For the fiscal year ended
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Commission file
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December 31, 2017
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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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Warrants to purchase shares 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 5.45% Non-Cumulative Preferred Stock, Series P
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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 6.70% Non-Cumulative Preferred Stock, Series T
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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 6.30% Non-Cumulative Preferred Stock, Series W
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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 6.125% Non-Cumulative Preferred Stock, Series Y
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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 6.10% Non-Cumulative Preferred Stock, Series AA
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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 6.15% Non-Cumulative Preferred Stock, Series BB
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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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Guarantee of Callable Step-Up Fixed Rate Notes due April 26, 2028 of JPMorgan Chase Financial Company LLC
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The New York Stock Exchange
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Guarantee of Cushing 30 MLP Index ETNs due June 15, 2037 of JPMorgan Chase Financial Company LLC
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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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Non-accelerated filer
(Do not check if a smaller reporting company)
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Smaller reporting company
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Emerging growth company
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32-35
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3
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5
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6
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limit the products and services that it offers
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reduce the liquidity that it can provide through its market-making activities
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stop or discourage it from engaging in business opportunities that it might otherwise pursue
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recognize losses in the value of assets that it holds
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8
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pay higher assessments, levies or other governmental charges
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dispose of certain assets, and do so at times or prices that are disadvantageous
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impose restrictions on certain business activities, or
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increase the prices that it charges for products and services, which could reduce the demand for them.
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larger firms are often subject to more stringent supervision and regulation
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financial technology companies and other competitors may not be subject to banking regulation, or may be supervised by a national or state regulatory agency that does not have the same resources or regulatory priorities as the regulatory agencies which supervise more diversified financial services firms, or
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the financial services regulatory framework in a particular jurisdiction may favor financial institutions that are based in that country.
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the resolution of financial institutions
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the establishment by non-EU financial institutions of intermediate holding companies in the EU
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the separation of trading activities from core banking services
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mandatory on-exchange trading
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position limits and reporting rules for derivatives
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governance and accountability regimes
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conduct of business requirements, and
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restrictions on compensation.
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divest assets or restructure its operations
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absorb increased operational, capital and liquidity costs
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change the prices that it charges for its products and services
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curtail the products and services that it offers to its customers and clients, or
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incur higher costs for complying with different legal and regulatory frameworks.
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greater exposure in civil litigation
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damage to reputation
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disqualification from doing business with certain clients or customers, or in specific jurisdictions, or
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9
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other direct and indirect adverse effects.
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JPMorgan Chase’s agreement in May 2015 to plead guilty to a single violation of federal antitrust law in connection with its settlements with certain government authorities relating to its foreign exchange sales and trading activities and controls related to those activities, and
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the non-prosecution agreement entered into by a subsidiary of JPMorgan Chase with the U.S. Department of Justice in November 2016 in connection with settlements to resolve various governmental investigations relating to a former hiring program for candidates referred by clients, potential clients and government officials in the Asia Pacific region.
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enter into further orders and settlements
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pay additional regulatory fines, penalties or judgments, or
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accept material regulatory restrictions on, or changes in the management of, its businesses.
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in a bankruptcy proceeding under Chapter 11 of the U.S. Bankruptcy Code, or
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in a receivership administered by the FDIC under Title II of the Dodd-Frank Act (“Title II”).
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10
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erode investor confidence in the U.S. economy and financial markets
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heighten concerns about whether the U.S. government will be funded, and its outstanding debt serviced, at any particular time, and
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undermine the status of the U.S. dollar as a safe haven currency.
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concerns about the capabilities and intentions of the government of North Korea, and
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regional hostilities, and political or social upheavals, in other parts of the world.
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the liquidity in the U.S. and global financial markets
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the level and volatility of market prices and rates, including those for debt and equity instruments,
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11
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investor, consumer and business sentiment
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events that reduce confidence in the financial markets
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inflation and unemployment
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the availability and cost of capital and credit
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the economic effects of natural disasters, severe weather conditions, health emergencies or pandemics, cyberattacks, outbreaks of hostilities, terrorism or other geopolitical instabilities
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monetary and fiscal policies and actions taken by governmental authorities, including the Federal Reserve and other central banks, and
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the health of the U.S. and global economies.
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U.S. interest rates
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the rate of unemployment
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housing prices
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the level of consumer confidence
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changes in consumer spending, and
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the number of personal bankruptcies.
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earn less fee revenue due to lower transaction volumes, including when clients are unwilling or unable to refinance their outstanding debt obligations in unfavorable market conditions
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dispose of portions of credit commitments, such as loan syndications or securities underwritings, at a loss, or
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hold larger residual positions in credit commitments that cannot be sold at favorable prices.
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JPMorgan Chase’s ability to effectively hedge market and other risks on its positions
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volatility in interest rates and debt, equity and commodities markets
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changes in interest rates and credit spreads, and
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the availability of liquidity in the capital markets.
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severe declines in asset values
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unexpected credit events
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unforeseen events or conditions that may cause previously uncorrelated factors to become correlated (and vice versa), or
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other market risks that may not have been appropriately taken into account in the development, structuring or pricing of a financial instrument.
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12
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fewer originations of commercial and residential loans
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lower returns on JPMorgan Chase’s investment securities portfolio, and
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the loss of deposits to the extent that JPMorgan Chase makes incorrect assumptions about depositor behavior.
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the amounts that JPMorgan Chase earns on its investment securities portfolio to the extent that it is unable to reinvest contemporaneously in higher-yielding instruments, and
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the value of JPMorgan Chase’s mortgage servicing rights (“MSRs”) asset, thereby reducing its net interest income and other revenues.
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curtail the trading markets for those instruments
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make it difficult to sell or hedge those instruments
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increase JPMorgan Chase’s funding costs, or
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adversely affect JPMorgan Chase’s profitability, capital or liquidity.
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13
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engage in similar businesses
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do business in the same geographic region, or
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have business profiles, models or strategies that could cause their ability to meet their obligations to be similarly affected by changes in economic conditions.
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14
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market-wide illiquidity or disruption
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unforeseen cash or capital requirements
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inability to sell assets, or to sell assets at favorable times or prices
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default by a CCP or other significant market participant
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unanticipated outflows of cash or collateral, and
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lack of market or customer confidence in JPMorgan Chase or financial institutions in general.
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satisfy applicable liquidity coverage ratio and net stable funding ratio requirements
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continue to satisfy requirements under the TLAC rules concerning the amount of eligible LTD that JPMorgan Chase must have outstanding
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address obligations under its resolution plan, or
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satisfy regulatory requirements in countries outside the U.S. relating to the pre-positioning of liquidity in subsidiaries that are material legal entities.
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pay interest on its debt securities
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pay dividends on its equity securities
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redeem or repurchase outstanding securities, and
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fulfill its other payment obligations.
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economic and geopolitical trends
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regulatory developments
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expected future profitability
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15
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risk management practices
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legal expenses
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assumptions about government support, and
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ratings differentials between bank holding companies and their bank and non-bank subsidiaries.
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reducing access to capital markets
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materially increasing the cost of issuing and servicing securities
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triggering additional collateral or funding requirements, and
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decreasing the number of investors and counterparties that are willing or permitted to do business with or lend to JPMorgan Chase.
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the quality of the information contained in those systems, as inaccurate, outdated or corrupted data can significantly compromise the functionality of a particular operational system and other systems to which it transmits information, and
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JPMorgan Chase’s ability to appropriately maintain and upgrade its systems on a regular basis, and to ensure that any changes introduced to its systems are managed carefully to ensure operational continuity.
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delays or other disruptions in providing information, services and liquidity to clients and customers
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the inability to settle transactions or obtain access to funds and other assets
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16
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the possibility that transactions such as funds transfers or capital markets trades are executed erroneously, illegally or with unintended consequences
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financial losses, including possible restitution to clients and customers
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higher operational costs associated with replacing services provided by a system that is unavailable
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customer dissatisfaction and loss of confidence in JPMorgan Chase’s products and services, and
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harm to reputation.
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errors, whether inadvertent or malicious, cause widespread system disruption
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isolated or seemingly insignificant errors in operational systems compound, or migrate to other systems over time, to become larger issues
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failures in synchronization or encryption software, or degraded performance of microprocessors due to design flaws, causes disruptions in operational systems, or the inability of systems to communicate with each other, and
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third parties attempt to block the use of key technology solutions by claiming that the use infringes on their intellectual property rights.
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potential liability to clients and customers
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increased operating expenses
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higher litigation costs, including regulatory fines, penalties and other sanctions
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damage to JPMorgan Chase’s reputation
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impairment of JPMorgan Chase’s liquidity
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regulatory intervention, or
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weaker competitive standing.
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heightened risk that third parties will be able to execute fraudulent transactions using JPMorgan Chase’s systems
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losses from fraudulent transactions, as well as potential liability for losses that exceed thresholds established in consumer protection laws and regulations
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increased operational costs to remediate the consequences of the third party’s security breach, and
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harm to reputation arising from the perception that JPMorgan Chase’s systems may not be secure.
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JPMorgan Chase’s clients and customers
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clients and customers of JPMorgan Chase’s clients and customers
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JPMorgan Chase’s employees, and
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employees of JPMorgan Chase’s suppliers, counterparties and other third parties.
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increase JPMorgan Chase’s operating costs
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affect the development of new products or services
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demand significant oversight by JPMorgan Chase’s management, and
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require JPMorgan Chase to structure its businesses, operations and systems in less efficient ways.
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erroneously provided to parties who are not permitted to have the information, or
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intercepted or otherwise compromised by third parties.
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cyberbreaches or breaches of physical premises
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electrical or telecommunications outages
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failures of, or loss of access to, operational systems, including computer systems, servers, networks and other technology assets
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damage to or loss of property or assets
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natural disasters or severe weather conditions
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health emergencies or pandemics, or
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events arising from local or larger-scale political events, including outbreaks of hostilities or terrorist acts.
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hinder its ability to provide services to its clients and customers
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require it to expend significant resources to correct the failure or disruption
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cause it to incur financial losses, both from loss of revenue and damage to or loss of property, and
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expose it to litigation or regulatory fines, penalties or other sanctions.
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18
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obtain unauthorized access to confidential information belonging to JPMorgan Chase or its clients and customers
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manipulate or destroy data
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disrupt, sabotage or degrade service on JPMorgan Chase’s systems, or
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steal money.
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the techniques used in cyberattacks change frequently and may not be recognized until launched
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cyberattacks can originate from a wide variety of sources, including third parties who are or may be involved in organized crime or linked to terrorist organizations or hostile foreign governments, and
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third parties may seek to gain access to JPMorgan Chase’s systems either directly or using equipment or security passwords belonging to employees, customers, third-party service providers or other users of JPMorgan Chase’s systems.
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significant disruption of JPMorgan Chase’s operations and those of its clients, customers and counterparties, including losing access to operational systems
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misappropriation of confidential information of JPMorgan Chase or that of its clients, customers, counterparties or employees
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damage to computers or systems of JPMorgan Chase and those of its clients, customers and counterparties
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inability to fully recover and restore data that has been stolen, manipulated or destroyed, or to prevent systems from processing fraudulent transactions
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violations by JPMorgan Chase of applicable privacy and other laws
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financial loss to JPMorgan Chase or to its clients and customers
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loss of confidence in JPMorgan Chase’s cybersecurity measures
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client and customer dissatisfaction
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significant exposure to litigation and regulatory fines, penalties or other sanctions, or
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harm to JPMorgan Chase’s reputation.
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the breadth of JPMorgan Chase’s operations and the high volume of transactions that it processes
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the large number of customers, counterparties and third-party service providers with which JPMorgan Chase does business
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the proliferation and increasing sophistication of cyberattacks, and
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the possibility that a third party, after establishing a foothold on an internal network without being detected, might obtain access to other networks and systems.
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19
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require significant resources to remediate
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attract heightened regulatory scrutiny
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expose JPMorgan Chase to regulatory investigations or legal proceedings
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subject it to litigation or regulatory fines, penalties or other sanctions
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harm its reputation, or
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diminish confidence in JPMorgan Chase.
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reliance on historical trends that may not accurately predict future events, including assumptions underlying the models and estimations which predict correlation among certain market indicators or asset prices
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inherent limitations associated with forecasting uncertain economic and financial outcomes
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historical trend information may be incomplete, or may not anticipate severely negative market conditions such as extreme volatility, dislocation or lack of liquidity
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technology that is introduced to run models or estimations may not perform as expected, or may not be well understood by the personnel using the technology
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models and estimations may contain erroneous data, valuations, formulas or algorithms, and
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review processes may fail to detect flaws in models and estimations.
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20
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potential liability to clients and customers
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regulatory fines, penalties or other sanctions
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increased operational costs, or
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harm to its reputation.
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trading assets and liabilities
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instruments in the investment securities portfolio
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certain loans
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MSRs
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structured notes, and
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certain repurchase and resale agreements.
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materially and adversely affect JPMorgan Chase’s business and results of operations or financial condition
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restrict its ability to access the capital markets
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require it to expend significant resources to correct the lapses or deficiencies
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expose it to litigation or regulatory fines, penalties or other sanctions
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harm its reputation, or
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otherwise diminish investor confidence in JPMorgan Chase.
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the products and services that JPMorgan Chase offers
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the geographies in which it operates
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the types of clients and customers that it serves
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the counterparties with which it does business, and
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the methods and distribution channels by which it offers products and services.
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prove to be incorrect
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21
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do not accurately assess the competitive landscape and industry trends, or
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fail to address changing regulatory and market environments in the U.S. and abroad.
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devise effective business plans and strategies
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effectively implement business decisions, including by minimizing bureaucratic processes
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institute controls that appropriately address the risks associated with business activities and any changes in those activities
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offer products and services that meet the expectations of clients and customers, and in ways that enhance their satisfaction with those products and services
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allocate capital to JPMorgan Chase’s businesses in a manner that promotes their long-term profitability
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adequately respond to regulatory requirements
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appropriately address shareholder concerns
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react quickly to changes in market conditions or market structures, or
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develop and enhance the operational, technology, risk, financial and managerial resources necessary to grow and manage JPMorgan Chase’s businesses.
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improperly selling and marketing JPMorgan Chase’s products or services
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engaging in insider trading, market manipulation or unauthorized trading
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facilitating illegal or aggressive tax-motivated transactions, or transactions designed to circumvent economic sanction programs
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failing to fulfill fiduciary obligations or other duties owed to clients or customers
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violating anti-trust or anti-competition laws by colluding with other market participants to manipulate markets, prices or indices
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making risk decisions in ways that subordinate JPMorgan Chase’s risk appetite to employee compensation objectives, and
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misappropriating property or confidential or proprietary information or technology belonging to JPMorgan Chase, its clients and customers or third parties.
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financial losses
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increased operational and compliance costs
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greater regulatory scrutiny
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requirements that JPMorgan Chase restructure, curtail or cease certain of its activities
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the need for significant oversight by JPMorgan Chase’s management
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the undermining of JPMorgan Chase’s culture
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22
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loss of clients or customers, and
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harm to JPMorgan Chase’s reputation.
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employee misconduct
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security breaches
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compliance failures
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litigation or regulatory fines, penalties or other sanctions, or
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regulatory investigations, enforcement actions or settlements.
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adequately address or appropriately disclose conflicts of interest
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deliver appropriate standards of service and quality
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treat clients and customers fairly
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use client and customer data responsibly and in a manner that meets legal requirements and regulatory expectations
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provide fiduciary products or services in accordance with the applicable legal and regulatory standards, or
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handle or use confidential information of customers or clients appropriately or in compliance with applicable data protection and privacy laws and regulations.
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negative effects from slowing growth rates or recessionary economic conditions
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the risk of loss from unfavorable political, legal or other developments, including social or political instability, in the countries or regions in which those companies operate, and
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the other risks and considerations discussed below.
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23
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default on or restructure its obligations
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claim that actions taken by government officials were beyond the legal authority of those officials, or
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repudiate transactions authorized by a previous incumbent government.
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extreme currency fluctuations
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high inflation
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low or negative growth, or
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defaults or potential defaults on sovereign debt.
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social unrest
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general strikes and demonstrations
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crime and corruption
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security and personal safety issues
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outbreaks of hostilities
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overthrow of incumbent governments
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terrorist attacks, or
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other forms of internal discord.
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the absence of a statutory or regulatory basis or guidance for engaging in specific types of business or transactions
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the adoption of conflicting or ambiguous laws and regulations, or the inconsistent application or interpretation of existing laws and regulations
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uncertainty concerning the enforceability of contractual obligations
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difficulty in competing in economies in which the government controls or protects all or a portion of the local economy or specific businesses, or where graft or corruption may be pervasive, and
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24
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the threat of arbitrary regulatory investigations, civil litigations or criminal prosecutions, the termination of licenses required to operate in the local market or the suspension of business relationships with governmental bodies.
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monetary policies
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expropriation, nationalization or confiscation of assets
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price, capital or exchange controls, and
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changes in laws and regulations.
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other banks and financial institutions
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trading, advisory and investment management firms
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finance companies and technology companies, and
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other firms that are engaged in providing similar products and services.
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25
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prohibitions on engaging in certain transactions
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higher capital and liquidity requirements
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making JPMorgan Chase’s pricing of certain transactions more expensive for clients, and
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adversely affecting JPMorgan Chase’s cost structure for providing certain products.
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26
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December 31, 2017
(in millions)
|
Approximate square footage
|
|
|
|
|
United States
(a)
|
|
|
New York City, New York
|
|
|
270 Park Ave, New York, New York
|
1.3
|
|
All other New York City locations
|
8.8
|
|
Total New York City, New York
|
10.1
|
|
|
|
|
Other U.S. locations
|
|
|
Columbus/Westerville, Ohio
|
3.7
|
|
Chicago, Illinois
|
2.8
|
|
Phoenix/Tempe, Arizona
|
2.6
|
|
Wilmington/Newark, Delaware
|
2.2
|
|
Dallas/Plano, Texas
|
2.1
|
|
Houston, Texas
|
2.1
|
|
Jersey City, New Jersey
|
1.5
|
|
All other U.S. locations
|
34.8
|
|
Total United States
|
61.9
|
|
|
|
|
Europe, the Middle East and Africa (“EMEA”)
|
|
|
25 Bank Street, London, U.K.
|
1.4
|
|
All other U.K. locations
|
3.0
|
|
All other EMEA locations
|
0.9
|
|
Total EMEA
|
5.3
|
|
|
|
|
Asia Pacific, Latin America and Canada
|
|
|
India
|
3.1
|
|
All other locations
|
3.9
|
|
Total Asia Pacific, Latin America and Canada
|
7.0
|
|
Total
|
74.2
|
|
(a)
|
At December 31, 2017, the Firm owned or leased 5,130 retail branches in 23 states.
|
|
|
27
|
Year ended December 31, 2017
|
|
Total shares of common stock repurchased
|
|
Average price paid per share of common stock
(a)
|
|
Aggregate repurchases of common equity (in millions)
(a)
|
|
Dollar value
of remaining
authorized
repurchase
(in millions)
(a)
|
|
|||||||
First quarter
|
|
32,132,964
|
|
|
$
|
88.14
|
|
|
$
|
2,832
|
|
|
$
|
3,221
|
|
|
Second quarter
|
|
34,940,127
|
|
|
86.05
|
|
|
3,007
|
|
|
214
|
|
(b)
|
|||
Third quarter
|
|
51,756,892
|
|
|
92.02
|
|
|
4,763
|
|
|
14,637
|
|
|
|||
October
|
|
14,248,307
|
|
|
98.04
|
|
|
1,397
|
|
|
13,241
|
|
|
|||
November
|
|
19,472,405
|
|
|
98.92
|
|
|
1,926
|
|
|
11,314
|
|
|
|||
December
|
|
14,006,503
|
|
|
106.02
|
|
|
1,485
|
|
|
9,830
|
|
|
|||
Fourth quarter
|
|
47,727,215
|
|
|
100.74
|
|
|
4,808
|
|
|
9,830
|
|
|
|||
Year-to-date
|
|
166,557,198
|
|
|
$
|
92.52
|
|
|
$
|
15,410
|
|
|
$
|
9,830
|
|
(c)
|
(a)
|
Excludes commissions cost.
|
(b)
|
The $214 million unused portion under the prior Board authorization was canceled when the $19.4 billion repurchase program was authorized by the Board of Directors on June 28, 2017.
|
(c)
|
Represents the amount remaining under the $19.4 billion repurchase program.
|
28
|
|
|
|
|
29
|
|
Age
|
|
Name
|
(at December 31, 2017)
|
Positions and offices
|
James Dimon
|
61
|
Chairman of the Board and Chief Executive Officer; he had been President from July 2004 until January 2018.
|
Ashley Bacon
|
48
|
Chief Risk Officer since June 2013. He had been Deputy Chief Risk Officer since June 2012, prior to which he had been Global Head of Market Risk for the Investment Bank (now part of Corporate & Investment Bank).
|
Lori A. Beer
(a)
|
50
|
Chief Information Officer since September 2017, prior to which she had been Chief Information Officer of the Corporate & Investment Bank since June 2016. She was Global Head of Banking Technology from January 2014 until May 2016. Prior to joining JPMorgan Chase in 2014, she was Executive Vice President of Specialty Businesses and Information Technology for Anthem, Inc.
|
Mary Callahan Erdoes
|
50
|
Chief Executive Officer of Asset & Wealth Management since September 2009, prior to which she had been Chief Executive Officer of Wealth Management.
|
Stacey Friedman
|
49
|
General Counsel since January 2016, prior to which she was Deputy General Counsel since July 2015 and General Counsel for the Corporate & Investment Bank since August 2012. Prior to joining JPMorgan Chase in 2012, she was a partner at the law firm of Sullivan & Cromwell LLP.
|
Marianne Lake
|
48
|
Chief Financial Officer since January 2013, prior to which she had been Chief Financial Officer of Consumer & Community Banking since 2009.
|
Robin Leopold
(b)
|
53
|
Head of Human Resources since January 2018, prior to which she had been Head of Human Resources for the Corporate & Investment Bank since 2012. She was a Human Resources Executive serving the Firm’s Corporate functions from February 2010 until August 2012.
|
Douglas B. Petno
|
52
|
Chief Executive Officer of Commercial Banking since January 2012, prior to which he had been Chief Operating Officer of Commercial Banking.
|
Daniel E. Pinto
(c)
|
55
|
Co-President and Co-Chief Operating Officer since January 30, 2018, Chief Executive Officer of the Corporate & Investment Bank since March 2014, and Chief Executive Officer of Europe, the Middle East and Africa since June 2011. He had been Co-Chief Executive Officer of the Corporate & Investment Bank from July 2012 until March 2014, prior to which he had been head or Co-head of the Global Fixed Income business from November 2009 until July 2012.
|
Peter Scher
(a)
|
56
|
Head of Corporate Responsibility since 2011 and Chairman of the Mid-Atlantic Region since 2015.
|
Gordon A. Smith
(c)
|
59
|
Co-President and Co-Chief Operating Officer since January 30, 2018, and Chief Executive Officer of Consumer & Community Banking since December 2012. He had been Co-Chief Executive Officer from July 2012 until December 2012, prior to which he had been Chief Executive Officer of Card Services from 2007 until 2012 and of the Auto Finance and Student Lending businesses from 2011 until 2012.
|
(a)
|
The Chief Information Officer and Head of Corporate Responsibility were both named as executive officers in 2017.
|
(b)
|
On January 1, 2018, Ms. Leopold was named Head of Human Resources. At that date, Mr. John L. Donnelly, formerly Head of Human Resources, became a Vice Chairman of JPMorgan Chase; he is no longer an executive officer of the Firm.
|
(c)
|
On January 30, 2018, Mr. Pinto and Mr. Smith were named Co-Presidents and Co-Chief Operating Officers of the Firm.
|
30
|
|
|
(a)
|
Does not include restricted stock units or performance stock units granted under the shareholder-approved Long-Term Incentive Plan (“LTIP”), as amended and restated effective May 19, 2015. For further discussion, see Note
9
.
|
(b)
|
Represents shares available for future issuance under the shareholder-approved LTIP.
|
|
|
31
|
1
|
|
Financial statements
|
|
|
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 147.
|
|
|
|
2
|
|
Financial statement schedules
|
|
|
|
3
|
|
Exhibits
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
3.3
|
|
|
|
|
|
|
|
|
3.4
|
|
|
|
|
|
3.5
|
|
|
|
|
|
3.6
|
|
|
|
|
|
3.7
|
|
|
|
|
|
3.8
|
|
|
|
|
|
3.9
|
|
|
|
|
|
3.10
|
|
|
|
|
|
3.11
|
|
|
|
|
|
3.12
|
|
|
3.13
|
|
|
|
|
|
3.14
|
|
|
|
|
|
3.15
|
|
|
|
|
|
3.16
|
|
|
|
|
|
3.17
|
|
|
|
|
|
32
|
|
|
3.18
|
|
|
4.1(a)
|
|
|
|
|
|
4.1(b)
|
|
|
|
|
|
4.2(a)
|
|
|
|
|
|
4.2(b)
|
|
|
|
|
|
4.3(a)
|
|
|
|
|
|
4.3(b)
|
|
|
|
|
|
4.4
|
|
|
|
|
|
|
|
33
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
10.22
|
|
|
|
|
|
12.1
|
|
|
|
|
|
12.2
|
|
|
|
|
|
21
|
|
|
|
|
|
22
|
|
Annual Report on Form 11-K of The JPMorgan Chase 401(k) Savings Plan for the year ended December 31, 2017 (to be filed pursuant to Rule 15d-21 under the Securities Exchange Act of 1934).
|
34
|
|
|
|
|
|
23
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32
|
|
|
|
|
|
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.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
(b)
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
(b)
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation 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, 2017
, formatted in XBRL (eXtensible Business Reporting Language) interactive data files: (i) the Consolidated statements of income for the years ended
December 31, 2017
,
2016
and
2015
, (ii) the Consolidated statements of comprehensive income for the years ended
December 31, 2017
,
2016
and
2015
, (iii) the Consolidated balance sheets as of
December 31, 2017
and
2016
, (iv) the Consolidated statements of changes in stockholders’ equity for the years ended
December 31, 2017
,
2016
and
2015
, (v) the Consolidated statements of cash flows for the years ended
December 31, 2017
,
2016
and
2015
, and (vi) the Notes to Consolidated Financial Statements.
|
|
|
35
|
Financial:
|
|
|
|
|
||
|
|
|
|
|
|
|
38
|
|
|
Audited financial statements:
|
|||
|
|
|
|
|
|
|
39
|
|
|
146
|
|
||
|
|
|
|
|
|
|
Management’s discussion and analysis:
|
|
147
|
|
|||
|
|
|
|
|
|
|
40
|
|
|
148
|
|
||
|
|
|
|
|
|
|
41
|
|
|
153
|
|
||
|
|
|
|
|
|
|
44
|
|
|
|
|||
|
|
|
|
|
|
|
47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52
|
|
|
Supplementary information:
|
|||
|
|
|
|
|
|
|
55
|
|
|
277
|
|
||
|
|
|
|
|
|
|
75
|
|
|
278
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81
|
|
|
283
|
|
||
|
|
|
|
|
|
|
99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
131
|
|
|
|
|
|
|
|
|
|
|
|
|
|
138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
37
|
(unaudited)
As of or for the year ended December 31,
(in millions, except per share, ratio, headcount data and where otherwise noted)
|
|
|
|
|
|
|
|
||||||||||
|
2017
|
2016
|
|
2015
|
2014
|
2013
|
|||||||||||
Selected income statement data
|
|
|
|
|
|
|
|
||||||||||
Total net revenue
|
|
$
|
99,624
|
|
$
|
95,668
|
|
|
$
|
93,543
|
|
$
|
95,112
|
|
$
|
97,367
|
|
Total noninterest expense
|
|
58,434
|
|
55,771
|
|
|
59,014
|
|
61,274
|
|
70,467
|
|
|||||
Pre-provision profit
|
|
41,190
|
|
39,897
|
|
|
34,529
|
|
33,838
|
|
26,900
|
|
|||||
Provision for credit losses
|
|
5,290
|
|
5,361
|
|
|
3,827
|
|
3,139
|
|
225
|
|
|||||
Income before income tax expense
|
|
35,900
|
|
34,536
|
|
|
30,702
|
|
30,699
|
|
26,675
|
|
|||||
Income tax expense
|
|
11,459
|
|
9,803
|
|
|
6,260
|
|
8,954
|
|
8,789
|
|
|||||
Net income
(a)
|
|
$
|
24,441
|
|
$
|
24,733
|
|
|
$
|
24,442
|
|
$
|
21,745
|
|
$
|
17,886
|
|
Earnings per share data
|
|
|
|
|
|
|
|
||||||||||
Net income: Basic
|
|
$
|
6.35
|
|
$
|
6.24
|
|
|
$
|
6.05
|
|
$
|
5.33
|
|
$
|
4.38
|
|
Diluted
|
|
6.31
|
|
6.19
|
|
|
6.00
|
|
5.29
|
|
4.34
|
|
|||||
Average shares: Basic
|
|
3,551.6
|
|
3,658.8
|
|
|
3,741.2
|
|
3,808.3
|
|
3,832.4
|
|
|||||
Diluted
|
|
3,576.8
|
|
3,690.0
|
|
|
3,773.6
|
|
3,842.3
|
|
3,864.9
|
|
|||||
Market and per common share data
|
|
|
|
|
|
|
|
||||||||||
Market capitalization
|
|
$
|
366,301
|
|
$
|
307,295
|
|
|
$
|
241,899
|
|
$
|
232,472
|
|
$
|
219,657
|
|
Common shares at period-end
|
|
3,425.3
|
|
3,561.2
|
|
|
3,663.5
|
|
3,714.8
|
|
3,756.1
|
|
|||||
Share price:
(b)
|
|
|
|
|
|
|
|
||||||||||
High
|
|
$
|
108.46
|
|
$
|
87.39
|
|
|
$
|
70.61
|
|
$
|
63.49
|
|
$
|
58.55
|
|
Low
|
|
81.64
|
|
52.50
|
|
|
50.07
|
|
52.97
|
|
44.20
|
|
|||||
Close
|
|
106.94
|
|
86.29
|
|
|
66.03
|
|
62.58
|
|
58.48
|
|
|||||
Book value per share
|
|
67.04
|
|
64.06
|
|
|
60.46
|
|
56.98
|
|
53.17
|
|
|||||
Tangible book value per share (“TBVPS”)
(c)
|
|
53.56
|
|
51.44
|
|
|
48.13
|
|
44.60
|
|
40.72
|
|
|||||
Cash dividends declared per share
|
|
2.12
|
|
1.88
|
|
|
1.72
|
|
1.58
|
|
1.44
|
|
|||||
Selected ratios and metrics
|
|
|
|
|
|
|
|
||||||||||
Return on common equity (“ROE”)
|
|
10
|
%
|
10
|
%
|
|
11
|
%
|
10
|
%
|
9
|
%
|
|||||
Return on tangible common equity (“ROTCE”)
(c)
|
|
12
|
|
13
|
|
|
13
|
|
13
|
|
11
|
|
|||||
Return on assets (“ROA”)
|
|
0.96
|
|
1.00
|
|
|
0.99
|
|
0.89
|
|
0.75
|
|
|||||
Overhead ratio
|
|
59
|
|
58
|
|
|
63
|
|
64
|
|
72
|
|
|||||
Loans-to-deposits ratio
|
|
64
|
|
65
|
|
|
65
|
|
56
|
|
57
|
|
|||||
High quality liquid assets (“HQLA”) (in billions)
(d)
|
|
$
|
556
|
|
$
|
524
|
|
|
$
|
496
|
|
$
|
600
|
|
$
|
522
|
|
Common equity tier 1 (“CET1”) capital ratio
(e)
|
|
12.2
|
%
|
12.3
|
%
|
(i)
|
11.8
|
%
|
10.2
|
%
|
10.7
|
%
|
|||||
Tier 1 capital ratio
(e)
|
|
13.9
|
|
14.0
|
|
(i)
|
13.5
|
|
11.6
|
|
11.9
|
|
|||||
Total capital ratio
(e)
|
|
15.9
|
|
15.5
|
|
|
15.1
|
|
13.1
|
|
14.3
|
|
|||||
Tier 1 leverage ratio
(e)
|
|
8.3
|
|
8.4
|
|
|
8.5
|
|
7.6
|
|
7.1
|
|
|||||
Selected balance sheet data (period-end)
|
|
|
|
|
|
|
|
||||||||||
Trading assets
|
|
$
|
381,844
|
|
$
|
372,130
|
|
|
$
|
343,839
|
|
$
|
398,988
|
|
$
|
374,664
|
|
Securities
|
|
249,958
|
|
289,059
|
|
|
290,827
|
|
348,004
|
|
354,003
|
|
|||||
Loans
|
|
930,697
|
|
894,765
|
|
|
837,299
|
|
757,336
|
|
738,418
|
|
|||||
Core Loans
|
|
863,683
|
|
806,152
|
|
|
732,093
|
|
628,785
|
|
583,751
|
|
|||||
Average core loans
|
|
829,558
|
|
769,385
|
|
|
670,757
|
|
596,823
|
|
563,809
|
|
|||||
Total assets
|
|
2,533,600
|
|
2,490,972
|
|
|
2,351,698
|
|
2,572,274
|
|
2,414,879
|
|
|||||
Deposits
|
|
1,443,982
|
|
1,375,179
|
|
|
1,279,715
|
|
1,363,427
|
|
1,287,765
|
|
|||||
Long-term debt
(f)
|
|
284,080
|
|
295,245
|
|
|
288,651
|
|
276,379
|
|
267,446
|
|
|||||
Common stockholders’ equity
|
|
229,625
|
|
228,122
|
|
|
221,505
|
|
211,664
|
|
199,699
|
|
|||||
Total stockholders’ equity
|
|
255,693
|
|
254,190
|
|
|
247,573
|
|
231,727
|
|
210,857
|
|
|||||
Headcount
|
|
252,539
|
|
243,355
|
|
|
234,598
|
|
241,359
|
|
251,196
|
|
|||||
Credit quality metrics
|
|
|
|
|
|
|
|
||||||||||
Allowance for credit losses
|
|
$
|
14,672
|
|
$
|
14,854
|
|
|
$
|
14,341
|
|
$
|
14,807
|
|
$
|
16,969
|
|
Allowance for loan losses to total retained loans
|
|
1.47
|
%
|
1.55
|
%
|
|
1.63
|
%
|
1.90
|
%
|
2.25
|
%
|
|||||
Allowance for loan losses to retained loans excluding purchased credit-impaired loans
(g)
|
|
1.27
|
|
1.34
|
|
|
1.37
|
|
1.55
|
|
1.80
|
|
|||||
Nonperforming assets
|
|
$
|
6,426
|
|
$
|
7,535
|
|
|
$
|
7,034
|
|
$
|
7,967
|
|
$
|
9,706
|
|
Net charge-offs
(h)
|
|
5,387
|
|
4,692
|
|
|
4,086
|
|
4,759
|
|
5,802
|
|
|||||
Net charge-off rate
(h)
|
|
0.60
|
%
|
0.54
|
%
|
|
0.52
|
%
|
0.65
|
%
|
0.81
|
%
|
(a)
|
On December 22, 2017, the Tax Cuts and Jobs Act (“TCJA”) was signed into law. The Firm’s results included a $2.4 billion decrease to net income as a result of the enactment of the TCJA. For additional information related to the impact of the TCJA, see Note
24
.
|
(b)
|
Based on daily prices reported by the New York Stock Exchange.
|
(c)
|
TBVPS and ROTCE are non-GAAP financial measures. For further discussion of these measures, see Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Financial Performance Measures on
pages 52–54
.
|
(d)
|
HQLA represents the amount of assets that qualify for inclusion in the liquidity coverage ratio. For December 31, 2017, the balance represents the average of quarterly reported results per the U.S. LCR public disclosure requirements effective April 1, 2017. Prior periods represent period-end balances under the final U.S. rule (“U.S. LCR”) for December 31, 2016 and 2015, and the Firm’s estimated amount for December 31, 2014 prior to the effective date of the final rule, and under the Basel III liquidity coverage ratio (“Basel III LCR”) for December 31, 2013. For additional information, see LCR and HQLA on
page 93
.
|
(e)
|
Ratios presented are calculated under the Basel III Transitional rules, which became effective on January 1, 2014, and for the capital ratios, represent the Collins Floor. Prior to 2014, the ratios were calculated under the Basel I rules. See Capital Risk Management on
pages 82–91
for additional information on Basel III.
|
(f)
|
Included unsecured long-term debt of $218.8 billion, $212.6 billion, $211.8 billion, $207.0 billion and $198.9 billion respectively, as of December 31, of each year presented.
|
(g)
|
Excluded the impact of residential real estate purchased credit-impaired (“PCI”) loans, a non-GAAP financial measure. For further discussion of these measures, see Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on
pages 52–54
, and the Allowance for credit losses on
pages 117–119
.
|
(h)
|
Excluding net charge-offs of $467 million related to the student loan portfolio sale, the net charge-off rate for the year ended December 31, 2017 would have been 0.55%.
|
(i)
|
The prior period ratios have been revised to conform with the current period presentation.
|
38
|
|
JPMorgan Chase & Co./2017 Annual Report
|
December 31,
(in dollars)
|
2012
|
|
|
2013
|
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
||||||
JPMorgan Chase
|
$
|
100.00
|
|
|
$
|
136.71
|
|
|
$
|
150.22
|
|
|
$
|
162.79
|
|
|
$
|
219.06
|
|
|
$
|
277.62
|
|
KBW Bank Index
|
100.00
|
|
|
137.76
|
|
|
150.66
|
|
|
151.39
|
|
|
194.55
|
|
|
230.72
|
|
||||||
S&P Financial Index
|
100.00
|
|
|
135.59
|
|
|
156.17
|
|
|
153.72
|
|
|
188.69
|
|
|
230.47
|
|
||||||
S&P 500 Index
|
100.00
|
|
|
132.37
|
|
|
150.48
|
|
|
152.55
|
|
|
170.78
|
|
|
208.05
|
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
39
|
INTRODUCTION
|
40
|
|
JPMorgan Chase & Co./2017 Annual Report
|
EXECUTIVE OVERVIEW
|
Financial performance of JPMorgan Chase
|
|
|
|||||||
Year ended December 31,
(in millions, except per share data and ratios)
|
|
||||||||
2017
|
2016
|
|
Change
|
||||||
Selected income statement data
|
|
|
|
|
|||||
Total net revenue
|
$
|
99,624
|
|
$
|
95,668
|
|
|
4
|
%
|
Total noninterest expense
|
58,434
|
|
55,771
|
|
|
5
|
|
||
Pre-provision profit
|
41,190
|
|
39,897
|
|
|
3
|
|
||
Provision for credit losses
|
5,290
|
|
5,361
|
|
|
(1
|
)
|
||
Net income
|
24,441
|
|
24,733
|
|
|
(1
|
)
|
||
Diluted earnings per share
|
6.31
|
|
6.19
|
|
|
2
|
|
||
Selected ratios and metrics
|
|
|
|
|
|||||
Return on common equity
|
10
|
%
|
10
|
%
|
|
|
|||
Return on tangible common equity
|
12
|
|
13
|
|
|
|
|||
Book value per share
|
$
|
67.04
|
|
$
|
64.06
|
|
|
5
|
|
Tangible book value per share
|
53.56
|
|
51.44
|
|
|
4
|
|
||
Capital ratios
(a)
|
|
|
|
|
|||||
CET1
|
12.2
|
%
|
12.3
|
%
|
(b)
|
|
|||
Tier 1 capital
|
13.9
|
|
14.0
|
|
(b)
|
|
|||
Total capital
|
15.9
|
|
15.5
|
|
|
|
(a)
|
Ratios presented are calculated under the Basel III Transitional rules and represent the Collins Floor. See Capital Risk Management on
pages 82–91
for additional information on Basel III.
|
(b)
|
The prior period ratios have been revised to conform with the current period presentation.
|
•
|
Net income decreased 1% driven by higher noninterest expense and income tax expense, predominantly offset by higher net interest income.
|
•
|
Total net revenue increased by 4% driven by higher net interest income and investment banking fees, partially
|
•
|
Noninterest expense was $58.4 billion, up 5%, driven by higher compensation expense, auto lease depreciation expense and continued investments across the businesses.
|
•
|
The provision for credit losses was $5.3 billion, relatively flat compared with the prior year, reflecting a decrease in the wholesale provision driven by credit quality improvements in the Oil & Gas, Natural Gas Pipelines and Metals & Mining portfolios, offset by an increase in the consumer provision. The increase in the consumer provision was driven by higher net charge-offs and a higher addition to the allowance for loan losses in the credit card portfolio, and the impact of the sale of the student loan portfolio.
|
•
|
The total allowance for credit losses was $14.7 billion at
December 31, 2017
, and the Firm had a loan loss coverage ratio, excluding the PCI portfolio, of 1.27%, compared with 1.34% in the prior year. The Firm’s nonperforming assets totaled $6.4 billion, a decrease from the prior-year level of $7.5 billion.
|
•
|
Firmwide average core loans increased 8%.
|
•
|
The Firm’s Basel III Fully Phased-In CET1 capital was $183 billion, and the Standardized and Advanced CET1 ratios were 12.1% and 12.7%, respectively.
|
•
|
The Firm’s Fully Phased-In supplementary leverage ratio (“SLR”) was 6.5%.
|
•
|
The Firm continued to grow tangible book value per share (“TBVPS”), ending 2017 at $53.56, up 4%.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
41
|
CCB
ROE 17%
|
|
•
Average core loans up 9%; average deposits of $640 billion, up 9%
•
Client investment assets of $273 billion, up 17%
•
Credit card sales volume up 14% and merchant processing volume up 12%
|
CIB
ROE 14%
|
|
•
Maintained #1 ranking for Global Investment Banking fees with 8.1% wallet share
•
Investment Banking revenue up 12%; Treasury Services revenue up 15%; and Securities Services revenue up 9%
|
CB
ROE 17%
|
|
•
Record revenue of $8.6 billion, up 15%; record net income of $3.5 billion, up 33%
•
Average loan balances of $198 billion, up 10%
|
AWM
ROE 25%
|
|
•
Record revenue of $12.9 billion, up 7%; record net income of $2.3 billion, up 4%
•
Average loan balances of $123 billion, up 9%
•
Record assets under management (“AUM”) of $2.0 trillion, up 15%
|
•
|
$258 billion of credit for consumers
|
•
|
$22 billion of credit for U.S. small businesses
|
•
|
$817 billion of credit for corporations
|
•
|
$1.1 trillion of capital raised for corporate clients and non-U.S. government entities
|
•
|
$92 billion of credit and capital raised for U.S. government and nonprofit entities, including states, municipalities, hospitals and universities.
|
•
|
On February 21, 2018, the Firm announced its intent to pursue building a new 2.5 million square foot headquarters at its 270 Park Avenue location in New York City. The project will be subject to various approvals, and the Firm will work closely with the New York City Council and State officials to complete the project in a manner that benefits all constituencies. Once the project’s approvals are granted, redevelopment and construction are expected to begin in 2019 and take approximately five years to complete. The project is not expected to have a material impact on the company’s financial results.
|
•
|
On January 30, 2018, Amazon, Berkshire Hathaway, and JPMorgan Chase announced that they are partnering on ways to address healthcare for their U.S. employees, with the aim of improving employee satisfaction and reducing costs. Through a new independent company, the initial focus will be on technology solutions that will provide U.S. employees and their families with simplified, high-quality and transparent healthcare at a reasonable cost.
|
•
|
On January 29, 2018, JPMorgan Chase announced that Daniel Pinto, Chief Executive Officer (“CEO”) of CIB, and Gordon Smith, CEO of CCB, have been appointed Co-Presidents and Co-Chief Operating Officers (“COO”) of the Firm, effective January 30, 2018, and will continue to report to Jamie Dimon, Chairman and CEO. In addition to their current roles, Mr. Pinto and Mr. Smith will work closely with Mr. Dimon to help drive critical Firmwide opportunities. Responsibilities for the rest of the Firm’s Operating Committee will remain unchanged, with its members continuing to report to Mr. Dimon.
|
•
|
On January 23, 2018, the Firm announced a $20 billion, five-year comprehensive investment to help its employees and support job and economic growth in the U.S. Through these new investments, the Firm plans to develop hundreds of new branches in several new U.S. markets, increase wages and benefits for hourly U.S. employees, make increased small business and mortgage lending commitments, add approximately 4,000 jobs throughout the country, and increase philanthropic investments.
|
•
|
On December 22, 2017, the TCJA was signed into law. The Firm’s results included a $2.4 billion decrease to net income as a result of the enactment of the TCJA. For additional information related to the impact of the TCJA, see Note
24
.
|
•
|
During the second half of 2017, natural disasters caused significant disruptions to individuals and businesses, and damage to homes and communities in several regions where the Firm conducts business. The Firm continues to provide assistance to customers, clients, communities and employees who have been affected by these disasters. These events did not have a material impact on the Firm’s 2017 financial results.
|
42
|
|
JPMorgan Chase & Co./2017 Annual Report
|
•
|
As a result of the change in tax rate due to the TCJA, management expects a reduction in tax-equivalent adjustments, decreasing both revenue and income tax expense, on a managed basis, by approximately $1.2 billion on an annual run-rate basis.
|
•
|
Management expects the new revenue recognition accounting standard to increase both noninterest revenue and expense for full-year 2018 by approximately $1.2 billion, with most of the impact in the AWM business. For additional information on the new accounting standard, see Accounting and Reporting Developments on page
141
.
|
•
|
Management expects first-quarter 2018 net interest income, on a managed basis, to be down modestly compared with the fourth quarter of 2017, driven by the impact of the TCJA and a lower day count. For full-year 2018, management expects net interest income, on a managed basis, to be in the $54 to $55 billion range, market dependent, and assuming expected core loan growth. Management expects Firmwide average core loan growth to be in the 6% to 7% range in 2018, excluding CIB loans.
|
•
|
Excluding the impact of the new revenue recognition accounting standard, management expects Firmwide noninterest revenue for full-year 2018, on a managed basis, to be up approximately 7%, depending on market conditions.
|
•
|
The Firm continues to take a disciplined approach to managing its expenses, while investing for growth and innovation. As a result, management expects Firmwide adjusted expense for full-year 2018 to be less than $62 billion, excluding the impact of the new revenue recognition accounting standard.
|
•
|
Management estimates the full-year 2018 effective income tax rate to be in the 19% to 20% range, depending upon several factors, including the geographic mix of taxable income and refinements to estimates of the impacts of the TCJA.
|
•
|
Management expects net charge-off rates to remain relatively flat across the wholesale and consumer portfolios, with the exception of Card.
|
•
|
Management expects the full-year 2018 Card Services net revenue rate to be approximately 11.25%.
|
•
|
In Card, management expects the net charge-off rate to increase to approximately 3.25% in 2018.
|
•
|
Markets revenue in the first-quarter 2018 is expected to be up by mid to high single digit percentage points when compared with the prior-year quarter; actual Markets revenue results will continue to be affected by market conditions, which can be volatile.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
43
|
CONSOLIDATED RESULTS OF OPERATIONS
|
Revenue
|
|
|
|
|
|
||||||
Year ended December 31,
(in millions)
|
|
|
|
|
|
||||||
2017
|
|
|
2016
|
|
|
2015
|
|
||||
Investment banking fees
|
$
|
7,248
|
|
|
$
|
6,448
|
|
|
$
|
6,751
|
|
Principal transactions
|
11,347
|
|
|
11,566
|
|
|
10,408
|
|
|||
Lending- and deposit-related fees
|
5,933
|
|
|
5,774
|
|
|
5,694
|
|
|||
Asset management, administration and commissions
|
15,377
|
|
|
14,591
|
|
|
15,509
|
|
|||
Securities gains/(losses)
|
(66
|
)
|
|
141
|
|
|
202
|
|
|||
Mortgage fees and related income
|
1,616
|
|
|
2,491
|
|
|
2,513
|
|
|||
Card income
|
4,433
|
|
|
4,779
|
|
|
5,924
|
|
|||
Other income
(a)
|
3,639
|
|
|
3,795
|
|
|
3,032
|
|
|||
Noninterest revenue
|
49,527
|
|
|
49,585
|
|
|
50,033
|
|
|||
Net interest income
|
50,097
|
|
|
46,083
|
|
|
43,510
|
|
|||
Total net revenue
|
$
|
99,624
|
|
|
$
|
95,668
|
|
|
$
|
93,543
|
|
(a)
|
Included operating lease income of
$3.6 billion
,
$2.7 billion
and
$2.1 billion
for the years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
•
|
lower Fixed Income-related revenue driven by sustained low volatility and tighter credit spreads
|
•
|
higher Equity-related revenue primarily in Prime Services, and
|
•
|
higher Lending-related revenue reflecting lower fair value losses on hedges of accrual loans.
|
•
|
lower other income in CIB largely driven by a $520 million impact related to the enactment of the TCJA, which reduced the value of certain of CIB’s tax-oriented investments, and
|
•
|
the absence in the current year of gains from
|
–
|
the sale of Visa Europe interests in CCB,
|
–
|
the redemption of guaranteed capital debt securities (“trust preferred securities”), and
|
–
|
the disposal of an asset in AWM
|
•
|
higher operating lease income reflecting growth in auto operating lease volume in CCB, and
|
•
|
a legal benefit of $645 million recorded in the second quarter of 2017 in Corporate related to a settlement with the FDIC receivership for Washington Mutual and with Deutsche Bank as trustee of certain Washington Mutual trusts.
|
44
|
|
JPMorgan Chase & Co./2017 Annual Report
|
▪
|
higher operating lease income from growth in auto operating lease assets in CCB
|
▪
|
a gain on the sale of Visa Europe interests in CCB
|
▪
|
a gain related to the redemption of guaranteed capital debt securities
|
▪
|
the absence of losses recognized in 2015 related to the accelerated amortization of cash flow hedges associated with the exit of certain non-operating deposits
|
▪
|
a gain on disposal of an asset in AWM
|
▪
|
a $514 million benefit recorded in the prior year from a legal settlement in Corporate.
|
Provision for credit losses
|
|
|
|
|
|||||||
Year ended December 31,
|
|
|
|
|
|
||||||
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Consumer, excluding credit card
|
$
|
620
|
|
|
$
|
467
|
|
|
$
|
(81
|
)
|
Credit card
|
4,973
|
|
|
4,042
|
|
|
3,122
|
|
|||
Total consumer
|
5,593
|
|
|
4,509
|
|
|
3,041
|
|
|||
Wholesale
|
(303
|
)
|
|
852
|
|
|
786
|
|
|||
Total provision for credit losses
|
$
|
5,290
|
|
|
$
|
5,361
|
|
|
$
|
3,827
|
|
•
|
a net $422 million reduction in the wholesale allowance for credit losses, reflecting credit quality improvements in the Oil & Gas
, Natural Gas Pipelines, and Metals & Mining portfolios
, compared with an addition of $511 million in the prior year driven by downgrades in the same portfolios
|
•
|
a higher consumer provision driven by
|
–
|
$450 million of higher net charge-offs, primarily in the credit card portfolio due to growth in newer vintages which, as anticipated, have higher loss rates than the more seasoned portion of the portfolio, partially offset by a decrease in net charge-offs in the residential real estate portfolio reflecting continued improvement in home prices and delinquencies,
|
–
|
a $416 million higher addition to the allowance for credit losses related to the credit card portfolio driven by higher loss rates and loan growth, and a lower reduction in the allowance for the residential real estate portfolio predominantly driven by continued improvement in home prices and delinquencies, and
|
–
|
a $218 million impact in connection with the sale of the student loan portfolio.
|
▪
|
a $920 million increase related to the credit card portfolio, due to a $600 million addition in the allowance for loan losses, as well as $320 million of higher net charge-offs, driven by loan growth (including growth in newer vintages which, as anticipated, have higher loss rates compared to the overall portfolio), and
|
JPMorgan Chase & Co./2017 Annual Report
|
|
45
|
▪
|
a $470 million lower benefit related to the residential real estate portfolio, as the reduction in the allowance for loan losses in 2016 was lower than the prior year. The reduction in both periods reflected continued improvements in home prices and lower delinquencies.
|
Noninterest expense
|
|
|
|
|
|||||||
Year ended December 31,
|
|
||||||||||
(in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Compensation expense
|
$
|
31,009
|
|
|
$
|
29,979
|
|
|
$
|
29,750
|
|
Noncompensation expense:
|
|
|
|
|
|
||||||
Occupancy
|
3,723
|
|
|
3,638
|
|
|
3,768
|
|
|||
Technology, communications and equipment
|
7,706
|
|
|
6,846
|
|
|
6,193
|
|
|||
Professional and outside services
|
6,840
|
|
|
6,655
|
|
|
7,002
|
|
|||
Marketing
|
2,900
|
|
|
2,897
|
|
|
2,708
|
|
|||
Other
(a)(b)
|
6,256
|
|
|
5,756
|
|
|
9,593
|
|
|||
Total noncompensation expense
|
27,425
|
|
|
25,792
|
|
|
29,264
|
|
|||
Total noninterest expense
|
$
|
58,434
|
|
|
$
|
55,771
|
|
|
$
|
59,014
|
|
(a)
|
Included Firmwide legal expense/(benefit) of
$(35) million
,
$(317) million
and
$3.0 billion
for the years ended
December 31, 2017, 2016 and 2015
, respectively.
|
(b)
|
Included FDIC-related expense of
$1.5 billion
,
$1.3 billion
and
$1.2 billion
for the years ended
December 31, 2017, 2016 and 2015
, respectively.
|
•
|
higher depreciation expense from growth in auto operating lease volume in CCB
|
•
|
contributions to the Firm’s Foundation
|
•
|
a lower legal net benefit compared to the prior year
|
•
|
higher FDIC-related expense, and
|
•
|
an impairment in CB on certain leased equipment, the majority of which was sold subsequent to year-end
|
•
|
the absence in the current year of two items totaling $175 million in CCB related to liabilities from a merchant in bankruptcy and mortgage servicing reserves.
|
Income tax expense
|
|
|
|
|
|
||||||
Year ended December 31,
(in millions, except rate)
|
|
|
|
|
|
||||||
2017
|
|
2016
|
|
2015
|
|||||||
Income before income tax expense
|
$
|
35,900
|
|
|
$
|
34,536
|
|
|
$
|
30,702
|
|
Income tax expense
|
11,459
|
|
|
9,803
|
|
|
6,260
|
|
|||
Effective tax rate
|
31.9
|
%
|
|
28.4
|
%
|
|
20.4
|
%
|
•
|
a $1.9 billion increase to income tax expense representing the impact of the enactment of the TCJA. The increase was driven by the deemed repatriation of the Firm’s unremitted non-U.S. earnings and adjustments to the value of certain tax-oriented investments, partially offset by a benefit from the revaluation of the Firm’s net deferred tax liability. The incremental expense resulted in a 5.4 percentage point increase to the Firm’s effective tax rate
|
•
|
benefits resulting from the vesting of employee share-based awards related to the appreciation of the Firm’s stock price upon vesting above their original grant price, and the release of a valuation allowance.
|
46
|
|
JPMorgan Chase & Co./2017 Annual Report
|
CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS
|
Selected Consolidated balance sheets data
|
|
||||||||
December 31, (in millions)
|
2017
|
|
2016
|
Change
|
|||||
Assets
|
|
|
|
|
|||||
Cash and due from banks
|
$
|
25,827
|
|
|
$
|
23,873
|
|
8
|
%
|
Deposits with banks
|
404,294
|
|
|
365,762
|
|
11
|
|
||
Federal funds sold and securities purchased under resale agreements
|
198,422
|
|
|
229,967
|
|
(14
|
)
|
||
Securities borrowed
|
105,112
|
|
|
96,409
|
|
9
|
|
||
Trading assets:
|
|
|
|
|
|||||
Debt and equity instruments
|
325,321
|
|
|
308,052
|
|
6
|
|
||
Derivative receivables
|
56,523
|
|
|
64,078
|
|
(12
|
)
|
||
Securities
|
249,958
|
|
|
289,059
|
|
(14
|
)
|
||
Loans
|
930,697
|
|
|
894,765
|
|
4
|
|
||
Allowance for loan losses
|
(13,604
|
)
|
|
(13,776
|
)
|
(1
|
)
|
||
Loans, net of allowance for loan losses
|
917,093
|
|
|
880,989
|
|
4
|
|
||
Accrued interest and accounts receivable
|
67,729
|
|
|
52,330
|
|
29
|
|
||
Premises and equipment
|
14,159
|
|
|
14,131
|
|
—
|
|
||
Goodwill, MSRs and other intangible assets
|
54,392
|
|
|
54,246
|
|
—
|
|
||
Other assets
|
114,770
|
|
|
112,076
|
|
2
|
|
||
Total assets
|
$
|
2,533,600
|
|
|
$
|
2,490,972
|
|
2
|
%
|
•
|
higher wholesale loans driven by new originations in CB and higher loans to Private Banking clients in AWM
|
•
|
higher consumer loans driven by higher retention of originated high-quality prime mortgages in CCB and AWM, and higher credit card loans, largely offset by the sale of the student loan portfolio, lower home equity loans and the run-off of PCI loans.
|
•
|
a net reduction in the wholesale allowance, reflecting credit quality improvements in the
Oil & Gas, Natural Gas Pipelines and Metals & Mining portfolios (compared with additions to the allowance in the prior year
driven by downgrades in the same portfolios
)
|
•
|
a net increase in the consumer allowance, reflecting additions to the allowance for the credit card and business banking portfolios, driven by loan growth in both of these portfolios and higher loss rates in the credit card portfolio, largely offset by a reduction in the allowance for the residential real estate portfolio, predominantly driven by continued improvement in home prices and delinquencies, and the utilization of the allowance in connection with the sale of the student loan portfolio.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
47
|
•
|
higher consumer deposits
reflecting
the continuation of strong growth from new and existing customers, and low attrition rates
|
•
|
higher wholesale deposits largely
driven by growth in client cash management activity in CIB’s Securities Services business, partially offset by lower balances in AWM reflecting balance migration predominantly into the Firm’s investment-related products
.
|
48
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(in millions)
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||
Net cash provided by/(used in)
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
(2,501
|
)
|
|
$
|
20,196
|
|
|
$
|
73,466
|
|
Investing activities
|
|
(10,283
|
)
|
|
(114,949
|
)
|
|
106,980
|
|
|||
Financing activities
|
|
14,642
|
|
|
98,271
|
|
|
(187,511
|
)
|
|||
Effect of exchange rate changes on cash
|
|
96
|
|
|
(135
|
)
|
|
(276
|
)
|
|||
Net increase/(decrease) in cash and due from banks
|
|
$
|
1,954
|
|
|
$
|
3,383
|
|
|
$
|
(7,341
|
)
|
•
|
In 2017, cash used reflected an increase in held-for-investment margin loans in accrued interest and accounts receivable and a decrease in trading liabilities.
|
•
|
In 2016, cash provided reflected increases in accounts payable and trading liabilities, partially offset by cash used reflecting an increase in trading assets, an increase in accounts receivable from merchants and higher client receivables.
|
•
|
In 2015, cash provided reflected decreases in trading assets and in accounts receivable, partially offset by cash used due to a decrease in accounts payable and other liabilities.
|
•
|
In 2017, cash used primarily reflected net originations of loans and a net increase in short-term interest-earning assets, partially offset by net proceeds from paydowns, maturities, sales and purchases of investment securities.
|
•
|
In 2016, cash used reflected net originations of loans, an increase in short-term interest-earning assets, an increase in securities purchased under resale agreements, and the deployment of excess cash.
|
•
|
In 2015, cash provided predominantly reflected lower short-term interest-earning assets, and net proceeds from lower investment securities, partially offset by cash used for net originations of loans.
|
•
|
In 2017, cash provided reflected higher deposits and short-term borrowings, partially offset by a decrease in long-term borrowings.
|
•
|
In 2016, cash provided reflected higher deposits, and an increase in securities loaned or sold under repurchase agreements, and net proceeds from long term borrowings.
|
•
|
In 2015, cash used reflected lower deposits and short-term borrowings, partially offset by net proceeds from long-term borrowings. Additionally, in 2015 cash outflows reflected a decrease in securities loaned or sold under repurchase agreements.
|
•
|
For all periods, cash was used for repurchases of common stock and cash dividends on common and preferred stock.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
49
|
OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL CASH OBLIGATIONS
|
Type of off-balance sheet arrangement
|
Location of disclosure
|
Page references
|
Special-purpose entities: variable interests and other obligations, including contingent obligations, arising from variable interests in nonconsolidated VIEs
|
See Note 14
|
236–243
|
Off-balance sheet lending-related financial instruments, guarantees, and other commitments
|
See Note 27
|
261–266
|
50
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Contractual cash obligations
|
|
|
|
|
|
|||||||||||||
By remaining maturity at December 31,
(in millions) |
2017
|
2016
|
||||||||||||||||
2018
|
2019-2020
|
2021-2022
|
After 2022
|
Total
|
Total
|
|||||||||||||
On-balance sheet obligations
|
|
|
|
|
|
|
||||||||||||
Deposits
(a)
|
$
|
1,421,174
|
|
$
|
5,276
|
|
$
|
4,810
|
|
$
|
6,204
|
|
$
|
1,437,464
|
|
$
|
1,368,866
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
133,779
|
|
4,198
|
|
4,958
|
|
15,981
|
|
158,916
|
|
165,666
|
|
||||||
Short-term borrowings
(a)
|
42,664
|
|
—
|
|
—
|
|
—
|
|
42,664
|
|
26,497
|
|
||||||
Beneficial interests issued by consolidated VIEs
|
13,636
|
|
9,542
|
|
2,544
|
|
314
|
|
26,036
|
|
38,927
|
|
||||||
Long-term debt
(a)
|
37,211
|
|
63,685
|
|
43,180
|
|
116,819
|
|
260,895
|
|
288,315
|
|
||||||
Other
(b)
|
4,726
|
|
2,146
|
|
2,080
|
|
4,573
|
|
13,525
|
|
8,980
|
|
||||||
Total on-balance sheet obligations
|
1,653,190
|
|
84,847
|
|
57,572
|
|
143,891
|
|
1,939,500
|
|
1,897,251
|
|
||||||
Off-balance sheet obligations
|
|
|
|
|
|
|
||||||||||||
Unsettled reverse repurchase and securities borrowing agreements
(c)
|
76,859
|
|
—
|
|
—
|
|
—
|
|
76,859
|
|
50,722
|
|
||||||
Contractual interest payments
(d)
|
9,248
|
|
11,046
|
|
7,471
|
|
26,338
|
|
54,103
|
|
48,862
|
|
||||||
Operating leases
(e)
|
1,526
|
|
2,750
|
|
1,844
|
|
3,757
|
|
9,877
|
|
10,115
|
|
||||||
Equity investment commitments
(f)
|
174
|
|
46
|
|
19
|
|
515
|
|
754
|
|
1,068
|
|
||||||
Contractual purchases and capital expenditures
|
1,923
|
|
937
|
|
439
|
|
204
|
|
3,503
|
|
2,566
|
|
||||||
Obligations under co-brand programs
|
249
|
|
500
|
|
478
|
|
207
|
|
1,434
|
|
868
|
|
||||||
Total off-balance sheet obligations
|
89,979
|
|
15,279
|
|
10,251
|
|
31,021
|
|
146,530
|
|
114,201
|
|
||||||
Total contractual cash obligations
|
$
|
1,743,169
|
|
$
|
100,126
|
|
$
|
67,823
|
|
$
|
174,912
|
|
$
|
2,086,030
|
|
$
|
2,011,452
|
|
(a)
|
Excludes structured notes on which 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 dividends declared on preferred and common stock, deferred annuity contracts, pension and other postretirement employee benefit obligations, insurance liabilities and income taxes payable associated with the deemed repatriation under the TCJA.
|
(c)
|
For further information, refer to unsettled reverse repurchase and securities borrowing agreements in Note
27
.
|
(d)
|
Includes accrued interest and future contractual interest obligations. Excludes interest related to structured notes for which 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. Excludes the benefit of noncancelable sublease rentals of
$1.0 billion
and $
1.4 billion
at
December 31, 2017
and
2016
, respectively. See Note
28
for more information on lease commitments.
|
(f)
|
At
December 31, 2017
and
2016
, included unfunded commitments of
$40 million
and
$48 million
, respectively, to third-party private equity funds, and
$714 million
and
$1.0 billion
of unfunded commitments, respectively, to other equity investments.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
51
|
EXPLANATION AND RECONCILIATION OF THE FIRM’S USE OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||||||||
Year ended
December 31,
(in millions, except ratios)
|
Reported
Results
|
|
Fully taxable-equivalent adjustments
(a)
|
|
Managed
basis
|
|
Reported
Results
|
|
Fully taxable-equivalent adjustments
(a)
|
|
Managed
basis
|
|
Reported
Results
|
|
Fully taxable-equivalent adjustments
(a)
|
|
Managed
basis
|
||||||||||||||||||
Other income
|
$
|
3,639
|
|
|
$
|
2,704
|
|
(b)
|
$
|
6,343
|
|
|
$
|
3,795
|
|
|
$
|
2,265
|
|
|
$
|
6,060
|
|
|
$
|
3,032
|
|
|
$
|
1,980
|
|
|
$
|
5,012
|
|
Total noninterest revenue
|
49,527
|
|
|
2,704
|
|
|
52,231
|
|
|
49,585
|
|
|
2,265
|
|
|
51,850
|
|
|
50,033
|
|
|
1,980
|
|
|
52,013
|
|
|||||||||
Net interest income
|
50,097
|
|
|
1,313
|
|
|
51,410
|
|
|
46,083
|
|
|
1,209
|
|
|
47,292
|
|
|
43,510
|
|
|
1,110
|
|
|
44,620
|
|
|||||||||
Total net revenue
|
99,624
|
|
|
4,017
|
|
|
103,641
|
|
|
95,668
|
|
|
3,474
|
|
|
99,142
|
|
|
93,543
|
|
|
3,090
|
|
|
96,633
|
|
|||||||||
Pre-provision profit
|
41,190
|
|
|
4,017
|
|
|
45,207
|
|
|
39,897
|
|
|
3,474
|
|
|
43,371
|
|
|
34,529
|
|
|
3,090
|
|
|
37,619
|
|
|||||||||
Income before income tax expense
|
35,900
|
|
|
4,017
|
|
|
39,917
|
|
|
34,536
|
|
|
3,474
|
|
|
38,010
|
|
|
30,702
|
|
|
3,090
|
|
|
33,792
|
|
|||||||||
Income tax expense
|
11,459
|
|
|
4,017
|
|
(b)
|
15,476
|
|
|
9,803
|
|
|
3,474
|
|
|
13,277
|
|
|
6,260
|
|
|
3,090
|
|
|
9,350
|
|
|||||||||
Overhead ratio
|
59
|
%
|
|
NM
|
|
|
56
|
%
|
|
58
|
%
|
|
NM
|
|
|
56
|
%
|
|
63
|
%
|
|
NM
|
|
|
61
|
%
|
52
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31,
(in millions, except rates)
|
2017
|
2016
|
2015
|
||||||
Net interest income – managed basis
(a)(b)
|
$
|
51,410
|
|
$
|
47,292
|
|
$
|
44,620
|
|
Less: CIB Markets net interest income
(c)
|
4,630
|
|
6,334
|
|
5,298
|
|
|||
Net interest income excluding CIB Markets
(a)
|
$
|
46,780
|
|
$
|
40,958
|
|
$
|
39,322
|
|
Average interest-earning assets
|
$
|
2,180,592
|
|
$
|
2,101,604
|
|
$
|
2,088,242
|
|
Less: Average CIB Markets interest-earning assets
(c)
|
540,835
|
|
520,307
|
|
510,292
|
|
|||
Average interest-earning assets excluding CIB Markets
|
$
|
1,639,757
|
|
$
|
1,581,297
|
|
$
|
1,577,950
|
|
Net interest yield on average interest-earning assets – managed basis
|
2.36
|
%
|
2.25
|
%
|
2.14
|
%
|
|||
Net interest yield on average CIB Markets interest-earning assets
(c)
|
0.86
|
|
1.22
|
|
1.04
|
|
|||
Net interest yield on average interest-earning assets excluding CIB Markets
|
2.85
|
%
|
2.59
|
%
|
2.49
|
%
|
(a)
|
Interest includes the effect of related hedges. Taxable-equivalent amounts are used where applicable.
|
(b)
|
For a reconciliation of net interest income on a reported and managed basis, see reconciliation from the Firm’s reported U.S. GAAP results to managed basis on page
52
.
|
(c)
|
The amounts in this table differ from the prior-period presentation to align with CIB’s Markets businesses. For further information on CIB’s Markets businesses, see page
65
.
|
Calculation of certain U.S. GAAP and non-GAAP financial measures
|
||||
Certain U.S. GAAP and non-GAAP financial measures are calculated as follows:
|
||||
Book value per share (“BVPS”)
Common stockholders’ equity at period-end /
Common shares at period-end
|
||||
Overhead ratio
Total noninterest expense / Total net revenue
|
||||
Return on assets (“ROA”)
Reported net income / Total average assets
|
||||
Return on common equity (“ROE”)
Net income* / Average common stockholders’ equity
|
||||
Return on tangible common equity (“ROTCE”)
Net income* / Average tangible common equity
|
||||
Tangible book value per share (“TBVPS”)
Tangible common equity at period-end / Common shares at period-end
|
||||
* Represents net income applicable to common equity
|
JPMorgan Chase & Co./2017 Annual Report
|
|
53
|
|
Period-end
|
|
Average
|
|||||||||||||
|
Dec 31,
2017 |
Dec 31,
2016 |
|
Year ended December 31,
|
||||||||||||
(in millions, except per share and ratio data)
|
|
2017
|
2016
|
2015
|
||||||||||||
Common stockholders’ equity
|
$
|
229,625
|
|
$
|
228,122
|
|
|
$
|
230,350
|
|
$
|
224,631
|
|
$
|
215,690
|
|
Less: Goodwill
|
47,507
|
|
47,288
|
|
|
47,317
|
|
47,310
|
|
47,445
|
|
|||||
Less: Other intangible assets
|
855
|
|
862
|
|
|
832
|
|
922
|
|
1,092
|
|
|||||
Add: Certain Deferred tax liabilities
(a)(b)
|
2,204
|
|
3,230
|
|
|
3,116
|
|
3,212
|
|
2,964
|
|
|||||
Tangible common equity
|
$
|
183,467
|
|
$
|
183,202
|
|
|
$
|
185,317
|
|
$
|
179,611
|
|
$
|
170,117
|
|
|
|
|
|
|
|
|
||||||||||
Return on tangible common equity
|
NA
|
|
NA
|
|
|
12
|
%
|
13
|
%
|
13
|
%
|
|||||
Tangible book value per share
|
$
|
53.56
|
|
$
|
51.44
|
|
|
NA
|
NA
|
NA
|
(a)
|
Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating TCE.
|
(b)
|
Includes the effect from the revaluation of the Firm’s net deferred tax liability as a result of the enactment of the TCJA.
|
•
|
Capital, risk-weighted assets (“RWA”), and capital and leverage ratios presented under Basel III Standardized and Advanced Fully Phased-In rules, and
|
•
|
SLR calculated under Basel III Advanced Fully Phased-In rules.
|
54
|
|
JPMorgan Chase & Co./2017 Annual Report
|
BUSINESS SEGMENT RESULTS
|
JPMorgan Chase
|
|||||||||||||
|
|||||||||||||
Consumer Businesses
|
|
Wholesale Businesses
|
|||||||||||
|
|||||||||||||
Consumer & Community Banking
|
|
Corporate & Investment Bank
|
|
Commercial Banking
|
|
Asset & Wealth Management
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer &
Business Banking
|
|
Home Lending
(a)
|
|
Card, Merchant Services & Auto
(b)
|
|
Banking
|
|
Markets &
Investor Services
|
|
• Middle Market Banking
|
|
• Asset Management
|
|
• Consumer Banking/Chase Wealth Management
• Business Banking
|
• Home Lending Production
• Home Lending Servicing
• Real Estate Portfolios
|
• Card Services
– Credit Card
– Merchant Services
• Auto
|
• Investment Banking
• Treasury Services
• Lending
|
• Fixed
Income
Markets
|
• Corporate Client Banking
|
• Wealth Management
|
|||||||
• Equity Markets
• Securities Services
• Credit Adjustments & Other
|
• Commercial Term Lending
|
||||||||||||
• Real Estate Banking
|
|||||||||||||
(a)
|
Formerly Mortgage Banking
|
(b)
|
Formerly Card, Commerce Solutions & Auto
|
JPMorgan Chase & Co./2017 Annual Report
|
|
55
|
Year ended December 31,
|
Total net revenue
|
|
Total noninterest expense
|
|
Pre-provision profit/(loss)
|
||||||||||||||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|||||||||
Consumer & Community Banking
|
$
|
46,485
|
|
$
|
44,915
|
|
$
|
43,820
|
|
|
$
|
26,062
|
|
$
|
24,905
|
|
$
|
24,909
|
|
|
$
|
20,423
|
|
$
|
20,010
|
|
$
|
18,911
|
|
Corporate & Investment Bank
|
34,493
|
|
35,216
|
|
33,542
|
|
|
19,243
|
|
18,992
|
|
21,361
|
|
|
15,250
|
|
16,224
|
|
12,181
|
|
|||||||||
Commercial Banking
|
8,605
|
|
7,453
|
|
6,885
|
|
|
3,327
|
|
2,934
|
|
2,881
|
|
|
5,278
|
|
4,519
|
|
4,004
|
|
|||||||||
Asset & Wealth Management
|
12,918
|
|
12,045
|
|
12,119
|
|
|
9,301
|
|
8,478
|
|
8,886
|
|
|
3,617
|
|
3,567
|
|
3,233
|
|
|||||||||
Corporate
|
1,140
|
|
(487
|
)
|
267
|
|
|
501
|
|
462
|
|
977
|
|
|
639
|
|
(949
|
)
|
(710
|
)
|
|||||||||
Total
|
$
|
103,641
|
|
$
|
99,142
|
|
$
|
96,633
|
|
|
$
|
58,434
|
|
$
|
55,771
|
|
$
|
59,014
|
|
|
$
|
45,207
|
|
$
|
43,371
|
|
$
|
37,619
|
|
Year ended December 31,
|
Provision for credit losses
|
|
Net income/(loss)
|
|
Return on equity
|
|||||||||||||||||||||
(in millions, except ratios)
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
||||||
Consumer & Community Banking
|
$
|
5,572
|
|
$
|
4,494
|
|
$
|
3,059
|
|
|
$
|
9,395
|
|
$
|
9,714
|
|
$
|
9,789
|
|
|
17
|
%
|
18
|
%
|
18
|
%
|
Corporate & Investment Bank
|
(45
|
)
|
563
|
|
332
|
|
|
10,813
|
|
10,815
|
|
8,090
|
|
|
14
|
|
16
|
|
12
|
|
||||||
Commercial Banking
|
(276
|
)
|
282
|
|
442
|
|
|
3,539
|
|
2,657
|
|
2,191
|
|
|
17
|
|
16
|
|
15
|
|
||||||
Asset & Wealth Management
|
39
|
|
26
|
|
4
|
|
|
2,337
|
|
2,251
|
|
1,935
|
|
|
25
|
|
24
|
|
21
|
|
||||||
Corporate
|
—
|
|
(4
|
)
|
(10
|
)
|
|
(1,643
|
)
|
(704
|
)
|
2,437
|
|
|
NM
|
NM
|
NM
|
|||||||||
Total
|
$
|
5,290
|
|
$
|
5,361
|
|
$
|
3,827
|
|
|
$
|
24,441
|
|
$
|
24,733
|
|
$
|
24,442
|
|
|
10
|
%
|
10
|
%
|
11
|
%
|
56
|
|
JPMorgan Chase & Co./2017 Annual Report
|
CONSUMER & COMMUNITY BANKING
|
Consumer & Community Banking offers services to consumers and businesses through bank branches, ATMs, online, mobile and telephone banking. CCB is organized into Consumer & Business Banking (including Consumer Banking/Chase Wealth Management and Business Banking), Home Lending (including Home Lending Production, Home Lending Servicing and Real Estate Portfolios) and Card, Merchant Services & Auto. Consumer & Business Banking offers deposit and investment products and services to consumers, and lending, deposit, and cash management and payment solutions to small businesses. Home Lending includes mortgage origination and servicing activities, as well as portfolios consisting of residential mortgages and home equity loans. Card, Merchant Services & Auto issues credit cards to consumers and small businesses, offers payment processing services to merchants, and originates and services auto loans and leases.
|
Selected income statement data
|
|
|
|
|
|||||||
Year ended December 31,
|
|
||||||||||
(in millions, except ratios)
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
|
|
|
|
||||||
Lending- and deposit-related fees
|
$
|
3,431
|
|
|
$
|
3,231
|
|
|
$
|
3,137
|
|
Asset management, administration and commissions
|
2,212
|
|
|
2,093
|
|
|
2,172
|
|
|||
Mortgage fees and related income
|
1,613
|
|
|
2,490
|
|
|
2,511
|
|
|||
Card income
|
4,024
|
|
|
4,364
|
|
|
5,491
|
|
|||
All other income
|
3,430
|
|
|
3,077
|
|
|
2,281
|
|
|||
Noninterest revenue
|
14,710
|
|
|
15,255
|
|
|
15,592
|
|
|||
Net interest income
|
31,775
|
|
|
29,660
|
|
|
28,228
|
|
|||
Total net revenue
|
46,485
|
|
|
44,915
|
|
|
43,820
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
5,572
|
|
|
4,494
|
|
|
3,059
|
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
|
|
|
|
|
||||||
Compensation expense
|
10,159
|
|
|
9,723
|
|
|
9,770
|
|
|||
Noncompensation expense
(a)
|
15,903
|
|
|
15,182
|
|
|
15,139
|
|
|||
Total noninterest expense
|
26,062
|
|
|
24,905
|
|
|
24,909
|
|
|||
Income before income tax expense
|
14,851
|
|
|
15,516
|
|
|
15,852
|
|
|||
Income tax expense
|
5,456
|
|
|
5,802
|
|
|
6,063
|
|
|||
Net income
|
$
|
9,395
|
|
|
$
|
9,714
|
|
|
$
|
9,789
|
|
|
|
|
|
|
|
||||||
Revenue by line of business
|
|
|
|
|
|
||||||
Consumer & Business Banking
|
$
|
21,104
|
|
|
$
|
18,659
|
|
|
$
|
17,983
|
|
Home Lending
|
5,955
|
|
|
7,361
|
|
|
6,817
|
|
|||
Card, Merchant Services & Auto
|
19,426
|
|
|
18,895
|
|
|
19,020
|
|
|||
|
|
|
|
|
|
||||||
Mortgage fees and related income details:
|
|
|
|
|
|
||||||
Net production revenue
|
636
|
|
|
853
|
|
|
769
|
|
|||
Net mortgage servicing
revenue
(b)
|
977
|
|
|
1,637
|
|
|
1,742
|
|
|||
Mortgage fees and related income
|
$
|
1,613
|
|
|
$
|
2,490
|
|
|
$
|
2,511
|
|
|
|
|
|
|
|
||||||
Financial ratios
|
|
|
|
|
|
||||||
Return on equity
|
17
|
%
|
|
18
|
%
|
|
18
|
%
|
|||
Overhead ratio
|
56
|
|
|
55
|
|
|
57
|
|
(a)
|
Included operating lease depreciation expense of $2.7 billion, $1.9 billion and $1.4 billion for the years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
(b)
|
Included MSR risk management results of $(242) million, $217 million and $(117) million for the years ended
December 31, 2017
,
2016
and
2015
, respectively
.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
57
|
•
|
higher new account origination costs in Card,
|
•
|
lower MSR risk management results,
|
•
|
the absence in the current year of a gain on the sale of Visa Europe interests,
|
•
|
lower net production revenue reflecting lower mortgage production margins and volumes, and
|
•
|
lower mortgage servicing revenue as a result of a lower level of third-party loans serviced
|
•
|
higher auto lease volume and
|
•
|
higher card- and deposit-related fees.
|
•
|
higher auto lease depreciation, and
|
•
|
continued business growth
|
•
|
two items totaling $175 million included in the prior year related to liabilities from a merchant bankruptcy and mortgage servicing reserves.
|
•
|
$445 million of higher net charge-offs, primarily in the credit card portfolio due to growth in newer vintages which, as anticipated, have higher loss rates than the more seasoned portion of the portfolio, partially offset by a decrease in net charge-offs in the residential real estate portfolio reflecting continued improvement in home prices and delinquencies,
|
•
|
a $415 million higher addition to the allowance for credit losses related to the credit card portfolio driven by higher loss rates and loan growth, and a lower reduction in the allowance for the residential real estate portfolio predominantly driven by continued improvement in home prices and delinquencies, and
|
•
|
a $218 million impact in connection with the sale of the student loan portfolio.
|
•
|
lower legal expense and branch efficiencies
|
•
|
higher auto lease depreciation, and
|
•
|
higher investment in marketing.
|
•
|
a $920 million increase related to the credit card portfolio, due to a $600 million addition in the allowance for loan losses, as well as $320 million of higher net charge-offs, driven by loan growth, including growth in newer vintages which, as anticipated, have higher loss rates compared to the overall portfolio,
|
•
|
a $450 million lower benefit related to the residential real estate portfolio, as the current year reduction in the allowance for loan losses was lower than the prior year. The reduction in both periods reflected continued improvements in home prices and lower delinquencies, and
|
•
|
a $150 million increase related to the auto and business banking portfolio, due to additions to the allowance for loan losses and higher net charge-offs, reflecting loan growth in the portfolios.
|
58
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Selected metrics
|
|
|
|
|
|||||||
As of or for the year ended
December 31, |
|
|
|
|
|
||||||
(in millions, except headcount)
|
2017
|
|
2016
|
|
2015
|
||||||
Selected balance sheet data (period-end)
|
|
|
|
|
|
||||||
Total assets
|
$
|
552,601
|
|
|
$
|
535,310
|
|
|
$
|
502,652
|
|
Loans:
|
|
|
|
|
|
||||||
Consumer & Business Banking
|
25,789
|
|
|
24,307
|
|
|
22,730
|
|
|||
Home equity
|
42,751
|
|
|
50,296
|
|
|
58,734
|
|
|||
Residential mortgage
|
197,339
|
|
|
181,196
|
|
|
164,500
|
|
|||
Home Lending
|
240,090
|
|
|
231,492
|
|
|
223,234
|
|
|||
Card
|
149,511
|
|
|
141,816
|
|
|
131,463
|
|
|||
Auto
|
66,242
|
|
|
65,814
|
|
|
60,255
|
|
|||
Student
|
—
|
|
|
7,057
|
|
|
8,176
|
|
|||
Total loans
|
481,632
|
|
|
470,486
|
|
|
445,858
|
|
|||
Core loans
|
415,167
|
|
|
382,608
|
|
|
341,881
|
|
|||
Deposits
|
659,885
|
|
|
618,337
|
|
|
557,645
|
|
|||
Equity
|
51,000
|
|
|
51,000
|
|
|
51,000
|
|
|||
Selected balance sheet data (average)
|
|
|
|
|
|
||||||
Total assets
|
$
|
532,756
|
|
|
$
|
516,354
|
|
|
$
|
472,972
|
|
Loans:
|
|
|
|
|
|
||||||
Consumer & Business Banking
|
24,875
|
|
|
23,431
|
|
|
21,894
|
|
|||
Home equity
|
46,398
|
|
|
54,545
|
|
|
63,261
|
|
|||
Residential mortgage
|
190,242
|
|
|
177,010
|
|
|
140,294
|
|
|||
Home Lending
|
236,640
|
|
|
231,555
|
|
|
203,555
|
|
|||
Card
|
140,024
|
|
|
131,165
|
|
|
125,881
|
|
|||
Auto
|
65,395
|
|
|
63,573
|
|
|
56,487
|
|
|||
Student
|
2,880
|
|
|
7,623
|
|
|
8,763
|
|
|||
Total loans
|
469,814
|
|
|
457,347
|
|
|
416,580
|
|
|||
Core loans
|
393,598
|
|
|
361,316
|
|
|
301,700
|
|
|||
Deposits
|
640,219
|
|
|
586,637
|
|
|
530,938
|
|
|||
Equity
|
51,000
|
|
|
51,000
|
|
|
51,000
|
|
|||
|
|
|
|
|
|
||||||
Headcount
|
134,117
|
|
|
132,802
|
|
|
127,094
|
|
Selected metrics
|
|
|
|||||||
As of or for the year ended
December 31, |
|
|
|
||||||
(in millions, except ratio data)
|
2017
|
2016
|
2015
|
||||||
Credit data and quality statistics
|
|
|
|
||||||
Nonaccrual loans
(a)(b)
|
$
|
4,084
|
|
$
|
4,708
|
|
$
|
5,313
|
|
Net charge-offs/(recoveries)
(c)
|
|
|
|
||||||
Consumer & Business Banking
|
257
|
|
257
|
|
253
|
|
|||
Home equity
|
63
|
|
184
|
|
283
|
|
|||
Residential mortgage
|
(16
|
)
|
14
|
|
2
|
|
|||
Home Lending
|
47
|
|
198
|
|
285
|
|
|||
Card
|
4,123
|
|
3,442
|
|
3,122
|
|
|||
Auto
|
331
|
|
285
|
|
214
|
|
|||
Student
|
498
|
|
162
|
|
210
|
|
|||
Total net charge-offs/(recoveries)
|
$
|
5,256
|
|
$
|
4,344
|
|
$
|
4,084
|
|
|
|
|
|
||||||
Net charge-off/(recovery) rate
(c)
|
|
|
|
||||||
Consumer & Business Banking
|
1.03
|
%
|
1.10
|
%
|
1.16
|
%
|
|||
Home equity
(d)
|
0.18
|
|
0.45
|
|
0.60
|
|
|||
Residential mortgage
(d)
|
(0.01
|
)
|
0.01
|
|
—
|
|
|||
Home Lending
(d)
|
0.02
|
|
0.10
|
|
0.18
|
|
|||
Card
|
2.95
|
|
2.63
|
|
2.51
|
|
|||
Auto
|
0.51
|
|
0.45
|
|
0.38
|
|
|||
Student
|
NM
|
|
2.13
|
|
2.40
|
|
|||
Total net charge-offs/(recovery) rate
(d)
|
1.21
|
|
1.04
|
|
1.10
|
|
|||
30+ day delinquency rate
|
|
|
|
||||||
Home Lending
(e)(f)
|
1.19
|
%
|
1.23
|
%
|
1.57
|
%
|
|||
Card
|
1.80
|
|
1.61
|
|
1.43
|
|
|||
Auto
|
0.89
|
|
1.19
|
|
1.35
|
|
|||
Student
(g)
|
—
|
|
1.60
|
|
1.81
|
|
|||
|
|
|
|
||||||
90+ day delinquency rate - Card
|
0.92
|
|
0.81
|
|
0.72
|
|
|||
|
|
|
|
||||||
Allowance for loan losses
|
|
|
|
||||||
Consumer & Business Banking
|
$
|
796
|
|
$
|
753
|
|
$
|
703
|
|
Home Lending, excluding PCI loans
|
1,003
|
|
1,328
|
|
1,588
|
|
|||
Home Lending — PCI loans
(c)
|
2,225
|
|
2,311
|
|
2,742
|
|
|||
Card
|
4,884
|
|
4,034
|
|
3,434
|
|
|||
Auto
|
464
|
|
474
|
|
399
|
|
|||
Student
|
—
|
|
249
|
|
299
|
|
|||
Total allowance for loan losses
(c)
|
$
|
9,372
|
|
$
|
9,149
|
|
$
|
9,165
|
|
(a)
|
Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the pools is performing.
|
(b)
|
At
December 31, 2017
,
2016
and
2015
, nonaccrual loans excluded loans 90 or more days past due as follows: (1) mortgage loans insured by U.S. government agencies of $4.3 billion, $5.0 billion and $6.3 billion, respectively; and (2) student loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) of zero, $263 million and $290 million, respectively. These amounts have been excluded based upon the government guarantee.
|
(c)
|
Net charge-offs and the net charge-off rates for the years ended
December 31, 2017
,
2016
and
2015
, excluded
$86 million
,
$156 million
and $208 million, respectively, of write-offs in the PCI portfolio. These write-offs decreased the allowance for loan losses for PCI loans. For further information on PCI write-offs, see summary of changes in the allowance on
page 118
.
|
(d)
|
Excludes the impact of PCI loans. For the years ended
December 31, 2017
,
2016
and
2015
, the net charge-off rates including the impact of PCI loans were as follows: (1) home equity of 0.14%, 0.34% and 0.45%, respectively; (2) residential mortgage of (0.01)%, 0.01% and –%, respectively; (3) Home Lending of 0.02%, 0.09% and 0.14%, respectively; and (4) total CCB of 1.12%, 0.95% and 0.99%, respectively.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
59
|
(e)
|
At
December 31, 2017
,
2016
and
2015
, excluded mortgage loans insured by U.S. government agencies of $6.2 billion, $7.0 billion and $8.4 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
|
(f)
|
Excludes PCI loans. The 30+ day delinquency rate for PCI loans was 10.13%, 9.82% and 11.21% at
December 31, 2017
,
2016
and
2015
, respectively.
|
(g)
|
Excluded student loans insured by U.S. government agencies under FFELP of $468 million and $526 million at
December 31, 2016
and
2015
, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
|
Selected metrics
|
|
|
|
|
|||||||
As of or for the year ended December 31,
|
|
|
|
|
|
||||||
(in billions, except ratios and where otherwise noted)
|
2017
|
|
2016
|
|
2015
|
||||||
Business Metrics
|
|
|
|
|
|
||||||
CCB households (in millions)
(a)
|
61.0
|
|
|
60.4
|
|
|
58.1
|
|
|||
Number of branches
|
5,130
|
|
|
5,258
|
|
|
5,413
|
|
|||
Active digital customers
(in thousands)
(b)
|
46,694
|
|
|
43,836
|
|
|
39,242
|
|
|||
Active mobile customers
(in thousands)
(c)
|
30,056
|
|
|
26,536
|
|
|
22,810
|
|
|||
Debit and credit card sales volume
(a)
|
$
|
916.9
|
|
|
$
|
821.6
|
|
|
$
|
754.1
|
|
|
|
|
|
|
|
||||||
Consumer & Business Banking
|
|
|
|
|
|
||||||
Average deposits
|
$
|
625.6
|
|
|
$
|
570.8
|
|
|
$
|
515.2
|
|
Deposit margin
|
1.98
|
%
|
|
1.81
|
%
|
|
1.90
|
%
|
|||
Business banking origination volume
|
$
|
7.3
|
|
|
$
|
7.3
|
|
|
$
|
6.8
|
|
Client investment assets
|
273.3
|
|
|
234.5
|
|
|
218.6
|
|
|||
|
|
|
|
|
|
||||||
Home Lending
|
|
|
|
|
|
||||||
Mortgage origination volume by channel
|
|
|
|
|
|
||||||
Retail
|
$
|
40.3
|
|
|
$
|
44.3
|
|
|
$
|
36.1
|
|
Correspondent
|
57.3
|
|
|
59.3
|
|
|
70.3
|
|
|||
Total mortgage origination volume
(d)
|
$
|
97.6
|
|
|
$
|
103.6
|
|
|
$
|
106.4
|
|
Total loans serviced
(period-end)
|
$
|
816.1
|
|
|
$
|
846.6
|
|
|
$
|
910.1
|
|
Third-party mortgage loans serviced (period-end)
|
553.5
|
|
|
591.5
|
|
|
674.0
|
|
|||
MSR carrying value
(period-end)
|
6.0
|
|
|
6.1
|
|
|
6.6
|
|
|||
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end)
|
1.08
|
%
|
|
1.03
|
%
|
|
0.98
|
%
|
|||
|
|
|
|
|
|
||||||
MSR revenue multiple
(e)
|
3.09
|
x
|
|
2.94
|
x
|
|
2.80
|
x
|
|||
|
|
|
|
|
|
||||||
Card, excluding Commercial Card
|
|
|
|
|
|
||||||
Credit card sales volume
|
$
|
622.2
|
|
|
$
|
545.4
|
|
|
$
|
495.9
|
|
New accounts opened
(in millions)
|
8.4
|
|
|
10.4
|
|
|
8.7
|
|
|||
|
|
|
|
|
|
||||||
Card Services
|
|
|
|
|
|
||||||
Net revenue rate
|
10.57
|
%
|
|
11.29
|
%
|
|
12.33
|
%
|
|||
|
|
|
|
|
|
||||||
Merchant Services
|
|
|
|
|
|
||||||
Merchant processing volume
|
$
|
1,191.7
|
|
|
$
|
1,063.4
|
|
|
$
|
949.3
|
|
|
|
|
|
|
|
||||||
Auto
|
|
|
|
|
|
||||||
Loan and lease origination volume
|
$
|
33.3
|
|
|
$
|
35.4
|
|
|
$
|
32.4
|
|
Average Auto operating lease assets
|
15.2
|
|
|
11.0
|
|
|
7.8
|
|
(a)
|
The prior period amounts have been revised to conform with the current period presentation.
|
(b)
|
Users of all web and/or mobile platforms who have logged in within the past 90 days.
|
(c)
|
Users of all mobile platforms who have logged in within the past 90 days.
|
(d)
|
Firmwide mortgage origination volume was $107.6 billion, $117.4 billion and $115.2 billion for the years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
(e)
|
Represents the ratio of MSR 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).
|
60
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
61
|
CORPORATE & INVESTMENT BANK
|
The Corporate & Investment Bank, which consists of Banking and Markets & Investor Services, offers a broad suite of investment banking, market-making, prime brokerage, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, government and municipal entities. Banking offers a full range of investment banking products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity and debt markets, as well as loan origination and syndication. Banking also includes Treasury Services, which provides transaction services, consisting of cash management and liquidity solutions. Markets & Investor Services 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 Securities Services, a leading global custodian which provides custody, fund accounting and administration, and securities lending products principally for asset managers, insurance companies and public and private investment funds.
|
Selected income statement data
|
|
|
|||||||||
Year ended December 31,
|
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
|
|
|
|
||||||
Investment banking fees
|
$
|
7,192
|
|
|
$
|
6,424
|
|
|
$
|
6,736
|
|
Principal transactions
|
10,873
|
|
|
11,089
|
|
|
9,905
|
|
|||
Lending- and deposit-related fees
|
1,531
|
|
|
1,581
|
|
|
1,573
|
|
|||
Asset management, administration and commissions
|
4,207
|
|
|
4,062
|
|
|
4,467
|
|
|||
All other income
|
572
|
|
|
1,169
|
|
|
1,012
|
|
|||
Noninterest revenue
|
24,375
|
|
|
24,325
|
|
|
23,693
|
|
|||
Net interest income
|
10,118
|
|
|
10,891
|
|
|
9,849
|
|
|||
Total net revenue
(a)(b)
|
34,493
|
|
|
35,216
|
|
|
33,542
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
(45
|
)
|
|
563
|
|
|
332
|
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
|
|
|
|
|
||||||
Compensation expense
|
9,535
|
|
|
9,546
|
|
|
9,973
|
|
|||
Noncompensation expense
|
9,708
|
|
|
9,446
|
|
|
11,388
|
|
|||
Total noninterest expense
|
19,243
|
|
|
18,992
|
|
|
21,361
|
|
|||
Income before income tax expense
|
15,295
|
|
|
15,661
|
|
|
11,849
|
|
|||
Income tax expense
|
4,482
|
|
|
4,846
|
|
|
3,759
|
|
|||
Net income
(a)
|
$
|
10,813
|
|
|
$
|
10,815
|
|
|
$
|
8,090
|
|
(a)
|
The full year 2017 results reflect the impact of the enactment of the TCJA including a decrease to net revenue of $259 million and a benefit to net income of $141 million. For additional information related to the impact of the TCJA, see Note
24
.
|
(b)
|
Included tax-equivalent adjustments, predominantly due to income tax credits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; and tax-exempt income from municipal bonds of $2.4 billion, $2.0 billion and $1.7 billion for the years ended
December 31, 2017, 2016 and 2015
, respectively.
|
Selected income statement data
|
|
|
|||||||||
Year ended December 31,
|
|
||||||||||
(in millions, except ratios)
|
2017
|
|
2016
|
|
2015
|
||||||
Financial ratios
|
|
|
|
|
|
||||||
Return on equity
|
14
|
%
|
|
16
|
%
|
|
12
|
%
|
|||
Overhead ratio
|
56
|
|
|
54
|
|
|
64
|
|
|||
Compensation expense as
percentage of total net
revenue
|
28
|
|
|
27
|
|
|
30
|
|
|||
Revenue by business
|
|
|
|
|
|
||||||
Investment Banking
|
$
|
6,688
|
|
|
$
|
5,950
|
|
|
$
|
6,376
|
|
Treasury Services
|
4,172
|
|
|
3,643
|
|
|
3,631
|
|
|||
Lending
|
1,429
|
|
|
1,208
|
|
|
1,461
|
|
|||
Total Banking
|
12,289
|
|
|
10,801
|
|
|
11,468
|
|
|||
Fixed Income Markets
|
12,812
|
|
|
15,259
|
|
|
12,592
|
|
|||
Equity Markets
|
5,703
|
|
|
5,740
|
|
|
5,694
|
|
|||
Securities Services
|
3,917
|
|
|
3,591
|
|
|
3,777
|
|
|||
Credit Adjustments & Other
(a)
|
(228
|
)
|
|
(175
|
)
|
|
11
|
|
|||
Total Markets & Investor
Services
|
22,204
|
|
|
24,415
|
|
|
22,074
|
|
|||
Total net revenue
|
$
|
34,493
|
|
|
$
|
35,216
|
|
|
$
|
33,542
|
|
(a)
|
Consists primarily of credit valuation adjustments (“CVA”) managed centrally within CIB, funding valuation adjustments (“FVA”) and debit valuation adjustments (“DVA”) on derivatives. Results are primarily reported in principal transactions revenue. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets.
For additional information, see Accounting and Reporting Developments on
pages 141–144
and Notes
2
,
3
and
23
.
|
62
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
63
|
Selected metrics
|
|
|
|
|
|||||||
As of or for the year ended
December 31,
(in millions, except headcount)
|
|
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Selected balance sheet data (period-end)
|
|
|
|
|
|
||||||
Assets
|
$
|
826,384
|
|
|
$
|
803,511
|
|
|
$
|
748,691
|
|
Loans:
|
|
|
|
|
|
||||||
Loans retained
(a)
|
108,765
|
|
|
111,872
|
|
|
106,908
|
|
|||
Loans held-for-sale and loans at fair value
|
4,321
|
|
|
3,781
|
|
|
3,698
|
|
|||
Total loans
|
113,086
|
|
|
115,653
|
|
|
110,606
|
|
|||
Core loans
|
112,754
|
|
|
115,243
|
|
|
110,084
|
|
|||
Equity
|
70,000
|
|
|
64,000
|
|
|
62,000
|
|
|||
Selected balance sheet data (average)
|
|
|
|
|
|
||||||
Assets
|
$
|
857,060
|
|
|
$
|
815,321
|
|
|
$
|
824,208
|
|
Trading assets-debt and equity instruments
|
342,124
|
|
|
300,606
|
|
|
302,514
|
|
|||
Trading assets-derivative receivables
|
56,466
|
|
|
63,387
|
|
|
67,263
|
|
|||
Loans:
|
|
|
|
|
|
||||||
Loans retained
(a)
|
108,368
|
|
|
111,082
|
|
|
98,331
|
|
|||
Loans held-for-sale and loans at fair value
|
4,995
|
|
|
3,812
|
|
|
4,572
|
|
|||
Total loans
|
113,363
|
|
|
114,894
|
|
|
102,903
|
|
|||
Core loans
|
113,006
|
|
|
114,455
|
|
|
102,142
|
|
|||
Equity
|
70,000
|
|
|
64,000
|
|
|
62,000
|
|
|||
|
|
|
|
|
|
||||||
Headcount
|
51,181
|
|
|
48,748
|
|
|
49,067
|
|
(a)
|
Loans retained includes credit portfolio loans, loans held by consolidated Firm-administered multi-seller conduits, trade finance loans, other held-for-investment loans and overdrafts.
|
Selected metrics
|
|
|
|
|
|
||||||
As of or for the year ended
December 31,
(in millions, except ratios)
|
|
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Credit data and quality statistics
|
|
|
|
|
|
||||||
Net charge-offs/(recoveries)
|
$
|
71
|
|
|
$
|
168
|
|
|
$
|
(19
|
)
|
Nonperforming assets:
|
|
|
|
|
|
||||||
Nonaccrual loans:
|
|
|
|
|
|
||||||
Nonaccrual loans retained
(a)
|
812
|
|
|
467
|
|
|
428
|
|
|||
Nonaccrual loans
held-for-sale and loans at fair value
|
—
|
|
|
109
|
|
|
10
|
|
|||
Total nonaccrual loans
|
812
|
|
|
576
|
|
|
438
|
|
|||
Derivative receivables
|
130
|
|
|
223
|
|
|
204
|
|
|||
Assets acquired in loan satisfactions
|
85
|
|
|
79
|
|
|
62
|
|
|||
Total nonperforming assets
|
1,027
|
|
|
878
|
|
|
704
|
|
|||
Allowance for credit losses:
|
|
|
|
|
|
||||||
Allowance for loan losses
|
1,379
|
|
|
1,420
|
|
|
1,258
|
|
|||
Allowance for lending-related commitments
|
727
|
|
|
801
|
|
|
569
|
|
|||
Total allowance for credit losses
|
2,106
|
|
|
2,221
|
|
|
1,827
|
|
|||
Net charge-off/(recovery) rate
(b)
|
0.07
|
%
|
|
0.15
|
%
|
|
(0.02
|
)%
|
|||
Allowance for loan losses to period-end loans
retained
|
1.27
|
|
|
1.27
|
|
|
1.18
|
|
|||
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits
(c)
|
1.92
|
|
|
1.86
|
|
|
1.88
|
|
|||
Allowance for loan losses to nonaccrual loans
retained
(a)
|
170
|
|
|
304
|
|
|
294
|
|
|||
Nonaccrual loans to total period-end loans
|
0.72
|
|
|
0.50
|
|
|
0.40
|
|
(a)
|
Allowance for loan losses of $316 million, $113 million and $177 million were held against these nonaccrual loans at
December 31, 2017, 2016 and 2015
, respectively.
|
(b)
|
Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.
|
(c)
|
Management uses allowance for loan losses to period-end loans retained, excluding trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of CIB’s allowance coverage ratio.
|
Investment banking fees
|
|
|
|
|
|
||||||
|
Year ended December 31,
|
||||||||||
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Advisory
|
$
|
2,150
|
|
|
$
|
2,110
|
|
|
$
|
2,133
|
|
Equity underwriting
|
1,396
|
|
|
1,159
|
|
|
1,434
|
|
|||
Debt underwriting
(a)
|
3,646
|
|
|
3,155
|
|
|
3,169
|
|
|||
Total investment banking fees
|
$
|
7,192
|
|
|
$
|
6,424
|
|
|
$
|
6,736
|
|
(a)
|
Includes loans syndication.
|
64
|
|
JPMorgan Chase & Co./2017 Annual Report
|
League table results – wallet share
|
|||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||
Year ended
December 31, |
Rank
|
Share
|
|
Rank
|
Share
|
|
Rank
|
Share
|
|||||
Based on fees
(a)
|
|
|
|
|
|
|
|
|
|||||
Debt, equity and equity-related
|
|
|
|
|
|
|
|
|
|||||
Global
|
#1
|
7.4
|
%
|
|
#1
|
|
7.0
|
%
|
|
#1
|
|
7.6
|
%
|
U.S.
|
1
|
11.2
|
|
|
1
|
|
11.9
|
|
|
1
|
|
11.5
|
|
Long-term debt
(b)
|
|
|
|
|
|
|
|
|
|||||
Global
|
1
|
7.6
|
|
|
1
|
|
6.7
|
|
|
1
|
|
8.1
|
|
U.S.
|
2
|
10.9
|
|
|
2
|
|
11.1
|
|
|
1
|
|
11.7
|
|
Equity and equity-related
|
|
|
|
|
|
|
|
|
|||||
Global
(c)
|
2
|
7.1
|
|
|
1
|
|
7.4
|
|
|
2
|
|
6.9
|
|
U.S.
|
1
|
11.7
|
|
|
1
|
|
13.3
|
|
|
1
|
|
11.3
|
|
M&A
(d)
|
|
|
|
|
|
|
|
|
|||||
Global
|
2
|
8.6
|
|
|
2
|
|
8.3
|
|
|
2
|
|
8.4
|
|
U.S.
|
2
|
9.2
|
|
|
2
|
|
9.8
|
|
|
2
|
|
9.9
|
|
Loan syndications
|
|
|
|
|
|
|
|
|
|||||
Global
|
1
|
9.5
|
|
|
1
|
|
9.3
|
|
|
1
|
|
7.5
|
|
U.S.
|
1
|
11.3
|
|
|
2
|
|
11.9
|
|
|
2
|
|
10.8
|
|
Global investment banking fees
(e)
|
#1
|
8.1
|
%
|
|
#1
|
|
7.9
|
%
|
|
#1
|
|
7.8
|
%
|
(a)
|
Source: Dealogic as of January 1, 2018. Reflects the ranking of revenue wallet and market share.
|
(b)
|
Long-term debt rankings include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”); and exclude money market, short-term debt, and U.S. municipal securities.
|
(c)
|
Global equity and equity-related ranking includes rights offerings and Chinese A-Shares.
|
(d)
|
Global M&A reflect the removal of any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S.
|
(e)
|
Global investment banking fees exclude money market, short-term debt and shelf deals.
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||
Year ended December 31,
(in millions, except where otherwise noted)
|
Fixed Income Markets
|
Equity Markets
|
Total Markets
|
|
Fixed Income Markets
|
Equity Markets
|
Total Markets
|
|
Fixed Income Markets
|
Equity Markets
|
Total Markets
|
||||||||||||||||||
Principal transactions
|
$
|
7,393
|
|
$
|
3,855
|
|
$
|
11,248
|
|
|
$
|
8,347
|
|
$
|
3,130
|
|
$
|
11,477
|
|
|
$
|
6,899
|
|
$
|
3,038
|
|
$
|
9,937
|
|
Lending- and deposit-related fees
|
191
|
|
6
|
|
197
|
|
|
220
|
|
2
|
|
222
|
|
|
194
|
|
—
|
|
194
|
|
|||||||||
Asset management, administration and commissions
|
390
|
|
1,635
|
|
2,025
|
|
|
388
|
|
1,551
|
|
1,939
|
|
|
383
|
|
1,704
|
|
2,087
|
|
|||||||||
All other income
|
436
|
|
(21
|
)
|
415
|
|
|
1,014
|
|
13
|
|
1,027
|
|
|
854
|
|
(84
|
)
|
770
|
|
|||||||||
Noninterest revenue
|
8,410
|
|
5,475
|
|
13,885
|
|
|
9,969
|
|
4,696
|
|
14,665
|
|
|
8,330
|
|
4,658
|
|
12,988
|
|
|||||||||
Net interest income
(a)
|
4,402
|
|
228
|
|
4,630
|
|
|
5,290
|
|
1,044
|
|
6,334
|
|
|
4,262
|
|
1,036
|
|
5,298
|
|
|||||||||
Total net revenue
|
$
|
12,812
|
|
$
|
5,703
|
|
$
|
18,515
|
|
|
$
|
15,259
|
|
$
|
5,740
|
|
$
|
20,999
|
|
|
$
|
12,592
|
|
$
|
5,694
|
|
$
|
18,286
|
|
Loss days
(b)
|
4
|
|
|
0
|
|
|
2
|
|
(a)
|
Declines in Markets net interest income in 2017 were driven by higher funding costs.
|
(b)
|
Loss days represent the number of days for which Markets posted losses. The loss days determined under this measure differ from the disclosure of daily market risk-related gains and losses for the Firm in the value-at-risk (“VaR”) back-testing discussion on
pages 123–125
.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
65
|
Selected metrics
|
|
|
|
|
|
||||||
As of or for the year ended
December 31,
(in millions, except where otherwise noted)
|
2017
|
|
2016
|
|
2015
|
||||||
Assets under custody (“AUC”) by asset class (period-end) (in billions):
|
|
|
|
|
|
||||||
Fixed Income
|
$
|
13,043
|
|
|
$
|
12,166
|
|
|
$
|
12,042
|
|
Equity
|
7,863
|
|
|
6,428
|
|
|
6,194
|
|
|||
Other
(a)
|
2,563
|
|
|
1,926
|
|
|
1,707
|
|
|||
Total AUC
|
$
|
23,469
|
|
|
$
|
20,520
|
|
|
$
|
19,943
|
|
Client deposits and other third party liabilities (average)
(b)
|
$
|
408,911
|
|
|
$
|
376,287
|
|
|
$
|
395,297
|
|
Trade finance loans (period-end)
|
17,947
|
|
|
15,923
|
|
|
19,255
|
|
(a)
|
Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts.
|
(b)
|
Client deposits and other third party liabilities pertain to the Treasury Services and Securities Services businesses.
|
International metrics
|
|
|
|
|
|||||||
Year ended December 31,
|
|
||||||||||
(in millions, except where otherwise noted)
|
2017
|
|
2016
|
|
2015
|
||||||
Total net revenue
(a)
|
|
|
|
|
|
||||||
Europe/Middle East/Africa
|
$
|
11,328
|
|
|
$
|
10,786
|
|
|
$
|
10,894
|
|
Asia/Pacific
|
4,525
|
|
|
4,915
|
|
|
4,901
|
|
|||
Latin America/Caribbean
|
1,125
|
|
|
1,225
|
|
|
1,096
|
|
|||
Total international net revenue
|
16,978
|
|
|
16,926
|
|
|
16,891
|
|
|||
North America
|
17,515
|
|
|
18,290
|
|
|
16,651
|
|
|||
Total net revenue
|
$
|
34,493
|
|
|
$
|
35,216
|
|
|
$
|
33,542
|
|
|
|
|
|
|
|
||||||
Loans retained (period-end)
(a)
|
|
|
|
|
|
||||||
Europe/Middle East/Africa
|
$
|
25,931
|
|
|
$
|
26,696
|
|
|
$
|
24,622
|
|
Asia/Pacific
|
15,248
|
|
|
14,508
|
|
|
17,108
|
|
|||
Latin America/Caribbean
|
6,546
|
|
|
7,607
|
|
|
8,609
|
|
|||
Total international loans
|
47,725
|
|
|
48,811
|
|
|
50,339
|
|
|||
North America
|
61,040
|
|
|
63,061
|
|
|
56,569
|
|
|||
Total loans retained
|
$
|
108,765
|
|
|
$
|
111,872
|
|
|
$
|
106,908
|
|
|
|
|
|
|
|
||||||
Client deposits and other third-party liabilities (average)
(a)(b)
|
|
|
|
|
|
||||||
Europe/Middle East/Africa
|
$
|
154,582
|
|
|
$
|
135,979
|
|
|
$
|
141,062
|
|
Asia/Pacific
|
76,744
|
|
|
68,110
|
|
|
67,111
|
|
|||
Latin America/Caribbean
|
25,419
|
|
|
22,914
|
|
|
23,070
|
|
|||
Total international
|
$
|
256,745
|
|
|
$
|
227,003
|
|
|
$
|
231,243
|
|
North America
|
152,166
|
|
|
149,284
|
|
|
164,054
|
|
|||
Total client deposits and other third-party liabilities
|
$
|
408,911
|
|
|
$
|
376,287
|
|
|
$
|
395,297
|
|
|
|
|
|
|
|
||||||
AUC (period-end) (in billions)
(a)
|
|
|
|
|
|
||||||
North America
|
$
|
13,971
|
|
|
$
|
12,290
|
|
|
$
|
12,034
|
|
All other regions
|
9,498
|
|
|
8,230
|
|
|
7,909
|
|
|||
Total AUC
|
$
|
23,469
|
|
|
$
|
20,520
|
|
|
$
|
19,943
|
|
(a)
|
Total net revenue is based predominantly on the domicile of the client or location of the trading desk, as applicable. Loans outstanding (excluding loans held-for-sale and loans at fair value), client deposits and other third-party liabilities, and AUC are based predominantly on the domicile of the client.
|
(b)
|
Client deposits and other third party liabilities pertain to the Treasury Services and Securities Services businesses.
|
66
|
|
JPMorgan Chase & Co./2017 Annual Report
|
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 nonprofit entities with annual revenue generally ranging from $20 million to $2 billion. In addition, 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)
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
|
|
|
|
||||||
Lending- and deposit-related fees
|
$
|
919
|
|
|
$
|
917
|
|
|
$
|
944
|
|
Asset management, administration and commissions
|
68
|
|
|
69
|
|
|
88
|
|
|||
All other income
(a)
|
1,535
|
|
|
1,334
|
|
|
1,333
|
|
|||
Noninterest revenue
|
2,522
|
|
|
2,320
|
|
|
2,365
|
|
|||
Net interest income
|
6,083
|
|
|
5,133
|
|
|
4,520
|
|
|||
Total net revenue
(b)
|
8,605
|
|
|
7,453
|
|
|
6,885
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
(276
|
)
|
|
282
|
|
|
442
|
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
|
|
|
|
|
||||||
Compensation expense
|
1,470
|
|
|
1,332
|
|
|
1,238
|
|
|||
Noncompensation expense
|
1,857
|
|
|
1,602
|
|
|
1,643
|
|
|||
Total noninterest expense
|
3,327
|
|
|
2,934
|
|
|
2,881
|
|
|||
|
|
|
|
|
|
||||||
Income before income tax expense
|
5,554
|
|
|
4,237
|
|
|
3,562
|
|
|||
Income tax expense
|
2,015
|
|
|
1,580
|
|
|
1,371
|
|
|||
Net income
|
$
|
3,539
|
|
|
$
|
2,657
|
|
|
$
|
2,191
|
|
(a)
|
Includes revenue from investment banking products and commercial card transactions.
|
(b)
|
Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities that provide loans to qualified businesses in low-income communities, as well as tax-exempt income related to municipal financing activities of
$699 million
,
$505 million
and
$493 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively. The 2017 results reflect the impact of the enactment of the TCJA including a benefit to all other income of $115 million on certain investments in the Community Development Banking business. For additional information related to the impact of the TCJA, see Note 24.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
67
|
CB product revenue consists of the following:
|
||||
Lending
includes a variety of financing alternatives, which are primarily provided on a secured basis; collateral includes receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures, leases, and standby letters of credit.
|
||||
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 Markets products used by CB clients is also included.
|
||||
Other
product revenue primarily includes tax-equivalent adjustments generated from Community Development Banking activities and certain income derived from principal transactions.
|
CB is divided into four primary client segments: Middle Market Banking, Corporate Client Banking, Commercial Term Lending, and Real Estate Banking.
|
||||
Middle Market Banking
covers corporate, municipal and nonprofit clients, with annual revenue generally ranging between $20 million and $500 million.
|
||||
Corporate Client Banking
covers clients with annual revenue generally ranging between $500 million and $2 billion and focuses on clients that have broader investment banking needs.
|
||||
Commercial Term Lending
primarily provides term financing to real estate investors/owners for multifamily properties as well as office, retail and industrial properties.
|
||||
Real Estate Banking
provides full-service banking to investors and developers of institutional-grade real estate investment properties.
|
||||
Other
primarily includes lending and investment-related activities within the Community Development Banking business.
|
(a)
|
Includes total Firm revenue from investment banking products sold to CB clients, net of revenue sharing with the CIB.
|
(b)
|
The 2017 results reflect the impact of the enactment of the TCJA including a benefit of $115 million on certain investments in the Community Development Banking business. For additional information related to the impact of the TCJA, see Note
24
.
|
(c)
|
Represents total Firm revenue from investment banking products sold to CB clients.
|
(d)
|
Certain clients were transferred from Middle Market Banking to Corporate Client Banking in the second quarter of 2017. The prior period amounts have been revised to conform with the current period presentation.
|
68
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(a)
|
Certain clients were transferred from Middle Market Banking to Corporate Client Banking in the second quarter of 2017. The prior period amounts have been revised to conform with the current period presentation.
|
Selected metrics
|
|
|
|
|
|||||||
As of or for the year ended December 31, (in millions, except ratios)
|
2017
|
|
2016
|
|
2015
|
||||||
Credit data and quality statistics
|
|
|
|
|
|
||||||
Net charge-offs/(recoveries)
|
$
|
39
|
|
|
$
|
163
|
|
|
$
|
21
|
|
Nonperforming assets
|
|
|
|
|
|
||||||
Nonaccrual loans:
|
|
|
|
|
|
||||||
Nonaccrual loans retained
(a)
|
617
|
|
|
1,149
|
|
|
375
|
|
|||
Nonaccrual loans held-for-sale and loans at fair value
|
—
|
|
|
—
|
|
|
18
|
|
|||
Total nonaccrual loans
|
617
|
|
|
1,149
|
|
|
393
|
|
|||
|
|
|
|
|
|
||||||
Assets acquired in loan satisfactions
|
3
|
|
|
1
|
|
|
8
|
|
|||
Total nonperforming assets
|
620
|
|
|
1,150
|
|
|
401
|
|
|||
Allowance for credit losses:
|
|
|
|
|
|
||||||
Allowance for loan losses
|
2,558
|
|
|
2,925
|
|
|
2,855
|
|
|||
Allowance for lending-related commitments
|
300
|
|
|
248
|
|
|
198
|
|
|||
Total allowance for credit losses
|
2,858
|
|
|
3,173
|
|
|
3,053
|
|
|||
|
|
|
|
|
|
||||||
Net charge-off/(recovery) rate
(b)
|
0.02
|
%
|
|
0.09
|
%
|
|
0.01
|
%
|
|||
Allowance for loan losses to period-end loans
retained
|
1.26
|
|
|
1.55
|
|
|
1.71
|
|
|||
Allowance for loan losses to nonaccrual loans retained
(a)
|
415
|
|
|
255
|
|
|
761
|
|
|||
Nonaccrual loans to period-end total loans
|
0.30
|
|
|
0.61
|
|
|
0.23
|
|
(a)
|
Allowance for loan losses of
$92 million
,
$155 million
and
$64 million
was held against nonaccrual loans retained at
December 31, 2017
,
2016
and
2015
, respectively.
|
(b)
|
Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
69
|
ASSET & WEALTH MANAGEMENT
|
Asset & Wealth Management, with client assets of $2.8 trillion, is a global leader in investment and wealth management. AWM clients include institutions, high-net-worth individuals and retail investors in many major markets throughout the world. AWM offers investment management across most major asset classes including equities, fixed income, alternatives and money market funds. AWM also offers multi-asset investment management, providing solutions for a broad range of clients’ investment needs. For Wealth Management clients, AWM also provides retirement products and services, brokerage and banking services including trusts and estates, loans, mortgages and deposits. The majority of AWM’s client assets are in actively managed portfolios.
|
Selected income statement data
|
|
|
|||||||
Year ended December 31,
(in millions, except ratios
and headcount)
|
2017
|
2016
|
2015
|
||||||
Revenue
|
|
|
|
||||||
Asset management, administration and commissions
|
$
|
8,946
|
|
$
|
8,414
|
|
$
|
9,175
|
|
All other income
|
593
|
|
598
|
|
388
|
|
|||
Noninterest revenue
|
9,539
|
|
9,012
|
|
9,563
|
|
|||
Net interest income
|
3,379
|
|
3,033
|
|
2,556
|
|
|||
Total net revenue
|
12,918
|
|
12,045
|
|
12,119
|
|
|||
|
|
|
|
||||||
Provision for credit losses
|
39
|
|
26
|
|
4
|
|
|||
|
|
|
|
||||||
Noninterest expense
|
|
|
|
||||||
Compensation expense
|
5,318
|
|
5,065
|
|
5,113
|
|
|||
Noncompensation expense
|
3,983
|
|
3,413
|
|
3,773
|
|
|||
Total noninterest expense
|
9,301
|
|
8,478
|
|
8,886
|
|
|||
|
|
|
|
||||||
Income before income tax expense
|
3,578
|
|
3,541
|
|
3,229
|
|
|||
Income tax expense
|
1,241
|
|
1,290
|
|
1,294
|
|
|||
Net income
|
$
|
2,337
|
|
$
|
2,251
|
|
$
|
1,935
|
|
|
|
|
|
||||||
Revenue by line of business
|
|
|
|
||||||
Asset Management
|
$
|
6,340
|
|
$
|
5,970
|
|
$
|
6,301
|
|
Wealth Management
|
6,578
|
|
6,075
|
|
5,818
|
|
|||
Total net revenue
|
$
|
12,918
|
|
$
|
12,045
|
|
$
|
12,119
|
|
|
|
|
|
||||||
Financial ratios
|
|
|
|
||||||
Return on common equity
|
25
|
%
|
24
|
%
|
21
|
%
|
|||
Overhead ratio
|
72
|
|
70
|
|
73
|
|
|||
Pre-tax margin ratio:
|
|
|
|
||||||
Asset Management
|
25
|
|
31
|
|
31
|
|
|||
Wealth Management
|
30
|
|
28
|
|
22
|
|
|||
Asset & Wealth Management
|
28
|
|
29
|
|
27
|
|
|||
|
|
|
|
||||||
Headcount
|
22,975
|
|
21,082
|
|
20,975
|
|
|||
|
|
|
|
||||||
Number of Wealth Management client advisors
|
2,605
|
|
2,504
|
|
2,778
|
|
70
|
|
JPMorgan Chase & Co./2017 Annual Report
|
AWM’s lines of business consist of the following:
|
||||
Asset Management
provides comprehensive global investment services, including asset management, pension analytics, asset-liability management and active risk-budgeting strategies.
|
||||
Wealth Management
offers investment advice and wealth management, including investment management, capital markets and risk management, tax and estate planning, banking, lending and specialty-wealth advisory services.
|
AWM’s client segments consist of the following:
|
||||
Private Banking
clients include high- and ultra-high-net-worth individuals, families, money managers, business owners and small corporations worldwide.
|
||||
Institutional
clients include both corporate and public institutions, endowments, foundations, nonprofit organizations and governments worldwide.
|
||||
Retail
clients include financial intermediaries and individual investors.
|
Asset Management has two high-level measures of its overall fund performance.
|
||||
•
Percentage of mutual fund assets under management in funds rated 4- or 5-star:
Mutual fund rating services rank funds based on their risk-adjusted performance over various periods. A 5-star rating is the best rating and represents the top 10% of industry-wide ranked funds. A 4-star rating represents the next 22.5% of industry-wide ranked funds. A 3-star rating represents the next 35% of industry-wide ranked funds. A 2-star rating represents the next 22.5% of industry-wide ranked funds. A 1-star rating is the worst rating and represents the bottom 10% of industry-wide ranked funds. The
“
overall Morningstar rating
”
is derived from a weighted average of the performance associated with a fund’s three-, five- and ten-year (if applicable) Morningstar Rating metrics. For U.S. domiciled funds, separate star ratings are given at the individual share class level. The Nomura
“
star rating
”
is based on three-year risk-adjusted performance only. Funds with fewer than three years of history are not rated and hence excluded from this analysis. All ratings, the assigned peer categories and the asset values used to derive this analysis are sourced from these fund rating providers mentioned in footnote (a). The data providers re-denominate the asset values into U.S. dollars. This % of AUM is based on star ratings at the share class level for U.S. domiciled funds, and at a
“
primary share class
”
level to represent the star rating of all other funds except for Japan where Nomura provides ratings at the fund level. The “primary share class”, as defined by Morningstar, denotes the share class recommended as being the best proxy for the portfolio and in most cases will be the most retail version (based upon annual management charge, minimum investment, currency and other factors). The performance data could have been different if all funds/accounts would have been included. Past performance is not indicative of future results.
|
||||
•
Percentage of mutual fund assets under management in funds ranked in the 1st or 2nd quartile (one, three and five years)
: All quartile rankings, the assigned peer categories and the asset values used to derive this analysis are sourced from the fund ranking providers mentioned in footnote (c). Quartile rankings are done on the net-of-fee absolute return of each fund. The data providers re-denominate the asset values into U.S. dollars. This % of AUM is based on fund performance and associated peer rankings at the share class level for U.S. domiciled funds, at a
“
primary share class” level to represent the quartile ranking of
the
U.K., Luxembourg and Hong Kong funds and at the fund level for all other funds. The
“
primary share class
”
, as defined by Morningstar, denotes the share class recommended as being the best proxy for the portfolio and in most cases will be the most retail version (based upon annual management charge, minimum investment, currency and other factors). Where peer group rankings given for a fund are in more than one “primary share class” territory both rankings are included to reflect local market competitiveness (applies to “Offshore Territories” and “HK SFC Authorized” funds only). The performance data could have been different if all funds/accounts would have been included. Past performance is not indicative of future results.
|
Selected metrics
|
|
|
|
||||||
As of or for the year ended December 31,
(in millions, except ranking data and ratios)
|
2017
|
2016
|
2015
|
||||||
% of JPM mutual fund assets rated as 4- or 5-star
(a)(b)
|
60
|
%
|
63
|
%
|
52
|
%
|
|||
% of JPM mutual fund assets ranked in 1
st
or 2
nd
quartile:
(c)
|
|
|
|
||||||
1 year
|
64
|
|
54
|
|
62
|
|
|||
3 years
|
75
|
|
72
|
|
78
|
|
|||
5 years
(b)
|
83
|
|
79
|
|
79
|
|
|||
|
|
|
|
||||||
Selected balance sheet data (period-end)
|
|
|
|
||||||
Total assets
|
$
|
151,909
|
|
$
|
138,384
|
|
$
|
131,451
|
|
Loans
|
130,640
|
|
118,039
|
|
111,007
|
|
|||
Core loans
|
130,640
|
|
118,039
|
|
111,007
|
|
|||
Deposits
|
146,407
|
|
161,577
|
|
146,766
|
|
|||
Equity
|
9,000
|
|
9,000
|
|
9,000
|
|
|||
|
|
|
|
||||||
Selected balance sheet data (average)
|
|
|
|
||||||
Total assets
|
$
|
144,206
|
|
$
|
132,875
|
|
$
|
129,743
|
|
Loans
|
123,464
|
|
112,876
|
|
107,418
|
|
|||
Core loans
|
123,464
|
|
112,876
|
|
107,418
|
|
|||
Deposits
|
148,982
|
|
153,334
|
|
149,525
|
|
|||
Equity
|
9,000
|
|
9,000
|
|
9,000
|
|
|||
|
|
|
|
||||||
Credit data and quality statistics
|
|
|
|
||||||
Net charge-offs
|
$
|
14
|
|
$
|
16
|
|
$
|
12
|
|
Nonaccrual loans
|
375
|
|
390
|
|
218
|
|
|||
Allowance for credit losses:
|
|
|
|
||||||
Allowance for loan losses
|
290
|
|
274
|
|
266
|
|
|||
Allowance for lending-related commitments
|
10
|
|
4
|
|
5
|
|
|||
Total allowance for credit losses
|
300
|
|
278
|
|
271
|
|
|||
Net charge-off rate
|
0.01
|
%
|
0.01
|
%
|
0.01
|
%
|
|||
Allowance for loan losses to period-end loans
|
0.22
|
|
0.23
|
|
0.24
|
|
|||
Allowance for loan losses to nonaccrual loans
|
77
|
|
70
|
|
122
|
|
|||
Nonaccrual loans to period-end loans
|
0.29
|
|
0.33
|
|
0.20
|
|
(a)
|
Represents the “overall star rating” derived from Morningstar for the U.S., the U.K., Luxembourg, Hong Kong and Taiwan domiciled funds; and Nomura “star rating” for Japan domiciled funds. Includes only Asset Management retail open-ended mutual funds that have a rating. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds.
|
(b)
|
The prior period amounts have been revised to conform with the current period presentation.
|
(c)
|
Quartile ranking sourced from: Lipper for the U.S. and Taiwan domiciled funds; Morningstar for the U.K., Luxembourg and Hong Kong domiciled funds; Nomura for Japan domiciled funds and Fund Doctor for South Korea domiciled funds. Includes only Asset Management retail open-ended mutual funds that are ranked by the aforementioned sources. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
71
|
Client assets
|
|
|
|||||||
December 31,
(in billions)
|
2017
|
2016
|
2015
|
||||||
Assets by asset class
|
|
|
|
||||||
Liquidity
(a)
|
$
|
459
|
|
$
|
436
|
|
$
|
430
|
|
Fixed income
(a)
|
474
|
|
420
|
|
376
|
|
|||
Equity
|
428
|
|
351
|
|
353
|
|
|||
Multi-asset and alternatives
|
673
|
|
564
|
|
564
|
|
|||
Total assets under management
|
2,034
|
|
1,771
|
|
1,723
|
|
|||
Custody/brokerage/
administration/deposits
|
755
|
|
682
|
|
627
|
|
|||
Total client assets
|
$
|
2,789
|
|
$
|
2,453
|
|
$
|
2,350
|
|
|
|
|
|
||||||
Memo:
|
|
|
|
||||||
Alternatives client assets
(b)
|
$
|
166
|
|
$
|
154
|
|
$
|
172
|
|
|
|
|
|
||||||
Assets by client segment
|
|
|
|
||||||
Private Banking
|
$
|
526
|
|
$
|
435
|
|
$
|
437
|
|
Institutional
|
968
|
|
869
|
|
816
|
|
|||
Retail
|
540
|
|
467
|
|
470
|
|
|||
Total assets under management
|
$
|
2,034
|
|
$
|
1,771
|
|
$
|
1,723
|
|
|
|
|
|
||||||
Private Banking
|
$
|
1,256
|
|
$
|
1,098
|
|
$
|
1,050
|
|
Institutional
|
990
|
|
886
|
|
824
|
|
|||
Retail
|
543
|
|
469
|
|
476
|
|
|||
Total client assets
|
$
|
2,789
|
|
$
|
2,453
|
|
$
|
2,350
|
|
(a)
|
The prior period amounts have been revised to conform with the current period presentation.
|
(b)
|
Represents assets under management, as well as client balances in brokerage accounts.
|
Client assets (continued)
|
|
|
|
||||||
Year ended December 31,
(in billions)
|
2017
|
2016
|
2015
|
||||||
Assets under management rollforward
|
|
|
|
||||||
Beginning balance
|
$
|
1,771
|
|
$
|
1,723
|
|
$
|
1,744
|
|
Net asset flows:
|
|
|
|
||||||
Liquidity
|
9
|
|
24
|
|
—
|
|
|||
Fixed income
|
36
|
|
30
|
|
(8
|
)
|
|||
Equity
|
(11
|
)
|
(29
|
)
|
1
|
|
|||
Multi-asset and alternatives
|
43
|
|
22
|
|
22
|
|
|||
Market/performance/other impacts
|
186
|
|
1
|
|
(36
|
)
|
|||
Ending balance, December 31
|
$
|
2,034
|
|
$
|
1,771
|
|
$
|
1,723
|
|
|
|
|
|
||||||
Client assets rollforward
|
|
|
|
||||||
Beginning balance
|
$
|
2,453
|
|
$
|
2,350
|
|
$
|
2,387
|
|
Net asset flows
|
93
|
|
63
|
|
27
|
|
|||
Market/performance/other impacts
|
243
|
|
40
|
|
(64
|
)
|
|||
Ending balance, December 31
|
$
|
2,789
|
|
$
|
2,453
|
|
$
|
2,350
|
|
International metrics
|
|||||||||
Year ended December 31,
(in billions, except where otherwise noted)
|
2017
|
2016
|
2015
|
||||||
Total net revenue
(in millions)
(a)
|
|
|
|
||||||
Europe/Middle East/Africa
|
$
|
2,021
|
|
$
|
1,849
|
|
$
|
1,946
|
|
Asia/Pacific
|
1,162
|
|
1,077
|
|
1,130
|
|
|||
Latin America/Caribbean
|
844
|
|
726
|
|
795
|
|
|||
Total international net revenue
|
4,027
|
|
3,652
|
|
3,871
|
|
|||
|
|
|
|
||||||
North America
|
8,891
|
|
8,393
|
|
8,248
|
|
|||
Total net revenue
|
$
|
12,918
|
|
$
|
12,045
|
|
$
|
12,119
|
|
|
|
|
|
||||||
Assets under management
|
|
|
|
||||||
Europe/Middle East/Africa
|
$
|
384
|
|
$
|
309
|
|
$
|
302
|
|
Asia/Pacific
|
160
|
|
123
|
|
123
|
|
|||
Latin America/Caribbean
|
61
|
|
45
|
|
45
|
|
|||
Total international assets under management
|
605
|
|
477
|
|
470
|
|
|||
|
|
|
|
||||||
North America
|
1,429
|
|
1,294
|
|
1,253
|
|
|||
Total assets under management
|
$
|
2,034
|
|
$
|
1,771
|
|
$
|
1,723
|
|
|
|
|
|
||||||
Client assets
|
|
|
|
||||||
Europe/Middle East/Africa
|
$
|
441
|
|
$
|
359
|
|
$
|
351
|
|
Asia/Pacific
|
225
|
|
177
|
|
173
|
|
|||
Latin America/Caribbean
|
154
|
|
114
|
|
110
|
|
|||
Total international client assets
|
820
|
|
650
|
|
634
|
|
|||
|
|
|
|
||||||
North America
|
1,969
|
|
1,803
|
|
1,716
|
|
|||
Total client assets
|
$
|
2,789
|
|
$
|
2,453
|
|
$
|
2,350
|
|
(a)
|
Regional revenue is based on the domicile of the client.
|
72
|
|
JPMorgan Chase & Co./2017 Annual Report
|
CORPORATE
|
The Corporate segment consists of Treasury and Chief Investment Office and Other Corporate, which includes corporate staff units and expense that is centrally managed. Treasury and CIO is predominantly responsible for measuring, monitoring, reporting and managing the Firm’s liquidity, funding and structural interest rate and foreign exchange risks, as well as executing the Firm’s capital plan. The major Other Corporate units include Real Estate, Enterprise Technology, Legal, Finance, Human Resources, Internal Audit, Risk Management, Compliance, Oversight & Controls, Corporate Responsibility and various Other Corporate groups.
|
Selected income statement data
|
|
|
|
|
|||||||
Year ended December 31,
(in millions, except headcount)
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
|
|
|
|
|
||||||
Principal transactions
|
$
|
284
|
|
|
$
|
210
|
|
|
$
|
41
|
|
Securities gains/(losses)
|
(66
|
)
|
|
140
|
|
|
190
|
|
|||
All other income/(loss)
(a)
|
867
|
|
|
588
|
|
|
569
|
|
|||
Noninterest revenue
|
1,085
|
|
|
938
|
|
|
800
|
|
|||
Net interest income
|
55
|
|
|
(1,425
|
)
|
|
(533
|
)
|
|||
Total net revenue
(b)
|
1,140
|
|
|
(487
|
)
|
|
267
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
—
|
|
|
(4
|
)
|
|
(10
|
)
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
(c)
|
501
|
|
|
462
|
|
|
977
|
|
|||
Income/(loss) before income tax benefit
|
639
|
|
|
(945
|
)
|
|
(700
|
)
|
|||
Income tax expense/(benefit)
|
2,282
|
|
|
(241
|
)
|
|
(3,137
|
)
|
|||
Net income/(loss)
|
$
|
(1,643
|
)
|
|
$
|
(704
|
)
|
|
$
|
2,437
|
|
Total net revenue
|
|
|
|
|
|
||||||
Treasury and CIO
|
566
|
|
|
(787
|
)
|
|
(493
|
)
|
|||
Other Corporate
|
574
|
|
|
300
|
|
|
760
|
|
|||
Total net revenue
|
$
|
1,140
|
|
|
$
|
(487
|
)
|
|
$
|
267
|
|
Net income/(loss)
|
|
|
|
|
|
||||||
Treasury and CIO
|
60
|
|
|
(715
|
)
|
|
(235
|
)
|
|||
Other Corporate
|
(1,703
|
)
|
|
11
|
|
|
2,672
|
|
|||
Total net income/(loss)
|
$
|
(1,643
|
)
|
|
$
|
(704
|
)
|
|
$
|
2,437
|
|
|
|
|
|
|
|
||||||
Total assets (period-end)
|
$
|
781,478
|
|
|
$
|
799,426
|
|
|
$
|
768,204
|
|
Loans (period-end)
|
1,653
|
|
|
1,592
|
|
|
2,187
|
|
|||
Core loans
(d)
|
1,653
|
|
|
1,589
|
|
|
2,182
|
|
|||
Headcount
|
35,261
|
|
|
32,358
|
|
|
29,617
|
|
(a)
|
Included revenue related to a legal settlement of $645 million for the year ended December 31, 2017.
|
(b)
|
Included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments of $
905 million
,
$885 million
and
$839 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
(c)
|
Included legal expense/(benefit) of $
(593) million
,
$(385) million
and
$832 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
(d)
|
Average core loans were $1.6 billion, $1.9 billion and $2.5 billion for the years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
73
|
74
|
|
JPMorgan Chase & Co./2017 Annual Report
|
ENTERPRISE-WIDE RISK MANAGEMENT
|
•
|
Acceptance of responsibility, including identification and escalation of risk issues, by all individuals within the Firm;
|
•
|
Ownership of risk identification, assessment, data and management within each of the lines of business and corporate functions; and
|
•
|
Firmwide structures for risk governance.
|
•
|
Strategic risk is the risk associated with the Firm’s current and future business plans and objectives, including capital risk, liquidity risk, and the impact to the Firm’s reputation.
|
•
|
Credit and investment risk is the risk associated with the default or change in credit profile of a client, counterparty or customer; or loss of principal or a reduction in expected returns on investments, including consumer credit risk, wholesale credit risk, and investment portfolio risk.
|
•
|
Market risk is the risk associated with the effect of changes in market factors, such as interest and foreign exchange rates, equity and commodity prices, credit spreads or implied volatilities, on the value of assets and liabilities held for both the short and long term.
|
•
|
Operational risk is the risk associated with inadequate or failed internal processes, people and systems, or from external events and includes compliance risk, conduct risk, legal risk, and estimations and model risk.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
75
|
Risk Oversight
|
Definition
|
Page
references
|
Strategic risk
|
The risk associated with the Firm’s current and future business plans and objectives.
|
81
|
Capital risk
|
The risk that the Firm has an insufficient level and composition of capital to support the Firm’s business activities and associated risks during normal economic environments and under stressed conditions.
|
82–91
|
Liquidity risk
|
The risk that the Firm will be unable to meet its contractual and contingent financial obligations as they arise or that it does not have the appropriate amount, composition and tenor of funding and liquidity to support its assets and liabilities.
|
92–97
|
Reputation risk
|
The potential that an action, inaction, transaction, investment or event will reduce trust in the Firm’s integrity or competence by its various constituents, including clients, counterparties, investors, regulators, employees and the broader public.
|
98
|
Consumer credit risk
|
The risk associated with the default or change in credit profile of a customer.
|
102–107
|
Wholesale credit risk
|
The risk associated with the default or change in credit profile of a client or counterparty.
|
108–116
|
Investment portfolio risk
|
The risk associated with the loss of principal or a reduction in expected returns on investments arising from the investment securities portfolio held by Treasury and CIO in connection with the Firm’s balance sheet or asset-liability management objectives or from principal investments managed in various lines of business in predominantly privately-held financial assets and instruments.
|
120
|
Market risk
|
The risk associated with the effect of changes in market factors, such as interest and foreign exchange rates, equity and commodity prices, credit spreads or implied volatilities, on the value of assets and liabilities held for both the short and long term.
|
121–128
|
Country risk
|
The framework for monitoring and assessing how financial, economic, political or other significant developments adversely affect the value of the Firm’s exposures related to a particular country or set of countries.
|
129–130
|
Operational risk
|
The risk associated with inadequate or failed internal processes, people and systems, or from external events.
|
131–133
|
Compliance risk
|
The risk of failure to comply with applicable laws, rules, and regulations.
|
134
|
Conduct risk
|
The risk that any action or inaction by an employee of the Firm could lead to unfair client/customer outcomes, compromise the Firm’s reputation, impact the integrity of the markets in which the Firm operates, or reflect poorly on the Firm’s culture.
|
135
|
Legal risk
|
The risk of loss primarily caused by the actual or alleged failure to meet legal obligations that arise from the rule of law in jurisdictions in which the Firm operates, agreements with clients and customers, and products and services offered by the Firm.
|
136
|
Estimations and Model risk
|
The risk of the potential for adverse consequences from decisions based on incorrect or misused estimation outputs.
|
137
|
76
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
77
|
78
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
79
|
80
|
|
JPMorgan Chase & Co./2017 Annual Report
|
STRATEGIC RISK MANAGEMENT
|
JPMorgan Chase & Co./2017 Annual Report
|
|
81
|
CAPITAL RISK MANAGEMENT
|
•
|
Maintain “well-capitalized” status for the Firm and its insured depository institution (“IDI”) subsidiaries;
|
•
|
Support risks underlying business activities;
|
•
|
Maintain sufficient capital in order to continue to build and invest in its businesses through the cycle and in stressed environments;
|
•
|
Retain flexibility to take advantage of future investment opportunities;
|
•
|
Serve as a source of strength to its subsidiaries;
|
•
|
Meet capital distribution objectives; and
|
•
|
Maintain sufficient capital resources to operate throughout a resolution period in accordance with the Firm’s preferred resolution strategy.
|
82
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
Transitional
|
Fully Phased-In
|
|
|||||||||||||||||||
December 31, 2017
(in millions, except ratios)
|
Standardized
|
|
Advanced
|
|
Minimum capital ratios
|
|
Standardized
|
|
Advanced
|
|
Minimum capital ratios
|
|
||||||||||
Risk-based capital metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CET1 capital
|
$
|
183,300
|
|
|
$
|
183,300
|
|
|
|
|
$
|
183,244
|
|
|
$
|
183,244
|
|
|
|
|
||
Tier 1 capital
|
208,644
|
|
|
208,644
|
|
|
|
|
208,564
|
|
|
208,564
|
|
|
|
|
||||||
Total capital
|
238,395
|
|
|
227,933
|
|
|
|
|
237,960
|
|
|
227,498
|
|
|
|
|
||||||
Risk-weighted assets
|
1,499,506
|
|
|
1,435,825
|
|
|
|
|
1,509,762
|
|
|
1,446,696
|
|
|
|
|
||||||
CET1 capital ratio
|
12.2
|
%
|
|
12.8
|
%
|
|
7.5
|
%
|
|
12.1
|
%
|
|
12.7
|
%
|
|
10.5
|
%
|
|
||||
Tier 1 capital ratio
|
13.9
|
|
|
14.5
|
|
|
9.0
|
|
|
13.8
|
|
|
14.4
|
|
|
12.0
|
|
|
||||
Total capital ratio
|
15.9
|
|
|
15.9
|
|
|
11.0
|
|
|
15.8
|
|
|
15.7
|
|
|
14.0
|
|
|
||||
Leverage-based capital metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted average assets
(a)
|
$
|
2,514,270
|
|
|
$
|
2,514,270
|
|
|
|
|
$
|
2,514,822
|
|
|
$
|
2,514,822
|
|
|
|
|
||
Tier 1 leverage ratio
(b)
|
8.3
|
%
|
|
8.3
|
%
|
|
4.0
|
%
|
|
8.3
|
%
|
|
8.3
|
%
|
|
4.0
|
%
|
|
||||
Total leverage exposure
|
NA
|
|
|
$
|
3,204,463
|
|
|
|
|
NA
|
|
|
$
|
3,205,015
|
|
|
|
|
||||
SLR
(c)
|
NA
|
|
|
6.5
|
%
|
|
NA
|
|
|
NA
|
|
|
6.5
|
%
|
|
5.0
|
%
|
(e)
|
|
Transitional
|
Fully Phased-In
|
|
|||||||||||||||||||
December 31, 2016
(in millions, except ratios)
|
Standardized
|
|
Advanced
|
|
Minimum capital ratios
|
|
Standardized
|
|
Advanced
|
|
Minimum capital ratios
|
|
||||||||||
Risk-based capital metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
CET1 capital
|
$
|
182,967
|
|
|
$
|
182,967
|
|
|
|
|
$
|
181,734
|
|
|
$
|
181,734
|
|
|
|
|
||
Tier 1 capital
|
208,112
|
|
|
208,112
|
|
|
|
|
207,474
|
|
|
207,474
|
|
|
|
|
||||||
Total capital
|
239,553
|
|
|
228,592
|
|
|
|
|
237,487
|
|
|
226,526
|
|
|
|
|
||||||
Risk-weighted assets
|
1,483,132
|
|
(d)
|
1,476,915
|
|
|
|
|
1,492,816
|
|
(d)
|
1,487,180
|
|
|
|
|
||||||
CET1 capital ratio
|
12.3
|
%
|
(d)
|
12.4
|
%
|
|
6.25
|
%
|
|
12.2
|
%
|
(d)
|
12.2
|
%
|
|
10.5
|
%
|
|
||||
Tier 1 capital ratio
|
14.0
|
|
(d)
|
14.1
|
|
|
7.75
|
|
|
13.9
|
|
(d)
|
14.0
|
|
|
12.0
|
|
|
||||
Total capital ratio
|
16.2
|
|
(d)
|
15.5
|
|
|
9.75
|
|
|
15.9
|
|
(d)
|
15.2
|
|
|
14.0
|
|
|
||||
Leverage
based capital metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted average assets
(a)
|
$
|
2,484,631
|
|
|
$
|
2,484,631
|
|
|
|
|
$
|
2,485,480
|
|
|
$
|
2,485,480
|
|
|
|
|
||
Tier 1 leverage ratio
(b)
|
8.4
|
%
|
|
8.4
|
%
|
|
4.0
|
%
|
|
8.3
|
%
|
|
8.3
|
%
|
|
4.0
|
%
|
|
||||
Total leverage exposure
|
NA
|
|
|
$
|
3,191,990
|
|
|
|
|
NA
|
|
|
$
|
3,192,839
|
|
|
|
|
||||
SLR
(c)
|
NA
|
|
|
6.5
|
%
|
|
NA
|
|
|
NA
|
|
|
6.5
|
%
|
|
5.0
|
%
|
(e)
|
(a)
|
Adjusted average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for unrealized gains/(losses) on available-for-sale (“AFS”) securities, less deductions for goodwill and other intangible assets, defined benefit pension plan assets, and deferred tax assets related to tax attributes, including net operating losses (“NOLs”).
|
(b)
|
The Tier 1 leverage ratio is calculated by dividing Tier 1 capital by adjusted total average assets.
|
(c)
|
The SLR leverage ratio is calculated by dividing Tier 1 capital by total leverage exposure. For additional information on total leverage exposure, see SLR on
page 88
.
|
(d)
|
The prior period amounts have been revised to conform with the current period presentation.
|
(e)
|
In the case of the SLR, the Fully Phased-In minimum ratio is effective January 1, 2018.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
83
|
84
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
2017
|
|
2016
|
|
Fully Phased-In:
|
|
|
||
Method 1
|
2.50
|
%
|
2.50
|
%
|
Method 2
|
3.50
|
%
|
4.50
|
%
|
|
|
|
||
Transitional
(a)
|
1.75
|
%
|
1.125
|
%
|
(a)
|
The GSIB surcharge is subject to transition provisions (in 25% increments) through the end of 2018.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
85
|
(a)
|
In the case of the SLR, the Fully Phased-In well-capitalized ratio is effective January 1, 2018.
|
Capital components
|
|
|
||||
(in millions)
|
December 31,
2017
|
|
December 31,
2016
|
|
||
Total stockholders’ equity
|
$
|
255,693
|
|
$
|
254,190
|
|
Less: Preferred stock
|
26,068
|
|
26,068
|
|
||
Common stockholders’ equity
|
229,625
|
|
228,122
|
|
||
Less:
|
|
|
||||
Goodwill
|
47,507
|
|
47,288
|
|
||
Other intangible assets
|
855
|
|
862
|
|
||
Add:
|
|
|
||||
Certain Deferred tax liabilities
(a)(b)
|
2,204
|
|
3,230
|
|
||
Less: Other CET1 capital adjustments
(b)
|
223
|
|
1,468
|
|
||
Standardized/Advanced Fully Phased-In CET1 capital
|
183,244
|
|
181,734
|
|
||
Preferred stock
|
26,068
|
|
26,068
|
|
||
Less:
|
|
|
||||
Other Tier 1 adjustments
(c)
|
748
|
|
328
|
|
||
Standardized/Advanced Fully Phased-In Tier 1 capital
|
$
|
208,564
|
|
$
|
207,474
|
|
Long-term debt and other instruments qualifying as Tier 2 capital
|
$
|
14,827
|
|
$
|
15,253
|
|
Qualifying allowance for credit losses
|
14,672
|
|
14,854
|
|
||
Other
|
(103
|
)
|
(94
|
)
|
||
Standardized Fully Phased-In Tier 2 capital
|
$
|
29,396
|
|
$
|
30,013
|
|
Standardized Fully Phased-in Total capital
|
$
|
237,960
|
|
$
|
237,487
|
|
Adjustment in qualifying allowance for credit losses for Advanced Tier 2 capital
|
(10,462
|
)
|
(10,961
|
)
|
||
Advanced Fully Phased-In Tier 2 capital
|
$
|
18,934
|
|
$
|
19,052
|
|
Advanced Fully Phased-In Total capital
|
$
|
227,498
|
|
$
|
226,526
|
|
(a)
|
Represents deferred tax liabilities related to tax-deductible goodwill and identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles
when calculating
TCE
.
|
(b)
|
Includes the effect from the revaluation of the Firm’s net deferred tax liability as a result of the enactment of the
TCJA
.
|
(c)
|
Includes the deduction associated with the permissible holdings of covered funds (as defined by the Volcker Rule). The deduction was not material as of December 31, 2017 and 2016.
|
86
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(in millions)
|
December 31, 2017
|
|
December 31, 2016
|
|
||
Transitional CET1 capital
|
$
|
183,300
|
|
$
|
182,967
|
|
AOCI phase-in
(a)
|
128
|
|
(156
|
)
|
||
CET1 capital deduction phase-in
(b)
|
(20
|
)
|
(695
|
)
|
||
Intangible assets deduction phase-in
(c)
|
(160
|
)
|
(312
|
)
|
||
Other adjustments to CET1 capital
(d)
|
(4
|
)
|
(70
|
)
|
||
Fully Phased-In CET1 capital
|
$
|
183,244
|
|
$
|
181,734
|
|
(a)
|
Includes the remaining balance of accumulated other comprehensive income (“AOCI”) related to AFS debt securities and defined benefit pension and other postretirement employee benefit (“OPEB”) plans that will qualify as Basel III CET1 capital upon full phase-in.
|
(b)
|
Predominantly includes regulatory adjustments related to changes in DVA, as well as CET1 deductions for defined benefit pension plan assets and deferred tax assets related to tax attributes, including NOLs.
|
(c)
|
Relates to intangible assets, other than goodwill and MSRs, that are required to be deducted from CET1 capital upon full phase-in.
|
(d)
|
Includes minority interest and the Firm’s investments in its own CET1 capital instruments.
|
Year Ended December 31, (in millions)
|
2017
|
|
|
Standardized/Advanced CET1 capital at December 31, 2016
|
$
|
181,734
|
|
Net income applicable to common equity
(a)
|
22,778
|
|
|
Dividends declared on common stock
|
(7,542
|
)
|
|
Net purchase of treasury stock
|
(13,741
|
)
|
|
Changes in additional paid-in capital
|
(1,048
|
)
|
|
Changes related to AOCI
|
536
|
|
|
Adjustment related to DVA
(b)
|
468
|
|
|
Changes related to other CET1 capital adjustments
(c)
|
59
|
|
|
Increase in Standardized/Advanced CET1 capital
|
1,510
|
|
|
Standardized/Advanced CET1 capital at
December 31, 2017
|
$
|
183,244
|
|
|
|
||
Standardized/Advanced Tier 1 capital at
December 31, 2016
|
$
|
207,474
|
|
Change in CET1 capital
|
1,510
|
|
|
Net issuance of noncumulative perpetual preferred stock
|
—
|
|
|
Other
|
(420
|
)
|
|
Increase in Standardized/Advanced Tier 1 capital
|
1,090
|
|
|
Standardized/Advanced Tier 1 capital at
December 31, 2017
|
$
|
208,564
|
|
|
|
||
Standardized Tier 2 capital at December 31, 2016
|
$
|
30,013
|
|
Change in long-term debt and other instruments qualifying as Tier 2
|
(426
|
)
|
|
Change in qualifying allowance for credit losses
|
(182
|
)
|
|
Other
|
(9
|
)
|
|
Decrease in Standardized Tier 2 capital
|
(617
|
)
|
|
Standardized Tier 2 capital at December 31, 2017
|
$
|
29,396
|
|
Standardized Total capital at December 31, 2017
|
$
|
237,960
|
|
Advanced Tier 2 capital at December 31, 2016
|
$
|
19,052
|
|
Change in long-term debt and other instruments qualifying as Tier 2
|
(426
|
)
|
|
Change in qualifying allowance for credit losses
|
317
|
|
|
Other
|
(9
|
)
|
|
Decrease in Advanced Tier 2 capital
|
(118
|
)
|
|
Advanced Tier 2 capital at December 31, 2017
|
$
|
18,934
|
|
Advanced Total capital at December 31, 2017
|
$
|
227,498
|
|
(a)
|
Includes a $2.4 billion decrease to net income as a result of the enactment of the TCJA. For additional information related to the impact of the TCJA, see Note
24
.
|
(b)
|
Includes
DVA
related to structured notes recorded in
AOCI
.
|
(c)
|
Includes the effect from the revaluation of the Firm’s net deferred tax liability as a result of the enactment of the TCJA.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
87
|
|
Standardized
|
|
Advanced
|
||||||||||||||||||||
Year ended December 31, 2017
(in millions)
|
Credit risk RWA
|
|
Market risk RWA
|
Total RWA
|
|
Credit risk RWA
|
Market risk RWA
|
Operational risk
RWA
|
Total RWA
|
||||||||||||||
December 31, 2016
|
$
|
1,365,137
|
|
(d)
|
$
|
127,679
|
|
$
|
1,492,816
|
|
(d)
|
$
|
959,523
|
|
$
|
127,657
|
|
$
|
400,000
|
|
$
|
1,487,180
|
|
Model & data changes
(a)
|
(8,214
|
)
|
|
1,739
|
|
(6,475
|
)
|
|
(14,189
|
)
|
1,739
|
|
—
|
|
(12,450
|
)
|
|||||||
Portfolio runoff
(b)
|
(13,600
|
)
|
|
—
|
|
(13,600
|
)
|
|
(16,100
|
)
|
—
|
|
—
|
|
(16,100
|
)
|
|||||||
Movement in portfolio levels
(c)
|
42,737
|
|
|
(5,716
|
)
|
37,021
|
|
|
(6,329
|
)
|
(5,605
|
)
|
—
|
|
(11,934
|
)
|
|||||||
Changes in RWA
|
20,923
|
|
|
(3,977
|
)
|
16,946
|
|
|
(36,618
|
)
|
(3,866
|
)
|
—
|
|
(40,484
|
)
|
|||||||
December 31, 2017
|
$
|
1,386,060
|
|
|
$
|
123,702
|
|
$
|
1,509,762
|
|
|
$
|
922,905
|
|
$
|
123,791
|
|
$
|
400,000
|
|
$
|
1,446,696
|
|
(a)
|
Model & data changes refer to material movements in levels of RWA as a result of revised methodologies and/or treatment per regulatory guidance (exclusive of rule changes).
|
(b)
|
Portfolio runoff for credit risk RWA primarily reflects
(under both the Standardized and Advanced approaches)
reduced risk from position rolloffs in legacy portfolios in
Home Lending
, the sale of the student loan portfolio during the second quarter of 2017, and the sale of reverse mortgages in CIB during the third quarter of 2017.
|
(c)
|
Movement in portfolio levels for credit risk RWA refers to changes primarily in book size, composition, credit quality, and market movements; and for market risk RWA refers to changes in position and market movements.
|
(d)
|
The prior period amounts have been revised to conform with the current period presentation.
|
(in millions, except ratio)
|
December 31, 2017
|
|
December 31, 2016
|
|
||
Tier 1 capital
|
$
|
208,564
|
|
$
|
207,474
|
|
Total average assets
|
2,562,155
|
|
2,532,457
|
|
||
Less: Adjustments for deductions from Tier 1 capital
|
47,333
|
|
46,977
|
|
||
Total adjusted average assets
(a)
|
2,514,822
|
|
2,485,480
|
|
||
Off-balance sheet exposures
(b)
|
690,193
|
|
707,359
|
|
||
Total leverage exposure
|
$
|
3,205,015
|
|
$
|
3,192,839
|
|
SLR
|
6.5
|
%
|
6.5
|
%
|
(a)
|
Adjusted average assets, for purposes of calculating the SLR, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.
|
(b)
|
Off-balance sheet exposures are calculated as the average of the three month-end spot balances during the reporting quarter.
|
88
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
89
|
Year ended December 31,
|
2017
|
|
|
2016
|
|
|
2015
|
|
Common dividend payout ratio
|
33
|
%
|
|
30
|
%
|
|
28
|
%
|
Year ended December 31, (in millions)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Total number of shares of common stock repurchased
|
|
166.6
|
|
|
140.4
|
|
|
89.8
|
|
|||
Aggregate purchase price of common stock repurchases
|
|
$
|
15,410
|
|
|
$
|
9,082
|
|
|
$
|
5,616
|
|
90
|
|
JPMorgan Chase & Co./2017 Annual Report
|
December 31, 2017
|
Net capital
|
|||||
(in billions)
|
Actual
|
|
Minimum
|
|
||
JPMorgan Securities
|
$
|
13.6
|
|
$
|
2.8
|
|
December 31, 2017
|
Total capital
|
|
CET1 ratio
|
|
Total capital ratio
|
||||
(in billions, except ratios)
|
Estimated
|
|
Estimated
|
Minimum
|
|
Estimated
|
Minimum
|
||
J.P. Morgan Securities plc
|
$
|
39.6
|
|
|
15.9
|
4.5
|
|
15.9
|
8.0
|
JPMorgan Chase & Co./2017 Annual Report
|
|
91
|
LIQUIDITY RISK MANAGEMENT
|
•
|
Establishing and monitoring limits, indicators, and thresholds, including liquidity risk appetite tolerances;
|
•
|
Monitoring internal firmwide and material legal entity liquidity stress tests, and monitoring and reporting regulatory defined liquidity stress testing;
|
•
|
Approving or escalating for review liquidity stress assumptions;
|
•
|
Monitoring liquidity positions, balance sheet variances and funding activities, and
|
•
|
Conducting ad hoc analysis to identify potential emerging liquidity risks
.
|
•
|
Ensure that the Firm’s core businesses and material legal entities are able to operate in support of client needs and meet contractual and contingent financial obligations through normal economic cycles as well as during stress events, and
|
•
|
Manage an optimal funding mix and availability of liquidity sources.
|
•
|
Analyzing and understanding the liquidity characteristics of the assets and liabilities of the Firm, lines of business and legal entities, taking into account legal, regulatory, and operational restrictions;
|
•
|
Developing internal liquidity stress testing assumptions;
|
•
|
Defining and monitoring firmwide and legal entity-specific liquidity strategies, policies, guidelines, reporting and contingency funding plans;
|
•
|
Managing liquidity within the Firm’s approved liquidity risk appetite tolerances and limits;
|
•
|
Managing compliance with regulatory requirements related to funding and liquidity risk, and
|
•
|
Setting transfer pricing in accordance with underlying liquidity characteristics of balance sheet assets and liabilities as well as certain off-balance sheet items.
|
•
|
Varying levels of access to unsecured and secured funding markets,
|
•
|
Estimated non-contractual and contingent cash outflows, and
|
•
|
Potential impediments to the availability and transferability of liquidity between jurisdictions and material legal entities such as regulatory, legal or other restrictions.
|
92
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Average amount
(in millions)
|
Three months ended
December 31, 2017
|
|
|
HQLA
|
|
||
Eligible cash
(a)
|
$
|
370,126
|
|
Eligible securities
(b)(c)
|
189,955
|
|
|
Total HQLA
(d)
|
$
|
560,081
|
|
Net cash outflows
|
$
|
472,078
|
|
LCR
|
119
|
%
|
|
Net excess HQLA
(d)
|
$
|
88,003
|
|
(a)
|
Represents cash on deposit at central banks, primarily Federal Reserve Banks.
|
(b)
|
Predominantly U.S. Agency MBS, U.S. Treasuries, and sovereign bonds net of applicable haircuts under the LCR rules
|
(c)
|
HQLA eligible securities may be reported in securities borrowed or purchased under resale agreements, trading assets, or securities on the Firm’s Consolidated balance sheets.
|
(d)
|
Excludes average excess HQLA at JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. that are not transferable to non-bank affiliates.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
93
|
Deposits
|
|
|
Year ended December 31,
|
||||||||||
As of or for the year ended December 31,
|
|
|
|
Average
|
|||||||||
(in millions)
|
2017
|
2016
|
|
2017
|
2016
|
||||||||
Consumer & Community Banking
|
$
|
659,885
|
|
$
|
618,337
|
|
|
$
|
640,219
|
|
$
|
586,637
|
|
Corporate & Investment Bank
|
455,883
|
|
412,434
|
|
|
447,697
|
|
409,680
|
|
||||
Commercial Banking
|
181,512
|
|
179,532
|
|
|
176,884
|
|
172,835
|
|
||||
Asset & Wealth Management
|
146,407
|
|
161,577
|
|
|
148,982
|
|
153,334
|
|
||||
Corporate
|
295
|
|
3,299
|
|
|
3,604
|
|
5,482
|
|
||||
Total Firm
|
$
|
1,443,982
|
|
$
|
1,375,179
|
|
|
$
|
1,417,386
|
|
$
|
1,327,968
|
|
As of December 31,
(in billions except ratios)
|
|
|
||||
2017
|
2016
|
|||||
Deposits
|
$
|
1,444.0
|
|
$
|
1,375.2
|
|
Deposits as a % of total liabilities
|
63
|
%
|
61
|
%
|
||
Loans
|
930.7
|
|
894.8
|
|
||
Loans-to-deposits ratio
|
64
|
%
|
65
|
%
|
94
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Sources of funds (excluding deposits)
|
|
|
|
|
|||||||||
As of or for the year ended December 31,
|
|
|
|
Average
|
|||||||||
(in millions)
|
2017
|
2016
|
|
2017
|
2016
|
||||||||
Commercial paper
|
$
|
24,186
|
|
$
|
11,738
|
|
|
$
|
19,920
|
|
$
|
15,001
|
|
Other borrowed funds
|
27,616
|
|
22,705
|
|
|
26,612
|
|
21,139
|
|
||||
Total short-term borrowings
|
$
|
51,802
|
|
$
|
34,443
|
|
|
$
|
46,532
|
|
$
|
36,140
|
|
|
|
|
|
|
|
||||||||
Obligations of Firm-administered multi-seller conduits
(a)
|
$
|
3,045
|
|
$
|
2,719
|
|
|
$
|
3,206
|
|
$
|
5,153
|
|
|
|
|
|
|
|
||||||||
Securities loaned or sold under agreements to repurchase:
|
|
|
|
|
|
||||||||
Securities sold under agreements to repurchase
(b)
|
$
|
146,432
|
|
$
|
149,826
|
|
|
$
|
171,973
|
|
$
|
160,458
|
|
Securities loaned
(c)
|
7,910
|
|
12,137
|
|
|
11,526
|
|
13,195
|
|
||||
Total securities loaned or sold under agreements to repurchase
(d)
|
$
|
154,342
|
|
$
|
161,963
|
|
|
$
|
183,499
|
|
$
|
173,653
|
|
|
|
|
|
|
|
||||||||
Senior notes
|
$
|
155,852
|
|
$
|
151,042
|
|
|
$
|
154,352
|
|
$
|
153,768
|
|
Trust preferred securities
(e)
|
690
|
|
2,345
|
|
|
2,276
|
|
3,724
|
|
||||
Subordinated debt
(e)
|
16,553
|
|
21,940
|
|
|
18,832
|
|
24,224
|
|
||||
Structured notes
|
45,727
|
|
37,292
|
|
|
42,918
|
|
35,978
|
|
||||
Total long-term unsecured funding
|
$
|
218,822
|
|
$
|
212,619
|
|
|
$
|
218,378
|
|
$
|
217,694
|
|
|
|
|
|
|
|
||||||||
Credit card securitization
(a)
|
$
|
21,278
|
|
$
|
31,181
|
|
|
$
|
25,933
|
|
$
|
29,428
|
|
Other securitizations
(a)(f)
|
—
|
|
1,527
|
|
|
626
|
|
1,669
|
|
||||
FHLB advances
|
60,617
|
|
79,519
|
|
|
69,916
|
|
73,260
|
|
||||
Other long-term secured funding
(g)
|
4,641
|
|
3,107
|
|
|
3,195
|
|
4,619
|
|
||||
Total long-term secured funding
|
$
|
86,536
|
|
$
|
115,334
|
|
|
$
|
99,670
|
|
$
|
108,976
|
|
|
|
|
|
|
|
||||||||
Preferred stock
(h)
|
$
|
26,068
|
|
$
|
26,068
|
|
|
26,212
|
|
$
|
26,068
|
|
|
Common stockholders’ equity
(h)
|
$
|
229,625
|
|
$
|
228,122
|
|
|
230,350
|
|
$
|
224,631
|
|
(a)
|
Included in beneficial interest issued by consolidated variable interest entities on the Firm’s Consolidated balance sheets.
|
(b)
|
Excludes long-term structured repurchase agreements of
$1.3 billion
and
$1.8 billion
as of
December 31, 2017
and
2016
, respectively, and average balances of
$1.5 billion
and
$2.9 billion
for the years ended
December 31, 2017
and
2016
, respectively.
|
(c)
|
Excludes long-term securities loaned of
$1.3 billion
and
$1.2 billion
as of
December 31, 2017
and
2016
, respectively, and average balances of
$1.3 billion
for both the years ended
December 31, 2017
and
2016
.
|
(d)
|
Excludes federal funds purchased.
|
(e)
|
Subordinated debt includes $1.6 billion of junior subordinated debentures distributed pro rata to the holders of the $1.6 billion of trust preferred securities which were cancelled on December 18, 2017. For further information see Note
19
.
|
(f)
|
Other securitizations includes securitizations of student loans. The Firm deconsolidated the student loan securitization entities in the second quarter of 2017 as it no longer had a controlling financial interest in these entities as a result of the sale of the student loan portfolio. The Firm’s wholesale businesses also securitize loans for client-driven transactions, which are not considered to be a source of funding for the Firm and are not included in the table.
|
(g)
|
Includes long-term structured notes which are secured.
|
(h)
|
For additional information on preferred stock and common stockholders’ equity see Capital Risk Management on
pages 82–91
, Consolidated statements of changes in stockholders’ equity, Note
20
and Note
21
.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
95
|
Long-term unsecured funding
|
|
|||||
Year ended December 31,
(in millions) |
2017
|
2016
|
||||
Issuance
|
|
|
||||
Senior notes issued in the U.S. market
|
$
|
21,192
|
|
$
|
25,639
|
|
Senior notes issued in non-U.S. markets
|
2,210
|
|
7,063
|
|
||
Total senior notes
|
23,402
|
|
32,702
|
|
||
Subordinated debt
|
—
|
|
1,093
|
|
||
Structured notes
|
29,040
|
|
22,865
|
|
||
Total long-term unsecured funding – issuance
|
$
|
52,442
|
|
$
|
56,660
|
|
|
|
|
||||
Maturities/redemptions
|
|
|
||||
Senior notes
|
$
|
22,337
|
|
$
|
29,989
|
|
Trust preferred securities
|
—
|
|
1,630
|
|
||
Subordinated debt
|
6,901
|
|
3,596
|
|
||
Structured notes
|
22,581
|
|
15,925
|
|
||
Total long-term unsecured funding – maturities/redemptions
|
$
|
51,819
|
|
$
|
51,140
|
|
Long-term secured funding
|
|
|
|
||||||||||
Year ended
December 31,
|
Issuance
|
|
Maturities/Redemptions
|
||||||||||
(in millions)
|
2017
|
2016
|
|
2017
|
2016
|
||||||||
Credit card securitization
|
$
|
1,545
|
|
$
|
8,277
|
|
|
$
|
11,470
|
|
$
|
5,025
|
|
Other securitizations
(a)
|
|
—
|
|
|
55
|
|
233
|
|
|||||
FHLB advances
|
—
|
|
17,150
|
|
|
18,900
|
|
9,209
|
|
||||
Other long-term secured funding
(b)
|
2,354
|
|
455
|
|
|
731
|
|
2,645
|
|
||||
Total long-term secured funding
|
$
|
3,899
|
|
$
|
25,882
|
|
|
$
|
31,156
|
|
$
|
17,112
|
|
(a)
|
Other securitizations includes securitizations of student loans. The Firm deconsolidated the student loan securitization entities in the second quarter of 2017 as it no longer had a controlling financial interest in these entities as a result of the sale of the student loan portfolio.
|
(b)
|
Includes long-term structured notes which are secured.
|
96
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
JPMorgan Chase & Co.
|
|
JPMorgan Chase Bank, N.A.
Chase Bank USA, N.A.
|
|
J.P. Morgan Securities LLC
J.P. Morgan Securities plc
|
||||||
December 31, 2017
|
Long-term issuer
|
Short-term issuer
|
Outlook
|
|
Long-term issuer
|
Short-term issuer
|
Outlook
|
|
Long-term issuer
|
Short-term issuer
|
Outlook
|
Moody’s Investors Service
|
A3
|
P-2
|
Stable
|
|
Aa3
|
P-1
|
Stable
|
|
A1
|
P-1
|
Stable
|
Standard & Poor’s
|
A-
|
A-2
|
Stable
|
|
A+
|
A-1
|
Stable
|
|
A+
|
A-1
|
Stable
|
Fitch Ratings
|
A+
|
F1
|
Stable
|
|
AA-
|
F1+
|
Stable
|
|
AA-
|
F1+
|
Stable
|
JPMorgan Chase & Co./2017 Annual Report
|
|
97
|
REPUTATION RISK MANAGEMENT
|
98
|
|
JPMorgan Chase & Co./2017 Annual Report
|
CREDIT AND INVESTMENT RISK MANAGEMENT
|
•
|
Establishing a comprehensive credit risk policy framework
|
•
|
Monitoring, measuring and managing credit risk across all portfolio segments, including transaction and exposure approval
|
•
|
Setting industry concentration limits and establishing underwriting guidelines
|
•
|
Assigning and managing credit authorities in connection with the approval of all credit exposure
|
•
|
Managing criticized exposures and delinquent loans
|
•
|
Estimating credit losses and ensuring appropriate credit risk-based capital management
|
JPMorgan Chase & Co./2017 Annual Report
|
|
99
|
•
|
Loan underwriting and credit approval process
|
•
|
Loan syndications and participations
|
•
|
Loan sales and securitizations
|
•
|
Credit derivatives
|
•
|
Master netting agreements
|
•
|
Collateral and other risk-reduction techniques
|
•
|
I
ndependently validating or changing the risk grades assigned to exposures in the Firm’s wholesale and commercial-oriented retail credit portfolios, and assessing the timeliness of risk grade changes initiated by responsible business units; and
|
•
|
Evaluating the effectiveness of business units’ credit management processes, including the adequacy of credit analyses and risk grading/
LGD
rationales, proper monitoring and management of credit exposures, and compliance with applicable grading policies and underwriting guidelines.
|
100
|
|
JPMorgan Chase & Co./2017 Annual Report
|
CREDIT PORTFOLIO
|
Total credit portfolio
|
|
|
|
|
|||||||||
December 31,
(in millions)
|
Credit exposure
|
|
Nonperforming
(e)(f)
|
||||||||||
2017
|
2016
|
|
2017
|
2016
|
|||||||||
Loans retained
|
$
|
924,838
|
|
$
|
889,907
|
|
|
$
|
5,943
|
|
$
|
6,721
|
|
Loans held-for-sale
|
3,351
|
|
2,628
|
|
|
—
|
|
162
|
|
||||
Loans at fair value
|
2,508
|
|
2,230
|
|
|
—
|
|
—
|
|
||||
Total loans – reported
|
930,697
|
|
894,765
|
|
|
5,943
|
|
6,883
|
|
||||
Derivative receivables
|
56,523
|
|
64,078
|
|
|
130
|
|
223
|
|
||||
Receivables from customers and other
(a)
|
26,272
|
|
17,560
|
|
|
—
|
|
—
|
|
||||
Total credit-related assets
|
1,013,492
|
|
976,403
|
|
|
6,073
|
|
7,106
|
|
||||
Assets acquired in loan satisfactions
|
|
|
|
|
|
||||||||
Real estate owned
|
NA
|
|
NA
|
|
|
311
|
|
370
|
|
||||
Other
|
NA
|
|
NA
|
|
|
42
|
|
59
|
|
||||
Total
assets acquired in loan satisfactions
|
NA
|
|
NA
|
|
|
353
|
|
429
|
|
||||
Lending-related commitments
|
991,482
|
|
975,152
|
|
(d)
|
731
|
|
506
|
|
||||
Total credit portfolio
|
$
|
2,004,974
|
|
$
|
1,951,555
|
|
(d)
|
$
|
7,157
|
|
$
|
8,041
|
|
Credit derivatives used in credit portfolio management activities
(b)
|
$
|
(17,609
|
)
|
$
|
(22,114
|
)
|
|
$
|
—
|
|
$
|
—
|
|
Liquid securities and other cash collateral held against derivatives
(c)
|
(16,108
|
)
|
(22,705
|
)
|
|
NA
|
|
NA
|
|
Year ended December 31,
(in millions, except ratios)
|
|
2017
|
2016
|
||||
Net charge-offs
(g)
|
|
$
|
5,387
|
|
$
|
4,692
|
|
Average retained loans
|
|
|
|
||||
Loans
|
|
898,979
|
|
861,345
|
|
||
Loans – reported, excluding
residential real estate PCI loans
|
|
865,887
|
|
822,973
|
|
||
Net charge-off rates
(g)
|
|
|
|
||||
Loans
|
|
0.60
|
%
|
0.54
|
%
|
||
Loans – excluding PCI
|
|
0.62
|
|
0.57
|
|
(a)
|
Receivables from customers and other primarily represents held-for-investment margin loans to brokerage customers.
|
(b)
|
Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. For additional information, see Credit derivatives on
pages 115–116
and Note
5
.
|
(c)
|
Includes collateral related to derivative instruments where an appropriate legal opinion has not been either sought or obtained.
|
(d)
|
The prior period amounts have been revised to conform with the current period presentation.
|
(e)
|
Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the pools is performing.
|
(f)
|
At
December 31, 2017
and
2016
, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of
$4.3 billion
and
$5.0 billion
, respectively, that are 90 or more days past due; (2) student loans insured by U.S. government agencies under the FFELP of zero and
$263 million
, respectively, that are 90 or more days past due; and (3) Real estate owned (“REO”) insured by U.S. government agencies of
$95 million
and
$142 million
, respectively. These amounts have been excluded based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”).
|
(g)
|
For the year ended
December 31, 2017
, excluding net charge-offs of
$467 million
related to the student loan portfolio sale, the net charge-off rate for loans would have been
0.55%
and for loans - excluding PCI would have been
0.57%
.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
101
|
CONSUMER CREDIT PORTFOLIO
|
102
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Consumer credit portfolio
|
||||||||||||||||||||||||||
As of or for the year ended December 31,
(in millions, except ratios)
|
Credit exposure
|
|
Nonaccrual loans
(k)(l)
|
|
Net charge-offs/(recoveries)
(e)(m)(n)
|
|
Average annual net charge-off rate
(e)(m)(n)
|
|||||||||||||||||||
2017
|
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|||||||||||||||
Consumer, excluding credit card
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans, excluding PCI loans and loans held-for-sale
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential mortgage
(a)
|
$
|
216,496
|
|
|
$
|
192,486
|
|
|
$
|
2,175
|
|
$
|
2,256
|
|
|
$
|
(10
|
)
|
$
|
16
|
|
|
—
|
%
|
0.01
|
%
|
Home equity
|
33,450
|
|
|
39,063
|
|
|
1,610
|
|
1,845
|
|
|
69
|
|
189
|
|
|
0.19
|
|
0.45
|
|
||||||
Auto
(b)(c)
|
66,242
|
|
|
65,814
|
|
|
141
|
|
214
|
|
|
331
|
|
285
|
|
|
0.51
|
|
0.45
|
|
||||||
Consumer & Business Banking
(a)(c)(d)
|
25,789
|
|
|
24,307
|
|
|
283
|
|
287
|
|
|
257
|
|
257
|
|
|
1.03
|
|
1.10
|
|
||||||
Student
(a)(e)
|
—
|
|
|
7,057
|
|
|
—
|
|
165
|
|
|
498
|
|
162
|
|
|
NM
|
|
2.13
|
|
||||||
Total loans, excluding PCI loans and loans held-for-sale
|
341,977
|
|
|
328,727
|
|
|
4,209
|
|
4,767
|
|
|
1,145
|
|
909
|
|
|
0.34
|
|
0.28
|
|
||||||
Loans – PCI
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Home equity
|
10,799
|
|
|
12,902
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
||||||
Prime mortgage
|
6,479
|
|
|
7,602
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
||||||
Subprime mortgage
|
2,609
|
|
|
2,941
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
||||||
Option ARMs
(f)
|
10,689
|
|
|
12,234
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
||||||
Total loans – PCI
|
30,576
|
|
|
35,679
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
|
NA
|
|
NA
|
|
||||||
Total loans – retained
|
372,553
|
|
|
364,406
|
|
|
4,209
|
|
4,767
|
|
|
1,145
|
|
909
|
|
|
0.31
|
|
0.25
|
|
||||||
Loans held-for-sale
|
128
|
|
|
238
|
|
|
—
|
|
53
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
Total consumer, excluding credit card loans
|
372,681
|
|
|
364,644
|
|
|
4,209
|
|
4,820
|
|
|
1,145
|
|
909
|
|
|
0.31
|
|
0.25
|
|
||||||
Lending-related commitments
(g)
|
48,553
|
|
|
53,247
|
|
(j)
|
|
|
|
|
|
|
|
|
||||||||||||
Receivables from customers
(h)
|
133
|
|
|
120
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total consumer exposure, excluding credit card
|
421,367
|
|
|
418,011
|
|
(j)
|
|
|
|
|
|
|
|
|
||||||||||||
Credit Card
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans retained
(i)
|
149,387
|
|
|
141,711
|
|
|
—
|
|
—
|
|
|
4,123
|
|
3,442
|
|
|
2.95
|
|
2.63
|
|
||||||
Loans held-for-sale
|
124
|
|
|
105
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||
Total credit card loans
|
149,511
|
|
|
141,816
|
|
|
—
|
|
—
|
|
|
4,123
|
|
3,442
|
|
|
2.95
|
|
2.63
|
|
||||||
Lending-related commitments
(g)
|
572,831
|
|
|
553,891
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total credit card exposure
|
722,342
|
|
|
695,707
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total consumer credit portfolio
|
$
|
1,143,709
|
|
|
$
|
1,113,718
|
|
(j)
|
$
|
4,209
|
|
$
|
4,820
|
|
|
$
|
5,268
|
|
$
|
4,351
|
|
|
1.04
|
%
|
0.89
|
%
|
Memo: Total consumer credit portfolio, excluding PCI
|
$
|
1,113,133
|
|
|
$
|
1,078,039
|
|
(j)
|
$
|
4,209
|
|
$
|
4,820
|
|
|
$
|
5,268
|
|
$
|
4,351
|
|
|
1.11
|
%
|
0.96
|
%
|
(a)
|
Certain loan portfolios have been reclassified. The prior period amounts have been revised to conform with the current period presentation.
|
(b)
|
At
December 31, 2017
and
2016
, excluded operating lease assets of
$17.1 billion
and
$13.2 billion
, respectively. These operating lease assets are included in other assets on the Firm’s Consolidated balance sheets. The risk of loss on these assets relates to the residual value of the leased vehicles, which is managed through projection of the lease residual value at lease origination, periodic review of residual values, and through arrangements with certain auto manufacturers that mitigates this risk.
|
(c)
|
Includes certain business banking and auto dealer risk-rated loans that apply the wholesale methodology for determining the allowance for loan losses; these loans are managed by CCB, and therefore, for consistency in presentation, are included within the consumer portfolio.
|
(d)
|
Predominantly includes Business Banking loans.
|
(e)
|
For the year ended
December 31, 2017
, excluding net charge-offs of $467 million related to the student loan portfolio sale, the net charge-off rate for Total consumer, excluding credit card and PCI loans and loans held-for-sale would have been 0.20%; Total consumer - retained excluding credit card loans would have been 0.18%; Total consumer credit portfolio would have been 0.95%; and Total consumer credit portfolio, excluding PCI loans would have been 1.01%.
|
(f)
|
At
December 31, 2017
and
2016
, approximately
68%
and
66%
, respectively, of the PCI option adjustable rate mortgages (“ARMs”) portfolio has been modified into fixed-rate, fully amortizing loans.
|
(g)
|
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 as permitted by law, without notice. For further information, see Note
27
.
|
(h)
|
Receivables from customers represent held-for-investment margin loans to brokerage customers that are collateralized through assets maintained in the clients’ brokerage accounts. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.
|
(i)
|
Includes billed interest and fees net of an allowance for uncollectible interest and fees.
|
(j)
|
The prior period amounts have been revised to conform with the current period presentation.
|
(k)
|
At
December 31, 2017
and
2016
, nonaccrual loans excluded loans 90 or more days past due as follows: (1) mortgage loans insured by U.S. government agencies of
$4.3 billion
and
$5.0 billion
, respectively; and (2) student loans insured by U.S. government agencies under the FFELP of zero and
$263 million
, respectively. These amounts have been excluded from nonaccrual loans based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status, as permitted by regulatory guidance issued by the FFIEC.
|
(l)
|
Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the pools is performing.
|
(m)
|
Net charge-offs and net charge-off rates excluded write-offs in the PCI portfolio of
$86 million
and
$156 million
for the years ended
December 31, 2017
and
2016
. These write-offs decreased the allowance for loan losses for PCI loans. See Allowance for Credit Losses on
pages 117–119
for further details.
|
(n)
|
Average consumer loans held-for-sale were
$1.5 billion
and
$496 million
for the years ended
December 31, 2017
and
2016
, respectively. These amounts were excluded when calculating net charge-off rates.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
103
|
104
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(a)
|
Includes the original nonaccretable difference established in purchase accounting of
$30.5 billion
for principal losses plus additional principal losses recognized subsequent to acquisition through the provision and allowance for loan losses. The remaining nonaccretable difference for principal losses was
$842 million
and
$1.1 billion
at
December 31, 2017
and
2016
, respectively.
|
(b)
|
Represents both realization of loss upon loan resolution and any principal forgiven upon modification.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
105
|
(a)
|
Amounts represent the carrying value of modified residential real estate loans.
|
(b)
|
At
December 31, 2017
and
2016
,
$3.8 billion
and
$3.4 billion
, respectively, of loans modified subsequent to repurchase from Ginnie Mae in accordance with the standards of the appropriate government agency (i.e., Federal Housing Administration (“FHA”), U.S. Department of Veterans Affairs (“VA”), Rural Housing Service of the U.S. Department of Agriculture (“RHS”)) are not included in the table above. When such loans perform subsequent to modification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure. For additional information about sales of loans in securitization transactions with Ginnie Mae, see Note
14
.
|
(c)
|
Amounts represent the unpaid principal balance of modified PCI loans.
|
(d)
|
As of
December 31, 2017
and
2016
, nonaccrual loans included
$2.2 billion
and
$2.3 billion
, respectively, of troubled debt restructuring (“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
12
.
|
Nonperforming assets
(a)
|
|
|
|
||||
December 31, (in millions)
|
2017
|
|
|
2016
|
|
||
Nonaccrual loans
(b)
|
|
|
|
||||
Residential real estate
(c)
|
$
|
3,785
|
|
|
$
|
4,154
|
|
Other consumer
(c)
|
424
|
|
|
666
|
|
||
Total nonaccrual loans
|
4,209
|
|
|
4,820
|
|
||
Assets acquired in loan satisfactions
|
|
|
|
||||
Real estate owned
|
225
|
|
|
292
|
|
||
Other
|
40
|
|
|
57
|
|
||
Total assets acquired in loan satisfactions
|
265
|
|
|
349
|
|
||
Total nonperforming assets
|
$
|
4,474
|
|
|
$
|
5,169
|
|
(a)
|
At
December 31, 2017
and
2016
, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of
$4.3 billion
and
$5.0 billion
, respectively, that are 90 or more days past due; (2) student loans insured by U.S. government agencies under the FFELP of zero and
$263 million
, respectively, that are 90 or more days past due; and (3) real estate owned insured by U.S. government agencies of
$95 million
and
$142 million
, respectively. These amounts have been excluded based upon the government guarantee.
|
(b)
|
Excludes PCI loans which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of individual loans within the pools, is not meaningful. The Firm is recognizing interest income on each pool of loans as each of the pools is performing.
|
(c)
|
Certain loan portfolios have been reclassified. The prior period amounts have been revised to conform with the current period presentation.
|
Nonaccrual loan activity
|
|
|
|||||
Year ended December 31,
|
|
|
|
||||
(in millions)
|
|
2017
|
|
2016
|
|
||
Beginning balance
|
|
$
|
4,820
|
|
$
|
5,413
|
|
Additions
|
|
3,525
|
|
3,858
|
|
||
Reductions:
|
|
|
|
||||
Principal payments and other
(a)
|
|
1,577
|
|
1,437
|
|
||
Charge-offs
|
|
699
|
|
843
|
|
||
Returned to performing status
|
|
1,509
|
|
1,589
|
|
||
Foreclosures and other liquidations
|
|
351
|
|
582
|
|
||
Total reductions
|
|
4,136
|
|
4,451
|
|
||
Net changes
|
|
(611
|
)
|
(593
|
)
|
||
Ending balance
|
|
$
|
4,209
|
|
$
|
4,820
|
|
(a)
|
Other reductions includes loan sales.
|
106
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
107
|
WHOLESALE CREDIT PORTFOLIO
|
Wholesale credit portfolio
|
|||||||||||||
December 31,
(in millions)
|
Credit exposure
|
|
Nonperforming
(c)
|
||||||||||
2017
|
2016
|
|
2017
|
2016
|
|||||||||
Loans retained
|
$
|
402,898
|
|
$
|
383,790
|
|
|
$
|
1,734
|
|
$
|
1,954
|
|
Loans held-for-sale
|
3,099
|
|
2,285
|
|
|
—
|
|
109
|
|
||||
Loans at fair value
|
2,508
|
|
2,230
|
|
|
—
|
|
—
|
|
||||
Loans – reported
|
408,505
|
|
388,305
|
|
|
1,734
|
|
2,063
|
|
||||
Derivative receivables
|
56,523
|
|
64,078
|
|
|
130
|
|
223
|
|
||||
Receivables from customers and other
(a)
|
26,139
|
|
17,440
|
|
|
—
|
|
—
|
|
||||
Total wholesale credit-related assets
|
491,167
|
|
469,823
|
|
|
1,864
|
|
2,286
|
|
||||
Lending-related commitments
|
370,098
|
|
368,014
|
|
|
731
|
|
506
|
|
||||
Total wholesale credit exposure
|
$
|
861,265
|
|
$
|
837,837
|
|
|
$
|
2,595
|
|
$
|
2,792
|
|
Credit derivatives used
in credit portfolio management activities
(b)
|
$
|
(17,609
|
)
|
$
|
(22,114
|
)
|
|
$
|
—
|
|
$
|
—
|
|
Liquid securities and other cash collateral held against derivatives
|
(16,108
|
)
|
(22,705
|
)
|
|
NA
|
|
NA
|
|
(a)
|
Receivables from customers and other include
$26.0 billion
and
$17.3 billion
of held-for-investment margin loans at
December 31, 2017
and
2016
, respectively, to brokerage customers in CIB Prime Services and in AWM; these are classified in accrued interest and accounts receivable on the Consolidated balance sheets.
|
(b)
|
Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. For additional information, see Credit derivatives on
pages 115–116
, and Note
5
.
|
(c)
|
Excludes assets acquired in loan satisfactions.
|
108
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
Maturity profile
(d)
|
|
Ratings profile
|
|||||||||||||||||||||||
|
Due in 1 year or less
|
Due after
1 year through
5 years
|
Due after 5 years
|
Total
|
|
Investment-grade
|
|
Noninvestment-grade
|
|
Total
|
Total %
of IG
|
|||||||||||||||
December 31, 2016
(in millions, except ratios) |
|
AAA/Aaa to BBB-/Baa3
|
|
BB+/Ba1 & below
|
|
|||||||||||||||||||||
Loans retained
|
$
|
117,238
|
|
$
|
167,235
|
|
$
|
99,317
|
|
$
|
383,790
|
|
|
$
|
289,923
|
|
|
$
|
93,867
|
|
|
$
|
383,790
|
|
76
|
%
|
Derivative receivables
|
|
|
|
64,078
|
|
|
|
|
|
|
64,078
|
|
|
|||||||||||||
Less: Liquid securities and other cash collateral held against derivatives
|
|
|
|
(22,705
|
)
|
|
|
|
|
|
(22,705
|
)
|
|
|||||||||||||
Total derivative receivables, net of all collateral
|
14,019
|
|
8,510
|
|
18,844
|
|
41,373
|
|
|
33,081
|
|
|
8,292
|
|
|
41,373
|
|
80
|
|
|||||||
Lending-related commitments
|
88,399
|
|
271,825
|
|
7,790
|
|
368,014
|
|
|
269,820
|
|
|
98,194
|
|
|
368,014
|
|
73
|
|
|||||||
Subtotal
|
219,656
|
|
447,570
|
|
125,951
|
|
793,177
|
|
|
592,824
|
|
|
200,353
|
|
|
793,177
|
|
75
|
|
|||||||
Loans held-for-sale and loans at fair value
(a)
|
|
|
|
4,515
|
|
|
|
|
|
|
4,515
|
|
|
|||||||||||||
Receivables from customers and other
|
|
|
|
17,440
|
|
|
|
|
|
|
17,440
|
|
|
|||||||||||||
Total exposure – net of liquid securities and other cash collateral held against derivatives
|
|
|
|
$
|
815,132
|
|
|
|
|
|
|
$
|
815,132
|
|
|
|||||||||||
Credit derivatives used in credit portfolio management activities
(b)(c)
|
$
|
(1,354
|
)
|
$
|
(16,537
|
)
|
$
|
(4,223
|
)
|
$
|
(22,114
|
)
|
|
$
|
(18,710
|
)
|
|
$
|
(3,404
|
)
|
|
$
|
(22,114
|
)
|
85
|
%
|
(a)
|
Represents loans held-for-sale, primarily related to syndicated loans and loans transferred from the retained portfolio, and loans at fair value.
|
(b)
|
These derivatives do not qualify for hedge accounting under U.S. GAAP.
|
(c)
|
The notional amounts are presented on a net basis by underlying reference entity and the ratings profile shown is based on the ratings of the reference entity on which protection has been purchased. Predominantly all of the credit derivatives entered into by the Firm where it has purchased protection used in credit portfolio management activities, are executed with investment-grade counterparties.
|
(d)
|
The maturity profile of retained loans, lending-related commitments and derivative receivables is based on remaining contractual maturity. Derivative contracts that are in a receivable position at
December 31, 2017
, may become payable prior to maturity based on their cash flow profile or changes in market conditions.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
109
|
110
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
Selected metrics
|
|||||||||||||||||||||
|
|
|
|
|
|
30 days or more past due and accruing
loans |
Net charge-offs/
(recoveries)
|
Credit derivative hedges
(f)
|
Liquid securities
and other cash collateral held against derivative
receivables (g) |
||||||||||||||||||
|
|
|
Noninvestment-grade
|
||||||||||||||||||||||||
|
Credit
exposure
(e)
|
Investment-
grade
|
Noncriticized
|
Criticized performing
|
Criticized
nonperforming
|
||||||||||||||||||||||
As of or for the year ended
December 31, 2016 (in millions) |
|||||||||||||||||||||||||||
Real Estate
|
$
|
134,287
|
|
$
|
104,869
|
|
$
|
28,281
|
|
$
|
937
|
|
$
|
200
|
|
$
|
206
|
|
$
|
(7
|
)
|
$
|
(54
|
)
|
$
|
(11
|
)
|
Consumer & Retail
|
84,804
|
|
54,730
|
|
28,255
|
|
1,571
|
|
248
|
|
75
|
|
24
|
|
(424
|
)
|
(69
|
)
|
|||||||||
Technology, Media & Telecommunications
|
63,324
|
|
39,998
|
|
21,751
|
|
1,559
|
|
16
|
|
9
|
|
2
|
|
(589
|
)
|
(30
|
)
|
|||||||||
Healthcare
|
49,445
|
|
39,244
|
|
9,279
|
|
882
|
|
40
|
|
86
|
|
37
|
|
(286
|
)
|
(246
|
)
|
|||||||||
Industrials
|
55,733
|
|
36,710
|
|
17,854
|
|
1,033
|
|
136
|
|
128
|
|
3
|
|
(434
|
)
|
(40
|
)
|
|||||||||
Banks & Finance Cos
|
48,393
|
|
35,385
|
|
12,560
|
|
438
|
|
10
|
|
21
|
|
(2
|
)
|
(1,336
|
)
|
(7,337
|
)
|
|||||||||
Oil & Gas
|
40,367
|
|
18,629
|
|
12,274
|
|
8,069
|
|
1,395
|
|
31
|
|
233
|
|
(1,532
|
)
|
(18
|
)
|
|||||||||
Asset Managers
|
33,201
|
|
29,194
|
|
4,006
|
|
1
|
|
—
|
|
17
|
|
—
|
|
—
|
|
(5,737
|
)
|
|||||||||
Utilities
|
29,672
|
|
24,203
|
|
4,959
|
|
424
|
|
86
|
|
8
|
|
—
|
|
(306
|
)
|
—
|
|
|||||||||
State & Municipal Govt
(b)
|
28,263
|
|
27,603
|
|
624
|
|
6
|
|
30
|
|
107
|
|
(1
|
)
|
(130
|
)
|
—
|
|
|||||||||
Central Govt
|
20,408
|
|
20,123
|
|
276
|
|
9
|
|
—
|
|
4
|
|
—
|
|
(11,691
|
)
|
(4,183
|
)
|
|||||||||
Chemicals & Plastics
|
15,043
|
|
10,405
|
|
4,452
|
|
156
|
|
30
|
|
3
|
|
—
|
|
(35
|
)
|
(3
|
)
|
|||||||||
Transportation
|
19,096
|
|
12,178
|
|
6,421
|
|
444
|
|
53
|
|
9
|
|
10
|
|
(93
|
)
|
(188
|
)
|
|||||||||
Automotive
|
16,736
|
|
9,235
|
|
7,299
|
|
201
|
|
1
|
|
7
|
|
—
|
|
(401
|
)
|
(14
|
)
|
|||||||||
Metals & Mining
|
13,419
|
|
5,523
|
|
6,744
|
|
1,133
|
|
19
|
|
—
|
|
36
|
|
(621
|
)
|
(62
|
)
|
|||||||||
Insurance
|
13,510
|
|
10,918
|
|
2,459
|
|
—
|
|
133
|
|
9
|
|
—
|
|
(275
|
)
|
(2,538
|
)
|
|||||||||
Financial Markets Infrastructure
|
8,732
|
|
7,980
|
|
752
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(390
|
)
|
|||||||||
Securities Firms
|
4,211
|
|
1,812
|
|
2,399
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(273
|
)
|
(491
|
)
|
|||||||||
All other
(c)
|
137,238
|
|
124,661
|
|
11,988
|
|
303
|
|
286
|
|
598
|
|
6
|
|
(3,634
|
)
|
(1,348
|
)
|
|||||||||
Subtotal
|
$
|
815,882
|
|
$
|
613,400
|
|
$
|
182,633
|
|
$
|
17,166
|
|
$
|
2,683
|
|
$
|
1,318
|
|
$
|
341
|
|
$
|
(22,114
|
)
|
$
|
(22,705
|
)
|
Loans held-for-sale and loans at fair value
|
4,515
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Receivables from customers and other
|
17,440
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total
(d)
|
$
|
837,837
|
|
|
|
|
|
|
|
|
|
(a)
|
The industry rankings presented in the table as of
December 31, 2016
, are based on the industry rankings of the corresponding exposures at
December 31, 2017
, not actual rankings of such exposures at
December 31, 2016
.
|
(b)
|
In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at
December 31, 2017
and
2016
, noted above, the Firm held:
$9.8 billion
and
$9.1 billion
, respectively, of trading securities;
$32.3 billion
and
$31.6 billion
, respectively, of AFS securities; and
$14.4 billion
and
$14.5 billion
, respectively, of HTM securities, issued by U.S. state and municipal governments. For further information, see N
ote
2
and Note
10
.
|
(c)
|
All other includes: individuals; SPEs; and private education and civic organizations, representing approximately 59%, 37% and 4%, respectively, at both
December 31, 2017
and
December 31, 2016
.
|
(d)
|
Excludes cash placed with banks of
$421.0 billion
and
$380.2 billion
, at
December 31, 2017
and
2016
, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.
|
(e)
|
Credit exposure is net of risk participations and excludes the benefit of credit derivatives used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables.
|
(f)
|
Represents the net notional amounts of protection purchased and sold through credit derivatives used to manage the credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. The All other category includes purchased credit protection on certain credit indices.
|
(g)
|
Prior period amounts have been revised to conform with the current period presentation.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
111
|
|
December 31, 2017
|
|
||||||||||||||||
(in millions, except ratios)
|
Loans and Lending-related Commitments
|
|
Derivative Receivables
|
|
Credit exposure
|
|
% Investment-grade
|
% Drawn
(c)
|
||||||||||
Multifamily
(a)
|
$
|
84,635
|
|
|
$
|
34
|
|
|
$
|
84,669
|
|
|
89
|
%
|
|
92
|
%
|
|
Other
|
54,620
|
|
|
120
|
|
|
54,740
|
|
|
74
|
|
|
66
|
|
|
|||
Total Real Estate Exposure
(b)
|
139,255
|
|
|
154
|
|
|
139,409
|
|
|
83
|
|
|
82
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2016
|
|
||||||||||||||||
(in millions, except ratios)
|
Loans and Lending-related Commitments
|
|
Derivative
Receivables |
|
Credit exposure
|
|
% Investment-
grade |
% Drawn
(c)
|
||||||||||
Multifamily
(a)
|
$
|
80,280
|
|
|
$
|
34
|
|
|
$
|
80,314
|
|
|
82
|
%
|
|
90
|
%
|
|
Other
|
53,801
|
|
|
172
|
|
|
53,973
|
|
|
72
|
|
|
62
|
|
|
|||
Total Real Estate Exposure
(b)
|
134,081
|
|
|
207
|
|
|
134,287
|
|
|
78
|
|
|
79
|
|
|
(a)
|
Multifamily exposure is largely in California.
|
(b)
|
Real Estate exposure is predominantly secured; unsecured exposure is largely investment-grade.
|
(c)
|
Represents drawn exposure as a percentage of credit exposure.
|
|
December 31, 2017
|
|
||||||||||||||||
(in millions, except ratios)
|
Loans and Lending-related Commitments
|
|
Derivative Receivables
|
|
Credit exposure
|
|
% Investment-grade
|
% Drawn
(d)
|
||||||||||
Exploration & Production (“E&P”) and Oilfield Services
|
$
|
20,558
|
|
|
$
|
1,175
|
|
|
$
|
21,733
|
|
|
34
|
%
|
|
33
|
%
|
|
Other Oil & Gas
(a)
|
19,032
|
|
|
552
|
|
|
19,584
|
|
|
72
|
|
|
28
|
|
|
|||
Total Oil & Gas
|
39,590
|
|
|
1,727
|
|
|
41,317
|
|
|
52
|
|
|
31
|
|
|
|||
Natural Gas Pipelines
(b)
|
4,507
|
|
|
38
|
|
|
4,545
|
|
|
66
|
|
|
14
|
|
|
|||
Total Oil & Gas and Natural Gas Pipelines
(c)
|
$
|
44,097
|
|
|
$
|
1,765
|
|
|
$
|
45,862
|
|
|
53
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
December 31, 2016
|
|
||||||||||||||||
(in millions, except ratios)
|
Loans and Lending-related Commitments
|
|
Derivative
Receivables
|
|
Credit exposure
|
|
% Investment-grade
|
% Drawn
(d)
|
||||||||||
E&P and Oilfield Services
|
$
|
20,971
|
|
|
$
|
1,256
|
|
|
$
|
22,227
|
|
|
27
|
%
|
|
35
|
%
|
|
Other Oil & Gas
(a)
|
17,518
|
|
|
622
|
|
|
18,140
|
|
|
70
|
|
|
31
|
|
|
|||
Total Oil & Gas
|
38,489
|
|
|
1,878
|
|
|
40,367
|
|
|
46
|
|
|
33
|
|
|
|||
Natural Gas Pipelines
(b)
|
4,253
|
|
|
106
|
|
|
4,359
|
|
|
66
|
|
|
30
|
|
|
|||
Total Oil & Gas and Natural Gas Pipelines
(c)
|
$
|
42,742
|
|
|
$
|
1,984
|
|
|
$
|
44,726
|
|
|
48
|
|
|
33
|
|
|
112
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Wholesale nonaccrual loan activit
y
(a)
|
|
|
|||||
Year ended December 31, (in millions)
|
|
2017
|
2016
|
||||
Beginning balance
|
|
$
|
2,063
|
|
$
|
1,016
|
|
Additions
|
|
1,482
|
|
2,981
|
|
||
Reductions:
|
|
|
|
||||
Paydowns and other
|
|
1,137
|
|
1,148
|
|
||
Gross charge-offs
|
|
200
|
|
385
|
|
||
Returned to performing status
|
|
189
|
|
242
|
|
||
Sales
|
|
285
|
|
159
|
|
||
Total reductions
|
|
1,811
|
|
1,934
|
|
||
Net changes
|
|
(329
|
)
|
1,047
|
|
||
Ending balance
|
|
$
|
1,734
|
|
$
|
2,063
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
113
|
Derivative receivables
|
|
|
||||
December 31, (in millions)
|
2017
|
|
2016
|
|
||
Interest rate
|
$
|
24,673
|
|
$
|
28,302
|
|
Credit derivatives
|
869
|
|
1,294
|
|
||
Foreign exchange
|
16,151
|
|
23,271
|
|
||
Equity
|
7,882
|
|
4,939
|
|
||
Commodity
|
6,948
|
|
6,272
|
|
||
Total, net of cash collateral
|
56,523
|
|
64,078
|
|
||
Liquid securities and other cash collateral held against derivative receivables
(a)
|
(16,108
|
)
|
(22,705
|
)
|
||
Total, net of all collateral
|
$
|
40,415
|
|
$
|
41,373
|
|
(a)
|
Includes collateral related to derivative instruments where an appropriate legal opinion has not been either sought or obtained.
|
114
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
115
|
Credit derivatives used in credit portfolio management activities
|
|||||||
|
Notional amount of protection
purchased
(a)
|
||||||
December 31, (in millions)
|
2017
|
2016
|
|||||
Credit derivatives used to manage:
|
|
|
|
||||
Loans and lending-related commitments
|
$
|
1,867
|
|
|
$
|
2,430
|
|
Derivative receivables
|
15,742
|
|
|
19,684
|
|
||
Credit derivatives used in credit portfolio management activities
|
$
|
17,609
|
|
|
$
|
22,114
|
|
(a)
|
Amounts are presented net, considering the Firm’s net protection purchased or sold with respect to each underlying reference entity or index.
|
116
|
|
JPMorgan Chase & Co./2017 Annual Report
|
ALLOWANCE FOR CREDIT LOSSES
|
•
|
a net reduction in the wholesale allowance, reflecting credit quality improvements in the
Oil & Gas, Natural Gas Pipelines, and Metals & Mining portfolios (compared with additions to the allowance in the prior year
driven by downgrades in the same portfolios)
|
•
|
a net increase in the consumer allowance, reflecting
|
–
|
additions to the allowance for the credit card and business banking portfolios, driven by loan growth in both of these portfolios and higher loss rates in the credit card portfolio,
|
–
|
a reduction in the allowance for the residential real estate portfolio, predominantly driven by continued improvement in home prices and delinquencies, and
|
–
|
the utilization of the allowance in connection with the sale of the student loan portfolio.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
117
|
Summary of changes in the allowance for credit losses
|
|
|
|
|
|
||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||||
Year ended December 31,
|
Consumer, excluding
credit card
|
Credit card
|
Wholesale
|
Total
|
|
Consumer, excluding
credit card
|
Credit card
|
Wholesale
|
Total
|
||||||||||||||||
(in millions, except ratios)
|
|||||||||||||||||||||||||
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning balance at January 1,
|
$
|
5,198
|
|
$
|
4,034
|
|
$
|
4,544
|
|
$
|
13,776
|
|
|
$
|
5,806
|
|
$
|
3,434
|
|
$
|
4,315
|
|
$
|
13,555
|
|
Gross charge-offs
|
1,779
|
|
4,521
|
|
212
|
|
6,512
|
|
|
1,500
|
|
3,799
|
|
398
|
|
5,697
|
|
||||||||
Gross recoveries
|
(634
|
)
|
(398
|
)
|
(93
|
)
|
(1,125
|
)
|
|
(591
|
)
|
(357
|
)
|
(57
|
)
|
(1,005
|
)
|
||||||||
Net charge-offs
(a)
|
1,145
|
|
4,123
|
|
119
|
|
5,387
|
|
|
909
|
|
3,442
|
|
341
|
|
4,692
|
|
||||||||
Write-offs of PCI loans
(b)
|
86
|
|
—
|
|
—
|
|
86
|
|
|
156
|
|
—
|
|
—
|
|
156
|
|
||||||||
Provision for loan losses
|
613
|
|
4,973
|
|
(286
|
)
|
5,300
|
|
|
467
|
|
4,042
|
|
571
|
|
5,080
|
|
||||||||
Other
|
(1
|
)
|
—
|
|
2
|
|
1
|
|
|
(10
|
)
|
—
|
|
(1
|
)
|
(11
|
)
|
||||||||
Ending balance at December 31,
|
$
|
4,579
|
|
$
|
4,884
|
|
$
|
4,141
|
|
$
|
13,604
|
|
|
$
|
5,198
|
|
$
|
4,034
|
|
$
|
4,544
|
|
$
|
13,776
|
|
Impairment methodology
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-specific
(c)
|
$
|
246
|
|
$
|
383
|
|
$
|
461
|
|
$
|
1,090
|
|
|
$
|
308
|
|
$
|
358
|
|
$
|
342
|
|
$
|
1,008
|
|
Formula-based
|
2,108
|
|
4,501
|
|
3,680
|
|
10,289
|
|
|
2,579
|
|
3,676
|
|
4,202
|
|
10,457
|
|
||||||||
PCI
|
2,225
|
|
—
|
|
—
|
|
2,225
|
|
|
2,311
|
|
—
|
|
—
|
|
2,311
|
|
||||||||
Total allowance for loan losses
|
$
|
4,579
|
|
$
|
4,884
|
|
$
|
4,141
|
|
$
|
13,604
|
|
|
$
|
5,198
|
|
$
|
4,034
|
|
$
|
4,544
|
|
$
|
13,776
|
|
Allowance for lending-related commitments
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning balance at January 1,
|
$
|
26
|
|
$
|
—
|
|
$
|
1,052
|
|
$
|
1,078
|
|
|
$
|
14
|
|
$
|
—
|
|
$
|
772
|
|
$
|
786
|
|
Provision for lending-related commitments
|
7
|
|
—
|
|
(17
|
)
|
(10
|
)
|
|
—
|
|
—
|
|
281
|
|
281
|
|
||||||||
Other
|
—
|
|
—
|
|
—
|
|
—
|
|
|
12
|
|
—
|
|
(1
|
)
|
11
|
|
||||||||
Ending balance at December 31,
|
$
|
33
|
|
$
|
—
|
|
$
|
1,035
|
|
$
|
1,068
|
|
|
$
|
26
|
|
$
|
—
|
|
$
|
1,052
|
|
$
|
1,078
|
|
Impairment methodology
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Asset-specific
|
$
|
—
|
|
$
|
—
|
|
$
|
187
|
|
$
|
187
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
169
|
|
$
|
169
|
|
Formula-based
|
33
|
|
—
|
|
848
|
|
881
|
|
|
26
|
|
—
|
|
883
|
|
909
|
|
||||||||
Total allowance for lending-related commitments
(d)
|
$
|
33
|
|
$
|
—
|
|
$
|
1,035
|
|
$
|
1,068
|
|
|
$
|
26
|
|
$
|
—
|
|
$
|
1,052
|
|
$
|
1,078
|
|
Total allowance for credit losses
|
$
|
4,612
|
|
$
|
4,884
|
|
$
|
5,176
|
|
$
|
14,672
|
|
|
$
|
5,224
|
|
$
|
4,034
|
|
$
|
5,596
|
|
$
|
14,854
|
|
Memo:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Retained loans, end of period
|
$
|
372,553
|
|
$
|
149,387
|
|
$
|
402,898
|
|
$
|
924,838
|
|
|
$
|
364,406
|
|
$
|
141,711
|
|
$
|
383,790
|
|
$
|
889,907
|
|
Retained loans, average
|
366,798
|
|
139,918
|
|
392,263
|
|
898,979
|
|
|
358,486
|
|
131,081
|
|
371,778
|
|
861,345
|
|
||||||||
PCI loans, end of period
|
30,576
|
|
—
|
|
3
|
|
30,579
|
|
|
35,679
|
|
—
|
|
3
|
|
35,682
|
|
||||||||
Credit ratios
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Allowance for loan losses to retained loans
|
1.23
|
%
|
3.27
|
%
|
1.03
|
%
|
1.47
|
%
|
|
1.43
|
%
|
2.85
|
%
|
1.18
|
%
|
1.55
|
%
|
||||||||
Allowance for loan losses to retained nonaccrual loans
(e)
|
109
|
|
NM
|
239
|
|
229
|
|
|
109
|
|
NM
|
233
|
|
205
|
|
||||||||||
Allowance for loan losses to retained nonaccrual loans excluding credit card
|
109
|
|
NM
|
239
|
|
147
|
|
|
109
|
|
NM
|
233
|
|
145
|
|
||||||||||
Net charge-off rate
(a)
|
0.31
|
|
2.95
|
|
0.03
|
|
0.60
|
|
|
0.25
|
|
2.63
|
|
0.09
|
|
0.54
|
|
||||||||
Credit ratios, excluding residential real estate PCI loans
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Allowance for loan losses to
retained loans |
0.69
|
|
3.27
|
|
1.03
|
|
1.27
|
|
|
0.88
|
|
2.85
|
|
1.18
|
|
1.34
|
|
||||||||
Allowance for loan losses to retained
nonaccrual loans
(e)
|
56
|
|
NM
|
239
|
|
191
|
|
|
61
|
|
NM
|
233
|
|
171
|
|
||||||||||
Allowance for loan losses to retained nonaccrual
loans excluding credit card
|
56
|
|
NM
|
239
|
|
109
|
|
|
61
|
|
NM
|
233
|
|
111
|
|
||||||||||
Net charge-off rate
(a)
|
0.34
|
%
|
2.95
|
%
|
0.03
|
%
|
0.62
|
%
|
|
0.28
|
%
|
2.63
|
%
|
0.09
|
%
|
0.57
|
%
|
Note:
|
In the table above, the financial measures which exclude the impact of PCI loans are non-GAAP financial measures.
|
(a)
|
For the year ended December 31, 2017, excluding net charge-offs of $467 million related to the student loan portfolio sale, the net charge-off rate for Consumer, excluding credit card would have been 0.18%; total Firm would have been 0.55%; Consumer, excluding credit card and PCI loans would have been 0.20%; and total Firm, excluding PCI would have been 0.57%.
|
(b)
|
Write-offs of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool (e.g., upon liquidation).
|
(c)
|
Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a TDR. The asset-specific credit card allowance for loan losses modified in a TDR is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.
|
(d)
|
The allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets.
|
(e)
|
The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.
|
118
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31,
(in millions)
|
Provision for loan losses
|
|
Provision for
lending-related commitments
|
|
Total provision for credit losses
|
||||||||||||||||||||||||
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|||||||||||
Consumer, excluding credit card
|
$
|
613
|
|
$
|
467
|
|
$
|
(82
|
)
|
|
$
|
7
|
|
$
|
—
|
|
$
|
1
|
|
|
$
|
620
|
|
$
|
467
|
|
$
|
(81
|
)
|
Credit card
|
4,973
|
|
4,042
|
|
3,122
|
|
|
—
|
|
—
|
|
—
|
|
|
4,973
|
|
4,042
|
|
3,122
|
|
|||||||||
Total consumer
|
5,586
|
|
4,509
|
|
3,040
|
|
|
7
|
|
—
|
|
1
|
|
|
5,593
|
|
4,509
|
|
3,041
|
|
|||||||||
Wholesale
|
(286
|
)
|
571
|
|
623
|
|
|
(17
|
)
|
281
|
|
163
|
|
|
(303
|
)
|
852
|
|
786
|
|
|||||||||
Total
|
$
|
5,300
|
|
$
|
5,080
|
|
$
|
3,663
|
|
|
$
|
(10
|
)
|
$
|
281
|
|
$
|
164
|
|
|
$
|
5,290
|
|
$
|
5,361
|
|
$
|
3,827
|
|
•
|
a net $422 million reduction in the wholesale allowance for credit losses, reflecting credit quality improvements in the Oil & Gas, Natural Gas Pipelines, and Metals & Mining portfolios, compared with an addition of $511 million in the prior year driven by downgrades in the same portfolios.
|
•
|
a higher consumer provision driven by
|
–
|
$450 million of higher net charge-offs, primarily in the credit card portfolio due to growth in newer vintages which, as anticipated, have higher loss rates than the more seasoned portion of the portfolio, partially offset by a decrease in net charge-offs in the residential real estate portfolio reflecting continued improvement in home prices and delinquencies,
|
–
|
a $218 million impact in connection with the sale of the student loan portfolio, and
|
–
|
a $416 million higher addition to the allowance for credit losses.
|
◦
|
an $850 million addition to the allowance for credit losses in the credit card portfolio, compared to a $600 million addition in the prior year, due to higher loss rates and loan growth in both years, and
|
◦
|
a $50 million addition to the allowance for credit losses in the business banking portfolio, driven by loan growth
|
◦
|
a $316 million net reduction in the allowance for credit losses in the residential real estate portfolio, compared to a $517 million net reduction in the prior year, reflecting continued improvement in home prices and delinquencies in both years.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
119
|
INVESTMENT PORTFOLIO RISK MANAGEMENT
|
120
|
|
JPMorgan Chase & Co./2017 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
|
•
|
VaR
|
•
|
Economic-value stress testing
|
•
|
Nonstatistical risk measures
|
•
|
Loss advisories
|
•
|
Profit and loss drawdowns
|
•
|
Earnings-at-risk
|
•
|
Other sensitivities
|
JPMorgan Chase & Co./2017 Annual Report
|
|
121
|
Risk identification and classification by line of business
|
||||
Line of Business
|
Predominant business activities and related market risks
|
Positions included in Risk Management VaR
|
Positions included in earnings-at-risk
|
Positions included in other sensitivity-based measures
|
CCB
|
• Services mortgage loans which give rise to complex, non-linear interest rate and basis risk
• Non-linear risk arises primarily from prepayment options embedded in mortgages and changes in the probability of newly originated mortgage commitments actually closing
• Basis risk results from differences in the relative movements of the rate indices underlying mortgage exposure and other interest rates
•
Originates loans and takes deposits
|
• Mortgage pipeline loans, classified as derivatives
• Warehouse loans, classified as trading assets – debt instruments
• MSRs
• Hedges of pipeline loans,
warehouse loans and MSRs, classified as derivatives
• Interest-only securities, classified as trading assets - debt instruments, and related hedges, classified as derivatives
|
•
Retained loan portfolio
•
Deposits
|
|
CIB
|
•
Makes markets and services clients across fixed income, foreign exchange, equities and commodities
•
Market risk arises from changes in market prices (e.g., rates and credit spreads) resulting in a potential decline in net income
•
Originates loans and takes deposits
|
• Trading assets/liabilities – debt and marketable equity instruments, and derivatives, including hedges of the retained loan portfolio
• Certain securities purchased, loaned or sold under resale agreements and securities borrowed
• Fair value option elected liabilities
•
Derivative CVA and associated hedges
|
•
Retained loan portfolio
•
Deposits
|
• Private equity investments measured at fair value
• Derivatives FVA and fair value option elected liabilities DVA
|
CB
|
•
Engages in traditional wholesale banking activities which include extensions of loans and credit facilities and taking deposits
•
Risk arises from changes in interest rates and prepayment risk with potential for adverse impact on net interest income and interest-rate sensitive fees
|
|
•
Retained loan portfolio
•
Deposits
|
|
AWM
|
• Provides initial capital investments in products such as mutual funds, which give rise to market risk arising from changes in market prices in such products
• Originates loans and takes deposits
|
• Debt securities held in advance of distribution to clients, classified as trading assets - debt instruments
|
•
Retained loan portfolio
•
Deposits
|
•
Initial seed capital investments and related hedges, classified as derivatives
•
Capital invested alongside third-party investors, typically in privately distributed collective vehicles managed by AWM (i.e., co-investments)
|
Corporate
|
• Manages the Firm’s liquidity, funding, structural interest rate and foreign exchange risks arising from activities undertaken by the Firm’s four major reportable business segments
|
•
Derivative positions measured at fair value through noninterest revenue in earnings
•
Marketable equity investments measured at fair value through noninterest revenue in earnings
|
•
Deposits with banks
•
Investment securities portfolio and related interest rate hedges
•
Long-term debt and related interest rate hedges
|
• Private equity investments measured at fair value
• Foreign exchange exposure related to Firm-issued non-USD long-term debt (“LTD”) and related hedges
|
122
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
123
|
Total VaR
|
|
|
|
|
|||||||||||||||||||||
As of or for the year ended December 31,
|
2017
|
|
2016
|
||||||||||||||||||||||
(in millions)
|
Avg.
|
Min
|
Max
|
|
Avg.
|
Min
|
Max
|
||||||||||||||||||
CIB trading VaR by risk type
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed income
|
$
|
28
|
|
|
$
|
20
|
|
|
$
|
40
|
|
|
|
$
|
45
|
|
|
$
|
33
|
|
|
$
|
65
|
|
|
Foreign exchange
|
10
|
|
|
4
|
|
|
20
|
|
|
|
12
|
|
|
7
|
|
|
27
|
|
|
||||||
Equities
|
12
|
|
|
8
|
|
|
19
|
|
|
|
13
|
|
|
5
|
|
|
32
|
|
|
||||||
Commodities and other
|
7
|
|
|
4
|
|
|
10
|
|
|
|
9
|
|
|
7
|
|
|
11
|
|
|
||||||
Diversification benefit to CIB trading VaR
|
(30
|
)
|
(a)
|
NM
|
|
(b)
|
NM
|
|
(b)
|
|
(36
|
)
|
(a)
|
NM
|
|
(b)
|
NM
|
|
(b)
|
||||||
CIB trading VaR
|
27
|
|
|
14
|
|
(b)
|
38
|
|
(b)
|
|
43
|
|
|
28
|
|
(b)
|
79
|
|
(b)
|
||||||
Credit portfolio VaR
|
7
|
|
|
3
|
|
|
12
|
|
|
|
12
|
|
|
10
|
|
|
16
|
|
|
||||||
Diversification benefit to CIB VaR
|
(6
|
)
|
(a)
|
NM
|
|
(b)
|
NM
|
|
(b)
|
|
(10
|
)
|
(a)
|
NM
|
|
(b)
|
NM
|
|
(b)
|
||||||
CIB VaR
|
28
|
|
|
17
|
|
(b)
|
39
|
|
(b)
|
|
45
|
|
|
32
|
|
(b)
|
81
|
|
(b)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
CCB VaR
|
2
|
|
|
1
|
|
|
4
|
|
|
|
3
|
|
|
1
|
|
|
6
|
|
|
||||||
Corporate VaR
|
4
|
|
|
1
|
|
|
16
|
|
(c)
|
|
6
|
|
|
3
|
|
|
13
|
|
(c)
|
||||||
AWM VaR
|
—
|
|
|
—
|
|
|
—
|
|
|
|
2
|
|
|
—
|
|
|
4
|
|
|
||||||
Diversification benefit to other VaR
|
(1
|
)
|
(a)
|
NM
|
|
(b)
|
NM
|
|
(b)
|
|
(3
|
)
|
(a)
|
NM
|
|
(b)
|
NM
|
|
(b)
|
||||||
Other VaR
|
5
|
|
|
2
|
|
(b)
|
16
|
|
(b)
|
|
8
|
|
|
4
|
|
(b)
|
16
|
|
(b)
|
||||||
Diversification benefit to CIB and other VaR
|
(4
|
)
|
(a)
|
NM
|
|
(b)
|
NM
|
|
(b)
|
|
(8
|
)
|
(a)
|
NM
|
|
(b)
|
NM
|
|
(b)
|
||||||
Total VaR
|
$
|
29
|
|
|
$
|
17
|
|
(b)
|
$
|
42
|
|
(b)
|
|
$
|
45
|
|
|
$
|
33
|
|
(b)
|
$
|
78
|
|
(b)
|
(a)
|
Average portfolio VaR is less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects that the risks are not perfectly correlated.
|
(b)
|
Diversification benefit represents the difference between the total VaR and each reported level and the sum of its individual components. Diversification benefit reflects the non-additive nature of VaR due to imperfect correlation across lines of business and risk types. The maximum and minimum VaR for each portfolio may have occurred on different trading days than the components and consequently diversification benefit is not meaningful.
|
(c)
|
Maximum Corporate VaR was higher than the prior year, due to a Private Equity position that became publicly traded in the fourth quarter of 2017. Previously, this position was included in other sensitivity-based measures.
|
124
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
|
First Quarter
2017
|
Second Quarter
2017
|
Third Quarter
2017
|
Fourth Quarter
2017
|
JPMorgan Chase & Co./2017 Annual Report
|
|
125
|
126
|
|
JPMorgan Chase & Co./2017 Annual Report
|
•
|
Differences in the timing among the maturity or repricing of assets, liabilities and off-balance sheet instruments
|
•
|
Differences in the amounts of assets, liabilities and off-balance sheet instruments that are repricing at the same time
|
•
|
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)
|
•
|
The impact of changes in the maturity of various assets, liabilities or off-balance sheet instruments as interest rates change
|
JPMorgan Chase’s 12-month earnings-at-risk sensitivity profiles
|
|||||||||||||
U.S. dollar
|
Instantaneous change in rates
|
|
|||||||||||
(in billions)
|
+200 bps
|
+100 bps
|
-100 bps
|
-200 bps
|
|||||||||
December 31, 2017
|
$
|
2.4
|
|
|
$
|
1.7
|
|
|
(3.6
|
)
|
(a)
|
NM
|
(b)
|
December 31, 2016
|
$
|
4.0
|
|
|
$
|
2.4
|
|
|
NM
|
|
(b)
|
NM
|
(b)
|
(a)
|
As a result of the 2017 increase in the Fed Funds target rate to between 1.25% and 1.50%, the -100 bps sensitivity has been included.
|
(b)
|
Given the level of market interest rates, these downward parallel earnings-at-risk scenarios are not considered to be meaningful.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
127
|
Gain/(loss)
(in millions)
|
|
|
|
|
|
|
|
||||
Activity
|
|
Description
|
|
Sensitivity measure
|
December 31, 2017
|
December 31, 2016
|
|||||
|
|
|
|
|
|
|
|
||||
Investment activities
|
|
|
|
|
|
|
|
||||
Investment management activities
|
|
Consists of seed capital and related hedges; and fund co-investments
|
|
10% decline in market value
|
|
$
|
(110
|
)
|
$
|
(166
|
)
|
Other investments
|
|
Consists of private equity and other investments held at fair value
|
|
10% decline in market value
|
|
(338
|
)
|
(358
|
)
|
||
|
|
|
|
|
|
|
|
||||
Funding activities
|
|
|
|
|
|
|
|
||||
Non-USD LTD cross-currency basis
|
|
Represents the basis risk on derivatives used to hedge the foreign exchange risk on the non-USD LTD
|
|
1 basis point parallel tightening of cross currency basis
|
|
(10
|
)
|
(7
|
)
|
||
Non-USD LTD hedges foreign currency (“FX”) exposure
|
|
Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges
|
|
10% depreciation of currency
|
|
(13
|
)
|
(23
|
)
|
||
Derivatives – funding spread risk
|
|
Impact of changes in the spread related to derivatives FVA
|
|
1 basis point parallel increase in spread
|
|
(6
|
)
|
(4
|
)
|
||
Fair value option elected liabilities –
funding spread risk
|
|
Impact of changes in the spread related to fair value option elected liabilities DVA
(a)
|
|
1 basis point parallel increase in spread
|
|
22
|
|
17
|
|
||
Fair value option elected liabilities –interest rate sensitivity
|
|
Interest rate sensitivity on fair value option liabilities resulting from a change in the Firm’s own credit spread
(a)
|
|
1 basis point parallel increase in spread
|
|
(1
|
)
|
NA
|
|
(a)
|
Impact recognized through OCI.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
128
|
COUNTRY RISK MANAGEMENT
|
•
|
Establishing policies, procedures and standards consistent with a comprehensive country risk framework
|
•
|
Assigning sovereign ratings, and assessing country risks and establishing risk tolerance relative to a country
|
•
|
Measuring and monitoring country risk exposure and stress across the Firm
|
•
|
Managing and approving country limits and reporting trends and limit breaches to senior management
|
•
|
Developing surveillance tools, such as signaling models and ratings indicators, 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 re
ceived
|
•
|
Deposits are measured as the cash balances placed with central and commercial banks
|
•
|
Securities financing exposures are measured at their receivable balance, net of collateral received
|
•
|
Debt and equity securities are measured at the fair value of all positions, including both long and short positions
|
•
|
Counterparty exposure on derivative receivables is measured at the derivative’s fair value, net of the fair value of the related collateral. Counterparty exposure on derivatives can change significantly because of market movements
|
•
|
Credit derivatives protection purchased and sold is 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 is measured on a net basis, as such activities often result in selling and purchasing protection related to the same underlying reference entity; this reflects the manner in which the Firm manages these exposures
|
JPMorgan Chase & Co./2017 Annual Report
|
|
129
|
(a)
|
Country exposures above reflect 86% of total firmwide non U.S. exposure.
|
(b)
|
Lending and deposits includes loans and accrued interest receivable (net of collateral and the allowance for loan losses), deposits with banks (including central banks), acceptances, other monetary assets, issued letters of credit net of participations, and unused commitments to extend credit. Excludes intra-day and operating exposures, such as from settlement and clearing activities.
|
(c)
|
Includes market-making inventory, AFS securities, counterparty exposure on derivative and securities financings net of collateral and hedging.
|
(d)
|
Includes single reference entity (“single-name”), index and other multiple reference entity transactions for which one or more of the underlying reference entities is in a country listed in the above table.
|
(e)
|
Includes capital invested in local entities and physical commodity inventory.
|
130
|
|
JPMorgan Chase & Co./2017 Annual Report
|
OPERATIONAL RISK MANAGEMENT
|
JPMorgan Chase & Co./2017 Annual Report
|
|
131
|
132
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
133
|
COMPLIANCE RISK MANAGEMENT
|
JPMorgan Chase & Co./2017 Annual Report
|
|
134
|
CONDUCT RISK MANAGEMENT
|
JPMorgan Chase & Co./2017 Annual Report
|
|
135
|
LEGAL RISK MANAGEMENT
|
•
|
managing actual and potential litigation and enforcement matters, including internal reviews and investigations related to such matters
|
•
|
advising on products and services, including contract negotiation and documentation
|
•
|
advising on offering and marketing documents and new business initiatives
|
•
|
managing dispute resolution
|
•
|
interpreting existing laws, rules and regulations, and advising on changes thereto
|
•
|
advising on advocacy in connection with contemplated and proposed laws, rules and regulations, and
|
•
|
providing legal advice to the LOBs and corporate functions, in alignment with the lines of defense described under Enterprise-wide Risk Management.
|
136
|
|
JPMorgan Chase & Co./2017 Annual Report
|
ESTIMATIONS AND MODEL RISK MANAGEMENT
|
JPMorgan Chase & Co./2017 Annual Report
|
|
137
|
CRITICAL ACCOUNTING ESTIMATES USED BY THE FIRM
|
•
|
A combined
5%
decline in housing prices and a
100
basis point increase in unemployment rates from current levels could imply:
|
◦
|
an increase to modeled credit loss estimates of approximately
$525 million
for PCI loans.
|
◦
|
an increase to modeled annual credit loss estimates of approximately
$100 million
for residential real estate, excluding PCI loans.
|
•
|
For credit card loans, a
100
basis point increase in unemployment rates from current levels could imply an increase to modeled annual loss estimates of approximately $1.0 billion.
|
•
|
An increase in PD factors consistent with a one-notch downgrade in the Firm’s internal risk ratings for its entire wholesale loan portfolio could imply an increase in the Firm’s modeled credit loss estimates of approximately
$1.4 billion
.
|
•
|
A 100 basis point increase in estimated loss given default (“LGD”) for the Firm’s entire wholesale loan portfolio could imply an increase in the Firm’s modeled credit loss estimates of approximately
$175 million
.
|
138
|
|
JPMorgan Chase & Co./2017 Annual Report
|
December 31, 2017
(in billions, except ratio data)
|
Total assets at fair value
|
Total level 3 assets
|
|||||
Trading debt and equity instruments
|
$
|
325.3
|
|
|
$
|
5.4
|
|
Derivative receivables
(a)
|
56.5
|
|
|
6.0
|
|
||
Trading assets
|
381.8
|
|
|
11.4
|
|
||
AFS securities
|
202.2
|
|
|
0.3
|
|
||
Loans
|
2.5
|
|
|
0.3
|
|
||
MSRs
|
6.0
|
|
|
6.0
|
|
||
Other
|
33.2
|
|
|
1.2
|
|
||
Total assets measured
at fair value on a recurring basis
|
625.7
|
|
|
19.2
|
|
||
Total assets measured at fair value on a nonrecurring basis
|
1.3
|
|
|
0.8
|
|
||
Total assets measured
at fair value
|
$
|
627.0
|
|
|
$
|
20.0
|
|
Total Firm assets
|
$
|
2,533.6
|
|
|
|
||
Level 3 assets as a percentage of total Firm assets
(a)
|
|
|
0.8
|
%
|
|||
Level 3 assets as a percentage of total Firm assets at fair value
(a)
|
|
|
3.2
|
%
|
(a)
|
For purposes of the table above, the derivative receivables total reflects the impact of netting adjustments; however, the
$6.0 billion
of derivative receivables classified as level 3 does not reflect the netting adjustment as such netting is not relevant to a presentation based on the transparency of inputs to the valuation of an asset. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
139
|
140
|
|
JPMorgan Chase & Co./2017 Annual Report
|
ACCOUNTING AND REPORTING DEVELOPMENTS
|
JPMorgan Chase & Co./2017 Annual Report
|
|
141
|
FASB Standards issued but not adopted as of December 31, 2017 (continued)
|
||||
|
|
|
|
|
Standard
|
|
Summary of guidance
|
|
Effects on financial statements
|
Classification of certain cash receipts and cash payments in the statement of cash flows
Issued August 2016
|
|
• Provides targeted amendments to the classification of certain cash flows, including treatment of cash payments for settlement of zero-coupon debt instruments and distributions received from equity method investments.
• Requires retrospective application to all periods presented.
|
|
• Adopted January 1, 2018.
• No material impact upon adoption as the Firm was either in compliance with the amendments or the amounts to which it is applied are immaterial.
|
Treatment of restricted cash on the statement of cash flows
Issued November 2016
|
|
• Requires inclusion of restricted cash in the cash and cash equivalents balances in the Consolidated statements of cash flows.
• Requires additional disclosures to supplement the Consolidated statements of cash flows.
• Requires retrospective application to all periods presented.
|
|
• Adopted January 1, 2018.
• The adoption of the guidance will result in reclassification of restricted cash balances into Cash and restricted cash on the Consolidated statements of cash flows in the first quarter of 2018. The Firm will include Cash and due from banks and Deposits with banks in Cash and restricted cash in the Consolidated statements of cash flows, resulting in Deposits with banks no longer being reflected in Investing activities.
• In addition, to align with the presentation of Cash and restricted cash on the Consolidated statements of cash flows, the Firm will reclassify restricted cash balances to Cash and due from banks and to Deposits with banks from Other assets and disclose the total for Cash and restricted cash on the Firm’s Consolidated balance sheets in the first quarter of 2018.
|
Definition of a business
Issued January 2017
|
|
• Narrows the definition of a business and clarifies that, to be considered a business, the fair value of the gross assets acquired (or disposed of) may not be substantially all concentrated in a single identifiable asset or a group of similar assets.
• In addition, in order to be considered a business, a set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs.
|
|
• Adopted January 1, 2018.
• No impact upon adoption because the guidance is to be applied prospectively. Subsequent to adoption, fewer transactions will be treated as acquisitions or dispositions of a business.
|
Presentation of net periodic pension cost and net periodic postretirement benefit cost
Issued March 2017
|
|
• Requires the service cost component of net periodic pension and postretirement benefit cost to be reported separately in the consolidated results of operations from the other components (e.g., expected return on assets, interest costs, amortization of gains/losses and prior service costs).
• Requires retrospective application and presentation in the consolidated results of operations of the service cost component in the same line item as other employee compensation costs and presentation of the other components in a different line item from the service cost component.
|
|
• Adopted January 1, 2018.
• The adoption of the guidance in the first quarter of 2018 will result in an increase in compensation expense and a reduction in other expense of $223 million and $250 million for the years ended December 31, 2017 and 2016, respectivel
y.
|
Premium amortization on purchased callable debt securities
Issued March 2017
|
|
• Requires amortization of premiums to the earliest call date on debt securities with call features that are explicit, noncontingent and callable at fixed prices and on preset dates.
• Does not impact securities held at a discount; the discount continues to be amortized to the contractual maturity.
• Requires adoption on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.
|
|
• The Firm early adopted the new guidance on January 1, 2018.
• The new guidance primarily impacts obligations of U.S. states and municipalities
held in the Firm’s investment securities portfolio.
• The adoption of this guidance resulted in a cumulative-effect adjustment that
reduced retained earnings by approximately $505 million as of January 1, 2018, with a corresponding increase of $261 million (after tax) in AOCI and related adjustments to securities and tax liabilities.
• Subsequent to adoption, although the guidance will reduce the interest income
recognized prior to the earliest call date for callable debt securities held at a premium, the effect of this guidance on the Firm’s net interest income is not expected to be material.
|
142
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
143
|
FASB Standards issued but not adopted as of December 31, 2017 (continued)
|
||||
|
|
|
|
|
Standard
|
|
Summary of guidance
|
|
Effects on financial statements
|
Financial instruments – credit losses
Issued June 2016
|
|
• Replaces existing incurred loss impairment guidance and establishes a single allowance framework for financial assets carried at amortized cost (including HTM securities), which will reflect management’s estimate of credit losses over the full remaining expected life of the financial assets.
• Eliminates existing guidance for PCI loans, and requires recognition of an allowance for expected credit losses on financial assets purchased with more than insignificant credit deterioration since origination.
• Amends existing impairment guidance for AFS securities to incorporate an allowance, which will allow for reversals of impairment losses in the event that the credit of an issuer improves.
• Requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption.
|
|
• Required effective date: January 1, 2020.
(a)
• The Firm has begun its implementation efforts by establishing a Firmwide, cross-discipline governance structure. The Firm is currently identifying key interpretive issues, and is assessing existing credit loss forecasting models and processes against the new guidance to determine what modifications may be required.
• The Firm expects that the new guidance will result in an increase in its allowance for credit losses due to several factors, including:
1.
The allowance related to the Firm’s loans and commitments will increase to cover credit losses over the full remaining expected life of the portfolio, and will consider expected future changes in macroeconomic conditions
2.
The nonaccretable difference on PCI loans will be recognized as an allowance, offset by an increase in the carrying value of the related loans
3.
An allowance will be established for estimated credit losses on HTM securities
• The extent of the increase is under evaluation, but will depend upon the nature and characteristics of the Firm’s portfolio at the adoption date, and the macroeconomic conditions and forecasts at that date.
|
Goodwill
Issued January 2017
|
|
• Requires an impairment loss to be recognized when the estimated fair value of a reporting unit falls below its carrying value.
• Eliminates the second condition in the current guidance that requires an impairment loss to be recognized only if the estimated implied fair value of the goodwill is below its carrying value.
|
|
• Required effective date: January 1, 2020.
(a)
• Based on current impairment test results, the Firm does not expect a material effect on the Consolidated Financial Statements.
• After adoption, the guidance may result in more frequent goodwill impairment losses due to the removal of the second condition.
• The Firm is evaluating the timing of adoption.
|
(a)
|
Early adoption is permitted.
|
144
|
|
JPMorgan Chase & Co./2017 Annual Report
|
FORWARD-LOOKING STATEMENTS
|
•
|
Local, regional and global business, economic and political conditions and geopolitical events;
|
•
|
Changes in laws and regulatory requirements, including capital and liquidity requirements affecting the Firm’s businesses, and the ability of the Firm to address those requirements;
|
•
|
Heightened regulatory and governmental oversight and scrutiny of JPMorgan Chase’s business practices, including dealings with retail customers;
|
•
|
Changes in trade, monetary and fiscal policies and laws;
|
•
|
Changes in income tax laws and regulations;
|
•
|
Securities and capital markets behavior, including changes in market liquidity and volatility;
|
•
|
Changes in investor sentiment or consumer spending or savings behavior;
|
•
|
Ability of the Firm to manage effectively its capital and liquidity, including approval of its capital plans by banking regulators;
|
•
|
Changes in credit ratings assigned to the Firm or its subsidiaries;
|
•
|
Damage to the Firm’s reputation;
|
•
|
Ability of the Firm to deal effectively with an economic slowdown or other economic or market disruption;
|
•
|
Technology changes instituted by the Firm, its counterparties or competitors;
|
•
|
The success of the Firm’s business simplification initiatives and the effectiveness of its control agenda;
|
•
|
Ability of the Firm to develop new products and services, and the extent to which products or services previously sold by the Firm (including but not limited to mortgages and asset-backed securities) require the Firm to incur liabilities or absorb losses not contemplated at their initiation or origination;
|
•
|
Acceptance of the Firm’s new and existing products and services by the marketplace and the ability of the Firm to innovate and to increase market share;
|
•
|
Ability of the Firm to attract and retain qualified employees;
|
•
|
Ability of the Firm to control expenses;
|
•
|
Competitive pressures;
|
•
|
Changes in the credit quality of the Firm’s customers and counterparties;
|
•
|
Adequacy of the Firm’s risk management framework, disclosure controls and procedures and internal control over financial reporting;
|
•
|
Adverse judicial or regulatory proceedings;
|
•
|
Changes in applicable accounting policies, including the introduction of new accounting standards;
|
•
|
Ability of the Firm to determine accurate values of certain assets and liabilities;
|
•
|
Occurrence of natural or man-made disasters or calamities or conflicts and the Firm’s ability to deal effectively with disruptions caused by the foregoing;
|
•
|
Ability of the Firm to maintain the security of its financial, accounting, technology, data processing and other operational systems and facilities;
|
•
|
Ability of the Firm to withstand disruptions that may be caused by any failure of its operational systems or those of third parties;
|
•
|
Ability of the Firm to effectively defend itself against cyberattacks and other attempts by unauthorized parties to access information of the Firm or its customers or to disrupt the Firm’s systems; and
|
•
|
The other risks and uncertainties detailed in Part I, Item 1A: Risk Factors in the Firm’s Annual Report on Form 10-K for the year ended December 31, 2017.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
145
|
146
|
|
JPMorgan Chase & Co./2017 Annual Report
|
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
|
JPMorgan Chase & Co./2017 Annual Report
|
|
147
|
Year ended December 31, (in millions, except per share data)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Revenue
|
|
|
|
|
|
||||||
Investment banking fees
|
$
|
7,248
|
|
|
$
|
6,448
|
|
|
$
|
6,751
|
|
Principal transactions
|
11,347
|
|
|
11,566
|
|
|
10,408
|
|
|||
Lending- and deposit-related fees
|
5,933
|
|
|
5,774
|
|
|
5,694
|
|
|||
Asset management, administration and commissions
|
15,377
|
|
|
14,591
|
|
|
15,509
|
|
|||
Securities gains/(losses)
|
(66
|
)
|
|
141
|
|
|
202
|
|
|||
Mortgage fees and related income
|
1,616
|
|
|
2,491
|
|
|
2,513
|
|
|||
Card income
|
4,433
|
|
|
4,779
|
|
|
5,924
|
|
|||
Other income
|
3,639
|
|
|
3,795
|
|
|
3,032
|
|
|||
Noninterest revenue
|
49,527
|
|
|
49,585
|
|
|
50,033
|
|
|||
Interest income
|
64,372
|
|
|
55,901
|
|
|
50,973
|
|
|||
Interest expense
|
14,275
|
|
|
9,818
|
|
|
7,463
|
|
|||
Net interest income
|
50,097
|
|
|
46,083
|
|
|
43,510
|
|
|||
Total net revenue
|
99,624
|
|
|
95,668
|
|
|
93,543
|
|
|||
|
|
|
|
|
|
||||||
Provision for credit losses
|
5,290
|
|
|
5,361
|
|
|
3,827
|
|
|||
|
|
|
|
|
|
||||||
Noninterest expense
|
|
|
|
|
|
||||||
Compensation expense
|
31,009
|
|
|
29,979
|
|
|
29,750
|
|
|||
Occupancy expense
|
3,723
|
|
|
3,638
|
|
|
3,768
|
|
|||
Technology, communications and equipment expense
|
7,706
|
|
|
6,846
|
|
|
6,193
|
|
|||
Professional and outside services
|
6,840
|
|
|
6,655
|
|
|
7,002
|
|
|||
Marketing
|
2,900
|
|
|
2,897
|
|
|
2,708
|
|
|||
Other expense
|
6,256
|
|
|
5,756
|
|
|
9,593
|
|
|||
Total noninterest expense
|
58,434
|
|
|
55,771
|
|
|
59,014
|
|
|||
Income before income tax expense
|
35,900
|
|
|
34,536
|
|
|
30,702
|
|
|||
Income tax expense
|
11,459
|
|
|
9,803
|
|
|
6,260
|
|
|||
Net income
|
$
|
24,441
|
|
|
$
|
24,733
|
|
|
$
|
24,442
|
|
Net income applicable to common stockholders
(a)
|
$
|
22,567
|
|
|
$
|
22,834
|
|
|
$
|
22,651
|
|
Net income per common share data
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
6.35
|
|
|
$
|
6.24
|
|
|
$
|
6.05
|
|
Diluted earnings per share
|
6.31
|
|
|
6.19
|
|
|
6.00
|
|
|||
|
|
|
|
|
|
||||||
Weighted-average basic shares
(a)
|
3,551.6
|
|
|
3,658.8
|
|
|
3,741.2
|
|
|||
Weighted-average diluted shares
(a)
|
3,576.8
|
|
|
3,690.0
|
|
|
3,773.6
|
|
|||
Cash dividends declared per common share
|
$
|
2.12
|
|
|
$
|
1.88
|
|
|
$
|
1.72
|
|
(a)
|
The prior period amounts have been revised to conform with the current period presentation. The revision had no impact on the Firm’s reported earnings per share.
|
148
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31, (in millions)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Net income
|
|
$
|
24,441
|
|
|
$
|
24,733
|
|
|
$
|
24,442
|
|
Other comprehensive income/(loss), after–tax
|
|
|
|
|
|
|
||||||
Unrealized gains/(losses) on investment securities
|
|
640
|
|
|
(1,105
|
)
|
|
(2,144
|
)
|
|||
Translation adjustments, net of hedges
|
|
(306
|
)
|
|
(2
|
)
|
|
(15
|
)
|
|||
Cash flow hedges
|
|
176
|
|
|
(56
|
)
|
|
51
|
|
|||
Defined benefit pension and OPEB plans
|
|
738
|
|
|
(28
|
)
|
|
111
|
|
|||
DVA on fair value option elected liabilities
|
|
(192
|
)
|
|
(330
|
)
|
|
—
|
|
|||
Total other comprehensive income/(loss), after–tax
|
|
1,056
|
|
|
(1,521
|
)
|
|
(1,997
|
)
|
|||
Comprehensive income
|
|
$
|
25,497
|
|
|
$
|
23,212
|
|
|
$
|
22,445
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
149
|
December 31, (in millions, except share data)
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Cash and due from banks
|
$
|
25,827
|
|
|
$
|
23,873
|
|
Deposits with banks
|
404,294
|
|
|
365,762
|
|
||
Federal funds sold and securities purchased under resale agreements (included
$14,732
and $21,506 at fair value)
|
198,422
|
|
|
229,967
|
|
||
Securities borrowed (included
$3,049
and $0 at fair value)
|
105,112
|
|
|
96,409
|
|
||
Trading assets (included assets pledged of
$110,061
and $115,847)
|
381,844
|
|
|
372,130
|
|
||
Securities (included
$202,225
and $238,891 at fair value and assets pledged of
$17,969
and $16,115)
|
249,958
|
|
|
289,059
|
|
||
Loans (included
$2,508
and $2,230 at fair value)
|
930,697
|
|
|
894,765
|
|
||
Allowance for loan losses
|
(13,604
|
)
|
|
(13,776
|
)
|
||
Loans, net of allowance for loan losses
|
917,093
|
|
|
880,989
|
|
||
Accrued interest and accounts receivable
|
67,729
|
|
|
52,330
|
|
||
Premises and equipment
|
14,159
|
|
|
14,131
|
|
||
Goodwill, MSRs and other intangible assets
|
54,392
|
|
|
54,246
|
|
||
Other assets (included
$16,128
and $7,557 at fair value and assets pledged of
$1,526
and $1,603)
|
114,770
|
|
|
112,076
|
|
||
Total assets
(a)
|
$
|
2,533,600
|
|
|
$
|
2,490,972
|
|
Liabilities
|
|
|
|
||||
Deposits (included
$21,321
and $13,912 at fair value)
|
$
|
1,443,982
|
|
|
$
|
1,375,179
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements (included
$697
and $687
at fair value)
|
158,916
|
|
|
165,666
|
|
||
Short-term borrowings (included
$9,191
and $9,105 at fair value)
|
51,802
|
|
|
34,443
|
|
||
Trading liabilities
|
123,663
|
|
|
136,659
|
|
||
Accounts payable and other liabilities (included
$9,208
and $9,120 at fair value)
|
189,383
|
|
|
190,543
|
|
||
Beneficial interests issued by consolidated VIEs (included
$45
and $120 at fair value)
|
26,081
|
|
|
39,047
|
|
||
Long-term debt (included
$47,519
and $37,686
at fair value)
|
284,080
|
|
|
295,245
|
|
||
Total liabilities
(a)
|
2,277,907
|
|
|
2,236,782
|
|
||
Commitments and contingencies (see Notes 27, 28 and 29)
|
|
|
|
|
|
||
Stockholders’ equity
|
|
|
|
||||
Preferred stock ($1 par value; authorized
200,000,000 shares: issued
2,606,750
shares)
|
26,068
|
|
|
26,068
|
|
||
Common stock ($1 par value; authorized 9,000,000,000 shares; issued
4,104,933,895
shares)
|
4,105
|
|
|
4,105
|
|
||
Additional paid-in capital
|
90,579
|
|
|
91,627
|
|
||
Retained earnings
|
177,676
|
|
|
162,440
|
|
||
Accumulated other comprehensive income
|
(119
|
)
|
|
(1,175
|
)
|
||
Shares held in restricted stock units (“RSU”) trust, at cost (
472,953
shares)
|
(21
|
)
|
|
(21
|
)
|
||
Treasury stock, at cost (679,635,064
and 543,744,003 shares)
|
(42,595
|
)
|
|
(28,854
|
)
|
||
Total stockholders’ equity
|
255,693
|
|
|
254,190
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,533,600
|
|
|
$
|
2,490,972
|
|
(a)
|
The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at
December 31, 2017
and
2016
. 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)
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Trading assets
|
$
|
1,449
|
|
|
$
|
3,185
|
|
Loans
|
68,995
|
|
|
75,614
|
|
||
All other assets
|
2,674
|
|
|
3,321
|
|
||
Total assets
|
$
|
73,118
|
|
|
$
|
82,120
|
|
Liabilities
|
|
|
|
||||
Beneficial interests issued by consolidated VIEs
|
$
|
26,081
|
|
|
$
|
39,047
|
|
All other liabilities
|
349
|
|
|
490
|
|
||
Total liabilities
|
$
|
26,430
|
|
|
$
|
39,537
|
|
150
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31, (in millions, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Preferred stock
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
$
|
26,068
|
|
|
$
|
26,068
|
|
|
$
|
20,063
|
|
Issuance
|
|
1,258
|
|
|
—
|
|
|
6,005
|
|
|||
Redemption
|
|
(1,258
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at December 31
|
|
26,068
|
|
|
26,068
|
|
|
26,068
|
|
|||
Common stock
|
|
|
|
|
|
|
||||||
Balance at January 1 and December 31
|
|
4,105
|
|
|
4,105
|
|
|
4,105
|
|
|||
Additional paid-in capital
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
91,627
|
|
|
92,500
|
|
|
93,270
|
|
|||
Shares issued and commitments to issue common stock for employee share-based compensation awards
|
|
(734
|
)
|
|
(334
|
)
|
|
(436
|
)
|
|||
Other
|
|
(314
|
)
|
|
(539
|
)
|
|
(334
|
)
|
|||
Balance at December 31
|
|
90,579
|
|
|
91,627
|
|
|
92,500
|
|
|||
Retained earnings
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
162,440
|
|
|
146,420
|
|
|
129,977
|
|
|||
Cumulative effect of change in accounting principle
|
|
—
|
|
|
(154
|
)
|
|
—
|
|
|||
Net income
|
|
24,441
|
|
|
24,733
|
|
|
24,442
|
|
|||
Dividends declared:
|
|
|
|
|
|
|
||||||
Preferred stock
|
|
(1,663
|
)
|
|
(1,647
|
)
|
|
(1,515
|
)
|
|||
Common stock (
$2.12
, $1.88 and $1.72 per share for 2017, 2016 and 2015, respectively)
|
|
(7,542
|
)
|
|
(6,912
|
)
|
|
(6,484
|
)
|
|||
Balance at December 31
|
|
177,676
|
|
|
162,440
|
|
|
146,420
|
|
|||
Accumulated other comprehensive income
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
(1,175
|
)
|
|
192
|
|
|
2,189
|
|
|||
Cumulative effect of change in accounting principle
|
|
—
|
|
|
154
|
|
|
—
|
|
|||
Other comprehensive income/(loss)
|
|
1,056
|
|
|
(1,521
|
)
|
|
(1,997
|
)
|
|||
Balance at December 31
|
|
(119
|
)
|
|
(1,175
|
)
|
|
192
|
|
|||
Shares held in RSU Trust, at cost
|
|
|
|
|
|
|
||||||
Balance at January 1 and December 31
|
|
(21
|
)
|
|
(21
|
)
|
|
(21
|
)
|
|||
Treasury stock, at cost
|
|
|
|
|
|
|
||||||
Balance at January 1
|
|
(28,854
|
)
|
|
(21,691
|
)
|
|
(17,856
|
)
|
|||
Repurchase
|
|
(15,410
|
)
|
|
(9,082
|
)
|
|
(5,616
|
)
|
|||
Reissuance
|
|
1,669
|
|
|
1,919
|
|
|
1,781
|
|
|||
Balance at December 31
|
|
(42,595
|
)
|
|
(28,854
|
)
|
|
(21,691
|
)
|
|||
Total stockholders
’
equity
|
|
$
|
255,693
|
|
|
$
|
254,190
|
|
|
$
|
247,573
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
151
|
Year ended December 31, (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
24,441
|
|
|
$
|
24,733
|
|
|
$
|
24,442
|
|
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
|
|
|
|
|
|
||||||
Provision for credit losses
|
5,290
|
|
|
5,361
|
|
|
3,827
|
|
|||
Depreciation and amortization
|
6,179
|
|
|
5,478
|
|
|
4,940
|
|
|||
Deferred tax expense
|
2,312
|
|
|
4,651
|
|
|
1,333
|
|
|||
Other
|
2,136
|
|
|
1,799
|
|
|
1,785
|
|
|||
Originations and purchases of loans held-for-sale
|
(94,628
|
)
|
|
(61,107
|
)
|
|
(48,109
|
)
|
|||
Proceeds from sales, securitizations and paydowns of loans held-for-sale
|
93,270
|
|
|
60,196
|
|
|
49,363
|
|
|||
Net change in:
|
|
|
|
|
|
||||||
Trading assets
|
5,673
|
|
|
(20,007
|
)
|
|
62,212
|
|
|||
Securities borrowed
|
(8,653
|
)
|
|
2,313
|
|
|
12,165
|
|
|||
Accrued interest and accounts receivable
|
(15,868
|
)
|
|
(5,815
|
)
|
|
22,664
|
|
|||
Other assets
|
4,318
|
|
|
(4,517
|
)
|
|
(3,701
|
)
|
|||
Trading liabilities
|
(26,256
|
)
|
|
5,198
|
|
|
(28,972
|
)
|
|||
Accounts payable and other liabilities
|
(8,518
|
)
|
|
3,740
|
|
|
(23,361
|
)
|
|||
Other operating adjustments
|
7,803
|
|
|
(1,827
|
)
|
|
(5,122
|
)
|
|||
Net cash provided by/(used in) operating activities
|
(2,501
|
)
|
|
20,196
|
|
|
73,466
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Net change in:
|
|
|
|
|
|
||||||
Deposits with banks
|
(38,532
|
)
|
|
(25,747
|
)
|
|
144,462
|
|
|||
Federal funds sold and securities purchased under resale agreements
|
31,448
|
|
|
(17,468
|
)
|
|
3,190
|
|
|||
Held-to-maturity securities:
|
|
|
|
|
|
||||||
Proceeds from paydowns and maturities
|
4,563
|
|
|
6,218
|
|
|
6,099
|
|
|||
Purchases
|
(2,349
|
)
|
|
(143
|
)
|
|
(6,204
|
)
|
|||
Available-for-sale securities:
|
|
|
|
|
|
||||||
Proceeds from paydowns and maturities
|
56,117
|
|
|
65,950
|
|
|
76,448
|
|
|||
Proceeds from sales
|
90,201
|
|
|
48,592
|
|
|
40,444
|
|
|||
Purchases
|
(105,309
|
)
|
|
(123,959
|
)
|
|
(70,804
|
)
|
|||
Proceeds from sales and securitizations of loans held-for-investment
|
15,791
|
|
|
15,429
|
|
|
18,604
|
|
|||
Other changes in loans, net
|
(61,650
|
)
|
|
(80,996
|
)
|
|
(108,962
|
)
|
|||
All other investing activities, net
|
(563
|
)
|
|
(2,825
|
)
|
|
3,703
|
|
|||
Net cash provided by/(used in) investing activities
|
(10,283
|
)
|
|
(114,949
|
)
|
|
106,980
|
|
|||
Financing activities
|
|
|
|
|
|
||||||
Net change in:
|
|
|
|
|
|
||||||
Deposits
|
57,022
|
|
|
97,336
|
|
|
(88,678
|
)
|
|||
Federal funds purchased and securities loaned or sold under repurchase agreements
|
(6,739
|
)
|
|
13,007
|
|
|
(39,415
|
)
|
|||
Short-term borrowings
|
16,540
|
|
|
(2,461
|
)
|
|
(57,828
|
)
|
|||
Beneficial interests issued by consolidated VIEs
|
(1,377
|
)
|
|
(5,707
|
)
|
|
(5,632
|
)
|
|||
Proceeds from long-term borrowings
|
56,271
|
|
|
83,070
|
|
|
79,611
|
|
|||
Payments of long-term borrowings
|
(83,079
|
)
|
|
(68,949
|
)
|
|
(67,247
|
)
|
|||
Proceeds from issuance of preferred stock
|
1,258
|
|
|
—
|
|
|
5,893
|
|
|||
Redemption of preferred stock
|
(1,258
|
)
|
|
—
|
|
|
—
|
|
|||
Treasury stock repurchased
|
(15,410
|
)
|
|
(9,082
|
)
|
|
(5,616
|
)
|
|||
Dividends paid
|
(8,993
|
)
|
|
(8,476
|
)
|
|
(7,873
|
)
|
|||
All other financing activities, net
|
407
|
|
|
(467
|
)
|
|
(726
|
)
|
|||
Net cash provided by/(used in) financing activities
|
14,642
|
|
|
98,271
|
|
|
(187,511
|
)
|
|||
Effect of exchange rate changes on cash and due from banks
|
96
|
|
|
(135
|
)
|
|
(276
|
)
|
|||
Net increase/(decrease) in cash and due from banks
|
1,954
|
|
|
3,383
|
|
|
(7,341
|
)
|
|||
Cash and due from banks at the beginning of the period
|
23,873
|
|
|
20,490
|
|
|
27,831
|
|
|||
Cash and due from banks at the end of the period
|
$
|
25,827
|
|
|
$
|
23,873
|
|
|
$
|
20,490
|
|
Cash interest paid
|
$
|
14,153
|
|
|
$
|
9,508
|
|
|
$
|
7,220
|
|
Cash income taxes paid, net
|
4,325
|
|
|
2,405
|
|
|
9,423
|
|
152
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
153
|
154
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Fair value measurement
|
Note 2
|
|
Page 155
|
Fair value option
|
Note 3
|
|
Page 174
|
Derivative instruments
|
Note 5
|
|
Page 179
|
Noninterest revenue
|
Note 6
|
|
Page 192
|
Interest income and interest expense
|
Note 7
|
|
Page 195
|
Pension and other postretirement employee benefit plans
|
Note 8
|
|
Page 195
|
Employee share-based incentives
|
Note 9
|
|
Page 201
|
Securities
|
Note 10
|
|
Page 203
|
Securities financing activities
|
Note 11
|
|
Page 208
|
Loans
|
Note 12
|
|
Page 211
|
Allowance for credit losses
|
Note 13
|
|
Page 231
|
Variable interest entities
|
Note 14
|
|
Page 236
|
Goodwill and Mortgage servicing rights
|
Note 15
|
|
page 244
|
Premises and equipment
|
Note 16
|
|
page 248
|
Long-term debt
|
Note 19
|
|
page 249
|
Income taxes
|
Note 24
|
|
page 255
|
Off–balance sheet lending-related financial instruments, guarantees and other commitments
|
Note 27
|
|
page 261
|
Litigation
|
Note 29
|
|
page 268
|
JPMorgan Chase & Co./2017 Annual Report
|
|
155
|
•
|
Liquidity valuation adjustments are considered where an observable external price or valuation parameter exists but is of lower reliability, potentially due to lower market activity. Liquidity valuation adjustments are applied and determined based on current market conditions. Factors that may be considered in determining the liquidity adjustment include analysis of: (1) the estimated bid-offer spread for the instrument being traded; (2) alternative pricing points for similar instruments in active markets; and (3) the range of reasonable values that the price or parameter could take.
|
•
|
The Firm
manages certain portfolios of financial instruments on the basis of net open risk exposure and, as permitted by U.S. GAAP, has elected to estimate the fair value of such portfolios on the basis of a transfer of the entire net open risk position in an orderly transaction. Where this is the case, valuation adjustments may be 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 that a relevant market participant would consider in the transfer of the net open risk position, 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 prices or input parameters to valuation models that are unobservable due to a lack of market activity or because they cannot be implied from observable market data. Such prices or parameters must be estimated and are, therefore, subject to management judgment. Unobservable
|
•
|
Where appropriate,
the Firm
also applies adjustments to its estimates of fair value in order to appropriately reflect counterparty credit quality
(CVA), the Firm’s
own creditworthiness
(DVA)
and the impact of funding
(
FVA
),
using a consistent framework across
the Firm.
For more information on such adjustments see Credit and funding adjustments on
page 171
of this Note.
|
•
|
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.
|
156
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
157
|
Product/instrument
|
Valuation methodology, inputs and assumptions
|
Classifications in the valuation hierarchy
|
Investment and trading securities
|
Quoted market prices are used where available.
|
Level 1
|
|
In the absence of quoted market prices, securities are valued based on:
|
Level 2 or 3
|
|
• Observable market prices for similar securities
|
|
|
•
Relevant broker quotes
|
|
|
•
Discounted cash flows
|
|
|
In addition, the following inputs to discounted cash flows are used for the following products:
|
|
|
Mortgage- and asset-backed securities specific inputs:
|
|
|
•
Collateral characteristics
|
|
|
• Deal-specific payment and loss allocations
|
|
|
• Current market assumptions related to yield, prepayment speed, conditional default rates and loss severity
|
|
|
Collateralized loan obligations (“CLOs”) specific inputs:
|
|
|
•
Collateral characteristics
|
|
|
•
Deal-specific payment and loss allocations
|
|
|
•
Expected prepayment speed, conditional default rates, loss severity
|
|
|
•
Credit spreads
|
|
|
• Credit rating data
|
|
Physical commodities
|
Valued using observable market prices or data.
|
Predominantly level 1 and 2
|
Derivatives
|
Exchange-traded derivatives that are actively traded and valued using the exchange price.
|
Level 1
|
|
Derivatives that are valued using models such as the Black-Scholes option pricing model, simulation models, or a combination of models that may use observable or unobservable valuation inputs as well as considering the contractual terms.
The key valuation inputs used will depend on the type of derivative and the nature of the underlying instruments and may include equity prices, commodity prices, interest rate yield curves, foreign exchange rates, volatilities, correlations, CDS spreads and recovery rates. Additionally, the credit quality of the counterparty and of the Firm as well as market funding levels may also be considered.
|
Level 2 or 3
|
|
In addition, specific inputs used for derivatives that are valued based on models with significant unobservable inputs are as follows:
|
|
|
Structured credit derivatives specific inputs include:
|
|
|
•
CDS spreads and recovery rates
|
|
|
•
Credit correlation between the underlying debt instruments
|
|
|
Equity option specific inputs include:
|
|
|
•
Equity volatilities
|
|
|
•
Equity correlation
|
|
|
•
Equity-FX correlation
|
|
|
•
Equity-IR correlation
|
|
|
Interest rate and FX exotic options specific inputs include:
|
|
|
•
Interest rate spread volatility
|
|
|
•
Interest rate correlation
|
|
|
•
Foreign exchange correlation
|
|
|
•
Interest rate-FX correlation
|
|
|
Commodity derivatives specific inputs include:
|
|
|
•
Commodity volatility
|
|
|
•
Forward commodity price
|
|
|
Additionally, adjustments are made to reflect counterparty credit quality (CVA) and the impact of funding (FVA). See page 171 of this Note.
|
|
|
|
|
|
|
|
|
|
158
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Product/instrument
|
Valuation methodology, inputs and assumptions
|
Classification in the valuation hierarchy
|
|
Mortgage servicing rights
|
See Mortgage servicing rights in Note 15.
|
Level 3
|
|
|
|||
Private equity direct investments
|
Fair value is estimated using all available information; the range of potential inputs include:
|
Level 2 or 3
|
|
• Transaction prices
|
|||
|
• Trading multiples of comparable public companies
|
|
|
|
• Operating performance of the underlying portfolio company
|
|
|
|
• Adjustments as required, since comparable public companies are not identical to the company being valued, and for company-specific issues and lack of liquidity.
|
|
|
|
• Additional available inputs relevant to the investment.
|
|
|
Fund investments (e.g., mutual/collective investment funds, private equity funds, hedge funds, and real estate funds)
|
Net asset value
|
|
|
• NAV is supported by the ability to redeem and purchase at the NAV level.
|
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
(a)
|
||
|
|
||
Beneficial interests issued by consolidated VIEs
|
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
|
|||
Structured notes (included in deposits, short-term borrowings and long-term debt)
|
• Valuations are based on discounted cash flow analyses that consider the embedded derivative and the terms and payment structure of the note.
• The embedded derivative features are considered using models such as the Black-Scholes option pricing model, simulation models, or a combination of models that may use observable or unobservable valuation inputs, depending on the embedded derivative. The specific inputs used vary according to the nature of the embedded derivative features, as described in the discussion above regarding derivatives valuation. Adjustments are then made to this base valuation to reflect the Firm’s own credit risk (DVA). See page 171 of this Note.
|
Level 2 or 3
|
|
(a)
|
Excludes certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
159
|
Assets and liabilities measured at fair value on a recurring basis
|
|
|
|
|
|
||||||||||||
|
Fair value hierarchy
|
|
|
|
|||||||||||||
December 31, 2017 (in millions)
|
Level 1
|
Level 2
|
|
Level 3
|
|
Derivative netting adjustments
|
Total fair value
|
||||||||||
Federal funds sold and securities purchased under resale agreements
|
$
|
—
|
|
$
|
14,732
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
14,732
|
|
Securities borrowed
|
—
|
|
3,049
|
|
|
—
|
|
|
—
|
|
3,049
|
|
|||||
Trading assets:
|
|
|
|
|
|
|
|
||||||||||
Debt instruments:
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||||
U.S. government agencies
(a)
|
—
|
|
41,515
|
|
|
307
|
|
|
—
|
|
41,822
|
|
|||||
Residential – nonagency
|
—
|
|
1,835
|
|
|
60
|
|
|
—
|
|
1,895
|
|
|||||
Commercial – nonagency
|
—
|
|
1,645
|
|
|
11
|
|
|
—
|
|
1,656
|
|
|||||
Total mortgage-backed securities
|
—
|
|
44,995
|
|
|
378
|
|
|
—
|
|
45,373
|
|
|||||
U.S. Treasury and government agencies
(a)
|
30,758
|
|
6,475
|
|
|
1
|
|
|
—
|
|
37,234
|
|
|||||
Obligations of U.S. states and municipalities
|
—
|
|
9,067
|
|
|
744
|
|
|
—
|
|
9,811
|
|
|||||
Certificates of deposit, bankers’ acceptances and commercial paper
|
—
|
|
226
|
|
|
—
|
|
|
—
|
|
226
|
|
|||||
Non-U.S. government debt securities
|
28,887
|
|
28,831
|
|
|
78
|
|
|
—
|
|
57,796
|
|
|||||
Corporate debt securities
|
—
|
|
24,146
|
|
|
312
|
|
|
—
|
|
24,458
|
|
|||||
Loans
(b)
|
—
|
|
35,242
|
|
|
2,719
|
|
|
—
|
|
37,961
|
|
|||||
Asset-backed securities
|
—
|
|
3,284
|
|
|
153
|
|
|
—
|
|
3,437
|
|
|||||
Total debt instruments
|
59,645
|
|
152,266
|
|
|
4,385
|
|
|
—
|
|
216,296
|
|
|||||
Equity securities
|
87,346
|
|
197
|
|
|
295
|
|
|
—
|
|
87,838
|
|
|||||
Physical commodities
(c)
|
4,924
|
|
1,322
|
|
|
—
|
|
|
—
|
|
6,246
|
|
|||||
Other
|
—
|
|
14,197
|
|
|
690
|
|
|
—
|
|
14,887
|
|
|||||
Total debt and equity instruments
(d)
|
151,915
|
|
167,982
|
|
|
5,370
|
|
|
—
|
|
325,267
|
|
|||||
Derivative receivables:
|
|
|
|
|
|
|
|
||||||||||
Interest rate
|
181
|
|
314,107
|
|
|
1,704
|
|
|
(291,319
|
)
|
24,673
|
|
|||||
Credit
|
—
|
|
21,995
|
|
|
1,209
|
|
|
(22,335
|
)
|
869
|
|
|||||
Foreign exchange
|
841
|
|
158,834
|
|
|
557
|
|
|
(144,081
|
)
|
16,151
|
|
|||||
Equity
|
—
|
|
37,722
|
|
|
2,318
|
|
|
(32,158
|
)
|
7,882
|
|
|||||
Commodity
|
—
|
|
19,875
|
|
|
210
|
|
|
(13,137
|
)
|
6,948
|
|
|||||
Total derivative receivables
(e)(f)
|
1,022
|
|
552,533
|
|
|
5,998
|
|
|
(503,030
|
)
|
56,523
|
|
|||||
Total trading assets
(g)
|
152,937
|
|
720,515
|
|
|
11,368
|
|
|
(503,030
|
)
|
381,790
|
|
|||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||||
U.S. government agencies
(a)
|
—
|
|
70,280
|
|
|
—
|
|
|
—
|
|
70,280
|
|
|||||
Residential – nonagency
|
—
|
|
11,366
|
|
|
1
|
|
|
—
|
|
11,367
|
|
|||||
Commercial – nonagency
|
—
|
|
5,025
|
|
|
—
|
|
|
—
|
|
5,025
|
|
|||||
Total mortgage-backed securities
|
—
|
|
86,671
|
|
|
1
|
|
|
—
|
|
86,672
|
|
|||||
U.S. Treasury and government agencies
(a)
|
22,745
|
|
—
|
|
|
—
|
|
|
—
|
|
22,745
|
|
|||||
Obligations of U.S. states and municipalities
|
—
|
|
32,338
|
|
|
—
|
|
|
—
|
|
32,338
|
|
|||||
Certificates of deposit
|
—
|
|
59
|
|
|
—
|
|
|
—
|
|
59
|
|
|||||
Non-U.S. government debt securities
|
18,140
|
|
9,154
|
|
|
—
|
|
|
—
|
|
27,294
|
|
|||||
Corporate debt securities
|
—
|
|
2,757
|
|
|
—
|
|
|
—
|
|
2,757
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
||||||||||
Collateralized loan obligations
|
—
|
|
20,720
|
|
|
276
|
|
|
—
|
|
20,996
|
|
|||||
Other
|
—
|
|
8,817
|
|
|
—
|
|
|
—
|
|
8,817
|
|
|||||
Equity securities
|
547
|
|
—
|
|
|
—
|
|
|
—
|
|
547
|
|
|||||
Total available-for-sale securities
|
41,432
|
|
160,516
|
|
|
277
|
|
|
—
|
|
202,225
|
|
|||||
Loans
|
—
|
|
2,232
|
|
|
276
|
|
|
—
|
|
2,508
|
|
|||||
Mortgage servicing rights
|
—
|
|
—
|
|
|
6,030
|
|
|
—
|
|
6,030
|
|
|||||
Other assets
(g)
|
13,795
|
|
343
|
|
|
1,265
|
|
|
—
|
|
15,403
|
|
|||||
Total assets measured at fair value on a recurring basis
|
$
|
208,164
|
|
$
|
901,387
|
|
|
$
|
19,216
|
|
|
$
|
(503,030
|
)
|
$
|
625,737
|
|
Deposits
|
$
|
—
|
|
$
|
17,179
|
|
|
$
|
4,142
|
|
|
$
|
—
|
|
$
|
21,321
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
—
|
|
697
|
|
|
—
|
|
|
—
|
|
697
|
|
|||||
Short-term borrowings
|
—
|
|
7,526
|
|
|
1,665
|
|
|
—
|
|
9,191
|
|
|||||
Trading liabilities:
|
|
|
|
|
|
|
|
|
|||||||||
Debt and equity instruments
(d)
|
64,664
|
|
21,183
|
|
|
39
|
|
|
—
|
|
85,886
|
|
|||||
Derivative payables:
|
|
|
|
|
|
|
|
|
|||||||||
Interest rate
|
170
|
|
282,825
|
|
|
1,440
|
|
|
(277,306
|
)
|
7,129
|
|
|||||
Credit
|
—
|
|
22,009
|
|
|
1,244
|
|
|
(21,954
|
)
|
1,299
|
|
|||||
Foreign exchange
|
794
|
|
154,075
|
|
|
953
|
|
|
(143,349
|
)
|
12,473
|
|
|||||
Equity
|
—
|
|
39,668
|
|
|
5,727
|
|
|
(36,203
|
)
|
9,192
|
|
|||||
Commodity
|
—
|
|
21,017
|
|
|
884
|
|
|
(14,217
|
)
|
7,684
|
|
|||||
Total derivative payables
(e)(f)
|
964
|
|
519,594
|
|
|
10,248
|
|
|
(493,029
|
)
|
37,777
|
|
|||||
Total trading liabilities
|
65,628
|
|
540,777
|
|
|
10,287
|
|
|
(493,029
|
)
|
123,663
|
|
|||||
Accounts payable and other liabilities
|
9,074
|
|
121
|
|
|
13
|
|
|
—
|
|
9,208
|
|
|||||
Beneficial interests issued by consolidated VIEs
|
—
|
|
6
|
|
|
39
|
|
|
—
|
|
45
|
|
|||||
Long-term debt
|
—
|
|
31,394
|
|
|
16,125
|
|
|
—
|
|
47,519
|
|
|||||
Total liabilities measured at fair value on a recurring basis
|
$
|
74,702
|
|
$
|
597,700
|
|
|
$
|
32,271
|
|
|
$
|
(493,029
|
)
|
$
|
211,644
|
|
160
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
Fair value hierarchy
|
|
|
|
|
|||||||||||||
December 31, 2016 (in millions)
|
Level 1
|
Level 2
|
|
Level 3
|
|
Derivative netting adjustments
|
|
Total fair value
|
||||||||||
Federal funds sold and securities purchased under resale agreements
|
$
|
—
|
|
$
|
21,506
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,506
|
|
Securities borrowed
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Trading assets:
|
|
|
|
|
|
|
|
|
||||||||||
Debt instruments:
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government agencies
(a)
|
13
|
|
40,586
|
|
|
392
|
|
|
—
|
|
|
40,991
|
|
|||||
Residential – nonagency
|
—
|
|
1,552
|
|
|
83
|
|
|
—
|
|
|
1,635
|
|
|||||
Commercial – nonagency
|
—
|
|
1,321
|
|
|
17
|
|
|
—
|
|
|
1,338
|
|
|||||
Total mortgage-backed securities
|
13
|
|
43,459
|
|
|
492
|
|
|
—
|
|
|
43,964
|
|
|||||
U.S. Treasury and government agencies
(a)
|
19,554
|
|
5,201
|
|
|
—
|
|
|
—
|
|
|
24,755
|
|
|||||
Obligations of U.S. states and municipalities
|
—
|
|
8,403
|
|
|
649
|
|
|
—
|
|
|
9,052
|
|
|||||
Certificates of deposit, bankers’ acceptances and commercial paper
|
—
|
|
1,649
|
|
|
—
|
|
|
—
|
|
|
1,649
|
|
|||||
Non-U.S. government debt securities
|
28,443
|
|
23,076
|
|
|
46
|
|
|
—
|
|
|
51,565
|
|
|||||
Corporate debt securities
|
—
|
|
22,751
|
|
|
576
|
|
|
—
|
|
|
23,327
|
|
|||||
Loans
(b)
|
—
|
|
28,965
|
|
|
4,837
|
|
|
—
|
|
|
33,802
|
|
|||||
Asset-backed securities
|
—
|
|
5,250
|
|
|
302
|
|
|
—
|
|
|
5,552
|
|
|||||
Total debt instruments
|
48,010
|
|
138,754
|
|
|
6,902
|
|
|
—
|
|
|
193,666
|
|
|||||
Equity securities
|
96,759
|
|
281
|
|
|
231
|
|
|
—
|
|
|
97,271
|
|
|||||
Physical commodities
(c)
|
5,341
|
|
1,620
|
|
|
—
|
|
|
—
|
|
|
6,961
|
|
|||||
Other
|
—
|
|
9,341
|
|
|
761
|
|
|
—
|
|
|
10,102
|
|
|||||
Total debt and equity instruments
(d)
|
150,110
|
|
149,996
|
|
|
7,894
|
|
|
—
|
|
|
308,000
|
|
|||||
Derivative receivables:
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate
|
715
|
|
602,747
|
|
|
2,501
|
|
|
(577,661
|
)
|
|
28,302
|
|
|||||
Credit
|
—
|
|
28,256
|
|
|
1,389
|
|
|
(28,351
|
)
|
|
1,294
|
|
|||||
Foreign exchange
|
812
|
|
231,743
|
|
|
870
|
|
|
(210,154
|
)
|
|
23,271
|
|
|||||
Equity
|
—
|
|
34,032
|
|
|
908
|
|
|
(30,001
|
)
|
|
4,939
|
|
|||||
Commodity
|
158
|
|
18,360
|
|
|
125
|
|
|
(12,371
|
)
|
|
6,272
|
|
|||||
Total derivative receivables
(e)
|
1,685
|
|
915,138
|
|
|
5,793
|
|
|
(858,538
|
)
|
|
64,078
|
|
|||||
Total trading assets
(g)
|
151,795
|
|
1,065,134
|
|
|
13,687
|
|
|
(858,538
|
)
|
|
372,078
|
|
|||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government agencies
(a)
|
—
|
|
64,005
|
|
|
—
|
|
|
—
|
|
|
64,005
|
|
|||||
Residential – nonagency
|
—
|
|
14,442
|
|
|
1
|
|
|
—
|
|
|
14,443
|
|
|||||
Commercial – nonagency
|
—
|
|
9,104
|
|
|
—
|
|
|
—
|
|
|
9,104
|
|
|||||
Total mortgage-backed securities
|
—
|
|
87,551
|
|
|
1
|
|
|
—
|
|
|
87,552
|
|
|||||
U.S. Treasury and government agencies
(a)
|
44,072
|
|
29
|
|
|
—
|
|
|
—
|
|
|
44,101
|
|
|||||
Obligations of U.S. states and municipalities
|
—
|
|
31,592
|
|
|
—
|
|
|
—
|
|
|
31,592
|
|
|||||
Certificates of deposit
|
—
|
|
106
|
|
|
—
|
|
|
—
|
|
|
106
|
|
|||||
Non-U.S. government debt securities
|
22,793
|
|
12,495
|
|
|
—
|
|
|
—
|
|
|
35,288
|
|
|||||
Corporate debt securities
|
—
|
|
4,958
|
|
|
—
|
|
|
—
|
|
|
4,958
|
|
|||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
||||||||||
Collateralized loan obligations
|
—
|
|
26,738
|
|
|
663
|
|
|
—
|
|
|
27,401
|
|
|||||
Other
|
—
|
|
6,967
|
|
|
—
|
|
|
—
|
|
|
6,967
|
|
|||||
Equity securities
|
926
|
|
—
|
|
|
—
|
|
|
—
|
|
|
926
|
|
|||||
Total available-for-sale securities
|
67,791
|
|
170,436
|
|
|
664
|
|
|
—
|
|
|
238,891
|
|
|||||
Loans
|
—
|
|
1,660
|
|
|
570
|
|
|
—
|
|
|
2,230
|
|
|||||
Mortgage servicing rights
|
—
|
|
—
|
|
|
6,096
|
|
|
—
|
|
|
6,096
|
|
|||||
Other assets
(g)
|
4,357
|
|
—
|
|
|
2,223
|
|
|
—
|
|
|
6,580
|
|
|||||
Total assets measured at fair value on a recurring basis
|
$
|
223,943
|
|
$
|
1,258,736
|
|
|
$
|
23,240
|
|
|
$
|
(858,538
|
)
|
|
$
|
647,381
|
|
Deposits
|
$
|
—
|
|
$
|
11,795
|
|
|
$
|
2,117
|
|
|
$
|
—
|
|
|
$
|
13,912
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
—
|
|
687
|
|
|
—
|
|
|
—
|
|
|
687
|
|
|||||
Short-term borrowings
|
—
|
|
7,971
|
|
|
1,134
|
|
|
—
|
|
|
9,105
|
|
|||||
Trading liabilities:
|
|
|
|
|
|
|
|
|
||||||||||
Debt and equity instruments
(d)
|
68,304
|
|
19,081
|
|
|
43
|
|
|
—
|
|
|
87,428
|
|
|||||
Derivative payables:
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate
|
539
|
|
569,001
|
|
|
1,238
|
|
|
(559,963
|
)
|
|
10,815
|
|
|||||
Credit
|
—
|
|
27,375
|
|
|
1,291
|
|
|
(27,255
|
)
|
|
1,411
|
|
|||||
Foreign exchange
|
902
|
|
231,815
|
|
|
2,254
|
|
|
(214,463
|
)
|
|
20,508
|
|
|||||
Equity
|
—
|
|
35,202
|
|
|
3,160
|
|
|
(30,222
|
)
|
|
8,140
|
|
|||||
Commodity
|
173
|
|
20,079
|
|
|
210
|
|
|
(12,105
|
)
|
|
8,357
|
|
|||||
Total derivative payables
(e)
|
1,614
|
|
883,472
|
|
|
8,153
|
|
|
(844,008
|
)
|
|
49,231
|
|
|||||
Total trading liabilities
|
69,918
|
|
902,553
|
|
|
8,196
|
|
|
(844,008
|
)
|
|
136,659
|
|
|||||
Accounts payable and other liabilities
|
9,107
|
|
—
|
|
|
13
|
|
|
—
|
|
|
9,120
|
|
|||||
Beneficial interests issued by consolidated VIEs
|
—
|
|
72
|
|
|
48
|
|
|
—
|
|
|
120
|
|
|||||
Long-term debt
|
—
|
|
24,836
|
|
(h)
|
12,850
|
|
(h)
|
—
|
|
|
37,686
|
|
|||||
Total liabilities measured at fair value on a recurring basis
|
$
|
79,025
|
|
$
|
947,914
|
|
(h)
|
$
|
24,358
|
|
(h)
|
$
|
(844,008
|
)
|
|
$
|
207,289
|
|
(a)
|
At
December 31, 2017
and
2016
, included total U.S. government-sponsored enterprise obligations of
$78.0 billion
and
$80.6 billion
, respectively, which were predominantly mortgage-related.
|
(b)
|
At
December 31, 2017
and
2016
, included within trading loans were
$11.4 billion
and
$16.5 billion
, respectively, of residential first-lien mortgages, and
$4.2 billion
and
$3.3 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
$5.7 billion
and
$11.0 billion
, respectively, and reverse mortgages of
$836 million
and
$2.0 billion
, respectively.
|
(c)
|
Physical commodities inventories are generally accounted for at the lower of cost or net realizable value. “Net realizable value” is a term defined in U.S. GAAP as not exceeding fair value less costs to sell (“transaction costs”). Transaction costs for the Firm’s physical commodities inventories are either not applicable or immaterial to the value of the inventory. Therefore, net realizable value approximates fair value for the Firm’s physical commodities inventories. When fair value hedging has been applied (or when net
|
JPMorgan Chase & Co./2017 Annual Report
|
|
161
|
(d)
|
Balances reflect the reduction of securities owned (long positions) by the amount of identical securities sold but not yet purchased (short positions).
|
(e)
|
As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral received and paid when a legally enforceable master netting agreement exists. For purposes of the tables above, the Firm does not reduce derivative receivables and derivative payables balances for this netting adjustment, either within or across the levels of the fair value hierarchy, as such netting is not relevant to a presentation based on the transparency of inputs to the valuation of an asset or liability. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.
|
(f)
|
Reflects the Firm’s adoption of rulebook changes made by two CCPs that require or allow the Firm to treat certain OTC-cleared derivative transactions as daily settled. For further information, see Note
5
.
|
(g)
|
Certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient are not required to be classified in the fair value hierarchy. At
December 31, 2017
and
2016
, the fair values of these investments, which include certain hedge funds, private equity funds, real estate and other funds, were
$779 million
and
$1.0 billion
, respectively. Included in these balances at
December 31, 2017
and
2016
, were trading assets of
$54 million
and
$52 million
, respectively, and other assets of
$725 million
and
$977 million
, respectively.
|
(h)
|
The prior period amounts have been revised to conform with the current period presentation.
|
•
|
$1.5 billion
of trading loans driven by an increase in observability.
|
•
|
$1.2 billion
of gross equity derivative payables as a result of an increase in observability and a decrease in the significance of unobservable inputs.
|
•
|
$
1.0 billion
of gross equity derivative receivables and $
2.5 billion
of gross equity derivative payables as a result of a decrease in observability and an increase in the significance of unobservable inputs.
|
•
|
$1.7 billion
of long-term debt driven by a decrease in observability and an increase in the significance of unobservable inputs for certain structured notes.
|
•
|
$1.4 billion
of long-term debt driven by an increase in observability and a reduction in the significance of unobservable inputs for certain structured notes.
|
•
|
$1.1 billion
of gross equity derivative receivables and
$1.0 billion
of gross equity derivative payables as a result of an decrease in observability and an increase in the significance of unobservable inputs.
|
•
|
$1.0 billion
of trading loans driven by a decrease in observability.
|
•
|
$3.1 billion
of long-term debt and
$1.0 billion
of deposits driven by an increase in observability on certain structured notes with embedded interest rate and FX derivatives and a reduction in the significance of unobservable inputs for certain structured notes with embedded equity derivatives.
|
•
|
$2.1 billion
of gross equity derivatives for both receivables and payables as a result of an increase in observability and a decrease in the significance of unobservable inputs; partially offset by transfers into level 3 resulting in net transfers of approximately
$1.2 billion
for both receivables and payables.
|
•
|
$2.8 billion
of trading loans driven by an increase in observability of certain collateralized financing transactions.
|
•
|
$2.4 billion
of corporate debt driven by a decrease in the significance of unobservable inputs and an increase in observability for certain structured products.
|
162
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
163
|
Level 3 inputs
(a)
|
|
|||||||||||
December 31, 2017
|
|
|
|
|
|
|||||||
Product/Instrument
|
Fair value
(in millions)
|
|
Principal valuation technique
|
Unobservable inputs
(g)
|
Range of input values
|
Weighted average
|
||||||
Residential mortgage-backed securities and loans
(b)
|
$
|
1,418
|
|
|
Discounted cash flows
|
Yield
|
3
|
%
|
–
|
16%
|
6%
|
|
|
|
|
Prepayment speed
|
0
|
%
|
–
|
13%
|
9%
|
||||
|
|
|
|
Conditional default rate
|
0
|
%
|
–
|
5%
|
1%
|
|||
|
|
|
|
Loss severity
|
0
|
%
|
–
|
84%
|
3%
|
|||
Commercial mortgage-backed securities and loans
(c)
|
714
|
|
|
Market comparables
|
Price
|
$
|
0
|
|
–
|
$100
|
$94
|
|
Obligations of U.S. states and municipalities
|
744
|
|
|
Market comparables
|
Price
|
$
|
59
|
|
–
|
$100
|
$98
|
|
Corporate debt securities
|
312
|
|
|
Market comparables
|
Price
|
$
|
3
|
|
–
|
$111
|
$82
|
|
Loans
(d)
|
1,242
|
|
|
Market comparables
|
Price
|
$
|
4
|
|
–
|
$103
|
$84
|
|
Asset-backed securities
|
276
|
|
|
Discounted cash flows
|
Credit spread
|
204
|
bps
|
–
|
205bps
|
205bps
|
||
|
|
|
|
Prepayment speed
|
20%
|
20%
|
||||||
|
|
|
|
Conditional default rate
|
2%
|
2%
|
||||||
|
|
|
|
Loss severity
|
30%
|
30%
|
||||||
|
153
|
|
|
Market comparables
|
Price
|
$
|
2
|
|
–
|
$160
|
$79
|
|
Net interest rate derivatives
|
28
|
|
|
Option pricing
|
Interest rate spread volatility
|
27
|
bps
|
–
|
38bps
|
|
||
|
|
|
|
Interest rate correlation
|
(50
|
)%
|
–
|
98%
|
|
|||
|
|
|
|
IR-FX correlation
|
60
|
%
|
–
|
70%
|
|
|||
|
236
|
|
|
Discounted cash flows
|
Prepayment speed
|
0
|
%
|
–
|
30%
|
|
||
Net credit derivatives
|
(37
|
)
|
|
Discounted cash flows
|
Credit correlation
|
40
|
%
|
–
|
75%
|
|
||
|
|
|
|
Credit spread
|
6
|
bps
|
–
|
1,489bps
|
|
|||
|
|
|
|
Recovery rate
|
20
|
%
|
–
|
70%
|
|
|||
|
|
|
|
Yield
|
1
|
%
|
–
|
20%
|
|
|||
|
|
|
|
Prepayment speed
|
4
|
%
|
–
|
21%
|
|
|||
|
|
|
|
Conditional default rate
|
0
|
%
|
–
|
100%
|
|
|||
|
|
|
|
Loss severity
|
4
|
%
|
–
|
100%
|
|
|||
|
2
|
|
|
Market comparables
|
Price
|
$
|
10
|
|
|
$98
|
|
|
Net foreign exchange derivatives
|
(200
|
)
|
|
Option pricing
|
IR-FX correlation
|
(50
|
)%
|
–
|
70%
|
|
||
|
(196
|
)
|
|
Discounted cash flows
|
Prepayment speed
|
7%
|
|
|||||
Net equity derivatives
|
(3,409
|
)
|
|
Option pricing
|
Equity volatility
|
20
|
%
|
–
|
55%
|
|
||
|
|
|
|
Equity correlation
|
0
|
%
|
–
|
85%
|
|
|||
|
|
|
|
Equity-FX correlation
|
(50
|
)%
|
–
|
30%
|
|
|||
|
|
|
|
Equity-IR correlation
|
10
|
%
|
–
|
40%
|
|
|||
Net commodity derivatives
|
(674
|
)
|
|
Option pricing
|
Forward commodity price
|
$
|
54
|
|
–
|
$68 per barrel
|
||
|
|
|
|
Commodity volatility
|
5
|
%
|
|
46%
|
|
|||
|
|
|
|
Commodity correlation
|
(40
|
)%
|
–
|
70%
|
|
|||
MSRs
|
6,030
|
|
|
Discounted cash flows
|
Refer to Note 15
|
|
|
|
|
|||
Other assets
|
984
|
|
|
Discounted cash flows
|
Credit spread
|
40bps
|
–
|
70bps
|
55bps
|
|||
|
|
|
|
Yield
|
8%
|
–
|
60%
|
47%
|
||||
|
971
|
|
|
Market comparables
|
EBITDA multiple
|
4.7x
|
–
|
10.6x
|
8.9x
|
|||
Long-term debt, short-term borrowings, and deposits
(e)
|
21,932
|
|
|
Option pricing
|
Interest rate spread volatility
|
27
|
bps
|
–
|
38bps
|
|
||
|
|
|
Interest rate correlation
|
(50
|
)%
|
–
|
98%
|
|
||||
|
|
|
IR-FX correlation
|
(50
|
)%
|
–
|
70%
|
|
||||
|
|
|
Equity correlation
|
0
|
%
|
–
|
85%
|
|
||||
|
|
|
Equity-FX correlation
|
(50
|
)%
|
–
|
30%
|
|
||||
|
|
|
Equity-IR correlation
|
10
|
%
|
–
|
40%
|
|
||||
Other level 3 assets and liabilities, net
(f)
|
283
|
|
|
|
|
|
|
|
|
(a)
|
The categories presented in the table have been aggregated based upon the product type, which may differ from their classification on the Consolidated balance sheets. Furthermore, the inputs presented for each valuation technique in the table are, in some cases, not applicable to every instrument valued using the technique as the characteristics of the instruments can differ.
|
164
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(b)
|
Includes U.S. government agency securities of
$297 million
, nonagency securities of
$61 million
and trading loans of
$1.1 billion
.
|
(c)
|
Includes U.S. government agency securities of
$10 million
, nonagency securities of
$11 million
, trading loans of
$417 million
and non-trading loans of
$276 million
.
|
(d)
|
Includes trading loans of
$1.2 billion
.
|
(e)
|
Long-term debt, short-term borrowings and deposits include structured notes issued by the Firm that are predominantly financial instruments containing embedded derivatives. The estimation of the fair value of structured notes includes the derivative features embedded within the instrument. The significant unobservable inputs are broadly consistent with those presented for derivative receivables.
|
(f)
|
Includes level 3 assets and liabilities that are insignificant both individually and in aggregate.
|
(g)
|
Price is a significant unobservable input for certain instruments. When quoted market prices are not readily available, reliance is generally placed on price-based internal valuation techniques. The price input is expressed assuming a par value of
$100
.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
165
|
166
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
Fair value measurements using significant unobservable inputs
|
|
|
||||||||||||||||||||||||||||||
Year ended
December 31, 2017
(in millions)
|
Fair value at January 1, 2017
|
Total realized/unrealized gains/(losses)
|
|
|
|
|
Transfers into
level 3 (h) |
Transfers (out of) level 3
(h)
|
Fair value at Dec. 31, 2017
|
|
Change in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2017
|
||||||||||||||||||||||
Purchases
(f)
|
Sales
|
|
Settlements
(g)
|
||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Debt instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. government agencies
|
$
|
392
|
|
$
|
(11
|
)
|
|
$
|
161
|
|
$
|
(171
|
)
|
|
$
|
(70
|
)
|
$
|
49
|
|
$
|
(43
|
)
|
$
|
307
|
|
|
$
|
(20
|
)
|
|
||
Residential – nonagency
|
83
|
|
19
|
|
|
53
|
|
(30
|
)
|
|
(64
|
)
|
132
|
|
(133
|
)
|
60
|
|
|
11
|
|
|
|||||||||||
Commercial – nonagency
|
17
|
|
9
|
|
|
27
|
|
(44
|
)
|
|
(13
|
)
|
64
|
|
(49
|
)
|
11
|
|
|
1
|
|
|
|||||||||||
Total mortgage-backed securities
|
492
|
|
17
|
|
|
241
|
|
(245
|
)
|
|
(147
|
)
|
245
|
|
(225
|
)
|
378
|
|
|
(8
|
)
|
|
|||||||||||
U.S. Treasury and government agencies
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
1
|
|
—
|
|
1
|
|
|
—
|
|
|
|||||||||||
Obligations of U.S. states and municipalities
|
649
|
|
18
|
|
|
152
|
|
(70
|
)
|
|
(5
|
)
|
—
|
|
—
|
|
744
|
|
|
15
|
|
|
|||||||||||
Non-U.S. government debt securities
|
46
|
|
—
|
|
|
559
|
|
(518
|
)
|
|
—
|
|
62
|
|
(71
|
)
|
78
|
|
|
—
|
|
|
|||||||||||
Corporate debt securities
|
576
|
|
11
|
|
|
872
|
|
(612
|
)
|
|
(497
|
)
|
157
|
|
(195
|
)
|
312
|
|
|
18
|
|
|
|||||||||||
Loans
|
4,837
|
|
333
|
|
|
2,389
|
|
(2,832
|
)
|
|
(1,323
|
)
|
806
|
|
(1,491
|
)
|
2,719
|
|
|
43
|
|
|
|||||||||||
Asset-backed securities
|
302
|
|
32
|
|
|
354
|
|
(356
|
)
|
|
(56
|
)
|
75
|
|
(198
|
)
|
153
|
|
|
—
|
|
|
|||||||||||
Total debt instruments
|
6,902
|
|
411
|
|
|
4,567
|
|
(4,633
|
)
|
|
(2,028
|
)
|
1,346
|
|
(2,180
|
)
|
4,385
|
|
|
68
|
|
|
|||||||||||
Equity securities
|
231
|
|
39
|
|
|
176
|
|
(148
|
)
|
|
(4
|
)
|
59
|
|
(58
|
)
|
295
|
|
|
21
|
|
|
|||||||||||
Other
|
761
|
|
100
|
|
|
30
|
|
(46
|
)
|
|
(162
|
)
|
17
|
|
(10
|
)
|
690
|
|
|
39
|
|
|
|||||||||||
Total trading assets – debt and equity instruments
|
7,894
|
|
550
|
|
(c)
|
4,773
|
|
(4,827
|
)
|
|
(2,194
|
)
|
1,422
|
|
(2,248
|
)
|
5,370
|
|
|
128
|
|
(c)
|
|||||||||||
Net derivative receivables:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Interest rate
|
1,263
|
|
72
|
|
|
60
|
|
(82
|
)
|
|
(1,040
|
)
|
(8
|
)
|
(1
|
)
|
264
|
|
|
(473
|
)
|
|
|||||||||||
Credit
|
98
|
|
(164
|
)
|
|
1
|
|
(6
|
)
|
|
—
|
|
77
|
|
(41
|
)
|
(35
|
)
|
|
32
|
|
|
|||||||||||
Foreign exchange
|
(1,384
|
)
|
43
|
|
|
13
|
|
(10
|
)
|
|
854
|
|
(61
|
)
|
149
|
|
(396
|
)
|
|
42
|
|
|
|||||||||||
Equity
|
(2,252
|
)
|
(417
|
)
|
|
1,116
|
|
(551
|
)
|
|
(245
|
)
|
(1,482
|
)
|
422
|
|
(3,409
|
)
|
|
(161
|
)
|
|
|||||||||||
Commodity
|
(85
|
)
|
(149
|
)
|
|
—
|
|
—
|
|
|
(433
|
)
|
(6
|
)
|
(1
|
)
|
(674
|
)
|
|
(718
|
)
|
|
|||||||||||
Total net derivative receivables
|
(2,360
|
)
|
(615
|
)
|
(c)
|
1,190
|
|
(649
|
)
|
|
(864
|
)
|
(1,480
|
)
|
528
|
|
(4,250
|
)
|
|
(1,278
|
)
|
(c)
|
|||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Asset-backed securities
|
663
|
|
15
|
|
|
—
|
|
(50
|
)
|
|
(352
|
)
|
—
|
|
—
|
|
276
|
|
|
14
|
|
|
|||||||||||
Other
|
1
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|
—
|
|
|
|||||||||||
Total available-for-sale securities
|
664
|
|
15
|
|
(d)
|
—
|
|
(50
|
)
|
|
(352
|
)
|
—
|
|
—
|
|
277
|
|
|
14
|
|
(d)
|
|||||||||||
Loans
|
570
|
|
35
|
|
(c)
|
—
|
|
(26
|
)
|
|
(303
|
)
|
—
|
|
—
|
|
276
|
|
|
3
|
|
(c)
|
|||||||||||
Mortgage servicing rights
|
6,096
|
|
(232
|
)
|
(e)
|
1,103
|
|
(140
|
)
|
|
(797
|
)
|
—
|
|
—
|
|
6,030
|
|
|
(232
|
)
|
(e)
|
|||||||||||
Other assets
|
2,223
|
|
244
|
|
(c)
|
66
|
|
(177
|
)
|
|
(870
|
)
|
—
|
|
(221
|
)
|
1,265
|
|
|
74
|
|
(c)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Fair value measurements using significant unobservable inputs
|
|
|
||||||||||||||||||||||||||||||
Year ended
December 31, 2017 (in millions) |
Fair value at January 1, 2017
|
Total realized/unrealized (gains)/losses
|
|
|
|
|
|
Transfers (out of) level 3
(h)
|
Fair value at Dec. 31, 2017
|
|
Change in unrealized (gains)/losses related to financial instruments held at Dec. 31, 2017
|
||||||||||||||||||||||
Purchases
|
Sales
|
Issuances
|
Settlements
(g)
|
Transfers into
level 3 (h) |
|||||||||||||||||||||||||||||
Liabilities:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Deposits
|
$
|
2,117
|
|
$
|
152
|
|
(c)(i)
|
$
|
—
|
|
$
|
—
|
|
$
|
3,027
|
|
$
|
(291
|
)
|
$
|
11
|
|
$
|
(874
|
)
|
$
|
4,142
|
|
|
$
|
198
|
|
(c)(i)
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
||||||||||
Short-term borrowings
|
1,134
|
|
42
|
|
(c)(i)
|
—
|
|
—
|
|
3,289
|
|
(2,748
|
)
|
150
|
|
(202
|
)
|
1,665
|
|
|
7
|
|
(c)(i)
|
||||||||||
Trading liabilities – debt and equity instruments
|
43
|
|
(3
|
)
|
(c)
|
(46
|
)
|
48
|
|
—
|
|
3
|
|
3
|
|
(9
|
)
|
39
|
|
|
—
|
|
(c)
|
||||||||||
Accounts payable and other liabilities
|
13
|
|
(2
|
)
|
|
(1
|
)
|
—
|
|
—
|
|
3
|
|
—
|
|
—
|
|
13
|
|
|
(2
|
)
|
|
||||||||||
Beneficial interests issued by consolidated VIEs
|
48
|
|
2
|
|
(c)
|
(122
|
)
|
39
|
|
—
|
|
(6
|
)
|
78
|
|
—
|
|
39
|
|
|
—
|
|
(c)
|
||||||||||
Long-term debt
|
12,850
|
|
1,067
|
|
(c)(i)
|
—
|
|
—
|
|
12,458
|
|
(10,985
|
)
|
1,660
|
|
(925
|
)
|
16,125
|
|
|
552
|
|
(c)(i)
|
JPMorgan Chase & Co./2017 Annual Report
|
|
167
|
|
Fair value measurements using significant unobservable inputs
|
|
|
||||||||||||||||||||||||||||||||
Year ended
December 31, 2016
(in millions)
|
Fair value at January 1, 2016
|
Total realized/unrealized gains/(losses)
|
|
|
|
|
|
|
Transfers (out of) level 3
(h)
|
Fair value at Dec. 31, 2016
|
|
Change in unrealized gains/(losses) related to financial instruments held at Dec. 31, 2016
|
|||||||||||||||||||||||
Purchases
(f)
|
Sales
|
|
|
Settlements
(g)
|
Transfers into
level 3 (h) |
||||||||||||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Debt instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
U.S. government agencies
|
$
|
715
|
|
|
$
|
(20
|
)
|
|
$
|
135
|
|
$
|
(295
|
)
|
|
|
$
|
(115
|
)
|
$
|
111
|
|
$
|
(139
|
)
|
$
|
392
|
|
|
$
|
(36
|
)
|
|
||
Residential – nonagency
|
194
|
|
|
4
|
|
|
252
|
|
(319
|
)
|
|
|
(20
|
)
|
67
|
|
(95
|
)
|
83
|
|
|
5
|
|
|
|||||||||||
Commercial – nonagency
|
115
|
|
|
(11
|
)
|
|
69
|
|
(29
|
)
|
|
|
(3
|
)
|
173
|
|
(297
|
)
|
17
|
|
|
3
|
|
|
|||||||||||
Total mortgage-backed securities
|
1,024
|
|
|
(27
|
)
|
|
456
|
|
(643
|
)
|
|
|
(138
|
)
|
351
|
|
(531
|
)
|
492
|
|
|
(28
|
)
|
|
|||||||||||
Obligations of U.S. states and municipalities
|
651
|
|
|
19
|
|
|
149
|
|
(132
|
)
|
|
|
(38
|
)
|
—
|
|
—
|
|
649
|
|
|
—
|
|
|
|||||||||||
Non-U.S. government debt securities
|
74
|
|
|
(4
|
)
|
|
91
|
|
(97
|
)
|
|
|
(7
|
)
|
19
|
|
(30
|
)
|
46
|
|
|
(7
|
)
|
|
|||||||||||
Corporate debt securities
|
736
|
|
|
2
|
|
|
445
|
|
(359
|
)
|
|
|
(189
|
)
|
148
|
|
(207
|
)
|
576
|
|
|
(22
|
)
|
|
|||||||||||
Loans
|
6,604
|
|
|
(343
|
)
|
|
2,228
|
|
(2,598
|
)
|
|
|
(1,311
|
)
|
1,044
|
|
(787
|
)
|
4,837
|
|
|
(169
|
)
|
|
|||||||||||
Asset-backed securities
|
1,832
|
|
|
39
|
|
|
655
|
|
(712
|
)
|
|
|
(968
|
)
|
288
|
|
(832
|
)
|
302
|
|
|
19
|
|
|
|||||||||||
Total debt instruments
|
10,921
|
|
|
(314
|
)
|
|
4,024
|
|
(4,541
|
)
|
|
|
(2,651
|
)
|
1,850
|
|
(2,387
|
)
|
6,902
|
|
|
(207
|
)
|
|
|||||||||||
Equity securities
|
265
|
|
|
—
|
|
|
90
|
|
(108
|
)
|
|
|
(40
|
)
|
29
|
|
(5
|
)
|
231
|
|
|
7
|
|
|
|||||||||||
Other
|
744
|
|
|
79
|
|
|
649
|
|
(287
|
)
|
|
|
(360
|
)
|
26
|
|
(90
|
)
|
761
|
|
|
28
|
|
|
|||||||||||
Total trading assets – debt and equity instruments
|
11,930
|
|
|
(235
|
)
|
(c)
|
4,763
|
|
(4,936
|
)
|
|
|
(3,051
|
)
|
1,905
|
|
(2,482
|
)
|
7,894
|
|
|
(172
|
)
|
(c)
|
|||||||||||
Net derivative receivables:
(a)
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
—
|
|
|
|
|
|
||||||||||||
Interest rate
|
876
|
|
|
756
|
|
|
193
|
|
(57
|
)
|
|
|
(713
|
)
|
(14
|
)
|
222
|
|
1,263
|
|
|
(144
|
)
|
|
|||||||||||
Credit
|
549
|
|
|
(742
|
)
|
|
10
|
|
(2
|
)
|
|
|
211
|
|
36
|
|
36
|
|
98
|
|
|
(622
|
)
|
|
|||||||||||
Foreign exchange
|
(725
|
)
|
|
67
|
|
|
64
|
|
(124
|
)
|
|
|
(649
|
)
|
(48
|
)
|
31
|
|
(1,384
|
)
|
|
(350
|
)
|
|
|||||||||||
Equity
|
(1,514
|
)
|
|
(145
|
)
|
|
277
|
|
(852
|
)
|
|
|
213
|
|
94
|
|
(325
|
)
|
(2,252
|
)
|
|
(86
|
)
|
|
|||||||||||
Commodity
|
(935
|
)
|
|
194
|
|
|
1
|
|
10
|
|
|
|
645
|
|
8
|
|
(8
|
)
|
(85
|
)
|
|
(36
|
)
|
|
|||||||||||
Total net derivative receivables
|
(1,749
|
)
|
|
130
|
|
(c)
|
545
|
|
(1,025
|
)
|
|
|
(293
|
)
|
76
|
|
(44
|
)
|
(2,360
|
)
|
|
(1,238
|
)
|
(c)
|
|||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Asset-backed securities
|
823
|
|
|
1
|
|
|
—
|
|
—
|
|
|
|
(119
|
)
|
—
|
|
(42
|
)
|
663
|
|
|
1
|
|
|
|||||||||||
Other
|
1
|
|
|
—
|
|
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|
—
|
|
|
|||||||||||
Total available-for-sale securities
|
824
|
|
|
1
|
|
(d)
|
—
|
|
—
|
|
|
|
(119
|
)
|
—
|
|
(42
|
)
|
664
|
|
|
1
|
|
(d)
|
|||||||||||
Loans
|
1,518
|
|
|
(49
|
)
|
(c)
|
259
|
|
(7
|
)
|
|
|
(838
|
)
|
—
|
|
(313
|
)
|
570
|
|
|
—
|
|
(c)
|
|||||||||||
Mortgage servicing rights
|
6,608
|
|
|
(163
|
)
|
(e)
|
679
|
|
(109
|
)
|
|
|
(919
|
)
|
—
|
|
—
|
|
6,096
|
|
|
(163
|
)
|
(e)
|
|||||||||||
Other assets
|
2,401
|
|
|
130
|
|
(c)
|
487
|
|
(496
|
)
|
|
|
(299
|
)
|
—
|
|
—
|
|
2,223
|
|
|
48
|
|
(c)
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Fair value measurements using significant unobservable inputs
|
|
|
||||||||||||||||||||||||||||||||
Year ended
December 31, 2016 (in millions) |
Fair value at January 1, 2016
|
|
Total realized/unrealized (gains)/losses
|
|
|
|
|
|
|
Transfers (out of) level 3
(h)
|
Fair value at Dec. 31, 2016
|
|
Change in unrealized (gains)/losses related to financial instruments held at Dec. 31, 2016
|
||||||||||||||||||||||
Purchases
|
Sales
|
Issuances
|
|
Settlements
(g)
|
Transfers into
level 3 (h) |
||||||||||||||||||||||||||||||
Liabilities:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Deposits
|
$
|
2,950
|
|
|
$
|
(56
|
)
|
(c)
|
$
|
—
|
|
$
|
—
|
|
$
|
1,375
|
|
|
$
|
(1,283
|
)
|
$
|
—
|
|
$
|
(869
|
)
|
$
|
2,117
|
|
|
$
|
23
|
|
(c)
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(2
|
)
|
6
|
|
(4
|
)
|
—
|
|
|
—
|
|
|
||||||||||
Short-term borrowings
|
639
|
|
|
(230
|
)
|
(c)
|
—
|
|
—
|
|
1,876
|
|
|
(1,210
|
)
|
114
|
|
(55
|
)
|
1,134
|
|
|
(70
|
)
|
(c)
|
||||||||||
Trading liabilities – debt and equity instruments
|
63
|
|
|
(12
|
)
|
(c)
|
(15
|
)
|
23
|
|
—
|
|
|
(22
|
)
|
13
|
|
(7
|
)
|
43
|
|
|
(18
|
)
|
(c)
|
||||||||||
Accounts payable and other liabilities
|
19
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
(6
|
)
|
—
|
|
—
|
|
13
|
|
|
—
|
|
|
||||||||||
Beneficial interests issued by consolidated VIEs
|
549
|
|
|
(31
|
)
|
(c)
|
—
|
|
—
|
|
143
|
|
|
(613
|
)
|
—
|
|
—
|
|
48
|
|
|
6
|
|
(c)
|
||||||||||
Long-term debt
|
11,447
|
|
(j)
|
147
|
|
(c)(j)
|
—
|
|
—
|
|
8,140
|
|
(j)
|
(5,810
|
)
|
315
|
|
(1,389
|
)
|
12,850
|
|
(j)
|
639
|
|
(c)(j)
|
168
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(a)
|
All level 3 derivatives are presented on a net basis, irrespective of underlying counterparty.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
169
|
(b)
|
Level 3 liabilities as a percentage of total Firm liabilities accounted for at fair value (including liabilities measured at fair value on a nonrecurring basis) were
15%
,
12%
and
13%
at
December 31, 2017
,
2016
and
2015
, respectively.
|
(c)
|
Predominantly reported in principal transactions revenue, except for changes in fair value for CCB mortgage loans, and lending-related commitments originated with the intent to sell, and mortgage loan purchase commitments, which are reported in mortgage fees and related income.
|
(d)
|
Realized gains/(losses) on AFS
securities, as well as other-than-temporary impairment (“OTTI”) losses that are recorded in earnings, are reported in securities gains. Unrealized gains/(losses) are reported in OCI. Realized gains/(losses) and foreign exchange hedge accounting adjustments recorded in income on AFS securities were
zero
,
zero
, and
$(7) million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively. Unrealized gains/(losses) recorded on AFS securities in OCI were
$15 million
,
$1 million
and
$(25) million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
(e)
|
Changes in fair value for CCB MSRs are reported in mortgage fees and related income.
|
(f)
|
Loan originations are included in purchases
|
(g)
|
Includes financial assets and liabilities that have matured, been partially or fully repaid, impacts of modifications, and deconsolidation associated with beneficial interests in VIEs and other items.
|
(h)
|
All transfers into and/or out of level 3 are based on changes in the observability of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur.
|
(i)
|
Realized (gains)/losses due to DVA for fair value option elected liabilities are reported in principal transactions revenue. Unrealized (gains)/losses are reported in OCI. Unrealized gains were
$48 million
for the year ended December 31, 2017. There were
no
realized gains for the year ended December 31, 2017.
|
(j)
|
The prior period amounts have been revised to conform with the current period presentation.
|
•
|
$2.5 billion
decrease in trading assets — debt and equity instruments was predominantly driven by a decrease of
$2.1 billion
in trading loans largely due to settlements, and a
$1.0 billion
decrease in other assets due to settlements and transfers from level 3 to level 2 as a result of increased observability in certain valuation inputs
|
•
|
$1.3 billion
of net losses on liabilities largely driven by market movements in long-term debt
|
•
|
There were no individually significant movements for the year ended
December 31, 2016
.
|
•
|
$1.6 billion
of net gains in interest rate, foreign exchange and equity derivative receivables largely due to market movements; partially offset by losses on commodity derivatives due to market movements
|
•
|
$1.3 billion
of net gains in liabilities due to market movements
|
170
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31,
(in millions) |
2017
|
|
2016
|
|
2015
|
||||||
Credit and funding adjustments:
|
|
|
|
|
|
||||||
Derivatives CVA
|
$
|
802
|
|
|
$
|
(84
|
)
|
|
$
|
620
|
|
Derivatives FVA
|
(295
|
)
|
|
7
|
|
|
73
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
171
|
|
Fair value hierarchy
|
|
Total fair value
|
|||||||||||
December 31, 2017 (in millions)
|
Level 1
|
|
Level 2
|
|
|
Level 3
|
|
|
||||||
Loans
|
$
|
—
|
|
$
|
238
|
|
|
$
|
596
|
|
(a)
|
$
|
834
|
|
Other assets
|
—
|
|
283
|
|
|
183
|
|
|
466
|
|
||||
Total assets measured at fair value on a nonrecurring basis
|
$
|
—
|
|
$
|
521
|
|
|
$
|
779
|
|
(a)
|
$
|
1,300
|
|
|
Fair value hierarchy
|
|
Total fair value
|
|||||||||||
December 31, 2016 (in millions)
|
Level 1
|
|
Level 2
|
|
|
Level 3
|
|
|
||||||
Loans
|
$
|
—
|
|
$
|
730
|
|
|
$
|
590
|
|
|
$
|
1,320
|
|
Other assets
|
—
|
|
5
|
|
|
232
|
|
|
237
|
|
||||
Total assets measured at fair value on a nonrecurring basis
|
$
|
—
|
|
$
|
735
|
|
|
$
|
822
|
|
|
$
|
1,557
|
|
December 31, (in millions)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Loans
|
$
|
(159
|
)
|
|
$
|
(209
|
)
|
|
$
|
(226
|
)
|
Other Assets
|
(148
|
)
|
|
37
|
|
|
(60
|
)
|
|||
Accounts payable and other liabilities
|
(1
|
)
|
|
—
|
|
|
(8
|
)
|
|||
Total nonrecurring fair value gains/(losses)
|
$
|
(308
|
)
|
|
$
|
(172
|
)
|
|
$
|
(294
|
)
|
172
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
|
Estimated fair value hierarchy
|
|
|
|
Estimated fair value hierarchy
|
|
||||||||||||||||||||||||
(in billions)
|
Carrying
value
|
Level 1
|
Level 2
|
Level 3
|
Total estimated
fair value
|
|
Carrying
value
|
Level 1
|
Level 2
|
Level 3
|
Total estimated
fair value
|
||||||||||||||||||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash and due from banks
|
$
|
25.8
|
|
$
|
25.8
|
|
$
|
—
|
|
$
|
—
|
|
$
|
25.8
|
|
|
$
|
23.9
|
|
$
|
23.9
|
|
$
|
—
|
|
$
|
—
|
|
$
|
23.9
|
|
Deposits with banks
|
404.3
|
|
401.8
|
|
2.5
|
|
—
|
|
404.3
|
|
|
365.8
|
|
362.0
|
|
3.8
|
|
—
|
|
365.8
|
|
||||||||||
Accrued interest and accounts receivable
|
67.0
|
|
—
|
|
67.0
|
|
—
|
|
67.0
|
|
|
52.3
|
|
—
|
|
52.2
|
|
0.1
|
|
52.3
|
|
||||||||||
Federal funds sold and securities purchased under resale agreements
|
183.7
|
|
—
|
|
183.7
|
|
—
|
|
183.7
|
|
|
208.5
|
|
—
|
|
208.3
|
|
0.2
|
|
208.5
|
|
||||||||||
Securities borrowed
|
102.1
|
|
—
|
|
102.1
|
|
—
|
|
102.1
|
|
|
96.4
|
|
—
|
|
96.4
|
|
—
|
|
96.4
|
|
||||||||||
Securities, held-to-maturity
|
47.7
|
|
—
|
|
48.7
|
|
—
|
|
48.7
|
|
|
50.2
|
|
—
|
|
50.9
|
|
—
|
|
50.9
|
|
||||||||||
Loans, net of allowance for loan losses
(a)(b)
|
914.6
|
|
—
|
|
213.2
|
|
707.1
|
|
920.3
|
|
|
878.8
|
|
—
|
|
24.1
|
|
851.0
|
|
875.1
|
|
||||||||||
Other
|
62.9
|
|
—
|
|
52.9
|
|
16.5
|
|
69.4
|
|
|
71.4
|
|
0.1
|
|
60.8
|
|
14.3
|
|
75.2
|
|
||||||||||
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Deposits
|
$
|
1,422.7
|
|
$
|
—
|
|
$
|
1,422.7
|
|
$
|
—
|
|
$
|
1,422.7
|
|
|
$
|
1,361.3
|
|
$
|
—
|
|
$
|
1,361.3
|
|
$
|
—
|
|
$
|
1,361.3
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
158.2
|
|
—
|
|
158.2
|
|
—
|
|
158.2
|
|
|
165.0
|
|
—
|
|
165.0
|
|
—
|
|
165.0
|
|
||||||||||
Short-term borrowings
|
42.6
|
|
—
|
|
42.4
|
|
0.2
|
|
42.6
|
|
|
25.3
|
|
—
|
|
25.3
|
|
—
|
|
25.3
|
|
||||||||||
Accounts payable and other liabilities
|
152.0
|
|
—
|
|
148.9
|
|
2.9
|
|
151.8
|
|
|
148.0
|
|
—
|
|
144.8
|
|
3.4
|
|
148.2
|
|
||||||||||
Beneficial interests issued by consolidated VIEs
|
26.0
|
|
—
|
|
26.0
|
|
—
|
|
26.0
|
|
|
38.9
|
|
—
|
|
38.9
|
|
—
|
|
38.9
|
|
||||||||||
Long-term debt and junior subordinated deferrable interest debentures
|
236.6
|
|
—
|
|
240.3
|
|
3.2
|
|
243.5
|
|
|
257.5
|
|
—
|
|
260.0
|
|
2.0
|
|
262.0
|
|
(a)
|
Fair value is typically estimated using a discounted cash flow model that incorporates the characteristics of the underlying loans (including principal, contractual interest rate and contractual fees) and other key inputs, including expected lifetime credit losses, interest rates, prepayment rates, and primary origination or secondary market spreads. For certain loans, the fair value is measured based on the value of the underlying collateral. The difference between the estimated fair value and carrying value of a financial asset or liability is the result of the different methodologies used to determine fair value as compared with carrying value. For example, credit losses are estimated for a financial asset’s remaining life in a fair value calculation but are estimated for a loss emergence period in the allowance for loan loss calculation; future loan income (interest and fees) is incorporated in a fair value calculation but is generally not considered in the allowance for loan losses. For a further discussion of the Firm’s methodologies for estimating the fair value of loans and lending-related commitments, see Valuation hierarchy on
pages 156–159
.
|
(b)
|
For the year ended December 31, 2017, the Firm transferred certain residential mortgage loans from Level 3 to Level 2 as a result of an increase in observability.
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||||||
|
|
Estimated fair value hierarchy
|
|
|
|
Estimated fair value hierarchy
|
|
||||||||||||||||||||||||
(in billions)
|
Carrying value
(a)
|
Level 1
|
Level 2
|
Level 3
|
Total estimated fair value
|
|
Carrying value
(a)
|
Level 1
|
Level 2
|
Level 3
|
Total estimated fair value
|
||||||||||||||||||||
Wholesale lending-related commitments
|
$
|
1.1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1.6
|
|
$
|
1.6
|
|
|
$
|
1.1
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2.1
|
|
$
|
2.1
|
|
(a)
|
Excludes the current carrying values of the guarantee liability and the offsetting asset, each of which is recognized at fair value at the inception of the guarantees.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
173
|
•
|
Loans purchased or originated as part of securitization warehousing activity, subject to bifurcation accounting, or managed on a fair value basis, including lending-related commitments
|
•
|
Certain
securities financing arrangements with an embedded derivative and/or a maturity of greater than one year
|
•
|
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
|
•
|
Structured notes, which are predominantly financial instruments that contain embedded derivatives, that are issued as part of
CIB’s
client-driven activities
|
•
|
Certain long-term beneficial interests issued by
CIB’s
consolidated securitization trusts where the underlying assets are carried at fair value
|
174
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||||||||||||||
December 31, (in millions)
|
Principal transactions
|
All other income
|
Total changes in fair value recorded
|
|
Principal transactions
|
All other income
|
Total changes in fair value recorded
|
|
Principal transactions
|
All other income
|
Total changes in fair value recorded
|
|||||||||||||||||||||
Federal funds sold and securities purchased under resale agreements
|
$
|
(97
|
)
|
$
|
—
|
|
|
$
|
(97
|
)
|
|
$
|
(76
|
)
|
$
|
—
|
|
|
$
|
(76
|
)
|
|
$
|
(38
|
)
|
$
|
—
|
|
|
$
|
(38
|
)
|
Securities borrowed
|
50
|
|
—
|
|
|
50
|
|
|
1
|
|
—
|
|
|
1
|
|
|
(6
|
)
|
—
|
|
|
(6
|
)
|
|||||||||
Trading assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt and equity instruments, excluding loans
|
1,943
|
|
2
|
|
(c)
|
1,945
|
|
|
120
|
|
(1
|
)
|
(c)
|
119
|
|
|
756
|
|
(10
|
)
|
(c)
|
746
|
|
|||||||||
Loans reported as trading
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Changes in instrument-specific credit risk
|
330
|
|
14
|
|
(c)
|
344
|
|
|
461
|
|
43
|
|
(c)
|
504
|
|
|
138
|
|
41
|
|
(c)
|
179
|
|
|||||||||
Other changes in fair value
|
217
|
|
747
|
|
(c)
|
964
|
|
|
79
|
|
684
|
|
(c)
|
763
|
|
|
232
|
|
818
|
|
(c)
|
1,050
|
|
|||||||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Changes in instrument-specific credit risk
|
(1
|
)
|
—
|
|
|
(1
|
)
|
|
13
|
|
—
|
|
|
13
|
|
|
35
|
|
—
|
|
|
35
|
|
|||||||||
Other changes in fair value
|
(12
|
)
|
3
|
|
(c)
|
(9
|
)
|
|
(7
|
)
|
—
|
|
|
(7
|
)
|
|
4
|
|
—
|
|
|
4
|
|
|||||||||
Other assets
|
11
|
|
(55
|
)
|
(d)
|
(44
|
)
|
|
20
|
|
62
|
|
(d)
|
82
|
|
|
79
|
|
(1
|
)
|
(d)
|
78
|
|
|||||||||
Deposits
(a)
|
(533
|
)
|
—
|
|
|
(533
|
)
|
|
(134
|
)
|
—
|
|
|
(134
|
)
|
|
93
|
|
—
|
|
|
93
|
|
|||||||||
Federal funds purchased and securities loaned or sold under repurchase agreements
|
11
|
|
—
|
|
|
11
|
|
|
19
|
|
—
|
|
|
19
|
|
|
8
|
|
—
|
|
|
8
|
|
|||||||||
Short-term borrowings
(a)
|
(747
|
)
|
—
|
|
|
(747
|
)
|
|
(236
|
)
|
—
|
|
|
(236
|
)
|
|
1,996
|
|
—
|
|
|
1,996
|
|
|||||||||
Trading liabilities
|
(1
|
)
|
—
|
|
|
(1
|
)
|
|
6
|
|
—
|
|
|
6
|
|
|
(20
|
)
|
—
|
|
|
(20
|
)
|
|||||||||
Beneficial interests issued by consolidated VIEs
|
—
|
|
—
|
|
|
—
|
|
|
23
|
|
—
|
|
|
23
|
|
|
49
|
|
—
|
|
|
49
|
|
|||||||||
Long-term debt
(a)(b)
|
(2,022
|
)
|
—
|
|
|
(2,022
|
)
|
|
(773
|
)
|
—
|
|
|
(773
|
)
|
|
1,388
|
|
—
|
|
|
1,388
|
|
(a)
|
Unrealized gains/(losses) due to instrument-specific credit risk (DVA) for liabilities for which the fair value option has been elected is recorded in OCI, while realized gains/(losses) are recorded in principal transactions revenue. DVA for 2015 was included in principal transactions revenue, and includes the impact of the Firm’s own credit quality on the inception value of liabilities as well as the impact of changes in the Firm’s own credit quality subsequent to issuance. See Notes
2
and
23
for further information. Realized gains/(losses) due to instrument-specific credit risk recorded in principal transaction revenue were not material for the years ended December 31, 2017 and 2016.
|
(b)
|
Long-term debt measured at fair value predominantly relates to structured notes. Although the risk associated with the structured notes is actively managed, the gains/(losses) reported in this table do not include the income statement impact of the risk management instruments used to manage such risk.
|
(c)
|
Reported in mortgage fees and related income.
|
(d)
|
Reported in other income.
|
•
|
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 recovery information, where available, or benchmarking to similar entities or industries.
|
•
|
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.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
175
|
|
2017
|
|
2016
|
||||||||||||||||||
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
|
$
|
4,219
|
|
|
$
|
1,371
|
|
$
|
(2,848
|
)
|
|
$
|
3,338
|
|
|
$
|
748
|
|
$
|
(2,590
|
)
|
Loans
|
39
|
|
|
—
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
—
|
|
||||||
Subtotal
|
4,258
|
|
|
1,371
|
|
(2,887
|
)
|
|
3,338
|
|
|
748
|
|
(2,590
|
)
|
||||||
All other performing loans
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans reported as trading assets
|
38,157
|
|
|
36,590
|
|
(1,567
|
)
|
|
35,477
|
|
|
33,054
|
|
(2,423
|
)
|
||||||
Loans
|
2,539
|
|
|
2,508
|
|
(31
|
)
|
|
2,259
|
|
|
2,228
|
|
(31
|
)
|
||||||
Total loans
|
$
|
44,954
|
|
|
$
|
40,469
|
|
$
|
(4,485
|
)
|
|
$
|
41,074
|
|
|
$
|
36,030
|
|
$
|
(5,044
|
)
|
Long-term debt
|
|
|
|
|
|
|
|
|
|
||||||||||||
Principal-protected debt
|
$
|
26,297
|
|
(c)
|
$
|
23,848
|
|
$
|
(2,449
|
)
|
|
$
|
21,602
|
|
(c)
|
$
|
19,195
|
|
$
|
(2,407
|
)
|
Nonprincipal-protected debt
(b)
|
NA
|
|
|
23,671
|
|
NA
|
|
|
NA
|
|
|
18,491
|
|
NA
|
|
||||||
Total long-term debt
|
NA
|
|
|
$
|
47,519
|
|
NA
|
|
|
NA
|
|
|
$
|
37,686
|
|
NA
|
|
||||
Long-term beneficial interests
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nonprincipal-protected debt
|
NA
|
|
|
$
|
45
|
|
NA
|
|
|
NA
|
|
|
$
|
120
|
|
NA
|
|
||||
Total long-term beneficial interests
|
NA
|
|
|
$
|
45
|
|
NA
|
|
|
NA
|
|
|
$
|
120
|
|
NA
|
|
(a)
|
There were
no
performing loans that were ninety days or more past due as of
December 31, 2017
and
2016
.
|
(b)
|
Remaining contractual principal is not applicable to nonprincipal-protected notes. Unlike principal-protected structured notes, for which the Firm is obligated to return a stated amount of principal at the maturity of the note, nonprincipal-protected structured notes do not obligate the Firm to return a stated amount of principal at maturity, but to return an amount based on the performance of an underlying variable or derivative feature embedded in the note. However, investors are exposed to the credit risk of the Firm as issuer for both nonprincipal-protected and principal protected notes.
|
(c)
|
Where the Firm issues principal-protected zero-coupon or discount notes, the balance reflects the contractual principal payment at maturity or, if applicable, the contractual principal payment at the Firm’s next call date.
|
176
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||
(in millions)
|
Long-term debt
|
Short-term borrowings
|
Deposits
|
Total
|
|
Long-term debt
|
Short-term borrowings
|
Deposits
|
Total
|
||||||||||||||||
Risk exposure
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate
|
$
|
22,056
|
|
$
|
69
|
|
$
|
8,058
|
|
$
|
30,183
|
|
|
$
|
16,296
|
|
$
|
184
|
|
$
|
4,296
|
|
$
|
20,776
|
|
Credit
|
4,329
|
|
1,312
|
|
—
|
|
5,641
|
|
|
3,267
|
|
225
|
|
—
|
|
3,492
|
|
||||||||
Foreign exchange
|
2,841
|
|
147
|
|
38
|
|
3,026
|
|
|
2,365
|
|
135
|
|
6
|
|
2,506
|
|
||||||||
Equity
|
17,581
|
|
7,106
|
|
6,548
|
|
31,235
|
|
|
14,831
|
|
8,234
|
|
5,481
|
|
28,546
|
|
||||||||
Commodity
|
230
|
|
15
|
|
4,468
|
|
4,713
|
|
|
488
|
|
37
|
|
1,811
|
|
2,336
|
|
||||||||
Total structured notes
|
$
|
47,037
|
|
$
|
8,649
|
|
$
|
19,112
|
|
$
|
74,798
|
|
|
$
|
37,247
|
|
$
|
8,815
|
|
$
|
11,594
|
|
$
|
57,656
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
177
|
|
2017
|
|
2016
|
|
||||||||||||||||||||||
|
Credit exposure
(f)
|
On-balance sheet
|
Off-balance sheet
(g)
|
|
Credit exposure
|
On-balance sheet
|
Off-balance sheet
(g)
|
|
||||||||||||||||||
December 31, (in millions)
|
Loans
|
Derivatives
|
|
Loans
|
Derivatives
|
|
||||||||||||||||||||
Consumer, excluding credit card
|
$
|
421,234
|
|
$
|
372,681
|
|
$
|
—
|
|
$
|
48,553
|
|
|
$
|
417,891
|
|
$
|
364,644
|
|
$
|
—
|
|
$
|
53,247
|
|
(h)
|
Receivables from customers
(a)
|
133
|
|
—
|
|
—
|
|
—
|
|
|
120
|
|
—
|
|
—
|
|
—
|
|
|
||||||||
Total Consumer, excluding credit card
|
421,367
|
|
372,681
|
|
—
|
|
48,553
|
|
|
418,011
|
|
364,644
|
|
—
|
|
53,247
|
|
(h)
|
||||||||
Credit Card
|
722,342
|
|
149,511
|
|
—
|
|
572,831
|
|
|
695,707
|
|
141,816
|
|
—
|
|
553,891
|
|
|
||||||||
Total consumer-related
|
1,143,709
|
|
522,192
|
|
—
|
|
621,384
|
|
|
1,113,718
|
|
506,460
|
|
—
|
|
607,138
|
|
(h)
|
||||||||
Wholesale-related
(b)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Real Estate
|
139,409
|
|
113,648
|
|
153
|
|
25,608
|
|
|
134,287
|
|
105,802
|
|
207
|
|
28,278
|
|
|
||||||||
Consumer & Retail
|
87,679
|
|
31,044
|
|
1,114
|
|
55,521
|
|
|
84,804
|
|
29,929
|
|
1,082
|
|
53,793
|
|
|
||||||||
Technology, Media & Telecommunications
|
59,274
|
|
13,665
|
|
2,265
|
|
43,344
|
|
|
63,324
|
|
14,063
|
|
1,293
|
|
47,968
|
|
|
||||||||
Healthcare
|
55,997
|
|
16,273
|
|
2,191
|
|
37,533
|
|
|
49,445
|
|
15,545
|
|
2,280
|
|
31,620
|
|
|
||||||||
Industrials
|
55,272
|
|
18,161
|
|
1,163
|
|
35,948
|
|
|
55,733
|
|
17,295
|
|
1,658
|
|
36,780
|
|
|
||||||||
Banks & Finance Cos
|
49,037
|
|
25,879
|
|
6,816
|
|
16,342
|
|
|
48,393
|
|
22,714
|
|
12,257
|
|
13,422
|
|
|
||||||||
Oil & Gas
|
41,317
|
|
12,621
|
|
1,727
|
|
26,969
|
|
|
40,367
|
|
13,253
|
|
1,878
|
|
25,236
|
|
|
||||||||
Asset Managers
|
32,531
|
|
11,480
|
|
7,998
|
|
13,053
|
|
|
33,201
|
|
10,339
|
|
10,820
|
|
12,042
|
|
|
||||||||
Utilities
|
29,317
|
|
6,187
|
|
2,084
|
|
21,046
|
|
|
29,672
|
|
7,208
|
|
888
|
|
21,576
|
|
|
||||||||
State & Municipal Govt
(c)
|
28,633
|
|
12,134
|
|
2,888
|
|
13,611
|
|
|
28,263
|
|
12,416
|
|
2,096
|
|
13,751
|
|
|
||||||||
Central Govt
|
19,182
|
|
3,375
|
|
13,937
|
|
1,870
|
|
|
20,408
|
|
3,964
|
|
14,235
|
|
2,209
|
|
|
||||||||
Chemicals & Plastics
|
15,945
|
|
5,654
|
|
208
|
|
10,083
|
|
|
15,043
|
|
5,292
|
|
271
|
|
9,480
|
|
|
||||||||
Transportation
|
15,797
|
|
6,733
|
|
977
|
|
8,087
|
|
|
19,096
|
|
8,996
|
|
751
|
|
9,349
|
|
|
||||||||
Automotive
|
14,820
|
|
4,903
|
|
342
|
|
9,575
|
|
|
16,736
|
|
4,964
|
|
1,196
|
|
10,576
|
|
|
||||||||
Metals & Mining
|
14,171
|
|
4,728
|
|
702
|
|
8,741
|
|
|
13,419
|
|
4,350
|
|
439
|
|
8,630
|
|
|
||||||||
Insurance
|
14,089
|
|
1,411
|
|
2,804
|
|
9,874
|
|
|
13,510
|
|
1,119
|
|
3,382
|
|
9,009
|
|
|
||||||||
Financial Markets Infrastructure
|
5,036
|
|
351
|
|
3,499
|
|
1,186
|
|
|
8,732
|
|
347
|
|
3,884
|
|
4,501
|
|
|
||||||||
Securities Firms
|
4,113
|
|
952
|
|
1,692
|
|
1,469
|
|
|
4,211
|
|
1,059
|
|
1,913
|
|
1,239
|
|
|
||||||||
All other
(d)
|
147,900
|
|
113,699
|
|
3,963
|
|
30,238
|
|
|
137,238
|
|
105,135
|
|
3,548
|
|
28,555
|
|
|
||||||||
Subtotal
|
829,519
|
|
402,898
|
|
56,523
|
|
370,098
|
|
|
815,882
|
|
383,790
|
|
64,078
|
|
368,014
|
|
|
||||||||
Loans held-for-sale and loans at fair value
|
5,607
|
|
5,607
|
|
—
|
|
—
|
|
|
4,515
|
|
4,515
|
|
—
|
|
—
|
|
|
||||||||
Receivables from customers and other
(a)
|
26,139
|
|
—
|
|
—
|
|
—
|
|
|
17,440
|
|
—
|
|
—
|
|
—
|
|
|
||||||||
Total wholesale-related
|
861,265
|
|
408,505
|
|
56,523
|
|
370,098
|
|
|
837,837
|
|
388,305
|
|
64,078
|
|
368,014
|
|
|
||||||||
Total exposure
(e)(f)
|
$
|
2,004,974
|
|
$
|
930,697
|
|
$
|
56,523
|
|
$
|
991,482
|
|
|
$
|
1,951,555
|
|
$
|
894,765
|
|
$
|
64,078
|
|
$
|
975,152
|
|
(h)
|
(a)
|
Receivables from customers primarily represent held-for-investment margin loans to brokerage customers (Prime Services in CIB, AWM and CCB) that are collateralized through assets maintained in the clients' brokerage accounts, as such no allowance is held against these receivables. These receivables are reported within accrued interest and accounts receivable on the Firm's Consolidated balance sheets.
|
(b)
|
The industry rankings presented in the table as of
December 31, 2016
, are based on the industry rankings of the corresponding exposures at
December 31, 2017
, not actual rankings of such exposures at
December 31, 2016
.
|
(c)
|
In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at
December 31, 2017
and
2016
, noted above, the Firm held:
$9.8 billion
and
$9.1 billion
, respectively, of trading securities;
$32.3 billion
and
$31.6 billion
, respectively, of AFS securities; and
$14.4 billion
and
$14.5 billion
, respectively, of HTM securities, issued by U.S. state and municipal governments. For further information, see Note
2
and Note
10
.
|
(d)
|
All other includes: individuals; SPEs; and private education and civic organizations. For more information on exposures to SPEs, see Note
14
.
|
(e)
|
Excludes cash placed with banks of
$421.0 billion
and
$380.2 billion
, at
December 31, 2017
and
2016
, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.
|
(f)
|
Credit exposure is net of risk participations and excludes the benefit of credit derivatives used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables.
|
(g)
|
Represents lending-related financial instruments.
|
(h)
|
The prior period amounts have been revised to conform with the current period presentation.
|
178
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
179
|
180
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
181
|
|
Notional amounts
(b)
|
||||||
December 31, (in billions)
|
2017
|
|
2016
|
||||
Interest rate contracts
|
|
|
|
||||
Swaps
|
$
|
21,043
|
|
|
$
|
22,000
|
|
Futures and forwards
|
4,904
|
|
|
5,289
|
|
||
Written options
|
3,576
|
|
|
3,091
|
|
||
Purchased options
|
3,987
|
|
|
3,482
|
|
||
Total interest rate contracts
|
33,510
|
|
|
33,862
|
|
||
Credit derivatives
(a)
|
1,522
|
|
|
2,032
|
|
||
Foreign exchange contracts
|
|
|
|
|
|||
Cross-currency swaps
|
3,953
|
|
|
3,359
|
|
||
Spot, futures and forwards
|
5,923
|
|
|
5,341
|
|
||
Written options
|
786
|
|
|
734
|
|
||
Purchased options
|
776
|
|
|
721
|
|
||
Total foreign exchange contracts
|
11,438
|
|
|
10,155
|
|
||
Equity contracts
|
|
|
|
||||
Swaps
|
367
|
|
|
258
|
|
||
Futures and forwards
|
90
|
|
|
59
|
|
||
Written options
|
531
|
|
|
417
|
|
||
Purchased options
|
453
|
|
|
345
|
|
||
Total equity contracts
|
1,441
|
|
|
1,079
|
|
||
Commodity contracts
|
|
|
|
|
|||
Swaps
|
116
|
|
|
102
|
|
||
Spot, futures and forwards
|
168
|
|
|
130
|
|
||
Written options
|
98
|
|
|
83
|
|
||
Purchased options
|
93
|
|
|
94
|
|
||
Total commodity contracts
|
475
|
|
|
409
|
|
||
Total derivative notional amounts
|
$
|
48,386
|
|
|
$
|
47,537
|
|
(a)
|
For more information on volumes and types of credit derivative contracts, see the Credit derivatives discussion on
pages 189–191
.
|
(b)
|
Represents the sum of gross long and gross short third-party notional derivative contracts.
|
182
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(a)
|
Balances exclude structured notes for which the fair value option has been elected. See Note
3
for further information.
|
(b)
|
As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral receivables and payables when a legally enforceable master netting agreement exists.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
183
|
•
|
collateral that consists of non-cash financial instruments (generally U.S. government and agency securities and other G7 government securities) and cash collateral held at third party custodians, which are shown separately as “Collateral not nettable on the Consolidated balance sheets” in the tables below, up to the fair value exposure amount.
|
•
|
the amount of collateral held or transferred that exceeds the fair value exposure at the individual counterparty level, as of the date presented, which is excluded from the tables below; and
|
•
|
collateral held or transferred that relates to derivative receivables or payables where an appropriate legal opinion has not been either sought or obtained with respect to the master netting agreement, which is excluded from the tables below.
|
|
2017
|
|
2016
|
||||||||||||||||||||
December 31, (in millions)
|
Gross derivative receivables
|
Amounts netted on the Consolidated balance sheets
|
Net derivative receivables
|
|
Gross derivative receivables
|
|
Amounts netted on the Consolidated balance sheets
|
Net derivative receivables
|
|||||||||||||||
U.S. GAAP nettable derivative receivables
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Over-the-counter (“OTC”)
|
$
|
305,569
|
|
$
|
(284,917
|
)
|
|
$
|
20,652
|
|
|
$
|
365,227
|
|
|
$
|
(342,173
|
)
|
|
$
|
23,054
|
|
|
OTC–cleared
|
6,531
|
|
(6,318
|
)
|
|
213
|
|
|
235,399
|
|
|
(235,261
|
)
|
|
138
|
|
|||||||
Exchange-traded
(a)
|
185
|
|
(84
|
)
|
|
101
|
|
|
241
|
|
|
(227
|
)
|
|
14
|
|
|||||||
Total interest rate contracts
|
312,285
|
|
(291,319
|
)
|
|
20,966
|
|
|
600,867
|
|
|
(577,661
|
)
|
|
23,206
|
|
|||||||
Credit contracts:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
OTC
|
15,390
|
|
(15,165
|
)
|
|
225
|
|
|
23,130
|
|
|
(22,612
|
)
|
|
518
|
|
|||||||
OTC–cleared
|
7,225
|
|
(7,170
|
)
|
|
55
|
|
|
5,746
|
|
|
(5,739
|
)
|
|
7
|
|
|||||||
Total credit contracts
|
22,615
|
|
(22,335
|
)
|
|
280
|
|
|
28,876
|
|
|
(28,351
|
)
|
|
525
|
|
|||||||
Foreign exchange contracts:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
OTC
|
155,289
|
|
(142,420
|
)
|
|
12,869
|
|
|
226,271
|
|
|
(208,962
|
)
|
|
17,309
|
|
|||||||
OTC–cleared
|
1,696
|
|
(1,654
|
)
|
|
42
|
|
|
1,238
|
|
|
(1,165
|
)
|
|
73
|
|
|||||||
Exchange-traded
(a)
|
141
|
|
(7
|
)
|
|
134
|
|
|
104
|
|
|
(27
|
)
|
|
77
|
|
|||||||
Total foreign exchange contracts
|
157,126
|
|
(144,081
|
)
|
|
13,045
|
|
|
227,613
|
|
|
(210,154
|
)
|
|
17,459
|
|
|||||||
Equity contracts:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
OTC
|
22,024
|
|
(19,917
|
)
|
|
2,107
|
|
|
20,868
|
|
|
(20,570
|
)
|
|
298
|
|
|||||||
Exchange-traded
(a)
|
14,188
|
|
(12,241
|
)
|
|
1,947
|
|
|
11,439
|
|
|
(9,431
|
)
|
|
2,008
|
|
|||||||
Total equity contracts
|
36,212
|
|
(32,158
|
)
|
|
4,054
|
|
|
32,307
|
|
|
(30,001
|
)
|
|
2,306
|
|
|||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
OTC
|
10,903
|
|
(4,436
|
)
|
|
6,467
|
|
|
11,571
|
|
|
(5,605
|
)
|
|
5,966
|
|
|||||||
Exchange-traded
(a)
|
8,854
|
|
(8,701
|
)
|
|
153
|
|
|
6,794
|
|
|
(6,766
|
)
|
|
28
|
|
|||||||
Total commodity contracts
|
19,757
|
|
(13,137
|
)
|
|
6,620
|
|
|
18,365
|
|
|
(12,371
|
)
|
|
5,994
|
|
|||||||
Derivative receivables with appropriate legal opinion
|
547,995
|
|
(503,030
|
)
|
(b)
|
44,965
|
|
|
908,028
|
|
|
(858,538
|
)
|
(b)
|
49,490
|
|
|||||||
Derivative receivables where an appropriate legal opinion has not been either sought or obtained
|
11,558
|
|
|
|
11,558
|
|
|
14,588
|
|
|
|
|
14,588
|
|
|||||||||
Total derivative receivables recognized on the Consolidated balance sheets
|
$
|
559,553
|
|
|
|
$
|
56,523
|
|
|
$
|
922,616
|
|
|
|
|
$
|
64,078
|
|
|||||
Collateral not nettable on the Consolidated balance sheets
(c)(d)
|
|
|
|
(13,363
|
)
|
|
|
|
|
|
(18,638
|
)
|
|||||||||||
Net amounts
|
|
|
|
$
|
43,160
|
|
|
|
|
|
|
$
|
45,440
|
|
184
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
2017
|
|
2016
|
||||||||||||||||||||
December 31, (in millions)
|
Gross derivative payables
|
Amounts netted on the Consolidated balance sheets
|
Net derivative payables
|
|
Gross derivative payables
|
|
Amounts netted on the Consolidated balance sheets
|
Net derivative payables
|
|||||||||||||||
U.S. GAAP nettable derivative payables
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
OTC
|
$
|
276,960
|
|
$
|
(271,294
|
)
|
|
$
|
5,666
|
|
|
$
|
338,502
|
|
|
$
|
(329,325
|
)
|
|
$
|
9,177
|
|
|
OTC–cleared
|
6,004
|
|
(5,928
|
)
|
|
76
|
|
|
230,464
|
|
|
(230,463
|
)
|
|
1
|
|
|||||||
Exchange-traded
(a)
|
127
|
|
(84
|
)
|
|
43
|
|
|
196
|
|
|
(175
|
)
|
|
21
|
|
|||||||
Total interest rate contracts
|
283,091
|
|
(277,306
|
)
|
|
5,785
|
|
|
569,162
|
|
|
(559,963
|
)
|
|
9,199
|
|
|||||||
Credit contracts:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
OTC
|
16,194
|
|
(15,170
|
)
|
|
1,024
|
|
|
22,366
|
|
|
(21,614
|
)
|
|
752
|
|
|||||||
OTC–cleared
|
6,801
|
|
(6,784
|
)
|
|
17
|
|
|
5,641
|
|
|
(5,641
|
)
|
|
—
|
|
|||||||
Total credit contracts
|
22,995
|
|
(21,954
|
)
|
|
1,041
|
|
|
28,007
|
|
|
(27,255
|
)
|
|
752
|
|
|||||||
Foreign exchange contracts:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
OTC
|
150,966
|
|
(141,789
|
)
|
|
9,177
|
|
|
228,300
|
|
|
(213,296
|
)
|
|
15,004
|
|
|||||||
OTC–cleared
|
1,555
|
|
(1,553
|
)
|
|
2
|
|
|
1,158
|
|
|
(1,158
|
)
|
|
—
|
|
|||||||
Exchange-traded
(a)
|
98
|
|
(7
|
)
|
|
91
|
|
|
328
|
|
|
(9
|
)
|
|
319
|
|
|||||||
Total foreign exchange contracts
|
152,619
|
|
(143,349
|
)
|
|
9,270
|
|
|
229,786
|
|
|
(214,463
|
)
|
|
15,323
|
|
|||||||
Equity contracts:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
OTC
|
28,193
|
|
(23,969
|
)
|
|
4,224
|
|
|
24,688
|
|
|
(20,808
|
)
|
|
3,880
|
|
|||||||
Exchange-traded
(a)
|
12,720
|
|
(12,234
|
)
|
|
486
|
|
|
10,004
|
|
|
(9,414
|
)
|
|
590
|
|
|||||||
Total equity contracts
|
40,913
|
|
(36,203
|
)
|
|
4,710
|
|
|
34,692
|
|
|
(30,222
|
)
|
|
4,470
|
|
|||||||
Commodity contracts:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
OTC
|
12,645
|
|
(5,508
|
)
|
|
7,137
|
|
|
12,885
|
|
|
(5,252
|
)
|
|
7,633
|
|
|||||||
Exchange-traded
(a)
|
8,870
|
|
(8,709
|
)
|
|
161
|
|
|
7,099
|
|
|
(6,853
|
)
|
|
246
|
|
|||||||
Total commodity contracts
|
21,515
|
|
(14,217
|
)
|
|
7,298
|
|
|
19,984
|
|
|
(12,105
|
)
|
|
7,879
|
|
|||||||
Derivative payables with appropriate legal opinion
|
521,133
|
|
(493,029
|
)
|
(b)
|
28,104
|
|
|
881,631
|
|
|
(844,008
|
)
|
(b)
|
37,623
|
|
|||||||
Derivative payables where an appropriate legal opinion has not been either sought or obtained
|
9,673
|
|
|
|
9,673
|
|
|
11,608
|
|
|
|
|
11,608
|
|
|||||||||
Total derivative payables recognized on the Consolidated balance sheets
|
$
|
530,806
|
|
|
|
$
|
37,777
|
|
|
$
|
893,239
|
|
|
|
|
$
|
49,231
|
|
|||||
Collateral not nettable on the Consolidated balance sheets
(c)(d)
|
|
|
|
(4,180
|
)
|
|
|
|
|
|
(8,925
|
)
|
|||||||||||
Net amounts
|
|
|
|
$
|
33,597
|
|
|
|
|
|
|
$
|
40,306
|
|
(a)
|
Exchange-traded derivative balances that relate to futures contracts are settled daily.
|
(b)
|
Net derivatives receivable included cash collateral netted of
$55.5 billion
and
$71.9 billion
at
December 31, 2017
and
2016
, respectively. Net derivatives payable included cash collateral netted of
$45.5 billion
and
$57.3 billion
related to OTC and OTC-cleared derivatives at
December 31, 2017
and
2016
, respectively.
|
(c)
|
Represents liquid security collateral as well as cash collateral held at third-party custodians related to derivative instruments where an appropriate legal opinion has been obtained. For some counterparties, the collateral amounts of financial instruments may exceed the derivative receivables and derivative payables balances. Where this is the case, the total amount reported is limited to the net derivative receivables and net derivative payables balances with that counterparty.
|
(d)
|
Derivative collateral relates only to OTC and OTC-cleared derivative instruments.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
185
|
OTC and OTC-cleared derivative payables containing downgrade triggers
|
||||||
December 31, (in millions)
|
2017
|
2016
|
||||
Aggregate fair value of net derivative payables
|
$
|
11,916
|
|
$
|
21,550
|
|
Collateral posted
|
9,973
|
|
19,383
|
|
(a)
|
Includes the additional collateral to be posted for initial margin.
|
(b)
|
Amounts represent fair values of derivative payables, and do not reflect collateral posted.
|
186
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
Gains/(losses) recorded in income
|
|
Income statement impact due to:
|
||||||||||||||||
Year ended December 31, 2017 (in millions)
|
Derivatives
|
Hedged items
|
Total income statement impact
|
|
Hedge ineffectiveness
(e)
|
Excluded components
(f)
|
|||||||||||||
Contract type
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate
(a)(b)
|
$
|
(481
|
)
|
|
$
|
1,359
|
|
|
$
|
878
|
|
|
$
|
(18
|
)
|
|
$
|
896
|
|
Foreign exchange
(c)
|
(3,509
|
)
|
|
3,507
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Commodity
(d)
|
(1,275
|
)
|
|
1,348
|
|
|
73
|
|
|
29
|
|
|
44
|
|
|||||
Total
|
$
|
(5,265
|
)
|
|
$
|
6,214
|
|
|
$
|
949
|
|
|
$
|
11
|
|
|
$
|
938
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Gains/(losses) recorded in income
|
|
Income statement impact due to:
|
||||||||||||||||
Year ended December 31, 2016 (in millions)
|
Derivatives
|
Hedged items
|
Total income statement impact
|
|
Hedge ineffectiveness
(e)
|
Excluded components
(f)
|
|||||||||||||
Contract type
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate
(a)(b)
|
$
|
(482
|
)
|
|
$
|
1,338
|
|
|
$
|
856
|
|
|
$
|
6
|
|
|
$
|
850
|
|
Foreign exchange
(c)
|
2,435
|
|
|
(2,261
|
)
|
|
174
|
|
|
—
|
|
|
174
|
|
|||||
Commodity
(d)
|
(536
|
)
|
|
586
|
|
|
50
|
|
|
(9
|
)
|
|
59
|
|
|||||
Total
|
$
|
1,417
|
|
|
$
|
(337
|
)
|
|
$
|
1,080
|
|
|
$
|
(3
|
)
|
|
$
|
1,083
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Gains/(losses) recorded in income
|
|
Income statement impact due to:
|
||||||||||||||||
Year ended December 31, 2015 (in millions)
|
Derivatives
|
Hedged items
|
Total income statement impact
|
|
Hedge ineffectiveness
(e)
|
Excluded components
(f)
|
|||||||||||||
Contract type
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate
(a)(b)
|
$
|
38
|
|
|
$
|
911
|
|
|
$
|
949
|
|
|
$
|
3
|
|
|
$
|
946
|
|
Foreign exchange
(c)
|
6,030
|
|
|
(6,006
|
)
|
|
24
|
|
|
—
|
|
|
24
|
|
|||||
Commodity
(d)
|
1,153
|
|
|
(1,142
|
)
|
|
11
|
|
|
(13
|
)
|
|
24
|
|
|||||
Total
|
$
|
7,221
|
|
|
$
|
(6,237
|
)
|
|
$
|
984
|
|
|
$
|
(10
|
)
|
|
$
|
994
|
|
(a)
|
Primarily consists of hedges of the benchmark (e.g., London Interbank Offered Rate (“LIBOR”)) interest rate risk of fixed-rate long-term debt and AFS securities. Gains and losses were recorded in net interest income.
|
(b)
|
Excludes the amortization expense associated with the inception hedge accounting adjustment applied to the hedged item. This expense is recorded in net interest income and substantially offsets the income statement impact of the excluded components.
|
(c)
|
Primarily consists of hedges of the foreign currency risk of long-term debt and AFS securities for changes in spot foreign currency rates. Gains and losses related to the derivatives and the hedged items, due to changes in foreign currency rates, were recorded primarily in principal transactions revenue and net interest income.
|
(d)
|
Consists of overall fair value hedges of physical commodities inventories that are generally carried at the lower of cost or net realizable value (net realizable value approximates fair value). Gains and losses were recorded in principal transactions revenue.
|
(e)
|
Hedge ineffectiveness is the amount by which the gain or loss on the designated derivative instrument does not exactly offset the gain or loss on the hedged item attributable to the hedged risk.
|
(f)
|
The assessment of hedge effectiveness excludes certain components of the changes in fair values of the derivatives and hedged items such as forward points on foreign exchange forward contracts and time values.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
187
|
|
|
Gains/(losses) recorded in income and other comprehensive income/(loss)
|
||||||||||||||||||||
Year ended December 31, 2017
(in millions)
|
Derivatives – effective portion reclassified from AOCI to income
|
Hedge ineffectiveness recorded directly in income
(c)
|
Total income statement impact
|
Derivatives – effective portion recorded in OCI
|
|
Total change
in OCI
for period
|
||||||||||||||||
Contract type
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate
(a)
|
|
$
|
(17
|
)
|
|
|
$
|
—
|
|
|
|
$
|
(17
|
)
|
|
$
|
12
|
|
|
$
|
29
|
|
Foreign exchange
(b)
|
|
(117
|
)
|
|
|
—
|
|
|
|
(117
|
)
|
|
135
|
|
|
252
|
|
|||||
Total
|
|
$
|
(134
|
)
|
|
|
$
|
—
|
|
|
|
$
|
(134
|
)
|
|
$
|
147
|
|
|
$
|
281
|
|
|
|
Gains/(losses) recorded in income and other comprehensive income/(loss)
|
||||||||||||||||||||
Year ended December 31, 2016
(in millions)
|
Derivatives – effective portion reclassified from AOCI to income
|
Hedge ineffectiveness recorded directly in income
(c)
|
Total income statement impact
|
Derivatives – effective portion recorded in OCI
|
|
Total change
in OCI for period |
||||||||||||||||
Contract type
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate
(a)
|
|
$
|
(74
|
)
|
|
|
$
|
—
|
|
|
|
$
|
(74
|
)
|
|
$
|
(55
|
)
|
|
$
|
19
|
|
Foreign exchange
(b)
|
|
(286
|
)
|
|
|
—
|
|
|
|
(286
|
)
|
|
(395
|
)
|
|
(109
|
)
|
|||||
Total
|
|
$
|
(360
|
)
|
|
|
$
|
—
|
|
|
|
$
|
(360
|
)
|
|
$
|
(450
|
)
|
|
$
|
(90
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Gains/(losses) recorded in income and other comprehensive income/(loss)
|
||||||||||||||||||||
Year ended December 31, 2015
(in millions)
|
Derivatives – effective portion reclassified from AOCI to income
|
Hedge ineffectiveness recorded directly in income
(c)
|
Total income statement impact
|
Derivatives – effective portion recorded in OCI
|
|
Total change
in OCI for period |
||||||||||||||||
Contract type
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest rate
(a)
|
|
$
|
(99
|
)
|
|
|
$
|
—
|
|
|
|
$
|
(99
|
)
|
|
$
|
(44
|
)
|
|
$
|
55
|
|
Foreign exchange
(b)
|
|
(81
|
)
|
|
|
—
|
|
|
|
(81
|
)
|
|
(53
|
)
|
|
28
|
|
|||||
Total
|
|
$
|
(180
|
)
|
|
|
$
|
—
|
|
|
|
$
|
(180
|
)
|
|
$
|
(97
|
)
|
|
$
|
83
|
|
(a)
|
Primarily consists of benchmark interest rate hedges of LIBOR-indexed floating-rate assets and floating-rate liabilities. Gains and losses were recorded in net interest income.
|
(b)
|
Primarily consists of hedges of the foreign currency risk of non-U.S. dollar-denominated revenue and expense. The income statement classification of gains and losses follows the hedged item – primarily noninterest revenue and compensation expense.
|
(c)
|
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.
|
188
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
Gains/(losses) recorded in income and other comprehensive income/(loss)
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
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
|
Foreign exchange derivatives
|
$(172)
|
$(1,294)
|
|
$(282)
|
$262
|
|
$(379)
|
$1,885
|
(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 other 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 significant ineffectiveness for net investment hedge accounting relationships during
2017
,
2016
and
2015
.
|
(a)
|
Primarily represents interest rate derivatives used to hedge the interest rate risk inherent in the mortgage pipeline, warehouse loans and MSRs, as well as written commitments to originate warehouse loans. Gains and losses were recorded predominantly in mortgage fees and related income.
|
(b)
|
Relates to credit derivatives used to mitigate credit risk associated with lending exposures in the Firm’s wholesale businesses. These derivatives do not include credit derivatives used to mitigate counterparty credit risk arising from derivative receivables, which is included in gains and losses on derivatives related to market-making activities and other derivatives. Gains and losses were recorded in principal transactions revenue.
|
(c)
|
Primarily relates to derivatives used to mitigate foreign exchange risk of specified foreign currency-denominated assets and liabilities. Gains and losses were recorded in principal transactions revenue.
|
(d)
|
Primarily relates to commodity derivatives used to mitigate energy
|
JPMorgan Chase & Co./2017 Annual Report
|
|
189
|
190
|
|
JPMorgan Chase & Co./2017 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, 2017
(in millions)
|
|||||||||||||||
Credit derivatives
|
|
|
|
|
|
|
|
||||||||
Credit default swaps
|
$
|
(690,224
|
)
|
|
|
$
|
702,098
|
|
|
$
|
11,874
|
|
$
|
5,045
|
|
Other credit derivatives
(a)
|
(54,157
|
)
|
|
|
59,158
|
|
|
5,001
|
|
11,747
|
|
||||
Total credit derivatives
|
(744,381
|
)
|
|
|
761,256
|
|
|
16,875
|
|
16,792
|
|
||||
Credit-related notes
|
(18
|
)
|
|
|
—
|
|
|
(18
|
)
|
7,915
|
|
||||
Total
|
$
|
(744,399
|
)
|
|
|
$
|
761,256
|
|
|
$
|
16,857
|
|
$
|
24,707
|
|
|
|
|
|
|
|
|
|
||||||||
|
Maximum payout/Notional amount
|
||||||||||||||
|
Protection sold
|
|
Protection purchased with identical underlyings
(b)
|
Net protection (sold)/purchased
(c)
|
Other protection purchased
(d)
|
||||||||||
December 31, 2016 (in millions)
|
|||||||||||||||
Credit derivatives
|
|
|
|
|
|
|
|
||||||||
Credit default swaps
|
$
|
(961,003
|
)
|
|
|
$
|
974,252
|
|
|
$
|
13,249
|
|
$
|
7,935
|
|
Other credit derivatives
(a)
|
(36,829
|
)
|
|
|
31,859
|
|
|
(4,970
|
)
|
19,991
|
|
||||
Total credit derivatives
|
(997,832
|
)
|
|
|
1,006,111
|
|
|
8,279
|
|
27,926
|
|
||||
Credit-related notes
|
(41
|
)
|
|
|
—
|
|
|
(41
|
)
|
4,505
|
|
||||
Total
|
$
|
(997,873
|
)
|
|
|
$
|
1,006,111
|
|
|
$
|
8,238
|
|
$
|
32,431
|
|
(a)
|
Other credit derivatives largely consists of credit swap options.
|
(b)
|
Represents the total notional amount of protection purchased where the underlying reference instrument is identical to the reference instrument on protection sold; the notional amount of protection purchased for each individual identical underlying reference instrument may be greater or lower than the notional amount of protection sold.
|
(c)
|
Does not take into account the fair value of the reference obligation at the time of settlement, which would generally reduce the amount the seller of protection pays to the buyer of protection in determining settlement value.
|
(d)
|
Represents protection purchased by the Firm on referenced instruments (single-name, portfolio or index) where the Firm has not sold any protection on the identical reference instrument.
|
December 31, 2016
(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
|
$
|
(273,688
|
)
|
|
$
|
(383,586
|
)
|
|
$
|
(39,281
|
)
|
|
$
|
(696,555
|
)
|
|
$
|
7,841
|
|
|
$
|
(3,055
|
)
|
|
$
|
4,786
|
|
Noninvestment-grade
|
(107,955
|
)
|
|
(170,046
|
)
|
|
(23,317
|
)
|
|
(301,318
|
)
|
|
8,184
|
|
|
(8,570
|
)
|
|
(386
|
)
|
|||||||
Total
|
$
|
(381,643
|
)
|
|
$
|
(553,632
|
)
|
|
$
|
(62,598
|
)
|
|
$
|
(997,873
|
)
|
|
$
|
16,025
|
|
|
$
|
(11,625
|
)
|
|
$
|
4,400
|
|
(a)
|
The ratings scale is primarily based on external credit ratings defined by S&P and Moody’s.
|
(b)
|
Amounts are shown on a gross basis, before the benefit of legally enforceable master netting agreements and cash collateral received by the Firm.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
191
|
Year ended December 31,
(in millions) |
2017
|
|
2016
|
|
2015
|
||||||
Underwriting
|
|
|
|
|
|
||||||
Equity
|
$
|
1,394
|
|
|
$
|
1,146
|
|
|
$
|
1,408
|
|
Debt
|
3,710
|
|
|
3,207
|
|
|
3,232
|
|
|||
Total underwriting
|
5,104
|
|
|
4,353
|
|
|
4,640
|
|
|||
Advisory
|
2,144
|
|
|
2,095
|
|
|
2,111
|
|
|||
Total investment banking fees
|
$
|
7,248
|
|
|
$
|
6,448
|
|
|
$
|
6,751
|
|
Year ended December 31,
(in millions) |
2017
|
|
2016
|
|
2015
|
||||||
Trading revenue by instrument type
|
|
|
|
|
|
||||||
Interest rate
|
$
|
2,479
|
|
|
$
|
2,325
|
|
|
$
|
1,933
|
|
Credit
|
1,329
|
|
|
2,096
|
|
|
1,735
|
|
|||
Foreign exchange
|
2,746
|
|
|
2,827
|
|
|
2,557
|
|
|||
Equity
|
3,873
|
|
|
2,994
|
|
|
2,990
|
|
|||
Commodity
|
661
|
|
|
1,067
|
|
|
842
|
|
|||
Total trading revenue
|
11,088
|
|
|
11,309
|
|
|
10,057
|
|
|||
Private equity gains
|
259
|
|
|
257
|
|
|
351
|
|
|||
Principal transactions
|
$
|
11,347
|
|
|
$
|
11,566
|
|
|
$
|
10,408
|
|
Year ended December 31, (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Lending-related fees
|
$
|
1,110
|
|
|
$
|
1,114
|
|
|
$
|
1,148
|
|
Deposit-related fees
|
4,823
|
|
|
4,660
|
|
|
4,546
|
|
|||
Total lending- and deposit-related fees
|
$
|
5,933
|
|
|
$
|
5,774
|
|
|
$
|
5,694
|
|
192
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31,
(in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Asset management fees
|
|
|
|
|
|
||||||
Investment management fees
|
$
|
9,526
|
|
|
$
|
8,865
|
|
|
$
|
9,403
|
|
All other asset management fees
(a)
|
294
|
|
|
336
|
|
|
352
|
|
|||
Total asset management fees
|
9,820
|
|
|
9,201
|
|
|
9,755
|
|
|||
|
|
|
|
|
|
||||||
Total administration fees
(b)
|
2,029
|
|
|
1,915
|
|
|
2,015
|
|
|||
|
|
|
|
|
|
||||||
Commissions and other fees
|
|
|
|
|
|
||||||
Brokerage commissions
(c)
|
2,239
|
|
|
2,151
|
|
|
2,304
|
|
|||
All other commissions and fees
|
1,289
|
|
|
1,324
|
|
|
1,435
|
|
|||
Total commissions and fees
|
3,528
|
|
|
3,475
|
|
|
3,739
|
|
|||
Total asset management, administration and commissions
|
$
|
15,377
|
|
|
$
|
14,591
|
|
|
$
|
15,509
|
|
(a)
|
The Firm receives other asset management fees for services that are ancillary to investment management services, including commissions earned on sales or distribution of mutual funds to clients. These fees are recorded as revenue at the time the service is rendered or, in the case of certain distribution fees based on the underlying fund’s asset value and/or investor redemption, recorded over time as the investor remains in the fund or upon investor redemption.
|
(b)
|
The Firm receives administrative fees predominantly from custody, securities lending, fund services and securities clearance fees. These fees are recorded as revenue over the period in which the related service is provided.
|
(c)
|
The Firm acts as a broker, facilitating its clients’ purchase and sale of securities and other financial instruments. It collects and recognizes brokerage commissions as revenue upon occurrence of the client transaction. The Firm reports certain costs paid to third-party clearing houses and exchanges net against commission revenue.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
193
|
Year ended December 31, (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Operating lease income
|
$
|
3,613
|
|
|
$
|
2,724
|
|
|
$
|
2,081
|
|
Year ended December 31,
(in millions) |
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Legal expense/(benefit)
|
$
|
(35
|
)
|
|
$
|
(317
|
)
|
|
$
|
2,969
|
|
FDIC-related expense
|
1,492
|
|
|
1,296
|
|
|
1,227
|
|
194
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31,
(in millions)
|
2017
|
2016
|
2015
|
||||||
Interest Income
|
|
|
|
||||||
Loans
|
$
|
41,008
|
|
$
|
36,634
|
|
$
|
33,134
|
|
Taxable securities
|
5,535
|
|
5,538
|
|
6,550
|
|
|||
Non-taxable securities
(a)
|
1,847
|
|
1,766
|
|
1,706
|
|
|||
Total securities
|
7,382
|
|
7,304
|
|
8,256
|
|
|||
Trading assets
|
7,610
|
|
7,292
|
|
6,621
|
|
|||
Federal funds sold and securities purchased under resale agreements
|
2,327
|
|
2,265
|
|
1,592
|
|
|||
Securities borrowed
(b)
|
(37
|
)
|
(332
|
)
|
(532
|
)
|
|||
Deposits with banks
|
4,219
|
|
1,863
|
|
1,250
|
|
|||
All other interest-earning assets
(c)
|
1,863
|
|
875
|
|
652
|
|
|||
Total interest income
|
$
|
64,372
|
|
$
|
55,901
|
|
$
|
50,973
|
|
Interest expense
|
|
|
|
||||||
Interest bearing deposits
|
$
|
2,857
|
|
$
|
1,356
|
|
$
|
1,252
|
|
Federal funds purchased and securities loaned or sold under repurchase agreements
|
1,611
|
|
1,089
|
|
609
|
|
|||
Short-term borrowings
(d)
|
481
|
|
203
|
|
175
|
|
|||
Trading liabilities - debt and all other interest-bearing liabilities
(e)
|
2,070
|
|
1,102
|
|
557
|
|
|||
Long-term debt
|
6,753
|
|
5,564
|
|
4,435
|
|
|||
Beneficial interest issued by consolidated VIEs
|
503
|
|
504
|
|
435
|
|
|||
Total interest expense
|
$
|
14,275
|
|
$
|
9,818
|
|
$
|
7,463
|
|
Net interest income
|
$
|
50,097
|
|
$
|
46,083
|
|
$
|
43,510
|
|
Provision for credit losses
|
5,290
|
|
5,361
|
|
3,827
|
|
|||
Net interest income after provision for credit losses
|
$
|
44,807
|
|
$
|
40,722
|
|
$
|
39,683
|
|
(a)
|
Represents securities that are tax-exempt for U.S. federal income tax purposes.
|
(b)
|
Negative interest income is related to client-driven demand for certain securities combined with the impact of low interest rates. This is matched book activity and the negative interest expense on the corresponding securities loaned is recognized in interest expense.
|
(c)
|
Includes held-for-investment margin loans, which are classified in accrued interest and accounts receivable, and all other interest-earning assets included in other assets.
|
(d)
|
Includes commercial paper.
|
(e)
|
Other interest-bearing liabilities include brokerage customer payables.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
195
|
As of or for the year ended December 31,
|
Defined benefit
pension plans |
OPEB plans
(f)
|
|||||||||||||
(in millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Change in benefit obligation
|
|
|
|
|
|
|
|
||||||||
Benefit obligation, beginning of year
|
$
|
(15,594
|
)
|
|
$
|
(15,259
|
)
|
|
$
|
(708
|
)
|
|
$
|
(744
|
)
|
Benefits earned during the year
|
(330
|
)
|
|
(332
|
)
|
|
—
|
|
|
—
|
|
||||
Interest cost on benefit obligations
|
(598
|
)
|
|
(629
|
)
|
|
(28
|
)
|
|
(31
|
)
|
||||
Employee contributions
|
(7
|
)
|
|
(7
|
)
|
|
(16
|
)
|
|
(19
|
)
|
||||
Net gain/(loss)
|
(721
|
)
|
|
(743
|
)
|
|
(4
|
)
|
|
4
|
|
||||
Benefits paid
|
841
|
|
|
851
|
|
|
76
|
|
|
76
|
|
||||
Plan settlements
|
30
|
|
|
21
|
|
|
—
|
|
|
—
|
|
||||
Expected Medicare Part D subsidy receipts
|
NA
|
|
|
NA
|
|
|
(1
|
)
|
|
—
|
|
||||
Foreign exchange impact and other
|
(321
|
)
|
|
504
|
|
|
(3
|
)
|
|
6
|
|
||||
Benefit obligation, end of year
(a)
|
$
|
(16,700
|
)
|
|
$
|
(15,594
|
)
|
|
$
|
(684
|
)
|
|
$
|
(708
|
)
|
Change in plan assets
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets, beginning of year
|
$
|
17,703
|
|
|
$
|
17,636
|
|
|
$
|
1,956
|
|
|
$
|
1,855
|
|
Actual return on plan assets
|
2,356
|
|
|
1,375
|
|
|
233
|
|
|
131
|
|
||||
Firm contributions
|
78
|
|
|
86
|
|
|
602
|
|
|
2
|
|
||||
Employee contributions
|
7
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(841
|
)
|
|
(851
|
)
|
|
(34
|
)
|
|
(32
|
)
|
||||
Plan settlements
|
(30
|
)
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
||||
Foreign exchange impact and other
|
330
|
|
|
(529
|
)
|
|
—
|
|
|
—
|
|
||||
Fair value of plan assets, end of year
(a)(b)(c)
|
$
|
19,603
|
|
|
$
|
17,703
|
|
|
$
|
2,757
|
|
|
$
|
1,956
|
|
Net funded status
(d)
|
$
|
2,903
|
|
|
$
|
2,109
|
|
|
$
|
2,073
|
|
|
$
|
1,248
|
|
Accumulated benefit obligation, end of year
|
$
|
(16,530
|
)
|
|
$
|
(15,421
|
)
|
|
NA
|
|
|
NA
|
|
||
Pretax pension and OPEB amounts recorded in AOCI
|
|||||||||||||||
Net gain/(loss)
|
$
|
(2,800
|
)
|
|
$
|
(3,667
|
)
|
|
$
|
271
|
|
|
$
|
138
|
|
Prior service credit/(loss)
|
6
|
|
|
42
|
|
|
—
|
|
|
—
|
|
||||
Accumulated other comprehensive income/(loss), pretax, end of year
|
$
|
(2,794
|
)
|
|
$
|
(3,625
|
)
|
|
$
|
271
|
|
|
$
|
138
|
|
Weighted-average actuarial assumptions used to determine benefit obligations
|
|||||||||||||||
Discount Rate
(e)
|
0.60 - 3.70%
|
|
|
0.60 - 4.30%
|
|
|
3.70
|
%
|
|
4.20
|
%
|
||||
Rate of compensation increase
(e)
|
2.25 – 3.00
|
|
|
2.25 – 3.00
|
|
|
NA
|
|
|
NA
|
|||||
Health care cost trend rate:
|
|||||||||||||||
Assumed for next year
|
NA
|
|
|
NA
|
|
|
5.00
|
|
|
5.00
|
|
||||
Ultimate
|
NA
|
|
|
NA
|
|
|
5.00
|
|
|
5.00
|
|
||||
Year when rate will reach ultimate
|
NA
|
|
|
NA
|
|
|
2018
|
|
2017
|
(a)
|
At December 31, 2017 and 2016, included non-U.S. benefit obligations of
$(3.8) billion
and
$(3.4) billion
, and plan assets of
$3.9 billion
and
$3.4 billion
, respectively, predominantly in the U.K.
|
(b)
|
At December 31, 2017 and 2016, approximately
$302 million
and
$390 million
, respectively, of U.S. defined benefit pension plan assets included participation rights under participating annuity contracts.
|
(c)
|
At December 31, 2017 and 2016, defined benefit pension plan amounts that were not measured at fair value included
$377 million
and
$130 million
, respectively, of accrued receivables, and
$587 million
and
$224 million
, respectively, of accrued liabilities, for U.S. plans.
|
(d)
|
Represents plans with an aggregate overfunded balance of
$5.6 billion
and
$4.0 billion
at December 31, 2017 and 2016, respectively, and plans with an aggregate underfunded balance of
$612 million
and
$639 million
at December 31, 2017 and 2016, respectively.
|
(e)
|
For the U.S. defined benefit pension plans, the discount rate assumption is
3.70%
and
4.30%
, and the rate of compensation increase is
2.30%
and
2.30%
, for 2017 and 2016 respectively.
|
(f)
|
Includes an unfunded postretirement benefit obligation of
$32 million
and
$35 million
at December 31, 2017 and 2016, respectively, for the U.K. plan.
|
196
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(a)
|
Includes various defined benefit pension plans which are individually immaterial.
|
(b)
|
The rate assumptions for the U.S. defined benefit pension plans are at the upper end of the range, except for the rate of compensation increase, which is
2.30%
for 2017 and
3.50%
for 2016 and 2015, respectively.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
197
|
(in millions)
|
|
Defined benefit pension plans
|
|||
Net loss/(gain)
|
|
$
|
106
|
|
|
Prior service cost/(credit)
|
|
$
|
(25
|
)
|
|
Total
|
|
$
|
81
|
|
|
(in millions)
|
Defined benefit pension and OPEB plan expense
|
|
Benefit obligation
|
||||
Expected long-term rate of return
|
$
|
54
|
|
|
NA
|
|
|
Discount rate
|
$
|
59
|
|
|
$
|
583
|
|
Interest crediting rate for U.S. plans
|
$
|
(41
|
)
|
|
$
|
(193
|
)
|
198
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Defined benefit pension plans
|
OPEB plan
(c)
|
||||||||||||||||
|
Asset
|
|
% of plan assets
|
|
Asset
|
|
% of plan assets
|
||||||||||
December 31,
|
Allocation
|
|
2017
|
|
2016
|
|
Allocation
|
|
2017
(d)
|
|
2016
|
||||||
Asset class
|
|
|
|
|
|
|
|
|
|
|
|||||||
Debt securities
(a)
|
0-80%
|
|
|
42
|
%
|
|
35
|
%
|
|
30-70%
|
|
|
61
|
%
|
|
50
|
%
|
Equity securities
|
0-85
|
|
|
42
|
|
|
47
|
|
|
30-70
|
|
|
39
|
|
|
50
|
|
Real estate
|
0-10
|
|
|
3
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Alternatives
(b)
|
0-35
|
|
|
13
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
(a)
|
Debt securities primarily include cash, 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.
|
(d)
|
Change in percentage of plan assets due to the contribution to the U.S. OPEB plan.
|
|
Defined benefit pension plans
|
||||||||||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||||||||||
December 31
,
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total fair value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total fair value
|
||||||||||||||||
Cash and cash equivalents
|
$
|
173
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
174
|
|
|
$
|
196
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
198
|
|
Equity securities
|
6,407
|
|
|
194
|
|
|
2
|
|
|
6,603
|
|
|
6,158
|
|
|
166
|
|
|
2
|
|
|
6,326
|
|
||||||||
Mutual funds
|
325
|
|
|
—
|
|
|
—
|
|
|
325
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Common/collective trust funds
(a)
|
778
|
|
|
—
|
|
|
—
|
|
|
778
|
|
|
384
|
|
|
—
|
|
|
—
|
|
|
384
|
|
||||||||
Limited partnerships
(b)
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
62
|
|
||||||||
Corporate debt securities
(c)
|
—
|
|
|
2,644
|
|
|
4
|
|
|
2,648
|
|
|
—
|
|
|
2,506
|
|
|
4
|
|
|
2,510
|
|
||||||||
U.S. federal, state, local and non-U.S. government debt securities
|
1,096
|
|
|
784
|
|
|
—
|
|
|
1,880
|
|
|
1,139
|
|
|
804
|
|
|
—
|
|
|
1,943
|
|
||||||||
Mortgage-backed securities
|
92
|
|
|
100
|
|
|
2
|
|
|
194
|
|
|
42
|
|
|
75
|
|
|
—
|
|
|
117
|
|
||||||||
Derivative receivables
|
—
|
|
|
203
|
|
|
—
|
|
|
203
|
|
|
—
|
|
|
243
|
|
|
—
|
|
|
243
|
|
||||||||
Other
(d)
|
2,353
|
|
|
60
|
|
|
302
|
|
|
2,715
|
|
|
1,497
|
|
|
53
|
|
|
390
|
|
|
1,940
|
|
||||||||
Total assets measured at fair value
(e)
|
$
|
11,284
|
|
|
$
|
3,986
|
|
|
$
|
310
|
|
|
$
|
15,580
|
|
|
$
|
9,478
|
|
|
$
|
3,849
|
|
|
$
|
396
|
|
|
$
|
13,723
|
|
Derivative payables
|
$
|
—
|
|
|
$
|
(141
|
)
|
|
$
|
—
|
|
|
$
|
(141
|
)
|
|
$
|
—
|
|
|
$
|
(208
|
)
|
|
$
|
—
|
|
|
$
|
(208
|
)
|
Total liabilities measured at fair value
(e)
|
$
|
—
|
|
|
$
|
(141
|
)
|
|
$
|
—
|
|
|
$
|
(141
|
)
|
|
$
|
—
|
|
|
$
|
(208
|
)
|
|
$
|
—
|
|
|
$
|
(208
|
)
|
(a)
|
At December 31, 2017 and 2016, 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
$605 million
and
$735 million
for 2017 and 2016, respectively.
|
(c)
|
Corporate debt securities include debt securities of U.S. and non-U.S. corporations.
|
(d)
|
Other consists primarily of money market funds and participating and non-participating annuity contracts. Money market 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 a lack of market mechanisms for transferring each policy and surrender restrictions.
|
(e)
|
At December 31, 2017 and 2016, excludes
$4.4 billion
and
$4.2 billion
of certain investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient, which are not required to be classified in the fair value hierarchy,
$377 million
and
$130 million
of defined benefit pension plan receivables for investments sold and dividends and interest receivables,
$561 million
and
$203 million
of defined benefit pension plan payables for investments purchased, and
$26 million
and
$21 million
of other liabilities, respectively.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
199
|
Changes in level 3 fair value measurements using significant unobservable inputs
|
|
|
|
|
||||||||||||||||||||
(in millions)
|
|
Fair value, Beginning balance
|
|
Actual return on plan assets
|
|
Purchases, sales and settlements, net
|
|
Transfers in and/or out of level 3
|
|
Fair value, Ending balance
|
||||||||||||||
Realized gains/(losses)
|
|
Unrealized gains/(losses)
|
||||||||||||||||||||||
Year ended December 31, 2017
U.S. defined benefit pension plan
Annuity contracts and other
(a)
|
|
$
|
396
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(87
|
)
|
|
$
|
—
|
|
|
$
|
310
|
|
U.S. OPEB plan
COLI policies
|
|
$
|
1,957
|
|
|
$
|
—
|
|
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,157
|
|
Year ended December 31, 2016
U.S. defined benefit pension plan
Annuity contracts and other
(a)
|
|
$
|
539
|
|
|
$
|
—
|
|
|
$
|
(157
|
)
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
396
|
|
U.S. OPEB plan
COLI policies
|
|
$
|
1,855
|
|
|
$
|
—
|
|
|
$
|
102
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,957
|
|
(a)
|
Substantially all are participating and non-participating annuity contracts.
|
Year ended December 31,
(in millions)
|
|
Defined benefit pension plans
|
|
|
OPEB before Medicare Part D subsidy
|
|
Medicare Part D subsidy
|
||||||
2018
|
|
$
|
926
|
|
|
|
$
|
65
|
|
|
$
|
1
|
|
2019
|
|
922
|
|
|
|
63
|
|
|
1
|
|
|||
2020
|
|
927
|
|
|
|
60
|
|
|
1
|
|
|||
2021
|
|
944
|
|
|
|
57
|
|
|
—
|
|
|||
2022
|
|
960
|
|
|
|
55
|
|
|
—
|
|
|||
Years 2023–2027
|
|
4,925
|
|
|
|
235
|
|
|
2
|
|
200
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
201
|
|
|
RSUs/PSUs
|
|
Options/SARs
|
||||||||||||||
Year ended December 31, 2017
|
|
Number of
units
|
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
|
|
81,707
|
|
$
|
57.15
|
|
|
30,267
|
|
|
$
|
40.65
|
|
|
|
|
||
Granted
|
|
26,017
|
|
84.30
|
|
|
109
|
|
|
90.94
|
|
|
|
|
||||
Exercised or vested
|
|
(32,961
|
)
|
57.80
|
|
|
(12,816
|
)
|
|
40.50
|
|
|
|
|
||||
Forfeited
|
|
(2,030
|
)
|
63.34
|
|
|
(54
|
)
|
|
55.82
|
|
|
|
|
||||
Canceled
|
|
NA
|
|
NA
|
|
|
(13
|
)
|
|
405.47
|
|
|
|
|
||||
Outstanding, December 31
|
|
72,733
|
|
$
|
66.36
|
|
|
17,493
|
|
|
$
|
40.76
|
|
|
3.4
|
$
|
1,169,470
|
|
Exercisable, December 31
|
|
NA
|
|
NA
|
|
|
15,828
|
|
|
40.00
|
|
|
3.3
|
1,070,212
|
|
Year ended December 31, (in millions)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Cost of prior grants of RSUs, PSUs and SARs that are amortized over their applicable vesting periods
|
|
$
|
1,125
|
|
|
$
|
1,046
|
|
|
$
|
1,109
|
|
Accrual of estimated costs of share-based awards to be granted in future periods including those to full-career eligible employees
|
|
945
|
|
|
894
|
|
|
878
|
|
|||
Total noncash compensation expense related to employee share-based incentive plans
|
|
$
|
2,070
|
|
|
$
|
1,940
|
|
|
$
|
1,987
|
|
Year ended December 31, (in millions)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Cash received for options exercised
|
|
$
|
18
|
|
|
$
|
26
|
|
|
$
|
20
|
|
Tax benefit
|
|
190
|
|
|
70
|
|
|
64
|
|
202
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
2017
|
|
2016
|
||||||||||||||||||||||||
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)
|
$
|
69,879
|
|
$
|
736
|
|
$
|
335
|
|
|
$
|
70,280
|
|
|
$
|
63,367
|
|
$
|
1,112
|
|
$
|
474
|
|
|
$
|
64,005
|
|
Residential:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S
(b)
|
8,193
|
|
185
|
|
14
|
|
|
8,364
|
|
|
8,171
|
|
100
|
|
28
|
|
|
8,243
|
|
||||||||
Non-U.S.
|
2,882
|
|
122
|
|
1
|
|
|
3,003
|
|
|
6,049
|
|
158
|
|
7
|
|
|
6,200
|
|
||||||||
Commercial
|
4,932
|
|
98
|
|
5
|
|
|
5,025
|
|
|
9,002
|
|
122
|
|
20
|
|
|
9,104
|
|
||||||||
Total mortgage-backed securities
|
85,886
|
|
1,141
|
|
355
|
|
|
86,672
|
|
|
86,589
|
|
1,492
|
|
529
|
|
|
87,552
|
|
||||||||
U.S. Treasury and government agencies
(a)
|
22,510
|
|
266
|
|
31
|
|
|
22,745
|
|
|
44,822
|
|
75
|
|
796
|
|
|
44,101
|
|
||||||||
Obligations of U.S. states and municipalities
|
30,490
|
|
1,881
|
|
33
|
|
|
32,338
|
|
|
30,284
|
|
1,492
|
|
184
|
|
|
31,592
|
|
||||||||
Certificates of deposit
|
59
|
|
—
|
|
—
|
|
|
59
|
|
|
106
|
|
—
|
|
—
|
|
|
106
|
|
||||||||
Non-U.S. government debt securities
|
26,900
|
|
426
|
|
32
|
|
|
27,294
|
|
|
34,497
|
|
836
|
|
45
|
|
|
35,288
|
|
||||||||
Corporate debt securities
|
2,657
|
|
101
|
|
1
|
|
|
2,757
|
|
|
4,916
|
|
64
|
|
22
|
|
|
4,958
|
|
||||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Collateralized loan obligations
|
20,928
|
|
69
|
|
1
|
|
|
20,996
|
|
|
27,352
|
|
75
|
|
26
|
|
|
27,401
|
|
||||||||
Other
|
8,764
|
|
77
|
|
24
|
|
|
8,817
|
|
|
6,950
|
|
62
|
|
45
|
|
|
6,967
|
|
||||||||
Total available-for-sale debt securities
|
198,194
|
|
3,961
|
|
477
|
|
|
201,678
|
|
|
235,516
|
|
4,096
|
|
1,647
|
|
|
237,965
|
|
||||||||
Available-for-sale equity securities
|
547
|
|
—
|
|
—
|
|
|
547
|
|
|
914
|
|
12
|
|
—
|
|
|
926
|
|
||||||||
Total available-for-sale securities
|
198,741
|
|
3,961
|
|
477
|
|
|
202,225
|
|
|
236,430
|
|
4,108
|
|
1,647
|
|
|
238,891
|
|
||||||||
Held-to-maturity debt securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. government agencies
(c)
|
27,577
|
|
558
|
|
40
|
|
|
28,095
|
|
|
29,910
|
|
638
|
|
37
|
|
|
30,511
|
|
||||||||
Commercial
|
5,783
|
|
1
|
|
74
|
|
|
5,710
|
|
|
5,783
|
|
—
|
|
129
|
|
|
5,654
|
|
||||||||
Total mortgage-backed securities
|
33,360
|
|
559
|
|
114
|
|
|
33,805
|
|
|
35,693
|
|
638
|
|
166
|
|
|
36,165
|
|
||||||||
Obligations of U.S. states and municipalities
|
14,373
|
|
554
|
|
80
|
|
|
14,847
|
|
|
14,475
|
|
374
|
|
125
|
|
|
14,724
|
|
||||||||
Total held-to-maturity debt securities
|
47,733
|
|
1,113
|
|
194
|
|
|
48,652
|
|
|
50,168
|
|
1,012
|
|
291
|
|
|
50,889
|
|
||||||||
Total securities
|
$
|
246,474
|
|
$
|
5,074
|
|
$
|
671
|
|
|
$
|
250,877
|
|
|
$
|
286,598
|
|
$
|
5,120
|
|
$
|
1,938
|
|
|
$
|
289,780
|
|
(a)
|
Includes total U.S. government-sponsored enterprise obligations with a fair value of
$45.8 billion
for the years ended
December 31, 2017
and
2016
, which were predominantly mortgage-related.
|
(b)
|
Prior period amounts have been revised to conform with the current period presentation.
|
(c)
|
Included total U.S. government-sponsored enterprise obligations with amortized cost of
$22.0 billion
and
$25.6 billion
at
December 31, 2017
and
2016
, respectively, which were mortgage-related.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
203
|
|
Securities with gross unrealized losses
|
||||||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
|
||||||||||||||
December 31, 2017 (in millions)
|
Fair value
|
Gross unrealized losses
|
|
Fair value
|
Gross unrealized losses
|
Total fair value
|
Total gross unrealized losses
|
||||||||||||
Available-for-sale debt securities
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities:
|
|
|
|
|
|
|
|
||||||||||||
U.S. government agencies
|
$
|
36,037
|
|
$
|
139
|
|
|
$
|
7,711
|
|
$
|
196
|
|
$
|
43,748
|
|
$
|
335
|
|
Residential:
|
|
|
|
|
|
|
|
||||||||||||
U.S
|
1,112
|
|
5
|
|
|
596
|
|
9
|
|
1,708
|
|
14
|
|
||||||
Non-U.S.
|
—
|
|
—
|
|
|
266
|
|
1
|
|
266
|
|
1
|
|
||||||
Commercial
|
528
|
|
4
|
|
|
335
|
|
1
|
|
863
|
|
5
|
|
||||||
Total mortgage-backed securities
|
37,677
|
|
148
|
|
|
8,908
|
|
207
|
|
46,585
|
|
355
|
|
||||||
U.S. Treasury and government agencies
|
1,834
|
|
11
|
|
|
373
|
|
20
|
|
2,207
|
|
31
|
|
||||||
Obligations of U.S. states and municipalities
|
949
|
|
7
|
|
|
1,652
|
|
26
|
|
2,601
|
|
33
|
|
||||||
Certificates of deposit
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Non-U.S. government debt securities
|
6,500
|
|
15
|
|
|
811
|
|
17
|
|
7,311
|
|
32
|
|
||||||
Corporate debt securities
|
—
|
|
—
|
|
|
52
|
|
1
|
|
52
|
|
1
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
||||||||||||
Collateralized loan obligations
|
—
|
|
—
|
|
|
276
|
|
1
|
|
276
|
|
1
|
|
||||||
Other
|
3,521
|
|
20
|
|
|
720
|
|
4
|
|
4,241
|
|
24
|
|
||||||
Total available-for-sale debt securities
|
50,481
|
|
201
|
|
|
12,792
|
|
276
|
|
63,273
|
|
477
|
|
||||||
Available-for-sale equity securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Held-to-maturity securities
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
|
|
|
|
|
|
|
||||||||||||
U.S. government securities
|
4,070
|
|
38
|
|
|
205
|
|
2
|
|
4,275
|
|
40
|
|
||||||
Commercial
|
3,706
|
|
41
|
|
|
1,882
|
|
33
|
|
5,588
|
|
74
|
|
||||||
Total mortgage-backed securities
|
7,776
|
|
79
|
|
|
2,087
|
|
35
|
|
9,863
|
|
114
|
|
||||||
Obligations of U.S. states and municipalities
|
584
|
|
9
|
|
|
2,131
|
|
71
|
|
2,715
|
|
80
|
|
||||||
Total held-to-maturity securities
|
8,360
|
|
88
|
|
|
4,218
|
|
106
|
|
12,578
|
|
194
|
|
||||||
Total securities with gross unrealized losses
|
$
|
58,841
|
|
$
|
289
|
|
|
$
|
17,010
|
|
$
|
382
|
|
$
|
75,851
|
|
$
|
671
|
|
204
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
Securities with gross unrealized losses
|
||||||||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
|
||||||||||||||
December 31, 2016 (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
|
$
|
29,856
|
|
$
|
463
|
|
|
$
|
506
|
|
$
|
11
|
|
$
|
30,362
|
|
$
|
474
|
|
Residential:
|
|
|
|
|
|
|
|
||||||||||||
U.S.
(a)
|
1,373
|
|
6
|
|
|
1,073
|
|
22
|
|
2,446
|
|
28
|
|
||||||
Non-U.S.
|
—
|
|
—
|
|
|
886
|
|
7
|
|
886
|
|
7
|
|
||||||
Commercial
|
2,328
|
|
17
|
|
|
1,078
|
|
3
|
|
3,406
|
|
20
|
|
||||||
Total mortgage-backed securities
|
33,557
|
|
486
|
|
|
3,543
|
|
43
|
|
37,100
|
|
529
|
|
||||||
U.S. Treasury and government agencies
|
23,543
|
|
796
|
|
|
—
|
|
—
|
|
23,543
|
|
796
|
|
||||||
Obligations of U.S. states and municipalities
|
7,215
|
|
181
|
|
|
55
|
|
3
|
|
7,270
|
|
184
|
|
||||||
Certificates of deposit
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Non-U.S. government debt securities
|
4,436
|
|
36
|
|
|
421
|
|
9
|
|
4,857
|
|
45
|
|
||||||
Corporate debt securities
|
797
|
|
2
|
|
|
829
|
|
20
|
|
1,626
|
|
22
|
|
||||||
Asset-backed securities:
|
|
|
|
|
|
|
|
||||||||||||
Collateralized loan obligations
|
766
|
|
2
|
|
|
5,263
|
|
24
|
|
6,029
|
|
26
|
|
||||||
Other
|
739
|
|
6
|
|
|
1,992
|
|
39
|
|
2,731
|
|
45
|
|
||||||
Total available-for-sale debt securities
|
71,053
|
|
1,509
|
|
|
12,103
|
|
138
|
|
83,156
|
|
1,647
|
|
||||||
Available-for-sale equity securities
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Held-to-maturity debt securities
|
|
|
|
|
|
|
|
||||||||||||
Mortgage-backed securities
|
|
|
|
|
|
|
|
||||||||||||
U.S. government agencies
|
3,129
|
|
37
|
|
|
—
|
|
—
|
|
3,129
|
|
37
|
|
||||||
Commercial
|
5,163
|
|
114
|
|
|
441
|
|
15
|
|
5,604
|
|
129
|
|
||||||
Total mortgage-backed securities
|
8,292
|
|
151
|
|
|
441
|
|
15
|
|
8,733
|
|
166
|
|
||||||
Obligations of U.S. states and municipalities
|
4,702
|
|
125
|
|
|
—
|
|
—
|
|
4,702
|
|
125
|
|
||||||
Total held-to-maturity securities
|
12,994
|
|
276
|
|
|
441
|
|
15
|
|
13,435
|
|
291
|
|
||||||
Total securities with gross unrealized losses
|
$
|
84,047
|
|
$
|
1,785
|
|
|
$
|
12,544
|
|
$
|
153
|
|
$
|
96,591
|
|
$
|
1,938
|
|
(a)
|
Prior period amounts have been revised to conform with the current period presentation.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
205
|
Year ended December 31,
(in millions) |
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Realized gains
|
$
|
1,013
|
|
|
$
|
401
|
|
|
$
|
351
|
|
Realized losses
|
(1,072
|
)
|
|
(232
|
)
|
|
(127
|
)
|
|||
OTTI losses
(a)
|
(7
|
)
|
|
(28
|
)
|
|
(22
|
)
|
|||
Net securities gains/(losses)
|
(66
|
)
|
|
141
|
|
|
202
|
|
|||
|
|
|
|
|
|
||||||
OTTI losses
|
|
|
|
|
|
||||||
Credit losses recognized in income
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Securities the Firm intends to sell
(a)
|
(7
|
)
|
|
(27
|
)
|
|
(21
|
)
|
|||
Total OTTI losses recognized in income
|
$
|
(7
|
)
|
|
$
|
(28
|
)
|
|
$
|
(22
|
)
|
(a)
|
Excludes realized losses on securities sold of
$6 million
,
$24 million
and
$5 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively that had been previously reported as an OTTI loss due to the intention to sell the securities.
|
206
|
|
JPMorgan Chase & Co./2017 Annual Report
|
By remaining maturity
December 31, 2017 (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
|
$
|
3
|
|
|
$
|
698
|
|
|
$
|
6,134
|
|
|
$
|
79,051
|
|
|
$
|
85,886
|
|
Fair value
|
3
|
|
|
708
|
|
|
6,294
|
|
|
79,667
|
|
|
86,672
|
|
|||||
Average yield
(b)
|
4.76
|
%
|
|
2.10
|
%
|
|
3.10
|
%
|
|
3.35
|
%
|
|
3.32
|
%
|
|||||
U.S. Treasury and government agencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
17,437
|
|
|
$
|
5,013
|
|
|
$
|
22,510
|
|
Fair value
|
60
|
|
|
—
|
|
|
17,542
|
|
|
5,143
|
|
|
22,745
|
|
|||||
Average yield
(b)
|
1.72
|
%
|
|
—
|
%
|
|
1.96
|
%
|
|
1.76
|
%
|
|
1.91
|
%
|
|||||
Obligations of U.S. states and municipalities
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
73
|
|
|
$
|
750
|
|
|
$
|
1,265
|
|
|
$
|
28,402
|
|
|
$
|
30,490
|
|
Fair value
|
72
|
|
|
765
|
|
|
1,324
|
|
|
30,177
|
|
|
32,338
|
|
|||||
Average yield
(b)
|
1.78
|
%
|
|
3.28
|
%
|
|
5.40
|
%
|
|
5.50
|
%
|
|
5.43
|
%
|
|||||
Certificates of deposit
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
59
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59
|
|
Fair value
|
59
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|||||
Average yield
(b)
|
0.50
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.50
|
%
|
|||||
Non-U.S. government debt securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
5,020
|
|
|
$
|
13,665
|
|
|
$
|
8,215
|
|
|
$
|
—
|
|
|
$
|
26,900
|
|
Fair value
|
5,022
|
|
|
13,845
|
|
|
8,427
|
|
|
—
|
|
|
27,294
|
|
|||||
Average yield
(b)
|
3.09
|
%
|
|
1.55
|
%
|
|
1.19
|
%
|
|
—
|
%
|
|
1.73
|
%
|
|||||
Corporate debt securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
150
|
|
|
$
|
1,159
|
|
|
$
|
1,203
|
|
|
$
|
145
|
|
|
$
|
2,657
|
|
Fair value
|
151
|
|
|
1,197
|
|
|
1,255
|
|
|
154
|
|
|
2,757
|
|
|||||
Average yield
(b)
|
3.07
|
%
|
|
3.60
|
%
|
|
3.58
|
%
|
|
3.22
|
%
|
|
3.54
|
%
|
|||||
Asset-backed securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
—
|
|
|
$
|
3,372
|
|
|
$
|
13,046
|
|
|
$
|
13,274
|
|
|
$
|
29,692
|
|
Fair value
|
—
|
|
|
3,353
|
|
|
13,080
|
|
|
13,380
|
|
|
29,813
|
|
|||||
Average yield
(b)
|
—
|
%
|
|
2.14
|
%
|
|
2.58
|
%
|
|
2.36
|
%
|
|
2.43
|
%
|
|||||
Total available-for-sale debt securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
5,365
|
|
|
$
|
19,644
|
|
|
$
|
47,300
|
|
|
$
|
125,885
|
|
|
$
|
198,194
|
|
Fair value
|
5,367
|
|
|
19,868
|
|
|
47,922
|
|
|
128,521
|
|
|
201,678
|
|
|||||
Average yield
(b)
|
3.03
|
%
|
|
1.86
|
%
|
|
2.28
|
%
|
|
3.66
|
%
|
|
3.14
|
%
|
|||||
Available-for-sale equity securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
547
|
|
|
$
|
547
|
|
Fair value
|
—
|
|
|
—
|
|
|
—
|
|
|
547
|
|
|
547
|
|
|||||
Average yield
(b)
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.71
|
%
|
|
0.71
|
%
|
|||||
Total available-for-sale securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
5,365
|
|
|
$
|
19,644
|
|
|
$
|
47,300
|
|
|
$
|
126,432
|
|
|
$
|
198,741
|
|
Fair value
|
5,367
|
|
|
19,868
|
|
|
47,922
|
|
|
129,068
|
|
|
202,225
|
|
|||||
Average yield
(b)
|
3.03
|
%
|
|
1.86
|
%
|
|
2.28
|
%
|
|
3.65
|
%
|
|
3.13
|
%
|
|||||
Held-to-maturity debt securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage-backed securities
(a)
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized Cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49
|
|
|
$
|
33,311
|
|
|
$
|
33,360
|
|
Fair value
|
—
|
|
|
—
|
|
|
49
|
|
|
33,756
|
|
|
33,805
|
|
|||||
Average yield
(b)
|
—
|
%
|
|
—
|
%
|
|
2.88
|
%
|
|
3.27
|
%
|
|
3.27
|
%
|
|||||
Obligations of U.S. states and municipalities
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
—
|
|
|
$
|
66
|
|
|
$
|
2,019
|
|
|
$
|
12,288
|
|
|
$
|
14,373
|
|
Fair value
|
—
|
|
|
65
|
|
|
2,067
|
|
|
12,715
|
|
|
14,847
|
|
|||||
Average yield
(b)
|
—
|
%
|
|
4.74
|
%
|
|
4.30
|
%
|
|
4.72
|
%
|
|
4.66
|
%
|
|||||
Total held-to-maturity securities
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortized cost
|
$
|
—
|
|
|
$
|
66
|
|
|
$
|
2,068
|
|
|
$
|
45,599
|
|
|
$
|
47,733
|
|
Fair value
|
—
|
|
|
65
|
|
|
2,116
|
|
|
46,471
|
|
|
48,652
|
|
|||||
Average yield
(b)
|
—
|
%
|
|
4.75
|
%
|
|
4.26
|
%
|
|
3.66
|
%
|
|
3.69
|
%
|
(a)
|
As of
December 31, 2017
, mortgage-backed securities issued by Fannie Mae exceeded
10%
of JPMorgan Chase’s total stockholders’ equity; the amortized cost and fair value of such securities was $
55.1 billion
and $
56.0 billion
, respectively
.
|
(b)
|
Average yield is computed using the effective yield of each security owned at the end of the period, weighted based on the amortized cost of each security. The effective yield considers the contractual coupon, amortization of premiums and accretion of discounts, and the effect of related hedging derivatives. Taxable-equivalent amounts are used
|
JPMorgan Chase & Co./2017 Annual Report
|
|
207
|
(c)
|
Includes securities with no stated maturity. Substantially all of the Firm’s U.S. residential MBS and collateralized mortgage obligations are due in
10 years
or more, based on contractual maturity. The estimated weighted-average life, which reflects anticipated future prepayments, is approximately
six years
for agency residential MBS,
three years
for agency residential collateralized mortgage obligations and
three years
for nonagency residential collateralized mortgage obligations.
|
208
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
2017
|
||||||||||||||
December 31, (in millions)
|
Gross amounts
|
Amounts netted on the Consolidated balance sheets
|
Amounts presented on the Consolidated balance sheets
(b)
|
Amounts not nettable on the Consolidated balance sheets
(c)
|
Net amounts
(d)
|
||||||||||
Assets
|
|
|
|
|
|
||||||||||
Securities purchased under resale agreements
|
$
|
448,608
|
|
$
|
(250,505
|
)
|
$
|
198,103
|
|
$
|
(188,502
|
)
|
$
|
9,601
|
|
Securities borrowed
|
113,926
|
|
(8,814
|
)
|
105,112
|
|
(76,805
|
)
|
28,307
|
|
|||||
Liabilities
|
|
|
|
|
|
||||||||||
Securities sold under repurchase agreements
|
$
|
398,218
|
|
$
|
(250,505
|
)
|
$
|
147,713
|
|
$
|
(129,178
|
)
|
$
|
18,535
|
|
Securities loaned and other
(a)
|
27,228
|
|
(8,814
|
)
|
18,414
|
|
(18,151
|
)
|
263
|
|
|
2016
|
||||||||||||||
December 31, (in millions)
|
Gross amounts
|
Amounts netted on the Consolidated balance sheets
|
Amounts presented on the Consolidated balance sheets
(b)
|
Amounts not nettable on the Consolidated balance sheets
(c)
|
Net amounts
(d)
|
||||||||||
Assets
|
|
|
|
|
|
||||||||||
Securities purchased under resale agreements
|
$
|
480,735
|
|
$
|
(250,832
|
)
|
$
|
229,903
|
|
$
|
(222,413
|
)
|
$
|
7,490
|
|
Securities borrowed
|
96,409
|
|
—
|
|
96,409
|
|
(66,822
|
)
|
29,587
|
|
|||||
Liabilities
|
|
|
|
|
|
||||||||||
Securities sold under repurchase agreements
|
$
|
402,465
|
|
$
|
(250,832
|
)
|
$
|
151,633
|
|
$
|
(133,300
|
)
|
$
|
18,333
|
|
Securities loaned and other
(a)
|
22,451
|
|
—
|
|
22,451
|
|
(22,177
|
)
|
274
|
|
(a)
|
Includes securities-for-securities lending transactions of
$9.2 billion
and
$9.1 billion
at
December 31, 2017
and
2016
, respectively, accounted for at fair value, where the Firm is acting as lender. These amounts are presented within accounts payable and other liabilities in the Consolidated balance sheets.
|
(b)
|
Includes securities financing agreements accounted for at fair value. At
December 31, 2017
and
2016
, included securities purchased under resale agreements of
$14.7 billion
and
$21.5 billion
, respectively, and securities sold under agreements to repurchase of
$697 million
and
$687 million
, respectively. There were
$3.0 billion
of securities borrowed at
December 31, 2017
and there were
no
securities borrowed at
December 31, 2016
. There were
no
securities loaned accounted for at fair value in either period.
|
(c)
|
In some cases, collateral exchanged with a counterparty exceeds the net asset or liability balance with that counterparty. In such cases, the amounts reported in this column are limited to the related asset or liability with that counterparty.
|
(d)
|
Includes securities financing agreements that provide collateral rights, but where an appropriate legal opinion with respect to the master netting agreement has not been either sought or obtained. At
December 31, 2017
and
2016
, included
$7.5 billion
and
$4.8 billion
, respectively, of securities purchased under resale agreements;
$25.5 billion
and
$27.1 billion
, respectively, of securities borrowed;
$16.5 billion
and
$15.9 billion
, respectively, of securities sold under agreements to repurchase; and
$29 million
and
$90 million
, respectively, of securities loaned and other.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
209
|
|
Gross liability balance
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
December 31, (in millions)
|
Securities sold under repurchase agreements
|
Securities loaned and other
(b)
|
|
Securities sold under repurchase agreements
|
Securities loaned and other
(b)
|
||||||||
Mortgage-backed securities:
|
|
|
|
|
|
||||||||
U.S. government agencies
(a)
|
$
|
13,100
|
|
$
|
—
|
|
|
$
|
14,034
|
|
$
|
—
|
|
Residential - nonagency
|
2,972
|
|
—
|
|
|
6,224
|
|
—
|
|
||||
Commercial - nonagency
|
1,594
|
|
—
|
|
|
4,173
|
|
—
|
|
||||
U.S. Treasury and government agencies
(a)
|
177,581
|
|
14
|
|
|
185,145
|
|
—
|
|
||||
Obligations of U.S. states and municipalities
|
1,557
|
|
—
|
|
|
2,491
|
|
—
|
|
||||
Non-U.S. government debt
|
170,196
|
|
2,485
|
|
|
149,008
|
|
1,279
|
|
||||
Corporate debt securities
|
14,231
|
|
287
|
|
|
18,140
|
|
108
|
|
||||
Asset-backed securities
|
3,508
|
|
—
|
|
|
7,721
|
|
—
|
|
||||
Equity securities
|
13,479
|
|
24,442
|
|
|
15,529
|
|
21,064
|
|
||||
Total
|
$
|
398,218
|
|
$
|
27,228
|
|
|
$
|
402,465
|
|
$
|
22,451
|
|
|
Remaining contractual maturity of the agreements
|
||||||||||||||
|
Overnight and continuous
|
|
|
Greater than
90 days
|
|
||||||||||
2017
(in millions)
|
Up to 30 days
|
30 – 90 days
|
Total
|
||||||||||||
Total securities sold under repurchase agreements
|
$
|
166,425
|
|
$
|
156,434
|
|
$
|
41,611
|
|
$
|
33,748
|
|
$
|
398,218
|
|
Total securities loaned and other
(b)
|
22,876
|
|
375
|
|
2,328
|
|
1,649
|
|
27,228
|
|
|
Remaining contractual maturity of the agreements
|
||||||||||||||
|
Overnight and continuous
|
|
|
Greater than
90 days
|
|
||||||||||
2016 (in millions)
|
Up to 30 days
|
30 – 90 days
|
Total
|
||||||||||||
Total securities sold under repurchase agreements
|
$
|
140,318
|
|
$
|
157,860
|
|
$
|
55,621
|
|
$
|
48,666
|
|
$
|
402,465
|
|
Total securities loaned and other
(b)
|
13,586
|
|
1,371
|
|
2,877
|
|
4,617
|
|
22,451
|
|
(a)
|
Prior period amounts were revised to conform with the current period presentation.
|
(b)
|
Includes securities-for-securities lending transactions of
$9.2 billion
and
$9.1 billion
at
December 31, 2017
and
2016
, respectively, accounted for at fair value, where the Firm is acting as lender. These amounts are presented within accounts payable and other liabilities on the Consolidated balance sheets.
|
210
|
|
JPMorgan Chase & Co./2017 Annual Report
|
•
|
Originated or purchased loans held-for-investment (i.e., “retained”), other than PCI loans
|
•
|
Loans held-for-sale
|
•
|
Loans at fair value
|
•
|
PCI loans held-for-investment
|
•
|
Loans modified in a
TDR
that are determined to be collateral-dependent.
|
•
|
Loans to borrowers who have experienced an event that suggests a loss is either known or highly certain are subject to accelerated charge-off standards (e.g., residential real estate and auto loans are charged off within 60 days of receiving notification of a bankruptcy filing).
|
•
|
Auto loans upon repossession of the automobile.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
211
|
212
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
213
|
Consumer, excluding
credit card
(a)
|
|
Credit card
|
|
Wholesale
(f)
|
Residential real estate – excluding PCI
• Residential mortgage
(b)
• Home equity
(c)
Other consumer loans
• Auto
(d)
• Consumer & Business Banking
(d)(e)
• Student
Residential real estate – PCI
• Home equity
• Prime mortgage
• Subprime mortgage
• Option ARMs
|
|
• Credit card loans
|
|
• Commercial and industrial
• Real estate
• Financial institutions
• Government agencies
• Other
(g)
|
(a)
|
Includes loans held in CCB,
prime mortgage and home equity loans held in
AWM
and prime mortgage loans held in
Corporate
.
|
(b)
|
Predominantly includes prime (including option ARMs) and subprime loans.
|
(c)
|
Includes senior and junior lien home equity loans.
|
(d)
|
Includes certain business banking and auto dealer risk-rated loans that apply the wholesale methodology for determining the allowance for loan losses; these loans are managed by CCB, and therefore, for consistency in presentation, are included with the other consumer loan classes.
|
(e)
|
Predominantly includes Business Banking loans.
|
(f)
|
Includes loans held in CIB, CB, AWM and Corporate. Excludes prime mortgage and home equity loans held in AWM and prime mortgage loans held in Corporate. Classes are internally defined and may not align with regulatory definitions.
|
(g)
|
Includes loans to: individuals; SPEs; and private education and civic organizations. For more information on SPEs, see Note
14
.
|
December 31, 2017
|
Consumer, excluding credit card
|
Credit card
(a)
|
Wholesale
|
Total
|
|
|||||||||||||||
(in millions)
|
|
|||||||||||||||||||
Retained
|
|
$
|
372,553
|
|
|
|
$
|
149,387
|
|
|
|
$
|
402,898
|
|
|
|
$
|
924,838
|
|
(b)
|
Held-for-sale
|
|
128
|
|
|
|
124
|
|
|
|
3,099
|
|
|
|
3,351
|
|
|
||||
At fair value
|
|
—
|
|
|
|
—
|
|
|
|
2,508
|
|
|
|
2,508
|
|
|
||||
Total
|
|
$
|
372,681
|
|
|
|
$
|
149,511
|
|
|
|
$
|
408,505
|
|
|
|
$
|
930,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
Consumer, excluding credit card
|
|
Credit card
(a)
|
|
|
Wholesale
|
|
|
Total
|
|
||||||||||
(in millions)
|
|
|||||||||||||||||||
Retained
|
|
$
|
364,406
|
|
|
|
$
|
141,711
|
|
|
|
$
|
383,790
|
|
|
|
$
|
889,907
|
|
(b)
|
Held-for-sale
|
|
238
|
|
|
|
105
|
|
|
|
2,285
|
|
|
|
2,628
|
|
|
||||
At fair value
|
|
—
|
|
|
|
—
|
|
|
|
2,230
|
|
|
|
2,230
|
|
|
||||
Total
|
|
$
|
364,644
|
|
|
|
$
|
141,816
|
|
|
|
$
|
388,305
|
|
|
|
$
|
894,765
|
|
|
(a)
|
Includes accrued interest and fees net of an allowance for the uncollectible portion of accrued interest and fee income.
|
(b)
|
Loans (other than PCI loans and those for which the fair value option has been elected) are presented net of unamortized discounts and premiums and net deferred loan fees or costs. These amounts were not material as of
December 31, 2017
and
2016
.
|
214
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
|
|
2017
|
|||||||||||||||||
Year ended December 31,
(in millions) |
|
Consumer, excluding
credit card
|
Credit card
|
Wholesale
|
Total
|
|||||||||||||||
Purchases
|
|
|
$
|
3,461
|
|
(a)(b)
|
|
$
|
—
|
|
|
|
$
|
1,799
|
|
|
|
$
|
5,260
|
|
Sales
|
|
|
3,405
|
|
|
|
—
|
|
|
|
11,063
|
|
|
|
14,468
|
|
||||
Retained loans reclassified to held-for-sale
|
|
|
6,340
|
|
(c)
|
|
—
|
|
|
|
1,229
|
|
|
|
7,569
|
|
|
|
|
2016
|
|||||||||||||||||
Year ended December 31,
(in millions) |
|
Consumer, excluding
credit card
|
Credit card
|
Wholesale
|
Total
|
|||||||||||||||
Purchases
|
|
|
$
|
4,116
|
|
(a)(b)
|
|
$
|
—
|
|
|
|
$
|
1,448
|
|
|
|
$
|
5,564
|
|
Sales
|
|
|
6,368
|
|
|
|
—
|
|
|
|
8,739
|
|
|
|
15,107
|
|
||||
Retained loans reclassified to held-for-sale
|
|
|
321
|
|
|
|
—
|
|
|
|
2,381
|
|
|
|
2,702
|
|
|
|
|
2015
|
|||||||||||||||||
Year ended December 31,
(in millions) |
|
Consumer, excluding
credit card
|
Credit card
|
Wholesale
|
Total
|
|||||||||||||||
Purchases
|
|
|
$
|
5,279
|
|
(a)(b)
|
|
$
|
—
|
|
|
|
$
|
2,154
|
|
|
|
$
|
7,433
|
|
Sales
|
|
|
5,099
|
|
|
|
—
|
|
|
|
9,188
|
|
|
|
14,287
|
|
||||
Retained loans reclassified to held-for-sale
|
|
|
1,514
|
|
|
|
79
|
|
|
|
642
|
|
|
|
2,235
|
|
(a)
|
Purchases predominantly represent the Firm’s voluntary repurchase of certain delinquent loans from loan pools as permitted by Government National Mortgage Association (“Ginnie Mae”) guidelines. The Firm typically elects to repurchase these delinquent loans as it continues to service them and/or manage the foreclosure process in accordance with applicable requirements of Ginnie Mae, FHA, RHS, and/or VA.
|
(b)
|
Excludes purchases of retained loans sourced through the correspondent origination channel and underwritten in accordance with the Firm’s standards. Such purchases were
$23.5 billion
,
$30.4 billion
and
$50.3 billion
for the
years ended
December 31, 2017
,
2016
and
2015
, respectively.
|
(c)
|
Includes the Firm’s student loan portfolio which was sold in 2017.
|
(a)
|
Excludes sales related to loans accounted for at fair value.
|
(b)
|
Includes amounts related to the Firm’s student loan portfolio which was sold in 2017.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
215
|
•
|
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 ratios can provide insight into a borrower’s continued willingness to pay, as the delinquency rate of high-LTV loans tends to be greater than that for loans where the borrower has equity in the collateral. The geographic distribution of the loan collateral also provides insight as to the credit quality of the portfolio, as factors such as the regional economy, home price changes and specific events such as natural disasters, will affect credit quality. The borrower’s current or “refreshed” FICO score is a secondary credit-quality indicator for certain loans, as FICO scores are an indication of the borrower’s credit payment history. Thus, a loan to a borrower with a low FICO score (less than
660
) is considered to be of higher risk than a loan to a borrower with a higher FICO score. Further, a loan to a borrower with a high LTV ratio and a low FICO score is at greater risk of default than a loan to a borrower that has both a high LTV ratio and a high FICO score.
|
•
|
For scored auto and scored business banking loans, geographic distribution is an indicator of the credit performance of the portfolio. Similar to residential real estate loans, geographic distribution provides insights into the portfolio performance based on regional economic activity and events.
|
•
|
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 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 228
of this Note.
|
216
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(a)
|
Individual delinquency classifications include mortgage loans insured by U.S. government agencies as follows: current included
$2.4 billion
and
$2.5 billion
;
30
–
149
days past due included
$3.2 billion
and
$3.1 billion
; and
150
or more days past due included
$2.9 billion
and
$3.8 billion
at
December 31, 2017
and
2016
, respectively.
|
(b)
|
At
December 31, 2017
and
2016
, residential mortgage loans excluded mortgage loans insured by U.S. government agencies of
$6.1 billion
and
$6.9 billion
, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
|
(c)
|
These balances, which are
90 days
or more past due, were excluded from nonaccrual loans as the loans are guaranteed by U.S government agencies. Typically the principal balance of the loans is insured and interest is guaranteed at a specified reimbursement rate subject to meeting agreed-upon servicing guidelines. At
December 31, 2017
and
2016
, these balances included
$1.5 billion
and
$2.2 billion
, respectively, of loans that are no longer accruing interest based on the agreed-upon servicing guidelines. For the remaining balance, interest is being accrued at the guaranteed reimbursement rate. There were
no
loans that were not guaranteed by U.S. government agencies that are 90 or more days past due and still accruing interest at
December 31, 2017
and
2016
.
|
(d)
|
Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates. Current estimated combined LTV for junior lien home equity loans considers all available lien positions, as well as unused lines, related to the property.
|
(e)
|
Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.
|
(f)
|
At
December 31, 2017
and
2016
, included mortgage loans insured by U.S. government agencies of
$8.5 billion
and
$9.4 billion
, respectively.
|
(g)
|
Certain loan portfolios have been reclassified. The prior period amounts have been revised to conform with the current period presentation.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
217
|
|
|
Total loans
|
|
Total 30+ day delinquency rate
|
||||||||
December 31, (in millions except ratios)
|
|
2017
|
2016
|
|
2017
|
2016
|
||||||
HELOCs:
(a)
|
|
|
|
|
|
|
||||||
Within the revolving period
(b)
|
|
$
|
6,363
|
|
$
|
10,304
|
|
|
0.50
|
%
|
1.27
|
%
|
Beyond the revolving period
|
|
13,532
|
|
13,272
|
|
|
3.56
|
|
3.05
|
|
||
HELOANs
|
|
1,371
|
|
1,861
|
|
|
3.50
|
|
2.85
|
|
||
Total
|
|
$
|
21,266
|
|
$
|
25,437
|
|
|
2.64
|
%
|
2.32
|
%
|
December 31,
(in millions)
|
Residential mortgage
|
|
Home equity
|
|
Total residential real estate
– excluding PCI
|
|||||||||||||||
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|||||||||||||
Impaired loans
|
|
|
|
|
|
|
|
|
||||||||||||
With an allowance
|
$
|
4,407
|
|
$
|
4,689
|
|
|
$
|
1,236
|
|
$
|
1,266
|
|
|
$
|
5,643
|
|
$
|
5,955
|
|
Without an allowance
(a)
|
1,213
|
|
1,343
|
|
|
882
|
|
998
|
|
|
2,095
|
|
2,341
|
|
||||||
Total impaired loans
(b)(c)
|
$
|
5,620
|
|
$
|
6,032
|
|
|
$
|
2,118
|
|
$
|
2,264
|
|
|
$
|
7,738
|
|
$
|
8,296
|
|
Allowance for loan losses related to impaired loans
|
$
|
62
|
|
$
|
68
|
|
|
$
|
111
|
|
$
|
121
|
|
|
$
|
173
|
|
$
|
189
|
|
Unpaid principal balance of impaired loans
(d)
|
7,741
|
|
8,285
|
|
|
3,701
|
|
3,847
|
|
|
11,442
|
|
12,132
|
|
||||||
Impaired loans on nonaccrual status
(e)
|
1,743
|
|
1,755
|
|
|
1,032
|
|
1,116
|
|
|
2,775
|
|
2,871
|
|
(a)
|
Represents collateral-dependent residential real estate loans that are charged off to the fair value of the underlying collateral less costs to sell. The Firm reports, in accordance with regulatory guidance, residential real estate loans that have been discharged under Chapter 7 bankruptcy and not reaffirmed by the borrower (“Chapter 7 loans”) as collateral-dependent nonaccrual TDRs, regardless of their delinquency status. At
December 31, 2017
, Chapter 7 residential real estate loans included approximately
12%
of home equity and
15%
of residential mortgages that were
30 days
or more past due.
|
(b)
|
At
December 31, 2017
and
2016
,
$3.8 billion
and
$3.4 billion
, respectively, of loans modified subsequent to repurchase from Ginnie Mae in accordance with the standards of the appropriate government agency (i.e., FHA, VA, RHS) are not included in the table above. When such loans perform subsequent to modification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure.
|
(c)
|
Predominantly all residential real estate impaired loans, excluding PCI loans, are in the U.S.
|
(d)
|
Represents the contractual amount of principal owed at
December 31, 2017
and
2016
. 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)
|
As of
December 31, 2017
and
2016
, nonaccrual loans included
$2.2 billion
and
$2.3 billion
, respectively, of TDRs for which the borrowers were less than
90 days
past due. For additional information about loans modified in a TDR that are on nonaccrual status refer to the Loan accounting framework on
pages 211–213
of this Note.
|
218
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31,
(in millions)
|
Average impaired loans
|
|
Interest income on
impaired loans
(a)
|
|
Interest income on impaired
loans on a cash basis
(a)
|
||||||||||||||||||||||||
2017
|
2016
|
2015
|
|
2017
|
2016
|
2015
|
|
2017
|
2016
|
2015
|
|||||||||||||||||||
Residential mortgage
|
$
|
5,797
|
|
$
|
6,376
|
|
$
|
7,697
|
|
|
$
|
287
|
|
$
|
305
|
|
$
|
348
|
|
|
$
|
75
|
|
$
|
77
|
|
$
|
87
|
|
Home equity
|
2,189
|
|
2,311
|
|
2,369
|
|
|
127
|
|
125
|
|
128
|
|
|
80
|
|
80
|
|
85
|
|
|||||||||
Total residential real estate – excluding PCI
|
$
|
7,986
|
|
$
|
8,687
|
|
$
|
10,066
|
|
|
$
|
414
|
|
$
|
430
|
|
$
|
476
|
|
|
$
|
155
|
|
$
|
157
|
|
$
|
172
|
|
(a)
|
Generally, interest income on loans modified in TDRs is recognized on a cash basis until such time as the borrower has made a minimum of
six
payments under the new terms, unless the loan is deemed to be collateral-dependent.
|
Year ended December 31,
|
Residential mortgage
|
|
Home equity
|
|
Total residential real estate
– excluding PCI
|
|||||||||||||||
2017
|
2016
|
2015
|
|
2017
|
2016
|
2015
|
|
2017
|
2016
|
2015
|
||||||||||
Number of loans approved for a trial modification
|
1,283
|
|
1,945
|
|
2,711
|
|
|
2,321
|
|
3,760
|
|
3,933
|
|
|
3,604
|
|
5,705
|
|
6,644
|
|
Number of loans permanently modified
|
2,628
|
|
3,338
|
|
3,145
|
|
|
5,624
|
|
4,824
|
|
4,296
|
|
|
8,252
|
|
8,162
|
|
7,441
|
|
Concession granted:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest rate reduction
|
63
|
%
|
76
|
%
|
71
|
%
|
|
59
|
%
|
75
|
%
|
66
|
%
|
|
60
|
%
|
76
|
%
|
68
|
%
|
Term or payment extension
|
72
|
|
90
|
|
81
|
|
|
69
|
|
83
|
|
89
|
|
|
70
|
|
86
|
|
86
|
|
Principal and/or interest deferred
|
15
|
|
16
|
|
27
|
|
|
10
|
|
19
|
|
23
|
|
|
12
|
|
18
|
|
24
|
|
Principal forgiveness
|
16
|
|
26
|
|
28
|
|
|
13
|
|
9
|
|
7
|
|
|
14
|
|
16
|
|
16
|
|
Other
(b)
|
33
|
|
25
|
|
11
|
|
|
31
|
|
6
|
|
—
|
|
|
32
|
|
14
|
|
5
|
|
(a)
|
Represents concessions granted in permanent modifications as a percentage of the number of loans permanently modified. The sum of the percentages exceeds
100%
because predominantly all of the modifications include more than one type of concession. A significant portion of trial modifications include interest rate reductions and/or term or payment extensions.
|
(b)
|
Predominantly represents variable interest rate to fixed interest rate modifications.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
219
|
Year ended
December 31, (in millions, except weighted-average data and number of loans) |
Residential mortgage
|
|
Home equity
|
|
Total residential real estate – excluding PCI
|
||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||
2017
|
2016
|
2015
|
|
2017
|
2016
|
2015
|
|
2017
|
2016
|
2015
|
|||||||||||||||||||
Weighted-average interest rate of loans with interest rate reductions – before TDR
|
5.15
|
%
|
5.59
|
%
|
5.67
|
%
|
|
4.94
|
%
|
4.99
|
%
|
5.20
|
%
|
|
5.06
|
%
|
5.36
|
%
|
5.51
|
%
|
|||||||||
Weighted-average interest rate of loans with interest rate reductions – after TDR
|
2.99
|
|
2.93
|
|
2.79
|
|
|
2.64
|
|
2.34
|
|
2.35
|
|
|
2.83
|
|
2.70
|
|
2.64
|
|
|||||||||
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR
|
24
|
|
24
|
|
25
|
|
|
21
|
|
18
|
|
18
|
|
|
23
|
|
22
|
|
22
|
|
|||||||||
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR
|
38
|
|
38
|
|
37
|
|
|
39
|
|
38
|
|
35
|
|
|
38
|
|
38
|
|
36
|
|
|||||||||
Charge-offs recognized upon permanent modification
|
$
|
2
|
|
$
|
4
|
|
$
|
11
|
|
|
$
|
1
|
|
$
|
1
|
|
$
|
4
|
|
|
$
|
3
|
|
$
|
5
|
|
$
|
15
|
|
Principal deferred
|
12
|
|
30
|
|
58
|
|
|
10
|
|
23
|
|
27
|
|
|
22
|
|
53
|
|
85
|
|
|||||||||
Principal forgiven
|
20
|
|
44
|
|
66
|
|
|
13
|
|
7
|
|
6
|
|
|
33
|
|
51
|
|
72
|
|
|||||||||
Balance of loans that redefaulted within one year of permanent modification
(a)
|
$
|
124
|
|
$
|
98
|
|
$
|
133
|
|
|
$
|
56
|
|
$
|
40
|
|
$
|
21
|
|
|
$
|
180
|
|
$
|
138
|
|
$
|
154
|
|
(a)
|
Represents loans permanently modified in TDRs that experienced a payment default in the periods presented, and for which the payment default occurred within
one year
of the modification. The dollar amounts presented represent the balance of such loans at the end of the reporting period in which such loans defaulted. For residential real estate loans modified in TDRs, payment default is deemed to occur when the loan becomes
two
contractual payments past due. In the event that a modified loan redefaults, it is probable that the loan will ultimately be liquidated through foreclosure or another similar type of liquidation transaction. Redefaults of loans modified within the last
12 months
may not be representative of ultimate redefault levels.
|
220
|
|
JPMorgan Chase & Co./2017 Annual Report
|
December 31,
(in millions, except ratios)
|
Auto
|
|
Consumer & Business Banking
(c)
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Loan delinquency
|
|
|
|
|
|
|
|
||||||||
Current
|
$
|
65,651
|
|
|
$
|
65,029
|
|
|
$
|
25,454
|
|
|
$
|
23,920
|
|
30–119 days past due
|
584
|
|
|
773
|
|
|
213
|
|
|
247
|
|
||||
120 or more days past due
|
7
|
|
|
12
|
|
|
122
|
|
|
140
|
|
||||
Total retained loans
|
$
|
66,242
|
|
|
$
|
65,814
|
|
|
$
|
25,789
|
|
|
$
|
24,307
|
|
% of 30+ days past due to total retained loans
|
0.89
|
%
|
|
1.19
|
%
|
|
1.30
|
%
|
|
1.59
|
%
|
||||
Nonaccrual loans
(a)
|
141
|
|
|
214
|
|
|
283
|
|
|
287
|
|
||||
Geographic region
|
|||||||||||||||
California
|
$
|
8,445
|
|
|
$
|
7,975
|
|
|
$
|
5,032
|
|
|
$
|
4,426
|
|
Texas
|
7,013
|
|
|
7,041
|
|
|
2,916
|
|
|
2,954
|
|
||||
New York
|
4,023
|
|
|
4,078
|
|
|
4,195
|
|
|
3,979
|
|
||||
Illinois
|
3,916
|
|
|
3,984
|
|
|
2,017
|
|
|
1,758
|
|
||||
Florida
|
3,350
|
|
|
3,374
|
|
|
1,424
|
|
|
1,195
|
|
||||
Arizona
|
2,221
|
|
|
2,209
|
|
|
1,383
|
|
|
1,307
|
|
||||
Ohio
|
2,105
|
|
|
2,194
|
|
|
1,380
|
|
|
1,402
|
|
||||
Michigan
|
1,418
|
|
|
1,567
|
|
|
1,357
|
|
|
1,343
|
|
||||
New Jersey
|
2,044
|
|
|
2,031
|
|
|
721
|
|
|
623
|
|
||||
Louisiana
|
1,656
|
|
|
1,814
|
|
|
849
|
|
|
979
|
|
||||
All other
|
30,051
|
|
|
29,547
|
|
|
4,515
|
|
|
4,341
|
|
||||
Total retained loans
|
$
|
66,242
|
|
|
$
|
65,814
|
|
|
$
|
25,789
|
|
|
$
|
24,307
|
|
Loans by risk ratings
(b)
|
|
|
|
|
|
|
|
||||||||
Noncriticized
|
$
|
15,604
|
|
|
$
|
13,899
|
|
|
$
|
17,938
|
|
|
$
|
16,858
|
|
Criticized performing
|
93
|
|
|
201
|
|
|
791
|
|
|
816
|
|
||||
Criticized nonaccrual
|
9
|
|
|
94
|
|
|
213
|
|
|
217
|
|
(a)
|
There were
no
loans that were 90 or more days past due and still accruing interest at
December 31, 2017
, and
December 31, 2016
.
|
(b)
|
For risk-rated business banking and auto loans, the primary credit quality indicator is the risk rating of the loan, including whether the loans are considered to be criticized and/or nonaccrual.
|
(c)
|
Certain loan portfolios have been reclassified. The prior period amounts have been revised to conform with the current period presentation.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
221
|
December 31, (in millions)
|
2017
|
|
2016
|
|
||
Impaired loans
|
|
|
||||
With an allowance
|
$
|
272
|
|
$
|
614
|
|
Without an allowance
(a)
|
26
|
|
30
|
|
||
Total impaired loans
(b)(c)
|
$
|
298
|
|
$
|
644
|
|
Allowance for loan losses related to impaired loans
|
$
|
73
|
|
$
|
119
|
|
Unpaid principal balance of impaired loans
(d)
|
402
|
|
753
|
|
||
Impaired loans on nonaccrual status
|
268
|
|
508
|
|
(a)
|
When discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged off and/or there have been interest payments received and applied to the loan balance.
|
(b)
|
Predominantly all other consumer impaired loans are in the U.S.
|
(c)
|
Other consumer average impaired loans were
$427 million
,
$635 million
and
$566 million
for the years ended
December 31, 2017
,
2016
and
2015
, respectively. The related interest income on impaired loans, including those on a cash basis, was not material for the years ended
December 31, 2017
,
2016
and
2015
.
|
(d)
|
Represents the contractual amount of principal owed at
December 31, 2017
and
2016
. 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.
|
December 31, (in millions)
|
2017
|
2016
|
||||
Loans modified in TDRs
(a)(b)
|
$
|
102
|
|
$
|
362
|
|
TDRs on nonaccrual status
|
72
|
|
226
|
|
(a)
|
The impact of these modifications was not material to the Firm for the years ended
December 31, 2017
and
2016
.
|
(b)
|
Additional commitments to lend to borrowers whose loans have been modified in TDRs as of
December 31, 2017
and
2016
were immaterial.
|
222
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
223
|
December 31,
(in millions, except ratios)
|
Home equity
|
|
Prime mortgage
|
|
Subprime mortgage
|
|
Option ARMs
|
|
Total PCI
|
|||||||||||||||||||||||||
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|||||||||||||||||||||
Carrying value
(a)
|
$
|
10,799
|
|
$
|
12,902
|
|
|
$
|
6,479
|
|
$
|
7,602
|
|
|
$
|
2,609
|
|
$
|
2,941
|
|
|
$
|
10,689
|
|
$
|
12,234
|
|
|
$
|
30,576
|
|
$
|
35,679
|
|
Related allowance for loan losses
(b)
|
1,133
|
|
1,433
|
|
|
863
|
|
829
|
|
|
150
|
|
—
|
|
|
79
|
|
49
|
|
|
2,225
|
|
2,311
|
|
||||||||||
Loan delinquency (based on unpaid principal balance)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Current
|
$
|
10,272
|
|
$
|
12,423
|
|
|
$
|
5,839
|
|
$
|
6,840
|
|
|
$
|
2,640
|
|
$
|
3,005
|
|
|
$
|
9,662
|
|
$
|
11,074
|
|
|
$
|
28,413
|
|
$
|
33,342
|
|
30–149 days past due
|
356
|
|
291
|
|
|
336
|
|
336
|
|
|
381
|
|
361
|
|
|
547
|
|
555
|
|
|
1,620
|
|
1,543
|
|
||||||||||
150 or more days past due
|
392
|
|
478
|
|
|
327
|
|
451
|
|
|
176
|
|
240
|
|
|
689
|
|
917
|
|
|
1,584
|
|
2,086
|
|
||||||||||
Total loans
|
$
|
11,020
|
|
$
|
13,192
|
|
|
$
|
6,502
|
|
$
|
7,627
|
|
|
$
|
3,197
|
|
$
|
3,606
|
|
|
$
|
10,898
|
|
$
|
12,546
|
|
|
$
|
31,617
|
|
$
|
36,971
|
|
% of 30+ days past due to total loans
|
6.79
|
%
|
5.83
|
%
|
|
10.20
|
%
|
10.32
|
%
|
|
17.42
|
%
|
16.67
|
%
|
|
11.34
|
%
|
11.73
|
%
|
|
10.13
|
%
|
9.82
|
%
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Current estimated LTV ratios (based on unpaid principal balance)
(c)(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Greater than 125% and refreshed FICO scores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Equal to or greater than 660
|
$
|
33
|
|
$
|
69
|
|
|
$
|
4
|
|
$
|
6
|
|
|
$
|
2
|
|
$
|
7
|
|
|
$
|
6
|
|
$
|
12
|
|
|
$
|
45
|
|
$
|
94
|
|
Less than 660
|
21
|
|
39
|
|
|
16
|
|
17
|
|
|
20
|
|
31
|
|
|
9
|
|
18
|
|
|
66
|
|
105
|
|
||||||||||
101% to 125% and refreshed FICO scores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Equal to or greater than 660
|
274
|
|
555
|
|
|
16
|
|
52
|
|
|
20
|
|
39
|
|
|
43
|
|
83
|
|
|
353
|
|
729
|
|
||||||||||
Less than 660
|
132
|
|
256
|
|
|
42
|
|
84
|
|
|
75
|
|
135
|
|
|
71
|
|
144
|
|
|
320
|
|
619
|
|
||||||||||
80% to 100% and refreshed FICO scores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Equal to or greater than 660
|
1,195
|
|
1,860
|
|
|
221
|
|
442
|
|
|
119
|
|
214
|
|
|
316
|
|
558
|
|
|
1,851
|
|
3,074
|
|
||||||||||
Less than 660
|
559
|
|
804
|
|
|
230
|
|
381
|
|
|
309
|
|
439
|
|
|
371
|
|
609
|
|
|
1,469
|
|
2,233
|
|
||||||||||
Lower than 80% and refreshed FICO scores:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Equal to or greater than 660
|
6,134
|
|
6,676
|
|
|
3,551
|
|
3,967
|
|
|
895
|
|
919
|
|
|
6,113
|
|
6,754
|
|
|
16,693
|
|
18,316
|
|
||||||||||
Less than 660
|
2,095
|
|
2,183
|
|
|
2,103
|
|
2,287
|
|
|
1,608
|
|
1,645
|
|
|
3,499
|
|
3,783
|
|
|
9,305
|
|
9,898
|
|
||||||||||
No FICO/LTV available
|
577
|
|
750
|
|
|
319
|
|
391
|
|
|
149
|
|
177
|
|
|
470
|
|
585
|
|
|
1,515
|
|
1,903
|
|
||||||||||
Total unpaid principal balance
|
$
|
11,020
|
|
$
|
13,192
|
|
|
$
|
6,502
|
|
$
|
7,627
|
|
|
$
|
3,197
|
|
$
|
3,606
|
|
|
$
|
10,898
|
|
$
|
12,546
|
|
|
$
|
31,617
|
|
$
|
36,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Geographic region (based on unpaid principal balance)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
California
|
$
|
6,555
|
|
$
|
7,899
|
|
|
$
|
3,716
|
|
$
|
4,396
|
|
|
$
|
797
|
|
$
|
899
|
|
|
$
|
6,225
|
|
$
|
7,128
|
|
|
$
|
17,293
|
|
$
|
20,322
|
|
Florida
|
1,137
|
|
1,306
|
|
|
428
|
|
501
|
|
|
296
|
|
332
|
|
|
878
|
|
1,026
|
|
|
2,739
|
|
3,165
|
|
||||||||||
New York
|
607
|
|
697
|
|
|
457
|
|
515
|
|
|
330
|
|
363
|
|
|
628
|
|
711
|
|
|
2,022
|
|
2,286
|
|
||||||||||
Washington
|
532
|
|
673
|
|
|
135
|
|
167
|
|
|
61
|
|
68
|
|
|
238
|
|
290
|
|
|
966
|
|
1,198
|
|
||||||||||
Illinois
|
273
|
|
314
|
|
|
200
|
|
226
|
|
|
161
|
|
178
|
|
|
249
|
|
282
|
|
|
883
|
|
1,000
|
|
||||||||||
New Jersey
|
242
|
|
280
|
|
|
178
|
|
210
|
|
|
110
|
|
125
|
|
|
336
|
|
401
|
|
|
866
|
|
1,016
|
|
||||||||||
Massachusetts
|
79
|
|
94
|
|
|
149
|
|
173
|
|
|
98
|
|
110
|
|
|
307
|
|
346
|
|
|
633
|
|
723
|
|
||||||||||
Maryland
|
57
|
|
64
|
|
|
129
|
|
144
|
|
|
132
|
|
145
|
|
|
232
|
|
267
|
|
|
550
|
|
620
|
|
||||||||||
Arizona
|
203
|
|
241
|
|
|
106
|
|
124
|
|
|
60
|
|
68
|
|
|
156
|
|
181
|
|
|
525
|
|
614
|
|
||||||||||
Virginia
|
66
|
|
77
|
|
|
123
|
|
142
|
|
|
51
|
|
56
|
|
|
280
|
|
314
|
|
|
520
|
|
589
|
|
||||||||||
All other
|
1,269
|
|
1,547
|
|
|
881
|
|
1,029
|
|
|
1,101
|
|
1,262
|
|
|
1,369
|
|
1,600
|
|
|
4,620
|
|
5,438
|
|
||||||||||
Total unpaid principal balance
|
$
|
11,020
|
|
$
|
13,192
|
|
|
$
|
6,502
|
|
$
|
7,627
|
|
|
$
|
3,197
|
|
$
|
3,606
|
|
|
$
|
10,898
|
|
$
|
12,546
|
|
|
$
|
31,617
|
|
$
|
36,971
|
|
(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, as well as unused lines, related to the property.
|
(d)
|
Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.
|
224
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
|
Total loans
|
|
Total 30+ day delinquency rate
|
||||||||
December 31,
|
|
2017
|
2016
|
|
2017
|
2016
|
||||||
(in millions, except ratios)
|
|
|
|
|
|
|
||||||
HELOCs:
(a)
|
|
|
|
|
|
|
||||||
Within the revolving period
(b)
|
|
$
|
51
|
|
$
|
2,126
|
|
|
1.96
|
%
|
3.67
|
%
|
Beyond the revolving period
(c)
|
|
7,875
|
|
7,452
|
|
|
4.63
|
|
4.03
|
|
||
HELOANs
|
|
360
|
|
465
|
|
|
5.28
|
|
5.38
|
|
||
Total
|
|
$
|
8,286
|
|
$
|
10,043
|
|
|
4.65
|
%
|
4.01
|
%
|
(a)
|
In general, these HELOCs are revolving loans for a
10
-year period, after which time the HELOC converts to an interest-only loan with a balloon payment at the end of the loan’s term.
|
(b)
|
Substantially all undrawn HELOCs within the revolving period have been closed.
|
(c)
|
Includes loans modified into fixed rate amortizing loans.
|
Year ended December 31,
(in millions, except ratios) |
Total PCI
|
||||||||||
2017
|
|
2016
|
|
2015
|
|||||||
Beginning balance
|
$
|
11,768
|
|
|
$
|
13,491
|
|
|
$
|
14,592
|
|
Accretion into interest income
|
(1,396
|
)
|
|
(1,555
|
)
|
|
(1,700
|
)
|
|||
Changes in interest rates on variable-rate loans
|
503
|
|
|
260
|
|
|
279
|
|
|||
Other changes in expected cash flows
(a)
|
284
|
|
|
(428
|
)
|
|
230
|
|
|||
Reclassification from nonaccretable difference
(b)
|
—
|
|
|
—
|
|
|
90
|
|
|||
Balance at December 31
|
$
|
11,159
|
|
|
$
|
11,768
|
|
|
$
|
13,491
|
|
Accretable yield percentage
|
4.53
|
%
|
|
4.35
|
%
|
|
4.20
|
%
|
(a)
|
Other changes in expected cash flows may vary from period to period as the Firm continues to refine its cash flow model, for example cash flows expected to be collected due to the impact of modifications and changes in prepayment assumptions.
|
(b)
|
Reclassifications from the nonaccretable difference in the year ended December 31, 2015 were driven by continued improvement in home prices and delinquencies, as well as increased granularity in the impairment estimates.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
225
|
As of or for the year ended December 31,
(in millions, except ratios)
|
2017
|
2016
|
||||
Net charge-offs
|
$
|
4,123
|
|
$
|
3,442
|
|
% of net charge-offs to retained loans
|
2.95
|
%
|
2.63
|
%
|
||
Loan delinquency
|
|
|
||||
Current and less than 30 days past due
and still accruing |
$
|
146,704
|
|
$
|
139,434
|
|
30–89 days past due and still accruing
|
1,305
|
|
1,134
|
|
||
90 or more days past due and still accruing
|
1,378
|
|
1,143
|
|
||
Total retained credit card loans
|
$
|
149,387
|
|
$
|
141,711
|
|
Loan delinquency ratios
|
|
|
||||
% of 30+ days past due to total retained loans
|
1.80
|
%
|
1.61
|
%
|
||
% of 90+ days past due to total retained loans
|
0.92
|
|
0.81
|
|
||
Credit card loans by geographic region
|
|
|
||||
California
|
$
|
22,245
|
|
$
|
20,571
|
|
Texas
|
14,200
|
|
13,220
|
|
||
New York
|
13,021
|
|
12,249
|
|
||
Florida
|
9,138
|
|
8,585
|
|
||
Illinois
|
8,585
|
|
8,189
|
|
||
New Jersey
|
6,506
|
|
6,271
|
|
||
Ohio
|
4,997
|
|
4,906
|
|
||
Pennsylvania
|
4,883
|
|
4,787
|
|
||
Colorado
|
4,006
|
|
3,699
|
|
||
Michigan
|
3,826
|
|
3,741
|
|
||
All other
|
57,980
|
|
55,493
|
|
||
Total retained credit card loans
|
$
|
149,387
|
|
$
|
141,711
|
|
Percentage of portfolio based on carrying value with estimated refreshed FICO scores
|
|
|
||||
Equal to or greater than 660
|
84.0
|
%
|
84.4
|
%
|
||
Less than 660
|
14.6
|
|
14.2
|
|
||
No FICO available
|
1.4
|
|
1.4
|
|
226
|
|
JPMorgan Chase & Co./2017 Annual Report
|
December 31, (in millions)
|
2017
|
|
2016
|
|
||
Impaired credit card loans with an allowance
(a)(b)
|
|
|
||||
Credit card loans with modified payment terms
(c)
|
$
|
1,135
|
|
$
|
1,098
|
|
Modified credit card loans that have reverted to pre-modification payment terms
(d)
|
80
|
|
142
|
|
||
Total impaired credit card loans
(e)
|
$
|
1,215
|
|
$
|
1,240
|
|
Allowance for loan losses related to impaired credit card loans
|
$
|
383
|
|
$
|
358
|
|
(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, 2017
and
2016
,
$43 million
and
$94 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
$37 million
and
$48 million
at
December 31, 2017
and
2016
, respectively, of these loans are to borrowers who have successfully completed a short-term modification program. The Firm continues to report these loans as TDRs since the borrowers’ credit lines remain closed.
|
(e)
|
Predominantly all impaired credit card loans are in the U.S.
|
Year ended December 31,
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
|
|||
Average impaired credit card loans
|
|
$
|
1,214
|
|
$
|
1,325
|
|
$
|
1,710
|
|
Interest income on
impaired credit card loans
|
|
59
|
|
63
|
|
82
|
|
Year ended December 31,
(in millions, except
weighted-average data)
|
|
2017
|
2016
|
2015
|
||||||
Weighted-average interest rate of loans – before TDR
|
|
16.58
|
%
|
15.56
|
%
|
15.08
|
%
|
|||
Weighted-average interest rate of loans – after TDR
|
|
4.88
|
|
4.76
|
|
4.40
|
|
|||
Loans that redefaulted within one year of modification
(a)
|
|
$
|
75
|
|
$
|
79
|
|
$
|
85
|
|
(a)
|
Represents loans modified in TDRs that experienced a payment default in the periods presented, and for which the payment default occurred within
one year
of the modification. The amounts presented represent the balance of such loans as of the end of the quarter in which they defaulted.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
227
|
228
|
|
JPMorgan Chase & Co./2017 Annual Report
|
As of or for the year ended December 31,
(in millions, except ratios)
|
Commercial
and industrial
|
|
Real estate
|
|
Financial
institutions |
|
Government agencies
|
|
Other
(d)
|
|
Total
retained loans |
||||||||||||||||||||||||||||||
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|||||||||||||||||||||||||
Loans by risk ratings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Investment-grade
|
$
|
68,071
|
|
$
|
65,687
|
|
|
$
|
98,467
|
|
$
|
88,649
|
|
|
$
|
26,791
|
|
$
|
24,294
|
|
|
$
|
15,140
|
|
$
|
15,935
|
|
|
$
|
103,212
|
|
$
|
95,358
|
|
|
$
|
311,681
|
|
$
|
289,923
|
|
Noninvestment-
grade:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Noncriticized
|
46,558
|
|
47,531
|
|
|
14,335
|
|
16,155
|
|
|
13,071
|
|
11,075
|
|
|
369
|
|
439
|
|
|
9,988
|
|
9,360
|
|
|
84,321
|
|
84,560
|
|
||||||||||||
Criticized performing
|
3,983
|
|
6,186
|
|
|
710
|
|
798
|
|
|
210
|
|
200
|
|
|
—
|
|
6
|
|
|
259
|
|
163
|
|
|
5,162
|
|
7,353
|
|
||||||||||||
Criticized nonaccrual
|
1,357
|
|
1,491
|
|
|
136
|
|
200
|
|
|
2
|
|
9
|
|
|
—
|
|
—
|
|
|
239
|
|
254
|
|
|
1,734
|
|
1,954
|
|
||||||||||||
Total
noninvestment- grade
|
51,898
|
|
55,208
|
|
|
15,181
|
|
17,153
|
|
|
13,283
|
|
11,284
|
|
|
369
|
|
445
|
|
|
10,486
|
|
9,777
|
|
|
91,217
|
|
93,867
|
|
||||||||||||
Total retained loans
|
$
|
119,969
|
|
$
|
120,895
|
|
|
$
|
113,648
|
|
$
|
105,802
|
|
|
$
|
40,074
|
|
$
|
35,578
|
|
|
$
|
15,509
|
|
$
|
16,380
|
|
|
$
|
113,698
|
|
$
|
105,135
|
|
|
$
|
402,898
|
|
$
|
383,790
|
|
% of total criticized to total retained loans
|
4.45
|
%
|
6.35
|
%
|
|
0.74
|
%
|
0.94
|
%
|
|
0.53
|
%
|
0.59
|
%
|
|
—
|
|
0.04
|
%
|
|
0.44
|
%
|
0.40
|
%
|
|
1.71
|
%
|
2.43
|
%
|
||||||||||||
% of nonaccrual loans to total retained loans
|
1.13
|
|
1.23
|
|
|
0.12
|
|
0.19
|
|
|
—
|
|
0.03
|
|
|
—
|
|
—
|
|
|
0.21
|
|
0.24
|
|
|
0.43
|
|
0.51
|
|
||||||||||||
Loans by geographic distribution
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total non-U.S.
|
$
|
28,470
|
|
$
|
30,563
|
|
|
$
|
3,101
|
|
$
|
3,302
|
|
|
$
|
16,790
|
|
$
|
15,147
|
|
|
$
|
2,906
|
|
$
|
3,726
|
|
|
$
|
44,112
|
|
$
|
38,776
|
|
|
$
|
95,379
|
|
$
|
91,514
|
|
Total U.S.
|
91,499
|
|
90,332
|
|
|
110,547
|
|
102,500
|
|
|
23,284
|
|
20,431
|
|
|
12,603
|
|
12,654
|
|
|
69,586
|
|
66,359
|
|
|
307,519
|
|
292,276
|
|
||||||||||||
Total retained loans
|
$
|
119,969
|
|
$
|
120,895
|
|
|
$
|
113,648
|
|
$
|
105,802
|
|
|
$
|
40,074
|
|
$
|
35,578
|
|
|
$
|
15,509
|
|
$
|
16,380
|
|
|
$
|
113,698
|
|
$
|
105,135
|
|
|
$
|
402,898
|
|
$
|
383,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Net charge-offs/(recoveries)
|
$
|
117
|
|
$
|
345
|
|
|
$
|
(4
|
)
|
$
|
(7
|
)
|
|
$
|
6
|
|
$
|
(1
|
)
|
|
$
|
5
|
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
$
|
5
|
|
|
$
|
119
|
|
$
|
341
|
|
% of net
charge-offs/(recoveries) to end-of-period retained loans
|
0.10
|
%
|
0.28
|
%
|
|
—
|
%
|
(0.01
|
)%
|
|
0.01
|
%
|
(0.01
|
)%
|
|
0.03
|
%
|
(0.01
|
)%
|
|
—
|
%
|
0.01
|
%
|
|
0.03
|
%
|
0.09
|
%
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Loan
delinquency
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current and less than 30 days past due and still accruing
|
$
|
118,288
|
|
$
|
119,050
|
|
|
$
|
113,258
|
|
$
|
105,396
|
|
|
$
|
40,042
|
|
$
|
35,523
|
|
|
$
|
15,493
|
|
$
|
16,269
|
|
|
$
|
112,559
|
|
$
|
104,280
|
|
|
$
|
399,640
|
|
$
|
380,518
|
|
30–89 days past due and still accruing
|
216
|
|
268
|
|
|
242
|
|
204
|
|
|
15
|
|
25
|
|
|
12
|
|
107
|
|
|
898
|
|
582
|
|
|
1,383
|
|
1,186
|
|
||||||||||||
90 or more days past due and still accruing
(c)
|
108
|
|
86
|
|
|
12
|
|
2
|
|
|
15
|
|
21
|
|
|
4
|
|
4
|
|
|
2
|
|
19
|
|
|
141
|
|
132
|
|
||||||||||||
Criticized nonaccrual
|
1,357
|
|
1,491
|
|
|
136
|
|
200
|
|
|
2
|
|
9
|
|
|
—
|
|
—
|
|
|
239
|
|
254
|
|
|
1,734
|
|
1,954
|
|
||||||||||||
Total retained loans
|
$
|
119,969
|
|
$
|
120,895
|
|
|
$
|
113,648
|
|
$
|
105,802
|
|
|
$
|
40,074
|
|
$
|
35,578
|
|
|
$
|
15,509
|
|
$
|
16,380
|
|
|
$
|
113,698
|
|
$
|
105,135
|
|
|
$
|
402,898
|
|
$
|
383,790
|
|
(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.
|
(c)
|
Represents loans that are considered well-collateralized and therefore still accruing interest.
|
(d)
|
Other includes individuals, SPEs, holding companies, and private education and civic organizations. For more information on exposures to SPEs, see Note
14
.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
229
|
December 31,
(in millions, except ratios)
|
Multifamily
|
|
Other Commercial
|
|
Total real estate loans
|
|||||||||||||||
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|||||||||||||
Real estate retained loans
|
$
|
77,597
|
|
$
|
72,143
|
|
|
$
|
36,051
|
|
$
|
33,659
|
|
|
$
|
113,648
|
|
$
|
105,802
|
|
Criticized
|
491
|
|
539
|
|
|
355
|
|
459
|
|
|
846
|
|
998
|
|
||||||
% of criticized to total real estate retained loans
|
0.63
|
%
|
0.75
|
%
|
|
0.98
|
%
|
1.36
|
%
|
|
0.74
|
%
|
0.94
|
%
|
||||||
Criticized nonaccrual
|
$
|
44
|
|
$
|
57
|
|
|
$
|
92
|
|
$
|
143
|
|
|
$
|
136
|
|
$
|
200
|
|
% of criticized nonaccrual to total real estate retained loans
|
0.06
|
%
|
0.08
|
%
|
|
0.26
|
%
|
0.42
|
%
|
|
0.12
|
%
|
0.19
|
%
|
December 31,
(in millions)
|
Commercial
and industrial
|
|
Real estate
|
|
Financial
institutions
|
|
Government
agencies
|
|
Other
|
|
Total
retained loans
|
|
|||||||||||||||||||||||||||||||
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
|
2016
|
|
|||||||||||||||||||||||||
Impaired loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
With an allowance
|
$
|
1,170
|
|
$
|
1,127
|
|
|
$
|
78
|
|
$
|
124
|
|
|
$
|
93
|
|
$
|
9
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
168
|
|
$
|
180
|
|
|
$
|
1,509
|
|
|
$
|
1,440
|
|
|
Without an allowance
(a)
|
228
|
|
414
|
|
|
60
|
|
87
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
70
|
|
76
|
|
|
358
|
|
|
577
|
|
|
||||||||||||
Total
impaired loans
|
$
|
1,398
|
|
$
|
1,541
|
|
|
$
|
138
|
|
$
|
211
|
|
|
$
|
93
|
|
$
|
9
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
238
|
|
$
|
256
|
|
|
$
|
1,867
|
|
(c)
|
$
|
2,017
|
|
(c)
|
Allowance for loan losses related to impaired loans
|
$
|
404
|
|
$
|
258
|
|
|
$
|
11
|
|
$
|
18
|
|
|
$
|
4
|
|
$
|
3
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
42
|
|
$
|
63
|
|
|
$
|
461
|
|
|
$
|
342
|
|
|
Unpaid principal balance of impaired loans
(b)
|
1,604
|
|
1,754
|
|
|
201
|
|
295
|
|
|
94
|
|
12
|
|
|
—
|
|
—
|
|
|
255
|
|
284
|
|
|
2,154
|
|
|
2,345
|
|
|
(a)
|
When the discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged-off and/or there have been interest payments received and applied to the loan balance.
|
(b)
|
Represents the contractual amount of principal owed at
December 31, 2017
and
2016
. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs; interest payments received and applied to the carrying value; net deferred loan fees or costs; and unamortized discount or premiums on purchased loans.
|
(c)
|
Based upon the domicile of the borrower, largely consists of loans in the U.S.
|
Year ended December 31, (in millions)
|
2017
|
2016
|
2015
|
||||||
Commercial and industrial
|
$
|
1,145
|
|
$
|
1,480
|
|
$
|
453
|
|
Real estate
|
164
|
|
217
|
|
250
|
|
|||
Financial institutions
|
20
|
|
13
|
|
13
|
|
|||
Government agencies
|
—
|
|
—
|
|
—
|
|
|||
Other
|
231
|
|
213
|
|
129
|
|
|||
Total
(a)
|
$
|
1,560
|
|
$
|
1,923
|
|
$
|
845
|
|
(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, 2017
,
2016
and
2015
.
|
230
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
231
|
232
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
233
|
|
2017
|
|
||||||||||||||
Year ended December 31,
(in millions)
|
Consumer,
excluding
credit card
|
|
Credit card
|
|
Wholesale
|
|
Total
|
|
||||||||
Allowance for loan losses
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance at January 1,
|
$
|
5,198
|
|
|
$
|
4,034
|
|
|
$
|
4,544
|
|
|
$
|
13,776
|
|
|
Gross charge-offs
|
1,779
|
|
|
4,521
|
|
|
212
|
|
|
6,512
|
|
|
||||
Gross recoveries
|
(634
|
)
|
|
(398
|
)
|
|
(93
|
)
|
|
(1,125
|
)
|
|
||||
Net charge-offs
|
1,145
|
|
|
4,123
|
|
|
119
|
|
|
5,387
|
|
|
||||
Write-offs of PCI loans
(a)
|
86
|
|
|
—
|
|
|
—
|
|
|
86
|
|
|
||||
Provision for loan losses
|
613
|
|
|
4,973
|
|
|
(286
|
)
|
|
5,300
|
|
|
||||
Other
|
(1
|
)
|
|
—
|
|
|
2
|
|
|
1
|
|
|
||||
Ending balance at December 31,
|
$
|
4,579
|
|
|
$
|
4,884
|
|
|
$
|
4,141
|
|
|
$
|
13,604
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for loan losses by impairment methodology
|
|
|
|
|
|
|
|
|
||||||||
Asset-specific
(b)
|
$
|
246
|
|
|
$
|
383
|
|
(c)
|
$
|
461
|
|
|
$
|
1,090
|
|
|
Formula-based
|
2,108
|
|
|
4,501
|
|
|
3,680
|
|
|
10,289
|
|
|
||||
PCI
|
2,225
|
|
|
—
|
|
|
—
|
|
|
2,225
|
|
|
||||
Total allowance for loan losses
|
$
|
4,579
|
|
|
$
|
4,884
|
|
|
$
|
4,141
|
|
|
$
|
13,604
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loans by impairment methodology
|
|
|
|
|
|
|
|
|
||||||||
Asset-specific
|
$
|
8,036
|
|
|
$
|
1,215
|
|
|
$
|
1,867
|
|
|
$
|
11,118
|
|
|
Formula-based
|
333,941
|
|
|
148,172
|
|
|
401,028
|
|
|
883,141
|
|
|
||||
PCI
|
30,576
|
|
|
—
|
|
|
3
|
|
|
30,579
|
|
|
||||
Total retained loans
|
$
|
372,553
|
|
|
$
|
149,387
|
|
|
$
|
402,898
|
|
|
$
|
924,838
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Impaired collateral-dependent loans
|
|
|
|
|
|
|
|
|
||||||||
Net charge-offs
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
95
|
|
|
Loans measured at fair value of collateral less cost to sell
|
2,133
|
|
|
—
|
|
|
233
|
|
|
2,366
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Allowance for lending-related commitments
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance at January 1,
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
1,052
|
|
|
$
|
1,078
|
|
|
Provision for lending-related commitments
|
7
|
|
|
—
|
|
|
(17
|
)
|
|
(10
|
)
|
|
||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
Ending balance at December 31,
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
1,035
|
|
|
$
|
1,068
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance for lending-related commitments by impairment methodology
|
|
|
|
|
|
|
|
|
||||||||
Asset-specific
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
187
|
|
|
$
|
187
|
|
|
Formula-based
|
33
|
|
|
—
|
|
|
848
|
|
|
881
|
|
|
||||
Total allowance for lending-related commitments
|
$
|
33
|
|
|
$
|
—
|
|
|
$
|
1,035
|
|
|
$
|
1,068
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Lending-related commitments by impairment methodology
|
|
|
|
|
|
|
|
|
||||||||
Asset-specific
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
731
|
|
|
$
|
731
|
|
|
Formula-based
|
48,553
|
|
|
572,831
|
|
|
369,367
|
|
|
990,751
|
|
|
||||
Total lending-related commitments
|
$
|
48,553
|
|
|
$
|
572,831
|
|
|
$
|
370,098
|
|
|
$
|
991,482
|
|
|
(a)
|
Write-offs of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool.
|
(b)
|
Includes risk-rated loans that have been placed on nonaccrual status and all loans that have been modified in a TDR.
|
(c)
|
The asset-specific credit card allowance for loan losses is related to loans that have been modified in a TDR; such allowance is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.
|
(d)
|
The prior period amounts have been revised to conform with the current period presentation.
|
234
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(table continued from previous page)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
2016
|
|
2015
|
|
||||||||||||||||||||||||||||
Consumer,
excluding
credit card
|
|
Credit card
|
|
Wholesale
|
|
Total
|
|
Consumer,
excluding
credit card
|
|
Credit card
|
|
Wholesale
|
|
Total
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
5,806
|
|
|
$
|
3,434
|
|
|
$
|
4,315
|
|
|
$
|
13,555
|
|
|
$
|
7,050
|
|
|
$
|
3,439
|
|
|
$
|
3,696
|
|
|
$
|
14,185
|
|
|
1,500
|
|
|
3,799
|
|
|
398
|
|
|
5,697
|
|
|
1,658
|
|
|
3,488
|
|
|
95
|
|
|
5,241
|
|
|
||||||||
(591
|
)
|
|
(357
|
)
|
|
(57
|
)
|
|
(1,005
|
)
|
|
(704
|
)
|
|
(366
|
)
|
|
(85
|
)
|
|
(1,155
|
)
|
|
||||||||
909
|
|
|
3,442
|
|
|
341
|
|
|
4,692
|
|
|
954
|
|
|
3,122
|
|
|
10
|
|
|
4,086
|
|
|
||||||||
156
|
|
|
—
|
|
|
—
|
|
|
156
|
|
|
208
|
|
|
—
|
|
|
—
|
|
|
208
|
|
|
||||||||
467
|
|
|
4,042
|
|
|
571
|
|
|
5,080
|
|
|
(82
|
)
|
|
3,122
|
|
|
623
|
|
|
3,663
|
|
|
||||||||
(10
|
)
|
|
—
|
|
|
(1
|
)
|
|
(11
|
)
|
|
—
|
|
|
(5
|
)
|
|
6
|
|
|
1
|
|
|
||||||||
$
|
5,198
|
|
|
$
|
4,034
|
|
|
$
|
4,544
|
|
|
$
|
13,776
|
|
|
$
|
5,806
|
|
|
$
|
3,434
|
|
|
$
|
4,315
|
|
|
$
|
13,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
308
|
|
|
$
|
358
|
|
(c)
|
$
|
342
|
|
|
$
|
1,008
|
|
|
$
|
364
|
|
|
$
|
460
|
|
(c)
|
$
|
274
|
|
|
$
|
1,098
|
|
|
2,579
|
|
|
3,676
|
|
|
4,202
|
|
|
10,457
|
|
|
2,700
|
|
|
2,974
|
|
|
4,041
|
|
|
9,715
|
|
|
||||||||
2,311
|
|
|
—
|
|
|
—
|
|
|
2,311
|
|
|
2,742
|
|
|
—
|
|
|
—
|
|
|
2,742
|
|
|
||||||||
$
|
5,198
|
|
|
$
|
4,034
|
|
|
$
|
4,544
|
|
|
$
|
13,776
|
|
|
$
|
5,806
|
|
|
$
|
3,434
|
|
|
$
|
4,315
|
|
|
$
|
13,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
8,940
|
|
|
$
|
1,240
|
|
|
$
|
2,017
|
|
|
$
|
12,197
|
|
|
$
|
9,606
|
|
|
$
|
1,465
|
|
|
$
|
1,024
|
|
|
$
|
12,095
|
|
|
319,787
|
|
|
140,471
|
|
|
381,770
|
|
|
842,028
|
|
|
293,751
|
|
|
129,922
|
|
|
356,022
|
|
|
779,695
|
|
|
||||||||
35,679
|
|
|
—
|
|
|
3
|
|
|
35,682
|
|
|
40,998
|
|
|
—
|
|
|
4
|
|
|
41,002
|
|
|
||||||||
$
|
364,406
|
|
|
$
|
141,711
|
|
|
$
|
383,790
|
|
|
$
|
889,907
|
|
|
$
|
344,355
|
|
|
$
|
131,387
|
|
|
$
|
357,050
|
|
|
$
|
832,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
98
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
105
|
|
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
120
|
|
|
2,391
|
|
|
—
|
|
|
300
|
|
|
2,691
|
|
|
2,566
|
|
|
—
|
|
|
283
|
|
|
2,849
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
14
|
|
|
$
|
—
|
|
|
$
|
772
|
|
|
$
|
786
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
609
|
|
|
$
|
622
|
|
|
—
|
|
|
—
|
|
|
281
|
|
|
281
|
|
|
1
|
|
|
—
|
|
|
163
|
|
|
164
|
|
|
||||||||
12
|
|
|
—
|
|
|
(1
|
)
|
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||
$
|
26
|
|
|
$
|
—
|
|
|
$
|
1,052
|
|
|
$
|
1,078
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
772
|
|
|
$
|
786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
—
|
|
|
$
|
—
|
|
|
$
|
169
|
|
|
$
|
169
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
73
|
|
|
$
|
73
|
|
|
26
|
|
|
—
|
|
|
883
|
|
|
909
|
|
|
14
|
|
|
—
|
|
|
699
|
|
|
713
|
|
|
||||||||
$
|
26
|
|
|
$
|
—
|
|
|
$
|
1,052
|
|
|
$
|
1,078
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
772
|
|
|
$
|
786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
$
|
—
|
|
|
$
|
—
|
|
|
$
|
506
|
|
|
$
|
506
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
193
|
|
|
$
|
193
|
|
|
53,247
|
|
(d)
|
553,891
|
|
|
367,508
|
|
|
974,646
|
|
(d)
|
56,865
|
|
(d)
|
515,518
|
|
|
366,206
|
|
|
938,589
|
|
(d)
|
||||||||
$
|
53,247
|
|
(d)
|
$
|
553,891
|
|
|
$
|
368,014
|
|
|
$
|
975,152
|
|
(d)
|
$
|
56,865
|
|
(d)
|
$
|
515,518
|
|
|
$
|
366,399
|
|
|
$
|
938,782
|
|
(d)
|
JPMorgan Chase & Co./2017 Annual Report
|
|
235
|
Line of Business
|
Transaction Type
|
Activity
|
Annual Report
page references
|
CCB
|
Credit card securitization trusts
|
Securitization of originated credit card receivables
|
236-237
|
Mortgage securitization trusts
|
Servicing and securitization of both originated and purchased residential mortgages
|
237-239
|
|
CIB
|
Mortgage and other securitization trusts
|
Securitization of both originated and purchased residential and commercial mortgages and other consumer loans
|
237-239
|
Multi-seller conduits
|
Assist clients in accessing the financial markets in a cost-efficient manner and structures transactions to meet investor needs
|
239
|
|
Municipal bond vehicles
|
Financing of municipal bond investments
|
239-240
|
•
|
Asset & Wealth Management: AWM sponsors and manages certain funds that are deemed VIEs. As asset manager of the funds, AWM 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, AWM’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
provides financing and lending-related services to a wide spectrum of clients, including certain third party-sponsored entities that may meet the definition of a VIE.
CB
does not control the activities of these entities and does not consolidate these entities.
CB’s
maximum loss exposure, regardless of whether the entity is a VIE, is generally limited to loans and lending-related commitments which are reported and disclosed in the same manner as any other third-party transaction.
|
•
|
Corporate
:
Corporate is involved with entities that may meet the definition of VIEs; however these entities are generally subject to specialized investment company accounting, which does not require the consolidation of investments, including VIEs. In addition, Treasury and CIO invest in securities generally issued by third parties which may meet the definition of VIEs (e.g., issuers of asset-backed securities). In general, the Firm does not have the power to direct the significant activities of these entities and therefore does not consolidate these entities. See Note
10
for further information on the Firm’s investment securities portfolio.
|
236
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
Principal amount outstanding
|
|
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs
(c)(d)(e)
|
|||||||||||||||||||
December 31, 2017
(in millions)
|
Total assets held by securitization VIEs
|
Assets
held in consolidated securitization VIEs
|
Assets held in nonconsolidated securitization VIEs with continuing involvement
|
|
Trading assets
|
Securities
|
Other financial assets
|
Total interests held by JPMorgan Chase
|
||||||||||||||
Securitization-related
(a)
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential mortgage:
|
|
|
|
|
|
|
|
|
||||||||||||||
Prime/Alt-A and option ARMs
|
$
|
68,874
|
|
$
|
3,615
|
|
$
|
52,280
|
|
|
$
|
410
|
|
$
|
943
|
|
$
|
—
|
|
$
|
1,353
|
|
Subprime
|
18,984
|
|
7
|
|
17,612
|
|
|
93
|
|
—
|
|
—
|
|
93
|
|
|||||||
Commercial and other
(b)
|
94,905
|
|
63
|
|
63,411
|
|
|
745
|
|
1,133
|
|
157
|
|
2,035
|
|
|||||||
Total
|
$
|
182,763
|
|
$
|
3,685
|
|
$
|
133,303
|
|
|
$
|
1,248
|
|
$
|
2,076
|
|
$
|
157
|
|
$
|
3,481
|
|
|
Principal amount outstanding
|
|
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs
(c)(d)(e)
|
|||||||||||||||||||
December 31, 2016(in millions)
|
Total assets held by securitization VIEs
|
Assets
held in consolidated securitization VIEs
|
Assets held in nonconsolidated securitization VIEs with continuing involvement
|
|
Trading assets
|
Securities
|
Other financial assets
|
Total interests held by JPMorgan Chase
|
||||||||||||||
Securitization-related
(a)
|
|
|
|
|
|
|
|
|
||||||||||||||
Residential mortgage:
|
|
|
|
|
|
|
|
|
||||||||||||||
Prime/Alt-A and option ARMs
|
$
|
76,789
|
|
$
|
4,209
|
|
$
|
57,543
|
|
|
$
|
226
|
|
$
|
1,334
|
|
$
|
—
|
|
$
|
1,560
|
|
Subprime
|
21,542
|
|
—
|
|
19,903
|
|
|
76
|
|
—
|
|
—
|
|
76
|
|
|||||||
Commercial and other
(b)
|
101,265
|
|
107
|
|
71,464
|
|
|
509
|
|
2,064
|
|
—
|
|
2,573
|
|
|||||||
Total
|
$
|
199,596
|
|
$
|
4,316
|
|
$
|
148,910
|
|
|
$
|
811
|
|
$
|
3,398
|
|
$
|
—
|
|
$
|
4,209
|
|
(a)
|
Excludes U.S. government agency securitizations and re-securitizations, which are not Firm-sponsored. See
page 243
of this Note for information on the Firm’s loan sales to U.S. government agencies.
|
(b)
|
Consists of securities backed by commercial loans (predominantly real estate) and non-mortgage-related consumer receivables purchased from third parties.
|
(c)
|
Excludes the following: retained servicing (see Note
15
for a discussion of MSRs); securities retained from loan sales to U.S. government agencies; interest rate and foreign exchange derivatives primarily used to manage interest rate and foreign exchange risks of securitization entities (See Note
5
for further information on derivatives); senior and subordinated securities of
$88 million
and
$48 million
, respectively, at
December 31, 2017
, and
$180 million
and
$49 million
, respectively, at
December 31, 2016
, which the Firm purchased in connection with CIB’s secondary market-making activities.
|
(d)
|
Includes interests held in re-securitization transactions.
|
(e)
|
As of
December 31, 2017
and
2016
,
61%
and
61%
, respectively, of the Firm’s retained securitization interests, which are predominantly carried at fair value and include amounts required to be held pursuant to credit risk retention rules, were risk-rated “A” or better, on an S&P-equivalent basis. The retained interests in prime residential mortgages consisted of
$1.3 billion
and
$1.5 billion
of investment-grade and
$48 million
and
$77 million
of noninvestment-grade retained interests at
December 31, 2017
and
2016
, respectively. The retained interests in commercial and other securitizations trusts consisted of
$1.6 billion
and
$2.4 billion
of investment-grade and
$412 million
and
$210 million
of noninvestment-grade retained interests at
December 31, 2017
and
2016
, respectively.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
237
|
Year ended December 31,
(in millions) |
2017
|
|
2016
|
|
2015
|
||||||
Transfers of securities to VIEs
|
|
|
|
|
|
||||||
Firm-sponsored private-label
|
$
|
—
|
|
|
$
|
647
|
|
|
$
|
777
|
|
Agency
|
$
|
12,617
|
|
|
$
|
11,241
|
|
|
$
|
21,908
|
|
238
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31,
(in millions)
|
2017
|
|
|
2016
|
|
Firm-sponsored private-label
|
|
|
|
||
Assets held in VIEs with continuing involvement
(a)
|
783
|
|
|
875
|
|
Interest in VIEs
|
29
|
|
|
43
|
|
Agency
|
|
|
|
||
Interest in VIEs
|
2,250
|
|
|
1,986
|
|
(a)
|
Represents the principal amount and includes the notional amount of interest-only securities.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
239
|
240
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
Assets
|
|
Liabilities
|
|||||||||||||||||||
December 31, 2017 (in millions)
|
Trading assets
|
Loans
|
Other
(d)
|
Total
assets (e) |
|
Beneficial interests in
VIE assets (f) |
Other
(g)
|
Total
liabilities |
||||||||||||||
VIE program type
(a)
|
|
|
|
|
|
|
|
|
||||||||||||||
Firm-sponsored credit card trusts
|
$
|
—
|
|
$
|
41,923
|
|
$
|
652
|
|
$
|
42,575
|
|
|
$
|
21,278
|
|
$
|
16
|
|
$
|
21,294
|
|
Firm-administered multi-seller conduits
|
—
|
|
23,411
|
|
48
|
|
23,459
|
|
|
3,045
|
|
28
|
|
3,073
|
|
|||||||
Municipal bond vehicles
|
1,278
|
|
—
|
|
3
|
|
1,281
|
|
|
1,265
|
|
2
|
|
1,267
|
|
|||||||
Mortgage securitization entities
(b)
|
66
|
|
3,661
|
|
55
|
|
3,782
|
|
|
359
|
|
199
|
|
558
|
|
|||||||
Student loan securitization entities
(c)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|||||||
Other
|
105
|
|
—
|
|
1,916
|
|
2,021
|
|
|
134
|
|
104
|
|
238
|
|
|||||||
Total
|
$
|
1,449
|
|
$
|
68,995
|
|
$
|
2,674
|
|
$
|
73,118
|
|
|
$
|
26,081
|
|
$
|
349
|
|
$
|
26,430
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Assets
|
|
Liabilities
|
|||||||||||||||||||
December 31, 2016 (in millions)
|
Trading assets
|
Loans
|
Other
(d)
|
Total
assets (e) |
|
Beneficial interests in
VIE assets (f) |
Other
(g)
|
Total
liabilities |
||||||||||||||
VIE program type
(a)
|
|
|
|
|
|
|
|
|
||||||||||||||
Firm-sponsored credit card trusts
|
$
|
—
|
|
$
|
45,919
|
|
$
|
790
|
|
$
|
46,709
|
|
|
$
|
31,181
|
|
$
|
18
|
|
$
|
31,199
|
|
Firm-administered multi-seller conduits
|
—
|
|
23,760
|
|
43
|
|
23,803
|
|
|
2,719
|
|
33
|
|
2,752
|
|
|||||||
Municipal bond vehicles
|
2,897
|
|
—
|
|
8
|
|
2,905
|
|
|
2,969
|
|
2
|
|
2,971
|
|
|||||||
Mortgage securitization entities
(b)
|
143
|
|
4,246
|
|
103
|
|
4,492
|
|
|
468
|
|
313
|
|
781
|
|
|||||||
Student loan securitization entities
(c)
|
—
|
|
1,689
|
|
59
|
|
1,748
|
|
|
1,527
|
|
4
|
|
1,531
|
|
|||||||
Other
|
145
|
|
—
|
|
2,318
|
|
2,463
|
|
|
183
|
|
120
|
|
303
|
|
|||||||
Total
|
$
|
3,185
|
|
$
|
75,614
|
|
$
|
3,321
|
|
$
|
82,120
|
|
|
$
|
39,047
|
|
$
|
490
|
|
$
|
39,537
|
|
(a)
|
Excludes intercompany transactions, which are eliminated in consolidation.
|
(b)
|
Includes residential and commercial mortgage securitizations.
|
(c)
|
The Firm deconsolidated the student loan securitization entities in the second quarter of 2017 as it no longer had a controlling financial interest in these entities as a result of the sale of the student loan portfolio.
|
(d)
|
Includes assets classified as cash and other assets on 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
$21.8 billion
and
$33.4 billion
at
December 31, 2017
and
2016
, respectively. For additional information on interest bearing long-term beneficial interest, see Note
19
.
|
(g)
|
Includes liabilities classified as accounts payable and other liabilities on the Consolidated balance sheets.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
241
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
Year ended December 31,
(in millions, except rates)
|
Residential mortgage
(d)
|
Commercial and other
(e)
|
|
Residential mortgage
(d)
|
Commercial and other
(e)
|
|
Residential mortgage
(d)
|
Commercial and other
(e)
|
||||||||||||
Principal securitized
|
$
|
5,532
|
|
$
|
10,252
|
|
|
$
|
1,817
|
|
$
|
8,964
|
|
|
$
|
3,008
|
|
$
|
11,933
|
|
All cash flows during the period:
(a)
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds received from loan sales as financial instruments
(b)
|
$
|
5,661
|
|
$
|
10,340
|
|
|
$
|
1,831
|
|
$
|
9,094
|
|
|
$
|
3,022
|
|
$
|
12,011
|
|
Servicing fees collected
|
525
|
|
3
|
|
|
477
|
|
3
|
|
|
528
|
|
3
|
|
||||||
Purchases of previously transferred financial assets (or the underlying collateral)
(c)
|
1
|
|
—
|
|
|
37
|
|
—
|
|
|
3
|
|
—
|
|
||||||
Cash flows received on interests
|
463
|
|
918
|
|
|
482
|
|
1,441
|
|
|
407
|
|
597
|
|
(a)
|
Excludes re-securitization transactions.
|
(b)
|
Predominantly includes Level 2 assets.
|
(c)
|
Includes cash paid by the Firm to reacquire assets from off–balance sheet, nonconsolidated entities – for example, loan repurchases due to representation and warranties and servicer “clean-up” calls.
|
(d)
|
Includes prime/Alt-A, subprime, and option ARMs. Excludes certain loan securitization transactions entered into with Ginnie Mae, Fannie Mae and Freddie Mac.
|
(e)
|
Includes commercial mortgage and other consumer loans.
|
Year ended December 31,
|
|
2017
|
|
2016
|
|
2015
|
|||
Residential mortgage retained interest:
|
|||||||||
Weighted-average life (in years)
|
|
4.8
|
|
|
4.5
|
|
|
4.2
|
|
Weighted-average discount rate
|
|
2.9
|
%
|
|
4.2
|
%
|
|
2.9
|
%
|
Commercial mortgage retained interest:
|
|
|
|||||||
Weighted-average life (in years)
|
|
7.1
|
|
|
6.2
|
|
|
6.2
|
|
Weighted-average discount rate
|
|
4.4
|
%
|
|
5.8
|
%
|
|
4.1
|
%
|
242
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31,
(in millions) |
2017
|
2016
|
2015
|
||||||
Carrying value of loans sold
|
$
|
64,542
|
|
$
|
52,869
|
|
$
|
42,161
|
|
Proceeds received from loan sales as cash
|
$
|
117
|
|
$
|
592
|
|
$
|
313
|
|
Proceeds from loans sales as securities
(a)
|
63,542
|
|
51,852
|
|
41,615
|
|
|||
Total proceeds received from loan sales
(b)
|
$
|
63,659
|
|
$
|
52,444
|
|
$
|
41,928
|
|
Gains on loan sales
(c)(d)
|
$
|
163
|
|
$
|
222
|
|
$
|
299
|
|
(a)
|
Predominantly includes securities from U.S. GSEs and Ginnie Mae that are generally sold shortly after receipt.
|
(b)
|
Excludes the value of MSRs retained upon the sale of loans.
|
(c)
|
Gains on loan sales include the value of MSRs.
|
(d)
|
The carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale.
|
December 31,
(in millions)
|
2017
|
|
2016
|
|
||
Loans repurchased or option to repurchase
(a)
|
$
|
8,629
|
|
$
|
9,556
|
|
Real estate owned
|
95
|
|
142
|
|
||
Foreclosed government-guaranteed residential mortgage loans
(b)
|
527
|
|
1,007
|
|
(a)
|
Predominantly all of these amounts relate to loans that have been repurchased from Ginnie Mae loan pools.
|
(b)
|
Relates to voluntary repurchases of loans, which are included in accrued interest and accounts receivable.
|
|
Securitized assets
|
|
90 days past due
|
|
Liquidation losses
|
|||||||||||||||
As of or for the year ended December 31, (in millions)
|
2017
|
2016
|
|
2017
|
2016
|
|
2017
|
2016
|
||||||||||||
Securitized loans
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage:
|
|
|
|
|
|
|
|
|
||||||||||||
Prime/ Alt-A & option ARMs
|
$
|
52,280
|
|
$
|
57,543
|
|
|
$
|
4,870
|
|
$
|
6,169
|
|
|
$
|
790
|
|
$
|
1,160
|
|
Subprime
|
17,612
|
|
19,903
|
|
|
3,276
|
|
4,186
|
|
|
719
|
|
1,087
|
|
||||||
Commercial and other
|
63,411
|
|
71,464
|
|
|
957
|
|
1,755
|
|
|
114
|
|
643
|
|
||||||
Total loans securitized
|
$
|
133,303
|
|
$
|
148,910
|
|
|
$
|
9,103
|
|
$
|
12,110
|
|
|
$
|
1,623
|
|
$
|
2,890
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
243
|
December 31, (in millions)
|
2017
|
2016
|
2015
|
||||||
Consumer & Community Banking
|
$
|
31,013
|
|
$
|
30,797
|
|
$
|
30,769
|
|
Corporate & Investment Bank
|
6,776
|
|
6,772
|
|
6,772
|
|
|||
Commercial Banking
|
2,860
|
|
2,861
|
|
2,861
|
|
|||
Asset & Wealth Management
|
6,858
|
|
6,858
|
|
6,923
|
|
|||
Total goodwill
|
$
|
47,507
|
|
$
|
47,288
|
|
$
|
47,325
|
|
Year ended December 31, (in millions)
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
$
|
47,288
|
|
|
$
|
47,325
|
|
|
$
|
47,647
|
|
Changes during the period from:
|
|
|
|
|
|
||||||
Business combinations
(a)
|
199
|
|
|
—
|
|
|
28
|
|
|||
Dispositions
(b)
|
—
|
|
|
(72
|
)
|
|
(160
|
)
|
|||
Other
(c)
|
20
|
|
|
35
|
|
|
(190
|
)
|
|||
Balance at December 31,
|
$
|
47,507
|
|
|
$
|
47,288
|
|
|
$
|
47,325
|
|
(a)
|
For 2017, represents CCB goodwill in connection with an acquisition.
|
(b)
|
For 2016, represents AWM goodwill, which was disposed of as part of an AWM sales transaction. For 2015 includes
$101 million
of Private Equity goodwill, which was disposed of as part of the Private Equity sale.
|
(c)
|
Includes foreign currency translation adjustments and other tax-related adjustments.
|
244
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
245
|
As of or for the year ended December 31, (in millions, except where otherwise noted)
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|||
Fair value at beginning of period
|
$
|
6,096
|
|
|
$
|
6,608
|
|
|
$
|
7,436
|
|
|
MSR activity:
|
|
|
|
|
|
|
||||||
Originations of MSRs
|
1,103
|
|
|
679
|
|
|
550
|
|
|
|||
Purchase of MSRs
|
—
|
|
|
—
|
|
|
435
|
|
|
|||
Disposition of MSRs
(a)
|
(140
|
)
|
|
(109
|
)
|
|
(486
|
)
|
|
|||
Net additions
|
963
|
|
|
570
|
|
|
499
|
|
|
|||
|
|
|
|
|
|
|
||||||
Changes due to collection/realization of expected cash flows
|
(797
|
)
|
|
(919
|
)
|
|
(922
|
)
|
|
|||
|
|
|
|
|
|
|
||||||
Changes in valuation due to inputs and assumptions:
|
|
|
|
|
|
|
||||||
Changes due to market interest rates and other
(b)
|
(202
|
)
|
|
(72
|
)
|
|
(160
|
)
|
|
|||
Changes in valuation due to other inputs and assumptions:
|
|
|
|
|
|
|
||||||
Projected cash flows (e.g., cost to service)
|
(102
|
)
|
|
(35
|
)
|
|
(112
|
)
|
|
|||
Discount rates
|
(19
|
)
|
|
7
|
|
|
(10
|
)
|
|
|||
Prepayment model changes and other
(c)
|
91
|
|
|
(63
|
)
|
|
(123
|
)
|
|
|||
Total changes in valuation due to other inputs and assumptions
|
(30
|
)
|
|
(91
|
)
|
|
(245
|
)
|
|
|||
Total changes in valuation due to inputs and assumptions
|
(232
|
)
|
|
(163
|
)
|
|
(405
|
)
|
|
|||
Fair value at December 31,
|
$
|
6,030
|
|
|
$
|
6,096
|
|
|
$
|
6,608
|
|
|
Change in unrealized gains/(losses) included in income related to MSRs held at December 31,
|
$
|
(232
|
)
|
|
$
|
(163
|
)
|
|
$
|
(405
|
)
|
|
Contractual service fees, late fees and other ancillary fees included in income
|
1,886
|
|
|
2,124
|
|
|
2,533
|
|
|
|||
Third-party mortgage loans serviced at December 31, (in billions)
|
555.0
|
|
|
593.3
|
|
|
677.0
|
|
|
|||
Servicer advances, net of an allowance for uncollectible amounts, at December 31, (in billions)
(d)
|
4.0
|
|
|
4.7
|
|
|
6.5
|
|
|
(a)
|
Includes excess MSRs transferred to agency-sponsored trusts in exchange for stripped mortgage backed securities (“SMBS”). In each transaction, a portion of the SMBS was acquired by third parties at the transaction date; the Firm acquired the remaining balance of those SMBS as trading securities.
|
(b)
|
Represents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments.
|
(c)
|
Represents changes in prepayments other than those attributable to changes in market interest rates.
|
(d)
|
Represents amounts the Firm pays as the servicer (e.g., scheduled principal and interest, taxes and insurance), which will generally be reimbursed within a short period of time after the advance from future cash flows from the trust or the underlying loans. The Firm’s credit risk associated with these servicer advances is minimal because reimbursement of the advances is typically senior to all cash payments to investors. In addition, the Firm maintains the right to stop payment to investors if the collateral is insufficient to cover the advance. However, certain of these servicer advances may not be recoverable if they were not made in accordance with applicable rules and agreements.
|
246
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31,
(in millions) |
2017
|
|
2016
|
|
2015
|
||||||
CCB mortgage fees and related income
|
|
|
|
|
|
||||||
Net production revenue
|
$
|
636
|
|
|
$
|
853
|
|
|
$
|
769
|
|
|
|
|
|
|
|
||||||
Net mortgage servicing revenue:
|
|
|
|
|
|
|
|||||
Operating revenue:
|
|
|
|
|
|
|
|||||
Loan servicing revenue
|
2,014
|
|
|
2,336
|
|
|
2,776
|
|
|||
Changes in MSR asset fair value due to collection/realization of expected cash flows
|
(795
|
)
|
|
(916
|
)
|
|
(917
|
)
|
|||
Total operating revenue
|
1,219
|
|
|
1,420
|
|
|
1,859
|
|
|||
Risk management:
|
|
|
|
|
|
|
|||||
Changes in MSR asset fair value
due to market interest rates and other (a) |
(202
|
)
|
|
(72
|
)
|
|
(160
|
)
|
|||
Other changes in MSR asset fair value due to other inputs and assumptions in model
(b)
|
(30
|
)
|
|
(91
|
)
|
|
(245
|
)
|
|||
Change in derivative fair value and other
|
(10
|
)
|
|
380
|
|
|
288
|
|
|||
Total risk management
|
(242
|
)
|
|
217
|
|
|
(117
|
)
|
|||
Total net mortgage servicing revenue
|
977
|
|
|
1,637
|
|
|
1,742
|
|
|||
|
|
|
|
|
|
||||||
Total CCB mortgage fees and related income
|
1,613
|
|
|
2,490
|
|
|
2,511
|
|
|||
|
|
|
|
|
|
||||||
All other
|
3
|
|
|
1
|
|
|
2
|
|
|||
Mortgage fees and related income
|
$
|
1,616
|
|
|
$
|
2,491
|
|
|
$
|
2,513
|
|
(a)
|
Represents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments.
|
(b)
|
Represents the aggregate impact of changes in model inputs and assumptions such as projected cash flows (e.g., cost to service), discount rates and changes in prepayments other than those attributable to changes in market interest rates (e.g., changes in prepayments due to changes in home prices).
|
December 31,
(in millions, except rates)
|
2017
|
|
2016
|
||||
Weighted-average prepayment speed assumption (“CPR”)
|
9.35
|
%
|
|
9.41
|
%
|
||
Impact on fair value of 10% adverse change
|
$
|
(221
|
)
|
|
$
|
(231
|
)
|
Impact on fair value of 20% adverse change
|
(427
|
)
|
|
(445
|
)
|
||
Weighted-average option adjusted spread
|
9.04
|
%
|
|
8.55
|
%
|
||
Impact on fair value of 100 basis points adverse change
|
$
|
(250
|
)
|
|
$
|
(248
|
)
|
Impact on fair value of 200 basis points adverse change
|
(481
|
)
|
|
(477
|
)
|
JPMorgan Chase & Co./2017 Annual Report
|
|
247
|
December 31, (in millions)
|
2017
|
|
|
2016
|
|
|
||
U.S. offices
|
|
|
|
|
||||
Noninterest-bearing
|
$
|
393,645
|
|
|
$
|
400,831
|
|
|
Interest-bearing (included
$14,947,
and $12,245 at fair value)
(a)
|
793,618
|
|
|
737,949
|
|
|
||
Total deposits in U.S. offices
|
1,187,263
|
|
|
1,138,780
|
|
|
||
Non-U.S. offices
|
|
|
|
|
||||
Noninterest-bearing
|
15,576
|
|
|
14,764
|
|
|
||
Interest-bearing (included
$6,374
and $1,667 at fair value)
(a)
|
241,143
|
|
|
221,635
|
|
|
||
Total deposits in non-U.S. offices
|
256,719
|
|
|
236,399
|
|
|
||
Total deposits
|
$
|
1,443,982
|
|
|
$
|
1,375,179
|
|
|
(a)
|
Includes structured notes classified as deposits for which the fair value option has been elected. For further discussion, see Note
3
.
|
December 31, (in millions)
|
|
2017
|
|
|
2016
|
|
||
U.S. offices
|
|
$
|
30,671
|
|
|
$
|
26,180
|
|
Non-U.S. offices
(a)
|
|
29,049
|
|
|
29,652
|
|
||
Total
(a)
|
|
$
|
59,720
|
|
|
$
|
55,832
|
|
December 31, 2017
(in millions)
|
|
|
|
|
|
|
|
|
|
|||
|
U.S.
|
|
Non-U.S.
|
|
|
Total
|
|
|||||
2018
|
|
$
|
37,645
|
|
|
$
|
27,621
|
|
|
$
|
65,266
|
|
2019
|
|
3,487
|
|
|
349
|
|
|
3,836
|
|
|||
2020
|
|
2,332
|
|
|
22
|
|
|
2,354
|
|
|||
2021
|
|
4,275
|
|
|
26
|
|
|
4,301
|
|
|||
2022
|
|
2,297
|
|
|
443
|
|
|
2,740
|
|
|||
After 5 years
|
|
3,391
|
|
|
1,697
|
|
|
5,088
|
|
|||
Total
|
|
$
|
53,427
|
|
|
$
|
30,158
|
|
|
$
|
83,585
|
|
December 31, (in millions)
|
|
2017
|
|
|
2016
|
|
||
Brokerage payables
|
|
$
|
102,727
|
|
|
$
|
109,842
|
|
Other payables and liabilities
(a)
|
|
86,656
|
|
|
80,701
|
|
||
Total accounts payable and other liabilities
|
|
$
|
189,383
|
|
|
$
|
190,543
|
|
(a)
|
Includes credit card rewards liability of
$4.9 billion
and
$3.8 billion
at
December 31, 2017
and
2016
, respectively.
|
248
|
|
JPMorgan Chase & Co./2017 Annual Report
|
By remaining maturity at
December 31,
(in millions, except rates)
|
|
2017
|
|
2016
|
||||||||||||||||
|
Under 1 year
|
|
|
1-5 years
|
|
|
After 5 years
|
|
|
Total
|
|
Total
|
||||||||
Parent company
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior debt:
|
Fixed rate
|
$
|
15,084
|
|
|
$
|
53,939
|
|
|
$
|
72,528
|
|
|
$
|
141,551
|
|
|
$
|
128,967
|
|
|
Variable rate
|
5,547
|
|
|
12,802
|
|
|
8,112
|
|
|
26,461
|
|
|
34,766
|
|
|||||
|
Interest rates
(a)
|
0.38-7.25%
|
|
0.16-6.30%
|
|
0.45-6.40%
|
|
0.16-7.25%
|
|
0.09-7.25%
|
||||||||||
Subordinated debt:
|
Fixed rate
|
$
|
—
|
|
|
$
|
149
|
|
|
$
|
14,497
|
|
|
$
|
14,646
|
|
|
$
|
16,811
|
|
|
Variable rate
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
1,245
|
|
|||||
|
Interest rates
(a)
|
—
|
%
|
|
8.53%
|
|
3.38-8.00%
|
|
3.38-8.53%
|
|
0.82-8.53%
|
|
||||||||
|
Subtotal
|
$
|
20,631
|
|
|
$
|
66,890
|
|
|
$
|
95,146
|
|
|
$
|
182,667
|
|
|
$
|
181,789
|
|
Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal Home Loan Banks advances:
|
Fixed rate
|
$
|
4
|
|
|
$
|
34
|
|
|
$
|
129
|
|
|
$
|
167
|
|
|
$
|
179
|
|
|
Variable rate
|
12,450
|
|
|
37,000
|
|
|
11,000
|
|
|
60,450
|
|
|
79,340
|
|
|||||
|
Interest rates
(a)
|
1.58-1.75%
|
|
1.46-2.00%
|
|
1.18-1.47%
|
|
1.18-2.00%
|
|
0.41-1.21%
|
|
|||||||||
Senior debt:
|
Fixed rate
|
$
|
1,122
|
|
|
$
|
3,970
|
|
|
$
|
6,898
|
|
|
$
|
11,990
|
|
|
$
|
8,329
|
|
|
Variable rate
|
8,967
|
|
|
13,287
|
|
|
3,964
|
|
|
26,218
|
|
|
19,379
|
|
|||||
|
Interest rates
(a)
|
0.22-7.50%
|
|
1.65-7.50%
|
|
1.00-7.50%
|
|
|
0.22-7.50%
|
|
0.00-7.50%
|
|
||||||||
Subordinated debt:
|
Fixed rate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
313
|
|
|
$
|
313
|
|
|
$
|
3,884
|
|
|
Variable rate
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
—
|
|
|||||
|
Interest rates
(a)
|
—
|
%
|
|
—
|
%
|
|
8.25%
|
|
8.25%
|
|
6.00-8.25%
|
|
|||||||
|
Subtotal
|
$
|
22,543
|
|
|
$
|
54,291
|
|
|
$
|
22,304
|
|
|
$
|
99,138
|
|
|
$
|
111,111
|
|
Junior subordinated debt
(b)
:
|
Fixed rate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
690
|
|
|
$
|
690
|
|
|
$
|
706
|
|
|
Variable rate
|
—
|
|
|
—
|
|
|
1,585
|
|
|
1,585
|
|
|
1,639
|
|
|||||
|
Interest rates
(a)
|
—
|
%
|
|
—
|
%
|
|
1.88-8.75%
|
|
1.88-8.75%
|
|
1.39-8.75%
|
|
|||||||
|
Subtotal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,275
|
|
|
$
|
2,275
|
|
|
$
|
2,345
|
|
Total long-term debt
(c)(d)(e)
|
|
$
|
43,174
|
|
|
$
|
121,181
|
|
|
$
|
119,725
|
|
|
$
|
284,080
|
|
(g)(h)
|
$
|
295,245
|
|
Long-term beneficial interests:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed rate
|
$
|
5,927
|
|
|
$
|
7,652
|
|
|
$
|
—
|
|
|
$
|
13,579
|
|
|
$
|
18,678
|
|
|
|
Variable rate
|
3,399
|
|
|
4,472
|
|
|
321
|
|
|
8,192
|
|
|
14,681
|
|
|||||
|
Interest rates
|
1.10-2.50%
|
|
1.27-6.54%
|
|
0.00-3.75%
|
|
0.00-6.54%
|
|
0.39-7.87%
|
||||||||||
Total long-term beneficial interests
(f)
|
|
$
|
9,326
|
|
|
$
|
12,124
|
|
|
$
|
321
|
|
|
$
|
21,771
|
|
|
$
|
33,359
|
|
(a)
|
The interest rates shown are the range of contractual rates in effect at December 31, 2017 and 2016, respectively, 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, 2017
, for total long-term debt was
(0.19)%
to
8.88%
, 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.
|
(b)
|
As of December 31, 2017, includes
$0.7 billion
of fixed rate junior subordinated debentures issued to an issuer trust and
$1.6 billion
of variable rate junior subordinated debentures distributed pro rata to the holders of the
$1.6 billion
of trust preferred securities which were cancelled on December 18, 2017.
|
(c)
|
Included long-term debt of
$63.5 billion
and
$82.2 billion
secured by assets totaling
$208.4 billion
and
$205.6 billion
at
December 31, 2017
and
2016
, respectively. The amount of long-term debt secured by assets does not include amounts related to hybrid instruments.
|
(d)
|
Included
$47.5 billion
and
$37.7 billion
of long-term debt accounted for at fair value at
December 31, 2017
and
2016
, respectively.
|
(e)
|
Included
$10.3 billion
and
$7.5 billion
of outstanding zero-coupon notes at
December 31, 2017
and
2016
, respectively. The aggregate principal amount of these notes at their respective maturities is
$33.5 billion
and
$25.1 billion
, respectively. The aggregate principal amount reflects the contractual principal payment at maturity, which may exceed the contractual principal payment at the Firm’s next call date, if applicable.
|
(f)
|
Included on the Consolidated balance sheets in beneficial interests issued by consolidated VIEs. Also included
$45 million
and
$120 million
accounted for at fair value at
December 31, 2017
and
2016
, respectively. Excluded short-term commercial paper and other short-term beneficial interests of
$4.3 billion
and
$5.7 billion
at
December 31, 2017
and
2016
, respectively.
|
(g)
|
At
December 31, 2017
, long-term debt in the aggregate of
$111.2 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 instruments.
|
(h)
|
The aggregate carrying values of debt that matures in each of the five years subsequent to 2017 is
$43.2 billion
in 2018,
$34.7 billion
in 2019,
$39.3 billion
in 2020,
$33.8 billion
in 2021 and
$13.4 billion
in 2022.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
249
|
250
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
Shares at December 31,
(a)
|
|
Carrying value
(in millions)
at December 31,
|
|
Issue date
|
Contractual rate
in effect at December 31, 2017 |
|
Earliest redemption date
|
Date at which dividend rate becomes floating
|
Floating annual
rate of three-month LIBOR plus: |
|||||||||
|
2017
|
2016
|
|
2017
|
2016
|
|
|||||||||||||
Fixed-rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Series O
|
—
|
|
125,750
|
|
|
$
|
—
|
|
$
|
1,258
|
|
|
8/27/2012
|
N/A
|
|
|
9/1/2017
|
NA
|
NA
|
Series P
|
90,000
|
|
90,000
|
|
|
900
|
|
900
|
|
|
2/5/2013
|
5.450
|
%
|
|
3/1/2018
|
NA
|
NA
|
||
Series T
|
92,500
|
|
92,500
|
|
|
925
|
|
925
|
|
|
1/30/2014
|
6.700
|
|
|
3/1/2019
|
NA
|
NA
|
||
Series W
|
88,000
|
|
88,000
|
|
|
880
|
|
880
|
|
|
6/23/2014
|
6.300
|
|
|
9/1/2019
|
NA
|
NA
|
||
Series Y
|
143,000
|
|
143,000
|
|
|
1,430
|
|
1,430
|
|
|
2/12/2015
|
6.125
|
|
|
3/1/2020
|
NA
|
NA
|
||
Series AA
|
142,500
|
|
142,500
|
|
|
1,425
|
|
1,425
|
|
|
6/4/2015
|
6.100
|
|
|
9/1/2020
|
NA
|
NA
|
||
Series BB
|
115,000
|
|
115,000
|
|
|
1,150
|
|
1,150
|
|
|
7/29/2015
|
6.150
|
|
|
9/1/2020
|
NA
|
NA
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fixed-to-floating-rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Series I
|
600,000
|
|
600,000
|
|
|
6,000
|
|
6,000
|
|
|
4/23/2008
|
7.900
|
%
|
|
4/30/2018
|
4/30/2018
|
LIBOR + 3.47%
|
||
Series Q
|
150,000
|
|
150,000
|
|
|
1,500
|
|
1,500
|
|
|
4/23/2013
|
5.150
|
|
|
5/1/2023
|
5/1/2023
|
LIBOR + 3.25
|
||
Series R
|
150,000
|
|
150,000
|
|
|
1,500
|
|
1,500
|
|
|
7/29/2013
|
6.000
|
|
|
8/1/2023
|
8/1/2023
|
LIBOR + 3.30
|
||
Series S
|
200,000
|
|
200,000
|
|
|
2,000
|
|
2,000
|
|
|
1/22/2014
|
6.750
|
|
|
2/1/2024
|
2/1/2024
|
LIBOR + 3.78
|
||
Series U
|
100,000
|
|
100,000
|
|
|
1,000
|
|
1,000
|
|
|
3/10/2014
|
6.125
|
|
|
4/30/2024
|
4/30/2024
|
LIBOR + 3.33
|
||
Series V
|
250,000
|
|
250,000
|
|
|
2,500
|
|
2,500
|
|
|
6/9/2014
|
5.000
|
|
|
7/1/2019
|
7/1/2019
|
LIBOR + 3.32
|
||
Series X
|
160,000
|
|
160,000
|
|
|
1,600
|
|
1,600
|
|
|
9/23/2014
|
6.100
|
|
|
10/1/2024
|
10/1/2024
|
LIBOR + 3.33
|
||
Series Z
|
200,000
|
|
200,000
|
|
|
2,000
|
|
2,000
|
|
|
4/21/2015
|
5.300
|
|
|
5/1/2020
|
5/1/2020
|
LIBOR + 3.80
|
||
Series CC
|
125,750
|
|
—
|
|
|
1,258
|
|
—
|
|
|
10/20/2017
|
4.625
|
|
|
11/1/2022
|
11/1/2022
|
LIBOR + 2.58
|
||
Total preferred stock
|
2,606,750
|
|
2,606,750
|
|
|
$
|
26,068
|
|
$
|
26,068
|
|
|
|
|
|
|
|
|
(a)
|
Represented by depositary shares.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
251
|
Year ended December 31,
(in millions)
|
2017
|
|
2016
|
|
2015
|
|
Total issued – balance at January 1
|
4,104.9
|
|
4,104.9
|
|
4,104.9
|
|
Treasury – balance at January 1
|
(543.7
|
)
|
(441.4
|
)
|
(390.1
|
)
|
Repurchase
|
(166.6
|
)
|
(140.4
|
)
|
(89.8
|
)
|
Reissuance:
|
|
|
|
|||
Employee benefits and compensation plans
|
24.5
|
|
26.0
|
|
32.8
|
|
Warrant exercise
|
5.4
|
|
11.1
|
|
4.7
|
|
Employee stock purchase plans
|
0.8
|
|
1.0
|
|
1.0
|
|
Total reissuance
|
30.7
|
|
38.1
|
|
38.5
|
|
Total treasury – balance at December 31
|
(679.6
|
)
|
(543.7
|
)
|
(441.4
|
)
|
Outstanding at December 31
|
3,425.3
|
|
3,561.2
|
|
3,663.5
|
|
Year ended December 31, (in millions)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Total number of shares of common stock repurchased
|
|
166.6
|
|
|
140.4
|
|
|
89.8
|
|
|||
Aggregate purchase price of common stock repurchases
|
|
$
|
15,410
|
|
|
$
|
9,082
|
|
|
$
|
5,616
|
|
252
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31,
(in millions,
except per share amounts)
|
2017
|
2016
|
2015
|
||||||
Basic earnings per share
|
|
|
|
||||||
Net income
|
$
|
24,441
|
|
$
|
24,733
|
|
$
|
24,442
|
|
Less: Preferred stock dividends
|
1,663
|
|
1,647
|
|
1,515
|
|
|||
Net income applicable to common equity
|
22,778
|
|
23,086
|
|
22,927
|
|
|||
Less: Dividends and undistributed earnings allocated to participating securities
(a)
|
211
|
|
252
|
|
276
|
|
|||
Net income applicable to common stockholders
(a)
|
$
|
22,567
|
|
$
|
22,834
|
|
$
|
22,651
|
|
|
|
|
|
||||||
Total weighted-average basic shares outstanding
(a)
|
3,551.6
|
|
3,658.8
|
|
3,741.2
|
|
|||
Net income per share
|
$
|
6.35
|
|
$
|
6.24
|
|
$
|
6.05
|
|
|
|
|
|
||||||
Diluted earnings per share
|
|
|
|
||||||
Net income applicable to common stockholders
(a)
|
$
|
22,567
|
|
$
|
22,834
|
|
$
|
22,651
|
|
|
|
|
|
||||||
Total weighted-average basic shares outstanding
(a)
|
3,551.6
|
|
3,658.8
|
|
3,741.2
|
|
|||
Add: Employee stock options, SARs, warrants and PSUs
(a)
|
25.2
|
|
31.2
|
|
32.4
|
|
|||
Total weighted-average diluted shares outstanding
(a)(b)
|
3,576.8
|
|
3,690.0
|
|
3,773.6
|
|
|||
Net income per share
|
$
|
6.31
|
|
$
|
6.19
|
|
$
|
6.00
|
|
(a)
|
The prior period amounts have been revised to conform with the current period presentation. The revision had no impact on the Firm’s reported earnings per share.
|
(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./2017 Annual Report
|
|
253
|
Year ended December 31,
(in millions)
|
Unrealized
gains/(losses)
on investment securities
(b)
|
|
Translation adjustments, net of hedges
|
|
Cash flow hedges
|
|
Defined benefit pension and OPEB plans
|
DVA on fair value option elected liabilities
|
Accumulated other comprehensive income/(loss)
|
||||||||||||||||||||||||
Balance at December 31, 2014
|
|
$
|
4,773
|
|
|
|
|
$
|
(147
|
)
|
|
|
|
$
|
(95
|
)
|
|
|
|
$
|
(2,342
|
)
|
|
|
$
|
—
|
|
|
|
$
|
2,189
|
|
|
Net change
|
|
(2,144
|
)
|
|
|
|
(15
|
)
|
|
|
|
51
|
|
|
|
|
111
|
|
|
|
—
|
|
|
|
(1,997
|
)
|
|||||||
Balance at December 31, 2015
|
|
$
|
2,629
|
|
|
|
|
$
|
(162
|
)
|
|
|
|
$
|
(44
|
)
|
|
|
|
$
|
(2,231
|
)
|
|
|
$
|
—
|
|
|
|
$
|
192
|
|
|
Cumulative effect of change in accounting principle
(a)
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
154
|
|
|
|
154
|
|
|||||||
Net change
|
|
(1,105
|
)
|
|
|
|
(2
|
)
|
|
|
|
(56
|
)
|
|
|
|
(28
|
)
|
|
|
(330
|
)
|
|
|
(1,521
|
)
|
|||||||
Balance at December 31, 2016
|
|
$
|
1,524
|
|
|
|
|
$
|
(164
|
)
|
|
|
|
$
|
(100
|
)
|
|
|
|
$
|
(2,259
|
)
|
|
|
$
|
(176
|
)
|
|
|
$
|
(1,175
|
)
|
|
Net change
|
|
640
|
|
|
|
|
(306
|
)
|
|
|
|
176
|
|
|
|
|
738
|
|
|
|
(192
|
)
|
|
|
1,056
|
|
|||||||
Balance at December 31, 2017
|
|
$
|
2,164
|
|
|
|
|
$
|
(470
|
)
|
|
|
|
$
|
76
|
|
|
|
|
$
|
(1,521
|
)
|
|
|
(368
|
)
|
|
|
$
|
(119
|
)
|
(a)
|
Effective January 1, 2016, the Firm adopted new accounting guidance related to the recognition and measurement of financial liabilities where the fair value option has been elected. This guidance requires the portion of the total change in fair value caused by changes in the Firm’s own credit risk (DVA) to be presented separately in OCI; previously these amounts were recognized in net income.
|
(b)
|
Represents the after-tax difference between the fair value and amortized cost of securities accounted for as AFS, including net unamortized unrealized gains and losses related to AFS securities transferred to HTM.
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||||||||||||||||||||
Year ended December 31, (in millions)
|
Pre-tax
|
|
Tax effect
|
|
After-tax
|
|
Pre-tax
|
|
Tax effect
|
|
After-tax
|
|
Pre-tax
|
|
Tax effect
|
|
After-tax
|
||||||||||||||||||
Unrealized gains/(losses) on investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net unrealized gains/(losses) arising during the period
|
$
|
944
|
|
|
$
|
(346
|
)
|
|
$
|
598
|
|
|
$
|
(1,628
|
)
|
|
$
|
611
|
|
|
$
|
(1,017
|
)
|
|
$
|
(3,315
|
)
|
|
$
|
1,297
|
|
|
$
|
(2,018
|
)
|
Reclassification adjustment for realized (gains)/losses included in net income
(a)
|
66
|
|
|
(24
|
)
|
|
42
|
|
|
(141
|
)
|
|
53
|
|
|
(88
|
)
|
|
(202
|
)
|
|
76
|
|
|
(126
|
)
|
|||||||||
Net change
|
1,010
|
|
|
(370
|
)
|
|
640
|
|
|
(1,769
|
)
|
|
664
|
|
|
(1,105
|
)
|
|
(3,517
|
)
|
|
1,373
|
|
|
(2,144
|
)
|
|||||||||
Translation adjustments
(b)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Translation
|
1,313
|
|
|
(801
|
)
|
|
512
|
|
|
(261
|
)
|
|
99
|
|
|
(162
|
)
|
|
(1,876
|
)
|
|
682
|
|
|
(1,194
|
)
|
|||||||||
Hedges
|
(1,294
|
)
|
|
476
|
|
|
(818
|
)
|
|
262
|
|
|
(102
|
)
|
|
160
|
|
|
1,885
|
|
|
(706
|
)
|
|
1,179
|
|
|||||||||
Net change
|
19
|
|
|
(325
|
)
|
|
(306
|
)
|
|
1
|
|
|
(3
|
)
|
|
(2
|
)
|
|
9
|
|
|
(24
|
)
|
|
(15
|
)
|
|||||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net unrealized gains/(losses) arising during the period
|
147
|
|
|
(55
|
)
|
|
92
|
|
|
(450
|
)
|
|
168
|
|
|
(282
|
)
|
|
(97
|
)
|
|
35
|
|
|
(62
|
)
|
|||||||||
Reclassification adjustment for realized (gains)/losses included in net income
(c)(d)
|
134
|
|
|
(50
|
)
|
|
84
|
|
|
360
|
|
|
(134
|
)
|
|
226
|
|
|
180
|
|
|
(67
|
)
|
|
113
|
|
|||||||||
Net change
|
281
|
|
|
(105
|
)
|
|
176
|
|
|
(90
|
)
|
|
34
|
|
|
(56
|
)
|
|
83
|
|
|
(32
|
)
|
|
51
|
|
|||||||||
Defined benefit pension and OPEB plans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net gains/(losses) arising during the period
|
802
|
|
|
(160
|
)
|
|
642
|
|
|
(366
|
)
|
|
145
|
|
|
(221
|
)
|
|
29
|
|
|
(47
|
)
|
|
(18
|
)
|
|||||||||
Reclassification adjustments included in net income
(e)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Amortization of net loss
|
250
|
|
|
(90
|
)
|
|
160
|
|
|
257
|
|
|
(97
|
)
|
|
160
|
|
|
282
|
|
|
(106
|
)
|
|
176
|
|
|||||||||
Prior service costs/(credits)
|
(36
|
)
|
|
13
|
|
|
(23
|
)
|
|
(36
|
)
|
|
14
|
|
|
(22
|
)
|
|
(36
|
)
|
|
14
|
|
|
(22
|
)
|
|||||||||
Settlement loss/(gain)
|
2
|
|
|
(1
|
)
|
|
1
|
|
|
4
|
|
|
(1
|
)
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Foreign exchange and other
|
(54
|
)
|
|
12
|
|
|
(42
|
)
|
|
77
|
|
|
(25
|
)
|
|
52
|
|
|
33
|
|
|
(58
|
)
|
|
(25
|
)
|
|||||||||
Net change
|
964
|
|
|
(226
|
)
|
|
738
|
|
|
(64
|
)
|
|
36
|
|
|
(28
|
)
|
|
308
|
|
|
(197
|
)
|
|
111
|
|
|||||||||
DVA on fair value option elected liabilities, net change:
|
$
|
(303
|
)
|
|
$
|
111
|
|
|
$
|
(192
|
)
|
|
$
|
(529
|
)
|
|
$
|
199
|
|
|
$
|
(330
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total other comprehensive income/(loss)
|
$
|
1,971
|
|
|
$
|
(915
|
)
|
|
$
|
1,056
|
|
|
$
|
(2,451
|
)
|
|
$
|
930
|
|
|
$
|
(1,521
|
)
|
|
$
|
(3,117
|
)
|
|
$
|
1,120
|
|
|
$
|
(1,997
|
)
|
(a)
|
The pre-tax amount is reported in securities gains/(losses) in the Consolidated statements of income.
|
(b)
|
Reclassifications of pre-tax realized gains/(losses) on translation adjustments and related hedges are reported in other income/expense in the Consolidated statements of income. The amounts were not material for the periods presented.
|
(c)
|
The pre-tax amounts are primarily recorded in noninterest revenue, net interest income and compensation expense in the Consolidated statements of income.
|
(d)
|
In 2015, the Firm reclassified approximately $
150 million
of net losses from AOCI to other income because the Firm determined that it is probable that the forecasted interest payment cash flows would not occur. For additional information, see Note
5
.
|
(e)
|
The pre-tax amount is reported in compensation expense in the Consolidated statements of income.
|
254
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Effective tax rate
|
|
|
|
|
|
|
|||
Year ended December 31,
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
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
|
|
2.2
|
|
|
2.4
|
|
|
1.5
|
|
Tax-exempt income
|
|
(3.3
|
)
|
|
(3.1
|
)
|
|
(3.3
|
)
|
Non-U.S. subsidiary earnings
(a)
|
|
(3.1
|
)
|
|
(1.7
|
)
|
|
(3.9
|
)
|
Business tax credits
|
|
(4.2
|
)
|
|
(3.9
|
)
|
|
(3.7
|
)
|
Nondeductible legal expense
|
|
—
|
|
|
0.3
|
|
|
0.8
|
|
Tax audit resolutions
|
|
—
|
|
|
—
|
|
|
(5.7
|
)
|
Impact of the TCJA
|
|
5.4
|
|
|
—
|
|
|
—
|
|
Other, net
|
|
(0.1
|
)
|
|
(0.6
|
)
|
|
(0.3
|
)
|
Effective tax rate
|
|
31.9
|
%
|
|
28.4
|
%
|
|
20.4
|
%
|
(a)
|
Predominantly includes earnings of U.K. subsidiaries that were deemed to be reinvested indefinitely through December 31, 2017.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
255
|
Income tax expense/(benefit)
|
||||||||||||
Year ended December 31,
(in millions) |
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Current income tax expense/(benefit)
|
|
|
|
|
|
|
||||||
U.S. federal
|
|
$
|
5,718
|
|
|
$
|
2,488
|
|
|
$
|
3,160
|
|
Non-U.S.
|
|
2,400
|
|
|
1,760
|
|
|
1,220
|
|
|||
U.S. state and local
|
|
1,029
|
|
|
904
|
|
|
547
|
|
|||
Total current income tax expense/(benefit)
|
|
9,147
|
|
|
5,152
|
|
|
4,927
|
|
|||
Deferred income tax expense/(benefit)
|
|
|
|
|
|
|
||||||
U.S. federal
|
|
2,174
|
|
|
4,364
|
|
|
1,213
|
|
|||
Non-U.S.
|
|
(144
|
)
|
|
(73
|
)
|
|
(95
|
)
|
|||
U.S. state and local
|
|
282
|
|
|
360
|
|
|
215
|
|
|||
Total deferred income tax
expense/(benefit) |
|
2,312
|
|
|
4,651
|
|
|
1,333
|
|
|||
Total income tax expense
|
|
$
|
11,459
|
|
|
$
|
9,803
|
|
|
$
|
6,260
|
|
Year ended December 31,
(in millions) |
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
U.S.
|
|
$
|
27,103
|
|
|
$
|
26,651
|
|
|
$
|
23,191
|
|
Non-U.S.
(a)
|
|
8,797
|
|
|
7,885
|
|
|
7,511
|
|
|||
Income before income tax expense
|
|
$
|
35,900
|
|
|
$
|
34,536
|
|
|
$
|
30,702
|
|
(a)
|
For purposes of this table, non-U.S. income is defined as income generated from operations located outside the U.S.
|
256
|
|
JPMorgan Chase & Co./2017 Annual Report
|
December 31, (in millions)
|
|
2017
|
|
|
2016
|
|
||
Deferred tax assets
|
|
|
|
|
||||
Allowance for loan losses
|
|
$
|
3,395
|
|
|
$
|
5,534
|
|
Employee benefits
|
|
688
|
|
|
2,911
|
|
||
Accrued expenses and other
|
|
3,528
|
|
|
6,831
|
|
||
Non-U.S. operations
|
|
327
|
|
|
5,368
|
|
||
Tax attribute carryforwards
|
|
219
|
|
|
2,155
|
|
||
Gross deferred tax assets
|
|
8,157
|
|
|
22,799
|
|
||
Valuation allowance
|
|
(46
|
)
|
|
(785
|
)
|
||
Deferred tax assets, net of valuation allowance
|
|
$
|
8,111
|
|
|
$
|
22,014
|
|
Deferred tax liabilities
|
|
|
|
|
||||
Depreciation and amortization
|
|
$
|
2,299
|
|
|
$
|
3,294
|
|
Mortgage servicing rights, net of hedges
|
|
2,757
|
|
|
4,807
|
|
||
Leasing transactions
|
|
3,483
|
|
|
4,053
|
|
||
Non-U.S. operations
|
|
200
|
|
|
4,572
|
|
||
Other, net
|
|
3,502
|
|
|
5,493
|
|
||
Gross deferred tax liabilities
|
|
12,241
|
|
|
22,219
|
|
||
Net deferred tax (liabilities)/assets
|
|
$
|
(4,130
|
)
|
|
$
|
(205
|
)
|
Year ended December 31,
(in millions) |
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Balance at January 1,
|
|
$
|
3,450
|
|
|
$
|
3,497
|
|
|
$
|
4,911
|
|
Increases based on tax positions related to the current period
|
|
1,355
|
|
|
262
|
|
|
408
|
|
|||
Increases based on tax positions related to prior periods
|
|
626
|
|
|
583
|
|
|
1,028
|
|
|||
Decreases based on tax positions related to prior periods
|
|
(350
|
)
|
|
(785
|
)
|
|
(2,646
|
)
|
|||
Decreases related to cash settlements with taxing authorities
|
|
(334
|
)
|
|
(56
|
)
|
|
(204
|
)
|
|||
Decreases related to a lapse of applicable statute of limitations
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|||
Balance at December 31,
|
|
$
|
4,747
|
|
|
$
|
3,450
|
|
|
$
|
3,497
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
257
|
December 31, 2017
|
|
Periods under examination
|
|
Status
|
JPMorgan Chase – U.S.
|
|
2003 – 2005
|
|
At Appellate level
|
JPMorgan Chase – U.S.
|
|
2006 – 2010
|
|
Field examination of amended returns; certain matters at Appellate level
|
JPMorgan Chase – U.S.
|
|
2011 – 2013
|
|
Field Examination
|
JPMorgan Chase – California
|
|
2011 – 2012
|
|
Field Examination
|
JPMorgan Chase – U.K.
|
|
2006 – 2015
|
|
Field examination of certain select entities
|
•
|
Receivables
and securities of
$18.0 billion
and
$18.2 billion
, respectively, consisting of cash
and securities
pledged with clearing organizations for the benefit of customers.
|
•
|
Securities with a fair value of
$3.5 billion
and
$19.3 billion
, respectively, were also restricted in relation to customer activity.
|
258
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
259
|
|
Chase Bank USA, N.A.
|
||||||||||||||
|
Basel III Standardized Transitional
|
|
Basel III Advanced Transitional
|
||||||||||||
(in millions,
except ratios)
|
Dec 31,
2017 |
|
|
Dec 31,
2016 |
|
|
Dec 31,
2017 |
|
|
Dec 31,
2016 |
|
||||
Regulatory capital
|
|
|
|
|
|
|
|
||||||||
CET1 capital
|
$
|
21,600
|
|
|
$
|
16,784
|
|
|
$
|
21,600
|
|
|
$
|
16,784
|
|
Tier 1 capital
|
21,600
|
|
|
16,784
|
|
|
21,600
|
|
|
16,784
|
|
||||
Total capital
|
27,691
|
|
|
22,862
|
|
|
26,250
|
|
|
21,434
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Risk-weighted
|
113,108
|
|
|
112,297
|
|
|
190,523
|
|
|
186,378
|
|
||||
Adjusted average
(b)
|
126,517
|
|
|
120,304
|
|
|
126,517
|
|
|
120,304
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Capital ratios
(c)
|
|
|
|
|
|
|
|
||||||||
CET1
|
19.1
|
%
|
|
14.9
|
%
|
|
11.3
|
%
|
|
9.0
|
%
|
||||
Tier 1
|
19.1
|
|
|
14.9
|
|
|
11.3
|
|
|
9.0
|
|
||||
Total
|
24.5
|
|
|
20.4
|
|
|
13.8
|
|
|
11.5
|
|
||||
Tier 1 leverage
(d)
|
17.1
|
|
|
14.0
|
|
|
17.1
|
|
|
14.0
|
|
(a)
|
Includes the deduction associated with the permissible holdings of covered funds (as defined by the Volcker Rule). The deduction was not material as of
December 31, 2017
and
2016
.
|
(b)
|
Adjusted average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for unrealized gains/(losses) on AFS securities, less deductions for goodwill and other intangible assets, defined benefit pension plan assets, and deferred tax assets related to tax attributes, including NOLs.
|
(c)
|
For each of the risk-based capital ratios, the capital adequacy of the Firm and its IDI subsidiaries is evaluated against the lower of the two ratios as calculated under Basel III approaches (Standardized or Advanced) as required by the Collins Amendment of the Dodd-Frank Act (the “Collins Floor”)
|
(d)
|
The Tier 1 leverage ratio is not a risk-based measure of capital. This ratio is calculated by dividing Tier 1 capital by adjusted average assets.
|
(e)
|
The prior period amounts have been revised to conform with the current period presentation.
|
(a)
|
Represents the Transitional minimum capital ratios applicable to the Firm under Basel III at
December 31, 2017
. At
December 31, 2017
, the CET1 minimum capital ratio includes
1.25%
resulting from the phase-in of the Firm’s
2.5%
capital conservation buffer, and
1.75%
resulting from the phase-in of the Firm’s
3.5%
GSIB surcharge.
|
(b)
|
Represents requirements for JPMorgan Chase’s IDI subsidiaries. The CET1 minimum capital ratio includes
1.25%
resulting from the phase-in of the
2.5%
capital conservation buffer that is applicable to the IDI subsidiaries. The IDI subsidiaries are not subject to the GSIB surcharge.
|
(c)
|
Represents requirements for bank holding companies pursuant to regulations issued by the Federal Reserve.
|
(d)
|
Represents requirements for IDI subsidiaries pursuant to regulations issued under the FDIC Improvement Act.
|
(e)
|
For the period ended December 31, 2016 the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm were
6.25%
,
7.75%
,
9.75%
and
4.0%
and the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm’s IDI subsidiaries were
5.125%
,
6.625%
,
8.625%
and
4.0%
respectively.
|
260
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
261
|
Off–balance sheet lending-related financial instruments, guarantees and other commitments
|
|
|||||||||||||||||||||||||
|
Contractual amount
|
|
Carrying value
(i)
|
|||||||||||||||||||||||
|
2017
|
|
2016
|
|
2017
|
2016
|
||||||||||||||||||||
By remaining maturity at December 31,
(in millions) |
Expires in 1 year or less
|
Expires after
1 year through 3 years |
Expires after
3 years through 5 years |
Expires after 5 years
|
Total
|
|
Total
|
|
|
|
||||||||||||||||
Lending-related
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Consumer, excluding credit card:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Home equity
|
$
|
2,165
|
|
$
|
1,370
|
|
$
|
1,379
|
|
$
|
15,446
|
|
$
|
20,360
|
|
|
$
|
21,714
|
|
|
$
|
12
|
|
$
|
12
|
|
Residential mortgage
(a)(b)
|
5,723
|
|
—
|
|
—
|
|
13
|
|
5,736
|
|
|
10,332
|
|
|
—
|
|
—
|
|
||||||||
Auto
|
8,007
|
|
872
|
|
292
|
|
84
|
|
9,255
|
|
|
8,468
|
|
|
2
|
|
2
|
|
||||||||
Consumer & Business Banking
(b)
|
11,642
|
|
926
|
|
112
|
|
522
|
|
13,202
|
|
|
12,733
|
|
|
19
|
|
12
|
|
||||||||
Total consumer, excluding credit card
|
27,537
|
|
3,168
|
|
1,783
|
|
16,065
|
|
48,553
|
|
|
53,247
|
|
(h)
|
33
|
|
26
|
|
||||||||
Credit card
|
572,831
|
|
—
|
|
—
|
|
—
|
|
572,831
|
|
|
553,891
|
|
|
—
|
|
—
|
|
||||||||
Total consumer
(c)
|
600,368
|
|
3,168
|
|
1,783
|
|
16,065
|
|
621,384
|
|
|
607,138
|
|
(h)
|
33
|
|
26
|
|
||||||||
Wholesale:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other unfunded commitments to extend credit
(d)
|
61,536
|
|
118,907
|
|
138,289
|
|
12,428
|
|
331,160
|
|
|
328,497
|
|
|
840
|
|
905
|
|
||||||||
Standby letters of credit and other financial guarantees
(d)
|
15,278
|
|
9,905
|
|
7,963
|
|
2,080
|
|
35,226
|
|
|
35,947
|
|
|
636
|
|
586
|
|
||||||||
Other letters of credit
(d)
|
3,459
|
|
114
|
|
139
|
|
—
|
|
3,712
|
|
|
3,570
|
|
|
3
|
|
2
|
|
||||||||
Total wholesale
(e)
|
80,273
|
|
128,926
|
|
146,391
|
|
14,508
|
|
370,098
|
|
|
368,014
|
|
|
1,479
|
|
1,493
|
|
||||||||
Total lending-related
|
$
|
680,641
|
|
$
|
132,094
|
|
$
|
148,174
|
|
$
|
30,573
|
|
$
|
991,482
|
|
|
$
|
975,152
|
|
(h)
|
$
|
1,512
|
|
$
|
1,519
|
|
Other guarantees and commitments
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Securities lending indemnification agreements and guarantees
(f)
|
$
|
179,490
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
179,490
|
|
|
$
|
137,209
|
|
|
$
|
—
|
|
$
|
—
|
|
Derivatives qualifying as guarantees
|
4,529
|
|
101
|
|
12,479
|
|
40,065
|
|
57,174
|
|
|
51,966
|
|
|
304
|
|
80
|
|
||||||||
Unsettled reverse repurchase and securities borrowing agreements
|
76,859
|
|
—
|
|
—
|
|
—
|
|
76,859
|
|
|
50,722
|
|
|
—
|
|
—
|
|
||||||||
Unsettled repurchase and securities lending agreements
|
44,205
|
|
—
|
|
—
|
|
—
|
|
44,205
|
|
|
26,948
|
|
|
—
|
|
—
|
|
||||||||
Loan sale and securitization-related indemnifications:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage repurchase liability
|
NA
|
|
NA
|
|
NA
|
|
NA
|
|
NA
|
|
|
NA
|
|
|
111
|
|
133
|
|
||||||||
Loans sold with recourse
|
NA
|
|
NA
|
|
NA
|
|
NA
|
|
1,169
|
|
|
2,730
|
|
|
38
|
|
64
|
|
||||||||
Other guarantees and commitments
(g)
|
7,668
|
|
1,084
|
|
434
|
|
2,681
|
|
11,867
|
|
|
5,715
|
|
|
(76
|
)
|
(118
|
)
|
(a)
|
Includes certain commitments to purchase loans from correspondents.
|
(b)
|
Certain loan portfolios have been reclassified. The prior period amounts have been revised to conform with the current period presentation.
|
(c)
|
Predominantly all consumer lending-related commitments are in the U.S.
|
(d)
|
At
December 31, 2017
and
2016
, reflected the contractual amount net of risk participations totaling
$334 million
and
$328 million
, respectively, for other unfunded commitments to extend credit;
$10.4 billion
and
$11.1 billion
, respectively, for standby letters of credit and other financial guarantees; and
$405 million
and
$265 million
, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.
|
(e)
|
At
December 31, 2017
and
2016
, the U.S. portion of the contractual amount of total wholesale lending-related commitments was
77%
and
79%
, respectively.
|
(f)
|
At
December 31, 2017
and
2016
, collateral held by the Firm in support of securities lending indemnification agreements was
$188.7 billion
and
$143.2 billion
, respectively. Securities lending collateral consist of primarily cash and securities issued by governments that are members of G7 and U.S. government agencies.
|
(g)
|
At December 31, 2017, primarily includes letters of credit hedged by derivative transactions and managed on a market risk basis, unfunded commitments related to institutional lending and commitments associated with the Firm’s membership in certain clearing houses. Additionally, includes unfunded commitments predominantly related to certain tax-oriented equity investments.
|
(h)
|
The prior period amounts have been revised to conform with the current period presentation.
|
(i)
|
For lending-related products, the carrying value represents the allowance for lending-related commitments and the guarantee liability; for derivative-related products, the carrying value represents the fair value.
|
262
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
2017
|
|
2016
|
||||||||||||||||
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)
|
|
$
|
28,492
|
|
|
|
$
|
2,646
|
|
|
|
$
|
28,245
|
|
|
|
$
|
2,781
|
|
Noninvestment-grade
(a)
|
|
6,734
|
|
|
|
1,066
|
|
|
|
7,702
|
|
|
|
789
|
|
||||
Total contractual amount
|
|
$
|
35,226
|
|
|
|
$
|
3,712
|
|
|
|
$
|
35,947
|
|
|
|
$
|
3,570
|
|
Allowance for lending-related commitments
|
|
$
|
192
|
|
|
|
$
|
3
|
|
|
|
$
|
145
|
|
|
|
$
|
2
|
|
Guarantee liability
|
|
444
|
|
|
|
—
|
|
|
|
441
|
|
|
|
—
|
|
||||
Total carrying value
|
|
$
|
636
|
|
|
|
$
|
3
|
|
|
|
$
|
586
|
|
|
|
$
|
2
|
|
Commitments with collateral
|
|
$
|
17,421
|
|
|
|
$
|
878
|
|
|
|
$
|
19,346
|
|
|
|
$
|
940
|
|
(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.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
263
|
(in millions)
|
December 31, 2017
|
|
|
December 31, 2016
|
|
Notional amounts
|
|
|
|
||
Derivative guarantees
|
57,174
|
|
|
51,966
|
|
Stable value contracts with contractually limited exposure
|
29,104
|
|
|
28,665
|
|
Maximum exposure of stable value contracts with contractually limited exposure
|
3,053
|
|
|
3,012
|
|
|
|
|
|
||
Fair value
|
|
|
|
||
Derivative payables
|
304
|
|
|
96
|
|
Derivative receivables
|
—
|
|
|
16
|
|
264
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
265
|
266
|
|
JPMorgan Chase & Co./2017 Annual Report
|
Year ended December 31, (in millions)
|
|
||
2018
|
1,526
|
|
|
2019
|
1,450
|
|
|
2020
|
1,300
|
|
|
2021
|
1,029
|
|
|
2022
|
815
|
|
|
After 2022
|
3,757
|
|
|
Total minimum payments required
|
9,877
|
|
|
Less: Sublease rentals under noncancelable subleases
|
(1,034
|
)
|
|
Net minimum payment required
|
$
|
8,843
|
|
Year ended December 31,
(in millions)
|
|
|
|
|
|
|
||||||
|
2017
|
|
2016
|
|
2015
|
|||||||
Gross rental expense
|
|
$
|
1,853
|
|
|
$
|
1,860
|
|
|
$
|
2,015
|
|
Sublease rental income
|
|
(251
|
)
|
|
(241
|
)
|
|
(411
|
)
|
|||
Net rental expense
|
|
$
|
1,602
|
|
|
$
|
1,619
|
|
|
$
|
1,604
|
|
December 31, (in billions)
|
|
2017
|
|
2016
|
||||
Assets that may be sold or repledged or otherwise used by secured parties
|
|
$
|
129.6
|
|
|
$
|
133.6
|
|
Assets that may not be sold or repledged or otherwise used by secured parties
|
|
67.9
|
|
|
53.5
|
|
||
Assets pledged at Federal Reserve banks and FHLBs
|
|
493.7
|
|
|
441.9
|
|
||
Total assets pledged
|
|
$
|
691.2
|
|
|
$
|
629.0
|
|
December 31, (in billions)
|
|
2017
|
|
2016
|
||||
Securities
|
|
$
|
86.2
|
|
|
$
|
101.1
|
|
Loans
|
|
437.7
|
|
|
374.9
|
|
||
Trading assets and other
|
|
167.3
|
|
|
153.0
|
|
||
Total assets pledged
|
|
$
|
691.2
|
|
|
$
|
629.0
|
|
December 31, (in billions)
|
|
2017
|
|
2016
|
||||
Collateral permitted to be sold or repledged, delivered, or otherwise used
|
|
$
|
968.8
|
|
|
$
|
914.1
|
|
Collateral sold, repledged, delivered or otherwise used
|
|
775.3
|
|
|
746.6
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
267
|
268
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
269
|
270
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
271
|
272
|
|
JPMorgan Chase & Co./2017 Annual Report
|
As of or for the year ended December 31,
(in millions) |
|
Revenue
(b)
|
|
Expense
(c)
|
|
Income before income tax
expense |
|
Net income
|
|
Total assets
|
|
|
|||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Europe/Middle East/Africa
|
|
$
|
14,426
|
|
|
$
|
8,653
|
|
|
$
|
5,773
|
|
|
$
|
4,007
|
|
|
$
|
407,145
|
|
(d)
|
Asia/Pacific
|
|
5,805
|
|
|
4,277
|
|
|
1,528
|
|
|
852
|
|
|
163,718
|
|
|
|||||
Latin America/Caribbean
|
|
1,994
|
|
|
1,523
|
|
|
471
|
|
|
299
|
|
|
44,569
|
|
|
|||||
Total international
|
|
22,225
|
|
|
14,453
|
|
|
7,772
|
|
|
5,158
|
|
|
615,432
|
|
|
|||||
North America
(a)
|
|
77,399
|
|
|
49,271
|
|
|
28,128
|
|
|
19,283
|
|
|
1,918,168
|
|
|
|||||
Total
|
|
$
|
99,624
|
|
|
$
|
63,724
|
|
|
$
|
35,900
|
|
|
$
|
24,441
|
|
|
$
|
2,533,600
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Europe/Middle East/Africa
|
|
$
|
13,842
|
|
|
$
|
8,550
|
|
|
$
|
5,292
|
|
|
$
|
3,783
|
|
|
$
|
394,134
|
|
(d)
|
Asia/Pacific
|
|
6,112
|
|
|
4,213
|
|
|
1,899
|
|
|
1,212
|
|
|
156,946
|
|
|
|||||
Latin America/Caribbean
|
|
1,959
|
|
|
1,632
|
|
|
327
|
|
|
208
|
|
|
42,971
|
|
|
|||||
Total international
|
|
21,913
|
|
|
14,395
|
|
|
7,518
|
|
|
5,203
|
|
|
594,051
|
|
|
|||||
North America
(a)
|
|
73,755
|
|
|
46,737
|
|
|
27,018
|
|
|
19,530
|
|
|
1,896,921
|
|
|
|||||
Total
|
|
$
|
95,668
|
|
|
$
|
61,132
|
|
|
$
|
34,536
|
|
|
$
|
24,733
|
|
|
$
|
2,490,972
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Europe/Middle East/Africa
|
|
$
|
14,206
|
|
|
$
|
8,871
|
|
|
$
|
5,335
|
|
|
$
|
4,158
|
|
|
$
|
347,647
|
|
(d)
|
Asia/Pacific
|
|
6,151
|
|
|
4,241
|
|
|
1,910
|
|
|
1,285
|
|
|
138,747
|
|
|
|||||
Latin America/Caribbean
|
|
1,923
|
|
|
1,508
|
|
|
415
|
|
|
253
|
|
|
48,185
|
|
|
|||||
Total international
|
|
22,280
|
|
|
14,620
|
|
|
7,660
|
|
|
5,696
|
|
|
534,579
|
|
|
|||||
North America
(a)
|
|
71,263
|
|
|
48,221
|
|
|
23,042
|
|
|
18,746
|
|
|
1,817,119
|
|
|
|||||
Total
|
|
$
|
93,543
|
|
|
$
|
62,841
|
|
|
$
|
30,702
|
|
|
$
|
24,442
|
|
|
$
|
2,351,698
|
|
|
(a)
|
Substantially reflects the U.S.
|
(b)
|
Revenue is composed of net interest income and noninterest revenue.
|
(c)
|
Expense is composed of noninterest expense and the provision for credit losses.
|
(d)
|
Total assets for the U.K. were approximately
$310 billion
,
$310 billion
, and
$306 billion
at
December 31, 2017
,
2016
and
2015
, respectively.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
273
|
274
|
|
JPMorgan Chase & Co./2017 Annual Report
|
As of or for the year ended
December 31,
(in millions, except ratios)
|
|
Consumer & Community Banking
|
|
Corporate & Investment Bank
|
|
Commercial Banking
|
|
Asset & Wealth Management
|
||||||||||||||||||||||||||||||||
|
2017
|
2016
|
2015
|
|
2017
|
2016
|
2015
|
|
2017
|
2016
|
2015
|
|
2017
|
2016
|
2015
|
|||||||||||||||||||||||||
Noninterest revenue
|
|
$
|
14,710
|
|
$
|
15,255
|
|
$
|
15,592
|
|
|
$
|
24,375
|
|
$
|
24,325
|
|
$
|
23,693
|
|
|
$
|
2,522
|
|
$
|
2,320
|
|
$
|
2,365
|
|
|
$
|
9,539
|
|
$
|
9,012
|
|
$
|
9,563
|
|
Net interest income
|
|
31,775
|
|
29,660
|
|
28,228
|
|
|
10,118
|
|
10,891
|
|
9,849
|
|
|
6,083
|
|
5,133
|
|
4,520
|
|
|
3,379
|
|
3,033
|
|
2,556
|
|
||||||||||||
Total net revenue
|
|
46,485
|
|
44,915
|
|
43,820
|
|
|
34,493
|
|
35,216
|
|
33,542
|
|
|
8,605
|
|
7,453
|
|
6,885
|
|
|
12,918
|
|
12,045
|
|
12,119
|
|
||||||||||||
Provision for credit losses
|
|
5,572
|
|
4,494
|
|
3,059
|
|
|
(45
|
)
|
563
|
|
332
|
|
|
(276
|
)
|
282
|
|
442
|
|
|
39
|
|
26
|
|
4
|
|
||||||||||||
Noninterest expense
|
|
26,062
|
|
24,905
|
|
24,909
|
|
|
19,243
|
|
18,992
|
|
21,361
|
|
|
3,327
|
|
2,934
|
|
2,881
|
|
|
9,301
|
|
8,478
|
|
8,886
|
|
||||||||||||
Income/(loss) before income tax expense/(benefit)
|
|
14,851
|
|
15,516
|
|
15,852
|
|
|
15,295
|
|
15,661
|
|
11,849
|
|
|
5,554
|
|
4,237
|
|
3,562
|
|
|
3,578
|
|
3,541
|
|
3,229
|
|
||||||||||||
Income tax expense/(benefit)
|
|
5,456
|
|
5,802
|
|
6,063
|
|
|
4,482
|
|
4,846
|
|
3,759
|
|
|
2,015
|
|
1,580
|
|
1,371
|
|
|
1,241
|
|
1,290
|
|
1,294
|
|
||||||||||||
Net income/(loss)
|
|
$
|
9,395
|
|
$
|
9,714
|
|
$
|
9,789
|
|
|
$
|
10,813
|
|
$
|
10,815
|
|
$
|
8,090
|
|
|
$
|
3,539
|
|
$
|
2,657
|
|
$
|
2,191
|
|
|
$
|
2,337
|
|
$
|
2,251
|
|
$
|
1,935
|
|
Average equity
|
|
$
|
51,000
|
|
$
|
51,000
|
|
$
|
51,000
|
|
|
$
|
70,000
|
|
$
|
64,000
|
|
$
|
62,000
|
|
|
$
|
20,000
|
|
$
|
16,000
|
|
$
|
14,000
|
|
|
$
|
9,000
|
|
$
|
9,000
|
|
$
|
9,000
|
|
Total assets
|
|
552,601
|
|
535,310
|
|
502,652
|
|
|
826,384
|
|
803,511
|
|
748,691
|
|
|
221,228
|
|
214,341
|
|
200,700
|
|
|
151,909
|
|
138,384
|
|
131,451
|
|
||||||||||||
Return on equity
|
|
17
|
%
|
18
|
%
|
18
|
%
|
|
14
|
%
|
16
|
%
|
12
|
%
|
|
17
|
%
|
16
|
%
|
15
|
%
|
|
25
|
%
|
24
|
%
|
21
|
%
|
||||||||||||
Overhead ratio
|
|
56
|
|
55
|
|
57
|
|
|
56
|
|
54
|
|
64
|
|
|
39
|
|
39
|
|
42
|
|
|
72
|
|
70
|
|
73
|
|
(table continued from above)
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
As of or for the year ended
December 31,
(in millions, except ratios)
|
|
Corporate
|
|
Reconciling Items
(a)
|
|
Total
|
|||||||||||||||||||||||||
|
2017
|
2016
|
2015
|
|
2017
|
|
2016
|
2015
|
|
2017
|
2016
|
2015
|
|||||||||||||||||||
Noninterest revenue
|
|
$
|
1,085
|
|
$
|
938
|
|
$
|
800
|
|
|
$
|
(2,704
|
)
|
(b)
|
$
|
(2,265
|
)
|
$
|
(1,980
|
)
|
|
$
|
49,527
|
|
$
|
49,585
|
|
$
|
50,033
|
|
Net interest income
|
|
55
|
|
(1,425
|
)
|
(533
|
)
|
|
(1,313
|
)
|
|
(1,209
|
)
|
(1,110
|
)
|
|
50,097
|
|
46,083
|
|
43,510
|
|
|||||||||
Total net revenue
|
|
1,140
|
|
(487
|
)
|
267
|
|
|
(4,017
|
)
|
|
(3,474
|
)
|
(3,090
|
)
|
|
99,624
|
|
95,668
|
|
93,543
|
|
|||||||||
Provision for credit losses
|
|
—
|
|
(4
|
)
|
(10
|
)
|
|
—
|
|
|
—
|
|
—
|
|
|
5,290
|
|
5,361
|
|
3,827
|
|
|||||||||
Noninterest expense
|
|
501
|
|
462
|
|
977
|
|
|
—
|
|
|
—
|
|
—
|
|
|
58,434
|
|
55,771
|
|
59,014
|
|
|||||||||
Income/(loss) before income
tax expense/(benefit)
|
|
639
|
|
(945
|
)
|
(700
|
)
|
|
(4,017
|
)
|
|
(3,474
|
)
|
(3,090
|
)
|
|
35,900
|
|
34,536
|
|
30,702
|
|
|||||||||
Income tax expense/(benefit)
|
|
2,282
|
|
(241
|
)
|
(3,137
|
)
|
|
(4,017
|
)
|
(b)
|
(3,474
|
)
|
(3,090
|
)
|
|
11,459
|
|
9,803
|
|
6,260
|
|
|||||||||
Net income/(loss)
|
|
$
|
(1,643
|
)
|
$
|
(704
|
)
|
$
|
2,437
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
24,441
|
|
$
|
24,733
|
|
$
|
24,442
|
|
Average equity
|
|
$
|
80,350
|
|
$
|
84,631
|
|
$
|
79,690
|
|
|
$
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
230,350
|
|
$
|
224,631
|
|
$
|
215,690
|
|
Total assets
|
|
781,478
|
|
799,426
|
|
768,204
|
|
|
NA
|
|
|
NA
|
|
NA
|
|
|
2,533,600
|
|
2,490,972
|
|
2,351,698
|
|
|||||||||
Return on equity
|
|
NM
|
|
NM
|
|
NM
|
|
|
NM
|
|
|
NM
|
|
NM
|
|
|
10
|
%
|
10
|
%
|
11
|
%
|
|||||||||
Overhead ratio
|
|
NM
|
|
NM
|
|
NM
|
|
|
NM
|
|
|
NM
|
|
NM
|
|
|
59
|
|
58
|
|
63
|
|
(a)
|
Segment results on a managed basis 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.
|
(b)
|
Included
$375 million
related to tax-oriented investments as a result of the enactment of the TCJA.
|
JPMorgan Chase & Co./2017 Annual Report
|
|
275
|
Statements of income and comprehensive income
(a)
|
||||||||||||
Year ended December 31,
(in millions)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Income
|
|
|
|
|
|
|
||||||
Dividends from subsidiaries and affiliates:
|
|
|
|
|
|
|
||||||
Bank and bank holding company
|
|
$
|
13,000
|
|
|
$
|
10,000
|
|
|
$
|
10,653
|
|
Non-bank
(b)
|
|
540
|
|
|
3,873
|
|
|
8,172
|
|
|||
Interest income from subsidiaries
|
|
72
|
|
|
794
|
|
|
443
|
|
|||
Other interest income
|
|
41
|
|
|
207
|
|
|
234
|
|
|||
Other income from subsidiaries, primarily fees:
|
|
|
|
|
|
|
||||||
Bank and bank holding company
|
|
1,553
|
|
|
852
|
|
|
1,438
|
|
|||
Non-bank
|
|
(88
|
)
|
|
1,165
|
|
|
(1,402
|
)
|
|||
Other income
|
|
(623
|
)
|
|
(846
|
)
|
|
1,773
|
|
|||
Total income
|
|
14,495
|
|
|
16,045
|
|
|
21,311
|
|
|||
Expense
|
|
|
|
|
|
|
||||||
Interest expense to subsidiaries and affiliates
(b)
|
|
400
|
|
|
105
|
|
|
98
|
|
|||
Other interest expense
|
|
5,202
|
|
|
4,413
|
|
|
3,720
|
|
|||
Noninterest expense
|
|
(1,897
|
)
|
|
1,643
|
|
|
2,611
|
|
|||
Total expense
|
|
3,705
|
|
|
6,161
|
|
|
6,429
|
|
|||
Income before income tax benefit and undistributed net income of subsidiaries
|
|
10,790
|
|
|
9,884
|
|
|
14,882
|
|
|||
Income tax benefit
|
|
1,007
|
|
|
876
|
|
|
1,640
|
|
|||
Equity in undistributed net income of subsidiaries
|
|
12,644
|
|
|
13,973
|
|
|
7,920
|
|
|||
Net income
|
|
$
|
24,441
|
|
|
$
|
24,733
|
|
|
$
|
24,442
|
|
Other comprehensive income, net
|
|
1,056
|
|
|
(1,521
|
)
|
|
(1,997
|
)
|
|||
Comprehensive income
|
|
$
|
25,497
|
|
|
$
|
23,212
|
|
|
$
|
22,445
|
|
Balance sheets
(a)
|
|
|
|
|
||||
December 31, (in millions)
|
|
2017
|
|
|
2016
|
|
||
Assets
|
|
|
|
|
||||
Cash and due from banks
|
|
$
|
163
|
|
|
$
|
113
|
|
Deposits with banking subsidiaries
|
|
5,306
|
|
|
5,450
|
|
||
Trading assets
|
|
4,773
|
|
|
10,326
|
|
||
Available-for-sale securities
|
|
—
|
|
|
2,694
|
|
||
Loans
|
|
—
|
|
|
77
|
|
||
Advances to, and receivables from, subsidiaries:
|
|
|
|
|
||||
Bank and bank holding company
|
|
2,106
|
|
|
524
|
|
||
Non-bank
|
|
82
|
|
|
46
|
|
||
Investments (at equity) in subsidiaries and affiliates:
|
|
|
|
|
||||
Bank and bank holding company
|
|
451,713
|
|
|
422,028
|
|
||
Non-bank
(b)
|
|
422
|
|
|
13,103
|
|
||
Other assets
|
|
10,458
|
|
|
10,257
|
|
||
Total assets
|
|
$
|
475,023
|
|
|
$
|
464,618
|
|
Liabilities and stockholders’ equity
|
|
|
|
|
||||
Borrowings from, and payables to, subsidiaries and affiliates
(b)
|
|
$
|
23,426
|
|
|
$
|
13,584
|
|
Short-term borrowings
|
|
3,350
|
|
|
3,831
|
|
||
Other liabilities
|
|
8,302
|
|
|
11,224
|
|
||
Long-term debt
(c)(d)
|
|
184,252
|
|
|
181,789
|
|
||
Total liabilities
(d)
|
|
219,330
|
|
|
210,428
|
|
||
Total stockholders’ equity
|
|
255,693
|
|
|
254,190
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
475,023
|
|
|
$
|
464,618
|
|
Statements of cash flows
(a)
|
|
|
||||||||||
Year ended December 31,
(in millions)
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||
Operating activities
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
24,441
|
|
|
$
|
24,733
|
|
|
$
|
24,442
|
|
Less: Net income of subsidiaries and affiliates
(b)
|
|
26,185
|
|
|
27,846
|
|
|
26,745
|
|
|||
Parent company net loss
|
|
(1,744
|
)
|
|
(3,113
|
)
|
|
(2,303
|
)
|
|||
Cash dividends from subsidiaries and affiliates
(b)
|
|
13,540
|
|
|
13,873
|
|
|
17,023
|
|
|||
Other operating adjustments
|
|
4,635
|
|
|
(18,166
|
)
|
|
2,483
|
|
|||
Net cash provided by/(used in) operating activities
|
|
16,431
|
|
|
(7,406
|
)
|
|
17,203
|
|
|||
Investing activities
|
|
|
|
|
|
|
||||||
Net change in:
|
|
|
|
|
|
|
||||||
Deposits with banking subsidiaries
|
|
144
|
|
|
60,349
|
|
|
30,085
|
|
|||
Available-for-sale securities:
|
|
|
|
|
|
|
||||||
Proceeds from paydowns and maturities
|
|
—
|
|
|
353
|
|
|
120
|
|
|||
Other changes in loans, net
|
|
78
|
|
|
1,793
|
|
|
321
|
|
|||
Advances to and investments in subsidiaries and affiliates, net
|
|
(280
|
)
|
|
(51,967
|
)
|
|
(81
|
)
|
|||
All other investing activities, net
|
|
17
|
|
|
114
|
|
|
153
|
|
|||
Net cash provided by/(used in) investing activities
|
|
(41
|
)
|
|
10,642
|
|
|
30,598
|
|
|||
Financing activities
|
|
|
|
|
|
|
||||||
Net change in:
|
|
|
|
|
|
|
||||||
Borrowings from subsidiaries and affiliates
(b)
|
|
13,862
|
|
|
2,957
|
|
|
(4,062
|
)
|
|||
Short-term borrowings
|
|
(481
|
)
|
|
109
|
|
|
(47,483
|
)
|
|||
Proceeds from long-term borrowings
|
|
25,855
|
|
|
41,498
|
|
|
42,121
|
|
|||
Payments of long-term borrowings
|
|
(29,812
|
)
|
|
(29,298
|
)
|
|
(30,077
|
)
|
|||
Proceeds from issuance of preferred stock
|
|
1,258
|
|
|
—
|
|
|
5,893
|
|
|||
Redemption of preferred stock
|
|
(1,258
|
)
|
|
—
|
|
|
—
|
|
|||
Treasury stock repurchased
|
|
(15,410
|
)
|
|
(9,082
|
)
|
|
(5,616
|
)
|
|||
Dividends paid
|
|
(8,993
|
)
|
|
(8,476
|
)
|
|
(7,873
|
)
|
|||
All other financing activities, net
|
|
(1,361
|
)
|
|
(905
|
)
|
|
(840
|
)
|
|||
Net cash used in financing activities
|
|
(16,340
|
)
|
|
(3,197
|
)
|
|
(47,937
|
)
|
|||
Net increase/(decrease) in cash and due from banks
|
|
50
|
|
|
39
|
|
|
(137
|
)
|
|||
Cash and due from banks at the beginning of the year
|
|
113
|
|
|
74
|
|
|
211
|
|
|||
Cash and due from banks at the end of the year
|
|
$
|
163
|
|
|
$
|
113
|
|
|
$
|
74
|
|
Cash interest paid
|
|
$
|
5,426
|
|
|
$
|
4,550
|
|
|
$
|
3,873
|
|
Cash income taxes paid, net
|
|
1,775
|
|
|
1,053
|
|
|
8,251
|
|
(a)
|
In 2016, in connection with the Firm’s 2016 Resolution Submission, the Parent Company established the IHC, and contributed substantially all of its direct subsidiaries (totaling
$55.4 billion
) other than JPMorgan Chase Bank, N.A., as well as most of its other assets (totaling
$160.5 billion
) and intercompany indebtedness to the IHC. Total noncash assets contributed were
$62.3 billion
. In 2017, the Parent Company transferred
$16.2 billion
of noncash assets to the IHC to complete the contributions to the IHC.
|
(b)
|
Affiliates include trusts that issued guaranteed capital debt securities (“issuer trusts”). For further discussion on these issuer trusts, see Note
19
.
|
(c)
|
At
December 31, 2017
, long-term debt that contractually matures in 2018 through 2022 totaled
$20.6 billion
,
$13.3 billion
,
$22.4 billion
,
$20.6 billion
and
$10.5 billion
, respectively.
|
(d)
|
For information regarding the Parent Company’s guarantees of its subsidiaries’ obligations, see Notes
19
and
27
.
|
276
|
|
JPMorgan Chase & Co./2017 Annual Report
|
As of or for the period ended
|
2017
|
|
|
2016
|
|||||||||||||||||||||||||
(in millions, except per share, ratio, headcount data and where otherwise noted)
|
4th quarter
|
3rd quarter
|
|
2nd quarter
|
|
1st quarter
|
|
|
4th quarter
|
|
3rd quarter
|
2nd quarter
|
1st quarter
|
||||||||||||||||
Selected income statement data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total net revenue
|
$
|
24,153
|
|
$
|
25,326
|
|
|
$
|
25,470
|
|
|
$
|
24,675
|
|
|
|
$
|
23,376
|
|
|
$
|
24,673
|
|
$
|
24,380
|
|
$
|
23,239
|
|
Total noninterest expense
|
14,591
|
|
14,318
|
|
|
14,506
|
|
|
15,019
|
|
|
|
13,833
|
|
|
14,463
|
|
13,638
|
|
13,837
|
|
||||||||
Pre-provision profit
|
9,562
|
|
11,008
|
|
|
10,964
|
|
|
9,656
|
|
|
|
9,543
|
|
|
10,210
|
|
10,742
|
|
9,402
|
|
||||||||
Provision for credit losses
|
1,308
|
|
1,452
|
|
|
1,215
|
|
|
1,315
|
|
|
|
864
|
|
|
1,271
|
|
1,402
|
|
1,824
|
|
||||||||
Income before income tax expense
|
8,254
|
|
9,556
|
|
|
9,749
|
|
|
8,341
|
|
|
|
8,679
|
|
|
8,939
|
|
9,340
|
|
7,578
|
|
||||||||
Income tax expense
|
4,022
|
|
2,824
|
|
|
2,720
|
|
|
1,893
|
|
|
|
1,952
|
|
|
2,653
|
|
3,140
|
|
2,058
|
|
||||||||
Net income
(a)
|
$
|
4,232
|
|
$
|
6,732
|
|
|
$
|
7,029
|
|
|
$
|
6,448
|
|
|
|
$
|
6,727
|
|
|
$
|
6,286
|
|
$
|
6,200
|
|
$
|
5,520
|
|
Per common share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Net income: Basic
|
$
|
1.08
|
|
$
|
1.77
|
|
|
$
|
1.83
|
|
|
$
|
1.66
|
|
|
|
$
|
1.73
|
|
|
$
|
1.60
|
|
$
|
1.56
|
|
$
|
1.36
|
|
Diluted
|
1.07
|
|
1.76
|
|
|
1.82
|
|
|
1.65
|
|
|
|
1.71
|
|
|
1.58
|
|
1.55
|
|
1.35
|
|
||||||||
Average shares: Basic
|
3,489.7
|
|
3,534.7
|
|
|
3,574.1
|
|
|
3,601.7
|
|
|
|
3,611.3
|
|
|
3,637.7
|
|
3,675.5
|
|
3,710.6
|
|
||||||||
Diluted
|
3,512.2
|
|
3,559.6
|
|
|
3,599.0
|
|
|
3,630.4
|
|
|
|
3,646.6
|
|
|
3,669.8
|
|
3,706.2
|
|
3,737.6
|
|
||||||||
Market and per common share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Market capitalization
|
$
|
366,301
|
|
$
|
331,393
|
|
|
$
|
321,633
|
|
|
$
|
312,078
|
|
|
|
$
|
307,295
|
|
|
$
|
238,277
|
|
$
|
224,449
|
|
$
|
216,547
|
|
Common shares at period-end
|
3,425.3
|
|
3,469.7
|
|
|
3,519.0
|
|
|
3,552.8
|
|
|
|
3,561.2
|
|
|
3,578.3
|
|
3,612.0
|
|
3,656.7
|
|
||||||||
Share price:
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
High
|
$
|
108.46
|
|
$
|
95.88
|
|
|
$
|
92.65
|
|
|
$
|
93.98
|
|
|
|
$
|
87.39
|
|
|
$
|
67.90
|
|
$
|
66.20
|
|
$
|
64.13
|
|
Low
|
94.96
|
|
88.08
|
|
|
81.64
|
|
|
83.03
|
|
|
|
66.10
|
|
|
58.76
|
|
57.05
|
|
52.50
|
|
||||||||
Close
|
106.94
|
|
95.51
|
|
|
91.40
|
|
|
87.84
|
|
|
|
86.29
|
|
|
66.59
|
|
62.14
|
|
59.22
|
|
||||||||
Book value per share
|
67.04
|
|
66.95
|
|
|
66.05
|
|
|
64.68
|
|
|
|
64.06
|
|
|
63.79
|
|
62.67
|
|
61.28
|
|
||||||||
TBVPS
(c)
|
53.56
|
|
54.03
|
|
|
53.29
|
|
|
52.04
|
|
|
|
51.44
|
|
|
51.23
|
|
50.21
|
|
48.96
|
|
||||||||
Cash dividends declared per share
|
0.56
|
|
0.56
|
|
|
0.50
|
|
|
0.50
|
|
|
|
0.48
|
|
|
0.48
|
|
0.48
|
|
0.44
|
|
||||||||
Selected ratios and metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
ROE
|
7
|
%
|
11
|
%
|
|
12
|
%
|
|
11
|
%
|
|
|
11
|
%
|
|
10
|
%
|
10
|
%
|
9
|
%
|
||||||||
ROTCE
(c)
|
8
|
|
13
|
|
|
14
|
|
|
13
|
|
|
|
14
|
|
|
13
|
|
13
|
|
12
|
|
||||||||
ROA
|
0.66
|
|
1.04
|
|
|
1.10
|
|
|
1.03
|
|
|
|
1.06
|
|
|
1.01
|
|
1.02
|
|
0.93
|
|
||||||||
Overhead ratio
|
60
|
|
57
|
|
|
57
|
|
|
61
|
|
|
|
59
|
|
|
59
|
|
56
|
|
60
|
|
||||||||
Loans-to-deposits ratio
|
64
|
|
63
|
|
|
63
|
|
|
63
|
|
|
|
65
|
|
|
65
|
|
66
|
|
64
|
|
||||||||
HQLA (in billions)
(d)
|
$
|
560
|
|
$
|
568
|
|
|
$
|
541
|
|
|
$
|
528
|
|
|
|
$
|
524
|
|
|
$
|
539
|
|
$
|
516
|
|
$
|
505
|
|
LCR (average)
|
119
|
%
|
120
|
%
|
|
115
|
%
|
|
NA%
|
|
|
|
NA%
|
|
|
NA%
|
|
NA%
|
|
NA%
|
|
||||||||
CET1 capital ratio
(e)
|
12.2
|
|
12.5
|
|
(i)
|
12.5
|
|
(i)
|
12.4
|
|
(i)
|
|
12.3
|
|
(i)
|
12.0
|
|
12.0
|
|
11.9
|
|
||||||||
Tier 1 capital ratio
(e)
|
13.9
|
|
14.1
|
|
(i)
|
14.2
|
|
(i)
|
14.1
|
|
(i)
|
|
14.0
|
|
(i)
|
13.6
|
|
13.6
|
|
13.5
|
|
||||||||
Total capital ratio
(e)
|
15.9
|
|
16.1
|
|
|
16.0
|
|
|
15.6
|
|
|
|
15.5
|
|
|
15.1
|
|
15.2
|
|
15.1
|
|
||||||||
Tier 1 leverage ratio
(e)
|
8.3
|
|
8.4
|
|
|
8.5
|
|
|
8.4
|
|
|
|
8.4
|
|
|
8.5
|
|
8.5
|
|
8.6
|
|
||||||||
Selected balance sheet data (period-end)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Trading assets
|
$
|
381,844
|
|
$
|
420,418
|
|
|
$
|
407,064
|
|
|
$
|
402,513
|
|
|
|
$
|
372,130
|
|
|
$
|
374,837
|
|
$
|
380,793
|
|
$
|
366,153
|
|
Securities
|
249,958
|
|
263,288
|
|
|
263,458
|
|
|
281,850
|
|
|
|
$
|
289,059
|
|
|
272,401
|
|
278,610
|
|
285,323
|
|
|||||||
Loans
|
930,697
|
|
913,761
|
|
|
908,767
|
|
|
895,974
|
|
|
|
$
|
894,765
|
|
|
888,054
|
|
872,804
|
|
847,313
|
|
|||||||
Core loans
|
863,683
|
|
843,432
|
|
|
834,935
|
|
|
812,119
|
|
|
|
806,152
|
|
|
795,077
|
|
775,813
|
|
746,196
|
|
||||||||
Average core loans
|
850,166
|
|
837,522
|
|
|
824,583
|
|
|
805,382
|
|
|
|
799,698
|
|
|
779,383
|
|
760,721
|
|
737,297
|
|
||||||||
Total assets
|
2,533,600
|
|
2,563,074
|
|
|
2,563,174
|
|
|
2,546,290
|
|
|
|
2,490,972
|
|
|
2,521,029
|
|
2,466,096
|
|
2,423,808
|
|
||||||||
Deposits
|
1,443,982
|
|
1,439,027
|
|
|
1,439,473
|
|
|
1,422,999
|
|
|
|
1,375,179
|
|
|
1,376,138
|
|
1,330,958
|
|
1,321,816
|
|
||||||||
Long-term debt
(f)
|
284,080
|
|
288,582
|
|
|
292,973
|
|
|
289,492
|
|
|
|
295,245
|
|
|
309,418
|
|
295,627
|
|
290,754
|
|
||||||||
Common stockholders’ equity
|
229,625
|
|
232,314
|
|
|
232,415
|
|
|
229,795
|
|
|
|
228,122
|
|
|
228,263
|
|
226,355
|
|
224,089
|
|
||||||||
Total stockholders’ equity
|
255,693
|
|
258,382
|
|
|
258,483
|
|
|
255,863
|
|
|
|
254,190
|
|
|
254,331
|
|
252,423
|
|
250,157
|
|
||||||||
Headcount
|
252,539
|
|
251,503
|
|
|
249,257
|
|
|
246,345
|
|
|
|
243,355
|
|
|
242,315
|
|
240,046
|
|
237,420
|
|
||||||||
Credit quality metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Allowance for credit losses
|
$
|
14,672
|
|
$
|
14,648
|
|
|
$
|
14,480
|
|
|
$
|
14,490
|
|
|
|
$
|
14,854
|
|
|
$
|
15,304
|
|
$
|
15,187
|
|
$
|
15,008
|
|
Allowance for loan losses to total retained loans
|
1.47
|
%
|
1.49
|
%
|
|
1.49
|
%
|
|
1.52
|
%
|
|
|
1.55
|
%
|
|
1.61
|
%
|
1.64
|
%
|
1.66
|
%
|
||||||||
Allowance for loan losses to retained loans excluding purchased credit-impaired loans
(g)
|
1.27
|
|
1.29
|
|
|
1.28
|
|
|
1.31
|
|
|
|
1.34
|
|
|
1.37
|
|
1.40
|
|
1.40
|
|
||||||||
Nonperforming assets
|
$
|
6,426
|
|
$
|
6,154
|
|
|
$
|
6,432
|
|
|
$
|
6,826
|
|
|
|
$
|
7,535
|
|
|
$
|
7,779
|
|
$
|
7,757
|
|
$
|
8,023
|
|
Net charge-offs
(h)
|
1,264
|
|
1,265
|
|
|
1,204
|
|
|
1,654
|
|
|
|
1,280
|
|
|
1,121
|
|
1,181
|
|
1,110
|
|
||||||||
Net charge-off rate
(h)
|
0.55
|
%
|
0.56
|
%
|
|
0.54
|
%
|
|
0.76
|
%
|
|
|
0.58
|
%
|
|
0.51
|
%
|
0.56
|
%
|
0.53
|
%
|
(a)
|
The Firm’s results for the three months ended December 31, 2017, included a $2.4 billion decrease to net income as a result of the enactment of the TCJA. For additional information related to the impact of the TCJA, see Note
24
.
|
(b)
|
Based on daily prices reported by the New York Stock Exchange.
|
(c)
|
TBVPS and ROTCE are non-GAAP financial measures. For further discussion of these measures, see Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Financial Performance Measures on
pages 52–54
.
|
(d)
|
HQLA represents the amount of assets that qualify for inclusion in the liquidity coverage ratio. For December 31, 2017, September 30,2017 and June 30, 2017 the balance represents the average of quarterly reported results per the U.S. LCR public disclosure requirements effective April 1, 2017 and period-end balances for the remaining periods. For additional information, see HQLA on
page 93
.
|
(e)
|
Ratios presented are calculated under the Basel III Transitional rules and for the capital ratios represent the Collins Floor. See Capital Risk Management on
pages 82–91
for additional information on Basel III.
|
(f)
|
Included unsecured long-term debt of $218.8 billion, $221.7 billion, $221.0 billion, $212.0 billion, $212.6 billion, $226.8 billion, $220.6 billion, $216.1 billion respectively, for the periods presented.
|
(g)
|
Excludes the impact of residential real estate PCI loans, a non-GAAP financial measure. For further discussion of these measures, see Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on
pages 52–54
, and the Allowance for credit losses on
pages 117–119
.
|
(h)
|
Excluding net charge-offs of $467 million related to the student loan portfolio sale, the net charge-off rates for the three months ended March 31, 2017 would have been 0.54%.
|
(i)
|
The prior period ratios have been revised to conform with the current period presentation.
|
277
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(a)
|
Represents securities that are tax-exempt for U.S. federal income tax purposes.
|
(b)
|
Includes held-for-investment margin loans, which are classified in accrued interest and accounts receivable, and all other interest-earning assets included in other assets.
|
(c)
|
Includes commercial paper.
|
(d)
|
Other interest-bearing liabilities include brokerage customer payables.
|
(e)
|
Included trading liabilities – debt and equity instruments of $90.7 billion, $92.8 billion and $81.4 billion for the twelve months ended December 31, 2017, 2016 and 2015, respectively.
|
(f)
|
The ratio of average stockholders’ equity to average assets was
10.0%
for
2017
,
10.2%
for 2016, and
9.7%
for
2015
. The return on average stockholders’ equity, based on net income, was
9.5%
for 2017,
9.9%
for
2016
, and
10.2%
for
2015
.
|
(g)
|
Interest includes the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable.
|
(h)
|
Negative interest income and yield is related to client-driven demand for certain securities combined with the impact of low interest rates; this is matched book activity and the negative interest expense on the corresponding securities loaned is recognized in interest expense and reported within trading liabilities – debt, short-term and other liabilities.
|
(i)
|
Fees and commissions on loans included in loan interest amounted to
$1.0 billion
in
2017
,
$808 million
in
2016
, and
$936 million
in
2015
.
|
(j)
|
The annualized rate for securities based on amortized cost was
3.13%
in
2017
,
2.99%
in
2016
, and
2.94%
in
2015
, and does not give effect to changes in fair value that are reflected in AOCI.
|
278
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(Table continued from previous page)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2016
|
|
2015
|
|
|||||||||||||||||||
Average
balance
|
|
Interest
(g)
|
|
Average
rate
|
|
Average
balance
|
|
Interest
(g)
|
|
Average
rate
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$
|
392,160
|
|
|
$
|
1,863
|
|
|
0.48
|
%
|
|
|
$
|
427,963
|
|
|
$
|
1,250
|
|
|
0.29
|
%
|
|
205,368
|
|
|
2,265
|
|
|
1.10
|
|
|
|
206,637
|
|
|
1,592
|
|
|
0.77
|
|
|
||||
102,964
|
|
|
(332
|
)
|
(h)
|
(0.32
|
)
|
|
|
105,273
|
|
|
(532
|
)
|
(h)
|
(0.50
|
)
|
|
||||
215,565
|
|
|
7,373
|
|
|
3.42
|
|
|
|
206,385
|
|
|
6,694
|
|
|
3.24
|
|
|
||||
235,211
|
|
|
5,538
|
|
|
2.35
|
|
|
|
273,730
|
|
|
6,550
|
|
|
2.39
|
|
|
||||
44,176
|
|
|
2,662
|
|
|
6.03
|
|
|
|
42,125
|
|
|
2,556
|
|
|
6.07
|
|
|
||||
279,387
|
|
|
8,200
|
|
|
2.94
|
|
(j)
|
|
315,855
|
|
|
9,106
|
|
|
2.88
|
|
(j)
|
||||
866,378
|
|
|
36,866
|
|
(i)
|
4.26
|
|
|
|
787,318
|
|
|
33,321
|
|
(i)
|
4.23
|
|
|
||||
39,782
|
|
|
875
|
|
|
2.20
|
|
|
|
38,811
|
|
|
652
|
|
|
1.68
|
|
|
||||
2,101,604
|
|
|
57,110
|
|
|
2.72
|
|
|
|
2,088,242
|
|
|
52,083
|
|
|
2.49
|
|
|
||||
(13,965
|
)
|
|
|
|
|
|
|
(13,885
|
)
|
|
|
|
|
|
||||||||
18,660
|
|
|
|
|
|
|
|
22,042
|
|
|
|
|
|
|
||||||||
95,528
|
|
|
|
|
|
|
|
105,489
|
|
|
|
|
|
|
||||||||
70,897
|
|
|
|
|
|
|
|
73,290
|
|
|
|
|
|
|
||||||||
53,752
|
|
|
|
|
|
|
|
55,439
|
|
|
|
|
|
|
||||||||
135,143
|
|
|
|
|
|
|
|
138,792
|
|
|
|
|
|
|
||||||||
$
|
2,461,619
|
|
|
|
|
|
|
|
$
|
2,469,409
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$
|
925,270
|
|
|
$
|
1,356
|
|
|
0.15
|
%
|
|
|
$
|
876,840
|
|
|
$
|
1,252
|
|
|
0.14
|
%
|
|
178,720
|
|
|
1,089
|
|
|
0.61
|
|
|
|
192,510
|
|
|
609
|
|
|
0.32
|
|
|
||||
36,140
|
|
|
203
|
|
|
0.56
|
|
|
|
66,956
|
|
|
175
|
|
|
0.26
|
|
|
||||
177,765
|
|
|
1,102
|
|
|
0.62
|
|
|
|
178,994
|
|
|
557
|
|
|
0.31
|
|
|
||||
40,180
|
|
|
504
|
|
|
1.25
|
|
|
|
49,200
|
|
|
435
|
|
|
0.88
|
|
|
||||
295,573
|
|
|
5,564
|
|
|
1.88
|
|
|
|
284,940
|
|
|
4,435
|
|
|
1.56
|
|
|
||||
1,653,648
|
|
|
9,818
|
|
|
0.59
|
|
|
|
1,649,440
|
|
|
7,463
|
|
|
0.45
|
|
|
||||
402,698
|
|
|
|
|
|
|
|
418,948
|
|
|
|
|
|
|
||||||||
20,737
|
|
|
|
|
|
|
|
17,282
|
|
|
|
|
|
|
||||||||
55,927
|
|
|
|
|
|
|
|
64,716
|
|
|
|
|
|
|
||||||||
77,910
|
|
|
|
|
|
|
|
79,293
|
|
|
|
|
|
|
||||||||
2,210,920
|
|
|
|
|
|
|
|
2,229,679
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
26,068
|
|
|
|
|
|
|
|
24,040
|
|
|
|
|
|
|
||||||||
224,631
|
|
|
|
|
|
|
|
215,690
|
|
|
|
|
|
|
||||||||
250,699
|
|
(f)
|
|
|
|
|
|
239,730
|
|
(f)
|
|
|
|
|
||||||||
$
|
2,461,619
|
|
|
|
|
|
|
|
$
|
2,469,409
|
|
|
|
|
|
|
||||||
|
|
|
|
2.13
|
%
|
|
|
|
|
|
|
2.04
|
%
|
|
||||||||
|
|
$
|
47,292
|
|
|
2.25
|
|
|
|
|
|
$
|
44,620
|
|
|
2.14
|
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
279
|
(a)
|
Includes commercial paper.
|
(b)
|
Represents the amount of noninterest-bearing liabilities funding interest-earning assets.
|
(c)
|
Negative interest income and yield is related to client-driven demand for certain securities combined with the impact of low interest rates; this is matched book activity and the negative interest expense on the corresponding securities loaned is recognized in interest expense and reported within trading liabilities – debt, short-term and other liabilities.
|
280
|
|
JPMorgan Chase & Co./2017 Annual Report
|
(Table continued from previous page)
|
|
|
|
|
|
|
|
|
||||||||||||
2016
|
|
2015
|
|
|||||||||||||||||
Average balance
|
Interest
|
|
Average rate
|
|
|
Average balance
|
Interest
|
|
Average rate
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
$
|
328,831
|
|
$
|
1,708
|
|
|
0.52
|
%
|
|
|
$
|
388,833
|
|
$
|
1,021
|
|
|
0.26
|
%
|
|
63,329
|
|
155
|
|
|
0.25
|
|
|
|
39,130
|
|
229
|
|
|
0.59
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
112,902
|
|
1,166
|
|
|
1.03
|
|
|
|
118,945
|
|
900
|
|
|
0.76
|
|
|
||||
92,466
|
|
1,099
|
|
|
1.19
|
|
|
|
87,692
|
|
692
|
|
|
0.79
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
73,297
|
|
(341
|
)
|
(c)
|
(0.46
|
)
|
|
|
78,815
|
|
(562
|
)
|
(c)
|
(0.71
|
)
|
|
||||
29,667
|
|
9
|
|
|
0.03
|
|
|
|
26,458
|
|
30
|
|
|
0.11
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
116,211
|
|
3,825
|
|
|
3.29
|
|
|
|
106,465
|
|
3,572
|
|
|
3.35
|
|
|
||||
99,354
|
|
3,548
|
|
|
3.57
|
|
|
|
99,920
|
|
3,122
|
|
|
3.12
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
216,726
|
|
6,971
|
|
|
3.22
|
|
|
|
200,240
|
|
6,676
|
|
|
3.33
|
|
|
||||
62,661
|
|
1,229
|
|
|
1.97
|
|
|
|
115,615
|
|
2,430
|
|
|
2.10
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
788,213
|
|
35,110
|
|
|
4.45
|
|
|
|
699,664
|
|
31,468
|
|
|
4.50
|
|
|
||||
78,165
|
|
1,756
|
|
|
2.25
|
|
|
|
87,654
|
|
1,853
|
|
|
2.11
|
|
|
||||
39,782
|
|
875
|
|
|
2.20
|
|
|
|
38,811
|
|
652
|
|
|
1.68
|
|
|
||||
2,101,604
|
|
57,110
|
|
|
2.72
|
|
|
|
2,088,242
|
|
52,083
|
|
|
2.49
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
703,738
|
|
1,029
|
|
|
0.15
|
|
|
|
638,756
|
|
761
|
|
|
0.12
|
|
|
||||
221,532
|
|
327
|
|
|
0.15
|
|
|
|
238,084
|
|
491
|
|
|
0.21
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
121,945
|
|
773
|
|
|
0.63
|
|
|
|
140,609
|
|
366
|
|
|
0.26
|
|
|
||||
56,775
|
|
316
|
|
|
0.56
|
|
|
|
51,901
|
|
243
|
|
|
0.47
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
133,788
|
|
86
|
|
|
0.06
|
|
|
|
166,838
|
|
(394
|
)
|
(c)
|
(0.24
|
)
|
|
||||
80,117
|
|
1,219
|
|
|
1.52
|
|
|
|
79,112
|
|
1,126
|
|
|
1.42
|
|
|
||||
40,180
|
|
504
|
|
|
1.25
|
|
|
|
49,200
|
|
435
|
|
|
0.88
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
283,169
|
|
5,533
|
|
|
1.95
|
|
|
|
273,033
|
|
4,386
|
|
|
1.61
|
|
|
||||
12,404
|
|
31
|
|
|
0.25
|
|
|
|
11,907
|
|
49
|
|
|
0.41
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(20,405
|
)
|
10
|
|
|
—
|
|
|
|
(50,517
|
)
|
7
|
|
|
—
|
|
|
||||
20,405
|
|
(10
|
)
|
|
—
|
|
|
|
50,517
|
|
(7
|
)
|
|
—
|
|
|
||||
1,653,648
|
|
9,818
|
|
|
0.59
|
|
|
|
1,649,440
|
|
7,463
|
|
|
0.45
|
|
|
||||
447,956
|
|
|
|
|
|
|
438,802
|
|
|
|
|
|
||||||||
$
|
2,101,604
|
|
$
|
9,818
|
|
|
0.47
|
%
|
|
|
$
|
2,088,242
|
|
$
|
7,463
|
|
|
0.36
|
%
|
|
|
$
|
47,292
|
|
|
2.25
|
%
|
|
|
|
$
|
44,620
|
|
|
2.14
|
%
|
|
||||
|
40,705
|
|
|
2.49
|
|
|
|
|
38,033
|
|
|
2.34
|
|
|
||||||
|
6,587
|
|
|
1.42
|
|
|
|
|
6,587
|
|
|
1.42
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
23.1
|
|
|
|
|
|
|
24.7
|
|
|
||||||||
|
|
|
20.7
|
|
|
|
|
|
|
21.1
|
|
|
JPMorgan Chase & Co./2017 Annual Report
|
|
281
|
|
2017 versus 2016
|
|
2016 versus 2015
|
||||||||||||||||||||
|
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.
|
$
|
410
|
|
|
$
|
1,973
|
|
|
$
|
2,383
|
|
|
$
|
(324
|
)
|
|
$
|
1,011
|
|
|
$
|
687
|
|
Non-U.S.
|
17
|
|
|
(44
|
)
|
|
(27
|
)
|
|
59
|
|
|
(133
|
)
|
|
(74
|
)
|
||||||
Federal funds sold and securities purchased under resale agreements:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
(337
|
)
|
|
531
|
|
|
194
|
|
|
(55
|
)
|
|
321
|
|
|
266
|
|
||||||
Non-U.S.
|
81
|
|
|
(213
|
)
|
|
(132
|
)
|
|
56
|
|
|
351
|
|
|
407
|
|
||||||
Securities borrowed:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
11
|
|
|
264
|
|
|
275
|
|
|
24
|
|
|
197
|
|
|
221
|
|
||||||
Non-U.S.
|
(4
|
)
|
|
24
|
|
|
20
|
|
|
—
|
|
|
(21
|
)
|
|
(21
|
)
|
||||||
Trading assets – debt instruments:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
396
|
|
|
(35
|
)
|
|
361
|
|
|
317
|
|
|
(64
|
)
|
|
253
|
|
||||||
Non-U.S.
|
308
|
|
|
(328
|
)
|
|
(20
|
)
|
|
(24
|
)
|
|
450
|
|
|
426
|
|
||||||
Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
216
|
|
|
303
|
|
|
519
|
|
|
515
|
|
|
(220
|
)
|
|
295
|
|
||||||
Non-U.S.
|
(303
|
)
|
|
(113
|
)
|
|
(416
|
)
|
|
(1,051
|
)
|
|
(150
|
)
|
|
(1,201
|
)
|
||||||
Loans:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
2,043
|
|
|
2,286
|
|
|
4,329
|
|
|
3,992
|
|
|
(350
|
)
|
|
3,642
|
|
||||||
Non-U.S.
|
(110
|
)
|
|
211
|
|
|
101
|
|
|
(220
|
)
|
|
123
|
|
|
(97
|
)
|
||||||
All other interest-earning assets, predominantly U.S.
|
137
|
|
|
851
|
|
|
988
|
|
|
21
|
|
|
202
|
|
|
223
|
|
||||||
Change in interest income
|
2,865
|
|
|
5,710
|
|
|
8,575
|
|
|
3,310
|
|
|
1,717
|
|
|
5,027
|
|
||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing deposits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
209
|
|
|
985
|
|
|
1,194
|
|
|
76
|
|
|
192
|
|
|
268
|
|
||||||
Non-U.S.
|
41
|
|
|
266
|
|
|
307
|
|
|
(21
|
)
|
|
(143
|
)
|
|
(164
|
)
|
||||||
Federal funds purchased and securities loaned or sold under repurchase agreements:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
(83
|
)
|
|
659
|
|
|
576
|
|
|
(113
|
)
|
|
520
|
|
|
407
|
|
||||||
Non-U.S.
|
54
|
|
|
(108
|
)
|
|
(54
|
)
|
|
26
|
|
|
47
|
|
|
73
|
|
||||||
Trading liabilities – debt, short-term and other interest-bearing liabilities:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
45
|
|
|
1,140
|
|
|
1,185
|
|
|
(24
|
)
|
|
504
|
|
|
480
|
|
||||||
Non-U.S.
|
(3
|
)
|
|
64
|
|
|
61
|
|
|
14
|
|
|
79
|
|
|
93
|
|
||||||
Beneficial interests issued by consolidated VIEs, predominantly U.S.
|
(122
|
)
|
|
121
|
|
|
(1
|
)
|
|
(113
|
)
|
|
182
|
|
|
69
|
|
||||||
Long-term debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S.
|
(176
|
)
|
|
1,388
|
|
|
1,212
|
|
|
219
|
|
|
928
|
|
|
1,147
|
|
||||||
Non-U.S.
|
2
|
|
|
(25
|
)
|
|
(23
|
)
|
|
1
|
|
|
(19
|
)
|
|
(18
|
)
|
||||||
Intercompany funding:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S.
|
151
|
|
|
(186
|
)
|
|
(35
|
)
|
|
(17
|
)
|
|
20
|
|
|
3
|
|
||||||
Non-U.S.
|
(151
|
)
|
|
186
|
|
|
35
|
|
|
17
|
|
|
(20
|
)
|
|
(3
|
)
|
||||||
Change in interest expense
|
(33
|
)
|
|
4,490
|
|
|
4,457
|
|
|
65
|
|
|
2,290
|
|
|
2,355
|
|
||||||
Change in net interest income
|
$
|
2,898
|
|
|
$
|
1,220
|
|
|
$
|
4,118
|
|
|
$
|
3,245
|
|
|
$
|
(573
|
)
|
|
$
|
2,672
|
|
(a)
|
Includes commercial paper.
|
282
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
283
|
284
|
|
JPMorgan Chase & Co./2017 Annual Report
|
•
|
All wholesale nonaccrual loans
|
•
|
All TDRs (both wholesale and consumer), including ones that have returned to accrual status
|
JPMorgan Chase & Co./2017 Annual Report
|
|
285
|
286
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
287
|
288
|
|
JPMorgan Chase & Co./2017 Annual Report
|
JPMorgan Chase & Co./2017 Annual Report
|
|
289
|
|
2015
|
||||||
December 31, (in millions)
|
Amortized
cost |
|
Fair
value |
||||
Available-for-sale debt securities
|
|
|
|
||||
Mortgage-backed securities: U.S Government agencies
|
$
|
53,689
|
|
|
$
|
55,066
|
|
U.S. Treasury and government agencies
|
11,202
|
|
|
11,036
|
|
||
All other AFS securities
|
172,567
|
|
|
175,652
|
|
||
Total available-for-sale debt securities
|
$
|
237,458
|
|
|
$
|
241,754
|
|
|
|
|
|
||||
Held-to-maturity securities
|
|
|
|
||||
Mortgage-backed securities: U.S Government agencies
|
36,271
|
|
|
37,081
|
|
||
All other HTM securities
|
12,802
|
|
|
13,506
|
|
||
Total held-to-maturity debt securities
|
$
|
49,073
|
|
|
$
|
50,587
|
|
Total securities
|
$
|
286,531
|
|
|
$
|
292,341
|
|
290
|
|
|
December 31, (in millions)
|
2017
|
|
2016
(b)
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
U.S. consumer, excluding credit card loans
|
|
|
|
|
|
||||||||||
Residential mortgage
|
$
|
236,157
|
|
$
|
215,178
|
|
$
|
192,714
|
|
$
|
139,973
|
|
$
|
129,008
|
|
Home equity
|
44,249
|
|
51,965
|
|
60,548
|
|
69,837
|
|
76,790
|
|
|||||
Auto
|
66,242
|
|
65,814
|
|
60,255
|
|
54,536
|
|
52,757
|
|
|||||
Other
|
26,033
|
|
31,687
|
|
31,304
|
|
31,028
|
|
30,508
|
|
|||||
Total U.S. consumer, excluding credit card loans
|
372,681
|
|
364,644
|
|
344,821
|
|
295,374
|
|
289,063
|
|
|||||
Credit card Loans
|
|
|
|
|
|
||||||||||
U.S. credit card loans
|
149,107
|
|
141,447
|
|
131,132
|
|
129,067
|
|
125,308
|
|
|||||
Non-U.S. credit card loans
|
404
|
|
369
|
|
331
|
|
1,981
|
|
2,483
|
|
|||||
Total credit card loans
|
149,511
|
|
141,816
|
|
131,463
|
|
131,048
|
|
127,791
|
|
|||||
Total consumer loans
|
522,192
|
|
506,460
|
|
476,284
|
|
426,422
|
|
416,854
|
|
|||||
U.S. wholesale loans
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
93,522
|
|
91,393
|
|
83,739
|
|
78,664
|
|
79,436
|
|
|||||
Real estate
|
112,562
|
|
104,268
|
|
90,836
|
|
77,022
|
|
67,815
|
|
|||||
Financial institutions
|
23,819
|
|
20,499
|
|
12,708
|
|
13,743
|
|
11,087
|
|
|||||
Government agencies
|
12,603
|
|
12,655
|
|
9,838
|
|
7,574
|
|
8,316
|
|
|||||
Other
|
69,602
|
|
66,363
|
|
67,925
|
|
49,838
|
|
48,158
|
|
|||||
Total U.S. wholesale loans
|
312,108
|
|
295,178
|
|
265,046
|
|
226,841
|
|
214,812
|
|
|||||
Non-U.S. wholesale loans
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
29,233
|
|
31,340
|
|
30,385
|
|
34,782
|
|
36,447
|
|
|||||
Real estate
|
3,302
|
|
3,975
|
|
4,577
|
|
2,224
|
|
1,621
|
|
|||||
Financial institutions
|
16,845
|
|
15,196
|
|
17,188
|
|
21,099
|
|
22,813
|
|
|||||
Government agencies
|
2,906
|
|
3,726
|
|
1,788
|
|
1,122
|
|
2,146
|
|
|||||
Other
|
44,111
|
|
38,890
|
|
42,031
|
|
44,846
|
|
43,725
|
|
|||||
Total non-U.S. wholesale loans
|
96,397
|
|
93,127
|
|
95,969
|
|
104,073
|
|
106,752
|
|
|||||
Total wholesale loans
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
122,755
|
|
122,733
|
|
114,124
|
|
113,446
|
|
115,883
|
|
|||||
Real estate
|
115,864
|
|
108,243
|
|
95,413
|
|
79,246
|
|
69,436
|
|
|||||
Financial institutions
|
40,664
|
|
35,695
|
|
29,896
|
|
34,842
|
|
33,900
|
|
|||||
Government agencies
|
15,509
|
|
16,381
|
|
11,626
|
|
8,696
|
|
10,462
|
|
|||||
Other
|
113,713
|
|
105,253
|
|
109,956
|
|
94,684
|
|
91,883
|
|
|||||
Total wholesale loans
|
408,505
|
|
388,305
|
|
361,015
|
|
330,914
|
|
321,564
|
|
|||||
Total loans
(a)
|
$
|
930,697
|
|
$
|
894,765
|
|
$
|
837,299
|
|
$
|
757,336
|
|
$
|
738,418
|
|
Memo:
|
|
|
|
|
|
||||||||||
Loans held-for-sale
|
$
|
3,351
|
|
$
|
2,628
|
|
$
|
1,646
|
|
$
|
7,217
|
|
$
|
12,230
|
|
Loans at fair value
|
2,508
|
|
2,230
|
|
2,861
|
|
2,611
|
|
2,011
|
|
|||||
Total loans held-for-sale and loans at fair value
|
$
|
5,859
|
|
$
|
4,858
|
|
$
|
4,507
|
|
$
|
9,828
|
|
$
|
14,241
|
|
(a)
|
Loans (other than purchased credit-impaired loans and those for which the fair value option have been elected) are presented net of unamortized discounts and premiums and net deferred loan fees or costs. These amounts were not material as of
December 31, 2017
,
2016
,
2015
,
2014
and
2013
.
|
(b)
|
Certain prior period amounts have been revised to conform with the current period presentation.
|
|
|
291
|
December 31, 2017 (in millions)
|
Within
1 year
(a)
|
|
1-5
years
|
|
After 5
years
|
|
Total
|
||||||||
U.S.
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial
|
$
|
15,403
|
|
|
$
|
67,056
|
|
|
$
|
11,063
|
|
|
$
|
93,522
|
|
Real estate
|
8,044
|
|
|
25,054
|
|
|
79,464
|
|
|
112,562
|
|
||||
Financial institutions
|
15,176
|
|
|
7,699
|
|
|
944
|
|
|
23,819
|
|
||||
Government agencies
|
1,644
|
|
|
4,182
|
|
|
6,777
|
|
|
12,603
|
|
||||
Other
|
23,274
|
|
|
42,702
|
|
|
3,626
|
|
|
69,602
|
|
||||
Total U.S.
|
63,541
|
|
|
146,693
|
|
|
101,874
|
|
|
312,108
|
|
||||
Non-U.S.
|
|
|
|
|
|
|
|
||||||||
Commercial and industrial
|
11,648
|
|
|
14,708
|
|
|
2,877
|
|
|
29,233
|
|
||||
Real estate
|
834
|
|
|
2,460
|
|
|
8
|
|
|
3,302
|
|
||||
Financial institutions
|
12,716
|
|
|
4,109
|
|
|
20
|
|
|
16,845
|
|
||||
Government agencies
|
149
|
|
|
1,955
|
|
|
802
|
|
|
2,906
|
|
||||
Other
|
33,383
|
|
|
9,788
|
|
|
940
|
|
|
44,111
|
|
||||
Total non-U.S.
|
58,730
|
|
|
33,020
|
|
|
4,647
|
|
|
96,397
|
|
||||
Total wholesale loans
|
$
|
122,271
|
|
|
$
|
179,713
|
|
|
$
|
106,521
|
|
|
$
|
408,505
|
|
Loans at fixed interest rates
|
|
|
$
|
13,561
|
|
|
$
|
13,310
|
|
|
|
||||
Loans at variable interest rates
|
|
|
166,152
|
|
|
93,211
|
|
|
|
||||||
Total wholesale loans
|
|
|
$
|
179,713
|
|
|
$
|
106,521
|
|
|
|
(a)
|
Includes demand loans and overdrafts.
|
December 31, (in millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Nonperforming assets
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. nonaccrual loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer, excluding credit card loans
|
$
|
4,209
|
|
|
$
|
4,820
|
|
|
$
|
5,413
|
|
|
$
|
6,509
|
|
|
$
|
7,496
|
|
Credit card loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total U.S. nonaccrual consumer loans
|
4,209
|
|
|
4,820
|
|
|
5,413
|
|
|
6,509
|
|
|
7,496
|
|
|||||
Wholesale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
703
|
|
|
1,145
|
|
|
315
|
|
|
184
|
|
|
317
|
|
|||||
Real estate
|
95
|
|
|
148
|
|
|
175
|
|
|
237
|
|
|
338
|
|
|||||
Financial institutions
|
2
|
|
|
4
|
|
|
4
|
|
|
12
|
|
|
19
|
|
|||||
Government agencies
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Other
|
137
|
|
|
198
|
|
|
86
|
|
|
59
|
|
|
97
|
|
|||||
Total U.S. wholesale nonaccrual loans
|
937
|
|
|
1,495
|
|
|
580
|
|
|
492
|
|
|
772
|
|
|||||
Total U.S. nonaccrual loans
|
5,146
|
|
|
6,315
|
|
|
5,993
|
|
|
7,001
|
|
|
8,268
|
|
|||||
Non-U.S. nonaccrual loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer, excluding credit card loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Credit card loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total non-U.S. nonaccrual consumer loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Wholesale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
654
|
|
|
454
|
|
|
314
|
|
|
21
|
|
|
116
|
|
|||||
Real estate
|
41
|
|
|
52
|
|
|
63
|
|
|
23
|
|
|
88
|
|
|||||
Financial institutions
|
—
|
|
|
5
|
|
|
6
|
|
|
7
|
|
|
8
|
|
|||||
Government agencies
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
102
|
|
|
57
|
|
|
53
|
|
|
81
|
|
|
60
|
|
|||||
Total non-U.S. wholesale nonaccrual loans
|
797
|
|
|
568
|
|
|
436
|
|
|
132
|
|
|
272
|
|
|||||
Total non-U.S. nonaccrual loans
|
797
|
|
|
568
|
|
|
436
|
|
|
132
|
|
|
272
|
|
|||||
Total nonaccrual loans
|
5,943
|
|
|
6,883
|
|
|
6,429
|
|
|
7,133
|
|
|
8,540
|
|
|||||
Derivative receivables
|
130
|
|
|
223
|
|
|
204
|
|
|
275
|
|
|
415
|
|
|||||
Assets acquired in loan satisfactions
|
353
|
|
|
429
|
|
|
401
|
|
|
559
|
|
|
751
|
|
|||||
Nonperforming assets
|
$
|
6,426
|
|
|
$
|
7,535
|
|
|
$
|
7,034
|
|
|
$
|
7,967
|
|
|
$
|
9,706
|
|
Memo:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loans held-for-sale
|
$
|
—
|
|
|
$
|
162
|
|
|
$
|
101
|
|
|
$
|
95
|
|
|
$
|
26
|
|
Loans at fair value
|
—
|
|
|
—
|
|
|
25
|
|
|
21
|
|
|
197
|
|
|||||
Total loans held-for-sale and loans at fair value
|
$
|
—
|
|
|
$
|
162
|
|
|
$
|
126
|
|
|
$
|
116
|
|
|
$
|
223
|
|
292
|
|
|
December 31, (in millions)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Contractually past-due loans
(a)
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer, excluding credit card loans
(b)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Credit card loans
|
1,378
|
|
|
1,143
|
|
|
944
|
|
|
893
|
|
|
997
|
|
|||||
Total U.S. consumer loans
|
1,378
|
|
|
1,143
|
|
|
944
|
|
|
893
|
|
|
997
|
|
|||||
Wholesale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
107
|
|
|
86
|
|
|
6
|
|
|
14
|
|
|
14
|
|
|||||
Real estate
|
12
|
|
|
2
|
|
|
15
|
|
|
33
|
|
|
14
|
|
|||||
Financial institutions
|
14
|
|
|
12
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Government agencies
|
4
|
|
|
4
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
2
|
|
|
19
|
|
|
28
|
|
|
26
|
|
|
16
|
|
|||||
Total U.S. wholesale loans
|
139
|
|
|
123
|
|
|
56
|
|
|
73
|
|
|
44
|
|
|||||
Total U.S. loans
|
1,517
|
|
|
1,266
|
|
|
1,000
|
|
|
966
|
|
|
1,041
|
|
|||||
Non-U.S. loans:
|
|
|
|
|
|
|
|
|
|
||||||||||
Consumer, excluding credit card loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Credit card loans
|
1
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
25
|
|
|||||
Total non-U.S. consumer loans
|
1
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
25
|
|
|||||
Wholesale:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Financial institutions
|
1
|
|
|
9
|
|
|
10
|
|
|
—
|
|
|
6
|
|
|||||
Government agencies
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|||||
Total non-U.S. wholesale loans
|
2
|
|
|
9
|
|
|
11
|
|
|
3
|
|
|
6
|
|
|||||
Total non-U.S. loans
|
3
|
|
|
11
|
|
|
11
|
|
|
5
|
|
|
31
|
|
|||||
Total contractually past due loans
|
$
|
1,520
|
|
|
$
|
1,277
|
|
|
$
|
1,011
|
|
|
$
|
971
|
|
|
$
|
1,072
|
|
(a)
|
Represents accruing loans past-due 90 days or more as to principal and interest, which are not characterized as nonaccrual loans. Excludes PCI loans which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of individual loans within the pools, is not meaningful. The Firm is recognizing interest income on each pool of loans as each of the pools is performing.
|
(b)
|
At
December 31, 2017
,
2016
,
2015
,
2014
and
2013
, excluded loans 90 or more days past due and still accruing as follows: (1) mortgage loans insured by U.S. government agencies of $2.7 billion, $2.7 billion, $2.8 billion, $3.4 billion and $3.2 billion, respectively; and (2) student loans insured by U.S. government agencies under the FFELP of zero, $263 million, $290 million, $367 million and $428 million, respectively. These amounts have been excluded from the nonaccrual loans based upon the government guarantee. Prior period amounts have been revised to conform with current period presentation.
|
(a)
|
Represents performing loans modified in TDRs 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 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 TDR.
|
|
|
293
|
294
|
|
|
|
|
295
|
(a)
|
Consists primarily of commercial and industrial.
|
(b)
|
Outstandings include 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.
|
(c)
|
Commitments include outstanding letters of credit, undrawn commitments to extend credit, and the gross notional value of credit derivatives where
JPMorgan Chase
is a protection seller.
|
296
|
|
|
(a)
|
Write-offs of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool (e.g., upon liquidation). During 2014 the Firm recorded a $291 million adjustment to reduce the PCI allowance and the recorded investment in the Firm’s PCI loan portfolio, primarily reflecting the cumulative effect of interest forgiveness modifications. This adjustment had no impact to the Firm’s Consolidated statements of income.
|
|
|
297
|
Year ended December 31, (in millions)
|
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||
Balance at beginning of year
|
$
|
1,078
|
|
$
|
786
|
|
$
|
622
|
|
$
|
705
|
|
$
|
668
|
|
Provision for lending-related commitments
|
(10
|
)
|
281
|
|
164
|
|
(85
|
)
|
37
|
|
|||||
Net charge-offs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Other
|
—
|
|
11
|
|
—
|
|
2
|
|
—
|
|
|||||
Balance at year-end
|
$
|
1,068
|
|
$
|
1,078
|
|
$
|
786
|
|
$
|
622
|
|
$
|
705
|
|
Loan loss analysis
|
|
|
|
|
|
||||||||||
As of or for the year ended December 31,
(in millions, except ratios)
|
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||
Balances
|
|
|
|
|
|
||||||||||
Loans – average
|
$
|
906,397
|
|
$
|
866,378
|
|
$
|
787,318
|
|
$
|
739,175
|
|
$
|
726,450
|
|
Loans – year-end
|
930,697
|
|
894,765
|
|
837,299
|
|
757,336
|
|
738,418
|
|
|||||
Net charge-offs
(a)
|
5,387
|
|
4,692
|
|
4,086
|
|
4,759
|
|
5,802
|
|
|||||
Allowance for loan losses:
|
|
|
|
|
|
||||||||||
U.S.
|
$
|
12,552
|
|
$
|
12,738
|
|
$
|
12,704
|
|
$
|
13,472
|
|
$
|
15,382
|
|
Non-U.S.
|
1,052
|
|
1,038
|
|
851
|
|
713
|
|
882
|
|
|||||
Total allowance for loan losses
|
$
|
13,604
|
|
$
|
13,776
|
|
$
|
13,555
|
|
$
|
14,185
|
|
$
|
16,264
|
|
Nonaccrual loans
|
$
|
5,943
|
|
$
|
6,883
|
|
$
|
6,429
|
|
$
|
7,133
|
|
$
|
8,540
|
|
Ratios
|
|
|
|
|
|
||||||||||
Net charge-offs to:
|
|
|
|
|
|
||||||||||
Loans retained – average
|
0.60
|
%
|
0.54
|
%
|
0.52
|
%
|
0.65
|
%
|
0.81
|
%
|
|||||
Allowance for loan losses
|
39.60
|
|
34.06
|
|
30.14
|
|
33.55
|
|
35.67
|
|
|||||
Allowance for loan losses to:
|
|
|
|
|
|
||||||||||
Loans retained – year-end
(b)
|
1.47
|
|
1.55
|
|
1.63
|
|
1.90
|
|
2.25
|
|
|||||
Nonaccrual loans retained
|
229
|
|
205
|
|
215
|
|
202
|
|
196
|
|
(a)
|
There were no net charge-offs/(recoveries) on lending-related commitments in
2017
,
2016
,
2015
,
2014
or
2013
.
|
(b)
|
The allowance for loan losses as a percentage of retained loans declined from
2013
to
2017
, due to improvement in credit quality of the consumer and wholesale credit portfolios. For a more detailed discussion of the
2015
through
2017
provision for credit losses, see Provision for credit losses on
page 119
.
|
298
|
|
|
Year ended December 31,
|
Average balances
|
|
Average interest rates
|
|||||||||||||||||
(in millions, except interest rates)
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
2016
|
|
2015
|
|||||||||
U.S. offices
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Noninterest-bearing
|
$
|
387,424
|
|
|
$
|
386,528
|
|
|
$
|
403,143
|
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Interest-bearing
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Demand
(a)(c)
|
162,985
|
|
|
128,046
|
|
|
78,516
|
|
|
0.50
|
|
|
0.18
|
|
|
0.11
|
|
|||
Savings
(b)
|
559,654
|
|
|
515,982
|
|
|
475,142
|
|
|
0.15
|
|
|
0.09
|
|
|
0.07
|
|
|||
Time
|
53,410
|
|
|
59,710
|
|
|
85,098
|
|
|
1.02
|
|
|
0.59
|
|
|
0.38
|
|
|||
Total interest-bearing deposits
(c)
|
776,049
|
|
|
703,738
|
|
|
638,756
|
|
|
0.29
|
|
|
0.15
|
|
|
0.12
|
|
|||
Total deposits in U.S. offices
(c)
|
1,163,473
|
|
|
1,090,266
|
|
|
1,041,899
|
|
|
0.19
|
|
|
0.09
|
|
|
0.07
|
|
|||
Non-U.S. offices
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Noninterest-bearing
|
16,741
|
|
|
16,170
|
|
|
15,805
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Interest-bearing
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Demand
(c)
|
213,733
|
|
|
198,919
|
|
|
197,572
|
|
|
0.18
|
|
|
0.10
|
|
|
0.12
|
|
|||
Savings
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
NM
|
|
|
NM
|
|
|||
Time
(c)
|
23,439
|
|
|
22,613
|
|
|
40,512
|
|
|
1.08
|
|
|
0.56
|
|
|
0.60
|
|
|||
Total interest-bearing deposits
(c)
|
237,172
|
|
|
221,532
|
|
|
238,084
|
|
|
0.27
|
|
|
0.15
|
|
|
0.21
|
|
|||
Total deposits in non-U.S. offices
(c)
|
253,913
|
|
|
237,702
|
|
|
253,889
|
|
|
0.25
|
|
|
0.14
|
|
|
0.19
|
|
|||
Total deposits
|
$
|
1,417,386
|
|
|
$
|
1,327,968
|
|
|
$
|
1,295,788
|
|
|
0.20
|
%
|
|
0.10
|
%
|
|
0.10
|
%
|
(a)
|
Includes Negotiable Order of Withdrawal (“NOW”) accounts, and certain trust accounts.
|
(b)
|
Includes Money Market Deposit Accounts (“MMDAs”).
|
(c)
|
Prior periods have been revised to conform with the current period presentation.
|
By remaining maturity at
December 31, 2017
(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)
|
$
|
6,425
|
|
|
$
|
2,174
|
|
|
$
|
2,095
|
|
|
$
|
6,207
|
|
|
$
|
16,901
|
|
|
|
299
|
As of or for the year ended December 31, (in millions, except rates)
|
2017
|
|
2016
|
|
2015
|
||||||
Federal funds purchased and securities loaned or sold under repurchase agreements:
|
|
|
|
|
|
||||||
Balance at year-end
|
$
|
158,916
|
|
|
$
|
165,666
|
|
|
$
|
152,678
|
|
Average daily balance during the year
|
187,386
|
|
|
178,720
|
|
|
192,510
|
|
|||
Maximum month-end balance
|
205,286
|
|
|
207,211
|
|
|
212,112
|
|
|||
Weighted-average rate at December 31
|
1.03
|
%
|
|
0.50
|
%
|
|
0.39
|
%
|
|||
Weighted-average rate during the year
|
0.86
|
|
|
0.61
|
|
|
0.32
|
|
|||
|
|
|
|
|
|
||||||
Commercial paper:
|
|
|
|
|
|
||||||
Balance at year-end
|
$
|
24,186
|
|
|
$
|
11,738
|
|
|
$
|
15,562
|
|
Average daily balance during the year
|
19,920
|
|
|
15,001
|
|
|
38,140
|
|
|||
Maximum month-end balance
|
24,934
|
|
|
19,083
|
|
|
64,012
|
|
|||
Weighted-average rate at December 31
|
1.59
|
%
|
|
1.13
|
%
|
|
0.55
|
%
|
|||
Weighted-average rate during the year
|
1.39
|
|
|
0.90
|
|
|
0.29
|
|
|||
|
|
|
|
|
|
||||||
Other borrowed funds:
(a)
|
|
|
|
|
|
||||||
Balance at year-end
|
$
|
87,652
|
|
|
$
|
89,154
|
|
|
$
|
80,126
|
|
Average daily balance during the year
|
96,331
|
|
|
93,252
|
|
|
93,001
|
|
|||
Maximum month-end balance
|
107,157
|
|
|
102,310
|
|
|
99,226
|
|
|||
Weighted-average rate at December 31
|
2.09
|
%
|
|
1.79
|
%
|
|
1.89
|
%
|
|||
Weighted-average rate during the year
|
1.98
|
|
|
1.93
|
|
|
1.84
|
|
|||
|
|
|
|
|
|
||||||
Short-term beneficial interests
:
(b)
|
|
|
|
|
|
||||||
Commercial paper and other borrowed funds:
|
|
|
|
|
|
||||||
Balance at year-end
|
$
|
4,310
|
|
|
$
|
5,688
|
|
|
$
|
11,322
|
|
Average daily balance during the year
|
5,327
|
|
|
8,296
|
|
|
15,608
|
|
|||
Maximum month-end balance
|
7,573
|
|
|
10,494
|
|
|
17,137
|
|
|||
Weighted-average rate at December 31
|
1.50
|
%
|
|
0.83
|
%
|
|
0.41
|
%
|
|||
Weighted-average rate during the year
|
1.07
|
|
|
0.67
|
|
|
0.32
|
|
(a)
|
Includes interest-bearing securities sold but not yet purchased.
|
(b)
|
Included on the Consolidated balance sheets in beneficial interests issued by consolidated VIEs.
|
300
|
|
|
|
JPMorgan Chase & Co.
(Registrant)
|
|
By: /s/ JAMES DIMON
|
|
(James Dimon
Chairman and Chief Executive Officer)
|
|
February 27, 2018
|
|
|
Capacity
|
|
Date
|
/s/ JAMES DIMON
|
|
Director, Chairman and Chief Executive Officer
(Principal Executive Officer)
|
|
|
(James Dimon)
|
|
|
|
|
|
|
|
|
|
/s/ LINDA B. BAMMANN
|
|
Director
|
|
|
(Linda B. Bammann)
|
|
|
|
|
|
|
|
|
|
/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/ TODD A. COMBS
|
|
Director
|
|
|
(Todd A. Combs)
|
|
|
|
|
|
|
|
|
|
/s/ JAMES S. CROWN
|
|
Director
|
|
February 27, 2018
|
(James S. Crown)
|
|
|
|
|
|
|
|
|
|
/s/ TIMOTHY P. FLYNN
|
|
Director
|
|
|
(Timothy P. Flynn)
|
|
|
|
|
|
|
|
|
|
/s/ LABAN P. JACKSON, JR.
|
|
Director
|
|
|
(Laban P. Jackson, Jr.)
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL A. NEAL
|
|
Director
|
|
|
(Michael A. Neal)
|
|
|
|
|
|
|
|
|
|
/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/ NICOLE GILES
|
|
Managing Director and Corporate Controller
(Principal Accounting Officer)
|
|
|
(Nicole Giles)
|
|
|
|
|
|
301
|
Award
Agreement
|
These terms and conditions are made part of the Award Agreement dated as of January 16, 2018 (“Grant Date”) awarding performance share units (“PSUs”) 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 and Plan.
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 PSU represents a non-transferable right to receive one share of Common Stock as of the vesting date as set forth in your Award Agreement.
The purpose of this award is to further emphasize sustained long-term performance and to align your interests with those of the Firm and its shareholders.
|
Protection-
Based Vesting
|
This award is intended and expected to vest on the 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 subsections “--Job Elimination,” “--Full Career Eligibility,” “--Government Office” or “--Disability.” However, vesting and the number of PSUs that will vest are subject to these terms and conditions (including, but not limited to, sections captioned “Recapture Provisions,” “Number to Vest on Vesting Date,” “Remedies” and the following protection-based vesting provision).
Up to a total of fifty percent of your award (including any associated Reinvested Dividend Equivalent Share Units) that would otherwise be distributable to you on the vesting date (“At Risk PSUs”) may be cancelled if the Chief Executive Officer of JPMorgan Chase (“CEO”) determines in his or her sole discretion that cancellation of all or portion of the At Risk PSUs 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, total net revenue, 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-tax pre-provision income at the Firm level is negative.
•
RSU 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.
•
The Firm does not meet the Firmwide Financial Threshold.
For avoidance of doubt, cancellation of the At Risk PSUs, in whole or part, for one or more of the above factors may occur prior to the end of the Performance Period and the maximum number of At Risk PSUs subject to cancellation prior to the end of the Performance Period will be up to fifty percent of the Target Award Number.
In the event that your employment terminates due to “Job Elimination,” ”Full Career Eligibility,” “Government Office” or “Disability” thereby entitling you to continued vesting in your award, (or potentially acceleration due to satisfaction of the Government Office Requirements), the cancellation circumstances described above will continue to apply.
Any determination above with respect to protection-based vesting provisions 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, all such determinations shall be made by the Committee.
|
Termination of Employment
|
Except as explicitly set forth below under the subsections captioned “--Job Elimination,” “--Full Career Eligibility,” “--Government Office” or “--Disability” or under the section captioned “Death,” this award (for avoidance of doubt, including any associated Reinvested Dividend Equivalent Share Units) will be cancelled in full effective on the date your employment with the Firm terminates for any reason.
Subject to these terms and conditions (including, but not limited to, sections captioned “Protection-Based Vesting,” “Number to Vest on Vesting Date,” “Bonus Recoupment,” “Recapture Provisions,” “Your Obligations” and "Remedies") you will be eligible to continue to vest (on the original vesting schedule) with respect to your award in accordance with its terms and conditions following the termination of your employment if one of the following circumstances applies to you:
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Job
Elimination
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Job Elimination:
In In the event that the Director of Human Resources or nominee in his or her sole discretion determines that
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the Firm terminated your employment because your job was eliminated, and
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after you are notified that your job will be eliminated, you provided such services as requested by the Firm in a cooperative and professional manner, and
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you satisfied the Release/Certification Requirements set forth below.
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Full
Career
Eligibility
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Full Career Eligibility:
In the event that the Director of Human Resources or nominee in his or her sole discretion determines that
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you voluntarily terminated your employment with the Firm, had completed at least five years of continuous service with the Firm immediately preceding your termination date, and
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the sum of your age and Recognized Service (as defined below) on your date of termination equaled or exceeded 60, [EU Version: your Recognized Service (as defined below) on your date of termination equaled or exceeded 15 years, or your combined Recognized Service with the Firm and external professional experience (as attested by you to the Firm) equaled or exceeded 30 years], and
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you provided at least 180 days advance written notice to the Firm of your intention to voluntarily terminate your employment under this provision, during which notice period you provided such services as requested by the Firm in a cooperative and professional manner and you did not perform any services for any other employer, and
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continued vesting shall be appropriate, which determination shall be made prior to your termination and will be based on your performance and conduct (before and after providing notice), and
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for 36 months from the date of grant of this award, you do not either perform services in any capacity (including self-employment) for a Financial Services Company (as defined below) or 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 such 180-day period as a condition to continued vesting or shorten the length of the 180-day period at the Firm’s discretion, but to a date no earlier than the date you would otherwise meet the age and service requirements.
Additional advance notice requirements may apply for employees subject to notice period policies. (See “Notice Period” below.)
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Government Office
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Government Office:
In the event that you voluntarily terminate your employment with the Firm to accept a Government Office or become a candidate for an elective Government Office, as described at the end of these terms and conditions under the section captioned “Government Office Requirements.” See also definition of Government Office in the section captioned “Definitions.”
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Disability
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Disability:
In the event that
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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 (in either case, “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; provided that you (x) request in writing continued vesting due to such disability within 30 days of the date your employment terminates, and (y) provide any requested supporting documentation and (z) receive the Firm’s written consent to such treatment, and
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you satisfy the Release/Certification Requirements set forth below.
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Cooperation
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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.
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Compliance with Award Agreement
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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
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If you are subject to a notice period or become subject to a notice period after the Grant Date, 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 180-day advance notice period described under the subsection captioned “-- Full Career Eligibility” in the event you wish to terminate employment under that same subsection.
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Remedies
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Cancellation
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In addition to the cancellation provisions described under the sections captioned “Bonus Recoupment,” “Protection-Based Vesting,” “Termination of Employment” and “Recapture Provisions,” your outstanding PSUs under this award may be cancelled if the Firm in its sole discretion determines that:
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you have failed to comply with any of the advance notice/cooperation requirements or employment restrictions applicable to your termination of employment, or
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you have failed to return the required forms specified under the section captioned “Release/Certification” by the specified deadline, or
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you have violated any of the provisions as set forth above in the section captioned “Your Obligations.”
To the extent provided under the subsection captioned “--Amendment” below, JPMorgan Chase reserves the right to suspend vesting of this award and/or distribution of shares under this award, including, without limitation, during any period that JPMorgan Chase is evaluating whether this award is subject to cancellation and/or recovery and/or whether the conditions for distributions of shares under this award are satisfied. The Firm is not responsible for any price fluctuations during any period of suspension and, if applicable, suspended units will be reinstated consistent with Plan administration procedures. See also “Administrative Provisions-No Ownership Rights.”
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Recovery
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In addition, you may be required to pay the Firm up to an amount equal to the Fair Market Value (determined as of the applicable vesting date or acceleration date) of the gross number of shares of Common Stock previously distributed, including vested shares subject to the Holding Requirements, under this award as follows:
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Payment may be required with respect to any shares of Common Stock distributed within the three year period prior to a notice-of-recovery under this section, if the Firm in its sole discretion determines that:
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you committed a fraudulent act, or engaged in knowing and willful misconduct related to your employment;
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you violated any of the provisions as set forth above in the section captioned “Your Obligations;” or
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you violated the employment restrictions set forth in the subsection Full Career Eligibility following the termination of your employment.
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In addition, payment may be required with respect to any shares distributed within the one year period prior to notice-of-recovery under this section, if the Firm in its sole discretion determines appropriate pursuant to the provisions in the section captioned “Recapture Provisions.”
Notice-of-recovery under this subsection is a written (including electronic) notice from the Firm to you either requiring payment under this subsection or stating that JPMorgan Chase is evaluating requiring payment under this subsection. Without limiting the foregoing, notice-of-recovery will be deemed provided if the Firm makes a good faith attempt to provide written (including electronic) notice at your last known address maintained in the Firm’s employment records. For the avoidance of doubt, a notice-of-recovery that the Firm is evaluating requiring payment under this subsection shall preserve JPMorgan Chase’s rights to require payment as set forth above in all respects and the Firm shall be under no obligation to complete its evaluation other than as the Firm may determine in its sole discretion.
For purposes of this subsection, shares distributed under this award include shares withheld for tax purposes. However, it is the Firm’s intention that you only be required to pay the amounts under this subsection with respect to shares that are or may be retained by you following a determination of tax liability and that you will not be required to pay amounts with respect to shares representing irrevocable tax withholdings or tax payments previously made (whether by you or the Firm) that you will not be able to recover, recapture or reclaim (including as a tax credit, refund or other benefit). Accordingly, JPMorgan Chase will not require you to pay any amount that the Firm or its nominee in his or her sole discretion determines is represented by such withholdings or tax payments.
Payment may be made in shares of Common Stock or in cash. You agree that any 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.
Nothing in the section in any way limits your obligations under “Bonus Recoupment.”
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Administrative Provisions
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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 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 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 and shares that vest under this award, and (iii) retaining shares that vest under this award until you pay any taxes associated with the award and vested shares directly to the competent authorities.
Right to Set Off:
Although the Firm expects to settle this award in share(s) of Common Stock as of the applicable vesting date, as set forth in your Award Agreement, the Firm may, to the maximum extent permitted by applicable law (including Section 409A of the Code to the extent it is applicable to you), retain for itself funds or the Common Stock resulting from any vesting of this award to satisfy any obligation or debt that you owe to the Firm. Notwithstanding any account agreement with the Firm to the contrary, the Firm will not recoup or recover any amount owed from any funds or unrestricted securities held in your name and maintained at the Firm pursuant to such account agreement to satisfy any obligation or debt or obligation owed by you under this award without your consent. This restriction on the Firm does not apply to accounts described and authorized in “No Ownership Rights” described below.
No Ownership Rights
: PSUs 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 number of PSUs have been determined, if any, and have vested and any applicable restrictions (other than Holding Requirement) have lapsed. 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 or book-entry account with our stock plan administrator and/or transfer agent and deliver to that account any vested shares derived from the award.
With respect to any applicable vesting date, JPMorgan Chase may impose for any reason, as of such vesting date for such period as it may specify in its sole discretion, 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, pledging, assignment, hedging or encumbrance of such shares of Common Stock. By accepting this award, you acknowledge that during such specified period should there be a determination that the cancellation or recovery provisions of this award apply, then you agree that any shares subject to such restrictions (notwithstanding the limitation set forth in the Right to Set Off section above) may be cancelled in whole or part. (See sections captioned “Protection-Based Vesting,” “Bonus Recoupment,” “Recapture Provisions,” “Termination of Employment” and “Remedies”, as well as the subsection captioned “-Amendment” permitting suspension of vesting.)
Binding Agreement
: The Award Agreement will be binding upon any successor in interest to JPMorgan Chase, by merger or otherwise.
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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 hereunder are intended to comply with Section 409A of the Code, and the Award Agreement, 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 with the exception of death) and if any units/shares under this award represent deferred compensation as defined in Section 409A and such shares are distributable (under the terms of this award) within six months following, and as a result of your separation from service, then those shares will be delivered during 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 the vesting date set forth in your Award Agreement shall be a payment date for purposes of distributing the vested
portion of the award.
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 PSUs outstanding under this award for such corporate events.
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Other Equitable Adjustments:
The Committee may make adjustments (up or down) to the award as it deems to be equitable, to maintain the intended economics of the award in light of changed circumstances, which may include unusual or non-recurring events affecting the Firm (or the Performance Companies) or its financial statements in each case resulting from changes in accounting methods, practices or policies, changes in capital structure by reason of legal or regulatory requirements and such other changed circumstances, as the Committee may deem appropriate.
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 contemplated hereunder by the Committee, the Firm, the Director of Human Resources or their respective delegates or nominees shall be binding on all parties.
Notwithstanding anything herein to the contrary, the determinations of the Director of Human Resources, the Firm, the Committee and their respective delegates and nominees under the Plan and the Award Agreements are not required to be uniform. By way of clarification, the Committee, the Firm, the Director of Human Resources and their respective delegates and nominees shall be entitled to make non-uniform and selective determinations and modifications under Award Agreements and the Plan.
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Amendment
: The Committee or its nominee 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/or (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 if it is applicable to you. This Award Agreement may not be amended except in writing signed by the Director of 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 of 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.
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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 PSUs, the Firm may accelerate the distribution of all or part of your outstanding award, including Reinvested Dividend Equivalent Share Units, effective on or before the required divestiture date and waive the Holding Requirement; provided that no accelerated distribution shall occur if the Firm determines that such acceleration will violate Section 409A of the Code. Accelerated distribution under this paragraph does not impact the dates as set forth in the “Recovery” section above. The time period for recovery shall be determined by the originally scheduled vesting date or distribution date prior to any acceleration event.
If you have voluntarily terminated your employment and have satisfied the requirements of the section captioned “Government Office Requirements”, 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 the subsections entitled “Job Elimination” or “Full Career Eligibility,” then acceleration shall apply, to the extent required, to the full outstanding award. Subject to the two foregoing sections, the number of shares of Common Stock to be received on acceleration shall be determined using the methodology set forth under the section captioned “Death.”
To the extent you have vested shares under this award subject to the Holding Requirement and become subject to divestiture requirement as forth herein, the Firm may waive the holding period to the extent required.
Notwithstanding an accelerated distribution or waiver of the Holding Requirement 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 and shares had been distributed as scheduled as of the vesting date, including, but not limited to, repayment obligations set forth in the section captioned “Remedies” and the employment restrictions in the sections captioned “Protection-Based Vesting” and “Government Office Requirements” and the subsection “Full Career Eligibility.”
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Use of Personal Data:
By accepting this award, you have acknowledged that the Firm may process your personal data (including sensitive personal data) for purposes, including but not limited to (i) determining your compensation, (ii) payroll activities, including, but not limited to, tax withholding and regulatory reporting, which tax and regulatory reporting and withholding may include, but is not limited to, the United States and its political subdivisions, (if not the United States) your work country and its political subdivisions (including countries to which you travel on Firm business) and your country of residence or nationality,(iii) registration of shares, (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 and/or other bodies, including regulators, supervisory bodies, law enforcement and other government agencies. You are acknowledging and agreeing that your personal data will be transferred to and processed in countries and locations that do not have the same data privacy laws and statutory protection for personal data as your work country, country of residence, or country of nationality. If your personal data is subject to data privacy laws or statutory protection for personal data and they so provide for termination of the foregoing authorization, you may terminate the authorization at any time except with respect to tax and regulatory reporting
and subject always to the Firm’s legal and regulatory obligations. In the event you terminate this authorization, 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 under the Plan, you agree (and have agreed) 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 under the Plan, you agree (and have agreed) 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 or any other 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.
Non-transferability:
Neither this award or any other outstanding awards of restricted stock units or of performance based share units, nor your interests or rights in any such awards, shall be assigned, pledged, transferred, hedged 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.
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Definitions
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“Annual PSUs”
means the number of PSUs determined by multiplying the Target Award Number (after giving effect to any cancellation thereof, in whole or in part) by the Target Award Percentage corresponding to the Firm’s Performance Ranking for each applicable performance year (both percentage and ranking, as set forth in the footnote to the Performance Table); provided that if the Firm Reported ROTCE for any completed calendar year in the Performance Period either equals or exceeds 17% or is less than 6%, one hundred fifty percent or zero, respectively as the case may be, shall be substituted for that year’s Target Award Percentage in calculating the number of Annual PSUs for that year. For avoidance of doubt, any cancellation of this award (in whole or in part) during the Performance Period will reduce the Target Award Number.
“Average Tangible Common Equity”
means annual average common stockholders’ equity less annual average goodwill and annual average identifiable intangible assets. Annual averages of the components of Average Tangible Common Equity will be calculated using quarterly balances as reported in publicly available financial disclosures. In the event that quarterly balances are not available, annual year end balances will be used.
This calculation is used solely for purposes of the Performance Ranking.
“Calculation Agent”
means a third party entity not owned or controlled by the Firm, such as an accounting or consulting firm, retained from time to time by the Director of Human Resources or his/her delegate.
“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 JPMorgan Chase Code of Conduct or other Firm policies or misconduct related to your duties to the Firm (other than immaterial and inadvertent violations or misconduct), (v) grossly 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 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 (such as an employee, contractor, consultant, advisor, or self-employed individual, whether paid or unpaid) and engages in:
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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, payment servicing or processing or merchant services,
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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,
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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,
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issuing, trading or selling instruments representing interests in pools of assets or in derivatives instruments,
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advising on, or investing in, private equity or real estate, or
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any similar activities that the Director of Human Resources or nominee determines in his or her sole discretion constitute financial services.
“Firmwide Financial Threshold”
means a cumulative return on tangible common equity for calendar years 2018, 2019 and 2020 of not less than 15%. Cumulative return on tangible common equity means (i) the sum of the Firm’s reported net income for all three calendar years, divided by (ii) reported year-end tangible equity averaged over the three years.
“Firm Reported ROTCE”
means the Firm’s percentage return on tangible common equity for each year in the Performance Period (as calculated for use in its publicly available year-end financial disclosures without taking into account any rounding conventions used for financial reporting purposes).
“Government Office”
means (i) a full-time position in an elected or appointed office in local, state, or federal government (including equivalent positions outside the U.S. or in a supranational organization), not reasonably anticipated to be a full-career position, or (ii) conducting a bona fide full-time campaign for such an elective public office after formally filing for candidacy, where it is customary and reasonably necessary to campaign full-time for the office.
“Line of Business”
means a business unit of the Firm (or one or more business units designated below under the definition “Line of Business Financial Threshold” of the Corporate Investment Bank). All Corporate Functions (including the functions of the Chief Investment Office) are considered a single Line of Business.
“Line of Business Financial Threshold”
means the financial threshold set forth below: for the following Lines of Business based on the Firm’s management reporting system:
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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.
Not-for-Profit Organization
shall also mean entities outside the United States exempt from local and national tax laws because they are organized and operated exclusively for purposes identical to those applicable to Section 501(c)(3) organization.
“Performance Companies”
mean the following institutions which have business activities that overlap with a significant portion of the Firm’s revenue mix: Bank of America Corporation, Barclays PLC, Capital One Financial Corporation, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group, Inc., HSBC Holdings PLC, Morgan Stanley, Wells Fargo & Company, and UBS Group AG.
If, during the Performance Period, one or more Performance Companies shall merge, engage in a spin-off or otherwise experience a material change in its revenue mix or business activities or its existence or its primary businesses shall terminate or cease due to receivership, bankruptcy, sale, or otherwise, then the Committee may eliminate such institution from the list of Performance Companies or make such other equitable adjustments, such as adding an acquirer or a new company to the list of Performance Companies, as it deems appropriate, with any such changes having effect for purposes of all calculations hereunder on a prospective basis from the date the applicable change is made.
“Performance Period”
means calendar years, 2018, 2019 and 2020.
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Firm Reported ROTCE (annual performance)
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Target Award Percentage
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Performance Ranking
1
(annual performance)
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Target Award Percentage
1
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≥17
%
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150%
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1st Quartile
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150%
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6% to <17%
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Pay by relative
ROTCE scale
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2nd Quartile
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100% to 125%
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<6%
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0%
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3rd Quartile
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70% to 100%
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4th Quartile
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25% to 55%
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1.
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The
following sets forth the precise Target Award Percentage corresponding to the Firm’s performance ranking (when compared to Performance Companies): Top 3 = 150%; #4 = 125%; #5 = 112.5%; #6 = 100%; #7 = 100%; #8 = 85%; #9 =70%; #10 = 55%; #11 = 40%; and #12 = 25%.
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At least 60 days’ advance written notice of your intention to resign to accept or pursue a Government Office (see section captioned “Definitions”), 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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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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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. (See section captioned “Definitions.”)
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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 to be eligible to receive the CV Award; provided that if your non-elective Government Office is for a period less than two years, you will be eligible to receive the CV Award if it has a vesting date during your period of Government Service; or
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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 16, 2018 (“Grant Date”) awarding Restricted Stock Units (“RSUs”) 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
|
Each RSU 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.
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Dividend
Equivalents
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If dividends are paid on Common Stock while RSUs 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 RSUs outstanding under this award as of the dividend record date.
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Protection-
Based Vesting
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This award is intended and expected to vest on the vesting date(s), provided that you are continuously employed by the Firm through such vesting date, or you meet the requirements for continued vesting described under the subsections “--Job Elimination”, “--Full Career Eligibility”, “--Government Office” or “--Disability.” However, vesting and the number of RSUs in which you vest are subject to these terms and conditions (including, but not limited to, sections captioned “
Recapture Provisions
”, “
Remedies
” and the following protection-based vesting provision).
Up to a total of fifty percent of your award that would otherwise be distributable to you during the vesting period (“At Risk RSUs”) may be cancelled if the Chief Executive Officer of JPMorgan Chase (“CEO”) determines in his or her sole discretion that cancellation of all or portion of the At Risk RSUs 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, total 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-tax pre-provision income 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.
•
The Firm does not meet the Firmwide Financial Threshold.
In the event that your employment terminates due to “Job Elimination”, ”Full Career Eligibility”, Government Office” or “Disability” thereby entitling you to continued vesting in your award (or potentially acceleration due to satisfaction of the Government Office Requirements), the cancellation circumstances described above will continue to apply to your At Risk RSUs pursuant to the subsection captioned “Accelerated Distribution for Ethics or Conflict Reasons Resulting From Employment by a Government Entity.”
Any determination above with respect to protection-based vesting provisions 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, all such determinations shall be made by the Committee.
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Vest Period
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The period from the Grant Date to the last vesting date is the “vesting period” (see subsections captioned “--Amendment” pursuant to which the Firm may extend the vesting period and “--No Ownership Rights” pursuant to which the Firm may place restrictions on delivered shares of Common Stock following a vesting date).
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Confidential Information
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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. In addition, following your termination of employment, you will not, without prior written authorization, access the Firm’s private and internal information through telephonic, intranet or internet means. “Confidential information” shall have the same meaning for the Award Agreement as it has in the JPMorgan Chase Code of Conduct.
Nothing in this award precludes you from reporting to the Firm’s management or directors, the government, a regulator, a self-regulatory agency, your attorneys or a court, conduct you believe to be in violation of the law or concerns of any known or suspected Code of Conduct violation. It is also not intended to prevent you from responding truthfully to questions or requests from the government, a regulator or in a court of law.
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Non-Disparagement
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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.
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Cooperation
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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.
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Compliance with Award Agreement
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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
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If you are subject to a notice period or become subject to a notice period after the Grant Date, 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 180-day advance notice period described under the subsection captioned “--Full Career Eligibility” in the event you wish to terminate employment under that same subsection.
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Remedies
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Cancellation
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In addition to the cancellation provisions described under the sections captioned “
Protection-Based Vesting
”, “
Bonus Recoupment
”, “
Recapture Provisions
” and “
Termination of Employment
”, your outstanding RSUs under this award may be cancelled if the Firm in its sole discretion determines that:
•
you have failed to comply with any of the advance notice/cooperation requirements or employment restrictions applicable to your termination of employment, or
•
you have failed to return the required forms specified under the section captioned “
Release/Certification
” by the specified deadline, or
•
you have violated any of the provisions as set forth above in the section captioned “
Your Obligations
.”
To the extent provided under the subsection captioned “--Amendment” below, JPMorgan Chase reserves the right to suspend vesting of this award and/or distribution of shares under this award, including, without limitation, during any period that JPMorgan Chase is evaluating whether this award is subject to cancellation and/or recovery and/or whether the conditions for distributions of shares under this award are satisfied. JPMorgan Chase is not responsible for any price fluctuations during any period of suspension and, if applicable, suspended units will be reinstated consistent with Plan administration procedures. See also subsection captioned “--No Ownership Rights.”
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Recovery
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In addition, you may be required to pay the Firm up to an amount equal to the Fair Market Value (determined as of the applicable vesting date) of the gross number of shares of Common Stock previously distributed under this award as follows:
•
Payment may be required with respect to any shares of Common Stock distributed within the three year period prior to a notice-of-recovery under this section, if the Firm in its sole discretion determines that:
◦
you committed a fraudulent act, or engaged in knowing and willful misconduct related to your employment,
◦
you violated any of the provisions as set forth above in the section captioned “
Your Obligations
”, or
◦
you violated the employment restrictions set forth in the subsection “--Full Career Eligibility” following the termination of your employment.
•
In addition, payment may be required with respect to any shares distributed within the one year period prior to notice-of-recovery under this section, if the Firm in its sole discretion determines appropriate pursuant to the provisions in the section captioned “
Recapture Provisions
.”
Notice-of-recovery under this subsection is a written (including electronic) notice from the Firm to you either requiring payment under this subsection or stating that JPMorgan Chase is evaluating requiring payment under this subsection. Without limiting the foregoing, notice-of-recovery will be deemed provided if the Firm makes a good faith attempt to provide written (including electronic) notice at your last known address maintained in the Firm’s employment records. For the avoidance of doubt, a notice-of-recovery that the Firm is evaluating requiring payment under this subsection shall preserve JPMorgan Chase’s rights to require payment as set forth above in all respects and the Firm shall be under no obligation to complete its evaluation other than as the Firm may determine in its sole discretion.
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For purposes of this subsection, shares distributed under this award include shares withheld for tax purposes. However, it is the Firm’s intention that you only be required to pay the amounts under this subsection with respect to shares that are or may be retained by you following a determination of tax liability and that you will not be required to pay amounts with respect to shares representing irrevocable tax withholdings or tax payments previously made (whether by you or the Firm) that you will not be able to recover, recapture or reclaim (including as a tax credit, refund or other benefit). Accordingly, JPMorgan Chase will not require you to pay any amount that the Firm or its nominee in his or her sole discretion determines is represented by such withholdings or tax payments.
Payment may be made in shares of Common Stock or in cash. You agree that any 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.
Nothing in the section in any way limits your obligations under “
Bonus Recoupment
.”
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Administrative Provisions
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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 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, shares that vest under this award, and/or dividend equivalents, and (iii) retaining shares that vest under this award or dividend equivalents until you pay any taxes associated with the award, vested shares and/or the dividend equivalents directly to the competent authorities.
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Right to Set Off:
Although the Firm expects to settle this award in share(s) of Common Stock as of the applicable vesting date, as set forth in your Award Agreement, the Firm may, to the maximum extent permitted by applicable law (including Section 409A of the Code to the extent it is applicable to you), retain for itself funds or the Common Stock resulting from any vesting of this award to satisfy any obligation or debt that you owe to the Firm. Notwithstanding any account agreement with the Firm to the contrary, the Firm will not recoup or recover any amount owed from any funds or unrestricted securities held in your name and maintained at the Firm pursuant to such account agreement to satisfy any obligation or debt or obligation owed by you under this award without your consent. This restriction on the Firm does not apply to accounts described and authorized in “No Ownership Rights” described below.
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No Ownership Rights
: RSUs 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 RSUs have vested and any applicable restrictions have lapsed. 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 or book-entry account with our stock plan administrator and/or transfer agent and deliver to that account any vested shares derived from the award.
With respect to any applicable vesting date, JPMorgan Chase may impose for any reason, as of such vesting date for such period as it may specify in its sole discretion, 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, pledging, assignment, hedging or encumbrance of such shares of Common Stock. By accepting this award, you acknowledge that during such specified period should there be a determination that the cancellation or recovery provisions of this award apply, then you agree that any shares subject to such restrictions (notwithstanding the limitation set forth in the Right to Set Off section above) may be cancelled in whole or part. (See sections captioned “
Protection-Based Vesting
”, “
Bonus Recoupment
”, “
Recapture Provisions
”, “
Termination of Employment
” and “
Remedies
”, as well as the subsection captioned “--Amendment” permitting suspension of vesting.)
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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 Award Agreement, 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 with the exception of death) and if any units/shares under this award represent deferred compensation as defined in Section 409A and such shares are distributable (under the terms of this award) within six months following, and as a result of your separation from service, then those shares will be delivered to you during 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 applicable vesting date set forth in your Award Agreement 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.
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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 RSUs 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 contemplated hereunder by the Committee, the Firm, the Director of Human Resources or their respective delegates or nominees shall be binding on all parties.
Notwithstanding anything herein to the contrary, the determinations of the Director of Human Resources, the Firm, the Committee and their respective delegates and nominees under the Plan and the Award Agreements are not required to be uniform. By way of clarification, the Committee, the Firm, the Director of Human Resources and their respective delegates and nominees shall be entitled to make non-uniform and selective determinations and modifications under Award Agreements and the Plan.
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Amendment
: The Committee or its nominee 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/or (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 if it is applicable to you. This Award Agreement may not be amended except in writing signed by the Director of 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 of 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.
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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 RSUs, the Firm may accelerate the distribution of all or part of your outstanding award effective on or before the required divestiture date; provided that no accelerated distribution shall occur if the Firm determines that such acceleration will violate Section 409A of the Code. Accelerated distribution under this paragraph does not impact the dates as set forth in the “Recovery” section above. The time period for recovery shall be determined by the originally scheduled vesting date or distribution date prior to any acceleration event.
If you have voluntarily terminated your employment and have satisfied the requirements of the section captioned “
Government Office Requirements
”, 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 the subsections entitled “--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 and shares had been distributed as scheduled as of each applicable vesting date, including, but not limited to, repayment obligations set forth in the section captioned “
Remedies
” and the employment restrictions in the sections captioned “
Protection-Based Vesting
”
and “
Government Office Requirements
” and the subsection “--Full Career Eligibility”.
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Use of Personal Data:
By accepting this award, you have acknowledged that the Firm may process your personal data (including sensitive personal data) for purposes, including but not limited to (i) determining your compensation, (ii) payroll activities, including, but not limited to, tax withholding and regulatory reporting, which tax and regulatory reporting and withholding may include, but is not limited to, the United States, your work country (including countries to which you travel on Firm business) and country of residence, (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 and/or other bodies, including regulators, supervisory bodies, law enforcement and other government agencies. You are acknowledging and agreeing that your personal data will be transferred to, and processed in, countries and locations that do not have the same data privacy laws and statutory protection for personal data as your work country, country of residence, or country of nationality. If your personal data is subject to data privacy laws or statutory protection for personal data and they so provide for termination of the foregoing authorization, you may terminate the authorization at any time except with respect to tax and regulatory reporting and subject always to the Firm’s legal and regulatory obligations. In the event you terminate this authorization, your award will be cancelled.
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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 under the Plan, you agree (and have agreed) 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.
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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 under the Plan, you agree (and have agreed) 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 or any other 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.
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Non-transferability:
Neither this award or any other outstanding awards of RSUs, nor your interests or rights in any such awards, shall be assigned, pledged, transferred, hedged, 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 RSUs outstanding as of the date hereof, and such awards are hereby amended.
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Definitions
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“
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 JPMorgan Chase Code of Conduct or other Firm policies or misconduct related to your duties to the Firm (other than immaterial and inadvertent violations or misconduct), (v) grossly 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 injurious to the interests of the Firm or its relationship with a customer, client or an employee.
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“
Financial Services Company
” means a business enterprise that employs you in any capacity (such 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, payment servicing or processing or merchant services,
•
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 the Director of Human Resources or nominee determines in his or her sole discretion constitute financial services.
“
Firmwide Financial Threshold
” means a cumulative return on tangible common equity for calendar years 2018, 2019 and 2020 of not less than 15%. Cumulative return on tangible common equity means (i) the sum of the Firm’s reported net income for all three calendar years, divided by (ii) reported year-end tangible equity averaged over the three years.
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“
Government Office
” means (i) a full-time position in an elected or appointed office in local, state, or federal government (including equivalent positions outside the U.S. or in a supranational organization), not reasonably anticipated to be a full-career position, or (ii) conducting a bona fide full-time campaign for such an elective public office after formally filing for candidacy, where it is customary and reasonably necessary to campaign full-time for the office.
“
Line of Business
” means a business unit of the Firm (or one or more business units designated below under the definition “Line of Business Financial Threshold” of the Corporate Investment Bank). All Corporate Functions (including the functions of the Chief Investment Office) are considered a single Line of Business.
“
Line of Business Financial Threshold
” means the financial threshold set forth below for the following Lines of Business based on the Firm’s management reporting system:
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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. Not-for-Profit Organization
shall also mean entities outside the United States exempt from local and national tax laws because they are 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 (see section captioned “
Definitions
”), 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. (See section captioned “
Definitions
.”)
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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 to receive in full your CV Award; provided that if your non-elective Government Office is for a period less than two years, you will be entitled to retain any portion of the CV Award with a vesting date during your period of Government Service; or
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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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Award
Agreement
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These terms and conditions are made part of the Award Agreement dated as of January 16, 2018 (“Grant Date”) awarding Restricted Stock Units (“RSUs”) 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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Each RSU 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.
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Dividend
Equivalents
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This award is not eligible for dividend equivalent payments.
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Protection-
Based Vesting
|
This award is intended and expected to vest on the vesting date(s), provided that you are continuously employed by the Firm through such vesting date, or you meet the requirements for continued vesting described under the subsections “--Job Elimination”, “--Full Career Eligibility”, “--Government Office” or “--Disability.” However, vesting and the number of RSUs in which you vest are subject to these terms and conditions (including, but not limited to, sections captioned “
Recapture Provisions
”, “
Remedies
” and the following protection-based vesting provision).
Up to a total of fifty percent of your award that would otherwise be distributable to you during the vesting period (“At Risk RSUs”) may be cancelled if the Chief Executive Officer of JPMorgan Chase (“CEO”) determines in his or her sole discretion that cancellation of all or portion of the At Risk RSUs 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, total 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-tax pre-provision income 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.
•
The Firm does not meet the Firmwide Financial Threshold.
In the event that your employment terminates due to “Job Elimination”, ”Full Career Eligibility”, Government Office” or “Disability” thereby entitling you to continued vesting in your award (or potentially acceleration due to satisfaction of the Government Office Requirements), the cancellation circumstances described above will continue to apply to your At Risk RSUs pursuant to the subsection captioned “Accelerated Distribution for Ethics or Conflict Reasons Resulting From Employment by a Government Entity.”
Any determination above with respect to protection-based vesting provisions 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, all such determinations shall be made by the Committee.
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Vest Period
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The period from the Grant Date to the last vesting date is the “vesting period”. (See subsections captioned “--Amendment” pursuant to which the Firm may extend the vesting period and “--No Ownership Rights” pursuant to which the Firm may place restrictions on delivered shares of Common Stock following a vesting date.)
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Holding Requirement
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As of each vesting date, you shall be entitled to a distribution equal to the Fair Market Value of the number of RSUs vesting on such date, less the number being withheld to satisfy tax withholding obligations. You agree that the distribution made to you will be held in an account in your name with restrictions preventing you from transferring, assigning, hedging, selling, pledging or otherwise encumbering such distribution for a twelve month period commencing with the vesting date. Such restrictions shall lapse in event of your death.
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Non-Solicitation of Employees and Customers
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During your employment by the Firm and for the longer of the (i) one year period following the termination of your employment or, (ii) if your award is not cancelled as of your termination date, the three year period from Grant Date, 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 of Human Resources: (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.
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Confidential Information
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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. In addition, following your termination of employment, you will not, without prior written authorization, access the Firm’s private and internal information through telephonic, intranet or internet means. “Confidential information” shall have the same meaning for the Award Agreement as it has in the JPMorgan Chase Code of Conduct.
Nothing in this award precludes you from reporting to the Firm’s management or directors, the government, a regulator, a self-regulatory agency, your attorneys or a court, conduct you believe to be in violation of the law or concerns of any known or suspected Code of Conduct violation. It is also not intended to prevent you from responding truthfully to questions or requests from the government, a regulator or in a court of law.
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Ø
Non-Disparagement
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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.
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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, 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.
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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.
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Ø
Notice Period
|
If you are subject to a notice period or become subject to a notice period after the Grant Date, 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 180-day advance notice period described under the subsection captioned “--Full Career Eligibility” in the event you wish to terminate employment under that same subsection.
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Right to Set Off:
Although the Firm expects to settle this award in share(s) of Common Stock as of the applicable vesting date, as set forth in your Award Agreement, the Firm may, to the maximum extent permitted by applicable law (including Section 409A of the Code to the extent it is applicable to you), retain for itself funds or the Common Stock resulting from any vesting of this award to satisfy any obligation or debt that you owe to the Firm. Notwithstanding any account agreement with the Firm to the contrary, the Firm will not recoup or recover any amount owed from any funds or unrestricted securities held in your name and maintained at the Firm pursuant to such account agreement to satisfy any obligation or debt or obligation owed by you under this award without your consent. This restriction on the Firm does not apply to accounts described and authorized in “No Ownership Rights” described below.
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No Ownership Rights
: RSUs 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 RSUs have vested and any applicable restrictions have lapsed. 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 or book-entry account with our stock plan administrator and/or transfer agent and deliver to that account any vested shares derived from the award.
With respect to any applicable vesting date, JPMorgan Chase may impose for any reason, as of such vesting date for such period as it may specify in its sole discretion, 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, pledging, assignment, hedging or encumbrance of such shares of Common Stock. By accepting this award, you acknowledge that during such specified period should there be a determination that the cancellation or recovery provisions of this award apply, then you agree that any shares subject to such restrictions (notwithstanding the limitation set forth in the Right to Set Off section above) may be cancelled in whole or part. (See sections captioned “
Protection-Based Vesting
”, “
Bonus Recoupment
”, "
EMEA Malus and Clawback Policy - Identified Staff
", “
Recapture Provisions
”, “
Termination of Employment
” and “
Remedies
”, as well as the subsection captioned “--Amendment” permitting suspension of vesting.)
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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 Award Agreement, 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 with the exception of death) and if any units/shares under this award represent deferred compensation as defined in Section 409A and such shares are distributable (under the terms of this award) within six months following, and as a result of your separation from service, then those shares will be delivered to you during 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 each applicable vesting date set forth in your Award Agreement shall be a payment date for purposes of distributing the vested
portion of the award.
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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 RSUs 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 contemplated hereunder by the Committee, the Firm, the Director of Human Resources or their respective delegates or nominees shall be binding on all parties.
Notwithstanding anything herein to the contrary, the determinations of the Director of Human Resources, the Firm, the Committee and their respective delegates and nominees under the Plan and the Award Agreements are not required to be uniform. By way of clarification, the Committee, the Firm, the Director of Human Resources and their respective delegates and nominees shall be entitled to make non-uniform and selective determinations and modifications under Award Agreements and the Plan.
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Amendment
: The Committee or its nominee 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/or (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 if it is applicable to you. This Award Agreement may not be amended except in writing signed by the Director of 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 of 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.
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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 RSUs, the Firm may accelerate the distribution of all or part of your outstanding award effective on or before the required divestiture date; provided that no accelerated distribution shall occur if the Firm determines that such acceleration will violate Section 409A of the Code. Accelerated distribution under this paragraph does not impact the dates as set forth in the “Recovery” section above. The time period for recovery shall be determined by the originally scheduled vesting date or distribution date prior to any acceleration event.
If you have voluntarily terminated your employment and have satisfied the requirements of the section captioned “
Government Office Requirements
”, 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 the subsections entitled “--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 and shares had been distributed as scheduled as of each applicable vesting date, including, but not limited to, repayment obligations set forth in the section captioned “
Remedies
” and the employment restrictions in the sections captioned “
Protection-Based Vesting
” and “
Government Office Requirements
” and the subsection “--Full Career Eligibility”.
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Use of Personal Data:
By accepting this award, you have acknowledged that the Firm may process your personal data (including sensitive personal data) for purposes, including but not limited to (i) determining your compensation, (ii) payroll activities, including, but not limited to, tax withholding and regulatory reporting, which tax and regulatory reporting and withholding may include, but is not limited to, the United States, your work country (including countries to which you travel on Firm business) and country of residence, (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 and/or other bodies, including regulators, supervisory bodies, law enforcement and other government agencies. You are acknowledging and agreeing that your personal data will be transferred to, and processed in, countries and locations that do not have the same data privacy laws and statutory protection for personal data as your work country, country of residence, or country of nationality. If your personal data is subject to data privacy laws or statutory protection for personal data and they so provide for termination of the foregoing authorization, you may terminate the authorization at any time except with respect to tax and regulatory reporting and subject always to the Firm’s legal and regulatory obligations. In the event you terminate this authorization, your award will be cancelled.
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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 under the Plan, you agree (and have agreed) 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.
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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 under the Plan, you agree (and have agreed) 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 or any other 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.
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Non-transferability:
Neither this award or any other outstanding awards of RSUs, nor your interests or rights in any such awards, shall be assigned, pledged, transferred, hedged, 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 RSUs outstanding as of the date hereof, and such awards are hereby amended.
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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 JPMorgan Chase Code of Conduct or other Firm policies or misconduct related to your duties to the Firm (other than immaterial and inadvertent violations or misconduct), (v) grossly 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 injurious to the interests of the Firm or its relationship with a customer, client or an employee.
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“
Financial Services Company
” means a business enterprise that employs you in any capacity (such 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, payment servicing or processing or merchant services,
•
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 the Director of Human Resources or nominee determines in his or her sole discretion constitute financial services.
“
Firmwide Financial Threshold
” means a cumulative return on tangible common equity for calendar years 2018, 2019 and 2020 of not less than 15%. Cumulative return on tangible common equity means (i) the sum of the Firm’s reported net income for all three calendar years, divided by (ii) reported year-end tangible equity averaged over the three years.
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“
Government Office
” means (i) a full-time position in an elected or appointed office in local, state, or federal government (including equivalent positions outside the U.S. or in a supranational organization), not reasonably anticipated to be a full-career position, or (ii) conducting a bona fide full-time campaign for such an elective public office after formally filing for candidacy, where it is customary and reasonably necessary to campaign full-time for the office.
“
Line of Business
” means a business unit of the Firm (or one or more business units designated below under the definition “Line of Business Financial Threshold” of the Corporate Investment Bank). All Corporate Functions (including the functions of the Chief Investment Office) are considered a single Line of Business.
“
Line of Business Financial Threshold
” means the financial threshold set forth below for the following Lines of Business based on the Firm’s management reporting system:
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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. Not-for-Profit Organization
shall also mean entities outside the United States exempt from local and national tax laws because they are 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 (see section captioned “
Definitions
”), 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. (See section captioned “
Definitions
.”)
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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 to receive in full your CV Award; provided that if your non-elective Government Office is for a period less than two years, you will be entitled to retain any portion of the CV Award with a vesting date during your period of Government Service; or
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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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Award
Agreement
|
These terms and conditions are made part of the Award Agreement dated as of January 16, 2018 (“Grant Date”) awarding performance share units (“PSUs”) 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 and Plan.
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
|
Each PSU represents a non-transferable right to receive one share of Common Stock following each vesting date as set forth in your Award Agreement.
The purpose of this award is to further emphasize sustained long-term performance and to align your interests with those of the Firm and its shareholders.
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Protection-
Based Vesting
|
This award is intended and expected to vest on each vesting date set forth in your Award Agreement, provided that you are continuously employed by the Firm through such vesting date, or you meet the requirements for continued vesting described under the subsections “--Job Elimination,” “--Full Career Eligibility,” “--Government Office” or “--Disability.” However, vesting and the number of PSUs that will vest are subject to these terms and conditions (including, but not limited to, sections captioned “
Recapture Provisions
”, “
Number of Performance Share Units at the end of Performance Period
”, “
Capital Ratio Performance Threshold
”, “
Remedies
” and the following protection-based vesting provision).
Up to a total of fifty percent of your award that would otherwise be distributable to you as of any vesting date (“At Risk PSUs”) may be cancelled if the Chief Executive Officer of JPMorgan Chase (“CEO”) determines in his or her sole discretion that cancellation of all or portion of the At Risk PSUs 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, total net revenue, 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-tax pre-provision income at the Firm level is negative.
•
RSU 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.
•
The Firm does not meet the Firmwide Financial Threshold.
For avoidance of doubt, cancellation of the At Risk PSUs, in whole or part, for one or more of the above factors may occur prior to the end of the Performance Period and the maximum number of At Risk PSUs subject to cancellation prior to the end of the Performance Period will be up to fifty percent of the Target Award Number.
In the event that your employment terminates due to “Job Elimination,” ”Full Career Eligibility,” “Government Office” or “Disability” thereby entitling you to continued vesting in your award, (or potentially acceleration due to satisfaction of the Government Office Requirements), the cancellation circumstances described above will continue to apply.
Any determination above with respect to protection-based vesting provisions 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, all such determinations shall be made by the Committee.
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Number of Performance Shares Units at the end of Performance Period
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Subject to any cancellation in whole or part of your award pursuant to these terms and conditions. The number of PSUs at the end of the Performance Period will be the sum of the number of the Annual PSUs divided by the number of years in the Performance Period.
The number of PSUs determined above will be subject to the Qualitative Performance Factor (as detailed below), which if the Committee determines that such an adjustment is appropriate, will be applied following the end of each year during the Performance Period, to adjust downward the number of Annual PSUs. Additionally, the Committee, in its discretion, may make a qualitative performance assessment based on the entire three year Performance Period and apply Qualitative Performance Factor to the entire number of PSUs determined above.
See sections captioned “Calculation of Relative Performance” and ”Definitions”.
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Reinvested Dividend Equivalent Share Units
|
Delivery of vested shares of Common Stock to your account will be made not later than the date specified in the last sentence of the subsection captioned “Section 409A Compliance”.
This award is not eligible for reinvested dividend equivalent share units.
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Holding Requirement
|
The net number of shares of Common Stock (after tax and all other lawful withholdings) in which you have vested, if any, as of the any vesting date will be held in an account in your name with restrictions preventing you from transferring, assigning, selling, pledging or otherwise encumbering such shares for: (i) a twelve month period measured from each vesting date; and (ii) a two year period for such shares vesting on March 25th, 2021, with the holding periods running concurrently. Such restrictions shall only lapse, prior to the expiration of the holding period, in the event of your death or for an accelerated distribution for ethics or conflict reasons. See section captioned, “Death” and subsection captioned, “Accelerated Distribution for Ethics or Conflict Reasons Resulting From Employment by a Government Entity.”
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Calculation of Performance Ranking
|
For purposes of the Performance Ranking, the Ranking of the Firm and of each Performance Company for each year in the Performance Period shall be determined and calculated by the Calculation Agent, using the definitions of “Annual PSUs,” ”ROTCE,” ”Average Tangible Common Equity,” (if otherwise applicable) “Firm Reported ROTCE” and “Performance Table” (including its footnote) as set forth in the Definitions section of these terms and conditions. See section captioned “
Definitions
”. Except for Firm Reported ROTCE, calculations will be expressed as a decimal to the second place (i.e. xx.yy%). See section captioned, “
Definitions--Performance Table
” in the event of a tie. All performance based calculations as set forth herein are binding and conclusive on you and your successors.
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Capital Ratio Performance Threshold
|
Unvested PSUs
are subject to reduction if the Firm’s fully phased-in Common Equity Tier 1 (CET1) capital ratio at year end falls below a predetermined threshold of 7.5%.
•
If the Firm’s CET1 capital ratio at year end is below this predetermined threshold, PSU annual tranches referencing that specific performance year will be subject to downward adjustment by the CMDC
•
The CMDC may reduce up to 100% of each impacted annual tranche
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Qualitative Performance
|
Determination
of Qualitative Performance Factor. Annually during the Performance Period, the Committee will formally assess your qualitative performance based on four broad categories: (1) Client/Customer Focus; (2) Risk, Controls & Conduct; (3) Teamwork & Leadership; and (4) Business Results. If the Committee determines that your performance “Meets” expectations, no downward adjustment to your Annual PSUs for that year shall take place (and the Qualitative Performance Factor shall be 100%). If the Committee determines that your performance did “Not Meet” expectations, the Committee shall determine whether a downward adjustment is appropriate, and if so, to what extent. A downward adjustment could result in a Qualitative Performance Factor of between 0% and 99%, depending on the circumstances. During the Performance Period, a 0% Performance Factor for each year in the Performance Period would reduce Annual PSUs to zero, resulting in the cancellation of award with no shares vesting.
Additionally, the Committee may, in its discretion, may make such assessment of your qualitative performance based on your performance during the entire three year Performance Period and apply the Qualitative Performance Factor to the entire number of PSUs determined under section captioned “Number of Performance Share Units at the end of the Performance Period.” In the case of a Qualitative Performance Factor of 0%, the award would be cancelled.
The assessment will have regard to feedback solicited from the Chair of the UK Remuneration Committee to incorporate qualitative performance against local regulatory responsibilities as a “Senior Manager” of the relevant CIB UK-regulated entities.
The Qualitative Performance Factor shall only be applied, if applicable, during your employment with the Firm, or as soon as administratively practical.
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Bonus
Recoupment
|
In consideration of the grant of this award, you agree that you are subject to the JPMorgan Chase Bonus Recoupment Policy (or successor policy) as in effect from time to time
as it applies both to the cash incentive compensation awarded to you for performance year 2017 and to this award. You can access this policy as currently in effect through the following link:
http://www.jpmorganchase.com/corporate/About-JPMC/corporate-governance-principles.htm#recoupment
For the avoidance of doubt, nothing in these terms and conditions in any way limits the rights of the Firm under the JPMorgan Chase Bonus Recoupment Policy (or successor policy).
|
EMEA Malus and Clawback Policy - Identified Staff
|
In consideration of this award, and without prejudice to any other provision of this Award Agreement, you agree that you are subject to the JPMorgan Chase EMEA Malus and Clawback Policy - Identified Staff (and any applicable supplement(s) to that policy) or successor policy as in effect from time to time. You can access this policy as currently in effect from time to time in My Rewards through the following link:
https://myrewards.jpmchase.net/myrewards
|
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. In addition, following your termination of employment, you will not, without prior written authorization, access the Firm’s private and internal information through telephonic, intranet or internet means. “Confidential information” shall have the same meaning for the Award Agreement as it has in the JPMorgan Chase Code of Conduct.
Nothing in this award precludes you from reporting to the Firm’s management or directors, the government, a regulator, a self-regulatory agency, your attorneys or a court, conduct you believe to be in violation of the law or concerns of any known or suspected Code of Conduct violation. It is also not intended to prevent you from responding truthfully to questions or requests from the government, a regulator or in a court of law.
|
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 or become subject to a notice period after the Grant Date, 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 180-day advance notice period described under the subsection captioned “-- Full Career Eligibility” in the event you wish to terminate employment under that same subsection.
|
Remedies
|
|
Ø
Cancellation
|
In addition to the cancellation provisions described under the sections captioned “
Bonus Recoupment
”, “
Protection-Based Vesting
”, “
EMEA Malus and Clawback Policy - Identified Staff
”, “
Qualitative Performance Factor
,” “
Termination of Employment
” and “
Recapture Provisions
”, your outstanding PSUs under this award may be cancelled if the Firm in its sole discretion determines that:
•
you have failed to comply with any of the advance notice/cooperation requirements or employment restrictions applicable to your termination of employment, or
•
you have failed to return the required forms specified under the section captioned “
Release/Certification
” by the specified deadline, or
•
you have violated any of the provisions as set forth above in the section captioned “
Your Obligations
”.
To the extent provided under the subsection captioned “--Amendment” below, JPMorgan Chase reserves the right to suspend vesting of this award and/or distribution of shares under this award, including, without limitation, during any period that JPMorgan Chase is evaluating whether this award is subject to cancellation and/or recovery and/or whether the conditions for distributions of shares under this award are satisfied. The Firm is not responsible for any price fluctuations during any period of suspension and, if applicable, suspended units will be reinstated consistent with Plan administration procedures. See also “
Administrative Provisions
-No Ownership Rights.”
|
Ø
Recovery
|
In addition to cancellation of outstanding PSUs, you may be required to pay the Firm up to an amount equal to the Fair Market Value (determined as of the applicable vesting date or acceleration date) of the gross number of shares of Common Stock previously distributed, including vested shares subject to the Holding Requirements, under this award as follows:
•
Payment may be required with respect to any shares of Common Stock within the three year period prior to a notice-of-recovery under this section, if the Firm in its sole discretion determines that:
◦
you committed a fraudulent act, or engaged in knowing and willful misconduct related to your employment;
◦
you violated any of the provisions as set forth above in the section captioned “
Your Obligations
”; or
◦
you violated the employment restrictions set forth in the subsection Full Career Eligibility following the termination of your employment.
•
In addition, payment may be required with respect to any shares distributed within the one year period prior to notice-of-recovery under this section, if the Firm in its sole discretion determines appropriate pursuant to the provisions in the section captioned “
Recapture Provisions
.”
Notice-of-recovery under this subsection is a written (including electronic) notice from the Firm to you either requiring payment under this subsection or stating that JPMorgan Chase is evaluating requiring payment under this subsection. Without limiting the foregoing, notice-of-recovery will be deemed provided if the Firm makes a good faith attempt to provide written (including electronic) notice at your last known address maintained in the Firm’s employment records. For the avoidance of doubt, a notice-of-recovery that the Firm is evaluating requiring payment under this subsection shall preserve JPMorgan Chase’s rights to require payment as set forth above in all respects and the Firm shall be under no obligation to complete its evaluation other than as the Firm may determine in its sole discretion.
For purposes of this subsection, shares distributed under this award include shares withheld for tax purposes. However, it is the Firm’s intention that you only be required to pay the amounts under this subsection with respect to shares that are or may be retained by you following a determination of tax liability and that you will not be required to pay amounts with respect to shares representing irrevocable tax withholdings or tax payments previously made (whether by you or the Firm) that you will not be able to recover, recapture or reclaim (including as a tax credit, refund or other benefit). Accordingly, JPMorgan Chase will not require you to pay any amount that the Firm or its nominee in his or her sole discretion determines is represented by such withholdings or tax payments.
Payment may be made in shares of Common Stock or in cash. You agree that any 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.
Nothing in the section in any way limits your obligations under “
Bonus Recoupment
” and “
EMEA Malus and Clawback Policy and Policy Supplement - Identified Staff
”.
|
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 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 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 and shares that vest under this award, and (iii) retaining shares that vest under this award until you pay any taxes associated with the award and vested shares directly to the competent authorities.
Right to Set Off:
Although the Firm expects to settle this award in share(s) of Common Stock as of the applicable vesting date, as set forth in your Award Agreement, the
Firm may, to the maximum extent permitted by applicable law (including Section 409A of the Code to the extent it is applicable to you), retain for itself funds or the Common Stock resulting from any vesting of this award to satisfy any obligation or debt that you owe to the Firm. Notwithstanding any account agreement with the Firm to the contrary, the Firm will not recoup or recover any amount owed from any funds or unrestricted securities held in your name and maintained at the Firm pursuant to such account agreement to satisfy any obligation or debt or obligation owed by you under this award without your consent. This restriction on the Firm does not apply to accounts described and authorized in “No Ownership Rights” described below.
No Ownership Rights
: PSUs 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 number of PSUs have been determined, if any, and have vested and any applicable restrictions (other than Holding Requirement) have lapsed. 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 or book-entry account with our stock plan administrator and/or transfer agent and deliver to that account any vested shares derived from the award.
With respect to any applicable vesting date, JPMorgan Chase may impose for any reason, as of such vesting date for such period as it may specify in its sole discretion, 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, pledging, assignment, hedging or encumbrance of such shares of Common Stock. By accepting this award, you acknowledge that during such specified period should there be a determination that the cancellation or recovery provisions of this award apply, then you agree that any shares subject to such restrictions (notwithstanding the limitation set forth in the Right to Set Off section above) may be cancelled in whole or part. (See sections captioned “
Protection-Based Vesting
”, “
Qualitative Performance Factor
”, “
Bonus Recoupment
”, “
Recapture Provisions
”, “
Termination of Employment
” and “
Remedies
”, as well as the subsection captioned “-Amendment” permitting suspension of vesting.)
|
|
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 hereunder are intended to comply with Section 409A of the Code, and the Award Agreement, 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 with the exception of death) and if any units/shares under this award represent deferred compensation as defined in Section 409A and such shares are distributable (under the terms of this award) within six months following, and as a result of your separation from service, then those shares will be delivered during 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 the vesting date set forth in your Award Agreement shall be a payment date for purposes of distributing the vested
portion of the award.
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 PSUs outstanding under this award for such corporate events.
|
|
Other Equitable Adjustments:
Except for the Qualitative Performance Factor, the Committee may make adjustments (up or down) to the award as it deems to be equitable, to maintain the intended economics of the award in light of changed circumstances, which may include unusual or non-recurring events affecting the Firm (or the Performance Companies) or its financial statements in each case resulting from changes in accounting methods, practices or policies, changes in capital structure by reason of legal or regulatory requirements and such other changed circumstances, as the Committee may deem appropriate.
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 and conditions 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 contemplated hereunder by the Committee, the Firm, the Director of Human Resources or their respective delegates or nominees shall be binding on all parties.
Notwithstanding anything herein to the contrary, the determinations of the Director of Human Resources, the Firm, the Committee and their respective delegates and nominees under the Plan and the Award Agreements are not required to be uniform. By way of clarification, the Committee, the Firm, the Director of Human Resources and their respective delegates and nominees shall be entitled to make non-uniform and selective determinations and modifications under Award Agreements and the Plan.
|
|
Amendment
: The Committee or its nominee 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/or (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 if it is applicable to you. This Award Agreement may not be amended except in writing signed by the Director of 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 of 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 the award, the Firm may accelerate the distribution of all or part of your outstanding award effective on or before the required divestiture date and waive the Holding Requirement; provided that no accelerated distribution shall occur if the Firm determines that such acceleration will violate Section 409A of the Code. Accelerated distribution under this paragraph does not impact the dates as set forth in the “Recovery” section above. The time period for recovery shall be determined by the originally scheduled vesting date or distribution date prior to any acceleration event.
If you have voluntarily terminated your employment and have satisfied the requirements of the section captioned “Government Office Requirements”, 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 the subsections entitled “Job Elimination” or “Full Career Eligibility,” then acceleration shall apply, to the extent required, to the full outstanding award. Subject to the two foregoing sections, the number of shares of Common Stock to be received on acceleration shall be determined using the methodology set forth under the section captioned “
Death
.”
|
|
To the extent you have vested shares under this award subject to the Holding Requirement and become subject to divestiture requirement as forth herein, the Firm may waive the holding period to the extent required.
Notwithstanding an accelerated distribution or waiver of the Holding Requirement 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 vesting period and shares had been distributed as scheduled as of each vesting date, including, but not limited to, repayment obligations set forth in the section captioned “Remedies” and employment restrictions in the sections captioned “Protection-Based Vesting” and “Government Office” and the subsection “Full Career Eligibility”.
|
|
Use of Personal Data:
By accepting this award, you have acknowledged that the Firm may process your personal data (including sensitive personal data) for purposes, including but not limited to (i) determining your compensation, (ii) payroll activities, including, but not limited to, tax withholding and regulatory reporting, which tax and regulatory reporting and withholding may include, but is not limited to, the United States and its political subdivisions, (if not the United States) your work country and its political subdivisions (including countries to which you travel on Firm business) and your country of residence or nationality,(iii) registration of shares, (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 and/or other bodies, including regulators, supervisory bodies, law enforcement and other government agencies. You are acknowledging and agreeing that your personal data will be transferred to and processed in countries and locations that do not have the same data privacy laws and statutory protection for personal data as your work country, country of residence, or country of nationality. If your personal data is subject to data privacy laws or statutory protection for personal data and they so provide for termination of the foregoing authorization, you may terminate the authorization at any time except with respect to tax and regulatory reporting
and subject always to the Firm’s legal and regulatory obligations. In the event you terminate this authorization, 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 under the Plan, you agree (and have agreed) 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 under the Plan, you agree (and have agreed) 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 or any other 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.
Non-transferability:
Neither this award or any other outstanding awards of restricted stock units or of performance based share units, nor your interests or rights in any such awards, shall be assigned, pledged, transferred, hedged 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.
|
Definitions
|
“Annual PSUs”
means the number of PSUs determined by multiplying the Target Award Number (after giving effect to any cancellation thereof, in whole or in part) by the Target Award Percentage corresponding to the Firm’s Performance Ranking for each applicable performance year (both percentage and ranking, as set forth in the footnote to the Performance Table); provided that if the Firm Reported ROTCE for any completed calendar year in the Performance Period either equals or exceeds 17% or is less than 6%, one hundred fifty percent or zero, respectively as the case may be, shall be substituted for that year’s Target Award Percentage in calculating the number of Annual PSUs for that year. For avoidance of doubt, any cancellation of this award (in whole or in part) during the Performance Period will reduce the Target Award Number.
“Average Tangible Common Equity”
means annual average common stockholders’ equity less annual average goodwill and annual average identifiable intangible assets. Annual averages of the components of Average Tangible Common Equity will be calculated using quarterly balances as reported in publicly available financial disclosures. In the event that quarterly balances are not available, annual year end balances will be used.
This calculation is used solely for purposes of the Performance Ranking.
|
|
“Calculation Agent”
means a third party entity not owned or controlled by the Firm, such as an accounting or consulting firm, retained from time to time by the Director of Human Resources or his/her delegate.
“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 JPMorgan Chase Code of Conduct or other Firm policies or misconduct related to your duties to the Firm (other than immaterial and inadvertent violations or misconduct), (v) grossly 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 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 (such 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, payment servicing or processing or merchant services,
•
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 the Director of Human Resources or nominee determines in his or her sole discretion constitute financial services.
|
|
“Firmwide Financial Threshold”
means a cumulative return on tangible common equity for calendar years 2018, 2019 and 2020 of not less than 15%. Cumulative return on tangible common equity means (i) the sum of the Firm’s reported net income for all three years, divided by (ii) reported year-end tangible equity averaged over the three years.
“Firm Reported ROTCE”
means the Firm’s percentage return on tangible common equity for each year in the Performance Period (as calculated for use in its publicly available year-end financial disclosures without taking into account any rounding conventions used for financial reporting purposes).
“Government Office”
means (i) a full-time position in an elected or appointed office in local, state, or federal government (including equivalent positions outside the U.S. or in a supranational organization), not reasonably anticipated to be a full-career position, or (ii) conducting a bona fide full-time campaign for such an elective public office after formally filing for candidacy, where it is customary and reasonably necessary to campaign full-time for the office.
|
|
“Line of Business”
means a business unit of the Firm (or one or more business units designated below under the definition “Line of Business Financial Threshold” of the Corporate Investment Bank). All Corporate Functions (including the functions of the Chief Investment Office) are considered a single Line of Business.
“Line of Business Financial Threshold”
means the financial threshold set forth below: for the following Lines of Business based on the Firm’s management reporting system:
|
|
“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.
Not-for-Profit Organization
shall also mean entities outside the United States exempt from local and national tax laws because they are organized and operated exclusively for purposes identical to those applicable to Section 501(c)(3) organization.
“Performance Companies”
mean the following institutions which have business activities that overlap with a significant portion of the Firm’s revenue mix: Bank of America Corporation, Barclays PLC, Capital One Financial Corporation, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group, Inc., HSBC Holdings PLC, Morgan Stanley, Wells Fargo & Company, and UBS Group AG.
If, during the Performance Period, one or more Performance Companies shall merge, engage in a spin-off or otherwise experience a material change in its revenue mix or business activities or its existence or its primary businesses shall terminate or cease due to receivership, bankruptcy, sale, or otherwise, then the Committee may eliminate such institution from the list of Performance Companies or make such other equitable adjustments, such as adding an acquirer or a new company to the list of Performance Companies, as it deems appropriate, with any such changes having effect for purposes of all calculations hereunder on a prospective basis from the date the applicable change is made.
“Performance Period”
means calendar years 2018, 2019 and 2020.
|
Firm Reported ROTCE (annual performance)
|
|
Target Award Percentage
|
|
Performance Ranking
1
(annual performance)
|
|
Target Award Percentage
1
|
≥17
%
|
|
150%
|
1st Quartile
|
|
150%
|
|
16% to <17%
|
|
Pay by relative
ROTCE scale
|
2nd Quartile
|
|
100% to 125%
|
|
<6%
|
|
0%
|
3rd Quartile
|
|
70% to 100%
|
|
|
|
|
4th Quartile
|
|
25% to 55%
|
1.
|
The
following sets forth the precise Target Award Percentage corresponding to the Firm’s performance ranking (when compared to Performance Companies): Top 3 = 150%; #4 = 125%; #5 = 112.5%; #6 = 100%; #7 = 100%; #8 = 85%; #9 =70%; #10 = 55%; #11 = 40%; and #12 = 25%.
|
•
|
At least 60 days’ advance written notice of your intention to resign to accept or pursue a Government Office (see section captioned “Definitions”), 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.
|
•
|
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.
|
•
|
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. (See section captioned “Definitions.”)
|
•
|
50% if you have at least 3 but less than 4 years of continuous service,
|
•
|
75% if you have at least 4 but less than 5 years of continuous service, or
|
•
|
100% if you have 5 or more years of continuous service.
|
•
|
You must remain in a non-elective Government Office for two or more years after your employment with the Firm terminates to be eligible to receive the CV Award; provided that if your non-elective Government Office is for a period less than two years, you will be eligible to receive the CV Award if it has a vesting date during your period of Government Service; or
|
Year ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|||||
(in millions, except ratios)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
Excluding interest on deposits
|
|
|
|
|
|
||||||||||
Income from continuing operations before income taxes
|
$
|
35,900
|
|
$
|
34,536
|
|
$
|
30,702
|
|
$
|
30,699
|
|
$
|
26,675
|
|
Fixed charges:
|
|
|
|
|
|
||||||||||
Interest expense
|
11,418
|
|
8,462
|
|
6,211
|
|
6,264
|
|
7,610
|
|
|||||
One-third of rents, net of income from subleases
(a)
|
534
|
|
540
|
|
535
|
|
624
|
|
616
|
|
|||||
Total fixed charges
|
11,952
|
|
9,002
|
|
6,746
|
|
6,888
|
|
8,226
|
|
|||||
Add: Equity in undistributed loss of affiliates/Less: Equity in undistributed income of affiliates
(b)
|
1,352
|
|
362
|
|
423
|
|
233
|
|
112
|
|
|||||
Income from continuing operations before income taxes and fixed charges, excluding capitalized interest
|
$
|
49,204
|
|
$
|
43,900
|
|
$
|
37,871
|
|
$
|
37,820
|
|
$
|
35,013
|
|
Fixed charges, as above
|
$
|
11,952
|
|
$
|
9,002
|
|
$
|
6,746
|
|
$
|
6,888
|
|
$
|
8,226
|
|
Ratio of earnings to fixed charges
|
4.12
|
|
4.88
|
|
5.61
|
|
5.49
|
|
4.26
|
|
|||||
Including interest on deposits
|
|
|
|
|
|
||||||||||
Fixed charges as above
|
$
|
11,952
|
|
$
|
9,002
|
|
$
|
6,746
|
|
$
|
6,888
|
|
$
|
8,226
|
|
Add: Interest on deposits
|
2,857
|
|
1,356
|
|
1,252
|
|
1,633
|
|
2,067
|
|
|||||
Total fixed charges and interest on deposits
|
$
|
14,809
|
|
$
|
10,358
|
|
$
|
7,998
|
|
$
|
8,521
|
|
$
|
10,293
|
|
Income from continuing operations before income taxes and fixed charges, excluding capitalized interest, as above
|
$
|
49,204
|
|
$
|
43,900
|
|
$
|
37,871
|
|
$
|
37,820
|
|
$
|
35,013
|
|
Add: Interest on deposits
|
2,857
|
|
1,356
|
|
1,252
|
|
1,633
|
|
2,067
|
|
|||||
Total income from continuing operations before income taxes, fixed charges and interest on deposits
|
$
|
52,061
|
|
$
|
45,256
|
|
$
|
39,123
|
|
$
|
39,453
|
|
$
|
37,080
|
|
Ratio of earnings to fixed charges
|
3.52
|
|
4.37
|
|
4.89
|
|
4.63
|
|
3.60
|
|
(a)
|
The proportion deemed representative of the interest factor.
|
(b)
|
Prior period amounts have been revised to conform with the current period presentation.
|
Year ended December 31,
|
|
|
|
|
|
|
|
|
|||||||
(in millions, except ratios)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
Excluding interest on deposits
|
|
|
|
|
|
||||||||||
Income from continuing operations before income taxes
|
$
|
35,900
|
|
$
|
34,536
|
|
$
|
30,702
|
|
$
|
30,699
|
|
$
|
26,675
|
|
Fixed charges:
|
|
|
|
|
|
||||||||||
Interest expense
|
11,418
|
|
8,462
|
|
6,211
|
|
6,264
|
|
7,610
|
|
|||||
One-third of rents, net of income from subleases
(a)
|
534
|
|
540
|
|
535
|
|
624
|
|
616
|
|
|||||
Total fixed charges
|
11,952
|
|
9,002
|
|
6,746
|
|
6,888
|
|
8,226
|
|
|||||
Add: Equity in undistributed loss of affiliates/Less: Equity in undistributed income of affiliates
(b)
|
1,352
|
|
362
|
|
423
|
|
233
|
|
112
|
|
|||||
Income from continuing operations before income taxes and fixed charges, excluding capitalized interest
|
$
|
49,204
|
|
$
|
43,900
|
|
$
|
37,871
|
|
$
|
37,820
|
|
$
|
35,013
|
|
Fixed charges, as above
|
$
|
11,952
|
|
$
|
9,002
|
|
$
|
6,746
|
|
$
|
6,888
|
|
$
|
8,226
|
|
Preferred stock dividends (pretax)
|
2,349
|
|
2,336
|
|
2,134
|
|
1,589
|
|
1,200
|
|
|||||
Fixed charges including preferred stock dividends
|
$
|
14,301
|
|
$
|
11,338
|
|
$
|
8,880
|
|
$
|
8,477
|
|
$
|
9,426
|
|
Ratio of earnings to fixed charges and preferred stock dividend requirements
|
3.44
|
|
3.87
|
|
4.26
|
|
4.46
|
|
3.71
|
|
|||||
Including interest on deposits
|
|
|
|
|
|
||||||||||
Fixed charges including preferred stock dividends, as above
|
$
|
14,301
|
|
$
|
11,338
|
|
$
|
8,880
|
|
$
|
8,477
|
|
$
|
9,426
|
|
Add: Interest on deposits
|
2,857
|
|
1,356
|
|
1,252
|
|
1,633
|
|
2,067
|
|
|||||
Total fixed charges including preferred stock dividends and interest on deposits
|
$
|
17,158
|
|
$
|
12,694
|
|
$
|
10,132
|
|
$
|
10,110
|
|
$
|
11,493
|
|
Income from continuing operations before income taxes and fixed charges, excluding capitalized interest, as above
|
$
|
49,204
|
|
$
|
43,900
|
|
$
|
37,871
|
|
$
|
37,820
|
|
$
|
35,013
|
|
Add: Interest on deposits
|
2,857
|
|
1,356
|
|
1,252
|
|
1,633
|
|
2,067
|
|
|||||
Total income from continuing operations before income taxes, fixed charges and interest on deposits
|
$
|
52,061
|
|
$
|
45,256
|
|
$
|
39,123
|
|
$
|
39,453
|
|
$
|
37,080
|
|
Ratio of earnings to fixed charges and preferred stock dividend requirements
|
3.03
|
|
3.57
|
|
3.86
|
|
3.90
|
|
3.23
|
|
(a)
|
The proportion deemed representative of the interest factor.
|
(b)
|
Prior period amounts have been revised to conform with the current period presentation.
|
December 31, 2017
Name
|
Organized Under
The Laws Of
|
JPMorgan Chase Bank, National Association
|
United States
|
Paymentech, LLC
|
United States
|
J.P. Morgan Treasury Technologies Corporation
|
United States
|
J.P. Morgan International Finance Limited
|
United States
|
Chase Paymentech Europe Limited
|
Ireland
|
JPMorgan Securities Japan Co., Ltd.
|
Japan
|
Chase Paymentech Solutions Inc.
|
Canada
|
J.P. Morgan Capital Holdings Limited
|
United Kingdom
|
J.P. Morgan Securities PLC
|
United Kingdom
|
J.P. Morgan Europe Limited
|
United Kingdom
|
J.P. Morgan International Bank Limited
|
United Kingdom
|
J.P. Morgan AG
|
Germany
|
JPMorgan Chase Holdings LLC
|
United States
|
J.P. Morgan Services India Private Limited
|
India
|
J.P. Morgan Ventures Energy Corporation
|
United States
|
JPMorgan Asset Management Holdings Inc.
|
United States
|
JPMorgan Distribution Services, Inc.
|
United States
|
JPMorgan Asset Management International Limited
|
United Kingdom
|
JPMorgan Asset Management Holdings (UK) Limited
|
United Kingdom
|
JPMorgan Asset Management (UK) 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 Investment Management Inc.
|
United States
|
J.P. Morgan Broker-Dealer Holdings Inc.
|
United States
|
J.P. Morgan Securities LLC
|
United States
|
J.P. Morgan Equity Holdings, Inc.
|
United States
|
Chase Bank USA, National Association
|
United States
|
Chase Card Funding LLC
|
United States
|
Chase Issuance Trust
|
United States
|
Chase BankCard Services, Inc.
|
United States
|
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.
|
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 control over financial reporting, or caused such internal control 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;
|
(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
|
(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
|
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.
|
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.
|
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 control over financial reporting, or caused such internal control 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;
|
(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
|
(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
|
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.
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of JPMorgan Chase & Co.
|
Date:
|
February 27, 2018
|
|
By:
|
/s/
|
James Dimon
|
|
|
|
|
|
|
|
|
|
|
|
James Dimon
|
|
|
|
|
|
Chairman and Chief Executive Officer
|
Date:
|
February 27, 2018
|
|
By:
|
/s/
|
Marianne Lake
|
|
|
|
|
|
|
|
|
|
|
|
Marianne Lake
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|