GAAP and non-GAAP measures. |
||||
Return on common equity
Net income* / Average common stockholders’ equity
|
||||
Return on tangible common equity
(a)
Net income* / Average tangible common equity
|
||||
Return on assets
Reported net income / Total average assets
|
||||
Return on risk-weighted assets
Annualized earnings / Average risk-weighted assets
|
||||
Overhead ratio
Total noninterest expense / Total net revenue
|
||||
* Represents net income applicable to common equity
|
||||
(a) The Firm uses ROTCE, a non-GAAP financial measure, to evaluate its
use of equity and to facilitate comparisons with competitors. Refer to the following table for the calculation of average tangible common equity. |
76
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Average tangible common equity
|
|
|
|
|
||||||||
Year ended December 31, (in millions)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Common stockholders’ equity
|
|
$
|
184,352
|
|
|
$
|
173,266
|
|
|
$
|
161,520
|
|
Less: Goodwill
|
|
48,176
|
|
|
48,632
|
|
|
48,618
|
|
|||
Less: Certain identifiable intangible assets
|
|
2,833
|
|
|
3,632
|
|
|
4,178
|
|
|||
Add: Deferred tax liabilities
(a)
|
|
2,754
|
|
|
2,635
|
|
|
2,587
|
|
|||
Tangible common equity
|
|
$
|
136,097
|
|
|
$
|
123,637
|
|
|
$
|
111,311
|
|
(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.
|
Core net interest income data
(a)
|
|
|
|||||||
Year ended December 31,
(in millions, except rates)
|
2012
|
|
2011
|
|
2010
|
|
|||
Net interest income - managed basis
(b)(c)
|
$
|
45,653
|
|
$
|
48,219
|
|
$
|
51,404
|
|
Less: Market-based net interest income
|
5,787
|
|
7,329
|
|
7,112
|
|
|||
Core net interest income
(b)
|
$
|
39,866
|
|
$
|
40,890
|
|
$
|
44,292
|
|
|
|
|
|
||||||
Average interest-earning assets
|
$
|
1,842,417
|
|
$
|
1,761,355
|
|
$
|
1,677,521
|
|
Less: Average market-based earning assets
|
499,339
|
|
519,655
|
|
470,927
|
|
|||
Core average interest-earning assets
|
$
|
1,343,078
|
|
$
|
1,241,700
|
|
$
|
1,206,594
|
|
|
|
|
|
||||||
Net interest yield on interest-earning assets - managed basis
|
2.48
|
%
|
2.74
|
%
|
3.06
|
%
|
|||
Net interest yield on market-based
activity
|
1.16
|
|
1.41
|
|
1.51
|
|
|||
Core net interest yield on core average interest-earning assets
|
2.97
|
%
|
3.29
|
%
|
3.67
|
%
|
JPMorgan Chase & Co./2012 Annual Report
|
|
77
|
BUSINESS SEGMENT RESULTS
|
78
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31,
|
Total net revenue
|
|
Noninterest expense
|
|
Pre-provision profit
|
||||||||||||||||||||||||
(in millions)
|
2012
|
|
2011
|
|
2010
|
|
|
2012
|
|
2011
|
|
2010
|
|
|
2012
|
|
2011
|
|
2010
|
|
|||||||||
Consumer & Community Banking
|
$
|
49,945
|
|
$
|
45,687
|
|
$
|
48,927
|
|
|
$
|
28,790
|
|
$
|
27,544
|
|
$
|
23,706
|
|
|
$
|
21,155
|
|
$
|
18,143
|
|
$
|
25,221
|
|
Corporate & Investment Bank
|
34,326
|
|
33,984
|
|
33,477
|
|
|
21,850
|
|
21,979
|
|
22,869
|
|
|
12,476
|
|
12,005
|
|
10,608
|
|
|||||||||
Commercial Banking
|
6,825
|
|
6,418
|
|
6,040
|
|
|
2,389
|
|
2,278
|
|
2,199
|
|
|
4,436
|
|
4,140
|
|
3,841
|
|
|||||||||
Asset Management
|
9,946
|
|
9,543
|
|
8,984
|
|
|
7,104
|
|
7,002
|
|
6,112
|
|
|
2,842
|
|
2,541
|
|
2,872
|
|
|||||||||
Corporate/Private Equity
|
(1,152
|
)
|
4,135
|
|
7,414
|
|
|
4,596
|
|
4,108
|
|
6,310
|
|
|
(5,748
|
)
|
27
|
|
1,104
|
|
|||||||||
Total
|
$
|
99,890
|
|
$
|
99,767
|
|
$
|
104,842
|
|
|
$
|
64,729
|
|
$
|
62,911
|
|
$
|
61,196
|
|
|
$
|
35,161
|
|
$
|
36,856
|
|
$
|
43,646
|
|
Year ended December 31,
|
Provision for credit losses
|
|
Net income/(loss)
|
|
Return on equity
|
|||||||||||||||||||||
(in millions, except ratios)
|
2012
|
|
2011
|
|
2010
|
|
|
2012
|
|
2011
|
|
2010
|
|
|
2012
|
|
2011
|
|
2010
|
|
||||||
Consumer & Community Banking
|
$
|
3,774
|
|
$
|
7,620
|
|
$
|
17,489
|
|
|
$
|
10,611
|
|
$
|
6,202
|
|
$
|
4,578
|
|
|
25
|
%
|
15
|
%
|
11
|
%
|
Corporate & Investment Bank
|
(479
|
)
|
(285
|
)
|
(1,247
|
)
|
|
8,406
|
|
7,993
|
|
7,718
|
|
|
18
|
|
17
|
|
17
|
|
||||||
Commercial Banking
|
41
|
|
208
|
|
297
|
|
|
2,646
|
|
2,367
|
|
2,084
|
|
|
28
|
|
30
|
|
26
|
|
||||||
Asset Management
|
86
|
|
67
|
|
86
|
|
|
1,703
|
|
1,592
|
|
1,710
|
|
|
24
|
|
25
|
|
26
|
|
||||||
Corporate/Private Equity
|
(37
|
)
|
(36
|
)
|
14
|
|
|
(2,082
|
)
|
822
|
|
1,280
|
|
|
NM
|
|
NM
|
|
NM
|
|
||||||
Total
|
$
|
3,385
|
|
$
|
7,574
|
|
$
|
16,639
|
|
|
$
|
21,284
|
|
$
|
18,976
|
|
$
|
17,370
|
|
|
11
|
%
|
11
|
%
|
10
|
%
|
JPMorgan Chase & Co./2012 Annual Report
|
|
79
|
CONSUMER & COMMUNITY BANKING
|
Consumer & Community Banking (“CCB”) serves consumers and businesses through personal service at bank branches and through ATMs, online, mobile and telephone banking. CCB is organized into Consumer & Business Banking, Mortgage Banking (including Mortgage Production, Mortgage Servicing and Real Estate Portfolios) and Card, Merchant Services & Auto (“Card”). Consumer & Business Banking offers deposit and investment products and services to consumers, and lending, deposit, and cash management and payment solutions to small businesses. Mortgage Banking includes mortgage origination and servicing activities, as well as portfolios comprised of residential mortgages and home equity loans, including the PCI portfolio acquired in the Washington Mutual transaction. Card issues credit cards to consumers and small businesses, provides payment services to corporate and public sector clients through its commercial card products, offers payment processing services to merchants, and provides auto and student loan services.
|
Selected income statement data
|
|
|
|
|
|||||||
Year ended December 31,
|
|
||||||||||
(in millions, except ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Revenue
|
|
|
|
|
|
||||||
Lending- and deposit-related fees
|
$
|
3,121
|
|
|
$
|
3,219
|
|
|
$
|
3,117
|
|
Asset management, administration and commissions
|
2,092
|
|
|
2,044
|
|
|
1,831
|
|
|||
Mortgage fees and related income
|
8,680
|
|
|
2,714
|
|
|
3,855
|
|
|||
Card income
|
5,446
|
|
|
6,152
|
|
|
5,469
|
|
|||
All other income
|
1,456
|
|
|
1,177
|
|
|
1,241
|
|
|||
Noninterest revenue
|
20,795
|
|
|
15,306
|
|
|
15,513
|
|
|||
Net interest income
|
29,150
|
|
|
30,381
|
|
|
33,414
|
|
|||
Total net revenue
|
49,945
|
|
|
45,687
|
|
|
48,927
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
3,774
|
|
|
7,620
|
|
|
17,489
|
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
|
|
|
|
|
||||||
Compensation expense
|
11,231
|
|
|
9,971
|
|
|
8,804
|
|
|||
Noncompensation expense
|
16,784
|
|
|
16,934
|
|
|
14,159
|
|
|||
Amortization of intangibles
|
775
|
|
|
639
|
|
|
743
|
|
|||
Total noninterest expense
|
28,790
|
|
|
27,544
|
|
|
23,706
|
|
|||
Income before income tax expense
|
17,381
|
|
|
10,523
|
|
|
7,732
|
|
|||
Income tax expense
|
6,770
|
|
|
4,321
|
|
|
3,154
|
|
|||
Net income
|
$
|
10,611
|
|
|
$
|
6,202
|
|
|
$
|
4,578
|
|
|
|
|
|
|
|
||||||
Financial ratios
|
|
|
|
|
|
||||||
Return on common equity
|
25
|
%
|
|
15
|
%
|
|
11
|
%
|
|||
Overhead ratio
|
58
|
|
|
60
|
|
|
48
|
|
80
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Selected metrics
|
|
|
|
|
|||||||
As of or for the year ended December 31,
|
|
|
|
|
|
||||||
(in millions, except headcount and ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Selected balance sheet data (period-end)
|
|
|
|
|
|
||||||
Total assets
|
$
|
463,608
|
|
|
$
|
483,307
|
|
|
$
|
508,775
|
|
Loans:
|
|
|
|
|
|
||||||
Loans retained
|
402,963
|
|
|
425,581
|
|
|
452,249
|
|
|||
Loans held-for-sale and loans at fair value
(a)
|
18,801
|
|
|
12,796
|
|
|
17,015
|
|
|||
Total loans
|
421,764
|
|
|
438,377
|
|
|
469,264
|
|
|||
Deposits
|
438,484
|
|
|
397,825
|
|
|
371,861
|
|
|||
Equity
|
43,000
|
|
|
41,000
|
|
|
43,000
|
|
|||
Selected balance sheet data (average)
|
|
|
|
|
|
||||||
Total assets
|
$
|
464,197
|
|
|
$
|
487,923
|
|
|
$
|
527,101
|
|
Loans:
|
|
|
|
|
|
||||||
Loans retained
|
408,559
|
|
|
429,975
|
|
|
475,549
|
|
|||
Loans held-for-sale and loans at fair value
(a)
|
18,006
|
|
|
17,187
|
|
|
16,663
|
|
|||
Total loans
|
426,565
|
|
|
447,162
|
|
|
492,212
|
|
|||
Deposits
|
413,911
|
|
|
382,678
|
|
|
363,645
|
|
|||
Equity
|
43,000
|
|
|
41,000
|
|
|
43,000
|
|
|||
|
|
|
|
|
|
||||||
Headcount
|
159,467
|
|
|
161,443
|
|
|
143,226
|
|
Selected metrics
|
|
|
|
|
|||||||
As of or for the year ended December 31,
|
|
|
|
|
|
||||||
(in millions, except headcount and ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Credit data and quality statistics
|
|
|
|
|
|
||||||
Net charge-offs
(b)
|
$
|
9,280
|
|
|
$
|
11,815
|
|
|
$
|
21,943
|
|
Nonaccrual loans:
|
|
|
|
|
|
||||||
Nonaccrual loans retained
|
9,114
|
|
|
7,354
|
|
|
8,770
|
|
|||
Nonaccrual loans held-for-sale and loans at fair value
|
39
|
|
|
103
|
|
|
145
|
|
|||
Total nonaccrual loans
(c)(d)(e)(f)
|
9,153
|
|
|
7,457
|
|
|
8,915
|
|
|||
Nonperforming assets
(c)(d)(e)(f)
|
9,830
|
|
|
8,292
|
|
|
10,268
|
|
|||
Allowance for loan losses
|
17,752
|
|
|
23,256
|
|
|
27,487
|
|
|||
Net charge-off rate
(b)(g)
|
2.27
|
%
|
|
2.75
|
%
|
|
4.61
|
%
|
|||
Net charge-off rate,
excluding PCI loans
(b)(g)
|
2.68
|
|
|
3.27
|
|
|
5.50
|
|
|||
Allowance for loan losses to period-end loans retained
|
4.41
|
|
|
5.46
|
|
|
6.08
|
|
|||
Allowance for loan losses to period-end loans retained,
excluding PCI loans
(h)
|
3.51
|
|
|
4.87
|
|
|
5.94
|
|
|||
Allowance for loan losses to nonaccrual loans retained, excluding credit card
(c)(f)(h)
|
72
|
|
|
143
|
|
|
131
|
|
|||
Nonaccrual loans to total period-end loans, excluding credit card
(f)
|
3.12
|
|
|
2.44
|
|
|
2.69
|
|
|||
Nonaccrual loans to total period-end loans, excluding credit card and PCI loans
(c)(f)
|
3.91
|
|
|
3.10
|
|
|
3.44
|
|
|||
Business metrics
|
|
|
|
|
|
||||||
Number of:
|
|
|
|
|
|
||||||
Branches
|
5,614
|
|
|
5,508
|
|
|
5,268
|
|
|||
ATMs
|
18,699
|
|
|
17,235
|
|
|
16,145
|
|
|||
Active online customers (in thousands)
|
31,114
|
|
|
29,749
|
|
|
28,708
|
|
|||
Active mobile customers (in thousands)
|
12,359
|
|
|
8,203
|
|
|
4,873
|
|
(a)
|
Predominantly consists of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets.
|
(b)
|
Net charge-offs and net charge-off rates for the year ended December 31, 2012, included $800 million of charge-offs, recorded in accordance with regulatory guidance. Excluding these charges-offs, net charge-offs for the year ended December 31, 2012, would have been $8.5 billion and excluding these charge-offs and PCI loans, the net charge-off rate for the year ended December 31, 2012, would have been 2.45%. For further information, see Consumer Credit Portfolio on pages
138–149
of this Annual Report.
|
(c)
|
Excludes PCI loans. Because the Firm is recognizing interest income on each pool of PCI loans, they are all considered to be performing.
|
(d)
|
Certain mortgages originated with the intent to sell are classified as trading assets on the Consolidated Balance Sheets.
|
(e)
|
At December 31, 2012, 2011 and 2010, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $10.6 billion, $11.5 billion, and $9.4 billion, respectively, that are 90 or more days past due; (2) real estate owned insured by U.S. government agencies of $1.6 billion, $954 million, and $1.9 billion, respectively; and (3) student loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) of $525 million, $551 million, and $625 million, respectively, that are 90 or more days past due. These amounts were excluded from nonaccrual loans as reimbursement of insured amounts is proceeding normally.
|
(f)
|
Nonaccrual loans included $3.0 billion of loans at December 31, 2012, based upon regulatory guidance. For further information, see Consumer Credit Portfolio on pages
138–149
of this Annual Report.
|
(g)
|
Loans held-for-sale and loans accounted for at fair value were excluded when calculating the net charge-off rate.
|
(h)
|
An allowance for loan losses of $5.7 billion at December 31, 2012 and 2011, and $4.9 billion at December 31, 2010 was recorded for PCI loans; these amounts were also excluded from the applicable ratios.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
81
|
Selected income statement data
|
|
|
|
|
|||||||
Year ended December 31,
|
|
||||||||||
(in millions, except ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Revenue
|
|
|
|
|
|
||||||
Lending- and deposit-related fees
|
$
|
3,068
|
|
|
$
|
3,160
|
|
|
$
|
3,025
|
|
Asset management, administration and commissions
|
1,637
|
|
|
1,559
|
|
|
1,390
|
|
|||
Card income
|
1,353
|
|
|
2,024
|
|
|
1,953
|
|
|||
All other income
|
481
|
|
|
467
|
|
|
484
|
|
|||
Noninterest revenue
|
6,539
|
|
|
7,210
|
|
|
6,852
|
|
|||
Net interest income
|
10,673
|
|
|
10,808
|
|
|
10,884
|
|
|||
Total net revenue
|
17,212
|
|
|
18,018
|
|
|
17,736
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
311
|
|
|
419
|
|
|
630
|
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
11,453
|
|
|
11,243
|
|
|
10,762
|
|
|||
Income before income tax expense
|
5,448
|
|
|
6,356
|
|
|
6,344
|
|
|||
Net income
|
$
|
3,263
|
|
|
$
|
3,796
|
|
|
$
|
3,630
|
|
Overhead ratio
|
67
|
%
|
|
62
|
%
|
|
61
|
%
|
|||
Overhead ratio, excluding core deposit intangibles
(a)
|
65
|
|
|
61
|
|
|
59
|
|
(a)
|
Consumer & Business Banking (“CBB”) uses the overhead ratio (excluding the amortization of core deposit intangibles (“CDI”)), a non-GAAP financial measure, to evaluate the underlying expense trends of the business. Including CDI amortization expense in the overhead ratio calculation would result in a higher overhead ratio in the earlier years and a lower overhead ratio in later years; this method would therefore result in an improving overhead ratio over time, all things remaining equal. This non-GAAP ratio excluded CBB’s CDI amortization expense related to prior business combination transactions of $200 million, $238 million, and $276 million for the years ended December 31,
2012, 2011 and 2010
, respectively.
|
82
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Selected income statement data
|
|||||||||||
Year ended December 31,
|
|
|
|
|
|
||||||
(in millions, except ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Revenue
|
|
|
|
|
|
||||||
Mortgage fees and related income
|
$
|
8,680
|
|
|
$
|
2,714
|
|
|
$
|
3,855
|
|
All other income
|
475
|
|
|
490
|
|
|
528
|
|
|||
Noninterest revenue
|
9,155
|
|
|
3,204
|
|
|
4,383
|
|
|||
Net interest income
|
4,808
|
|
|
5,324
|
|
|
6,336
|
|
|||
Total net revenue
|
13,963
|
|
|
8,528
|
|
|
10,719
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
(490
|
)
|
|
3,580
|
|
|
8,289
|
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
9,121
|
|
|
8,256
|
|
|
5,766
|
|
|||
Income/(loss) before income tax expense/(benefit)
|
5,332
|
|
|
(3,308
|
)
|
|
(3,336
|
)
|
|||
Net income/(loss)
|
$
|
3,341
|
|
|
$
|
(2,138
|
)
|
|
$
|
(1,924
|
)
|
|
|
|
|
|
|
||||||
Overhead ratio
|
65
|
%
|
|
97
|
%
|
|
54
|
%
|
JPMorgan Chase & Co./2012 Annual Report
|
|
83
|
Functional results
|
|||||||||||
Year ended December 31,
|
|
|
|
|
|
||||||
(in millions, except ratios)
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Mortgage Production
|
|
|
|
|
|
||||||
Production revenue
|
$
|
5,783
|
|
|
$
|
3,395
|
|
|
$
|
3,440
|
|
Production-related net interest & other income
|
787
|
|
|
840
|
|
|
869
|
|
|||
Production-related revenue, excluding repurchase losses
|
6,570
|
|
|
4,235
|
|
|
4,309
|
|
|||
Production expense
(a)
|
2,747
|
|
|
1,895
|
|
|
1,613
|
|
|||
Income, excluding repurchase losses
|
3,823
|
|
|
2,340
|
|
|
2,696
|
|
|||
Repurchase losses
|
(272
|
)
|
|
(1,347
|
)
|
|
(2,912
|
)
|
|||
Income/(loss) before income tax expense/(benefit)
|
3,551
|
|
|
993
|
|
|
(216
|
)
|
|||
|
|
|
|
|
|
||||||
Mortgage Servicing
|
|
|
|
|
|
||||||
Loan servicing revenue
|
3,772
|
|
|
4,134
|
|
|
4,575
|
|
|||
Servicing-related net interest & other income
|
407
|
|
|
390
|
|
|
433
|
|
|||
Servicing-related revenue
|
4,179
|
|
|
4,524
|
|
|
5,008
|
|
|||
MSR asset modeled amortization
|
(1,222
|
)
|
|
(1,904
|
)
|
|
(2,384
|
)
|
|||
Default servicing expense
|
3,707
|
|
|
3,814
|
|
|
1,747
|
|
|||
Core servicing expense
|
1,033
|
|
|
1,031
|
|
|
837
|
|
|||
Income/(loss), excluding MSR risk management
|
(1,783
|
)
|
|
(2,225
|
)
|
|
40
|
|
|||
MSR risk management, including related net interest income/(expense)
|
616
|
|
|
(1,572
|
)
|
|
1,151
|
|
|||
Income/(loss) before income tax expense/(benefit)
|
(1,167
|
)
|
|
(3,797
|
)
|
|
1,191
|
|
|||
Real Estate Portfolios
|
|
|
|
|
|
||||||
Noninterest revenue
|
43
|
|
|
38
|
|
|
115
|
|
|||
Net interest income
|
4,049
|
|
|
4,554
|
|
|
5,432
|
|
|||
Total net revenue
|
4,092
|
|
|
4,592
|
|
|
5,547
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
(509
|
)
|
|
3,575
|
|
|
8,231
|
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
1,653
|
|
|
1,521
|
|
|
1,627
|
|
|||
Income/(loss) before income tax expense/(benefit)
|
2,948
|
|
|
(504
|
)
|
|
(4,311
|
)
|
|||
Mortgage Banking income/(loss) before income tax expense/(benefit)
|
$
|
5,332
|
|
|
$
|
(3,308
|
)
|
|
$
|
(3,336
|
)
|
Mortgage Banking net income/(loss)
|
$
|
3,341
|
|
|
$
|
(2,138
|
)
|
|
$
|
(1,924
|
)
|
|
|
|
|
|
|
||||||
Overhead ratios
|
|
|
|
|
|
||||||
Mortgage Production
|
43
|
%
|
|
65
|
%
|
|
111
|
%
|
|||
Mortgage Servicing
|
133
|
|
|
462
|
|
|
68
|
|
|||
Real Estate Portfolios
|
40
|
|
|
33
|
|
|
29
|
|
(a)
|
Includes credit costs associated with Production.
|
Selected income statement data
|
|||||||||||
Year ended December 31,
|
|
|
|
|
|
||||||
(in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Supplemental mortgage fees and related income details
|
|
|
|
|
|
||||||
Net production revenue:
|
|
|
|
|
|
||||||
Production revenue
|
$
|
5,783
|
|
|
$
|
3,395
|
|
|
$
|
3,440
|
|
Repurchase losses
|
(272
|
)
|
|
(1,347
|
)
|
|
(2,912
|
)
|
|||
Net production revenue
|
5,511
|
|
|
2,048
|
|
|
528
|
|
|||
Net mortgage servicing revenue:
|
|
|
|
|
|
|
|||||
Operating revenue:
|
|
|
|
|
|
|
|||||
Loan servicing revenue
|
3,772
|
|
|
4,134
|
|
|
4,575
|
|
|||
Changes in MSR asset fair value due to modeled amortization
|
(1,222
|
)
|
|
(1,904
|
)
|
|
(2,384
|
)
|
|||
Total operating revenue
|
2,550
|
|
|
2,230
|
|
|
2,191
|
|
|||
Risk management:
|
|
|
|
|
|
||||||
Changes in MSR asset fair value due to market interest rates
|
(587
|
)
|
|
(5,390
|
)
|
|
(2,224
|
)
|
|||
Other changes in MSR asset fair value due to inputs or assumptions in model
(a)
|
(46
|
)
|
|
(1,727
|
)
|
|
(44
|
)
|
|||
Changes in derivative fair value and other
|
1,252
|
|
|
5,553
|
|
|
3,404
|
|
|||
Total risk management
|
619
|
|
|
(1,564
|
)
|
|
1,136
|
|
|||
Total net mortgage servicing revenue
|
3,169
|
|
|
666
|
|
|
3,327
|
|
|||
Mortgage fees and related income
|
$
|
8,680
|
|
|
$
|
2,714
|
|
|
$
|
3,855
|
|
(a)
|
Represents the aggregate impact of changes in model inputs and assumptions such as costs to service, home prices, mortgage spreads, ancillary income, and assumptions used to derive prepayment speeds, as well as changes to the valuation models themselves.
|
84
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Net production revenue
includes net gains or losses on originations and sales of prime and subprime mortgage loans, other production-related fees and losses related to the repurchase of previously-sold loans.
|
||||
Net mortgage servicing revenue
includes the following components:
|
||||
(a) Operating revenue comprises:
|
||||
– gross income earned from servicing third-party mortgage loans including stated service fees, excess service fees and other ancillary fees; and
|
||||
– modeled MSR asset amortization (or time decay).
|
||||
(b) Risk management comprises:
|
||||
– changes in MSR asset fair value due to market-based inputs such as interest rates, as well as updates to assumptions used in the MSR valuation model; and
|
||||
– changes in derivative fair value and other, which represents changes in the fair value of derivative instruments used to offset the impact of changes in interest rates to the MSR valuation model.
|
||||
Mortgage origination channels comprise the following:
|
||||
Retail
– Borrowers who buy or refinance a home through direct contact with a mortgage banker employed by the Firm using a branch office, the Internet or by phone. Borrowers are frequently referred to a mortgage banker by a banker in a Chase branch, real estate brokers, home builders or other third parties.
|
||||
Wholesale
– Third-party mortgage brokers refer loan application packages to the Firm. The Firm then underwrites and funds the loan. Brokers are independent loan originators that specialize in counseling applicants on available home financing options, but do not provide funding for loans. Chase materially eliminated broker-originated loans in 2008, with the exception of a small number of loans guaranteed by the U.S. Department of Agriculture under its Section 502 Guaranteed Loan program that serves low-and-moderate income families in small rural communities.
|
||||
Correspondent
– Banks, thrifts, other mortgage banks and other financial institutions that sell closed loans to the Firm.
|
||||
Correspondent negotiated transactions (“CNTs”)
– Mid-to-large-sized mortgage lenders, banks and bank-owned mortgage companies sell servicing to the Firm on an as-originated basis (excluding sales of bulk servicing transactions). These transactions supplement traditional production channels and provide growth opportunities in the servicing portfolio in periods of stable and rising interest rates.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
85
|
86
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Mortgage Production and Servicing
|
|
|
|||||||||
Selected metrics
|
|
||||||||||
As of or for the year ended December 31,
|
|
|
|
|
|
||||||
(in millions, except ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Selected balance sheet data
|
|
|
|
|
|
||||||
Period-end loans:
|
|
|
|
|
|
||||||
Prime mortgage, including option ARMs
(a)
|
$
|
17,290
|
|
|
$
|
16,891
|
|
|
$
|
14,186
|
|
Loans held-for-sale and loans at fair value
(b)
|
18,801
|
|
|
12,694
|
|
|
14,863
|
|
|||
Average loans:
|
|
|
|
|
|
||||||
Prime mortgage, including option ARMs
(a)
|
17,335
|
|
|
14,580
|
|
|
13,422
|
|
|||
Loans held-for-sale and loans at fair value
(b)
|
17,573
|
|
|
16,354
|
|
|
15,395
|
|
|||
Average assets
|
59,837
|
|
|
59,891
|
|
|
57,778
|
|
|||
Repurchase liability (period-end)
|
2,530
|
|
|
3,213
|
|
|
3,000
|
|
|||
Credit data and quality statistics
|
|
|
|
|
|
||||||
Net charge-offs:
|
|
|
|
|
|
||||||
Prime mortgage, including option ARMs
|
19
|
|
|
5
|
|
|
41
|
|
|||
Net charge-off rate:
|
|
|
|
|
|
||||||
Prime mortgage, including option ARMs
|
0.11
|
%
|
|
0.03
|
%
|
|
0.31
|
%
|
|||
30+ day delinquency rate
(c)
|
3.05
|
|
|
3.15
|
|
|
3.44
|
|
|||
Nonperforming assets
(d)
|
$
|
638
|
|
|
$
|
716
|
|
|
$
|
729
|
|
(a)
|
Predominantly represents prime loans repurchased from Government National Mortgage Association (“Ginnie Mae”) pools, which are insured by U.S. government agencies. See further discussion of loans repurchased from Ginnie Mae pools in Mortgage repurchase liability on pages
111–115
of this Annual Report.
|
(b)
|
Predominantly consists of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets on the Consolidated Balance Sheets.
|
(c)
|
At December 31, 2012, 2011 and 2010, excluded mortgage loans insured by U.S. government agencies of $11.8 billion, $12.6 billion, and $10.3 billion, respectively, that are 30 or more days past due. These amounts were excluded as reimbursement of insured amounts is proceeding normally. For further discussion, see Note 14 on pages
250–275
of this Annual Report which summarizes loan delinquency information.
|
(d)
|
At December 31, 2012, 2011 and 2010, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $10.6 billion, $11.5 billion, and $9.4 billion, respectively, that are 90 or more days past due; and (2) real estate owned insured by U.S. government agencies of $1.6 billion, $954 million, and $1.9 billion, respectively. These amounts were excluded from nonaccrual loans as reimbursement of insured amounts is proceeding normally. For further discussion, see Note 14 on pages
250–275
of this Annual Report which summarizes loan delinquency information.
|
Selected metrics
|
|
|
|
|
|
||||||
As of or for the year ended
December 31,
|
|
|
|
|
|
||||||
(in millions, except ratios and where otherwise noted)
|
2012
|
|
2011
|
|
2010
|
||||||
Business metrics (in billions)
|
|
|
|
|
|
||||||
Origination volume by channel
|
|
|
|
|
|
||||||
Retail
|
$
|
101.4
|
|
|
$
|
87.2
|
|
|
$
|
68.8
|
|
Wholesale
(a)
|
0.3
|
|
|
0.5
|
|
|
1.3
|
|
|||
Correspondent
(a)
|
73.1
|
|
|
52.1
|
|
|
75.3
|
|
|||
CNT (negotiated transactions)
|
6.0
|
|
|
5.8
|
|
|
10.2
|
|
|||
Total origination volume
|
$
|
180.8
|
|
|
$
|
145.6
|
|
|
$
|
155.6
|
|
Application volume by channel
|
|
|
|
|
|
||||||
Retail
|
$
|
164.5
|
|
|
$
|
137.2
|
|
|
$
|
115.1
|
|
Wholesale
(a)
|
0.7
|
|
|
1.0
|
|
|
2.4
|
|
|||
Correspondent
(a)
|
100.5
|
|
|
66.5
|
|
|
97.3
|
|
|||
Total application volume
|
$
|
265.7
|
|
|
$
|
204.7
|
|
|
$
|
214.8
|
|
Third-party mortgage loans serviced (period-end)
|
$
|
859.4
|
|
|
$
|
902.2
|
|
|
$
|
967.5
|
|
Third-party mortgage loans serviced (average)
|
847.0
|
|
|
937.6
|
|
|
1,037.6
|
|
|||
MSR net carrying value (period-end)
|
7.6
|
|
|
7.2
|
|
|
13.6
|
|
|||
Ratio of MSR net carrying value (period-end) to third-party mortgage loans serviced (period-end)
|
0.88
|
%
|
|
0.80
|
%
|
|
1.41
|
%
|
|||
Ratio of loan servicing-related revenue to third-party mortgage loans serviced (average)
|
0.46
|
|
|
0.44
|
|
|
0.44
|
|
|||
MSR revenue multiple
(b)
|
1.91x
|
|
|
1.82x
|
|
|
3.20x
|
|
(a)
|
Includes rural housing loans sourced through brokers and correspondents, which are underwritten and closed with pre-funding loan approval from the U.S. Department of Agriculture Rural Development, which acts as the guarantor in the transaction.
|
(b)
|
Represents the ratio of MSR net carrying value (period-end) to third-party mortgage loans serviced (period-end) divided by the ratio of loan servicing-related revenue to third-party mortgage loans serviced (average).
|
JPMorgan Chase & Co./2012 Annual Report
|
|
87
|
Real Estate Portfolios
|
|
|
|||||||||
Selected metrics
|
|
|
|
|
|
||||||
As of or for the year ended December 31, (in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Loans, excluding PCI
|
|
|
|
|
|
||||||
Period-end loans owned:
|
|
|
|
|
|
||||||
Home equity
|
$
|
67,385
|
|
|
$
|
77,800
|
|
|
$
|
88,385
|
|
Prime mortgage, including option ARMs
|
41,316
|
|
|
44,284
|
|
|
49,768
|
|
|||
Subprime mortgage
|
8,255
|
|
|
9,664
|
|
|
11,287
|
|
|||
Other
|
633
|
|
|
718
|
|
|
857
|
|
|||
Total period-end loans owned
|
$
|
117,589
|
|
|
$
|
132,466
|
|
|
$
|
150,297
|
|
Average loans owned:
|
|
|
|
|
|
||||||
Home equity
|
$
|
72,674
|
|
|
$
|
82,886
|
|
|
$
|
94,835
|
|
Prime mortgage, including option ARMs
|
42,311
|
|
|
46,971
|
|
|
53,431
|
|
|||
Subprime mortgage
|
8,947
|
|
|
10,471
|
|
|
12,729
|
|
|||
Other
|
675
|
|
|
773
|
|
|
954
|
|
|||
Total average loans owned
|
$
|
124,607
|
|
|
$
|
141,101
|
|
|
$
|
161,949
|
|
PCI loans
|
|
|
|
|
|
||||||
Period-end loans owned:
|
|
|
|
|
|
||||||
Home equity
|
$
|
20,971
|
|
|
$
|
22,697
|
|
|
$
|
24,459
|
|
Prime mortgage
|
13,674
|
|
|
15,180
|
|
|
17,322
|
|
|||
Subprime mortgage
|
4,626
|
|
|
4,976
|
|
|
5,398
|
|
|||
Option ARMs
|
20,466
|
|
|
22,693
|
|
|
25,584
|
|
|||
Total period-end loans owned
|
$
|
59,737
|
|
|
$
|
65,546
|
|
|
$
|
72,763
|
|
Average loans owned:
|
|
|
|
|
|
||||||
Home equity
|
$
|
21,840
|
|
|
$
|
23,514
|
|
|
$
|
25,455
|
|
Prime mortgage
|
14,400
|
|
|
16,181
|
|
|
18,526
|
|
|||
Subprime mortgage
|
4,777
|
|
|
5,170
|
|
|
5,671
|
|
|||
Option ARMs
|
21,545
|
|
|
24,045
|
|
|
27,220
|
|
|||
Total average loans owned
|
$
|
62,562
|
|
|
$
|
68,910
|
|
|
$
|
76,872
|
|
Total Real Estate Portfolios
|
|
|
|
|
|
||||||
Period-end loans owned:
|
|
|
|
|
|
||||||
Home equity
|
$
|
88,356
|
|
|
$
|
100,497
|
|
|
$
|
112,844
|
|
Prime mortgage, including option ARMs
|
75,456
|
|
|
82,157
|
|
|
92,674
|
|
|||
Subprime mortgage
|
12,881
|
|
|
14,640
|
|
|
16,685
|
|
|||
Other
|
633
|
|
|
718
|
|
|
857
|
|
|||
Total period-end loans owned
|
$
|
177,326
|
|
|
$
|
198,012
|
|
|
$
|
223,060
|
|
Average loans owned:
|
|
|
|
|
|
||||||
Home equity
|
$
|
94,514
|
|
|
$
|
106,400
|
|
|
$
|
120,290
|
|
Prime mortgage, including option ARMs
|
78,256
|
|
|
87,197
|
|
|
99,177
|
|
|||
Subprime mortgage
|
13,724
|
|
|
15,641
|
|
|
18,400
|
|
|||
Other
|
675
|
|
|
773
|
|
|
954
|
|
|||
Total average loans owned
|
$
|
187,169
|
|
|
$
|
210,011
|
|
|
$
|
238,821
|
|
Average assets
|
$
|
175,712
|
|
|
$
|
197,096
|
|
|
$
|
226,961
|
|
Home equity origination volume
|
1,420
|
|
|
1,127
|
|
|
1,203
|
|
(a)
|
Net charge-offs and net charge-off rates for the year ended December 31, 2012, included $744 million of charge-offs related to regulatory guidance. Excluding these charges-offs, net charge-offs for the year ended December 31, 2012, would have been $1.8 billion, $410 million and $416 million for the home equity, prime mortgage, including option ARMs, and subprime mortgage portfolios, respectively. Net charge-off rates for the same period, excluding these charge-offs and PCI loans, would have been 2.41%, 0.97% and 4.65% for the home equity, prime mortgage, including option ARMs, and subprime mortgage portfolios, respectively. For further information, see Consumer Credit Portfolio on pages
138–149
of this Annual Report.
|
(b)
|
The delinquency rate for PCI loans was 20.14%, 23.30%, and 28.20% at December 31, 2012, 2011 and 2010, respectively.
|
(c)
|
Excludes PCI loans. Because the Firm is recognizing interest income on each pool of PCI loans, they are all considered to be performing.
|
(d)
|
Nonperforming assets at December 31, 2012, included loans based upon regulatory guidance. For further information, see Consumer Credit Portfolio on pages
138–149
of this Annual Report.
|
88
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Selected income statement data
|
|||||||||||
Year ended December 31,
(in millions, except ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Revenue
|
|
|
|
|
|
||||||
Card income
|
$
|
4,092
|
|
|
$
|
4,127
|
|
|
$
|
3,514
|
|
All other income
|
1,009
|
|
|
765
|
|
|
764
|
|
|||
Noninterest revenue
|
5,101
|
|
|
4,892
|
|
|
4,278
|
|
|||
Net interest income
|
13,669
|
|
|
14,249
|
|
|
16,194
|
|
|||
Total net revenue
|
18,770
|
|
|
19,141
|
|
|
20,472
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
3,953
|
|
|
3,621
|
|
|
8,570
|
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
8,216
|
|
|
8,045
|
|
|
7,178
|
|
|||
Income before income tax expense
|
6,601
|
|
|
7,475
|
|
|
4,724
|
|
|||
Net income
|
$
|
4,007
|
|
|
$
|
4,544
|
|
|
$
|
2,872
|
|
|
|
|
|
|
|
||||||
Overhead ratio
|
44
|
%
|
|
42
|
%
|
|
35
|
%
|
JPMorgan Chase & Co./2012 Annual Report
|
|
89
|
Selected metrics
|
|||||||||||
As of or for the year ended December 31,
(in millions, except ratios and where otherwise noted)
|
2012
|
|
2011
|
|
2010
|
||||||
Selected balance sheet data (period-end)
|
|
|
|
|
|
||||||
Loans:
|
|
|
|
|
|
||||||
Credit Card
|
$
|
127,993
|
|
|
$
|
132,277
|
|
|
$
|
137,676
|
|
Auto
|
49,913
|
|
|
47,426
|
|
|
48,367
|
|
|||
Student
|
11,558
|
|
|
13,425
|
|
|
14,454
|
|
|||
Total loans
|
$
|
189,464
|
|
|
$
|
193,128
|
|
|
$
|
200,497
|
|
Selected balance sheet
data (average)
|
|
|
|
|
|
||||||
Total assets
|
$
|
197,661
|
|
|
$
|
201,162
|
|
|
$
|
213,041
|
|
Loans:
|
|
|
|
|
|
||||||
Credit Card
|
125,464
|
|
|
128,167
|
|
|
144,367
|
|
|||
Auto
|
48,413
|
|
|
47,034
|
|
|
47,603
|
|
|||
Student
|
12,507
|
|
|
13,986
|
|
|
15,945
|
|
|||
Total loans
|
$
|
186,384
|
|
|
$
|
189,187
|
|
|
$
|
207,915
|
|
Business metrics
|
|
|
|
|
|
||||||
Credit Card, excluding Commercial Card
|
|
|
|
|
|
||||||
Sales volume (in billions)
|
$
|
381.1
|
|
|
$
|
343.7
|
|
|
$
|
313.0
|
|
New accounts opened
|
6.7
|
|
|
8.8
|
|
|
11.3
|
|
|||
Open accounts
|
64.5
|
|
|
65.2
|
|
|
90.7
|
|
|||
Accounts with sales activity
|
30.6
|
|
|
30.7
|
|
|
39.9
|
|
|||
% of accounts acquired online
|
51
|
%
|
|
32
|
%
|
|
15
|
%
|
|||
Merchant Services
|
|
|
|
|
|
||||||
Merchant processing volume (in billions)
|
$
|
655.2
|
|
|
$
|
553.7
|
|
|
$
|
469.3
|
|
Total transactions
(in billions)
|
29.5
|
|
|
24.4
|
|
|
20.5
|
|
|||
Auto & Student
|
|
|
|
|
|
||||||
Origination volume
(in billions)
|
|
|
|
|
|
||||||
Auto
|
$
|
23.4
|
|
|
$
|
21.0
|
|
|
$
|
23.0
|
|
Student
|
0.2
|
|
|
0.3
|
|
|
1.9
|
|
The following are brief descriptions of selected business metrics within Card, Merchant Services & Auto.
|
Card Services
includes the Credit Card and Merchant Services businesses.
|
Merchant Services
is a business that processes transactions for merchants.
|
Total transactions
– Number of transactions and authorizations processed for merchants.
|
Commercial Card
provides a wide range of payment services to corporate and public sector clients worldwide through the commercial card products. Services include procurement, corporate travel and entertainment, expense management services and business-to-business payment solutions.
|
Sales volume
- Dollar amount of cardmember purchases, net of returns.
|
Open accounts
– Cardmember accounts with charging privileges.
|
Auto origination volume
- Dollar amount of auto loans and leases originated.
|
90
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Selected metrics
|
||||||||||||
As of or for the year ended December 31,
(in millions, except ratios) |
|
2012
|
|
2011
|
|
2010
|
||||||
Credit data and quality statistics
|
|
|
|
|
|
|
||||||
Net charge-offs:
|
|
|
|
|
|
|
||||||
Credit Card
|
|
$
|
4,944
|
|
|
$
|
6,925
|
|
|
$
|
14,037
|
|
Auto
(a)
|
|
188
|
|
|
152
|
|
|
298
|
|
|||
Student
|
|
377
|
|
|
434
|
|
|
387
|
|
|||
Total net charge-offs
|
|
$
|
5,509
|
|
|
$
|
7,511
|
|
|
$
|
14,722
|
|
Net charge-off rate:
|
|
|
|
|
|
|
||||||
Credit Card
(b)
|
|
3.95
|
%
|
|
5.44
|
%
|
|
9.73
|
%
|
|||
Auto
(a)
|
|
0.39
|
|
|
0.32
|
|
|
0.63
|
|
|||
Student
(c)
|
|
3.01
|
|
|
3.10
|
|
|
2.61
|
|
|||
Total net charge-off rate
|
|
2.96
|
|
|
3.99
|
|
|
7.12
|
|
|||
Delinquency rates
|
|
|
|
|
|
|
||||||
30+ day delinquency rate:
|
|
|
|
|
|
|
||||||
Credit Card
(d)
|
|
2.10
|
|
|
2.81
|
|
|
4.14
|
|
|||
Auto
|
|
1.25
|
|
|
1.13
|
|
|
1.22
|
|
|||
Student
(e)
|
|
2.13
|
|
|
1.78
|
|
|
1.53
|
|
|||
Total 30+ day delinquency rate
|
|
1.87
|
|
|
2.32
|
|
|
3.23
|
|
|||
90+ day delinquency rate – Credit Card
(d)
|
|
1.02
|
|
|
1.44
|
|
|
2.25
|
|
|||
Nonperforming assets
(a)(f)
|
|
$
|
265
|
|
|
$
|
228
|
|
|
$
|
269
|
|
Allowance for loan losses:
|
|
|
|
|
|
|
||||||
Credit Card
|
|
$
|
5,501
|
|
|
$
|
6,999
|
|
|
$
|
11,034
|
|
Auto & Student
|
|
954
|
|
|
1,010
|
|
|
899
|
|
|||
Total allowance for loan losses
|
|
$
|
6,455
|
|
|
$
|
8,009
|
|
|
$
|
11,933
|
|
Allowance for loan losses to period-end loans:
|
|
|
|
|
|
|
|
|||||
Credit Card
(d)
|
|
4.30
|
%
|
|
5.30
|
%
|
|
8.14
|
%
|
|||
Auto & Student
|
|
1.55
|
|
|
1.66
|
|
|
1.43
|
|
|||
Total allowance for loan losses to period-end loans
|
|
3.41
|
|
|
4.15
|
|
|
6.02
|
|
(a)
|
Net charge-offs and net charge-off rates for the year ended December 31, 2012, included
$53 million
of charge-offs related to regulatory guidance. Excluding these charge-offs, net charge-offs for the year ended December 31, 2012, would have been
$135 million
, and the net charge-off rate would have been
0.28%
. Nonperforming assets at
December 31, 2012
, included
$51 million
of loans based upon regulatory guidance.
|
(b)
|
Average credit card loans included loans held-for-sale of
$433 million
,
$833 million
and
$148 million
for the years ended December 31, 2012, 2011 and 2010, respectively. These amounts are excluded when calculating the net charge-off rate.
|
(c)
|
Average student loans included loans held-for-sale of
$1.1 billion
for the year ended
December 31, 2010
. There were no loans held-for-sale for all other periods. This amount is excluded when calculating the net charge-off rate.
|
(d)
|
Period-end credit card loans included loans held-for-sale of
$102 million
and
$2.2 billion
at
December 31, 2011
and
2010
, respectively. These amounts are excluded when calculating delinquency rates and the allowance for loan losses to period-end loans. There were no loans held-for-sale at
December 31, 2012
. No allowance for loan losses was recorded for these loans.
|
(e)
|
Excluded student loans insured by U.S. government agencies under the FFELP of
$894 million
,
$989 million
and
$1.1 billion
at
December 31, 2012
,
2011
and
2010
, respectively, that are 30 or more days past
|
(f)
|
Nonperforming assets excluded student loans insured by U.S. government agencies under the FFELP of
$525 million
,
$551 million
and
$625 million
at
December 31, 2012
,
2011
and
2010
, respectively, that are 90 or more days past due. These amounts are excluded as reimbursement of insured amounts is proceeding normally.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
91
|
CORPORATE & INVESTMENT BANK
|
The Corporate & Investment Bank (“CIB”) 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, government and municipal entities. Within Banking, the CIB 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. Also included in Banking is Treasury Services, which includes transaction services, comprised primarily of cash management and liquidity solutions, and trade finance products. The Markets & Investor Services segment of the CIB is a global market-maker in cash securities and derivative instruments, and also offers sophisticated risk management solutions, prime brokerage, and research. Markets & Investor Services also includes the Securities Services business, a leading global custodian which holds, values, clears and services securities, cash and alternative investments for investors and broker-dealers, and manages depositary receipt programs globally.
|
Selected income statement data
|
|
|
|||||||||
Year ended December 31,
|
|
||||||||||
(in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Revenue
|
|
|
|
|
|
||||||
Investment banking fees
|
$
|
5,769
|
|
|
$
|
5,859
|
|
|
$
|
6,186
|
|
Principal transactions
(a)
|
9,510
|
|
|
8,347
|
|
|
8,474
|
|
|||
Lending- and deposit-related fees
|
1,948
|
|
|
2,098
|
|
|
2,075
|
|
|||
Asset management, administration and commissions
|
4,693
|
|
|
4,955
|
|
|
5,110
|
|
|||
All other income
|
1,184
|
|
|
1,264
|
|
|
1,044
|
|
|||
Noninterest revenue
|
23,104
|
|
|
22,523
|
|
|
22,889
|
|
|||
Net interest income
|
11,222
|
|
|
11,461
|
|
|
10,588
|
|
|||
Total net revenue
(b)
|
34,326
|
|
|
33,984
|
|
|
33,477
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
(479
|
)
|
|
(285
|
)
|
|
(1,247
|
)
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
|
|
|
|
|
||||||
Compensation expense
|
11,313
|
|
|
11,654
|
|
|
12,418
|
|
|||
Noncompensation expense
|
10,537
|
|
|
10,325
|
|
|
10,451
|
|
|||
Total noninterest expense
|
21,850
|
|
|
21,979
|
|
|
22,869
|
|
|||
Income before income tax expense
|
12,955
|
|
|
12,290
|
|
|
11,855
|
|
|||
Income tax expense
|
4,549
|
|
|
4,297
|
|
|
4,137
|
|
|||
Net income
|
$
|
8,406
|
|
|
$
|
7,993
|
|
|
$
|
7,718
|
|
(a)
|
Included DVA on structured notes and derivative liabilities measured at fair value. DVA gains/(losses) were $(930) million, $1.4 billion and $509 million for the years ended December 31, 2012, 2011 and 2010, respectively.
|
(b)
|
Included tax-equivalent adjustments, predominantly due to income tax credits related to affordable housing and alternative energy investments, as well as tax-exempt income from municipal bond investments of $2.0 billion, $1.9 billion and $1.7 billion for the years ended December 31, 2012, 2011 and 2010, respectively.
|
Selected income statement data
|
|
|
|||||||||
Year ended December 31,
|
|
||||||||||
(in millions, except ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Financial ratios
|
|
|
|
|
|
||||||
Return on common equity
(a)
|
18
|
%
|
|
17
|
%
|
|
17
|
%
|
|||
Overhead ratio
|
64
|
|
|
65
|
|
|
68
|
|
|||
Compensation expense as a percentage of total net revenue
(b)
|
33
|
|
|
34
|
|
|
37
|
|
|||
Revenue by business
|
|
|
|
|
|
||||||
Advisory
|
$
|
1,491
|
|
|
$
|
1,792
|
|
|
$
|
1,469
|
|
Equity underwriting
|
1,026
|
|
|
1,181
|
|
|
1,589
|
|
|||
Debt underwriting
|
3,252
|
|
|
2,886
|
|
|
3,128
|
|
|||
Total investment banking fees
|
5,769
|
|
|
5,859
|
|
|
6,186
|
|
|||
Treasury Services
|
4,249
|
|
|
3,841
|
|
|
3,698
|
|
|||
Lending
|
1,331
|
|
|
1,054
|
|
|
811
|
|
|||
Total Banking
|
11,349
|
|
|
10,754
|
|
|
10,695
|
|
|||
Fixed Income Markets
(c)
|
15,412
|
|
|
14,784
|
|
|
14,738
|
|
|||
Equity Markets
|
4,406
|
|
|
4,476
|
|
|
4,582
|
|
|||
Securities Services
|
4,000
|
|
|
3,861
|
|
|
3,683
|
|
|||
Credit Adjustments & Other
(d)(e)
|
(841
|
)
|
|
109
|
|
|
(221
|
)
|
|||
Total Markets & Investor Services
|
22,977
|
|
|
23,230
|
|
|
22,782
|
|
|||
Total net revenue
|
$
|
34,326
|
|
|
$
|
33,984
|
|
|
$
|
33,477
|
|
(a)
|
Return on equity excluding DVA, a non-GAAP financial measure, was 19%, 15% and 16% for the years ended December 31, 2012, 2011 and 2010, respectively.
|
(b)
|
Compensation expense as a percentage of total net revenue excluding DVA, a non-GAAP financial measure, was 32%, 36% and 38% for the years ended December 31, 2012, 2011 and 2010, respectively. In addition, compensation expense as a percent of total net revenue for the year ended December 31, 2010, excluding both DVA and the payroll tax expense related to the U.K. Bank Payroll Tax on certain compensation awarded from December 9, 2009, to April 5, 2010, to relevant banking employees, which is a non-GAAP financial measure, was 36%.
|
(c)
|
Includes results of the synthetic credit portfolio that was transferred from the CIO effective July 2, 2012.
|
(d)
|
Primarily includes credit portfolio credit valuation adjustments (“CVA”) net of associated hedging activities; DVA on structured notes and derivative liabilities; and nonperforming derivative receivable results effective in the first quarter of 2012 and thereafter.
|
(e)
|
Included DVA on structured notes and derivative liabilities measured at fair value. DVA gains/(losses) were $(930) million, $1.4 billion and $509 million for the years ended December 31, 2012, 2011 and 2010, respectively.
|
92
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
93
|
Selected metrics
|
|
|
|
|
|||||||
As of or for the year ended December 31,
|
|
||||||||||
(in millions, except headcount)
|
2012
|
|
2011
|
|
2010
|
||||||
Selected balance sheet data (period-end)
|
|
|
|
|
|
||||||
Assets
|
$
|
876,107
|
|
|
$
|
845,095
|
|
|
$
|
870,631
|
|
Loans:
|
|
|
|
|
|
||||||
Loans retained
(a)
|
109,501
|
|
|
111,099
|
|
|
80,208
|
|
|||
Loans held-for-sale and loans at fair value
|
5,749
|
|
|
3,016
|
|
|
3,851
|
|
|||
Total loans
|
115,250
|
|
|
114,115
|
|
|
84,059
|
|
|||
Equity
|
47,500
|
|
|
47,000
|
|
|
46,500
|
|
|||
Selected balance sheet data (average)
|
|
|
|
|
|
||||||
Assets
|
$
|
854,670
|
|
|
$
|
868,930
|
|
|
$
|
774,295
|
|
Trading assets-debt and equity instruments
|
312,944
|
|
|
348,234
|
|
|
309,383
|
|
|||
Trading assets-derivative receivables
|
74,874
|
|
|
73,200
|
|
|
70,286
|
|
|||
Loans:
|
|
|
|
|
|
||||||
Loans retained
(a)
|
110,100
|
|
|
91,173
|
|
|
77,620
|
|
|||
Loans held-for-sale and loans at fair value
|
3,502
|
|
|
3,221
|
|
|
3,268
|
|
|||
Total loans
|
113,602
|
|
|
94,394
|
|
|
80,888
|
|
|||
Equity
|
47,500
|
|
|
47,000
|
|
|
46,500
|
|
|||
|
|
|
|
|
|
||||||
Headcount
|
52,151
|
|
|
53,557
|
|
|
55,142
|
|
(a)
|
Loans retained includes credit portfolio loans, trade finance loans, other held-for-investment loans and overdrafts.
|
Selected metrics
|
|
|
|
|
|
||||||
As of or for the year ended December 31,
|
|
||||||||||
(in millions, except ratios and where otherwise noted)
|
2012
|
|
2011
|
|
2010
|
||||||
Credit data and quality statistics
|
|
|
|
|
|
||||||
Net charge-offs/(recoveries)
|
$
|
(284
|
)
|
|
$
|
161
|
|
|
$
|
736
|
|
Nonperforming assets:
|
|
|
|
|
|
||||||
Nonaccrual loans:
|
|
|
|
|
|
||||||
Nonaccrual loans retained
(a)(b)
|
535
|
|
|
1,039
|
|
|
3,171
|
|
|||
Nonaccrual loans
held-for-sale and loans at fair value
|
82
|
|
|
166
|
|
|
460
|
|
|||
Total nonaccrual loans
|
617
|
|
|
1,205
|
|
|
3,631
|
|
|||
Derivative receivables
(c)
|
239
|
|
|
293
|
|
|
159
|
|
|||
Assets acquired in loan satisfactions
|
64
|
|
|
79
|
|
|
117
|
|
|||
Total nonperforming assets
|
920
|
|
|
1,577
|
|
|
3,907
|
|
|||
Allowance for credit losses:
|
|
|
|
|
|
||||||
Allowance for loan losses
|
1,300
|
|
|
1,501
|
|
|
1,928
|
|
|||
Allowance for lending-related commitments
|
473
|
|
|
467
|
|
|
498
|
|
|||
Total allowance for credit losses
|
1,773
|
|
|
1,968
|
|
|
2,426
|
|
|||
Net charge-off/(recovery) rate
(a)
|
(0.26
|
)%
|
|
0.18
|
%
|
|
0.95
|
%
|
|||
Allowance for loan losses to period-end loans retained
(a)
|
1.19
|
|
|
1.35
|
|
|
2.40
|
|
|||
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits
(d)
|
2.52
|
|
|
3.06
|
|
|
4.90
|
|
|||
Allowance for loan losses to nonaccrual loans retained
(a)(b)
|
243
|
|
|
144
|
|
|
61
|
|
|||
Nonaccrual loans to total period-end loans
|
0.54
|
|
|
1.06
|
|
|
4.32
|
|
|||
Business metrics
|
|
|
|
|
|
||||||
Assets under custody (“AUC”) by asset class (period-end) in billions:
|
|
|
|
|
|
||||||
Fixed Income
|
$
|
11,745
|
|
|
$
|
10,926
|
|
|
$
|
10,364
|
|
Equity
|
5,637
|
|
|
4,878
|
|
|
4,850
|
|
|||
Other
(e)
|
1,453
|
|
|
1,066
|
|
|
906
|
|
|||
Total AUC
|
$
|
18,835
|
|
|
$
|
16,870
|
|
|
$
|
16,120
|
|
Client deposits and other third party liabilities (average)
(f)
|
$
|
355,766
|
|
|
$
|
318,802
|
|
|
$
|
248,451
|
|
Trade finance loans (period-end)
|
35,783
|
|
|
36,696
|
|
|
21,156
|
|
(a)
|
Loans retained includes credit portfolio loans, trade finance loans, other held-for-investment loans and overdrafts.
|
(b)
|
Allowance for loan losses of $153 million, $263 million and $1.1 billion were held against these nonaccrual loans at December 31, 2012, 2011 and 2010, respectively.
|
(c)
|
Prior to 2012, reported amounts had only included defaulted derivatives; effective in the first quarter of 2012, reported amounts included both defaulted derivatives as well as derivatives that have been risk rated as nonperforming.
|
(d)
|
Management uses allowance for loan losses to period-end loans retained, excluding trade finance and conduits, a non-GAAP financial measure, as a more relevant metric to reflect the allowance coverage of the retained lending portfolio.
|
94
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(e)
|
Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and nonsecurities contracts.
|
(f)
|
Client deposits and other third party liabilities pertain to the Treasury Services and Securities Services businesses, and include deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements) as part of their client cash management program.
|
International metrics
|
|
|
|
|
|||||||
Year ended December 31,
|
|
||||||||||
(in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Total net revenue
(a)
|
|
|
|
|
|
||||||
Europe/Middle East/Africa
|
$
|
10,639
|
|
|
$
|
11,102
|
|
|
$
|
9,740
|
|
Asia/Pacific
|
4,100
|
|
|
4,589
|
|
|
4,775
|
|
|||
Latin America/Caribbean
|
1,524
|
|
|
1,409
|
|
|
1,154
|
|
|||
Total international net revenue
|
16,263
|
|
|
17,100
|
|
|
15,669
|
|
|||
North America
|
18,063
|
|
|
16,884
|
|
|
17,808
|
|
|||
Total net revenue
|
$
|
34,326
|
|
|
$
|
33,984
|
|
|
$
|
33,477
|
|
|
|
|
|
|
|
||||||
Loans (period-end)
(a)
|
|
|
|
|
|
||||||
Europe/Middle East/Africa
|
$
|
30,266
|
|
|
$
|
29,484
|
|
|
$
|
21,072
|
|
Asia/Pacific
|
27,193
|
|
|
27,803
|
|
|
18,251
|
|
|||
Latin America/Caribbean
|
10,220
|
|
|
9,692
|
|
|
5,928
|
|
|||
Total international loans
|
67,679
|
|
|
66,979
|
|
|
45,251
|
|
|||
North America
|
41,822
|
|
|
44,120
|
|
|
34,957
|
|
|||
Total loans
|
$
|
109,501
|
|
|
$
|
111,099
|
|
|
$
|
80,208
|
|
|
|
|
|
|
|
||||||
Client deposits and other third-party liabilities (average)
(a)(b)
|
|
|
|
|
|
||||||
Europe/Middle East/Africa
|
$
|
127,326
|
|
|
$
|
123,920
|
|
|
$
|
102,014
|
|
Asia/Pacific
|
51,180
|
|
|
43,524
|
|
|
32,862
|
|
|||
Latin America/Caribbean
|
11,052
|
|
|
12,625
|
|
|
11,558
|
|
|||
Total international
|
$
|
189,558
|
|
|
$
|
180,069
|
|
|
$
|
146,434
|
|
North America
|
166,208
|
|
|
138,733
|
|
|
102,017
|
|
|||
Total client deposits and other third-party liabilities
|
$
|
355,766
|
|
|
$
|
318,802
|
|
|
$
|
248,451
|
|
|
|
|
|
|
|
||||||
AUC (period-end) (in billions)
(a)
|
|
|
|
|
|
||||||
North America
|
$
|
10,504
|
|
|
$
|
9,735
|
|
|
$
|
9,836
|
|
All other regions
|
8,331
|
|
|
7,135
|
|
|
6,284
|
|
|||
Total AUC
|
$
|
18,835
|
|
|
$
|
16,870
|
|
|
$
|
16,120
|
|
(a)
|
Total net revenue is based primarily on the domicile of the client or location of the trading desk, as applicable. Loans outstanding (excluding loans-held-for-sale and loans carried at fair value), client deposits and AUC are based predominantly on the domicile of the client.
|
(b)
|
Client deposits and other third-party liabilities pertain to the Treasury Services and Securities Services businesses, and include deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements) as part of their client cash management program.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
95
|
COMMERCIAL BANKING
|
Commercial Banking delivers extensive industry knowledge, local
expertise and dedicated service to U.S. and U.S. multinational clients, including corporations, municipalities, financial institutions and non-profit entities with annual revenue generally ranging from $20 million to $2 billion. CB provides financing to real estate investors and owners. Partnering with the Firm’s other businesses, CB provides comprehensive financial solutions, including lending, treasury services, investment banking and asset management to meet its clients’ domestic and international financial needs.
|
Selected income statement data
|
|
|
|
|
|||||||
Year ended December 31,
(in millions, except ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Revenue
|
|
|
|
|
|
||||||
Lending- and deposit-related fees
|
$
|
1,072
|
|
|
$
|
1,081
|
|
|
$
|
1,099
|
|
Asset management, administration and commissions
|
130
|
|
|
136
|
|
|
144
|
|
|||
All other income
(a)
|
1,081
|
|
|
978
|
|
|
957
|
|
|||
Noninterest revenue
|
2,283
|
|
|
2,195
|
|
|
2,200
|
|
|||
Net interest income
|
4,542
|
|
|
4,223
|
|
|
3,840
|
|
|||
Total net revenue
(b)
|
6,825
|
|
|
6,418
|
|
|
6,040
|
|
|||
Provision for credit losses
|
41
|
|
|
208
|
|
|
297
|
|
|||
Noninterest expense
|
|
|
|
|
|
||||||
Compensation expense
(c)
|
1,014
|
|
|
936
|
|
|
863
|
|
|||
Noncompensation expense
(c)
|
1,348
|
|
|
1,311
|
|
|
1,301
|
|
|||
Amortization of intangibles
|
27
|
|
|
31
|
|
|
35
|
|
|||
Total noninterest expense
|
2,389
|
|
|
2,278
|
|
|
2,199
|
|
|||
Income before income tax expense
|
4,395
|
|
|
3,932
|
|
|
3,544
|
|
|||
Income tax expense
|
1,749
|
|
|
1,565
|
|
|
1,460
|
|
|||
Net income
|
$
|
2,646
|
|
|
$
|
2,367
|
|
|
$
|
2,084
|
|
Revenue by product
|
|
|
|
|
|
||||||
Lending
(d)
|
$
|
3,675
|
|
|
$
|
3,455
|
|
|
$
|
2,749
|
|
Treasury services
(d)
|
2,428
|
|
|
2,270
|
|
|
2,632
|
|
|||
Investment banking
|
545
|
|
|
498
|
|
|
466
|
|
|||
Other
|
177
|
|
|
195
|
|
|
193
|
|
|||
Total Commercial Banking revenue
|
$
|
6,825
|
|
|
$
|
6,418
|
|
|
$
|
6,040
|
|
|
|
|
|
|
|
||||||
Investment banking revenue, gross
|
$
|
1,597
|
|
|
$
|
1,421
|
|
|
$
|
1,335
|
|
|
|
|
|
|
|
||||||
Revenue by client segment
|
|
|
|
|
|
||||||
Middle Market Banking
|
$
|
3,334
|
|
|
$
|
3,145
|
|
|
$
|
3,060
|
|
Commercial Term Lending
|
1,194
|
|
|
1,168
|
|
|
1,023
|
|
|||
Corporate Client Banking
|
1,456
|
|
|
1,261
|
|
|
1,154
|
|
|||
Real Estate Banking
|
438
|
|
|
416
|
|
|
460
|
|
|||
Other
|
403
|
|
|
428
|
|
|
343
|
|
|||
Total Commercial Banking revenue
|
$
|
6,825
|
|
|
$
|
6,418
|
|
|
$
|
6,040
|
|
Financial ratios
|
|
|
|
|
|
||||||
Return on common equity
|
28
|
%
|
|
30
|
%
|
|
26
|
%
|
|||
Overhead ratio
|
35
|
|
|
35
|
|
|
36
|
|
(a)
|
CB client revenue from investment banking products and commercial card transactions is included in all other income.
|
(b)
|
Included tax-equivalent adjustments, predominantly due to income tax credits related to equity investments in designated community development entities that provide loans to qualified businesses in low-
|
(c)
|
Effective July 1, 2012, certain Treasury Services product sales staff supporting CB were transferred from CIB to CB. As a result, compensation expense for these sales staff is now reflected in CB’s compensation expense rather than as an allocation from CIB in noncompensation expense. CB’s and CIB’s previously reported headcount, compensation expense and noncompensation expense have been revised to reflect this transfer.
|
(d)
|
Effective
January 1, 2011
, product revenue from commercial card and standby letters of credit transactions was included in lending. For the years ended December 31, 2012 and 2011, the impact of the change was $434 million and $438 million, respectively. For the year ended December 31, 2010, it was reported in treasury services.
|
CB revenue comprises the following:
|
||||
Lending
includes a variety of financing alternatives, which are predominantly provided on a basis secured by receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures, leases, commercial card products and standby letters of credit.
|
||||
Treasury services
includes revenue from a broad range of products and services that enable CB clients to manage payments and receipts, as well as invest and manage funds.
|
||||
Investment banking
includes revenue from a range of products providing CB clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through advisory, equity underwriting, and loan syndications. Revenue from Fixed income and Equity market products available to CB clients is also included. Investment banking revenue, gross, represents total revenue related to investment banking products sold to CB clients.
|
||||
Other
product revenue primarily includes tax-equivalent adjustments generated from Community Development Banking activity and certain income derived from principal transactions.
|
Commercial Banking is divided into four primary client segments for management reporting purposes:
Middle Market Banking, Commercial Term Lending, Corporate Client Banking, and Real Estate Banking.
|
||||
Middle Market Banking
covers corporate, municipal, financial institution and non-profit clients, with annual revenue generally ranging between $20 million and $500 million.
|
||||
Commercial Term Lending
primarily provides term financing to real estate investors/owners for multifamily properties as well as financing office, retail and industrial properties.
|
||||
Corporate Client Banking
covers clients with annual revenue generally ranging between $500 million and $2 billion and focuses on clients that have broader investment banking needs.
|
||||
Real Estate Banking
provides full-service banking to investors and developers of institutional-grade real estate properties.
|
||||
Other
primarily includes lending and investment activity within the Community Development Banking and Chase Capital businesses.
|
96
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
97
|
Selected metrics
|
|
|
|
|
|
||||||
As of or for the year ended December 31, (in millions, except headcount and ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Selected balance sheet data (period-end)
|
|
|
|
|
|
||||||
Total assets
|
$
|
181,502
|
|
|
$
|
158,040
|
|
|
$
|
142,646
|
|
Loans:
|
|
|
|
|
|
||||||
Loans retained
|
126,996
|
|
|
111,162
|
|
|
97,900
|
|
|||
Loans held-for-sale and loans at fair value
|
1,212
|
|
|
840
|
|
|
1,018
|
|
|||
Total loans
|
$
|
128,208
|
|
|
$
|
112,002
|
|
|
$
|
98,918
|
|
Equity
|
9,500
|
|
|
8,000
|
|
|
8,000
|
|
|||
|
|
|
|
|
|
||||||
Period-end loans by client segment
|
|
|
|
|
|
||||||
Middle Market Banking
|
$
|
50,701
|
|
|
$
|
44,437
|
|
|
$
|
37,942
|
|
Commercial Term Lending
|
43,512
|
|
|
38,583
|
|
|
37,928
|
|
|||
Corporate Client Banking
|
21,558
|
|
|
16,747
|
|
|
11,678
|
|
|||
Real Estate Banking
|
8,552
|
|
|
8,211
|
|
|
7,591
|
|
|||
Other
|
3,885
|
|
|
4,024
|
|
|
3,779
|
|
|||
Total Commercial Banking loans
|
$
|
128,208
|
|
|
$
|
112,002
|
|
|
$
|
98,918
|
|
|
|
|
|
|
|
||||||
Selected balance sheet data (average)
|
|
|
|
|
|
||||||
Total assets
|
$
|
165,111
|
|
|
$
|
146,230
|
|
|
$
|
133,654
|
|
Loans:
|
|
|
|
|
|
||||||
Loans retained
|
119,218
|
|
|
103,462
|
|
|
96,584
|
|
|||
Loans held-for-sale and loans at fair value
|
882
|
|
|
745
|
|
|
422
|
|
|||
Total loans
|
$
|
120,100
|
|
|
$
|
104,207
|
|
|
$
|
97,006
|
|
Client deposits and other third-party liabilities
(a)
|
195,912
|
|
|
174,729
|
|
|
138,862
|
|
|||
Equity
|
9,500
|
|
|
8,000
|
|
|
8,000
|
|
|||
Average loans by client segment
|
|
|
|
|
|
||||||
Middle Market Banking
|
$
|
47,198
|
|
|
$
|
40,759
|
|
|
$
|
35,059
|
|
Commercial Term Lending
|
40,872
|
|
|
38,107
|
|
|
36,978
|
|
|||
Corporate Client Banking
|
19,383
|
|
|
13,993
|
|
|
11,926
|
|
|||
Real Estate Banking
|
8,562
|
|
|
7,619
|
|
|
9,344
|
|
|||
Other
|
4,085
|
|
|
3,729
|
|
|
3,699
|
|
|||
Total Commercial Banking loans
|
$
|
120,100
|
|
|
$
|
104,207
|
|
|
$
|
97,006
|
|
|
|
|
|
|
|
||||||
Headcount
(b)
|
6,120
|
|
|
5,787
|
|
|
5,126
|
|
As of or for the year ended December 31, (in millions, except headcount and ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Credit data and quality statistics
|
|
|
|
|
|
||||||
Net charge-offs
|
$
|
35
|
|
|
$
|
187
|
|
|
$
|
909
|
|
Nonperforming assets
|
|
|
|
|
|
||||||
Nonaccrual loans:
|
|
|
|
|
|
||||||
Nonaccrual loans retained
(c)
|
644
|
|
|
1,036
|
|
|
1,964
|
|
|||
Nonaccrual loans held-for-sale and loans held at fair value
|
29
|
|
|
17
|
|
|
36
|
|
|||
Total nonaccrual loans
|
673
|
|
|
1,053
|
|
|
2,000
|
|
|||
Assets acquired in loan satisfactions
|
14
|
|
|
85
|
|
|
197
|
|
|||
Total nonperforming assets
|
687
|
|
|
1,138
|
|
|
2,197
|
|
|||
Allowance for credit losses:
|
|
|
|
|
|
||||||
Allowance for loan losses
|
2,610
|
|
|
2,603
|
|
|
2,552
|
|
|||
Allowance for lending-related commitments
|
183
|
|
|
189
|
|
|
209
|
|
|||
Total allowance for credit losses
|
2,793
|
|
|
2,792
|
|
|
2,761
|
|
|||
Net charge-off rate
(d)
|
0.03
|
%
|
|
0.18
|
%
|
|
0.94
|
%
|
|||
Allowance for loan losses to period-end loans
retained
|
2.06
|
|
|
2.34
|
|
|
2.61
|
|
|||
Allowance for loan losses to nonaccrual loans retained
(c)
|
405
|
|
|
251
|
|
|
130
|
|
|||
Nonaccrual loans to total period-end loans
|
0.52
|
|
|
0.94
|
|
|
2.02
|
|
(a)
|
Client deposits and other third-party liabilities include deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased, and securities loaned or sold under repurchase agreements) as part of client cash management programs.
|
(b)
|
Effective July 1, 2012, certain Treasury Services product sales staff supporting CB were transferred from CIB to CB. For further discussion of this transfer, see footnote (c) on page 96 of this Annual Report.
|
(c)
|
Allowance for loan losses of
$107 million
,
$176 million
and
$340 million
was held against nonaccrual loans retained at
December 31, 2012
,
2011
and 2010, respectively.
|
(d)
|
Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off rate.
|
98
|
|
JPMorgan Chase & Co./2012 Annual Report
|
ASSET MANAGEMENT
|
Asset Management, with client assets of $2.1 trillion, is a global leader in investment and wealth management. AM clients include institutions, high-net-worth individuals and retail investors in every major market throughout the world. AM offers investment management across all major asset classes including equities, fixed income, alternatives and money market funds. AM also offers multi-asset investment management, providing solutions to a broad range of clients’ investment needs. For individual investors, AM also provides retirement products and services, brokerage and banking services including trust and estate, loans, mortgages and deposits. The majority of AM’s client assets are in actively managed portfolios.
|
Selected income statement data
|
|
|
|
|
|||||||
Year ended December 31,
(in millions, except ratios)
|
2012
|
|
2011
|
|
2010
|
||||||
Revenue
|
|
|
|
|
|
||||||
Asset management, administration and commissions
|
$
|
7,041
|
|
|
$
|
6,748
|
|
|
$
|
6,374
|
|
All other income
|
806
|
|
|
1,147
|
|
|
1,111
|
|
|||
Noninterest revenue
|
7,847
|
|
|
7,895
|
|
|
7,485
|
|
|||
Net interest income
|
2,099
|
|
|
1,648
|
|
|
1,499
|
|
|||
Total net revenue
|
9,946
|
|
|
9,543
|
|
|
8,984
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
86
|
|
|
67
|
|
|
86
|
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
|
|
|
|
|
||||||
Compensation expense
|
4,405
|
|
|
4,152
|
|
|
3,763
|
|
|||
Noncompensation expense
|
2,608
|
|
|
2,752
|
|
|
2,277
|
|
|||
Amortization of intangibles
|
91
|
|
|
98
|
|
|
72
|
|
|||
Total noninterest expense
|
7,104
|
|
|
7,002
|
|
|
6,112
|
|
|||
Income before income tax expense
|
2,756
|
|
|
2,474
|
|
|
2,786
|
|
|||
Income tax expense
|
1,053
|
|
|
882
|
|
|
1,076
|
|
|||
Net income
|
$
|
1,703
|
|
|
$
|
1,592
|
|
|
$
|
1,710
|
|
Revenue by client segment
|
|
|
|
|
|
||||||
Private Banking
|
$
|
5,426
|
|
|
$
|
5,116
|
|
|
$
|
4,860
|
|
Institutional
|
2,386
|
|
|
2,273
|
|
|
2,180
|
|
|||
Retail
|
2,134
|
|
|
2,154
|
|
|
1,944
|
|
|||
Total net revenue
|
$
|
9,946
|
|
|
$
|
9,543
|
|
|
$
|
8,984
|
|
Financial ratios
|
|
|
|
|
|
||||||
Return on common equity
|
24
|
%
|
|
25
|
%
|
|
26
|
%
|
|||
Overhead ratio
|
71
|
|
|
73
|
|
|
68
|
|
|||
Pretax margin ratio
|
28
|
|
|
26
|
|
|
31
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
99
|
Selected metrics
|
|
|
|
|
|
||||||
Business metrics
|
|
||||||||||
As of or for the year ended December 31, (in millions, except headcount, ranking data, ratios and where otherwise noted)
|
2012
|
|
2011
|
|
2010
|
||||||
Number of:
|
|
|
|
|
|
||||||
Client advisors
(a)
|
2,821
|
|
|
2,883
|
|
2,696
|
|
||||
Retirement planning services participants (in thousands)
|
1,961
|
|
|
1,798
|
|
1,580
|
|
||||
% of customer assets in 4 & 5 Star Funds
(b)
|
47
|
%
|
|
43
|
%
|
|
49
|
%
|
|||
% of AUM in 1
st
and 2
nd
quartiles:
(c)
|
|
|
|
|
|
||||||
1 year
|
67
|
|
|
48
|
|
|
67
|
|
|||
3 years
|
74
|
|
|
72
|
|
|
72
|
|
|||
5 years
|
76
|
|
|
78
|
|
|
80
|
|
|||
Selected balance sheet data (period-end)
|
|
|
|
|
|
||||||
Total assets
|
$
|
108,999
|
|
|
$
|
86,242
|
|
|
$
|
68,997
|
|
Loans
(d)
|
80,216
|
|
|
57,573
|
|
|
44,084
|
|
|||
Equity
|
7,000
|
|
|
6,500
|
|
|
6,500
|
|
|||
Selected balance sheet data (average)
|
|
|
|
|
|
||||||
Total assets
|
$
|
97,447
|
|
|
$
|
76,141
|
|
|
$
|
65,056
|
|
Loans
|
68,719
|
|
|
50,315
|
|
|
38,948
|
|
|||
Deposits
|
129,208
|
|
|
106,421
|
|
86,096
|
|
||||
Equity
|
7,000
|
|
|
6,500
|
|
|
6,500
|
|
|||
|
|
|
|
|
|
||||||
Headcount
|
18,480
|
|
|
18,036
|
|
|
16,918
|
|
|||
|
|
|
|
|
|
||||||
Credit data and quality statistics
|
|
|
|
|
|
||||||
Net charge-offs
|
$
|
64
|
|
|
$
|
92
|
|
|
$
|
76
|
|
Nonaccrual loans
|
250
|
|
|
317
|
|
|
375
|
|
|||
Allowance for credit losses:
|
|
|
|
|
|
||||||
Allowance for loan losses
|
248
|
|
|
209
|
|
|
267
|
|
|||
Allowance for lending-related commitments
|
5
|
|
|
10
|
|
|
4
|
|
|||
Total allowance for credit losses
|
253
|
|
|
219
|
|
|
271
|
|
|||
Net charge-off rate
|
0.09
|
%
|
|
0.18
|
%
|
|
0.20
|
%
|
|||
Allowance for loan losses to period-end loans
|
0.31
|
|
|
0.36
|
|
|
0.61
|
|
|||
Allowance for loan losses to nonaccrual loans
|
99
|
|
|
66
|
|
|
71
|
|
|||
Nonaccrual loans to period-end loans
|
0.31
|
|
|
0.55
|
|
|
0.85
|
|
(a)
|
Effective January 1, 2012, the previously disclosed separate metric for client advisors and JPMorgan Securities brokers were combined into one metric that reflects the number of Private Banking client-facing representatives.
|
(b)
|
Derived from Morningstar for the U.S., the U.K., Luxembourg, France, Hong Kong and Taiwan; and Nomura for Japan.
|
(c)
|
Quartile ranking sourced from: Lipper for the U.S. and Taiwan; Morningstar for the U.K., Luxembourg, France and Hong Kong; and Nomura for Japan.
|
(d)
|
Included
$10.9 billion
of prime mortgage loans reported in the Consumer, excluding credit card, loan portfolio at December 31, 2012.
|
AM’s client segments comprise the following:
|
||||
Private Banking
offers investment advice and wealth management services to high- and ultra-high-net-worth individuals, families, money managers, business owners and small corporations worldwide, including investment management, capital markets and risk management, tax and estate planning, banking, capital raising and specialty-wealth advisory services.
|
||||
Institutional
brings comprehensive global investment services – including asset management, pension analytics, asset-liability management and active risk-budgeting strategies – to corporate and public institutions, endowments, foundations, non-profit organizations and governments worldwide.
|
||||
Retail
provides worldwide investment management services and retirement planning and administration, through financial intermediaries and direct distribution of a full range of investment products.
|
J.P. Morgan Asset Management has two high-level measures of its overall fund performance.
|
||||
• Percentage of assets under management in funds rated 4- and 5-stars (three years). Mutual fund rating services rank funds based on their risk-adjusted performance over various periods. A 5-star rating is the best and represents the top 10% of industry-wide ranked funds. A 4-star rating represents the next 22% of industry wide ranked funds. The worst rating is a 1-star rating.
|
||||
• Percentage of assets under management in first- or second- quartile funds (one, three and five years). Mutual fund rating services rank funds according to a peer-based performance system, which measures returns according to specific time and fund classification (small-, mid-, multi- and large-cap).
|
100
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Assets under supervision
|
|
|
|
|
|||||||
December 31,
(in billions)
|
2012
|
|
|
2011
|
|
|
2010
|
||||
Assets by asset class
|
|
|
|
|
|
||||||
Liquidity
|
$
|
475
|
|
|
$
|
515
|
|
|
$
|
497
|
|
Fixed income
|
386
|
|
|
336
|
|
|
289
|
|
|||
Equity and multi-asset
|
447
|
|
|
372
|
|
|
404
|
|
|||
Alternatives
|
118
|
|
|
113
|
|
|
108
|
|
|||
Total assets under management
|
1,426
|
|
|
1,336
|
|
|
1,298
|
|
|||
Custody/brokerage/administration/deposits
|
669
|
|
|
585
|
|
|
542
|
|
|||
Total assets under supervision
|
$
|
2,095
|
|
|
$
|
1,921
|
|
|
$
|
1,840
|
|
Assets by client segment
|
|
|
|
|
|
||||||
Private Banking
|
$
|
318
|
|
|
$
|
291
|
|
|
$
|
284
|
|
Institutional
|
741
|
|
|
722
|
|
|
703
|
|
|||
Retail
|
367
|
|
|
323
|
|
|
311
|
|
|||
Total assets under management
|
$
|
1,426
|
|
|
$
|
1,336
|
|
|
$
|
1,298
|
|
Private Banking
|
$
|
877
|
|
|
$
|
781
|
|
|
$
|
731
|
|
Institutional
|
741
|
|
|
723
|
|
|
703
|
|
|||
Retail
|
477
|
|
|
417
|
|
|
406
|
|
|||
Total assets under supervision
|
$
|
2,095
|
|
|
$
|
1,921
|
|
|
$
|
1,840
|
|
Mutual fund assets by asset class
|
|
|
|
|
|
||||||
Liquidity
|
$
|
410
|
|
|
$
|
458
|
|
|
$
|
446
|
|
Fixed income
|
136
|
|
|
107
|
|
|
92
|
|
|||
Equity and multi-asset
|
180
|
|
|
147
|
|
|
169
|
|
|||
Alternatives
|
5
|
|
|
8
|
|
|
7
|
|
|||
Total mutual fund assets
|
$
|
731
|
|
|
$
|
720
|
|
|
$
|
714
|
|
Year ended December 31,
(in billions)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Assets under management rollforward
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
1,336
|
|
|
$
|
1,298
|
|
|
$
|
1,249
|
|
Net asset flows:
|
|
|
|
|
|
|
||||||
Liquidity
|
|
(43
|
)
|
|
18
|
|
|
(89
|
)
|
|||
Fixed income
|
|
30
|
|
|
40
|
|
|
50
|
|
|||
Equity, multi-asset and alternatives
|
|
30
|
|
|
13
|
|
|
19
|
|
|||
Market/performance/other impacts
|
|
73
|
|
|
(33
|
)
|
|
69
|
|
|||
Ending balance, December 31
|
|
$
|
1,426
|
|
|
$
|
1,336
|
|
|
$
|
1,298
|
|
Assets under supervision rollforward
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
1,921
|
|
|
$
|
1,840
|
|
|
$
|
1,701
|
|
Net asset flows
|
|
60
|
|
|
123
|
|
|
28
|
|
|||
Market/performance/other impacts
|
|
114
|
|
|
(42
|
)
|
|
111
|
|
|||
Ending balance, December 31
|
|
$
|
2,095
|
|
|
$
|
1,921
|
|
|
$
|
1,840
|
|
International metrics
|
|
|
||||||||||
Year ended December 31,
(in billions, except where otherwise noted)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Total net revenue
(in millions)
(a)
|
|
|
|
|
|
|
||||||
Europe/Middle East/Africa
|
|
$
|
1,641
|
|
|
$
|
1,704
|
|
|
$
|
1,642
|
|
Asia/Pacific
|
|
967
|
|
|
971
|
|
|
925
|
|
|||
Latin America/Caribbean
|
|
772
|
|
|
808
|
|
|
541
|
|
|||
North America
|
|
6,566
|
|
|
6,060
|
|
|
5,876
|
|
|||
Total net revenue
|
|
$
|
9,946
|
|
|
$
|
9,543
|
|
|
$
|
8,984
|
|
Assets under management
|
|
|
|
|
|
|
||||||
Europe/Middle East/Africa
|
|
$
|
258
|
|
|
$
|
278
|
|
|
$
|
282
|
|
Asia/Pacific
|
|
114
|
|
|
105
|
|
|
111
|
|
|||
Latin America/Caribbean
|
|
45
|
|
|
34
|
|
|
35
|
|
|||
North America
|
|
1,009
|
|
|
919
|
|
|
870
|
|
|||
Total assets under management
|
|
$
|
1,426
|
|
|
$
|
1,336
|
|
|
$
|
1,298
|
|
Assets under supervision
|
|
|
|
|
|
|
||||||
Europe/Middle East/Africa
|
|
$
|
317
|
|
|
$
|
329
|
|
|
$
|
331
|
|
Asia/Pacific
|
|
160
|
|
|
139
|
|
|
147
|
|
|||
Latin America/Caribbean
|
|
110
|
|
|
89
|
|
|
84
|
|
|||
North America
|
|
1,508
|
|
|
1,364
|
|
|
1,278
|
|
|||
Total assets under supervision
|
|
$
|
2,095
|
|
|
$
|
1,921
|
|
|
$
|
1,840
|
|
(a)
|
Regional revenue is based on the domicile of the client.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
101
|
CORPORATE/PRIVATE EQUITY
|
The Corporate/Private Equity segment comprises Private Equity, Treasury, Chief Investment Office (“CIO”), and Other Corporate, which includes corporate staff units and expense that is centrally managed. Treasury and CIO are predominantly responsible for measuring, monitoring, reporting and managing the Firm’s liquidity, funding, capital and structural interest rate and foreign exchange risks. The corporate staff units include Central Technology and Operations, Internal Audit, Executive, Finance, Human Resources, Legal & Compliance, Global Real Estate, General Services, Operational Control, Risk Management, and Corporate Responsibility & Public Policy. Other centrally managed expense includes the Firm’s occupancy and pension-related expense that are subject to allocation to the businesses.
|
Selected income statement data
|
|
|
|
|
|||||||
Year ended December 31,
(in millions, except headcount)
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Revenue
|
|
|
|
|
|
||||||
Principal transactions
|
$
|
(4,268
|
)
|
|
$
|
1,434
|
|
|
$
|
2,208
|
|
Securities gains
|
2,024
|
|
|
1,600
|
|
|
2,898
|
|
|||
All other income
|
2,452
|
|
|
595
|
|
|
245
|
|
|||
Noninterest revenue
|
208
|
|
|
3,629
|
|
|
5,351
|
|
|||
Net interest income
|
(1,360
|
)
|
|
506
|
|
|
2,063
|
|
|||
Total net revenue
(a)
|
(1,152
|
)
|
|
4,135
|
|
|
7,414
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
(37
|
)
|
|
(36
|
)
|
|
14
|
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
|
|
|
|
|
||||||
Compensation expense
|
2,622
|
|
|
2,324
|
|
|
2,276
|
|
|||
Noncompensation expense
(b)
|
7,353
|
|
|
6,693
|
|
|
8,641
|
|
|||
Subtotal
|
9,975
|
|
|
9,017
|
|
|
10,917
|
|
|||
Net expense allocated to other businesses
|
(5,379
|
)
|
|
(4,909
|
)
|
|
(4,607
|
)
|
|||
Total noninterest expense
|
4,596
|
|
|
4,108
|
|
|
6,310
|
|
|||
Income before income tax expense/(benefit)
|
(5,711
|
)
|
|
63
|
|
|
1,090
|
|
|||
Income tax expense/(benefit)
(c)
|
(3,629
|
)
|
|
(759
|
)
|
|
(190
|
)
|
|||
Net income
|
$
|
(2,082
|
)
|
|
$
|
822
|
|
|
$
|
1,280
|
|
Total net revenue
|
|
|
|
|
|
||||||
Private equity
|
$
|
601
|
|
|
$
|
836
|
|
|
$
|
1,239
|
|
Treasury and CIO
|
(3,064
|
)
|
|
3,196
|
|
|
6,642
|
|
|||
Other Corporate
|
1,311
|
|
|
103
|
|
|
(467
|
)
|
|||
Total net revenue
|
$
|
(1,152
|
)
|
|
$
|
4,135
|
|
|
$
|
7,414
|
|
Net income
|
|
|
|
|
|
||||||
Private equity
|
$
|
292
|
|
|
$
|
391
|
|
|
$
|
588
|
|
Treasury and CIO
|
(2,093
|
)
|
|
1,349
|
|
|
3,576
|
|
|||
Other Corporate
|
(281
|
)
|
|
(918
|
)
|
|
(2,884
|
)
|
|||
Total net income
|
$
|
(2,082
|
)
|
|
$
|
822
|
|
|
$
|
1,280
|
|
Total assets (period-end)
|
$
|
728,925
|
|
|
$
|
693,108
|
|
|
$
|
526,556
|
|
Headcount
|
22,747
|
|
|
21,334
|
|
|
19,419
|
|
(a)
|
Included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments of
$443 million
, $
298 million
and
$226 million
for the years ended
December 31, 2012
,
2011
and
2010
, respectively.
|
(b)
|
Included litigation expense of
$3.7 billion
,
$3.2 billion
and
$5.7 billion
for the years ended December 31, 2012, 2011 and 2010, respectively.
|
(c)
|
Includes tax benefits recognized upon the resolution of tax audits.
|
102
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(a)
|
Reflects repositioning of the investment securities portfolio.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
103
|
Selected income statement and balance sheet data
|
|||||||||||
Year ended December 31,
(in millions)
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Private equity gains/(losses)
|
|
|
|
|
|
||||||
Realized gains
|
$
|
17
|
|
|
$
|
1,842
|
|
|
$
|
1,409
|
|
Unrealized gains/(losses)
(a)
|
639
|
|
|
(1,305
|
)
|
|
(302
|
)
|
|||
Total direct investments
|
656
|
|
|
537
|
|
|
1,107
|
|
|||
Third-party fund investments
|
134
|
|
|
417
|
|
|
241
|
|
|||
Total private equity gains/(losses)
(b)
|
$
|
790
|
|
|
$
|
954
|
|
|
$
|
1,348
|
|
(a)
|
Unrealized gains/(losses) contain reversals of unrealized gains and losses that were recognized in prior periods and have now been realized.
|
(b)
|
Included in principal transactions revenue in the Consolidated Statements of Income.
|
(a)
|
For more information on the Firm’s policies regarding the valuation of the private equity portfolio, see Note 3 on pages
196–214
of this Annual Report.
|
(b)
|
Unfunded commitments to third-party private equity funds were
$370 million
,
$789 million
and
$1.0 billion
at
December 31, 2012
,
2011
and
2010
, respectively.
|
104
|
|
JPMorgan Chase & Co./2012 Annual Report
|
INTERNATIONAL OPERATIONS
|
As of or for the year ended December 31,
|
EMEA
|
|
Asia/Pacific
|
|
Latin America/Caribbean
|
||||||||||||||||||||||||
(in millions, except headcount and where otherwise noted)
|
2012
|
2011
|
2010
|
|
2012
|
2011
|
2010
|
|
2012
|
2011
|
2010
|
||||||||||||||||||
Revenue
(a)
|
$
|
10,398
|
|
$
|
16,141
|
|
$
|
14,149
|
|
|
$
|
5,590
|
|
$
|
5,971
|
|
$
|
6,082
|
|
|
$
|
2,327
|
|
$
|
2,232
|
|
$
|
1,697
|
|
Countries of operation
|
33
|
|
33
|
|
33
|
|
|
17
|
|
16
|
|
16
|
|
|
9
|
|
9
|
|
8
|
|
|||||||||
New offices
|
—
|
|
1
|
|
6
|
|
|
2
|
|
2
|
|
7
|
|
|
—
|
|
4
|
|
2
|
|
|||||||||
Total headcount
(b)
|
15,533
|
|
16,178
|
|
16,122
|
|
|
20,548
|
|
20,172
|
|
19,153
|
|
|
1,436
|
|
1,378
|
|
1,201
|
|
|||||||||
Front-office headcount
|
5,917
|
|
5,993
|
|
5,872
|
|
|
4,195
|
|
4,253
|
|
4,168
|
|
|
644
|
|
569
|
|
486
|
|
|||||||||
Significant clients
(c)
|
992
|
|
938
|
|
900
|
|
|
492
|
|
479
|
|
451
|
|
|
164
|
|
140
|
|
126
|
|
|||||||||
Deposits (average)
(d)
|
$
|
169,693
|
|
$
|
168,882
|
|
$
|
142,859
|
|
|
$
|
57,329
|
|
$
|
57,684
|
|
$
|
53,268
|
|
|
$
|
4,823
|
|
$
|
5,318
|
|
$
|
6,263
|
|
Loans (period-end)
(e)
|
40,760
|
|
36,637
|
|
27,934
|
|
|
30,287
|
|
31,119
|
|
20,552
|
|
|
30,322
|
|
25,141
|
|
16,480
|
|
|||||||||
Assets under management (in billions)
|
258
|
|
278
|
|
282
|
|
|
114
|
|
105
|
|
111
|
|
|
45
|
|
34
|
|
35
|
|
|||||||||
Assets under supervision (in billions)
|
317
|
|
329
|
|
331
|
|
|
160
|
|
139
|
|
147
|
|
|
110
|
|
89
|
|
84
|
|
|||||||||
Assets under custody (in billions)
|
6,502
|
|
5,430
|
|
4,810
|
|
|
1,577
|
|
1,426
|
|
1,321
|
|
|
252
|
|
279
|
|
153
|
|
(a)
|
Revenue is based predominantly on the domicile of the client, the location from which the client relationship is managed, or the location of the trading desk.
|
(b)
|
Total headcount includes all employees, including those in service centers, located in the region.
|
(c)
|
Significant clients are defined as companies with over
$1 million
in revenue over a trailing 12-month period in the region (excludes private banking clients).
|
(d)
|
Deposits are based on the location from which the client relationship is managed.
|
(e)
|
Loans outstanding are based predominantly on the domicile of the borrower and exclude loans held-for-sale and loans carried at fair value.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
105
|
BALANCE SHEET ANALYSIS
|
Selected Consolidated Balance Sheets data
|
|
|
|||||
December 31, (in millions)
|
2012
|
|
2011
|
||||
Assets
|
|
|
|
||||
Cash and due from banks
|
$
|
53,723
|
|
|
$
|
59,602
|
|
Deposits with banks
|
121,814
|
|
|
85,279
|
|
||
Federal funds sold and securities purchased under resale agreements
|
296,296
|
|
|
235,314
|
|
||
Securities borrowed
|
119,017
|
|
|
142,462
|
|
||
Trading assets:
|
|
|
|
||||
Debt and equity instruments
|
375,045
|
|
|
351,486
|
|
||
Derivative receivables
|
74,983
|
|
|
92,477
|
|
||
Securities
|
371,152
|
|
|
364,793
|
|
||
Loans
|
733,796
|
|
|
723,720
|
|
||
Allowance for loan losses
|
(21,936
|
)
|
|
(27,609
|
)
|
||
Loans, net of allowance for loan losses
|
711,860
|
|
|
696,111
|
|
||
Accrued interest and accounts receivable
|
60,933
|
|
|
61,478
|
|
||
Premises and equipment
|
14,519
|
|
|
14,041
|
|
||
Goodwill
|
48,175
|
|
|
48,188
|
|
||
Mortgage servicing rights
|
7,614
|
|
|
7,223
|
|
||
Other intangible assets
|
2,235
|
|
|
3,207
|
|
||
Other assets
|
101,775
|
|
|
104,131
|
|
||
Total assets
|
$
|
2,359,141
|
|
|
$
|
2,265,792
|
|
Liabilities
|
|
|
|
||||
Deposits
|
$
|
1,193,593
|
|
|
$
|
1,127,806
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
240,103
|
|
|
213,532
|
|
||
Commercial paper
|
55,367
|
|
|
51,631
|
|
||
Other borrowed funds
|
26,636
|
|
|
21,908
|
|
||
Trading liabilities:
|
|
|
|
||||
Debt and equity instruments
|
61,262
|
|
|
66,718
|
|
||
Derivative payables
|
70,656
|
|
|
74,977
|
|
||
Accounts payable and other liabilities
|
195,240
|
|
|
202,895
|
|
||
Beneficial interests issued by consolidated VIEs
|
63,191
|
|
|
65,977
|
|
||
Long-term debt
|
249,024
|
|
|
256,775
|
|
||
Total liabilities
|
2,155,072
|
|
|
2,082,219
|
|
||
Stockholders’ equity
|
204,069
|
|
|
183,573
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,359,141
|
|
|
$
|
2,265,792
|
|
106
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
107
|
108
|
|
JPMorgan Chase & Co./2012 Annual Report
|
OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL CASH OBLIGATIONS
|
JPMorgan Chase & Co./2012 Annual Report
|
|
109
|
Contractual cash obligations
|
|
|
|
|
|
|||||||||||||
By remaining maturity at December 31,
(in millions)
|
2012
|
2011
|
||||||||||||||||
2013
|
2014-2015
|
2016-2017
|
After 2017
|
Total
|
Total
|
|||||||||||||
On-balance sheet obligations
|
|
|
|
|
|
|
||||||||||||
Deposits
(a)
|
$
|
1,175,886
|
|
$
|
7,440
|
|
$
|
5,434
|
|
$
|
3,016
|
|
$
|
1,191,776
|
|
$
|
1,125,470
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
236,875
|
|
1,464
|
|
500
|
|
1,264
|
|
240,103
|
|
213,532
|
|
||||||
Commercial paper
|
55,367
|
|
—
|
|
—
|
|
—
|
|
55,367
|
|
51,631
|
|
||||||
Other borrowed funds
(a)
|
15,357
|
|
|
|
—
|
|
—
|
|
15,357
|
|
12,450
|
|
||||||
Beneficial interests issued by consolidated VIEs
(a)
|
40,071
|
|
11,310
|
|
4,710
|
|
5,930
|
|
62,021
|
|
65,977
|
|
||||||
Long-term debt
(a)
|
26,256
|
|
63,515
|
|
57,998
|
|
83,454
|
|
231,223
|
|
236,905
|
|
||||||
Other
(b)
|
1,120
|
|
1,025
|
|
915
|
|
2,647
|
|
5,707
|
|
6,032
|
|
||||||
Total on-balance sheet obligations
|
1,550,932
|
|
84,754
|
|
69,557
|
|
96,311
|
|
1,801,554
|
|
1,711,997
|
|
||||||
Off-balance sheet obligations
|
|
|
|
|
|
|
||||||||||||
Unsettled reverse repurchase and securities borrowing agreements
(c)
|
34,871
|
|
—
|
|
—
|
|
—
|
|
34,871
|
|
39,939
|
|
||||||
Contractual interest payments
(d)
|
7,703
|
|
11,137
|
|
8,195
|
|
29,245
|
|
56,280
|
|
76,418
|
|
||||||
Operating leases
(e)
|
1,788
|
|
3,282
|
|
2,749
|
|
6,536
|
|
14,355
|
|
15,014
|
|
||||||
Equity investment commitments
(f)
|
449
|
|
6
|
|
2
|
|
1,452
|
|
1,909
|
|
2,290
|
|
||||||
Contractual purchases and capital expenditures
|
1,232
|
|
634
|
|
382
|
|
497
|
|
2,745
|
|
2,660
|
|
||||||
Obligations under affinity and co-brand programs
|
980
|
|
1,924
|
|
1,336
|
|
66
|
|
4,306
|
|
5,393
|
|
||||||
Other
|
32
|
|
2
|
|
—
|
|
—
|
|
34
|
|
284
|
|
||||||
Total off-balance sheet obligations
|
47,055
|
|
16,985
|
|
12,664
|
|
37,796
|
|
114,500
|
|
141,998
|
|
||||||
Total contractual cash obligations
|
$
|
1,597,987
|
|
$
|
101,739
|
|
$
|
82,221
|
|
$
|
134,107
|
|
$
|
1,916,054
|
|
$
|
1,853,995
|
|
(a)
|
Excludes structured notes where the Firm is not obligated to return a stated amount of principal at the maturity of the notes, but is obligated to return an amount based on the performance of the structured notes.
|
(b)
|
Primarily includes deferred annuity contracts, pension and postretirement obligations and insurance liabilities.
|
(c)
|
For further information, refer to unsettled reverse repurchase and securities borrowing agreements in Note 29 on page
312
of
this Annual Report
.
|
(d)
|
Includes accrued interest and future contractual interest obligations. Excludes interest related to structured notes where the Firm’s payment obligation is based on the performance of certain benchmarks.
|
(e)
|
Includes noncancelable operating leases for premises and equipment used primarily for banking purposes and for energy-related tolling service agreements. Excludes the benefit of noncancelable sublease rentals of
$1.7 billion
and $
1.5 billion
at
December 31, 2012
and
2011
, respectively.
|
(f)
|
At
December 31, 2012
and
2011
, included unfunded commitments of
$370 million
and
$789 million
, respectively, to third-party private equity funds that are generally valued as discussed in Note 3 on pages
196–214
of this Annual Report; and
$1.5 billion
and
$1.5 billion
of unfunded commitments, respectively, to other equity investments.
|
110
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
111
|
(i)
|
the level of outstanding unresolved repurchase demands,
|
(ii)
|
estimated probable future repurchase demands, considering information about file requests, delinquent and liquidated loans, resolved and unresolved mortgage insurance rescission notices and the Firm’s historical experience,
|
(iii)
|
the potential ability of the Firm to cure the defects identified in the repurchase demands (“cure rate”),
|
(iv)
|
the estimated severity of loss upon repurchase of the loan or collateral, make-whole settlement, or indemnification,
|
(v)
|
the Firm’s potential ability to recover its losses from third-party originators, and
|
(vi)
|
the terms of agreements with certain mortgage insurers and other parties.
|
112
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(a)
|
The decrease from September 30, 2012 predominantly relates to repurchase demands from private-label securitizations that had been presented in this table as of September 30, 2012 but that subsequently became subject to repurchase litigation in the fourth quarter of 2012; such repurchase demands are excluded from this table.
|
(b)
|
Because the GSEs and others may make repurchase demands based on mortgage insurance rescission notices that remain unresolved, certain loans may be subject to both an unresolved mortgage insurance rescission notice and an outstanding repurchase demand.
|
(in millions)
|
Dec 31,
2012 |
Sep 30,
2012 |
Jun 30,
2012 |
Mar 31,
2012 |
Dec 31,
2011 |
||||||||||
Pre-2005
|
$
|
42
|
|
$
|
33
|
|
$
|
28
|
|
$
|
41
|
|
$
|
39
|
|
2005
|
42
|
|
103
|
|
65
|
|
95
|
|
55
|
|
|||||
2006
|
292
|
|
963
|
|
506
|
|
375
|
|
315
|
|
|||||
2007
|
241
|
|
371
|
|
420
|
|
645
|
|
804
|
|
|||||
2008
|
114
|
|
196
|
|
311
|
|
361
|
|
291
|
|
|||||
Post-2008
|
87
|
|
124
|
|
191
|
|
124
|
|
81
|
|
|||||
Total repurchase demands received
|
$
|
818
|
|
$
|
1,790
|
|
$
|
1,521
|
|
$
|
1,641
|
|
$
|
1,585
|
|
(in millions)
|
Dec 31,
2012 |
Sep 30,
2012 |
Jun 30,
2012 |
Mar 31,
2012 |
Dec 31,
2011 |
||||||||||
Pre-2005
|
$
|
6
|
|
$
|
6
|
|
$
|
9
|
|
$
|
13
|
|
$
|
4
|
|
2005
|
18
|
|
14
|
|
13
|
|
19
|
|
12
|
|
|||||
2006
|
35
|
|
46
|
|
26
|
|
36
|
|
19
|
|
|||||
2007
|
83
|
|
139
|
|
121
|
|
78
|
|
48
|
|
|||||
2008
|
26
|
|
37
|
|
51
|
|
32
|
|
26
|
|
|||||
Post-2008
|
7
|
|
8
|
|
6
|
|
4
|
|
2
|
|
|||||
Total mortgage insurance rescissions received
(a)
|
$
|
175
|
|
$
|
250
|
|
$
|
226
|
|
$
|
182
|
|
$
|
111
|
|
(a)
|
Mortgage insurance rescissions typically result in a repurchase demand from the GSEs. This table includes mortgage insurance rescission notices for which the GSEs also have issued a repurchase demand.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
113
|
114
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31,
(in millions)
|
2012
|
|
2011
|
|
2010
|
|
||||||
Repurchase liability at beginning of period
|
$
|
3,557
|
|
|
$
|
3,285
|
|
|
$
|
1,705
|
|
|
Realized losses
(b)
|
(1,158
|
)
|
|
(1,263
|
)
|
|
(1,423
|
)
|
|
|||
Provision for repurchase losses
(c)
|
412
|
|
|
1,535
|
|
|
3,003
|
|
|
|||
Repurchase liability at end of period
|
$
|
2,811
|
|
|
$
|
3,557
|
|
|
3,285
|
|
|
(a)
|
All mortgage repurchase demands associated with private-label securitizations are separately evaluated by the Firm in establishing its litigation reserves.
|
(b)
|
Includes principal losses and accrued interest on repurchased loans, “make-whole” settlements, settlements with claimants, and certain related expense. Make-whole settlements were
$524 million
,
$640 million
and
$632 million
, for the years ended
December 31, 2012
,
2011
and
2010
, respectively.
|
(c)
|
Includes
$112 million
,
$52 million
and
$47 million
of provision related to new loan sales for the years ended
December 31, 2012
,
2011
and
2010
, respectively.
|
(a)
|
This table includes: (i) repurchases of mortgage loans due to breaches of representations and warranties, and (ii) loans repurchased from Ginnie Mae loan pools as described in (b) below. This table does not include mortgage insurance rescissions; while the rescission of mortgage insurance typically results in a repurchase demand from the GSEs, the mortgage insurers themselves do not present repurchase demands to the Firm. This table also excludes mortgage loan repurchases associated with repurchase demands asserted in or in connection with pending litigation.
|
(b)
|
In substantially all cases, these repurchases represent the Firm’s voluntary repurchase of certain delinquent loans from loan pools as permitted by Ginnie Mae guidelines (i.e., they do not result from repurchase demands due to breaches of representations and warranties). The Firm typically elects to repurchase these delinquent loans as it continues to service them and/or manage the foreclosure process in accordance with applicable requirements of Ginnie Mae, the Federal Housing Administration (“FHA”), Rural Housing Services (“RHS”) and/or the U.S. Department of Veterans Affairs (“VA”).
|
(c)
|
Nonaccrual loans held-for-investment included
$465 million
,
$477 million
and
$354 million
at
December 31, 2012
,
2011
and
2010
, respectively, of loans repurchased as a result of breaches of representations and warranties.
|
(d)
|
Represents loans repurchased from parties other than the GSEs, excluding those repurchased in connection with pending repurchase litigation.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
115
|
CAPITAL MANAGEMENT
|
•
|
Cover all material risks underlying the Firm’s business activities;
|
•
|
Maintain “well-capitalized” status under regulatory requirements;
|
•
|
Maintain debt ratings that enable the Firm to optimize its funding mix and liquidity sources while minimizing costs;
|
•
|
Retain flexibility to take advantage of future investment opportunities; and
|
•
|
Build and invest in businesses, even in a highly stressed environment.
|
116
|
|
JPMorgan Chase & Co./2012 Annual Report
|
•
|
Regulatory capital requirements
|
•
|
Economic risk capital assessment
|
•
|
Line of business equity attribution
|
•
|
Credit risk
|
•
|
Market risk
|
•
|
Operational risk
|
•
|
Private equity risk
|
JPMorgan Chase & Co./2012 Annual Report
|
|
117
|
Risk-based capital ratios
|
|
|
|
||
December 31,
|
2012
|
|
2011
|
||
Capital ratios
|
|
|
|
||
Tier 1 capital
|
12.6
|
%
|
|
12.3
|
%
|
Total capital
|
15.3
|
|
|
15.4
|
|
Tier 1 leverage
|
7.1
|
|
|
6.8
|
|
Tier 1 common
(a)
|
11.0
|
|
|
10.1
|
|
Risk-based capital components and assets
|
|
|
|||||
December 31, (in millions)
|
2012
|
|
|
2011
|
|
||
Total stockholders’ equity
|
$
|
204,069
|
|
|
$
|
183,573
|
|
Less: Preferred stock
|
9,058
|
|
|
7,800
|
|
||
Common stockholders’ equity
|
195,011
|
|
|
175,773
|
|
||
Effect of certain items in accumulated other comprehensive income/(loss) excluded from Tier 1 common
|
(4,198
|
)
|
|
(970
|
)
|
||
Less: Goodwill
(a)
|
45,663
|
|
|
45,873
|
|
||
Fair value DVA on structured notes and derivative liabilities related to the Firm’s credit quality
|
1,577
|
|
|
2,150
|
|
||
Investments in certain subsidiaries and other
|
920
|
|
|
993
|
|
||
Other intangible assets
(a)
|
2,311
|
|
|
2,871
|
|
||
Tier 1 common
|
140,342
|
|
|
122,916
|
|
||
Preferred stock
|
9,058
|
|
|
7,800
|
|
||
Qualifying hybrid securities and noncontrolling interests
(b)
|
10,608
|
|
|
19,668
|
|
||
Adjustment for investments in certain subsidiaries and other
|
(6
|
)
|
|
—
|
|
||
Total Tier 1 capital
|
160,002
|
|
|
150,384
|
|
||
Long-term debt and other instruments qualifying as Tier 2
|
18,061
|
|
|
22,275
|
|
||
Qualifying allowance for credit losses
|
15,995
|
|
|
15,504
|
|
||
Adjustment for investments in certain subsidiaries and other
|
(22
|
)
|
|
(75
|
)
|
||
Total Tier 2 capital
|
34,034
|
|
|
37,704
|
|
||
Total qualifying capital
|
$
|
194,036
|
|
|
$
|
188,088
|
|
Risk-weighted assets
|
$
|
1,270,378
|
|
|
$
|
1,221,198
|
|
Total adjusted average assets
|
$
|
2,243,242
|
|
|
$
|
2,202,087
|
|
(a)
|
Goodwill and other intangible assets are net of any associated deferred tax liabilities.
|
(b)
|
Primarily includes trust preferred securities of certain business trusts.
|
Capital rollforward
|
|||
Year ended December 31, (in millions)
|
2012
|
||
Tier 1 common at December 31, 2011
|
$
|
122,916
|
|
Net income
|
21,284
|
|
|
Dividends declared
|
(5,376
|
)
|
|
Net issuance of treasury stock
|
1,153
|
|
|
Changes in capital surplus
|
(998
|
)
|
|
Effect of certain items in accumulated other comprehensive income/(loss) excluded from Tier 1 common
|
(69
|
)
|
|
Qualifying non-controlling minority interests in consolidated subsidiaries
|
309
|
|
|
DVA on structured notes and derivative liabilities
|
573
|
|
|
Goodwill and other nonqualifying intangibles (net of deferred tax liabilities)
|
770
|
|
|
Other
|
(220
|
)
|
|
Increase in Tier 1 common
|
17,426
|
|
|
Tier 1 common at December 31, 2012
|
$
|
140,342
|
|
|
|
||
Tier 1 capital at December 31, 2011
|
$
|
150,384
|
|
Change in Tier 1 common
|
17,426
|
|
|
Issuance of noncumulative perpetual preferred stock
|
1,258
|
|
|
Net redemption of qualifying trust preferred securities
|
(9,369
|
)
|
|
Other
|
303
|
|
|
Increase in Tier 1 capital
|
9,618
|
|
|
Tier 1 capital at December 31, 2012
|
$
|
160,002
|
|
|
|
||
Tier 2 capital at December 31, 2011
|
$
|
37,704
|
|
Change in long-term debt and other instruments qualifying as Tier 2
|
(4,214
|
)
|
|
Change in allowance for credit losses
|
491
|
|
|
Other
|
53
|
|
|
Decrease in Tier 2 capital
|
(3,670
|
)
|
|
Tier 2 capital at December 31, 2012
|
$
|
34,034
|
|
Total capital at December 31, 2012
|
$
|
194,036
|
|
118
|
|
JPMorgan Chase & Co./2012 Annual Report
|
December 31, 2012
(in millions, except ratios)
|
|
||
Tier 1 common under Basel I rules
|
$
|
140,342
|
|
Adjustments related to AOCI for AFS securities and defined benefit pension and OPEB plans
|
4,077
|
|
|
All other adjustments
|
(453
|
)
|
|
Estimated Tier 1 common under Basel III rules
|
$
|
143,966
|
|
Estimated risk-weighted assets under Basel III rules
(a)
|
$
|
1,647,903
|
|
Estimated Tier 1 common ratio under Basel III rules
(b)
|
8.7
|
%
|
(a)
|
Key differences in the calculation of risk-weighted assets between Basel I and Basel III include: (1) Basel III credit risk RWA is based on risk-sensitive approaches which largely rely on the use of internal
|
(b)
|
The Tier 1 common ratio is Tier 1 common divided by RWA.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
119
|
|
|
Yearly Average
|
||||||||||
Year ended December 31,
(in billions)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Credit risk
|
|
$
|
46.6
|
|
|
$
|
48.2
|
|
|
$
|
49.7
|
|
Market risk
|
|
17.5
|
|
|
14.5
|
|
|
15.1
|
|
|||
Operational risk
|
|
15.9
|
|
|
8.5
|
|
|
7.4
|
|
|||
Private equity risk
|
|
6.0
|
|
|
6.9
|
|
|
6.2
|
|
|||
Economic risk capital
|
|
86.0
|
|
|
78.1
|
|
|
78.4
|
|
|||
Goodwill
|
|
48.2
|
|
|
48.6
|
|
|
48.6
|
|
|||
Other
(a)
|
|
50.2
|
|
|
46.6
|
|
|
34.5
|
|
|||
Total common stockholders
’
equity
|
|
$
|
184.4
|
|
|
$
|
173.3
|
|
|
$
|
161.5
|
|
(a)
|
Reflects additional capital required, in the Firm’s view, to meet its regulatory and debt rating objectives.
|
120
|
|
JPMorgan Chase & Co./2012 Annual Report
|
•
|
Integrate firmwide and line of business capital management activities;
|
•
|
Measure performance consistently across all lines of business; and
|
•
|
Provide comparability with peer firms for each of the lines of business
|
Line of business equity
|
|
Yearly Average
|
||||||||||
Year ended December 31,
(in billions)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Consumer & Community Banking
|
|
$
|
43.0
|
|
|
$
|
41.0
|
|
|
$
|
43.0
|
|
Corporate & Investment Bank
|
|
47.5
|
|
|
47.0
|
|
|
46.5
|
|
|||
Commercial Banking
|
|
9.5
|
|
|
8.0
|
|
|
8.0
|
|
|||
Asset Management
|
|
7.0
|
|
|
6.5
|
|
|
6.5
|
|
|||
Corporate/Private Equity
|
|
77.4
|
|
|
70.8
|
|
|
57.5
|
|
|||
Total common stockholders’ equity
|
|
$
|
184.4
|
|
|
$
|
173.3
|
|
|
$
|
161.5
|
|
Line of business equity
|
January 1,
|
|
|
December 31,
|
|||||||
(in billions)
|
2013
(a)
|
|
2012
|
|
2011
|
||||||
Consumer & Community Banking
|
$
|
46.0
|
|
|
$
|
43.0
|
|
|
$
|
41.0
|
|
Corporate & Investment Bank
|
56.5
|
|
|
47.5
|
|
|
47.0
|
|
|||
Commercial Banking
|
13.5
|
|
|
9.5
|
|
|
8.0
|
|
|||
Asset Management
|
9.0
|
|
|
7.0
|
|
|
6.5
|
|
|||
Corporate/Private Equity
|
70.0
|
|
|
88.0
|
|
|
73.3
|
|
|||
Total common stockholders’ equity
|
$
|
195.0
|
|
|
$
|
195.0
|
|
|
$
|
175.8
|
|
(a)
|
Reflects refined capital allocations effective January 1, 2013 as discussed above.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
121
|
Year ended December 31,
|
2012
|
|
|
2011
|
|
|
2010
|
|
Common dividend payout ratio
|
23
|
%
|
|
22
|
%
|
|
5
|
%
|
122
|
|
JPMorgan Chase & Co./2012 Annual Report
|
RISK MANAGEMENT
|
JPMorgan Chase & Co./2012 Annual Report
|
|
123
|
124
|
|
JPMorgan Chase & Co./2012 Annual Report
|
•
|
Risk identification: The Firm’s exposure to risk through its daily business dealings, including lending and capital markets activities and operational services, is identified and aggregated through the Firm’s risk management infrastructure. There are nine major risk types identified in the business activities of the Firm: liquidity risk, credit risk, market risk, interest rate risk, country risk, private equity risk, operational risk, legal and fiduciary risk, and reputation risk.
|
•
|
Risk measurement: The Firm measures risk using a variety of methodologies, including calculating probable loss, unexpected loss and value-at-risk, and by conducting stress tests and making comparisons to external benchmarks. Measurement models and related assumptions are subject to internal model review, empirical validation and benchmarking with the goal of ensuring that the Firm’s risk estimates are reasonable and reflective of the risk of the underlying positions.
|
•
|
Risk monitoring/control: The Firm’s risk management policies and procedures incorporate risk mitigation strategies and include approval limits by customer, product, industry, country and business. These limits are monitored on a daily, weekly and monthly basis, as appropriate.
|
•
|
Risk reporting: The Firm reports risk exposures on both a line of business and a consolidated basis. This information is reported to management on a daily, weekly and monthly basis, as appropriate.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
125
|
126
|
|
JPMorgan Chase & Co./2012 Annual Report
|
LIQUIDITY RISK MANAGEMENT
|
•
|
Measuring, managing, monitoring and reporting the Firm’s current and projected liquidity sources and uses;
|
•
|
Understanding the liquidity characteristics of the Firm’s assets and liabilities;
|
•
|
Defining and monitoring Firmwide and legal entity liquidity strategies, policies, guidelines, and contingency funding plans;
|
•
|
Liquidity stress testing under a variety of adverse scenarios
|
•
|
Managing funding mix and deployment of excess short-term cash;
|
•
|
Defining and implementing funds transfer pricing (“FTP”) across all lines of business and regions; and
|
•
|
Defining and addressing the impact of regulatory changes on funding and liquidity.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
127
|
Deposits
|
|
|
Year ended December 31,
|
||||||||||
|
December 31,
|
|
Average
|
||||||||||
(in millions)
|
2012
|
2011
|
|
2012
|
2011
|
||||||||
Consumer & Community Banking
|
$
|
438,484
|
|
$
|
397,825
|
|
|
$
|
413,911
|
|
$
|
382,678
|
|
Corporate & Investment Bank
|
385,560
|
|
362,384
|
|
|
353,048
|
|
317,213
|
|
||||
Commercial Banking
|
198,383
|
|
196,366
|
|
|
181,805
|
|
157,899
|
|
||||
Asset Management
|
144,579
|
|
127,464
|
|
|
129,208
|
|
106,421
|
|
||||
Corporate/Private Equity
|
26,587
|
|
43,767
|
|
|
27,911
|
|
47,779
|
|
||||
Total Firm
|
$
|
1,193,593
|
|
$
|
1,127,806
|
|
|
$
|
1,105,883
|
|
$
|
1,011,990
|
|
|
December 31, 2012
|
December 31, 2011
|
|
Year ended December 31,
|
|||||||||
Select Short-term funding
|
|
Average
|
|||||||||||
(in millions)
|
|
2012
|
2011
|
||||||||||
Commercial paper:
|
|
|
|
|
|
||||||||
Wholesale funding
|
$
|
15,589
|
|
$
|
4,245
|
|
|
$
|
14,302
|
|
$
|
6,119
|
|
Client cash management
|
39,778
|
|
47,386
|
|
|
36,478
|
|
36,534
|
|
||||
Total commercial paper
|
$
|
55,367
|
|
$
|
51,631
|
|
|
$
|
50,780
|
|
$
|
42,653
|
|
|
|
|
|
|
|
||||||||
Other borrowed funds
|
$
|
26,636
|
|
$
|
21,908
|
|
|
$
|
24,174
|
|
$
|
30,943
|
|
|
|
|
|
|
|
||||||||
Securities loaned or sold under agreements to repurchase:
|
|
|
|
|
|
||||||||
Securities sold under agreements to repurchase
|
$
|
212,278
|
|
$
|
191,649
|
|
|
$
|
219,625
|
|
$
|
228,514
|
|
Securities loaned
|
23,125
|
|
14,214
|
|
|
20,763
|
|
19,438
|
|
||||
Total securities loaned or sold under agreements to repurchase
(a)(b)(c)
|
$
|
235,403
|
|
$
|
205,863
|
|
|
$
|
240,388
|
|
$
|
247,952
|
|
(a)
|
Excludes federal funds purchased.
|
(b)
|
Excludes long-term structured repurchase agreements of $3.3 billion and $6.1 billion as of December 31, 2012 and 2011, respectively, and average balance of $7.0 billion and $4.6 billion for the years ended December 31, 2012 and 2011, respectively.
|
(c)
|
Excludes long-term securities loaned of $457 million as of December 31, 2012, and average balance of $113 million for the year ended December 31, 2012. There were no long-term securities loaned as of December 31, 2011.
|
128
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Long-term unsecured funding
|
|
||||||
Year ended December 31,
(in millions)
|
2012
|
|
2011
|
||||
Issuance
|
|
|
|
||||
Senior notes issued in the U.S. market
|
$
|
15,695
|
|
|
$
|
29,043
|
|
Senior notes issued in non-U.S. markets
|
8,341
|
|
|
5,173
|
|
||
Total senior notes
|
24,036
|
|
|
34,216
|
|
||
Trust preferred securities
|
—
|
|
|
—
|
|
||
Subordinated debt
|
—
|
|
|
—
|
|
||
Structured notes
|
15,525
|
|
|
14,761
|
|
||
Total long-term unsecured funding – issuance
|
$
|
39,561
|
|
|
$
|
48,977
|
|
|
|
|
|
||||
Maturities/redemptions
|
|
|
|
||||
Total senior notes
|
$
|
40,484
|
|
|
$
|
36,773
|
|
Trust preferred securities
|
9,482
|
|
|
101
|
|
||
Subordinated debt
|
1,045
|
|
|
2,912
|
|
||
Structured notes
|
20,183
|
|
|
18,692
|
|
||
Total long-term unsecured funding – maturities/redemptions
|
$
|
71,194
|
|
|
$
|
58,478
|
|
Long-term secured funding
|
|
|
|
|
|||||||||
Year ended
December 31,
|
Issuance
|
|
Maturities/Redemptions
|
||||||||||
(in millions)
|
2012
|
2011
|
|
2012
|
2011
|
||||||||
Credit card securitization
|
$
|
10,800
|
|
$
|
1,775
|
|
|
$
|
13,187
|
|
$
|
13,556
|
|
Other securitizations
(a)
|
—
|
|
—
|
|
|
487
|
|
478
|
|
||||
FHLB advances
|
35,350
|
|
4,000
|
|
|
11,124
|
|
9,155
|
|
||||
Total long-term secured funding
|
$
|
46,150
|
|
$
|
5,775
|
|
|
$
|
24,798
|
|
$
|
23,189
|
|
(a)
|
Other securitizations includes securitizations of residential mortgages, auto loans and student loans.
|
•
|
Number of months of pre-funding: The Firm targets pre-funding of the parent holding company to ensure that both contractual and non-contractual obligations can be met for at least 18 months assuming no access to wholesale funding markets. However, due to conservative liquidity management actions taken by the Firm, the current pre-funding of such obligations is greater than target.
|
•
|
Excess cash: Excess cash is managed to ensure that daily cash requirements can be met in both normal and stressed environments. Excess cash generated by parent holding company issuance activity is placed on deposit with or as advances to both bank and nonbank subsidiaries or held as liquid collateral purchased through reverse repurchase agreements.
|
•
|
Stress testing: The Firm conducts regular stress testing for the parent holding company and major bank subsidiaries as well as the Firm’s principal U.S. and U.K. broker-dealer subsidiaries to ensure sufficient liquidity for the Firm in a stressed environment. The Firm’s
|
JPMorgan Chase & Co./2012 Annual Report
|
|
129
|
•
|
Deposits
|
◦
|
For bank deposits that have no contractual maturity, the range of potential outflows reflect the type and size of deposit account, and the nature and extent of the Firm’s relationship with the depositor.
|
•
|
Secured funding
|
◦
|
Range of haircuts on collateral based on security type and counterparty.
|
•
|
Derivatives
|
◦
|
Margin calls by exchanges or clearing houses;
|
◦
|
Collateral calls associated with ratings downgrade triggers and variation margin;
|
◦
|
Outflows of excess client collateral;
|
◦
|
Novation of derivative trades.
|
•
|
Unfunded commitments
|
◦
|
Potential facility drawdowns reflecting the type of commitment and counterparty.
|
130
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
131
|
132
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
133
|
CREDIT RISK MANAGEMENT
|
•
|
Establishing a comprehensive credit risk policy framework
|
•
|
Monitoring and managing credit risk across all portfolio segments, including transaction and line approval
|
•
|
Assigning and managing credit authorities in connection with the approval of all credit exposure
|
•
|
Managing criticized exposures and delinquent loans
|
•
|
Determining the allowance for credit losses and ensuring appropriate credit risk-based capital management
|
134
|
|
JPMorgan Chase & Co./2012 Annual Report
|
•
|
Loan underwriting and credit approval process
|
•
|
Loan syndications and participations
|
•
|
Loan sales and securitizations
|
•
|
Credit derivatives
|
•
|
Use of master netting agreements
|
•
|
Collateral and other risk-reduction techniques
|
•
|
Independently assessing and validating the changing risk grades assigned to exposures; and
|
•
|
Evaluating the effectiveness of business units’ risk-ratings, including the accuracy and consistency of risk grades, the timeliness of risk grade changes and the justification of risk grades in credit memoranda
|
JPMorgan Chase & Co./2012 Annual Report
|
|
135
|
CREDIT PORTFOLIO
|
136
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Total credit portfolio
|
|
|
|
|
|||||||||
December 31, 2012
|
Credit exposure
|
|
Nonperforming
(b)(c)(d)(e)(f)
|
||||||||||
(in millions)
|
2012
|
2011
|
|
2012
|
2011
|
||||||||
Loans retained
|
$
|
726,835
|
|
$
|
718,997
|
|
|
$
|
10,609
|
|
$
|
9,810
|
|
Loans held-for-sale
|
4,406
|
|
2,626
|
|
|
18
|
|
110
|
|
||||
Loans at fair value
|
2,555
|
|
2,097
|
|
|
93
|
|
73
|
|
||||
Total loans – reported
|
733,796
|
|
723,720
|
|
|
10,720
|
|
9,993
|
|
||||
Derivative receivables
|
74,983
|
|
92,477
|
|
|
239
|
|
297
|
|
||||
Receivables from customers and other
|
23,761
|
|
17,561
|
|
|
—
|
|
—
|
|
||||
Total credit-related assets
|
832,540
|
|
833,758
|
|
|
10,959
|
|
10,290
|
|
||||
Assets acquired in loan satisfactions
|
|
|
|
|
|
||||||||
Real estate owned
|
NA
|
|
NA
|
|
|
738
|
|
975
|
|
||||
Other
|
NA
|
|
NA
|
|
|
37
|
|
50
|
|
||||
Total
assets acquired in loan satisfactions
|
NA
|
|
NA
|
|
|
775
|
|
1,025
|
|
||||
Total assets
|
832,540
|
|
833,758
|
|
|
11,734
|
|
11,315
|
|
||||
Lending-related commitments
|
1,027,988
|
|
975,662
|
|
|
355
|
|
865
|
|
||||
Total credit portfolio
|
$
|
1,860,528
|
|
$
|
1,809,420
|
|
|
$
|
12,089
|
|
$
|
12,180
|
|
Credit Portfolio Management derivatives notional, net
(a)
|
$
|
(27,447
|
)
|
$
|
(26,240
|
)
|
|
$
|
(25
|
)
|
$
|
(38
|
)
|
Liquid securities and other cash collateral held against derivatives
|
(13,658
|
)
|
(21,807
|
)
|
|
NA
|
|
NA
|
|
Year ended December 31,
(in millions, except ratios)
|
|
2012
|
2011
|
||||
Net charge-offs
(g)
|
|
$
|
9,063
|
|
$
|
12,237
|
|
Average retained loans
|
|
|
|
||||
Loans – reported
|
|
717,035
|
|
688,181
|
|
||
Loans – reported, excluding
residential real estate PCI loans
|
|
654,454
|
|
619,227
|
|
||
Net charge-off rates
(g)
|
|
|
|
||||
Loans – reported
|
|
1.26
|
%
|
1.78
|
%
|
||
Loans – reported, excluding PCI
|
|
1.38
|
|
1.98
|
|
(a)
|
Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. Excludes the synthetic credit portfolio. For additional information, see Credit derivatives on pages
158–159
and Note 6 on pages
218–227
of
this Annual Report
.
|
(b)
|
Nonperforming includes nonaccrual loans, nonperforming derivatives, commitments that are risk rated as nonaccrual, real estate owned and other commercial and personal property.
|
(c)
|
At
December 31, 2012
and
2011
, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of
$10.6 billion
and
$11.5 billion
, respectively, that are 90 or more days past due; (2) real estate owned insured by U.S. government agencies of
$1.6 billion
and
$954 million
, respectively; and (3) student loans insured by U.S. government agencies under the FFELP of
$525 million
and
$551 million
, respectively, that are 90 or more days past due. These amounts were excluded from nonaccrual loans as reimbursement of insured amounts is proceeding normally. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”).
|
(d)
|
Excludes PCI loans. Because the Firm is recognizing interest income on each pool of PCI loans, they are all considered to be performing.
|
(e)
|
At
December 31, 2012
and
2011
, total nonaccrual loans represented
1.46%
and
1.38%
, respectively, of total loans. At
December 31, 2012
, included
$1.8 billion
of Chapter 7 loans and
$1.2 billion
of performing junior liens that are subordinate to senior liens that are 90 days or more past due. For more information, see Consumer Credit Portfolio on pages
138–149
of
this Annual Report
.
|
(f)
|
Prior to the first quarter of 2012, reported amounts had only included defaulted derivatives; effective in the first quarter of 2012, reported amounts in all periods include both defaulted derivatives as well as derivatives that have been risk rated as nonperforming.
|
(g)
|
Net charge-offs and net charge-off rates for the year ended
December 31, 2012
, included
$800 million
of charge-offs of Chapter 7 loans. See Consumer Credit Portfolio on pages
138–149
of
this Annual Report
for further details.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
137
|
CONSUMER CREDIT PORTFOLIO
|
138
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Consumer credit portfolio
|
|||||||||||||||||||||||||
As of or for the year ended December 31,
(in millions, except ratios)
|
Credit exposure
|
|
Nonaccrual loans
(f)(g)(h)
|
|
Net charge-offs
(i)
|
|
Average annual net charge-off rate
(i)(j)
|
||||||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|||||||||||||||
Consumer, excluding credit card
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans, excluding PCI loans and loans held-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity – senior lien
|
$
|
19,385
|
|
$
|
21,765
|
|
|
$
|
931
|
|
$
|
495
|
|
|
$
|
279
|
|
$
|
284
|
|
|
1.33
|
%
|
1.20
|
%
|
Home equity – junior lien
|
48,000
|
|
56,035
|
|
|
2,277
|
|
792
|
|
|
2,106
|
|
2,188
|
|
|
4.07
|
|
3.69
|
|
||||||
Prime mortgage, including option ARMs
|
76,256
|
|
76,196
|
|
|
3,445
|
|
3,462
|
|
|
487
|
|
708
|
|
|
0.64
|
|
0.95
|
|
||||||
Subprime mortgage
|
8,255
|
|
9,664
|
|
|
1,807
|
|
1,781
|
|
|
486
|
|
626
|
|
|
5.43
|
|
5.98
|
|
||||||
Auto
(a)
|
49,913
|
|
47,426
|
|
|
163
|
|
118
|
|
|
188
|
|
152
|
|
|
0.39
|
|
0.32
|
|
||||||
Business banking
|
18,883
|
|
17,652
|
|
|
481
|
|
694
|
|
|
411
|
|
494
|
|
|
2.27
|
|
2.89
|
|
||||||
Student and other
|
12,191
|
|
14,143
|
|
|
70
|
|
69
|
|
|
340
|
|
420
|
|
|
2.58
|
|
2.85
|
|
||||||
Total loans, excluding PCI loans and loans held-for-sale
|
232,883
|
|
242,881
|
|
|
9,174
|
|
7,411
|
|
|
4,297
|
|
4,872
|
|
|
1.81
|
|
1.97
|
|
||||||
Loans – PCI
(b)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity
|
20,971
|
|
22,697
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
||||||
Prime mortgage
|
13,674
|
|
15,180
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
||||||
Subprime mortgage
|
4,626
|
|
4,976
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
||||||
Option ARMs
|
20,466
|
|
22,693
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
||||||
Total loans – PCI
|
59,737
|
|
65,546
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
||||||
Total loans – retained
|
292,620
|
|
308,427
|
|
|
9,174
|
|
7,411
|
|
|
4,297
|
|
4,872
|
|
|
1.43
|
|
1.54
|
|
||||||
Loans held-for-sale
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
Total consumer, excluding credit card loans
|
292,620
|
|
308,427
|
|
|
9,174
|
|
7,411
|
|
|
4,297
|
|
4,872
|
|
|
1.43
|
|
1.54
|
|
||||||
Lending-related commitments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity – senior lien
(c)
|
15,180
|
|
16,542
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Home equity – junior lien
(c)
|
21,796
|
|
26,408
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prime mortgage
|
4,107
|
|
1,500
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subprime mortgage
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Auto
|
7,185
|
|
6,694
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Business banking
|
11,092
|
|
10,299
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Student and other
|
796
|
|
864
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total lending-related commitments
|
60,156
|
|
62,307
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Receivables from customers
(d)
|
113
|
|
100
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total consumer exposure, excluding credit card
|
352,889
|
|
370,834
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Credit Card
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans retained
(e)
|
127,993
|
|
132,175
|
|
|
1
|
|
1
|
|
|
4,944
|
|
6,925
|
|
|
3.95
|
|
5.44
|
|
||||||
Loans held-for-sale
|
—
|
|
102
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
Total credit card loans
|
127,993
|
|
132,277
|
|
|
1
|
|
1
|
|
|
4,944
|
|
6,925
|
|
|
3.95
|
|
5.44
|
|
||||||
Lending-related commitments
(c)
|
533,018
|
|
530,616
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total credit card exposure
|
661,011
|
|
662,893
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total consumer credit portfolio
|
$
|
1,013,900
|
|
$
|
1,033,727
|
|
|
$
|
9,175
|
|
$
|
7,412
|
|
|
$
|
9,241
|
|
$
|
11,797
|
|
|
2.17
|
%
|
2.66
|
%
|
Memo: Total consumer credit portfolio, excluding PCI
|
$
|
954,163
|
|
$
|
968,181
|
|
|
$
|
9,175
|
|
$
|
7,412
|
|
|
$
|
9,241
|
|
$
|
11,797
|
|
|
2.55
|
%
|
3.15
|
%
|
(a)
|
At
December 31, 2012
and
2011
, excluded operating lease-related assets of
$4.7 billion
and
$4.4 billion
, respectively.
|
(b)
|
Charge-offs are not recorded on PCI loans until actual losses exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. To date, no charge-offs have been recorded for these loans.
|
(c)
|
Credit card and home equity lending-related commitments represent the total available lines of credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit would be used at the same time. For credit card and home equity commitments (if certain conditions are met), the Firm can reduce or cancel these lines of credit by providing the borrower notice or, in some cases, without notice as permitted by law.
|
(d)
|
Receivables from customers primarily represent margin loans to retail brokerage customers, which are included in accrued interest and accounts receivable on the Consolidated Balance Sheets.
|
(e)
|
Includes accrued interest and fees net of an allowance for the uncollectible portion of accrued interest and fee income.
|
(f)
|
At
December 31, 2012
and
2011
, nonaccrual loans excluded: (1) mortgage loans insured by U.S. government agencies of
$10.6 billion
and
$11.5 billion
, respectively, that are 90 or more days past due; and (2) student loans insured by U.S. government agencies under the FFELP of
$525 million
and
$551 million
, respectively, that are 90 or more days past due. These amounts were excluded from nonaccrual loans as reimbursement of insured amounts is proceeding normally. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
139
|
(g)
|
Excludes PCI loans. Because the Firm is recognizing interest income on each pool of PCI loans, they are all considered to be performing.
|
(h)
|
At
December 31, 2012
, included
$1.8 billion
of Chapter 7 loans as well as
$1.2 billion
of performing junior liens that are subordinate to senior liens that are 90 days or more past due. See Consumer Credit Portfolio on pages
138–149
of
this Annual Report
for further details.
|
(i)
|
Charge-offs and net charge-off rates for the year ended
December 31, 2012
, included net charge-offs of Chapter 7 loans of
$91 million
for senior lien home equity,
$539 million
for junior lien home equity,
$47 million
for prime mortgage, including option ARMs,
$70 million
for subprime mortgage and
$53 million
for auto loans. Net charge-off rates for the for the year ended
December 31, 2012
, excluding these net charge-offs would have been
0.90%
,
3.03%
,
0.58%
,
4.65%
and
0.28%
for the senior lien home equity, junior lien home equity, prime mortgage, including option ARMs, subprime mortgages and auto loans, respectively. See Consumer Credit Portfolio on pages
138–149
of
this Annual Report
for further details.
|
(j)
|
Average consumer loans held-for-sale were
$433 million
and
$924 million
, respectively, for the years ended
December 31, 2012
and
2011
. These amounts were excluded when calculating net charge-off rates.
|
140
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Current high risk junior liens
|
|
|
|
|||
(in billions)
|
|
December 31, 2012
|
||||
Junior liens subordinate to:
|
|
|
|
|
||
Modified current senior lien
|
|
|
$
|
1.1
|
|
|
Senior lien 30 – 89 days delinquent
|
|
|
0.9
|
|
|
|
Senior lien 90 days or more delinquent
|
|
|
1.1
|
|
(a)
|
|
Total current high risk junior liens
|
|
|
$
|
3.1
|
|
|
(a)
|
Junior liens subordinate to senior liens that are 90 days or more past due are classified as nonaccrual loans. Excludes approximately
$100 million
of junior liens that are performing but not current, which were placed on nonaccrual in accordance with the regulatory guidance.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
141
|
(a)
|
Includes the original nonaccretable difference established in purchase accounting of
$30.5 billion
for principal losses only plus additional principal losses recognized subsequent to acquisition through the provision and allowance for loan losses. The remaining nonaccretable difference for principal losses only was
$5.8 billion
and
$9.4 billion
at
December 31, 2012
and
2011
, respectively.
|
(b)
|
Life-to-date (“LTD”) liquidation losses represent realization of loss upon loan resolution.
|
142
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
143
|
LTV ratios and ratios of carrying values to current estimated collateral values – PCI loans
|
|
|
|
|
||||||||||||||||||||
|
|
2012
|
|
2011
|
||||||||||||||||||||
December 31,
(in millions,
except ratios)
|
|
Unpaid principal balance
|
Current estimated
LTV ratio
(a)
|
Net carrying value
(c)
|
Ratio of net
carrying value
to current estimated
collateral value
(c)
|
|
Unpaid principal
balance
|
Current estimated
LTV ratio
(a)
|
Net carrying value
(c)
|
Ratio of net
carrying value
to current estimated
collateral value
(c)
|
||||||||||||||
Home equity
|
|
$
|
22,343
|
|
111
|
%
|
(b)
|
$
|
19,063
|
|
95
|
%
|
|
$
|
25,064
|
|
117
|
%
|
(b)
|
$
|
20,789
|
|
97
|
%
|
Prime mortgage
|
|
13,884
|
|
104
|
|
|
11,745
|
|
88
|
|
|
16,060
|
|
110
|
|
|
13,251
|
|
91
|
|
||||
Subprime mortgage
|
|
6,326
|
|
107
|
|
|
4,246
|
|
72
|
|
|
7,229
|
|
115
|
|
|
4,596
|
|
73
|
|
||||
Option ARMs
|
|
22,591
|
|
101
|
|
|
18,972
|
|
85
|
|
|
26,139
|
|
109
|
|
|
21,199
|
|
89
|
|
(a)
|
Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated at least quarterly based on home valuation models that utilize nationally recognized home price index valuation estimates; such models incorporate actual data to the extent available and forecasted data where actual data is not available.
|
(b)
|
Represents current estimated combined LTV for junior home equity liens, which considers all available lien positions related to the property. All other products are presented without consideration of subordinate liens on the property.
|
(c)
|
Net carrying value includes the effect of fair value adjustments that were applied to the consumer PCI portfolio at the date of acquisition and is also net of the allowance for loan losses of
$1.9 billion
for home equity,
$1.9 billion
for prime mortgage,
$1.5 billion
for option ARMs, and
$380 million
for subprime mortgage at both
December 31, 2012
and
2011
.
|
144
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(a)
|
Amounts represent the carrying value of modified residential real estate loans.
|
(b)
|
At
December 31, 2012
and
2011
,
$7.5 billion
and
$4.3 billion
, respectively, of loans permanently modified subsequent to repurchase from Ginnie Mae in accordance with the standards of the appropriate government agency (i.e., FHA, VA, RHS) are not included in the table above. When such loans perform subsequent to modification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure. For additional information about sales of loans in securitization transactions with Ginnie Mae, see Note 16 on pages
280–291
of
this Annual Report
.
|
(c)
|
At
December 31, 2012
, included
$1.6 billion
of Chapter 7 loans, consisting of
$450 million
of senior lien home equity loans,
$448 million
of junior lien home equity loans,
$465 million
of prime, including option ARMs, and
$245 million
of subprime mortgages. Certain of these loans were previously reported as nonaccrual loans (e.g. based upon the delinquency status of the loan). See Consumer Credit Portfolio on pages
138–149
of
this Annual Report
for further details.
|
(d)
|
Amounts represent the unpaid principal balance of modified PCI loans.
|
(e)
|
As of
December 31, 2012
and
2011
, nonaccrual loans included
$2.9 billion
and
$886 million
, respectively, of TDRs for which the borrowers were less than 90 days past due. For additional information about loans modified in a TDR that are on nonaccrual status, see Note 14 on pages
250–275
of this Annual Report.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
145
|
Nonperforming assets
(a)
|
|
|
|
||||
December 31, (in millions)
|
2012
|
|
2011
|
||||
Nonaccrual loans
(b)
|
|
|
|
||||
Home equity – senior lien
|
$
|
931
|
|
|
$
|
495
|
|
Home equity – junior lien
|
2,277
|
|
|
792
|
|
||
Prime mortgage, including option ARMs
|
3,445
|
|
|
3,462
|
|
||
Subprime mortgage
|
1,807
|
|
|
1,781
|
|
||
Auto
|
163
|
|
|
118
|
|
||
Business banking
|
481
|
|
|
694
|
|
||
Student and other
|
70
|
|
|
69
|
|
||
Total nonaccrual loans
|
9,174
|
|
|
7,411
|
|
||
Assets acquired in loan satisfactions
|
|
|
|
||||
Real estate owned
|
647
|
|
|
802
|
|
||
Other
|
37
|
|
|
44
|
|
||
Total assets acquired in loan satisfactions
|
684
|
|
|
846
|
|
||
Total nonperforming assets
|
$
|
9,858
|
|
|
$
|
8,257
|
|
(a)
|
At
December 31, 2012
and
2011
, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of
$10.6 billion
and
$11.5 billion
, respectively, that are 90 or more days past due; (2) real estate owned insured by U.S. government agencies of
$1.6 billion
and
$954 million
, respectively; and (3) student loans insured by U.S. government agencies under the FFELP of
$525 million
and
$551 million
, respectively, that are 90 or more days past due. These amounts were excluded as reimbursement of insured amounts is proceeding normally.
|
(b)
|
Excludes PCI loans that were acquired as part of the Washington Mutual transaction, which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of individual loans within the pools, is not meaningful. Because the Firm is recognizing interest income on each pool of loans, they are all considered to be performing.
|
146
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
147
|
•
|
Established an independent Compliance Committee which meets regularly and monitors progress against the Orders.
|
•
|
Launched a new Customer Assistance Specialist organization for borrowers to facilitate the single point of contact initiative and ensure effective coordination and communication related to foreclosure, loss-mitigation and loan modification.
|
•
|
Enhanced its approach to oversight over third-party vendors for foreclosure or other related functions.
|
•
|
Standardized the processes for maintaining appropriate controls and oversight of the Firm’s activities with respect to the Mortgage Electronic Registration system (“MERS”)
|
•
|
Strengthened its compliance program so as to ensure mortgage-servicing and foreclosure operations, including loss-mitigation and loan modification, comply with all applicable legal requirements.
|
•
|
Enhanced management information systems for loan modification, loss-mitigation and foreclosure activities.
|
•
|
Developed a comprehensive assessment of risks in servicing operations including, but not limited to, operational, transaction, legal and reputational risks.
|
•
|
Made technological enhancements to automate and streamline processes for the Firm’s document management, training, skills assessment and payment processing initiatives.
|
•
|
Deployed an internal validation process to monitor progress under the comprehensive action plans.
|
148
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
149
|
WHOLESALE CREDIT PORTFOLIO
|
Wholesale credit portfolio
|
|||||||||||||
December 31,
|
Credit exposure
|
|
Nonperforming
(c)(d)
|
||||||||||
(in millions)
|
2012
|
2011
|
|
2012
|
2011
|
||||||||
Loans retained
|
$
|
306,222
|
|
$
|
278,395
|
|
|
$
|
1,434
|
|
$
|
2,398
|
|
Loans held-for-sale
|
4,406
|
|
2,524
|
|
|
18
|
|
110
|
|
||||
Loans at fair value
|
2,555
|
|
2,097
|
|
|
93
|
|
73
|
|
||||
Loans – reported
|
313,183
|
|
283,016
|
|
|
1,545
|
|
2,581
|
|
||||
Derivative receivables
|
74,983
|
|
92,477
|
|
|
239
|
|
297
|
|
||||
Receivables from customers and other
(a)
|
23,648
|
|
17,461
|
|
|
—
|
|
—
|
|
||||
Total wholesale credit-related assets
|
411,814
|
|
392,954
|
|
|
1,784
|
|
2,878
|
|
||||
Lending-related commitments
|
434,814
|
|
382,739
|
|
|
355
|
|
865
|
|
||||
Total wholesale credit exposure
|
$
|
846,628
|
|
$
|
775,693
|
|
|
$
|
2,139
|
|
$
|
3,743
|
|
Credit Portfolio Management derivatives notional, net
(b)
|
$
|
(27,447
|
)
|
$
|
(26,240
|
)
|
|
$
|
(25
|
)
|
$
|
(38
|
)
|
Liquid securities and other cash collateral held against derivatives
|
(13,658
|
)
|
(21,807
|
)
|
|
NA
|
|
NA
|
|
(a)
|
Receivables from customers and other primarily includes margin loans to prime and retail brokerage customers; these are classified in accrued interest and accounts receivable on the Consolidated Balance Sheets.
|
(b)
|
Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. Excludes the synthetic credit portfolio. For additional information, see Credit derivatives on pages
158–159
, and Note 6 on pages
218–227
of
this Annual Report
.
|
(c)
|
Excludes assets acquired in loan satisfactions.
|
(d)
|
Prior to the first quarter of 2012, reported amounts had only included defaulted derivatives; effective in the first quarter of 2012, reported amounts in all periods include both defaulted derivatives as well as derivatives that have been risk rated as nonperforming.
|
150
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
Maturity profile
(e)
|
|
Ratings profile
|
||||||||||||||||||||||
December 31, 2011
|
Due in 1 year or less
|
Due after 1 year through 5 years
|
Due after 5 years
|
Total
|
|
Investment-grade
|
|
Noninvestment-grade
|
Total
|
Total %
of IG
|
|||||||||||||||
(in millions, except ratios)
|
|
AAA/Aaa to BBB-/Baa3
|
|
BB+/Ba1 & below
|
|||||||||||||||||||||
Loans retained
|
$
|
113,222
|
|
$
|
101,959
|
|
$
|
63,214
|
|
$
|
278,395
|
|
|
$
|
196,998
|
|
|
$
|
81,397
|
|
$
|
278,395
|
|
71
|
%
|
Derivative receivables
|
|
|
|
92,477
|
|
|
|
|
|
92,477
|
|
|
|||||||||||||
Less: Liquid securities and other cash collateral held against derivatives
|
|
|
|
(21,807
|
)
|
|
|
|
|
(21,807
|
)
|
|
|||||||||||||
Total derivative receivables, net of all collateral
|
8,243
|
|
29,910
|
|
32,517
|
|
70,670
|
|
|
57,637
|
|
|
13,033
|
|
70,670
|
|
82
|
|
|||||||
Lending-related commitments
|
139,978
|
|
233,396
|
|
9,365
|
|
382,739
|
|
|
310,107
|
|
|
72,632
|
|
382,739
|
|
81
|
|
|||||||
Subtotal
|
261,443
|
|
365,265
|
|
105,096
|
|
731,804
|
|
|
564,742
|
|
|
167,062
|
|
731,804
|
|
77
|
|
|||||||
Loans held-for-sale and loans at fair value
(a)
|
|
|
|
4,621
|
|
|
|
|
|
4,621
|
|
|
|||||||||||||
Receivables from customers and other
|
|
|
|
17,461
|
|
|
|
|
|
17,461
|
|
|
|||||||||||||
Total exposure – net of liquid securities and other cash collateral held against derivatives
|
|
|
|
$
|
753,886
|
|
|
|
|
|
$
|
753,886
|
|
|
|||||||||||
Credit Portfolio Management derivatives net notional by counterparty ratings profile
(b)(c)
|
$
|
(2,034
|
)
|
$
|
(16,450
|
)
|
$
|
(7,756
|
)
|
$
|
(26,240
|
)
|
|
$
|
(26,300
|
)
|
|
$
|
60
|
|
$
|
(26,240
|
)
|
100
|
%
|
Credit Portfolio Management derivatives net notional by reference entity ratings profile
(b)(d)
|
|
|
|
|
|
$
|
(22,159
|
)
|
|
$
|
(4,081
|
)
|
$
|
(26,240
|
)
|
84
|
%
|
(a)
|
Represents loans held-for-sale primarily related to syndicated loans and loans transferred from the retained portfolio, and loans at fair value.
|
(b)
|
These derivatives do not quality for hedge accounting under U.S. GAAP. Excludes the synthetic credit portfolio.
|
(c)
|
The notional amounts are presented on a net basis by each derivative counterparty and the ratings profile shown is based on the ratings of those counterparties. The counterparties to these positions are predominately investment-grade banks and finance companies.
|
(d)
|
The notional amounts are presented on a net basis by underlying reference entity and the ratings profile shown is based on the ratings of the reference entity on which protection has been purchased.
|
(e)
|
The maturity profiles of retained loans and lending-related commitments are based on the remaining contractual maturity. The maturity profiles of derivative receivables are based on the maturity profile of average exposure. For further discussion of average exposure, see Derivative receivables on pages
156–159
of
this Annual Report
.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
151
|
152
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(a)
|
The industry rankings presented in the table as of
December 31, 2011
, are based on the industry rankings of the corresponding exposures at
December 31, 2012
, not actual rankings of such exposures at
December 31, 2011
.
|
(b)
|
In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at
December 31, 2012
and
2011
, noted above, the Firm held
$18.2 billion
and
$16.7 billion
, respectively, of trading securities and
$21.7 billion
and
$16.5 billion
, respectively, of AFS securities issued by U.S. state and municipal governments. For further information, see Note 3 and Note 12 on pages
196–214
and
244–248
, respectively, of
this Annual Report
.
|
(c)
|
Credit exposure is net of risk participations and excludes the benefit of “Credit Portfolio Management derivatives net notional” held against derivative receivables or loans and “Liquid securities and other cash collateral held against derivative receivables”.
|
(d)
|
As of
December 31, 2012
, exposures deemed criticized correspond to special mention, substandard and doubtful categories as defined by bank regulatory agencies. Prior periods have been reclassified to conform with the current presentation.
|
(e)
|
Represents the net notional amounts of protection purchased and sold through credit derivatives used to manage the credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. The all other category includes purchased credit protection on certain credit indices. Credit Portfolio Management derivatives excludes the synthetic credit portfolio.
|
(f)
|
Prior to the first quarter of 2012, reported amounts had only included defaulted derivatives; effective in the first quarter of 2012, reported amounts in all periods include both defaulted derivatives as well as derivatives that have been risk rated as nonperforming.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
153
|
•
|
Real estate:
Exposure to this industry increased by
$8.6 billion
or
13%
, in
2012
to
$76.2 billion
. The increase was primarily driven by CB. The credit quality of this industry improved as the investment-grade portion of the exposures to this industry increased by
22%
from
2011
, while the criticized portion declined by
32%
from
2011
, primarily as a result of repayments and loan sales. The ratio of nonaccrual retained loans to total retained loans decreased to
0.86%
at December 31, 2012 from
1.62%
at December 31, 2011 in line with the decrease in real estate criticized exposure. For further information on commercial real estate loans, see Note 14 on pages
250–275
of
this Annual Report
.
|
•
|
Banks and finance companies:
Exposure to this industry increased by
$1.9 billion
or
3%
, and criticized exposure decreased by
0.7%
, compared with
2011
. At
December 31, 2012
,
76%
of the portfolio is rated investment-grade.
|
•
|
State and municipal governments:
Exposure to this industry decreased by
$109 million
in
2012
to
$41.8 billion
. Lending-related commitments comprise approximately
69%
of the exposure to this sector, generally in the form of bond and commercial paper
|
•
|
All other:
All other at
December 31, 2012
(excluding loans held-for-sale and loans at fair value), included
$195.6 billion
of credit exposure. Concentrations of exposures include: (1) Individuals, Private Education & Civic Organizations, which were
57%
of this category and (2) SPEs which were
28%
of this category. Each of these categories has high credit quality, and approximately
90%
of each of these categories were rated investment-grade. SPEs provide secured financing (generally backed by receivables, loans or bonds with a diverse group of obligors); the lending in this category was all secured and well-structured. For further discussion of SPEs, see Note 1 on pages
193–194
and Note 16 on pages
280–291
of this Annual Report. The remaining exposure within this category is well-diversified, with no category being more than
7%
of its total.
|
154
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
Credit exposure
|
|
Nonperforming
|
Assets acquired in loan satisfactions
|
30 days or more past due and accruing loans
|
||||||||||||||||||||||||||
December 31, 2012
(in millions)
|
Loans
|
Lending-related commitments
|
Derivative receivables
|
Total credit exposure
|
|
Nonaccrual
loans
(a)
|
Derivatives
|
Lending-related commitments
|
Total non- performing credit exposure
|
||||||||||||||||||||||
Europe/Middle East/Africa
|
$
|
40,760
|
|
$
|
75,706
|
|
$
|
35,561
|
|
$
|
152,027
|
|
|
$
|
13
|
|
$
|
8
|
|
$
|
15
|
|
$
|
36
|
|
$
|
9
|
|
$
|
131
|
|
Asia/Pacific
|
30,287
|
|
22,919
|
|
10,557
|
|
63,763
|
|
|
13
|
|
—
|
|
—
|
|
13
|
|
—
|
|
18
|
|
||||||||||
Latin America/Caribbean
|
30,322
|
|
26,438
|
|
4,889
|
|
61,649
|
|
|
67
|
|
—
|
|
4
|
|
71
|
|
—
|
|
640
|
|
||||||||||
Other North America
|
2,987
|
|
7,653
|
|
1,418
|
|
12,058
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14
|
|
||||||||||
Total non-U.S.
|
104,356
|
|
132,716
|
|
52,425
|
|
289,497
|
|
|
93
|
|
8
|
|
19
|
|
120
|
|
9
|
|
803
|
|
||||||||||
Total U.S.
|
201,866
|
|
302,098
|
|
22,558
|
|
526,522
|
|
|
1,341
|
|
231
|
|
336
|
|
1,908
|
|
82
|
|
1,293
|
|
||||||||||
Loans held-for-sale and loans at fair value
|
6,961
|
|
—
|
|
—
|
|
6,961
|
|
|
111
|
|
NA
|
|
—
|
|
111
|
|
NA
|
|
—
|
|
||||||||||
Receivables from customers and other
|
—
|
|
—
|
|
—
|
|
23,648
|
|
|
—
|
|
NA
|
|
NA
|
|
—
|
|
NA
|
|
—
|
|
||||||||||
Total
|
$
|
313,183
|
|
$
|
434,814
|
|
$
|
74,983
|
|
$
|
846,628
|
|
|
$
|
1,545
|
|
$
|
239
|
|
$
|
355
|
|
$
|
2,139
|
|
$
|
91
|
|
$
|
2,096
|
|
|
Credit exposure
|
|
Nonperforming
|
Assets acquired in loan satisfactions
|
30 days or more past due and Accruing loans
|
||||||||||||||||||||||||||
December 31, 2011
(in millions)
|
Loans
|
Lending-related commitments
|
Derivative receivables
|
Total credit exposure
|
|
Nonaccrual
loans
(a)
|
Derivatives
(b)
|
Lending-related commitments
|
Total non- performing credit exposure
|
||||||||||||||||||||||
Europe/Middle East/Africa
|
$
|
36,637
|
|
$
|
60,681
|
|
$
|
43,204
|
|
$
|
140,522
|
|
|
$
|
44
|
|
$
|
14
|
|
$
|
25
|
|
$
|
83
|
|
$
|
—
|
|
$
|
68
|
|
Asia/Pacific
|
31,119
|
|
17,194
|
|
10,943
|
|
59,256
|
|
|
1
|
|
42
|
|
—
|
|
43
|
|
—
|
|
6
|
|
||||||||||
Latin America/Caribbean
|
25,141
|
|
20,859
|
|
5,316
|
|
51,316
|
|
|
386
|
|
—
|
|
15
|
|
401
|
|
3
|
|
222
|
|
||||||||||
Other North America
|
2,267
|
|
6,680
|
|
1,488
|
|
10,435
|
|
|
3
|
|
—
|
|
1
|
|
4
|
|
—
|
|
—
|
|
||||||||||
Total non-U.S.
|
95,164
|
|
105,414
|
|
60,951
|
|
261,529
|
|
|
434
|
|
56
|
|
41
|
|
531
|
|
3
|
|
296
|
|
||||||||||
Total U.S.
|
183,231
|
|
277,325
|
|
31,526
|
|
492,082
|
|
|
1,964
|
|
241
|
|
824
|
|
3,029
|
|
176
|
|
1,543
|
|
||||||||||
Loans held-for-sale and loans at fair value
|
4,621
|
|
—
|
|
—
|
|
4,621
|
|
|
183
|
|
NA
|
|
—
|
|
183
|
|
NA
|
|
—
|
|
||||||||||
Receivables from customers and other
|
—
|
|
—
|
|
—
|
|
17,461
|
|
|
—
|
|
NA
|
|
NA
|
|
—
|
|
NA
|
|
—
|
|
||||||||||
Total
|
$
|
283,016
|
|
$
|
382,739
|
|
$
|
92,477
|
|
$
|
775,693
|
|
|
$
|
2,581
|
|
$
|
297
|
|
$
|
865
|
|
$
|
3,743
|
|
$
|
179
|
|
$
|
1,839
|
|
(a)
|
At
December 31, 2012
and
2011
, the Firm held an allowance for loan losses of
$310 million
and
$496 million
, respectively, related to nonaccrual retained loans resulting in allowance coverage ratios of
22%
and
21%
, respectively. Wholesale nonaccrual loans represented
0.49%
and
0.91%
of total wholesale loans at
December 31, 2012
and
2011
, respectively.
|
(b)
|
Prior to the first quarter of 2012, reported amounts had only included defaulted derivatives; effective in the first quarter of 2012, reported amounts in all periods include both defaulted derivatives as well as derivatives that have been risk rated as nonperforming.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
155
|
Derivative receivables
|
|
|
||||
December 31, (in millions)
|
Derivative receivables
|
|||||
2012
|
2011
|
|||||
Interest rate
|
$
|
39,205
|
|
$
|
46,369
|
|
Credit derivatives
|
1,735
|
|
6,684
|
|
||
Foreign exchange
|
14,142
|
|
17,890
|
|
||
Equity
|
9,266
|
|
6,793
|
|
||
Commodity
|
10,635
|
|
14,741
|
|
||
Total, net of cash collateral
|
74,983
|
|
92,477
|
|
||
Liquid securities and other cash collateral held against derivative receivables
|
(13,658
|
)
|
(21,807
|
)
|
||
Total, net of all collateral
|
$
|
61,325
|
|
$
|
70,670
|
|
156
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
157
|
Ratings profile of derivative receivables
|
|
|
|
|
|
||||||
Rating equivalent
|
2012
|
|
2011
|
||||||||
December 31,
(in millions, except ratios)
|
Exposure net of all collateral
|
% of exposure net of all collateral
|
|
Exposure net of all collateral
|
% of exposure net of all collateral
|
||||||
AAA/Aaa to AA-/Aa3
|
$
|
20,040
|
|
33
|
%
|
|
$
|
25,100
|
|
35
|
%
|
A+/A1 to A-/A3
|
12,169
|
|
20
|
|
|
22,942
|
|
32
|
|
||
BBB+/Baa1 to BBB-/Baa3
|
18,197
|
|
29
|
|
|
9,595
|
|
14
|
|
||
BB+/Ba1 to B-/B3
|
9,636
|
|
16
|
|
|
10,545
|
|
15
|
|
||
CCC+/Caa1 and below
|
1,283
|
|
2
|
|
|
2,488
|
|
4
|
|
||
Total
|
$
|
61,325
|
|
100
|
%
|
|
$
|
70,670
|
|
100
|
%
|
158
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Credit Portfolio Management derivatives
|
|||||||
|
Notional amount of protection
purchased and sold
(a)
|
||||||
December 31, (in millions)
|
2012
|
|
2011
|
||||
Credit derivatives used to manage:
|
|
|
|
||||
Loans and lending-related commitments
|
$
|
2,166
|
|
|
$
|
3,488
|
|
Derivative receivables
|
25,347
|
|
|
22,883
|
|
||
Total net protection purchased
|
27,513
|
|
|
26,371
|
|
||
Total net protection sold
|
66
|
|
|
131
|
|
||
Credit Portfolio Management derivatives net notional
|
$
|
27,447
|
|
|
$
|
26,240
|
|
(a)
|
Amounts are presented net, considering the Firm’s net protection purchased or sold with respect to each underlying reference entity or index.
|
Net gains and losses on credit portfolio hedges
|
|||||||||||
Year ended December 31,
(in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Hedges of loans and lending-related commitments
|
$
|
(163
|
)
|
|
$
|
(32
|
)
|
|
$
|
(279
|
)
|
CVA and hedges of CVA
|
127
|
|
|
(769
|
)
|
|
(403
|
)
|
|||
Net gains/(losses)
|
$
|
(36
|
)
|
|
$
|
(801
|
)
|
|
$
|
(682
|
)
|
COMMUNITY REINVESTMENT ACT EXPOSURE
|
ALLOWANCE FOR CREDIT LOSSES
|
JPMorgan Chase & Co./2012 Annual Report
|
|
159
|
160
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(a)
|
|
(a)
|
Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a TDR.
|
(b)
|
The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.
|
(c)
|
Charge-offs are not recorded on PCI loans until actual losses exceed estimated losses recorded as purchase accounting adjustments at the time of acquisition.
|
(d)
|
Net charge-offs and net charge-off rates for the year ended
December 31, 2012
, included
$800 million
of charge-offs of Chapter 7 loans. See Consumer Credit Portfolio on pages
138–149
of
this Annual Report
for further details.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
161
|
Year ended December 31,
|
|
Provision for loan losses
|
|
Provision for
lending-related commitments
|
|
Total provision for credit losses
|
||||||||||||||||||||||||
(in millions)
|
|
2012
|
|
2011
|
|
2010
|
|
2012
|
|
2011
|
|
2010
|
|
|
2012
|
|
2011
|
|
2010
|
|
||||||||||
Consumer, excluding credit card
|
|
$
|
302
|
|
$
|
4,670
|
|
$
|
9,458
|
|
|
$
|
—
|
|
$
|
2
|
|
$
|
(6
|
)
|
|
$
|
302
|
|
$
|
4,672
|
|
$
|
9,452
|
|
Credit card
|
|
3,444
|
|
2,925
|
|
8,037
|
|
|
—
|
|
—
|
|
—
|
|
|
3,444
|
|
2,925
|
|
8,037
|
|
|||||||||
Wholesale
|
|
(359
|
)
|
17
|
|
(673
|
)
|
|
(2
|
)
|
(40
|
)
|
(177
|
)
|
|
(361
|
)
|
(23
|
)
|
(850
|
)
|
|||||||||
Total provision for credit losses
|
|
$
|
3,387
|
|
$
|
7,612
|
|
$
|
16,822
|
|
|
$
|
(2
|
)
|
$
|
(38
|
)
|
$
|
(183
|
)
|
|
$
|
3,385
|
|
$
|
7,574
|
|
$
|
16,639
|
|
162
|
|
JPMorgan Chase & Co./2012 Annual Report
|
MARKET RISK MANAGEMENT
|
•
|
Establishment of a market risk policy framework
|
•
|
Independent measurement, monitoring and control of line of business and firmwide market risk
|
•
|
Definition, approval and monitoring of limits
|
•
|
Performance of stress testing and qualitative risk assessments
|
•
|
Value-at-risk (“VaR”)
|
•
|
Economic-value stress testing
|
•
|
Nonstatistical risk measures
|
•
|
Loss advisories
|
•
|
Profit and loss drawdowns
|
•
|
Risk identification for large exposures (“RIFLEs”)
|
•
|
Nontrading interest rate-sensitive revenue-at-risk stress testing
|
JPMorgan Chase & Co./2012 Annual Report
|
|
163
|
164
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Total VaR
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
As of or for the year ended December 31,
|
2012
|
|
2011
|
|
At December 31,
|
|||||||||||||||||||||||||||||
(in millions)
|
Avg.
|
Min
|
Max
|
|
Avg.
|
Min
|
Max
|
|
2012
|
2011
|
||||||||||||||||||||||||
CIB trading VaR by risk type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fixed income
|
$
|
83
|
|
(a)
|
$
|
47
|
|
|
$
|
131
|
|
|
|
$
|
50
|
|
|
$
|
31
|
|
|
$
|
68
|
|
|
|
$
|
69
|
|
|
$
|
49
|
|
|
Foreign exchange
|
10
|
|
|
6
|
|
|
22
|
|
|
|
11
|
|
|
6
|
|
|
19
|
|
|
|
8
|
|
|
19
|
|
|
||||||||
Equities
|
21
|
|
|
12
|
|
|
35
|
|
|
|
23
|
|
|
15
|
|
|
42
|
|
|
|
22
|
|
|
19
|
|
|
||||||||
Commodities and other
|
15
|
|
|
11
|
|
|
27
|
|
|
|
16
|
|
|
8
|
|
|
24
|
|
|
|
15
|
|
|
22
|
|
|
||||||||
Diversification benefit to CIB trading VaR
|
(45
|
)
|
(b)
|
NM
|
|
(c)
|
NM
|
|
(c)
|
|
(42
|
)
|
(b)
|
NM
|
|
(c)
|
NM
|
|
(c)
|
|
(39
|
)
|
(b)
|
(55
|
)
|
(b)
|
||||||||
CIB trading VaR
|
84
|
|
|
50
|
|
|
128
|
|
|
|
58
|
|
|
34
|
|
|
80
|
|
|
|
75
|
|
|
54
|
|
|
||||||||
Credit portfolio VaR
|
25
|
|
|
16
|
|
|
42
|
|
|
|
33
|
|
|
19
|
|
|
55
|
|
|
|
18
|
|
|
42
|
|
|
||||||||
Diversification benefit to CIB trading and credit portfolio VaR
|
(13
|
)
|
(b)
|
NM
|
|
(c)
|
NM
|
|
(c)
|
|
(15
|
)
|
(b)
|
NM
|
|
(c)
|
NM
|
|
(c)
|
|
(9
|
)
|
(b)
|
(20
|
)
|
(b)
|
||||||||
Total CIB trading and credit portfolio VaR
|
96
|
|
(a)(e)
|
58
|
|
|
142
|
|
|
|
76
|
|
|
42
|
|
|
102
|
|
|
|
84
|
|
(a)(e)
|
76
|
|
|
||||||||
Other VaR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage Production and Mortgage Servicing VaR
|
17
|
|
|
8
|
|
|
43
|
|
|
|
30
|
|
|
6
|
|
|
98
|
|
|
|
24
|
|
|
16
|
|
|
||||||||
Chief Investment Office (“CIO”) VaR
|
92
|
|
(a)(d)
|
5
|
|
|
196
|
|
|
|
57
|
|
|
30
|
|
|
80
|
|
|
|
6
|
|
|
77
|
|
|
||||||||
Diversification benefit to total other VaR
|
(8
|
)
|
(b)
|
NM
|
|
(c)
|
NM
|
|
(c)
|
|
(17
|
)
|
(b)
|
NM
|
|
(c)
|
NM
|
|
(c)
|
|
(5
|
)
|
(b)
|
(10
|
)
|
(b)
|
||||||||
Total other VaR
|
101
|
|
|
18
|
|
|
204
|
|
|
|
70
|
|
|
46
|
|
|
110
|
|
|
|
25
|
|
|
83
|
|
|
||||||||
Diversification benefit to total CIB and other VaR
|
(45
|
)
|
(b)
|
NM
|
|
(c)
|
NM
|
|
(c)
|
|
(45
|
)
|
(b)
|
NM
|
|
(c)
|
NM
|
|
(c)
|
|
(11
|
)
|
(b)
|
(46
|
)
|
(b)
|
||||||||
Total VaR
|
$
|
152
|
|
|
$
|
93
|
|
|
$
|
254
|
|
|
|
$
|
101
|
|
|
$
|
67
|
|
|
$
|
147
|
|
|
|
$
|
98
|
|
|
$
|
113
|
|
|
(a)
|
On July 2, 2012, CIO transferred its synthetic credit portfolio, other than a portion aggregating approximately $12 billion notional, to CIB; CIO’s retained portfolio was effectively closed out during the three months ended September 30, 2012. During the third quarter of 2012, the Firm applied a new VaR model to calculate VaR for both the portion of the synthetic credit portfolio held by CIB, as well as the portion that was retained by CIO, and which was effectively closed out at September 30, 2012. For the three months ended December 31, 2012, this new VaR model resulted in a reduction to average fixed income VaR of $11 million, average CIB trading and credit portfolio VaR of $8 million, and average total VaR of $7 million.
|
(b)
|
Average portfolio VaR and period-end portfolio VaR were less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects the fact that the risks were not perfectly correlated.
|
(c)
|
Designated as not meaningful (“NM”), because the minimum and maximum may occur on different days for different risk components, and hence it is not meaningful to compute a portfolio-diversification effect.
|
(d)
|
Reference is made to CIO synthetic credit portfolio on pages
69–70
of this Annual Report regarding the Firm’s restatement of its 2012 first quarter financial statements. The CIO VaR amount has not been recalculated for the first quarter to reflect the restatement. The 2012 full-year VaR does not include recalculated amounts for the first quarter of 2012.
|
(e)
|
Effective in the fourth quarter of 2012, CIB’s VaR includes the VaR of former reportable business segments, Investment Bank and Treasury & Securities Services (“TSS”), which were combined to form the CIB business segment as a result of the reorganization of the Firm’s business segments. TSS VaR was not material and was previously classified within Other VaR. Prior period VaR disclosures were not revised as a result of the business segment reorganization.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
165
|
166
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
167
|
•
|
Differences in the timing among the maturity or repricing of assets, liabilities and off-balance sheet instruments. For example, if liabilities reprice more quickly than assets and funding interest rates are declining, net interest income will increase initially.
|
•
|
Differences in the amounts of assets, liabilities and off-balance sheet instruments that are repricing at the same time. For example, if more deposit liabilities are repricing than assets when general interest rates are declining, net interest income will increase initially.
|
•
|
Differences in the amounts by which short-term and long-term market interest rates change (for example, changes in the slope of the yield curve) because the Firm has the ability to lend at long-term fixed rates and borrow at variable or short-term fixed rates. Based on these scenarios, the Firm’s net interest income would be affected negatively by a sudden and unanticipated increase in short-term rates paid on its liabilities (e.g., deposits) without a corresponding increase in long-term rates received on its assets (e.g., loans). Conversely, higher long-term rates received on assets generally are beneficial to net interest income, particularly when the increase is not accompanied by rising short-term rates paid on liabilities.
|
•
|
The impact of changes in the maturity of various assets, liabilities or off-balance sheet instruments as interest rates change. For example, if more borrowers than forecasted pay down higher-rate loan balances when general interest rates are declining, net interest income may decrease initially.
|
168
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(a)
|
Downward 100- and 200-basis-point parallel shocks result in a federal funds target rate of zero and negative three- and six-month treasury rates. The earnings-at-risk results of such a low-probability scenario are not meaningful.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
169
|
COUNTRY RISK MANAGEMENT
|
•
|
Developing guidelines and policies consistent with a comprehensive country risk framework
|
•
|
Assigning sovereign ratings and assessing country risks
|
•
|
Measuring and monitoring country risk exposure across the Firm
|
•
|
Managing country limits and reporting utilization to senior management
|
•
|
Developing surveillance tools for early identification of potential country risk concerns
|
•
|
Providing country risk scenario analysis
|
•
|
Lending exposures are measured at the total committed amount (funded and unfunded), net of the allowance for credit losses and cash and marketable securities collateral received
|
•
|
AFS securities are measured at par value
|
•
|
Securities financing exposures are measured at their receivable balance, net of collateral received
|
•
|
Debt and equity securities in market-making and investing activities are measured at the fair value of all positions, including both long and short positions
|
•
|
Counterparty exposure on derivative receivables, including credit derivative receivables, is measured at the derivative’s fair value, net of the fair value of the related collateral
|
•
|
Credit derivatives protection purchased and sold are reported based on the underlying reference entity and is measured at the notional amount of protection purchased or sold, net of the fair value of the recognized derivative receivable or payable. Credit derivatives protection purchased and sold in the Firm’s market-making activities are presented on a net basis, as such activities often result in selling and purchasing protection related to the same underlying reference entity, and which reflects the manner in which the Firm manages these exposures
|
170
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Top 20 country exposures
|
|
|
|
||||||||||
|
|
||||||||||||
December 31, 2012
(in billions)
|
|
Lending
(a)
|
Trading and investing
(b)(c)
|
Other
(d)
|
Total exposure
|
||||||||
United Kingdom
|
|
$
|
23.3
|
|
$
|
52.6
|
|
$
|
2.6
|
|
$
|
78.5
|
|
Germany
|
|
24.4
|
|
36.3
|
|
—
|
|
60.7
|
|
||||
France
|
|
14.7
|
|
30.3
|
|
—
|
|
45.0
|
|
||||
Netherlands
|
|
5.0
|
|
29.8
|
|
3.0
|
|
37.8
|
|
||||
Switzerland
|
|
24.4
|
|
1.5
|
|
2.1
|
|
28.0
|
|
||||
Australia
|
|
7.1
|
|
16.2
|
|
—
|
|
23.3
|
|
||||
Canada
|
|
12.8
|
|
5.8
|
|
0.6
|
|
19.2
|
|
||||
Brazil
|
|
5.9
|
|
13.0
|
|
—
|
|
18.9
|
|
||||
India
|
|
7.3
|
|
7.9
|
|
0.7
|
|
15.9
|
|
||||
Korea
|
|
6.5
|
|
7.8
|
|
0.6
|
|
14.9
|
|
||||
China
|
|
8.0
|
|
3.9
|
|
1.3
|
|
13.2
|
|
||||
Japan
|
|
3.7
|
|
7.7
|
|
—
|
|
11.4
|
|
||||
Mexico
|
|
2.8
|
|
6.8
|
|
—
|
|
9.6
|
|
||||
Italy
|
|
2.8
|
|
4.7
|
|
—
|
|
7.5
|
|
||||
Singapore
|
|
3.8
|
|
1.8
|
|
1.2
|
|
6.8
|
|
||||
Russia
|
|
4.6
|
|
1.9
|
|
—
|
|
6.5
|
|
||||
Hong Kong
|
|
3.4
|
|
2.8
|
|
—
|
|
6.2
|
|
||||
Sweden
|
|
3.5
|
|
1.9
|
|
0.5
|
|
5.9
|
|
||||
Malaysia
|
|
1.5
|
|
3.6
|
|
0.7
|
|
5.8
|
|
||||
Spain
|
|
3.1
|
|
1.6
|
|
—
|
|
4.7
|
|
(a)
|
Lending includes loans and accrued interest receivable, net of the allowance for loan losses, deposits with banks, acceptances, other monetary assets, issued letters of credit net of participations, and undrawn commitments to extend credit. Excludes intra-day and operating exposures, such as from settlement and clearing activities.
|
(b)
|
Includes market-making inventory, securities held in AFS accounts and hedging.
|
(c)
|
Includes single-name and index and tranched credit derivatives for which one or more of the underlying reference entities is in a country listed in the above table.
|
(d)
|
Includes capital invested in local entities and physical commodity inventory.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
171
|
December 31, 2012
|
Lending net of Allowance
(a)
|
AFS securities
(b)
|
Trading
(c)
|
Derivative collateral
(d)
|
Portfolio
hedging
(e)
|
Total exposure
|
||||||||||||
(in billions)
|
||||||||||||||||||
Spain
|
|
|
|
|
|
|
||||||||||||
Sovereign
|
$
|
—
|
|
$
|
0.5
|
|
$
|
(0.4
|
)
|
$
|
—
|
|
$
|
(0.1
|
)
|
$
|
—
|
|
Non-sovereign
|
3.1
|
|
—
|
|
5.2
|
|
(3.3
|
)
|
(0.3
|
)
|
4.7
|
|
||||||
Total Spain exposure
|
$
|
3.1
|
|
$
|
0.5
|
|
$
|
4.8
|
|
$
|
(3.3
|
)
|
$
|
(0.4
|
)
|
$
|
4.7
|
|
|
|
|
|
|
|
|
||||||||||||
Italy
|
|
|
|
|
|
|
||||||||||||
Sovereign
|
$
|
—
|
|
$
|
—
|
|
$
|
11.6
|
|
$
|
(1.4
|
)
|
$
|
(4.9
|
)
|
$
|
5.3
|
|
Non-sovereign
|
2.8
|
|
—
|
|
1.0
|
|
(1.2
|
)
|
(0.4
|
)
|
2.2
|
|
||||||
Total Italy exposure
|
$
|
2.8
|
|
$
|
—
|
|
$
|
12.6
|
|
$
|
(2.6
|
)
|
$
|
(5.3
|
)
|
$
|
7.5
|
|
|
|
|
|
|
|
|
||||||||||||
Ireland
|
|
|
|
|
|
|
||||||||||||
Sovereign
|
$
|
—
|
|
$
|
0.3
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(0.3
|
)
|
$
|
—
|
|
Non-sovereign
|
0.5
|
|
—
|
|
1.7
|
|
(0.3
|
)
|
—
|
|
1.9
|
|
||||||
Total Ireland exposure
|
$
|
0.5
|
|
$
|
0.3
|
|
$
|
1.7
|
|
$
|
(0.3
|
)
|
$
|
(0.3
|
)
|
$
|
1.9
|
|
|
|
|
|
|
|
|
||||||||||||
Portugal
|
|
|
|
|
|
|
||||||||||||
Sovereign
|
$
|
—
|
|
$
|
—
|
|
$
|
0.4
|
|
$
|
—
|
|
$
|
(0.3
|
)
|
$
|
0.1
|
|
Non-sovereign
|
0.5
|
|
—
|
|
(0.4
|
)
|
(0.4
|
)
|
(0.1
|
)
|
(0.4
|
)
|
||||||
Total Portugal exposure
|
$
|
0.5
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(0.4
|
)
|
$
|
(0.4
|
)
|
$
|
(0.3
|
)
|
|
|
|
|
|
|
|
||||||||||||
Greece
|
|
|
|
|
|
|
||||||||||||
Sovereign
|
$
|
—
|
|
$
|
—
|
|
$
|
0.1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
0.1
|
|
Non-sovereign
|
0.1
|
|
—
|
|
0.7
|
|
(0.9
|
)
|
—
|
|
(0.1
|
)
|
||||||
Total Greece exposure
|
$
|
0.1
|
|
$
|
—
|
|
$
|
0.8
|
|
$
|
(0.9
|
)
|
$
|
—
|
|
$
|
—
|
|
|
|
|
|
|
|
|
||||||||||||
Total exposure
|
$
|
7.0
|
|
$
|
0.8
|
|
$
|
19.9
|
|
$
|
(7.5
|
)
|
$
|
(6.4
|
)
|
$
|
13.8
|
|
(a)
|
Lending includes loans and accrued interest receivable, deposits with banks, acceptances, other monetary assets, issued letters of credit net of participations, and undrawn commitments to extend credit. Excludes intra-day and operating exposures, such as from settlement and clearing activities. Amounts are presented net of the allowance for credit losses of
$116 million
(Spain),
$79 million
(Italy),
$9 million
(Ireland),
$15 million
(Portugal), and
$12 million
(Greece) specifically attributable to these countries. Includes
$2.4 billion
of unfunded lending exposure at
December 31, 2012
. These exposures consist typically of committed, but unused corporate credit agreements, with market-based lending terms and covenants.
|
(b)
|
The fair value of AFS securities was approximately
$0.7 billion
at
December 31, 2012
. The table above reflects AFS securities measured at par value.
|
(c)
|
Primarily includes:
$19.9 billion
of counterparty exposure on derivative and securities financings,
$3.7 billion
of issuer exposure on debt and equity securities held in trading,
$(3.6) billion
of net protection from credit derivatives, including
$(4.1) billion
related to the synthetic credit portfolio managed by CIB. Securities financings of approximately
$17.9 billion
were collateralized with approximately
$20.2 billion
of cash and marketable securities as of
December 31, 2012
.
|
(d)
|
Includes cash and marketable securities pledged to the Firm, of which approximately
97%
of the collateral was cash at
December 31, 2012
.
|
(e)
|
Reflects net protection purchased through the Firm’s credit portfolio management activities, which are managed separately from its market-making activities. Predominantly includes single-name CDS and also includes index credit derivatives and short bond positions. It does not include the synthetic credit portfolio.
|
172
|
|
JPMorgan Chase & Co./2012 Annual Report
|
December 31, 2012
|
|
Trading
|
|
Portfolio hedging
|
||||||||||||||||||||
(in billions)
|
|
Purchased
|
|
Sold
|
|
Net
|
|
Purchased
|
|
Sold
|
|
Net
|
||||||||||||
Spain
|
|
$
|
(121.2
|
)
|
|
$
|
120.2
|
|
|
$
|
(1.0
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
0.9
|
|
|
$
|
(0.3
|
)
|
Italy
|
|
(157.9
|
)
|
|
156.5
|
|
|
(1.4
|
)
|
|
(11.0
|
)
|
|
5.9
|
|
|
(5.1
|
)
|
||||||
Ireland
|
|
(7.1
|
)
|
|
7.2
|
|
|
0.1
|
|
|
(1.0
|
)
|
|
0.7
|
|
|
(0.3
|
)
|
||||||
Portugal
|
|
(43.2
|
)
|
|
42.2
|
|
|
(1.0
|
)
|
|
(0.5
|
)
|
|
0.1
|
|
|
(0.4
|
)
|
||||||
Greece
|
|
(11.7
|
)
|
|
11.4
|
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
(341.1
|
)
|
|
$
|
337.5
|
|
|
$
|
(3.6
|
)
|
|
$
|
(13.7
|
)
|
|
$
|
7.6
|
|
|
$
|
(6.1
|
)
|
JPMorgan Chase & Co./2012 Annual Report
|
|
173
|
PRINCIPAL RISK MANAGEMENT
|
174
|
|
JPMorgan Chase & Co./2012 Annual Report
|
OPERATIONAL RISK MANAGEMENT
|
•
|
Ownership of the risk by the businesses and functional areas
|
•
|
Monitoring and validation by business control officers
|
•
|
Oversight by independent risk management
|
•
|
Governance through business risk & control committees
|
•
|
Independent review by Internal Audit
|
•
|
Fraud risk
|
•
|
Improper market practices
|
•
|
Improper client management
|
•
|
Processing error
|
•
|
Financial reporting error
|
•
|
Information risk
|
•
|
Technology risk (including cybersecurity risk)
|
•
|
Third-party risk
|
•
|
Disruption & safety risk
|
•
|
Employee risk
|
•
|
Risk management error (including model risk)
|
JPMorgan Chase & Co./2012 Annual Report
|
|
175
|
176
|
|
JPMorgan Chase & Co./2012 Annual Report
|
LEGAL, FIDUCIARY AND REPUTATION RISK MANAGEMENT
|
JPMorgan Chase & Co./2012 Annual Report
|
|
177
|
CRITICAL ACCOUNTING ESTIMATES USED BY THE FIRM
|
178
|
|
JPMorgan Chase & Co./2012 Annual Report
|
•
|
A
5%
decline in housing prices from current levels, accompanied by an assumed corresponding change in the unemployment rate, for the residential real estate portfolio, excluding PCI loans, could result in an increase to modeled annual loss estimates of approximately
$200 million
.
|
•
|
A
5%
decline in housing prices from current levels, accompanied by an assumed corresponding change in the unemployment rate, could result in an increase in credit loss estimates for PCI loans of approximately
$600 million
.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
179
|
•
|
A
50
basis point deterioration in forecasted credit card loss rates could imply an increase to modeled annualized credit card loan loss estimates of approximately
$800 million
.
|
•
|
A one-notch downgrade in the Firm’s internal risk ratings for its entire wholesale loan portfolio could imply an increase in the Firm’s modeled loss estimates of approximately
$2.1 billion
.
|
December 31, 2012
(in billions, except ratio data)
|
Total assets at fair value
|
Total level 3 assets
|
||||||
Trading debt and equity instruments
|
$
|
375.0
|
|
|
$
|
25.6
|
|
|
Derivative receivables
|
75.0
|
|
|
23.3
|
|
|
||
Trading assets
|
450.0
|
|
|
48.9
|
|
|
||
AFS securities
|
371.1
|
|
|
28.9
|
|
|
||
Loans
|
2.6
|
|
|
2.3
|
|
|
||
MSRs
|
7.6
|
|
|
7.6
|
|
|
||
Private equity investments
|
7.8
|
|
|
7.2
|
|
|
||
Other
|
43.1
|
|
|
4.2
|
|
|
||
Total assets measured
at fair value on a recurring basis
|
882.2
|
|
|
99.1
|
|
|
||
Total assets measured at fair value on a nonrecurring basis
|
5.1
|
|
|
4.4
|
|
|
||
Total assets measured
at fair value
|
$
|
887.3
|
|
|
$
|
103.5
|
|
(a)
|
Total Firm assets
|
$
|
2,359.1
|
|
|
|
|
||
Level 3 assets as a percentage of total Firm assets
|
|
|
4.4
|
%
|
|
|||
Level 3 assets as a percentage of total Firm assets at fair value
|
|
|
11.7
|
%
|
|
180
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
181
|
182
|
|
JPMorgan Chase & Co./2012 Annual Report
|
ACCOUNTING AND REPORTING DEVELOPMENTS
|
JPMorgan Chase & Co./2012 Annual Report
|
|
183
|
NONEXCHANGE TRADED COMMODITY DERIVATIVE CONTRACTS AT FAIR VALUE
|
Year ended December 31, 2012
(in millions)
|
Asset position
|
|
Liability position
|
||||
Net fair value of contracts outstanding at January 1, 2012
|
$
|
13,122
|
|
|
$
|
13,517
|
|
Effect of legally enforceable master netting agreements
|
33,495
|
|
|
35,695
|
|
||
Gross fair value of contracts outstanding at January 1, 2012
|
46,617
|
|
|
49,212
|
|
||
Contracts realized or otherwise settled
|
(23,889
|
)
|
|
(26,321
|
)
|
||
Fair value of new contracts
|
19,357
|
|
|
21,502
|
|
||
Changes in fair values attributable to changes in valuation techniques and assumptions
|
—
|
|
|
—
|
|
||
Other changes in fair value
|
(4,934
|
)
|
|
(3,072
|
)
|
||
Gross fair value of contracts outstanding at December 31, 2012
|
37,151
|
|
|
41,321
|
|
||
Effect of legally enforceable master netting agreements
|
(28,856
|
)
|
|
(30,505
|
)
|
||
Net fair value of contracts outstanding at December 31, 2012
|
$
|
8,295
|
|
|
$
|
10,816
|
|
December 31, 2012 (in millions)
|
Asset position
|
|
Liability position
|
||||
Maturity less than 1 year
|
$
|
21,878
|
|
|
$
|
23,129
|
|
Maturity 1–3 years
|
12,029
|
|
|
12,424
|
|
||
Maturity 4–5 years
|
1,947
|
|
|
2,155
|
|
||
Maturity in excess of 5 years
|
1,297
|
|
|
3,613
|
|
||
Gross fair value of contracts outstanding at December 31, 2012
|
37,151
|
|
|
41,321
|
|
||
Effect of legally enforceable master netting agreements
|
(28,856
|
)
|
|
(30,505
|
)
|
||
Net fair value of contracts outstanding at December 31, 2012
|
$
|
8,295
|
|
|
$
|
10,816
|
|
184
|
|
JPMorgan Chase & Co./2012 Annual Report
|
FORWARD-LOOKING STATEMENTS
|
•
|
Local, regional and international business, economic and political conditions and geopolitical events;
|
•
|
Changes in laws and regulatory requirements, including as a result of recent financial services legislation;
|
•
|
Changes in trade, monetary and fiscal policies and laws;
|
•
|
Securities and capital markets behavior, including changes in market liquidity and volatility;
|
•
|
Changes in investor sentiment or consumer spending or savings behavior;
|
•
|
Ability of the Firm to manage effectively its capital and liquidity, including approval of its capital plans by banking regulators;
|
•
|
Changes in credit ratings assigned to the Firm or its subsidiaries;
|
•
|
Damage to the Firm’s reputation;
|
•
|
Ability of the Firm to deal effectively with an economic slowdown or other economic or market disruption;
|
•
|
Technology changes instituted by the Firm, its counterparties or competitors;
|
•
|
Mergers and acquisitions, including the Firm’s ability to integrate acquisitions;
|
•
|
Ability of the Firm to develop new products and services, and the extent to which products or services previously sold by the Firm (including but not limited to mortgages and asset-backed securities) require the Firm to incur
|
•
|
Ability of the Firm to address enhanced bank regulatory and other governmental agency requirements affecting its mortgage business;
|
•
|
Ability of the Firm to implement successfully the actions required under the various Consent Orders entered into with its banking regulators;
|
•
|
Acceptance of the Firm’s new and existing products and services by the marketplace and the ability of the Firm to increase market share;
|
•
|
Ability of the Firm to attract and retain employees;
|
•
|
Ability of the Firm to control expense;
|
•
|
Competitive pressures;
|
•
|
Changes in the credit quality of the Firm’s customers and counterparties;
|
•
|
Adequacy of the Firm’s risk management framework, disclosure controls and procedures and internal control over financial reporting, and the effectiveness of such controls and procedures in preventing control lapses or deficiencies;
|
•
|
Efficacy of the models used by the Firm in valuing, measuring, monitoring and managing positions and risk;
|
•
|
Adverse judicial or regulatory proceedings;
|
•
|
Changes in applicable accounting policies;
|
•
|
Ability of the Firm to determine accurate values of certain assets and liabilities;
|
•
|
Occurrence of natural or man-made disasters or calamities or conflicts, including any effect of any such disasters, calamities or conflicts on the Firm’s power generation facilities and the Firm’s other commodity-related activities;
|
•
|
Ability of the Firm to maintain the security of its financial, accounting, technology, data processing and other operating systems and facilities;
|
•
|
The other risks and uncertainties detailed in Part I, Item 1A: Risk Factors in the Firm’s Annual Report on Form 10-K for the year ended
December 31, 2012
.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
185
|
186
|
|
JPMorgan Chase & Co./2012 Annual Report
|
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
|
JPMorgan Chase & Co./2012 Annual Report
|
|
187
|
Year ended December 31, (in millions, except per share data)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Revenue
|
|
|
|
|
|
|
||||||
Investment banking fees
|
|
$
|
5,808
|
|
|
$
|
5,911
|
|
|
$
|
6,190
|
|
Principal transactions
|
|
5,536
|
|
|
10,005
|
|
|
10,894
|
|
|||
Lending- and deposit-related fees
|
|
6,196
|
|
|
6,458
|
|
|
6,340
|
|
|||
Asset management, administration and commissions
|
|
13,868
|
|
|
14,094
|
|
|
13,499
|
|
|||
Securities gains
(a)
|
|
2,110
|
|
|
1,593
|
|
|
2,965
|
|
|||
Mortgage fees and related income
|
|
8,687
|
|
|
2,721
|
|
|
3,870
|
|
|||
Card income
|
|
5,658
|
|
|
6,158
|
|
|
5,891
|
|
|||
Other income
|
|
4,258
|
|
|
2,605
|
|
|
2,044
|
|
|||
Noninterest revenue
|
|
52,121
|
|
|
49,545
|
|
|
51,693
|
|
|||
Interest income
|
|
56,063
|
|
|
61,293
|
|
|
63,782
|
|
|||
Interest expense
|
|
11,153
|
|
|
13,604
|
|
|
12,781
|
|
|||
Net interest income
|
|
44,910
|
|
|
47,689
|
|
|
51,001
|
|
|||
Total net revenue
|
|
97,031
|
|
|
97,234
|
|
|
102,694
|
|
|||
|
|
|
|
|
|
|
||||||
Provision for credit losses
|
|
3,385
|
|
|
7,574
|
|
|
16,639
|
|
|||
|
|
|
|
|
|
|
||||||
Noninterest expense
|
|
|
|
|
|
|
||||||
Compensation expense
|
|
30,585
|
|
|
29,037
|
|
|
28,124
|
|
|||
Occupancy expense
|
|
3,925
|
|
|
3,895
|
|
|
3,681
|
|
|||
Technology, communications and equipment expense
|
|
5,224
|
|
|
4,947
|
|
|
4,684
|
|
|||
Professional and outside services
|
|
7,429
|
|
|
7,482
|
|
|
6,767
|
|
|||
Marketing
|
|
2,577
|
|
|
3,143
|
|
|
2,446
|
|
|||
Other expense
|
|
14,032
|
|
|
13,559
|
|
|
14,558
|
|
|||
Amortization of intangibles
|
|
957
|
|
|
848
|
|
|
936
|
|
|||
Total noninterest expense
|
|
64,729
|
|
|
62,911
|
|
|
61,196
|
|
|||
Income before income tax expense
|
|
28,917
|
|
|
26,749
|
|
|
24,859
|
|
|||
Income tax expense
|
|
7,633
|
|
|
7,773
|
|
|
7,489
|
|
|||
Net income
|
|
$
|
21,284
|
|
|
$
|
18,976
|
|
|
$
|
17,370
|
|
Net income applicable to common stockholders
|
|
$
|
19,877
|
|
|
$
|
17,568
|
|
|
$
|
15,764
|
|
Net income per common share data
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
$
|
5.22
|
|
|
$
|
4.50
|
|
|
$
|
3.98
|
|
Diluted earnings per share
|
|
5.20
|
|
|
4.48
|
|
|
3.96
|
|
|||
|
|
|
|
|
|
|
||||||
Weighted-average basic shares
|
|
3,809.4
|
|
|
3,900.4
|
|
|
3,956.3
|
|
|||
Weighted-average diluted shares
|
|
3,822.2
|
|
|
3,920.3
|
|
|
3,976.9
|
|
|||
Cash dividends declared per common share
|
|
$
|
1.20
|
|
|
$
|
1.00
|
|
|
$
|
0.20
|
|
(a)
|
The following other-than-temporary impairment losses are included in securities gains for the periods presented
.
|
Year ended December 31, (in millions)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Debt securities the Firm does not intend to sell that have credit losses
|
|
|
|
|
|
|
||||||
Total other-than-temporary impairment losses
|
|
$
|
(113
|
)
|
|
$
|
(27
|
)
|
|
$
|
(94
|
)
|
Losses recorded in/(reclassified from) other comprehensive income
|
|
85
|
|
|
(49
|
)
|
|
(6
|
)
|
|||
Total credit losses recognized in income
|
|
(28
|
)
|
|
(76
|
)
|
|
(100
|
)
|
|||
Securities the Firm intends to sell
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|||
Total other-than-temporary impairment losses recognized in income
|
|
$
|
(43
|
)
|
|
$
|
(76
|
)
|
|
$
|
(100
|
)
|
188
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31, (in millions)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Net income
|
|
$
|
21,284
|
|
|
$
|
18,976
|
|
|
$
|
17,370
|
|
Other comprehensive income, after–tax
|
|
|
|
|
|
|
|
|
|
|||
Unrealized gains on AFS securities
|
|
3,303
|
|
|
1,067
|
|
|
610
|
|
|||
Translation adjustments, net of hedges
|
|
(69
|
)
|
|
(279
|
)
|
|
269
|
|
|||
Cash flow hedges
|
|
69
|
|
|
(155
|
)
|
|
25
|
|
|||
Defined benefit pension and OPEB plans
|
|
(145
|
)
|
|
(690
|
)
|
|
332
|
|
|||
Total other comprehensive income, after–tax
|
|
3,158
|
|
|
(57
|
)
|
|
1,236
|
|
|||
Comprehensive income
|
|
$
|
24,442
|
|
|
$
|
18,919
|
|
|
$
|
18,606
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
189
|
December 31, (in millions, except share data)
|
2012
|
|
2011
|
||||
Assets
|
|
|
|
||||
Cash and due from banks
|
$
|
53,723
|
|
|
$
|
59,602
|
|
Deposits with banks
|
121,814
|
|
|
85,279
|
|
||
Federal funds sold and securities purchased under resale agreements (included
$24,258
and $22,191 at fair value)
|
296,296
|
|
|
235,314
|
|
||
Securities borrowed (included
$10,177
and $15,308 at fair value)
|
119,017
|
|
|
142,462
|
|
||
Trading assets (included assets pledged of
$108,784
and $89,856)
|
450,028
|
|
|
443,963
|
|
||
Securities (included
$371,145
and $364,781 at fair value and assets pledged of
$71,167
and $94,691)
|
371,152
|
|
|
364,793
|
|
||
Loans (included
$2,555
and $2,097 at fair value)
|
733,796
|
|
|
723,720
|
|
||
Allowance for loan losses
|
(21,936
|
)
|
|
(27,609
|
)
|
||
Loans, net of allowance for loan losses
|
711,860
|
|
|
696,111
|
|
||
Accrued interest and accounts receivable
|
60,933
|
|
|
61,478
|
|
||
Premises and equipment
|
14,519
|
|
|
14,041
|
|
||
Goodwill
|
48,175
|
|
|
48,188
|
|
||
Mortgage servicing rights
|
7,614
|
|
|
7,223
|
|
||
Other intangible assets
|
2,235
|
|
|
3,207
|
|
||
Other assets (included
$16,458
and $16,499 at fair value and assets pledged of
$1,127
and $1,316)
|
101,775
|
|
|
104,131
|
|
||
Total assets
(a)
|
$
|
2,359,141
|
|
|
$
|
2,265,792
|
|
Liabilities
|
|
|
|
||||
Deposits (included
$5,733
and $4,933 at fair value)
|
$
|
1,193,593
|
|
|
$
|
1,127,806
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements (included
$4,388
and $6,817 at fair value)
|
240,103
|
|
|
213,532
|
|
||
Commercial paper
|
55,367
|
|
|
51,631
|
|
||
Other borrowed funds (included
$11,591
and $9,576 at fair value)
|
26,636
|
|
|
21,908
|
|
||
Trading liabilities
|
131,918
|
|
|
141,695
|
|
||
Accounts payable and other liabilities (included
$36
and $51 at fair value)
|
195,240
|
|
|
202,895
|
|
||
Beneficial interests issued by consolidated variable interest entities (included
$1,170
and $1,250 at fair value)
|
63,191
|
|
|
65,977
|
|
||
Long-term debt (included
$30,788
and $34,720 at fair value)
|
249,024
|
|
|
256,775
|
|
||
Total liabilities
(a)
|
2,155,072
|
|
|
2,082,219
|
|
||
Commitments and contingencies (see Notes 29, 30 and 31 of this Annual Report)
|
|
|
|
|
|
||
Stockholders’ equity
|
|
|
|
||||
Preferred stock ($1 par value; authorized 200,000,000 shares: issued
905,750
and
780,000 shares)
|
9,058
|
|
|
7,800
|
|
||
Common stock ($1 par value; authorized 9,000,000,000 shares; issued
4,104,933,895
shares)
|
4,105
|
|
|
4,105
|
|
||
Capital surplus
|
94,604
|
|
|
95,602
|
|
||
Retained earnings
|
104,223
|
|
|
88,315
|
|
||
Accumulated other comprehensive income/(loss)
|
4,102
|
|
|
944
|
|
||
Shares held in RSU Trust, at cost (
479,126
and 852,906 shares)
|
(21
|
)
|
|
(38
|
)
|
||
Treasury stock, at cost (
300,981,690
and 332,243,180 shares)
|
(12,002
|
)
|
|
(13,155
|
)
|
||
Total stockholders’ equity
|
204,069
|
|
|
183,573
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,359,141
|
|
|
$
|
2,265,792
|
|
(a)
|
The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at December 31, 2012 and
2011
. The difference between total VIE assets and liabilities represents the Firm’s interests in those entities, which were eliminated in consolidation.
|
December 31, (in millions)
|
2012
|
|
2011
|
||||
Assets
|
|
|
|
||||
Trading assets
|
$
|
11,966
|
|
|
$
|
12,079
|
|
Loans
|
82,723
|
|
|
86,754
|
|
||
All other assets
|
2,090
|
|
|
2,638
|
|
||
Total assets
|
$
|
96,779
|
|
|
$
|
101,471
|
|
Liabilities
|
|
|
|
||||
Beneficial interests issued by consolidated variable interest entities
|
$
|
63,191
|
|
|
$
|
65,977
|
|
All other liabilities
|
1,244
|
|
|
1,487
|
|
||
Total liabilities
|
$
|
64,435
|
|
|
$
|
67,464
|
|
190
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31, (in millions, except per share data)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Preferred stock
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
$
|
7,800
|
|
|
$
|
7,800
|
|
|
$
|
8,152
|
|
Issuance of preferred stock
|
|
1,258
|
|
|
—
|
|
|
—
|
|
|||
Redemption of preferred stock
|
|
—
|
|
|
—
|
|
|
(352
|
)
|
|||
Balance at December 31
|
|
9,058
|
|
|
7,800
|
|
|
7,800
|
|
|||
Common stock
|
|
|
|
|
|
|
||||||
Balance at January 1 and December 31
|
|
4,105
|
|
|
4,105
|
|
|
4,105
|
|
|||
Capital surplus
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
95,602
|
|
|
97,415
|
|
|
97,982
|
|
|||
Shares issued and commitments to issue common stock for employee stock-based compensation awards, and related tax effects
|
|
(736
|
)
|
|
(1,688
|
)
|
|
706
|
|
|||
Other
|
|
(262
|
)
|
|
(125
|
)
|
|
(1,273
|
)
|
|||
Balance at December 31
|
|
94,604
|
|
|
95,602
|
|
|
97,415
|
|
|||
Retained earnings
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
88,315
|
|
|
73,998
|
|
|
62,481
|
|
|||
Cumulative effect of changes in accounting principles
|
|
—
|
|
|
—
|
|
|
(4,376
|
)
|
|||
Net income
|
|
21,284
|
|
|
18,976
|
|
|
17,370
|
|
|||
Dividends declared:
|
|
|
|
|
|
|
||||||
Preferred stock
|
|
(647
|
)
|
|
(629
|
)
|
|
(642
|
)
|
|||
Common stock (
$1.20
, $1.00 and $0.20 per share for 2012, 2011 and 2010, respectively)
|
|
(4,729
|
)
|
|
(4,030
|
)
|
|
(835
|
)
|
|||
Balance at December 31
|
|
104,223
|
|
|
88,315
|
|
|
73,998
|
|
|||
Accumulated other comprehensive income/(loss)
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
944
|
|
|
1,001
|
|
|
(91
|
)
|
|||
Cumulative effect of changes in accounting principles
|
|
—
|
|
|
—
|
|
|
(144
|
)
|
|||
Other comprehensive (loss)/income
|
|
3,158
|
|
|
(57
|
)
|
|
1,236
|
|
|||
Balance at December 31
|
|
4,102
|
|
|
944
|
|
|
1,001
|
|
|||
Shares held in RSU Trust, at cost
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
(38
|
)
|
|
(53
|
)
|
|
(68
|
)
|
|||
Reissuance from RSU Trust
|
|
17
|
|
|
15
|
|
|
15
|
|
|||
Balance at December 31
|
|
(21
|
)
|
|
(38
|
)
|
|
(53
|
)
|
|||
Treasury stock, at cost
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
(13,155
|
)
|
|
(8,160
|
)
|
|
(7,196
|
)
|
|||
Purchase of treasury stock
|
|
(1,415
|
)
|
|
(8,741
|
)
|
|
(2,999
|
)
|
|||
Reissuance from treasury stock
|
|
2,574
|
|
|
3,750
|
|
|
2,040
|
|
|||
Share repurchases related to employee stock-based compensation awards
|
|
(6
|
)
|
|
(4
|
)
|
|
(5
|
)
|
|||
Balance at December 31
|
|
(12,002
|
)
|
|
(13,155
|
)
|
|
(8,160
|
)
|
|||
Total stockholders
’
equity
|
|
$
|
204,069
|
|
|
$
|
183,573
|
|
|
$
|
176,106
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
191
|
Year ended December 31, (in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
21,284
|
|
|
$
|
18,976
|
|
|
$
|
17,370
|
|
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
|
|
|
|
|
|
||||||
Provision for credit losses
|
3,385
|
|
|
7,574
|
|
|
16,639
|
|
|||
Depreciation and amortization
|
4,190
|
|
|
4,257
|
|
|
4,029
|
|
|||
Amortization of intangibles
|
957
|
|
|
848
|
|
|
936
|
|
|||
Deferred tax expense/(benefit)
|
1,130
|
|
|
1,693
|
|
|
(968
|
)
|
|||
Investment securities gains
|
(2,110
|
)
|
|
(1,593
|
)
|
|
(2,965
|
)
|
|||
Stock-based compensation
|
2,545
|
|
|
2,675
|
|
|
3,251
|
|
|||
Originations and purchases of loans held-for-sale
|
(34,026
|
)
|
|
(52,561
|
)
|
|
(37,085
|
)
|
|||
Proceeds from sales, securitizations and paydowns of loans held-for-sale
|
33,202
|
|
|
54,092
|
|
|
40,155
|
|
|||
Net change in:
|
|
|
|
|
|
||||||
Trading assets
|
(5,379
|
)
|
|
36,443
|
|
|
(72,082
|
)
|
|||
Securities borrowed
|
23,455
|
|
|
(18,936
|
)
|
|
(3,926
|
)
|
|||
Accrued interest and accounts receivable
|
1,732
|
|
|
8,655
|
|
|
443
|
|
|||
Other assets
|
(4,683
|
)
|
|
(15,456
|
)
|
|
(12,452
|
)
|
|||
Trading liabilities
|
(3,921
|
)
|
|
7,905
|
|
|
19,344
|
|
|||
Accounts payable and other liabilities
|
(13,069
|
)
|
|
35,203
|
|
|
17,325
|
|
|||
Other operating adjustments
|
(3,613
|
)
|
|
6,157
|
|
|
6,234
|
|
|||
Net cash provided by/(used in) operating activities
|
25,079
|
|
|
95,932
|
|
|
(3,752
|
)
|
|||
Investing activities
|
|
|
|
|
|
||||||
Net change in:
|
|
|
|
|
|
||||||
Deposits with banks
|
(36,595
|
)
|
|
(63,592
|
)
|
|
41,625
|
|
|||
Federal funds sold and securities purchased under resale agreements
|
(60,821
|
)
|
|
(12,490
|
)
|
|
(26,957
|
)
|
|||
Held-to-maturity securities:
|
|
|
|
|
|
||||||
Proceeds
|
4
|
|
|
6
|
|
|
7
|
|
|||
Available-for-sale securities:
|
|
|
|
|
|
||||||
Proceeds from maturities
|
112,633
|
|
|
86,850
|
|
|
92,740
|
|
|||
Proceeds from sales
|
81,957
|
|
|
68,631
|
|
|
118,600
|
|
|||
Purchases
|
(189,630
|
)
|
|
(202,309
|
)
|
|
(179,487
|
)
|
|||
Proceeds from sales and securitizations of loans held-for-investment
|
6,430
|
|
|
10,478
|
|
|
9,476
|
|
|||
Other changes in loans, net
|
(30,491
|
)
|
|
(58,365
|
)
|
|
3,022
|
|
|||
Net cash received from/(used in) business acquisitions or dispositions
|
88
|
|
|
102
|
|
|
(4,910
|
)
|
|||
All other investing activities, net
|
(3,400
|
)
|
|
(63
|
)
|
|
(114
|
)
|
|||
Net cash (used in)/provided by investing activities
|
(119,825
|
)
|
|
(170,752
|
)
|
|
54,002
|
|
|||
Financing activities
|
|
|
|
|
|
||||||
Net change in:
|
|
|
|
|
|
||||||
Deposits
|
67,250
|
|
|
203,420
|
|
|
(9,637
|
)
|
|||
Federal funds purchased and securities loaned or sold under repurchase agreements
|
26,546
|
|
|
(63,116
|
)
|
|
15,202
|
|
|||
Commercial paper and other borrowed funds
|
9,315
|
|
|
7,230
|
|
|
(6,869
|
)
|
|||
Beneficial interests issued by consolidated variable interest entities
|
345
|
|
|
1,165
|
|
|
2,426
|
|
|||
Proceeds from long-term borrowings and trust preferred capital debt securities
|
86,271
|
|
|
54,844
|
|
|
55,181
|
|
|||
Payments of long-term borrowings and trust preferred capital debt securities
|
(96,473
|
)
|
|
(82,078
|
)
|
|
(99,043
|
)
|
|||
Excess tax benefits related to stock-based compensation
|
255
|
|
|
867
|
|
|
26
|
|
|||
Redemption of preferred stock
|
—
|
|
|
—
|
|
|
(352
|
)
|
|||
Proceeds from issuance of preferred stock
|
1,234
|
|
|
—
|
|
|
—
|
|
|||
Treasury stock and warrants repurchased
|
(1,653
|
)
|
|
(8,863
|
)
|
|
(2,999
|
)
|
|||
Dividends paid
|
(5,194
|
)
|
|
(3,895
|
)
|
|
(1,486
|
)
|
|||
All other financing activities, net
|
(189
|
)
|
|
(1,868
|
)
|
|
(1,666
|
)
|
|||
Net cash provided by/(used in) financing activities
|
87,707
|
|
|
107,706
|
|
|
(49,217
|
)
|
|||
Effect of exchange rate changes on cash and due from banks
|
1,160
|
|
|
(851
|
)
|
|
328
|
|
|||
Net (decrease)/increase in cash and due from banks
|
(5,879
|
)
|
|
32,035
|
|
|
1,361
|
|
|||
Cash and due from banks at the beginning of the period
|
59,602
|
|
|
27,567
|
|
|
26,206
|
|
|||
Cash and due from banks at the end of the period
|
$
|
53,723
|
|
|
$
|
59,602
|
|
|
$
|
27,567
|
|
Cash interest paid
|
$
|
11,161
|
|
|
$
|
13,725
|
|
|
$
|
12,404
|
|
Cash income taxes paid, net
|
2,050
|
|
|
8,153
|
|
|
9,747
|
|
192
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
193
|
Business changes and developments
|
Note 2
|
|
Page 195
|
Fair value measurement
|
Note 3
|
|
Page 196
|
Fair value option
|
Note 4
|
|
Page 214
|
Derivative instruments
|
Note 6
|
|
Page 218
|
Noninterest revenue
|
Note 7
|
|
Page 228
|
Interest income and interest expense
|
Note 8
|
|
Page 230
|
Pension and other postretirement employee benefit plans
|
Note 9
|
|
Page 231
|
Employee stock-based incentives
|
Note 10
|
|
Page 241
|
Securities
|
Note 12
|
|
Page 244
|
Securities financing activities
|
Note 13
|
|
Page 249
|
Loans
|
Note 14
|
|
Page 250
|
Allowance for credit losses
|
Note 15
|
|
Page 276
|
Variable interest entities
|
Note 16
|
|
Page 280
|
Goodwill and other intangible assets
|
Note 17
|
|
Page 291
|
Premises and equipment
|
Note 18
|
|
Page 296
|
Long-term debt
|
Note 21
|
|
Page 297
|
Income taxes
|
Note 26
|
|
Page 303
|
Off–balance sheet lending-related financial instruments, guarantees and other commitments
|
Note 29
|
|
Page 308
|
Litigation
|
Note 31
|
|
Page 316
|
194
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
195
|
196
|
|
JPMorgan Chase & Co./2012 Annual Report
|
•
|
Liquidity valuation adjustments are considered when the Firm may not be able to observe a recent market price for a financial instrument that trades in an inactive (or less active) market. The Firm estimates the amount of uncertainty in the initial fair value estimate based on the degree of liquidity in the market. Factors considered in determining the liquidity adjustment include: (1) the amount of time since the last relevant pricing point; (2) whether there was an actual trade or relevant external quote or alternatively pricing points for similar instruments in active markets; and (3) the volatility of the principal risk component of the financial instrument. For certain portfolios of financial instruments that the Firm manages on the basis of net open risk exposure, valuation adjustments are necessary to reflect the cost of exiting a larger-than-normal market-size net open risk position. Where applied, such adjustments are based on factors including the size of the adverse market move that is likely to occur during the period required to reduce the net open risk position to a normal market-size.
|
•
|
Unobservable parameter valuation adjustments may be made when positions are valued using internally developed models that incorporate unobservable parameters – that is, parameters that must be estimated and are, therefore, subject to management judgment. Unobservable parameter valuation adjustments are applied to reflect the uncertainty inherent in the valuation estimate provided by the model.
|
•
|
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
•
|
Level 3 – one or more inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
197
|
198
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
199
|
Product/instrument
|
Valuation methodology, inputs and assumptions
|
Classification in the valuation hierarchy
|
Mortgage servicing rights (“MSRs”)
|
See Mortgage servicing rights in Note 17 on pages 292-294 of this Annual Report.
|
Level 3
|
|
||
Private equity direct investments
|
Private equity direct investments
|
Level 3
|
|
Fair value is estimated using all available information and considering the range of potential inputs, including:
|
|
|
•
Transaction prices
|
|
|
•
Trading multiples of comparable public companies
|
|
|
• Operating performance of the underlying portfolio company
|
|
|
•
Additional available inputs relevant to the investment
|
|
|
•
Adjustments as required, since comparable public companies are not identical to the company being valued, and for company-specific issues and lack of liquidity
|
|
|
Public investments held in the Private Equity portfolio
|
Level 1 or 2
|
|
•
Valued using observable market prices less adjustments for relevant restrictions, where applicable
|
|
|
|
|
Fund investments (i.e., mutual/collective investment funds, private equity funds, hedge funds, and real estate funds)
|
Net asset value (“NAV”)
|
|
•
NAV is validated by sufficient level of observable activity (i.e., purchases and sales)
|
Level 1
|
|
|
||
•
Adjustments to the NAV as required, for restrictions on redemption (e.g., lock up periods or withdrawal limitations) or where observable activity is limited
|
Level 2 or 3
|
|
|
|
|
Beneficial interests issued by consolidated VIE
|
Valued using observable market information, where available
|
Level 2 or 3
|
In the absence of observable market information, valuations are based on the fair value of the underlying assets held by the VIE
|
|
|
Long-term debt, not carried at fair value
|
Valuations are based on discounted cash flows, which consider:
|
Predominantly level 2
|
•
Market rates for respective maturity
|
||
|
• The Firm’s own creditworthiness (DVA), see page 212 of this Note
|
|
Structured notes (included in deposits, other borrowed funds and long-term debt)
|
Valuations are based on discounted cash flows, which consider:
|
Level 2 or 3
|
•
The Firm’s own creditworthiness (DVA), see page 212 of this Note
|
||
•
Consideration of derivative features. For further information refer to discussion on derivatives above
|
200
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
201
|
|
Fair value hierarchy
|
|
|
|
|||||||||||||
December 31, 2011 (in millions)
|
Level 1
|
Level 2
|
|
Level 3
|
|
Netting adjustments
|
Total fair value
|
||||||||||
Federal funds sold and securities purchased under resale agreements
|
$
|
—
|
|
$
|
22,191
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
22,191
|
|
Securities borrowed
|
—
|
|
15,308
|
|
|
—
|
|
|
—
|
|
15,308
|
|
|||||
Trading assets:
|
|
|
|
|
|
|
|
||||||||||
Debt instruments:
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||||
U.S. government agencies
(a)
|
27,082
|
|
7,801
|
|
|
86
|
|
|
—
|
|
34,969
|
|
|||||
Residential – nonagency
|
—
|
|
2,956
|
|
|
796
|
|
|
—
|
|
3,752
|
|
|||||
Commercial – nonagency
|
—
|
|
870
|
|
|
1,758
|
|
|
—
|
|
2,628
|
|
|||||
Total mortgage-backed securities
|
27,082
|
|
11,627
|
|
|
2,640
|
|
|
—
|
|
41,349
|
|
|||||
U.S. Treasury and government agencies
(a)
|
11,508
|
|
8,391
|
|
|
—
|
|
|
—
|
|
19,899
|
|
|||||
Obligations of U.S. states and municipalities
|
—
|
|
15,117
|
|
|
1,619
|
|
|
—
|
|
16,736
|
|
|||||
Certificates of deposit, bankers’ acceptances and commercial paper
|
—
|
|
2,615
|
|
|
—
|
|
|
—
|
|
2,615
|
|
|||||
Non-U.S. government debt securities
|
18,618
|
|
40,080
|
|
|
104
|
|
|
—
|
|
58,802
|
|
|||||
Corporate debt securities
|
—
|
|
33,938
|
|
|
6,373
|
|
|
—
|
|
40,311
|
|
|||||
Loans
(b)
|
—
|
|
21,589
|
|
|
12,209
|
|
|
—
|
|
33,798
|
|
|||||
Asset-backed securities
|
—
|
|
2,406
|
|
|
7,965
|
|
|
—
|
|
10,371
|
|
|||||
Total debt instruments
|
57,208
|
|
135,763
|
|
|
30,910
|
|
|
—
|
|
223,881
|
|
|||||
Equity securities
|
93,799
|
|
3,502
|
|
|
1,177
|
|
|
—
|
|
98,478
|
|
|||||
Physical commodities
(c)
|
21,066
|
|
4,898
|
|
|
—
|
|
|
—
|
|
25,964
|
|
|||||
Other
|
—
|
|
2,283
|
|
|
880
|
|
|
—
|
|
3,163
|
|
|||||
Total debt and equity instruments
(d)
|
172,073
|
|
146,446
|
|
|
32,967
|
|
|
—
|
|
351,486
|
|
|||||
Derivative receivables:
|
|
|
|
|
|
|
|
||||||||||
Interest rate
|
1,324
|
|
1,433,469
|
|
|
6,728
|
|
|
(1,395,152
|
)
|
46,369
|
|
|||||
Credit
|
—
|
|
152,569
|
|
|
17,081
|
|
|
(162,966
|
)
|
6,684
|
|
|||||
Foreign exchange
|
833
|
|
162,689
|
|
|
4,641
|
|
|
(150,273
|
)
|
17,890
|
|
|||||
Equity
|
—
|
|
43,604
|
|
|
4,132
|
|
|
(40,943
|
)
|
6,793
|
|
|||||
Commodity
|
4,561
|
|
50,409
|
|
|
2,459
|
|
|
(42,688
|
)
|
14,741
|
|
|||||
Total derivative receivables
(e)
|
6,718
|
|
1,842,740
|
|
|
35,041
|
|
|
(1,792,022
|
)
|
92,477
|
|
|||||
Total trading assets
|
178,791
|
|
1,989,186
|
|
|
68,008
|
|
|
(1,792,022
|
)
|
443,963
|
|
|||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||||
U.S. government agencies
(a)
|
92,426
|
|
14,681
|
|
|
—
|
|
|
—
|
|
107,107
|
|
|||||
Residential – nonagency
|
—
|
|
67,554
|
|
|
3
|
|
|
—
|
|
67,557
|
|
|||||
Commercial – nonagency
|
—
|
|
10,962
|
|
|
267
|
|
|
—
|
|
11,229
|
|
|||||
Total mortgage-backed securities
|
92,426
|
|
93,197
|
|
|
270
|
|
|
—
|
|
185,893
|
|
|||||
U.S. Treasury and government agencies
(a)
|
3,837
|
|
4,514
|
|
|
—
|
|
|
—
|
|
8,351
|
|
|||||
Obligations of U.S. states and municipalities
|
36
|
|
16,246
|
|
|
258
|
|
|
—
|
|
16,540
|
|
|||||
Certificates of deposit
|
—
|
|
3,017
|
|
|
—
|
|
|
—
|
|
3,017
|
|
|||||
Non-U.S. government debt securities
|
25,381
|
|
19,884
|
|
|
—
|
|
|
—
|
|
45,265
|
|
|||||
Corporate debt securities
|
—
|
|
62,176
|
|
|
—
|
|
|
—
|
|
62,176
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
||||||||||
Collateralized loan obligations
|
—
|
|
116
|
|
|
24,745
|
|
|
—
|
|
24,861
|
|
|||||
Other
|
—
|
|
15,760
|
|
|
213
|
|
|
—
|
|
15,973
|
|
|||||
Equity securities
|
2,667
|
|
38
|
|
|
—
|
|
|
—
|
|
2,705
|
|
|||||
Total available-for-sale securities
|
124,347
|
|
214,948
|
|
|
25,486
|
|
|
—
|
|
364,781
|
|
|||||
Loans
|
—
|
|
450
|
|
|
1,647
|
|
|
—
|
|
2,097
|
|
|||||
Mortgage servicing rights
|
—
|
|
—
|
|
|
7,223
|
|
|
—
|
|
7,223
|
|
|||||
Other assets:
|
|
|
|
|
|
|
|
||||||||||
Private equity investments
(f)
|
99
|
|
706
|
|
|
6,751
|
|
|
—
|
|
7,556
|
|
|||||
All other
|
4,336
|
|
233
|
|
|
4,374
|
|
|
—
|
|
8,943
|
|
|||||
Total other assets
|
4,435
|
|
939
|
|
|
11,125
|
|
|
—
|
|
16,499
|
|
|||||
Total assets measured at fair value on a recurring basis
|
$
|
307,573
|
|
$
|
2,243,022
|
|
(g)
|
$
|
113,489
|
|
(g)
|
$
|
(1,792,022
|
)
|
$
|
872,062
|
|
Deposits
|
$
|
—
|
|
$
|
3,515
|
|
|
$
|
1,418
|
|
|
$
|
—
|
|
$
|
4,933
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
—
|
|
6,817
|
|
|
—
|
|
|
—
|
|
6,817
|
|
|||||
Other borrowed funds
|
—
|
|
8,069
|
|
|
1,507
|
|
|
—
|
|
9,576
|
|
|||||
Trading liabilities:
|
|
|
|
|
|
|
|
||||||||||
Debt and equity instruments
(d)
|
50,830
|
|
15,677
|
|
|
211
|
|
|
—
|
|
66,718
|
|
|||||
Derivative payables:
|
|
|
|
|
|
|
|
||||||||||
Interest rate
|
1,537
|
|
1,395,113
|
|
|
3,167
|
|
|
(1,371,807
|
)
|
28,010
|
|
|||||
Credit
|
—
|
|
155,772
|
|
|
9,349
|
|
|
(159,511
|
)
|
5,610
|
|
|||||
Foreign exchange
|
846
|
|
159,258
|
|
|
5,904
|
|
|
(148,573
|
)
|
17,435
|
|
|||||
Equity
|
—
|
|
39,129
|
|
|
7,237
|
|
|
(36,711
|
)
|
9,655
|
|
|||||
Commodity
|
3,114
|
|
53,684
|
|
|
3,146
|
|
|
(45,677
|
)
|
14,267
|
|
|||||
Total derivative payables
(e)
|
5,497
|
|
1,802,956
|
|
|
28,803
|
|
|
(1,762,279
|
)
|
74,977
|
|
|||||
Total trading liabilities
|
56,327
|
|
1,818,633
|
|
|
29,014
|
|
|
(1,762,279
|
)
|
141,695
|
|
|||||
Accounts payable and other liabilities
|
—
|
|
—
|
|
|
51
|
|
|
—
|
|
51
|
|
|||||
Beneficial interests issued by consolidated VIEs
|
—
|
|
459
|
|
|
791
|
|
|
—
|
|
1,250
|
|
|||||
Long-term debt
|
—
|
|
24,410
|
|
|
10,310
|
|
|
—
|
|
34,720
|
|
|||||
Total liabilities measured at fair value on a recurring basis
|
$
|
56,327
|
|
$
|
1,861,903
|
|
|
$
|
43,091
|
|
|
$
|
(1,762,279
|
)
|
$
|
199,042
|
|
(a)
|
At
December 31, 2012
and
2011
, included total U.S. government-sponsored enterprise obligations of
$119.4 billion
and
$122.4 billion
respectively, which were predominantly mortgage-related.
|
(b)
|
At
December 31, 2012
and
2011
, included within trading loans were
$26.4 billion
and
$20.1 billion
, respectively, of residential first-lien mortgages, and
$2.2 billion
and
$2.0 billion
, respectively, of commercial first-lien mortgages. Residential mortgage loans include conforming mortgage loans originated with the intent to sell to U.S. government agencies of
$17.4 billion
and
$11.0 billion
, respectively, and reverse mortgages of
$4.0 billion
and
$4.0 billion
, respectively.
|
(c)
|
Physical commodities inventories are generally accounted for at the lower of cost or market. “Market” is a term defined in U.S. GAAP as an amount not exceeding fair value less costs to sell (“transaction costs”). Transaction costs for the Firm’s physical commodities inventories are either not applicable or immaterial to the value of the inventory.
|
202
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(d)
|
Balances reflect the reduction of securities owned (long positions) by the amount of securities sold but not yet purchased (short positions) when the long and short positions have identical Committee on Uniform Security Identification Procedures numbers (“CUSIPs”).
|
(e)
|
As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral received and paid when a legally enforceable master netting agreement exists. For purposes of the tables above, the Firm does not reduce derivative receivables and derivative payables balances for this netting adjustment, either within or across the levels of the fair value hierarchy, as such netting is not relevant to a presentation based on the transparency of inputs to the valuation of an asset or liability. Therefore, the balances reported in the fair value hierarchy table are gross of any counterparty netting adjustments. However, if the Firm were to net such balances within level 3, the reduction in the level 3 derivative receivable and payable balances would be
$8.4 billion
and
$11.7 billion
at
December 31, 2012
and
2011
, respectively; this is exclusive of the netting benefit associated with cash collateral, which would further reduce the level 3 balances.
|
(f)
|
Private equity instruments represent investments within the Corporate/Private Equity segment. The cost basis of the private equity investment portfolio totaled
$8.4 billion
and
$9.5 billion
at
December 31, 2012
and
2011
, respectively.
|
(g)
|
Includes investments in hedge funds, private equity funds, real estate and other funds that do not have readily determinable fair values. The Firm uses net asset value per share when measuring the fair value of these investments. At
December 31, 2012
and
2011
, the fair value of these investments were
$4.9 billion
and
$5.5 billion
, respectively, of which
$1.1 billion
and
$1.2 billion
, respectively, in level 2, and
$3.8 billion
and
$4.3 billion
, respectively, in level 3.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
203
|
204
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(a)
|
The categories presented in the table have been aggregated based upon the product type, which may differ from their classification on the Consolidated Balance Sheet.
|
(b)
|
The unobservable inputs and associated input ranges for approximately
$1.3 billion
of credit derivative receivables and
$1.2 billion
of credit derivative payables with underlying mortgage risk have been included in the inputs and ranges provided for commercial mortgage-backed securities and loans.
|
(c)
|
Approximately
16%
of instruments in this category include price as an unobservable input. This balance includes certain securities and illiquid trading loans, which are generally valued using comparable prices and/or yields for similar instruments.
|
(d)
|
CLOs are securities backed by corporate loans. At December 31, 2012,
$27.9 billion
of CLOs were held in the available–for–sale (“AFS”) securities portfolio and
$2.1 billion
were included in asset-backed securities held in the trading portfolio. Substantially all of the securities are rated “AAA”, “AA” and “A”. The reported range of credit spreads increased from the third quarter to the fourth quarter of 2012, while the reported ranges of other unobservable parameters decreased. This was primarily due to the Firm incorporating a revised valuation model for CLOs, which uses a different combination of valuation parameters as compared with the old model. The change did not have a significant impact on the fair value of the Firm’s CLO positions.
|
(e)
|
Long-term debt, other borrowed funds, and deposits include structured notes issued by the Firm that are financial instruments containing embedded derivatives. The estimation of the fair value of structured notes is predominantly based on the derivative features embedded within the instruments. The significant unobservable inputs are broadly consistent with those presented for derivative receivables.
|
(f)
|
The range has not been disclosed due to the wide range of possible values given the diverse nature of the underlying investments.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
205
|
206
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
207
|
|
Fair value measurements using significant unobservable inputs
|
|
|
|||||||||||||||||||||||||||
Year ended
December 31, 2012
(in millions)
|
Fair value at January 1, 2012
|
Total realized/unrealized gains/(losses)
|
|
|
|
|
Transfers into and/or out of level 3
(h)
|
Fair value at Dec. 31, 2012
|
|
Change in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2012
|
||||||||||||||||||||
Purchases
(g)
|
Sales
|
|
Settlements
|
|||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Debt instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
U.S. government agencies
|
$
|
86
|
|
$
|
(44
|
)
|
|
$
|
575
|
|
$
|
(103
|
)
|
|
$
|
(16
|
)
|
$
|
—
|
|
$
|
498
|
|
|
$
|
(21
|
)
|
|
||
Residential – nonagency
|
796
|
|
151
|
|
|
417
|
|
(533
|
)
|
|
(145
|
)
|
(23
|
)
|
663
|
|
|
74
|
|
|
||||||||||
Commercial – nonagency
|
1,758
|
|
(159
|
)
|
|
287
|
|
(475
|
)
|
|
(104
|
)
|
(100
|
)
|
1,207
|
|
|
(145
|
)
|
|
||||||||||
Total mortgage-backed securities
|
2,640
|
|
(52
|
)
|
|
1,279
|
|
(1,111
|
)
|
|
(265
|
)
|
(123
|
)
|
2,368
|
|
|
(92
|
)
|
|
||||||||||
Obligations of U.S. states and municipalities
|
1,619
|
|
37
|
|
|
336
|
|
(552
|
)
|
|
(4
|
)
|
—
|
|
1,436
|
|
|
(15
|
)
|
|
||||||||||
Non-U.S. government debt securities
|
104
|
|
(6
|
)
|
|
661
|
|
(668
|
)
|
|
(24
|
)
|
—
|
|
67
|
|
|
(5
|
)
|
|
||||||||||
Corporate debt securities
|
6,373
|
|
187
|
|
|
8,391
|
|
(6,186
|
)
|
|
(3,045
|
)
|
(412
|
)
|
5,308
|
|
|
689
|
|
|
||||||||||
Loans
|
12,209
|
|
836
|
|
|
5,342
|
|
(3,269
|
)
|
|
(3,801
|
)
|
(530
|
)
|
10,787
|
|
|
411
|
|
|
||||||||||
Asset-backed securities
|
7,965
|
|
272
|
|
|
2,550
|
|
(6,468
|
)
|
|
(614
|
)
|
(9
|
)
|
3,696
|
|
|
184
|
|
|
||||||||||
Total debt instruments
|
30,910
|
|
1,274
|
|
|
18,559
|
|
(18,254
|
)
|
|
(7,753
|
)
|
(1,074
|
)
|
23,662
|
|
|
1,172
|
|
|
||||||||||
Equity securities
|
1,177
|
|
(209
|
)
|
|
460
|
|
(379
|
)
|
|
(12
|
)
|
77
|
|
1,114
|
|
|
(112
|
)
|
|
||||||||||
Other
|
880
|
|
186
|
|
|
68
|
|
(108
|
)
|
|
(163
|
)
|
—
|
|
863
|
|
|
180
|
|
|
||||||||||
Total trading assets – debt and equity instruments
|
32,967
|
|
1,251
|
|
(c)
|
19,087
|
|
(18,741
|
)
|
|
(7,928
|
)
|
(997
|
)
|
25,639
|
|
|
1,240
|
|
(c)
|
||||||||||
Net derivative receivables:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest rate
|
3,561
|
|
6,930
|
|
|
406
|
|
(194
|
)
|
|
(7,071
|
)
|
(310
|
)
|
3,322
|
|
|
905
|
|
|
||||||||||
Credit
|
7,732
|
|
(4,487
|
)
|
|
124
|
|
(84
|
)
|
|
(1,416
|
)
|
4
|
|
1,873
|
|
|
(3,271
|
)
|
|
||||||||||
Foreign exchange
|
(1,263
|
)
|
(800
|
)
|
|
112
|
|
(184
|
)
|
|
436
|
|
(51
|
)
|
(1,750
|
)
|
|
(957
|
)
|
|
||||||||||
Equity
|
(3,105
|
)
|
168
|
|
|
1,676
|
|
(2,579
|
)
|
|
899
|
|
1,135
|
|
(1,806
|
)
|
|
580
|
|
|
||||||||||
Commodity
|
(687
|
)
|
(673
|
)
|
|
74
|
|
64
|
|
|
1,278
|
|
198
|
|
254
|
|
|
(160
|
)
|
|
||||||||||
Total net derivative receivables
|
6,238
|
|
1,138
|
|
(c)
|
2,392
|
|
(2,977
|
)
|
|
(5,874
|
)
|
976
|
|
1,893
|
|
|
(2,903
|
)
|
(c)
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Asset-backed securities
|
24,958
|
|
135
|
|
|
9,280
|
|
(3,361
|
)
|
|
(3,104
|
)
|
116
|
|
28,024
|
|
|
118
|
|
|
||||||||||
Other
|
528
|
|
55
|
|
|
667
|
|
(113
|
)
|
|
(245
|
)
|
—
|
|
892
|
|
|
59
|
|
|
||||||||||
Total available-for-sale securities
|
25,486
|
|
190
|
|
(d)
|
9,947
|
|
(3,474
|
)
|
|
(3,349
|
)
|
116
|
|
28,916
|
|
|
177
|
|
(d)
|
||||||||||
Loans
|
1,647
|
|
695
|
|
(c)
|
1,536
|
|
(22
|
)
|
|
(1,718
|
)
|
144
|
|
2,282
|
|
|
12
|
|
(c)
|
||||||||||
Mortgage servicing rights
|
7,223
|
|
(635
|
)
|
(e)
|
2,833
|
|
(579
|
)
|
|
(1,228
|
)
|
—
|
|
7,614
|
|
|
(635
|
)
|
(e)
|
||||||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Private equity investments
|
6,751
|
|
420
|
|
(c)
|
1,545
|
|
(512
|
)
|
|
(977
|
)
|
(46
|
)
|
7,181
|
|
|
333
|
|
(c)
|
||||||||||
All other
|
4,374
|
|
(195
|
)
|
(f)
|
818
|
|
(238
|
)
|
|
(501
|
)
|
—
|
|
4,258
|
|
|
(200
|
)
|
(f)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Fair value measurements using significant unobservable inputs
|
|
|
|||||||||||||||||||||||||||
Year ended
December 31, 2012
(in millions)
|
Fair value at January 1, 2012
|
Total realized/unrealized (gains)/losses
|
|
|
|
|
Transfers into and/or out of level 3
(h)
|
Fair value at Dec. 31, 2012
|
|
Change in unrealized (gains)/losses related to financial instruments held at Dec. 31, 2012
|
||||||||||||||||||||
Purchases
(g)
|
Sales
|
Issuances
|
Settlements
|
|||||||||||||||||||||||||||
Liabilities:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Deposits
|
$
|
1,418
|
|
$
|
212
|
|
(c)
|
$
|
—
|
|
$
|
—
|
|
$
|
1,236
|
|
$
|
(380
|
)
|
$
|
(503
|
)
|
$
|
1,983
|
|
|
$
|
185
|
|
(c)
|
Other borrowed funds
|
1,507
|
|
148
|
|
(c)
|
—
|
|
—
|
|
1,646
|
|
(1,774
|
)
|
92
|
|
1,619
|
|
|
72
|
|
(c)
|
|||||||||
Trading liabilities – debt and equity instruments
|
211
|
|
(16
|
)
|
(c)
|
(2,875
|
)
|
2,940
|
|
—
|
|
(50
|
)
|
(5
|
)
|
205
|
|
|
(12
|
)
|
(c)
|
|||||||||
Accounts payable and other liabilities
|
51
|
|
1
|
|
(f)
|
—
|
|
—
|
|
—
|
|
(16
|
)
|
—
|
|
36
|
|
|
1
|
|
(f)
|
|||||||||
Beneficial interests issued by consolidated VIEs
|
791
|
|
181
|
|
(c)
|
—
|
|
—
|
|
221
|
|
(268
|
)
|
—
|
|
925
|
|
|
143
|
|
(c)
|
|||||||||
Long-term debt
|
10,310
|
|
328
|
|
(c)
|
—
|
|
—
|
|
3,662
|
|
(4,511
|
)
|
(1,313
|
)
|
8,476
|
|
|
(101
|
)
|
(c)
|
208
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
Fair value measurements using significant unobservable inputs
|
|
|
|||||||||||||||||||||||||||
Year ended
December 31, 2011
(in millions)
|
Fair value at January 1, 2011
|
Total realized/unrealized gains/(losses)
|
|
|
|
|
Transfers into and/or out of level 3
(h)
|
Fair value at
Dec. 31, 2011
|
Change in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2011
|
|||||||||||||||||||||
Purchases
(g)
|
Sales
|
|
Settlements
|
|||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Debt instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
U.S. government agencies
|
$
|
174
|
|
$
|
24
|
|
|
$
|
28
|
|
$
|
(39
|
)
|
|
$
|
(43
|
)
|
$
|
(58
|
)
|
$
|
86
|
|
|
$
|
(51
|
)
|
|
||
Residential – nonagency
|
687
|
|
109
|
|
|
708
|
|
(432
|
)
|
|
(221
|
)
|
(55
|
)
|
796
|
|
|
(9
|
)
|
|
||||||||||
Commercial – nonagency
|
2,069
|
|
37
|
|
|
796
|
|
(973
|
)
|
|
(171
|
)
|
—
|
|
1,758
|
|
|
33
|
|
|
||||||||||
Total mortgage-backed securities
|
2,930
|
|
170
|
|
|
1,532
|
|
(1,444
|
)
|
|
(435
|
)
|
(113
|
)
|
2,640
|
|
|
(27
|
)
|
|
||||||||||
Obligations of U.S. states and municipalities
|
2,257
|
|
9
|
|
|
807
|
|
(1,465
|
)
|
|
(1
|
)
|
12
|
|
1,619
|
|
|
(11
|
)
|
|
||||||||||
Non-U.S. government debt securities
|
202
|
|
35
|
|
|
552
|
|
(531
|
)
|
|
(80
|
)
|
(74
|
)
|
104
|
|
|
38
|
|
|
||||||||||
Corporate debt securities
|
4,946
|
|
32
|
|
|
8,080
|
|
(5,939
|
)
|
|
(1,005
|
)
|
259
|
|
6,373
|
|
|
26
|
|
|
||||||||||
Loans
|
13,144
|
|
329
|
|
|
5,532
|
|
(3,873
|
)
|
|
(2,691
|
)
|
(232
|
)
|
12,209
|
|
|
142
|
|
|
||||||||||
Asset-backed securities
|
8,460
|
|
90
|
|
|
4,185
|
|
(4,368
|
)
|
|
(424
|
)
|
22
|
|
7,965
|
|
|
(217
|
)
|
|
||||||||||
Total debt instruments
|
31,939
|
|
665
|
|
|
20,688
|
|
(17,620
|
)
|
|
(4,636
|
)
|
(126
|
)
|
30,910
|
|
|
(49
|
)
|
|
||||||||||
Equity securities
|
1,685
|
|
267
|
|
|
180
|
|
(541
|
)
|
|
(352
|
)
|
(62
|
)
|
1,177
|
|
|
278
|
|
|
||||||||||
Other
|
930
|
|
48
|
|
|
36
|
|
(39
|
)
|
|
(95
|
)
|
—
|
|
880
|
|
|
79
|
|
|
||||||||||
Total trading assets – debt and equity instruments
|
34,554
|
|
980
|
|
(c)
|
20,904
|
|
(18,200
|
)
|
|
(5,083
|
)
|
(188
|
)
|
32,967
|
|
|
308
|
|
(c)
|
||||||||||
Net derivative receivables:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Interest rate
|
2,836
|
|
5,205
|
|
|
511
|
|
(219
|
)
|
|
(4,534
|
)
|
(238
|
)
|
3,561
|
|
|
1,497
|
|
|
||||||||||
Credit
|
5,386
|
|
2,240
|
|
|
22
|
|
(13
|
)
|
|
116
|
|
(19
|
)
|
7,732
|
|
|
2,744
|
|
|
||||||||||
Foreign exchange
|
(614
|
)
|
(1,913
|
)
|
|
191
|
|
(20
|
)
|
|
886
|
|
207
|
|
(1,263
|
)
|
|
(1,878
|
)
|
|
||||||||||
Equity
|
(2,446
|
)
|
(60
|
)
|
|
715
|
|
(1,449
|
)
|
|
37
|
|
98
|
|
(3,105
|
)
|
|
(132
|
)
|
|
||||||||||
Commodity
|
(805
|
)
|
596
|
|
|
328
|
|
(350
|
)
|
|
(294
|
)
|
(162
|
)
|
(687
|
)
|
|
208
|
|
|
||||||||||
Total net derivative receivables
|
4,357
|
|
6,068
|
|
(c)
|
1,767
|
|
(2,051
|
)
|
|
(3,789
|
)
|
(114
|
)
|
6,238
|
|
|
2,439
|
|
(c)
|
||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Asset-backed securities
|
13,775
|
|
(95
|
)
|
|
15,268
|
|
(1,461
|
)
|
|
(2,529
|
)
|
—
|
|
24,958
|
|
|
(106
|
)
|
|
||||||||||
Other
|
512
|
|
—
|
|
|
57
|
|
(15
|
)
|
|
(26
|
)
|
—
|
|
528
|
|
|
8
|
|
|
||||||||||
Total available-for-sale securities
|
14,287
|
|
(95
|
)
|
(d)
|
15,325
|
|
(1,476
|
)
|
|
(2,555
|
)
|
—
|
|
25,486
|
|
|
(98
|
)
|
(d)
|
||||||||||
Loans
|
1,466
|
|
504
|
|
(c)
|
326
|
|
(9
|
)
|
|
(639
|
)
|
(1
|
)
|
1,647
|
|
|
484
|
|
(c)
|
||||||||||
Mortgage servicing rights
|
13,649
|
|
(7,119
|
)
|
(e)
|
2,603
|
|
—
|
|
|
(1,910
|
)
|
—
|
|
7,223
|
|
|
(7,119
|
)
|
(e)
|
||||||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Private equity investments
|
7,862
|
|
943
|
|
(c)
|
1,452
|
|
(2,746
|
)
|
|
(594
|
)
|
(166
|
)
|
6,751
|
|
|
(242
|
)
|
(c)
|
||||||||||
All other
|
4,179
|
|
(54
|
)
|
(f)
|
938
|
|
(139
|
)
|
|
(521
|
)
|
(29
|
)
|
4,374
|
|
|
(83
|
)
|
(f)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Fair value measurements using significant unobservable inputs
|
|
|
|||||||||||||||||||||||||||
Year ended
December 31, 2011
(in millions)
|
Fair value at January 1, 2011
|
Total realized/unrealized (gains)/losses
|
|
|
|
|
Transfers into and/or out of level 3
(h)
|
Fair value at Dec. 31, 2011
|
Change in unrealized (gains)/losses related to financial instruments held at Dec. 31, 2011
|
|||||||||||||||||||||
Purchases
(g)
|
Sales
|
Issuances
|
Settlements
|
|||||||||||||||||||||||||||
Liabilities:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Deposits
|
$
|
773
|
|
$
|
15
|
|
(c)
|
$
|
—
|
|
$
|
—
|
|
$
|
433
|
|
$
|
(386
|
)
|
$
|
583
|
|
$
|
1,418
|
|
|
$
|
4
|
|
(c)
|
Other borrowed funds
|
1,384
|
|
(244
|
)
|
(c)
|
—
|
|
—
|
|
1,597
|
|
(834
|
)
|
(396
|
)
|
1,507
|
|
|
(85
|
)
|
(c)
|
|||||||||
Trading liabilities – debt and equity instruments
|
54
|
|
17
|
|
(c)
|
(533
|
)
|
778
|
|
—
|
|
(109
|
)
|
4
|
|
211
|
|
|
(7
|
)
|
(c)
|
|||||||||
Accounts payable and other liabilities
|
236
|
|
(61
|
)
|
(f)
|
—
|
|
—
|
|
—
|
|
(124
|
)
|
—
|
|
51
|
|
|
5
|
|
(f)
|
|||||||||
Beneficial interests issued by consolidated VIEs
|
873
|
|
17
|
|
(c)
|
—
|
|
—
|
|
580
|
|
(679
|
)
|
—
|
|
791
|
|
|
(15
|
)
|
(c)
|
|||||||||
Long-term debt
|
13,044
|
|
60
|
|
(c)
|
—
|
|
—
|
|
2,564
|
|
(3,218
|
)
|
(2,140
|
)
|
10,310
|
|
|
288
|
|
(c)
|
JPMorgan Chase & Co./2012 Annual Report
|
|
209
|
|
Fair value measurements using significant unobservable inputs
|
|
|||||||||||||||||||
Year ended
December 31, 2010
(in millions)
|
Fair value at January 1, 2010
|
Total realized/ unrealized gains/(losses)
|
Purchases, issuances, settlements, net
|
Transfers into and/or out of level 3
(h)
|
Fair value at Dec. 31, 2010
|
Change in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2010
|
|||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|||||||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|||||||||||||
Debt instruments:
|
|
|
|
|
|
|
|
|
|||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|||||||||||||
U.S. government agencies
|
$
|
260
|
|
$
|
24
|
|
|
$
|
(107
|
)
|
$
|
(3
|
)
|
$
|
174
|
|
$
|
(31
|
)
|
|
|
Residential – nonagency
|
1,115
|
|
178
|
|
|
(564
|
)
|
(42
|
)
|
687
|
|
110
|
|
|
|||||||
Commercial – nonagency
|
1,770
|
|
230
|
|
|
(33
|
)
|
102
|
|
2,069
|
|
130
|
|
|
|||||||
Total mortgage-backed securities
|
3,145
|
|
432
|
|
|
(704
|
)
|
57
|
|
2,930
|
|
209
|
|
|
|||||||
Obligations of U.S. states and municipalities
|
1,971
|
|
2
|
|
|
142
|
|
142
|
|
2,257
|
|
(30
|
)
|
|
|||||||
Non-U.S. government debt securities
|
89
|
|
(36
|
)
|
|
194
|
|
(45
|
)
|
202
|
|
(8
|
)
|
|
|||||||
Corporate debt securities
|
5,241
|
|
(325
|
)
|
|
115
|
|
(85
|
)
|
4,946
|
|
28
|
|
|
|||||||
Loans
|
13,218
|
|
(40
|
)
|
|
1,296
|
|
(1,330
|
)
|
13,144
|
|
(385
|
)
|
|
|||||||
Asset-backed securities
|
8,620
|
|
237
|
|
|
(408
|
)
|
11
|
|
8,460
|
|
195
|
|
|
|||||||
Total debt instruments
|
32,284
|
|
270
|
|
|
635
|
|
(1,250
|
)
|
31,939
|
|
9
|
|
|
|||||||
Equity securities
|
1,956
|
|
133
|
|
|
(351
|
)
|
(53
|
)
|
1,685
|
|
199
|
|
|
|||||||
Other
|
1,441
|
|
211
|
|
|
(801
|
)
|
79
|
|
930
|
|
299
|
|
|
|||||||
Total trading assets – debt and equity instruments
|
35,681
|
|
614
|
|
(c)
|
(517
|
)
|
(1,224
|
)
|
34,554
|
|
507
|
|
(c)
|
|||||||
Net derivative receivables:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate
|
2,040
|
|
3,057
|
|
|
(2,520
|
)
|
259
|
|
2,836
|
|
487
|
|
|
|||||||
Credit
|
10,350
|
|
(1,757
|
)
|
|
(3,102
|
)
|
(105
|
)
|
5,386
|
|
(1,048
|
)
|
|
|||||||
Foreign exchange
|
1,082
|
|
(913
|
)
|
|
(434
|
)
|
(349
|
)
|
(614
|
)
|
(464
|
)
|
|
|||||||
Equity
|
(2,306
|
)
|
(194
|
)
|
|
(82
|
)
|
136
|
|
(2,446
|
)
|
(212
|
)
|
|
|||||||
Commodity
|
(329
|
)
|
(700
|
)
|
|
134
|
|
90
|
|
(805
|
)
|
(76
|
)
|
|
|||||||
Total net derivative receivables
|
10,837
|
|
(507
|
)
|
(c)
|
(6,004
|
)
|
31
|
|
4,357
|
|
(1,313
|
)
|
(c)
|
|||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Asset-backed securities
|
12,732
|
|
(146
|
)
|
|
1,189
|
|
—
|
|
13,775
|
|
(129
|
)
|
|
|||||||
Other
|
461
|
|
(49
|
)
|
|
37
|
|
63
|
|
512
|
|
18
|
|
|
|||||||
Total available-for-sale securities
|
13,193
|
|
(195
|
)
|
(d)
|
1,226
|
|
63
|
|
14,287
|
|
(111
|
)
|
(d)
|
|||||||
Loans
|
990
|
|
145
|
|
(c)
|
323
|
|
8
|
|
1,466
|
|
37
|
|
(c)
|
|||||||
Mortgage servicing rights
|
15,531
|
|
(2,268
|
)
|
(e)
|
386
|
|
—
|
|
13,649
|
|
(2,268
|
)
|
(e)
|
|||||||
Other assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Private equity investments
|
6,563
|
|
1,038
|
|
(c)
|
715
|
|
(454
|
)
|
7,862
|
|
688
|
|
(c)
|
|||||||
All other
|
9,521
|
|
(113
|
)
|
(f)
|
(5,132
|
)
|
(97
|
)
|
4,179
|
|
37
|
|
(f)
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Fair value measurements using significant unobservable inputs
|
|
|||||||||||||||||||
Year ended
December 31, 2010
(in millions)
|
Fair value at January 1, 2010
|
Total realized/ unrealized (gains)/losses
|
Purchases, issuances, settlements, net
|
Transfers into and/or out of level 3
(h)
|
Fair value at Dec. 31, 2010
|
Change in unrealized (gains)/losses related to financial instruments held at Dec. 31, 2010
|
|||||||||||||||
Liabilities:
(b)
|
|
|
|
|
|
|
|
|
|||||||||||||
Deposits
|
$
|
476
|
|
$
|
54
|
|
(c)
|
$
|
(86
|
)
|
$
|
329
|
|
$
|
773
|
|
$
|
(77
|
)
|
(c)
|
|
Other borrowed funds
|
542
|
|
(242
|
)
|
(c)
|
1,326
|
|
(242
|
)
|
1,384
|
|
445
|
|
(c)
|
|||||||
Trading liabilities – debt and equity instruments
|
10
|
|
2
|
|
(c)
|
19
|
|
23
|
|
54
|
|
—
|
|
|
|||||||
Accounts payable and other liabilities
|
355
|
|
(138
|
)
|
(f)
|
19
|
|
—
|
|
236
|
|
37
|
|
(f)
|
|||||||
Beneficial interests issued by consolidated VIEs
|
625
|
|
(7
|
)
|
(c)
|
87
|
|
168
|
|
873
|
|
(76
|
)
|
(c)
|
|||||||
Long-term debt
|
18,287
|
|
(532
|
)
|
(c)
|
(4,796
|
)
|
85
|
|
13,044
|
|
662
|
|
(c)
|
(a)
|
All level 3 derivatives are presented on a net basis, irrespective of underlying counterparty.
|
(b)
|
Level 3 liabilities as a percentage of total Firm liabilities accounted for at fair value (including liabilities measured at fair value on a nonrecurring basis) were
19%
,
22%
and
23%
at
December 31, 2012
,
2011
and
2010
, respectively.
|
(c)
|
Predominantly reported in principal transactions revenue, except for changes in fair value for Consumer & Community Banking (“CCB”) mortgage loans and lending-related commitments originated with the intent to sell, which are reported in mortgage fees and related income.
|
(d)
|
Realized gains/(losses) on AFS securities, as well as other-than-temporary impairment losses that are recorded in earnings, are reported in securities gains. Unrealized gains/(losses) are reported in OCI. Realized gains/(losses) and foreign exchange remeasurement adjustments recorded in income on AFS securities were
$145 million
,
$(240) million
, and
$(66) million
for the years ended
December 31, 2012
,
2011
and
2010
, respectively. Unrealized gains/(losses) recorded on AFS securities in OCI were
$45 million
,
$145 million
and
$(129) million
for the years ended
December 31, 2012
,
2011
and
2010
, respectively.
|
(e)
|
Changes in fair value for CCB mortgage servicing rights are reported in mortgage fees and related income.
|
(f)
|
Largely reported in other income.
|
(g)
|
Loan originations are included in purchases.
|
(h)
|
All transfers into and/or out of level 3 are assumed to occur at the beginning of the reporting period.
|
210
|
|
JPMorgan Chase & Co./2012 Annual Report
|
•
|
$11.8 billion
decrease in gross derivative receivables, predominantly driven by a
$10.6 billion
decrease from the impact of tightening reference entity credit spreads and risk reductions of credit derivatives and
$1.6 billion
decrease due to fluctuation in foreign exchange rates;
|
•
|
$7.3 billion
decrease in trading assets – debt and equity instruments, predominantly driven by sales and settlements of ABS, trading loans, and corporate debt securities.
|
•
|
$3.1 billion
increase in asset-backed AFS securities, predominantly driven by purchases of CLOs.
|
•
|
$1.3 billion
of net gains on trading assets - debt and equity instruments, largely driven by tightening of credit spreads and fluctuation in foreign exchange rates; and
|
•
|
$1.1 billion
of net gains on derivatives, driven by
$6.9 billion
of net gains predominantly on interest rate lock commitments due to increased volumes and lower interest rates, partially offset by
$4.5 billion
of net losses on credit derivatives largely as a result of tightening of reference entity credit spreads.
|
•
|
$7.1 billion
of losses on MSRs. For further discussion of the change, refer to Note 17 on pages
291–295
of this Annual Report; and
|
•
|
$6.1 billion
of net gains on derivatives, related to declining interest rates and widening of reference entity credit spreads, partially offset by losses due to fluctuation in foreign exchange rates.
|
•
|
$2.3 billion
of losses on MSRs; For further discussion of the change, refer to Note 17 on pages
291–295
of this Annual Report; and
|
•
|
$1.0 billion
gain in private equity largely driven by gains on investments in the portfolio.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
211
|
•
|
Credit valuation adjustments (“CVA”) are taken to reflect the credit quality of a counterparty in the valuation of derivatives. CVA adjustments are necessary when the market price (or parameter) is not indicative of the credit quality of the counterparty. As few classes of derivative contracts are listed on an exchange, derivative positions are predominantly valued using models that use as their basis observable market parameters. An adjustment is necessary to reflect the credit quality of each derivative counterparty to arrive at fair value. The adjustment also takes into account contractual factors designed to reduce the Firm’s credit exposure to each counterparty, such as collateral and legal rights of offset.
|
•
|
Debit valuation adjustments (“DVA”) are taken to reflect the credit quality of the Firm in the valuation of liabilities measured at fair value. The methodology to determine the adjustment is generally consistent with CVA and incorporates JPMorgan Chase’s credit spread as observed through the credit default swap (“CDS”) market.
|
December 31, (in millions)
|
2012
|
2011
|
||||
Derivative receivables balance (net of derivatives CVA)
|
$
|
74,983
|
|
$
|
92,477
|
|
Derivatives CVA
(a)
|
(4,238
|
)
|
(6,936
|
)
|
||
Derivative payables balance (net of derivatives DVA)
|
70,656
|
|
74,977
|
|
||
Derivatives DVA
|
(830
|
)
|
(1,420
|
)
|
||
Structured notes balance (net of structured notes DVA)
(b)(c)
|
48,112
|
|
49,229
|
|
||
Structured notes DVA
|
(1,712
|
)
|
(2,052
|
)
|
(a)
|
Derivatives CVA, gross of hedges, includes results managed by the credit portfolio and other lines of business within the Corporate & Investment Bank (“CIB”).
|
(b)
|
Structured notes are recorded within long-term debt, other borrowed funds or deposits on the Consolidated Balance Sheets, depending upon the tenor and legal form of the note.
|
(c)
|
Structured notes are measured at fair value based on the Firm’s election under the fair value option. For further information on these elections, see Note 4 on pages
214–216
of this Annual Report.
|
Year ended December 31,
(in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Credit adjustments:
|
|
|
|
|
|
||||||
Derivative CVA
(a)
|
$
|
2,698
|
|
|
$
|
(2,574
|
)
|
|
$
|
(665
|
)
|
Derivative DVA
|
(590
|
)
|
|
538
|
|
|
41
|
|
|||
Structured notes DVA
(b)
|
(340
|
)
|
|
899
|
|
|
468
|
|
(a)
|
Derivatives CVA, gross of hedges, includes results managed by the credit portfolio and other lines of business within the CIB.
|
(b)
|
Structured notes are measured at fair value based on the Firm’s election under the fair value option. For further information on these elections, see Note 4 on pages
214–216
of this Annual Report.
|
212
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
2012
|
|
2011
|
|||||||||||||||||||
|
|
Estimated fair value hierarchy
|
|
|
|
|
||||||||||||||||
December 31,
(in billions)
|
Carrying
value
|
Level 1
|
Level 2
|
Level 3
|
Total estimated
fair value
|
|
Carrying
value
|
Estimated
fair value
|
||||||||||||||
Financial assets
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash and due from banks
|
$
|
53.7
|
|
$
|
53.7
|
|
$
|
—
|
|
$
|
—
|
|
$
|
53.7
|
|
|
$
|
59.6
|
|
$
|
59.6
|
|
Deposits with banks
|
121.8
|
|
114.1
|
|
7.7
|
|
—
|
|
121.8
|
|
|
85.3
|
|
85.3
|
|
|||||||
Accrued interest and accounts receivable
|
60.9
|
|
—
|
|
60.3
|
|
0.6
|
|
60.9
|
|
|
61.5
|
|
61.5
|
|
|||||||
Federal funds sold and securities purchased under resale agreements
|
272.0
|
|
—
|
|
272.0
|
|
—
|
|
272.0
|
|
|
213.1
|
|
213.1
|
|
|||||||
Securities borrowed
|
108.8
|
|
—
|
|
108.8
|
|
—
|
|
108.8
|
|
|
127.2
|
|
127.2
|
|
|||||||
Loans, net of allowance for loan losses
(a)
|
709.3
|
|
—
|
|
26.4
|
|
685.4
|
|
711.8
|
|
|
694.0
|
|
693.7
|
|
|||||||
Other
|
49.7
|
|
—
|
|
42.7
|
|
7.4
|
|
50.1
|
|
|
49.8
|
|
50.3
|
|
|||||||
Financial liabilities
|
|
|
|
|
|
|
|
|
||||||||||||||
Deposits
|
$
|
1,187.9
|
|
$
|
—
|
|
$
|
1,187.2
|
|
$
|
1.2
|
|
$
|
1,188.4
|
|
|
$
|
1,122.9
|
|
$
|
1,123.4
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
235.7
|
|
—
|
|
235.7
|
|
—
|
|
235.7
|
|
|
206.7
|
|
206.7
|
|
|||||||
Commercial paper
|
55.4
|
|
—
|
|
55.4
|
|
—
|
|
55.4
|
|
|
51.6
|
|
51.6
|
|
|||||||
Other borrowed funds
|
15.0
|
|
—
|
|
15.0
|
|
—
|
|
15.0
|
|
|
12.3
|
|
12.3
|
|
|||||||
Accounts payable and other liabilities
|
156.5
|
|
—
|
|
153.8
|
|
2.5
|
|
156.3
|
|
|
166.9
|
|
166.8
|
|
|||||||
Beneficial interests issued by consolidated VIEs
|
62.0
|
|
—
|
|
57.7
|
|
4.4
|
|
62.1
|
|
|
64.7
|
|
64.9
|
|
|||||||
Long-term debt and junior subordinated deferrable interest debentures
|
218.2
|
|
—
|
|
220.0
|
|
5.4
|
|
225.4
|
|
|
222.1
|
|
219.5
|
|
(a)
|
Fair value is typically estimated using a discounted cash flow model that incorporates the characteristics of the underlying loans (including principal, contractual interest rate and contractual fees) and other key inputs, including expected lifetime credit losses, interest rates, prepayment rates, and primary origination or secondary market spreads. For certain loans, the fair value is measured based on the value of the underlying collateral. The difference between the estimated fair value and carrying value of a financial asset or liability is the result of the different methodologies used to determine fair value as compared with carrying value. For example, credit losses are estimated for a financial asset’s remaining life in a fair value calculation but are estimated for a loss emergence period in the allowance for loan loss calculation; future loan income (interest and fees) is incorporated in a fair value calculation but is generally not considered in the allowance for loan losses. For a further discussion of the Firm’s methodologies for estimating the fair value of loans and lending-related commitments, see page
198
of this Note.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
213
|
|
2012
|
|
2011
|
|||||||||||||||||||
|
|
Estimated fair value hierarchy
|
|
|
|
|
||||||||||||||||
December 31,
(in billions)
|
Carrying value
(a)
|
Level 1
|
Level 2
|
Level 3
|
Total estimated fair value
|
|
Carrying value
(a)
|
Estimated fair value
|
||||||||||||||
Wholesale lending-related commitments
|
$
|
0.7
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1.9
|
|
$
|
1.9
|
|
|
$
|
0.7
|
|
$
|
3.4
|
|
(a)
|
Represents the allowance for wholesale lending-related commitments. Excludes the current carrying values of the guarantee liability and the offsetting asset, each of which are recognized at fair value at the inception of guarantees.
|
Year ended December 31, (in millions)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Trading assets – debt and equity instruments
(a)
|
|
$
|
349,337
|
|
|
$
|
393,890
|
|
|
$
|
354,441
|
|
Trading assets – derivative receivables
|
|
85,744
|
|
|
90,003
|
|
|
84,676
|
|
|||
Trading liabilities – debt and equity instruments
(a)(b)
|
|
69,001
|
|
|
81,916
|
|
|
78,159
|
|
|||
Trading liabilities – derivative payables
|
|
76,162
|
|
|
71,539
|
|
|
65,714
|
|
(a)
|
Balances reflect the reduction of securities owned (long positions) by the amount of securities sold, but not yet purchased (short positions) when the long and short positions have identical CUSIP numbers.
|
(b)
|
Primarily represent securities sold, not yet purchased.
|
•
|
Mitigate income statement volatility caused by the differences in the measurement basis of elected instruments (for example, certain instruments elected were previously accounted for on an accrual basis) while the associated risk management arrangements are accounted for on a fair value basis;
|
•
|
Eliminate the complexities of applying certain accounting models (e.g., hedge accounting or bifurcation accounting for hybrid instruments); and/or
|
•
|
Better reflect those instruments that are managed on a fair value basis.
|
•
|
Loans purchased or originated as part of securitization warehousing activity, subject to bifurcation accounting, or managed on a fair value basis.
|
•
|
Securities financing arrangements with an embedded derivative and/or a maturity of greater than one year.
|
214
|
|
JPMorgan Chase & Co./2012 Annual Report
|
•
|
Owned beneficial interests in securitized financial assets that contain embedded credit derivatives, which would otherwise be required to be separately accounted for as a derivative instrument.
|
•
|
Certain investments that receive tax credits and other equity investments acquired as part of the Washington Mutual transaction.
|
•
|
Structured notes issued as part of CIB’s client-driven activities. (Structured notes are financial instruments that contain embedded derivatives.)
|
•
|
Long-term beneficial interests issued by CIB’s consolidated securitization trusts where the underlying assets are carried at fair value.
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||||||||||||||
December 31, (in millions)
|
Principal transactions
|
Other income
|
Total changes in fair value recorded
|
|
Principal transactions
|
Other income
|
Total changes in fair value recorded
|
|
Principal transactions
|
Other income
|
Total changes in fair value recorded
|
|||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements
|
$
|
161
|
|
$
|
—
|
|
|
$
|
161
|
|
|
$
|
270
|
|
$
|
—
|
|
|
$
|
270
|
|
|
$
|
173
|
|
$
|
—
|
|
|
$
|
173
|
|
Securities borrowed
|
10
|
|
—
|
|
|
10
|
|
|
(61
|
)
|
—
|
|
|
(61
|
)
|
|
31
|
|
—
|
|
|
31
|
|
|||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt and equity instruments, excluding loans
|
513
|
|
7
|
|
(c)
|
520
|
|
|
53
|
|
(6
|
)
|
(c)
|
47
|
|
|
556
|
|
(2
|
)
|
(c)
|
554
|
|
|||||||||
Loans reported as trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Changes in instrument-specific credit risk
|
1,489
|
|
81
|
|
(c)
|
1,570
|
|
|
934
|
|
(174
|
)
|
(c)
|
760
|
|
|
1,279
|
|
(6
|
)
|
(c)
|
1,273
|
|
|||||||||
Other changes in fair value
|
(183
|
)
|
7,670
|
|
(c)
|
7,487
|
|
|
127
|
|
5,263
|
|
(c)
|
5,390
|
|
|
(312
|
)
|
4,449
|
|
(c)
|
4,137
|
|
|||||||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Changes in instrument-specific credit risk
|
(14
|
)
|
—
|
|
|
(14
|
)
|
|
2
|
|
—
|
|
|
2
|
|
|
95
|
|
—
|
|
|
95
|
|
|||||||||
Other changes in fair value
|
676
|
|
—
|
|
|
676
|
|
|
535
|
|
—
|
|
|
535
|
|
|
90
|
|
—
|
|
|
90
|
|
|||||||||
Other assets
|
—
|
|
(339
|
)
|
(d)
|
(339
|
)
|
|
(49
|
)
|
(19
|
)
|
(d)
|
(68
|
)
|
|
—
|
|
(263
|
)
|
(d)
|
(263
|
)
|
|||||||||
Deposits
(a)
|
(188
|
)
|
—
|
|
|
(188
|
)
|
|
(237
|
)
|
—
|
|
|
(237
|
)
|
|
(564
|
)
|
—
|
|
|
(564
|
)
|
|||||||||
Federal funds purchased and securities loaned or sold under repurchase agreements
|
(25
|
)
|
—
|
|
|
(25
|
)
|
|
(4
|
)
|
—
|
|
|
(4
|
)
|
|
(29
|
)
|
—
|
|
|
(29
|
)
|
|||||||||
Other borrowed funds
(a)
|
494
|
|
—
|
|
|
494
|
|
|
2,986
|
|
—
|
|
|
2,986
|
|
|
123
|
|
—
|
|
|
123
|
|
|||||||||
Trading liabilities
|
(41
|
)
|
—
|
|
|
(41
|
)
|
|
(57
|
)
|
—
|
|
|
(57
|
)
|
|
(23
|
)
|
—
|
|
|
(23
|
)
|
|||||||||
Beneficial interests issued by consolidated VIEs
|
(166
|
)
|
—
|
|
|
(166
|
)
|
|
(83
|
)
|
—
|
|
|
(83
|
)
|
|
(12
|
)
|
—
|
|
|
(12
|
)
|
|||||||||
Other liabilities
|
—
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
(5
|
)
|
(d)
|
(8
|
)
|
|
(9
|
)
|
8
|
|
(d)
|
(1
|
)
|
|||||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Changes in instrument-specific credit risk
(a)
|
(835
|
)
|
—
|
|
|
(835
|
)
|
|
927
|
|
—
|
|
|
927
|
|
|
400
|
|
—
|
|
|
400
|
|
|||||||||
Other changes in fair value
(b)
|
(1,025
|
)
|
—
|
|
|
(1,025
|
)
|
|
322
|
|
—
|
|
|
322
|
|
|
1,297
|
|
—
|
|
|
1,297
|
|
(a)
|
Total changes in instrument-specific credit risk related to structured notes were
$(340) million
,
$899 million
, and
$468 million
for the years ended
December 31, 2012
,
2011
and
2010
, respectively. These totals include adjustments for structured notes classified within deposits and other borrowed funds, as well as long-term debt.
|
(b)
|
Structured notes are debt instruments with embedded derivatives that are tailored to meet a client’s need. The embedded derivative is the primary driver of risk. Although the risk associated with the structured notes is actively managed, the gains/(losses) reported in this table do not include the income statement impact of such risk management instruments.
|
(c)
|
Reported in mortgage fees and related income.
|
(d)
|
Reported in other income.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
215
|
•
|
Loans and lending-related commitments: For floating-rate instruments, all changes in value are attributed to instrument-specific credit risk. For fixed-rate instruments, an allocation of the changes in value for the period is made between those changes in value that are interest rate-related and changes in value that are credit-related. Allocations are generally based on an analysis of borrower-specific credit spread and
|
•
|
Long-term debt: Changes in value attributable to instrument-specific credit risk were derived principally from observable changes in the Firm’s credit spread.
|
•
|
Resale and repurchase agreements, securities borrowed agreements and securities lending agreements: Generally, for these types of agreements, there is a requirement that collateral be maintained with a market value equal to or in excess of the principal amount loaned; as a result, there would be no adjustment or an immaterial adjustment for instrument-specific credit risk related to these agreements.
|
|
2012
|
|
2011
|
||||||||||||||||||
December 31, (in millions)
|
Contractual principal outstanding
|
|
Fair value
|
Fair value over/(under) contractual principal outstanding
|
|
Contractual principal outstanding
|
|
Fair value
|
Fair value over/(under) contractual principal outstanding
|
||||||||||||
Loans
(a)
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nonaccrual loans
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans reported as trading assets
|
$
|
4,217
|
|
|
$
|
960
|
|
$
|
(3,257
|
)
|
|
$
|
4,875
|
|
|
$
|
1,141
|
|
$
|
(3,734
|
)
|
Loans
|
116
|
|
|
64
|
|
(52
|
)
|
|
820
|
|
|
56
|
|
(764
|
)
|
||||||
Subtotal
|
4,333
|
|
|
1,024
|
|
(3,309
|
)
|
|
5,695
|
|
|
1,197
|
|
(4,498
|
)
|
||||||
All other performing loans
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans reported as trading assets
|
44,084
|
|
|
40,581
|
|
(3,503
|
)
|
|
37,481
|
|
|
32,657
|
|
(4,824
|
)
|
||||||
Loans
|
2,211
|
|
|
2,099
|
|
(112
|
)
|
|
2,136
|
|
|
1,601
|
|
(535
|
)
|
||||||
Total loans
|
$
|
50,628
|
|
|
$
|
43,704
|
|
$
|
(6,924
|
)
|
|
$
|
45,312
|
|
|
$
|
35,455
|
|
$
|
(9,857
|
)
|
Long-term debt
|
|
|
|
|
|
|
|
|
|
||||||||||||
Principal-protected debt
|
$
|
16,541
|
|
(c)
|
$
|
16,391
|
|
$
|
(150
|
)
|
|
$
|
19,417
|
|
(c)
|
$
|
19,890
|
|
$
|
473
|
|
Nonprincipal-protected debt
(b)
|
NA
|
|
|
14,397
|
|
NA
|
|
|
NA
|
|
|
14,830
|
|
NA
|
|
||||||
Total long-term debt
|
NA
|
|
|
$
|
30,788
|
|
NA
|
|
|
NA
|
|
|
$
|
34,720
|
|
NA
|
|
||||
Long-term beneficial interests
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nonprincipal-protected debt
(b)
|
NA
|
|
|
$
|
1,170
|
|
NA
|
|
|
NA
|
|
|
$
|
1,250
|
|
NA
|
|
||||
Total long-term beneficial interests
|
NA
|
|
|
$
|
1,170
|
|
NA
|
|
|
NA
|
|
|
$
|
1,250
|
|
NA
|
|
(a)
|
There were no performing loans which were ninety days or more past due as of
December 31, 2012
and
2011
, respectively.
|
(b)
|
Remaining contractual principal is not applicable to nonprincipal-protected notes. Unlike principal-protected structured notes, for which the Firm is obligated to return a stated amount of principal at the maturity of the note, nonprincipal-protected structured notes do not obligate the Firm to return a stated amount of principal at maturity, but to return an amount based on the performance of an underlying variable or derivative feature embedded in the note.
|
(c)
|
Where the Firm issues principal-protected zero-coupon or discount notes, the balance reflected as the remaining contractual principal is the final principal payment at maturity.
|
216
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
2012
|
|
2011
|
||||||||||||||||||||||
|
Credit exposure
|
On-balance sheet
|
Off-balance sheet
(c)
|
|
Credit exposure
|
On-balance sheet
|
Off-balance sheet
(c)
|
||||||||||||||||||
December 31, (in millions)
|
Loans
|
Derivatives
|
|
Loans
|
Derivatives
|
||||||||||||||||||||
Total consumer, excluding credit card
(a)
|
$
|
352,889
|
|
$
|
292,620
|
|
$
|
—
|
|
$
|
60,156
|
|
|
$
|
370,834
|
|
$
|
308,427
|
|
$
|
—
|
|
$
|
62,307
|
|
Total credit card
|
661,011
|
|
127,993
|
|
—
|
|
533,018
|
|
|
662,893
|
|
132,277
|
|
—
|
|
530,616
|
|
||||||||
Total consumer
|
1,013,900
|
|
420,613
|
|
—
|
|
593,174
|
|
|
1,033,727
|
|
440,704
|
|
—
|
|
592,923
|
|
||||||||
Wholesale-related
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Real estate
|
76,198
|
|
60,740
|
|
1,084
|
|
14,374
|
|
|
67,594
|
|
54,684
|
|
1,155
|
|
11,755
|
|
||||||||
Banks and finance companies
|
73,318
|
|
26,651
|
|
19,846
|
|
26,821
|
|
|
71,440
|
|
29,392
|
|
20,372
|
|
21,676
|
|
||||||||
Healthcare
|
48,487
|
|
11,638
|
|
3,359
|
|
33,490
|
|
|
42,247
|
|
8,908
|
|
3,021
|
|
30,318
|
|
||||||||
Oil and gas
|
42,563
|
|
14,704
|
|
2,345
|
|
25,514
|
|
|
35,437
|
|
10,780
|
|
3,521
|
|
21,136
|
|
||||||||
State and municipal governments
|
41,821
|
|
7,998
|
|
5,138
|
|
28,685
|
|
|
41,930
|
|
7,144
|
|
6,575
|
|
28,211
|
|
||||||||
Consumer products
|
32,778
|
|
9,151
|
|
826
|
|
22,801
|
|
|
29,637
|
|
9,187
|
|
1,079
|
|
19,371
|
|
||||||||
Asset managers
|
31,474
|
|
6,220
|
|
8,390
|
|
16,864
|
|
|
33,465
|
|
6,182
|
|
9,458
|
|
17,825
|
|
||||||||
Utilities
|
29,533
|
|
6,814
|
|
2,649
|
|
20,070
|
|
|
28,650
|
|
5,191
|
|
3,602
|
|
19,857
|
|
||||||||
Retail and consumer services
|
25,597
|
|
7,901
|
|
429
|
|
17,267
|
|
|
22,891
|
|
6,353
|
|
565
|
|
15,973
|
|
||||||||
Central government
|
21,223
|
|
1,333
|
|
11,232
|
|
8,658
|
|
|
17,138
|
|
623
|
|
10,813
|
|
5,702
|
|
||||||||
Metals/mining
|
20,958
|
|
6,059
|
|
624
|
|
14,275
|
|
|
15,254
|
|
6,073
|
|
690
|
|
8,491
|
|
||||||||
Transportation
|
19,827
|
|
12,763
|
|
673
|
|
6,391
|
|
|
16,305
|
|
10,000
|
|
947
|
|
5,358
|
|
||||||||
Machinery and equipment manufacturing
|
18,504
|
|
6,304
|
|
592
|
|
11,608
|
|
|
16,498
|
|
5,111
|
|
417
|
|
10,970
|
|
||||||||
Technology
|
18,488
|
|
3,806
|
|
1,192
|
|
13,490
|
|
|
17,898
|
|
4,394
|
|
1,310
|
|
12,194
|
|
||||||||
Media
|
16,007
|
|
3,967
|
|
973
|
|
11,067
|
|
|
11,909
|
|
3,655
|
|
202
|
|
8,052
|
|
||||||||
All other
(b)
|
299,243
|
|
120,173
|
|
15,631
|
|
163,439
|
|
|
285,318
|
|
110,718
|
|
28,750
|
|
145,850
|
|
||||||||
Subtotal
|
816,019
|
|
306,222
|
|
74,983
|
|
434,814
|
|
|
753,611
|
|
278,395
|
|
92,477
|
|
382,739
|
|
||||||||
Loans held-for-sale and loans at fair value
|
6,961
|
|
6,961
|
|
—
|
|
—
|
|
|
4,621
|
|
4,621
|
|
—
|
|
—
|
|
||||||||
Receivables from customers and other
|
23,648
|
|
—
|
|
—
|
|
—
|
|
|
17,461
|
|
—
|
|
—
|
|
—
|
|
||||||||
Total wholesale-related
|
846,628
|
|
313,183
|
|
74,983
|
|
434,814
|
|
|
$
|
775,693
|
|
$
|
283,016
|
|
92,477
|
|
382,739
|
|
||||||
Total exposure
(d)
|
$
|
1,860,528
|
|
$
|
733,796
|
|
$
|
74,983
|
|
$
|
1,027,988
|
|
|
$
|
1,809,420
|
|
$
|
723,720
|
|
$
|
92,477
|
|
$
|
975,662
|
|
(a)
|
As of December 31, 2012 and 2011, credit exposure for total consumer, excluding credit card, includes receivables from customers of
$113 million
and
$100 million
, respectively.
|
(b)
|
For more information on exposures to SPEs included within All other see Note 16 on pages
280–291
of this Annual Report.
|
(c)
|
Represents lending-related financial instruments.
|
(d)
|
For further information regarding on–balance sheet credit concentrations by major product and/or geography, see Notes 6, 14 and 15 on pages
218–227
,
250–275
and
276–279
, respectively, of this Annual Report. For information regarding concentrations of off–balance sheet lending-related financial instruments by major product, see Note 29 on pages
308–315
of this Annual Report.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
217
|
218
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(a)
|
Includes a limited number of single-name credit derivatives used to mitigate the credit risk arising from specified AFS securities.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
219
|
|
Notional amounts
(b)
|
|||||
December 31, (in billions)
|
2012
|
|
2011
|
|
||
Interest rate contracts
|
|
|
||||
Swaps
|
$
|
33,183
|
|
$
|
38,704
|
|
Futures and forwards
|
11,824
|
|
7,888
|
|
||
Written options
|
3,866
|
|
3,842
|
|
||
Purchased options
|
3,911
|
|
4,026
|
|
||
Total interest rate contracts
|
52,784
|
|
54,460
|
|
||
Credit derivatives
(a)
|
5,981
|
|
5,774
|
|
||
Foreign exchange contracts
|
|
|
|
|||
Cross-currency swaps
|
3,355
|
|
2,931
|
|
||
Spot, futures and forwards
|
4,033
|
|
4,512
|
|
||
Written options
|
651
|
|
674
|
|
||
Purchased options
|
661
|
|
670
|
|
||
Total foreign exchange contracts
|
8,700
|
|
8,787
|
|
||
Equity contracts
|
|
|
||||
Swaps
|
163
|
|
119
|
|
||
Futures and forwards
|
49
|
|
38
|
|
||
Written options
|
442
|
|
460
|
|
||
Purchased options
|
403
|
|
405
|
|
||
Total equity contracts
|
1,057
|
|
1,022
|
|
||
Commodity contracts
|
|
|
|
|||
Swaps
|
313
|
|
341
|
|
||
Spot, futures and forwards
|
190
|
|
188
|
|
||
Written options
|
265
|
|
310
|
|
||
Purchased options
|
260
|
|
274
|
|
||
Total commodity contracts
|
1,028
|
|
1,113
|
|
||
Total derivative notional amounts
|
$
|
69,550
|
|
$
|
71,156
|
|
(a)
|
Primarily consists of credit default swaps. For more information on volumes and types of credit derivative contracts, see the Credit derivatives discussion on pages
226–227
of this Note.
|
(b)
|
Represents the sum of gross long and gross short third-party notional derivative contracts.
|
220
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(a)
|
Balances exclude structured notes for which the fair value option has been elected. See Note 4 on pages
214–216
of this
Annual Report
for further information.
|
(b)
|
Excludes
$11 million
of foreign currency-denominated debt designated as a net investment hedge at
December 31, 2011
. Foreign currency-denominated debt was not designated as a hedging instrument at
December 31, 2012
.
|
(c)
|
As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral receivables and payables when a legally enforceable master netting agreement exists.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
221
|
|
Gains/(losses) recorded in income
|
|
Income statement impact due to:
|
||||||||||||||
Year ended December 31, 2012 (in millions)
|
Derivatives
|
Hedged items
|
Total income statement impact
|
|
Hedge ineffectiveness
(e)
|
Excluded components
(f)
|
|||||||||||
Contract type
|
|
|
|
|
|
|
|
||||||||||
Interest rate
(a)
|
$
|
(1,238
|
)
|
|
$
|
1,879
|
|
$
|
641
|
|
|
$
|
(28
|
)
|
$
|
669
|
|
Foreign exchange
(b)
|
(3,027
|
)
|
(d)
|
2,925
|
|
(102
|
)
|
|
—
|
|
(102
|
)
|
|||||
Commodity
(c)
|
(2,530
|
)
|
|
1,131
|
|
(1,399
|
)
|
|
107
|
|
(1,506
|
)
|
|||||
Total
|
$
|
(6,795
|
)
|
|
$
|
5,935
|
|
$
|
(860
|
)
|
|
$
|
79
|
|
$
|
(939
|
)
|
|
|
|
|
|
|
|
|
||||||||||
|
Gains/(losses) recorded in income
|
|
Income statement impact due to:
|
||||||||||||||
Year ended December 31, 2011 (in millions)
|
Derivatives
|
Hedged items
|
|
Total income statement impact
|
|
Hedge ineffectiveness
(e)
|
|
Excluded components
(f)
|
|
||||||||
Contract type
|
|
|
|
|
|
|
|
||||||||||
Interest rate
(a)
|
$
|
532
|
|
|
$
|
33
|
|
$
|
565
|
|
|
$
|
104
|
|
$
|
461
|
|
Foreign exchange
(b)
|
5,684
|
|
(d)
|
(3,761
|
)
|
1,923
|
|
|
—
|
|
1,923
|
|
|||||
Commodity
(c)
|
1,784
|
|
|
(2,880
|
)
|
(1,096
|
)
|
|
(10
|
)
|
(1,086
|
)
|
|||||
Total
|
$
|
8,000
|
|
|
$
|
(6,608
|
)
|
$
|
1,392
|
|
|
$
|
94
|
|
$
|
1,298
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Gains/(losses) recorded in income
|
|
Income statement impact due to:
|
||||||||||||||
Year ended December 31, 2010 (in millions)
|
Derivatives
|
Hedged items
|
|
Total income statement impact
|
|
Hedge ineffectiveness
(e)
|
|
Excluded components
(f)
|
|
||||||||
Contract type
|
|
|
|
|
|
|
|
||||||||||
Interest rate
(a)
|
$
|
1,102
|
|
|
$
|
(376
|
)
|
$
|
726
|
|
|
$
|
175
|
|
$
|
551
|
|
Foreign exchange
(b)
|
1,357
|
|
(d)
|
(1,812
|
)
|
(455
|
)
|
|
—
|
|
(455
|
)
|
|||||
Commodity
(c)
|
(1,354
|
)
|
|
1,882
|
|
528
|
|
|
—
|
|
528
|
|
|||||
Total
|
$
|
1,105
|
|
|
$
|
(306
|
)
|
$
|
799
|
|
|
$
|
175
|
|
$
|
624
|
|
(a)
|
Primarily consists of hedges of the benchmark (e.g., London Interbank Offered Rate (“LIBOR”)) interest rate risk of fixed-rate long-term debt and AFS securities. Gains and losses were recorded in net interest income. The current presentation excludes accrued interest. Prior period amounts have been revised to conform with the current presentation.
|
(b)
|
Primarily consists of hedges of the foreign currency risk of long-term debt and AFS securities for changes in spot foreign currency rates. Gains and losses related to the derivatives and the hedged items, due to changes in foreign currency rates, were recorded in principal transactions revenue and net interest income.
|
(c)
|
Consists of overall fair value hedges of physical commodities inventories that are generally carried at the lower of cost or market (market approximates fair value). Gains and losses were recorded in principal transactions revenue.
|
(d)
|
Included
$(3.1) billion
,
$4.9 billion
and
$278 million
for the years ended
December 31, 2012
,
2011
and
2010
, respectively, of revenue related to certain foreign exchange trading derivatives designated as fair value hedging instruments.
|
(e)
|
Hedge ineffectiveness is the amount by which the gain or loss on the designated derivative instrument does not exactly offset the gain or loss on the hedged item attributable to the hedged risk.
|
(f)
|
The assessment of hedge effectiveness excludes certain components of the changes in fair values of the derivatives and hedged items such as forward points on foreign exchange forward contracts and time values.
|
222
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
Gains/(losses) recorded in income and other comprehensive income/(loss)
(c)
|
||||||||||||||
Year ended December 31, 2012
(in millions)
|
Derivatives – effective portion reclassified from AOCI to income
|
Hedge ineffectiveness recorded directly in income
(d)
|
Total income statement impact
|
Derivatives – effective portion recorded in OCI
|
Total change
in OCI
for period
|
||||||||||
Contract type
|
|
|
|
|
|
||||||||||
Interest rate
(a)
|
$
|
(3
|
)
|
$
|
5
|
|
$
|
2
|
|
$
|
13
|
|
$
|
16
|
|
Foreign exchange
(b)
|
31
|
|
—
|
|
31
|
|
128
|
|
97
|
|
|||||
Total
|
$
|
28
|
|
$
|
5
|
|
$
|
33
|
|
$
|
141
|
|
$
|
113
|
|
|
Gains/(losses) recorded in income and other comprehensive income/(loss)
(c)
|
||||||||||||||
Year ended December 31, 2011
(in millions)
|
Derivatives – effective portion reclassified from AOCI to income
|
Hedge ineffectiveness recorded directly in income
(d)
|
Total income statement impact
|
Derivatives – effective portion recorded in OCI
|
Total change
in OCI for period |
||||||||||
Contract type
|
|
|
|
|
|
||||||||||
Interest rate
(a)
|
$
|
310
|
|
$
|
19
|
|
$
|
329
|
|
$
|
107
|
|
$
|
(203
|
)
|
Foreign exchange
(b)
|
(9
|
)
|
—
|
|
(9
|
)
|
(57
|
)
|
(48
|
)
|
|||||
Total
|
$
|
301
|
|
$
|
19
|
|
$
|
320
|
|
$
|
50
|
|
$
|
(251
|
)
|
|
|
|
|
|
|
||||||||||
|
Gains/(losses) recorded in income and other comprehensive income/(loss)
(c)
|
||||||||||||||
Year ended December 31, 2010
(in millions)
|
Derivatives – effective portion reclassified from AOCI to income
|
Hedge ineffectiveness recorded directly in income
(d)
|
Total income statement impact
|
Derivatives – effective portion recorded in OCI
|
Total change
in OCI for period |
||||||||||
Contract type
|
|
|
|
|
|
||||||||||
Interest rate
(a)
|
$
|
288
|
|
$
|
20
|
|
$
|
308
|
|
$
|
388
|
|
$
|
100
|
|
Foreign exchange
(b)
|
(82
|
)
|
(3
|
)
|
(85
|
)
|
(141
|
)
|
(59
|
)
|
|||||
Total
|
$
|
206
|
|
$
|
17
|
|
$
|
223
|
|
$
|
247
|
|
$
|
41
|
|
(a)
|
Primarily consists of benchmark interest rate hedges of LIBOR-indexed floating-rate assets and floating-rate liabilities. Gains and losses were recorded in net interest income.
|
(b)
|
Primarily consists of hedges of the foreign currency risk of non-U.S. dollar-denominated revenue and expense. The income statement classification of gains and losses follows the hedged item – primarily net interest income, noninterest revenue and compensation expense.
|
(c)
|
The Firm did not experience any forecasted transactions that failed to occur for the years ended
December 31, 2012
and 2011. In 2010, the Firm reclassified a
$25 million
loss from AOCI to earnings because the Firm determined that it was probable that forecasted interest payment cash flows related to certain wholesale deposits would not occur.
|
(d)
|
Hedge ineffectiveness is the amount by which the cumulative gain or loss on the designated derivative instrument exceeds the present value of the cumulative expected change in cash flows on the hedged item attributable to the hedged risk.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
223
|
|
Gains/(losses) recorded in income and other comprehensive income/(loss)
|
|||||||||||||||||||
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||
Year ended December 31,
(in millions)
|
Excluded components recorded directly in income
(a)
|
Effective portion recorded in OCI
|
|
Excluded components recorded directly in income
(a)
|
Effective portion recorded in OCI
|
|
Excluded components recorded directly in income
(a)
|
Effective portion recorded in OCI
|
||||||||||||
Contract type
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange derivatives
|
$
|
(306
|
)
|
$
|
(82
|
)
|
|
$
|
(251
|
)
|
$
|
225
|
|
|
$
|
(139
|
)
|
$
|
(30
|
)
|
Foreign currency denominated debt
|
—
|
|
—
|
|
|
—
|
|
1
|
|
|
—
|
|
41
|
|
||||||
Total
|
$
|
(306
|
)
|
$
|
(82
|
)
|
|
$
|
(251
|
)
|
$
|
226
|
|
|
$
|
(139
|
)
|
$
|
11
|
|
(a)
|
Certain components of hedging derivatives are permitted to be excluded from the assessment of hedge effectiveness, such as forward points on foreign exchange forward contracts. Amounts related to excluded components are recorded in current-period income. The Firm measures the ineffectiveness of net investment hedge accounting relationships based on changes in spot foreign currency rates, and therefore there was no ineffectiveness for net investment hedge accounting relationships during
2012
,
2011
and
2010
.
|
(a)
|
Primarily relates to interest rate derivatives used to hedge the interest rate risks associated with the mortgage pipeline, warehouse loans and MSRs. Gains and losses were recorded predominantly in mortgage fees and related income.
|
(b)
|
Relates to credit derivatives used to mitigate credit risk associated with lending exposures in the Firm’s wholesale businesses, and single-name credit derivatives used to mitigate credit risk arising from certain AFS securities. These derivatives do not include the synthetic credit portfolio or credit derivatives used to mitigate counterparty credit risk arising from derivative receivables, both of which are included in gains and losses on derivatives related to market-making activities and other derivatives. Gains and losses were recorded in principal transactions revenue.
|
(c)
|
Primarily relates to hedges of the foreign exchange risk of specified foreign currency-denominated liabilities. Gains and losses were recorded in principal transactions revenue and net interest income.
|
(d)
|
Primarily relates to commodity derivatives used to mitigate energy price risk associated with energy-related contracts and investments. Gains and losses were recorded in principal transactions revenue.
|
224
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Derivative payables containing downgrade triggers
|
||||||
December 31, (in millions)
|
2012
|
|
2011
|
|
||
Aggregate fair value of net derivative payables
(a)
|
$
|
40,844
|
|
$
|
39,316
|
|
Collateral posted
(a)
|
34,414
|
|
31,473
|
|
(a)
|
The current period presentation excludes contracts with downgrade triggers that were in a net receivable position. Prior period amounts have been revised to conform with the current presentation.
|
Total derivative collateral
|
|
|
|
|
|
||||||||
|
Collateral held
|
|
Collateral transferred
|
||||||||||
December 31, (in millions)
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
||||
Netting adjustment for cash collateral
(a)
|
$
|
79,153
|
|
$
|
81,499
|
|
|
$
|
60,658
|
|
$
|
51,756
|
|
Liquid securities and other cash collateral
(b)
|
13,658
|
|
21,807
|
|
|
21,767
|
|
19,439
|
|
||||
Additional liquid securities and cash collateral
(c)
|
22,562
|
|
17,613
|
|
|
9,635
|
|
10,824
|
|
||||
Total collateral for derivative transactions
|
$
|
115,373
|
|
$
|
120,919
|
|
|
$
|
92,060
|
|
$
|
82,019
|
|
(a)
|
As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral received and paid when a legally enforceable master netting agreement exists.
|
(b)
|
Represents cash collateral received and paid that is not subject to a legally enforceable master netting agreement, and liquid securities collateral held and transferred.
|
(c)
|
Represents liquid securities and cash collateral held and transferred at the initiation of derivative transactions, which is available as security against potential exposure that could arise should the fair value of the transactions move, as well as collateral held and transferred related to contracts that have non-daily call frequency for collateral to be posted, and collateral that the Firm or a counterparty has agreed to return but has not yet settled as of the reporting date. These amounts were not netted against the derivative receivables and payables in the tables above, because, at an individual counterparty level, the collateral exceeded the fair value exposure at both
December 31, 2012
and
2011
.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
225
|
226
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
Maximum payout/Notional amount
|
|||||||||||
|
Protection sold
|
Protection purchased with identical underlyings
(b)
|
Net protection (sold)/purchased
(c)
|
Other protection purchased
(d)
|
||||||||
December 31, 2012
(in millions)
|
||||||||||||
Credit derivatives
|
|
|
|
|
||||||||
Credit default swaps
|
$
|
(2,954,705
|
)
|
$
|
2,879,105
|
|
$
|
(75,600
|
)
|
$
|
42,460
|
|
Other credit derivatives
(a)
|
(66,244
|
)
|
5,649
|
|
(60,595
|
)
|
33,174
|
|
||||
Total credit derivatives
|
(3,020,949
|
)
|
2,884,754
|
|
(136,195
|
)
|
75,634
|
|
||||
Credit-related notes
|
(233
|
)
|
—
|
|
(233
|
)
|
3,255
|
|
||||
Total
|
$
|
(3,021,182
|
)
|
$
|
2,884,754
|
|
$
|
(136,428
|
)
|
$
|
78,889
|
|
|
|
|
|
|
||||||||
|
Maximum payout/Notional amount
|
|||||||||||
|
Protection sold
|
Protection purchased with identical underlyings
(b)
|
Net protection (sold)/purchased
(c)
|
Other protection purchased
(d)
|
||||||||
December 31, 2011 (in millions)
|
||||||||||||
Credit derivatives
|
|
|
|
|
||||||||
Credit default swaps
|
$
|
(2,839,492
|
)
|
$
|
2,798,207
|
|
$
|
(41,285
|
)
|
$
|
29,139
|
|
Other credit derivatives
(a)
|
(79,711
|
)
|
4,954
|
|
(74,757
|
)
|
22,292
|
|
||||
Total credit derivatives
|
(2,919,203
|
)
|
2,803,161
|
|
(116,042
|
)
|
51,431
|
|
||||
Credit-related notes
|
(742
|
)
|
—
|
|
(742
|
)
|
3,944
|
|
||||
Total
|
$
|
(2,919,945
|
)
|
$
|
2,803,161
|
|
$
|
(116,784
|
)
|
$
|
55,375
|
|
(a)
|
Primarily consists of total return swaps and CDS options.
|
(b)
|
Represents the total notional amount of protection purchased where the underlying reference instrument is identical to the reference instrument on protection sold; the notional amount of protection purchased for each individual identical underlying reference instrument may be greater or lower than the notional amount of protection sold.
|
(c)
|
Does not take into account the fair value of the reference obligation at the time of settlement, which would generally reduce the amount the seller of protection pays to the buyer of protection in determining settlement value.
|
(d)
|
Represents protection purchased by the Firm on referenced instruments (single-name, portfolio or index) where the Firm has not sold any protection on the identical reference instrument.
|
December 31, 2011 (in millions)
|
<1 year
|
1–5 years
|
>5 years
|
Total
notional amount
|
Fair value of receivables
(b)
|
Fair value of payables
(b)
|
Net fair value
|
||||||||||||||
Risk rating of reference entity
|
|
|
|
|
|
|
|
||||||||||||||
Investment-grade
|
$
|
(352,215
|
)
|
$
|
(1,262,143
|
)
|
$
|
(345,996
|
)
|
$
|
(1,960,354
|
)
|
$
|
7,809
|
|
$
|
(57,697
|
)
|
$
|
(49,888
|
)
|
Noninvestment-grade
|
(241,823
|
)
|
(589,954
|
)
|
(127,814
|
)
|
(959,591
|
)
|
13,212
|
|
(85,304
|
)
|
(72,092
|
)
|
|||||||
Total
|
$
|
(594,038
|
)
|
$
|
(1,852,097
|
)
|
$
|
(473,810
|
)
|
$
|
(2,919,945
|
)
|
$
|
21,021
|
|
$
|
(143,001
|
)
|
$
|
(121,980
|
)
|
(a)
|
The ratings scale is based on the Firm’s internal ratings, which generally correspond to ratings as defined by S&P and Moody’s.
|
(b)
|
Amounts are shown on a gross basis, before the benefit of legally enforceable master netting agreements and cash collateral received by the Firm.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
227
|
Year ended December 31,
(in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Underwriting
|
|
|
|
|
|
||||||
Equity
|
$
|
1,026
|
|
|
$
|
1,181
|
|
|
$
|
1,589
|
|
Debt
|
3,290
|
|
|
2,934
|
|
|
3,172
|
|
|||
Total underwriting
|
4,316
|
|
|
4,115
|
|
|
4,761
|
|
|||
Advisory
|
1,492
|
|
|
1,796
|
|
|
1,429
|
|
|||
Total investment banking fees
|
$
|
5,808
|
|
|
$
|
5,911
|
|
|
$
|
6,190
|
|
Year ended December 31,
(in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Trading revenue by risk exposure
|
|
|
|
|
|
||||||
Interest rate
(a)
|
$
|
3,922
|
|
|
$
|
(873
|
)
|
|
$
|
(199
|
)
|
Credit
(b)
|
(5,460
|
)
|
|
3,393
|
|
|
4,543
|
|
|||
Foreign exchange
|
1,436
|
|
|
1,154
|
|
|
1,896
|
|
|||
Equity
|
2,504
|
|
|
2,401
|
|
|
2,275
|
|
|||
Commodity
(c)
|
2,363
|
|
|
2,823
|
|
|
889
|
|
|||
Total trading revenue
|
4,765
|
|
|
8,898
|
|
|
9,404
|
|
|||
Private equity gains/(losses)
(d)
|
771
|
|
|
1,107
|
|
|
1,490
|
|
|||
Principal transactions
(e)
|
$
|
5,536
|
|
|
$
|
10,005
|
|
|
$
|
10,894
|
|
(a)
|
Includes a pretax gain of
$665 million
for the year ended December 31, 2012, reflecting the recovery on a Bear Stearns-related subordinated loan.
|
(b)
|
Includes
$5.8 billion
of losses incurred by CIO from the synthetic credit portfolio for the six months ended June 30, 2012, and
$449 million
of losses incurred by CIO from the retained index credit derivative positions for the three months ended September 30, 2012; and losses incurred by CIB from the synthetic credit portfolio.
|
(c)
|
Includes realized gains and losses and unrealized losses on physical commodities inventories that are generally carried at the lower of cost or market (market approximates fair value), subject to any applicable fair value hedge accounting adjustments, and gains and losses on commodity derivatives and other financial instruments that are carried at fair value through income. Commodity derivatives are frequently used to manage the Firm’s risk exposure to its physical commodities inventories. Gains/(losses) related to commodity fair value hedges were
$(1.4) billion
,
$(1.1) billion
and
$528 million
for the years ended
December 31, 2012
,
2011
and
2010
, respectively.
|
(d)
|
Includes revenue on private equity investments held in the Private Equity business within Corporate/Private Equity, as well as those held in other business segments.
|
(e)
|
Principal transactions revenue included DVA related to structured notes and derivative liabilities measured at fair value in CIB. DVA gains/(losses) were
$(930) million
,
$1.4 billion
, and
$509 million
for the years ended
December 31, 2012
,
2011
and
2010
, respectively.
|
228
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31,
(in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Asset management
|
|
|
|
|
|
||||||
Investment management fees
|
$
|
6,309
|
|
|
$
|
6,085
|
|
|
$
|
5,632
|
|
All other asset management fees
|
792
|
|
|
605
|
|
|
496
|
|
|||
Total asset management fees
|
7,101
|
|
|
6,690
|
|
|
6,128
|
|
|||
|
|
|
|
|
|
||||||
Total administration fees
(a)
|
2,135
|
|
|
2,171
|
|
|
2,023
|
|
|||
|
|
|
|
|
|
||||||
Commission and other fees
|
|
|
|
|
|
|
|||||
Brokerage commissions
|
2,331
|
|
|
2,753
|
|
|
2,804
|
|
|||
All other commissions and fees
|
2,301
|
|
|
2,480
|
|
|
2,544
|
|
|||
Total commissions and fees
|
4,632
|
|
|
5,233
|
|
|
5,348
|
|
|||
Total asset management, administration and commissions
|
$
|
13,868
|
|
|
$
|
14,094
|
|
|
$
|
13,499
|
|
(a)
|
Includes fees for custody, securities lending, funds services and securities clearance.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
229
|
Year ended December 31,
(in millions)
|
2012
|
|
|
2011
|
|
2010
|
|
|||
Interest income
|
|
|
|
|
||||||
Loans
|
$
|
35,832
|
|
|
$
|
37,098
|
|
$
|
40,388
|
|
Securities
|
7,939
|
|
|
9,215
|
|
9,540
|
|
|||
Trading assets
|
9,039
|
|
|
11,142
|
|
11,007
|
|
|||
Federal funds sold and securities purchased under resale agreements
|
2,442
|
|
|
2,523
|
|
1,786
|
|
|||
Securities borrowed
|
(3
|
)
|
(c)
|
110
|
|
175
|
|
|||
Deposits with banks
|
555
|
|
|
599
|
|
345
|
|
|||
Other assets
(a)
|
259
|
|
|
606
|
|
541
|
|
|||
Total interest income
|
56,063
|
|
|
61,293
|
|
63,782
|
|
|||
Interest expense
|
|
|
|
|
||||||
Interest-bearing deposits
|
2,655
|
|
|
3,855
|
|
3,424
|
|
|||
Short-term and other liabilities
(b)
|
1,788
|
|
|
2,873
|
|
2,364
|
|
|||
Long-term debt
|
6,062
|
|
|
6,109
|
|
5,848
|
|
|||
Beneficial interests issued by consolidated VIEs
|
648
|
|
|
767
|
|
1,145
|
|
|||
Total interest expense
|
11,153
|
|
|
13,604
|
|
12,781
|
|
|||
Net interest income
|
44,910
|
|
|
47,689
|
|
51,001
|
|
|||
Provision for credit losses
|
3,385
|
|
|
7,574
|
|
16,639
|
|
|||
Net interest income after provision for credit losses
|
$
|
41,525
|
|
|
$
|
40,115
|
|
$
|
34,362
|
|
(a)
|
Largely margin loans.
|
(b)
|
Includes brokerage customer payables.
|
(c)
|
Negative interest income for the year ended December 31, 2012, is a result of increased client-driven demand for certain securities combined with the impact of low interest rates; the offset of this matched book activity is reflected as lower net interest expense reported within short-term and other liabilities.
|
230
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
231
|
|
Defined benefit pension plans
|
|
|
|
||||||||||||||||||||
As of or for the year ended December 31,
|
U.S.
|
|
Non-U.S.
|
|
|
OPEB plans
(e)
|
||||||||||||||||||
(in millions)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
||||||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Benefit obligation, beginning of year
|
$
|
(9,043
|
)
|
|
$
|
(8,320
|
)
|
|
$
|
(2,829
|
)
|
|
$
|
(2,600
|
)
|
|
|
$
|
(999
|
)
|
|
$
|
(980
|
)
|
Benefits earned during the year
|
(272
|
)
|
|
(249
|
)
|
|
(41
|
)
|
|
(36
|
)
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||
Interest cost on benefit obligations
|
(466
|
)
|
|
(451
|
)
|
|
(126
|
)
|
|
(133
|
)
|
|
|
(44
|
)
|
|
(51
|
)
|
||||||
Plan amendments
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||||
WaMu Global Settlement
|
(1,425
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||||
Employee contributions
|
NA
|
|
|
NA
|
|
|
(5
|
)
|
|
(5
|
)
|
|
|
(74
|
)
|
|
(84
|
)
|
||||||
Net gain/(loss)
|
(864
|
)
|
|
(563
|
)
|
|
(244
|
)
|
|
(160
|
)
|
|
|
(9
|
)
|
|
(39
|
)
|
||||||
Benefits paid
|
592
|
|
|
540
|
|
|
108
|
|
|
93
|
|
|
|
149
|
|
|
166
|
|
||||||
Expected Medicare Part D subsidy receipts
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
NA
|
|
|
|
(10
|
)
|
|
(10
|
)
|
||||||
Foreign exchange impact and other
|
—
|
|
|
—
|
|
|
(112
|
)
|
|
12
|
|
|
|
(2
|
)
|
|
—
|
|
||||||
Benefit obligation, end of year
|
$
|
(11,478
|
)
|
|
$
|
(9,043
|
)
|
|
$
|
(3,243
|
)
|
|
$
|
(2,829
|
)
|
|
|
$
|
(990
|
)
|
|
$
|
(999
|
)
|
Change in plan assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value of plan assets, beginning of year
|
$
|
10,472
|
|
|
$
|
10,828
|
|
|
$
|
2,989
|
|
|
$
|
2,647
|
|
|
|
$
|
1,435
|
|
|
$
|
1,381
|
|
Actual return on plan assets
|
1,292
|
|
|
147
|
|
|
237
|
|
|
277
|
|
|
|
142
|
|
|
78
|
|
||||||
Firm contributions
|
31
|
|
|
37
|
|
|
86
|
|
|
169
|
|
|
|
2
|
|
|
2
|
|
||||||
WaMu Global Settlement
|
1,809
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||||
Employee contributions
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
|
—
|
|
|
—
|
|
||||||
Benefits paid
|
(592
|
)
|
|
(540
|
)
|
|
(108
|
)
|
|
(93
|
)
|
|
|
(16
|
)
|
|
(26
|
)
|
||||||
Foreign exchange impact and other
|
—
|
|
|
—
|
|
|
121
|
|
|
(16
|
)
|
|
|
—
|
|
|
—
|
|
||||||
Fair value of plan assets, end of year
|
$
|
13,012
|
|
(b)(c)
|
$
|
10,472
|
|
(b)(c)
|
$
|
3,330
|
|
(c)
|
$
|
2,989
|
|
(c)
|
|
$
|
1,563
|
|
|
$
|
1,435
|
|
Funded/(unfunded) status
(a)
|
$
|
1,534
|
|
|
$
|
1,429
|
|
(d)
|
$
|
87
|
|
|
$
|
160
|
|
|
|
$
|
573
|
|
|
$
|
436
|
|
Accumulated benefit obligation, end of year
|
$
|
(11,447
|
)
|
|
$
|
(9,008
|
)
|
|
$
|
(3,221
|
)
|
|
$
|
(2,800
|
)
|
|
|
NA
|
|
|
NA
|
|
(a)
|
Represents overfunded plans with an aggregate balance of
$2.8 billion
and
$2.6 billion
at
December 31, 2012
and
2011
, respectively, and underfunded plans with an aggregate balance of
$612 million
and
$621 million
at
December 31, 2012
and
2011
, respectively.
|
(b)
|
At
December 31, 2012
and
2011
, approximately
$418 million
and
$426 million
, respectively, of U.S. plan assets included participation rights under participating annuity contracts.
|
(c)
|
At
December 31, 2012
and
2011
, defined benefit pension plan amounts not measured at fair value included
$137 million
and
$50 million
, respectively, of accrued receivables, and
$310 million
and
$245 million
, respectively, of accrued liabilities, for U.S. plans; and
$47 million
and
$56 million
, respectively, of accrued receivables, and
$46 million
and
$69 million
of accrued liabilities, respectively, for non-U.S. plans.
|
(d)
|
Does not include any amounts attributable to the WaMu Pension Plan.
|
(e)
|
Includes an unfunded accumulated postretirement benefit obligation of
$31 million
and
$33 million
at
December 31, 2012
and
2011
, respectively, for the U.K. plan.
|
232
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
Defined benefit pension plans
|
|
|
||||||||||||||||||||
December 31,
|
U.S.
|
|
Non-U.S.
|
|
OPEB plans
|
||||||||||||||||||
(in millions)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||||
Net gain/(loss)
|
$
|
(3,814
|
)
|
|
$
|
(3,669
|
)
|
|
$
|
(676
|
)
|
|
$
|
(544
|
)
|
|
$
|
(133
|
)
|
|
$
|
(176
|
)
|
Prior service credit/(cost)
|
237
|
|
|
278
|
|
|
18
|
|
|
12
|
|
|
1
|
|
|
1
|
|
||||||
Accumulated other comprehensive income/(loss), pretax, end of year
|
$
|
(3,577
|
)
|
|
$
|
(3,391
|
)
|
|
$
|
(658
|
)
|
|
$
|
(532
|
)
|
|
$
|
(132
|
)
|
|
$
|
(175
|
)
|
|
Pension plans
|
|
|
|
|
||||||||||||||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
OPEB plans
|
||||||||||||||||||||||||
Year ended December 31, (in millions)
|
2012
|
|
2011
|
|
2010
|
|
|
2012
|
|
2011
|
|
2010
|
|
|
2012
|
|
2011
|
|
2010
|
|
|||||||||
Components of net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Benefits earned during the year
|
$
|
272
|
|
$
|
249
|
|
$
|
230
|
|
|
$
|
41
|
|
$
|
36
|
|
$
|
31
|
|
|
$
|
1
|
|
$
|
1
|
|
$
|
2
|
|
Interest cost on benefit obligations
|
466
|
|
451
|
|
468
|
|
|
126
|
|
133
|
|
128
|
|
|
44
|
|
51
|
|
55
|
|
|||||||||
Expected return on plan assets
|
(861
|
)
|
(791
|
)
|
(742
|
)
|
|
(137
|
)
|
(141
|
)
|
(126
|
)
|
|
(90
|
)
|
(88
|
)
|
(96
|
)
|
|||||||||
Amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Net (gain)/loss
|
289
|
|
165
|
|
225
|
|
|
36
|
|
48
|
|
56
|
|
|
(1
|
)
|
1
|
|
(1
|
)
|
|||||||||
Prior service cost/(credit)
|
(41
|
)
|
(43
|
)
|
(43
|
)
|
|
—
|
|
(1
|
)
|
(1
|
)
|
|
—
|
|
(8
|
)
|
(13
|
)
|
|||||||||
Settlement (gain)/loss
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Special termination benefits
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
1
|
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Net periodic defined benefit cost
|
125
|
|
31
|
|
138
|
|
|
66
|
|
75
|
|
90
|
|
|
(46
|
)
|
(43
|
)
|
(53
|
)
|
|||||||||
Other defined benefit pension plans
(a)
|
15
|
|
19
|
|
14
|
|
|
8
|
|
12
|
|
11
|
|
|
NA
|
|
NA
|
|
NA
|
|
|||||||||
Total defined benefit plans
|
140
|
|
50
|
|
152
|
|
|
74
|
|
87
|
|
101
|
|
|
(46
|
)
|
(43
|
)
|
(53
|
)
|
|||||||||
Total defined contribution plans
|
409
|
|
370
|
|
332
|
|
|
302
|
|
285
|
|
251
|
|
|
NA
|
|
NA
|
|
NA
|
|
|||||||||
Total pension and OPEB cost included in compensation expense
|
$
|
549
|
|
$
|
420
|
|
$
|
484
|
|
|
$
|
376
|
|
$
|
372
|
|
$
|
352
|
|
|
$
|
(46
|
)
|
$
|
(43
|
)
|
$
|
(53
|
)
|
Changes in plan assets and benefit obligations recognized in other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net (gain)/loss arising during the year
|
$
|
434
|
|
$
|
1,207
|
|
$
|
(187
|
)
|
|
$
|
146
|
|
$
|
25
|
|
$
|
(21
|
)
|
|
$
|
(43
|
)
|
$
|
58
|
|
$
|
(54
|
)
|
Prior service credit arising during the year
|
—
|
|
—
|
|
—
|
|
|
(6
|
)
|
—
|
|
(10
|
)
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Amortization of net loss
|
(289
|
)
|
(165
|
)
|
(225
|
)
|
|
(36
|
)
|
(48
|
)
|
(56
|
)
|
|
1
|
|
(1
|
)
|
1
|
|
|||||||||
Amortization of prior service (cost)/credit
|
41
|
|
43
|
|
43
|
|
|
—
|
|
1
|
|
1
|
|
|
—
|
|
8
|
|
13
|
|
|||||||||
Settlement loss/(gain)
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
(1
|
)
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Foreign exchange impact and other
|
—
|
|
—
|
|
—
|
|
|
22
|
|
1
|
|
(23
|
)
|
|
(1
|
)
|
—
|
|
1
|
|
|||||||||
Total recognized in other comprehensive income
|
$
|
186
|
|
$
|
1,085
|
|
$
|
(369
|
)
|
|
$
|
126
|
|
$
|
(21
|
)
|
$
|
(110
|
)
|
|
$
|
(43
|
)
|
$
|
65
|
|
$
|
(39
|
)
|
Total recognized in net periodic benefit cost and other comprehensive income
|
$
|
311
|
|
$
|
1,116
|
|
$
|
(231
|
)
|
|
$
|
192
|
|
$
|
54
|
|
$
|
(20
|
)
|
|
$
|
(89
|
)
|
$
|
22
|
|
$
|
(92
|
)
|
(a)
|
Includes various defined benefit pension plans which are individually immaterial.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
233
|
|
|
Defined benefit pension plans
|
|
OPEB plans
|
||||||||||||
(in millions)
|
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||
Net loss/(gain)
|
|
$
|
276
|
|
|
$
|
50
|
|
|
$
|
5
|
|
|
$
|
(1
|
)
|
Prior service cost/(credit)
|
|
(41
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
235
|
|
|
$
|
48
|
|
|
$
|
5
|
|
|
$
|
(1
|
)
|
|
U.S.
|
|
Non-U.S.
|
|||||||||||
Year ended December 31,
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2012
|
|
2011
|
|
2010
|
Actual rate of return:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Defined benefit pension plans
|
12.66
|
%
|
|
0.72
|
%
|
|
12.23
|
%
|
|
7.21 - 11.72%
|
|
(4.29)-13.12%
|
|
0.77-10.65%
|
OPEB plans
|
10.10
|
|
|
5.22
|
|
|
11.23
|
|
|
NA
|
|
NA
|
|
NA
|
234
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31, 2012 (in millions)
|
1-Percentage point increase
|
|
1-Percentage point decrease
|
||||
Effect on total service and interest cost
|
$
|
1
|
|
|
$
|
(1
|
)
|
Effect on accumulated postretirement benefit obligation
|
28
|
|
|
(25
|
)
|
JPMorgan Chase & Co./2012 Annual Report
|
|
235
|
|
Defined benefit pension plans
|
|
|
||||||||||||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
OPEB plans
(c)
|
||||||||||||||||||||
|
Target
|
|
% of plan assets
|
|
Target
|
|
% of plan assets
|
|
Target
|
|
% of plan assets
|
||||||||||||||
December 31,
|
Allocation
|
|
2012
|
|
|
2011
|
|
|
Allocation
|
|
2012
|
|
|
2011
|
|
|
Allocation
|
|
2012
|
|
|
2011
|
|
||
Asset category
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Debt securities
(a)
|
10-30%
|
|
20
|
%
|
|
20
|
%
|
|
70
|
%
|
|
72
|
%
|
|
74
|
%
|
|
50
|
%
|
|
50
|
%
|
|
50
|
%
|
Equity securities
|
25-60
|
|
41
|
|
|
39
|
|
|
29
|
|
|
27
|
|
|
25
|
|
|
50
|
|
|
50
|
|
|
50
|
|
Real estate
|
5-20
|
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Alternatives
(b)
|
15-50
|
|
34
|
|
|
36
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
100%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(a)
|
Debt securities primarily include corporate debt, U.S. federal, state, local and non-U.S. government, and mortgage-backed securities.
|
(b)
|
Alternatives primarily include limited partnerships.
|
(c)
|
Represents the U.S. OPEB plan only, as the U.K. OPEB plan is unfunded.
|
236
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
237
|
|
U.S. defined benefit pension plans
|
|
Non-U.S. defined benefit pension plans
|
||||||||||||||||||||||||||||
December 31, 2011
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total fair value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total fair value
|
||||||||||||||||
Cash and cash equivalents
|
$
|
117
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
117
|
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
72
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Capital equipment
|
607
|
|
|
7
|
|
|
—
|
|
|
614
|
|
|
69
|
|
|
12
|
|
|
—
|
|
|
81
|
|
||||||||
Consumer goods
|
657
|
|
|
—
|
|
|
—
|
|
|
657
|
|
|
64
|
|
|
30
|
|
|
—
|
|
|
94
|
|
||||||||
Banks and finance companies
|
301
|
|
|
2
|
|
|
—
|
|
|
303
|
|
|
83
|
|
|
13
|
|
|
—
|
|
|
96
|
|
||||||||
Business services
|
332
|
|
|
—
|
|
|
—
|
|
|
332
|
|
|
48
|
|
|
10
|
|
|
—
|
|
|
58
|
|
||||||||
Energy
|
173
|
|
|
—
|
|
|
—
|
|
|
173
|
|
|
52
|
|
|
10
|
|
|
—
|
|
|
62
|
|
||||||||
Materials
|
161
|
|
|
—
|
|
|
1
|
|
|
162
|
|
|
35
|
|
|
6
|
|
|
—
|
|
|
41
|
|
||||||||
Real estate
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||
Other
|
766
|
|
|
274
|
|
|
—
|
|
|
1,040
|
|
|
160
|
|
|
5
|
|
|
—
|
|
|
165
|
|
||||||||
Total equity securities
|
3,008
|
|
|
283
|
|
|
1
|
|
|
3,292
|
|
|
512
|
|
|
86
|
|
|
—
|
|
|
598
|
|
||||||||
Common/collective trust funds
(a)
|
401
|
|
|
1,125
|
|
|
202
|
|
|
1,728
|
|
|
138
|
|
|
170
|
|
|
—
|
|
|
308
|
|
||||||||
Limited partnerships:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Hedge funds
|
—
|
|
|
933
|
|
|
1,039
|
|
|
1,972
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Private equity
|
—
|
|
|
—
|
|
|
1,367
|
|
|
1,367
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Real estate
|
—
|
|
|
—
|
|
|
306
|
|
|
306
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Real assets
(c)
|
—
|
|
|
—
|
|
|
264
|
|
|
264
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total limited partnerships
|
—
|
|
|
933
|
|
|
2,976
|
|
|
3,909
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Corporate debt securities
(d)
|
—
|
|
|
544
|
|
|
2
|
|
|
546
|
|
|
—
|
|
|
958
|
|
|
—
|
|
|
958
|
|
||||||||
U.S. federal, state, local and non-U.S. government debt securities
|
—
|
|
|
328
|
|
|
—
|
|
|
328
|
|
|
—
|
|
|
904
|
|
|
—
|
|
|
904
|
|
||||||||
Mortgage-backed securities
|
122
|
|
|
36
|
|
|
—
|
|
|
158
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||||||
Derivative receivables
|
1
|
|
|
2
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||||
Other
(e)
|
102
|
|
|
60
|
|
|
427
|
|
|
589
|
|
|
74
|
|
|
65
|
|
|
—
|
|
|
139
|
|
||||||||
Total assets measured at fair value
(f)(g)
|
$
|
3,751
|
|
|
$
|
3,311
|
|
|
$
|
3,608
|
|
|
$
|
10,670
|
|
|
$
|
813
|
|
|
$
|
2,190
|
|
|
$
|
—
|
|
|
$
|
3,003
|
|
Derivative payables
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Total liabilities measured at fair value
(h)
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
(a)
|
At
December 31, 2012
and
2011
, common/collective trust funds primarily included a mix of short-term investment funds, domestic and international equity investments (including index) and real estate funds.
|
(b)
|
Unfunded commitments to purchase limited partnership investments for the plans were
$1.4 billion
and
$1.2 billion
for 2012 and 2011, respectively.
|
(c)
|
Real assets include investments in productive assets such as agriculture, energy rights, mining and timber properties and exclude raw land to be developed for real estate purposes.
|
(d)
|
Corporate debt securities include debt securities of U.S. and non-U.S. corporations.
|
(e)
|
Other consists of exchange-traded funds and participating and non-participating annuity contracts. Exchange-traded funds are primarily classified within level 1 of the fair value hierarchy given they are valued using market observable prices. Participating and non-participating annuity contracts are classified within level 3 of the fair value hierarchy due to lack of market mechanisms for transferring each policy and surrender restrictions.
|
(f)
|
At
December 31, 2012
and
2011
, the fair value of investments valued at NAV were
$4.4 billion
and
$3.9 billion
, respectively, which were classified within the valuation hierarchy as follows:
$0.4 billion
and
$0.4 billion
in level 1,
$2.5 billion
and
$2.1 billion
in level 2 and
$1.5 billion
and
$1.4 billion
in level 3.
|
(g)
|
At
December 31, 2012
and
2011
, excluded U.S. defined benefit pension plan receivables for investments sold and dividends and interest receivables of
$137 million
and
$50 million
, respectively; and excluded non-U.S. defined benefit pension plan receivables for investments sold and dividends and interest receivables of
$47 million
and
$56 million
, respectively.
|
(h)
|
At
December 31, 2012
and
2011
, excluded
$306 million
and
$241 million
, respectively, of U.S. defined benefit pension plan payables for investments purchased; and $
4 million
and
$4 million
, respectively, of other liabilities; and excluded non-U.S. defined benefit pension plan payables for investments purchased of
$46 million
and
$69 million
, respectively.
|
238
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31, 2011
(in millions)
|
|
Fair value, January 1, 2011
|
|
Actual return on plan assets
|
|
Purchases, sales and settlements, net
|
|
Transfers in and/or out of level 3
|
|
Fair value, December 31, 2011
|
||||||||||||||
Realized gains/(losses)
|
|
Unrealized gains/(losses)
|
||||||||||||||||||||||
U.S. defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Common/collective trust funds
|
|
194
|
|
|
35
|
|
|
1
|
|
|
(28
|
)
|
|
—
|
|
|
202
|
|
||||||
Limited partnerships:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Hedge funds
|
|
1,160
|
|
|
(16
|
)
|
|
27
|
|
|
(76
|
)
|
|
(56
|
)
|
|
1,039
|
|
||||||
Private equity
|
|
1,232
|
|
|
56
|
|
|
2
|
|
|
77
|
|
|
—
|
|
|
1,367
|
|
||||||
Real estate
|
|
304
|
|
|
8
|
|
|
40
|
|
|
14
|
|
|
(60
|
)
|
|
306
|
|
||||||
Real assets
|
|
—
|
|
|
5
|
|
|
(7
|
)
|
|
150
|
|
|
116
|
|
|
264
|
|
||||||
Total limited partnerships
|
|
2,696
|
|
|
53
|
|
|
62
|
|
|
165
|
|
|
—
|
|
|
2,976
|
|
||||||
Corporate debt securities
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
2
|
|
||||||
Other
|
|
387
|
|
|
—
|
|
|
41
|
|
|
(1
|
)
|
|
—
|
|
|
427
|
|
||||||
Total U.S. plans
|
|
$
|
3,278
|
|
|
$
|
88
|
|
|
$
|
104
|
|
|
$
|
137
|
|
|
$
|
1
|
|
|
$
|
3,608
|
|
Non-U.S. defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total non-U.S. plans
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
OPEB plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
COLI
|
|
$
|
1,381
|
|
|
$
|
—
|
|
|
$
|
70
|
|
|
$
|
(24
|
)
|
|
$
|
—
|
|
|
$
|
1,427
|
|
Total OPEB plans
|
|
$
|
1,381
|
|
|
$
|
—
|
|
|
$
|
70
|
|
|
$
|
(24
|
)
|
|
$
|
—
|
|
|
$
|
1,427
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
239
|
Year ended December 31, 2010
(in millions)
|
|
Fair value, January 1, 2010
|
|
Actual return on plan assets
|
|
Purchases, sales and settlements, net
|
|
Transfers in and/or out of level 3
|
|
Fair value, December 31, 2010
|
||||||||||||||
Realized gains/(losses)
|
|
Unrealized gains/(losses)
|
||||||||||||||||||||||
U.S. defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equities
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Common/collective trust funds
(a)
|
|
284
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
—
|
|
|
194
|
|
||||||
Limited partnerships:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Hedge funds
|
|
680
|
|
|
(1
|
)
|
|
14
|
|
|
388
|
|
|
79
|
|
|
1,160
|
|
||||||
Private equity
|
|
874
|
|
|
3
|
|
|
108
|
|
|
235
|
|
|
12
|
|
|
1,232
|
|
||||||
Real estate
|
|
196
|
|
|
3
|
|
|
16
|
|
|
89
|
|
|
—
|
|
|
304
|
|
||||||
Real assets
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total limited partnerships
|
|
1,750
|
|
|
5
|
|
|
138
|
|
|
712
|
|
|
91
|
|
|
2,696
|
|
||||||
Corporate debt securities
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||||
Other
|
|
334
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
387
|
|
||||||
Total U.S. plans
|
|
$
|
2,368
|
|
|
$
|
5
|
|
|
$
|
101
|
|
|
$
|
712
|
|
|
$
|
92
|
|
|
$
|
3,278
|
|
Non-U.S. defined benefit pension plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Total non-U.S. plans
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
OPEB plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
COLI
|
|
$
|
1,269
|
|
|
$
|
—
|
|
|
$
|
137
|
|
|
$
|
(25
|
)
|
|
$
|
—
|
|
|
$
|
1,381
|
|
Total OPEB plans
|
|
$
|
1,269
|
|
|
$
|
—
|
|
|
$
|
137
|
|
|
$
|
(25
|
)
|
|
$
|
—
|
|
|
$
|
1,381
|
|
(a)
|
The prior period has been revised to consider redemption notification periods in determining the classification of investments within the fair value hierarchy.
|
Year ended December 31,
(in millions)
|
|
U.S. defined benefit pension plans
|
|
Non-U.S. defined benefit pension plans
|
|
OPEB before Medicare Part D subsidy
|
|
Medicare Part D subsidy
|
||||||||
2013
|
|
$
|
1,159
|
|
|
$
|
102
|
|
|
$
|
92
|
|
|
$
|
11
|
|
2014
|
|
1,162
|
|
|
101
|
|
|
91
|
|
|
12
|
|
||||
2015
|
|
705
|
|
|
108
|
|
|
89
|
|
|
13
|
|
||||
2016
|
|
709
|
|
|
110
|
|
|
87
|
|
|
14
|
|
||||
2017
|
|
711
|
|
|
112
|
|
|
84
|
|
|
14
|
|
||||
Years 2018–2022
|
|
3,555
|
|
|
626
|
|
|
376
|
|
|
65
|
|
240
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
241
|
|
|
RSUs
|
|
Options/SARs
|
|||||||||||||
Year ended December 31, 2012
|
|
Number of
shares
|
Weighted-average grant
date fair value
|
|
Number of awards
|
Weighted-average exercise price
|
|
Weighted-average remaining contractual life (in years)
|
Aggregate intrinsic value
|
||||||||
(in thousands, except weighted-average data, and where otherwise stated)
|
|
|
|
||||||||||||||
Outstanding, January 1
|
|
166,631
|
|
$
|
37.65
|
|
|
155,761
|
|
$
|
40.58
|
|
|
|
|
||
Granted
|
|
59,646
|
|
35.73
|
|
|
14,738
|
|
35.70
|
|
|
|
|
||||
Exercised or vested
|
|
(79,062
|
)
|
30.91
|
|
|
(18,675
|
)
|
26.45
|
|
|
|
|
||||
Forfeited
|
|
(5,209
|
)
|
40.22
|
|
|
(3,888
|
)
|
38.07
|
|
|
|
|
||||
Canceled
|
|
NA
|
|
NA
|
|
|
(32,030
|
)
|
40.10
|
|
|
|
|
||||
Outstanding, December 31
|
|
142,006
|
|
$
|
40.49
|
|
|
115,906
|
|
$
|
42.44
|
|
|
5.5
|
$
|
721,059
|
|
Exercisable, December 31
|
|
NA
|
|
NA
|
|
|
70,576
|
|
45.87
|
|
|
4.2
|
420,713
|
|
Year ended December 31, (in millions)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Cost of prior grants of RSUs and SARs that are amortized over their applicable vesting periods
|
|
$
|
1,810
|
|
|
$
|
1,986
|
|
|
$
|
2,479
|
|
Accrual of estimated costs of RSUs and SARs to be granted in future periods including those to full-career eligible employees
|
|
735
|
|
|
689
|
|
|
772
|
|
|||
Total noncash compensation expense related to employee stock-based incentive plans
|
|
$
|
2,545
|
|
|
$
|
2,675
|
|
|
$
|
3,251
|
|
Year ended December 31, (in millions)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Cash received for options exercised
|
|
$
|
333
|
|
|
$
|
354
|
|
|
$
|
205
|
|
Tax benefit realized
(a)
|
|
53
|
|
|
31
|
|
|
14
|
|
(a)
|
The tax benefit realized from dividends or dividend equivalents paid on equity-classified share-based payment awards that are charged to retained earnings are recorded as an increase to additional paid-in capital and included in the pool of excess tax benefits available to absorb tax deficiencies on share-based payment awards.
|
242
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31,
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Weighted-average annualized valuation assumptions
|
|
|
|
|
|
|
|||
Risk-free interest rate
|
|
1.19
|
%
|
|
2.58
|
%
|
|
3.89
|
%
|
Expected dividend yield
(a)
|
|
3.15
|
|
|
2.20
|
|
|
3.13
|
|
Expected common stock price volatility
|
|
35
|
|
|
34
|
|
|
37
|
|
Expected life (in years)
|
|
6.6
|
|
6.5
|
|
6.4
|
(a)
|
In
2012
and
2011
, the expected dividend yield was determined using forward-looking assumptions. In
2010
the expected dividend yield was determined using historical dividend yields.
|
Year ended December 31,
(in millions)
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Compensation expense
(a)
|
$
|
30,585
|
|
|
$
|
29,037
|
|
|
$
|
28,124
|
|
Noncompensation expense:
|
|
|
|
|
|
|
|||||
Occupancy expense
|
3,925
|
|
|
3,895
|
|
|
3,681
|
|
|||
Technology, communications and equipment expense
|
5,224
|
|
|
4,947
|
|
|
4,684
|
|
|||
Professional and outside services
|
7,429
|
|
|
7,482
|
|
|
6,767
|
|
|||
Marketing
|
2,577
|
|
|
3,143
|
|
|
2,446
|
|
|||
Other expense
(b)(c)
|
14,032
|
|
|
13,559
|
|
|
14,558
|
|
|||
Amortization of intangibles
|
957
|
|
|
848
|
|
|
936
|
|
|||
Total noncompensation expense
|
34,144
|
|
|
33,874
|
|
|
33,072
|
|
|||
Total noninterest expense
|
$
|
64,729
|
|
|
$
|
62,911
|
|
|
$
|
61,196
|
|
(a)
|
Expense for 2010 includes a payroll tax expense related to the United Kingdom (“U.K.”) Bank Payroll Tax on certain compensation awarded from December 9, 2009, to April 5, 2010, to relevant banking employees.
|
(b)
|
Included litigation expense of
$5.0 billion
,
$4.9 billion
and
$7.4 billion
for the y
ears ended
December 31, 2012
,
2011
and
2010
, respectively.
|
(c)
|
Included FDIC-related expense of
$1.7 billion
,
$1.5 billion
and
$899 million
for the years ended
December 31, 2012
,
2011
and
2010
, respectively.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
243
|
Year ended December 31,
(in millions)
|
2012
|
|
|
2011
|
|
2010
|
|
|||
Realized gains
|
$
|
2,610
|
|
|
$
|
1,811
|
|
$
|
3,382
|
|
Realized losses
|
(457
|
)
|
|
(142
|
)
|
(317
|
)
|
|||
Net realized gains
(a)
|
2,153
|
|
|
1,669
|
|
3,065
|
|
|||
OTTI losses
|
|
|
|
|
|
|
|
|||
Credit-related
(b)
|
(28
|
)
|
|
(76
|
)
|
(100
|
)
|
|||
Securities the Firm intends to sell
(c)
|
(15
|
)
|
(d)
|
—
|
|
—
|
|
|||
Total OTTI losses recognized in income
|
(43
|
)
|
|
(76
|
)
|
(100
|
)
|
|||
Net securities gains
|
$
|
2,110
|
|
|
$
|
1,593
|
|
$
|
2,965
|
|
(a)
|
Proceeds from securities sold were within approximately
4%
of amortized cost in
2012
and
2011
, and within approximately
3%
of amortized cost in
2010
.
|
(b)
|
Includes other-than-temporary impairment losses recognized in income on certain prime mortgage-backed securities and obligations of U.S. states and municipalities for the year ended
December 31, 2012
; certain prime mortgage-backed securities for the year ended
December 31, 2011
; and certain prime mortgage-backed securities and obligations of U.S. states and municipalities for the year ended
December 31, 2010
.
|
(c)
|
Represents the excess of the amortized cost over the fair value of certain non-U.S. corporate debt, and non-U.S. government debt securities the Firm intends to sell.
|
(d)
|
Excludes realized losses of
$24 million
on sales of non-U.S. corporate debt, non-U.S. government debt and certain asset-backed securities that had been previously reported as an OTTI loss due to the intention to sell the securities during the year ended December 31, 2012.
|
244
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
2012
|
|
2011
|
||||||||||||||||||||||||
December 31, (in millions)
|
Amortized cost
|
Gross unrealized gains
|
Gross unrealized losses
|
Fair
value
|
|
Amortized cost
|
Gross unrealized gains
|
Gross unrealized losses
|
Fair
value
|
||||||||||||||||||
Available-for-sale debt securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. government agencies
(a)
|
$
|
93,693
|
|
$
|
4,708
|
|
$
|
13
|
|
|
$
|
98,388
|
|
|
$
|
101,968
|
|
$
|
5,141
|
|
$
|
2
|
|
|
$
|
107,107
|
|
Residential:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Prime and Alt-A
|
1,853
|
|
83
|
|
3
|
|
(c)
|
1,933
|
|
|
2,170
|
|
54
|
|
218
|
|
(c)
|
2,006
|
|
||||||||
Subprime
|
825
|
|
28
|
|
—
|
|
|
853
|
|
|
1
|
|
—
|
|
—
|
|
|
1
|
|
||||||||
Non-U.S.
|
70,358
|
|
1,524
|
|
29
|
|
|
71,853
|
|
|
66,067
|
|
170
|
|
687
|
|
|
65,550
|
|
||||||||
Commercial
|
12,268
|
|
948
|
|
13
|
|
|
13,203
|
|
|
10,632
|
|
650
|
|
53
|
|
|
11,229
|
|
||||||||
Total mortgage-backed securities
|
178,997
|
|
7,291
|
|
58
|
|
|
186,230
|
|
|
180,838
|
|
6,015
|
|
960
|
|
|
185,893
|
|
||||||||
U.S. Treasury and government agencies
(a)
|
12,022
|
|
116
|
|
8
|
|
|
12,130
|
|
|
8,184
|
|
169
|
|
2
|
|
|
8,351
|
|
||||||||
Obligations of U.S. states and municipalities
|
19,876
|
|
1,845
|
|
10
|
|
|
21,711
|
|
|
15,404
|
|
1,184
|
|
48
|
|
|
16,540
|
|
||||||||
Certificates of deposit
|
2,781
|
|
4
|
|
2
|
|
|
2,783
|
|
|
3,017
|
|
—
|
|
—
|
|
|
3,017
|
|
||||||||
Non-U.S. government debt securities
|
65,168
|
|
901
|
|
25
|
|
|
66,044
|
|
|
44,944
|
|
402
|
|
81
|
|
|
45,265
|
|
||||||||
Corporate debt securities
(b)
|
37,999
|
|
694
|
|
84
|
|
|
38,609
|
|
|
63,607
|
|
216
|
|
1,647
|
|
|
62,176
|
|
||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Collateralized loan obligations
|
27,483
|
|
465
|
|
52
|
|
|
27,896
|
|
|
24,474
|
|
553
|
|
166
|
|
|
24,861
|
|
||||||||
Other
|
12,816
|
|
166
|
|
11
|
|
|
12,971
|
|
|
15,779
|
|
251
|
|
57
|
|
|
15,973
|
|
||||||||
Total available-for-sale debt securities
|
357,142
|
|
11,482
|
|
250
|
|
(c)
|
368,374
|
|
|
356,247
|
|
8,790
|
|
2,961
|
|
(c)
|
362,076
|
|
||||||||
Available-for-sale equity securities
|
2,750
|
|
21
|
|
—
|
|
|
2,771
|
|
|
2,693
|
|
14
|
|
2
|
|
|
2,705
|
|
||||||||
Total available-for-sale securities
|
$
|
359,892
|
|
$
|
11,503
|
|
$
|
250
|
|
(c)
|
$
|
371,145
|
|
|
$
|
358,940
|
|
$
|
8,804
|
|
$
|
2,963
|
|
(c)
|
$
|
364,781
|
|
Total held-to-maturity securities
|
$
|
7
|
|
$
|
1
|
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
12
|
|
$
|
1
|
|
$
|
—
|
|
|
$
|
13
|
|
(a)
|
Includes total U.S. government-sponsored enterprise obligations with fair values of
$84.0 billion
and
$89.3 billion
at
December 31, 2012
and
2011
, respectively, which were predominantly mortgage-related.
|
(b)
|
Consists primarily of bank debt including sovereign government-guaranteed bank debt.
|
(c)
|
Includes a total of
$91 million
(pretax) of unrealized losses related to prime mortgage-backed securities for which credit losses have been recognized in income at December 31, 2011. These unrealized losses are not credit-related and remain reported in AOCI. There were no such losses at December 31, 2012.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
245
|
|
Securities with gross unrealized losses
|
||||||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
|
||||||||||||||
December 31, 2012
(in millions)
|
Fair value
|
Gross unrealized losses
|
|
Fair value
|
Gross unrealized losses
|
Total fair value
|
Total gross unrealized losses
|
||||||||||||
Available-for-sale debt securities
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||||||
U.S. government agencies
|
$
|
2,440
|
|
$
|
13
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,440
|
|
$
|
13
|
|
Residential:
|
|
|
|
|
|
|
|
||||||||||||
Prime and Alt-A
|
218
|
|
2
|
|
|
76
|
|
1
|
|
294
|
|
3
|
|
||||||
Subprime
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Non-U.S.
|
2,442
|
|
6
|
|
|
734
|
|
23
|
|
3,176
|
|
29
|
|
||||||
Commercial
|
1,159
|
|
8
|
|
|
312
|
|
5
|
|
1,471
|
|
13
|
|
||||||
Total mortgage-backed securities
|
6,259
|
|
29
|
|
|
1,122
|
|
29
|
|
7,381
|
|
58
|
|
||||||
U.S. Treasury and government agencies
|
4,198
|
|
8
|
|
|
—
|
|
—
|
|
4,198
|
|
8
|
|
||||||
Obligations of U.S. states and municipalities
|
907
|
|
10
|
|
|
—
|
|
—
|
|
907
|
|
10
|
|
||||||
Certificates of deposit
|
741
|
|
2
|
|
|
—
|
|
—
|
|
741
|
|
2
|
|
||||||
Non-U.S. government debt securities
|
14,527
|
|
21
|
|
|
1,927
|
|
4
|
|
16,454
|
|
25
|
|
||||||
Corporate debt securities
|
2,651
|
|
10
|
|
|
5,641
|
|
74
|
|
8,292
|
|
84
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
||||||||||||
Collateralized loan obligations
|
6,328
|
|
17
|
|
|
2,063
|
|
35
|
|
8,391
|
|
52
|
|
||||||
Other
|
2,076
|
|
7
|
|
|
275
|
|
4
|
|
2,351
|
|
11
|
|
||||||
Total available-for-sale debt securities
|
37,687
|
|
104
|
|
|
11,028
|
|
146
|
|
48,715
|
|
250
|
|
||||||
Available-for-sale equity securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Total securities with gross unrealized losses
|
$
|
37,687
|
|
$
|
104
|
|
|
$
|
11,028
|
|
$
|
146
|
|
$
|
48,715
|
|
$
|
250
|
|
|
Securities with gross unrealized losses
|
||||||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
|
||||||||||||||
December 31, 2011 (in millions)
|
Fair value
|
Gross unrealized losses
|
|
Fair value
|
Gross unrealized losses
|
Total fair value
|
Total gross unrealized losses
|
||||||||||||
Available-for-sale debt securities
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||||||
U.S. government agencies
|
$
|
2,724
|
|
$
|
2
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,724
|
|
$
|
2
|
|
Residential:
|
|
|
|
|
|
|
|
||||||||||||
Prime and Alt-A
|
649
|
|
12
|
|
|
970
|
|
206
|
|
1,619
|
|
218
|
|
||||||
Subprime
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Non-U.S.
|
30,500
|
|
266
|
|
|
25,176
|
|
421
|
|
55,676
|
|
687
|
|
||||||
Commercial
|
837
|
|
53
|
|
|
—
|
|
—
|
|
837
|
|
53
|
|
||||||
Total mortgage-backed securities
|
34,710
|
|
333
|
|
|
26,146
|
|
627
|
|
60,856
|
|
960
|
|
||||||
U.S. Treasury and government agencies
|
3,369
|
|
2
|
|
|
—
|
|
—
|
|
3,369
|
|
2
|
|
||||||
Obligations of U.S. states and municipalities
|
147
|
|
42
|
|
|
40
|
|
6
|
|
187
|
|
48
|
|
||||||
Certificates of deposit
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Non-U.S. government debt securities
|
11,901
|
|
66
|
|
|
1,286
|
|
15
|
|
13,187
|
|
81
|
|
||||||
Corporate debt securities
|
22,230
|
|
901
|
|
|
9,585
|
|
746
|
|
31,815
|
|
1,647
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
||||||||||||
Collateralized loan obligations
|
5,610
|
|
49
|
|
|
3,913
|
|
117
|
|
9,523
|
|
166
|
|
||||||
Other
|
4,735
|
|
40
|
|
|
1,185
|
|
17
|
|
5,920
|
|
57
|
|
||||||
Total available-for-sale debt securities
|
82,702
|
|
1,433
|
|
|
42,155
|
|
1,528
|
|
124,857
|
|
2,961
|
|
||||||
Available-for-sale equity securities
|
338
|
|
2
|
|
|
—
|
|
—
|
|
338
|
|
2
|
|
||||||
Total securities with gross unrealized losses
|
$
|
83,040
|
|
$
|
1,435
|
|
|
$
|
42,155
|
|
$
|
1,528
|
|
$
|
125,195
|
|
$
|
2,963
|
|
246
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31,
(in millions)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|||
Debt securities the Firm does not intend to sell that have credit losses
|
|
|
|
|
|
|
|
||||||
Total OTTI
(a)
|
|
$
|
(113
|
)
|
|
$
|
(27
|
)
|
|
$
|
(94
|
)
|
|
Losses recorded in/(reclassified from) AOCI
|
|
85
|
|
|
(49
|
)
|
|
(6
|
)
|
|
|||
Total credit losses recognized in income
(b)
|
|
(28
|
)
|
(d)
|
(76
|
)
|
(f)
|
(100
|
)
|
(g)
|
|||
Securities the Firm intends to sell
(c)
|
|
(15
|
)
|
(e)
|
—
|
|
|
—
|
|
|
|||
Total OTTI losses recognized in income
|
|
$
|
(43
|
)
|
|
$
|
(76
|
)
|
|
$
|
(100
|
)
|
|
(a)
|
For initial OTTI, represents the excess of the amortized cost over the fair value of AFS debt securities. For subsequent impairments of the same security, represents additional declines in fair value subsequent to previously recorded OTTI, if applicable.
|
(b)
|
Subsequent credit losses may be recorded on securities without a corresponding further decline in fair value if there has been a decline in expected cash flows.
|
(c)
|
Represents the excess of the amortized cost over the fair value of certain non-U.S. corporate debt, and non-U.S. government debt securities the Firm intends to sell.
|
(d)
|
Represents the credit loss component on certain prime mortgage-backed securities and obligations of U.S. states and municipalities for the year ended December 31, 2012, that the Firm does not intend to sell. At December 31, 2012, there were no unrealized losses remaining in AOCI on securities for which credit losses were recognized in income during 2012.
|
(e)
|
Excludes realized losses of
$24 million
on sales of non-U.S. corporate debt, non-U.S. government debt and certain asset-backed securities that had been previously reported as an OTTI loss due to the intention to sell the securities during the year ended December 31, 2012.
|
(f)
|
Represents the credit loss component on certain prime mortgage-backed securities for the year ended December 31, 2011, that the Firm did not intend to sell.
|
(g)
|
Represents the credit loss component on certain prime mortgage-backed securities and obligations of U.S. states and municipalities for the year ended December 31, 2010 that the Firm did not intend to sell.
|
Year ended December 31, (in millions)
|
2012
|
|
2011
|
|
2010
|
|
|||
Balance, beginning of period
|
$
|
708
|
|
$
|
632
|
|
$
|
578
|
|
Additions:
|
|
|
|
||||||
Newly credit-impaired securities
|
21
|
|
4
|
|
—
|
|
|||
Increase in losses on previously credit-impaired securities
|
—
|
|
—
|
|
94
|
|
|||
Losses reclassified from other comprehensive income on previously credit-impaired securities
|
7
|
|
72
|
|
6
|
|
|||
Reductions:
|
|
|
|
||||||
Sales of credit-impaired securities
|
(214
|
)
|
—
|
|
(31
|
)
|
|||
Impact of new accounting guidance related to VIEs
|
—
|
|
—
|
|
(15
|
)
|
|||
Balance, end of period
|
$
|
522
|
|
$
|
708
|
|
$
|
632
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
247
|
By remaining maturity
December 31, 2012
(in millions)
|
Due in one
year or less
|
Due after one year through five years
|
Due after five years through 10 years
|
Due after
10 years
(c)
|
Total
|
||||||||||
Available-for-sale debt securities
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
(a)
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
102
|
|
$
|
11,915
|
|
$
|
10,568
|
|
$
|
156,412
|
|
$
|
178,997
|
|
Fair value
|
103
|
|
12,268
|
|
11,008
|
|
162,851
|
|
186,230
|
|
|||||
Average yield
(b)
|
1.91
|
%
|
1.94
|
%
|
2.81
|
%
|
3.15
|
%
|
3.05
|
%
|
|||||
U.S. Treasury and government agencies
(a)
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
7,779
|
|
$
|
1,502
|
|
$
|
1,651
|
|
$
|
1,090
|
|
$
|
12,022
|
|
Fair value
|
7,805
|
|
1,558
|
|
1,653
|
|
1,114
|
|
12,130
|
|
|||||
Average yield
(b)
|
0.51
|
%
|
2.29
|
%
|
1.17
|
%
|
0.78
|
%
|
0.85
|
%
|
|||||
Obligations of U.S. states and municipalities
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
23
|
|
$
|
436
|
|
$
|
972
|
|
$
|
18,445
|
|
$
|
19,876
|
|
Fair value
|
23
|
|
471
|
|
1,033
|
|
20,184
|
|
21,711
|
|
|||||
Average yield
(b)
|
3.45
|
%
|
5.52
|
%
|
4.08
|
%
|
6.02
|
%
|
5.91
|
%
|
|||||
Certificates of deposit
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
2,730
|
|
$
|
51
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,781
|
|
Fair value
|
2,729
|
|
54
|
|
—
|
|
—
|
|
2,783
|
|
|||||
Average yield
(b)
|
5.78
|
%
|
3.28
|
%
|
—
|
%
|
—
|
%
|
5.73
|
%
|
|||||
Non-U.S. government debt securities
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
18,248
|
|
$
|
21,937
|
|
$
|
22,870
|
|
$
|
2,113
|
|
$
|
65,168
|
|
Fair value
|
18,254
|
|
22,172
|
|
23,386
|
|
2,232
|
|
66,044
|
|
|||||
Average yield
(b)
|
1.23
|
%
|
2.03
|
%
|
1.40
|
%
|
1.65
|
%
|
1.57
|
%
|
|||||
Corporate debt securities
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
5,605
|
|
$
|
23,342
|
|
$
|
8,899
|
|
$
|
153
|
|
$
|
37,999
|
|
Fair value
|
5,618
|
|
23,732
|
|
9,098
|
|
161
|
|
38,609
|
|
|||||
Average yield
(b)
|
2.09
|
%
|
2.37
|
%
|
2.57
|
%
|
3.99
|
%
|
2.38
|
%
|
|||||
Asset-backed securities
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
500
|
|
$
|
3,104
|
|
$
|
17,129
|
|
$
|
19,566
|
|
$
|
40,299
|
|
Fair value
|
501
|
|
3,145
|
|
17,468
|
|
19,753
|
|
40,867
|
|
|||||
Average yield
(b)
|
1.08
|
%
|
2.10
|
%
|
1.75
|
%
|
2.09
|
%
|
1.93
|
%
|
|||||
Total available-for-sale debt securities
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
34,987
|
|
$
|
62,287
|
|
$
|
62,089
|
|
$
|
197,779
|
|
$
|
357,142
|
|
Fair value
|
35,033
|
|
63,400
|
|
63,646
|
|
206,295
|
|
368,374
|
|
|||||
Average yield
(b)
|
1.57
|
%
|
2.17
|
%
|
1.94
|
%
|
3.29
|
%
|
2.69
|
%
|
|||||
Available-for-sale equity securities
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,750
|
|
$
|
2,750
|
|
Fair value
|
—
|
|
—
|
|
—
|
|
2,771
|
|
2,771
|
|
|||||
Average yield
(b)
|
—
|
%
|
—
|
%
|
—
|
%
|
0.36
|
%
|
0.36
|
%
|
|||||
Total available-for-sale securities
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
34,987
|
|
$
|
62,287
|
|
$
|
62,089
|
|
$
|
200,529
|
|
$
|
359,892
|
|
Fair value
|
35,033
|
|
63,400
|
|
63,646
|
|
209,066
|
|
371,145
|
|
|||||
Average yield
(b)
|
1.57
|
%
|
2.17
|
%
|
1.94
|
%
|
3.25
|
%
|
2.67
|
%
|
|||||
Total held-to-maturity securities
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
—
|
|
$
|
6
|
|
$
|
1
|
|
$
|
—
|
|
$
|
7
|
|
Fair value
|
—
|
|
7
|
|
1
|
|
—
|
|
8
|
|
|||||
Average yield
(b)
|
—
|
%
|
6.85
|
%
|
6.64
|
%
|
—
|
%
|
6.83
|
%
|
(a)
|
U.S. government agencies and U.S. government-sponsored enterprises were the only issuers whose securities exceeded
10%
of
JPMorgan Chase
’s total stockholders’ equity at
December 31, 2012
.
|
(b)
|
Average yield is computed using the effective yield of each security owned at the end of the period, weighted based on the amortized cost of each security. The effective yield considers the contractual coupon, amortization of premiums and accretion of discounts, and the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable. The effective yield excludes unscheduled principal prepayments; and accordingly, actual maturities of securities may differ from their contractual or expected maturities as certain securities may be prepaid.
|
(c)
|
Includes securities with no stated maturity. Substantially all of the Firm’s residential mortgage-backed securities and collateralized mortgage obligations are due in
10 years
or more, based on contractual maturity. The estimated duration, which reflects anticipated future prepayments based on a consensus of dealers in the market, is approximately
three years
for agency residential mortgage-backed securities,
two years
for agency residential collateralized mortgage obligations and
four years
for nonagency residential collateralized mortgage obligations.
|
248
|
|
JPMorgan Chase & Co./2012 Annual Report
|
December 31,
(in millions)
|
2012
|
|
2011
|
||||||||
Securities purchased under resale agreements
(a)
|
|
$
|
295,413
|
|
|
|
|
$
|
235,000
|
|
|
Securities borrowed
(b)
|
|
119,017
|
|
|
|
|
142,462
|
|
|
||
Securities sold under repurchase agreements
(c)
|
|
$
|
215,560
|
|
|
|
|
$
|
197,789
|
|
|
Securities loaned
(d)
|
|
23,582
|
|
|
|
|
14,214
|
|
|
(a)
|
At
December 31, 2012
and
2011
, included resale agreements of
$24.3 billion
and
$22.2 billion
, respectively, accounted for at fair value.
|
(b)
|
At
December 31, 2012
and
2011
, included securities borrowed of
$10.2 billion
and
$15.3 billion
, respectively, accounted for at fair value.
|
(c)
|
At
December 31, 2012
and
2011
, included repurchase agreements of
$3.9 billion
and
$6.8 billion
, respectively, accounted for at fair value.
|
(d)
|
At
December 31, 2012
, included securities loaned of
$457 million
accounted for at fair value. There were no securities loaned accounted for at fair value at December 31, 2011.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
249
|
•
|
Originated or purchased loans held-for-investment (i.e., “retained”), other than purchased credit-impaired (“PCI”) loans
|
•
|
Loans held-for-sale
|
•
|
Loans at fair value
|
•
|
PCI loans held-for-investment
|
250
|
|
JPMorgan Chase & Co./2012 Annual Report
|
•
|
A charge-off is recognized when a loan is modified in a TDR if the loan is determined to be collateral-dependent. A loan is considered to be collateral-dependent when repayment of the loan is expected to be provided solely by the underlying collateral, rather than by cash flows from the borrower’s operations, income or other resources.
|
•
|
Loans to borrowers who have experienced an event (e.g., bankruptcy) that suggests a loss is either known or highly certain are subject to accelerated charge-off standards. Residential real estate and auto loans are charged off when the loan becomes
60 days
past due, or sooner if the loan is determined to be collateral-dependent. Credit card and scored business banking loans are charged off within
60 days
of receiving notification of the bankruptcy filing or other event. Student loans are generally charged off when the loan becomes
60 days
past due after receiving notification of a bankruptcy.
|
•
|
Auto loans are written down to net realizable value upon repossession of the automobile and after a redemption period (i.e., the period during which a borrower may cure the loan) has passed.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
251
|
252
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Consumer, excluding
credit card
(a)
|
|
Credit card
|
|
Wholesale
(c)
|
Residential real estate – excluding PCI
• Home equity – senior lien
• Home equity – junior lien
• Prime mortgage, including
option ARMs
• Subprime mortgage
Other consumer loans
• Auto
(b)
• Business banking
(b)
• Student and other
Residential real estate – PCI
• Home equity
• Prime mortgage
• Subprime mortgage
• Option ARMs
|
|
• Credit card loans
|
|
• Commercial and industrial
• Real estate
• Financial institutions
• Government agencies
• Other
|
(a)
|
Includes loans reported in CCB and residential real estate loans reported in the AM business segment and in Corporate/Private Equity.
|
(b)
|
Includes certain business banking and auto dealer risk-rated loans that apply the wholesale methodology for determining the allowance for loan losses; these loans are managed by CCB, and therefore, for consistency in presentation, are included with the other consumer loan classes.
|
(c)
|
Includes loans reported in CIB, CB and AM business segments and in Corporate/Private Equity.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
253
|
December 31, 2012
(in millions)
|
Consumer, excluding credit card
|
Credit card
(a)
|
Wholesale
|
Total
|
|
||||||||
Retained
|
$
|
292,620
|
|
$
|
127,993
|
|
$
|
306,222
|
|
$
|
726,835
|
|
(b)
|
Held-for-sale
|
—
|
|
—
|
|
4,406
|
|
4,406
|
|
|
||||
At fair value
|
—
|
|
—
|
|
2,555
|
|
2,555
|
|
|
||||
Total
|
$
|
292,620
|
|
$
|
127,993
|
|
$
|
313,183
|
|
$
|
733,796
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2011
(in millions)
|
Consumer, excluding credit card
|
Credit card
(a)
|
Wholesale
|
Total
|
|
||||||||
Retained
|
$
|
308,427
|
|
$
|
132,175
|
|
$
|
278,395
|
|
$
|
718,997
|
|
(b)
|
Held-for-sale
|
—
|
|
102
|
|
2,524
|
|
2,626
|
|
|
||||
At fair value
|
—
|
|
—
|
|
2,097
|
|
2,097
|
|
|
||||
Total
|
$
|
308,427
|
|
$
|
132,277
|
|
$
|
283,016
|
|
$
|
723,720
|
|
|
(a)
|
Includes billed finance charges and fees net of an allowance for uncollectible amounts.
|
(b)
|
Loans (other than PCI loans and those for which the fair value option has been elected) are presented net of unearned income, unamortized discounts and premiums, and net deferred loan costs of
$2.5 billion
and
$2.7 billion
at
December 31, 2012
and
2011
, respectively.
|
|
|
2012
|
|
2011
|
||||||||||||||||||||||||
Years ended December 31,
(in millions) |
|
Consumer, excluding credit card
|
Credit card
|
Wholesale
|
Total
|
|
|
Consumer, excluding credit card
|
Credit card
|
Wholesale
|
Total
|
|
||||||||||||||||
Purchases
|
|
$
|
6,601
|
|
$
|
—
|
|
$
|
827
|
|
$
|
7,428
|
|
|
|
$
|
7,525
|
|
$
|
—
|
|
$
|
906
|
|
$
|
8,431
|
|
|
Sales
|
|
1,852
|
|
—
|
|
3,423
|
|
5,275
|
|
|
|
1,384
|
|
—
|
|
3,289
|
|
4,673
|
|
|
||||||||
Retained loans reclassified to held-for-sale
|
|
—
|
|
1,043
|
|
504
|
|
1,547
|
|
|
|
—
|
|
2,006
|
|
538
|
|
2,544
|
|
|
(a)
|
Excludes sales related to loans accounted for at fair value.
|
254
|
|
JPMorgan Chase & Co./2012 Annual Report
|
•
|
For residential real estate loans, including both non-PCI and PCI portfolios, the current estimated LTV ratio, or the combined LTV ratio in the case of junior lien loans, is an indicator of the potential loss severity in the event of default. Additionally, LTV or combined LTV can provide
|
•
|
For scored auto, scored business banking and student loans, geographic distribution is an indicator of the credit performance of the portfolio. Similar to residential real estate loans, geographic distribution provides insights into the portfolio performance based on regional economic activity and events.
|
•
|
Risk-rated business banking and auto loans are similar to wholesale loans in that the primary credit quality indicators are the risk rating that is assigned to the loan and whether the loans are considered to be criticized and/or nonaccrual. Risk ratings are reviewed on a regular and ongoing basis by Credit and Risk Management and are adjusted as necessary for updated information about borrowers’ ability to fulfill their obligations. For further information about risk-rated wholesale loan credit quality indicators, see page
271
of this Note.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
255
|
Residential real estate – excluding PCI loans
|
|
|
|
|
|
|
||||||||
|
Home equity
|
|||||||||||||
December 31,
(in millions, except ratios)
|
Senior lien
|
|
Junior lien
|
|||||||||||
2012
|
2011
|
|
2012
|
|
2011
|
|||||||||
Loan delinquency
(a)
|
|
|
|
|
|
|
||||||||
Current
|
$
|
18,688
|
|
$
|
20,992
|
|
|
$
|
46,805
|
|
|
$
|
54,533
|
|
30–149 days past due
|
330
|
|
405
|
|
|
960
|
|
|
1,272
|
|
||||
150 or more days past due
|
367
|
|
368
|
|
|
235
|
|
|
230
|
|
||||
Total retained loans
|
$
|
19,385
|
|
$
|
21,765
|
|
|
$
|
48,000
|
|
|
$
|
56,035
|
|
% of 30+ days past due to total retained loans
|
3.60
|
%
|
3.55
|
%
|
|
2.49
|
%
|
|
2.68
|
%
|
||||
90 or more days past due and still accruing
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
90 or more days past due and government guarantee
d
(b)
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Nonaccrual loans
(c)
|
931
|
|
495
|
|
|
2,277
|
|
(h)
|
792
|
|
||||
Current estimated LTV ratios
(d)(e)(f)
|
|
|
|
|
|
|
||||||||
Greater than 125% and refreshed FICO scores:
|
|
|
|
|
|
|
||||||||
Equal to or greater than 660
|
$
|
197
|
|
$
|
341
|
|
|
$
|
4,561
|
|
|
$
|
6,463
|
|
Less than 660
|
93
|
|
160
|
|
|
1,338
|
|
|
2,037
|
|
||||
101% to 125% and refreshed FICO scores:
|
|
|
|
|
|
|
||||||||
Equal to or greater than 660
|
491
|
|
663
|
|
|
7,089
|
|
|
8,775
|
|
||||
Less than 660
|
191
|
|
241
|
|
|
1,971
|
|
|
2,510
|
|
||||
80% to 100% and refreshed FICO scores:
|
|
|
|
|
|
|
||||||||
Equal to or greater than 660
|
1,502
|
|
1,850
|
|
|
9,604
|
|
|
11,433
|
|
||||
Less than 660
|
485
|
|
601
|
|
|
2,279
|
|
|
2,616
|
|
||||
Less than 80% and refreshed FICO scores:
|
|
|
|
|
|
|
||||||||
Equal to or greater than 660
|
13,988
|
|
15,350
|
|
|
18,252
|
|
|
19,326
|
|
||||
Less than 660
|
2,438
|
|
2,559
|
|
|
2,906
|
|
|
2,875
|
|
||||
U.S. government-guaranteed
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total retained loans
|
$
|
19,385
|
|
$
|
21,765
|
|
|
$
|
48,000
|
|
|
$
|
56,035
|
|
Geographic region
|
|
|
|
|
|
|
||||||||
California
|
$
|
2,786
|
|
$
|
3,066
|
|
|
$
|
10,969
|
|
|
$
|
12,851
|
|
New York
|
2,847
|
|
3,023
|
|
|
9,753
|
|
|
10,979
|
|
||||
Illinois
|
1,358
|
|
1,495
|
|
|
3,265
|
|
|
3,785
|
|
||||
Florida
|
892
|
|
992
|
|
|
2,572
|
|
|
3,006
|
|
||||
Texas
|
2,508
|
|
3,027
|
|
|
1,503
|
|
|
1,859
|
|
||||
New Jersey
|
652
|
|
687
|
|
|
2,838
|
|
|
3,238
|
|
||||
Arizona
|
1,183
|
|
1,339
|
|
|
2,151
|
|
|
2,552
|
|
||||
Washington
|
651
|
|
714
|
|
|
1,629
|
|
|
1,895
|
|
||||
Ohio
|
1,514
|
|
1,747
|
|
|
1,091
|
|
|
1,328
|
|
||||
Michigan
|
910
|
|
1,044
|
|
|
1,169
|
|
|
1,400
|
|
||||
All other
(g)
|
4,084
|
|
4,631
|
|
|
11,060
|
|
|
13,142
|
|
||||
Total retained loans
|
$
|
19,385
|
|
$
|
21,765
|
|
|
$
|
48,000
|
|
|
$
|
56,035
|
|
(a)
|
Individual delinquency classifications included mortgage loans insured by U.S. government agencies as follows: current includes
$3.8 billion
and
$3.0 billion
;
30
–
149
days past due includes
$2.3 billion
and
$2.3 billion
; and
150
or more days past due includes
$9.5 billion
and
$10.3 billion
at
December 31, 2012
and
2011
, respectively.
|
(b)
|
These balances, which are
90 days
or more past due but insured by U.S. government agencies, are excluded from nonaccrual loans. In predominately all cases,
100%
of the principal balance of the loans is insured and interest is guaranteed at a specified reimbursement rate subject to meeting agreed-upon servicing guidelines. These amounts are excluded from nonaccrual loans because reimbursement of insured and guaranteed amounts is proceeding normally. At
December 31, 2012
and
2011
, these balances included
$6.8 billion
and
$7.0 billion
, respectively, of loans that are no longer accruing interest because interest has been curtailed by the U.S. government agencies although, in predominantly all cases,
100%
of the principal is still insured. For the remaining balance, interest is being accrued at the guaranteed reimbursement rate.
|
(c)
|
At
December 31, 2012
, included
$1.7 billion
of loans recorded in accordance with regulatory guidance requiring loans discharged under Chapter 7 bankruptcy and not reaffirmed by the borrower to be reported as nonaccrual loans, regardless of their delinquency status. This
$1.7 billion
consisted of
$450 million
,
$440 million
,
$500 million
, and
$357 million
for home equity - senior lien, home equity - junior lien, prime mortgage, including option ARMs, and subprime mortgages, respectively. Certain of these loans have previously been reported as performing TDRs (e.g., loans that were previously modified under one of the Firm’s loss mitigation programs and that have made at least
six
payments under the modified payment terms).
|
(d)
|
Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates.
|
(e)
|
Junior lien represents combined LTV, which considers all available lien positions related to the property. All other products are presented without consideration of subordinate liens on the property.
|
(f)
|
Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.
|
(g)
|
At both
December 31, 2012
and
2011
, included mortgage loans insured by U.S. government agencies of
$15.6 billion
.
|
(h)
|
Includes
$1.2 billion
of performing junior liens at
December 31, 2012
, that are subordinate to senior liens that are
90 days
or more past due; such junior liens are now being reported as nonaccrual loans based upon regulatory guidance issued in the first quarter of 2012. Of the total,
$1.1 billion
were current at
December 31, 2012
. Prior periods have not been restated.
|
(i)
|
At
December 31, 2012
and
2011
, excluded mortgage loans insured by U.S. government agencies of
$11.8 billion
and
$12.6 billion
, respectively. These amounts were excluded as reimbursement of insured amounts is proceeding normally.
|
256
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(table continued from previous page)
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgages
|
|
|
|
||||||||||||||||||||
Prime, including option ARMs
|
|
|
Subprime
|
|
Total residential real estate – excluding PCI
|
|
|||||||||||||||||
2012
|
|
2011
|
|
|
2012
|
2011
|
|
2012
|
|
2011
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
$
|
61,439
|
|
|
$
|
59,855
|
|
|
|
$
|
6,673
|
|
$
|
7,585
|
|
|
$
|
133,605
|
|
|
$
|
142,965
|
|
|
3,237
|
|
|
3,475
|
|
|
|
727
|
|
820
|
|
|
5,254
|
|
|
5,972
|
|
|
||||||
11,580
|
|
|
12,866
|
|
|
|
855
|
|
1,259
|
|
|
13,037
|
|
|
14,723
|
|
|
||||||
$
|
76,256
|
|
|
$
|
76,196
|
|
|
|
$
|
8,255
|
|
$
|
9,664
|
|
|
$
|
151,896
|
|
|
$
|
163,660
|
|
|
3.97
|
%
|
(i)
|
4.96
|
%
|
(i)
|
|
19.16
|
%
|
21.51
|
%
|
|
4.28
|
%
|
(i)
|
4.97
|
%
|
(i)
|
||||||
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
10,625
|
|
|
11,516
|
|
|
|
—
|
|
—
|
|
|
10,625
|
|
|
11,516
|
|
|
||||||
3,445
|
|
|
3,462
|
|
|
|
1,807
|
|
1,781
|
|
|
8,460
|
|
|
6,530
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
$
|
2,573
|
|
|
$
|
3,168
|
|
|
|
$
|
236
|
|
$
|
367
|
|
|
$
|
7,567
|
|
|
$
|
10,339
|
|
|
991
|
|
|
1,416
|
|
|
|
653
|
|
1,061
|
|
|
3,075
|
|
|
4,674
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
3,697
|
|
|
4,626
|
|
|
|
457
|
|
506
|
|
|
11,734
|
|
|
14,570
|
|
|
||||||
1,376
|
|
|
1,636
|
|
|
|
985
|
|
1,284
|
|
|
4,523
|
|
|
5,671
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
7,070
|
|
|
9,343
|
|
|
|
726
|
|
817
|
|
|
18,902
|
|
|
23,443
|
|
|
||||||
2,117
|
|
|
2,349
|
|
|
|
1,346
|
|
1,556
|
|
|
6,227
|
|
|
7,122
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
38,281
|
|
|
33,849
|
|
|
|
1,793
|
|
1,906
|
|
|
72,314
|
|
|
70,431
|
|
|
||||||
4,549
|
|
|
4,225
|
|
|
|
2,059
|
|
2,167
|
|
|
11,952
|
|
|
11,826
|
|
|
||||||
15,602
|
|
|
15,584
|
|
|
|
—
|
|
—
|
|
|
15,602
|
|
|
15,584
|
|
|
||||||
$
|
76,256
|
|
|
$
|
76,196
|
|
|
|
$
|
8,255
|
|
$
|
9,664
|
|
|
$
|
151,896
|
|
|
$
|
163,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
$
|
17,539
|
|
|
$
|
18,029
|
|
|
|
$
|
1,240
|
|
$
|
1,463
|
|
|
$
|
32,534
|
|
|
$
|
35,409
|
|
|
11,190
|
|
|
10,200
|
|
|
|
1,081
|
|
1,217
|
|
|
24,871
|
|
|
25,419
|
|
|
||||||
3,999
|
|
|
3,922
|
|
|
|
323
|
|
391
|
|
|
8,945
|
|
|
9,593
|
|
|
||||||
4,372
|
|
|
4,565
|
|
|
|
1,031
|
|
1,206
|
|
|
8,867
|
|
|
9,769
|
|
|
||||||
2,927
|
|
|
2,851
|
|
|
|
257
|
|
300
|
|
|
7,195
|
|
|
8,037
|
|
|
||||||
2,131
|
|
|
2,042
|
|
|
|
399
|
|
461
|
|
|
6,020
|
|
|
6,428
|
|
|
||||||
1,162
|
|
|
1,194
|
|
|
|
165
|
|
199
|
|
|
4,661
|
|
|
5,284
|
|
|
||||||
1,741
|
|
|
1,878
|
|
|
|
177
|
|
209
|
|
|
4,198
|
|
|
4,696
|
|
|
||||||
405
|
|
|
441
|
|
|
|
191
|
|
234
|
|
|
3,201
|
|
|
3,750
|
|
|
||||||
866
|
|
|
909
|
|
|
|
203
|
|
246
|
|
|
3,148
|
|
|
3,599
|
|
|
||||||
29,924
|
|
|
30,165
|
|
|
|
3,188
|
|
3,738
|
|
|
48,256
|
|
|
51,676
|
|
|
||||||
$
|
76,256
|
|
|
$
|
76,196
|
|
|
|
$
|
8,255
|
|
$
|
9,664
|
|
|
$
|
151,896
|
|
|
$
|
163,660
|
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
257
|
|
|
Delinquencies
|
|
|
|
|
|||||||||||||
December 31, 2012
(in millions, except ratios)
|
|
30–89 days past due
|
|
90–149 days past due
|
|
150+ days past due
|
|
Total loans
|
|
Total 30+ day delinquency rate
|
|||||||||
HELOCs:
(a)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Within the revolving period
(b)
|
|
$
|
514
|
|
|
$
|
196
|
|
|
$
|
185
|
|
|
$
|
40,794
|
|
|
2.19
|
%
|
Beyond the revolving period
|
|
48
|
|
|
19
|
|
|
27
|
|
|
2,127
|
|
|
4.42
|
|
||||
HELOANs
|
|
125
|
|
|
58
|
|
|
23
|
|
|
5,079
|
|
|
4.06
|
|
||||
Total
|
|
$
|
687
|
|
|
$
|
273
|
|
|
$
|
235
|
|
|
$
|
48,000
|
|
|
2.49
|
%
|
|
|
Delinquencies
|
|
|
|
|
|||||||||||||
December 31, 2011
(in millions, except ratios)
|
|
30–89 days past due
|
|
90–149 days past due
|
|
150+ days past due
|
|
Total loans
|
|
Total 30+ day delinquency rate
|
|||||||||
HELOCs:
(a)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Within the revolving period
(b)
|
|
$
|
606
|
|
|
$
|
314
|
|
|
$
|
173
|
|
|
$
|
47,760
|
|
|
2.29
|
%
|
Beyond the revolving period
|
|
45
|
|
|
19
|
|
|
15
|
|
|
1,636
|
|
|
4.83
|
|
||||
HELOANs
|
|
188
|
|
|
100
|
|
|
42
|
|
|
6,639
|
|
|
4.97
|
|
||||
Total
|
|
$
|
839
|
|
|
$
|
433
|
|
|
$
|
230
|
|
|
$
|
56,035
|
|
|
2.68
|
%
|
258
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
Home equity
|
|
Mortgages
|
|
Total residential
real estate
– excluding PCI
|
|||||||||||||||||||||||||||||
December 31,
(in millions)
|
Senior lien
|
|
Junior lien
|
|
Prime, including
option ARMs
|
|
Subprime
|
|
||||||||||||||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|||||||||||||||||||||
Impaired loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
With an allowance
|
$
|
542
|
|
$
|
319
|
|
|
$
|
677
|
|
$
|
622
|
|
|
$
|
5,810
|
|
$
|
4,332
|
|
|
$
|
3,071
|
|
$
|
3,047
|
|
|
$
|
10,100
|
|
$
|
8,320
|
|
Without an allowance
(a)
|
550
|
|
16
|
|
|
546
|
|
35
|
|
|
1,308
|
|
545
|
|
|
741
|
|
172
|
|
|
3,145
|
|
768
|
|
||||||||||
Total impaired loans
(b)(c)
|
$
|
1,092
|
|
$
|
335
|
|
|
$
|
1,223
|
|
$
|
657
|
|
|
$
|
7,118
|
|
$
|
4,877
|
|
|
$
|
3,812
|
|
$
|
3,219
|
|
|
$
|
13,245
|
|
$
|
9,088
|
|
Allowance for loan losses related to impaired loans
|
$
|
159
|
|
$
|
80
|
|
|
$
|
188
|
|
$
|
141
|
|
|
$
|
70
|
|
$
|
4
|
|
|
$
|
174
|
|
$
|
366
|
|
|
$
|
591
|
|
$
|
591
|
|
Unpaid principal balance of impaired loans
(d)(e)
|
1,408
|
|
433
|
|
|
2,352
|
|
994
|
|
|
9,095
|
|
6,190
|
|
|
5,700
|
|
4,827
|
|
|
18,555
|
|
12,444
|
|
||||||||||
Impaired loans on nonaccrual status
(f)
|
607
|
|
77
|
|
|
599
|
|
159
|
|
|
1,888
|
|
922
|
|
|
1,308
|
|
832
|
|
|
4,402
|
|
1,990
|
|
(a)
|
Represents collateral-dependent residential mortgage loans, including Chapter 7 loans, that are charged off to the fair value of the underlying collateral less cost to sell.
|
(b)
|
At
December 31, 2012
and
2011
,
$7.5 billion
and
$4.3 billion
, respectively, of loans permanently modified subsequent to repurchase from Government National Mortgage Association (“Ginnie Mae”) in accordance with the standards of the appropriate government agency (i.e., Federal Housing Administration (“FHA”), U.S. Department of Veterans Affairs (“VA”), Rural Housing Services (“RHS”)) are not included in the table above. When such loans perform subsequent to modification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure.
|
(c)
|
At
December 31, 2012
, included
$1.6 billion
of Chapter 7 loans, consisting of
$450 million
of senior lien home equity loans,
$448 million
of junior lien home equity loans,
$465 million
of prime including option ARMs, and
$245 million
of subprime mortgages. Certain of these loans were previously reported as nonaccrual loans (e.g., based upon the delinquency status of the loan).
|
(d)
|
Represents the contractual amount of principal owed at
December 31, 2012
and
2011
. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs, net deferred loan fees or costs, and unamortized discounts or premiums on purchased loans.
|
(e)
|
At
December 31, 2012
, included
$2.7 billion
of Chapter 7 loans, consisting of
$596 million
of senior lien home equity loans,
$990 million
of junior lien home equity loans,
$713 million
of prime, including option ARMs, and
$379 million
of subprime mortgages.
|
(f)
|
As of
December 31, 2012
and
2011
, nonaccrual loans included
$2.9 billion
and
$886 million
, respectively, of TDRs for which the borrowers were less than
90 days
past due. For additional information about loans modified in a TDR that are on nonaccrual status refer to the Loan accounting framework on pages
250–252
of this Note.
|
Year ended December 31,
|
Average impaired loans
|
|
Interest income on
impaired loans
(a)
|
|
Interest income on impaired
loans on a cash basis
(a)
|
||||||||||||||||||||||||
(in millions)
|
2012
|
2011
|
2010
|
|
2012
|
2011
|
2010
|
|
2012
|
2011
|
2010
|
||||||||||||||||||
Home equity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Senior lien
|
$
|
610
|
|
$
|
287
|
|
$
|
207
|
|
|
$
|
27
|
|
$
|
10
|
|
$
|
15
|
|
|
$
|
12
|
|
$
|
1
|
|
$
|
1
|
|
Junior lien
|
848
|
|
521
|
|
266
|
|
|
42
|
|
18
|
|
10
|
|
|
16
|
|
2
|
|
1
|
|
|||||||||
Mortgages
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Prime, including option ARMs
|
5,989
|
|
3,859
|
|
1,530
|
|
|
238
|
|
147
|
|
70
|
|
|
28
|
|
14
|
|
14
|
|
|||||||||
Subprime
|
3,494
|
|
3,083
|
|
2,539
|
|
|
183
|
|
148
|
|
121
|
|
|
31
|
|
16
|
|
19
|
|
|||||||||
Total residential real estate – excluding PCI
|
$
|
10,941
|
|
$
|
7,750
|
|
$
|
4,542
|
|
|
$
|
490
|
|
$
|
323
|
|
$
|
216
|
|
|
$
|
87
|
|
$
|
33
|
|
$
|
35
|
|
(a)
|
Generally, interest income on loans modified in TDRs is recognized on a cash basis until such time as the borrower has made a minimum of
six
payments under the new terms.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
259
|
Year ended December 31,
(in millions)
|
Home equity
|
|
Mortgages
|
|
Total residential
real estate – excluding PCI
|
|||||||||||||||||||||||||||||
Senior lien
|
|
Junior lien
|
|
Prime, including option ARMs
|
|
Subprime
|
|
|||||||||||||||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|||||||||||||||||||||
Beginning balance of TDRs
|
$
|
335
|
|
$
|
226
|
|
|
$
|
657
|
|
$
|
283
|
|
|
$
|
4,877
|
|
$
|
2,084
|
|
|
$
|
3,219
|
|
$
|
2,751
|
|
|
$
|
9,088
|
|
$
|
5,344
|
|
New TDRs
(a)
|
835
|
|
138
|
|
|
711
|
|
518
|
|
|
2,918
|
|
3,268
|
|
|
1,043
|
|
883
|
|
|
5,507
|
|
4,807
|
|
||||||||||
Charge-offs post-modification
(b)
|
(31
|
)
|
(15
|
)
|
|
(2
|
)
|
(78
|
)
|
|
(135
|
)
|
(119
|
)
|
|
(208
|
)
|
(234
|
)
|
|
(376
|
)
|
(446
|
)
|
||||||||||
Foreclosures and other liquidations (e.g., short sales)
|
(5
|
)
|
—
|
|
|
(21
|
)
|
(11
|
)
|
|
(138
|
)
|
(108
|
)
|
|
(113
|
)
|
(82
|
)
|
|
(277
|
)
|
(201
|
)
|
||||||||||
Principal payments and other
|
(42
|
)
|
(14
|
)
|
|
(122
|
)
|
(55
|
)
|
|
(404
|
)
|
(248
|
)
|
|
(129
|
)
|
(99
|
)
|
|
(697
|
)
|
(416
|
)
|
||||||||||
Ending balance of TDRs
|
$
|
1,092
|
|
$
|
335
|
|
|
$
|
1,223
|
|
$
|
657
|
|
|
$
|
7,118
|
|
$
|
4,877
|
|
|
$
|
3,812
|
|
$
|
3,219
|
|
|
$
|
13,245
|
|
$
|
9,088
|
|
Permanent modifications
(a)
|
$
|
1,058
|
|
$
|
285
|
|
|
$
|
1,218
|
|
$
|
634
|
|
|
$
|
6,834
|
|
$
|
4,601
|
|
|
$
|
3,661
|
|
$
|
3,029
|
|
|
$
|
12,771
|
|
$
|
8,549
|
|
Trial modifications
|
$
|
34
|
|
$
|
50
|
|
|
$
|
5
|
|
$
|
23
|
|
|
$
|
284
|
|
$
|
276
|
|
|
$
|
151
|
|
$
|
190
|
|
|
$
|
474
|
|
$
|
539
|
|
(a)
|
For the year ended
December 31, 2012
, included
$1.6 billion
of Chapter 7 loans consisting of
$450 million
of senior lien home equity loans,
$448 million
of junior lien home equity loans,
$465 million
of prime, including option ARMs, and
$245 million
of subprime mortgages. Certain of these loans were previously reported as nonaccrual loans (e.g., based upon the delinquency status of the loan).
|
(b)
|
Includes charge-offs on unsuccessful trial modifications.
|
260
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31,
|
Home equity
|
|
Mortgages
|
|
Total residential
real estate -
excluding PCI
|
|||||||||||||||||||
Senior lien
|
|
Junior lien
|
|
Prime, including option ARMs
|
|
Subprime
|
|
|||||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|||||||||||
Number of loans approved for a trial modification, but not permanently modified
|
410
|
|
654
|
|
|
528
|
|
778
|
|
|
1,101
|
|
898
|
|
|
1,168
|
|
1,730
|
|
|
3,207
|
|
4,060
|
|
Number of loans permanently modified
|
4,385
|
|
1,006
|
|
|
7,430
|
|
9,142
|
|
|
9,043
|
|
9,579
|
|
|
9,964
|
|
4,972
|
|
|
30,822
|
|
24,699
|
|
Concession granted:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate reduction
|
81
|
%
|
76
|
%
|
|
89
|
%
|
95
|
%
|
|
75
|
%
|
54
|
%
|
|
70
|
%
|
79
|
%
|
|
77
|
%
|
75
|
%
|
Term or payment extension
|
49
|
|
86
|
|
|
76
|
|
81
|
|
|
61
|
|
71
|
|
|
45
|
|
74
|
|
|
57
|
|
76
|
|
Principal and/or interest deferred
|
8
|
|
12
|
|
|
19
|
|
22
|
|
|
21
|
|
18
|
|
|
12
|
|
19
|
|
|
16
|
|
19
|
|
Principal forgiveness
|
12
|
|
8
|
|
|
22
|
|
20
|
|
|
30
|
|
3
|
|
|
43
|
|
14
|
|
|
30
|
|
12
|
|
Other
(b)
|
3
|
|
27
|
|
|
5
|
|
7
|
|
|
31
|
|
68
|
|
|
8
|
|
26
|
|
|
13
|
|
35
|
|
(a)
|
As a percentage of the number of loans modified. The sum of the percentages exceeds
100%
because predominantly all of the modifications include more than one type of concession.
|
(b)
|
Represents variable interest rate to fixed interest rate modifications.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
261
|
Year ended December 31,
(in millions, except weighted-average data and number of loans) |
Home equity
|
|
Mortgages
|
|
Total residential real estate – excluding PCI
|
|||||||||||||||||||||||||||||
Senior lien
|
|
Junior lien
|
|
Prime, including option ARMs
|
|
Subprime
|
|
|||||||||||||||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|||||||||||||||||||||
Weighted-average interest rate of loans with interest rate reductions – before TDR
|
7.14
|
%
|
7.25
|
%
|
|
5.40
|
%
|
5.44
|
%
|
|
6.12
|
%
|
5.99
|
%
|
|
7.78
|
%
|
8.27
|
%
|
|
6.56
|
%
|
6.47
|
%
|
||||||||||
Weighted-average interest rate of loans with interest rate reductions – after TDR
|
4.56
|
|
3.54
|
|
|
1.89
|
|
1.48
|
|
|
3.57
|
|
3.32
|
|
|
4.09
|
|
3.50
|
|
|
3.62
|
|
3.09
|
|
||||||||||
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR
|
19
|
|
18
|
|
|
20
|
|
21
|
|
|
25
|
|
25
|
|
|
23
|
|
23
|
|
|
23
|
|
24
|
|
||||||||||
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR
|
28
|
|
30
|
|
|
32
|
|
34
|
|
|
36
|
|
35
|
|
|
32
|
|
34
|
|
|
34
|
|
35
|
|
||||||||||
Charge-offs recognized upon permanent modification
|
$
|
8
|
|
$
|
1
|
|
|
$
|
65
|
|
$
|
117
|
|
|
$
|
35
|
|
$
|
61
|
|
|
$
|
29
|
|
$
|
19
|
|
|
$
|
137
|
|
$
|
198
|
|
Principal deferred
|
5
|
|
4
|
|
|
26
|
|
36
|
|
|
164
|
|
176
|
|
|
50
|
|
68
|
|
|
245
|
|
284
|
|
||||||||||
Principal forgiven
|
23
|
|
1
|
|
|
58
|
|
62
|
|
|
318
|
|
24
|
|
|
371
|
|
55
|
|
|
770
|
|
142
|
|
||||||||||
Number of loans that redefaulted within one year of permanent modification
(a)
|
374
|
|
201
|
|
|
1,436
|
|
1,170
|
|
|
920
|
|
1,041
|
|
|
1,426
|
|
1,742
|
|
|
4,156
|
|
4,154
|
|
||||||||||
Balance of loans that redefaulted within one year of permanent modification
(a)
|
$
|
30
|
|
$
|
17
|
|
|
$
|
46
|
|
$
|
47
|
|
|
$
|
255
|
|
$
|
319
|
|
|
$
|
156
|
|
$
|
245
|
|
|
$
|
487
|
|
$
|
628
|
|
(a)
|
Represents loans permanently modified in TDRs that experienced a payment default in the period presented, and for which the payment default occurred within
one year
of the modification. The dollar amounts presented represent the balance of such loans at the end of the reporting period in which such loans defaulted. For residential real estate loans modified in TDRs, payment default is deemed to occur when the loan becomes
two
contractual payments past due. In the event that a modified loan redefaults, it is probable that the loan will ultimately be liquidated through foreclosure or another similar type of liquidation transaction. Redefaults of loans modified within the last
12 months
may not be representative of ultimate redefault levels.
|
262
|
|
JPMorgan Chase & Co./2012 Annual Report
|
December 31,
(in millions, except ratios)
|
Auto
|
|
Business banking
|
|
Student and other
|
|
Total other consumer
|
|
|||||||||||||||||||||||
2012
|
|
2011
|
|
2012
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|||||||||||||||||
Loan delinquency
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Current
|
$
|
49,290
|
|
|
$
|
46,891
|
|
|
$
|
18,482
|
|
$
|
17,173
|
|
|
$
|
11,038
|
|
|
$
|
12,905
|
|
|
$
|
78,810
|
|
|
$
|
76,969
|
|
|
30–119 days past due
|
616
|
|
|
528
|
|
|
263
|
|
326
|
|
|
709
|
|
|
777
|
|
|
1,588
|
|
|
1,631
|
|
|
||||||||
120 or more days past due
|
7
|
|
|
7
|
|
|
138
|
|
153
|
|
|
444
|
|
|
461
|
|
|
589
|
|
|
621
|
|
|
||||||||
Total retained loans
|
$
|
49,913
|
|
|
$
|
47,426
|
|
|
$
|
18,883
|
|
$
|
17,652
|
|
|
$
|
12,191
|
|
|
$
|
14,143
|
|
|
$
|
80,987
|
|
|
$
|
79,221
|
|
|
% of 30+ days past due to total retained loans
|
1.25
|
%
|
|
1.13
|
%
|
|
2.12
|
%
|
2.71
|
%
|
|
2.12
|
%
|
(e)
|
1.76
|
%
|
(e)
|
1.58
|
%
|
(e)
|
1.59
|
%
|
(e)
|
||||||||
90 or more days past due and still accruing
(b)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
525
|
|
|
$
|
551
|
|
|
$
|
525
|
|
|
$
|
551
|
|
|
Nonaccrual loans
|
163
|
|
(d)
|
118
|
|
|
481
|
|
694
|
|
|
70
|
|
|
69
|
|
|
714
|
|
|
881
|
|
|
||||||||
Geographic region
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
California
|
$
|
4,962
|
|
|
$
|
4,413
|
|
|
$
|
1,983
|
|
$
|
1,342
|
|
|
$
|
1,108
|
|
|
$
|
1,261
|
|
|
$
|
8,053
|
|
|
$
|
7,016
|
|
|
New York
|
3,742
|
|
|
3,616
|
|
|
2,981
|
|
2,792
|
|
|
1,202
|
|
|
1,401
|
|
|
7,925
|
|
|
7,809
|
|
|
||||||||
Illinois
|
2,738
|
|
|
2,496
|
|
|
1,404
|
|
1,364
|
|
|
556
|
|
|
851
|
|
|
4,698
|
|
|
4,711
|
|
|
||||||||
Florida
|
1,922
|
|
|
1,881
|
|
|
527
|
|
313
|
|
|
748
|
|
|
658
|
|
|
3,197
|
|
|
2,852
|
|
|
||||||||
Texas
|
4,739
|
|
|
4,467
|
|
|
2,749
|
|
2,680
|
|
|
891
|
|
|
1,053
|
|
|
8,379
|
|
|
8,200
|
|
|
||||||||
New Jersey
|
1,921
|
|
|
1,829
|
|
|
379
|
|
376
|
|
|
409
|
|
|
460
|
|
|
2,709
|
|
|
2,665
|
|
|
||||||||
Arizona
|
1,719
|
|
|
1,495
|
|
|
1,139
|
|
1,165
|
|
|
265
|
|
|
316
|
|
|
3,123
|
|
|
2,976
|
|
|
||||||||
Washington
|
824
|
|
|
735
|
|
|
202
|
|
160
|
|
|
287
|
|
|
249
|
|
|
1,313
|
|
|
1,144
|
|
|
||||||||
Ohio
|
2,462
|
|
|
2,633
|
|
|
1,443
|
|
1,541
|
|
|
770
|
|
|
880
|
|
|
4,675
|
|
|
5,054
|
|
|
||||||||
Michigan
|
2,091
|
|
|
2,282
|
|
|
1,368
|
|
1,389
|
|
|
548
|
|
|
637
|
|
|
4,007
|
|
|
4,308
|
|
|
||||||||
All other
|
22,793
|
|
|
21,579
|
|
|
4,708
|
|
4,530
|
|
|
5,407
|
|
|
6,377
|
|
|
32,908
|
|
|
32,486
|
|
|
||||||||
Total retained loans
|
$
|
49,913
|
|
|
$
|
47,426
|
|
|
$
|
18,883
|
|
$
|
17,652
|
|
|
$
|
12,191
|
|
|
$
|
14,143
|
|
|
$
|
80,987
|
|
|
$
|
79,221
|
|
|
Loans by risk ratings
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Noncriticized
|
$
|
8,882
|
|
|
$
|
6,775
|
|
|
$
|
13,336
|
|
$
|
11,749
|
|
|
NA
|
|
|
NA
|
|
|
$
|
22,218
|
|
|
$
|
18,524
|
|
|
||
Criticized performing
|
130
|
|
|
166
|
|
|
713
|
|
817
|
|
|
NA
|
|
|
NA
|
|
|
843
|
|
|
983
|
|
|
||||||||
Criticized nonaccrual
|
4
|
|
|
3
|
|
|
386
|
|
524
|
|
|
NA
|
|
|
NA
|
|
|
390
|
|
|
527
|
|
|
(a)
|
Individual delinquency classifications included loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) as follows: current includes
$5.4 billion
and
$7.0 billion
;
30
-
119 days
past due includes
$466 million
and
$542 million
; and
120
or more days past due includes
$428 million
and
$447 million
at
December 31, 2012
and
2011
, respectively.
|
(b)
|
These amounts represent student loans, which are insured by U.S. government agencies under the FFELP. These amounts were accruing as reimbursement of insured amounts is proceeding normally.
|
(c)
|
For risk-rated business banking and auto loans, the primary credit quality indicator is the risk rating of the loan, including whether the loans are considered to be criticized and/or nonaccrual.
|
(d)
|
At
December 31, 2012
, included
$51 million
of Chapter 7 auto loans.
|
(e)
|
December 31, 2012
and
2011
, excluded loans
30 days
or more past due and still accruing, which are insured by U.S. government agencies under the FFELP, of
$894 million
and
$989 million
, respectively. These amounts were excluded as reimbursement of insured amounts is proceeding normally.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
263
|
December 31,
(in millions)
|
Auto
|
|
Business banking
|
|
Total other consumer
(e)
|
|||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|||||||||||||
Impaired loans
|
|
|
|
|
|
|
|
|
||||||||||||
With an allowance
|
$
|
78
|
|
$
|
88
|
|
|
$
|
543
|
|
$
|
713
|
|
|
$
|
621
|
|
$
|
801
|
|
Without an allowance
(a)
|
72
|
|
3
|
|
|
—
|
|
—
|
|
|
72
|
|
3
|
|
||||||
Total impaired loans
(b)
|
$
|
150
|
|
$
|
91
|
|
|
$
|
543
|
|
$
|
713
|
|
|
$
|
693
|
|
$
|
804
|
|
Allowance for loan losses related to impaired loans
|
$
|
12
|
|
$
|
12
|
|
|
$
|
126
|
|
$
|
225
|
|
|
$
|
138
|
|
$
|
237
|
|
Unpaid principal balance of impaired loans
(c)(d)
|
259
|
|
126
|
|
|
624
|
|
822
|
|
|
883
|
|
948
|
|
||||||
Impaired loans on nonaccrual status
(b)
|
109
|
|
41
|
|
|
394
|
|
551
|
|
|
503
|
|
592
|
|
(a)
|
When discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged off and/or there have been interest payments received and applied to the loan balance.
|
(b)
|
At
December 31, 2012
, included
$72 million
of Chapter 7 auto loans. Certain of these loans were previously reported as nonaccrual loans (e.g., based upon the delinquency status of the loan).
|
(c)
|
At
December 31, 2012
, included
$146 million
of Chapter 7 auto loans.
|
(d)
|
Represents the contractual amount of principal owed at
December 31, 2012
and
2011
. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs; interest payments received and applied to the principal balance; net deferred loan fees or costs; and unamortized discounts or premiums on purchased loans.
|
(e)
|
There were no impaired student and other loans at
December 31, 2012
and
2011
.
|
Year ended December 31,
(in millions) |
Average impaired loans
(b)
|
||||||||
2012
|
2011
|
2010
|
|||||||
Auto
|
$
|
111
|
|
$
|
92
|
|
$
|
120
|
|
Business banking
|
622
|
|
760
|
|
682
|
|
|||
Total other consumer
(a)
|
$
|
733
|
|
$
|
852
|
|
$
|
802
|
|
(a)
|
There were no impaired student and other loans for the years ended
2012
,
2011
and
2010
.
|
(b)
|
The related interest income on impaired loans, including those on a cash basis, was not material for the years ended
2012
,
2011
and
2010
.
|
December 31,
(in millions)
|
Auto
|
|
Business banking
|
|
Total other consumer
(d)
|
|||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|||||||||||||
Loans modified in troubled debt restructurings
(a)(b)(c)
|
$
|
150
|
|
$
|
88
|
|
|
$
|
352
|
|
$
|
415
|
|
|
$
|
502
|
|
$
|
503
|
|
TDRs on nonaccrual status
|
109
|
|
38
|
|
|
203
|
|
253
|
|
|
312
|
|
291
|
|
(a)
|
These modifications generally provided interest rate concessions to the borrower or deferral of principal repayments.
|
(b)
|
Additional commitments to lend to borrowers whose loans have been modified in TDRs as of
December 31, 2012
and
2011
, were immaterial.
|
(c)
|
At
December 31, 2012
, included
$72 million
of Chapter 7 auto loans. Certain of these loans were previously reported as nonaccrual loans (e.g., based upon the delinquency status of the loan).
|
(d)
|
There were no student and other loans modified in TDRs at
December 31, 2012
and
2011
.
|
264
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
||||||||||||||||||||
Year ended December 31,
(in millions) |
Auto
|
|
Business banking
|
|
Total other consumer
|
|||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|||||||||||||
Beginning balance of TDRs
|
$
|
88
|
|
$
|
91
|
|
|
$
|
415
|
|
$
|
395
|
|
|
$
|
503
|
|
$
|
486
|
|
New TDRs
(a)
|
145
|
|
54
|
|
|
104
|
|
195
|
|
|
249
|
|
249
|
|
||||||
Charge-offs post-modification
|
(9
|
)
|
(5
|
)
|
|
(9
|
)
|
(11
|
)
|
|
(18
|
)
|
(16
|
)
|
||||||
Foreclosures and other liquidations
|
—
|
|
—
|
|
|
(1
|
)
|
(3
|
)
|
|
(1
|
)
|
(3
|
)
|
||||||
Principal payments and other
|
(74
|
)
|
(52
|
)
|
|
(157
|
)
|
(161
|
)
|
|
(231
|
)
|
(213
|
)
|
||||||
E
nding balance of TDRs
|
$
|
150
|
|
$
|
88
|
|
|
$
|
352
|
|
$
|
415
|
|
|
$
|
502
|
|
$
|
503
|
|
(a)
|
At
December 31, 2012
, included
$72 million
of Chapter 7 auto loans. Certain of these loans were previously reported as nonaccrual loans (e.g., based upon the delinquency status of the loan).
|
Year ended December 31,
|
|
Auto
|
|
Business banking
|
||||||
|
2012
|
2011
|
|
2012
|
2011
|
|||||
Weighted-average interest rate of loans with interest rate reductions – before TDR
|
|
12.64
|
%
|
12.45
|
%
|
|
7.33
|
%
|
7.55
|
%
|
Weighted-average interest rate of loans with interest rate reductions – after TDR
|
|
4.83
|
|
5.70
|
|
|
5.49
|
|
5.52
|
|
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR
|
|
NM
|
|
NM
|
|
|
1.4
|
|
1.4
|
|
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR
|
|
NM
|
|
NM
|
|
|
2.4
|
|
2.6
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
265
|
266
|
|
JPMorgan Chase & Co./2012 Annual Report
|
December 31,
(in millions, except ratios)
|
Home equity
|
|
Prime mortgage
|
|
Subprime mortgage
|
|
Option ARMs
|
|
Total PCI
|
|||||||||||||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|||||||||||||||||||||
Carrying value
(a)
|
$
|
20,971
|
|
$
|
22,697
|
|
|
$
|
13,674
|
|
$
|
15,180
|
|
|
$
|
4,626
|
|
$
|
4,976
|
|
|
$
|
20,466
|
|
$
|
22,693
|
|
|
$
|
59,737
|
|
$
|
65,546
|
|
Related allowance for loan losses
(b)
|
1,908
|
|
1,908
|
|
|
1,929
|
|
1,929
|
|
|
380
|
|
380
|
|
|
1,494
|
|
1,494
|
|
|
5,711
|
|
5,711
|
|
||||||||||
Loan delinquency (based on unpaid principal balance)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Current
|
$
|
20,331
|
|
$
|
22,682
|
|
|
$
|
11,078
|
|
$
|
12,148
|
|
|
$
|
4,198
|
|
$
|
4,388
|
|
|
$
|
16,415
|
|
$
|
17,919
|
|
|
$
|
52,022
|
|
$
|
57,137
|
|
30–149 days past due
|
803
|
|
1,130
|
|
|
740
|
|
912
|
|
|
698
|
|
782
|
|
|
1,314
|
|
1,467
|
|
|
3,555
|
|
4,291
|
|
||||||||||
150 or more days past due
|
1,209
|
|
1,252
|
|
|
2,066
|
|
3,000
|
|
|
1,430
|
|
2,059
|
|
|
4,862
|
|
6,753
|
|
|
9,567
|
|
13,064
|
|
||||||||||
Total loans
|
$
|
22,343
|
|
$
|
25,064
|
|
|
$
|
13,884
|
|
$
|
16,060
|
|
|
$
|
6,326
|
|
$
|
7,229
|
|
|
$
|
22,591
|
|
$
|
26,139
|
|
|
$
|
65,144
|
|
$
|
74,492
|
|
% of 30+ days past due to total loans
|
9.01
|
%
|
9.50
|
%
|
|
20.21
|
%
|
24.36
|
%
|
|
33.64
|
%
|
39.30
|
%
|
|
27.34
|
%
|
31.45
|
%
|
|
20.14
|
%
|
23.30
|
%
|
||||||||||
Current estimated LTV ratios (based on unpaid principal balance)
(c)(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Greater than 125% and refreshed FICO scores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Equal to or greater than 660
|
$
|
4,508
|
|
$
|
5,915
|
|
|
$
|
1,478
|
|
$
|
2,313
|
|
|
$
|
375
|
|
$
|
473
|
|
|
$
|
1,597
|
|
$
|
2,509
|
|
|
$
|
7,958
|
|
$
|
11,210
|
|
Less than 660
|
2,344
|
|
3,299
|
|
|
1,449
|
|
2,319
|
|
|
1,300
|
|
1,939
|
|
|
2,729
|
|
4,608
|
|
|
7,822
|
|
12,165
|
|
||||||||||
101% to 125% and refreshed FICO scores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Equal to or greater than 660
|
4,966
|
|
5,393
|
|
|
2,968
|
|
3,328
|
|
|
434
|
|
434
|
|
|
3,281
|
|
3,959
|
|
|
11,649
|
|
13,114
|
|
||||||||||
Less than 660
|
2,098
|
|
2,304
|
|
|
1,983
|
|
2,314
|
|
|
1,256
|
|
1,510
|
|
|
3,200
|
|
3,884
|
|
|
8,537
|
|
10,012
|
|
||||||||||
80% to 100% and refreshed FICO scores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Equal to or greater than 660
|
3,531
|
|
3,482
|
|
|
1,872
|
|
1,629
|
|
|
416
|
|
372
|
|
|
3,794
|
|
3,740
|
|
|
9,613
|
|
9,223
|
|
||||||||||
Less than 660
|
1,305
|
|
1,264
|
|
|
1,378
|
|
1,457
|
|
|
1,182
|
|
1,197
|
|
|
2,974
|
|
3,035
|
|
|
6,839
|
|
6,953
|
|
||||||||||
Lower than 80% and refreshed FICO scores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Equal to or greater than 660
|
2,524
|
|
2,409
|
|
|
1,356
|
|
1,276
|
|
|
255
|
|
198
|
|
|
2,624
|
|
2,189
|
|
|
6,759
|
|
6,072
|
|
||||||||||
Less than 660
|
1,067
|
|
998
|
|
|
1,400
|
|
1,424
|
|
|
1,108
|
|
1,106
|
|
|
2,392
|
|
2,215
|
|
|
5,967
|
|
5,743
|
|
||||||||||
Total unpaid principal balance
|
$
|
22,343
|
|
$
|
25,064
|
|
|
$
|
13,884
|
|
$
|
16,060
|
|
|
$
|
6,326
|
|
$
|
7,229
|
|
|
$
|
22,591
|
|
$
|
26,139
|
|
|
$
|
65,144
|
|
$
|
74,492
|
|
Geographic region (based on unpaid principal balance)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
California
|
$
|
13,493
|
|
$
|
15,091
|
|
|
$
|
7,877
|
|
$
|
9,121
|
|
|
$
|
1,444
|
|
$
|
1,661
|
|
|
$
|
11,889
|
|
$
|
13,565
|
|
|
$
|
34,703
|
|
$
|
39,438
|
|
New York
|
1,067
|
|
1,179
|
|
|
927
|
|
1,018
|
|
|
649
|
|
709
|
|
|
1,404
|
|
1,548
|
|
|
4,047
|
|
4,454
|
|
||||||||||
Illinois
|
502
|
|
558
|
|
|
433
|
|
511
|
|
|
338
|
|
411
|
|
|
587
|
|
702
|
|
|
1,860
|
|
2,182
|
|
||||||||||
Florida
|
2,054
|
|
2,307
|
|
|
1,023
|
|
1,265
|
|
|
651
|
|
812
|
|
|
2,480
|
|
3,201
|
|
|
6,208
|
|
7,585
|
|
||||||||||
Texas
|
385
|
|
455
|
|
|
148
|
|
168
|
|
|
368
|
|
405
|
|
|
118
|
|
140
|
|
|
1,019
|
|
1,168
|
|
||||||||||
New Jersey
|
423
|
|
471
|
|
|
401
|
|
445
|
|
|
260
|
|
297
|
|
|
854
|
|
969
|
|
|
1,938
|
|
2,182
|
|
||||||||||
Arizona
|
408
|
|
468
|
|
|
215
|
|
254
|
|
|
105
|
|
126
|
|
|
305
|
|
362
|
|
|
1,033
|
|
1,210
|
|
||||||||||
Washington
|
1,215
|
|
1,368
|
|
|
328
|
|
388
|
|
|
142
|
|
160
|
|
|
563
|
|
649
|
|
|
2,248
|
|
2,565
|
|
||||||||||
Ohio
|
27
|
|
32
|
|
|
71
|
|
79
|
|
|
100
|
|
114
|
|
|
89
|
|
111
|
|
|
287
|
|
336
|
|
||||||||||
Michigan
|
70
|
|
81
|
|
|
211
|
|
239
|
|
|
163
|
|
187
|
|
|
235
|
|
268
|
|
|
679
|
|
775
|
|
||||||||||
All other
|
2,699
|
|
3,054
|
|
|
2,250
|
|
2,572
|
|
|
2,106
|
|
2,347
|
|
|
4,067
|
|
4,624
|
|
|
11,122
|
|
12,597
|
|
||||||||||
Total unpaid principal balance
|
$
|
22,343
|
|
$
|
25,064
|
|
|
$
|
13,884
|
|
$
|
16,060
|
|
|
$
|
6,326
|
|
$
|
7,229
|
|
|
$
|
22,591
|
|
$
|
26,139
|
|
|
$
|
65,144
|
|
$
|
74,492
|
|
(a)
|
Carrying value includes the effect of fair value adjustments that were applied to the consumer PCI portfolio at the date of acquisition.
|
(b)
|
Management concluded as part of the Firm’s regular assessment of the PCI loan pools that it was probable that higher expected credit losses would result in a decrease in expected cash flows. As a result, an allowance for loan losses for impairment of these pools has been recognized.
|
(c)
|
Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates. Current estimated combined LTV for junior lien home equity loans considers all available lien positions related to the property.
|
(d)
|
Refreshed FICO scores, which the Firm obtains at least quarterly, represent each borrower’s most recent credit score.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
267
|
|
|
Delinquencies
|
|
|
|
Total 30+ day delinquency rate
|
|||||||||||||
December 31, 2012
(in millions, except ratios)
|
|
30–89 days past due
|
|
90–149 days past due
|
|
150+ days past due
|
|
Total loans
|
|
||||||||||
HELOCs:
(a)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Within the revolving period
(b)
|
|
$
|
361
|
|
|
$
|
175
|
|
|
$
|
591
|
|
|
$
|
15,915
|
|
|
7.08
|
%
|
Beyond the revolving period
(c)
|
|
30
|
|
|
13
|
|
|
20
|
|
|
666
|
|
|
9.46
|
|
||||
HELOANs
|
|
37
|
|
|
18
|
|
|
44
|
|
|
1,085
|
|
|
9.12
|
|
||||
Total
|
|
$
|
428
|
|
|
$
|
206
|
|
|
$
|
655
|
|
|
$
|
17,666
|
|
|
7.30
|
%
|
|
|
Delinquencies
|
|
|
|
Total 30+ day delinquency rate
|
|||||||||||||
December 31, 2011
(in millions, except ratios)
|
|
30–89 days past due
|
|
90–149 days past due
|
|
150+ days past due
|
|
Total loans
|
|
||||||||||
HELOCs:
(a)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Within the revolving period
(b)
|
|
$
|
500
|
|
|
$
|
296
|
|
|
$
|
543
|
|
|
$
|
18,246
|
|
|
7.34
|
%
|
Beyond the revolving period
(c)
|
|
16
|
|
|
11
|
|
|
5
|
|
|
400
|
|
|
8.00
|
|
||||
HELOANs
|
|
53
|
|
|
29
|
|
|
44
|
|
|
1,327
|
|
|
9.50
|
|
||||
Total
|
|
$
|
569
|
|
|
$
|
336
|
|
|
$
|
592
|
|
|
$
|
19,973
|
|
|
7.50
|
%
|
(a)
|
In general, these HELOCs are revolving loans for a
10
-year period, after which time the HELOC converts to an interest-only loan with a balloon payment at the end of the loan’s term.
|
(b)
|
Substantially all undrawn HELOCs within the revolving period have been closed.
|
(c)
|
Predominantly all of these loans have been modified into fixed-rate amortizing loans.
|
Year ended December 31,
(in millions, except ratios) |
Total PCI
|
||||||||||
2012
|
|
2011
|
|
2010
|
|||||||
Beginning balance
|
$
|
19,072
|
|
|
$
|
19,097
|
|
|
$
|
25,544
|
|
Accretion into interest income
|
(2,491
|
)
|
|
(2,767
|
)
|
|
(3,232
|
)
|
|||
Changes in interest rates on variable-rate loans
|
(449
|
)
|
|
(573
|
)
|
|
(819
|
)
|
|||
Other changes in expected cash flows
(a)
|
2,325
|
|
|
3,315
|
|
|
(2,396
|
)
|
|||
Balance at December 31
|
$
|
18,457
|
|
|
$
|
19,072
|
|
|
$
|
19,097
|
|
Accretable yield percentage
|
4.38
|
%
|
|
4.33
|
%
|
|
4.35
|
%
|
(a)
|
Other changes in expected cash flows may vary from period to period as the Firm continues to refine its cash flow model and periodically updates model assumptions. For the years ended
December 31, 2012
and
2011
, other changes in expected cash flows were principally driven by the impact of modifications, but also related to changes in prepayment assumptions. For the year ended
December 31, 2010
, other changes in expected cash flows were principally driven by changes in prepayment assumptions, as well as reclassification to the nonaccretable difference. Changes to prepayment assumptions change the expected remaining life of the portfolio, which drives changes in expected future interest cash collections. Such changes do not have a significant impact on the accretable yield percentage.
|
268
|
|
JPMorgan Chase & Co./2012 Annual Report
|
As of or for the year ended December 31,
(in millions, except ratios)
|
2012
|
2011
|
||||
Net charge-offs
|
$
|
4,944
|
|
$
|
6,925
|
|
% of net charge-offs to retained loans
|
3.95
|
%
|
5.44
|
%
|
||
Loan delinquency
|
|
|
||||
Current and less than 30 days past due
and still accruing |
$
|
125,309
|
|
$
|
128,464
|
|
30–89 days past due and still accruing
|
1,381
|
|
1,808
|
|
||
90 or more days past due and still accruing
|
1,302
|
|
1,902
|
|
||
Nonaccrual loans
|
1
|
|
1
|
|
||
Total retained credit card loans
|
$
|
127,993
|
|
$
|
132,175
|
|
Loan delinquency ratios
|
|
|
||||
% of 30+ days past due to total retained loans
|
2.10
|
%
|
2.81
|
%
|
||
% of 90+ days past due to total retained loans
|
1.02
|
|
1.44
|
|
||
Credit card loans by geographic region
|
|
|
||||
California
|
$
|
17,115
|
|
$
|
17,598
|
|
New York
|
10,379
|
|
10,594
|
|
||
Texas
|
10,209
|
|
10,239
|
|
||
Illinois
|
7,399
|
|
7,548
|
|
||
Florida
|
7,231
|
|
7,583
|
|
||
New Jersey
|
5,503
|
|
5,604
|
|
||
Ohio
|
4,956
|
|
5,202
|
|
||
Pennsylvania
|
4,549
|
|
4,779
|
|
||
Michigan
|
3,745
|
|
3,994
|
|
||
Virginia
|
3,193
|
|
3,298
|
|
||
All other
|
53,714
|
|
55,736
|
|
||
Total retained credit card loans
|
$
|
127,993
|
|
$
|
132,175
|
|
Percentage of portfolio based on carrying value with estimated refreshed FICO scores
(a)
|
|
|
||||
Equal to or greater than 660
|
84.1
|
%
|
81.4
|
%
|
||
Less than 660
|
15.9
|
|
18.6
|
|
(a)
|
Refreshed FICO scores are estimated based on a statistically significant random sample of credit card accounts in the credit card portfolio for the periods shown. The Firm obtains refreshed FICO scores at least quarterly.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
269
|
December 31, (in millions)
|
2012
|
2011
|
||||
Impaired credit card loans with an
allowance
(a)(b)
|
|
|
||||
Credit card loans with modified payment terms
(c)
|
$
|
4,189
|
|
$
|
6,075
|
|
Modified credit card loans that have reverted to pre-modification payment terms
(d)
|
573
|
|
1,139
|
|
||
Total impaired credit card loans
|
$
|
4,762
|
|
$
|
7,214
|
|
Allowance for loan losses related to impaired credit card loans
|
$
|
1,681
|
|
$
|
2,727
|
|
(a)
|
The carrying value and the unpaid principal balance are the same for credit card impaired loans.
|
(b)
|
There were no impaired loans without an allowance.
|
(c)
|
Represents credit card loans outstanding to borrowers enrolled in a credit card modification program as of the date presented.
|
(d)
|
Represents credit card loans that were modified in TDRs but that have subsequently reverted back to the loans’ pre-modification payment terms. At
December 31, 2012
and
2011
,
$341 million
and
$762 million
, respectively, of loans have reverted back to the pre-modification payment terms of the loans due to noncompliance with the terms of the modified loans. The remaining
$232 million
and
$377 million
at
December 31, 2012
and
2011
, respectively, of these loans are to borrowers who have successfully completed a short-term modification program. The Firm continues to report these loans as TDRs since the borrowers’ credit lines remain closed.
|
Year ended December 31,
(in millions)
|
|
2012
|
2011
|
2010
|
||||||
Average impaired credit card loans
|
|
$
|
5,893
|
|
$
|
8,499
|
|
$
|
10,730
|
|
Interest income on
impaired credit card loans
|
|
308
|
|
463
|
|
605
|
|
Year ended December 31,
|
|
New enrollments
|
|||||
(in millions)
|
|
2012
|
2011
|
||||
Short-term programs
|
|
$
|
47
|
|
$
|
167
|
|
Long-term programs
|
|
1,607
|
|
2,523
|
|
||
Total new enrollments
|
|
$
|
1,654
|
|
$
|
2,690
|
|
Year ended December 31,
(in millions, except
weighted-average data)
|
|
2012
|
2011
|
||||
Weighted-average interest rate of loans – before TDR
|
|
15.67
|
%
|
16.05
|
%
|
||
Weighted-average interest rate of loans – after TDR
|
|
5.19
|
|
5.28
|
|
||
Loans that redefaulted within one year of modification
(a)
|
|
$
|
309
|
|
$
|
687
|
|
(a)
|
Represents loans modified in TDRs that experienced a payment default in the period presented, and for which the payment default occurred within
one year
of the modification. The amounts presented represent the balance of such loans as of the end of the quarter in which they defaulted.
|
270
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
271
|
As of or for the year ended December 31,
(in millions, except ratios)
|
Commercial
and industrial
|
|
Real estate
|
||||||||||
2012
|
2011
|
|
2012
|
2011
|
|||||||||
Loans by risk ratings
|
|
|
|
|
|
||||||||
Investment grade
|
$
|
61,870
|
|
$
|
52,379
|
|
|
$
|
41,796
|
|
$
|
33,920
|
|
Noninvestment grade:
|
|
|
|
|
|
||||||||
Noncriticized
|
44,651
|
|
37,870
|
|
|
14,567
|
|
14,394
|
|
||||
Criticized performing
|
2,636
|
|
3,077
|
|
|
3,857
|
|
5,484
|
|
||||
Criticized nonaccrual
|
708
|
|
889
|
|
|
520
|
|
886
|
|
||||
Total noninvestment grade
|
47,995
|
|
41,836
|
|
|
18,944
|
|
20,764
|
|
||||
Total retained loans
|
$
|
109,865
|
|
$
|
94,215
|
|
|
$
|
60,740
|
|
$
|
54,684
|
|
% of total criticized to total retained loans
|
3.04
|
%
|
4.21
|
%
|
|
7.21
|
%
|
11.65
|
%
|
||||
% of nonaccrual loans to total retained loans
|
0.64
|
|
0.94
|
|
|
0.86
|
|
1.62
|
|
||||
Loans by geographic distribution
(a)
|
|
|
|
|
|
||||||||
Total non-U.S.
|
$
|
35,494
|
|
$
|
30,813
|
|
|
$
|
1,533
|
|
$
|
1,497
|
|
Total U.S.
|
74,371
|
|
63,402
|
|
|
59,207
|
|
53,187
|
|
||||
Total retained loans
|
$
|
109,865
|
|
$
|
94,215
|
|
|
$
|
60,740
|
|
$
|
54,684
|
|
|
|
|
|
|
|
||||||||
Net charge-offs/(recoveries)
|
$
|
(212
|
)
|
$
|
124
|
|
|
$
|
54
|
|
$
|
256
|
|
% of net charge-offs/(recoveries) to end-of-period retained loans
|
(0.19
|
)%
|
0.13
|
%
|
|
0.09
|
%
|
0.47
|
%
|
||||
|
|
|
|
|
|
||||||||
Loan delinquency
(b)
|
|
|
|
|
|
||||||||
Current and less than 30 days past due and still accruing
|
$
|
109,019
|
|
$
|
93,060
|
|
|
$
|
59,829
|
|
$
|
53,387
|
|
30–89 days past due and still accruing
|
119
|
|
266
|
|
|
322
|
|
327
|
|
||||
90 or more days past due and still accruing
(c)
|
19
|
|
—
|
|
|
69
|
|
84
|
|
||||
Criticized nonaccrual
|
708
|
|
889
|
|
|
520
|
|
886
|
|
||||
Total retained loans
|
$
|
109,865
|
|
$
|
94,215
|
|
|
$
|
60,740
|
|
$
|
54,684
|
|
(a)
|
The U.S. and non-U.S. distribution is determined based predominantly on the domicile of the borrower.
|
(b)
|
The credit quality of wholesale loans is assessed primarily through ongoing review and monitoring of an obligor’s ability to meet contractual obligations rather than relying on the past due status, which is generally a lagging indicator of credit quality. For a discussion of more significant risk factors, see page
271
of this Note.
|
(c)
|
Represents loans that are considered well-collateralized and therefore still accruing interest.
|
(d)
|
Other primarily includes loans to SPEs and loans to private banking clients. See Note 1 on pages
193–194
of
this Annual Report
for additional information on SPEs.
|
December 31,
(in millions, except ratios)
|
Multifamily
|
|
Commercial lessors
|
||||||||||
2012
|
2011
|
|
2012
|
2011
|
|||||||||
Real estate retained loans
|
$
|
38,030
|
|
$
|
32,524
|
|
|
$
|
14,668
|
|
$
|
14,444
|
|
Criticized exposure
|
2,118
|
|
3,452
|
|
|
1,951
|
|
2,192
|
|
||||
% of criticized exposure to total real estate retained loans
|
5.57
|
%
|
10.61
|
%
|
|
13.30
|
%
|
15.18
|
%
|
||||
Criticized nonaccrual
|
$
|
249
|
|
$
|
412
|
|
|
$
|
207
|
|
$
|
284
|
|
% of criticized nonaccrual to total real estate retained loans
|
0.65
|
%
|
1.27
|
%
|
|
1.41
|
%
|
1.97
|
%
|
272
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Financial
institutions
|
|
Government agencies
|
|
Other
(d)
|
|
Total
retained loans
|
||||||||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
22,064
|
|
$
|
28,803
|
|
|
$
|
9,183
|
|
$
|
7,421
|
|
|
$
|
79,533
|
|
$
|
74,475
|
|
|
$
|
214,446
|
|
$
|
196,998
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
13,760
|
|
8,849
|
|
|
356
|
|
377
|
|
|
9,914
|
|
7,450
|
|
|
83,248
|
|
68,940
|
|
||||||||
395
|
|
530
|
|
|
5
|
|
5
|
|
|
201
|
|
963
|
|
|
7,094
|
|
10,059
|
|
||||||||
8
|
|
37
|
|
|
—
|
|
16
|
|
|
198
|
|
570
|
|
|
1,434
|
|
2,398
|
|
||||||||
14,163
|
|
9,416
|
|
|
361
|
|
398
|
|
|
10,313
|
|
8,983
|
|
|
91,776
|
|
81,397
|
|
||||||||
$
|
36,227
|
|
$
|
38,219
|
|
|
$
|
9,544
|
|
$
|
7,819
|
|
|
$
|
89,846
|
|
$
|
83,458
|
|
|
$
|
306,222
|
|
$
|
278,395
|
|
1.11
|
%
|
1.48
|
%
|
|
0.05
|
%
|
0.27
|
%
|
|
0.44
|
%
|
1.84
|
%
|
|
2.78
|
%
|
4.47
|
%
|
||||||||
0.02
|
|
0.10
|
|
|
—
|
|
0.20
|
|
|
0.22
|
|
0.68
|
|
|
0.47
|
|
0.86
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
26,326
|
|
$
|
29,996
|
|
|
$
|
1,582
|
|
$
|
583
|
|
|
$
|
39,421
|
|
$
|
32,275
|
|
|
$
|
104,356
|
|
$
|
95,164
|
|
9,901
|
|
8,223
|
|
|
7,962
|
|
7,236
|
|
|
50,425
|
|
51,183
|
|
|
201,866
|
|
183,231
|
|
||||||||
$
|
36,227
|
|
$
|
38,219
|
|
|
$
|
9,544
|
|
$
|
7,819
|
|
|
$
|
89,846
|
|
$
|
83,458
|
|
|
$
|
306,222
|
|
$
|
278,395
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
(36
|
)
|
$
|
(137
|
)
|
|
$
|
2
|
|
$
|
—
|
|
|
$
|
14
|
|
$
|
197
|
|
|
$
|
(178
|
)
|
$
|
440
|
|
(0.10
|
)%
|
(0.36
|
)%
|
|
0.02
|
%
|
—
|
%
|
|
0.02
|
%
|
0.24
|
%
|
|
(0.06
|
)%
|
0.16
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
36,151
|
|
$
|
38,129
|
|
|
$
|
9,516
|
|
$
|
7,780
|
|
|
$
|
88,177
|
|
$
|
81,802
|
|
|
$
|
302,692
|
|
$
|
274,158
|
|
62
|
|
51
|
|
|
28
|
|
23
|
|
|
1,427
|
|
1,072
|
|
|
1,958
|
|
1,739
|
|
||||||||
6
|
|
2
|
|
|
—
|
|
—
|
|
|
44
|
|
14
|
|
|
138
|
|
100
|
|
||||||||
8
|
|
37
|
|
|
—
|
|
16
|
|
|
198
|
|
570
|
|
|
1,434
|
|
2,398
|
|
||||||||
$
|
36,227
|
|
$
|
38,219
|
|
|
$
|
9,544
|
|
$
|
7,819
|
|
|
$
|
89,846
|
|
$
|
83,458
|
|
|
$
|
306,222
|
|
$
|
278,395
|
|
Commercial construction and development
|
|
Other
|
|
Total real estate loans
|
|||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
||||||||||||
$
|
2,989
|
|
$
|
3,148
|
|
|
$
|
5,053
|
|
$
|
4,568
|
|
|
$
|
60,740
|
|
$
|
54,684
|
|
119
|
|
304
|
|
|
189
|
|
422
|
|
|
4,377
|
|
6,370
|
|
||||||
3.98
|
%
|
9.66
|
%
|
|
3.74
|
%
|
9.24
|
%
|
|
7.21
|
%
|
11.65
|
%
|
||||||
$
|
21
|
|
$
|
69
|
|
|
$
|
43
|
|
$
|
121
|
|
|
$
|
520
|
|
$
|
886
|
|
0.70
|
%
|
2.19
|
%
|
|
0.85
|
%
|
2.65
|
%
|
|
0.86
|
%
|
1.62
|
%
|
JPMorgan Chase & Co./2012 Annual Report
|
|
273
|
December 31,
(in millions)
|
Commercial
and industrial
|
|
Real estate
|
|
Financial
institutions
|
|
Government
agencies
|
|
Other
|
|
Total
retained loans
|
||||||||||||||||||||||||||||||
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
|||||||||||||||||||||||||
Impaired loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
With an allowance
|
$
|
588
|
|
$
|
828
|
|
|
$
|
375
|
|
$
|
621
|
|
|
$
|
6
|
|
$
|
21
|
|
|
$
|
—
|
|
$
|
16
|
|
|
$
|
122
|
|
$
|
473
|
|
|
$
|
1,091
|
|
$
|
1,959
|
|
Without an allowance
(a)
|
173
|
|
177
|
|
|
133
|
|
292
|
|
|
2
|
|
18
|
|
|
—
|
|
—
|
|
|
76
|
|
103
|
|
|
384
|
|
590
|
|
||||||||||||
Total
impaired loans
|
$
|
761
|
|
$
|
1,005
|
|
|
$
|
508
|
|
$
|
913
|
|
|
$
|
8
|
|
$
|
39
|
|
|
$
|
—
|
|
$
|
16
|
|
|
$
|
198
|
|
$
|
576
|
|
|
$
|
1,475
|
|
$
|
2,549
|
|
Allowance for loan losses related to impaired loans
|
$
|
205
|
|
$
|
276
|
|
|
$
|
82
|
|
$
|
148
|
|
|
$
|
2
|
|
$
|
5
|
|
|
$
|
—
|
|
$
|
10
|
|
|
$
|
30
|
|
$
|
77
|
|
|
$
|
319
|
|
$
|
516
|
|
Unpaid principal balance of impaired loans
(b)
|
957
|
|
1,705
|
|
|
626
|
|
1,124
|
|
|
22
|
|
63
|
|
|
—
|
|
17
|
|
|
318
|
|
1,008
|
|
|
1,923
|
|
3,917
|
|
(a)
|
When the discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, then the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged-off and/or there have been interest payments received and applied to the loan balance.
|
(b)
|
Represents the contractual amount of principal owed at
December 31, 2012
and
2011
. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs; interest payments received and applied to the carrying value; net deferred loan fees or costs; and unamortized discount or premiums on purchased loans.
|
Year ended December 31, (in millions)
|
2012
|
2011
|
2010
|
||||||
Commercial and industrial
|
$
|
873
|
|
$
|
1,309
|
|
$
|
1,655
|
|
Real estate
|
784
|
|
1,813
|
|
3,101
|
|
|||
Financial institutions
|
17
|
|
84
|
|
304
|
|
|||
Government agencies
|
9
|
|
20
|
|
5
|
|
|||
Other
|
277
|
|
634
|
|
884
|
|
|||
Total
(a)
|
$
|
1,960
|
|
$
|
3,860
|
|
$
|
5,949
|
|
(a)
|
The related interest income on accruing impaired loans and interest income recognized on a cash basis were not material for the years ended
December 31, 2012
,
2011
and
2010
.
|
274
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Years ended December 31,
(in millions)
|
|
Commercial and industrial
|
|
Real estate
|
|
Other
(b)
|
|
Total
|
||||||||||||||||||||||||
2012
|
|
2011
|
2012
|
|
2011
|
2012
|
|
2011
|
2012
|
|
2011
|
|||||||||||||||||||||
Beginning balance of TDRs
|
|
$
|
531
|
|
|
$
|
212
|
|
|
$
|
176
|
|
|
$
|
907
|
|
|
$
|
43
|
|
|
$
|
24
|
|
|
$
|
750
|
|
|
$
|
1,143
|
|
New TDRs
|
|
162
|
|
|
$
|
665
|
|
|
43
|
|
|
113
|
|
|
73
|
|
|
32
|
|
|
278
|
|
|
810
|
|
|||||||
Increases to existing TDRs
|
|
183
|
|
|
96
|
|
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
183
|
|
|
112
|
|
||||||||
Charge-offs post-modification
|
|
(27
|
)
|
|
(30
|
)
|
|
(2
|
)
|
|
(146
|
)
|
|
(7
|
)
|
|
—
|
|
|
(36
|
)
|
|
(176
|
)
|
||||||||
Sales and other
(a)
|
|
(274
|
)
|
|
(412
|
)
|
|
(118
|
)
|
|
(714
|
)
|
|
(87
|
)
|
|
(13
|
)
|
|
(479
|
)
|
|
(1,139
|
)
|
||||||||
Ending balance of TDRs
|
|
$
|
575
|
|
|
$
|
531
|
|
|
$
|
99
|
|
|
$
|
176
|
|
|
$
|
22
|
|
|
$
|
43
|
|
|
$
|
696
|
|
|
$
|
750
|
|
TDRs on nonaccrual status
|
|
$
|
522
|
|
|
$
|
415
|
|
|
$
|
92
|
|
|
$
|
128
|
|
|
$
|
22
|
|
|
$
|
35
|
|
|
$
|
636
|
|
|
$
|
578
|
|
Additional commitments to lend to borrowers whose loans have been modified in TDRs
|
|
44
|
|
|
147
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
46
|
|
|
147
|
|
(a)
|
Sales and other are largely sales and paydowns, but also includes performing loans restructured at market rates that were removed from the reported TDR balance of
$44 million
and
$152 million
during the years ended
December 31, 2012
and
2011
, respectively.
|
(b)
|
Includes loans to Financial institutions, Government agencies and Other.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
275
|
276
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
277
|
|
2012
|
|||||||||||||
Year ended December 31,
(in millions)
|
Consumer,
excluding
credit card
|
|
Credit card
|
|
Wholesale
|
Total
|
||||||||
Allowance for loan losses
|
|
|
|
|
|
|
||||||||
Beginning balance at January 1,
|
$
|
16,294
|
|
|
$
|
6,999
|
|
|
$
|
4,316
|
|
$
|
27,609
|
|
Cumulative effect of change in accounting principles
(a)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
||||
Gross charge-offs
|
4,805
|
|
(c)
|
5,755
|
|
|
346
|
|
10,906
|
|
||||
Gross recoveries
|
(508
|
)
|
|
(811
|
)
|
|
(524
|
)
|
(1,843
|
)
|
||||
Net charge-offs
|
4,297
|
|
(c)
|
4,944
|
|
|
(178
|
)
|
9,063
|
|
||||
Provision for loan losses
|
302
|
|
|
3,444
|
|
|
(359
|
)
|
3,387
|
|
||||
Other
|
(7
|
)
|
|
2
|
|
|
8
|
|
3
|
|
||||
Ending balance at December 31,
|
$
|
12,292
|
|
|
$
|
5,501
|
|
|
$
|
4,143
|
|
$
|
21,936
|
|
|
|
|
|
|
|
|
||||||||
Allowance for loan losses by impairment methodology
|
|
|
|
|
|
|
||||||||
Asset-specific
(b)
|
$
|
729
|
|
|
$
|
1,681
|
|
(d)
|
$
|
319
|
|
$
|
2,729
|
|
Formula-based
|
5,852
|
|
|
3,820
|
|
|
3,824
|
|
13,496
|
|
||||
PCI
|
5,711
|
|
|
—
|
|
|
—
|
|
5,711
|
|
||||
Total allowance for loan losses
|
$
|
12,292
|
|
|
$
|
5,501
|
|
|
$
|
4,143
|
|
$
|
21,936
|
|
|
|
|
|
|
|
|
||||||||
Loans by impairment methodology
|
|
|
|
|
|
|
||||||||
Asset-specific
|
$
|
13,938
|
|
|
$
|
4,762
|
|
|
$
|
1,475
|
|
$
|
20,175
|
|
Formula-based
|
218,945
|
|
|
123,231
|
|
|
304,728
|
|
646,904
|
|
||||
PCI
|
59,737
|
|
|
—
|
|
|
19
|
|
59,756
|
|
||||
Total retained loans
|
$
|
292,620
|
|
|
$
|
127,993
|
|
|
$
|
306,222
|
|
$
|
726,835
|
|
|
|
|
|
|
|
|
||||||||
Impaired collateral-dependent loans
|
|
|
|
|
|
|
||||||||
Net charge-offs
|
$
|
973
|
|
(c)
|
$
|
—
|
|
|
$
|
77
|
|
$
|
1,050
|
|
Loans measured at fair value of collateral less cost to sell
|
3,272
|
|
|
—
|
|
|
445
|
|
3,717
|
|
||||
|
|
|
|
|
|
|
||||||||
Allowance for lending-related commitments
|
|
|
|
|
|
|
||||||||
Beginning balance at January 1,
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
666
|
|
$
|
673
|
|
Cumulative effect of change in accounting principles
(a)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
||||
Provision for lending-related commitments
|
—
|
|
|
—
|
|
|
(2
|
)
|
(2
|
)
|
||||
Other
|
—
|
|
|
—
|
|
|
(3
|
)
|
(3
|
)
|
||||
Ending balance at December 31,
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
661
|
|
$
|
668
|
|
|
|
|
|
|
|
|
||||||||
Allowance for lending-related commitments by impairment methodology
|
|
|
|
|
|
|
||||||||
Asset-specific
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
97
|
|
$
|
97
|
|
Formula-based
|
7
|
|
|
—
|
|
|
564
|
|
571
|
|
||||
Total allowance for lending-related commitments
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
661
|
|
$
|
668
|
|
|
|
|
|
|
|
|
||||||||
Lending-related commitments by impairment methodology
|
|
|
|
|
|
|
||||||||
Asset-specific
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
355
|
|
$
|
355
|
|
Formula-based
|
60,156
|
|
|
533,018
|
|
|
434,459
|
|
1,027,633
|
|
||||
Total lending-related commitments
|
$
|
60,156
|
|
|
$
|
533,018
|
|
|
$
|
434,814
|
|
$
|
1,027,988
|
|
(a)
|
Effective January 1, 2010, the Firm adopted accounting guidance related to VIEs. Upon adoption of the guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, its Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related. As a result,
$7.4 billion
,
$14 million
and
$127 million
, respectively, of allowance for loan losses were recorded on-balance sheet with the consolidation of these entities. For further discussion, see Note 16 on pages
280–291
of
this Annual Report
.
|
(b)
|
Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a TDR.
|
(c)
|
Consumer, excluding credit card, charge-offs for the year ended
December 31, 2012
, included
$747 million
of charge-offs for Chapter 7 residential real estate loans and
$53 million
of charge-offs for Chapter 7 auto loans.
|
(d)
|
The asset-specific credit card allowance for loan losses is related to loans that have been modified in a TDR; such allowance is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.
|
278
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(table continued from previous page)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
2011
|
|
2010
|
||||||||||||||||||||||||||
Consumer,
excluding
credit card
|
|
Credit card
|
|
Wholesale
|
Total
|
|
Consumer,
excluding
credit card
|
|
Credit card
|
|
Wholesale
|
Total
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
16,471
|
|
|
$
|
11,034
|
|
|
$
|
4,761
|
|
$
|
32,266
|
|
|
$
|
14,785
|
|
|
$
|
9,672
|
|
|
$
|
7,145
|
|
$
|
31,602
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
127
|
|
|
7,353
|
|
|
14
|
|
7,494
|
|
||||||||
5,419
|
|
|
8,168
|
|
|
916
|
|
14,503
|
|
|
8,383
|
|
|
15,410
|
|
|
1,989
|
|
25,782
|
|
||||||||
(547
|
)
|
|
(1,243
|
)
|
|
(476
|
)
|
(2,266
|
)
|
|
(474
|
)
|
|
(1,373
|
)
|
|
(262
|
)
|
(2,109
|
)
|
||||||||
4,872
|
|
|
6,925
|
|
|
440
|
|
12,237
|
|
|
7,909
|
|
|
14,037
|
|
|
1,727
|
|
23,673
|
|
||||||||
4,670
|
|
|
2,925
|
|
|
17
|
|
7,612
|
|
|
9,458
|
|
|
8,037
|
|
|
(673
|
)
|
16,822
|
|
||||||||
25
|
|
|
(35
|
)
|
|
(22
|
)
|
(32
|
)
|
|
10
|
|
|
9
|
|
|
2
|
|
21
|
|
||||||||
$
|
16,294
|
|
|
$
|
6,999
|
|
|
$
|
4,316
|
|
$
|
27,609
|
|
|
$
|
16,471
|
|
|
$
|
11,034
|
|
|
$
|
4,761
|
|
$
|
32,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
828
|
|
|
$
|
2,727
|
|
(d)
|
$
|
516
|
|
$
|
4,071
|
|
|
$
|
1,075
|
|
|
$
|
4,069
|
|
(d)
|
$
|
1,574
|
|
$
|
6,718
|
|
9,755
|
|
|
4,272
|
|
|
3,800
|
|
17,827
|
|
|
10,455
|
|
|
6,965
|
|
|
3,187
|
|
20,607
|
|
||||||||
5,711
|
|
|
—
|
|
|
—
|
|
5,711
|
|
|
4,941
|
|
|
—
|
|
|
—
|
|
4,941
|
|
||||||||
$
|
16,294
|
|
|
$
|
6,999
|
|
|
$
|
4,316
|
|
$
|
27,609
|
|
|
$
|
16,471
|
|
|
$
|
11,034
|
|
|
$
|
4,761
|
|
$
|
32,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
9,892
|
|
|
$
|
7,214
|
|
|
$
|
2,549
|
|
$
|
19,655
|
|
|
$
|
6,220
|
|
|
$
|
10,005
|
|
|
$
|
5,486
|
|
$
|
21,711
|
|
232,989
|
|
|
124,961
|
|
|
275,825
|
|
633,775
|
|
|
248,481
|
|
|
125,519
|
|
|
216,980
|
|
590,980
|
|
||||||||
65,546
|
|
|
—
|
|
|
21
|
|
65,567
|
|
|
72,763
|
|
|
—
|
|
|
44
|
|
72,807
|
|
||||||||
$
|
308,427
|
|
|
$
|
132,175
|
|
|
$
|
278,395
|
|
$
|
718,997
|
|
|
$
|
327,464
|
|
|
$
|
135,524
|
|
|
$
|
222,510
|
|
$
|
685,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
110
|
|
|
$
|
—
|
|
|
$
|
128
|
|
$
|
238
|
|
|
$
|
304
|
|
|
$
|
—
|
|
|
$
|
636
|
|
$
|
940
|
|
830
|
|
|
—
|
|
|
833
|
|
1,663
|
|
|
890
|
|
|
—
|
|
|
1,269
|
|
2,159
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
6
|
|
|
$
|
—
|
|
|
$
|
711
|
|
$
|
717
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
927
|
|
$
|
939
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
(18
|
)
|
||||||||
2
|
|
|
—
|
|
|
(40
|
)
|
(38
|
)
|
|
(6
|
)
|
|
—
|
|
|
(177
|
)
|
(183
|
)
|
||||||||
(1
|
)
|
|
—
|
|
|
(5
|
)
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
(21
|
)
|
||||||||
$
|
7
|
|
|
$
|
—
|
|
|
$
|
666
|
|
$
|
673
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
711
|
|
$
|
717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
—
|
|
|
$
|
—
|
|
|
$
|
150
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
180
|
|
$
|
180
|
|
7
|
|
|
—
|
|
|
516
|
|
523
|
|
|
6
|
|
|
—
|
|
|
531
|
|
537
|
|
||||||||
$
|
7
|
|
|
$
|
—
|
|
|
$
|
666
|
|
$
|
673
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
711
|
|
$
|
717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
—
|
|
|
$
|
—
|
|
|
$
|
865
|
|
$
|
865
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,005
|
|
$
|
1,005
|
|
62,307
|
|
|
530,616
|
|
|
381,874
|
|
974,797
|
|
|
65,403
|
|
|
547,227
|
|
|
345,074
|
|
957,704
|
|
||||||||
$
|
62,307
|
|
|
$
|
530,616
|
|
|
$
|
382,739
|
|
$
|
975,662
|
|
|
$
|
65,403
|
|
|
$
|
547,227
|
|
|
$
|
346,079
|
|
$
|
958,709
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
279
|
Line-of-Business
|
Transaction Type
|
Activity
|
Annual Report
page reference
|
CCB
|
Credit card securitization trusts
|
Securitization of both originated and purchased credit card receivables
|
281
|
|
Other securitization trusts
|
Securitization of originated automobile and student loans
|
281–283
|
|
Mortgage securitization trusts
|
Securitization of originated and purchased residential mortgages
|
281–283
|
CIB
|
Mortgage and other securitization trusts
|
Securitization of both originated and purchased residential and commercial mortgages, automobile and student loans
|
281–283
|
|
Multi-seller conduits
Investor intermediation activities:
|
Assist clients in accessing the financial markets in a cost-efficient manner and structures transactions to meet investor needs
|
284–285
|
|
Municipal bond vehicles
|
|
285–286
|
|
Credit-related note and asset swap vehicles
|
|
286–288
|
•
|
Asset Management: Sponsors and manages certain funds that are deemed VIEs. As asset manager of the funds, AM earns a fee based on assets managed; the fee varies with each fund’s investment objective and is competitively priced. For fund entities that qualify as VIEs, AM’s interests are, in certain cases, considered to be significant variable interests that result in consolidation of the financial results of these entities.
|
•
|
Commercial Banking: CB makes investments in and provides lending to community development entities that may meet the definition of a VIE. In addition, CB provides financing and lending related services to certain client-sponsored VIEs. In general, CB does not control the activities of these entities and does not consolidate these entities.
|
•
|
Corporate/Private Equity: Corporate uses VIEs to issue trust preferred securities. See Note 21 on pages
297–299
of this Annual Report for further information. The Private Equity business, within Corporate/Private Equity, may be involved with entities that are deemed VIEs. However, the Firm’s private equity business is subject to specialized investment company accounting, which does not require the consolidation of investments, including VIEs.
|
280
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
281
|
|
Principal amount outstanding
|
|
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs
(d)(e)(f)
|
||||||||||||||||
December 31, 2012
(a)
(in billions)
|
Total assets held by securitization VIEs
|
Assets held in consolidated securitization VIEs
|
Assets held in nonconsolidated securitization VIEs with continuing involvement
|
|
Trading assets
|
AFS securities
|
Total interests held by JPMorgan Chase
|
||||||||||||
Securitization-related
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage:
|
|
|
|
|
|
|
|
||||||||||||
Prime and Alt-A
|
$
|
107.2
|
|
$
|
2.5
|
|
$
|
80.6
|
|
|
$
|
0.3
|
|
$
|
—
|
|
$
|
0.3
|
|
Subprime
|
34.5
|
|
1.3
|
|
31.3
|
|
|
0.1
|
|
—
|
|
0.1
|
|
||||||
Option ARMs
|
26.3
|
|
0.2
|
|
26.1
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Commercial and other
(b)
|
127.8
|
|
—
|
|
81.8
|
|
|
1.5
|
|
2.8
|
|
4.3
|
|
||||||
Total
|
$
|
295.8
|
|
$
|
4.0
|
|
$
|
219.8
|
|
|
$
|
1.9
|
|
$
|
2.8
|
|
$
|
4.7
|
|
|
Principal amount outstanding
|
|
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs
(d)(e)(f)
|
||||||||||||||||
December 31, 2011
(a)
(in billions)
|
Total assets held by securitization VIEs
|
Assets held in consolidated securitization VIEs
|
Assets held in nonconsolidated securitization VIEs with continuing involvement
|
|
Trading assets
|
AFS securities
|
Total interests held by JPMorgan Chase
|
||||||||||||
Securitization-related
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage:
|
|
|
|
|
|
|
|
||||||||||||
Prime and Alt-A
|
$
|
129.9
|
|
$
|
2.7
|
|
$
|
101.0
|
|
|
$
|
0.6
|
|
$
|
—
|
|
$
|
0.6
|
|
Subprime
|
39.4
|
|
1.4
|
|
35.8
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Option ARMs
|
31.4
|
|
0.3
|
|
31.1
|
|
|
—
|
|
—
|
|
—
|
|
||||||
Commercial and other
(b)
|
139.3
|
|
—
|
|
93.3
|
|
|
1.7
|
|
2.0
|
|
3.7
|
|
||||||
Total
(c)
|
$
|
340.0
|
|
$
|
4.4
|
|
$
|
261.2
|
|
|
$
|
2.3
|
|
$
|
2.0
|
|
$
|
4.3
|
|
(a)
|
Excludes U.S. government agency securitizations. See pages 289–290 of this Note for information on the Firm’s loan sales to U.S. government agencies.
|
(b)
|
Consists of securities backed by commercial loans (predominantly real estate) and non-mortgage-related consumer receivables purchased from third parties. The Firm generally does not retain a residual interest in its sponsored commercial mortgage securitization transactions.
|
(c)
|
Prior period amounts have been revised to conform with the current presentation methodology.
|
(d)
|
The table above excludes the following: retained servicing (see Note 17 on pages
291–295
of this Annual Report for a discussion of MSRs); securities retained from loans sales to U.S. government agencies; interest rate and foreign exchange derivatives primarily used to manage interest rate and foreign exchange risks of securitization entities (See Note 6 on pages
218–227
of this Annual Report for further information on derivatives); senior and subordinated securities of
$131 million
and
$45 million
, respectively, at
December 31, 2012
, and
$110 million
and
$8 million
, respectively, at
December 31, 2011
, which the Firm purchased in connection with CIB’s secondary market-making activities.
|
(e)
|
Includes interests held in re-securitization transactions.
|
(f)
|
As of
December 31, 2012
and
2011
,
74%
and
68%
, respectively, of the Firm’s retained securitization interests, which are carried at fair value, were risk-rated “A” or better, on an S&P-equivalent basis. The retained interests in prime residential mortgages consisted of
$170 million
and
$136 million
of investment-grade and
$171 million
and
$427 million
of noninvestment-grade retained interests at
December 31, 2012
and 2011, respectively. The retained interests in commercial and other securitizations trusts consisted of
$4.1 billion
and
$3.4 billion
of investment-grade and
$164 million
and
$283 million
of noninvestment-grade retained interests at
December 31, 2012
and
2011
, respectively.
|
282
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
283
|
284
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
285
|
December 31,
(in billions)
|
Fair value of assets held by VIEs
|
Liquidity facilities
|
Excess/(deficit)
(a)
|
Maximum exposure
|
||||||||
Nonconsolidated municipal bond vehicles
|
|
|
|
|
||||||||
2012
|
$
|
14.2
|
|
$
|
8.0
|
|
$
|
6.2
|
|
$
|
8.0
|
|
2011
|
13.5
|
|
7.9
|
|
5.6
|
|
7.9
|
|
||||
|
|
|
|
|
|
Ratings profile of VIE assets
(b)
|
Fair value of assets held by VIEs
|
Wt. avg. expected life of assets (years)
|
|||||||||||||||||
|
Investment-grade
|
|
Noninvestment- grade
|
|||||||||||||||||
December 31,
(in billions, except where otherwise noted)
|
AAA to AAA-
|
AA+ to AA-
|
A+ to A-
|
BBB+ to BBB-
|
|
BB+ and below
|
||||||||||||||
2012
|
$
|
1.6
|
|
$
|
11.8
|
|
$
|
0.8
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
14.2
|
|
5.9
|
2011
|
1.5
|
|
11.2
|
|
0.7
|
|
—
|
|
|
0.1
|
|
13.5
|
|
6.6
|
(a)
|
Represents the excess/(deficit) of the fair values of municipal bond assets available to repay the liquidity facilities, if drawn.
|
(b)
|
The ratings scale is based on the Firm’s internal risk ratings and is presented on an S&P-equivalent basis.
|
286
|
|
JPMorgan Chase & Co./2012 Annual Report
|
December 31, 2012
(in billions)
|
Net derivative receivables
|
Total exposure
|
Par value of collateral held by VIEs
(a)
|
||||||
Credit-related notes
|
|
|
|
||||||
Static structure
|
$
|
0.5
|
|
$
|
0.5
|
|
$
|
7.3
|
|
Managed structure
|
0.6
|
|
0.6
|
|
5.6
|
|
|||
Total credit-related notes
|
1.1
|
|
1.1
|
|
12.9
|
|
|||
Asset swaps
|
0.4
|
|
0.4
|
|
7.9
|
|
|||
Total
|
$
|
1.5
|
|
$
|
1.5
|
|
$
|
20.8
|
|
|
|
|
|
||||||
December 31, 2011
(in billions)
|
Net derivative receivables
|
Total exposure
|
Par value of collateral held by VIEs
(a)
|
||||||
Credit-related notes
|
|
|
|
||||||
Static structure
|
$
|
1.0
|
|
$
|
1.0
|
|
$
|
9.1
|
|
Managed structure
|
2.7
|
|
2.7
|
|
7.7
|
|
|||
Total credit-related notes
|
3.7
|
|
3.7
|
|
16.8
|
|
|||
Asset swaps
|
0.6
|
|
0.6
|
|
8.6
|
|
|||
Total
|
$
|
4.3
|
|
$
|
4.3
|
|
$
|
25.4
|
|
(a)
|
The Firm’s maximum exposure arises through the derivatives executed with the VIEs; the exposure varies over time with changes in the fair value of the derivatives. The Firm relies on the collateral held by the VIEs to pay any amounts due under the derivatives; the vehicles are structured at inception so that the par value of the collateral is expected to be sufficient to pay amounts due under the derivative contracts.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
287
|
|
Assets
|
|
Liabilities
|
|||||||||||||||||||
December 31, 2012
(in billions)
(a)
|
Trading assets –
debt and equity instruments |
Loans
|
Other
(d)
|
Total
assets
(e)
|
|
Beneficial interests in
VIE assets
(f)
|
Other
(g)
|
Total
liabilities
|
||||||||||||||
VIE program type
|
|
|
|
|
|
|
|
|
||||||||||||||
Firm-sponsored credit card trusts
|
$
|
—
|
|
$
|
51.9
|
|
$
|
0.8
|
|
$
|
52.7
|
|
|
$
|
30.1
|
|
$
|
—
|
|
$
|
30.1
|
|
Firm-administered multi-seller conduits
|
—
|
|
25.4
|
|
0.1
|
|
25.5
|
|
|
17.2
|
|
—
|
|
17.2
|
|
|||||||
Municipal bond vehicles
|
9.8
|
|
—
|
|
0.1
|
|
9.9
|
|
|
11.0
|
|
—
|
|
11.0
|
|
|||||||
Mortgage securitization entities
(b)
|
1.4
|
|
2.0
|
|
—
|
|
3.4
|
|
|
2.3
|
|
1.1
|
|
3.4
|
|
|||||||
Other
(c)
|
0.8
|
|
3.4
|
|
1.1
|
|
5.3
|
|
|
2.6
|
|
0.1
|
|
2.7
|
|
|||||||
Total
|
$
|
12.0
|
|
$
|
82.7
|
|
$
|
2.1
|
|
$
|
96.8
|
|
|
$
|
63.2
|
|
$
|
1.2
|
|
$
|
64.4
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Assets
|
|
Liabilities
|
|||||||||||||||||||
December 31, 2011 (in billions)
(a)
|
Trading assets –
debt and equity instruments |
Loans
|
Other
(d)
|
Total
assets
(e)
|
|
Beneficial interests in
VIE assets
(f)
|
Other
(g)
|
Total
liabilities
|
||||||||||||||
VIE program type
|
|
|
|
|
|
|
|
|
||||||||||||||
Firm-sponsored credit card trusts
|
$
|
—
|
|
$
|
50.7
|
|
$
|
0.8
|
|
$
|
51.5
|
|
|
$
|
32.5
|
|
$
|
—
|
|
$
|
32.5
|
|
Firm-administered multi-seller conduits
|
—
|
|
29.7
|
|
0.2
|
|
29.9
|
|
|
18.7
|
|
—
|
|
18.7
|
|
|||||||
Municipal bond vehicles
|
9.2
|
|
—
|
|
0.1
|
|
9.3
|
|
|
9.2
|
|
—
|
|
9.2
|
|
|||||||
Mortgage securitization entities
(b)
|
1.4
|
|
2.3
|
|
—
|
|
3.7
|
|
|
2.3
|
|
1.3
|
|
3.6
|
|
|||||||
Other
(c)
|
1.5
|
|
4.1
|
|
1.5
|
|
7.1
|
|
|
3.3
|
|
0.2
|
|
3.5
|
|
|||||||
Total
|
$
|
12.1
|
|
$
|
86.8
|
|
$
|
2.6
|
|
$
|
101.5
|
|
|
$
|
66.0
|
|
$
|
1.5
|
|
$
|
67.5
|
|
(a)
|
Excludes intercompany transactions which were eliminated in consolidation.
|
(b)
|
Includes residential and commercial mortgage securitizations as well as re-securitizations.
|
(c)
|
Primarily comprises student loan securitization entities. The Firm consolidated
$3.3 billion
and
$4.1 billion
of student loan securitization entities as of December 31, 2012 and 2011, respectively.
|
(d)
|
Includes assets classified as cash, derivative receivables, AFS securities, and other assets within the Consolidated Balance Sheets.
|
(e)
|
The assets of the consolidated VIEs included in the program types above are used to settle the liabilities of those entities. The difference between total assets and total liabilities recognized for consolidated VIEs represents the Firm’s interest in the consolidated VIEs for each program type.
|
(f)
|
The interest-bearing beneficial interest liabilities issued by consolidated VIEs are classified in the line item on the Consolidated Balance Sheets titled, “Beneficial interests issued by consolidated variable interest entities.” The holders of these beneficial interests do not have recourse to the general credit of
JPMorgan Chase
. Included in beneficial interests in VIE assets are long-term beneficial interests of
$35.0 billion
and
$39.7 billion
at
December 31, 2012
and
2011
, respectively. The maturities of the long-term beneficial interests as of
December 31, 2012
, were as follows:
$11.9 billion
under one year,
$16.0 billion
between one and five years, and
$7.1 billion
over five years, all respectively.
|
(g)
|
Includes liabilities classified as accounts payable and other liabilities in the Consolidated Balance Sheets.
|
288
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
2012
|
|
2011
|
|
2010
|
||||||||||||||||
Year ended December 31,
(in millions, except rates)
(a)
|
Residential mortgage
(d)(e)
|
Commercial and other
(f)(g)
|
|
Residential mortgage
(d)(e)
|
Commercial and other
(f)(g)
|
|
Residential mortgage
(d)(e)
|
Commercial and other
(f)(g)
|
|
||||||||||||
Principal securitized
|
$
|
—
|
|
$
|
5,421
|
|
|
$
|
—
|
|
$
|
5,961
|
|
|
$
|
35
|
|
$
|
2,237
|
|
|
All cash flows during the period:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from new securitizations
(b)
|
$
|
—
|
|
$
|
5,705
|
|
|
$
|
—
|
|
$
|
6,142
|
|
|
$
|
36
|
|
$
|
2,369
|
|
|
Servicing fees collected
|
662
|
|
4
|
|
|
755
|
|
4
|
|
|
968
|
|
4
|
|
|
||||||
Purchases of previously transferred financial assets (or the underlying collateral)
(c)
|
222
|
|
—
|
|
|
772
|
|
—
|
|
|
321
|
|
—
|
|
|
||||||
Cash flows received on interests
|
185
|
|
163
|
|
|
235
|
|
178
|
|
|
319
|
|
143
|
|
|
(a)
|
Excludes re-securitization transactions.
|
(b)
|
Proceeds from commercial mortgage securitizations were received in the form of securities. During 2012,
$5.7 billion
of commercial mortgage securitizations were classified in level 2 of the fair value hierarchy. During 2011,
$4.0 billion
and
$2.1 billion
of commercial mortgage securitizations were classified in levels 2 and 3 of the fair value hierarchy, respectively. During 2010,
$2.2 billion
and
$172 million
of residential and commercial mortgage securitizations were classified in levels 2 and 3 of the fair value hierarchy, respectively.
|
(c)
|
Includes cash paid by the Firm to reacquire assets from off–balance sheet, nonconsolidated entities – for example, loan repurchases due to representation and warranties and servicer clean-up calls
|
(d)
|
Includes prime, Alt-A, subprime, and option ARMs. Excludes sales for which the Firm did not securitize the loan (including loans sold to Ginnie Mae, Fannie Mae and Freddie Mac).
|
(e)
|
There were no residential mortgage securitizations during 2012 and 2011.
|
(f)
|
Includes commercial and student loan securitizations
.
|
(g)
|
Key assumptions used to measure retained interests originated during the year included weighted-average life (in years) of
8.8
,
1.7
and
7.1
for the years ended December 31, 2012, 2011, and 2010, respectively, and weighted-average discount rate of
3.6%
,
3.5%
and
7.7%
for the years ended December 31, 2012, 2011, and 2010, respectively.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
289
|
Year ended December 31,
(in millions)
|
2012
|
2011
|
2010
|
||||||
Carrying value of loans sold
(a)
|
$
|
180,097
|
|
$
|
150,632
|
|
$
|
156,615
|
|
Proceeds received from loan sales as cash
|
$
|
1,270
|
|
$
|
2,864
|
|
$
|
3,887
|
|
Proceeds from loan sales as securities
(b)
|
176,592
|
|
145,340
|
|
149,786
|
|
|||
Total proceeds received from loan sales
(c)
|
$
|
177,862
|
|
$
|
148,204
|
|
$
|
153,673
|
|
Gains on loan sales
(d)
|
141
|
|
133
|
|
212
|
|
(a)
|
Predominantly to U.S. government agencies.
|
(b)
|
Predominantly includes securities from U.S. government agencies that are generally sold shortly after receipt.
|
(c)
|
Excludes the value of MSRs retained upon the sale of loans. Gains on loan sales include the value of MSRs.
|
(d)
|
The carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale.
|
(a)
|
The Firm’s interests in prime mortgage securitizations were
$341 million
and
$555 million
, as of
December 31, 2012
and
2011
, respectively. These include retained interests in Alt-A loans and re-securitization transactions. The Firm’s interests in subprime mortgage securitizations were
$68 million
and
$31 million
, as of
December 31, 2012
and
2011
, respectively. Additionally, the Firm had interests in option ARM mortgage securitizations of
$23 million
at December 31,
2011
.
|
(b)
|
Includes certain investments acquired in the secondary market but predominantly held for investment purposes.
|
(c)
|
Incorporates the Firm’s weighted-average loss assumption.
|
(d)
|
The prior period has been reclassified to conform with the current presentation.
|
290
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
Securitized assets
|
|
90 days past due
|
|
Liquidation losses
|
|||||||||||||||
As of or for the year ended December 31, (in millions)
|
2012
|
2011
|
|
2012
|
2011
|
|
2012
|
2011
|
||||||||||||
Securitized loans
(a)
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage:
|
|
|
|
|
|
|
|
|
||||||||||||
Prime mortgage
(b)
|
$
|
80,572
|
|
$
|
101,004
|
|
|
$
|
16,270
|
|
$
|
24,285
|
|
|
$
|
6,850
|
|
$
|
5,650
|
|
Subprime mortgage
|
31,264
|
|
35,755
|
|
|
10,570
|
|
14,293
|
|
|
3,013
|
|
3,086
|
|
||||||
Option ARMs
|
26,095
|
|
31,075
|
|
|
6,595
|
|
9,999
|
|
|
2,268
|
|
1,907
|
|
||||||
Commercial and other
|
81,834
|
|
93,336
|
|
|
4,077
|
|
4,836
|
|
|
1,265
|
|
1,101
|
|
||||||
Total loans securitized
(c)
|
$
|
219,765
|
|
$
|
261,170
|
|
|
$
|
37,512
|
|
$
|
53,413
|
|
|
$
|
13,396
|
|
$
|
11,744
|
|
(a)
|
Total assets held in securitization-related SPEs were
$295.8 billion
and
$340.0 billion
, respectively, at
December 31, 2012
and
2011
. The
$219.8 billion
and
$261.2 billion
, respectively, of loans securitized at
December 31, 2012
and
2011
, excludes:
$72.0 billion
and
$74.4 billion
, respectively, of securitized loans in which the Firm has no continuing involvement, and
$4.0 billion
and
$4.4 billion
, respectively, of loan securitizations consolidated on the Firm’s Consolidated Balance Sheets at
December 31, 2012
and
2011
.
|
(b)
|
Includes Alt-A loans.
|
(c)
|
Includes securitized loans that were previously recorded at fair value and classified as trading assets.
|
December 31, (in millions)
|
2012
|
2011
|
2010
|
||||||
Goodwill
|
$
|
48,175
|
|
$
|
48,188
|
|
$
|
48,854
|
|
Mortgage servicing rights
|
7,614
|
|
7,223
|
|
13,649
|
|
|||
Other intangible assets:
|
|
|
|
||||||
Purchased credit card relationships
|
$
|
295
|
|
$
|
602
|
|
$
|
897
|
|
Other credit card-related intangibles
|
229
|
|
488
|
|
593
|
|
|||
Core deposit intangibles
|
355
|
|
594
|
|
879
|
|
|||
Other intangibles
|
1,356
|
|
1,523
|
|
1,670
|
|
|||
Total other intangible assets
|
$
|
2,235
|
|
$
|
3,207
|
|
$
|
4,039
|
|
December 31, (in millions)
|
2012
|
2011
|
2010
|
||||||
Consumer & Community Banking
|
$
|
31,048
|
|
$
|
30,996
|
|
$
|
31,018
|
|
Corporate & Investment Bank
|
6,895
|
|
6,944
|
|
6,958
|
|
|||
Commercial Banking
|
2,863
|
|
2,864
|
|
2,866
|
|
|||
Asset Management
|
6,992
|
|
7,007
|
|
7,635
|
|
|||
Corporate/Private Equity
|
377
|
|
377
|
|
377
|
|
|||
Total goodwill
|
$
|
48,175
|
|
$
|
48,188
|
|
$
|
48,854
|
|
Year ended December 31,
(in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Balance at beginning of period
(a)
|
$
|
48,188
|
|
|
$
|
48,854
|
|
|
$
|
48,357
|
|
Changes during the period from:
|
|
|
|
|
|
|
|||||
Business combinations
|
43
|
|
|
97
|
|
|
556
|
|
|||
Dispositions
|
(4
|
)
|
|
(685
|
)
|
|
(19
|
)
|
|||
Other
(b)
|
(52
|
)
|
|
(78
|
)
|
|
(40
|
)
|
|||
Balance at December 31,
(a)
|
$
|
48,175
|
|
|
$
|
48,188
|
|
|
$
|
48,854
|
|
(a)
|
Reflects gross goodwill balances as the Firm has not recognized any impairment losses to date.
|
(b)
|
Includes foreign currency translation adjustments and other tax-related adjustments.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
291
|
292
|
|
JPMorgan Chase & Co./2012 Annual Report
|
As of or for the year ended December 31, (in millions, except where otherwise noted)
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Fair value at beginning of period
|
$
|
7,223
|
|
|
$
|
13,649
|
|
|
$
|
15,531
|
|
MSR activity
|
|
|
|
|
|
|
|||||
Originations of MSRs
|
2,376
|
|
|
2,570
|
|
|
3,153
|
|
|||
Purchase of MSRs
|
457
|
|
|
33
|
|
|
26
|
|
|||
Disposition of MSRs
|
(579
|
)
|
(e)
|
—
|
|
|
(407
|
)
|
|||
Changes due to modeled amortization
|
(1,228
|
)
|
|
(1,910
|
)
|
|
(2,386
|
)
|
|||
Net additions and amortization
|
1,026
|
|
|
693
|
|
|
386
|
|
|||
Changes due to market interest rates
|
(589
|
)
|
|
(5,392
|
)
|
|
(2,224
|
)
|
|||
Other changes in valuation due to inputs and assumptions
(a)
|
(46
|
)
|
|
(1,727
|
)
|
|
(44
|
)
|
|||
Total change in fair value of MSRs
(b)
|
(635
|
)
|
|
(7,119
|
)
|
|
(2,268
|
)
|
|||
Fair value at December 31
(c)
|
$
|
7,614
|
|
|
$
|
7,223
|
|
|
$
|
13,649
|
|
Change in unrealized gains/(losses) included in income related to MSRs held at December 31
|
$
|
(635
|
)
|
|
$
|
(7,119
|
)
|
|
$
|
(2,268
|
)
|
Contractual service fees, late fees and other ancillary fees included in income
|
$
|
3,783
|
|
|
$
|
3,977
|
|
|
$
|
4,484
|
|
Third-party mortgage loans serviced at December 31 (in billions)
|
$
|
867
|
|
|
$
|
910
|
|
|
$
|
976
|
|
Servicer advances at December 31 (in billions)
(d)
|
$
|
10.9
|
|
|
$
|
11.1
|
|
|
$
|
9.9
|
|
(a)
|
Represents the aggregate impact of changes in model inputs and assumptions such as costs to service, home prices, mortgage spreads, ancillary income, and assumptions used to derive prepayment speeds, as well as changes to the valuation models themselves.
|
(b)
|
Includes changes related to commercial real estate of
$(8) million
,
$(9) million
and
$(1) million
for the years ended
December 31, 2012
,
2011
and 2010, respectively.
|
(c)
|
Includes
$23 million
,
$31 million
and
$40 million
related to commercial real estate at
December 31, 2012
,
2011
and 2010, respectively.
|
(d)
|
Represents amounts the Firm pays as the servicer (e.g., scheduled principal and interest to a trust, taxes and insurance), which will generally be reimbursed within a short period of time after the advance from future cash flows from the trust or the underlying loans. The Firm’s credit risk associated with these advances is minimal because reimbursement of the advances is senior to all cash payments to investors. In addition, the Firm maintains the right to stop payment to investors if the collateral is insufficient to cover the advance.
|
(e)
|
Includes excess mortgage servicing rights transferred to an agency-sponsored trust in exchange for stripped mortgage backed securities (“SMBS”). A portion of the SMBS was acquired by third parties at the transaction date; the Firm acquired and has retained the remaining balance of those SMBS as trading assets.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
293
|
Year ended December 31,
(in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Mortgage fees and related income
|
|
|
|
|
|
||||||
Net production revenue:
|
|
|
|
|
|
||||||
Production revenue
|
$
|
5,783
|
|
|
$
|
3,395
|
|
|
$
|
3,440
|
|
Repurchase losses
|
(272
|
)
|
|
(1,347
|
)
|
|
(2,912
|
)
|
|||
Net production revenue
|
5,511
|
|
|
2,048
|
|
|
528
|
|
|||
Net mortgage servicing revenue
|
|
|
|
|
|
|
|||||
Operating revenue:
|
|
|
|
|
|
|
|||||
Loan servicing revenue
|
3,772
|
|
|
4,134
|
|
|
4,575
|
|
|||
Changes in MSR asset fair value due to modeled amortization
|
(1,222
|
)
|
|
(1,904
|
)
|
|
(2,384
|
)
|
|||
Total operating revenue
|
2,550
|
|
|
2,230
|
|
|
2,191
|
|
|||
Risk management:
|
|
|
|
|
|
|
|||||
Changes in MSR asset fair value due to market interest rates
|
(587
|
)
|
|
(5,390
|
)
|
|
(2,224
|
)
|
|||
Other changes in MSR asset fair value due to inputs or assumptions in model
(a)
|
(46
|
)
|
|
(1,727
|
)
|
|
(44
|
)
|
|||
Change in derivative fair value and other
|
1,252
|
|
|
5,553
|
|
|
3,404
|
|
|||
Total risk management
|
619
|
|
|
(1,564
|
)
|
|
1,136
|
|
|||
Net mortgage servicing revenue
|
3,169
|
|
|
666
|
|
|
3,327
|
|
|||
All other
|
7
|
|
|
7
|
|
|
15
|
|
|||
Mortgage fees and related income
|
$
|
8,687
|
|
|
$
|
2,721
|
|
|
$
|
3,870
|
|
(a)
|
Represents the aggregate impact of changes in model inputs and assumptions such as costs to service, home prices, mortgage spreads, ancillary income, and assumptions used to derive prepayment speeds, as well as changes to the valuation models themselves.
|
December 31,
(in millions, except rates)
|
2012
|
|
2011
|
||||
Weighted-average prepayment speed assumption (“CPR”)
|
13.04
|
%
|
|
18.07
|
%
|
||
Impact on fair value of 10% adverse change
|
$
|
(517
|
)
|
|
$
|
(585
|
)
|
Impact on fair value of 20% adverse change
|
(1,009
|
)
|
|
(1,118
|
)
|
||
Weighted-average option adjusted spread
|
7.61
|
%
|
|
7.83
|
%
|
||
Impact on fair value of 100 basis points adverse change
|
$
|
(306
|
)
|
|
$
|
(269
|
)
|
Impact on fair value of 200 basis points adverse change
|
(591
|
)
|
|
(518
|
)
|
294
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
2012
|
|
2011
|
||||||||||||||||
|
Gross amount
(a)
|
Accumulated amortization
(a)
|
Net
carrying value
|
|
Gross amount
|
Accumulated amortization
|
Net
carrying value
|
||||||||||||
December 31, (in millions)
|
|
||||||||||||||||||
Purchased credit card relationships
|
$
|
3,775
|
|
$
|
3,480
|
|
$
|
295
|
|
|
$
|
3,826
|
|
$
|
3,224
|
|
$
|
602
|
|
Other credit card-related intangibles
|
850
|
|
621
|
|
229
|
|
|
844
|
|
356
|
|
488
|
|
||||||
Core deposit intangibles
|
4,133
|
|
3,778
|
|
355
|
|
|
4,133
|
|
3,539
|
|
594
|
|
||||||
Other intangibles
(b)
|
2,390
|
|
1,034
|
|
1,356
|
|
|
2,467
|
|
944
|
|
1,523
|
|
(a)
|
The decrease in the gross amount and accumulated amortization from
December 31, 2011
, was due to the removal of fully amortized assets.
|
(b)
|
Includes intangible assets of approximately
$600 million
consisting primarily of asset management advisory contracts, which were determined to have an indefinite life and are not amortized.
|
December 31, (in millions)
|
2012
|
|
2011
|
|
2010
|
||||||
Purchased credit card relationships
|
$
|
309
|
|
|
$
|
295
|
|
|
$
|
355
|
|
Other credit card-related intangibles
|
265
|
|
|
106
|
|
|
111
|
|
|||
Core deposit intangibles
|
239
|
|
|
285
|
|
|
328
|
|
|||
Other intangibles
|
144
|
|
|
162
|
|
|
142
|
|
|||
Total amortization expense
|
$
|
957
|
|
|
$
|
848
|
|
|
$
|
936
|
|
Year ended December 31,
(in millions)
|
Purchased credit card relationships
|
Other credit
card-related intangibles
|
Core deposit intangibles
|
Other
intangibles
|
Total
|
||||||||||
2013
|
$
|
192
|
|
$
|
57
|
|
$
|
196
|
|
$
|
132
|
|
$
|
577
|
|
2014
|
91
|
|
49
|
|
102
|
|
116
|
|
358
|
|
|||||
2015
|
7
|
|
39
|
|
26
|
|
96
|
|
168
|
|
|||||
2016
|
4
|
|
34
|
|
14
|
|
89
|
|
141
|
|
|||||
2017
|
1
|
|
29
|
|
13
|
|
88
|
|
131
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
295
|
December 31, (in millions)
|
2012
|
|
2011
|
||||
U.S. offices
|
|
|
|
||||
Noninterest-bearing
|
$
|
380,320
|
|
|
$
|
346,670
|
|
Interest-bearing
|
|
|
|
||||
Demand
(a)
|
53,980
|
|
|
47,075
|
|
||
Savings
(b)
|
407,710
|
|
|
375,051
|
|
||
Time (included
$5,140
and $3,861 at fair value)
(c)
|
90,416
|
|
|
82,738
|
|
||
Total interest-bearing deposits
|
552,106
|
|
|
504,864
|
|
||
Total deposits in U.S. offices
|
932,426
|
|
|
851,534
|
|
||
Non-U.S. offices
|
|
|
|
||||
Noninterest-bearing
|
17,845
|
|
|
18,790
|
|
||
Interest-bearing
|
|
|
|
||||
Demand
|
195,395
|
|
|
188,202
|
|
||
Savings
|
1,004
|
|
|
687
|
|
||
Time (included
$593
and $1,072 at fair value)
(c)
|
46,923
|
|
|
68,593
|
|
||
Total interest-bearing deposits
|
243,322
|
|
|
257,482
|
|
||
Total deposits in non-U.S. offices
|
261,167
|
|
|
276,272
|
|
||
Total deposits
|
$
|
1,193,593
|
|
|
$
|
1,127,806
|
|
(a)
|
Includes Negotiable Order of Withdrawal (“NOW”) accounts, and certain trust accounts.
|
(b)
|
Includes Money Market Deposit Accounts (“MMDAs”).
|
(c)
|
Includes structured notes classified as deposits for which the fair value option has been elected. For further discussion, see Note 4 on pages
214–216
of this
Annual Report
.
|
December 31, (in millions)
|
|
2012
|
|
2011
|
|
||||
U.S. offices
|
|
$
|
70,008
|
|
|
$
|
57,802
|
|
|
Non-U.S. offices
|
|
46,890
|
|
|
60,066
|
|
(a)
|
||
Total
|
|
$
|
116,898
|
|
|
$
|
117,868
|
|
|
December 31, 2012
|
|
|
|
|
|
|
|
|
|
|||
(in millions)
|
|
U.S.
|
|
Non-U.S.
|
|
Total
|
||||||
2013
|
|
$
|
74,469
|
|
|
$
|
45,731
|
|
|
$
|
120,200
|
|
2014
|
|
3,792
|
|
|
795
|
|
|
4,587
|
|
|||
2015
|
|
3,374
|
|
|
34
|
|
|
3,408
|
|
|||
2016
|
|
4,566
|
|
|
188
|
|
|
4,754
|
|
|||
2017
|
|
1,195
|
|
|
110
|
|
|
1,305
|
|
|||
After 5 years
|
|
3,020
|
|
|
65
|
|
|
3,085
|
|
|||
Total
|
|
$
|
90,416
|
|
|
$
|
46,923
|
|
|
$
|
137,339
|
|
December 31, (in millions)
|
|
2012
|
|
|
2011
|
|
||
Brokerage payables
(a)
|
|
$
|
108,398
|
|
|
$
|
121,353
|
|
Accounts payable and other liabilities
(b)
|
|
86,842
|
|
|
81,542
|
|
||
Total
|
|
$
|
195,240
|
|
|
$
|
202,895
|
|
(a)
|
Includes payables to customers, brokers, dealers and clearing organizations, and securities fails.
|
(b)
|
Includes
$36 million
and
$51 million
accounted for at fair value at
December 31, 2012
and
2011
, respectively.
|
296
|
|
JPMorgan Chase & Co./2012 Annual Report
|
By remaining maturity at
December 31,
|
|
|
|
2012
|
|
2011
|
|
|||||||||||||||
(in millions, except rates)
|
|
|
|
Under 1 year
|
|
|
1-5 years
|
|
|
After 5 years
|
|
|
Total
|
|
|
Total
|
|
|||||
Parent company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Senior debt:
|
|
Fixed rate
(a)
|
|
$
|
6,876
|
|
|
$
|
47,101
|
|
|
$
|
45,739
|
|
|
$
|
99,716
|
|
|
$
|
96,478
|
|
|
|
Variable rate
(b)
|
|
10,049
|
|
|
22,706
|
|
|
6,010
|
|
|
38,765
|
|
|
55,779
|
|
|||||
|
|
Interest rates
(c)
|
|
0.43-5.38%
|
|
|
0.35-7.00%
|
|
|
0.26-7.25%
|
|
|
0.26-7.25%
|
|
|
0.32-7.25%
|
|
|||||
Subordinated debt:
|
|
Fixed rate
|
|
$
|
2,421
|
|
|
$
|
8,259
|
|
|
$
|
5,632
|
|
|
$
|
16,312
|
|
|
$
|
19,167
|
|
|
|
Variable rate
|
|
—
|
|
|
3,431
|
|
|
9
|
|
|
3,440
|
|
|
1,954
|
|
|||||
|
|
Interest rates
(c)
|
|
5.25-5.75%
|
|
|
0.61-6.13%
|
|
|
3.88-8.53%
|
|
|
0.61-8.53%
|
|
|
1.09-8.53%
|
|
|||||
|
|
Subtotal
|
|
$
|
19,346
|
|
|
$
|
81,497
|
|
|
$
|
57,390
|
|
|
$
|
158,233
|
|
|
$
|
173,378
|
|
Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
FHLB advances:
|
|
Fixed rate
|
|
$
|
1,510
|
|
|
$
|
3,040
|
|
|
$
|
162
|
|
|
$
|
4,712
|
|
|
$
|
4,738
|
|
|
|
Variable rate
|
|
2,321
|
|
|
23,012
|
|
|
12,000
|
|
|
37,333
|
|
|
13,085
|
|
|||||
|
|
Interest rates
(c)
|
|
0.30-1.15%
|
|
|
0.30-2.04%
|
|
|
0.39-0.47%
|
|
|
0.30-2.04%
|
|
|
0.32-2.04%
|
|
|||||
Senior debt:
|
|
Fixed rate
|
|
$
|
582
|
|
|
$
|
2,397
|
|
|
$
|
3,782
|
|
|
$
|
6,761
|
|
|
$
|
6,546
|
|
|
|
Variable rate
|
|
7,577
|
|
|
11,390
|
|
|
2,640
|
|
|
21,607
|
|
|
28,257
|
|
|||||
|
|
Interest rates
(c)
|
|
0.33-2.10%
|
|
|
0.16-3.75%
|
|
|
1.00-7.28%
|
|
|
0.16-7.28%
|
|
|
0.13-14.21%
|
|
|||||
Subordinated debt:
|
|
Fixed rate
|
|
$
|
—
|
|
|
$
|
5,651
|
|
|
$
|
1,862
|
|
|
$
|
7,513
|
|
|
$
|
8,755
|
|
|
|
Variable rate
|
|
—
|
|
|
2,466
|
|
|
—
|
|
|
2,466
|
|
|
1,150
|
|
|||||
|
|
Interest rates
(c)
|
|
—
|
%
|
|
0.64-6.00%
|
|
|
4.38-8.25%
|
|
|
0.64-8.25%
|
|
|
0.87-8.25%
|
|
|||||
|
|
Subtotal
|
|
$
|
11,990
|
|
|
$
|
47,956
|
|
|
$
|
20,446
|
|
|
$
|
80,392
|
|
|
$
|
62,531
|
|
Junior subordinated debt:
|
|
Fixed rate
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,131
|
|
|
$
|
7,131
|
|
|
$
|
15,784
|
|
|
|
Variable rate
|
|
—
|
|
|
—
|
|
|
3,268
|
|
|
3,268
|
|
|
5,082
|
|
|||||
|
|
Interest rates
(c)
|
|
—
|
%
|
|
—
|
%
|
|
0.81-8.75%
|
|
|
0.81-8.75%
|
|
|
0.93-8.75%
|
|
|||||
|
|
Subtotal
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,399
|
|
|
$
|
10,399
|
|
|
$
|
20,866
|
|
Total long-term debt
(d)(e)(f)
|
|
|
|
$
|
31,336
|
|
|
$
|
129,453
|
|
|
$
|
88,235
|
|
|
$
|
249,024
|
|
(h)(i)
|
$
|
256,775
|
|
Long-term beneficial interests:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Fixed rate
|
|
$
|
1,629
|
|
|
$
|
5,502
|
|
|
$
|
3,262
|
|
|
$
|
10,393
|
|
|
$
|
6,261
|
|
|
|
Variable rate
|
|
10,226
|
|
|
10,551
|
|
|
3,802
|
|
|
24,579
|
|
|
33,473
|
|
|||||
|
|
Interest rates
|
|
0.27-5.40%
|
|
|
0.23-5.63%
|
|
|
0.32-13.91%
|
|
|
0.23-13.91%
|
|
|
0.02-11.00%
|
|
|||||
Total long-term beneficial interests
(g)
|
|
|
|
$
|
11,855
|
|
|
$
|
16,053
|
|
|
$
|
7,064
|
|
|
$
|
34,972
|
|
|
$
|
39,734
|
|
(a)
|
Included
$8.4 billion
as of
December 31, 2011
, that was guaranteed by the FDIC under the Temporary Liquidity Guarantee (“TLG”) Program. All long-term debt guaranteed under the TLG Program matured prior to December 31, 2012.
|
(b)
|
Included
$11.9 billion
as of
December 31, 2011
that was guaranteed by the FDIC under the TLG Program. All long-term debt guaranteed under the TLG Program matured prior to December 31, 2012.
|
(c)
|
The interest rates shown are the range of contractual rates in effect at year-end, including non-U.S. dollar fixed- and variable-rate issuances, which excludes the effects of the associated derivative instruments used in hedge accounting relationships, if applicable. The use of these derivative instruments modifies the Firm’s exposure to the contractual interest rates disclosed in the table above. Including the effects of the hedge accounting derivatives, the range of modified rates in effect at
December 31, 2012
, for total long-term debt was
(0.76)%
to
7.86%
, versus the contractual range of
0.16%
to
8.75%
presented in the table above. The interest rate ranges shown exclude structured notes accounted for at fair value.
|
(d)
|
Included long-term debt of
$48.0 billion
and
$23.8 billion
secured by assets totaling
$112.8 billion
and
$89.4 billion
at
December 31, 2012
and
2011
, respectively. The amount of long-term debt secured by assets does not include amounts related to hybrid instruments.
|
(e)
|
Included
$30.8 billion
and
$34.7 billion
of outstanding structured notes accounted for at fair value at
December 31, 2012
and
2011
, respectively.
|
(f)
|
Included
$1.6 billion
and
$2.1 billion
of outstanding zero-coupon notes at
December 31, 2012
and
2011
, respectively. The aggregate principal amount of these notes at their respective maturities was
$3.0 billion
and
$5.0 billion
, respectively.
|
(g)
|
Included on the Consolidated Balance Sheets in beneficial interests issued by consolidated VIEs. Also included
$1.2 billion
and
$1.3 billion
of outstanding structured notes accounted for at fair value at
December 31, 2012
and
2011
, respectively. Excluded short-term commercial paper and other short-term beneficial interests of
$28.2 billion
and
$26.2 billion
at
December 31, 2012
and
2011
, respectively.
|
(h)
|
At
December 31, 2012
, long-term debt in the aggregate of
$22.1 billion
was redeemable at the option of JPMorgan Chase, in whole or in part, prior to maturity, based on the terms specified in the respective notes.
|
(i)
|
The aggregate carrying values of debt that matures in each of the five years subsequent to 2012 is
$31.3 billion
in 2013,
$35.8 billion
in 2014,
$32.0 billion
in 2015,
$28.0 billion
in 2016 and
$33.6 billion
in 2017.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
297
|
298
|
|
JPMorgan Chase & Co./2012 Annual Report
|
December 31, 2012
(in millions)
|
|
Amount of trust preferred securities issued by trust
(a)
|
|
Principal amount of debenture issued to trust
(b)
|
|
Issue date
|
|
Stated maturity of trust preferred securities and debentures
|
|
Earliest redemption date
|
|
Interest rate of trust preferred securities and debentures
|
|
Interest payment/distribution dates
|
Bank One Capital III
|
|
$474
|
|
$757
|
|
2000
|
|
2030
|
|
Any time
|
|
8.75%
|
|
Semiannually
|
Bank One Capital VI
|
|
100
|
|
105
|
|
2001
|
|
2031
|
|
Any time
|
|
7.20%
|
|
Quarterly
|
Chase Capital II
|
|
482
|
|
498
|
|
1997
|
|
2027
|
|
Any time
|
|
LIBOR + 0.50%
|
|
Quarterly
|
Chase Capital III
|
|
296
|
|
305
|
|
1997
|
|
2027
|
|
Any time
|
|
LIBOR + 0.55%
|
|
Quarterly
|
Chase Capital VI
|
|
241
|
|
249
|
|
1998
|
|
2028
|
|
Any time
|
|
LIBOR + 0.625%
|
|
Quarterly
|
First Chicago NBD Capital I
|
|
249
|
|
256
|
|
1997
|
|
2027
|
|
Any time
|
|
LIBOR + 0.55%
|
|
Quarterly
|
J.P. Morgan Chase Capital X
|
|
1,000
|
|
1,018
|
|
2002
|
|
2032
|
|
Any time
|
|
7.00%
|
|
Quarterly
|
J.P. Morgan Chase Capital XI
|
|
1,075
|
|
1,013
|
|
2003
|
|
2033
|
|
Any time
|
|
5.88%
|
|
Quarterly
|
J.P. Morgan Chase Capital XII
|
|
400
|
|
392
|
|
2003
|
|
2033
|
|
Any time
|
|
6.25%
|
|
Quarterly
|
JPMorgan Chase Capital XIII
|
|
465
|
|
480
|
|
2004
|
|
2034
|
|
2014
|
|
LIBOR + 0.95%
|
|
Quarterly
|
JPMorgan Chase Capital XIV
|
|
600
|
|
588
|
|
2004
|
|
2034
|
|
Any time
|
|
6.20%
|
|
Quarterly
|
JPMorgan Chase Capital XVI
|
|
500
|
|
494
|
|
2005
|
|
2035
|
|
Any time
|
|
6.35%
|
|
Quarterly
|
JPMorgan Chase Capital XIX
|
|
563
|
|
564
|
|
2006
|
|
2036
|
|
Any time
|
|
6.63%
|
|
Quarterly
|
JPMorgan Chase Capital XXI
|
|
836
|
|
837
|
|
2007
|
|
2037
|
|
Any time
|
|
LIBOR + 0.95%
|
|
Quarterly
|
JPMorgan Chase Capital XXIII
|
|
643
|
|
643
|
|
2007
|
|
2047
|
|
Any time
|
|
LIBOR + 1.00%
|
|
Quarterly
|
JPMorgan Chase Capital XXIV
|
|
700
|
|
700
|
|
2007
|
|
2047
|
|
Any time
|
|
6.88%
|
|
Quarterly
|
JPMorgan Chase Capital XXIX
|
|
1,500
|
|
1,500
|
|
2010
|
|
2040
|
|
2015
|
|
6.70%
|
|
Quarterly
|
Total
|
|
$10,124
|
|
$10,399
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Represents the amount of trust preferred securities issued to the public by each trust, including unamortized original issue discount.
|
(b)
|
Represents the principal amount of JPMorgan Chase debentures issued to each trust, including unamortized original-issue discount. The principal amount of debentures issued to the trusts includes the impact of hedging and purchase accounting fair value adjustments that were recorded on the Firm’s Consolidated Financial Statements.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
299
|
|
|
Contractual rate in effect at
December 31, 2012
|
|
Shares
at December 31,
(a)
|
|
Carrying value (in millions) at December 31,
|
|
Earliest redemption date
|
|
Share value and redemption
price per share
(b)
|
|||||||||||
|
|
|
2012
|
2011
|
|
2012
|
2011
|
|
|||||||||||||
Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series I
|
|
7.900
|
%
|
|
600,000
|
|
600,000
|
|
|
$
|
6,000
|
|
$
|
6,000
|
|
|
4/30/2018
|
|
$
|
10,000
|
|
8.625% Non-Cumulative Perpetual Preferred Stock, Series J
|
|
8.625
|
%
|
|
180,000
|
|
180,000
|
|
|
1,800
|
|
1,800
|
|
|
9/1/2013
|
|
10,000
|
|
|||
5.50% Non-Cumulative Perpetual Preferred Stock, Series O
|
|
5.500
|
%
|
|
125,750
|
|
—
|
|
|
1,258
|
|
—
|
|
|
9/1/2017
|
|
10,000
|
|
|||
Total preferred stock
|
|
|
|
905,750
|
|
780,000
|
|
|
$
|
9,058
|
|
$
|
7,800
|
|
|
|
|
|
(a)
|
Represented by depositary shares.
|
(b)
|
The redemption price includes the amount shown in the table plus any accrued but unpaid dividends.
|
Year ended December 31,
(in millions)
|
2012
|
|
2011
|
|
2010
|
|
Issued – balance at January 1
|
4,104.9
|
|
4,104.9
|
|
4,104.9
|
|
New open market issuances
|
—
|
|
—
|
|
—
|
|
Total issued – balance at December 31
|
4,104.9
|
|
4,104.9
|
|
4,104.9
|
|
Treasury – balance at January 1
|
(332.2
|
)
|
(194.6
|
)
|
(162.9
|
)
|
Purchase of treasury stock
|
(33.5
|
)
|
(226.9
|
)
|
(77.9
|
)
|
Share repurchases related to employee stock-based awards
(a)
|
(0.2
|
)
|
(0.1
|
)
|
(0.1
|
)
|
Issued from treasury:
|
|
|
|
|||
Employee benefits and compensation plans
|
63.7
|
|
88.3
|
|
45.3
|
|
Employee stock purchase plans
|
1.3
|
|
1.1
|
|
1.0
|
|
Total issued from treasury
|
65.0
|
|
89.4
|
|
46.3
|
|
Total treasury – balance at December 31
|
(300.9
|
)
|
(332.2
|
)
|
(194.6
|
)
|
Outstanding
|
3,804.0
|
|
3,772.7
|
|
3,910.3
|
|
(a)
|
Participants in the Firm’s stock-based incentive plans may have shares withheld to cover income taxes.
|
300
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31,
(in millions,
except per share amounts)
|
2012
|
2011
|
2010
|
||||||
Basic earnings per share
|
|
|
|
||||||
Net income
|
$
|
21,284
|
|
$
|
18,976
|
|
$
|
17,370
|
|
Less: Preferred stock dividends
|
653
|
|
629
|
|
642
|
|
|||
Net income applicable to common equity
|
20,631
|
|
18,347
|
|
16,728
|
|
|||
Less: Dividends and undistributed earnings allocated to participating securities
|
754
|
|
779
|
|
964
|
|
|||
Net income applicable to common stockholders
|
$
|
19,877
|
|
$
|
17,568
|
|
$
|
15,764
|
|
Total weighted-average basic shares outstanding
|
3,809.4
|
|
3,900.4
|
|
3,956.3
|
|
|||
Net income per share
|
$
|
5.22
|
|
$
|
4.50
|
|
$
|
3.98
|
|
|
|
|
|
||||||
Diluted earnings per share
|
|
|
|
||||||
Net income applicable to common stockholders
|
$
|
19,877
|
|
$
|
17,568
|
|
$
|
15,764
|
|
Total weighted-average basic shares outstanding
|
3,809.4
|
|
3,900.4
|
|
3,956.3
|
|
|||
Add: Employee stock options, SARs and warrants
(a)
|
12.8
|
|
19.9
|
|
20.6
|
|
|||
Total weighted-average diluted shares outstanding
(b)
|
3,822.2
|
|
3,920.3
|
|
3,976.9
|
|
|||
Net income per share
|
$
|
5.20
|
|
$
|
4.48
|
|
$
|
3.96
|
|
(a)
|
Excluded from the computation of diluted EPS (due to the antidilutive effect) were options issued under employee benefit plans and the warrants originally issued in 2008 under the U.S. Treasury’s Capital Purchase Program to purchase shares of the Firm’s common stock. The aggregate number of shares issuable upon the exercise of such options and warrants was
148 million
,
133 million
and
233 million
for the full years ended
December 31, 2012
,
2011
and
2010
respectively.
|
(b)
|
Participating securities were included in the calculation of diluted EPS using the two-class method, as this computation was more dilutive than the calculation using the treasury stock method.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
301
|
Year ended December 31,
|
Unrealized gains/(losses) on AFS securities
(b)
|
|
Translation adjustments, net of hedges
|
|
Cash flow hedges
|
|
Defined benefit pension and OPEB plans
|
|
Accumulated other comprehensive income/(loss)
|
|
||||||||||||||||||||
(in millions)
|
||||||||||||||||||||||||||||||
Balance at December 31, 2009
|
|
$
|
2,032
|
|
|
|
|
$
|
(16
|
)
|
|
|
|
$
|
181
|
|
|
|
|
$
|
(2,288
|
)
|
|
|
|
$
|
(91
|
)
|
|
|
Cumulative effect of changes in accounting principles
(a)
|
|
(144
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(144
|
)
|
|
|
|||||
Net change
|
|
610
|
|
(c)
|
|
|
269
|
|
|
|
|
25
|
|
|
|
|
332
|
|
|
|
|
1,236
|
|
|
|
|||||
Balance at December 31, 2010
|
|
$
|
2,498
|
|
(d)
|
|
|
$
|
253
|
|
|
|
|
$
|
206
|
|
|
|
|
$
|
(1,956
|
)
|
|
|
|
$
|
1,001
|
|
|
|
Net change
|
|
1,067
|
|
(e)
|
|
|
(279
|
)
|
|
|
|
(155
|
)
|
|
|
|
(690
|
)
|
|
|
|
(57
|
)
|
|
|
|||||
Balance at December 31, 2011
|
|
$
|
3,565
|
|
(d)
|
|
|
$
|
(26
|
)
|
|
|
|
$
|
51
|
|
|
|
|
$
|
(2,646
|
)
|
|
|
|
$
|
944
|
|
|
|
Net change
|
|
3,303
|
|
(f)
|
|
|
(69
|
)
|
|
|
|
69
|
|
|
|
|
(145
|
)
|
|
|
|
3,158
|
|
|
|
|||||
Balance at December 31, 2012
|
|
$
|
6,868
|
|
(d)
|
|
|
$
|
(95
|
)
|
|
|
|
$
|
120
|
|
|
|
|
$
|
(2,791
|
)
|
|
|
|
$
|
4,102
|
|
|
|
(a)
|
Reflects the effect of the adoption of accounting guidance related to the consolidation of VIEs and to embedded credit derivatives in beneficial interests in securitized financial assets. AOCI decreased by
$129 million
due to the adoption of the accounting guidance related to VIEs, as a result of the reversal of the fair value adjustments taken on retained AFS securities that were eliminated in consolidation; for further discussion see Note 16 on pages
280–291
of this
Annual Report
. AOCI decreased by
$15 million
due to the adoption of guidance related to credit derivatives embedded in certain of the Firm’s AFS securities; for further discussion see Note 6 on pages
218–227
of this
Annual Report
.
|
(b)
|
Represents the after-tax difference between the fair value and amortized cost of securities accounted for as AFS.
|
(c)
|
The net change during 2010 was due primarily to the narrowing of spreads on commercial and non-agency MBS as well as on collateralized loan obligations; also reflects increased market value on pass-through MBS due to narrowing of spreads and other market factors.
|
(d)
|
Included after-tax unrealized losses not related to credit on debt securities for which credit losses have been recognized in income of
$(56) million
and
$(81) million
at December 31,
2011
and
2010
, respectively. There were no such losses at December 31, 2012.
|
(e)
|
The net change for 2011 was due primarily to increased market value on agency MBS and municipal securities, partially offset by the widening of spreads on non-U.S. corporate debt and the realization of gains due to portfolio repositioning.
|
(f)
|
The net change for 2012 was predominantly driven by increased market value on non-U.S. residential MBS, corporate debt securities and obligations of U.S. states and municipalities, partially offset by realized gains.
|
|
2012
|
|
2011
|
|
2010
|
||||||||||||||||||||||||||||||
Year ended December 31, (in millions)
|
Pretax
|
|
Tax effect
|
|
After-tax
|
|
Pretax
|
|
Tax effect
|
|
After-tax
|
|
Pretax
|
|
Tax effect
|
|
After-tax
|
||||||||||||||||||
Unrealized gains/(losses) on AFS securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net unrealized gains/(losses) arising during the period
|
$
|
7,521
|
|
|
$
|
(2,930
|
)
|
|
$
|
4,591
|
|
|
$
|
3,361
|
|
|
$
|
(1,322
|
)
|
|
$
|
2,039
|
|
|
$
|
3,982
|
|
|
$
|
(1,540
|
)
|
|
$
|
2,442
|
|
Reclassification adjustment for realized (gains)/losses included in net income
|
(2,110
|
)
|
|
822
|
|
|
(1,288
|
)
|
|
(1,593
|
)
|
|
621
|
|
|
(972
|
)
|
|
(2,982
|
)
|
|
1,150
|
|
|
(1,832
|
)
|
|||||||||
Net change
|
5,411
|
|
|
(2,108
|
)
|
|
3,303
|
|
|
1,768
|
|
|
(701
|
)
|
|
1,067
|
|
|
1,000
|
|
|
(390
|
)
|
|
610
|
|
|||||||||
Translation adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Translation
|
(26
|
)
|
|
8
|
|
|
(18
|
)
|
|
(672
|
)
|
|
255
|
|
|
(417
|
)
|
|
402
|
|
|
(139
|
)
|
|
263
|
|
|||||||||
Hedges
|
(82
|
)
|
|
31
|
|
|
(51
|
)
|
|
226
|
|
|
(88
|
)
|
|
138
|
|
|
11
|
|
|
(5
|
)
|
|
6
|
|
|||||||||
Net change
|
(108
|
)
|
|
39
|
|
|
(69
|
)
|
|
(446
|
)
|
|
167
|
|
|
(279
|
)
|
|
413
|
|
|
(144
|
)
|
|
269
|
|
|||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net unrealized gains/(losses) arising during the period
|
141
|
|
|
(55
|
)
|
|
86
|
|
|
50
|
|
|
(19
|
)
|
|
31
|
|
|
247
|
|
|
(96
|
)
|
|
151
|
|
|||||||||
Reclassification adjustment for realized (gains)/losses included in net income
|
(28
|
)
|
|
11
|
|
|
(17
|
)
|
|
(301
|
)
|
|
115
|
|
|
(186
|
)
|
|
(206
|
)
|
|
80
|
|
|
(126
|
)
|
|||||||||
Net change
|
113
|
|
|
(44
|
)
|
|
69
|
|
|
(251
|
)
|
|
96
|
|
|
(155
|
)
|
|
41
|
|
|
(16
|
)
|
|
25
|
|
|||||||||
Defined benefit pension and OPEB plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Prior service credits arising during the period
|
6
|
|
|
(2
|
)
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
(4
|
)
|
|
6
|
|
|||||||||
Net gains/(losses) arising during the period
|
(537
|
)
|
|
228
|
|
|
(309
|
)
|
|
(1,290
|
)
|
|
502
|
|
|
(788
|
)
|
|
262
|
|
|
(84
|
)
|
|
178
|
|
|||||||||
Reclassification adjustments included in net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Amortization of net loss
|
324
|
|
|
(126
|
)
|
|
198
|
|
|
214
|
|
|
(83
|
)
|
|
131
|
|
|
280
|
|
|
(112
|
)
|
|
168
|
|
|||||||||
Prior service costs/(credits)
|
(41
|
)
|
|
16
|
|
|
(25
|
)
|
|
(52
|
)
|
|
20
|
|
|
(32
|
)
|
|
(57
|
)
|
|
22
|
|
|
(35
|
)
|
|||||||||
Settlement gain/(loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||||||
Foreign exchange and other
|
(21
|
)
|
|
8
|
|
|
(13
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
22
|
|
|
(8
|
)
|
|
14
|
|
|||||||||
Net change
|
(269
|
)
|
|
124
|
|
|
(145
|
)
|
|
(1,129
|
)
|
|
439
|
|
|
(690
|
)
|
|
518
|
|
|
(186
|
)
|
|
332
|
|
|||||||||
Total other comprehensive income/(loss)
|
$
|
5,147
|
|
|
$
|
(1,989
|
)
|
|
$
|
3,158
|
|
|
$
|
(58
|
)
|
|
$
|
1
|
|
|
$
|
(57
|
)
|
|
$
|
1,972
|
|
|
$
|
(736
|
)
|
|
$
|
1,236
|
|
302
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Income tax expense/(benefit)
|
||||||||||||
Year ended December 31,
(in millions)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Current income tax expense
|
|
|
|
|
|
|
||||||
U.S. federal
|
|
$
|
3,225
|
|
|
$
|
3,719
|
|
|
$
|
4,001
|
|
Non-U.S.
|
|
1,782
|
|
|
1,183
|
|
|
2,712
|
|
|||
U.S. state and local
|
|
1,496
|
|
|
1,178
|
|
|
1,744
|
|
|||
Total current income tax expense
|
|
6,503
|
|
|
6,080
|
|
|
8,457
|
|
|||
Deferred income tax expense/(benefit)
|
|
|
|
|
|
|
||||||
U.S. federal
|
|
2,238
|
|
|
2,109
|
|
|
(753
|
)
|
|||
Non-U.S.
|
|
(327
|
)
|
|
102
|
|
|
169
|
|
|||
U.S. state and local
|
|
(781
|
)
|
|
(518
|
)
|
|
(384
|
)
|
|||
Total deferred income tax expense/(benefit)
|
|
1,130
|
|
|
1,693
|
|
|
(968
|
)
|
|||
Total income tax expense
|
|
$
|
7,633
|
|
|
$
|
7,773
|
|
|
$
|
7,489
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
303
|
Effective tax rate
|
|||||||||
Year ended December 31,
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Statutory U.S. federal tax rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increase/(decrease) in tax rate resulting from:
|
|
|
|
|
|
|
|||
U.S. state and local income taxes, net of U.S. federal income tax benefit
|
|
1.6
|
|
|
1.6
|
|
|
3.6
|
|
Tax-exempt income
|
|
(2.9
|
)
|
|
(2.1
|
)
|
|
(2.4
|
)
|
Non-U.S. subsidiary earnings
(a)
|
|
(2.4
|
)
|
|
(2.3
|
)
|
|
(2.2
|
)
|
Business tax credits
|
|
(4.2
|
)
|
|
(4.0
|
)
|
|
(3.7
|
)
|
Other, net
|
|
(0.7
|
)
|
|
0.9
|
|
|
(0.2
|
)
|
Effective tax rate
|
|
26.4
|
%
|
|
29.1
|
%
|
|
30.1
|
%
|
(a)
|
Includes earnings deemed to be reinvested indefinitely in non-U.S. subsidiaries.
|
Deferred taxes
|
|
|
|
|
||||
December 31, (in millions)
|
|
2012
|
|
|
2011
|
|
||
Deferred tax assets
|
|
|
|
|
||||
Allowance for loan losses
|
|
$
|
8,712
|
|
|
$
|
10,689
|
|
Employee benefits
|
|
4,308
|
|
|
4,570
|
|
||
Accrued expenses and other
(a)
|
|
12,393
|
|
|
11,183
|
|
||
Non-U.S. operations
|
|
3,537
|
|
|
2,943
|
|
||
Tax attribute carryforwards
|
|
1,062
|
|
|
1,547
|
|
||
Gross deferred tax assets
(a)
|
|
30,012
|
|
|
30,932
|
|
||
Valuation allowance
|
|
(689
|
)
|
|
(1,303
|
)
|
||
Deferred tax assets, net of valuation allowance
(a)
|
|
$
|
29,323
|
|
|
$
|
29,629
|
|
Deferred tax liabilities
|
|
|
|
|
||||
Depreciation and amortization
(a)
|
|
$
|
2,563
|
|
|
$
|
2,799
|
|
Mortgage servicing rights, net of hedges
(a)
|
|
5,336
|
|
|
4,396
|
|
||
Leasing transactions
(a)
|
|
2,242
|
|
|
2,348
|
|
||
Non-U.S. operations
|
|
3,582
|
|
|
2,790
|
|
||
Other, net
(a)
|
|
4,340
|
|
|
2,520
|
|
||
Gross deferred tax liabilities
(a)
|
|
18,063
|
|
|
14,853
|
|
||
Net deferred tax assets
|
|
$
|
11,260
|
|
|
$
|
14,776
|
|
(a)
|
The prior period has been revised to conform with the current presentation.
|
304
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Unrecognized tax benefits
|
||||||||||||
Year ended December 31,
(in millions)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Balance at January 1,
|
|
$
|
7,189
|
|
|
$
|
7,767
|
|
|
$
|
6,608
|
|
Increases based on tax positions related to the current period
|
|
680
|
|
|
516
|
|
|
813
|
|
|||
Decreases based on tax positions related to the current period
|
|
—
|
|
|
(110
|
)
|
|
(24
|
)
|
|||
Increases based on tax positions related to prior periods
|
|
234
|
|
|
496
|
|
|
1,681
|
|
|||
Decreases based on tax positions related to prior periods
|
|
(853
|
)
|
|
(1,433
|
)
|
|
(1,198
|
)
|
|||
Decreases related to settlements with taxing authorities
|
|
(50
|
)
|
|
(16
|
)
|
|
(74
|
)
|
|||
Decreases related to a lapse of applicable statute of limitations
|
|
(42
|
)
|
|
(31
|
)
|
|
(39
|
)
|
|||
Balance at December 31,
|
|
$
|
7,158
|
|
|
$
|
7,189
|
|
|
$
|
7,767
|
|
December 31, 2012
|
|
Periods under examination
|
|
Status
|
JPMorgan Chase – U.S.
|
|
2003 - 2005
|
|
Field examination completed, JPMorgan Chase intends to file refund claims
|
JPMorgan Chase – U.S.
|
|
2006 - 2010
|
|
Field examination
|
Bear Stearns – U.S.
|
|
2006 – 2008
|
|
Field examination
|
JPMorgan Chase – United Kingdom
|
|
2006 – 2010
|
|
Field examination
|
JPMorgan Chase – New York State and City
|
|
2005 – 2007
|
|
Field examination
|
JPMorgan Chase – California
|
|
2006 – 2008
|
|
Field examination
|
(a)
|
For purposes of this table, non-U.S. income is defined as income generated from operations located outside the U.S.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
305
|
306
|
|
JPMorgan Chase & Co./2012 Annual Report
|
December 31,
|
JPMorgan Chase & Co.
(d)
|
|
JPMorgan Chase Bank, N.A.
(d)
|
|
Chase Bank USA, N.A.
(d)
|
|
Well-capitalized ratios
(e)
|
|
Minimum capital ratios
(e)
|
|
||||||||||||||||||||
(in millions, except ratios)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
||||||||||||||||
Regulatory capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Tier 1
(a)
|
$
|
160,002
|
|
|
$
|
150,384
|
|
|
$
|
111,827
|
|
|
$
|
98,426
|
|
|
$
|
9,648
|
|
|
$
|
11,903
|
|
|
|
|
|
|
||
Total
|
194,036
|
|
|
188,088
|
|
|
146,870
|
|
|
136,017
|
|
|
13,131
|
|
|
15,448
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Risk-weighted
(b)
|
$
|
1,270,378
|
|
|
$
|
1,221,198
|
|
|
$
|
1,094,155
|
|
|
$
|
1,042,898
|
|
|
$
|
103,593
|
|
|
$
|
107,421
|
|
|
|
|
|
|
||
Adjusted average
(c)
|
2,243,242
|
|
|
2,202,087
|
|
|
1,815,816
|
|
|
1,789,194
|
|
|
103,688
|
|
|
106,312
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Capital ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Tier 1
(a)
|
12.6
|
%
|
|
12.3
|
%
|
|
10.2
|
%
|
|
9.4
|
%
|
|
9.3
|
%
|
|
11.1
|
%
|
|
6.0
|
%
|
|
4.0
|
%
|
|
||||||
Total
|
15.3
|
|
|
15.4
|
|
|
13.4
|
|
|
13.0
|
|
|
12.7
|
|
|
14.4
|
|
|
10.0
|
|
|
8.0
|
|
|
||||||
Tier 1 leverage
|
7.1
|
|
|
6.8
|
|
|
6.2
|
|
|
5.5
|
|
|
9.3
|
|
|
11.2
|
|
|
5.0
|
|
(f)
|
3.0
|
|
(g)
|
(a)
|
JPMorgan Chase redeemed
$9.0 billion
of trust preferred securities effective July 12, 2012. At
December 31, 2012
, for
JPMorgan Chase
and
JPMorgan Chase Bank, N.A.
, trust preferred securities were
$10.2 billion
and
$600 million
, respectively. If these securities were excluded from the calculation at
December 31, 2012
, Tier 1 capital would be
$149.8 billion
and
$111.2 billion
, respectively, and the Tier 1 capital ratio would be
11.8%
and
10.2%
, respectively. At
December 31, 2012
, Chase Bank USA, N.A. had
no
trust preferred securities.
|
(b)
|
Includes off–balance sheet risk-weighted assets at
December 31, 2012
, of
$304.5 billion
,
$297.1 billion
and
$16 million
, and at
December 31, 2011
, of
$301.1 billion
,
$291.0 billion
and
$38 million
, for
JPMorgan Chase
,
JPMorgan Chase Bank, N.A.
and Chase Bank USA, N.A., respectively.
|
(c)
|
Adjusted average assets, for purposes of calculating the leverage ratio, include total quarterly average assets adjusted for unrealized gains/(losses) on securities, less deductions for disallowed goodwill and other intangible assets, investments in certain subsidiaries, and the total adjusted carrying value of nonfinancial equity investments that are subject to deductions from Tier 1 capital.
|
(d)
|
Asset and capital amounts for
JPMorgan Chase
’s banking subsidiaries reflect intercompany transactions; whereas the respective amounts for
JPMorgan Chase
reflect the elimination of intercompany transactions.
|
(e)
|
As defined by the regulations issued by the Federal Reserve, OCC and FDIC.
|
(f)
|
Represents requirements for banking subsidiaries pursuant to regulations issued under the FDIC Improvement Act. There is no Tier 1 leverage component in the definition of a well-capitalized bank holding company.
|
(g)
|
The minimum Tier 1 leverage ratio for bank holding companies and banks is
3%
or
4%
, depending on factors specified in regulations issued by the Federal Reserve and OCC.
|
Note:
|
Rating agencies allow measures of capital to be adjusted upward for deferred tax liabilities, which have resulted from both nontaxable business combinations and from tax-deductible goodwill. The Firm had deferred tax liabilities resulting from nontaxable business combinations totaling
$291 million
and
$414 million
at
December 31, 2012
and
2011
, respectively; and deferred tax liabilities resulting from tax-deductible goodwill of
$2.5 billion
and
$2.3 billion
at
December 31, 2012
and
2011
, respectively.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
307
|
December 31, (in millions)
|
|
2012
|
|
|
2011
|
|
||
Tier 1 capital
|
|
|
|
|
||||
Total stockholders’ equity
|
|
$
|
204,069
|
|
|
$
|
183,573
|
|
Effect of certain items in accumulated other comprehensive income/(loss) excluded from Tier 1 capital
|
|
(4,198
|
)
|
|
(970
|
)
|
||
Qualifying hybrid securities and noncontrolling interests
(a)
|
|
10,608
|
|
|
19,668
|
|
||
Less: Goodwill
(b)
|
|
45,663
|
|
|
45,873
|
|
||
Fair value DVA on structured notes and derivative liabilities related to the Firm’s credit quality
|
|
1,577
|
|
|
2,150
|
|
||
Investments in certain subsidiaries
|
|
926
|
|
|
993
|
|
||
Other intangible assets
(b)
|
|
2,311
|
|
|
2,871
|
|
||
Total Tier 1 capital
|
|
160,002
|
|
|
150,384
|
|
||
Tier 2 capital
|
|
|
|
|
||||
Long-term debt and other instruments qualifying as Tier 2
|
|
18,061
|
|
|
22,275
|
|
||
Qualifying allowance for credit losses
|
|
15,995
|
|
|
15,504
|
|
||
Adjustment for investments in certain subsidiaries and other
|
|
(22
|
)
|
|
(75
|
)
|
||
Total Tier 2 capital
|
|
34,034
|
|
|
37,704
|
|
||
Total qualifying capital
|
|
$
|
194,036
|
|
|
$
|
188,088
|
|
(a)
|
Primarily includes trust preferred securities of certain business trusts.
|
(b)
|
Goodwill and other intangible assets are net of any associated deferred tax liabilities.
|
308
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(a)
|
At
December 31, 2012
and
2011
, reflects the contractual amount net of risk participations totaling
$473 million
and
$1.1 billion
, respectively, for other unfunded commitments to extend credit;
$16.6 billion
and
$19.8 billion
, respectively, for standby letters of credit and other financial guarantees; and
$690 million
and
$974 million
, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.
|
(b)
|
At
December 31, 2012
and
2011
, included credit enhancements and bond and commercial paper liquidity commitments to U.S. states and municipalities, hospitals and other non-profit entities of
$44.5 billion
and
$48.6 billion
, respectively. These commitments also include liquidity facilities to nonconsolidated municipal bond VIEs; for further information, see Note 16 on pages
280–291
of this
Annual Report
.
|
(c)
|
At
December 31, 2012
and
2011
, included unissued standby letters of credit commitments of
$44.4 billion
and
$44.1 billion
, respectively.
|
(d)
|
At
December 31, 2012
and
2011
,
JPMorgan Chase
held collateral relating to
$42.7 billion
and
$41.5 billion
, respectively, of standby letters of credit; and
$1.1 billion
and
$1.3 billion
, respectively, of other letters of credit.
|
(e)
|
At
December 31, 2012
and
2011
, collateral held by the Firm in support of securities lending indemnification agreements was
$165.1 billion
and
$186.3 billion
, respectively. Securities lending collateral comprises primarily cash and securities issued by governments that are members of the Organisation for Economic Co-operation and Development (“OECD”) and U.S. government agencies.
|
(f)
|
At
December 31, 2012
and
2011
, the amount of commitments related to forward-starting reverse repurchase agreements and securities borrowing agreements were
$13.2 billion
and
$14.4 billion
, respectively. Commitments related to unsettled reverse repurchase agreements and securities borrowing agreements with regular-way settlement periods were
$21.7 billion
and
$25.5 billion
, at
December 31, 2012
and
2011
, respectively.
|
(g)
|
At
December 31, 2012
and
2011
, included unfunded commitments of
$370 million
and
$789 million
, respectively, to third-party private equity funds; and
$1.5 billion
and
$1.5 billion
, respectively, to other equity investments. These commitments included
$333 million
and
$820 million
, respectively, related to investments that are generally fair valued at net asset value as discussed in Note 3 on pages
196–214
of this
Annual Report
. In addition, at
December 31, 2012
and
2011
, included letters of credit hedged by derivative transactions and managed on a market risk basis of
$4.5 billion
and
$3.9 billion
, respectively.
|
(h)
|
For lending-related products, the carrying value represents the allowance for lending-related commitments and the guarantee liability; for derivative-related products, the carrying value represents the fair value.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
309
|
310
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
2012
|
|
2011
|
||||||||||||||
December 31,
(in millions)
|
Standby letters of
credit and other financial guarantees
|
Other letters
of credit
|
|
Standby letters of
credit and other financial guarantees
|
Other letters
of credit
|
||||||||||||
Investment-grade
(a)
|
|
$
|
77,081
|
|
|
$
|
3,998
|
|
|
|
$
|
78,884
|
|
|
$
|
4,105
|
|
Noninvestment-grade
(a)
|
|
23,848
|
|
|
1,575
|
|
|
|
23,015
|
|
|
1,281
|
|
||||
Total contractual amount
|
|
$
|
100,929
|
|
(b)
|
$
|
5,573
|
|
|
|
$
|
101,899
|
|
(b)
|
$
|
5,386
|
|
Allowance for lending-related commitments
|
|
$
|
282
|
|
|
$
|
2
|
|
|
|
$
|
317
|
|
|
$
|
2
|
|
Commitments with collateral
|
|
42,654
|
|
|
1,145
|
|
|
|
41,529
|
|
|
1,264
|
|
(a)
|
The ratings scale is based on the Firm’s internal ratings which generally correspond to ratings as defined by S&P and Moody’s.
|
(b)
|
At
December 31, 2012
and
2011
, included unissued standby letters of credit commitments of
$44.4 billion
and
$44.1 billion
, respectively.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
311
|
312
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(i)
|
the level of outstanding unresolved repurchase demands,
|
(ii)
|
estimated probable future repurchase demands considering information about file requests, delinquent and liquidated loans, resolved and unresolved mortgage insurance rescission notices and the Firm’s historical experience,
|
(iii)
|
the potential ability of the Firm to cure the defects identified in the repurchase demands (“cure rate”),
|
(iv)
|
the estimated severity of loss upon repurchase of the loan or collateral, make-whole settlement, or indemnification,
|
(v)
|
the Firm’s potential ability to recover its losses from third-party originators, and
|
(vi)
|
the terms of agreements with certain mortgage insurers and other parties.
|
Year ended December 31,
(in millions)
|
2012
|
|
2011
|
|
2010
|
|
||||||
Repurchase liability at beginning of period
|
$
|
3,557
|
|
|
$
|
3,285
|
|
|
$
|
1,705
|
|
|
Realized losses
(b)
|
(1,158
|
)
|
|
(1,263
|
)
|
|
(1,423
|
)
|
|
|||
Provision for repurchase losses
(c)
|
412
|
|
|
1,535
|
|
|
3,003
|
|
|
|||
Repurchase liability at end of period
|
$
|
2,811
|
|
|
$
|
3,557
|
|
|
$
|
3,285
|
|
|
(a)
|
All mortgage repurchase demands associated with private-label securitizations are separately evaluated by the Firm in establishing its litigation reserves.
|
(b)
|
Includes principal losses and accrued interest on repurchased loans, “make-whole” settlements, settlements with claimants, and certain related expense. Make-whole settlements were
$524 million
,
$640 million
and
$632 million
, for the years ended
December 31, 2012
,
2011
and
2010
, respectively.
|
(c)
|
Includes
$112 million
,
$52 million
and
$47 million
of provision related to new loan sales for the years ended
December 31, 2012
,
2011
and
2010
, respectively.
|
JPMorgan Chase & Co./2012 Annual Report
|
|
313
|
314
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Year ended December 31, (in millions)
|
|
||
2013
|
$
|
1,788
|
|
2014
|
1,711
|
|
|
2015
|
1,571
|
|
|
2016
|
1,431
|
|
|
2017
|
1,318
|
|
|
After 2017
|
6,536
|
|
|
Total minimum payments required
(a)
|
14,355
|
|
|
Less: Sublease rentals under noncancelable subleases
|
(1,732
|
)
|
|
Net minimum payment required
|
$
|
12,623
|
|
(a)
|
Lease restoration obligations are accrued in accordance with U.S. GAAP, and are not reported as a required minimum lease payment.
|
Year ended December 31,
|
|
|
|
|
|
|
||||||
(in millions)
|
|
2012
|
|
2011
|
|
2010
|
||||||
Gross rental expense
|
|
$
|
2,212
|
|
|
$
|
2,228
|
|
|
$
|
2,212
|
|
Sublease rental income
|
|
(288
|
)
|
|
(403
|
)
|
|
(545
|
)
|
|||
Net rental expense
|
|
$
|
1,924
|
|
|
$
|
1,825
|
|
|
$
|
1,667
|
|
December 31, (in billions)
|
|
2012
|
|
2011
|
||||
Securities
|
|
$
|
110.1
|
|
|
$
|
134.8
|
|
Loans
|
|
207.2
|
|
|
198.6
|
|
||
Trading assets and other
|
|
155.5
|
|
|
122.8
|
|
||
Total assets pledged
|
|
$
|
472.8
|
|
|
$
|
456.2
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
315
|
316
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
317
|
318
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
319
|
320
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
321
|
322
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
323
|
324
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
325
|
As of or for the year ended December 31, (in millions)
|
|
Revenue
(c)
|
|
Expense
(d)
|
|
Income before income tax
expense
|
|
Net income
|
|
Total assets
|
|
||||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Europe/Middle East and Africa
|
|
$
|
10,522
|
|
|
$
|
9,326
|
|
|
$
|
1,196
|
|
|
$
|
1,508
|
|
|
$
|
553,147
|
|
(e)
|
Asia and Pacific
|
|
5,605
|
|
|
3,952
|
|
|
1,653
|
|
|
1,048
|
|
|
167,955
|
|
|
|||||
Latin America and the Caribbean
|
|
2,328
|
|
|
1,580
|
|
|
748
|
|
|
454
|
|
|
53,984
|
|
|
|||||
Total international
|
|
18,455
|
|
|
14,858
|
|
|
3,597
|
|
|
3,010
|
|
|
775,086
|
|
|
|||||
North America
(a)
|
|
78,576
|
|
|
53,256
|
|
|
25,320
|
|
|
18,274
|
|
|
1,584,055
|
|
|
|||||
Total
|
|
$
|
97,031
|
|
|
$
|
68,114
|
|
|
$
|
28,917
|
|
|
$
|
21,284
|
|
|
$
|
2,359,141
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Europe/Middle East and Africa
|
|
$
|
16,212
|
|
|
$
|
9,157
|
|
|
$
|
7,055
|
|
|
$
|
4,844
|
|
|
$
|
566,866
|
|
(e)
|
Asia and Pacific
|
|
5,992
|
|
|
3,802
|
|
|
2,190
|
|
|
1,380
|
|
|
156,411
|
|
|
|||||
Latin America and the Caribbean
|
|
2,273
|
|
|
1,711
|
|
|
562
|
|
|
340
|
|
|
51,481
|
|
|
|||||
Total international
|
|
24,477
|
|
|
14,670
|
|
|
9,807
|
|
|
6,564
|
|
|
774,758
|
|
|
|||||
North America
(a)
|
|
72,757
|
|
|
55,815
|
|
|
16,942
|
|
|
12,412
|
|
|
1,491,034
|
|
|
|||||
Total
|
|
$
|
97,234
|
|
|
$
|
70,485
|
|
|
$
|
26,749
|
|
|
$
|
18,976
|
|
|
$
|
2,265,792
|
|
|
2010
(b)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Europe/Middle East and Africa
|
|
$
|
14,135
|
|
|
$
|
8,777
|
|
|
$
|
5,358
|
|
|
$
|
3,635
|
|
|
$
|
446,547
|
|
(e)
|
Asia and Pacific
|
|
6,073
|
|
|
3,677
|
|
|
2,396
|
|
|
1,614
|
|
|
151,379
|
|
|
|||||
Latin America and the Caribbean
|
|
1,750
|
|
|
1,181
|
|
|
569
|
|
|
362
|
|
|
33,192
|
|
|
|||||
Total international
|
|
21,958
|
|
|
13,635
|
|
|
8,323
|
|
|
5,611
|
|
|
631,118
|
|
|
|||||
North America
(a)
|
|
80,736
|
|
|
64,200
|
|
|
16,536
|
|
|
11,759
|
|
|
1,486,487
|
|
|
|||||
Total
|
|
$
|
102,694
|
|
|
$
|
77,835
|
|
|
$
|
24,859
|
|
|
$
|
17,370
|
|
|
$
|
2,117,605
|
|
|
(a)
|
Substantially reflects the U.S.
|
(b)
|
The regional allocation of revenue, expense and net income for 2010 has been modified to conform with current allocation methodologies.
|
(c)
|
Revenue is composed of net interest income and noninterest revenue.
|
(d)
|
Expense is composed of noninterest expense and the provision for credit losses.
|
(e)
|
Total assets for the U.K. were approximately
$498 billion
,
$510 billion
, and
$419 billion
at December 31, 2012, 2011 and 2010, respectively.
|
326
|
|
JPMorgan Chase & Co./2012 Annual Report
|
JPMorgan Chase & Co./2012 Annual Report
|
|
327
|
As of or the year ended
December 31,
(in millions, except ratios)
|
Consumer & Community Banking
|
|
Corporate & Investment Bank
|
|
Commercial Banking
|
|
Asset Management
|
||||||||||||||||||||||||||||||||
2012
|
|
2011
|
|
2010
|
|
|
2012
|
2011
|
2010
|
|
2012
|
2011
|
2010
|
|
2012
|
2011
|
2010
|
||||||||||||||||||||||
Noninterest revenue
|
$
|
20,795
|
|
$
|
15,306
|
|
$
|
15,513
|
|
|
$
|
23,104
|
|
$
|
22,523
|
|
$
|
22,889
|
|
|
$
|
2,283
|
|
$
|
2,195
|
|
$
|
2,200
|
|
|
$
|
7,847
|
|
$
|
7,895
|
|
$
|
7,485
|
|
Net interest income
|
29,150
|
|
30,381
|
|
33,414
|
|
|
11,222
|
|
11,461
|
|
10,588
|
|
|
4,542
|
|
4,223
|
|
3,840
|
|
|
2,099
|
|
1,648
|
|
1,499
|
|
||||||||||||
Total net revenue
|
49,945
|
|
45,687
|
|
48,927
|
|
|
34,326
|
|
33,984
|
|
33,477
|
|
|
6,825
|
|
6,418
|
|
6,040
|
|
|
9,946
|
|
9,543
|
|
8,984
|
|
||||||||||||
Provision for credit losses
|
3,774
|
|
7,620
|
|
17,489
|
|
|
(479
|
)
|
(285
|
)
|
(1,247
|
)
|
|
41
|
|
208
|
|
297
|
|
|
86
|
|
67
|
|
86
|
|
||||||||||||
Noninterest expense
|
28,790
|
|
27,544
|
|
23,706
|
|
|
21,850
|
|
21,979
|
|
22,869
|
|
|
2,389
|
|
2,278
|
|
2,199
|
|
|
7,104
|
|
7,002
|
|
6,112
|
|
||||||||||||
Income/(loss) before income tax expense/(benefit)
|
17,381
|
|
10,523
|
|
7,732
|
|
|
12,955
|
|
12,290
|
|
11,855
|
|
|
4,395
|
|
3,932
|
|
3,544
|
|
|
2,756
|
|
2,474
|
|
2,786
|
|
||||||||||||
Income tax expense/(benefit)
|
6,770
|
|
4,321
|
|
3,154
|
|
|
4,549
|
|
4,297
|
|
4,137
|
|
|
1,749
|
|
1,565
|
|
1,460
|
|
|
1,053
|
|
882
|
|
1,076
|
|
||||||||||||
Net income/(loss)
|
$
|
10,611
|
|
$
|
6,202
|
|
$
|
4,578
|
|
|
$
|
8,406
|
|
$
|
7,993
|
|
$
|
7,718
|
|
|
$
|
2,646
|
|
$
|
2,367
|
|
$
|
2,084
|
|
|
$
|
1,703
|
|
$
|
1,592
|
|
$
|
1,710
|
|
Average common equity
|
$
|
43,000
|
|
$
|
41,000
|
|
$
|
43,000
|
|
|
$
|
47,500
|
|
$
|
47,000
|
|
$
|
46,500
|
|
|
$
|
9,500
|
|
$
|
8,000
|
|
$
|
8,000
|
|
|
$
|
7,000
|
|
$
|
6,500
|
|
$
|
6,500
|
|
Total assets
|
463,608
|
|
483,307
|
|
508,775
|
|
|
876,107
|
|
845,095
|
|
870,631
|
|
|
181,502
|
|
158,040
|
|
142,646
|
|
|
108,999
|
|
86,242
|
|
68,997
|
|
||||||||||||
Return on average common equity
|
25
|
%
|
15
|
%
|
11
|
%
|
|
18
|
%
|
17
|
%
|
17
|
%
|
|
28
|
%
|
30
|
%
|
26
|
%
|
|
24
|
%
|
25
|
%
|
26
|
%
|
||||||||||||
Overhead ratio
|
58
|
|
60
|
|
48
|
|
|
64
|
|
65
|
|
68
|
|
|
35
|
|
35
|
|
36
|
|
|
71
|
|
73
|
|
68
|
|
(a)
|
Managed basis starts with the reported U.S. GAAP results and includes certain reclassifications as discussed below that do not have any impact on net income as reported by the lines of business or by the Firm as a whole.
|
(b)
|
Segment managed results reflect revenue on a FTE basis with the corresponding income tax impact recorded within income tax expense/(benefit). These adjustments are eliminated in reconciling items to arrive at the Firm’s reported U.S. GAAP results. FTE adjustments for the years ended December 31, 2012, 2011, and 2010, were as follows.
|
Year ended December 31, (in millions)
|
2012
|
|
2011
|
|
2010
|
|
|||
Noninterest revenue
|
$
|
2,116
|
|
$
|
2,003
|
|
$
|
1,745
|
|
Net interest income
|
743
|
|
530
|
|
403
|
|
|||
Income tax expense
|
2,859
|
|
2,533
|
|
2,148
|
|
328
|
|
JPMorgan Chase & Co./2012 Annual Report
|
Corporate/Private Equity
|
|
Reconciling Items
(b)
|
|
Total
|
||||||||||||||||||||||||
2012
|
2011
|
2010
|
|
2012
|
2011
|
2010
|
|
2012
|
2011
|
2010
|
||||||||||||||||||
$
|
208
|
|
$
|
3,629
|
|
$
|
5,351
|
|
|
$
|
(2,116
|
)
|
$
|
(2,003
|
)
|
$
|
(1,745
|
)
|
|
$
|
52,121
|
|
$
|
49,545
|
|
$
|
51,693
|
|
(1,360
|
)
|
506
|
|
2,063
|
|
|
(743
|
)
|
(530
|
)
|
(403
|
)
|
|
44,910
|
|
47,689
|
|
51,001
|
|
|||||||||
(1,152
|
)
|
4,135
|
|
7,414
|
|
|
(2,859
|
)
|
(2,533
|
)
|
(2,148
|
)
|
|
97,031
|
|
97,234
|
|
102,694
|
|
|||||||||
(37
|
)
|
(36
|
)
|
14
|
|
|
—
|
|
—
|
|
—
|
|
|
3,385
|
|
7,574
|
|
16,639
|
|
|||||||||
4,596
|
|
4,108
|
|
6,310
|
|
|
—
|
|
—
|
|
—
|
|
|
64,729
|
|
62,911
|
|
61,196
|
|
|||||||||
(5,711
|
)
|
63
|
|
1,090
|
|
|
(2,859
|
)
|
(2,533
|
)
|
(2,148
|
)
|
|
28,917
|
|
26,749
|
|
24,859
|
|
|||||||||
(3,629
|
)
|
(759
|
)
|
(190
|
)
|
|
(2,859
|
)
|
(2,533
|
)
|
(2,148
|
)
|
|
7,633
|
|
7,773
|
|
7,489
|
|
|||||||||
$
|
(2,082
|
)
|
$
|
822
|
|
$
|
1,280
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
21,284
|
|
$
|
18,976
|
|
$
|
17,370
|
|
$
|
77,352
|
|
$
|
70,766
|
|
$
|
57,520
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
184,352
|
|
$
|
173,266
|
|
$
|
161,520
|
|
728,925
|
|
693,108
|
|
526,556
|
|
|
NA
|
|
NA
|
|
NA
|
|
|
2,359,141
|
|
2,265,792
|
|
2,117,605
|
|
|||||||||
NM
|
|
NM
|
|
NM
|
|
|
NM
|
|
NM
|
|
NM
|
|
|
11
|
%
|
11
|
%
|
10
|
%
|
|||||||||
NM
|
|
NM
|
|
NM
|
|
|
NM
|
|
NM
|
|
NM
|
|
|
67
|
|
65
|
|
60
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
329
|
Parent company – Statements of income
|
|
|
|
|
||||||||
Year ended December 31,
(in millions)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Income
|
|
|
|
|
|
|
||||||
Dividends from subsidiaries and affiliates:
|
|
|
|
|
|
|
||||||
Bank and bank holding company
|
|
$
|
4,828
|
|
|
$
|
10,852
|
|
|
$
|
16,554
|
|
Nonbank
(a)
|
|
1,972
|
|
|
2,651
|
|
|
932
|
|
|||
Interest income from subsidiaries
|
|
1,041
|
|
|
1,099
|
|
|
985
|
|
|||
Other interest income
|
|
293
|
|
|
384
|
|
|
294
|
|
|||
Other income from subsidiaries,
primarily fees:
|
|
|
|
|
|
|
||||||
Bank and bank holding company
|
|
939
|
|
|
809
|
|
|
680
|
|
|||
Nonbank
|
|
1,207
|
|
|
92
|
|
|
312
|
|
|||
Other income/(loss)
|
|
579
|
|
|
(85
|
)
|
|
157
|
|
|||
Total income
|
|
10,859
|
|
|
15,802
|
|
|
19,914
|
|
|||
Expense
|
|
|
|
|
|
|
||||||
Interest expense to subsidiaries and affiliates
(a)
|
|
836
|
|
|
1,121
|
|
|
1,263
|
|
|||
Other interest expense
|
|
4,679
|
|
|
4,447
|
|
|
3,782
|
|
|||
Other noninterest expense
|
|
2,399
|
|
|
649
|
|
|
540
|
|
|||
Total expense
|
|
7,914
|
|
|
6,217
|
|
|
5,585
|
|
|||
Income before income tax benefit and undistributed net income of subsidiaries
|
|
2,945
|
|
|
9,585
|
|
|
14,329
|
|
|||
Income tax benefit
|
|
1,665
|
|
|
1,089
|
|
|
511
|
|
|||
Equity in undistributed net income of subsidiaries
|
|
16,674
|
|
|
8,302
|
|
|
2,530
|
|
|||
Net income
|
|
$
|
21,284
|
|
|
$
|
18,976
|
|
|
$
|
17,370
|
|
Parent company – Balance sheets
|
|
|
|
|
|
|||
December 31, (in millions)
|
|
2012
|
|
|
2011
|
|
||
Assets
|
|
|
|
|
||||
Cash and due from banks
|
|
$
|
216
|
|
|
$
|
132
|
|
Deposits with banking subsidiaries
|
|
75,521
|
|
|
91,622
|
|
||
Trading assets
|
|
8,128
|
|
|
18,485
|
|
||
Available-for-sale securities
|
|
3,541
|
|
|
3,657
|
|
||
Loans
|
|
2,101
|
|
|
1,880
|
|
||
Advances to, and receivables from, subsidiaries:
|
|
|
|
|
||||
Bank and bank holding company
|
|
39,773
|
|
|
39,888
|
|
||
Nonbank
|
|
86,904
|
|
|
83,138
|
|
||
Investments (at equity) in subsidiaries and affiliates:
|
|
|
|
|
||||
Bank and bank holding company
|
|
170,276
|
|
|
157,160
|
|
||
Nonbank
(a)
|
|
45,305
|
|
|
42,231
|
|
||
Goodwill and other intangibles
|
|
1,018
|
|
|
1,027
|
|
||
Other assets
|
|
16,481
|
|
|
15,506
|
|
||
Total assets
|
|
$
|
449,264
|
|
|
$
|
454,726
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
||||
Borrowings from, and payables to, subsidiaries and affiliates
(a)
|
|
$
|
16,744
|
|
|
$
|
30,231
|
|
Other borrowed funds, primarily commercial paper
|
|
62,010
|
|
|
59,891
|
|
||
Other liabilities
|
|
8,208
|
|
|
7,653
|
|
||
Long-term debt
(b)(c)
|
|
158,233
|
|
|
173,378
|
|
||
Total liabilities
(c)
|
|
245,195
|
|
|
271,153
|
|
||
Total stockholders’ equity
|
|
204,069
|
|
|
183,573
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
449,264
|
|
|
$
|
454,726
|
|
Parent company – Statements of cash flows
|
|
|
||||||||||
Year ended December 31,
(in millions)
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
Operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
21,284
|
|
|
$
|
18,976
|
|
|
$
|
17,370
|
|
Less: Net income of subsidiaries and affiliates
(a)
|
|
23,474
|
|
|
21,805
|
|
|
20,016
|
|
|||
Parent company net loss
|
|
(2,190
|
)
|
|
(2,829
|
)
|
|
(2,646
|
)
|
|||
Cash dividends from subsidiaries and affiliates
(a)
|
|
6,798
|
|
|
13,414
|
|
|
17,432
|
|
|||
Other, net
|
|
2,401
|
|
|
889
|
|
|
1,685
|
|
|||
Net cash provided by operating activities
|
|
7,009
|
|
|
11,474
|
|
|
16,471
|
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Net change in:
|
|
|
|
|
|
|
||||||
Deposits with banking subsidiaries
|
|
16,100
|
|
|
20,866
|
|
|
7,692
|
|
|||
Available-for-sale securities:
|
|
|
|
|
|
|
||||||
Purchases
|
|
(364
|
)
|
|
(1,109
|
)
|
|
(1,387
|
)
|
|||
Proceeds from sales and maturities
|
|
621
|
|
|
886
|
|
|
745
|
|
|||
Loans, net
|
|
(350
|
)
|
|
153
|
|
|
(90
|
)
|
|||
Advances to subsidiaries, net
|
|
5,951
|
|
|
(28,105
|
)
|
|
8,051
|
|
|||
Investments (at equity) in subsidiaries and affiliates, net
(a)
|
|
3,546
|
|
|
(1,530
|
)
|
|
(871
|
)
|
|||
Net cash provided by/(used in) investing activities
|
|
25,504
|
|
|
(8,839
|
)
|
|
14,140
|
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Net change in borrowings from subsidiaries and affiliates
(a)
|
|
(14,038
|
)
|
|
2,827
|
|
|
(2,039
|
)
|
|||
Net change in other borrowed funds
|
|
3,736
|
|
|
16,268
|
|
|
(11,843
|
)
|
|||
Proceeds from the issuance of long-term debt
|
|
28,172
|
|
|
33,566
|
|
|
21,610
|
|
|||
Repayments of long-term debt
|
|
(44,240
|
)
|
|
(41,747
|
)
|
|
(32,893
|
)
|
|||
Excess tax benefits related to stock-based compensation
|
|
255
|
|
|
867
|
|
|
26
|
|
|||
Redemption of preferred stock
|
|
—
|
|
|
—
|
|
|
(352
|
)
|
|||
Proceeds from issuance of preferred stock
|
|
1,234
|
|
|
—
|
|
|
—
|
|
|||
Treasury stock and warrants repurchased
|
|
(1,653
|
)
|
|
(8,863
|
)
|
|
(2,999
|
)
|
|||
Dividends paid
|
|
(5,194
|
)
|
|
(3,895
|
)
|
|
(1,486
|
)
|
|||
All other financing activities, net
|
|
(701
|
)
|
|
(1,622
|
)
|
|
(641
|
)
|
|||
Net cash used in financing activities
|
|
(32,429
|
)
|
|
(2,599
|
)
|
|
(30,617
|
)
|
|||
Net increase/(decrease) in cash and due from banks
|
|
84
|
|
|
36
|
|
|
(6
|
)
|
|||
Cash and due from banks at the beginning of the year, primarily with bank subsidiaries
|
|
132
|
|
|
96
|
|
|
102
|
|
|||
Cash and due from banks at the end of the year, primarily with bank subsidiaries
|
|
$
|
216
|
|
|
$
|
132
|
|
|
$
|
96
|
|
Cash interest paid
|
|
$
|
5,690
|
|
|
$
|
5,800
|
|
|
$
|
5,090
|
|
Cash income taxes paid, net
|
|
3,080
|
|
|
5,885
|
|
|
7,001
|
|
(a)
|
Affiliates include trusts that issued guaranteed capital debt securities (“issuer trusts”). The Parent received dividends of
$12 million
,
$13 million
and
$13 million
from the issuer trusts in 2012, 2011 and 2010, respectively. For further discussion on these issuer trusts, see Note 21 on pages
297–299
of this Annual Report.
|
(b)
|
At December 31, 2012, long-term debt that contractually matures in 2013 through 2017 totaled
$19.3 billion
,
$25.1 billion
,
$21.6 billion
,
$17.5 billion
and
$17.3 billion
, respectively.
|
(c)
|
For information regarding the Firm’s guarantees of its subsidiaries’ obligations, see Note 21 and Note 29 on pages
297–299
and
308–315
, respectively, of this Annual Report.
|
330
|
|
JPMorgan Chase & Co./2012 Annual Report
|
(Table continued on next page)
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
As of or for the period ended
|
2012
|
|
2011
|
||||||||||||||||||||||
(in millions, except per share, ratio and headcount data)
|
4th quarter
|
3rd quarter
|
2nd quarter
|
1st quarter
|
|
4th quarter
|
3rd quarter
|
2nd quarter
|
1st quarter
|
||||||||||||||||
Selected income statement data
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total net revenue
|
$
|
23,653
|
|
$
|
25,146
|
|
$
|
22,180
|
|
$
|
26,052
|
|
|
$
|
21,471
|
|
$
|
23,763
|
|
$
|
26,779
|
|
$
|
25,221
|
|
Total noninterest expense
|
16,047
|
|
15,371
|
|
14,966
|
|
18,345
|
|
|
14,540
|
|
15,534
|
|
16,842
|
|
15,995
|
|
||||||||
Pre-provision profit
|
7,606
|
|
9,775
|
|
7,214
|
|
7,707
|
|
|
6,931
|
|
8,229
|
|
9,937
|
|
9,226
|
|
||||||||
Provision for credit losses
|
656
|
|
1,789
|
|
214
|
|
726
|
|
|
2,184
|
|
2,411
|
|
1,810
|
|
1,169
|
|
||||||||
Income before income tax expense
|
6,950
|
|
7,986
|
|
7,000
|
|
6,981
|
|
|
4,747
|
|
5,818
|
|
8,127
|
|
8,057
|
|
||||||||
Income tax expense
|
1,258
|
|
2,278
|
|
2,040
|
|
2,057
|
|
|
1,019
|
|
1,556
|
|
2,696
|
|
2,502
|
|
||||||||
Net income
|
$
|
5,692
|
|
$
|
5,708
|
|
$
|
4,960
|
|
$
|
4,924
|
|
|
$
|
3,728
|
|
$
|
4,262
|
|
$
|
5,431
|
|
$
|
5,555
|
|
Per common share data
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income per share: Basic
|
$
|
1.40
|
|
$
|
1.41
|
|
$
|
1.22
|
|
$
|
1.20
|
|
|
$
|
0.90
|
|
$
|
1.02
|
|
$
|
1.28
|
|
$
|
1.29
|
|
Diluted
|
1.39
|
|
1.40
|
|
1.21
|
|
1.19
|
|
|
0.90
|
|
1.02
|
|
1.27
|
|
1.28
|
|
||||||||
Cash dividends declared per share
(a)
|
0.30
|
|
0.30
|
|
0.30
|
|
0.30
|
|
|
0.25
|
|
0.25
|
|
0.25
|
|
0.25
|
|
||||||||
Book value per share
|
51.27
|
|
50.17
|
|
48.40
|
|
47.48
|
|
|
46.59
|
|
45.93
|
|
44.77
|
|
43.34
|
|
||||||||
Tangible book value per share
(b)
|
38.75
|
|
37.53
|
|
35.71
|
|
34.79
|
|
|
33.69
|
|
33.05
|
|
32.01
|
|
30.77
|
|
||||||||
Common shares outstanding
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Average: Basic
|
3,806.7
|
|
3,803.3
|
|
3,808.9
|
|
3,818.8
|
|
|
3,801.9
|
|
3,859.6
|
|
3,958.4
|
|
3,981.6
|
|
||||||||
Diluted
|
3,820.9
|
|
3,813.9
|
|
3,820.5
|
|
3,833.4
|
|
|
3,811.7
|
|
3,872.2
|
|
3,983.2
|
|
4,014.1
|
|
||||||||
Common shares at period-end
|
3,804.0
|
|
3,799.6
|
|
3,796.8
|
|
3,822.0
|
|
|
3,772.7
|
|
3,798.9
|
|
3,910.2
|
|
3,986.6
|
|
||||||||
Share price
(c)
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
High
|
$
|
44.54
|
|
$
|
42.09
|
|
$
|
46.35
|
|
$
|
46.49
|
|
|
$
|
37.54
|
|
$
|
42.55
|
|
$
|
47.80
|
|
$
|
48.36
|
|
Low
|
38.83
|
|
33.10
|
|
30.83
|
|
34.01
|
|
|
27.85
|
|
28.53
|
|
39.24
|
|
42.65
|
|
||||||||
Close
|
43.97
|
|
40.48
|
|
35.73
|
|
45.98
|
|
|
33.25
|
|
30.12
|
|
40.94
|
|
46.10
|
|
||||||||
Market capitalization
|
167,260
|
|
153,806
|
|
135,661
|
|
175,737
|
|
|
125,442
|
|
114,422
|
|
160,083
|
|
183,783
|
|
||||||||
Selected ratios
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Return on common equity
|
11
|
%
|
12
|
%
|
11
|
%
|
11
|
%
|
|
8
|
%
|
9
|
%
|
12
|
%
|
13
|
%
|
||||||||
Return on tangible common equity
(b)
|
15
|
|
16
|
|
15
|
|
15
|
|
|
11
|
|
13
|
|
17
|
|
18
|
|
||||||||
Return on assets
|
0.98
|
|
1.01
|
|
0.88
|
|
0.88
|
|
|
0.65
|
|
0.76
|
|
0.99
|
|
1.07
|
|
||||||||
Return on risk-weighted assets
(d)
|
1.76
|
|
1.74
|
|
1.52
|
|
1.57
|
|
|
1.21
|
|
1.40
|
|
1.82
|
|
1.90
|
|
||||||||
Overhead ratio
|
68
|
|
61
|
|
67
|
|
70
|
|
|
68
|
|
65
|
|
63
|
|
63
|
|
||||||||
Deposits-to-loans ratio
|
163
|
|
158
|
|
153
|
|
157
|
|
|
156
|
|
157
|
|
152
|
|
145
|
|
||||||||
Tier 1 capital ratio
|
12.6
|
|
11.9
|
|
11.3
|
|
11.9
|
|
|
12.3
|
|
12.1
|
|
12.4
|
|
12.3
|
|
||||||||
Total capital ratio
|
15.3
|
|
14.7
|
|
14.0
|
|
14.9
|
|
|
15.4
|
|
15.3
|
|
15.7
|
|
15.6
|
|
||||||||
Tier 1 leverage ratio
|
7.1
|
|
7.1
|
|
6.7
|
|
7.1
|
|
|
6.8
|
|
6.8
|
|
7.0
|
|
7.2
|
|
||||||||
Tier 1 common capital ratio
(e)
|
11.0
|
|
10.4
|
|
9.9
|
|
9.8
|
|
|
10.1
|
|
9.9
|
|
10.1
|
|
10.0
|
|
||||||||
Selected balance sheet data (period-end)
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Trading assets
|
$
|
450,028
|
|
$
|
447,053
|
|
$
|
417,324
|
|
$
|
455,633
|
|
|
$
|
443,963
|
|
$
|
461,531
|
|
$
|
458,722
|
|
$
|
501,148
|
|
Securities
|
371,152
|
|
365,901
|
|
354,595
|
|
381,742
|
|
|
364,793
|
|
339,349
|
|
324,741
|
|
334,800
|
|
||||||||
Loans
|
733,796
|
|
721,947
|
|
727,571
|
|
720,967
|
|
|
723,720
|
|
696,853
|
|
689,736
|
|
685,996
|
|
||||||||
Total assets
|
2,359,141
|
|
2,321,284
|
|
2,290,146
|
|
2,320,164
|
|
|
2,265,792
|
|
2,289,240
|
|
2,246,764
|
|
2,198,161
|
|
||||||||
Deposits
|
1,193,593
|
|
1,139,611
|
|
1,115,886
|
|
1,128,512
|
|
|
1,127,806
|
|
1,092,708
|
|
1,048,685
|
|
995,829
|
|
||||||||
Long-term debt
|
249,024
|
|
241,140
|
|
239,539
|
|
255,831
|
|
|
256,775
|
|
273,688
|
|
279,228
|
|
269,616
|
|
||||||||
Common stockholders’ equity
|
195,011
|
|
190,635
|
|
183,772
|
|
181,469
|
|
|
175,773
|
|
174,487
|
|
175,079
|
|
172,798
|
|
||||||||
Total stockholders’ equity
|
204,069
|
|
199,639
|
|
191,572
|
|
189,269
|
|
|
183,573
|
|
182,287
|
|
182,879
|
|
180,598
|
|
||||||||
Headcount
|
258,965
|
|
259,547
|
|
262,882
|
|
261,453
|
|
|
260,157
|
|
256,663
|
|
250,095
|
|
242,929
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
331
|
(Table continued from previous page)
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
As of or for the period ended
|
2012
|
|
2011
|
||||||||||||||||||||||
(in millions, except ratio data)
|
4th quarter
|
3rd quarter
|
2nd quarter
|
1st quarter
|
|
4th quarter
|
3rd quarter
|
2nd quarter
|
1st quarter
|
||||||||||||||||
Credit quality metrics
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Allowance for credit losses
|
$
|
22,604
|
|
$
|
23,576
|
|
$
|
24,555
|
|
$
|
26,621
|
|
|
$
|
28,282
|
|
$
|
29,036
|
|
$
|
29,146
|
|
$
|
30,438
|
|
Allowance for loan losses to total retained loans
|
3.02
|
%
|
3.18
|
%
|
3.29
|
%
|
3.63
|
%
|
|
3.84
|
%
|
4.09
|
%
|
4.16
|
%
|
4.40
|
%
|
||||||||
Allowance for loan losses to retained loans excluding purchased credit-impaired loans
(f)
|
2.43
|
|
2.61
|
|
2.74
|
|
3.11
|
|
|
3.35
|
|
3.74
|
|
3.83
|
|
4.10
|
|
||||||||
Nonperforming assets
|
$
|
11,734
|
|
$
|
12,481
|
|
$
|
11,397
|
|
$
|
11,953
|
|
|
$
|
11,315
|
|
$
|
12,468
|
|
$
|
13,435
|
|
$
|
15,149
|
|
Net charge-offs
|
1,628
|
|
2,770
|
|
2,278
|
|
2,387
|
|
|
2,907
|
|
2,507
|
|
3,103
|
|
3,720
|
|
||||||||
Net charge-off rate
|
0.90
|
%
|
1.53
|
%
|
1.27
|
%
|
1.35
|
%
|
|
1.64
|
%
|
1.44
|
%
|
1.83
|
%
|
2.22
|
%
|
(a)
|
On March 13, 2012, the Firm’s quarterly stock dividend was increased from $0.25 to $0.30 per share.
|
(b)
|
Tangible book value per share and ROTCE are non-GAAP financial measures. Tangible book value per share represents the Firm’s tangible common equity divided by period-end common shares. ROTCE measures the Firm’s annualized earnings as a percentage of tangible common equity. For further discussion of these measures, see Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages
76–77
of this Annual Report.
|
(c)
|
Share prices shown for JPMorgan Chase’s common stock are from the New York Stock Exchange. JPMorgan Chase’s common stock is also listed and traded on the London Stock Exchange and the Tokyo Stock Exchange.
|
(d)
|
Return on Basel I risk-weighted assets is the annualized earnings of the Firm divided by its average risk-weighted assets.
|
(e)
|
Basel I Tier 1 common capital ratio (“Tier 1 common ratio”) is Tier 1 common capital (“Tier 1 common”) divided by risk-weighted assets. The Firm uses Tier 1 common capital along with the other capital measures to assess and monitor its capital position. For further discussion of the Tier 1 common ratio, see Regulatory capital on pages
117–120
of this Annual Report.
|
(f)
|
Excludes the impact of residential real estate PCI loans. For further discussion, see Allowance for credit losses on pages
159–162
of this Annual Report.
|
332
|
|
JPMorgan Chase & Co./2012 Annual Report
|
|
|
333
|
334
|
|
|
|
|
335
|
(Table continued on next page)
|
2012
|
||||||||||
Year ended December 31,
(Taxable-equivalent interest and rates; in millions, except rates)
|
Average
balance
|
|
Interest
(e)
|
|
Average
rate
|
||||||
Assets
|
|
|
|
|
|
|
|||||
Deposits with banks
|
$
|
118,463
|
|
|
$
|
555
|
|
|
0.47
|
%
|
|
Federal funds sold and securities purchased under resale agreements
|
239,703
|
|
|
2,442
|
|
|
1.02
|
|
|
||
Securities borrowed
|
131,446
|
|
|
(3
|
)
|
(a)
|
—
|
|
|
||
Trading assets – debt instruments
|
234,224
|
|
|
9,285
|
|
|
3.96
|
|
|
||
Securities
|
363,230
|
|
|
8,322
|
|
|
2.29
|
|
(g)
|
||
Loans
|
722,384
|
|
|
35,946
|
|
(f)
|
4.98
|
|
|
||
Other assets
(b)
|
32,967
|
|
|
259
|
|
|
0.79
|
|
|
||
Total interest-earning assets
|
1,842,417
|
|
|
56,806
|
|
|
3.08
|
|
|
||
Allowance for loan losses
|
(24,906
|
)
|
|
|
|
|
|
||||
Cash and due from banks
|
51,410
|
|
|
|
|
|
|
||||
Trading assets – equity instruments
|
115,113
|
|
|
|
|
|
|
||||
Trading assets – derivative receivables
|
85,744
|
|
|
|
|
|
|
||||
Goodwill
|
48,176
|
|
|
|
|
|
|
||||
Other intangible assets:
|
|
|
|
|
|
|
|||||
Mortgage servicing rights
|
7,133
|
|
|
|
|
|
|
||||
Purchased credit card relationships
|
470
|
|
|
|
|
|
|
||||
Other intangibles
|
2,363
|
|
|
|
|
|
|
||||
Other assets
|
144,061
|
|
|
|
|
|
|
||||
Total assets
|
$
|
2,271,981
|
|
|
|
|
|
|
|||
Liabilities
|
|
|
|
|
|
|
|||||
Interest-bearing deposits
|
$
|
751,098
|
|
|
$
|
2,655
|
|
|
0.35
|
%
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
248,561
|
|
|
535
|
|
|
0.22
|
|
|
||
Commercial paper
|
50,780
|
|
|
91
|
|
|
0.18
|
|
|
||
Trading liabilities - debt, short-term and other liabilities
(c)
|
193,459
|
|
|
1,162
|
|
|
0.60
|
|
|
||
Beneficial interests issued by consolidated VIEs
|
60,234
|
|
|
648
|
|
|
1.08
|
|
|
||
Long-term debt
|
245,662
|
|
|
6,062
|
|
|
2.47
|
|
|
||
Total interest-bearing liabilities
|
1,549,794
|
|
|
11,153
|
|
|
0.72
|
|
|
||
Noninterest-bearing deposits
|
354,785
|
|
|
|
|
|
|
||||
Trading liabilities – equity instruments
|
14,172
|
|
|
|
|
|
|
||||
Trading liabilities – derivative payables
|
76,162
|
|
|
|
|
|
|
||||
All other liabilities, including the allowance for lending-related commitments
|
84,480
|
|
|
|
|
|
|
||||
Total liabilities
|
2,079,393
|
|
|
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
|
|
|
|||||
Preferred stock
|
8,236
|
|
|
|
|
|
|
||||
Common stockholders’ equity
|
184,352
|
|
|
|
|
|
|
||||
Total stockholders’ equity
|
192,588
|
|
(d)
|
|
|
|
|
||||
Total liabilities and stockholders’ equity
|
$
|
2,271,981
|
|
|
|
|
|
|
|||
Interest rate spread
|
|
|
|
|
2.36
|
%
|
|
||||
Net interest income and net yield on interest-earning assets
|
|
|
$
|
45,653
|
|
|
2.48
|
|
|
(a)
|
Negative interest income for the year ended December 31, 2012, is a result of increased client-driven demand for certain securities combined with the impact of low interest rates; the offset of this matched book activity is reflected as lower net interest expense reported within trading liabilities - debt, short-term and other liabilities.
|
(b)
|
Includes margin loans.
|
(c)
|
Includes brokerage customer payables.
|
(d)
|
The ratio of average stockholders’ equity to average assets was
8.5%
for
2012
,
8.2%
for 2011, and
8.3%
for
2010
. The return on average stockholders’ equity, based on net income, was
11.1%
for 2012,
10.5%
for
2011
, and
10.2%
for
2010
.
|
(e)
|
Interest includes the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable.
|
(f)
|
Fees and commissions on loans included in loan interest amounted to
$1.3 billion
in
2012
,
$1.2 billion
in
2011
, and
$1.5 billion
in
2010
.
|
(g)
|
The annualized rate for available-for-sale securities based on amortized cost was
2.35%
in
2012
,
2.84%
in
2011
, and
3.00%
in
2010
, and does not give effect to changes in fair value that are reflected in accumulated other comprehensive income/(loss).
|
(h)
|
Reflects a benefit from the favorable market environments for dollar-roll financings.
|
336
|
|
|
(Table continued from previous page)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2011
|
|
2010
|
||||||||||||||||||||
Average
balance
|
|
Interest
(e)
|
|
Average
rate
|
|
Average
balance
|
|
Interest
(e)
|
|
Average
rate
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$
|
79,783
|
|
|
$
|
599
|
|
|
0.75
|
%
|
|
|
$
|
47,611
|
|
|
$
|
345
|
|
|
0.72
|
%
|
|
211,800
|
|
|
2,523
|
|
|
1.19
|
|
|
|
188,394
|
|
|
1,786
|
|
|
0.95
|
|
|
||||
128,777
|
|
|
110
|
|
|
0.09
|
|
|
|
117,416
|
|
|
175
|
|
|
0.15
|
|
|
||||
264,941
|
|
|
11,309
|
|
|
4.27
|
|
|
|
254,898
|
|
|
11,128
|
|
|
4.37
|
|
|
||||
337,894
|
|
|
9,462
|
|
|
2.80
|
|
(g)
|
|
330,166
|
|
|
9,729
|
|
|
2.95
|
|
(g)
|
||||
693,523
|
|
|
37,214
|
|
(f)
|
5.37
|
|
|
|
703,540
|
|
|
40,481
|
|
(f)
|
5.75
|
|
|
||||
44,637
|
|
|
606
|
|
|
1.36
|
|
|
|
35,496
|
|
|
541
|
|
|
1.52
|
|
|
||||
1,761,355
|
|
|
61,823
|
|
|
3.51
|
|
|
|
1,677,521
|
|
|
64,185
|
|
|
3.83
|
|
|
||||
(29,483
|
)
|
|
|
|
|
|
|
(36,588
|
)
|
|
|
|
|
|
||||||||
40,725
|
|
|
|
|
|
|
|
30,318
|
|
|
|
|
|
|
||||||||
128,949
|
|
|
|
|
|
|
|
99,543
|
|
|
|
|
|
|
||||||||
90,003
|
|
|
|
|
|
|
|
84,676
|
|
|
|
|
|
|
||||||||
48,632
|
|
|
|
|
|
|
|
48,618
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
11,249
|
|
|
|
|
|
|
|
12,896
|
|
|
|
|
|
|
||||||||
744
|
|
|
|
|
|
|
|
1,061
|
|
|
|
|
|
|
||||||||
2,889
|
|
|
|
|
|
|
|
3,117
|
|
|
|
|
|
|
||||||||
143,135
|
|
|
|
|
|
|
|
132,089
|
|
|
|
|
|
|
||||||||
$
|
2,198,198
|
|
|
|
|
|
|
|
$
|
2,053,251
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$
|
733,683
|
|
|
$
|
3,855
|
|
|
0.53
|
%
|
|
|
$
|
668,640
|
|
|
$
|
3,424
|
|
|
0.51
|
%
|
|
256,283
|
|
|
534
|
|
|
0.21
|
|
|
|
278,603
|
|
|
(192
|
)
|
(h)
|
(0.07
|
)
|
(h)
|
||||
42,653
|
|
|
73
|
|
|
0.17
|
|
|
|
36,000
|
|
|
72
|
|
|
0.20
|
|
|
||||
206,531
|
|
|
2,266
|
|
|
1.10
|
|
|
|
186,059
|
|
|
2,484
|
|
|
1.34
|
|
|
||||
68,523
|
|
|
767
|
|
|
1.12
|
|
|
|
87,493
|
|
|
1,145
|
|
|
1.31
|
|
|
||||
272,985
|
|
|
6,109
|
|
|
2.24
|
|
|
|
273,074
|
|
|
5,848
|
|
|
2.14
|
|
|
||||
1,580,658
|
|
|
13,604
|
|
|
0.86
|
|
|
|
1,529,869
|
|
|
12,781
|
|
|
0.84
|
|
|
||||
278,307
|
|
|
|
|
|
|
|
212,414
|
|
|
|
|
|
|
||||||||
5,316
|
|
|
|
|
|
|
|
6,172
|
|
|
|
|
|
|
||||||||
71,539
|
|
|
|
|
|
|
|
65,714
|
|
|
|
|
|
|
||||||||
81,312
|
|
|
|
|
|
|
|
69,539
|
|
|
|
|
|
|
||||||||
2,017,132
|
|
|
|
|
|
|
|
1,883,708
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
7,800
|
|
|
|
|
|
|
|
8,023
|
|
|
|
|
|
|
||||||||
173,266
|
|
|
|
|
|
|
|
161,520
|
|
|
|
|
|
|
||||||||
181,066
|
|
(d)
|
|
|
|
|
|
169,543
|
|
(d)
|
|
|
|
|
||||||||
$
|
2,198,198
|
|
|
|
|
|
|
|
$
|
2,053,251
|
|
|
|
|
|
|
||||||
|
|
|
|
2.65
|
%
|
|
|
|
|
|
|
2.99
|
%
|
|
||||||||
|
|
$
|
48,219
|
|
|
2.74
|
|
|
|
|
|
$
|
51,404
|
|
|
3.06
|
|
|
|
|
337
|
(Table continued on next page)
|
|
|
|
|
|
|||||
|
2012
|
|||||||||
Year ended December 31,
(Taxable-equivalent interest and rates; in millions, except rates)
|
Average balance
|
Interest
|
|
Average rate
|
||||||
Interest-earning assets
|
|
|
|
|
|
|||||
Deposits with banks:
|
|
|
|
|
|
|||||
U.S.
|
$
|
79,992
|
|
$
|
168
|
|
|
0.21
|
%
|
|
Non-U.S.
|
38,471
|
|
387
|
|
|
1.01
|
|
|
||
Federal funds sold and securities purchased under resale agreements:
|
|
|
|
|
|
|||||
U.S.
|
137,874
|
|
872
|
|
|
0.63
|
|
|
||
Non-U.S.
|
101,829
|
|
1,570
|
|
|
1.54
|
|
|
||
Securities borrowed:
|
|
|
|
|
|
|||||
U.S.
|
70,084
|
|
(407
|
)
|
(c)
|
(0.58
|
)
|
|
||
Non-U.S.
|
61,362
|
|
404
|
|
|
0.66
|
|
|
||
Trading assets – debt instruments:
|
|
|
|
|
|
|||||
U.S.
|
119,854
|
|
4,592
|
|
|
3.83
|
|
|
||
Non-U.S.
|
114,370
|
|
4,693
|
|
|
4.10
|
|
|
||
Securities:
|
|
|
|
|
|
|||||
U.S.
|
161,727
|
|
3,991
|
|
|
2.47
|
|
|
||
Non-U.S.
|
201,503
|
|
4,331
|
|
|
2.15
|
|
|
||
Loans
(a)
:
|
|
|
|
|
|
|||||
U.S.
|
620,615
|
|
33,167
|
|
|
5.34
|
|
|
||
Non-U.S.
|
101,769
|
|
2,779
|
|
|
2.73
|
|
|
||
Other assets, predominantly U.S.
|
32,967
|
|
259
|
|
|
0.79
|
|
|
||
Total interest-earning assets
|
1,842,417
|
|
56,806
|
|
|
3.08
|
|
|
||
Interest-bearing liabilities
|
|
|
|
|
|
|||||
Interest-bearing deposits:
|
|
|
|
|
|
|||||
U.S.
|
512,589
|
|
1,345
|
|
|
0.26
|
|
|
||
Non-U.S.
|
238,509
|
|
1,310
|
|
|
0.55
|
|
|
||
Federal funds purchased and securities loaned or sold under repurchase agreements:
|
|
|
|
|
|
|||||
U.S.
|
181,460
|
|
4
|
|
(d)
|
—
|
|
(d)
|
||
Non-U.S.
|
67,101
|
|
531
|
|
|
0.79
|
|
|
||
Trading liabilities - debt, short-term and other liabilities
(a)
:
|
|
|
|
|
|
|||||
U.S.
|
176,755
|
|
(82
|
)
|
(c)
|
(0.05
|
)
|
|
||
Non-U.S.
|
67,484
|
|
1,335
|
|
|
1.98
|
|
|
||
Beneficial interests issued by consolidated VIEs, predominantly U.S.
|
60,234
|
|
648
|
|
|
1.08
|
|
|
||
Long-term debt:
|
|
|
|
|
|
|||||
U.S.
|
230,101
|
|
5,998
|
|
|
2.61
|
|
|
||
Non-U.S.
|
15,561
|
|
64
|
|
|
0.41
|
|
|
||
Intracompany funding:
|
|
|
|
|
|
|||||
U.S.
|
(253,906
|
)
|
(551
|
)
|
|
—
|
|
|
||
Non-U.S.
|
253,906
|
|
551
|
|
|
—
|
|
|
||
Total interest-bearing liabilities
|
1,549,794
|
|
11,153
|
|
|
0.72
|
|
|
||
Noninterest-bearing liabilities
(b)
|
292,623
|
|
|
|
|
|
||||
Total investable funds
|
$
|
1,842,417
|
|
$
|
11,153
|
|
|
0.60
|
%
|
|
Net interest income and net yield:
|
|
$
|
45,653
|
|
|
2.48
|
%
|
|
||
U.S.
|
|
35,315
|
|
|
2.91
|
|
|
|||
Non-U.S.
|
|
10,338
|
|
|
1.65
|
|
|
|||
Percentage of total assets and liabilities attributable to non-U.S. operations:
|
|
|
|
|
|
|||||
Assets
|
|
|
|
36.2
|
|
|
||||
Liabilities
|
|
|
|
23.4
|
|
|
(a)
|
2011 has been reclassified to conform with the current presentation.
|
(b)
|
Represents the amount of noninterest-bearing liabilities funding interest-earning assets.
|
(c)
|
Negative interest income is a result of increased client-driven demand for certain securities combined with the impact of low interest rates; the offset of this matched book activity is reflected as lower net interest expense reported within trading liabilities - debt, short-term and other liabilities.
|
(d)
|
Reflects a benefit from the favorable market environments for dollar-roll financings.
|
338
|
|
|
(Table continued from previous page)
|
|
|
|
|
|
|
|
|
||||||||||||
2011
|
|
2010
|
|
|||||||||||||||||
Average balance
|
Interest
|
|
Average rate
|
|
|
Average balance
|
Interest
|
|
Average rate
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$
|
51,123
|
|
$
|
127
|
|
|
0.25
|
%
|
|
|
$
|
26,148
|
|
$
|
88
|
|
|
0.34
|
%
|
|
28,660
|
|
472
|
|
|
1.65
|
|
|
|
21,463
|
|
257
|
|
|
1.20
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
106,927
|
|
690
|
|
|
0.65
|
|
|
|
89,619
|
|
830
|
|
|
0.93
|
|
|
||||
104,873
|
|
1,833
|
|
|
1.75
|
|
|
|
98,775
|
|
956
|
|
|
0.97
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
65,702
|
|
(358
|
)
|
(c)
|
(0.54
|
)
|
|
|
67,031
|
|
(237
|
)
|
(c)
|
(0.35
|
)
|
|
||||
63,075
|
|
468
|
|
|
0.74
|
|
|
|
50,385
|
|
412
|
|
|
0.82
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
123,078
|
|
5,071
|
|
|
4.12
|
|
|
|
119,660
|
|
5,513
|
|
|
4.61
|
|
|
||||
141,863
|
|
6,238
|
|
|
4.40
|
|
|
|
135,238
|
|
5,615
|
|
|
4.15
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
183,692
|
|
5,761
|
|
|
3.14
|
|
|
|
226,345
|
|
7,210
|
|
|
3.19
|
|
|
||||
154,202
|
|
3,701
|
|
|
2.40
|
|
|
|
103,821
|
|
2,519
|
|
|
2.43
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
611,057
|
|
34,846
|
|
|
5.70
|
|
|
|
644,504
|
|
38,800
|
|
|
6.02
|
|
|
||||
82,466
|
|
2,368
|
|
|
2.87
|
|
|
|
59,036
|
|
1,681
|
|
|
2.85
|
|
|
||||
44,637
|
|
606
|
|
|
1.36
|
|
|
|
35,496
|
|
541
|
|
|
1.52
|
|
|
||||
1,761,355
|
|
61,823
|
|
|
3.51
|
|
|
|
1,677,521
|
|
64,185
|
|
|
3.83
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
472,645
|
|
1,680
|
|
|
0.36
|
|
|
|
433,227
|
|
2,156
|
|
|
0.50
|
|
|
||||
261,038
|
|
2,175
|
|
|
0.83
|
|
|
|
235,413
|
|
1,268
|
|
|
0.54
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
203,899
|
|
(92
|
)
|
(d)
|
(0.05
|
)
|
(d)
|
|
231,710
|
|
(635
|
)
|
(d)
|
(0.27
|
)
|
(d)
|
||||
52,384
|
|
626
|
|
|
1.20
|
|
|
|
46,893
|
|
443
|
|
|
0.95
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
171,731
|
|
573
|
|
|
0.34
|
|
|
|
145,422
|
|
682
|
|
|
0.47
|
|
|
||||
77,453
|
|
1,766
|
|
|
2.27
|
|
|
|
76,637
|
|
1,874
|
|
|
2.45
|
|
|
||||
68,523
|
|
767
|
|
|
1.12
|
|
|
|
87,493
|
|
1,145
|
|
|
1.31
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
252,506
|
|
6,041
|
|
|
2.39
|
|
|
|
247,813
|
|
5,752
|
|
|
2.32
|
|
|
||||
20,479
|
|
68
|
|
|
0.33
|
|
|
|
25,261
|
|
96
|
|
|
0.38
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(190,282
|
)
|
(600
|
)
|
|
—
|
|
|
|
(88,286
|
)
|
(359
|
)
|
|
—
|
|
|
||||
190,282
|
|
600
|
|
|
—
|
|
|
|
88,286
|
|
359
|
|
|
—
|
|
|
||||
1,580,658
|
|
13,604
|
|
|
0.86
|
|
|
|
1,529,869
|
|
12,781
|
|
|
0.84
|
|
|
||||
180,697
|
|
|
|
|
|
|
147,652
|
|
|
|
|
|
||||||||
$
|
1,761,355
|
|
$
|
13,604
|
|
|
0.77
|
%
|
|
|
$
|
1,677,521
|
|
$
|
12,781
|
|
|
0.76
|
%
|
|
|
$
|
48,219
|
|
|
2.74
|
%
|
|
|
|
$
|
51,404
|
|
|
3.06
|
%
|
|
||||
|
38,399
|
|
|
3.25
|
|
|
|
|
44,059
|
|
|
3.65
|
|
|
||||||
|
9,820
|
|
|
1.69
|
|
|
|
|
7,345
|
|
|
1.56
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
36.3
|
|
|
|
|
|
|
31.9
|
|
|
||||||||
|
|
|
24.9
|
|
|
|
|
|
|
25.2
|
|
|
|
|
339
|
|
2012 versus 2011
|
|
2011 versus 2010
|
||||||||||||||||||||
|
Increase/(decrease) due to change in:
|
|
|
|
Increase/(decrease) due to change in:
|
|
|
||||||||||||||||
Year ended December 31,
(On a taxable-equivalent basis: in millions)
|
Volume
|
|
Rate
|
|
Net
change
|
|
Volume
|
|
Rate
|
|
Net
change
|
||||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits with banks:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
$
|
61
|
|
|
$
|
(20
|
)
|
|
$
|
41
|
|
|
$
|
63
|
|
|
$
|
(24
|
)
|
|
$
|
39
|
|
Non-U.S.
|
98
|
|
|
(183
|
)
|
|
(85
|
)
|
|
118
|
|
|
97
|
|
|
215
|
|
||||||
Federal funds sold and securities purchased under resale agreements:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
203
|
|
|
(21
|
)
|
|
182
|
|
|
111
|
|
|
(251
|
)
|
|
(140
|
)
|
||||||
Non-U.S.
|
(43
|
)
|
|
(220
|
)
|
|
(263
|
)
|
|
107
|
|
|
770
|
|
|
877
|
|
||||||
Securities borrowed:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
(23
|
)
|
|
(26
|
)
|
|
(49
|
)
|
|
6
|
|
|
(127
|
)
|
|
(121
|
)
|
||||||
Non-U.S.
|
(14
|
)
|
|
(50
|
)
|
|
(64
|
)
|
|
96
|
|
|
(40
|
)
|
|
56
|
|
||||||
Trading assets – debt instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
(122
|
)
|
|
(357
|
)
|
|
(479
|
)
|
|
144
|
|
|
(586
|
)
|
|
(442
|
)
|
||||||
Non-U.S.
|
(1,119
|
)
|
|
(426
|
)
|
|
(1,545
|
)
|
|
285
|
|
|
338
|
|
|
623
|
|
||||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
(539
|
)
|
|
(1,231
|
)
|
|
(1,770
|
)
|
|
(1,336
|
)
|
|
(113
|
)
|
|
(1,449
|
)
|
||||||
Non-U.S.
|
1,016
|
|
|
(386
|
)
|
|
630
|
|
|
1,213
|
|
|
(31
|
)
|
|
1,182
|
|
||||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
521
|
|
|
(2,200
|
)
|
|
(1,679
|
)
|
|
(1,892
|
)
|
|
(2,062
|
)
|
|
(3,954
|
)
|
||||||
Non-U.S.
|
526
|
|
|
(115
|
)
|
|
411
|
|
|
675
|
|
|
12
|
|
|
687
|
|
||||||
Other assets, predominantly U.S.
|
(93
|
)
|
|
(254
|
)
|
|
(347
|
)
|
|
122
|
|
|
(57
|
)
|
|
65
|
|
||||||
Change in interest income
|
472
|
|
|
(5,489
|
)
|
|
(5,017
|
)
|
|
(288
|
)
|
|
(2,074
|
)
|
|
(2,362
|
)
|
||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
138
|
|
|
(473
|
)
|
|
(335
|
)
|
|
131
|
|
|
(607
|
)
|
|
(476
|
)
|
||||||
Non-U.S.
|
(134
|
)
|
|
(731
|
)
|
|
(865
|
)
|
|
224
|
|
|
683
|
|
|
907
|
|
||||||
Federal funds purchased and securities loaned or sold under repurchase agreements:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
(6
|
)
|
|
102
|
|
|
96
|
|
|
33
|
|
|
510
|
|
|
543
|
|
||||||
Non-U.S.
|
120
|
|
|
(215
|
)
|
|
(95
|
)
|
|
66
|
|
|
117
|
|
|
183
|
|
||||||
Trading liabilities - debt, short-term and other liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
15
|
|
|
(670
|
)
|
|
(655
|
)
|
|
80
|
|
|
(189
|
)
|
|
(109
|
)
|
||||||
Non-U.S.
|
(206
|
)
|
|
(225
|
)
|
|
(431
|
)
|
|
30
|
|
|
(138
|
)
|
|
(108
|
)
|
||||||
Beneficial interests issued by consolidated VIEs, predominantly U.S.
|
(92
|
)
|
|
(27
|
)
|
|
(119
|
)
|
|
(212
|
)
|
|
(166
|
)
|
|
(378
|
)
|
||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
(599
|
)
|
|
556
|
|
|
(43
|
)
|
|
116
|
|
|
173
|
|
|
289
|
|
||||||
Non-U.S.
|
(20
|
)
|
|
16
|
|
|
(4
|
)
|
|
(15
|
)
|
|
(13
|
)
|
|
(28
|
)
|
||||||
Intracompany funding:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
(141
|
)
|
|
190
|
|
|
49
|
|
|
(320
|
)
|
|
79
|
|
|
(241
|
)
|
||||||
Non-U.S.
|
141
|
|
|
(190
|
)
|
|
(49
|
)
|
|
320
|
|
|
(79
|
)
|
|
241
|
|
||||||
Change in interest expense
|
(784
|
)
|
|
(1,667
|
)
|
|
(2,451
|
)
|
|
453
|
|
|
370
|
|
|
823
|
|
||||||
Change in net interest income
|
$
|
1,256
|
|
|
$
|
(3,822
|
)
|
|
$
|
(2,566
|
)
|
|
$
|
(741
|
)
|
|
$
|
(2,444
|
)
|
|
$
|
(3,185
|
)
|
340
|
|
|
|
|
341
|
December 31, (in millions)
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||
U.S. Consumer, excluding credit card loans
|
|
|
|
|
|
||||||||||
Home equity
|
$
|
88,356
|
|
$
|
100,497
|
|
$
|
112,844
|
|
$
|
127,945
|
|
$
|
142,890
|
|
Mortgage
|
123,277
|
|
128,709
|
|
134,284
|
|
143,129
|
|
157,078
|
|
|||||
Auto
|
49,913
|
|
47,426
|
|
48,367
|
|
46,031
|
|
42,603
|
|
|||||
Other
|
31,074
|
|
31,795
|
|
32,123
|
|
33,392
|
|
35,537
|
|
|||||
Total U.S. Consumer, excluding credit card loans
|
292,620
|
|
308,427
|
|
327,618
|
|
350,497
|
|
378,108
|
|
|||||
Credit Card Loans
|
|
|
|
|
|
||||||||||
U.S. Credit Card loans
|
125,277
|
|
129,587
|
|
134,781
|
|
76,490
|
|
102,607
|
|
|||||
Non-U.S. Credit Card loans
|
2,716
|
|
2,690
|
|
2,895
|
|
2,296
|
|
2,139
|
|
|||||
Total Credit Card loans
|
127,993
|
|
132,277
|
|
137,676
|
|
78,786
|
|
104,746
|
|
|||||
Total Consumer loans
|
420,613
|
|
440,704
|
|
465,294
|
|
429,283
|
|
482,854
|
|
|||||
U.S. wholesale loans
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
77,900
|
|
65,958
|
|
50,912
|
|
51,113
|
|
74,153
|
|
|||||
Real estate
|
59,369
|
|
53,230
|
|
51,734
|
|
54,970
|
|
61,890
|
|
|||||
Financial institutions
|
10,708
|
|
8,489
|
|
12,120
|
|
13,557
|
|
20,953
|
|
|||||
Government agencies
|
7,962
|
|
7,236
|
|
6,408
|
|
5,634
|
|
5,919
|
|
|||||
Other
|
50,948
|
|
52,126
|
|
38,298
|
|
23,811
|
|
23,861
|
|
|||||
Total U.S. wholesale loans
|
206,887
|
|
187,039
|
|
159,472
|
|
149,085
|
|
186,776
|
|
|||||
Non-U.S. wholesale loans
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
36,674
|
|
31,108
|
|
19,053
|
|
20,188
|
|
35,291
|
|
|||||
Real estate
|
1,757
|
|
1,748
|
|
1,973
|
|
2,270
|
|
2,811
|
|
|||||
Financial institutions
|
26,564
|
|
30,262
|
|
20,043
|
|
11,848
|
|
17,552
|
|
|||||
Government agencies
|
1,586
|
|
583
|
|
870
|
|
1,707
|
|
602
|
|
|||||
Other
|
39,715
|
|
32,276
|
|
26,222
|
|
19,077
|
|
19,012
|
|
|||||
Total non-U.S. wholesale loans
|
106,296
|
|
95,977
|
|
68,161
|
|
55,090
|
|
75,268
|
|
|||||
Total wholesale loans
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
114,574
|
|
97,066
|
|
69,965
|
|
71,301
|
|
109,444
|
|
|||||
Real estate
|
61,126
|
|
54,978
|
|
53,707
|
|
57,240
|
|
64,701
|
|
|||||
Financial institutions
|
37,272
|
|
38,751
|
|
32,163
|
|
25,405
|
|
38,505
|
|
|||||
Government agencies
|
9,548
|
|
7,819
|
|
7,278
|
|
7,341
|
|
6,521
|
|
|||||
Other
|
90,663
|
|
84,402
|
|
64,520
|
|
42,888
|
|
42,873
|
|
|||||
Total wholesale loans
|
313,183
|
|
283,016
|
|
227,633
|
|
204,175
|
|
262,044
|
|
|||||
Total loans
(a)
|
$
|
733,796
|
|
$
|
723,720
|
|
$
|
692,927
|
|
$
|
633,458
|
|
$
|
744,898
|
|
Memo:
|
|
|
|
|
|
||||||||||
Loans held-for-sale
|
$
|
4,406
|
|
$
|
2,626
|
|
$
|
5,453
|
|
$
|
4,876
|
|
$
|
8,287
|
|
Loans at fair value
|
2,555
|
|
2,097
|
|
1,976
|
|
1,364
|
|
7,696
|
|
|||||
Total loans held-for-sale and loans at fair value
|
$
|
6,961
|
|
$
|
4,723
|
|
$
|
7,429
|
|
$
|
6,240
|
|
$
|
15,983
|
|
(a)
|
Loans (other than purchased credit-impaired loans and those for which the fair value option have been elected) are presented net of unearned income, unamortized discounts and premiums, and net deferred loan costs of
$2.5 billion
,
$2.7 billion
,
$1.9 billion
,
$1.4 billion
and
$2.0 billion
at
December 31, 2012
,
2011
,
2010
,
2009
and
2008
, respectively.
|
342
|
|
|
December 31, 2012 (in millions)
|
Within
1 year
(a)
|
1-5
years
|
After 5
years
|
Total
|
||||||||
U.S.
|
|
|
|
|
||||||||
Commercial and industrial
|
$
|
14,543
|
|
$
|
47,236
|
|
$
|
16,121
|
|
$
|
77,900
|
|
Real estate
|
4,656
|
|
13,559
|
|
41,154
|
|
59,369
|
|
||||
Financial institutions
|
4,887
|
|
4,277
|
|
1,544
|
|
10,708
|
|
||||
Government agencies
|
1,765
|
|
1,604
|
|
4,593
|
|
7,962
|
|
||||
Other
|
22,283
|
|
25,663
|
|
3,002
|
|
50,948
|
|
||||
Total U.S.
|
48,134
|
|
92,339
|
|
66,414
|
|
206,887
|
|
||||
Non-U.S.
|
|
|
|
|
||||||||
Commercial and industrial
|
13,523
|
|
15,083
|
|
8,068
|
|
36,674
|
|
||||
Real estate
|
479
|
|
1,126
|
|
152
|
|
1,757
|
|
||||
Financial institutions
|
22,237
|
|
3,641
|
|
686
|
|
26,564
|
|
||||
Government agencies
|
1,025
|
|
8
|
|
553
|
|
1,586
|
|
||||
Other
|
30,832
|
|
7,970
|
|
913
|
|
39,715
|
|
||||
Total non-U.S.
|
68,096
|
|
27,828
|
|
10,372
|
|
106,296
|
|
||||
Total wholesale loans
|
$
|
116,230
|
|
$
|
120,167
|
|
$
|
76,786
|
|
$
|
313,183
|
|
Loans at fixed interest rates
|
|
$
|
11,446
|
|
$
|
49,185
|
|
|
||||
Loans at variable interest rates
|
|
108,721
|
|
27,601
|
|
|
||||||
Total wholesale loans
|
|
$
|
120,167
|
|
$
|
76,786
|
|
|
(a)
|
Includes demand loans and overdrafts.
|
|
|||||||||||||||
December 31, (in millions)
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||
Nonperforming assets
|
|
|
|
|
|
||||||||||
U.S. nonaccrual loans:
|
|
|
|
|
|
||||||||||
Consumer, excluding credit card loans
|
$
|
9,174
|
|
$
|
7,411
|
|
$
|
8,833
|
|
$
|
10,657
|
|
$
|
6,567
|
|
Credit Card loans
|
1
|
|
1
|
|
2
|
|
3
|
|
4
|
|
|||||
Total U.S. nonaccrual consumer loans
|
9,175
|
|
7,412
|
|
8,835
|
|
10,660
|
|
6,571
|
|
|||||
Wholesale:
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
702
|
|
936
|
|
1,745
|
|
2,182
|
|
1,052
|
|
|||||
Real estate
|
520
|
|
886
|
|
2,390
|
|
2,647
|
|
806
|
|
|||||
Financial institutions
|
60
|
|
76
|
|
111
|
|
663
|
|
60
|
|
|||||
Government agencies
|
—
|
|
—
|
|
—
|
|
4
|
|
—
|
|
|||||
Other
|
153
|
|
234
|
|
267
|
|
348
|
|
205
|
|
|||||
Total U.S. wholesale nonaccrual loans
|
1,435
|
|
2,132
|
|
4,513
|
|
5,844
|
|
2,123
|
|
|||||
Total U.S. nonaccrual loans
|
10,610
|
|
9,544
|
|
13,348
|
|
16,504
|
|
8,694
|
|
|||||
Non-U.S. nonaccrual loans:
|
|
|
|
|
|
||||||||||
Consumer, excluding credit card loans
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Credit Card loans
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Total Non-U.S. nonaccrual consumer loans
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Wholesale:
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
48
|
|
79
|
|
234
|
|
281
|
|
45
|
|
|||||
Real estate
|
—
|
|
—
|
|
585
|
|
241
|
|
—
|
|
|||||
Financial institutions
|
—
|
|
—
|
|
30
|
|
118
|
|
115
|
|
|||||
Government agencies
|
5
|
|
16
|
|
22
|
|
—
|
|
—
|
|
|||||
Other
|
57
|
|
354
|
|
622
|
|
420
|
|
99
|
|
|||||
Total non-U.S. Wholesale nonaccrual loans
|
110
|
|
449
|
|
1,493
|
|
1,060
|
|
259
|
|
|||||
Total Non-U.S. nonaccrual loans
|
110
|
|
449
|
|
1,493
|
|
1,060
|
|
259
|
|
|||||
Total nonaccrual loans
|
10,720
|
|
9,993
|
|
14,841
|
|
17,564
|
|
8,953
|
|
|||||
Derivative receivables
|
239
|
|
297
|
|
159
|
|
736
|
|
1,145
|
|
|||||
Assets acquired in loan satisfactions
|
775
|
|
1,025
|
|
1,682
|
|
1,648
|
|
2,682
|
|
|||||
Nonperforming assets
|
$
|
11,734
|
|
$
|
11,315
|
|
$
|
16,682
|
|
$
|
19,948
|
|
$
|
12,780
|
|
Memo:
|
|
|
|
|
|
||||||||||
Loans held-for-sale
|
$
|
18
|
|
$
|
110
|
|
$
|
341
|
|
$
|
234
|
|
$
|
12
|
|
Loans at fair value
|
93
|
|
73
|
|
155
|
|
111
|
|
20
|
|
|||||
Total loans held-for-sale and loans at fair value
|
$
|
111
|
|
$
|
183
|
|
$
|
496
|
|
$
|
345
|
|
$
|
32
|
|
|
|
343
|
|
|||||||||||||||
December 31, (in millions)
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||
Contractually past-due loans
(a)
|
|
|
|
|
|
||||||||||
U.S. loans:
|
|
|
|
|
|
||||||||||
Consumer, excluding credit card loans
|
$
|
525
|
|
$
|
551
|
|
$
|
625
|
|
$
|
542
|
|
$
|
463
|
|
Credit Card loans
|
1,268
|
|
1,867
|
|
3,015
|
|
3,443
|
|
2,621
|
|
|||||
Total U.S. Consumer loans
|
1,793
|
|
2,418
|
|
3,640
|
|
3,985
|
|
3,084
|
|
|||||
Wholesale:
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
19
|
|
—
|
|
7
|
|
23
|
|
30
|
|
|||||
Real estate
|
69
|
|
84
|
|
109
|
|
114
|
|
76
|
|
|||||
Financial institutions
|
6
|
|
2
|
|
2
|
|
6
|
|
—
|
|
|||||
Government agencies
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Other
|
30
|
|
6
|
|
171
|
|
75
|
|
54
|
|
|||||
Total U.S. Wholesale loans
|
124
|
|
92
|
|
289
|
|
218
|
|
160
|
|
|||||
Total U.S. loans
|
1,917
|
|
2,510
|
|
3,929
|
|
4,203
|
|
3,244
|
|
|||||
Non-U.S. loans:
|
|
|
|
|
|
||||||||||
Consumer, excluding credit card loans
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Credit Card loans
|
34
|
|
36
|
|
38
|
|
38
|
|
28
|
|
|||||
Total Non-U.S. Consumer loans
|
34
|
|
36
|
|
38
|
|
38
|
|
28
|
|
|||||
Wholesale:
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
—
|
|
—
|
|
—
|
|
5
|
|
—
|
|
|||||
Real estate
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Financial institutions
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Government agencies
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Other
|
14
|
|
8
|
|
70
|
|
109
|
|
3
|
|
|||||
Total non-U.S. Wholesale loans
|
14
|
|
8
|
|
70
|
|
114
|
|
3
|
|
|||||
Total non-U.S. loans
|
48
|
|
44
|
|
108
|
|
152
|
|
31
|
|
|||||
Total contractually past due loans
|
$
|
1,965
|
|
$
|
2,554
|
|
$
|
4,037
|
|
$
|
4,355
|
|
$
|
3,275
|
|
(a)
|
Represents accruing loans past-due 90 days or more as to principal and interest, which are not characterized as nonaccrual loans.
|
(a)
|
Represents performing loans modified in troubled debt restructurings in which an economic concession was granted by the Firm and the borrower has demonstrated its ability to repay the loans according to the terms of the restructuring. As defined in accounting principles generally accepted in the United States of America (“U.S. GAAP”), concessions include the reduction of interest rates or the deferral of interest or principal payments, resulting from deterioration in the borrowers’ financial condition. Excludes nonaccrual assets and contractually past-due assets, which are included in the sections above.
|
(b)
|
Includes credit card loans that have been modified in a troubled debt restructuring.
|
344
|
|
|
|
|
345
|
(a)
|
Predominantly real estate-related.
|
346
|
|
|
•
|
the benefit of collateral received for securities financing exposures;
|
•
|
the netting of cash and marketable securities received for lending exposures. The FFIEC guidelines require risk
|
•
|
the netting of long and short positions across issuers in the same country; and
|
•
|
the netting of credit derivative protection purchased and sold. The FFIEC guidelines require the reporting of the gross notional of credit derivative protection sold and does not permit netting for credit derivatives protection on the same underlying reference entity.
|
(a)
|
Excluded from the table are
$905.6 billion
,
$657.2 billion
and
$503.5 billion
, at
December 31, 2012
,
2011
and
2010
, respectively, substantially all of which represent notional amounts related to credit protection sold on indices representing baskets of exposures from multiple European countries, which had previously been reported within the United Kingdom. Based on regulatory guidance, credit protection sold on indices representing baskets of exposures from multiple countries are to be disclosed in the aggregate as “other” rather than as a single country. Prior periods have been revised to conform with the current presentation.
|
(b)
|
Consists primarily of commercial and industrial.
|
(c)
|
Outstandings includes loans and accrued interest receivable, interest-bearing deposits with banks, acceptances, resale agreements, other monetary assets, cross-border trading debt and equity instruments, fair value of foreign exchange and derivative contracts, and local country assets, net of local country liabilities. The amounts associated with foreign exchange and derivative contracts are presented after taking into account the impact of legally enforceable master netting agreements.
|
(d)
|
Commitments include outstanding letters of credit, undrawn commitments to extend credit, and the notional value of credit derivatives where
JPMorgan Chase
is a protection seller.
|
|
|
347
|
(a)
|
The 2008 amount relates to the Washington Mutual transaction.
|
(b)
|
Effective January 1, 2010, the Firm adopted accounting guidance related to variable interest entities (“VIEs”). Upon adoption of the guidance, the Firm consolidated its Firm-sponsored credit card securitization trusts, its Firm-administered multi-seller conduits and certain other consumer loan securitization entities, primarily mortgage-related. As a result,
$7.4 billion
,
$14 million
and
$127 million
, respectively, of allowance for loan losses were recorded on-balance sheet with the consolidation of these entities. For further discussion, see Note 16 on pages
280–291
.
|
(c)
|
Predominantly includes a reclassification in 2009 related to the issuance and retention of securities from the Chase Issuance Trust.
|
348
|
|
|
Year ended December 31, (in millions)
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||
Balance at beginning of year
|
$
|
673
|
|
$
|
717
|
|
$
|
939
|
|
$
|
659
|
|
$
|
850
|
|
Addition resulting from mergers and acquisitions
(a)
|
—
|
|
—
|
|
—
|
|
—
|
|
66
|
|
|||||
Provision for lending-related commitments
|
(2
|
)
|
(38
|
)
|
(183
|
)
|
280
|
|
(258
|
)
|
|||||
Net charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Change in accounting principles
(b)
|
—
|
|
—
|
|
(18
|
)
|
—
|
|
—
|
|
|||||
Other
|
(3
|
)
|
(6
|
)
|
(21
|
)
|
—
|
|
1
|
|
|||||
Balance at year-end
|
$
|
668
|
|
$
|
673
|
|
$
|
717
|
|
$
|
939
|
|
$
|
659
|
|
(a)
|
The 2008 amount relates to the Washington Mutual transaction.
|
(b)
|
Relates to the adoption of the new accounting guidance related to VIEs.
|
Loan loss analysis
|
|
|
|
|
|
||||||||||
As of or for the year ended December 31,
(in millions, except ratios)
|
2012
|
2011
|
2010
|
2009
|
2008
(c)
|
||||||||||
Balances
|
|
|
|
|
|
||||||||||
Loans – average
|
$
|
722,384
|
|
$
|
693,523
|
|
$
|
703,540
|
|
$
|
682,885
|
|
$
|
588,801
|
|
Loans – year-end
|
733,796
|
|
723,720
|
|
692,927
|
|
633,458
|
|
744,898
|
|
|||||
Net charge-offs
(a)
|
9,063
|
|
12,237
|
|
23,673
|
|
22,965
|
|
9,835
|
|
|||||
Allowance for loan losses:
|
|
|
|
|
|
||||||||||
U.S.
|
$
|
20,946
|
|
$
|
26,621
|
|
$
|
31,111
|
|
$
|
29,802
|
|
$
|
21,830
|
|
Non-U.S.
|
990
|
|
988
|
|
1,155
|
|
1,800
|
|
1,334
|
|
|||||
Total allowance for loan losses
|
$
|
21,936
|
|
$
|
27,609
|
|
$
|
32,266
|
|
$
|
31,602
|
|
$
|
23,164
|
|
Nonaccrual loans
|
10,720
|
|
9,993
|
|
14,841
|
|
17,564
|
|
8,953
|
|
|||||
Ratios
|
|
|
|
|
|
||||||||||
Net charge-offs to:
|
|
|
|
|
|
||||||||||
Loans retained – average
|
1.26
|
%
|
1.78
|
%
|
3.39
|
%
|
3.42
|
%
|
1.73
|
%
|
|||||
Allowance for loan losses
|
41.32
|
|
44.32
|
|
73.37
|
|
72.67
|
|
42.46
|
|
|||||
Allowance for loan losses to:
|
|
|
|
|
|
||||||||||
Loans retained – year-end
(b)
|
3.02
|
|
3.84
|
|
4.71
|
|
5.04
|
|
3.18
|
|
|||||
Nonaccrual loans retained
|
207
|
|
281
|
|
225
|
|
184
|
|
260
|
|
(a)
|
There were no net charge-offs/(recoveries) on lending-related commitments in
2012
,
2011
,
2010
,
2009
or
2008
.
|
(b)
|
The allowance for loan losses as a percentage of retained loans declined from
2009
to
2012
, due to an improvement in credit quality of the consumer and wholesale credit portfolios. Deteriorating credit conditions during
2008
to
2009
, primarily within consumer lending, resulted in increasing losses and correspondingly higher loan loss provisions for those periods. For a more detailed discussion of the
2010
through
2012
provision for credit losses, see Provision for credit losses on page
162
.
|
(c)
|
On September 25, 2008,
JPMorgan Chase
acquired the banking operations of Washington Mutual Bank. On May 30, 2008, the Bear Stearns merger was consummated. Each of these transactions was accounted for as a purchase, and their respective results of operations are included in the Firm’s results from each respective transaction.
|
|
|
349
|
Year ended December 31,
|
Average balances
|
|
Average interest rates
|
|||||||||||||||||
(in millions, except interest rates)
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|||
U.S. offices
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Noninterest-bearing
|
$
|
338,652
|
|
|
$
|
265,522
|
|
|
$
|
202,459
|
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Interest-bearing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Demand
|
43,124
|
|
|
39,177
|
|
|
18,881
|
|
|
0.08
|
|
|
0.08
|
|
|
0.04
|
|
|||
Savings
|
383,777
|
|
|
349,425
|
|
|
312,118
|
|
|
0.18
|
|
|
0.23
|
|
|
0.27
|
|
|||
Time
|
85,688
|
|
|
84,043
|
|
|
102,228
|
|
|
0.74
|
|
|
1.00
|
|
|
1.27
|
|
|||
Total interest-bearing deposits
|
512,589
|
|
|
472,645
|
|
|
433,227
|
|
|
0.26
|
|
|
0.36
|
|
|
0.50
|
|
|||
Total deposits in U.S. offices
|
851,241
|
|
|
738,167
|
|
|
635,686
|
|
|
0.16
|
|
|
0.23
|
|
|
0.34
|
|
|||
Non-U.S. offices
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Noninterest-bearing
|
16,133
|
|
|
12,785
|
|
|
9,955
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Interest-bearing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Demand
|
184,366
|
|
|
190,092
|
|
|
163,550
|
|
|
0.35
|
|
|
0.66
|
|
|
0.35
|
|
|||
Savings
|
846
|
|
|
637
|
|
|
605
|
|
|
0.23
|
|
|
0.14
|
|
|
0.28
|
|
|||
Time
|
53,297
|
|
|
70,309
|
|
|
71,258
|
|
|
1.23
|
|
|
1.32
|
|
|
0.97
|
|
|||
Total interest-bearing deposits
|
238,509
|
|
|
261,038
|
|
|
235,413
|
|
|
0.55
|
|
|
0.83
|
|
|
0.54
|
|
|||
Total deposits in non-U.S. offices
|
254,642
|
|
|
273,823
|
|
|
245,368
|
|
|
0.51
|
|
|
0.79
|
|
|
0.52
|
|
|||
Total deposits
|
$
|
1,105,883
|
|
|
$
|
1,011,990
|
|
|
$
|
881,054
|
|
|
0.24
|
%
|
|
0.38
|
%
|
|
0.39
|
%
|
By remaining maturity at
December 31, 2012 (in millions)
|
Three months
or less
|
|
Over three months
but within six months
|
|
Over six months
but within 12 months
|
|
Over 12 months
|
|
Total
|
||||||||||
U.S. time certificates of deposit ($100,000 or more)
|
$
|
11,638
|
|
|
$
|
2,148
|
|
|
$
|
4,197
|
|
|
$
|
3,652
|
|
|
$
|
21,635
|
|
350
|
|
|
As of or for the year ended December 31, (in millions, except rates)
|
2012
|
|
2011
|
|
2010
|
|
||||||
Federal funds purchased and securities loaned or sold under repurchase agreements:
|
|
|
|
|
|
|
||||||
Balance at year-end
|
$
|
240,103
|
|
|
$
|
213,532
|
|
|
$
|
276,644
|
|
|
Average daily balance during the year
|
248,561
|
|
|
256,283
|
|
|
278,603
|
|
|
|||
Maximum month-end balance
|
268,931
|
|
|
289,835
|
|
|
314,161
|
|
|
|||
Weighted-average rate at December 31
|
0.23
|
%
|
|
0.16
|
%
|
|
0.18
|
%
|
|
|||
Weighted-average rate during the year
|
0.22
|
|
|
0.21
|
|
|
(0.07
|
)
|
(c)
|
|||
|
|
|
|
|
|
|
||||||
Commercial paper:
|
|
|
|
|
|
|
||||||
Balance at year-end
|
$
|
55,367
|
|
|
$
|
51,631
|
|
|
$
|
35,363
|
|
|
Average daily balance during the year
|
50,780
|
|
|
42,653
|
|
|
36,000
|
|
|
|||
Maximum month-end balance
|
62,875
|
|
|
51,631
|
|
|
50,554
|
|
|
|||
Weighted-average rate at December 31
|
0.21
|
%
|
|
0.12
|
%
|
|
0.21
|
%
|
|
|||
Weighted-average rate during the year
|
0.18
|
|
|
0.17
|
|
|
0.20
|
|
|
|||
|
|
|
|
|
|
|
||||||
Other borrowed funds:
(a)
|
|
|
|
|
|
|
||||||
Balance at year-end
|
$
|
79,258
|
|
|
$
|
75,181
|
|
|
$
|
100,375
|
|
|
Average daily balance during the year
|
79,003
|
|
|
107,543
|
|
|
104,951
|
|
|
|||
Maximum month-end balance
|
87,815
|
|
|
124,138
|
|
|
116,473
|
|
|
|||
Weighted-average rate at December 31
|
1.83
|
%
|
|
1.60
|
%
|
|
5.71
|
%
|
|
|||
Weighted-average rate during the year
|
2.49
|
|
|
2.50
|
|
|
2.89
|
|
|
|||
|
|
|
|
|
|
|
||||||
Short-term beneficial interests
:
(b)
|
|
|
|
|
|
|
||||||
Commercial paper and other borrowed funds:
|
|
|
|
|
|
|
||||||
Balance at year-end
|
$
|
28,219
|
|
|
$
|
26,243
|
|
|
$
|
25,095
|
|
|
Average daily balance during the year
|
25,653
|
|
|
25,125
|
|
|
21,853
|
|
|
|||
Maximum month-end balance
|
30,043
|
|
|
26,780
|
|
|
25,095
|
|
|
|||
Weighted-average rate at December 31
|
0.18
|
%
|
|
0.18
|
%
|
|
0.25
|
%
|
|
|||
Weighted-average rate during the year
|
0.16
|
|
|
0.23
|
|
|
0.27
|
|
|
(a)
|
Includes interest-bearing securities sold but not yet purchased.
|
(b)
|
Included on the Consolidated Balance Sheets in beneficial interests issued by consolidated variable interest entities.
|
(c)
|
Reflects a benefit from the favorable market environments for U.S. dollar-roll financings.
|
|
|
351
|
|
JPMorgan Chase & Co.
(Registrant)
|
|
By: /s/ JAMES DIMON
|
|
(James Dimon
Chairman and Chief Executive Officer)
|
|
February 28, 2013
|
|
|
Capacity
|
|
Date
|
/s/ JAMES DIMON
|
|
Director, Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
|
(James Dimon)
|
|
|
|
|
|
|
|
|
|
/s/ JAMES A. BELL
|
|
Director
|
|
|
(James A. Bell)
|
|
|
|
|
|
|
|
|
|
/s/ CRANDALL C. BOWLES
|
|
Director
|
|
|
(Crandall C. Bowles)
|
|
|
|
|
|
|
|
|
|
/s/ STEPHEN B. BURKE
|
|
Director
|
|
|
(Stephen B. Burke)
|
|
|
|
|
|
|
|
|
|
/s/ DAVID M. COTE
|
|
Director
|
|
|
(David M. Cote)
|
|
|
|
|
|
|
|
|
|
/s/ JAMES S. CROWN
|
|
Director
|
|
February 28, 2013
|
(James S. Crown)
|
|
|
|
|
|
|
|
|
|
/s/ TIMOTHY P. FLYNN
|
|
Director
|
|
|
(Timothy P. Flynn)
|
|
|
|
|
|
|
|
|
|
/s/ ELLEN V. FUTTER
|
|
Director
|
|
|
(Ellen V. Futter)
|
|
|
|
|
|
|
|
|
|
/s/ LABAN P. JACKSON, JR.
|
|
Director
|
|
|
(Laban P. Jackson, Jr.)
|
|
|
|
|
|
|
|
|
|
/s/ LEE R. RAYMOND
|
|
Director
|
|
|
(Lee R. Raymond)
|
|
|
|
|
|
|
|
|
|
/s/ WILLIAM C. WELDON
|
|
Director
|
|
|
(William C. Weldon)
|
|
|
|
|
|
|
|
|
|
/s/ MARIANNE LAKE
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
(Marianne Lake)
|
|
|
|
|
|
|
|
|
|
/s/ MARK W. O’DONOVAN
|
|
Managing Director and Corporate Controller
(Principal Accounting Officer)
|
|
|
(Mark W. O’Donovan)
|
|
|
|
352
|
|
|
Award
Agreement
|
These terms and conditions are made part of the Award Agreement dated as of January 17, 2013 (“Grant Date”) awarding restricted stock units pursuant to the terms of the JPMorgan Chase & Co. Long-Term Incentive Plan (“Plan”). To the extent the terms of the Award Agreement (all references to which will include these terms and conditions) conflict with the Plan, the Plan will govern. The Award Agreement, the Plan and Prospectus supersede any other agreement, whether written or oral, that may have been entered into by the Firm and you relating to this award.
This award was granted on the Grant Date subject to the Award Agreement.
Unless you decline by the deadline and in the manner specified in the Award Agreement, you will have agreed to be bound by these terms and conditions, effective as of the Grant Date.
If you decline the award, it will be cancelled as of the Grant Date.
Capitalized terms that are not defined in “
Definitions”
below or elsewhere in the Award Agreement will have the same meaning as set forth in the Plan.
JPMorgan Chase & Co. will be referred to throughout the Award Agreement as “JPMorgan Chase,” and together with its subsidiaries as the “Firm.”
|
Form and
Purpose of
Award
|
Each restricted stock unit represents a non-transferable right to receive one share of Common Stock as of the applicable vesting date as set forth in your Award Agreement.
The purpose of this award is to motivate your future performance for services to be provided during the vesting period and to align your interests with those of the Firm and its shareholders.
|
Dividend
Equivalents
|
If dividends are paid on Common Stock while restricted stock units under this award are outstanding, you will be paid an amount equal to the dividend paid on one share of Common Stock, multiplied by the number of restricted stock units outstanding under this award.
|
Protection-
Based Vesting
|
This award is intended and expected to vest on the applicable vesting date, provided that you are continuously employed by the Firm through such vesting date, or you meet the requirements for continued vesting described under the captions “Job Elimination,” “Full Career Eligibility,” “Government Office” and “Disability.” However, vesting is subject to the sections of these terms and conditions captioned “
Bonus Recoupment
” and “
Recapture Provisions
” and the following protection-based vesting provisions.
Up to a total of fifty percent of your award (“At Risk restricted stock units”) may be cancelled under (i) and (ii):
(i) The Chief Executive Officer of JPMorgan Chase (“CEO”) determines that cancellation of all or portion of the At Risk restricted stock units is appropriate in light of any one or a combination of the following factors:
• Your performance in relation to the priorities for your position, or the Firm’s performance in relation to the priorities for which you share responsibility as a member of the Operating Committee, have been unsatisfactory for a sustained period of time. Among the factors the CEO may consider in assessing performance are net income, net revenue, return on equity, earnings per share and capital ratios of the Firm, both on an absolute basis and, as appropriate, relative to peer firms.
• For any calendar year ending during the vesting period, JPMorgan Chase’s annual pre-provision net income reported at the Firm level is negative.
• Awards granted to participants in a Line of Business, for which you exercise, or during the vesting period exercised, direct or indirect responsibility, were in whole or in part cancelled because the Line of Business did not meet its annual Line of Business Financial Threshold.
(ii) To the extent that the full number of At Risk restricted stock units have not been cancelled pursuant to the circumstances described in (i) above, then any remaining At Risk restricted stock units scheduled to vest on January 13, 2016 will be cancelled if, for the three calendar years preceding that date, the Firm does not meet the Firmwide Financial Threshold, unless the CEO determines that it is appropriate that some or all of such At Risk restricted stock units should vest with respect to a particular individual or individuals due to extraordinary circumstances.
|
Ø
Non-Solicitation of Employees and Customers
|
During your employment by the Firm and for one year following the termination of your employment, or if longer, during the vesting period, if you continue to vest after your employment with the Firm terminates, you will not directly or indirectly, whether on your own behalf or on behalf of any other party, without the prior written consent of the Director Human Resources of JPMorgan Chase: (i) solicit, induce or encourage any of the Firm’s then current employees to leave the Firm or to apply for employment elsewhere, (ii) hire any employee or former employee who was employed by the Firm at the date your employment terminated, unless the individual’s employment terminated because his or her job was eliminated, or the individual’s employment with the Firm has been terminated for more than six months, (iii) to the fullest extent enforceable under applicable law, solicit or induce or attempt to induce to leave the Firm, or divert or attempt to divert from doing business with the Firm, any then current customers, suppliers or other persons or entities that were serviced by you or whose names became known to you by virtue of your employment with the Firm, or otherwise interfere with the relationship between the Firm and such customers, suppliers or other persons or entities. This does not apply to publicly known institutional customers that you service after your employment with the Firm without the use of the Firm’s confidential or proprietary information.
These restrictions do not apply to authorized actions you take in the normal course of your employment with the Firm, such as employment decisions with respect to employees you supervise or business referrals in accordance with the Firm’s policies.
|
Ø
Confidential Information
|
You will not, either during your employment with the Firm or thereafter, directly or indirectly (i) use or disclose to anyone any confidential information related to the Firm’s business, or (ii) communicate with the press or other media about matters related to the Firm, its customers or employees, including matters and activities relating to your employment, or the employment of others, by the Firm, in the case of either (i) or (ii), except as explicitly permitted by the JPMorgan Chase Code of Conduct and applicable policies or law or legal process. “Confidential information” shall have the same meaning for the Award Agreement as it has in the JPMorgan Chase Code of Conduct.
|
Ø
Non-Disparagement
|
You will not, either during your employment with the Firm or thereafter, make or encourage others to make any public statement or release any information in verbal, written, electronic or any other form, that is intended to, or reasonably could be foreseen to, disparage, embarrass or criticize the Firm or its employees, officers, directors or shareholders as a group. This shall not preclude you from reporting to the Firm’s management or directors or to the government or a regulator conduct you believe to be in violation of the law or the Firm’s Code of Conduct or responding truthfully to questions or requests for information to the government, a regulator or in a court of law in connection with a legal or regulatory investigation or proceeding.
|
Ø
Cooperation
|
You will cooperate fully with and provide full and accurate information to the Firm and its counsel with respect to any matter (including any audit, tax proceeding, litigation, investigation or governmental proceeding) with respect to which you may have knowledge or information, subject to reimbursement for actual, appropriate and reasonable out-of-pocket expenses incurred by you.
|
Ø
Compliance with Award Agreement
|
You will provide the Firm with any information reasonably requested to determine compliance with the Award Agreement, and you authorize the Firm to disclose the terms of the Award Agreement to any third party who might be affected thereby, including your prospective employer.
|
Ø
Notice Period
|
If you are subject to a notice period, whether by contract or by policy, that requires you to provide advance written notice of your intention to terminate your employment (“Notice Period”), then as consideration for this award and continued employment, you will provide the Firm with the necessary advance written notice that applies to you, as specified by such contract or policy.
After receipt of your notice, the Firm may choose to have you continue to provide services during the applicable Notice Period or may place you on a paid leave for all or part of the applicable Notice Period. During the Notice Period, you shall continue to devote your full time and loyalty to the Firm by providing services in a cooperative and professional manner and not perform any services for any other employer and shall receive your base salary and certain benefits until your employment terminates. You and the Firm may mutually agree to waive or modify the length of the Notice Period.
Regardless of whether a Notice Period applies to you, you must comply with the 90-day advance notice period described under the section captioned “Full Career Eligibility” in the event you wish to terminate employment under the Full Career Eligibility provision.
|
|
|
Remedies
|
|
Ø
Cancellation
|
In addition to the cancellation provisions described under sections captioned “
Protection-Based Vesting
,” “
Termination of Employment
” and “
Recapture Provisions
”, your outstanding restricted stock units under this award may be cancelled if:
• the Firm, in its sole discretion, determines that you are not in compliance with any of the advance notice/cooperation requirements or employment restrictions applicable to your termination of employment, or
• you fail to return the required forms specified under the section captioned “
Release/Certification
” within the specified deadline, including the certification required immediately prior to a vesting date under Full Career Eligibility and Disability, or
• you violate any of the provisions as set forth above in the section captioned “
Your Obligations
.”
|
Ø
Recovery
|
In addition, you may be required to pay the Firm an amount equal to the Fair Market Value (determined as of the vesting date) of the gross number of shares of Common Stock distributable to you under this award as follows:
• shares distributed, including shares withheld for tax purposes, within the one year period prior to your violation of any of the provisions as set forth above in the section captioned “
Your Obligations
,”
• shares distributed, including shares withheld for tax purposes, at any time following termination of employment when you were not in compliance with the employment restrictions then applicable to you during such period,
• shares distributed, including shares withheld for tax purposes, within the one year period immediately preceding and any time after your termination of employment, if your employment was terminated or the Firm determines that your employment could have been terminated, for Cause,
• shares distributed, including shares withheld for tax purposes, within the three year period immediately preceding and any time after your termination of employment, if the Firm determines that you committed a fraudulent act, or engaged in knowing and willful misconduct related to your employment,
• for a period up to one year after shares are distributed (including shares withheld for tax purposes) under this award (or any longer period applicable in the case of termination for Cause), to the extent that the Firm determines appropriate pursuant to the section captioned “
Recapture Provisions
” above.
Payment may be made in shares of Common Stock or in cash. You agree that this repayment will be a recovery of shares to which you were not entitled under the terms and conditions of your Award Agreement and is not to be construed in any manner as a penalty. You also acknowledge that a violation or attempted violation of the obligations set forth herein will cause immediate and irreparable damage to the Firm, and therefore agree that the Firm shall be entitled as a matter of right to an injunction, from any court of competent jurisdiction, restraining any violation or further violation of such obligations; such right to an injunction, however, shall be cumulative and in addition to whatever other remedies the Firm may have under law or equity.
|
Administrative Provisions
|
Withholding Taxes:
The Firm, in its sole discretion, may (i) retain from each distribution the number of shares of Common Stock required to satisfy applicable tax obligations (including, to the extent legally permissible, recovery by the Firm of fringe benefit taxes) or (ii) implement any other desirable or necessary procedures, so that appropriate withholding and other taxes are paid to the competent authorities with respect to the vested shares, dividend equivalents and the award. This may include but is not limited to (i) a market sale of a number of such shares on your behalf substantially equal to the withholding or other taxes, (ii) to the extent required by law, withhold from cash compensation, an amount equal to any withholding obligation with respect to the award, vested shares, and/or dividend equivalents, and (iii) retaining vested shares or dividend equivalents until you pay any taxes associated with the award, vested shares and/or the dividend equivalents directly to the competent authorities. For United States tax purposes, dividend equivalents are treated as wages and subject to tax withholding when paid.
|
|
Right to Set Off:
The Firm may, to the maximum extent permitted by applicable law, retain for itself funds or securities otherwise payable to you pursuant to this award to satisfy any obligation or debt that you owe to the Firm. The Firm may not retain such funds or securities payable under this award until such time as they would otherwise be distributable to you in accordance with the Award Agreement.
|
|
No Ownership Rights:
Restricted stock units do not convey the rights of ownership of Common Stock and do not carry voting rights. No shares of Common Stock will be issued to you until after the restricted stock units have vested and any applicable restrictions have lapsed. Prior to any vesting date, JPMorgan Chase may impose for any reason, as of such vesting date and for up to 90 days following such date, such restrictions on the Common Stock to be issued to you as it may deem appropriate, including, but not limited to, restricting the sale, transfer, pledge, assignment or encumbrance of such shares of Common Stock. By accepting this award, you agree to such restrictions without any further consent required. Shares will be issued in accordance with JPMorgan Chase’s procedures for issuing stock. By accepting this award, you authorize the Firm, in its discretion, to establish on your behalf a brokerage account in your name with the Firm and deliver to that brokerage account any vested shares derived from the award and, for avoidance of doubt, you further agree that it shall apply to prior unvested awards. JPMorgan Chase’s obligation hereunder is unfunded.
Binding Agreement:
The Award Agreement will be binding upon any successor in interest to JPMorgan Chase, by merger or otherwise.
Not a Contract of Employment:
Nothing contained in the Award Agreement constitutes a contract of employment or continued employment. Employment is “at-will” and may be terminated by either you or JPMorgan Chase for any reason at any time. This award does not confer any right or entitlement to, nor does the award impose any obligation on the Firm to provide, the same or any similar award in the future and its value is not compensation for purposes of determining severance.
Section 409A Compliance:
To the extent that Section 409A of the Code is applicable to this award, distributions of shares and cash hereunder are intended to comply with Section 409A of the Code, and the Agreement Award, including these terms and conditions, shall be interpreted in a manner consistent with such intent.
Notwithstanding anything herein to the contrary, if you (i) are subject to taxation under the Code, (ii) are a specified employee as defined in the JPMorgan Chase 2005 Deferred Compensation Plan and (iii) have incurred a separation from service (as defined In that Plan) and if any units/shares under this award represent deferred compensation as defined in Section 409A and such shares are distributable to you as a result your separation from service, then those shares will be delivered to you on first business day of the first calendar month after the expiration of six full months from date of your separation from service. Further, if your award is not subject to a substantial risk of forfeiture as defined by regulations issued under Section 409A of the Code, then the remainder of each calendar year immediately following (i) each vesting date shall be a payment date for purposes of distributing the vested portion of the award and (ii) each date that JPMorgan Chase specifies for payment of dividends declared on its Common Stock shall be the payment date(s) for purposes of distributing dividend equivalent payments.
Change in Outstanding Shares:
In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, issuance of a new class of common stock, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to stockholders of Common Stock other than regular cash dividends, the Committee will make an equitable substitution or proportionate adjustment, in the number or kind of shares of Common Stock or other securities issued or reserved for issuance pursuant to the Plan and to any restricted stock units outstanding under this award for such corporate events.
Interpretation/Administration:
The Committee has sole and complete authority to interpret and administer this Award Agreement, including, without limitation, the power to (i) interpret the Plan and the terms of this Award Agreement; (ii) determine the reason for termination of employment; (iii) determine application of the post-employment obligations and cancellation and recovery provisions; (iv) decide all claims arising with respect to this award; and (v) delegate such authority as it deems appropriate. Any determination by such Committee or its delegate shall be binding on all parties.
|
|
Notwithstanding anything herein to the contrary, the Firm’s and the Committee’s determinations under the Plan and the Award Agreements are not required to be uniform. By way of clarification, the Committee and the Firm shall be entitled to make non-uniform and selective determinations and modifications under Award Agreements and the Plan.
|
|
Amendment:
The Committee or its delegate reserves the right to amend this Award Agreement in any manner, at any time and for any reason; provided, however, that no such amendment shall materially adversely affect your rights under this Award Agreement without your consent except to the extent that the Committee or its delegate considers advisable to (x) comply with applicable laws or changes in or interpretation of applicable laws, regulatory requirements and accounting rules or standards and (y) make a change in a scheduled vesting date or impose the restrictions described above under “No Ownership Rights,” in either case, to the extent permitted by Section 409A of the Code. This Award Agreement may not be amended except in writing signed by the Director Human Resources of JPMorgan Chase.
|
|
Severability:
If any portion of the Award Agreement is determined by the Firm to be unenforceable in any jurisdiction, any court or arbitrator of competent jurisdiction or the Director Human Resources may reform the relevant provisions (e.g., as to length of service, time, geographical area or scope) to the extent the Firm (or court/arbitrator) considers necessary to make the provision enforceable under applicable law.
|
|
Accelerated Distribution for Ethics or Conflict Reasons Resulting From Employment by a Government Entity:
Upon receipt of satisfactory evidence that applicable United States federal, state, local, foreign or supranational ethics or conflict of interest laws or regulations require you to divest your interest in JPMorgan Chase restricted stock units, the Firm may accelerate the distribution of all or part of your outstanding award effective on or before the required divesture date; provided that no accelerated distribution shall occur if the Firm determines that such acceleration will violate Section 409A of the Code. If you have voluntarily terminated your employment and have satisfied the requirements of the “Government Office” section of this award, acceleration shall apply (to extent required) to the percentage of your outstanding award that would continue to vest under that section. In the case of a termination of employment where the award is outstanding as a result of “Job Elimination” or “Full Career Eligibility”, then acceleration shall apply, to the extent required, to the full outstanding award. Notwithstanding accelerated distribution pursuant to the foregoing, you will remain subject to the applicable terms of your Award Agreement as if your award had remained outstanding for the duration of the original vesting period, including, but not limited to, repayment obligations and employment restrictions in the case of “Full Career Eligibility” or “Government Office.”
Use of Personal Data:
By accepting this award, you have acknowledged that the Firm may use your personal data for purposes of (i) determining your compensation, (ii) payroll activities, including, but not limited to, tax withholding and regulatory reporting, (iii) registration of shares and units, (iv) establishing brokerage account on your behalf, and (v) all other lawful purposes related to your employment and this award and that the Firm may provide such data to third party vendors with whom it has contracted to provide such services. You may terminate this authorization at any time except with respect to tax and regulatory reporting. In such case, your award will be cancelled.
Governing Law:
This award shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of law principles.
Choice of Forum:
By accepting this award, you agree that to the extent not otherwise subject to arbitration under an arbitration agreement between you and the Firm, any dispute arising directly or indirectly in connection with this award or the Plan shall be submitted to arbitration in accordance with the rules of the American Arbitration Association if so elected by the Firm in its sole discretion. In the event such a dispute is not subject to arbitration for any reason, you agree to accept the exclusive jurisdiction and venue of the United States District Court for the Southern District of New York with respect to any judicial proceeding in connection with this award or the Plan. You waive, to the fullest extent permitted by law, any objection to personal jurisdiction or to the laying of venue of such dispute and further agree not to commence any action arising out of or relating to this award or the Plan in any other forum.
Waiver of Jury Trial/Class Claims:
By accepting this award, you agree, with respect to any claim brought in connection with your employment with the Firm in any forum (i) to waive the right to a jury trial and (ii) that any judicial proceeding or arbitration claim will be brought on an individual basis, and you hereby waive any right to submit, initiate, or participate in a representative capacity or as a plaintiff, claimant or member in a class action, collective action, or other representative or joint action.
Litigation: By accepting any award, you agree that in any action or proceeding by the Firm (other than a derivative suit in the right of the Firm) to enforce the terms and conditions of this Award Agreement where the Firm is the prevailing party, the Firm shall be entitled to recover from you its reasonable attorney fees and expenses incurred in such action or proceeding. In addition, you agree that you are not entitled to, and agree not to seek, advancement of attorney fees and indemnification under the Firm’s By-Laws in the event of such a suit by the Firm.
Nontransferability:
Neither this award or any other outstanding awards of restricted stock units, nor your interests or rights in any such awards, shall be assigned, pledged, transferred, hypothecated or subject to any lien. An award may be transferred following your death by will, the laws of descent or by a beneficiary designation on file with the Firm.
Outstanding Awards:
The Administrative provisions set forth above shall apply to any award of restricted stock units outstanding as of the date hereof, and such awards are hereby amended.
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Asset Management
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Annual negative pre-provision net income
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Card Services
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Annual negative pre-tax, pre-loan loss reserve income
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Commercial Bank
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Annual negative pre-provision net income including loan charge-offs
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Chief Investment Office
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Annual trading loss in the mark-to-market portfolios in excess of $1.5bn
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Corporate Investment Bank
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Annual negative pre-provision net income for CIB overall and/or annual negative allocated product revenues (excluding DVA) for:
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n
Global FX, Global Rates, Rates Exotics & Hybrids, Public Finance
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n
Securitized Products
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n
Credit Trading and Syndicate, Credit Exotics & Hybrids
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n
Global Emerging Markets, GSOG
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Commodities
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Equities
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n
Global Banking
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Consumer Banking Business
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Annual negative pre-provision net income
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Corporate Functions (other than Chief Investment Office)
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Annual negative pre-provision net income reported at the Firm level
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Home Lending
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Annual negative pre-provision net income excluding losses from liquidating portfolios and MSR Trading
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“
Not-for-Profit Organization
” means an entity exempt from tax under state law and under Section 501(c)(3) of the Code. Section 501(c)(3) only includes entities organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary or educational purposes, or to foster national or international amateur sports competition or for the prevention of cruelty to children or animals.
“
Recognized Service
” means the period of service as an employee set forth in the Firm’s applicable
service-related policies.
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•
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At least 60 days’ advance written notice of your intention to resign to accept or pursue a Government Office, during which period you must perform in a cooperative and professional manner services requested by the Firm and not provide services for any other employer. The Firm may elect to shorten this notice period at the Firm’s discretion.
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•
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Confirmation, in a form satisfactory to the Firm, that vesting in this award pursuant to this provision would not violate any applicable law, regulation or rule.
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•
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Documentation in a form satisfactory to the Firm that your resignation is for the purpose of accepting a Government Office or becoming a candidate for a Government Office.
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•
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50% if you have at least 3 but less than 4 years of continuous service,
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•
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75% if you have at least 4 but less than 5 years of continuous service, or
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•
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100% if you have 5 or more years of continuous service.
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•
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You must remain in a non-elective Government Office for two or more years after your employment with the Firm terminates.
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•
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In the case of resignation from the Firm to campaign for an elective Government Office, your name must be on the primary or final public ballot for the election. (If you are not elected, see below for employment restrictions.)
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JPMORGAN CHASE & CO. LONG-TERM INCENTIVE PLAN
TERMS AND CONDITIONS OF JANUARY 17, 2013 STOCK APPRECIATION RIGHTS OPERATING COMMITTEE |
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Award Agreement
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These terms and conditions are made part of the Award Agreement dated as of January 17, 2013 (“Grant Date”) awarding Stock Appreciation Rights pursuant to the terms of the JPMorgan Chase & Co. Long-Term Incentive Plan (“Plan”). To the extent the terms of the Award Agreement (all references to which will include these terms and conditions) conflict with the Plan, the Plan will govern. The Award Agreement, the Plan and Prospectus supersede any other agreement, whether written or oral, that may have been entered into by the Firm and you relating to this award.
This award was granted on the Grant Date subject to the Award Agreement.
Unless you decline by the deadline and in the manner specified in the Award Agreement, you will have agreed to be bound by these terms and conditions, effective as of the Grant Date.
If you decline the award, it will be cancelled as of the Grant Date.
Capitalized terms that are not defined in “
Definitions”
below or elsewhere in the Award Agreement will have the same meaning as set forth in the Plan.
JPMorgan Chase & Co. will be referred to throughout the Award Agreement as “JPMorgan Chase,” and together with its subsidiaries as the “Firm.”
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Form and Purpose of Award
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Stock Appreciation Rights represent the right, following exercise, to receive (without payment), a number of shares of JPMorgan Chase Common Stock, the Fair Market Value of which, as of the date of exercise, is equal to the excess of the Fair Market Value of one share of such Common Stock on such exercise date over the Exercise Price, multiplied by the number of Stock Appreciation Rights being exercised. See “
Exercise Procedures/Withholding Taxes
” for further information.
The purpose of this award is to motivate your future performance for future services to be provided while the award is outstanding and to align your interests with those of the Firm and its shareholders.
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Exercisable Dates/
Expiration Date
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This award is intended and expected to become exercisable on the “Exercisable Dates” set forth in your Award Agreement, provided that you are continuously employed by the Firm through the relevant Exercisable Date or you meet the requirements to allow your award to remain outstanding upon termination of employment under the captions “Job Elimination,” “Full Career Eligibility,” “Government Office,” and “Disability.”
However, the number of Stock Appreciation Rights that have not yet become exercisable may be reduced (and therefore may be cancelled) or Exercisable Dates may be deferred (but not beyond the Expiration Date) in the event that the Chief Executive Officer of JPMorgan Chase (“CEO”) determines that such cancellation or deferral is appropriate in light of (i) your performance in relation to the priorities for your position, or (ii) the Firm’s performance in relation to the priorities for which you share responsibility as a member of the Operating Committee has been unsatisfactory for a sustained period of time. Among the factors the CEO may consider in assessing performance are net income, net revenue, return on equity, earnings per share and capital ratios of the Firm, both on an absolute basis and, as appropriate, relative to peer firms. Such a determination is subject to ratification by the Compensation and Management Development Committee of the Board of Directors of JPMorgan Chase (“Committee”). In the case of an award to the CEO, such determinations shall be made by the Committee.
Your award will remain exercisable until the
earlier of
the tenth anniversary of the Grant Date (the “Expiration Date”) or the date the award is cancelled pursuant to this Award Agreement. Notwithstanding any provision herein, including but not limited to those provisions governing Job Elimination, Full Career Eligibility, Death, and Total Disability, no Stock Appreciation Right may be exercised after its Expiration Date.
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Bonus Recoupment
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In consideration of the grant of this award, you agree that you are subject to the JPMorgan Chase Bonus Recoupment Policy as in effect from time to time, as it applies both to the cash incentive compensation awarded to you for 2012 and to this award of Stock Appreciation Rights. You can access this policy through the following link:
http://www.jpmorganchase.com/corporate/About-JPMC/corporate-governance-principles.htm#recoupment
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Recapture Provisions
(Detrimental Conduct,
Risk-Related and Other Recapture Provisions)
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Notwithstanding any terms of this Award Agreement to the contrary, JPMorgan Chase reserves the right in its sole discretion to cancel outstanding Stock Appreciation Rights under this award and/or to recover from you an amount equal to the Fair Market Value (determined as of the exercise date) of the gross number of shares of Common Stock distributable to you on any exercise of Stock Appreciation Rights under this award as set forth in the section captioned “
Remedies”:
• If you engaged in conduct detrimental to the Firm, insofar as it causes material financial or reputational harm to the Firm or its business activities, or
• If this award was based on materially inaccurate performance metrics, whether or not you were responsible for the inaccuracy, or
• If this award was based on a material misrepresentation by you, or
• If you improperly or with gross negligence failed to identify, raise or assess, in a timely manner and as reasonably expected, risks and/or concerns with respect to risks material to the Firm or its business activities, or.
• If your employment was terminated for Cause (see “
Definitions”
below) or the Firm determines after the termination of your employment that your employment could have been terminated for Cause.
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Termination of Employment
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Except as explicitly set forth below under the sections captioned “Job Elimination,” “Full Career Eligibility”, “Death” and “Disability,” any Stock Appreciation Rights outstanding under this award will be cancelled effective on the date your employment with the Firm terminates for any reason.
Job Elimination
:
For the one year period commencing with the date of termination of your employment (or if longer the 90 day period commencing with an Exercisable Date occurring during such one year period), any Stock Appreciation Right that is exercisable on your termination date or becomes exercisable during such period may be exercised by you in the event that:
•
the Director Human Resources of the Firm or nominee in his/her sole discretion determines that the Firm terminated your employment because your job was eliminated,
and
•
after you are notified that your job will be eliminated, you provide such services as requested by the Firm in a cooperative and professional manner,
and
•
you satisfy the Release/Certifications Requirement set forth below.
Full Career Eligibility
:
For the two year period commencing with the date of termination of your employment (or if longer the 90 day period commencing with the last Exercisable Date occurring during such two year period), any Stock Appreciation Right that is exercisable on your termination date or becomes exercisable during such period may be exercised by you in the event that:
•
you voluntarily terminate your employment with the Firm, have completed at least five years of continuous service with the Firm immediately preceding your termination date, and the sum of your age and Recognized Service (as defined below) on your date of termination equals or exceeds 60,
and
•
you provide at least 90 days advance written notice to the Firm of your intention to voluntarily terminate your employment under this provision, during which notice period you provide such services as requested by the Firm in a cooperative and professional manner and you do not perform any services for any other employer,
and
•
the Firm determines prior to the date your employment terminates that the ability to continue exercise the award is appropriate, which determination will be based on your performance and conduct (before and after providing notice),
and
• for the exercise period, you do not (i) perform services in any capacity (including self-employment) for a Financial Services Company (as defined below) or (ii) work in your profession (whether or not for a Financial Services Company); provided that you may work for a government, education or Not-for-Profit Organization (as defined below),
and
•
you satisfy the Release/Certification Requirements set forth below.
After receipt of such advance written notice, the Firm may choose to have you continue to provide services during the 90-day period or shorten the length of the 90-day notice period at the Firm's discretion, but to a date no earlier than the date you would otherwise meet the service requirement. Additional advance notice requirements may apply for employees subject to notice period policies.
(See “Notice Period” below.)
Death
:
If you die while employed by the Firm, your designated beneficiary on file with the Human Resources Department (or if no beneficiary is on file or survives you, then your estate) may exercise for a two year period measured from date of your death (or if longer the 90 day period commencing with the last Exercisable Date occurring during such two year period) (i) any Stock Appreciation Rights that were exercisable as of that date and (ii) any Stock Appreciation Rights that would have become exercisable had you remained employed during such two year period.
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Disability:
In the event that your employment with the Firm terminates because:
(i) you are unable to return to work while you are receiving benefits under the JPMorgan Chase Long Term Disability Plan, or for non-U.S. employees, under the equivalent JPMorgan Chase-sponsored local country plan, (“LTD Plan”), or
(ii) if you are not covered by a LTD Plan, you are unable to return to work due to a long-term disability that would qualify for benefits under the applicable LTD Plan, as determined by the Firm or a third-party designated by the Firm,
and
(iii) you request in writing the ability to continue to exercise due to such disability within 30 days of the date your employment terminates,
and
(iv) you provide requested supporting documentation
then you may exercise for a two year period measured from the date that your employment terminates any Stock Appreciation Rights that were exercisable as of the date of your termination; provided that you satisfy the Release/Certification Requirements set forth below.
Cancellation after the One or Two Year Period or Ninety Day Period:
Any Stock Appreciation Rights that are not exercised within the applicable one or two year period or ninety day period described above will be cancelled.
Release/Certification Requirements
To qualify for continued exercisability of your award after the termination of your employment under any of the foregoing circumstances (other than death):
• you must timely execute and deliver a release of claims in favor of the Firm, having such form and terms as the Firm shall specify,
• with respect to Full Career Eligibility, prior to the termination of your employment, you must confirm with management that you meet the eligibility criteria (including providing at least 90 days advance written notification) and advise that you are seeking to be treated as an individual eligible for Full Career Eligibility, and receive written consent to such continued exercisability,
• with respect to Disability, you must satisfy the notice and documentation described above and receive written consent to such continued exercisability, and
• you also must certify compliance with the above requirements relevant to you and with all other terms of the Award Agreement (See “
Your
Obligations
” below.), pursuant to procedures established by the Firm in connection with any exercise of Stock Appreciation Rights.
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Restriction on Disposition of Shares Derived from an Exercise Under this Award
|
If you exercise any part of your award before the fifth anniversary of the Grant Date, then you may not sell, assign, transfer, pledge or encumber the net number of shares of Common Stock derived from such exercise until the fifth anniversary of the Grant Date. Prior to the fifth anniversary of the Grant Date and prior to any exercise date thereafter, JPMorgan Chase may impose for any reason, as of such exercise date and for up to 90 days following such date, such restrictions on the Common Stock to be issued to you as it may deem appropriate, including, but not limited to, restricting the sale, transfer, pledge, assignment or encumbrance of such shares of Common Stock. By accepting this award, you agree to such restrictions without any further consent required. In the Firm’s discretion, such shares may be held in an account with the Firm’s stock transfer agent. Notwithstanding the foregoing, this restriction on disposition and transfer of shares shall not apply to your beneficiary in the event of your death.
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Your Obligations
|
In consideration of the grant of this award, you agree to comply with and be bound by obligations set forth below next to the sections captioned “Non-Solicitation of Employees and Customers,” “Confidential Information,” “Non-Disparagement,” ”Cooperation,” “Compliance with Award Agreement,” and “Notice Period.”
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Non-Solicitation of Employees and Customers
|
During your employment by the Firm and for one year following the termination of your employment (or if longer, the exercise period), you will not directly or indirectly, whether on your own behalf or on behalf of any other party, without the prior written consent of the Director Human Resources of JPMorgan Chase: (i) solicit, induce or encourage any of the Firm’s then current employees to leave the Firm or to apply for employment elsewhere, (ii) hire any employee or former employee who was employed by the Firm at the date your employment terminated, unless the individual’s employment terminated because his or her job was eliminated, or the individual’s employment with the Firm has been terminated for more than six months, or (iii) to the fullest extent enforceable under applicable law, solicit or induce or attempt to induce to leave the Firm, or divert or attempt to divert from doing business with the Firm, any then current customers, suppliers or other persons or entities that were serviced by you or whose names became known to you by virtue of your employment with the Firm, or otherwise interfere with the relationship between the Firm and such customers, suppliers or other persons or entities. This does not apply to publicly known institutional customers that you service after your employment with the Firm without the use of the Firm’s confidential or proprietary information.
These restrictions do not apply to authorized actions you take in the normal course of your employment with the Firm, such as employment decisions with respect to employees you supervise or business referrals in accordance with the Firm’s policies
.
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Confidential Information
|
You will not, either during your employment with the Firm or thereafter, directly or indirectly (i) use or disclose to anyone any confidential information related to the Firm’s business, or (ii) communicate with the press or other media about matters related to the Firm, its customers or employees, including matters and activities relating to your employment, or the employment of others, by the Firm, in the case of either (i) or (ii), except as explicitly permitted by the Firm’s Code of Conduct and applicable policies or law or legal process. “Confidential information” shall have the same meaning for the Award Agreement as it has in the Firm’s Code of Conduct.
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Non-Disparagement
|
You will not, either during your employment with the Firm or thereafter, make or encourage others to make any public statement or release any information in verbal, written, electronic or any other form that is intended to, or reasonably could be foreseen to, embarrass or criticize the Firm or its employees, directors or shareholders as a group. This shall not preclude you from reporting to the Firm’s management or directors or to the government or a regulator conduct you believe to be in violation of the law or the Firm’s Code of Conduct or responding truthfully to questions or requests for information to the government, a regulator or in a court of law in connection with a legal or regulatory investigation or proceeding.
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Cooperation
|
You will cooperate fully with and provide full and accurate information to the Firm and its counsel with respect to any matter (including any audit, tax proceeding, litigation or governmental proceeding) with respect to which you may have knowledge or information, subject to reimbursement for actual, appropriate and reasonable out-of-pocket expenses incurred by you.
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Compliance with Award Agreement
|
You will provide the Firm with any information reasonably requested to determine compliance with the Award Agreement, and you authorize the Firm to disclose the terms of the Award Agreement to any third party who might be affected thereby, including your prospective employer.
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Notice Period
|
If you are subject to a notice policy, whether by contract or policy, that requires you to provide advance written notice of your intention to terminate your employment (“Notice Period”), then as consideration for this award and continued employment, you will provide the Firm with the necessary advance written notice that applies to you, as specified by such contract or policy.
After receipt of such notice, the Firm may choose to have you continue to provide services during the applicable Notice Period or may place you on a paid leave for all or part of the applicable Notice Period. During the Notice Period, you shall continue to devote your full time and loyalty to the Firm by providing services in a cooperative and professional manner and not perform any services for any other employer and shall receive your base salary and certain benefits until your employment terminates. You and the Firm may mutually agree to waive or modify the length of the Notice Period.
Regardless of whether a Notice Period applies to you, you must comply with the 90-day advance notice period described under the section captioned “Full Career Eligibility” in the event you wish to terminate employment under the Full Career Eligibility provision.
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Remedies
|
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Cancellation
|
In addition to the cancellation of the award under the sections captioned “
Termination of Employment
, ” and the “
Recapture Provisions,
” all or part of your award may be cancelled if:
•
the Firm, in its sole discretion, determines that you are not in compliance with any of the advance notice/cooperation requirements or employment restrictions applicable to your termination of employment,
•
you have not returned the required forms specified under the section captioned “
Release/Certification
” within the specified deadline,
•
you violated any of the provisions as set forth above in the section captioned “
Your Obligations
,” or
• the Firm in its sole discretion determines cancellation is appropriate pursuant to the section captioned “
Recapture Provision
” above, and cancellation occurs within one year after the applicable Exercisable Date (except in the case of Cause, where the entire outstanding award may be cancelled).
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Recovery
|
In addition, you may be required to pay the Firm an amount equal to the Fair Market Value (determined as of the exercise date) of the gross number of shares of Common Stock distributable to you resulting from an exercise:
shares distributed, including shares withheld for tax purposes, during the one year prior to the violation of any of the provisions as set forth above in the section captioned “
Your Obligations
,”
shares distributed, including shares withheld for tax purposes, following termination of employment when you were not in compliance with the employment restrictions then applicable to you during the exercise period,
shares distributed, including shares withheld for tax purposes, during the one year period prior to the termination of your employment for Cause, including a later determination by the Firm that your employment could have been terminated for Cause (in which case the one year period will be measured from your actual termination date),
shares distributed, including shares withheld for tax purposes, within the three year period immediately preceding and any time after your termination of employment, if the Firm determines that you committed a fraudulent act, or engaged in knowing and willful misconduct related to your employment, or
shares distributed, including shares withheld for tax purposes, during the one year period immediately following the date that the Stock Appreciation Rights became exercisable, provided that during such one year period, the Firm, in its sole discretion, determines that the application of the “
Recovery Provisions
” above is appropriate to such exercise(s).
Payment may be made in shares of Common Stock or in cash and may be deducted by the Firm from any shares that are subject to restriction on disposition as described above.
You agree that this payment represents recovery of shares to which you were not entitled under the terms and conditions of the Award Agreement and is not to be construed in any manner as a penalty. You also acknowledge that a violation or attempted violation of the obligations set forth herein will cause immediate and irreparable damage to the Firm, and therefore agree that the Firm shall be entitled as a matter of right to an injunction, from any court of competent jurisdiction, restraining any violation or further violation of such obligations; such right to an injunction, however, shall be cumulative and in addition to whatever other remedies the Firm may have under law or equity.
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Administrative Provisions
|
Exercise Procedures/Withholding Taxes
: The exercise of Stock Appreciation Rights shall be in accordance with the Firm’s procedures for exercises of such awards. The date of exercise shall be the date when the properly completed notice of exercise is received and accepted by the Firm or its designee in accordance with the Firm’s procedures. Under these procedures, the Firm reserves the right to prohibit exercise of stock appreciation awards for a period of time, such as during a black-out period where trading in the Firm’s stock is restricted, or for legal, accounting or regulatory reasons. In such an event, the Firm will not change expiration dates or make other adjustments to awards to compensate for the time that exercise is prohibited.
The Firm, in its sole discretion, may (i) retain from each exercise the number of shares of Common Stock required to satisfy applicable tax obligations (including, to the extent legally permissible, recovery by the Firm of fringe benefit taxes, if any) or (ii) implement any other desirable or necessary procedures, so that appropriate withholding and other taxes are paid to the competent authorities. This may include but is not limited to (i) a market sale of a number of such shares on your behalf substantially equal to the withholding or other taxes, (ii) to the extent required by law, withhold from cash compensation, an amount equal to any withholding obligation with respect to each exercise, and (iii) retaining shares until you pay any taxes associated with the exercise directly to the competent authorities.
Right to Set Off:
The Firm may, to the maximum extent permitted by applicable law, retain for itself funds or securities otherwise payable to you pursuant to this award to satisfy any obligation or debt that you owe to the Firm.
Assignment or Transfer:
Except as otherwise provided in this Award Agreement, Stock Appreciation Rights shall not be assignable or transferable or subject to any lien, obligation or liability. You may make a gift of unexpired, unexercised Stock Appreciation Rights, subject to the Firm’s prior consent, to an immediate family member or a trust (or similar vehicle) for the benefit of these immediate family members (or beneficiaries) as defined below. JPMorgan Chase may condition its prior consent to receipt of an agreement by you and proposed transferee containing such terms and conditions and undertakings as JPMorgan Chase deems appropriate in its sole and absolute discretion. No attempted transfer will be valid without the Firm’s prior consent. “Immediate family members” include your parents, parents-in-law, children (including adopted children), grandchildren, and siblings or a trust exclusively for the benefit of one or more of these immediate family members. Your spouse is an Immediate Family Member but only if Stock Appreciation Rights are transferred to a trust (or similar vehicle) for the benefit of such spouse, which trust includes one or more other Immediate Family Members as beneficiaries.
Binding Agreement:
The Award Agreement will be binding upon any successor in interest to JPMorgan Chase, by merger or otherwise.
Not a Contract of Employment:
Nothing contained herein constitutes a contract of employment or continued employment. Employment is at-will and may be terminated by either you or JPMorgan Chase for any reason at any time. This award does not confer any right or entitlement to, nor does the award impose any obligation on the Firm to provide, the same or any similar award in the future, nor is its value included in any severance calculation.
Cancellation/Substitution
: JPMorgan Chase may, in its sole discretion and for any reason, cancel outstanding unexercised Stock Appreciation Rights and substitute an equal number of non-qualified stock options to purchase the same number of shares of common stock of JPMorgan Chase represented by the cancelled Stock Appreciation Rights. Such substituted options shall have the same exercise price, Expiration Date and other terms and conditions that were applicable to the Stock Appreciation Rights; provided that the method of exercise and the payment of exercise price, as well as the method of payment of withholding taxes, may be changed by JPMorgan Chase.
Change in Outstanding Shares:
In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, issuance of a new class of common stock, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to stockholders of Common Stock other than regular cash dividends, the Committee will make an equitable substitution or proportionate adjustment, in the number or kind of shares of Common Stock or other securities issued or reserved for issuance pursuant to the Plan and to any Stock Appreciation Rights (including but not to limited to their Exercise Price) outstanding under this award for such corporate events.
Interpretation/Administration:
The Committee has sole and complete authority to interpret and administer this Award Agreement, including, without limitation, the power to (i) interpret the Plan and the terms of this Award Agreement, (ii) determine the reason for termination of employment, (iii) determine the application of the post-employment obligations and cancellation and recovery provisions, (iv) decide all claims arising with respect to this award, and (v) delegate such authority as it deems appropriate. Any determination by the Committee or its delegate shall be binding on all parties.
Notwithstanding anything herein to the contrary, the Firm’s determinations under the Plan and the Award Agreements are not required to be uniform. By way of clarification, the Firm shall be entitled to make non-uniform and selective determinations and modifications under Award Agreements and the Plan.
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This Award is intended to be exempt from the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”) and shall be interpreted accordingly. Notwithstanding anything else herein or in the Plan, no action described herein or in the Plan shall be permitted if the Firm determines such action would result in the imposition of additional tax under Section 409A of the Code.”
Amendment:
The Committee or its delegate reserves the right to amend this Award Agreement in any manner, at any time and for any reason; provided, however, that no such amendment shall materially adversely affect your rights under this Award Agreement without your consent except to the extent that the Committee or its delegate considers advisable to (x) comply with applicable laws or changes in or interpretation of applicable laws, regulatory requirements and accounting rules or standards and (y) impose the restrictions under the section captioned “Restriction on Disposition of Shares Derived from an Exercise” and, to the extent permitted by Section 409A of the Code, make a change in a scheduled Exercisable Date. This Award Agreement may not be amended except in writing signed by the Director Human Resources of JPMorgan Chase.
Severability:
If any portion of the Award Agreement is determined by the Firm to be unenforceable in any jurisdiction, any court of competent jurisdiction (or arbitrator) or the Director Human Resources of JPMorgan Chase may reform the relevant provisions (e.g. as to length of service, geographical area or scope) to the extent the Firm (or court/arbitrator) considered necessary to make the provision enforceable under applicable law.
Use of Personal Data:
By accepting this award, you have acknowledged that the Firm may use your personal data for purposes of (i) determining your compensation, (ii) payroll activities, including, but not limited to, tax withholding and regulatory reporting, (iii) registration of shares, (iv) at its discretion, establishing brokerage account on your behalf, and (v) all other lawful purposes related to your employment and this award and that the Firm may provide such data to third party vendors with whom it has contracted to provide such services. You may terminate this authorization at any time except with respect to tax and regulatory reporting. In such case, your award will be cancelled.
Governing Law:
This award shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of law principles.
Choice of Forum:
By accepting this award, you agree that to the extent not otherwise subject to arbitration under an arbitration agreement between you and the Firm, any dispute arising directly or indirectly in connection with this award or the Plan shall be submitted to arbitration in accordance with the rules of the American Arbitration Association if so elected by the Firm in its sole discretion. In the event such a dispute is not subject to arbitration for any reason, you agree to accept the exclusive jurisdiction and venue of the United States District Court for the Southern District of New York with respect to any judicial proceeding in connection with this award or the Plan. You waive, to the fullest extent permitted by law, any objection to personal jurisdiction or to the laying of venue of such dispute and further agree not to commence any action arising out of or relating to this award or the Plan in any other forum.
Waiver of Jury Trial/Class Claims: By accepting this award, you agree with respect to any claim brought in connection with your employment with the Firm in any forum (i) to waive the right to a jury trial and (ii) that any judicial proceeding or arbitration claim will be brought on an individual basis, and you hereby waive any right to submit, initiate, or participate in a representative capacity or as a plaintiff, claimant or member in a class action, collective action, or other representative or joint action.
Litigation:
By accepting any award, you agree that in any action or proceeding by the Firm (other than a derivative suit in the right of the Firm) to enforce the terms and conditions of this Award Agreement where the Firm is the prevailing party, the Firm shall be entitled to recover from you its reasonable attorney fees and expenses incurred in such action or proceeding. In addition, you agree that you are not entitled to, and agree not to seek, advancement of attorney fees and indemnification under the Firm’s By-Laws in the event of such a suit by the Firm.
Outstanding Awards:
The Administrative provisions set forth above shall apply to any award of stock appreciation rights outstanding as of the date hereof, and such awards are hereby amended.
|
Definitions
|
"Cause"
means a determination by the Firm that your employment terminated as a result of your (i) violation of any law, rule or regulation (including rules of self-regulatory bodies) related to the Firm's business, (ii) indictment or conviction of a felony, (iii) commission of a fraudulent act, (iv) violation of the Firm’s Code of Conduct or other Firm policies or misconduct related to your duties to the Firm (other than an immaterial and inadvertent violation or misconduct), (v) inadequate performance of the duties associated with your position or job function or failure to follow reasonable directives of your manager, or (vi) any act or failure to act that is or might reasonably be expected to be injurious to the interests of the Firm or its relationship with a customer, client or an employee.
“
Financial Services Company
” means a business enterprise that employs you in any capacity (as an employee, contractor, consultant, advisor or self-employed individual whether paid or unpaid) and engages in:
• commercial or retail banking, including, but not limited to, commercial, institutional and personal trust, custody and/or lending and processing services, originating and servicing mortgages, issuing and servicing credit cards,
• insurance, including but not limited to, guaranteeing against loss, harm, damage, illness, disability or death, providing and issuing annuities, acting as principal, agent or broker for purpose of the forgoing,
• financial, investment or economic advisory services, including but not limited to, investment banking services (such as advising on mergers or dispositions, underwriting, dealing in, or making a market in securities or other similar activities), brokerage services, investment management services, asset management services, and hedge funds,
• issuing, trading or selling instruments representing interests in pools of assets or in derivatives instruments,
• advising on, or investing in, private equity or real estate, or
• any similar activities that JPMorgan Chase determines in its sole discretion constitute financial services.
“
Not-for-Profit Organization
” means an entity exempt from tax under state law and under Section 501(c) (3) of the Code. Section 501(c) (3) only includes entities organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary or educational purposes, or to foster national or international amateur sports competition or for the prevention of cruelty to children or animals.
“
Recognized Service
” means the period of service as an employee set forth in the Firm’s applicable service-related policies.
|
Year ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|||||
(in millions, except ratios)
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
(b)
|
|
|||||
Excluding interest on deposits
|
|
|
|
|
|
||||||||||
Income from continuing operations before income taxes
|
$
|
28,917
|
|
$
|
26,749
|
|
$
|
24,859
|
|
$
|
16,067
|
|
$
|
2,773
|
|
Fixed charges:
|
|
|
|
|
|
||||||||||
Interest expense
|
8,498
|
|
9,749
|
|
9,357
|
|
10,372
|
|
19,693
|
|
|||||
One-third of rents, net of income from subleases
(a)
|
554
|
|
562
|
|
578
|
|
569
|
|
507
|
|
|||||
Total fixed charges
|
9,052
|
|
10,311
|
|
9,935
|
|
10,941
|
|
20,200
|
|
|||||
Add: Equity in undistributed loss of affiliates/Less: Equity in undistributed income of affiliates
|
172
|
|
59
|
|
127
|
|
(21
|
)
|
623
|
|
|||||
Income from continuing operations before income taxes and fixed charges, excluding capitalized interest
|
$
|
38,141
|
|
$
|
37,119
|
|
$
|
34,921
|
|
$
|
26,987
|
|
$
|
23,596
|
|
Fixed charges, as above
|
$
|
9,052
|
|
$
|
10,311
|
|
$
|
9,935
|
|
$
|
10,941
|
|
$
|
20,200
|
|
Ratio of earnings to fixed charges
|
4.21
|
|
3.60
|
|
3.51
|
|
2.47
|
|
1.17
|
|
|||||
Including interest on deposits
|
|
|
|
|
|
||||||||||
Fixed charges as above
|
$
|
9,052
|
|
$
|
10,311
|
|
$
|
9,935
|
|
$
|
10,941
|
|
$
|
20,200
|
|
Add: Interest on deposits
|
2,655
|
|
3,855
|
|
3,424
|
|
4,826
|
|
14,546
|
|
|||||
Total fixed charges and interest on deposits
|
$
|
11,707
|
|
$
|
14,166
|
|
$
|
13,359
|
|
$
|
15,767
|
|
$
|
34,746
|
|
Income from continuing operations before income taxes and fixed charges, excluding capitalized interest, as above
|
$
|
38,141
|
|
$
|
37,119
|
|
$
|
34,921
|
|
$
|
26,987
|
|
$
|
23,596
|
|
Add: Interest on deposits
|
2,655
|
|
3,855
|
|
3,424
|
|
4,826
|
|
14,546
|
|
|||||
Total income from continuing operations before income taxes, fixed charges and interest on deposits
|
$
|
40,796
|
|
$
|
40,974
|
|
$
|
38,345
|
|
$
|
31,813
|
|
$
|
38,142
|
|
Ratio of earnings to fixed charges
|
3.48
|
|
2.89
|
|
2.87
|
|
2.02
|
|
1.10
|
|
(a)
|
The proportion deemed representative of the interest factor.
|
(b)
|
On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual Bank. On May 30, 2008, JPMorgan Chase merged with The Bear Stearns Companies Inc. Each of these transactions was accounted for as a purchase, and their respective results of operations are included in the Firm’s results from each respective transaction date.
|
Year ended December 31,
|
|
|
|
|
|
|
|
|
|
|
||||||
(in millions, except ratios)
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
|
2008
(c)
|
|
|||||
Excluding interest on deposits
|
|
|
|
|
|
|
||||||||||
Income from continuing operations before income taxes
|
$
|
28,917
|
|
$
|
26,749
|
|
$
|
24,859
|
|
$
|
16,067
|
|
|
$
|
2,773
|
|
Fixed charges:
|
|
|
|
|
|
|
||||||||||
Interest expense
|
8,498
|
|
9,749
|
|
9,357
|
|
10,372
|
|
|
19,693
|
|
|||||
One-third of rents, net of income from subleases
(a)
|
554
|
|
562
|
|
578
|
|
569
|
|
|
507
|
|
|||||
Total fixed charges
|
9,052
|
|
10,311
|
|
9,935
|
|
10,941
|
|
|
20,200
|
|
|||||
Add: Equity in undistributed loss of affiliates/Less: Equity in undistributed income of affiliates
|
172
|
|
59
|
|
127
|
|
(21
|
)
|
|
623
|
|
|||||
Income from continuing operations before income taxes and fixed charges, excluding capitalized interest
|
$
|
38,141
|
|
$
|
37,119
|
|
$
|
34,921
|
|
$
|
26,987
|
|
|
$
|
23,596
|
|
Fixed charges, as above
|
$
|
9,052
|
|
$
|
10,311
|
|
$
|
9,935
|
|
$
|
10,941
|
|
|
$
|
20,200
|
|
Preferred stock dividends (pretax)
|
906
|
|
899
|
|
947
|
|
3,435
|
|
(b)
|
803
|
|
|||||
Fixed charges including preferred stock dividends
|
$
|
9,958
|
|
$
|
11,210
|
|
$
|
10,882
|
|
$
|
14,376
|
|
|
$
|
21,003
|
|
Ratio of earnings to fixed charges and preferred stock dividend requirements
|
3.83
|
|
3.31
|
|
3.21
|
|
1.88
|
|
|
1.12
|
|
|||||
Including interest on deposits
|
|
|
|
|
|
|
||||||||||
Fixed charges including preferred stock dividends, as above
|
$
|
9,958
|
|
$
|
11,210
|
|
$
|
10,882
|
|
$
|
14,376
|
|
|
$
|
21,003
|
|
Add: Interest on deposits
|
2,655
|
|
3,855
|
|
3,424
|
|
4,826
|
|
|
14,546
|
|
|||||
Total fixed charges including preferred stock dividends and interest on deposits
|
$
|
12,613
|
|
$
|
15,065
|
|
$
|
14,306
|
|
$
|
19,202
|
|
|
$
|
35,549
|
|
Income from continuing operations before income taxes and fixed charges, excluding capitalized interest, as above
|
$
|
38,141
|
|
$
|
37,119
|
|
$
|
34,921
|
|
$
|
26,987
|
|
|
$
|
23,596
|
|
Add: Interest on deposits
|
2,655
|
|
3,855
|
|
3,424
|
|
4,826
|
|
|
14,546
|
|
|||||
Total income from continuing operations before income taxes, fixed charges and interest on deposits
|
$
|
40,796
|
|
$
|
40,974
|
|
$
|
38,345
|
|
$
|
31,813
|
|
|
$
|
38,142
|
|
Ratio of earnings to fixed charges and preferred stock dividend requirements
|
3.23
|
|
2.72
|
|
2.68
|
|
1.66
|
|
|
1.07
|
|
(a)
|
The proportion deemed representative of the interest factor.
|
(b)
|
Includes a one-time $1.6 billion pretax payment of TARP preferred dividends.
|
(c)
|
On September 25, 2008, JPMorgan Chase acquired the banking operations of Washington Mutual Bank. On May 30, 2008, JPMorgan Chase merged with The Bear Stearns Companies Inc. Each of these transactions was accounted for as a purchase, and their respective results of operations are included in the Firm’s results from each respective transaction date.
|
December 31, 2012
Name
|
Organized Under
The Laws Of
|
Banc One Building Management Corporation
|
Wisconsin
|
Banc One Capital Holdings LLC
|
Delaware
|
BOCP Holdings Corporation
|
Ohio
|
Banc One Capital Partners IV, Ltd.
|
Ohio
|
BOCF, LLC
|
Delaware
|
JPM Mezzanine Capital, LLC
|
Delaware
|
Banc One Financial LLC
|
Delaware
|
JPMorgan Capital Corporation
|
Delaware
|
First Chicago Leasing Corporation
|
Delaware
|
FM Holdings I, Inc.
|
Delaware
|
OX FCL Two, Inc.
|
Delaware
|
NLTC Fund Holdings I, Inc.
|
Delaware
|
GTC Fund V Holdings, Inc.
|
Delaware
|
GTC Fund IV Holdings, Inc.
|
Delaware
|
GTC Fund III Holdings, Inc.
|
Delaware
|
GHML Holdings II, Inc.
|
Delaware
|
GHML Holdings I, Inc.
|
Delaware
|
First Chicago Lease Holdings, Inc.
|
Delaware
|
Palo Verde Leasing Corporation
|
Delaware
|
JPMorgan Housing Corporation
|
Delaware
|
Cooper Project, L.L.C.
|
Delaware
|
J.P. Morgan Mansart Investments
|
France
|
Lenox Court Associates, Ltd
|
Florida
|
SAHP 130 Holdings, Inc.
|
Delaware
|
First Chicago Capital Corporation
|
Delaware
|
JPMorgan Capital (Canada) Corp.
|
Canada
|
One Mortgage Partners Corp.
|
Vermont
|
OEP Holding Corporation
|
Delaware
|
OEP Parent LLC
|
Delaware
|
Bank One Investment LLC
|
Delaware
|
Banc One Equity Capital Fund II, L.L.C.
|
Delaware
|
Banc One Equity Capital II, L.L.C.
|
Delaware
|
One Equity Partners LLC
|
Delaware
|
One Equity Partners II, L.P.
|
Cayman Islands
|
One Equity Partners III, L.P.
|
Cayman Islands
|
One Equity Partners IV, L.P.
|
Cayman Islands
|
One Equity Partners V, L.P.
|
Cayman Islands
|
Chase Travel Investment I, LLC
|
Delaware
|
SapoToro B.V.
|
Netherlands
|
VAC Holdings II (Cayman) Limited
|
Cayman Islands
|
Banc One Neighborhood Development Corporation
|
Ohio
|
Bear Stearns Irish Holdings Inc.
|
Delaware
|
Bear Stearns Ireland Limited
|
Ireland
|
Bear Stearns International Funding I S.à r.l.
|
Luxembourg
|
J.P. Morgan Dublin Financial Holdings Limited
|
Ireland
|
J.P. Morgan Bank Dublin plc
|
Ireland
|
Bear Stearns International Funding II S.à r.l.
|
Luxembourg
|
Bryant Financial Corporation
|
California
|
Chase Capital Holding Corporation
|
Delaware
|
Chase Capital Corporation
|
Delaware
|
Chase Capital Credit Corporation
|
Delaware
|
Chase Lincoln First Commercial Corporation
|
Delaware
|
Chase Manhattan Realty Leasing Corporation
|
New York
|
Palo Verde 1-PNM August 50 Corporation
|
Delaware
|
Palo Verde 1-PNM December 75 Corporation
|
Delaware
|
PV2-APS 150 Corporation
|
Delaware
|
Chatham Ventures, Inc.
|
New York
|
December 31, 2012
Name
|
Organized Under
The Laws Of
|
J.P. Morgan Partners (BHCA), L.P.
|
California
|
CVCA, LLC
|
Delaware
|
Chemical Investments, Inc.
|
Delaware
|
Clintstone Properties Inc.
|
New York
|
Hambrecht & Quist California
|
California
|
H&Q Holdings Inc.
|
Delaware
|
Homesales, Inc.
|
Delaware
|
J.P. Morgan Broker-Dealer Holdings Inc.
|
Delaware
|
J.P. Morgan Securities LLC
|
Delaware
|
J.P. Morgan Clearing Corp.
|
Delaware
|
J.P. Morgan Capital Financing Limited
|
United Kingdom
|
Robert Fleming Holdings Limited
|
United Kingdom
|
Copthall Overseas Limited
|
United Kingdom
|
J.P. Morgan Management (Jersey) Limited
|
Jersey
|
J.P. Morgan Chase International Financing Limited
|
United Kingdom
|
Chase Commercial Corporation
|
Delaware
|
J.P. Morgan Chase Community Development Corporation
|
Delaware
|
J.P. Morgan Chase National Corporate Services, Inc.
|
New York
|
J.P. Morgan Equity Holdings, Inc.
|
Delaware
|
JPM Capital Corporation
|
Delaware
|
JPMC Wind Assignor Corporation
|
Delaware
|
JPMC Wind Investment LLC
|
Delaware
|
JPMC Wind Investment Portfolio LLC
|
Delaware
|
JPM Heartland Wind I, LLC
|
Delaware
|
JPM Penta Wind, LLC
|
Delaware
|
CMC Holding Delaware Inc.
|
Delaware
|
Chase Bank USA, National Association
|
United States
|
Chase BankCard Services, Inc.
|
Delaware
|
Chase BankCard LLC
|
Delaware
|
J.P. Morgan Trust Company of Delaware
|
Delaware
|
JPMorgan Bank and Trust Company, National Association
|
United States
|
J.P. Morgan Finance Holdings (Japan) LLC
|
Delaware
|
J.P.Morgan Finance Japan YK
|
Japan
|
J.P. Morgan GT Corporation
|
Delaware
|
J.P. Morgan Insurance Holdings, L.L.C.
|
Arizona
|
Banc One Insurance Company
|
Vermont
|
Chase Insurance Agency, Inc.
|
Wisconsin
|
J.P. Morgan International Holdings LLC
|
Delaware
|
J.P. Morgan Trust Company (Cayman) Limited
|
Cayman Islands
|
J.P. Morgan Trust Company (Bahamas) Limited
|
The Bahamas
|
J.P. Morgan Invest Holdings LLC
|
Delaware
|
J.P. Morgan Retirement Plan Services LLC
|
Delaware
|
J.P. Morgan Partners (23A Manager), LLC
|
Delaware
|
J.P. Morgan Private Investments Inc.
|
Delaware
|
J.P. Morgan Services Asia Holdings, Inc.
|
Delaware
|
J.P. Morgan Services Asia Holdings Limited
|
Mauritius
|
J.P. Morgan Services India Private Limited
|
India
|
J.P. Morgan Ventures Energy Corporation
|
Delaware
|
JPMorgan Ventures Energy (Asia) Pte Ltd
|
Singapore
|
BE Investment Holding Inc.
|
Delaware
|
Arroyo Energy Investors LLC
|
Delaware
|
Okwari CB Holdings LP
|
Delaware
|
Argonaut Power LP
|
Delaware
|
J.P. Morgan Commodities Canada Corporation
|
Canada
|
J.P. Morgan China Commodities Corporation
|
Peoples Republic of China
|
Carbon Acquisition Company Limited
|
Jersey
|
ECOSECURITIES GROUP PLC
|
Ireland
|
Trading & Transportation Management LLC
|
Delaware
|
J.P. Morgan Metals Group Limited
|
United Kingdom
|
J.P. Morgan Metals Limited
|
United Kingdom
|
Henry Bath & Son Limited
|
United Kingdom
|
December 31, 2012
Name
|
Organized Under
The Laws Of
|
Henry Bath Singapore Pte Ltd
|
Singapore
|
Henry Bath LLC
|
Delaware
|
Henry Bath BV
|
Netherlands
|
J.P. Morgan Energy Trading Holdings Ltd.
|
United Kingdom
|
J.P. Morgan Energy Europe Ltd.
|
United Kingdom
|
J.P. Morgan Energy Europe s.r.o.
|
Czech Republic
|
J.P. Morgan Commodities Sarl
|
Switzerland
|
TTMI Sarl
|
Switzerland
|
JPM Ventures Energy Mexico S. de R.L. de C.V.
|
Mexico
|
JPM International Consumer Holding Inc.
|
Delaware
|
JPM International Consumer Holding, LLC
|
Delaware
|
JPMorgan Asset Management Holdings Inc.
|
Delaware
|
J.P. Morgan Alternative Asset Management, Inc.
|
Delaware
|
JPMorgan Asset Management (Asia) Inc.
|
Delaware
|
JPMorgan Asset Management (Taiwan) Limited
|
Taiwan
|
JPMorgan Asset Management (Japan) Limited
|
Japan
|
JPMAM Japan Cayman Fund Limited
|
Cayman Islands
|
JF Asset Management Limited
|
Hong Kong
|
JPMorgan Funds (Taiwan) Limited
|
Taiwan
|
JPMorgan Funds (Asia) Limited
|
Hong Kong
|
JPMorgan Asset Management (Singapore) Limited
|
Singapore
|
JPMorgan Asset Management (Korea) Company Limited
|
Korea, South
|
JPMorgan Asset Management India Private Limited
|
India
|
JPMorgan Asset Management Real Assets (Asia) Limited
|
Hong Kong
|
JPMorgan Asset Management (Canada) Inc.
|
Canada
|
J.P. Morgan Investment Management Inc.
|
Delaware
|
J.P. Morgan Direct Investors L.P.
|
Delaware
|
DVCMM LLC
|
Delaware
|
JPMPEG LLC
|
Delaware
|
JPMorgan Global Absolute Return Strategies Fund LLC
|
Delaware
|
SMF Global GP LLC
|
Delaware
|
JPMorgan Absolute Return Credit Fund LLC
|
Delaware
|
J.P. Morgan Research Total Return Fund LLC
|
Delaware
|
J. P. Morgan Research Total Return Master Fund Ltd
|
Cayman Islands
|
JPMorgan Distressed Debt Opportunities Fund LLC
|
Delaware
|
JPMorgan Distressed Debt Opportunities Master Fund Ltd.
|
Cayman Islands
|
JPMorgan Distressed Debt Fund LLC
|
Delaware
|
JPMorgan Distressed Debt Master Fund Ltd.
|
Cayman Islands
|
Junius Woodfield Carry LLC
|
Delaware
|
Junius Woodfield CIP LLC
|
Delaware
|
Junius Woodfield LP
|
Delaware
|
Junius Woodfield SPV LLC
|
Delaware
|
JPMorgan Asset Management International Limited
|
United Kingdom
|
JPMorgan Asset Management Holdings (UK) Limited
|
United Kingdom
|
JPMorgan Asset Management Marketing Limited
|
United Kingdom
|
J.P. Morgan Trustee & Administration Services Limited
|
United Kingdom
|
JPMorgan Funds Limited
|
United Kingdom
|
JPMorgan Asset Management Holdings (Luxembourg) S.à r.l.
|
Luxembourg
|
JPMorgan Asset Management (Europe) S.à r.l.
|
Luxembourg
|
J.P. Morgan GMIF (GP) Limited
|
United Kingdom
|
JPMorgan Life Limited
|
United Kingdom
|
JPMorgan Investments Limited
|
United Kingdom
|
JPMorgan Asset Management Luxembourg S.A.
|
Luxembourg
|
JPMorgan Asset Management (UK) Limited
|
United Kingdom
|
Security Capital Research & Management Incorporated
|
Delaware
|
Highbridge Capital Management, LLC
|
Delaware
|
Highbridge Capital Management (UK), Ltd.
|
United Kingdom
|
Highbridge Capital Management (Hong Kong), Limited
|
Hong Kong
|
Highbridge Capital Administrators, LLC
|
Delaware
|
Highbridge Principal Strategies, LLC
|
Delaware
|
Highbridge Principal Strategies (UK) I, Ltd
|
United Kingdom
|
December 31, 2012
Name |
Organized Under
The Laws Of
|
Highbridge Principal Strategies (UK), LLP
|
United Kingdom
|
Highbridge Principal Strategies Mezzanine Partners Offshore GP, L.P.
|
Cayman Islands
|
Highbridge Principal Strategies Mezzanine Partners GP, L.P.
|
Delaware
|
JPMorgan LDHES LLC
|
Delaware
|
J.P. Morgan Fund Investor LLC
|
Delaware
|
Constellation Venture Capital III (EF), L.P.
|
Delaware
|
HCM Participacoes Brasil Ltda.
|
Brazil
|
Gavea Investimentos Ltda.
|
Brazil
|
JPMorgan Asset Management Private Equity (China) LLC
|
Delaware
|
Gavea Equity Fund, L.P.
|
Delaware
|
Gavea Equity Master Fund SPC
|
Cayman Islands
|
JPMorgan Chase Bank, Dearborn
|
Michigan
|
JPMorgan Chase Bank, National Association
|
United States
|
Chase Community Development Corporation
|
Delaware
|
J.P. Morgan International Inc.
|
United States
|
Bank One International Holdings Corporation
|
United States
|
J.P. Morgan International Finance Limited
|
United States
|
J.P. Morgan Bank Canada
|
Canada
|
J.P. Morgan Beteiligungs-und Verwaltungsgesellschaft mbH
|
Germany
|
J.P. Morgan AG
|
Germany
|
NorChem Participacoes e Consultoria S.A.
|
Brazil
|
Norchem Holdings e Negocios S.A.
|
Brazil
|
J.P. Morgan Grupo Financiero S.A. De C.V.
|
Mexico
|
J.P. Morgan Casa de Bolsa, S.A. de C.V., J.P. Morgan Grupo Financiero
|
Mexico
|
Banco J.P. Morgan S.A., Institucion de Banca Multiple, J.P. Morgan Grupo Financiero
|
Mexico
|
Fideicomiso Socio Liquidador de Posición de Terceros F00265
|
Mexico
|
Banco J.P. Morgan S.A.
|
Brazil
|
J.P. Morgan S.A. Distribuidora de Titulos e Valores Mobiliarios
|
Brazil
|
J.P. Morgan Corretora de Cambio e Valores Mobiliarios S.A.
|
Brazil
|
Atacama Multimercado - Fundo de Investimento
|
Brazil
|
J.P. Morgan Trust Company (Jersey) Limited
|
Jersey
|
CB "J.P. Morgan Bank International" (LLC)
|
Russia
|
J.P. Morgan Bank Luxembourg S.A.
|
Luxembourg
|
J.P. Morgan Bank (Ireland) plc
|
Ireland
|
J.P. Morgan Administration Services (Ireland) Limited
|
Ireland
|
J.P. Morgan Chase Bank Berhad
|
Malaysia
|
Chase Manhattan Holdings Limitada
|
Brazil
|
J.P. Morgan Securities (C.I.) Limited
|
Jersey
|
Sibelius Corporation
|
Delaware
|
Inversiones J.P. Morgan Limitada
|
Chile
|
J.P. Morgan Corredores de Bolsa SpA
|
Chile
|
J.P. Morgan Funding South East Asia Private Limited
|
Singapore
|
J.P. Morgan (S.E.A.) Limited
|
Singapore
|
J.P. Morgan Capital Holdings Limited
|
United Kingdom
|
J.P. Morgan Chase (UK) Holdings Limited
|
United Kingdom
|
J.P. Morgan Chase International Holdings
|
United Kingdom
|
J.P. Morgan EU Holdings Limited
|
United Kingdom
|
J.P. Morgan Equities South Africa Proprietary Limited
|
South Africa
|
J.P. Morgan (SC) Limited
|
United Kingdom
|
J.P. Morgan International Bank Limited
|
United Kingdom
|
J.P. Morgan Securities plc
|
United Kingdom
|
J.P. Morgan Europe Limited
|
United Kingdom
|
Morgan Property Development Company Limited
|
United Kingdom
|
JPMorgan Servicios Auxiliares, S.A.
|
Spain
|
J.P. Morgan Limited
|
United Kingdom
|
J.P. Morgan Chase Finance Limited
|
United Kingdom
|
JPMorgan Cazenove Holdings
|
United Kingdom
|
J.P. Morgan Cazenove Limited
|
United Kingdom
|
JPMorgan Cazenove Service Company
|
United Kingdom
|
J.P. Morgan Holdings B.V.
|
Netherlands
|
J.P. Morgan International Holdings Limited
|
Cayman Islands
|
December 31, 2012
Name |
Organized Under
The Laws Of
|
JPMorgan Securities (Malaysia) Sdn. Bhd.
|
Malaysia
|
J.P. Morgan Securities Thailand Holdings Limited
|
British Virgin Islands
|
PGW Limited
|
Thailand
|
JPMorgan Securities (Thailand) Limited
|
Thailand
|
J.P. Morgan Securities Singapore Private Limited
|
Singapore
|
Jadeling Malaysia Holdings Limited
|
British Virgin Islands
|
J.P. Morgan Services (Malaysia) Sdn. Bhd.
|
Malaysia
|
J.P. Morgan India Securities Holdings Limited
|
Mauritius
|
J.P. Morgan India Private Limited
|
India
|
J.P. Morgan Indonesia Holdings (B.V.I.) Limited
|
British Virgin Islands
|
J.P. Morgan Holdings (Hong Kong) Limited
|
Hong Kong
|
Copthall Mauritius Investment Limited
|
Mauritius
|
J.P. Morgan Securities (Far East) Limited
|
Hong Kong
|
J.P. Morgan Broking (Hong Kong) Limited
|
Hong Kong
|
J.P. Morgan Futures Co., Limited
|
Peoples Republic of China
|
Crosby Sterling (Holdings) Limited
|
United Kingdom
|
J.P. Morgan Securities Holdings (Hong Kong) Limited
|
Hong Kong
|
J.P. Morgan Securities (Asia Pacific) Limited
|
Hong Kong
|
J.P. Morgan Securities Holdings (Caymans) Limited
|
Cayman Islands
|
J.P. Morgan Securities Philippines, Inc.
|
Philippines
|
J.P. Morgan Overseas Capital Corporation
|
Delaware
|
PT J.P. Morgan Securities Indonesia
|
Indonesia
|
J.P. Morgan Securities Canada Inc.
|
Canada
|
J.P. Morgan Espana S.A.
|
Spain
|
J.P. Morgan Whitefriars Inc.
|
Delaware
|
J.P. Morgan Whitefriars (UK)
|
United Kingdom
|
Morgan Guaranty Trust Company Limited
|
United Kingdom
|
J.P. Morgan Australia Group Pty Limited
|
Australia
|
J.P. Morgan Operations Australia Limited
|
Australia
|
J.P. Morgan Administrative Services Australia Limited
|
Australia
|
J.P. Morgan Australia Limited
|
Australia
|
J.P. Morgan Nominees Australia Limited
|
Australia
|
J.P. Morgan Securities Australia Limited
|
Australia
|
J.P. Morgan Portfolio Services Limited
|
Australia
|
JPMorgan Investments Australia Limited
|
Australia
|
J.P. Morgan Markets Australia Pty Limited
|
Australia
|
JPMorgan Colombia Holdings I, LLC
|
Delaware
|
JPMorgan Colombia Ltda.
|
Colombia
|
Patrimonio Autonomo "macondo"
|
Colombia
|
JPMorgan Colombia Holdings II, LLC
|
Delaware
|
JPMorgan Corporacion Financiera S.A.
|
Colombia
|
J.P. Morgan (Suisse) SA
|
Switzerland
|
J.P. Morgan Investimentos e Financas Ltda.
|
Brazil
|
J.P. Morgan Gavea Gestão de Patrimônio Ltda.
|
Brazil
|
J.P. Morgan Securities Asia Private Limited
|
Singapore
|
J.P. Morgan International Derivatives Ltd.
|
Jersey
|
J.P. Morgan Securities South Africa (Proprietary) Limited
|
South Africa
|
J.P. Morgan Malaysia Ltd.
|
Malaysia
|
J.P. Morgan Securities India Private Limited
|
India
|
Dearborn Merchant Services, Inc.
|
Canada
|
Chase Paymentech Solutions
|
Canada
|
First Data/Paymentech Canada Partner ULC
|
British Columbia
|
BOL Canada III, Inc.
|
Delaware
|
BOL Canada III Sub, Inc.
|
Delaware
|
BO Leasing III ULC
|
Canada
|
BOL Canada I, Inc.
|
Delaware
|
BOL Canada I Sub, Inc.
|
Delaware
|
BOL Canada II Sub, Inc.
|
Delaware
|
BOL Canada II Trust
|
Delaware
|
BO Leasing II ULC
|
Canada
|
JPMorgan Hedge Fund Services (Bermuda) Limited
|
Bermuda
|
December 31, 2012
Name |
Organized Under
The Laws Of
|
JPMorgan Hedge Fund Services (Ireland) Limited
|
Ireland
|
J.P. Morgan Securities (Taiwan) Limited
|
Taiwan
|
Bluebay Mauritius Investment Limited
|
Mauritius
|
Ambre Mauritius Investment Limited
|
Mauritius
|
Dauphine Mauritius Investment Limited
|
Mauritius
|
J.P. Morgan Structured Products B.V.
|
Netherlands
|
JPMorgan Holdings (Japan) LLC
|
Delaware
|
JPMorgan Securities Japan Co., Ltd.
|
Japan
|
J.P. Morgan Luxembourg International S.à r.l.
|
Luxembourg
|
J.P. Morgan Partners (CMB Reg K GP), Inc.
|
Delaware
|
J.P. Morgan Saudi Arabia Limited
|
Saudi Arabia
|
Asselijn Finance C.V.
|
Netherlands
|
Brysam Lux (Colombia), S.a.r.l.
|
Luxembourg
|
Paymentech Salem Services, LLC
|
Delaware
|
Chase Paymentech Europe Limited
|
Ireland
|
Cazenove Group Limited
|
Jersey
|
Cazenove IP Limited
|
United Kingdom
|
Cazenove Holdings Limited
|
Jersey
|
Bank One Europe Limited
|
United Kingdom
|
Manufacturers Hanover Leasing International Corp.
|
Delaware
|
Chase Access Services Corporation
|
Delaware
|
Chase Funding Corporation
|
Delaware
|
Chase Preferred Capital LLC
|
Delaware
|
CPCC Delaware Statutory Trust
|
Delaware
|
CPCC Texas Limited Partnership
|
Texas
|
CPCC Massachusetts Business Trust
|
Massachusetts
|
Cross Country Insurance Company
|
Vermont
|
Chase Mortgage Holdings, Inc.
|
Delaware
|
Harvest Opportunity Holdings Corp.
|
New York
|
Georgetown/Chase Phase I LLC
|
Delaware
|
J.P. Morgan Treasury Technologies Corporation
|
Delaware
|
DNT Asset Trust
|
Delaware
|
Ventures Business Trust
|
Maryland
|
J.P. Morgan Services Inc. Eimination Company
|
Delaware
|
J.P. Morgan Chase Custody Services, Inc.
|
Delaware
|
J.P. Morgan Mortgage Acquisition Corp.
|
Delaware
|
J.P. Morgan Electronic Financial Services, Inc.
|
New York
|
Banc One Real Estate Investment Corp.
|
Delaware
|
Banc One Kentucky Leasing Corporation
|
Kentucky
|
Banc One Equipment Finance, Inc.
|
Indiana
|
Banc One Community Development Corporation
|
Delaware
|
Banc One Building Corporation
|
Illinois
|
JPMN II Inc.
|
Nevada
|
JPMN Inc.
|
Nevada
|
Chase New Markets Corporation
|
Delaware
|
BONA Capital II, LLC
|
Delaware
|
BONA Capital I, LLC
|
Delaware
|
FNBC Leasing Corporation
|
Delaware
|
Guilford Capital Fund II, LLC
|
Delaware
|
Protech Tax Credit Fund III, LLC
|
United States
|
ICIB Fund I Holdings, Inc.
|
Delaware
|
FC Energy Finance I, Inc.
|
Delaware
|
Banc One Arizona Leasing Corporation
|
Arizona
|
FDC Offer Corporation
|
Delaware
|
Chase Merchant Services, L.L.C.
|
Delaware
|
Chase Paymentech Solutions, LLC
|
Delaware
|
Paymentech, LLC
|
Delaware
|
Paymentech, Inc.
|
Delaware
|
Paymentech Management Resources, Inc.
|
Delaware
|
Collegiate Funding Services, L.L.C.
|
Virginia
|
Collegiate Funding of Delaware, L.L.C.
|
Delaware
|
December 31, 2012
Name |
Organized Under
The Laws Of
|
Collegiate Funding Services Education Loan Trust 2003B
|
Delaware
|
Collegiate Funding Services Education Loan Trust 2004A
|
Delaware
|
Collegiate Funding Services Education Loan Trust 2005A
|
Delaware
|
Collegiate Funding Services Education Loan Trust 2005B
|
Delaware
|
Chase Student Loans, Inc.
|
Delaware
|
JPMorgan Chase Bank (China) Company Limited
|
Peoples Republic of China
|
J.P. Morgan Commercial Mortgage Inc.
|
New York
|
Bear Stearns Mortgage Capital Corporation
|
Delaware
|
Bear, Stearns Funding, Inc.
|
Delaware
|
JPMorgan Xign Corporation
|
Delaware
|
California Reconveyance Company
|
California
|
HCP Properties, Inc.
|
California
|
JPMC Mortgage Funding LLC
|
Delaware
|
WaMu 2007 MF-1 Trust
|
United States
|
WaMu 2008 SFR- 2
|
United States
|
Providian Bancorp Services
|
California
|
Second and Union, LLC
|
Delaware
|
Stockton Plaza, Incorporated
|
Florida
|
WaMu Asset Acceptance Corp.
|
Delaware
|
WaMu Capital Corp.
|
Washington
|
Washington Mutual Mortgage Securities Corp.
|
Delaware
|
WM Asset Holdings Corp.
|
Delaware
|
JPMC Real Estate Investment Trust
|
Maryland
|
Washington Mutual Preferred Funding LLC
|
Delaware
|
Washington Mutual Home Equity Trust I
|
Delaware
|
Wamu 2006-OA1
|
Delaware
|
Wamu 2007-Flex 1
|
United States
|
JPMC Specialty Mortgage LLC
|
Delaware
|
WMB Baker LLC
|
Nevada
|
FA Out-of-State Holdings, Inc.
|
California
|
Ahmanson Marketing, Inc.
|
California
|
CRP Properties, Inc.
|
California
|
FA California Aircraft Holding Corp.
|
California
|
Pacific Centre Associates LLC
|
California
|
WMRP Delaware Holdings LLC
|
Delaware
|
WMICC Delaware Holdings LLC
|
Delaware
|
Irvine Corporate Center, Inc.
|
California
|
Savings of America, Inc.
|
California
|
Washington Mutual Community Development, Inc.
|
California
|
Rivergrade Investment Corp.
|
California
|
Commercial Loan Partners L.P.
|
Nevada
|
Chase NMTC Crown Heights, LLC
|
Delaware
|
Attollo Holding Corp.
|
Delaware
|
Isolieren Holding Corp.
|
Delaware
|
We Uterque Holding Corp.
|
Delaware
|
Chase Community Equity, LLC
|
Delaware
|
Chase NMTC CHASS Investment Fund, LLC
|
Delaware
|
Chase NMTC KIPP Bronx Investment Fund, LLC
|
Delaware
|
Chase NMTC Madison Theatre Investment Fund, LLC
|
Delaware
|
Chase NMTC CFHC Investment Fund, LLC
|
Delaware
|
CNMC Sub-CDE 2, LLC
|
Delaware
|
Chase NMTC Swedish Covenant Investment Fund, LLC
|
Delaware
|
Chase NMTC Cook Investment Fund, LLC
|
Delaware
|
Chase NMTC SA St. Joseph Investment Fund, LLC
|
Delaware
|
Georgetown/Chase Phase II LLC
|
Delaware
|
JPMorgan Chase Funding Inc.
|
Delaware
|
PropPartners Master Fund L.P.
|
Cayman Islands
|
J.P. Morgan Indies SRL
|
Barbados
|
Madison Rubicon Holdings, LLC
|
Delaware
|
Rubicon US REIT, Inc.
|
Delaware
|
JPMorgan China Investment Company Limited
|
Delaware
|
December 31, 2012
Name |
Organized Under
The Laws Of
|
JPS Credit Opportunities Master Fund, L.P.
|
Cayman Islands
|
JPMorgan Distribution Services, Inc.
|
Delaware
|
JPMorgan Funds Management, Inc.
|
Delaware
|
JPMorgan Private Capital Asia Corp.
|
Delaware
|
JPMorgan Private Capital Asia GP Limited
|
Cayman Islands
|
JPMorgan Private Capital Asia General Partner, L.P.
|
Cayman Islands
|
JPMorgan Private Capital Asia Fund I, L.P.
|
Cayman Islands
|
JPMorgan PCA Holdings (Mauritius) I Limited
|
Mauritius
|
JPMorgan Securities Holdings LLC
|
Delaware
|
J.P. Morgan Commercial Mortgage Investment Corp.
|
Delaware
|
Reoco, Inc.
|
Delaware
|
J.P. Morgan Institutional Investments Inc.
|
Delaware
|
Neovest, Inc.
|
Utah
|
JPMorgan Special Situations Asia Corporation
|
Delaware
|
JPMorgan Special Situations (Mauritius) Limited
|
Mauritius
|
J.P. Morgan Advisors India Private Limited
|
India
|
Silver Summit (Delaware) Corporation
|
Delaware
|
Magenta Magic Limited
|
British Virgin Islands
|
Mountain Orchard Limited
|
Mauritius
|
Sterling Pathway
|
Mauritius
|
Banrod Investments Limited
|
Cyprus
|
JPMorgan Mauritius Holdings IV Limited
|
Mauritius
|
JPMorgan Mauritius Holdings VII Limited
|
Mauritius
|
Harbour Formosa Investment Holdings Limited
|
Mauritius
|
Harbour Victoria Investment Holdings Limited
|
Mauritius
|
JPMorgan Global Special Situations I LLC
|
Delaware
|
J.P. Morgan (China) Venture Capital Investment Company Limited
|
Peoples Republic of China
|
JPMorgan Global Special Situations II LLC
|
Delaware
|
J.P. Morgan Special Opportunities (Delaware) I LLC
|
Delaware
|
J.P. Morgan Special Opportunities (Delaware) II LLC
|
Delaware
|
J.P. Morgan Special Opportunities (Delaware) III LLC
|
Delaware
|
JPMP Capital Corp.
|
New York
|
J.P. Morgan Partners, LLC
|
Delaware
|
JPMP Capital, LLC
|
Delaware
|
J.P. Morgan Partnership Capital Corporation
|
Delaware
|
Peabody Real Estate Partnership Corporation
|
Delaware
|
The Peabody Fund Consultants, Inc.
|
Delaware
|
J.P. Morgan Capital, L.P.
|
Delaware
|
J.P. Morgan Investment Holdings, LLC
|
Delaware
|
JPMCC Belgium (SCA)
|
Belgium
|
JPMREP Holding Corporation
|
Delaware
|
JPMorgan Real Estate Partners, L.P.
|
Delaware
|
PIM Continental LLC
|
Delaware
|
Patriot-JPM Conti Charlotte Holdings, LLC
|
Delaware
|
PIM SP4 Office Holdings, LLC
|
Delaware
|
JPMorgan Real Estate Partners, LP, BofA Plaza LLC
|
Delaware
|
Westcore Vine, LP
|
Delaware
|
LabMorgan Corporation
|
Delaware
|
J.P. Morgan Financial Investments Limited
|
United Kingdom
|
LabMorgan Investment Corporation
|
Delaware
|
LabMorgan Investment LLC
|
Delaware
|
Max Recovery Australia Pty Limited
|
Australia
|
MorServ, Inc.
|
Delaware
|
NBD Community Development Corporation
|
Michigan
|
Offshore Equities, Inc.
|
New York
|
Park Assurance Company
|
Vermont
|
SCG Equities I Holding Corp.
|
Delaware
|
SIG Holdings, Inc.
|
New York
|
J.P. Morgan SIG Holdings (Spain), S.L.
|
Spain
|
Special Situations Investing Inc.
|
Delaware
|
The Bear Stearns Companies LLC
|
Delaware
|
December 31, 2012
Name |
Organized Under
The Laws Of
|
Bear, Stearns International Holdings Inc.
|
New York
|
BSG Insurance Holdings Limited
|
United Kingdom
|
Minster Insurance Company Limited
|
United Kingdom
|
EMC Mortgage LLC
|
Delaware
|
Bear Stearns Asset Management Inc.
|
New York
|
Bear Stearns Access Fund Management LLC
|
Delaware
|
Bear Stearns Access Fund VII, L.P.
|
Delaware
|
Bear Stearns Capital Markets Inc.
|
Delaware
|
Bear Stearns Alternative Assets International Limited
|
Cayman Islands
|
Bear Stearns Investment Products Inc.
|
New York
|
Strategic Mortgage Opportunities REIT Inc.
|
Delaware
|
Bear Stearns International Funding I, Inc.
|
Delaware
|
Bear Stearns International Funding (Bermuda) Limited
|
Bermuda
|
Bear Stearns Overseas Funding Unlimited
|
United Kingdom
|
Bear Stearns International Funding II, Inc.
|
Delaware
|
Bear Hunter Holdings LLC
|
Delaware
|
Vandelay Recoveries Inc.
|
Delaware
|
Max Recovery Canada Company
|
Canada
|
PricingDirect Inc.
|
Delaware
|
Plymouth Park Tax Services LLC
|
Delaware
|
Madison Tax Capital, LLC
|
Delaware
|
eCAST Settlement Corporation
|
Delaware
|
Bear, Stearns Realty Investors, Inc.
|
Delaware
|
Bear Stearns Corporate Lending Inc.
|
Delaware
|
Bear Strategic Investments Corp.
|
Delaware
|
Bear Stearns Singapore Holdings Pte Ltd
|
Singapore
|
Bear Stearns Services Inc.
|
Delaware
|
MLP Investment Holdings, Inc.
|
Delaware
|
Gregory/Madison Avenue LLC
|
Delaware
|
Bear Stearns Residential Mortgage Corporation
|
Delaware
|
Bear Stearns UK Holdings Limited
|
United Kingdom
|
Bear Stearns Holdings Limited
|
United Kingdom
|
J.P. Morgan Markets Limited
|
United Kingdom
|
Bear Stearns International Trading Limited
|
United Kingdom
|
Community Capital Markets LLC
|
Delaware
|
Commercial Lending LLC
|
Delaware
|
Indiana Four Holdings LLC
|
Delaware
|
Indiana Four LLC
|
Delaware
|
CL II Holdings LLC
|
Delaware
|
Commercial Lending II LLC
|
Delaware
|
Commercial Lending III LLC
|
Delaware
|
Bear UK Mortgages Limited
|
United Kingdom
|
Rooftop Holdings Limited
|
United Kingdom
|
Rooftop Funding Limited
|
United Kingdom
|
Rooftop Mortgages Limited
|
United Kingdom
|
Max Recovery Limited
|
United Kingdom
|
MAX Recovery Inc.
|
Delaware
|
MAX Flow Corp.
|
Delaware
|
Bear Growth Capital Partners, LP
|
Delaware
|
J.P. Morgan Mansart Management Limited
|
United Kingdom
|
Aldermanbury Investments Limited
|
United Kingdom
|
Principal Real Estate Funding Corporation Limited
|
United Kingdom
|
Bear Stearns MB 1998-1999 Pre-Fund, LLC
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K of JPMorgan Chase & Co.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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1.
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I have reviewed this annual report on Form 10-K of JPMorgan Chase & Co.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of JPMorgan Chase & Co.
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Date:
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February 28, 2013
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By:
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/s/
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James Dimon
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James Dimon
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Chairman and Chief Executive Officer
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Date:
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February 28, 2013
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By:
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/s/
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Marianne Lake
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Marianne Lake
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Executive Vice President and Chief Financial Officer
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