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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended Commission file 
March 31, 2020
number1-5805
June 30, 2019 number 1-5805
JPMorgan Chase & Co.
(Exact name of registrant as specified in its charter)
Delaware 13-2624428
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. employer
identification no.)
    
383 Madison Avenue,  
383 Madison Avenue, New York, New York10179
(Address of principal executive offices) (ZipNew York,New York10179(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code: (212) 270-6000
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stockJPMThe New York Stock Exchange
Depositary Shares, each representing interestsa one-four hundredth interest in shares of 5.45% Non-Cumulative Preferred Stock Series PJPM PR AThe New York Stock Exchange
Depositary Shares representing interests in shares of 6.30% Non-Cumulative Preferred Stock Series WJPM PR EThe New York Stock Exchange
Depositary Shares representing interests in shares of 6.125% Non-Cumulative Preferred Stock Series YJPM PR FThe New York Stock Exchange
Depositary Shares representing interests in sharesa share of 6.10% Non-Cumulative Preferred Stock, Series AAJPM PR GThe New York Stock Exchange
Depositary Shares, each representing interestsa one-four hundredth interest in sharesa share of 6.15% Non-Cumulative Preferred Stock, Series BBJPM PR HThe New York Stock Exchange
Depositary Shares, each representing interestsa one-four hundredth interest in sharesa share of 5.75% Non-Cumulative Preferred Stock, Series DDJPM PR DThe New York Stock Exchange
Depositary Shares, each representing interestsa one-four hundredth interest in sharesa share of 6.00% Non-Cumulative Preferred Stock, Series EEJPM PR CThe New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.75% Non-Cumulative Preferred Stock, Series GGJPM PR JThe New York Stock Exchange
Alerian MLP Index ETNs due May 24, 2024AMJNYSE Arca, Inc.
Guarantee of Callable Step-Up FRNsFixed Rate Notes due April 26, 2028 of JPMorgan Chase Financial Company LLCJPM/28The New York Stock Exchange
Guarantee of Cushing 30 MLP Index ETNs due June 15, 2037 of JPMorgan Chase Financial Company LLCPPLNNYSE Arca, Inc.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒

Accelerated filer☐
    
Non-accelerated filer☐Smaller reporting company☐
    
  Emerging growth company☐
    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

 
Number of shares of common stock outstanding as of June 30, 2019: 3,197,484,989March 31, 2020: 3,047,022,877
 


FORM 10-Q
TABLE OF CONTENTS
Part I – Financial information
Page
Item 1.
Financial Statements.
 
 
Consolidated Financial Statements – JPMorgan Chase & Co.:
 
 
Consolidated statements of income (unaudited) for the three and six months ended June 30,March 31, 2020 and 2019 and 2018
80
 
Consolidated statements of comprehensive income (unaudited) for the three and six months ended June 30,March 31, 2020 and 2019 and 2018
81
 
Consolidated balance sheets (unaudited) at June 30, 2019March 31, 2020 and December 31, 20182019
82
 
Consolidated statements of changes in stockholders’ equity (unaudited) for the three ended March 31, 2020 and six months ended June 30, 2019 and 2018
83
 
Consolidated statements of cash flows (unaudited) for the sixthree months ended June 30,March 31, 2020 and 2019 and 2018
84
 
Notes to Consolidated Financial Statements (unaudited)
85
 
Report of Independent Registered Public Accounting Firm
165169
 
Consolidated Average Balance Sheets, Interest and Rates (unaudited) for the three months ended June 30,March 31, 2020 and 2019 and 2018
166170
 
Glossary of Terms and Acronyms and Line of Business Metrics
168171
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
 
 
Consolidated Financial Highlights
3
 
Introduction
4
 
Executive Overview
5
 
Consolidated Results of Operations
1012
 
Consolidated Balance Sheets and Cash Flows Analysis
15
 
Off-Balance Sheet Arrangements
18
 
Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures
19
 
Business Segment Results
21
 
Enterprise-WideFirmwide Risk Management
4338
 
Capital Risk Management
4439
 
Liquidity Risk Management
4945
 
Consumer Credit Portfolio
5552
 
Wholesale Credit Portfolio
6056
 
Investment Portfolio Risk Management
6966
 
Market Risk Management
7067
 
Country Risk Management
7572
Operational Risk Management
73
Estimations and Model Risk Management
74
 
Critical Accounting Estimates Used by the Firm
7675
 
Accounting and Reporting Developments
78
 
Forward-Looking Statements
79
Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
176180
Item 4.
Controls and Procedures.
176180
Part II – Other information
 
Item 1.
Legal Proceedings.
176180
Item 1A.
Risk Factors.
176180
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
176181
Item 3.
Defaults Upon Senior Securities.
177182
Item 4.
Mine Safety Disclosures.
177182
Item 5.
Other Information.
177182
Item 6.
Exhibits.
177182


JPMorgan Chase & Co.
Consolidated financial highlights (unaudited)
As of or for the period ended, (in millions, except per share,
ratio, headcount data and where otherwise noted)

As of or for the period ended, (in millions, except per share,
ratio, headcount data and where otherwise noted)

  Six months ended June 30, 
As of or for the period ended, (in millions, except per share, ratio, headcount data and where otherwise noted)

 
2Q19
1Q19
4Q18
3Q18
2Q18
 2019
2018
 1Q20
4Q19
3Q19
2Q19
1Q19
Selected income statement dataSelected income statement data    Selected income statement data 
Total net revenueTotal net revenue$28,832
$29,123
$26,109
$27,260
$27,753
 $57,955
$55,660
 Total net revenue$28,251
$28,331
$29,341
$28,832
$29,123
Total noninterest expenseTotal noninterest expense16,341
16,395
15,720
15,623
15,971
 32,736
32,051
 Total noninterest expense16,850
16,339
16,422
16,341
16,395
Pre-provision profit(a)Pre-provision profit(a)12,491
12,728
10,389
11,637
11,782
 25,219
23,609
 Pre-provision profit(a)11,401
11,992
12,919
12,491
12,728
Provision for credit lossesProvision for credit losses1,149
1,495
1,548
948
1,210
 2,644
2,375
 Provision for credit losses8,285
1,427
1,514
1,149
1,495
Income before income tax expenseIncome before income tax expense11,342
11,233
8,841
10,689
10,572
 22,575
21,234
 Income before income tax expense3,116
10,565
11,405
11,342
11,233
Income tax expenseIncome tax expense1,690
2,054
1,775
2,309
2,256
 3,744
4,206
 Income tax expense251
2,045
2,325
1,690
2,054
Net incomeNet income$9,652
$9,179
$7,066
$8,380
$8,316
 $18,831
$17,028
 Net income$2,865
$8,520
$9,080
$9,652
$9,179
 
Earnings per share dataEarnings per share data    Earnings per share data 
Net income: BasicNet income: Basic$2.83
$2.65
$1.99
$2.35
$2.31
 $5.48
$4.69
 Net income: Basic$0.79
$2.58
$2.69
$2.83
$2.65
Diluted Diluted2.82
2.65
1.98
2.34
2.29
 5.46
4.66
  Diluted0.78
2.57
2.68
2.82
2.65
Average shares: BasicAverage shares: Basic3,250.6
3,298.0
3,335.8
3,376.1
3,415.2
 3,274.3
3,436.7
 Average shares: Basic3,095.8
3,140.7
3,198.5
3,250.6
3,298.0
Diluted Diluted3,259.7
3,308.2
3,347.3
3,394.3
3,434.7
 3,283.9
3,457.1
  Diluted3,100.7
3,148.5
3,207.2
3,259.7
3,308.2
 
Market and per common share dataMarket and per common share data    Market and per common share data 
Market capitalizationMarket capitalization357,479
328,387
319,780
375,239
350,204
 357,479
350,204
 Market capitalization274,323
429,913
369,133
357,479
328,387
Common shares at period-endCommon shares at period-end3,197.5
3,244.0
3,275.8
3,325.4
3,360.9
 3,197.5
3,360.9
 Common shares at period-end3,047.0
3,084.0
3,136.5
3,197.5
3,244.0
Book value per shareBook value per share73.88
71.78
70.35
69.52
68.85
 73.88
68.85
 Book value per share75.88
75.98
75.24
73.88
71.78
Tangible book value per share (“TBVPS”)(a)
Tangible book value per share (“TBVPS”)(a)
59.52
57.62
56.33
55.68
55.14
 59.52
55.14
 
Tangible book value per share (“TBVPS”)(a)
60.71
60.98
60.48
59.52
57.62
Cash dividends declared per shareCash dividends declared per share0.80
0.80
0.80
0.80
0.56
 1.60
1.12
 Cash dividends declared per share0.90
0.90
0.90
0.80
0.80
 
Selected ratios and metricsSelected ratios and metrics    Selected ratios and metrics 
Return on common equity (“ROE”)(b)
Return on common equity (“ROE”)(b)
16%16%12%14%14% 16%14% 
Return on common equity (“ROE”)(b)
4%14%15%16%16%
Return on tangible common equity (“ROTCE”)(a)(b)
Return on tangible common equity (“ROTCE”)(a)(b)
20
19
14
17
17
 20
18
 
Return on tangible common equity (“ROTCE”)(a)(b)
5
17
18
20
19
Return on assets(b)
Return on assets(b)
1.41
1.39
1.06
1.28
1.28
 1.40
1.32
 
Return on assets(b)
0.40
1.22
1.30
1.41
1.39
Overhead ratioOverhead ratio57
56
60
57
58
 56
58
 Overhead ratio60
58
56
57
56
Loans-to-deposits ratioLoans-to-deposits ratio63
64
67
65
65
 63
65
 Loans-to-deposits ratio55
61
62
63
64
Liquidity coverage ratio (“LCR”) (average)Liquidity coverage ratio (“LCR”) (average)113
111
113
115
115
 113
115
 Liquidity coverage ratio (“LCR”) (average)114
116
115
113
111
Common equity Tier 1 (“CET1”) capital ratio(c)
Common equity Tier 1 (“CET1”) capital ratio(c)
12.2
12.1
12.0
12.0
12.0
 12.2
12.0
 
Common equity Tier 1 (“CET1”) capital ratio(c)
11.5
12.4
12.3
12.2
12.1
Tier 1 capital ratio(c)
Tier 1 capital ratio(c)
14.0
13.8
13.7
13.6
13.6
 14.0
13.6
 
Tier 1 capital ratio(c)
13.3
14.1
14.1
14.0
13.8
Total capital ratio(c)
Total capital ratio(c)
15.8
15.7
15.5
15.4
15.5
 15.8
15.5
 
Total capital ratio(c)
15.5
16.0
15.9
15.8
15.7
Tier 1 leverage ratio(c)
Tier 1 leverage ratio(c)
8.0
8.1
8.1
8.2
8.2
 8.0
8.2
 
Tier 1 leverage ratio(c)
7.5
7.9
7.9
8.0
8.1
Supplementary leverage ratio (“SLR”)6.4
6.4
6.4
6.5
6.5
 6.4
6.5
 
Supplementary leverage ratio (“SLR”)(c)
Supplementary leverage ratio (“SLR”)(c)
6.0
6.3
6.3
6.4
6.4
 
Selected balance sheet data (period-end)Selected balance sheet data (period-end)    Selected balance sheet data (period-end) 
Trading assetsTrading assets$523,373
$533,402
$413,714
$419,827
$418,799
 $523,373
$418,799
 Trading assets$548,580
$411,103
$495,875
$523,373
$533,402
Investment securities307,264
267,365
261,828
231,398
233,015
 307,264
233,015
 
Investment securities, net of allowance for credit lossesInvestment securities, net of allowance for credit losses471,144
398,239
394,251
307,264
267,365
LoansLoans956,889
956,245
984,554
954,318
948,414
 956,889
948,414
 Loans1,015,375
959,769
945,218
956,889
956,245
Core loans908,971
905,943
931,856
899,006
889,433
 908,971
889,433
 
Average core loans905,786
916,567
907,271
894,279
877,640
 911,146
869,410
 
Total assetsTotal assets2,727,379
2,737,188
2,622,532
2,615,183
2,590,050
 2,727,379
2,590,050
 Total assets3,139,431
2,687,379
2,764,661
2,727,379
2,737,188
DepositsDeposits1,524,361
1,493,441
1,470,666
1,458,762
1,452,122
 1,524,361
1,452,122
 Deposits1,836,009
1,562,431
1,525,261
1,524,361
1,493,441
Long-term debtLong-term debt288,869
290,893
282,031
270,124
273,114
 288,869
273,114
 Long-term debt299,344
291,498
296,472
288,869
290,893
Common stockholders’ equityCommon stockholders’ equity236,222
232,844
230,447
231,192
231,390
 236,222
231,390
 Common stockholders’ equity231,199
234,337
235,985
236,222
232,844
Total stockholders’ equityTotal stockholders’ equity263,215
259,837
256,515
258,956
257,458
 263,215
257,458
 Total stockholders’ equity261,262
261,330
264,348
263,215
259,837
HeadcountHeadcount254,983
255,998
256,105
255,313
252,942
 254,983
252,942
 Headcount256,720
256,981
257,444
254,983
255,998
 
Credit quality metricsCredit quality metrics    Credit quality metrics 
Allowance for credit losses$14,295
$14,591
$14,500
$14,225
$14,367
 $14,295
$14,367
 
Allowances for loan losses and lending-related commitmentsAllowances for loan losses and lending-related commitments$25,391
$14,314
$14,400
$14,295
$14,591
Allowance for loan losses to total retained loansAllowance for loan losses to total retained loans1.39%1.43%1.39%1.39%1.41% 1.39%1.41% Allowance for loan losses to total retained loans2.32%1.39%1.42%1.39%1.43%
Allowance for loan losses to retained loans excluding purchased credit-impaired loans(d)
1.28
1.28
1.23
1.23
1.22
 1.28
1.22
 
Nonperforming assetsNonperforming assets$5,260
$5,616
$5,190
$5,034
$5,767
 $5,260
$5,767
 Nonperforming assets$6,421
$4,497
$5,343
$5,260
$5,616
Net charge-offsNet charge-offs1,403
1,361
1,236
1,033
1,252
 2,764
2,587
 Net charge-offs1,469
1,494
1,371
1,403
1,361
Net charge-off rateNet charge-off rate0.60%0.58%0.52%0.43%0.54% 0.59%0.56% Net charge-off rate0.62%0.63%0.58%0.60%0.58%
Effective January 1, 2020, the Firm adopted the Financial Instruments – Credit Losses (“CECL”) accounting guidance. Refer to Note 1 for further information.
(a)Pre-provision profit, TBVPS and ROTCE are each non-GAAP financial measures. For a further discussion of these measures, referRefer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 19–20.20 for a further discussion of these measures.
(b)Quarterly ratios are based upon annualized amounts.
(c)The Basel III capital rules became fully phased-in effective January 1, 2019. During 2018,As of March 31, 2020, the required capital measures were subject toreflect the transitional rules and as of December 31, 2018 and September 30, 2018, were the same on a fully phased-in and on a transitional basis. For additional information on these measures, referCECL capital transition provisions. Refer to Capital Risk Management on pages 85-9485-92 of JPMorgan Chase’s 20182019 Form 10-K and pages 44–4839–44 of this Form 10-Q.10-Q for additional information on these measures.
(d)Excludes the impact of residential real estate purchased credit-impaired (“PCI”) loans, a non-GAAP financial measure. For a further discussion of these measures, refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 19–20, and the Allowance for credit losses on pages 67–68.


INTRODUCTION
The following is Management’s discussion and analysis of the financial condition and results of operations (“MD&A”) of JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) for the secondfirst quarter of 2019.2020.
This Quarterly Report on Form 10-Q for the secondfirst quarter of 20192020 (“Form 10-Q”) should be read together with JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, 20182019 (“20182019 Form 10-K”), to which reference is hereby made, and which is referred to throughout this Form 10-Q.. Refer to the Glossary of terms and acronyms and line of business (“LOB”) metrics on pages 168–175171–179 for definitions of terms and acronyms used throughout this Form 10-Q.
This document contains forward-looking statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q and are subject to significant risks and uncertainties. For a further discussion of certain of those risks and uncertainties and the factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties, refer to Forward-looking Statements on page 79 of this Form 10-Q, Part II, Item 1A, Risk Factors on pages 180-181 of this Form 10-Q and Part I, Item 1A, Risk factors, on pages 7–286-28 of the 20182019 Form 10-K.
JPMorgan Chase & Co. (NYSE: JPM), a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the United States of America (“U.S.”), with operations worldwide; JPMorgan Chase had $2.7$3.1 trillion in assets and $263.2$261.3 billion in stockholders’
equity as of June 30, 2019.March 31, 2020. The Firm is a leader in investment banking, financial services for consumers and
small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S. and many of the world’s most prominent corporate, institutional and government clients.
JPMorgan Chase’s principal bank subsidiary is JPMorgan Chase Bank, National Association (“JPMorgan Chase Bank N.A.”), a national banking association with U.S. branches in 2838 states and Washington, D.C. as of June 30, 2019.March 31, 2020. JPMorgan Chase’s principal nonbanknon-bank subsidiary is J.P. Morgan Securities LLC (“J.P. Morgan Securities”), a U.S. broker-dealer. The bank and non-bank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Firm’s principal operating subsidiary inoutside the United Kingdom (“U.K.”)U.S. is J.P. Morgan Securities plc, a U.K.-based subsidiary of JPMorgan Chase Bank, N.A.

For management reporting purposes, the Firm’s activities are organized into four major reportable business segments, as well as a Corporate segment. The Firm’s consumer business segment is Consumer & Community Banking (“CCB”). The Firm’s wholesale business segments are Corporate & Investment Bank (“CIB”), Commercial Banking (“CB”), and Asset & Wealth Management (“AWM”). For a description of the Firm’s business segments and the products and services they provide to their respective
client bases, refer to Note 3126 of this Form 10-Q and Note 32 of JPMorgan Chase’s 20182019 Form 10-K.




EXECUTIVE OVERVIEW
This executive overview of the MD&A highlights selected information and does not contain all of the information that is important to readers of this Form 10-Q. For a complete description of the trends and uncertainties, as well as the risks and critical accounting estimates affecting the Firm and its various lines of business,LOBs, this Form 10-Q and the 20182019 Form 10-K should be read together and in their entirety.
Effective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.
Financial performance of JPMorgan ChaseFinancial performance of JPMorgan Chase        Financial performance of JPMorgan Chase  
(unaudited)
As of or for the period ended,
(in millions, except per share data and ratios)
Three months ended June 30, Six months ended June 30,Three months ended March 31,
2019
 2018
 Change
 2019
 2018
 Change
2020
 2019
 Change
Selected income statement data                
Total net revenue$28,832
 $27,753
 4 % $57,955
 $55,660
 4%$28,251
 $29,123
 (3)%
Total noninterest expense16,341
 15,971
 2
 32,736
 32,051
 2
16,850
 16,395
 3
Pre-provision profit12,491
 11,782
 6
 25,219
 23,609
 7
11,401
 12,728
 (10)
Provision for credit losses1,149
 1,210
 (5) 2,644
 2,375
 11
8,285
 1,495
 454
Net income9,652
 8,316
 16
 18,831
 17,028
 11
2,865
 9,179
 (69)
Diluted earnings per share$2.82
 $2.29
 23
 $5.46
 $4.66
 17
$0.78
 $2.65
 (71)
Selected ratios and metrics                
Return on common equity16% 14%   16% 14%  4% 16%  
Return on tangible common equity20
 17
   20
 18
  5
 19
  
Book value per share$73.88
 $68.85
 7
 $73.88
 $68.85
 7
$75.88
 $71.78
 6
Tangible book value per share59.52
 55.14
 8
 59.52
 55.14
 8
60.71
 57.62
 5
Capital ratios(a)
                
CET112.2% 12.0%   12.2% 12.0%  11.5% 12.1%  
Tier 1 capital14.0
 13.6
   14.0
 13.6
  13.3
 13.8
  
Total capital15.8
 15.5
   15.8
 15.5
  15.5
 15.7
  
(a)The Basel III capital rules became fully phased-in effective January 1, 2019. During 2018,As of March 31, 2020, the required capital measures were subject toreflect the transitional rules. For additional information on these measures, referCECL capital transition provisions. Refer to Capital Risk Management on pages 85-9485-92 of JPMorgan Chase’s 20182019 Form 10-K and pages 44–4839–44 of this Form 10-Q.10-Q for additional information on these measures.







Comparisons noted in the sections below are for the secondfirst quarter of 2020 versus the first quarter of 2019, versus the second quarter of 2018, unless otherwise specified.
Firmwide overview
JPMorgan Chase reported strong results in the second quarter of 2019, with record net income of $9.7$2.9 billion for the first quarter of 2020, or $2.82$0.78 per share, on net revenue of $28.8$28.3 billion. The Firm reported ROE of 16%4% and ROTCE of 20%5%.
The Firm had record net incomerecorded a number of $9.7 billion, up 16%, which reflects income tax benefitssignificant items in the first quarter of $768 million related2020, including an addition to the resolutionallowance for credit losses of certain tax audits, higher net revenue$6.8 billion, a $951 million loss in Credit Adjustments & Other in CIB predominantly driven by funding spread widening on derivatives, and lower credit costs, partially offset$896 million of markdowns on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio in CIB and CB.
Net income was down 69%, predominantly driven by an increase in the provision for credit losses across the Firm reflecting deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic and continued pressure on oil prices.
Total net revenue decreased 3%. Net interest income was $14.4 billion, flat versus the prior year, with the impact of lower rates offset by balance sheet growth and mix, as
well as higher net interest income in CIB Markets. Noninterest revenue was $13.8 billion, down 6%. The reduction in revenue included a $951 million loss in Credit Adjustments & Other in CIB predominantly driven by funding spread widening on derivatives and $896 million of markdowns on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio in CIB and CB; these items were partially offset by higher CIB Markets noninterest revenue.
Noninterest expense was $16.9 billion, up 3%, driven by higher volume- and revenue-related expense and investments, as well as higher legal expense, partially offset by lower structural expense.
•
Total net revenue increased 4%. Net interest incomeThe provision for credit losses was $14.4$8.3 billion, up 7%,$6.8 billion from the prior year driven by balance sheet growth and mix, as well as the impact of higher rates. additions to the allowance for credit losses.Noninterest revenue was $14.4 billion, up 1%, driven by several notable items, including:
–a gain from the IPO of a strategic investment in Tradeweb, and
–the impact of the prior-year adjustment of approximately $330 million to the credit card rewards liability
predominantly offset by
–MSR adjustments reflecting updates to model inputs, and
–net valuation losses on certain legacy private equity investments compared with net gains in the prior year.
Excluding these items, noninterest revenue was relatively flat, with strength in CCB, offset by lower investment banking fees in the CIB and CB, as well as lower Markets noninterest revenue.
Noninterest expense was $16.3 billion, up 2%, driven by continued investments in the business and higher auto lease depreciation, partially offset by lower FDIC charges.
The provision for credit losses was $1.1 billion, down 5%.
The total allowance for credit losses was $14.3$25.4 billion at June 30, 2019,March 31, 2020, and the Firm had a loan loss coverage ratio of 1.39%2.32%, compared with 1.41%1.43% in the prior year; excludingyear, driven by the PCI portfolio,additions to allowance for credit losses and the equivalent ratio was 1.28%, compared with 1.22% in the prior year.adoption of CECL. The Firm’s nonperforming assets totaled $5.3$6.4 billion at June 30, 2019, a decreaseMarch 31, 2020, an increase from $5.8$5.6 billion in the prior year, reflecting improveddriven by the inclusion of purchased credit performancedeteriorated loans in the consumer portfolio.mortgage portfolio, which are subject to nonaccrual loan treatment following the adoption of CECL.
Firmwide end-of-period (“EOP”) loans of $1.0 trillion were up 6% driven by drawdowns on committed revolving credit facilities in March within the wholesale LOBs. Excluding the impact of certain loan sales in Home Lending, EOP loans would have been up 9%. Firmwide average total loans were $954.9$963 billion, down 1%. Excluding the impact of certain loan sales in Home Lending, average loans would have been up 2%3%.
On March 15, 2020, in response to the COVID-19 pandemic, the Firm temporarily suspended share repurchases through the second quarter of 2020.
Selected capital-related metrics
The Firm’s CET1 capital was $189$184 billion, and the Standardized and Advanced CET1 ratios were 12.2%11.5% and 13.1%12.3%, respectively.
The Firm’s supplementary leverage ratio (“SLR”)SLR was 6.4% at June 30, 2019.6.0%.
The Firm continued to grow tangible book value per share (“TBVPS”),grew TBVPS, ending the secondfirst quarter of 20192020 at $59.52,$60.71, up 8%.5% versus the prior year.
ROTCE and TBVPS are non-GAAP financial measures. For a further discussion of each of these measures, referRefer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 19–20.20 for a further discussion of each of these measures.


Business segment highlights
Selected business metrics for each of the Firm’s four lines of businessLOBs are presented below for the secondfirst quarter of 2019.2020.
CCB
ROE 31%
1%
 
•
AverageEOP loans down 2%7%; Home Lending loans down 7%15% impacted by loan sales; credit card loans up 8%2%
•
ClientEOP Deposits up 10%; client investment assets up 16%3%; average depositscredit card sales volume up 3%4%
•
Credit card sales volume up 11% and merchant processing volume up 12%Provision for credit losses of $5.8 billion, including an addition to the allowance for credit losses of $4.5 billion
CIB
ROE 14%
9%
 
•
Maintained #1 ranking for Global Investment Banking fees with 9.2%9.1% wallet share YTDin 1Q20
•
Total Markets revenue of $5.4$7.2 billion, was flat, or down 6% adjustedup 32%
•
(a)EOP loans up 30%; deposits up 37%
•
Provision for credit losses of $1.4 billion, including an addition to the allowance for credit losses of $1.3 billion
CB
ROE 17%
2%
 
•
Gross Investment Banking revenue of $592$686 million, down 16%
•
StrongEOP loans up 14%; deposits up 39%
•
Provision for credit performance with net charge-offslosses of 3 bps$1.0 billion, including an addition to the allowance for credit losses of approximately $900 million
AWM
ROE 27%25%
 
•
Average loan balances up 7%
•
Assets under management (AUM) of $2.2 trillion, up 7%
•
EOP loans up 16%; deposits up 18%
•
Provision for credit losses of $94 million driven by an addition to the allowance for credit losses
(a) Adjusted Markets revenue excludes a gain fromRefer to the IPO of a strategic investment in Tradeweb.
ForBusiness Segment Results on pages 21–37 for a detailed discussion of results by business segment, refer to the Business Segment Results on pages 21–42.segment.
 
Credit provided and capital raised
JPMorgan Chase continues to support consumers, businesses and communities around the globe. The Firm provided new and renewed credit and raised capital for wholesale and consumer clients during the first sixthree months of 2019,2020, consisting of:
$1.1 trillion638 billion Total credit provided and capital raised
   
$11963
billion
 Credit for consumers
   
$148
billion
 Credit for U.S. small businesses
   
$435213 billion Credit for corporations
   
$547334 billion Capital raised for corporate clients and non-U.S. government entities
   
$3420 billion 
Credit and capital raised for nonprofit and U.S. government entities(a)
(a)Includes states, municipalities, hospitals and universities.


Recent events
On July 24, 2019, JPMorgan Chase acquired InstaMed, a leading U.S. healthcare technology company that specializes in healthcare payments.
On July 10, 2019, JPMorgan Chase announced the launch of You Invest Portfolios, a new digital investing solution.
On June 27, 2019, the Federal Reserve informed the Firm that it did not object to the Firm’s 2019 capital plan, submitted under the Comprehensive Capital Analysis and Review (“CCAR”). As a result, the Firm announced that the Board of Directors intends to increase the quarterly common stock dividend to $0.90 per share (up from the current $0.80 per share), effective the third quarter of 2019 and has authorized gross common equity repurchases of up to $29.4 billion between July 1, 2019 and June 30, 2020 under a new common equity repurchase program.
On June 26, 2019, JPMorgan Chase announced that it will expand the Firm’s investment in Detroit’s economic recovery, committing to reach $200 million by the end of 2022. The announcement comes as the Firm exceeded its initial five year $150 million commitment.outlook
On May 18, 2019, Chase Bank USA, National Association (“Chase Bank USA, N.A.”), a national bank which was the Firm’s principal credit card-issuing bank, merged with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A. as the surviving bank.

2019 outlook
These current expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q, and are subject to significant risks and uncertainties. ForRefer to Forward-Looking Statements on page 79 and Risk Factors on page 180 of this Form 10-Q and pages 6–28 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of certain of those risks and uncertainties and the other factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties, refer to Forward-Looking Statements on page 79 of this Form 10-Q and Risk Factors on pages 7–28 of JPMorgan Chase’s 2018 Annual Report.uncertainties. There is no assurance that actual results in the full year of 20192020 will be in line with the outlook set forth below, and the Firm does not undertake to update any forward-looking statements.
JPMorgan Chase’s current outlook for the remainder of 20192020 should be viewed against the backdrop of the global and U.S. economies, the COVID-19 pandemic, financial markets activity, the geopolitical environment, the competitive environment, client and customer activity levels, and regulatory and legislative developments in the U.S. and other countries where the Firm does business. Each of these factors will affect the performance of the Firm and its lines of business.LOBs. The Firm expects that it will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the legal,business, economic, regulatory business and economiclegal environments in which it operates.The outlook information contained in the 2019 Form 10-K, in the Firm’s Current Report on Form 8-K dated February 25, 2020, containing copies of the slides furnished at the Firm’s 2020 Investor Day, and in the Firm’s Current Reports on Form 8-K dated April 14, 2020, to review 2020 first quarter earnings, is superseded by the information contained in this
Form 10-Q.
Firmwide
Management expects full-year 2019second quarter 2020 net interest income, on a managed basis, to be $57.5approximately $14 billion, +/-, market dependent. This range reflects lower long-end rates and up to three federal funds rate cuts of 25bps each in July, September, and December 2019 byFor the Federal Reserve.
The Firm takes a disciplined approach to managing its expenses, while investing for growth and innovation. As a result,full-year 2020, management expects Firmwidenet interest income, on a managed basis, to be approximately $56 billion, market dependent.
Management expects adjusted expense for the full-year 20192020 to be less than $66below $65 billion.
The Firm continues to experience charge-off rates at very low levels as credit trends across the consumer and wholesale portfolios remain favorable. Management expects full-year 2019 net charge-offsadditions to the allowance for credit losses in the second quarter of 2020. Depending on the extent of the deterioration in macroeconomic conditions, the additions to the Firm’s allowance for credit losses could be approximately $5.5 billion.meaningfully higher in aggregate over the next several quarters versus the additions in the first quarter of 2020.


Business Developments
Expected departureCOVID-19 Pandemic
In response to the COVID-19 pandemic, the Firm established a corporate crisis team (“CCT”) along with crisis response teams that are connected across countries, regions and globally. The CCT includes representation from each LOB and critical functions including Human Resources, Risk and Compliance, Legal, Security and Technology, and it engages directly with the Firm’s Operating Committee on a frequent basis. The CCT provides a central point for the gathering of data which allows for rapid identification and prioritization of issues. The CCT also monitors key operational metrics, risks and concerns on an ongoing basis.
The Firm invoked resiliency plans to allow its businesses to remain operational, utilizing disaster recovery sites and implementing alternative work arrangements globally. The Firm now has more than 180,000 employees globally working from home from every LOB and corporate function, including traders, bankers, portfolio managers, operations, finance, risk and compliance, legal and call center teams globally. The Firm is monitoring the status of work-from-home arrangements and has been updating relevant local authorities as appropriate. Management continues to monitor key operational metrics as well as thematic cross-business risks and concerns.
In addition, the Firm implemented strategies and procedures designed to help it respond to increased market volatility, client demand for credit and liquidity, distress in certain industries/sectors and the ongoing impacts to consumers and small businesses.
Supporting clients and customers
The Firm has continued to support its clients and customers as they navigate the challenging conditions caused by the COVID-19 pandemic by providing liquidity and advice. In March 2020, the Firm extended more than $100 billion of new and renewed credit to its clients and customers.
In the wholesale businesses, clients drew more than $50 billion on their committed revolving credit facilities, and the Firm approved over $25 billion of new credit extensions for clients most impacted by the COVID-19 pandemic, during the first quarter
In the consumer businesses, the Firm extended approximately $20 billion in new credit across Home Lending, Credit Card and Auto.
The Firm is actively participating in the Small Business Association’s (“SBA”) Paycheck Protection Program (“PPP”) and as of May 4th the Firm has funded approximately $29 billion under the program.
For customers that are experiencing financial hardships as a result of the COVID-19 pandemic, the Firm developed a payment assistance program to allow mortgage, auto and card customers to delay payments for three months, as well as waiving or refunding certain fees.
Three-quarters of the Firm’s branch network continues to operate, ATMs remain accessible and the Firm continues to
provide a wide range of banking services accessible to customers online.
Protecting and supporting employees
In addition to widespread work-from-home arrangements, the Firm has taken further actions to protect and support its employees including;
For employees with jobs that can only be performed on-site, modified business operations, implemented staggered shifts, changed seating arrangements, closed buildings to nonessential visitors and intensified and increased frequency of cleaning of all offices and branches worldwide
Ensured that all branch employees are being paid for their regularly scheduled hours even if those hours are reduced or their branch is temporarily closed
Continued to pay employees who are at home due to potential exposure to the virus or whose health is at higher risk as well as provided paid medical leave to affected employees
Deployed clinical staff internally to support employees
Granted a special payment of up to $1,000 to full- and part-time employees whose jobs require them to continue working on-site and whose annual cash compensation is less than $60,000
Provided all employees with up to five additional paid days off to manage personal needs, which may include dependent care, child care or other issues, as well as offering free COVID-19 related medical treatment for all of the Firm’s U.S. employees and their dependents.
Giving to communities
The Firm has taken steps to help address immediate humanitarian needs and long-term economic challenges posed by the COVID-19 pandemic on the communities in which it operates. To help the most vulnerable and hardest hit communities, the Firm has announced a $150 million loan program to deploy capital to underserved small businesses and nonprofits, as well as a $50 million philanthropic commitment. An initial $15 million commitment is intended to:
Provide immediate healthcare, food and other humanitarian relief globally
Help existing nonprofit partners around the world that are responding in their communities to the COVID-19 pandemic
Assist small businesses that are vulnerable to economic hardships.
Regulatory actions and programs
Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 10-11 for information concerning relevant regulatory actions and the significant financing programs in which the Firm is participating in order to support its customers and clients.
The impact of the COVID-19 pandemic on the Firm’s results and operations are discussed throughout this document.

Departure of the U.K. from the EU
The U.K.’s expected departure from the EU, which is commonly referred to as “Brexit,” is scheduled to occur not later than October 31, 2019.
The Firm continues to execute the relevant elements ofon its Firmwide Brexit Implementation program with the objective of delivering the Firm’s capabilities to its EU clients on “day one” of any departure by the U.K. from the EU, whether or not an agreement has been reached to allow an orderly withdrawal.
The principal operational risks associated with Brexit continue to be the potential for disruption caused by insufficient preparations by individual market participants or in the overall market ecosystem, and risks related to potential disruptions of connectivity among market participants. Although legislative and regulatory actions taken by the EU and the U.K. have mitigated some of the significant market-wide risks, there continues to be regulatory and legal uncertainty with respect to various matters including contract continuity and access by market participants to liquidity in certain products, such as products subject to potentially conflicting U.K. and EU regulatory requirements in relation to eligible trading venues, including certain cross-border derivative contracts and equities that are listed on both U.K. and EU exchanges.
As discussed in Business Developments on page 46 of the 2018 Form 10-K, the Firm isremains focused on the following key areas to ensure continuation of service to its EU clients: regulatory and legal entity readiness; client readiness; and business and operational readiness. Following areHowever, the significant updates from the matters discussed in the 2018 Form 10-K.
Regulatory and legal entity readiness
The Firm’s legal entities in Germany, Luxembourg and Ireland are now prepared and licensed to provide servicesCOVID-19 pandemic has added incremental risk to the Firm’s EUprogram due to the potential impact on execution of changes such as relocation of employees given travel restrictions, or the ability of clients including after any departure byto be operationally ready to the U.K. fromextent that they have diverted resources to address the EU.
Client readiness
The agreements covering a significant proportioneffects of the Firm’s EU client activity have been re-documentedpandemic. It has also slowed down the political process to other EUfinalize the legal entitiesand regulatory framework that will be in place after the transition period that is scheduled to help facilitate continuationexpire on December 31, 2020, thus lengthening the period of service.planning uncertainty.
Interbank Offered Rate (“IBOR”) transition
On March 12, 2020, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update providing optional expedients and exceptions for applying generally accepted accounting principles to contracts and hedge relationships affected by benchmark reform. The Firm expects to apply certain of the practical expedients and is evaluating the timing and application of those elections. Refer to Accounting and Reporting Developments on page 78 for additional information. The Firm continues to actively engage with clients that have not completed re-documentation to ensure preparedness both in termsmonitor the transition relief being considered by the International Accounting Standards Board (“IASB”) and U.S. Treasury Department regarding accounting and tax implications of documentation and any operational changes that may be required. The Firm may be negatively impacted by any operational disruption stemming from delays of or lapses in the readiness of other market participants or market infrastructures.
Business and operational readinessreference rate reform.
The Firm relocated certain employees during the first quarter of 2019. During the second quarter of 2019, the Firm has added specific employees to certain EU legal entities, where appropriate, to support the level of client activity that has been migrated. However, the Firm’s final staffing plan will depend upon the timing and terms of any withdrawal by the U.K. from the EU.
If Brexit is further delayed due to a transition deal or another mechanism, the Firm will continue to review the timing and extent of any further expansion of activities in its EU legal entities, as appropriate. The Firm continues to closely monitor legislative developments, and its implementation plan allows for flexibility given the continued uncertainties.
LIBOR transition
The Firmalso continues to develop and implement plans to appropriately mitigate the risks associated with the expected discontinuation of certain unsecured benchmark interest rates, including the London Interbank Offered Rate (“LIBOR”) and other Interbank Offered Rates (“IBORs”). In particular, the Firm:
has implemented or is in the process of implementing fallback language for LIBOR-linked syndicated loans, securitizations, floating rate notes and bi-lateral business loans based on the recommendations of the Alternative Reference Rates Committee, and has started to introduce the Secured Overnight Financing Rate as a replacement benchmark rate for certain of these products;
continues to monitor the transition relief being considered by the Financial Accounting Standards Board (“FASB”) and International Accounting Standards Board (“IASB”) concerning the accounting for contract modifications and hedge accounting; and
continues to engage with regulators and clients as the transition from IBORs progresses.
IBOR discontinuation. Refer to Business Developments on page 47 of the 20182019 Form 10-K for a discussion of the Firm’s initiatives to address the expected discontinuation of LIBORthe London Interbank Offered Rate (“LIBOR”) and other IBORs.


Regulatory Developments Relating to the COVID-19 Pandemic
Beginning in March 2020, the U.S. government as well as central banks around the world have taken a series of actions to help individuals, households and businesses that have been adversely affected by the economic disruption caused by the COVID-19 pandemic. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was signed into law on March 27, 2020, provides, among other things, funding to support loan facilities to assist consumers and businesses. Set forth below is a summary as of the date of this Form 10-Q of U.S. government actions currently impacting the Firm and U.S. government programs in which the Firm is participating to support individuals, businesses, and the broader economy. The Firm will continue to assess ongoing developments in government actions in response to the COVID-19 pandemic.
U.S. government actions
Eligible retained income definition. On March 17, 2020, the Office of the Comptroller of the Currency (“OCC”), the Board of Governors of the Federal Reserve System (“Federal Reserve”), and the Federal Deposit Insurance Corporation (“FDIC”), collectively the “federal banking agencies,” issued an interim final rule that revised the definition of “eligible retained income” in the regulatory capital rules that apply to all U.S. banking organizations. On March 23, 2020, the Federal Reserve issued an interim final rule that revised the definition of “eligible retained income” for purposes of the total loss-absorbing capacity (“TLAC”) buffer requirements that apply to global systemically important banking organizations. The revised definition of eligible retained income makes any automatic limitations on payout distributions that could apply under the agencies’ capital rules or TLAC rule take effect on a more graduated basis in the event that a banking organization’s capital, leverage and TLAC ratios were to decline below regulatory requirements (including buffers). The March 17 interim final rule was issued, in conjunction with an interagency statement encouraging banking organizations to use their capital and liquidity buffers, to further support banking organizations’ abilities to lend to households and businesses affected by the COVID-19 pandemic.
Reserve requirements. On March 26, 2020, the Federal Reserve reduced reserve requirement ratios to zero percent, effectively eliminating the reserve requirement for all depository institutions, an action that frees up liquidity in the banking system to support lending to households and businesses.
Refer to Liquidity Risk Management on pages 45–49 and Note 21 for additional information on the reduction to the reserve requirement.
Regulatory Capital - Current Expected Credit Losses (“CECL”) transition delay. On March 31, 2020, the federal banking agencies issued an interim final rule that provided the option to temporarily delay the effects of CECL on
regulatory capital for two years, followed by a three-year transition period (“CECL capital transition provisions”). The Firm elected to apply the CECL capital transition provisions.
Refer to Capital Risk Management on pages 39–44 and Note 22 on pages 159-160 for additional information on the CECL capital transition provisions and the impact to the Firm’s capital measures.
Supplementary leverage ratio (“SLR”) temporary revision. On April 1, 2020, the Federal Reserve issued an interim final rule that revises, on a temporary basis, the calculation of total leverage exposure for purposes of calculating the SLR for bank holding companies, to exclude the on-balance sheet amounts of U.S. Treasury securities and deposits at Federal Reserve Banks. These exclusions will allow the Firm to continue to support U.S. Treasury markets and to serve as financial intermediaries for households and businesses. This exclusion is effective April 1, 2020, and will remain in effect through March 31, 2021. 
Refer to Capital Risk Management on pages 39–44 for additional information on the Firm’s SLR.
Loan modifications. On April 7, 2020, the federal banking agencies along with the National Credit Union Administration, and the Consumer Financial Protection Bureau, in consultation with the state financial regulators, issued an interagency statement revising a March 22, 2020 interagency statement on loan modifications and the reporting for financial institutions working with customers affected by the COVID-19 pandemic (the “IA Statement”). The IA Statement reconfirmed that efforts to work with borrowers where the loans are prudently underwritten, and not considered past due or carried on nonaccrual status, should not result in the loans automatically being considered modified in a troubled debt restructuring (“TDR”) for accounting and financial reporting purposes, or for purposes of their respective risk-based capital rules, which would otherwise require financial institutions subject to the capital rules to hold more capital. The IA Statement also clarifies the interaction between its previous guidance and Section 4013 of the CARES Act, which provides certain financial institutions the option to suspend the application of accounting guidance for TDRs for a limited period of time for loan modifications made to address the effects of the COVID-19 pandemic. The special considerations addressed in the IA Statement and Section 4013 of the CARES Act, if applied, would have had no impact on the accounting for the Firm’s modification activities in the three months ended March 31, 2020 but may be relevant for modifications offered in the future.
Refer to Credit Portfolio on pages 50-51 and Note 12 for additional information on the Firm’s loan modification activities.
U.S. government facilities and programs. Beginning in March 2020, the Federal Reserve announced a suite of facilities using its emergency lending powers under section 13(3) of

the Federal Reserve Act to support the flow of credit to individuals, households and businesses adversely affected by the COVID-19 pandemic and to support the broader economy. These facilities include the Money Market Mutual Fund Liquidity Facility (“MMLF”), Primary Dealer Credit Facility (“PDCF”) and Commercial Paper Funding Facility (“CPFF”). The Firm is currently participating in the MMLF and PDCF to support the broader economy by providing liquidity to money market mutual funds and supporting the functioning of the secured financing market, respectively. Under the CPFF, the Firm is acting as a dealer to purchase eligible commercial paper. In addition, beginning April 3, 2020, the PPP, established by the CARES Act and administered by the SBA, authorized eligible lenders to provide nonrecourse loans to small businesses to provide an incentive for these businesses to keep their workers on their payroll. The Firm is currently participating in the PPP to support its small business clients.
Refer to Capital Risk Management on pages 39–44, Liquidity Risk Management on pages 45–49 and Note 22 for additional information of the Firm’s participation in the MMLF. Refer to Liquidity Risk Management on pages 45–49 for additional information of the Firm’s participation in the PDCF. Refer to Business Developments on pages 8-9 for additional information on the Firm’s participation in the PPP.


CONSOLIDATED RESULTS OF OPERATIONS
This section provides a comparative discussion of JPMorgan Chase’s Consolidated Results of Operations on a reported basis for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, unless otherwise specified. Factors that relate primarily to a single business segment are discussed in more detail within that business segment. ForRefer to pages 75–77 of this Form 10-Q and pages 136–138 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations, referOperations.
Revenue     
 Three months ended March 31,
(in millions)2020
 2019
 Change
Investment banking fees$1,866
 $1,840
 1 %
Principal transactions2,937
 4,076
 (28)
Lending- and deposit-related fees(a)
1,706
 1,559
 9
Asset management, administration and commissions(a)
4,540
 4,037
 12
Investment securities gains233
 13
 NM
Mortgage fees and related income320
 396
 (19)
Card income1,054
 1,274
 (17)
Other income(b)
1,156
 1,475
 (22)
Noninterest revenue13,812
 14,670
 (6)
Net interest income14,439
 14,453
 —
Total net revenue$28,251
 $29,123
 (3)%
(a) In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to pages 76–77lending- and deposit-related fees. Prior-period amounts were revised to conform with the current presentation.
(b) Included operating lease income of this Form 10-Q$1.4 billion and pages 141-143 of JPMorgan Chase’s 2018 Form 10-K.$1.3 billion for the three months ended March 31, 2020 and 2019.
Revenue           
 Three months ended June 30, Six months ended June 30,
(in millions)2019
 2018
 Change
 2019
 2018
 Change
Investment banking fees$1,851
 $2,168
 (15)% $3,691
 $3,904
 (5)%
Principal transactions3,714
 3,782
 (2) 7,790
 7,734
 1
Lending- and deposit-related fees1,535
 1,495
 3
 3,017
 2,972
 2
Asset management, administration and commissions4,353
 4,304
 1
 8,467
 8,613
 (2)
Investment securities gains/(losses)44
 (80) NM
 57
 (325) NM
Mortgage fees and related income279
 324
 (14) 675
 789
 (14)
Card income1,366
 1,020
 34
 2,640
 2,295
 15
Other income(a)
1,292
 1,255
 3
 2,767
 2,881
 (4)
Noninterest revenue14,434
 14,268
 1
 29,104
 28,863
 1
Net interest income14,398
 13,485
 7
 28,851
 26,797
 8
Total net revenue$28,832
 $27,753
 4 % $57,955
 $55,660
 4 %
(a)Included operating lease income of $1.3 billion and $1.1 billion for the three months ended June 30, 2019 and 2018, respectively and $2.6 billion and $2.2 billion for the six months ended June 30, 2019 and 2018, respectively.
Quarterly results
Investment banking fees decreased reflecting lower fees across productsincreased, driven by declinesCIB, reflecting:
higher debt underwriting fees driven by both increased industry-wide fees and wallet share gains in investment-grade bonds, particularly in March, as clients sought to access liquidity,
higher equity underwriting fees driven by increased industry-wide fee levels,fees primarily in the IPO market, with strong activity in January and whenFebruary, compared withto a weak prior year,
largely offset by
lower advisory fees compared to a strong prior year. For additional information, referyear, driven by a lower number of completed transactions, as well as the impact of delays in regulatory approvals.
Refer to CIB segment results on pages 27–3226–30 and Note 5.6 for additional information.
Principal transactions revenue includes decreased reflecting two significant items:
a gain$951 million loss in CIB’s Credit Adjustments & Other predominantly driven by funding spread widening on derivatives, and
$896 million of markdowns on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio in CIB from the IPO of a strategic investment in Tradeweb. and CB, as high-yield spreads widened significantly.
Excluding this gain,these two items, principal transactions revenue decreased, reflecting:increased driven by Fixed Income Markets on strong client activity, primarily in Rates and Currencies & Emerging Markets, as a result of higher trading volume, and in Equity Markets on strong client activity in derivatives, particularly in March for both businesses.
lowerPrincipal transactions revenue in CIB primarily driven by derivativesmay in Equity Markets, largely offset by higher client activity in agency mortgage trading in Fixed Income Markets
net valuation losses on certain legacy private equity investments in Corporate compared with net gains in the prior year
losses on cash deployment transactions in Treasury and Chief Investment Office (“CIO”), which were more than offset by the relatedcases have offsets across other revenue lines, including net interest income earnedincome. The Firm assesses its CIB Markets business performance on those transactions
lowera total revenue related to hedges on certain investments in AWM, which was more than offset by higher valuation gains on the related investments reflected in other income.basis.
For additional information, referRefer to CIB, AWMCB and Corporate segment results on pages 27–32,26–30, pages 37–4034–36 and pages 41–42,page 37, and Note 5.6 for additional information.
Lending- and deposit-related fees increased primarily due to higher deposit-related fees in CCB, reflecting growth in customer accounts and transactions, and in CIB and CB from an increase in cash management transactions.
Refer to CCB segment results on pages 23–25, CIB on pages 26–30 and CB on pages 31–33, respectively, and Note 6 for additional information.
Asset management, administration and commissions revenue increased primarily reflecting driven by:
higher brokerage commissions in CIB and AWM on higher client-driven volume particularly in March, and
higher asset management fees in CBB from growthAWM and CCB as a result of higher asset values at the beginning of 2020, driven by higher average market levels and strong net inflows into long-term products over the past year, despite the impact of market volatility in client investment assets. For additional information, referMarch.
Refer to CCB, AWMCIB and CIBAWM segment results on pages 22–26 ,23–25, pages 37–4026–30 and pages 27–32,34–36 , respectively, and Note 5.
Lending- and deposit-related fees increased primarily reflecting higher deposit-related fees in CCB. For6 for additional information, refer to CCB segment results on pages 22–26, CIB on pages 27–32 and CB on pages 33–36, respectively, and Note 5.information.
Investment securities gains/(losses) gainsprimarily reflect in both periods reflected the impact of repositioning the investment securities portfolio. For additional information, referRefer to Corporate segment results on pages 41–42page 37 and Note 9.10 for additional information.

Mortgage fees and related income decreased driven by:due to:
lower net mortgage servicing revenue on lower MSR risk management results reflecting updates to model inputs, and lower operating revenue reflecting faster prepayment speeds on lower rates and a lower level of third-party loans serviced, as well as lower MSR risk management results,
predominantlylargely offset by
higher net mortgage production revenue reflecting higher mortgage production volumes and margins, and volumes, as well as the impactabsence of a gain on a loan salessale in Home Lending.the prior year.
For further information, referRefer to CCB segment results on pages 22–26,23–25, Note 56 and 14.15 for further information.

Card income increaseddecreased driven by lower net interchange income reflecting the impact of the prior-year adjustment of approximately $330 million to the credithigher rewards costs and partner payments, partially offset by higher card rewards liability. For further information, refersales volume, despite a decline in March.
Refer to CCB segment results on pages 22–2623–25 and Note 5.6 for further information.
Other income decreased reflecting:
losses on certain equity investments in CIB
net valuation losses on certain investments in AWM, compared with gains in the prior year
higher amortization on a higher level of alternative energy investments in CIB. The increased reflecting:amortization is more than offset by lower income tax expense from the associated tax credits.
largely offset by
higher operating lease income from growth in auto operating lease volume in CCB and
higher investment valuation gains in AWM, which were largely offset by the impact of the related hedges reflected in principal transactions revenue
partially offset by
lower other income in CIB associated with the increased amortization on a higher level of alternative energy investments. The lower income tax expense from the associated tax credits more than offset the impact of the higher amortization.
For further information, referRefer to Note 5.6 for further information.
Net interest income increased driven bywas flat as the impact of lower rates was offset by balance sheet growth and change in mix, as well as higher rates, partially offset by lower CIB Markets net interest income.
The Firm’s average interest-earning assets were $2.3$2.5 trillion, up $133$167 billion, and the yield was 3.14%, down 66 bps. The net interest yield on these assets, on a fully taxable-equivalent (“FTE”)an FTE basis, was 2.49%2.37%, an increasea decrease of 1 basis point.20 bps. The net interest yield excluding CIB Markets was 3.35%3.01%, an increase of 14 basis points. down 42bps.
Net interest yield excluding CIB marketsMarkets is a non-GAAP financial measure. For aRefer to the Consolidated average balance sheets, interest and rates schedule on page 170 for further discussion of this measure, refer todetails; and the Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures and Key Performance Measures on pages 19–20.
Year-to-date results
Investment banking fees decreased reflecting lower equity underwriting and advisory fees driven by declines in industry-wide fee levels.
Principal transactions revenue includes20 for a gain in CIB from the IPOfurther discussion of a strategic investment in Tradeweb. Excluding this gain, CIB’s revenue was relatively flat, reflecting:
favorable changes in funding spreads on derivatives in Credit Adjustments & Other, and higher revenue in agency mortgage trading in Fixed Income Markets
offset by
–lower client activity in derivatives in Equity Markets, and lower revenue in Currencies & Emerging Markets within Fixed Income Markets
the net increase in CIB was offset by
losses on cash deployment transactions in Treasury and CIO, which were more than offset by the related net interest income earned on those transactions
lower revenue related to hedges on certain investments in AWM, which was more than offset by higher valuation gains on the related investments reflected in other income.
Asset management, administration and commissions revenue decreased reflecting:
lower asset management fees in AWM driven by a shift in the mix toward lower fee products and lower average market levels, and
lower brokerage commissions in CIB on lower activity
partially offset by
higher asset management fees in CBB from growth in client investment assets.
For information on lending- and deposit-related fees, refer to CCB on pages 22–26, CIB on pages 27–32 and CB on pages 33–36, respectively, and Note 5.
Investment securities gains/(losses) primarily reflect the impact of repositioning the investment securities portfolio.

Mortgage fees and related income decreased driven by:
lower net mortgage servicing revenue on lower MSR risk management results reflecting updates to model inputs, and lower operating revenue reflecting lower servicing revenue on a lower level of third-party loans serviced and faster prepayment speeds on lower rates
predominantly offset by
higher net mortgage production revenue reflecting higher mortgage production margins and volumes, as well as the impact of loan sales in Home Lending.
Card income increased reflecting the impact of the prior-year adjustment of approximately $330 million to the credit card rewards liability.
Other income decreased reflecting:
lower other income in CIB associated with the increased amortization on a higher level of alternative energy investments. The lower income tax expense from the associated tax credits more than offset the impact of the higher amortization
partially offset by
higher operating lease income from growth in auto operating lease volume in CCB, and
higher investment valuation gains in AWM, which were largely offset by the impact of the related hedges reflected in principal transactions revenue.
The prior year included $505 million of fair value gains related to the adoption of the recognition and measurement accounting guidance for certain equity investments previously held at cost in the first quarter of 2018.
Net interest income increased driven by the impact of balance sheet growth and change in mix, as well as higher rates, partially offset by lower CIB Markets net interest income. The Firm’s average interest-earning assets were $2.3 trillion, up $122 billion, and the net interest yield on these assets, on an FTE basis, was 2.53%, an increase of 4 basis points. The net interest yield excluding CIB Markets was 3.39%, an increase of 22 basis points. Net interest yield excluding CIB markets is a non-GAAP financial measure.

markets.
Provision for credit losses          
 Three months ended June 30, Six months ended June 30,
(in millions)

2019
 2018
 Change
 2019
 2018
 Change
Consumer, excluding credit card$(318) $(56) (468)% $(204) $90
 NM
Credit card1,440
 1,164
 24
 2,642
 2,334
 13
Total consumer1,122
 1,108
 1
 2,438
 2,424
 1
Wholesale27
 102
 (74) 206
 (49) NM
Total provision for credit losses$1,149
 $1,210
 (5)% $2,644
 $2,375
 11%
Quarterly results
Provision for credit losses     
 Three months ended March 31,
(in millions)

2020
 2019
 Change
Consumer, excluding credit card$619
 $120
 416%
Credit card5,063
 1,202
 321
Total consumer5,682
 1,322
 330
Wholesale2,594
 173
 NM
Investment securities9
 NA
 NM
Total provision for credit losses$8,285
 $1,495
 454%
Effective January 1, 2020, the Firm adopted the CECL accounting guidance. In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.
The provision for credit losses decreasedincreased driven by wholesale, withadditions to both the prior year reflecting a higher provision from net portfolio activity, including new exposuresconsumer and loan sales.wholesale allowance for credit losses.
The increase in total consumer provision was relatively flat reflecting:driven by:
anadditions of $4.4 billion to the allowance for credit losses, reflecting the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic, consisting of $3.8 billion for Card, $300 million for Home Lending, $235 million for Auto, and $80 million for CBB;
net charge-offs were flat reflecting higher net charge-offs in Card on loan growth, in line with prior expectations, offset by higher recoveries in Home Lending on a current period loan sale.
The increase in wholesale reflects a net addition of $2.4 billion to the allowance for credit card duelosses across the LOBs. The net addition was predominantly driven by the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic across multiple sectors, and continued pressure on oil prices, with the largest impacts in the Oil & Gas, Real Estate, and Consumer & Retail industries.
Refer to
–a $200 million addition to the allowance CCB segment results on pages 23–25, CIB on pages 26–30, CB on pages 31–33, AWM on pages 34–36, the Allowance for Credit Losses on pages 64–65, and Note 13 for loan losses reflecting loan growth and higher loss rates, as anticipated, and
–higher net charge-offs on loan growth
offset by

a decrease in consumer, excluding credit card due to
–a $400 million reduction in the allowance for loan losses in the PCI residential real estate portfolio, reflecting continued improvement in home prices and delinquencies
partially offset by
–higher net charge-offs in the residential real estate portfolio as the prior year benefited from a recovery on a loan sale.
For additional information on the credit portfolio and the allowance for credit losses, refer to the segments discussions of CCB on pages 22–26, CIB on pages 27–32, CB on pages 33–36, the Allowance for Credit Losses on pages 67–68, and Note 12.losses.


Year-to-date results
The provision for credit losses increased predominantly driven by wholesale, reflecting a net addition to the allowance for credit losses on select Commercial and Industrial (“C&I”) client downgrades. The prior period was a benefit, reflecting a reduction in the allowance for credit losses primarily driven by a single name in the Oil & Gas portfolio, partially offset by other net portfolio activity.
The total consumer provision was relatively flat reflecting:
an increase in credit card due to
–a $200 million addition to the allowance for loan losses reflecting loan growth and higher loss rates, as anticipated, and
–higher net charge-offs on loan growth
offset by
a decrease in consumer, excluding credit card due to
–a $400 million reduction in the allowance for loan losses in the PCI residential real estate portfolio, reflecting continued improvement in home prices and delinquencies
partially offset by
–higher net charge-offs in the residential real estate portfolio as the prior year benefited from a recovery from a loan sale.



Noninterest expense                
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)

2019
 2018
 Change
 2019
 2018
 Change2020
 2019
 Change
Compensation expense$8,547
 $8,338
 3 % $17,484
 $17,200
 2 %$8,895
 $8,937
 —
Noncompensation expense:                
Occupancy1,060
 981
 8
 2,128
 1,869
 14
1,066
 1,068
 —
Technology, communications and equipment2,378
 2,168
 10
 4,742
 4,222
 12
2,578
 2,364
 9
Professional and outside services2,212
 2,126
 4
 4,251
 4,247
 —
2,028
 2,039
 (1)
Marketing862
 798
 8
 1,741
 1,598
 9
859
 879
 (2)
Other expense(a)(b)
1,282
 1,560
 (18) 2,390
 2,915
 (18)1,424
 1,108
 29
Total noncompensation expense7,794
 7,633
 2
 15,252
 14,851
 3
7,955
 7,458
 7
Total noninterest expense$16,341
 $15,971
 2 % $32,736
 $32,051
 2 %$16,850
 $16,395
 3 %
(a)Included Firmwide legal expense/(benefit) of $69$197 million and $0$(81) million for the three months ended June 30, 2019March 31, 2020 and 2018, respectively and $(12) million and $70 million for the six months ended June 30, 2019 and 2018, respectively.2019.
(b)Included FDIC-related expense of $121$99 million and $368$143 million for the three months ended June 30, 2019March 31, 2020 and 2018, respectively and $264 million and $751 million for the six months ended June 30, 2019 and 2018, respectively.2019.
Quarterly results
Compensation expense increased drivenwas flat as efficiencies in several businesses and lower compensation expense in CIB was offset by investments in the businesses, including front office hires, as well as technology staff, largely offset by lower performance-related compensation in CIB.new hires.
Noncompensation expense increased as a result of:
higher legal expense in CIB and Corporate
higher volume-related expense, including depreciation from growth in auto lease assets in CCB, and brokerage expense in CIB
higher investments inacross the businesses, including technology, real estate and marketing
higher depreciation expense from growth in auto operating lease volume in CCB
higher outside services expense primarily due to higher volume-related brokerage expense in certain businesses in CIB
higher legal expense, and
a contribution to the Firm’s Foundation, whereas all prior-year contributions were made in the fourth quarter
largelypartially offset by lower other structural expense.
lower FDIC charges as a result of the elimination of the surcharge at the end of the third quarter of 2018, and
the absence of a loss in the prior year on the liquidation of a legal entity of $174 million

 
For additional information on the liquidation of a legal entity, refer to Note 19.
Income tax expense 
 Three months ended March 31,
(in millions)

2020
 2019
 Change
Income before income tax expense$3,116
 $11,233
 (72)%
Income tax expense251
 2,054
 (88)
Effective tax rate8.1% 18.3%  
Year-to-date results
Compensation expense increased driven by investments in the businesses, including front office hires, as well as technology staff, largely offset by lower performance-related compensation in CIB.
Noncompensation expense increased as a result of:
higher investments in the businesses, including, technology, real estate and marketing
higher depreciation expense from growth in auto operating lease volume in CCB, and
contributions to the Firm’s Foundation, whereas all prior-year contributions were made in the fourth quarter
largely offset by
lower FDIC charges as a result of the elimination of the surcharge at the end of the third quarter of 2018, and
the absence of a loss of $174 million in the prior year in other expense on the liquidation of a legal entity in Corporate.

Income tax expense       
 Three months ended June 30, Six months ended June 30,
(in millions)

2019
 2018
 Change
 2019
 2018
 Change
Income before income tax expense$11,342
 $10,572
 7 % $22,575
 $21,234
 6 %
Income tax expense1,690
 2,256
 (25) 3,744
 4,206
 (11)
Effective tax rate14.9% 21.3%   16.6% 19.8%  
Quarterly results
The effective tax rate decreased due todriven by changes in the recognition of $768 million of tax benefits related to the resolution of certain tax auditslevel and the change in the mix of income and expenses subject to U.S. federal, and state and local taxes. The decrease was partially offset by a $189 million tax benefit recorded intaxes, as well as the second quarter of 2018 resulting from a change in the estimate for the deemed repatriation tax on non-U.S. earnings. For additional information on the 2019 tax benefits, refer to Note 1.

Year-to-date results
The effective tax rate decreased due to the recognition of $874 million of tax benefits related to the resolutionmore significant effect of certain tax audits and the change in the mixbenefits on a lower level of income and expenses subject to U.S. federal, state and local taxes. The decrease was partially offset by a decrease in tax benefits related to the vesting of employee stock-based awards, as well as a $189 million tax benefit recorded in the second quarter of 2018 resulting from a change in the estimate for the deemed repatriation tax on non-U.S. earnings.pre-tax income.



CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS
Effective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.
Consolidated balance sheets analysis
The following is a discussion of the significant changes between June 30, 2019,March 31, 2020, and December 31, 2018.2019.
Selected Consolidated balance sheets data
(in millions)June 30,
2019
 December 31,
2018
Change
March 31,
2020
 December 31,
2019
Change
Assets        
Cash and due from banks$23,164
 $22,324
4 %$24,001
 $21,704
11 %
Deposits with banks244,874
 256,469
(5)343,533
 241,927
42
Federal funds sold and securities purchased under resale agreements267,864
 321,588
(17)248,580
 249,157
—
Securities borrowed130,661
 111,995
17
139,839
 139,758
—
Trading assets523,373
 413,714
27
548,580
 411,103
33
Investment securities307,264
 261,828
17
Available-for-sale securities399,944
 350,699
14
Held-to-maturity securities, net of allowance for credit losses71,200
 47,540
50
Investment securities, net of allowance for credit losses471,144
 398,239
18
Loans956,889
 984,554
(3)1,015,375
 959,769
6
Allowance for loan losses(13,166) (13,445)(2)(23,244) (13,123)77
Loans, net of allowance for loan losses943,723
 971,109
(3)992,131
 946,646
5
Accrued interest and accounts receivable88,399
 73,200
21
122,064
 72,861
68
Premises and equipment24,665
 14,934
65
25,882
 25,813
—
Goodwill, MSRs and other intangible assets53,302
 54,349
(2)51,867
 53,341
(3)
Other assets120,090
 121,022
(1)171,810
 126,830
35
Total assets$2,727,379
 $2,622,532
4 %$3,139,431
 $2,687,379
17 %
Cash and due from banks and deposits with banks decreasedincreased primarily as a result of a shift insignificant deposit inflows, which also funded asset growth across the deployment of cash in Treasury and CIO into short-term instruments in trading assets.Firm. Deposits with banks reflect the Firm’s placements of its excess cash with various central banks, including the Federal Reserve Banks.
Federal funds sold and securities purchased under resale agreements reflected higher client activity in CIB, which was more than offset by the impact of netting, andflat as the reduction in the deployment of cash in Treasury and CIO. For additional information, referCIO was offset by an increase in client-driven market-making activities and higher collateral requirements as a result of changes in market conditions in March, as well as higher demand for securities to cover short positions when compared with lower levels at year-end in CIB. Refer to Liquidity Risk Management on pages 49–5345–49 and Note 10.
Securities borrowed increased driven by higher demand11 for securities largely related to client-driven market-making activities in CIB. For additional information, refer to Liquidity Risk Management on pages 49–53 and Note 10.information.
Trading assets increased, reflecting growth in client-driven market-making activities in CIB, predominantly debt instruments in Fixed Income Markets and when compared with lower levels at year-end, predominantly due to client-driven market-making activities in debt and equity instrumentsas well as higher derivative receivables in CIB Markets,as a result of market movements, including prime brokerage. In addition, but to a lesser extent, trading assets increased in Treasury and CIO associated with the deploymentimpact of cash into short-term instruments. For additional information, referthe COVID-19 pandemic.
Refer to Notes 2 and 4.5 for additional information.
Investment securities increased, primarily reflectingreflecting:
in the available-for-sale (“AFS”) portfolio, net purchases of U.S. GSE and government agency mortgage-backed securities (“MBS”)MBS and U.S. Treasuries driven by interest rate risk management activities, partially offset by a non-cash transfer of $26.1 billion of U.S. GSE and government agency MBS from the AFS to the held-to-maturity (“HTM”) portfolio, resulting in Treasury and CIO. For additional information on Investment securities, refera comparable increase in HTM.
Refer to Corporate segment results on pages 41–42,page 37, Investment Portfolio Risk Management on page 69,66, and Notes 2 and 9.10 for additional information on Investment securities.
Loans decreased reflecting:
lower consumer loansincreased predominantly reflecting drawdowns on committed revolving credit facilities in the residential real estate portfolio, predominantly driven by loan sales in Home Lending, and
lower loansMarch in CIB, primarily driven by a loan syndicationCB and net paydowns,AWM, partially offset by increasesa reduction in CBCard due to seasonality and AWM.a decline in sales volume in March as a result of the COVID-19 pandemic.
The allowance for loan losses decreased largelyincreased driven by Consumer dueby:
additions of $5.9 billion, consisting of
–
$4.4 billion in consumer, predominantly in Credit Card, reflecting the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic, and
–
a net $1.6 billion in wholesale, primarily reflecting the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic across multiple sectors, and continued pressure on oil prices, with the largest impacts in the Oil & Gas, Real Estate, and Consumer & Retail industries, and
•
a net $4.2 billion addition as a result of the adoption of CECL.
There were also additions to a $400 million reduction in the allowance for loan losseslending-related commitments, which is included in other liabilities on the PCI residential real estate portfolio, reflectingconsolidated balance sheets, of $858 million related to the impact of the COVID-19 pandemic and continued improvementpressure on oil prices, and $98 million related to the adoption of CECL, resulting in home prices and delinquencies, partially offset by a $200 million additiontotal additions to the allowance in thefor credit card portfolio, duelosses of $6.8 billion and $4.3 billion, respectively, as of March 31, 2020.

Refer to loan growthCredit and higher loss rates, as anticipated.
ForInvestment Risk Management on pages 50–66, and Notes 1, 2, 3, 12 and 13 for a more detailed discussion of loans and the allowance for loan losses, refer to Credit and Investment Risk Management on pages 54–69, and Notes 2, 3, 11 and 12.losses.
Accrued interest and accounts receivable increased reflectingpredominantly driven by higher client receivables related to client-driven market-making activities in CIB Fixed Income Markets,during a period of heightened market volatility.
Goodwill, MSRs and other intangibles decreased reflecting lower MSRs as well asa result of faster prepayment speeds on lower rates and the realization of expected cash flows, partially offset by net additions to the MSRs. Refer to Note 15 for additional information.
Other assets increased reflecting higher receivablescash collateral placed with central counterparties during a period of heightened market volatility, and the Firm’s participation in CCBthe Federal Reserve Bank of Boston’s (“FRBB”) MMLF. The assets purchased from money market mutual fund clients related to the timing of payment activitiesMMLF were funded by nonrecourse advances from the FRBB, which are recorded in Card Services, dueshort-term borrowings. Refer to Regulatory Developments Relating to the end of the quarter fallingCOVID-19 Pandemic on a weekend.pages 10-11 and Liquidity Risk Management on pages 45–49 for additional information.
Premises and equipment increased due to the adoption of the new lease accounting guidance effective January 1, 2019. For additional information, refer to Note 16.
For information on Goodwill and MSRs, refer to Note 14.

Selected Consolidated balance sheets data (continued)Selected Consolidated balance sheets data (continued) Selected Consolidated balance sheets data (continued) 
(in millions)June 30,
2019
 December 31,
2018
Change
March 31,
2020
 December 31,
2019
Change
Liabilities        
Deposits$1,524,361
 $1,470,666
4 %$1,836,009
 $1,562,431
18 %
Federal funds purchased and securities loaned or sold under repurchase agreements201,683
 182,320
11
233,207
 183,675
27
Short-term borrowings59,890
 69,276
(14)51,909
 40,920
27
Trading liabilities147,639
 144,773
2
184,196
 119,277
54
Accounts payable and other liabilities216,137
 196,710
10
253,874
 210,407
21
Beneficial interests issued by consolidated variable interest entities (“VIEs”)25,585
 20,241
26
19,630
 17,841
10
Long-term debt288,869
 282,031
2
299,344
 291,498
3
Total liabilities2,464,164
 2,366,017
4
2,878,169
 2,426,049
19
Stockholders’ equity263,215
 256,515
3
261,262
 261,330
—
Total liabilities and stockholders’ equity$2,727,379
 $2,622,532
4 %$3,139,431
 $2,687,379
17 %
Deposits increased due to growthdriven by significant inflows in CIB, from client activity in Securities Services and Treasury Services, and net issuances of structured notes in Markets, as well as continued growth in new accounts in CCB. Deposits in CB and AWM were relatively stable. For additional information, referas clients focused on increasing their cash balances as a result of changes in market conditions driven by the COVID-19 pandemic. Deposits also increased in CCB due to seasonal growth in existing and new accounts.
Refer to Liquidity Risk Management on pages 49–5345–49 and Notes 2 and 15.16 for additional information.
Federal funds purchased and securities loaned or sold under repurchase agreements increased primarily due tofrom client-driven market-making activities as a result of changes in market conditions in March and higher secured financing of trading assets-debt and equity instruments and client-driven market-making activitieswhen compared with lower levels at year-end in CIB. For additional information, referRefer to Liquidity Risk Management on pages 49–5345–49 and Note 10.11 for additional information.
Short-term borrowings decreased reflecting lower short-term increased driven by the Firm’s participation in the FRBB’s MMLF. The nonrecourse advances from Federal Home Loan Banks (“FHLB”)the FRBB funded the assets purchased from money market mutual fund clients related to the MMLF, which are recorded in other assets. Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 10-11 and commercial paper in Treasury and CIO primarily due to short-term liquidity management. For additional information, refer to Liquidity Risk Management on pages 49–53.45–49 for additional information.
Trading liabilitiesincreased modestly as a result ofdue to client-driven market-making activities in CIB, which resulted in higher levels of short positions in both debt and equity instruments in Fixed Income Markets, largely offset byas well as higher derivative payables as a decline in short positions in equity instruments, primarily in prime brokerage. For additional information, referresult of market movements, including the impact of the COVID-19 pandemic. Refer to Notes 2 and 4.5 for additional information.
Accounts payable and other liabilities increased reflecting:
the impact of the adoption of the new lease accounting guidance effective January 1, 2019
reflecting higher client payables in CCB related to the timing of paymentclient-driven activities in Card Services, due to the endCIB during a period of the quarter falling on a weekend.heightened market volatility.
For additional information on Leases, refer to Note 16.
Beneficial interests issued by consolidated VIEs increased due to:
to higher levels of Firm-administered multi-seller conduit commercial paper issued to third parties,
partially offset by activity in municipal bond vehicles.
maturities of credit card securitizations.
For further information on Firm-sponsored VIEs and loan securitization trusts, referRefer to Off-Balance Sheet Arrangements on page 18 and Notes 1314 and 22.23 for further information on Firm-sponsored VIEs and loan securitization trusts.
Long-term debt increased primarily dueas a result of
higher FHLB advances and an increase in senior debt reflecting fair value hedge accounting adjustments related to client-drivenlower interest rates, partially offset by net issuancesmaturities in Treasury and CIO,
partially offset by
a decrease in the fair value of structured notes in CIB Markets, andrelated to market movements in Treasury and CIO, from the net issuances of senior debt, partially offset by lower FHLB advances. ForMarch.
Refer to Liquidity Risk Management on pages 45–49 for additional information on the Firm’s long-term debt activities, referactivities.
Stockholders’ equity was flat reflecting the net impact of capital actions, net income, the adoption of CECL and an increase in accumulated other comprehensive income (“AOCI”). The increase in AOCI was driven by higher valuation of interest rate cash flow hedges, debit valuation adjustment on fair value option-elected liabilities, and net unrealized gains on AFS securities. Refer to Liquidity Risk Management on pages 49–53.
Forpage 83 for information on changes in stockholders’ equity refer to page 83, and on the Firm’s capital actions, refer to Capital actions on pages 46–47.42–43.



Consolidated cash flows analysis
The following is a discussion of cash flow activities during the sixthree months ended June 30, 2019March 31, 2020 and 2018.2019.
(in millions) Six months ended June 30, Three months ended March 31,
2019
 2018
 2020
 2019
Net cash provided by/(used in)        
Operating activities $(94,734) $576
 $(120,772) $(80,880)
Investing activities 27,424
 (38,974) (135,150) 36,301
Financing activities 56,469
 13,766
 362,305
 69,435
Effect of exchange rate changes on cash 86
 (1,492) (2,480) (1,045)
Net decrease in cash and due from banks and deposits with banks $(10,755) $(26,124)
Net increase in cash and due from banks and deposits with banks $103,903
 $23,811
Operating activities
In 2020, cash used primarily resulted from higher trading assets, other assets and accrued interest and accounts receivable, partially offset by higher trading liabilities and accounts payable and other liabilities.
In 2019, cash used primarily resulted from higher trading assets-debt and equity instruments and securities borrowed, accrued interest and accounts receivable and other assets, partially offset by higherincreased trading liabilities and accounts payable and other liabilities, and net proceeds from loans originated for sale.
In 2018, cash provided primarily resulted from higher trading liabilities-debt and equity instruments and accounts payable and other liabilities, offset by higher trading assets-debt and equity instruments.held-for-sale.
 
Investing activities
In 2020, cash used primarily resulted from net purchases of investment securities, net loan originations and purchases of assets from money market mutual fund clients pursuant to nonrecourse advances provided by the FRBB under the MMLF.
In 2019, cash provided resulted from lowera decrease in securities purchased under resale agreements, and net proceeds from the salesales of loans held-for-investment, partially offset by net purchases of investment securities.
In 2018, cash used resulted from higher securities purchased under resale agreements and net loans originated, partially offset by net proceeds from investment securities.held-for-investment.
Financing activities
In 2019,2020, cash provided resulted from higher deposits, federal funds purchased and securities loaned or sold under repurchase agreements, partially offsetand net proceeds from long- and short-term borrowings, which included the non-recourse advances provided by net payments on long-term borrowings.the FRBB.
In 2018,2019, cash provided resulted from higher securities loaned or sold under repurchase agreements short-term borrowings and deposits, partially offset by net payments on long-term borrowings.higher deposits.
For both periods, cash was used for repurchases of common stock and cash dividends on common and preferred stock. On March 15, 2020, in response to the COVID-19 pandemic, the Firm temporarily suspended share repurchases through the second quarter of 2020.
* * *
ForRefer to Consolidated Balance Sheets Analysis on pages 15-16, Capital Risk Management on pages 39–44, and Liquidity Risk Management on pages 45–49 of this Form 10-Q, and pages 93–98 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of the activities affecting the Firm’s cash flows, refer to Consolidated Balance Sheets Analysis on pages 15–17, Capital Risk Management on pages 44–48, and Liquidity Risk Management on pages 49–53 of this Form 10-Q, and pages 95–100 of JPMorgan Chase’s 2018 Form 10-K.flows.


OFF-BALANCE SHEET ARRANGEMENTS
In the normal course of business, the Firm enters into various off-balance sheet arrangements and contractual obligations that may require future cash payments. Certain obligations are recognized on-balance sheet, while others are disclosed as off-balance sheet under accounting principles generally accepted in the U.S. (“U.S. GAAP”).
Special-purpose entities
The Firm has several types of off–balance sheet arrangements, including through nonconsolidated special-purpose entities (“SPEs”), which are a type of VIE, and through lending-related financial instruments (e.g., commitments and guarantees).
The Firm holds capital, as appropriate, against all SPE-related transactions and related exposures, such as derivative contracts and lending-related commitments and guarantees.
The Firm has no commitments to issue its own stock to support any SPE transaction, and its policies require that transactions with SPEs be conducted at arm’s length and reflect market pricing. Consistent with this policy, no JPMorgan Chase employee is permitted to invest in SPEs with which the Firm is involved where such investment would violate the Firm’s Code of Conduct.
The table below provides an index of where in this Form 10-Q a discussion of the Firm’s various off-balance sheet arrangements can be found. In addition, referRefer to Note 1 for additional information about the Firm’s consolidation policies.
Type of off-balance sheet arrangementLocation of disclosurePage references
Special-purpose entities: variable interests and other obligations, including contingent obligations, arising from variable interests in nonconsolidated VIEsRefer to Note 1314138-143145-150
Off-balance sheet lending-related financial instruments, guarantees, and other commitmentsRefer to Note 2223155-158161-164



EXPLANATION AND RECONCILIATION OF THE FIRM’S USE OF NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES
The Firm prepares its Consolidated Financial Statements in accordance with U.S. GAAP and this presentation is referred to as “reported” basis; these financial statements appear on pages 80–84.
In addition to analyzing the Firm’s results on a reported basis, the Firm also reviews and uses certain non-GAAP financial measures at the Firmwide and segment level. These non-GAAP measures include:
Firmwide “managed” basis results, including the overhead ratio, which include certain reclassifications to present total net revenue from investments that receive tax credits and tax-exempt securities on a basis comparable to taxable investments and securities (“FTE” basis)
 
Pre-provision profit, which represents total net revenue less noninterest expense
Net interest income and net yield excluding CIB’s Markets businesses
Certain credit metrics and ratios, which exclude PCI loans
Tangible common equity (“TCE”), ROTCE, and TBVPS.TBVPS
In addition, coreAllowance for loan losses to period-end loans is a key performance measure utilized by the Firmretained, excluding trade finance and its investors and analysts in assessing actual growth in the loan portfolio.conduits.
For a further discussion of management’s use of non-GAAP financial measures and key performance measures, referRefer to Explanation and Reconciliation Ofof the Firm’s Use Of Non-GAAP Financial Measures and Key Performance Measures on pages 57-5957–59 of JPMorgan Chase’s 20182019 Form 10-K.10-K for a further discussion of management’s use of non-GAAP financial measures.
The following summary table provides a reconciliation from the Firm’s reported U.S. GAAP results to managed basis.
Three months ended June 30,Three months ended March 31,
2019 20182020 2019
(in millions, except ratios)Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis		 Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis		Reported 
Fully taxable-equivalent adjustments(a)
 Managed
basis		 Reported 
Fully taxable-equivalent adjustments(a)
 Managed
basis
Other income$1,292
 $596
 $1,888
 $1,255
 $474
 $1,729
$1,156
 $708
 $1,864
 $1,475
 $585
 $2,060
Total noninterest revenue14,434
 596
 15,030
 14,268
 474
 14,742
13,812
 708
 14,520
 14,670
 585
 15,255
Net interest income14,398
 138
 14,536
 13,485
 161
 13,646
14,439
 110
 14,549
 14,453
 143
 14,596
Total net revenue28,832
 734
 29,566
 27,753
 635
 28,388
28,251
 818
 29,069
 29,123
 728
 29,851
Total noninterest expense16,850
 NA
 16,850
 16,395
 NA
 16,395
Pre-provision profit12,491
 734
 13,225
 11,782
 635
 12,417
11,401
 818
 12,219
 12,728
 728
 13,456
Provision for credit losses8,285
 NA
 8,285
 1,495
 NA
 1,495
Income before income tax expense11,342
 734
 12,076
 10,572
 635
 11,207
3,116
 818
 3,934
 11,233
 728
 11,961
Income tax expense$1,690
 $734
 $2,424
 $2,256
 $635
 $2,891
251
 818
 1,069
 2,054
 728
 2,782
Net income$2,865
 NA
 $2,865
 $9,179
 NA
 $9,179
           
Overhead ratio57% NM
 55% 58% NM
 56%60% NM
 58% 56% NM
 55%
           
Six months ended June 30,
2019 2018
(in millions, except ratios)Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis		 Reported
results		 
Fully taxable-equivalent adjustments(a)
 Managed
basis
Other income$2,767
 $1,181
 $3,948
 $2,881
 $929
 $3,810
Total noninterest revenue29,104
 1,181
 30,285
 28,863
 929
 29,792
Net interest income28,851
 281
 29,132
 26,797
 319
 27,116
Total net revenue57,955
 1,462
 59,417
 55,660
 1,248
 56,908
Pre-provision profit25,219
 1,462
 26,681
 23,609
 1,248
 24,857
Income before income tax expense22,575
 1,462
 24,037
 21,234
 1,248
 22,482
Income tax expense$3,744
 $1,462
 $5,206
 $4,206
 $1,248
 $5,454
Overhead ratio56% NM
 55% 58% NM
 56%
(a)Predominantly recognized in CIB, CB and Corporate.













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

(in millions, except rates)
Three months ended June 30, Six months ended June 30,
2019
2018
 Change
 20192018 Change
Net interest income – managed basis(a)(b)
$14,536
$13,646
 7 % $29,132
$27,116
 7 %
Less: CIB Markets net interest income(c)
624
754
 (17) 1,248
1,784
 (30)
Net interest income excluding CIB Markets(a)
$13,912
$12,892
 8
 $27,884
$25,332
 10
          
Average interest-earning assets(d)
$2,339,094
$2,206,005
 6
 $2,319,105
$2,196,675
 6
Less: Average CIB Markets interest-earning assets(c)(d)
673,480
595,160
 13
 661,397
585,322
 13
Average interest-earning assets excluding CIB Markets$1,665,614
$1,610,845
 3 % $1,657,708
$1,611,353
 3 %
Net interest yield on average interest-earning assets – managed basis(d)
2.49%2.48%   2.53%2.49%  
Net interest yield on average CIB Markets interest-earning assets(c)(d)
0.37
0.51
   0.38
0.61
  
Net interest yield on average interest-earning assets excluding CIB Markets3.35%3.21%   3.39%3.17%  

(in millions, except rates)
Three months ended March 31,
2020
2019
 Change
Net interest income – reported$14,439
$14,453
 — %
Fully taxable-equivalent adjustments110
143
 (23)
Net interest income – managed basis(a)
$14,549
$14,596
 —
Less: CIB Markets net interest income(b)
1,596
624
 156
Net interest income excluding CIB Markets(a)
$12,953
$13,972
 (7)
     
Average interest-earning assets$2,465,732
$2,298,894
 7
Less: Average CIB Markets interest-earning assets(b)
736,035
649,180
 13
Average interest-earning assets excluding CIB Markets$1,729,697
$1,649,714
 5 %
Net yield on average interest-earning assets – managed basis2.37%2.57%  
Net yield on average CIB Markets interest-earning assets(b)
0.87
0.39
  
Net yield on average interest-earning assets excluding CIB Markets3.01%3.43%  
(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, referRefer to the table above relating to the reconciliation from the Firm’s reported U.S. GAAP results to managed basis.
(c)Forpage 29 for further information on CIB’s Markets businesses, refer to page 31.businesses.
(d)In the second quarter of 2019, the Firm reclassified balances related to certain instruments from interest-earning to noninterest-earning assets, as the associated returns are recorded in principal transactions revenue and not in net interest income. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation.

The following summary table provides a reconciliation from the Firm’s common stockholders’ equity to TCE.
Period-end AveragePeriod-end Average
(in millions, except per share and ratio data)Jun 30,
2019
Dec 31,
2018
 Three months ended June 30, Six months ended June 30,Mar 31,
2020
Dec 31,
2019
 Three months ended March 31,
2019
2018
 2019
2018
 2020
2019
Common stockholders’ equity$236,222
$230,447
 $233,026
$228,901
 $231,547
$228,261
$231,199
$234,337
 $234,530
$230,051
Less: Goodwill47,477
47,471
 47,472
47,494
 47,474
47,499
47,800
47,823
 47,812
47,475
Less: Other intangible assets732
748
 741
822
 741
833
800
819
 812
744
Add: Certain Deferred tax liabilities(a)
2,316
2,280
 2,304
2,221
 2,296
2,216
2,389
2,381
 2,385
2,287
Tangible common equity$190,329
$184,508
 $187,117
$182,806
 $185,628
$182,145
$184,988
$188,076
 $188,291
$184,119
        
Return on tangible common equityNA
NA
 20%17% 20%18%NA
NA
 5%19%
Tangible book value per share$59.52
$56.33
 NA
NA
 NA
NA
$60.71
$60.98
 NA
NA
(a)Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating TCE.


BUSINESS SEGMENT RESULTS
The Firm is managed on a line of businessan LOB basis. There are four major reportable business segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset & Wealth Management. In addition, there is a Corporate segment.
The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by the Firm’s Operating Committee. Segment results are presented on a managed basis. For a definition of managed basis, referRefer to Explanation and Reconciliation of the Firm’s use of Non-GAAP Financial Measures and Key Performance Measures on pages 19–20.20 for a definition of managed basis.
Description of business segment reporting methodology
Results of the business segments are intended to present each segment as if it were essentially a stand-alone business. The management reporting process that derives business segment results includes the allocation of certain
income and expense items. For further information about line of business capital, refer to Line of business equity on page 46. The Firm periodically assesses the assumptions, methodologies and reporting classifications used for segment reporting, and further refinements may be implemented in future periods.
Revenue sharing
When business segments join efforts to sell products and services to the Firm’s clients, the participating business segments may agree to share revenue from those transactions. Revenue and expense are generally recognized in the segment responsible for the related product or service, with allocations to the other segment(s) involved in the transaction. The segment results reflect these revenue-sharing agreements.
Business segment capital allocation
The amount of capital assigned to each business is referred to as equity. On at least an annual basis,Periodically, the assumptions and methodologies used into allocate capital allocation are assessed and as a result, the capital allocated to lines of businessthe LOBs may change. For additional information on business segment capital allocation, referRefer to Line of business equity on page 9190 of JPMorgan Chase’s 20182019 Form 10-K.10-K for additional information on business segment capital allocation.
For a further discussion of those methodologies, referRefer to Business Segment Results – Description of business segment reporting methodology on pages 60–61 of JPMorgan Chase’s 20182019 Form 10-K.10-K for a further discussion of those methodologies.
Business segment changes
In the first quarter of 2020, the Firm began reporting a Wholesale Payments business unit within CIB following a realignment of the Firm’s wholesale payments businesses. The Wholesale Payments business comprises:
Merchant Services, which was realigned from CCB to CIB
Treasury Services and Trade Finance in CIB. Trade Finance was previously reported in Lending in CIB.
In connection with the alignment of Wholesale Payments, the assets, liabilities and headcount associated with the Merchant Services business were realigned to CIB from CCB, and the revenue and expenses of the Merchant Services business is reported across CCB, CIB and CB based primarily on client relationships. Prior periods have been revised to reflect this realignment and revised allocation methodology.
JPMorgan Chase
Consumer BusinessesWholesale Businesses
Consumer & Community BankingCorporate & Investment BankCommercial BankingAsset & Wealth Management
Consumer &
Business Banking		Home LendingCard & AutoBankingMarkets &
Securities Services		 • Middle Market Banking • Asset Management
 • Consumer Banking/Chase Wealth Management
 • Business Banking
 • Home Lending Production
 • Home Lending Servicing
 • Real Estate Portfolios
 • Credit Card
 • Auto

 • Investment Banking
 • Wholesale Payments
 • Lending
 • Fixed Income Markets • Corporate Client Banking
 • Wealth Management

 • Equity Markets
 • Securities Services
 • Credit Adjustments & Other
 • Commercial Real Estate Banking

Segment results – managed basis
The following tables summarize the Firm’s results by segment for the periods indicated.
Three months ended June 30,Consumer & Community Banking Corporate & Investment Bank Commercial Banking
Three months ended March 31,Consumer & Community Banking Corporate & Investment Bank Commercial Banking
(in millions, except ratios)2019
2018
Change 2019
2018
Change
 2019
2018
Change
2020
2019
Change
 2020
2019
Change
 2020
2019
Change
Total net revenue$13,833
$12,497
11 $9,641
$9,923
(3)% $2,211
$2,316
(5)%$13,171
$13,490
(2)% $9,948
$10,034
(1)% $2,178
$2,413
(10)%
Total noninterest expense7,162
6,879
4 5,487
5,403
2
 864
844
2
7,161
6,970
3
 5,896
5,629
5
 988
938
5
Pre-provision profit/(loss)6,671
5,618
19 4,154
4,520
(8) 1,347
1,472
(8)6,010
6,520
(8) 4,052
4,405
(8) 1,190
1,475
(19)
Provision for credit losses1,120
1,108
1 —
58
NM
 29
43
(33)5,772
1,314
339
 1,401
87
NM
 1,010
90
NM
Net income/(loss)4,174
3,412
22 2,935
3,198
(8) 996
1,087
(8)191
3,947
(95) 1,988
3,260
(39) 147
1,060
(86)
Return on equity (“ROE”)31%26% 14%17%  17%21% 1%30%  9%16%  2%19% 
Three months ended June 30,Asset & Wealth Management Corporate Total
Three months ended March 31,Asset & Wealth Management Corporate Total
(in millions, except ratios)2019
2018
Change
 2019
2018
Change
 2019
2018
Change
2020
2019
Change 2020
2019
Change
 2020
2019
Change
Total net revenue$3,559
$3,572
—
 $322
$80
303 % $29,566
$28,388
4 %$3,606
$3,489
3 $166
$425
(61)% $29,069
$29,851
(3)%
Total noninterest expense2,596
2,566
1
 232
279
(17) 16,341
15,971
2
2,659
2,647
— 146
211
(31) 16,850
16,395
3
Pre-provision profit/(loss)963
1,006
(4) 90
(199)NM
 13,225
12,417
7
947
842
12 20
214
(91) 12,219
13,456
(9)
Provision for credit losses2
2
—
 (2)(1)(100) 1,149
1,210
(5)94
2
NM 8
2
300
 8,285
1,495
454
Net income/(loss)719
755
(5) 828
(136)NM
 9,652
8,316
16
664
661
— (125)251
NM
 2,865
9,179
(69)
ROE27%33%  NM
NM
  16%14% 25%25% NM
NM
  4%16% 
Six months ended June 30,Consumer & Community Banking Corporate & Investment Bank Commercial Banking
(in millions, except ratios)2019
2018
Change 2019
2018
Change
 2019
2018
Change
Total net revenue$27,584
$25,094
10 $19,489
$20,406
(4)% $4,549
$4,482
1 %
Total noninterest expense14,373
13,788
4 10,940
11,062
(1) 1,737
1,688
3
Pre-provision profit/(loss)13,211
11,306
17 8,549
9,344
(9) 2,812
2,794
1
Provision for credit losses2,434
2,425
— 87
(100)NM
 119
38
213
Net income/(loss)8,137
6,738
21 6,186
7,172
(14) 2,049
2,112
(3)
ROE31%26%  15%20%  18%20% 
Six months ended June 30,Asset & Wealth Management Corporate Total
(in millions, except ratios)2019
2018
Change
 2019
2018
Change 2019
2018
Change
Total net revenue$7,048
$7,078
—
 $747
$(152)NM $59,417
$56,908
4%
Total noninterest expense5,243
5,147
2
 443
366
21 32,736
32,051
2
Pre-provision profit/(loss)1,805
1,931
(7) 304
(518)NM 26,681
24,857
7
Provision for credit losses4
17
(76) —
(5)NM 2,644
2,375
11
Net income/(loss)1,380
1,525
(10) 1,079
(519)NM 18,831
17,028
11
ROE26%33%  NM
NM
  16%14% 
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation.
The following sections provide a comparative discussion of the Firm’s results by segment as of or for the three and six months ended June 30, 2019March 31, 2020 versus the corresponding periods in the prior year, unless otherwise specified.


CONSUMER & COMMUNITY BANKING
For
Consumer & Community Banking offers services to consumers and businesses through bank branches, ATMs, digital (including mobile and online) and telephone banking. CCB is organized into Consumer & Business Banking (including Consumer Banking/Chase Wealth Management and Business Banking), Home Lending (including Home Lending Production, Home Lending Servicing and Real Estate Portfolios) and Card & Auto. Consumer & Business Banking offers deposit and investment products and services to consumers, and lending, deposit, and cash management and payment solutions to small businesses. Home Lending includes mortgage origination and servicing activities, as well as portfolios consisting of residential mortgages and home equity loans. Card & Auto issues credit cards to consumers and small businesses and originates and services auto loans and leases.
Refer to Line of Business Metrics on page 177 for a discussion of the business profile of CCB, refer to pages 62–65 of JPMorgan Chase’s 2018 Form 10-K and Line of Business Metrics on page 173.CCB.
Selected income statement data    
 Three months ended March 31,
(in millions, except ratios)2020
 2019
 Change
Revenue     
Lending- and deposit-related fees(a)
$972
 $909
 7 %
Asset management, administration and commissions(a)
585
 581
 1
Mortgage fees and related income320
 396
 (19)
Card income768
 909
 (16)
All other income1,373
 1,290
 6
Noninterest revenue4,018
 4,085
 (2)
Net interest income9,153
 9,405
 (3)
Total net revenue13,171
 13,490
 (2)
      
Provision for credit losses5,772
 1,314
 339
      
Noninterest expense     
Compensation expense2,597
 2,566
 1
Noncompensation expense(b)
4,564
 4,404
 4
Total noninterest expense7,161
 6,970
 3
Income before income tax expense238
 5,206
 (95)
Income tax expense47
 1,259
 (96)
Net income$191
 $3,947
 (95)
      
Revenue by line of business     
Consumer & Business Banking$6,091
 $6,661
 (9)
Home Lending1,161
 1,346
 (14)
Card & Auto5,919
 5,483
 8
      
Mortgage fees and related income details:     
Net production revenue319
 200
 60
Net mortgage servicing revenue(c)
1
 196
 (99)
Mortgage fees and related income$320
 $396
 (19)%
      
Financial ratios     
Return on equity1% 30%  
Overhead ratio54
 52
  
Selected income statement data          
 Three months ended June 30, Six months ended June 30,
(in millions, except ratios)2019
 2018
 Change
 2019
 2018
 Change
Revenue           
Lending- and deposit-related fees$928
 $875
 6 % $1,801
 $1,732
 4 %
Asset management, administration and commissions664
 591
 12
 1,282
 1,166
 10
Mortgage fees and related income279
 324
 (14) 675
 789
 (14)
Card income1,257
 910
 38
 2,425
 2,080
 17
All other income1,312
 1,048
 25
 2,590
 2,120
 22
Noninterest revenue4,440
 3,748
 18
 8,773
 7,887
 11
Net interest income9,393
 8,749
 7
 18,811
 17,207
 9
Total net revenue13,833
 12,497
 11
 27,584
 25,094
 10
            
Provision for credit losses1,120
 1,108
 1
 2,434
 2,425
 —
            
Noninterest expense           
Compensation expense2,672
 2,621
 2
 5,380
 5,281
 2
Noncompensation expense(a)
4,490
 4,258
 5
 8,993
 8,507
 6
Total noninterest expense7,162
 6,879
 4
 14,373
 13,788
 4
Income before income tax expense5,551
 4,510
 23
 10,777
 8,881
 21
Income tax expense1,377
 1,098
 25
 2,640
 2,143
 23
Net income$4,174
 $3,412
 22
 $8,137
 $6,738
 21
            
Revenue by line of business           
Consumer & Business Banking$6,797
 $6,131
 11
 $13,365
 $11,853
 13
Home Lending1,118
 1,347
 (17) 2,464
 2,856
 (14)
Card, Merchant Services & Auto5,918
 5,019
 18
 11,755
 10,385
 13
            
Mortgage fees and related income details:           
Net production revenue353
 93
 280
 553
 188
 194
Net mortgage servicing revenue(b)
(74) 231
 NM
 122
 601
 (80)
Mortgage fees and related income$279
 $324
 (14)% $675
 $789
 (14)%
            
Financial ratios           
Return on equity31% 26%   31% 26%  
Overhead ratio52
 55
   52
 55
  
Note: In the discussion andfirst quarter of 2020, the tables which follow,Merchant Services business was realigned from CCB presents certain financial measures which excludeto CIB as part of the impact of PCI loans; these are non-GAAP financial measures.Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation.
(a)Included operating lease depreciation expenseIn the first quarter of $959 million2020, the Firm reclassified certain fees from asset management, administration and $827 million forcommissions to lending- and deposit-related fees. The prior-period amounts were revised to conform with the three months ended June 30, 2019 and 2018, respectively, and $1.9 billion and $1.6 billion for six months ended June 30, 2019 and 2018, respectively.current presentation.
(b)Included MSR risk management resultsdepreciation expense on leased assets of $(244) million$1.1 billion and $(23)$967 million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively and $(253)respectively.
(c)Included MSR risk management results of $(90) million and $(6)$(9) million for sixthe three months ended June 30,March 31, 2020 and 2019, and 2018, respectively.



Quarterly results
Net income was $4.2 billion,$191 million, a decrease of 95%, predominantly driven by an increase of 22%.in the provision for credit losses.
Net revenue was $13.8$13.2 billion, an increasea decrease of 11%2%.
Net interest income was $9.4$9.2 billion, up 7%down 3%, driven by:
higherthe impact of deposit margins and balancemargin compression, partially offset by growth in deposit balances in CBB, as well as and
lower loan balances in Home Lending predominantly due to prior year loan sales,
largely offset by
higher loan balances and margin expansion in Card,
partially offset by
loan spread compression and lower loan balances in Home Lending.Card.
Noninterest revenue was $4.4$4.0 billion, up 18%down 2%, including the impact of the prior-year adjustment of approximately $330 milliondriven by:
lower card income due to the credit cardlower net interchange income reflecting higher rewards liability, predominantlycosts and partner payments, partially offset by higher card sales volume, despite a decline in March, and
lower net mortgage servicing revenue reflecting faster prepayment speeds on lower rates and a lower level of third-party loans serviced, as well as lower MSR risk management results, reflecting updates to model inputs. Excluding these notable items, noninterest revenue was up 16%, largely driven by:
predominantly offset by
higher net mortgage production revenue reflecting higher mortgage production volumes and margins, and volumes, as well as the impactabsence of a gain on a loan salessale in Home Lending, andthe prior year,
higher auto lease volume, and
partially offset by
lower operating revenue reflecting faster prepayment speeds on lower rates.higher deposit-related fees.
Refer to Note 1415 for further information regarding changes in value of the MSR asset and related hedges, and mortgage fees and related income.
Noninterest expense was $7.2 billion, up 4%3%, largely driven by:
technology, marketinghigher volume- and otherrevenue-related expense, including depreciation on auto lease assets, and investments in the business, as well as higher auto lease depreciation,
partially offset by
expense efficiencies and lower FDIC charges.structural expense.
The provision for credit losses was $1.1 billion, relatively flat compared with the prior year, reflecting:
an increase in credit card due to
–a $200 million addition to the allowance for loan losses reflecting loan growth and higher loss rates, as anticipated, and
–higher net charge-offs, on loan growth
offset by
a decrease in consumer, excluding credit card due to
–a $400 million reduction in the allowance for loan losses in the PCI residential real estate portfolio, reflecting continued improvement in home prices and delinquencies
partially offset by
–higher net charge-offs in the residential real estate portfolio as the prior year benefited from a recovery on a loan sale.
Year-to-date results
Net income was $8.1$5.8 billion, an increase of 21%.
Net revenue was $27.6$4.5 billion, an increasedriven by additions to the allowance for credit losses reflecting deterioration in the macroeconomic environment as a result of 10%.
Net interest income was $18.8 billion, up 9%, driven by:
higher deposit margins and balance growth in CBB, as well as higher loan balances and margin expansion in Card,
partially offset by
loan spread compression and lower loan balances in Home Lending.
Noninterest revenue was $8.8 billion, up 11%, including the impact of the prior-year adjustmentCOVID-19 pandemic, consisting of:
$3.8 billion for Card, $300 million for Home Lending, $250 million for Auto and $159 million in CBB
net charge-offs were flat reflecting higher net charge-offs in Card on loan growth, in line with prior expectations, offset by higher recoveries in Home Lending on a current period loan sale.
Refer to Credit and Investment Risk Management on pages 50–66 and Allowance for Credit Losses on pages 64–65 for further discussions of approximately $330 million to the credit card rewards liability, predominantly offset by lower MSR risk management results reflecting updates to model inputs. Excluding these notable items, noninterest revenue was up 10%, largely driven by:
higher auto lease volume,portfolios and
higher net mortgage production revenue reflecting higher mortgage production margins and volumes, as well as the impact of loan sales in Home Lending,
partially offset by
lower operating revenue reflecting lower servicing revenue on a lower level of third-party loans serviced and faster prepayment speeds on lower rates.
Noninterest expense was $14.4 billion, up 4%, driven by:
technology, marketing and other investments in the business, as well as higher auto lease depreciation,
partially offset by
expense efficiencies and lower FDIC charges.
The provisionallowance for credit losseslosses.
Selected metrics     
 As of or for the three months
ended March 31,
(in millions, except headcount)2020
 2019
 Change
Selected balance sheet data (period-end)     
Total assets$506,147
 $539,127
 (6)%
Loans:     
Consumer & Business Banking27,709
 26,492
 5
Home Lending196,401
 230,599
 (15)
Card154,021
 150,527
 2
Auto61,468
 62,786
 (2)
Total loans439,599
 470,404
 (7)
Deposits775,068
 702,587
 10
Equity52,000
 52,000
 —
Selected balance sheet data (average)     
Total assets$517,213
 $546,042
 (5)
Loans:     
Consumer & Business Banking27,261
 26,488
 3
Home Lending198,042
 238,949
 (17)
Card162,660
 151,134
 8
Auto60,893
 62,763
 (3)
Total loans448,856
 479,334
 (6)
Deposits733,648
 681,013
 8
Equity52,000
 52,000
 —
      
Headcount122,081
 124,305
 (2)%
In the first quarter of 2020, the Merchant Services business was $2.4 billion, flat comparedrealigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the prior year, reflecting:
an increase in credit card due to
–a $200 million addition to the allowance for loan losses reflecting loan growth and higher loss rates, as anticipated, and
–higher net charge-offs, on loan growth
offset by
current presentation, including a decrease in consumer, excluding credit card due to
–a $400 million reduction in the allowance for loan losses in the PCI residential real estate portfolio, reflecting continued improvement in home prices and delinquencies
partially offset by
–higher net charge-offs in the residential real estate portfolio as the prior year benefited from a recovery on a loan sale.

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



Selected metrics    
 As of or for the three months
ended March 31,
(in millions, except ratio data)2020

2019
 Change
Credit data and quality statistics     
Nonaccrual loans(a)(b)
$4,008

$3,265

23 %
      
Net charge-offs/(recoveries)     
Consumer & Business Banking74
 59
 25
Home Lending(122) (5) NM
Card1,313
 1,202
 9
Auto48
 58
 (17)
Total net charge-offs/(recoveries)$1,313
 $1,314
 —
      
Net charge-off/(recovery) rate     
Consumer & Business Banking1.09% 0.90%  
Home Lending(0.25) (0.01)  
Card3.25
 3.23
  
Auto0.32
 0.37
  
Total net charge-off/(recovery) rate1.18% 1.11%  
      
30+ day delinquency rate     
Home Lending(c)(d)
1.48% 1.62%  
Card1.96
 1.85
  
Auto0.89
 0.63
  
      
90+ day delinquency rate — Card1.02% 0.97%  
      
Allowance for loan losses     
Consumer & Business Banking$882
 $796
 11
Home Lending2,137
 2,741
 (22)
Card14,950
 5,183
 188
Auto732
 465
 57
Total allowance for loan losses$18,701
 $9,185
 104 %
Selected metrics           
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in millions, except headcount)2019
 2018
 Change
 2019 2018 Change
Selected balance sheet data (period-end)           
Total assets$550,690
 $552,674
 — % $550,690
 $552,674
 — %
Loans:           
Consumer & Business Banking26,616
 26,272
 1
 26,616
 26,272
 1
Home equity32,958
 39,033
 (16) 32,958
 39,033
 (16)
Residential mortgage186,575
 202,205
 (8) 186,575
 202,205
 (8)
Home Lending219,533
 241,238
 (9) 219,533
 241,238
 (9)
Card157,576
 145,255
 8
 157,576
 145,255
 8
Auto62,073
 65,014
 (5) 62,073
 65,014
 (5)
Total loans465,798
 477,779
 (3) 465,798
 477,779
 (3)
Core loans418,177
 419,295
 —
 418,177
 419,295
 —
Deposits695,100
 679,154
 2
 695,100
 679,154
 2
Equity52,000
 51,000
 2
 52,000
 51,000
 2
Selected balance sheet data (average)           
Total assets$542,337
 $544,642
 —
 $548,053
 $541,806
 1
Loans:           
Consumer & Business Banking26,570
 26,110
 2
 26,529
 25,978
 2
Home equity33,676
 39,898
 (16) 34,446
 40,836
 (16)
Residential mortgage191,009
 201,587
 (5) 197,332
 200,129
 (1)
Home Lending224,685
 241,485
 (7) 231,778
 240,965
 (4)
Card153,746
 142,724
 8
 152,447
 142,825
 7
Auto62,236
 65,383
 (5) 62,498
 65,622
 (5)
Total loans467,237
 475,702
 (2) 473,252
 475,390
 —
Core loans418,470
 414,120
 1
 423,315
 412,145
 3
Deposits690,892
 673,761
 3
 685,980
 666,719
 3
Equity52,000
 51,000
 2
 52,000
 51,000
 2
            
Headcount(a)
127,732
 131,945
 (3)% 127,732
 131,945
 (3)%
Effective January 1, 2020, the Firm adopted the CECL accounting guidance. The adoption resulted in a change in the accounting for PCI loans, which are considered purchased credit deteriorated (“PCD”) loans under CECL. Refer to Note 1 for further information.
(a)DuringAt March 31, 2020, nonaccrual loans included $970 million of PCD loans. Prior to the third quarteradoption of 2018, approximately 1,200 employees transferred from CCB to CIBCECL, nonaccrual loans excluded PCI loans as part of the reorganization of the Commercial Card business.


Selected metrics          
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in millions, except ratio data)2019

2018
 Change
 2019 2018 Change
Credit data and quality statistics           
Nonaccrual loans(a)(b)
$3,142

$3,854

(18)%
$3,142

$3,854

(18)%
            
Net charge-offs/(recoveries)(c)
           
Consumer & Business Banking66
 50
 32
 125
 103
 21
Home equity(16) (7) (129) (16) 9
 NM
Residential mortgage(12) (149) 92
 (17) (147) 88
Home Lending(28) (156) 82
 (33) (138) 76
Card1,240
 1,164
 7
 2,442
 2,334
 5
Auto42
 50
 (16) 100
 126
 (21)
Total net charge-offs/(recoveries)$1,320
 $1,108
 19
 $2,634
 $2,425
 9
            
Net charge-off/(recovery) rate(c)
           
Consumer & Business Banking1.00 % 0.77%   0.95 % 0.80%  
Home equity(d)
(0.25) (0.09)   (0.12) 0.06
  
Residential mortgage(d)
(0.03) (0.33)   (0.02) (0.16)  
Home Lending(d)
(0.06) (0.29)   (0.03) (0.13)  
Card3.24
 3.27
   3.23
 3.30
  
Auto0.27
 0.31
   0.32
 0.39
  
Total net charge-off/(recovery) rate(d)
1.19
 1.00
   1.18
 1.10
  
            
30+ day delinquency rate           
Home Lending(e)(f)
0.71 % 0.86%   0.71 % 0.86%  
Card1.71
 1.65
   1.71
 1.65
  
Auto0.82
 0.77
   0.82
 0.77
  
            
90+ day delinquency rate — Card0.87
 0.85
   0.87
 0.85
  
            
Allowance for loan losses           
Consumer & Business Banking$796
 $796
 —
 $796
 $796
 —
Home Lending, excluding PCI loans1,003
 1,003
 —
 1,003
 1,003
 —
Home Lending — PCI loans(c)
1,299
 2,132
 (39) 1,299
 2,132
 (39)
Card5,383
 4,884
 10
 5,383
 4,884
 10
Auto465
 464
 —
 465
 464
 —
Total allowance for loan losses(c)
$8,946
 $9,279
 (4)% $8,946
 $9,279
 (4)%
(a)Excludes PCI loans. The Firm is recognizingrecognized interest income on each pool of PCI loans as each of the pools iswas performing.
(b)At June 30,March 31, 2020 and 2019, and 2018, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $1.8 billion$616 million and $3.3$2.2 billion, respectively. These amounts have been excluded based upon the government guarantee.
(c)Net charge-offs/(recoveries) andAt March 31, 2020, the net charge-off/(recovery)30+ day delinquency rates forincluded PCD loans. The rate prior to January 1, 2020 was revised to include the three months ended June 30, 2019 and 2018, excluded $39 million and $73 million, respectively, and for six months ended June 30, 2019 and 2018, excluded $89 million and $93 million, respectively,impact 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, refer to Summary of changes in the allowance for credit losses on page 68.
(d)Excludes the impact of PCI loans. For the three months ended June 30,At March 31, 2020 and 2019, and 2018, the net charge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of (0.19)% and (0.07)%, respectively; (2) residential mortgage of (0.03)% and (0.30)%, respectively; (3) Home Lending of (0.05)% and (0.26)%, respectively; and (4) total CCB of 1.14% and 0.93%, respectively. For six months ended June 30, 2019 and 2018, the net charge-off/(recovery) rates included impact of PCI loans were as follows: (1) home equity of (0.09)% and 0.04%, respectively; (2) residential mortgage of (0.02)% and (0.15)%, respectively; (3) Home Lending of (0.03)% and (0.12)%, respectively; and (4) total CCB of 1.13% and 1.03%, respectively.
(e)At June 30, 2019 and 2018, excluded mortgage loans insured by U.S. government agencies of $2.9$1.0 billion and $5.0$3.2 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
(f)Excludes PCI loans. The 30+ day delinquency rate for PCI loans was 8.71% and 9.40% at June 30, 2019 and 2018, respectively.


Selected metrics    
 As of or for the three months
ended March 31,
(in billions, except ratios and where otherwise noted)2020
 2019
 Change
Business Metrics     
Number of branches4,967
 5,028
 (1)%
Active digital customers
(in thousands)(a)
53,799
 50,651
 6
Active mobile customers
(in thousands)(b)
38,236
 34,371
 11
Debit and credit card sales volume$266.0

$255.1

4
      
Consumer & Business Banking     
Average deposits$718.9
 $668.5
 8
Deposit margin2.06% 2.62%  
Business banking origination volume$1.5
 $1.5
 1
Client investment assets323.0
 312.3
 3
      
Home Lending     
Mortgage origination volume by channel     
Retail$14.1
 $7.9
 78
Correspondent14.0
 7.1
 97
Total mortgage origination volume(c)
$28.1
 $15.0
 87
      
Total loans serviced (period-end)$737.8
 $791.5
 (7)
Third-party mortgage loans serviced (period-end)505.0
 529.6
 (5)
MSR carrying value (period-end)3.3
 6.0
 (45)
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end)0.65% 1.13%  
      
MSR revenue multiple(d)
2.10x 3.32x  
      
Credit Card     
Credit card sales volume, excluding Commercial Card$179.1
 $172.5
 4
Net revenue rate10.68% 10.68%  
      
Auto     
Loan and lease origination volume$8.3
 $7.9
 5
Average auto operating lease assets23.1
 20.8
 11 %
Selected metrics          
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in billions, except ratios and where otherwise noted)2019
 2018
 Change
 2019
 2018
 Change
Business Metrics           
Number of branches4,970
 5,091
 (2)% 4,970
 5,091
 (2)%
Active digital customers
(in thousands)(a)
51,032
 47,952
 6
 51,032
 47,952
 6
Active mobile customers
(in thousands)(b)
35,392
 31,651
 12
 35,392
 31,651
 12
Debit and credit card sales volume$281.5

$255.0

10
 $536.6

$487.4
 10
            
Consumer & Business Banking           
Average deposits$676.7
 $659.8
 3
 $672.6
 $653.1
 3
Deposit margin2.60% 2.36%   2.61% 2.28%  
Business banking origination volume$1.7
 $1.9
 (9) $3.2
 $3.6
 (10)
Client investment assets328.1
 283.7
 16
 328.1
 283.7
 16
            
Home Lending           
Mortgage origination volume by channel           
Retail$12.5
 $10.4
 20
 $20.4
 $18.7
 9
Correspondent12.0
 11.1
 8
 19.1
 21.0
 (9)
Total mortgage origination volume(c)
$24.5
 $21.5
 14
 $39.5
 $39.7
 (1)
            
Total loans serviced (period-end)$780.1
 $802.6
 (3) $780.1
 $802.6
 (3)
Third-party mortgage loans serviced (period-end)526.6
 533.0
 (1) 526.6
 533.0
 (1)
MSR carrying value (period-end)5.1
 6.2
 (18) 5.1
 6.2
 (18)
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end)0.97% 1.16%   0.97% 1.16%  
            
MSR revenue multiple(d)
2.69x 3.31x   2.77x 3.22x  
            
Card, excluding Commercial Card           
Credit card sales volume$192.5
 $174.0
 11
 $365.0
 $331.1
 10
            
Card Services           
Net revenue rate11.48% 10.38%   11.55% 11.00%  
            
Merchant Services           
Merchant processing volume$371.6
 $330.8
 12
 $728.1
 $647.1
 13
            
Auto           
Loan and lease origination volume$8.5
 $8.3
 2
 $16.4
 $16.7
 (2)
Average auto operating lease assets21.3
 18.4
 16 % 21.1
 18.0
 17 %
(a)Users of all web and/or mobile platforms who have logged in within the past 90 days.
(b)Users of all mobile platforms who have logged in within the past 90 days.
(c)Firmwide mortgage origination volume was $26.3$31.9 billion and $23.7$16.4 billion for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $42.7 billion and $43.7 billion for six months ended June 30, 2019 and 2018, respectively.
(d)Represents the ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) divided by the ratio of annualized loan servicing-related revenue to third-party mortgage loans serviced (average).


CORPORATE & INVESTMENT BANK
For
The Corporate & Investment Bank, which consists of Banking and Markets & Securities Services, offers a broad suite of investment banking, market-making, prime brokerage, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, merchants, government and municipal entities. Banking offers a full range of investment banking products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity and debt markets, as well as loan origination and syndication. Banking also includes Wholesale Payments, which provides payments services enabling clients to manage payments and receipts globally, and cross-border financing. Markets & Securities Services includes Markets, a global market-maker in cash securities and derivative instruments, which also offers sophisticated risk management solutions, prime brokerage, and research. Markets & Securities Services also includes Securities Services, a leading global custodian which provides custody, fund accounting and administration, and securities lending products principally for asset managers, insurance companies and public and private investment funds.
Refer to Line of Business Metrics on page 177 for a discussion of the business profile of CIB, refer to pages 66–70 of JPMorgan Chase’s 2018 Form 10-K and Line of Business Metrics on page 173.
CIB.
Selected income statement data        
 Three months ended June 30, Six months ended June 30,
(in millions, except ratios)2019 2018 Change 2019 2018 Change
Revenue           
Investment banking fees$1,846
 $2,139
 (14)% $3,690
 $3,835
 (4)%
Principal transactions3,885
 3,666
 6
 8,048
 7,695
 5
Lending- and deposit-related fees374
 382
 (2) 735
 763
 (4)
Asset management, administration and commissions1,149
 1,155
 (1) 2,250
 2,286
 (2)
All other income229
 190
 21
 423
 870
 (51)
Noninterest revenue7,483
 7,532
 (1) 15,146
 15,449
 (2)
Net interest income2,158
 2,391
 (10) 4,343
 4,957
 (12)
Total net revenue(a)
9,641
 9,923
 (3) 19,489
 20,406
 (4)
            
Provision for credit losses—
 58
 NM
 87
 (100) NM
            
Noninterest expense           
Compensation expense2,698
 2,720
 (1) 5,647
 5,756
 (2)
Noncompensation expense2,789
 2,683
 4
 5,293
 5,306
 —
Total noninterest expense5,487
 5,403
 2
 10,940
 11,062
 (1)
Income before income tax expense4,154
 4,462
 (7) 8,462
 9,444
 (10)
Income tax expense1,219
 1,264
 (4) 2,276
 2,272
 —
Net income$2,935
 $3,198
 (8)% $6,186
 $7,172
 (14)%
Financial ratios           
Return on equity14% 17%   15% 20%  
Overhead ratio57
 54
   56
 54
  
Compensation expense as percentage of total net revenue28
 27
   29
 28
  
Selected income statement data  
 Three months ended March 31,
(in millions, except ratios)2020 2019 Change
Revenue     
Investment banking fees$1,907
 $1,844
 3 %
Principal transactions3,188
 4,164
 (23)
Lending- and deposit-related fees(a)
450
 396
 14
Asset management, administration and commissions(a)

1,261
 1,067
 18
All other income35
 365
 (90)
Noninterest revenue6,841
 7,836
 (13)
Net interest income3,107
 2,198
 41
Total net revenue(b)
9,948
 10,034
 (1)
      
Provision for credit losses1,401
 87
 NM
      
Noninterest expense     
Compensation expense3,006
 3,091
 (3)
Noncompensation expense2,890
 2,538
 14
Total noninterest expense5,896
 5,629
 5
Income before income tax expense2,651
 4,318
 (39)
Income tax expense663
 1,058
 (37)
Net income$1,988
 $3,260
 (39)%
Financial ratios     
Return on equity9% 16%  
Overhead ratio59
 56
  
Compensation expense as percentage of total net revenue30
 31
  
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation.
(a)In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts were revised to conform with the current presentation.
(b)Includes tax-equivalent adjustments, predominantly due to income tax credits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; and tax-exempt income from municipal bonds of $547$667 million and $428$539 million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $1.1 billion and $833 million for the six months ended June 30, 2019 and 2018, respectively.
Selected income statement data        
 Three months ended June 30, Six months ended June 30,
(in millions)2019 2018 Change 2019 2018 Change
Revenue by business           
Investment Banking$1,776
 $1,949
 (9)% $3,521
 $3,536
 — %
Treasury Services1,135
 1,181
 (4) 2,282
 2,297
 (1)
Lending337
 321
 5
 677
 623
 9
Total Banking3,248
 3,451
 (6) 6,480
 6,456
 —
Fixed Income Markets3,690
 3,453
 7
 7,415
 8,006
 (7)
Equity Markets1,728
 1,959
 (12) 3,469
 3,976
 (13)
Securities Services1,045
 1,103
 (5) 2,059
 2,162
 (5)
Credit Adjustments & Other(a)
(70) (43) (63) 66
 (194) NM
Total Markets & Securities Services(b)
6,393
 6,472
 (1) 13,009
 13,950
 (7)
Total net revenue$9,641
 $9,923
 (3)% $19,489
 $20,406
 (4)%

Selected income statement data  
 Three months ended March 31,
(in millions)2020 2019 Change
Revenue by business     
Investment Banking$886
 $1,745
 (49)%
Wholesale Payments
1,359
 1,415
 (4)
Lending350
 258
 36
Total Banking2,595
 3,418
 (24)
Fixed Income Markets4,993
 3,725
 34
Equity Markets2,237
 1,741
 28
Securities Services1,074
 1,014
 6
Credit Adjustments & Other(a)
(951) 136
 NM
Total Markets & Securities Services7,353
 6,616
 11
Total net revenue$9,948
 $10,034
 (1)%
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation.
(a)Consists primarily ofIncludes credit valuation adjustments (“CVA”) managed centrally within CIB and funding valuation adjustments (“FVA”) on derivatives. Resultsderivatives and certain components of fair value option elected liabilities, which are primarily reported in principal transactions revenue. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets.
(b)Formerly Markets & Investor Services.







Quarterly results
Net income was $2.9$2.0 billion, down 8%.39%, predominantly driven by an increase in the provision for credit losses.
Net revenue was $9.6$9.9 billion, down 3%1%.
Banking revenue was $3.2$2.6 billion, down 6%24%.
Investment Banking revenue was $1.8 billion,$886 million, down 9%49%, reflecting lowerpredominantly driven by $820 million of markdowns on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio as high-yield spreads widened significantly. The decline was partially offset by higher Investment Banking fees, across products.up 3%. The Firm maintained its #1 ranking for Global Investment Banking fees, according to Dealogic.
–Debt underwriting fees were $816 million, down 13%$1.1 billion, up 15%, driven by declinesboth increased industry-wide fees and wallet share gains in investment-grade bonds, particularly in March as clients sought to access liquidity.
–Equity underwriting fees were $331 million, up 25%, driven by increased industry-wide fee levels.fees primarily in the IPO market, with strong activity in January and February, compared to a weak prior year.
–Advisory fees were $525$503 million, down 16% and Equity underwriting fees were $505 million, down 11%22%, driven by declines in industry-wide fee levels and when compared to a strong prior year.year, driven by a lower number of completed transactions as well as the impact of delays in regulatory approvals.
Treasury ServicesWholesale Payments revenue was $1.1$1.4 billion, down 4%, predominantly driven by a reporting re-classification for certain expenses which are now reported as contra revenue in Merchant Services. In addition, deposit margin
compression largelywas offset by growth in operating depositshigher balances and higher fees on increased payments volume.fee growth.
Lending revenue was $337$350 million, up 5%36%, predominantly driven by higher net interest income reflecting growth in loan balances.fair value gains on hedges of accrual loans.
Markets & Securities Services revenue was $6.4$7.4 billion, down 1%up 11%. Markets revenue was $5.4$7.2 billion, flat compared to the prior year, and included a gain from the IPO of a strategic investment in Tradeweb. Excluding this gain, total Markets revenue and Fixed Income Markets revenue were down 6% and 3% respectively.up 32%.
Fixed Income Markets revenue was $3.7$5.0 billion, reflecting relative weakness in EMEAup 34%, driven by strong client activity across products largely offset by increased client activityprimarily in North America Rates and agency mortgageCurrencies & Emerging Markets reflecting higher trading due to the changing rate environment.volume particularly in March.
Equity Markets revenue was $1.7$2.2 billion, down 12% compared to a strong prior year, predominantlyup 28%, driven by lowerstrong client activity in derivatives.derivatives and higher revenue in Cash Equities, particularly in March.
Securities Services revenue was $1.0$1.1 billion, downup 6%, predominantly driven by deposit balance and fee growth partially offset by deposit margin compression.
Credit Adjustments & Other was a loss of $951 million, predominantly driven by funding spread widening on derivatives.
Noninterest expense was $5.9 billion, up 5%, driven by deposit margin compressionhigher legal expense, volume- and revenue-related expenses and investments in the impact of a business, exit, partially offset by increased client activity.lower structural expense.
The provision for credit losses was zero,$1.4 billion, compared with $58$87 million in the prior year.
Noninterest expense The increase was $5.5 billion, up 2%, reflecting higher legal expense, largely offset by lower performance-related compensation expense.
Year-to-date results
Net income was $6.2 billion, down 14%.
Net revenue was $19.5 billion, down 4%.
Banking revenue was $6.5 billion, flat compared to the prior year.
Investment Banking revenue was $3.5 billion, flat compared to the prior year, driven by lower equity underwriting and advisory fees, partially offset by higher debt underwriting fees. The Firm maintained its #1 ranking for Global Investment Banking fees with overall share gains, according to Dealogic.
–Equity underwriting fees were $770 million, down 16% and Advisory fees were $1.2 billion, down 3%, driven by declines in industry-wide fee levels.
–Although industry-wide fee levels declined, Debt underwriting fees of $1.8 billion were up 2%, driven by large acquisition financing deals.
Treasury Services revenue was $2.3 billion, down 1%, reflecting deposit margin compression offset by growth in operating deposits and higher fees on increased payments volume.
Lending revenue was $677 million, up 9%, predominantly driven by higher net interest income reflecting growth in loan balances.
Markets & Securities Services revenue was $13.0 billion, down 7%. Markets revenue was $10.9 billion, which included a gain from the IPO of a strategic investment in Tradeweb. In addition, prior year results included approximately $500 million of fair value gains relatedadditions to the adoption of the recognition and measurement accounting guidance for certain equity investments previously held at cost. Excluding these gains, total Markets revenue and Fixed Income Markets revenue were down 8% and 6% respectively.
Fixed Income Markets revenue was $7.4 billion reflecting lower revenue in Currencies & Emerging Markets and Rates. This decline was partially offset by higher revenue in agency mortgage trading due to the changing rate environment.
Equity Markets revenue was $3.5 billion, down 13% compared to a strong prior year, predominantly driven by lower client activity in derivatives.
Securities Services revenue was $2.1 billion, down 5%, driven by deposit margin compression and the impact of a business exit, partially offset by increased client activity.
Credit Adjustments & Other was a gain of $66 million, compared with a loss of $194 million in the prior year.
The provision for credit losses was $87 million reflecting select C&I client downgrades. The prior year was a benefit of $100 million, reflecting a reduction in the allowance for credit losses primarily driven by a single namefrom the impact of the COVID-19 pandemic across multiple sectors and continued pressure on oil prices, with the largest impact in the Oil & Gas portfolio, partially offset by net portfolio activity. and Consumer & Retail industries.
Noninterest expense was $10.9 billion, down 1%, reflecting lower performance-related compensation expenseRefer to Credit and lower FDIC charges partially offset by higher investments in technologyInvestment Risk Management on pages 50–66 and higher legal expense.Allowance for Credit Losses on pages 64–65 for further discussions of the credit portfolios and the allowance for credit losses.



Selected metrics    
 As of or for the three months
ended March 31,
(in millions, except headcount)2020 2019 Change
Selected balance sheet data (period-end)     
Assets$1,217,459
 $1,019,470
 19%
Loans:     
Loans retained(a)
165,376
 127,086
 30
Loans held-for-sale and loans at fair value9,326
 7,783
 20
Total loans174,702
 134,869
 30
Equity80,000
 80,000
 —
Selected balance sheet data (average)     
Assets$1,082,820
 $967,632
 12
Trading assets-debt and equity instruments427,316
 381,312
 12
Trading assets-derivative receivables55,133
 50,609
 9
Loans:     
Loans retained(a)
$128,838
 $126,990
 1
Loans held-for-sale and loans at fair value9,818
 8,615
 14
Total loans$138,656
 $135,605
 2
Equity80,000
 80,000
 —
Headcount60,245
 58,811
 2%
Selected metrics          
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in millions, except headcount)2019 2018 Change 2019 2018 Change
Selected balance sheet data (period-end)           
Assets$962,498
 $908,954
 6 % $962,498
 $908,954
 6 %
Loans:           
Loans retained(a)
123,074
 116,645
 6
 123,074
 116,645
 6
Loans held-for-sale and loans at fair value6,838
 6,254
 9
 6,838
 6,254
 9
Total loans129,912
 122,899
 6
 129,912
 122,899
 6
Core loans129,747
 122,574
 6
 129,747
 122,574
 6
Equity80,000
 70,000
 14
 80,000
 70,000
 14
Selected balance sheet data (average)           
Assets$992,792
 $937,217
 6
 $976,408
 $923,756
 6
Trading assets-debt and equity instruments421,775
 358,611
 18
 401,656
 356,750
 13
Trading assets-derivative receivables48,815
 60,623
 (19) 49,707
 60,393
 (18)
Loans:           
Loans retained(a)
$124,194
 $113,950
 9
 $125,585
 $111,665
 12
Loans held-for-sale and loans at fair value7,763
 5,961
 30
 8,186
 5,722
 43
Total loans$131,957
 $119,911
 10
 $133,771
 $117,387
 14
Core loans131,792
 119,637
 10
 133,596
 117,090
 14
Equity80,000
 70,000
 14
 80,000
 70,000
 14
Headcount(b)
54,959
 51,400
 7 % 54,959
 51,400
 7 %
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation, including an increase to period-end assets and headcount of $13.4 billion and 4,114, respectively, as of March 31, 2019.
(a)Loans retained includes credit portfolio loans, loans held by consolidated Firm-administered multi-seller conduits, trade finance loans, other held-for-investment loans and overdrafts.
(b)During the third quarter of 2018 approximately 1,200 employees transferred from CCB to CIB as part of the reorganization of the Commercial Card business.

Selected metrics           
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in millions, except ratios)2019 2018 Change 2019 2018 Change
Credit data and quality statistics           
Net charge-offs/(recoveries)$72
 $114
 (37)% $102
 $134
 (24)%
Nonperforming assets:           
Nonaccrual loans:           
Nonaccrual loans retained(a)
$569
 $352
 62 % $569
 $352
 62
Nonaccrual loans held-for-sale and loans at fair value
370
 175
 111
 370
 175
 111
Total nonaccrual loans939
 527
 78
 939
 527
 78
Derivative receivables39
 112
 (65) 39
 112
 (65)
Assets acquired in loan satisfactions58
 104
 (44) 58
 104
 (44)
Total nonperforming assets$1,036
 $743
 39
 $1,036
 $743
 39
Allowance for credit losses:           
Allowance for loan losses$1,131
 $1,043
 8
 $1,131
 $1,043
 8
Allowance for lending-related commitments807
 828
 (3) 807
 828
 (3)
Total allowance for credit losses$1,938
 $1,871
 4 % $1,938
 $1,871
 4 %
Net charge-off/(recovery) rate(b)
0.23% 0.40%   0.16% 0.24%  
Allowance for loan losses to period-end loans retained0.92
 0.89
   0.92
 0.89
  
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(c)
1.27
 1.27
   1.27
 1.27
  
Allowance for loan losses to nonaccrual loans retained(a)
199
 296
   199
 296
  
Nonaccrual loans to total period-end loans0.72% 0.43%   0.72% 0.43%  
Selected metrics     
 As of or for the three months
ended March 31,
(in millions, except ratios)2020 2019 Change
Credit data and quality statistics     
Net charge-offs/(recoveries)$55
 $30
 83 %
Nonperforming assets:     
Nonaccrual loans:     
Nonaccrual loans retained(a)
$689
 $812
 (15)%
Nonaccrual loans held-for-sale and loans at fair value
138
 313
 (56)
Total nonaccrual loans827
 1,125
 (26)
Derivative receivables85
 44
 94
Assets acquired in loan satisfactions43
 58
 (26)
Total nonperforming assets$955
 $1,227
 (22)
Allowance for credit losses:     
Allowance for loan losses$1,422
 $1,252
 14
Allowance for lending-related commitments1,468
 758
 94
Total allowance for credit losses$2,890
 $2,010
 44 %
Net charge-off/(recovery) rate(b)
0.17% 0.10%  
Allowance for loan losses to period-end loans retained0.86
 0.99
  
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(c)
1.11
 1.34
  
Allowance for loan losses to nonaccrual loans retained(a)
206
 154
  
Nonaccrual loans to total period-end loans0.47% 0.83%  
(a)Allowance for loan losses of $147$317 million and $141$252 million were held against these nonaccrual loans at June 30,March 31, 2020 and 2019, and 2018, respectively.
(b)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.
(c)Management uses allowance for loan losses to period-end loans retained, excluding trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of CIB’s allowance coverage ratio.

Investment banking feesInvestment banking fees          Investment banking fees    
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)2019 2018 Change 2019 2018 Change2020 2019 Change
Advisory$525
 $626
 (16)% $1,169
 $1,201
 (3)%$503
 $644
 (22)%
Equity underwriting505
 570
 (11) 770
 916
 (16)331
 265
 25
Debt underwriting(a)
816
 943
 (13) 1,751
 1,718
 2
1,073
 935
 15
Total investment banking fees$1,846
 $2,139
 (14)% $3,690
 $3,835
 (4)%$1,907
 $1,844
 3 %
(a)IncludesRepresents long-term debt and loan syndications.

League table results – wallet shareLeague table results – wallet share    League table results – wallet share    
Three months ended June 30, 2019 Full-year 2018Three months ended March 31, Full-year 2019
RankShare RankShare2020 2019 
Rank Share Rank Share Rank Share
Based on fees(a)
     
Based on fees(a)
      
Long-term debt(b)
     
M&A(b)
       
Global#1
 7.3 #1
 7.2%#2
 8.6 #2
 9.8 #2
 9.0%
U.S.1
 10.7 1
 11.2
2
 9.0 2
 10.1 2
 9.3
Equity and equity-related(c)
            
Global1
 9.7 1
 9.0
2
 8.8 3
 8.7 1
 9.3
U.S.2
 11.6 1
 12.3
2
 12.5 1
 12.4 1
 13.3
M&A(d)
     
Long-term debt(d)
       
Global2
 9.3 2
 8.7
1
 9.5 1
 7.8 1
 7.8
U.S.2
 9.7 2
 8.9
1
 12.8 1
 11.8 1
 12.0
Loan syndications            
Global2
 8.9 1
 9.5
1
 9.8 1
 13.0 1
 10.2
U.S.2
 10.3 1
 12.0
2
 9.1 1
 16.4 1
 12.5
Global investment banking fees(e)
#1
 8.7 #1
 8.6%#1
 9.1 #1
 9.6 #1
 8.9%
(a)Source: Dealogic as of JulyApril 1, 2019.2020. Reflects the ranking of revenue wallet and market share.
(b)Global M&A excludes any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S.
(c)Global equity and equity-related ranking includes rights offerings and Chinese A-Shares.
(d)Long-term debt rankings include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”); and exclude money market, short-term debt, and U.S. municipal securities.
(c)Global equity and equity-related ranking includes rights offerings and Chinese A-Shares.
(d)Global M&A excludes any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S.
(e)Global investment banking fees exclude money market, short-term debt and shelf deals.

Markets revenue
The following table summarizes select income statement data for the Markets businesses. Markets includes both Fixed Income Markets and Equity Markets. Markets revenue comprises principal transactions, fees, commissions and other income, as well as net interest income. The Firm assesses its Markets business performance on a total revenue basis, as offsets may occur across revenue line items. For example, securities that generate net interest income may be risk-managed by derivatives that are
 
recorded in principal transactions revenue. ForRefer to Notes 6 and 7 for a description of the composition of these income statement line items, refer to Notes 5 and 6. For further information, referitems. Refer to Markets revenue on page 69 of JPMorgan Chase’s 20182019 Form 10-K.10-K for further information.
For the periods presented below, the predominant source of principal transactions revenue was the amount recognized upon executing new transactions.
Three months ended June 30, Three months ended June 30,Three months ended March 31, Three months ended March 31,
2019 20182020 2019

(in millions)		Fixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal MarketsFixed Income MarketsEquity
Markets		Total
Markets		 Fixed Income MarketsEquity
Markets		Total
Markets
Principal transactions$2,431
$1,608
$4,039
 $2,214
$1,664
$3,878
$3,143
$1,723
$4,866
 $2,482
$1,557
$4,039
Lending- and deposit-related fees49
2
51
 49
2
51
47
2
49
 49
2
51
Asset management, administration and commissions97
453
550
 104
460
564
111
608
719
 103
434
537
All other income173
(19)154
 171
(6)165
1
(1)—
 219
(4)215
Noninterest revenue2,750
2,044
4,794
 2,538
2,120
4,658
3,302
2,332
5,634
 2,853
1,989
4,842
Net interest income(a)
940
(316)624
 915
(161)754
1,691
(95)1,596
 872
(248)624
Total net revenue$3,690
$1,728
$5,418
 $3,453
$1,959
$5,412
$4,993
$2,237
$7,230
 $3,725
$1,741
$5,466
In the first quarter of 2020, CIB Markets had two loss days. Loss days represent the number of days for which CIB Markets, which consists of Fixed Income Markets and Equity Markets, posted losses to total net revenue. The loss days determined under this measure differ from the measure used to determine backtesting gains and losses. Daily backtesting gains and losses include positions in the Firm’s Risk Management value-at-risk (“VaR”) measure and exclude select components of total net revenue, which may more than offset backtesting gains or losses on a particular day. For more information on daily backtesting gains and losses, refer to the VaR discussion on pages 67–69.
 Six months ended June 30, Six months ended June 30,
 2019 2018

(in millions)		Fixed Income MarketsEquity MarketsTotal Markets Fixed Income MarketsEquity MarketsTotal Markets
Principal transactions$4,913
$3,165
$8,078
 $4,946
$3,276
$8,222
Lending- and deposit-related fees98
4
102
 96
3
99
Asset management, administration and commissions200
887
1,087
 217
918
1,135
All other income392
(23)369
 731
11
742
Noninterest revenue5,603
4,033
9,636
 5,990
4,208
10,198
Net interest income(a)
1,812
(564)1,248
 2,016
(232)1,784
Total net revenue$7,415
$3,469
$10,884
 $8,006
$3,976
$11,982
(a)Declines in Markets net interest income were driven by higher funding costs.


Selected metrics     
 As of or for the three months
ended March 31,
(in millions, except where otherwise noted)2020 2019 Change
Assets under custody (“AUC”) by asset class (period-end)
(in billions):
     
Fixed Income$13,572
 $12,772
 6 %
Equity7,819
 9,028
 (13)
Other(a)
3,018
 2,916
 3
Total AUC$24,409

$24,716
 (1)
Merchant processing volume (in billions)(b)
$374.8
 $356.5
 5
Client deposits and other third-party liabilities (average)(c)
$514,464

$444,055
 16 %
Selected metrics           
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in millions, except where otherwise noted)2019 2018 Change 2019 2018 Change
Assets under custody (“AUC”) by asset class (period-end)
(in billions):
           
Fixed Income$13,056
 $12,611
 4% $13,056
 $12,611
 4%
Equity9,352
 8,791
 6
 9,352
 8,791
 6
Other(a)
3,042
 2,782
 9
 3,042
 2,782
 9
Total AUC$25,450

$24,184
 5
 $25,450
 $24,184
 5
Client deposits and other third-party liabilities (average)(b)
$458,237

$433,646
 6% $451,185
 $428,502
 5%
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation.
(a)Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts.
(b)Represents total merchant processing volume across CIB, CCB and CB.
(c)Client deposits and other third-party liabilities pertain to the Treasury ServicesWholesale Payments and Securities Services businesses.
International metrics     
 As of or for the three months
ended March 31,
(in millions, except where
 otherwise noted)
2020 
2019(c)
 Change
Total net revenue(a)
     
Europe/Middle East/Africa$2,590
 $3,180
 (19)%
Asia-Pacific1,776
 1,407
 26
Latin America/Caribbean507
 406
 25
Total international net revenue4,873
 4,993
 (2)
North America5,075
 5,041
 1
Total net revenue$9,948
 $10,034
 (1)
      
Loans retained (period-end)(a)
    
Europe/Middle East/Africa$29,184
 $26,329
 11
Asia-Pacific16,822
 18,006
 (7)
Latin America/Caribbean8,197
 7,397
 11
Total international loans54,203
 51,732
 5
North America111,173
 75,354
 48
Total loans retained$165,376
 $127,086
 30
      
Client deposits and other third-party liabilities (average)(b)
     
Europe/Middle East/Africa$190,976
 $164,138
 16
Asia-Pacific103,792
 85,082
 22
Latin America/Caribbean30,849
 27,482
 12
Total international$325,617
 $276,702
 18
North America188,847
 167,353
 13
Total client deposits and other third-party liabilities$514,464
 $444,055
 16
      
AUC (period-end)(b)
(in billions)
     
North America$15,590
 $15,352
 2
All other regions8,819
 9,364
 (6)
Total AUC$24,409
 $24,716
 (1)%
International metrics           
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in millions, except where
 otherwise noted)
2019 
2018(c)
 Change 2019 
2018(c)
 Change
Total net revenue(a)
           
Europe/Middle East/Africa$2,910
 $3,470
 (16)% $6,063
 $7,163
 (15)%
Asia/Pacific1,296
 1,341
 (3) 2,715
 2,763
 (2)
Latin America/Caribbean398
 369
 8
 801
 805
 —
Total international net revenue4,604
 5,180
 (11) 9,579
 10,731
 (11)
North America5,037
 4,743
 6
 9,910
 9,675
 2
Total net revenue$9,641
 $9,923
 (3) $19,489
 $20,406
 (4)
            
Loans retained (period-end)(a)
          
Europe/Middle East/Africa$24,665
 $26,342
 (6) $24,665
 $26,342
 (6)
Asia/Pacific15,302
 16,983
 (10) 15,302
 16,983
 (10)
Latin America/Caribbean7,090
 5,621
 26
 7,090
 5,621
 26
Total international loans47,057
 48,946
 (4) 47,057
 48,946
 (4)
North America76,017
 67,699
 12
 76,017
 67,699
 12
Total loans retained$123,074
 $116,645
 6
 $123,074
 $116,645
 6
            
Client deposits and other third-party liabilities (average)(b)
           
Europe/Middle East/Africa$175,189
 $164,735
 6
 $169,694
 $162,124
 5
Asia/Pacific86,889
 81,465
 7
 85,990
 82,526
 4
Latin America/Caribbean28,869
 27,747
 4
 28,180
 26,620
 6
Total international$290,947
 $273,947
 6
 $283,864
 $271,270
 5
North America167,290
 159,699
 5
 167,321
 157,232
 6
Total client deposits and other third-party liabilities$458,237
 $433,646
 6
 $451,185
 $428,502
 5
            
AUC (period-end)(b)
(in billions)
           
North America$15,875
 $14,942
 6
 $15,875
 $14,942
 6
All other regions9,575
 9,242
 4
 9,575
 9,242
 4
Total AUC$25,450
 $24,184
 5 % $25,450
 $24,184
 5 %
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior-period amounts were revised to conform with the current presentation.
(a)Total net revenue and loans retained (excluding loans held-for-sale and loans at fair value) are based on the location of the trading desk, booking location, or domicile of the client, as applicable.
(b)Client deposits and other third-party liabilities pertaining to the Treasury ServicesWholesale Payments and Securities Services businesses, and AUC, are based on the domicile of the client.
(c)The prior periodprior-period amounts have been revised to conform with the current period presentation.

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

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

Corporate Client Banking covers large corporations.

Commercial Real Estate Banking covers investors, developers, and owners of multifamily, office, retail, industrial and affordable housing properties.
Refer to Line of Business Metrics on page 178 for a discussion of the business profile of CB, refer to pages 71-73 of JPMorgan Chase’s 2018 Form 10-K and Line of Business Metrics on page 174.CB.
Selected income statement dataSelected income statement data      Selected income statement data
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)2019
 2018
 Change
 2019
 2018
 Change2020
 2019
 Change
Revenue                
Lending- and deposit-related fees(a)$216
 $224
 (4)% $443
 $450
 (2)%$261
 $233
 12 %
All other income(a)
333
 409
 (19) 764
 732
 4
360
 500
 (28)
Noninterest revenue549
 633
 (13) 1,207
 1,182
 2
621
 733
 (15)
Net interest income1,662
 1,683
 (1) 3,342
 3,300
 1
1,557
 1,680
 (7)
Total net revenue(b)
2,211
 2,316
 (5) 4,549
 4,482
 1
2,178
 2,413
 (10)
                
Provision for credit losses29
 43
 (33) 119
 38
 213
1,010
 90
 NM
                
Noninterest expense                
Compensation expense438
 415
 6
 887
 836
 6
472
 449
 5
Noncompensation expense426
 429
 (1) 850
 852
 —
513
 489
 5
Amortization of intangibles3
 —
 NM
Total noninterest expense864
 844
 2
 1,737
 1,688
 3
988
 938
 5
                
Income before income tax expense1,318
 1,429
 (8) 2,693
 2,756
 (2)180
 1,385
 (87)
Income tax expense322
 342
 (6) 644
 644
 —
33
 325
 (90)
Net income$996
 $1,087
 (8)% $2,049
 $2,112
 (3)%$147
 $1,060
 (86)%
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB and the revenue and expense of the business is reported across CCB, CIB and CB based primarily on client relationship. In conjunction with this realignment, treasury services product revenue has been renamed wholesale payments. Prior period revenue and expense amounts were revised to conform with the current presentation.
(a)Effective inIn the first quarter of 2019, includes revenue2020, the Firm reclassified certain fees from investment banking products, commercial card transactions and asset management, administration and commissions (which are included in all other income) to lending- and deposit-related fees. The prior periodPrior-period amounts have beenwere revised to conform with the current period presentation.
(b)Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community
development entities that provide loans to qualified businessesand in low-income communities,entities established for rehabilitation of historic properties, as well as tax-exempt income related to municipal financing activities of $100$81 million and $106$94 million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively and $194 million and $209 million for the six months ended June 30, 2019 and 2018, respectively.
Quarterly results
Net income was $1.0 billion,$147 million, a decrease of 8%.86%, predominantly driven by an increase in the provision for credit losses.
Net revenue was $2.2 billion, down 5%10%. Net interest income was $1.7$1.6 billion, down 1%7%, predominantly driven by lower deposit margins, partially offset by higher deposit balances. Noninterest revenue was $549$621 million, a decrease of 13%15%, largely driven by markdowns on held-for-sale positions, including unfunded commitments in the bridge financing portfolio, and lower investment banking revenue, due to the timing of large fee transactions.partially offset by higher deposit-related fees.
Noninterest expense was $864$988 million, up 2%5%, predominantly driven by continued investments in banker coverage and technology.the business.
The provision for credit losses was $29 million,$1.0 billion, compared with $43$90 million in the prior year.
Year-to-date results
Net income The increase was $2.0 billion, a decrease of 3%.
Net revenue was $4.5 billion, an increase of 1%. Net interest income was $3.3 billion, an increase of 1%, driven by higher deposit margins partially offset by lower deposit balances. Noninterest revenue was $1.2 billion, up 2% driven by higher investment banking revenue, partially offset by lower deposit fees.
Noninterest expense was $1.7 billion, an increase of 3%, driven by continued investments in banker coverage and technology.
The provision for credit losses was $119 million, predominantly driven by a net additionadditions to the allowance for credit losses from the impact of the COVID-19 pandemic across multiple sectors and continued pressure on select C&I client downgrades. The prior year was an expenseoil prices, with the largest impacts in the Oil & Gas, Real Estate, and Consumer & Retail industries.
Refer to Credit and Investment Risk Management on pages 50–66 and Allowance for Credit Losses on pages 64–65 for further discussions of $38 million.

the credit portfolios and the allowance for credit losses.
Selected income statement data (continued)      
 Three months ended June 30, Six months ended June 30,
(in millions, except ratios)2019
 2018
 Change
 2019
 2018
 Change
Revenue by product           
Lending$1,012
 $1,026
 (1)% $2,024
 $2,025
 — %
Treasury services989
 1,026
 (4) 2,018
 1,998
 1
Investment banking(a)
193
 254
 (24) 482
 438
 10
Other17
 10
 70
 25
 21
 19
Total Commercial Banking net revenue$2,211
 $2,316
 (5) $4,549
 $4,482
 1
            
Investment banking revenue, gross(b)
$592
 $739
 (20) $1,410
 $1,308
 8
            
Revenue by client segments           
Middle Market Banking$939
 $919
 2
 $1,890
 $1,814
 4
Corporate Client Banking709
 807
 (12) 1,525
 1,494
 2
Commercial Real Estate Banking(c)
538
 559
 (4) 1,085
 1,119
 (3)
Other(c)
25
 31
 (19) 49
 55
 (11)
Total Commercial Banking net revenue$2,211
 $2,316
 (5)% $4,549
 $4,482
 1 %
            
Financial ratios           
Return on equity17% 21%   18% 20%  
Overhead ratio39
 36
   38
 38
  
CB product revenue consists of the following:
Lending includes a variety of financing alternatives, which are primarily provided on a secured basis; collateral includes receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures, leases, and standby letters of credit.
Wholesale payments includes revenue from a broad range of products and services that enable CB clients to manage payments and receipts, as well as invest and manage funds.
Investment banking includes revenue from a range of products providing CB clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through advisory, equity underwriting, and loan syndications. Revenue from Fixed Income and Equity Markets products used by CB clients is also included.
Other product revenue primarily includes tax-equivalent adjustments generated from Community Development Banking activities and certain income derived from principal transactions.


Selected income statement data (continued)
 Three months ended March 31,
(in millions, except ratios)2020
 2019
 Change
Revenue by product     
Lending$954
 $1,012
 (6)%
Wholesale payments991
 1,104
 (10)
Investment banking(a)
235
 289
 (19)
Other(2) 8
 NM
Total Commercial Banking net revenue$2,178
 $2,413
 (10)
      
Investment banking revenue, gross(b)
$686
 $818
 (16)
      
Revenue by client segments     
Middle Market Banking$946
 $974
 (3)
Corporate Client Banking681
 851
 (20)
Commercial Real Estate Banking541
 547
 (1)
Other10
 41
 (76)
Total Commercial Banking net revenue$2,178
 $2,413
 (10)%
      
Financial ratios     
Return on equity2% 19%  
Overhead ratio45
 39
  
In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB and the revenue and expense of the business is reported across CCB, CIB and CB based primarily on client relationship. In conjunction with this realignment, treasury services product revenue has been renamed wholesale payments. Prior period revenue and expense amounts were revised to conform with the current presentation.
(a)Includes CB’s share of revenue from investment banking products sold to CB clients through the CIB.
(b)ForRefer to Business Segment Results on page 21 for discussion of revenue sharing, refer to page 60 of the 2018 Form 10-K.
(c)Effective in the first quarter of 2019, client segment data includes Commercial Real Estate Banking which comprises the former Commercial Term Lending and Real Estate Banking client segments, and Community Development Banking (previously part of Other). The prior period amounts have been revised to conform with the current period presentation.


Selected metrics      
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in millions, except headcount)2019
2018
Change
 20192018Change
Selected balance sheet data (period-end)       
Total assets$220,712
$220,232
— % $220,712
$220,232
— %
Loans:       
Loans retained208,323
205,834
1
 208,323
205,834
1
Loans held-for-sale and loans at fair value1,284
1,576
(19) 1,284
1,576
(19)
Total loans$209,607
$207,410
1
 $209,607
$207,410
1
Core loans209,475
207,238
1
 209,475
207,238
1
Equity22,000
20,000
10
 22,000
20,000
10
        
Period-end loans by client segment       
Middle Market Banking$56,346
$58,301
(3) $56,346
$58,301
(3)
Corporate Client Banking51,500
48,885
5
 51,500
48,885
5
Commercial Real Estate Banking(a)
100,751
98,808
2
 100,751
98,808
2
Other(a)
1,010
1,416
(29) 1,010
1,416
(29)
Total Commercial Banking loans$209,607
$207,410
1
 $209,607
$207,410
1
        
Selected balance sheet data (average)       
Total assets$218,760
$218,396
—
 $218,530
$217,781
—
Loans:       
Loans retained206,771
204,239
1
 205,623
203,109
1
Loans held-for-sale and loans at fair value701
1,381
(49) 1,165
896
30
Total loans$207,472
$205,620
1
 $206,788
$204,005
1
Core loans207,336
205,440
1
 206,646
203,809
1
        
Average loans by client segment       
Middle Market Banking$57,155
$57,346
—
 $56,940
$57,052
—
Corporate Client Banking48,656
48,150
1
 48,400
46,962
3
Commercial Real Estate Banking(a)
100,671
98,601
2
 100,469
98,500
2
Other(a)
990
1,523
(35) 979
1,491
(34)
Total Commercial Banking loans$207,472
$205,620
1
 $206,788
$204,005
1
        
Client deposits and other third-party liabilities$168,247
$170,745
(1) $167,756
$173,168
(3)
Equity22,000
20,000
10
 22,000
20,000
10
        
Headcount11,248
10,579
6 % 11,248
10,579
6 %
(a)Effective in the first quarter of 2019, client segment data includes Commercial Real Estate Banking which comprises the former Commercial Term Lending and Real Estate Banking client segments, and Community Development Banking (previously part of Other). The prior period amounts have been revised to conform with the current period presentation.sharing.

Selected metrics  
 As of or for the three months
ended March 31,
(in millions, except headcount)2020
2019
Change
Selected balance sheet data (period-end)   
Total assets$247,786
$216,111
15 %
Loans:   
Loans retained232,254
204,927
13
Loans held-for-sale and loans at fair value1,112
410
171
Total loans$233,366
$205,337
14
Equity22,000
22,000
—
    
Period-end loans by client segment   
Middle Market Banking$60,317
$56,846
6
Corporate Client Banking69,540
46,897
48
Commercial Real Estate Banking102,799
100,622
2
Other710
972
(27)
Total Commercial Banking loans$233,366
$205,337
14
    
Selected balance sheet data (average)   
Total assets$226,071
$218,297
4
Loans:   
Loans retained209,988
204,462
3
Loans held-for-sale and loans at fair value1,831
1,634
12
Total loans$211,819
$206,096
3
    
Average loans by client segment   
Middle Market Banking$56,045
$56,723
(1)
Corporate Client Banking53,032
48,141
10
Commercial Real Estate Banking101,526
100,264
1
Other1,216
968
26
Total Commercial Banking loans$211,819
$206,096
3
    
Client deposits and other third-party liabilities$188,808
$167,260
13
Equity22,000
22,000
—
    
Headcount11,779
11,033
7 %
Selected metrics (continued)        
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in millions, except ratios)2019
2018
Change
 2019
 2018
 Change
Credit data and quality statistics         
Net charge-offs/(recoveries)$15
$34
(56)% $26
 $34
 (24)%
Nonperforming assets         
Nonaccrual loans:         
Nonaccrual loans retained(a)
$614
$546
12 % $614
 $546
 12 %
Nonaccrual loans held-for-sale and loans at fair value—
—
—
 —
 —
 —
Total nonaccrual loans$614
$546
12
 $614
 $546
 12
Assets acquired in loan satisfactions20
2
NM
 20
 2
 NM
Total nonperforming assets$634
$548
16
 $634
 $548
 16
Allowance for credit losses:         
Allowance for loan losses$2,756
$2,622
5
 $2,756
 $2,622
 5
Allowance for lending-related commitments274
243
13
 274
 243
 13
Total allowance for credit losses$3,030
$2,865
6 % $3,030
 $2,865
 6 %
Net charge-off/(recovery) rate(b)
0.03%0.07%  0.03% 0.03%  
Allowance for loan losses to period-end loans retained
1.32
1.27
  1.32
 1.27
  
Allowance for loan losses to nonaccrual loans retained(a)
449
480
  449
 480
  
Nonaccrual loans to period-end total loans0.29
0.26
  0.29
 0.26
  

Selected metrics (continued)  
 As of or for the three months
ended March 31,
(in millions, except ratios)2020
2019
Change
Credit data and quality statistics   
Net charge-offs/(recoveries)$100
$11
NM
Nonperforming assets   
Nonaccrual loans:   
Nonaccrual loans retained(a)
$793
$544
46 %
Nonaccrual loans held-for-sale and loans at fair value—
—
—
Total nonaccrual loans$793
$544
46
Assets acquired in loan satisfactions24
—
NM
Total nonperforming assets$817
$544
50
Allowance for credit losses:   
Allowance for loan losses$2,680
$2,766
(3)
Allowance for lending-related commitments505
250
102
Total allowance for credit losses$3,185
$3,016
6 %
Net charge-off/(recovery) rate(b)
0.19%0.02% 
Allowance for loan losses to period-end loans retained
1.15
1.35
 
Allowance for loan losses to nonaccrual loans retained(a)
338
508
 
Nonaccrual loans to period-end total loans0.34
0.26
 
(a)Allowance for loan losses of $125$175 million and $126$132 million was held against nonaccrual loans retained at June 30,March 31, 2020 and 2019, and 2018, respectively.
(b)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.


ASSET & WEALTH MANAGEMENT
For a discussion of the business profile of AWM, referRefer to pages 74–76 of JPMorgan Chase’s 20182019 Form 10-K and Line of Business Metrics on pages 174–175.178–179 for a discussion of the business profile of AWM.
Selected income statement data
(in millions, except ratios)Three months ended March 31,
2020
2019
Change
Revenue   
Asset management, administration and commissions$2,706
$2,416
12 %
All other income3
177
(98)
Noninterest revenue2,709
2,593
4
Net interest income897
896
—
Total net revenue3,606
3,489
3
    
Provision for credit losses94
2
NM
    
Noninterest expense   
Compensation expense1,411
1,462
(3)
Noncompensation expense1,248
1,185
5
Total noninterest expense2,659
2,647
—
    
Income before income tax expense853
840
2
Income tax expense189
179
6
Net income$664
$661
—
    
Revenue by line of business   
Asset Management$1,740
$1,761
(1)
Wealth Management1,866
1,728
8
Total net revenue$3,606
$3,489
3 %
    
Financial ratios   
Return on equity25%25% 
Overhead ratio74
76
 
Pre-tax margin ratio:   
Asset Management24
23
 
Wealth Management24
25
 
Asset & Wealth Management24
24
 
Selected income statement data    
(in millions, except ratios)Three months ended June 30, Six months ended June 30,
2019
2018
Change
 2019
2018
Change
Revenue       
Asset management, administration and commissions$2,568
$2,532
1 % $4,984
$5,060
(2)%
All other income115
155
(26) 292
257
14
Noninterest revenue2,683
2,687
—
 5,276
5,317
(1)
Net interest income876
885
(1) 1,772
1,761
1
Total net revenue3,559
3,572
—
 7,048
7,078
—
        
Provision for credit losses2
2
—
 4
17
(76)
        
Noninterest expense       
Compensation expense1,406
1,329
6
 2,868
2,721
5
Noncompensation expense1,190
1,237
(4) 2,375
2,426
(2)
Total noninterest expense2,596
2,566
1
 5,243
5,147
2
        
Income before income tax expense961
1,004
(4) 1,801
1,914
(6)
Income tax expense242
249
(3) 421
389
8
Net income$719
$755
(5) $1,380
$1,525
(10)
        
Revenue by line of business       
Asset Management$1,785
$1,826
(2) $3,546
$3,613
(2)
Wealth Management1,774
1,746
2
 3,502
3,465
1
Total net revenue$3,559
$3,572
— % $7,048
$7,078
— %
        
Financial ratios       
Return on equity27%33%  26%33% 
Overhead ratio73
72
  74
73
 
Pre-tax margin ratio:       
Asset Management25
28
  24
27
 
Wealth Management29
28
  27
27
 
Asset & Wealth Management27
28
  26
27
 
Quarterly results
Net income was $719$664 million, a decrease of 5%.flat versus the prior year.
Net revenue of $3.6 billion was flat.up 3%. Net interest income of $897 million was $876 million,flat, reflecting deposit and loan growth, offset by deposit margin compression. Noninterest revenue was $2.7 billion, up 4%, largely driven by:
higher asset management fees as a result of higher asset values at the beginning of 2020 driven by higher average market levels, and strong net inflows into long-term products over the past year despite the impact of market volatility in March, and
increased brokerage commissions on higher client-driven volume particularly in March,
largely offset by
net valuation losses on certain investments, compared with gains in the prior year.
Revenue from Asset Management was $1.7 billion, down 1%, driven by lower deposit revenue, by:
net valuation losses on certain investments, compared with gains in the prior year,
largely offset by
higher asset management fees as a result of higher average market levels, despite the impact of market volatility in March.
Revenue from Wealth Management was $1.9 billion, up 8%, predominantly driven by:
increased brokerage commissions on higher client-driven volume particularly in March,
deposit and loan growth. growth, and
higher asset management fees as a result of higher average market levels and strong net inflows into long-term products over the past year, despite the impact of market volatility in March,
partially offset by
deposit margin compression.
Noninterest revenueexpense of $2.7 billion was flat, as the impact of higher average market levels wasinvestments and volume-and revenue-related expense, were predominantly offset by lower net investment valuation gains.structural expense.
Noninterest expenseThe provision for credit losses was $2.6 billion, an increase of 1%,$94 million, driven by continued investments in advisorsadditions to the allowance for credit losses from the impact of the COVID-19 pandemic, as well as loan growth.
Refer to Credit and technology, partially offset by lower distribution fees.
Year-to-date results
Net income was $1.4 billion, a decreaseInvestment Risk Management on pages 50–66 and Allowance for Credit Losses on pages 64–65 for further discussions of 10%.
Net revenue of $7 billion was flat. Net interest income was $1.8 billion, up 1%, predominantly driven by loan growth, offset by lower deposit revenue. Noninterest revenue was $5.3 billion, down 1%, driven by a shift in the mix toward lower fee productscredit portfolios and lower average market levels, predominantly offset by higher net investment valuation gains.
Noninterest expense was $5.2 billion, an increase of 2%, largely driven by continued investments in technology and advisors, partially offset by lower distribution fees.the allowance for credit losses.



Selected metrics   
 As of or for the three months
ended March 31,
(in millions, except ranking data, headcount and ratios)2020
2019
Change
% of JPM mutual fund assets rated as 4- or 5-star(a)
62%60% 
% of JPM mutual fund assets ranked in 1st or 2nd quartile:(b)
   
1 year69
72
 
3 years74
78
 
5 years78
86
 
    
Selected balance sheet data (period-end)(c)
   
Total assets$186,102
$165,865
12 %
Loans166,058
143,750
16
Deposits168,561
143,348
18
Equity10,500
10,500
—
    
Selected balance sheet data (average)(c)
   
Total assets$183,316
$167,358
10
Loans161,823
145,406
11
Deposits150,631
138,235
9
Equity10,500
10,500
—
    
Headcount23,830
24,347
(2)
    
Number of Wealth Management client advisors2,878
2,877
—
    
Credit data and quality statistics(c)
   
Net charge-offs$2
$4
(50)
Nonaccrual loans304
285
7
Allowance for credit losses:   
Allowance for loan losses$438
$325
35
Allowance for lending-related commitments14
18
(22)
Total allowance for credit losses$452
$343
32 %
Net charge-off rate—
0.01% 
Allowance for loan losses to period-end loans0.26
0.23
 
Allowance for loan losses to nonaccrual loans144
114
 
Nonaccrual loans to period-end loans0.18
0.20
 
Selected metrics       
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in millions, except ranking data, headcount and ratios)2019
2018
Change
 2019
2018
Change
% of JPM mutual fund assets rated as 4- or 5-star(a)
63%59%  63%59% 
% of JPM mutual fund assets ranked in 1st or 2nd quartile:(b)
       
1 year78
65
  78
65
 
3 years75
71
  75
71
 
5 years82
85
  82
85
 
        
Selected balance sheet data (period-end)       
Total assets$172,149
$161,474
7 % $172,149
$161,474
7 %
Loans149,877
138,606
8
 149,877
138,606
8
Core loans149,877
138,606
8
 149,877
138,606
8
Deposits136,225
131,511
4
 136,225
131,511
4
Equity10,500
9,000
17
 10,500
9,000
17
        
Selected balance sheet data (average)       
Total assets$167,544
$158,244
6
 $167,452
$156,305
7
Loans146,494
136,710
7
 145,953
134,683
8
Core loans146,494
136,710
7
 145,953
134,683
8
Deposits140,317
139,557
1
 139,282
141,865
(2)
Equity10,500
9,000
17
 10,500
9,000
17
        
Headcount23,683
23,141
2
 23,683
23,141
2
        
Number of Wealth Management client advisors2,735
2,644
3
 2,735
2,644
3
        
Credit data and quality statistics       
Net charge-offs$(3)$(5)40
 $1
$(4)NM
Nonaccrual loans127
323
(61) 127
323
(61)
Allowance for credit losses:       
Allowance for loan losses$331
$304
9
 $331
$304
9
Allowance for lending-related commitments17
15
13
 17
15
13
Total allowance for credit losses$348
$319
9 % $348
$319
9 %
Net charge-off rate(0.01)%(0.01)%  —
(0.01)% 
Allowance for loan losses to period-end loans0.22
0.22
  0.22
0.22
 
Allowance for loan losses to nonaccrual loans261
94
  261
94
 
Nonaccrual loans to period-end loans0.08
0.23
  0.08
0.23
 
(a)Represents the “overall star rating” derived from Morningstar for the U.S., the U.K., Luxembourg, Hong Kong and Taiwan domiciled funds; and Nomura “star rating” for Japan domiciled funds and Morningstar for all other domiciled funds. Includes only Asset Management retail open-ended mutual funds that have a rating. Excludes money market funds, Undiscovered Managers Fund, and Brazil and India domiciled funds.
(b)Quartile ranking sourced from:from Lipper, for the U.S. and Taiwan domiciled funds; Morningstar, for the U.K., Luxembourg and Hong Kong domiciled funds; Nomura for Japan domiciled funds and Fund Doctor for South Korea domiciled funds.based on country of domicile. Includes only Asset Management retail open-ended mutual funds that are ranked by the aforementioned sources. Excludes money market funds, Undiscovered Managers Fund, and Brazil and India domiciled funds.

(c)Loans, deposits and related credit data and quality statistics relate to the Wealth Management business.
Client assets
Client assets of $3.0 trillion and assets under management of $2.2 trillion were both up 4% and 7%, predominantly respectively, driven by cumulative net inflows, into long-term and liquidity products as well as higherpartially offset by the impact of lower market levels globally.at the end of the quarter.
Client assets    
June 30,As of March 31,
(in billions)2019
2018
Change
2020
2019
Change
Assets by asset class    
Liquidity$481
$448
7%$618
$476
30 %
Fixed income543
452
20
586
495
18
Equity441
435
1
369
427
(14)
Multi-asset and alternatives713
693
3
666
698
(5)
Total assets under management2,178
2,028
7
2,239
2,096
7
Custody/brokerage/administration/deposits820
771
6
763
801
(5)
Total client assets$2,998
$2,799
7
$3,002
$2,897
4
    
Memo:    
Alternatives client assets (a)
$177
$172
3
$188
$172
9
    
Assets by client segment    
Private Banking$617
$551
12
$617
$597
3
Institutional991
934
6
1,097
943
16
Retail570
543
5
525
556
(6)
Total assets under management$2,178
$2,028
7
$2,239
$2,096
7
    
Private Banking$1,410
$1,298
9
$1,355
$1,371
(1)
Institutional1,013
956
6
1,118
965
16
Retail575
545
6
529
561
(6)
Total client assets$2,998
$2,799
7%$3,002
$2,897
4 %
(a)Represents assets under management, as well as client balances in brokerage accounts
Client assets (continued)  


Three months ended
March 31,
(in billions)2020
2019
Assets under management rollforward  
Beginning balance$2,364
$1,987
Net asset flows:  
Liquidity75
(5)
Fixed income1
19
Equity(1)(6)
Multi-asset and alternatives(2)(3)
Market/performance/other impacts(198)104
Ending balance, March 31$2,239
$2,096
   
Client assets rollforward  
Beginning balance$3,226
$2,733
Net asset flows85
9
Market/performance/other impacts(309)155
Ending balance, March 31$3,002
$2,897
Client assets (continued)     


Three months ended
June 30,		Six months ended
June 30,
(in billions)2019
2018
 2019
2018
Assets under management rollforward     
Beginning balance$2,096
$2,016
 $1,987
$2,034
Net asset flows:     
Liquidity4
17
 (1)(4)
Fixed income37
(7) 56
(12)
Equity(1)2
 (7)7
Multi-asset and alternatives—
9
 (3)25
Market/performance/other impacts42
(9) 146
(22)
Ending balance, June 30$2,178
$2,028
 $2,178
$2,028
      
Client assets rollforward     
Beginning balance$2,897
$2,788
 $2,733
$2,789
Net asset flows52
11
 61
25
Market/performance/other impacts49
—
 204
(15)
Ending balance, June 30$2,998
$2,799
 $2,998
$2,799







International metrics   
 Three months ended
March 31,
(in millions)2020
2019
Change
Total net revenue (a)
   
Europe/Middle East/Africa$623
$695
(10)%
Asia-Pacific400
364
10
Latin America/Caribbean188
182
3
Total international net revenue1,211
1,241
(2)
North America2,395
2,248
7
Total net revenue(a)
$3,606
$3,489
3 %
International metrics       
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in millions)2019
2018
Change
 2019
2018
Change
Total net revenue (a)
       
Europe/Middle East/Africa$680
$692
(2)% $1,342
$1,418
(5)%
Asia/Pacific370
391
(5) 728
784
(7)
Latin America/Caribbean219
234
(6) 440
461
(5)
Total international net revenue1,269
1,317
(4) 2,510
2,663
(6)
North America2,290
2,255
2
 4,538
4,415
3
Total net revenue(a)
$3,559
$3,572
—
 $7,048
$7,078
— %
(a)Regional revenue is based on the domicile of the client.
 As of March 31,
(in billions)2020
2019
Change
Assets under management   
Europe/Middle East/Africa$395
$378
4 %
Asia-Pacific174
178
(2)
Latin America/Caribbean56
54
4
Total international assets under management625
610
2
North America1,614
1,486
9
Total assets under management$2,239
$2,096
7
    
Client assets   
Europe/Middle East/Africa$479
$461
4
Asia-Pacific248
247
—
Latin America/Caribbean134
132
2
Total international client assets861
840
2
North America2,141
2,057
4
Total client assets$3,002
$2,897
4 %
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in billions)2019
2018
Change
 2019
2018
Change
Assets under management       
Europe/Middle East/Africa$381
$371
3% $381
$371
3%
Asia/Pacific182
164
11
 182
164
11
Latin America/Caribbean68
65
5
 68
65
5
Total international assets under management631
600
5
 631
600
5
North America1,547
1,428
8
 1,547
1,428
8
Total assets under management$2,178
$2,028
7
 $2,178
$2,028
7
        
Client assets       
Europe/Middle East/Africa$448
$431
4
 $448
$431
4
Asia/Pacific252
229
10
 252
229
10
Latin America/Caribbean171
160
7
 171
160
7
Total international client assets871
820
6
 871
820
6
North America2,127
1,979
7
 2,127
1,979
7
Total client assets$2,998
$2,799
7% $2,998
$2,799
7%

CORPORATE
For a discussion of Corporate, refer
Refer to pages 77–78 of JPMorgan Chase’s 20182019 Form 10-K.10-K for a discussion of Corporate.
Selected income statement and balance sheet dataSelected income statement and balance sheet data      Selected income statement and balance sheet data
As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,		As of or for the three months
ended March 31,
(in millions, except headcount)2019
2018
 Change
 2019
 2018
 Change
2020
2019
 Change
Revenue            
Principal transactions$(175)$83
 NM
 $(237) $(61) (289)%$(113)$(62) (82)%
Investment securities gains/(losses)44
(80) NM
 57
 (325) NM
Investment securities gains233
13
 NM
All other income6
139
 (96)% 63
 343
 (82)%211
57
 270 %
Noninterest revenue(125)142
 NM
 (117) (43) (172)331
8
 NM
Net interest income447
(62) NM
 864
 (109) NM
(165)417
 NM
Total net revenue(a)
322
80
 303 % 747
 (152) NM
166
425
 (61)%
            
Provision for credit losses(2)(1) (100)% —
 (5) NM
8
2
 300 %
            
Noninterest expense(b)
232
279
 (17)% 443
 366
 21 %146
211
 (31)%
Income/(loss) before income tax expense/(benefit)92
(198) NM
 304
 (513) NM
Income before income tax expense/(benefit)12
212
 (94)%
Income tax expense/(benefit)(736)(62) NM
 (775) 6
 NM
137
(39) NM
Net income/(loss)$828
$(136) NM
 $1,079
 $(519) NM
$(125)$251
 NM
Total net revenue            
Treasury and CIO$618
$87
 NM
 $1,129
 $49
 NM
$169
$511
 (67)
Other Corporate(296)(7) NM
 (382) (201) (90)%(3)(86) 97
Total net revenue$322
$80
 303 % $747
 $(152) NM
$166
$425
 (61)
Net income/(loss)            
Treasury and CIO$462
$(153) NM
 $796
 $(340) NM
$83
$334
 (75)
Other Corporate366
17
 NM
 283
 (179) NM
(208)(83) (151)
Total net income/(loss)$828
$(136) NM
 $1,079
 $(519) NM
$(125)$251
 NM
Total assets (period-end)$821,330
$746,716
 10 % $821,330
 $746,716
 10 %$981,937
$796,615
 23
Loans (period-end)1,695
1,720
 (1)% 1,695
 1,720
 (1)%1,650
1,885
 (12)
Core loans(c)
1,695
1,720
 (1)% 1,695
 1,720
 (1)%
Headcount37,361
35,877
 4 % 37,361
 35,877
 4 %38,785
37,502
 3 %
(a)Included tax-equivalent adjustments, driven by tax-exempt income from municipal bond investments,bonds, of $81$61 million and $95$86 million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $167 million and $193 million for the six months ended June 30, 2019 and 2018, respectively.
(b)Included a net legal benefit of $(67)$(20) million and $(8)$(90) million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $(157) million and $(50) million for the six months ended June 30, 2019 and 2018, respectively.
(c)Average core loans were $1.7 billion for both the three months ended June 30, 2019 and 2018, and $1.6 billion and $1.7 billion for the six months ended June 30, 2019 and 2018, respectively.
Quarterly results
Net incomeloss was $828$125 million compared with a net lossincome of $136$251 million in the prior year.
Net revenue was $322$166 million, compared with $80 million in the prior year. This increase was driven by higher net interest income on higher rates and change in balance sheet mix, as well as an increase in investment securities gains due to the repositioning of the investment securities portfolio, partially offset by approximately $100 million of net valuation losses on certain legacy private equity investments compared to net gains in the prior year.
Noninterest expense was $232 million, compared with $279$425 million in the prior year. The current period included investments in technology as well asdecrease was driven by lower net interest income on lower rates, largely offset by higher noninterest revenue primarily due to higher net investment securities gains reflecting the impact of repositioning the investment securities portfolio, and market-driven impacts on certain Corporate investments.
Noninterest expense of $146 million was down $65 million due to lower structural expense, largely offset by a contributionlower net legal benefit compared to the Firm’s Foundation, whereas all prior-year contributions were made in the fourth quarter. The prior year included a $174 million pretax loss on the liquidation of a legal entity.year.
The current period includedincome tax benefits of $742 million related toexpense was driven by the resolution of certain tax audits. The prior period reflected a benefit of $189 million resulting from a change in the estimatelevel and mix of income and expenses subject to U.S. federal, and state and local taxes and more specifically, the impact of the Firm’s estimated full-year expected tax rate relative to the level of pretax income for the deemed repatriation tax on non-U.S. earnings, as well as other net tax adjustments that were predominantly offset by changes to certain tax reserves.quarter.
 
Year-to-date results
Net income was $1,079 million, compared with a net loss of $519 million in the prior year.
Net revenue was $747 million, compared with a net loss of $152 million in the prior year. This increase was driven by higher net interest income on higher rates and change in balance sheet mix, as well as an increase in investment securities gains due to the repositioning of the investment securities portfolio.
Noninterest expense was $443 million, compared with $366 million in the prior year. The current period included investments in technology and real estate as well as contributions to the Firm’s Foundation, whereas all prior-year contributions were made in the fourth quarter. The prior year included a $174 million pretax loss on the liquidation of a legal entity.
The current period included tax benefits of $825 million related to the resolution of certain tax audits. The prior period reflected changes to certain tax reserves, largely offset by changes in the estimate for the deemed repatriation tax on non-U.S. earnings and other tax adjustments.

Treasury and CIO overview
At June 30, 2019,March 31, 2020, the average credit rating of the Treasury and CIO investment securities comprising the portfolio in the table below was AA+ (based upon external ratings where available and, where not available, based primarily upon internal ratings that correspond to ratings as defined by S&P and Moody’s)risk ratings). Refer to Note 910 for further information on the Firm’s investment securities portfolio.
portfolio and internal risk ratings.
ForRefer to Liquidity Risk Management on pages 45–49 for further information on liquidity and funding risk, referrisk. Refer to LiquidityMarket Risk Management on pages 49–53. For67–71 for information on interest rate, foreign exchange and other risks, refer to Market Risk Management on pages 70–74.
risks.
Selected income statement and balance sheet data      
 As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,
(in millions)2019
 2018
 Change
 2019
 2018
 Change
Investment securities gains/(losses)$44
 $(80) NM
 $57
 $(325) NM
Available-for-sale (“AFS”) investment securities (average)$248,612
 $200,232
 24 % $237,669
 $202,266
 18 %
Held-to-maturity (“HTM”) investment securities (average)30,929
 30,304
 2
 31,005
 32,152
 (4)
Investment securities portfolio (average)$279,541
 $230,536
 21
 $268,674
 $234,418
 15
AFS investment securities (period-end)$274,533
 $200,434
 37
 $274,533
 $200,434
 37
HTM investment securities (period-end)30,907
 31,006
 —
 30,907
 31,006
 —
Investment securities portfolio (period-end)$305,440
 $231,440
 32 % $305,440
 $231,440
 32 %
Selected income statement and balance sheet data
 As of or for the three months
ended March 31,
(in millions)2020
 2019
 Change
Investment securities gains$233
 $13
 NM
Available-for-sale securities (average)$372,954
 $226,605
 65
Held-to-maturity securities (average)46,673
 31,082
 50
Investment securities portfolio (average)$419,627
 $257,687
 63
Available-for-sale securities (period-end)$397,891
 $234,832
 69
Held-to-maturity securities, net of allowance for credit losses (period-end)(a)(b)
71,200
 30,849
 131
Investment securities portfolio, net of allowance for credit losses (period-end)(a)
$469,091
 $265,681
 77
(a)At March 31, 2020, the allowance for credit losses on HTM securities was $19 million.
(b)During the first quarter of 2020, the Firm transferred $26.1 billion of U.S. GSE and government agency MBS from AFS to HTM for capital management purposes.
Refer to Note 10 for further information.


ENTERPRISE-WIDEFIRMWIDE RISK MANAGEMENT
Risk is an inherent part of JPMorgan Chase’s business activities. When the Firm extends a consumer or wholesale loan, advises customers and clients on their investment decisions, makes markets in securities, or offers other products or services, the Firm takes on some degree of risk. The Firm’s overall objective is to manage its businesses, and the associated risks, in a manner that balances serving the interests of its clients, customers and investors and protects the safety and soundness of the Firm.
The Firm believes that effective risk management requires:requires, among other things:
Acceptance of responsibility, including identification and escalation of risk issues, by all individuals within the Firm;
Ownership of risk identification, assessment, data and management within each of the lines of businessLOBs and Corporate; and
Firmwide structures for risk governance.
The Firm strives for continual improvement throughin its efforts to enhance controls, ongoing employee training and development, talent retention, and other measures. The Firm follows a disciplined and balanced compensation framework with strong internal governance and independent oversight by the Board oversight.of Directors (the “Board”). The impact of risk and control issues areis carefully considered in the Firm’s performance evaluation and incentive compensation processes.
Firmwide Risk Management is overseengovernance and managed on an enterprise-wide basis. oversight framework
The Firm’s risk management governance and oversight framework involves understanding drivers of risks, types of risks, and impacts of risks.
jpmcgovernancea06.jpg
For a further discussion of Enterprise-wide risk management governance and oversight, referRefer to pages 79-83 of JPMorgan Chase’s 20182019 Form 10-K.












Effective July 2019, the Board of Directors’ Risk Policy Committee (“DRPC”) was renamed the Risk Committee. The committee’s responsibilities were not changed. For10-K for a further discussion of the committee, refer to page 81 of JPMorgan Chase’s 2018 Form 10-K.Firmwide risk management governance and oversight.

Governance
Risk governance and Oversight Functionsoversight functions
The following sections of this Form 10-Q and the 20182019 Form 10-K discuss the risk governance and oversight functions in place to manage the risks inherent in the Firm’s business activities.
Risk governance and oversight functionsForm 10-Q page referenceForm 10-K page referenceForm 10-Q page referenceForm 10-K page reference
Strategic risk 84 84
Capital risk44–4885–9439–4485–92
Liquidity risk49–5395–10045–4993–98
Reputation risk 101 99
Consumer credit risk55–59106-11152–55103–107
Wholesale credit risk60–66112-11956–63108–115
Investment portfolio risk6912366118
Market risk70–74124-13167–71119–126
Country risk75132–13372127–128
Operational risk 134-13645129–135
Compliance risk 137 132
Conduct risk 138 133
Legal risk 139 134
Estimations and Model risk 14074135

CAPITAL RISK MANAGEMENT
Capital risk is the risk the Firm has an insufficient level andor composition of capital to support the Firm’s business activities and associated risks during normal economic environments and under stressed conditions.
For aRefer to pages 85–92 of JPMorgan Chase’s 2019 Form
10-K, Note 22 of this Form 10-Q and the Firm’s Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website, for further discussion of the Firm’s Capital Risk Management, including capital planning and stress testing, refertesting.
COVID-19 Pandemic
The Firm remains well-capitalized, but has been impacted by recent market events as a result of the COVID-19 pandemic. The continuation or further deterioration of the current macroeconomic environment could result in additional impacts to pages 85-94 of JPMorgan Chase’sthe Firms capital and leverage position.
2018 Form 10-K, Note 21 of this Form 10-Q, and the Firm’s Pillar 3 Regulatory Capital Disclosures reports,Basel III Overview
which are available on the Firm’s website (https://jpmorganchaseco.gcs-web.com/financial-information/basel-pillar-3-us-lcr-disclosures).
The capital rules under Basel III establish minimum capital ratios and overall capital adequacy standards for large and internationally active U.S. bank holding companies (“BHC”) and banks, including the Firm and its insured depository institution (“IDI”) subsidiaries, including JPMorgan Chase Bank, N.A. The minimum amount of regulatory capital that must be held by BHCs and banks is determined by calculating risk-weighted assets (“RWA”), which are on-balance sheet assets and off-balance sheet exposures, weighted according to risk. Two comprehensive approaches are prescribed for calculating RWA: a standardized approach (“Basel III Standardized”), and an advanced approach (“Basel III Advanced”). Effective January 1, 2019,For each of the risk-based capital
ratios, the capital adequacy of the Firm is evaluated against the fully phased-in measures under Basel III and represents the lower of the Standardized or Advanced approaches. During 2018, the required capital measures were subject to the transitional rules and as of December 31, 2018 were the same on a fully phased-in and on a transitional basis.
The Firm’s Basel III Standardized risk-basedStandardized-risk-based ratios are currently more binding than the Basel III Advanced risk-based ratios, and the Firm expects that this will remain the case for the foreseeable future.Advanced-risk-based ratios.
Basel III also includes a requirement for Advanced Approach banking organizations, including the Firm, to calculate the SLR. ForRefer to SLR on page 90 of JPMorgan Chase’s 2019 Form 10-K for additional information.
Key Regulatory Developments
Current Expected Credit Losses. As disclosed in the Firm’s 2019 Form 10-K, the Firm initially elected to phase-in the January 1, 2020 (“day 1”) CECL adoption impact to retained earnings of $2.7 billion to CET1 capital, at 25% per year in each of 2020 to 2023. As part of their response to the impact of the COVID-19 pandemic, on March 31, 2020, the federal banking agencies issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period (“CECL capital transition provisions”).
The interim final rule provides a uniform approach for estimating the effects of CECL compared to the legacy incurred loss model during the first two years of the transition period (the “day 2” transition amount), whereby the Firm may exclude from CET1 capital 25% of the change in the allowance for credit losses (excluding allowances on PCD loans). The cumulative day 2 transition amount as at December 31, 2021 that is not recognized in CET1 capital as well as the $2.7 billion day 1 impact, will be phased into CET1 capital at 25% per year beginning January 1, 2022. The Firm has elected to apply the CECL capital transition provisions, and accordingly, for the period ended March 31, 2020, the capital measures of the Firm exclude $4.3 billion, which is the $2.7 billion day 1 impact to retained earnings and 25% of the $6.8 billion increase in the allowance for credit losses (excluding allowances on PCD loans).
The impacts of the CECL capital transition provisions on Tier 2 capital, adjusted average assets, and total leverage exposure have also been incorporated into the Firm’s capital measures. Refer to Note 1 for further information on the CECL accounting guidance.

Money Market Mutual Fund Liquidity Facility. On March 18, 2020, the Federal Reserve established a facility, authorized through September 30, 2020, to enhance the liquidity and functioning of money markets. Under the MMLF, the FRBB makes nonrecourse advances to participating financial institutions to purchase certain types of assets from eligible money market mutual fund clients. These assets, which are reflected in other assets on the Firm’s Consolidated balance sheets, are pledged to the FRBB as collateral. On March 23, 2020, the federal banking agencies issued an interim final rule to neutralize the effects of purchasing assets through the program on risk-based and leverage-based capital ratios. As of March 31, 2020 the Firm excluded assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF in the amount of $12.0 billion from its RWA and $1.2 billion from adjusted average assets and total leverage exposure.
Refer to Regulatory Developments Relating to the COVID-19 pandemic on pages 10-11 for additional information on SLR, referregulatory actions and significant financing programs that the U.S. government and regulators have introduced to page 91address the effects of JPMorgan Chase’s 2018 Form 10-K.the COVID-19 pandemic.
In addition to meeting the capital ratio requirements of Basel III, the Firm and its IDI subsidiaries also must maintain minimum capital and leverage ratios in order to be “well-capitalized” under the regulations issued by
Stress Capital Buffer. On March 4, 2020, the Federal Reserve andissued the Prompt Corrective Action requirementsfinal rule introducing a stress capital buffer (“SCB”) framework for the Basel III Standardized approach that is designed to more closely integrate the results of the FDIC Improvement Act respectively.quantitative assessment in CCAR with the ongoing minimum capital requirements for BHCs under the U.S. Basel III rules. The final rule replaces the static 2.5% CET1 capital conservation buffer in the Standardized approach with a dynamic institution-specific SCB. The final rule does not apply to the Advanced approach capital requirements. The SCB requirement for BHCs will be effective on October 1 of each year and is expected to remain in effect until September 30 of the following year. The Firm anticipates that the Federal Reserve will disclose the Firm’s SCB requirement and summary information regarding the Firm’s stress test results by June 30, 2020. Starting on October 1, 2020, the SCB will take effect based on the 2020 CCAR submission and will be integrated into the Firm’s ongoing minimum capital requirements.
The following tables present the Firm’s risk-based and leverage-based capital metricsmeasures under both the Basel III Standardized and Advanced Approaches. The Firm’s Basel III ratios exceeded regulatory minimums asRefer to Capital Risk Management on pages 85–92 of June 30,JPMorgan Chase’s 2019 and December 31, 2018. ForForm 10-K for a further discussion of these capital metrics, refer to Capital Risk Management on pages 85-94 of JPMorgan Chase’s 2018 Form 10-K.metrics.
June 30, 2019 December 31, 2018
March 31, 2020(b)(c)
 December 31, 2019  
(in millions)Standardized Advanced Minimum capital ratios 
Standardized(b)
 
Advanced(b)
 Minimum capital ratios
(in millions, except ratios)StandardizedAdvanced StandardizedAdvanced 
Minimum capital ratios(d)
Risk-based capital metrics:                
CET1 capital$189,169
 $189,169
   $183,474
 $183,474
  $183,591
$183,591
 $187,753
$187,753
  
Tier 1 capital215,808
 215,808
   209,093
 209,093
  213,406
213,406
 214,432
214,432
  
Total capital244,490
 234,507
   237,511
 227,435
  247,541
234,434
 242,589
232,112
  
Risk-weighted assets1,545,101
 1,449,211
   1,528,916
 1,421,205
  1,598,828
1,489,134
 1,515,869
1,397,878
  
CET1 capital ratio12.2% 13.1% 10.5% 12.0% 12.9% 9.0%11.5%12.3% 12.4%13.4% 10.5%
Tier 1 capital ratio14.0
 14.9
 12.0
 13.7
 14.7
 10.5
13.3
14.3
 14.1
15.3
 12.0
Total capital ratio15.8
 16.2
 14.0
 15.5
 16.0
 12.5
15.5
15.7
 16.0
16.6
 14.0
Leverage-based capital metrics:                
Adjusted average assets(a)
$2,692,225
 $2,692,225
   $2,589,887
 $2,589,887
  $2,842,244
$2,842,244
 $2,730,239
$2,730,239
  
Tier 1 leverage ratio8.0% 8.0% 4.0% 8.1% 8.1% 4.0%7.5%7.5% 7.9%7.9% 4.0%
Total leverage exposureNA
 $3,367,154
   NA
 $3,269,988
  NA
$3,535,822
 NA
$3,423,431
  
SLRNA
 6.4% 5.0% NA
 6.4% 5.0%NA
6.0% NA
6.3% 5.0%
(a)
Adjusted average assets, for purposes of calculating the Tier 1 leverage ratio,ratios, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.
(b)The Firm’sAs of March 31, 2020, the capital ratios asmeasures reflect the CECL capital transition provisions.
(c)As of DecemberMarch 31, 2018 were equivalent whether calculated on a transitional or fully phased-in basis.2020, the capital measures reflect the exclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF.
(d)Represents minimum requirements and regulatory buffers applicable to the Firm. Refer to Note 22 for additional information.


Capital components
The following table presents reconciliations of total stockholders’ equity to Basel III CET1 capital, Tier 1 capital and Total capital as of June 30, 2019March 31, 2020 and December 31, 2018.2019.
(in millions)June 30, 2019
December 31, 2018
March 31, 2020
December 31, 2019
Total stockholders’ equity$263,215
$256,515
$261,262
$261,330
Less: Preferred stock26,993
26,068
30,063
26,993
Common stockholders’ equity236,222
230,447
231,199
234,337
Add: 
Certain deferred tax liabilities(a)
2,389
2,381
Less:  
Goodwill47,477
47,471
47,800
47,823
Other intangible assets732
748
800
819
Other CET1 capital adjustments1,160
1,034
Add: 
Deferred tax liabilities(a)
2,316
2,280
Other CET1 capital adjustments(b)
1,397
323
Standardized/Advanced CET1 capital189,169
183,474
183,591
187,753
Preferred stock26,993
26,068
30,063
26,993
Less: Other Tier 1 adjustments354
449
248
314
Standardized/Advanced Tier 1 capital$215,808
$209,093
$213,406
$214,432
Long-term debt and other instruments qualifying as Tier 2 capital$14,263
$13,772
$15,264
$13,733
Qualifying allowance for credit losses(c)14,295
14,500
18,748
14,314
Other124
146
123
110
Standardized Tier 2 capital$28,682
$28,418
$34,135
$28,157
Standardized Total capital$244,490
$237,511
$247,541
$242,589
Adjustment in qualifying allowance for credit losses for Advanced Tier 2 capital(d)(9,983)(10,076)(13,107)(10,477)
Advanced Tier 2 capital$18,699
$18,342
$21,028
$17,680
Advanced Total capital$234,507
$227,435
$234,434
$232,112
(a)
Represents certain deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating CET1 capital.
(b)
As of March 31, 2020, the impact of the CECL capital transition provision was an increase in CET1 capital of $4.3 billion.
(c)Represents the allowance for credit losses eligible for inclusion in Tier 2 capital up to 1.25% of credit risk RWA, including the impact of the CECL capital transition provision with any excess deducted from RWA.
(d)Represents an adjustment to qualifying allowance for credit losses for the excess of eligible credit reserves over expected credit losses up to 0.6% of credit risk RWA, including the impact of the CECL capital transition provision with any excess deducted from RWA.
 
Capital rollforward
The following table presents the changes in Basel III CET1 capital, Tier 1 capital and Tier 2 capital for the sixthree months ended June 30, 2019.March 31, 2020.
Six months ended June 30,
(in millions)		2019
Standardized/Advanced CET1 capital at December 31, 2018$183,474
Three months ended March 31,
(in millions)		2020
Standardized/Advanced CET1 capital at December 31, 2019$187,753
Net income applicable to common equity18,053
2,444
Dividends declared on common stock(5,224)(2,779)
Net purchase of treasury stock(8,934)(5,337)
Changes in additional paid-in capital(803)(665)
Changes related to AOCI2,386
5,849
Adjustment related to DVA(a)
458
Adjustment related to AOCI(a)
(4,939)
Changes related to other CET1 capital adjustments(b)(241)1,265
Change in Standardized/Advanced CET1 capital5,695
(4,162)
Standardized/Advanced CET1 capital at June 30, 2019$189,169
Standardized/Advanced CET1 capital at March 31, 2020$183,591
  
Standardized/Advanced Tier 1 capital at December 31, 2018$209,093
Standardized/Advanced Tier 1 capital at December 31, 2019$214,432
Change in CET1 capital(b)5,695
(4,162)
Net issuance of noncumulative perpetual preferred stock925
3,070
Other95
66
Change in Standardized/Advanced Tier 1 capital6,715
(1,026)
Standardized/Advanced Tier 1 capital at June 30, 2019$215,808
Standardized/Advanced Tier 1 capital at March 31, 2020$213,406
  
Standardized Tier 2 capital at December 31, 2018$28,418
Standardized Tier 2 capital at December 31, 2019$28,157
Change in long-term debt and other instruments qualifying as Tier 2491
1,531
Change in qualifying allowance for credit losses(204)
Change in qualifying allowance for credit losses(b)
4,434
Other(23)13
Change in Standardized Tier 2 capital264
5,978
Standardized Tier 2 capital at June 30, 2019$28,682
Standardized Total capital at June 30, 2019$244,490
Standardized Tier 2 capital at March 31, 2020$34,135
Standardized Total capital at March 31, 2020$247,541
  
Advanced Tier 2 capital at December 31, 2018$18,342
Advanced Tier 2 capital at December 31, 2019$17,680
Change in long-term debt and other instruments qualifying as Tier 2491
1,531
Change in qualifying allowance for credit losses(111)
Change in qualifying allowance for credit losses(b)
1,804
Other(23)13
Change in Advanced Tier 2 capital357
3,348
Advanced Tier 2 capital at June 30, 2019$18,699
Advanced Total capital at June 30, 2019$234,507
Advanced Tier 2 capital at March 31, 2020$21,028
Advanced Total capital at March 31, 2020$234,434
(a)Includes cash flow hedges and DVA related to structured notes recorded in AOCI.

(b)Includes the impact of the CECL capital transition provisions.


RWA rollforward
The following table presents changes in the components of RWA under Basel III Standardized and Advanced approaches for the sixthree months ended June 30, 2019.March 31, 2020. The amounts in the rollforward categories are estimates, based on the predominant driver of the change.
Standardized Advanced Standardized Advanced 
Six months ended June 30, 2019
(in millions)		Credit risk RWAMarket risk RWATotal RWA Credit risk RWAMarket risk RWA
Operational risk
RWA
Total RWA
December 31, 2018$1,423,053
$105,863
$1,528,916
 $926,647
$105,976
$388,582
$1,421,205
Three months ended March 31, 2020
(in millions)		Credit risk RWAMarket risk RWATotal RWA Credit risk RWAMarket risk RWA
Operational risk
RWA
Total RWA
December 31, 2019$1,440,220
$75,649
$1,515,869
 $932,948
$75,652
$389,278
$1,397,878
Model & data changes(a)
(2,906)(8,941)(11,847) 4,858
(8,941)—
(4,083)1,800
(8,200)(6,400) 1,600
(8,200)—
(6,600)
Portfolio runoff(b)
(2,900)—
(2,900) (3,000)—
—
(3,000)(1,300)—
(1,300) (1,300)—
—
(1,300)
Movement in portfolio levels(c)
27,668
3,264
30,932
 35,857
2,992
(3,760)35,089
58,238
32,421
90,659
 65,535
32,424
1,197
99,156
Changes in RWA21,862
(5,677)16,185
 37,715
(5,949)(3,760)28,006
58,738
24,221
82,959
 65,835
24,224
1,197
91,256
June 30, 2019$1,444,915
$100,186
$1,545,101
 $964,362
$100,027
$384,822
$1,449,211
March 31, 2020$1,498,958
$99,870
$1,598,828
 $998,783
$99,876
$390,475
$1,489,134
(a)
Model & data changes refer to material movements in levels of RWA as a result of revised methodologies and/or treatment per regulatory guidance (exclusive of rule changes).
(b)Portfolio runoff for credit risk RWA primarily reflects reduced risk from position rolloffs in legacy portfolios in Home Lending.
(c)Movement in portfolio levels (inclusive of rule changes) refers to: changes in book size, composition, credit quality, and market movements for credit risk RWA; changes in position and market movements for market risk RWA; and updates to cumulative losses for operational risk RWA.RWA; and deductions to credit risk RWA for excess eligible credit reserves not eligible for inclusion in Tier 2 capital.

Supplementary leverage ratio
For additional information, referRefer to Capital Risk ManagementSupplementary Leverage Ratio on page 88pages 87-88 of JPMorgan Chase’s 20182019 Form 10-K.10-K for additional information.
The following table presents the components of the Firm’s SLR as of June 30, 2019 and December 31, 2018.SLR.
(in millions, except ratio)June 30,
2019
December 31,
2018
March 31,
2020
December 31,
2019
Tier 1 capital$215,808
$209,093
$213,406
$214,432
Total average assets2,739,055
2,636,505
2,890,232
2,777,270
Less: Adjustments for deductions from Tier 1 capital46,830
46,618
Less: Regulatory capital adjustments(a)
47,988
47,031
Total adjusted average assets(a)
2,692,225
2,589,887
2,842,244
2,730,239
Off-balance sheet exposures(b)
674,929
680,101
Add: Off-balance sheet exposures(b)
693,578
693,192
Total leverage exposure$3,367,154
$3,269,988
$3,535,822
$3,423,431
SLR6.4%6.4%6.0%6.3%
(a)
Adjusted average assets, forFor purposes of calculating the SLR, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets. As of March 31, 2020, includes adjustments for the CECL capital transition provisions and the exclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF.
(b)Off-balance sheet exposures are calculated as the average of the three month-end spot balances during the reporting quarter.
ForRefer to Note 22 for JPMorgan Chase Bank, N.A.’s SLR ratios, refer to Note 21.ratios.
Line of business equity
Each business segment is allocated capital by taking into consideration a variety of factors including capital levels of similarly rated peers and applicable regulatory capital requirements. Effective January 1, 2019,Refer to line of business capital allocations have increased due to a combination of changes in the relative weights, with greater emphasisequity on Standardized RWA and stress, a higher capitalization rate, updated stress simulations, and general business growth. For additional information, refer to page 9190 of JPMorgan Chase’s 20182019 Form 10-K.10-K for additional information on capital allocation.
 
The following table representspresents the capital allocated to each business segment:

(in billions)
June 30,
2019
 December 31,
2018
March 31,
2020
 December 31,
2019
Consumer & Community Banking$52.0
 $51.0
$52.0
 $52.0
Corporate & Investment Bank80.0
 70.0
80.0
 80.0
Commercial Banking22.0
 20.0
22.0
 22.0
Asset & Wealth Management10.5
 9.0
10.5
 10.5
Corporate71.7
 80.4
66.7
(a) 
69.8
Total common stockholders’ equity$236.2
 $230.4
$231.2
 $234.3
(a)Includes the $2.7 billion (after-tax) impact to retained earnings upon the adoption of CECL on January 1, 2020.
Planning and stress testing
Comprehensive Capital Analysis and Review (“CCAR”)
The Federal Reserve requires large bank holding companies, includingOn April 6, 2020, the Firm submitted its 2020 Capital Plan to submit on an annual basis a capital plan that has been reviewed and approved by the Board of Directors. Through CCAR, the Federal Reserve evaluates each bank holding company’s (“BHC”) capital adequacy and internal capital adequacy assessment processes (“ICAAP”), as well as its plans to make capital distributions, such as dividend payments or stock repurchases.
On June 27, 2019,under the Federal Reserve’s 2020 CCAR process. The Firm anticipates that the Federal Reserve informed the Firm that it did not object towill disclose the Firm’s SCB requirement and summary information regarding the Firm’s stress test results by June 30, 2020.
Refer to Stress Capital Buffer regulatory developments on page 40 of this Form 10-Q and capital planning and stress testing on pages 85-86 of JPMorgan Chase’s 2019 capital plan.Form 10-K for additional information.
Capital actions
Preferred stock
Preferred stock dividends declared were $404 million and $778$421 million for the three and six months ended June 30, 2019.March 31, 2020.
On JulyDuring the three months ended March 31, 2019,2020, the Firm redeemed and issued $2.25 billionseveral series of fixed-to-floating rate non-cumulative preferred stock, Series FF,stock. Refer to Note 18 of this Form 10-Q and on August 2,Note 21 of JPMorgan Chase’s 2019 the Firm announced that it will redeem all $880 million of its 6.30% non-cumulative preferred stock, Series W on September 1, 2019.
ForForm 10-K for additional information on the Firm’s preferred stock, refer to Note 17 of this Form 10-Qincluding issuances and Note 20 of JPMorgan Chase’s 2018 Form 10-K.redemptions.


Common stock dividends
The Firm’s second quarter common stock dividend was $0.80 per share. On June 27, 2019, the Firm announced that its Board of Directors intends to increase the quarterly common stock dividend tois currently $0.90 per share, effective the third quarter of 2019.share. The Firm’s dividends are subject to the Board of Directors’ approval on a quarterly basis.
Common equity
Effective June 27, 2019, theThe Firm’s Board of Directors has authorized the repurchase of up to $29.4 billion of gross common equity between July 1, 2019 and June 30, 2020 as part of the Firm’s annual capital plan.
On March 15, 2020, in response to the COVID-19 pandemic, the Firm temporarily suspended through the second quarter of 2020 repurchases of its common equity. The decision to suspend these repurchases is consistent with the Firm’s objective to use its capital and liquidity to provide support to individuals, small businesses, and the broader economy through lending and other services.
The following table sets forth the Firm’s repurchases of common equity on a settlement-date basis, for the three and six months ended June 30, 2019March 31, 2020 and 2018.2019.

Three months ended
June 30,
Six months ended
June 30,
(in millions)2019
2018

2019
2018
Total shares of common stock repurchased47.5
45.3

97.0
86.7
Aggregate common stock repurchases$5,210
$4,968

$10,301
$9,639

Three months ended
March 31,
(in millions)2020
2019
Total number of shares of common stock repurchased50.0
49.5
Aggregate purchase price of common stock repurchases$6,397
$5,091
For additional information regarding repurchases of the Firm’s equity securities, referRefer to Part II, Item 2: Unregistered Sales of Equity Securities and Use of Proceeds and Part II, Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities on page 176pages 181-182 of this Form 10-Q and page 30 of JPMorgan Chase’s 20182019 Form 10-K, respectively.respectively, for additional information regarding repurchases of the Firm’s equity securities.

 
Other capital requirements
TLACTotal Loss-Absorbing Capacity (“TLAC”)
The Federal Reserve’s TLAC rule requires the top-tier U.S. GSIBglobal systemically important bank (“GSIB”) top-tier holding companies, including the Firm, to maintain minimum levels of external TLAC and eligible LTD effective January 1, 2019.long-term debt (“eligible LTD”).
For additional information, referRefer to other capital requirements on page 9391 of JPMorgan Chase’s 20182019 Form 10-K.10-K for additional information on TLAC.
The following table presents the TLAC and external long-term debt minimum requirements including applicable regulatory buffers, as of March 31, 2020 and December 31, 2019.
Minimum Requirements
TLAC to RWA23.0%
TLAC to leverage exposure9.5
External long-term debt to RWA9.5
External long-term debt to leverage4.5
The following table presents the eligible external TLAC and eligible LTD amounts, as well as a representation of the amounts as a percentage of the Firm’s total RWA and total leverage exposure.exposure applying the impact of the CECL capital transition provisions as of March 31, 2020.
June 30, 2019 
March 31, 2020December 31, 2019
(in billions, except ratio)Eligible External TLACEligible LTDEligible external TLACEligible LTDEligible external TLACEligible LTD
Total eligible TLAC & LTD$388.6
$160.8
$387.4
$165.0
$386.4
$161.8
% of RWA25.1%10.4%24.2%10.3%25.5%10.7%
Minimum requirement23.0
9.5
Surplus/(shortfall)$33.2
$14.1
$19.6
$13.1
$37.7
$17.8
  
% of total leverage exposure11.5%4.8%11.0%4.7%11.3%4.7%
Minimum requirement9.5
4.5
Surplus/(shortfall)$68.7
$9.3
$51.5
$5.9
$61.2
$7.8
ForRefer to Part I, Item 1A: Risk Factors on pages 6–28 of JPMorgan Chase’s 2019 Form 10-K for information on the financial consequences to holders of
the Firm’s debt and equity securities in a resolution
scenario, refer to Part I, Item 1A: Risk Factors on pages
7-28 of JPMorgan Chase’s 2018 Form 10-K.

 scenario.

Broker-dealer regulatory capital
J.P. Morgan Securities
JPMorgan Chase’s principal U.S. broker-dealer subsidiary is J.P. Morgan Securities. J.P. Morgan Securities is subject to Rule 15c3-1 under the Securities Exchange Act of 1934 (the “Net Capital Rule”). J.P. Morgan Securities is also registered as a futures commission merchant and subject to Rule 1.17the Rules of the Commodity Futures Trading Commission (“CFTC”).
ForRefer to Capital risk management on pages 85–92 of JPMorgan Chase’s 2019 Form 10-K for a discussion on J.P. Morgan Securities’ capital requirements, refer to Capital risk management on pages 85-94 of JPMorgan Chase’s 2018 Form 10-K.requirements.
The following table presents J.P. Morgan Securities’ net capital:
June 30, 2019 
March 31, 2020 
(in millions)Actual
Minimum
Actual(a)

Minimum
Net Capital$20,858
$3,446
$17,288
$5,945
(a)Net capital reflects the exclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF.

 

J.P. Morgan Securities plc
J.P. Morgan Securities plc is a wholly-owned subsidiary of JPMorgan Chase Bank, N.A. and has authority to engage in banking, investment banking and broker-dealer activities. J.P. Morgan Securities plc is jointly regulated by the U.K. Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”).
ForRefer to Capital risk management on pages 85–92 of JPMorgan Chase’s 2019 Form 10-K for a further discussion on J.P. Morgan Securities plc, refer to Capital risk management on pages 85-94 of JPMorgan Chase’s 2018 Form 10-K.plc.
Effective January 1, 2019, theThe Bank of England requires, on a transitional basis, that U.K. banks, including U.K. regulated subsidiaries of overseas groups, maintain a minimum requirement for own funds and eligible liabilities (“MREL”). As of June 30, 2019,March 31, 2020, J.P. Morgan Securities plc was compliant with the requirements of the MREL rule. For additional information on MREL, referRefer to Supervision and Regulation on pages 1-61–6 of JPMorgan Chase’s 20182019 Form 10-K.10-K for additional information on MREL.
The following table presents J.P. Morgan Securities plc’s capital metrics:
June 30, 2019  
March 31, 2020  
(in millions, except ratios)Estimated
Minimum ratios
Estimated
Minimum ratios
Total capital$55,598
 $53,654
 
CET1 ratio17.9%4.5%16.6%4.5%
Total capital ratio22.9%8.0%21.3%8.0%




LIQUIDITY RISK MANAGEMENT
Liquidity risk is the risk that the Firm will be unable to meet its contractual and contingent financial obligations as they arise or that it does not have the appropriate amount, composition and tenor of funding and liquidity to support its assets and liabilities. For a further discussion of the Firm’s Liquidity Risk Management, referRefer to pages 95–10093–98 of JPMorgan Chase’s 20182019 Form 10-K and the Firm’s USU.S. LCR Disclosure reports, which are available on the Firm’s website at: (https://jpmorganchaseco.gcs-web.com/financial-information/basel-pillar-3-us-lcr-disclosures).for a further discussion of the Firm’s Liquidity Risk Management.
LCR and HQLA
The LCR rule requires that the Firm to maintain an amount of unencumbered HQLAHigh Quality Liquid Assets (“HQLA”) that is sufficient to meet its estimated total net cash outflows over a prospective 30 calendar-day period of significant stress. HQLA is the amount of liquid assets that qualify for inclusion in the LCR. HQLA primarily consist of unencumbered cash and certain high-quality liquid securities as defined in the LCR rule. The LCR is required to be a minimum of 100%.
Under the LCR rule, the amount of HQLA held by JPMorgan Chase Bank, N.A. that is in excess of its standalonestand-alone 100% minimum LCR requirement, and that is not transferable to non-bank affiliates, must be excluded from the Firm’s reported HQLA. The LCR is required to be a minimum of 100%. For additional information on HQLA and net cash outflows, refer to page 94 of JPMorgan Chase’s 2019 Form 10-K and the Firm’s U.S. LCR Disclosure reports.
The following table summarizes the Firm’s average LCR for the three months ended June 30,March 31, 2020, December 31, 2019 and March 31, 2019 and June 30, 2018 based on the Firm’s interpretation of the finalized LCR framework.
Three months endedThree months ended
Average amount
(in millions)
June 30,
2019		March 31, 2019June 30,
2018		March 31,
2020		December 31, 2019March 31,
2019
HQLA  
Eligible cash(a)
$219,838
$216,787
$362,608
$205,027
$203,296
$216,787
Eligible securities(b)(c)
317,439
303,249
166,427
343,124
341,990
303,249
Total HQLA(d)
$537,277
$520,036
$529,035
$548,151
$545,286
$520,036
Net cash outflows$477,442
$467,329
$458,432
$482,372
$469,402
$467,329
LCR113%111%115%114%116%111%
Net excess HQLA(d)
$59,835
$52,707
$70,603
$65,779
$75,884
$52,707
(a)
Represents cash on deposit at central banks, primarily the Federal Reserve Banks.
(b)Predominantly U.S. Treasuries, U.S. AgencyGSE and government agency MBS, and sovereign bonds net of applicable haircuts under the LCR rules.rule.
(c)HQLA eligible securities may be reported in securities borrowed or purchased under resale agreements, trading assets, or investment securities on the Firm’s Consolidated balance sheets.
(d)Excludes average excess HQLA at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates.
The Firm’s average LCR increased during the three months ended June 30, 2019, compared with the three-month period ended March 31, 2019, primarily from an increase in cash from unsecured long-term debt issuances.  Additionally, liquidity in JPMorgan Chase Bank, N.A. increased during the quarter due to growth in stable deposits and a reduction in loans, however this increase in excess liquidity is excluded from the Firm’s reported LCR under the LCR rule.
The Firm’s average LCR decreased during the three months ended June 30,March 31, 2020, compared with the three-month period ended December 31, 2019, primarily due to an increase in CIB market activities and long-term debt maturities. Liquidity in JPMorgan Chase Bank, N.A. increased during the quarter primarily due to deposits net of loan growth. Deposits increased in March as a result of market conditions driven by the COVID-19 pandemic. Additionally, effective March 26, 2020, the Federal Reserve, in response to the COVID-19 pandemic, reduced reserve requirements to zero percent, which increased JPMorgan
Chase Bank, N.A.’s HQLA by approximately $25 billion. However, these increases in excess liquidity in JPMorgan Chase Bank, N.A. are excluded from the Firm’s reported LCR under the LCR rule. Refer to Note 21 for additional information.
The Firm's average LCR increased during the three months ended March 31, 2020, compared with the prior year period.  The decreaseperiod, primarily from an increase in the LCR was driven by a decrease in theaverage amount of reportable HQLA in JPMorgan Chase Bank, N.A. that was determined to be transferable to non-bank affiliates based onas a change in the Firm’s interpretationresult of amounts available for transfer during the three months ended December 31, 2018. This change in interpretation had no impact on the HQLA in JPMorgan Chase Bank, N.A. which had increased over the period.cash from unsecured long-term debt issuances.
The Firm’s average LCR may fluctuatefluctuates from period to period, due to changes in its HQLA and estimated net cash outflows under the LCR as a result of ongoing business activity.
Other liquidity sources
As of June 30, 2019, inIn addition to the assets reported in the Firm’s HQLA under the LCR rule,above, the Firm had approximately $277 billion of unencumbered marketable securities, such as equity securities and fixed income debt securities, that the Firm believes would be available to raise liquidity, if required.liquidity. This includes HQLA-eligible securities included as part of the excess liquidityHQLA at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates.affiliates, as described above. The fair value of these securities was approximately $432 billion and $315 billion as of March 31, 2020 and December 31, 2019, respectively, however, the amount of liquidity that could be raised would be dependent on prevailing market conditions. The fair value increased compared to December 31, 2019, due to an increase in excess HQLA at JPMorgan Chase Bank, N.A. and an increase in CIB trading assets during the quarter.
As of June 30, 2019, theThe Firm also had approximately $314 billion of available borrowing capacity at FHLBs and the discount window at the Federal Reserve Bank and various other central banks as a result of collateral pledged by the Firm to such banks.banks of approximately $317 billion and $322 billion as of March 31, 2020 and December 31, 2019, respectively. This borrowing capacity excludes the benefit of cash and securities reported in the Firm’s HQLA or other unencumbered securities that are currently pledged at the Federal Reserve Bank discount window. window and other central banks. Although available, the Firm does not view thethis borrowing capacity at the Federal Reserve Bank discount window and the various other central banks as a primary source of liquidity.

Funding
Sources of funds
Management believes that the Firm’s unsecured and secured funding capacity is sufficient to meet its on- and off-balance sheet obligations.
The Firm funds its global balance sheet through diverse sources of funding including stable deposits, as well as secured and unsecured funding in the capital markets. The Firm’s loan portfoliois funded with a portion ofmarkets and stockholders’ equity. Deposits are the Firm’s deposits,primary funding source for JPMorgan Chase Bank, N.A. Additionally, JPMorgan Chase Bank, N.A. may also access funding through securitizations and, with respect to a portionshort- or long-term secured borrowings, through the issuance of the Firm’s real estate-related loans, with secured
unsecured long-term debt, or from borrowings from the FHLBs. Deposits in excess ofParent company or the amount utilized to fund loansIntermediate Holding Company (“IHC”). The Firm’s non-bank subsidiaries are primarily funded from long-term unsecured borrowings and short-term secured borrowings, primarily securities loaned or sold under repurchase agreements. Excess funding is invested by Treasury and CIO in the Firm’s investment securities portfolio or deployed in cash or other short-term liquid investments based on their interest rate and liquidity risk
characteristics. Securities borrowed or purchased under resale agreements and trading assets-debt and equity instruments are primarily funded by the Firm’s securities loaned or sold under agreements to repurchase, trading liabilities-debt and equity instruments, and a portion of the Firm’s long-term debt and stockholders’ equity. In addition to funding securities borrowed or purchased under resale agreements and trading assets-debt and equity instruments, proceeds from the Firm’s debt and equity issuances are used to fund certain loans and other financial and non-financial assets, or may be invested in the Firm’s investment securities portfolio. Refer to the discussion below for additional information relating to Deposits, Short-term funding, and Long-term funding and issuance.
Deposits
The table below summarizes, by line of business,LOB, the deposit balances as of June 30, 2019,March 31, 2020, and December 31, 2018,2019, and the average deposit balances for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, respectively.
June 30, 2019
December 31, 2018
 Three months ended June 30, Six months ended June 30,March 31, 2020
December 31, 2019
 Three months ended March 31,
Deposits Average Average Average
(in millions) 2019
2018
 2019
2018
 2020
2019
Consumer & Community Banking$695,100
$678,854
 $690,892
$673,761
 $685,980
$666,719
$775,068
$718,354
(a) 
 $733,648
$681,013
Corporate & Investment Bank523,364
482,084
 512,098
475,697
 502,280
470,788
667,622
511,905
(a) 
 562,226
492,354
Commercial Banking169,100
170,859
 168,194
170,665
 167,688
173,081
224,198
184,115
 188,683
167,177
Asset & Wealth Management136,225
138,546
 140,317
139,557
 139,282
141,865
168,561
147,804
 150,631
138,235
Corporate572
323
 793
815
 878
839
560
253
 998
963
Total Firm$1,524,361
$1,470,666
 $1,512,294
$1,460,495
 $1,496,108
$1,453,292
$1,836,009
$1,562,431
 $1,636,186
$1,479,742
(a)In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior- period amounts were revised to conform with the current presentation.
Deposits provide a stable source of funding and reduce the Firm’s reliance on the wholesale funding markets. A significant portion of the Firm’s deposits are consumer deposits and wholesale operating deposits, which are both considered to be stable sources of liquidity. Wholesale operating deposits are considered to be stable sources of liquidity because they are generated from customers that maintain operating service relationships with the Firm.
The table below shows the loan and deposit balances, the loans-to-deposits ratios, and deposits as a percentage of total liabilities, as of June 30, 2019March 31, 2020 and December 31, 2018.2019.
(in billions except ratios)March 31, 2020
 December 31, 2019
Deposits$1,836.0
 $1,562.4
Deposits as a % of total liabilities64% 64%
Loans$1,015.4
 $959.8
Loans-to-deposits ratio55% 61%
(in billions except ratios)June 30, 2019
 December 31, 2018
Deposits$1,524.4
 $1,470.7
Deposits as a % of total liabilities62% 62%
Loans$956.9
 $984.6
Loans-to-deposits ratio63% 67%
The Firm believes that average deposit balances are generally more representative of deposit trends than period-end deposit balances.balances, over time. However, during periods of market disruption those trends could be affected.
Average deposits across the Firm increased for the three months ended June 30, 2019March 31, 2020. CIB deposits increased largely driven by continued growth in CIB, CCB and AWM, partially offset by a decline in CB.
The increase in CIB reflects an increase inclient activity. CB deposits in Treasury Services and Securities Servicesincreased predominantly driven by growth in client activity, and an increase in the net issuances of structured notes in Markets. The increase in CCB was driven by growth in new accounts. The increase ininterest-bearing deposits. AWM wasdeposits increased largely driven by growth in time deposits, partially offsetdeposits. Average balances for CIB, CB and AWM were also impacted by migration predominantly intonet inflows in the Firm’s investment-related products.
The decrease in CB was primarilymonth of March as a result of market conditions driven by lower non-operating deposits.
AverageCOVID-19 pandemic concerns. CCB deposits increased for the six months ended June 30, 2019 in CIB and CCB, partially offset by declines in CB and AWM.
The increase in CIB reflects an increase in deposits in Treasury Services driven by growth in client activity, and an increase in the net issuances of structured notes in Markets. The increase in CCB was driven bycontinued growth in new accounts.
The decrease in CB was primarily driven by lower non-operating deposits. The decrease in AWM was largely driven by migration predominantly into the Firm’s investment-related products.
For further information on deposit and liability balance trends, referRefer to the discussion of the Firm’s Business Segment Results and the Consolidated Balance Sheets Analysis on pages 21–4237 and pages 15–17, respectively.15-16, respectively, for further information on deposit and liability balance trends.


The following table summarizes short-term and long-term funding, excluding deposits, as of June 30, 2019,March 31, 2020, and December 31, 2018,2019, and average balances for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, respectively. For additional information, referRefer to the Consolidated Balance Sheets Analysis on pages 15–1715-16 and Note 10.11 for additional information.
June 30, 2019December 31, 2018 Three months ended June 30, Six months ended June 30,March 31, 2020December 31, 2019 Three months ended March 31,
Sources of funds (excluding deposits)Average AverageAverage
(in millions)2019
2018
 2019
2018
2020
2019
Commercial paper$25,268
$30,059
 $26,030
$27,143
 $27,373
$26,571
$13,770
$14,754
 $13,974
$28,731
Other borrowed funds(a)
9,762
8,789
 11,818
11,840
 11,037
11,993
8,774
7,544
 9,093
10,247
Total short-term unsecured funding(a)
$35,030
$38,848
 $37,848
$38,983
 $38,410
$38,564
$22,544
$22,298
 $23,067
$38,978
Securities sold under agreements to repurchase(b)(a)
$192,837
$171,975
 $218,057
$178,064
 $207,812
$181,212
$223,913
$175,709
 $234,394
$197,454
Securities loaned(b)(a)
7,799
9,481
 8,090
13,058
 9,428
11,799
6,677
5,983
 7,349
10,781
Other borrowed funds(c)(b)
24,860
30,428
 27,840
23,356
 31,690
21,420
29,365
18,622
 19,761
35,583
Obligations of Firm-administered multi-seller conduits(d)(c)
$14,734
$4,843
 $13,356
$2,993
 $10,387
$3,054
$12,174
$9,223
 $9,898
$7,386
Total short-term secured funding(a)
$240,230
$216,727
 $267,343
$217,471
 $259,317
$217,485
$272,129
$209,537
 $271,402
$251,204
        
Senior notes$170,626
$162,733
 $167,376
$151,047
 $165,176
$150,635
$171,939
$166,185
 $165,741
$162,952
Trust preferred securities—
—
 —
684
 —
686
—
—
 —
—
Subordinated debt17,540
16,743
 17,056
16,010
 16,890
16,120
19,267
17,591
 18,155
16,722
Structured notes(e)(d)
66,377
53,090
 62,284
48,674
 59,853
47,842
67,689
74,724
 72,848
57,395
Total long-term unsecured funding$254,543
$232,566
 $246,716
$216,415
 $241,919
$215,283
$258,895
$258,500
 $256,744
$237,069
        
Credit card securitization(d)(c)
$9,302
$13,404
 $11,671
$16,181
 $12,535
$17,416
$6,562
$6,461
 $6,171
$13,409
Federal Home Loan Bank (“FHLB”) advances29,649
44,455
 34,541
54,232
 39,227
57,291
FHLB advances36,131
28,635
 27,128
43,965
Other long-term secured funding(f)(e)
4,677
5,010
 4,680
4,998
 4,785
4,741
4,318
4,363
 4,408
4,891
Total long-term secured funding$43,628
$62,869
 $50,892
$75,411
 $56,547
$79,448
$47,011
$39,459
 $37,707
$62,265
        
Preferred stock(g)(f)
$26,993
$26,068
 $26,993
$26,068
 $27,059
$26,068
$30,063
$26,993
 $29,406
$27,126
Common stockholders’ equity(g)(f)
$236,222
$230,447
 $233,026
$228,901
 $231,547
$228,261
$231,199
$234,337
 $234,530
$230,051
(a)The prior period amounts have been revised to conform with the current period presentation.
(b)Primarily consists of short-term securities loaned or sold under agreements to repurchase.
(c)(b)Includes FHLBAt March 31, 2020 includes nonrecourse advances with original maturities of less than one year of $5.6 billion and $11.4 billion as of June 30, 2019 and December 31, 2018, respectively.provided under the MMLF.
(d)(c)Included in beneficial interests issued by consolidated variable interest entities on the Firm’s Consolidated balance sheets.
(e)(d)Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
(f)(e)Includes long-term structured notes which are secured.
(g)(f)ForRefer to Capital Risk Management on pages 39–44 and Consolidated statements of changes in stockholders’ equity on page 83 of this Form 10-Q, and Note 21 and Note 22 of JPMorgan Chase’s 2019 Form 10-K for additional information on preferred stock and common stockholders’ equity refer to Capital Risk Management on pages 44–48, Consolidated statements of changes in stockholders’ equity, and Note 20 and Note 21 of JPMorgan Chase’s 2018 Form 10-K.equity.
Short-term funding
The Firm’s sources of short-term secured funding primarily consist of securities loaned or sold under agreements to repurchase. These instruments are secured predominantly by high-quality securities collateral, including government-issued debt and U.S. GSE and government agency MBS, and constitute a significant portion of the federal funds purchased and securitiesMBS. Securities loaned or sold under agreements to repurchase agreements on the Consolidated balance sheets. The increaseincreased at June 30,March 31, 2020, compared with December 31, 2019, from December 31, 2018, reflectedclient-driven market-making activities as a result of changes in market conditions in March and higher secured financing of trading assets-debt and equity instruments and client-driven market-making activitieswhen compared with lower levels at year-end in CIB.
The balances associated with securities loaned or sold under agreements to repurchase fluctuate over time due to customers’ investment and financing activities, the Firm’s demand for financing, the ongoing management of the mix of the Firm’s liabilities, including its secured and unsecured financing (for both the investment securities and market-making portfolios), and other market and portfolio factors.
As of March 31, 2020, the Firm has participated in several of the U.S. government facilities, including the MMLF. The secured nonrecourse advances under the MMLF are included
in other borrowed funds. Refer to Capital Risk Management on pages 39-44 for additional information on the MMLF.
In addition, the Firm is participating in the PDCF established by the Federal Reserve on March 20, 2020, which allows primary dealers to support smooth market functioning by facilitating the availability of credit to businesses and households. Under the PDCF, the Federal Reserve Bank of New York (“FRBNY”) provides collateralized financing on a term basis to primary dealers. At March 31, 2020, these financing transactions were reported as securities sold under agreements to repurchase. The PDCF will remain available to primary dealers for at least six months, or longer if conditions warrant.
The Firm also continues to participate in the Federal Reserve’s open market operations.
The Firm’s sources of short-term unsecured funding primarily consist of issuance of wholesale commercial paper. The decrease in commercial paper at June 30, 2019,March 31, 2020, from December 31, 2018,2019, was due to lower net issuance primarily for short-term liquidity management.


Long-term funding and issuance
Long-term funding provides additional sources of stable funding and liquidity for the Firm. The Firm’s long-term funding plan is driven primarily by expected client activity, liquidity considerations, and regulatory requirements, including TLAC. Long-term funding objectives include maintaining diversification, maximizing market access and optimizing funding costs. The Firm evaluates various funding markets, tenors and currencies in creating its optimal long-term funding plan.
The significant majority of the Firm’s long-term unsecured funding is issued by the Parent Company to provide maximum flexibility in support of both bank and nonbanknon-bank subsidiary funding needs. The Parent Company advances substantially all net funding proceeds to its subsidiary, the Intermediate Holding Company (“IHC”).IHC. The IHC does not issue debt to external counterparties. The following table summarizes long-term unsecured issuance and maturities or redemptions for the three and six months ended June 30,March 31, 2020 and 2019. Refer to Liquidity Risk Management on pages 93–98 and Note 20 of JPMorgan Chase’s 2019 and 2018. ForForm 10-K for additional information on the IHC and long-term debt, refer to Liquidity Risk Management and Note 19 of JPMorgan Chase’s 2018 Form 10-K.debt.
Long-term unsecured fundingLong-term unsecured funding       Long-term unsecured funding 
Three months ended June 30, Six months ended June 30, Three months ended June 30, Six months ended June 30,Three months ended March 31,
2019
2018
 2019
2018
 2019
2018
 2019
2018
2020
2019
2020
2019
(Notional in millions)
Parent Company(b)
 
Subsidiaries(b)
Parent CompanySubsidiaries
Issuance        
Senior notes issued in the U.S. market$4,000
$7,000
 $8,250
$11,000
 $—
$3,500
 $1,750
$7,511
$5,250
$4,250
$—
$1,750
Senior notes issued in non-U.S. markets—
1,175
 2,248
1,175
 —
—
 —
—
1,355
2,248
—
—
Total senior notes4,000
8,175
 10,498
12,175
 —
3,500
 1,750
7,511
6,605
6,498
—
1,750
Structured notes(a)
631
829
 1,816
1,660
 9,016
7,267
 15,132
14,225
2,782
1,185
9,252
6,116
Total long-term unsecured funding – issuance$4,631
$9,004
 $12,314
$13,835
 $9,016
$10,767
 $16,882
$21,736
$9,387
$7,683
$9,252
$7,866
        
Maturities/redemptions        
Senior notes$4,157
$3,928
 $7,907
$17,987
 $1
$2,899
 $1,816
$2,964
$5,466
$3,750
$4,065
$1,815
Subordinated debt—
—
 146
—
 —
—
 —
—
—
146
—
—
Structured notes331
1,068
 959
1,883
 4,327
3,918
 8,160
8,630
1,525
628
9,382
3,833
Total long-term unsecured funding – maturities/redemptions$4,488
$4,996
 $9,012
$19,870
 $4,328
$6,817
 $9,976
$11,594
$6,991
$4,524
$13,447
$5,648
(a)Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
(b)The prior period amounts have been revised to conform with the current period presentation.

The Firm raisescan also raise secured long-term funding through securitization of consumer credit card loans and advances from the FHLBs.FHLB advances. The following table summarizes the securitization issuance and FHLB advances and their respective maturities or redemptions for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, respectively.
Long-term secured funding   
 Three months ended March 31,
 Issuance Maturities/Redemptions
(in millions)20202019 20202019
Credit card securitization$1,000
$—
 $900
$—
FHLB advances15,000
—
 7,503
2,001
Other long-term secured funding(a)
234
35
 205
246
Total long-term secured funding$16,234
$35
 $8,608
$2,247
Long-term secured funding         
 Three months ended June 30, Six months ended June 30,
 Issuance Maturities/Redemptions Issuance Maturities/Redemptions
(in millions)20192018 20192018 2019
2018
 2019
2018
Credit card securitization$—
$1,396
 $4,125
$1,725
 $—
$1,396
 $4,125
$6,125
FHLB advances—
—
 12,804
4,702
 —
4,000
 14,805
12,453
Other long-term secured funding(a)
18
74
 207
6
 53
195
 453
22
Total long-term secured funding$18
$1,470
 $17,136
$6,433
 $53
$5,591
 $19,383
$18,600
(a)Includes long-term structured notes which are secured.
The Firm’s wholesale businesses also securitize loans for client-driven transactions; those client-driven loan securitizations are not considered to be a source of funding for the Firm and are not included in the table above. ForRefer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for further description of the client-driven loan securitizations, refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K.securitizations.

Credit ratings
The cost and availability of financing are influenced by credit ratings. Reductions in these ratings could have an adverse effect on the Firm’s access to liquidity sources, increase the cost of funds, trigger additional collateral or funding requirements and decrease the number of investors and counterparties willing to lend to the Firm. The nature and magnitude of the impact of ratings downgrades depends on numerous contractual and behavioral factors, which the Firm believes are incorporated in its liquidity risk and stress testing metrics. The Firm believes that it
maintains sufficient liquidity to withstand a potential decrease in funding capacity due to ratings downgrades.
Additionally, the Firm’s funding requirements for VIEs and other third-party commitments may be adversely affected by a decline in credit ratings. ForRefer to SPEs on page 18, and liquidity risk and credit-related contingent features in Note 5 for additional information on the impact of a credit ratings downgrade on the funding requirements for VIEs, and on derivatives and collateral agreements, refer to SPEs on page 18, and liquidity risk and credit-related contingent features in Note 4.agreements.

The credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries as of June 30, 2019,March 31, 2020, except as noted below, were as follows.follows:
 JPMorgan Chase & Co. 
JPMorgan Chase Bank, N.A.(a)
 
J.P. Morgan Securities LLC
J.P. Morgan Securities plc
June 30, 2019March 31, 2020Long-term issuerShort-term issuerOutlook Long-term issuerShort-term issuerOutlook Long-term issuerShort-term issuerOutlook
Moody’s Investors ServiceA2P-1Stable Aa2P-1Stable Aa3P-1Stable
Standard & Poor’sA-A-2Stable A+A-1Stable A+A-1Stable
Fitch Ratings(a)
AA-F1+StableNegative AAF1+StableNegative AAF1+StableNegative
(a)On May 18, 2019, the Firm merged Chase Bank USA, N.A. with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A. as the surviving bank. The credit rating
(a) On April 18, 2020, Fitch affirmed the credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries but revised the outlook on the credit ratings from stable to negative given expectations that credit fundamentals will deteriorate as a result of the COVID-19 pandemic.
Refer to page 98 of JPMorgan Chase’s 2019 Form 10-K for JPMorgan Chase Bank, N.A. reflects the credit rating of the merged entity.
For a discussion of the factors that could affect credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries, refer to page 100 of JPMorgan Chase’s 2018 Form 10-K.subsidiaries.


CREDIT AND INVESTMENT RISK MANAGEMENT
Credit and investment risk is the risk associated with the default or change in credit profile of a client, counterparty or customer; or loss of principal or a reduction in expected returns on investments, including consumer credit risk,
wholesale credit risk, and investment portfolio risk. ForRefer to pages 50–65 for a further discussion of Credit Risk referRisk.
Refer to pages 54–69.
Forpage 66 for a further discussion of Investment Portfolio Risk. Refer to Credit and Investment Risk refer to page 69. ForManagement on pages 100–118 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of the Firm’s Credit and Investment Risk Management framework and organization, and the identification, monitoring and management, refer to Credit and Investment Risk Management on pages 102-123 of JPMorgan Chase’s 2018 Form 10-K.framework.

CREDIT PORTFOLIO
Credit risk is the risk associated with the default or change in credit profile of a client, counterparty or customer.
In the following tables, reported loans include loans retained (i.e., held-for-investment); loans held-for-sale; and certain loans accounted for at fair value. The following tables do not include loans which the Firm accounts for at fair value and classifies as trading assets. For further information regarding these loans,assets; refer to Notes 2 and 3. For3 for further information regarding these loans. Refer to Notes 12, 23, and 5 for additional information on the Firm’s loans, lending-related commitments and derivative receivables, including the Firm’s accounting policies, referpolicies.
Refer to Notes 11, 22, and 4, respectively.
For further information regarding the credit risk inherent in the Firm’s cash placed with banks, refer to Wholesale credit exposure – industry exposures on pages 62–64;Note 10 for information regarding the credit risk inherent in the Firm’s investment securities portfolio,portfolio; and refer to Note 9 of this Form 10-Q, and Note 10 of JPMorgan Chase’s 2018 Form 10-K; and11 for information regarding the credit risk inherent in the securities financing portfolio, referportfolio. Refer to Note 10 of this Form 10-Q,Consumer Credit Portfolio on pages 52-55 and Note 11 of JPMorgan Chase’s 2018 Form 10-K.
For a12 for further discussiondiscussions of the consumer credit environment and consumer loans, referloans. Refer to ConsumerWholesale Credit Portfolio on pages 106–111 of JPMorgan Chase’s 2018 Form 10-K56-63 and Note 11 of this Form 10-Q. For a further discussion of12 as well as the wholesale credit environment and wholesale loans.
Effective January 1, 2020, the Firm adopted the CECL accounting guidance. The adoption resulted in a change in the accounting for PCI loans, referwhich are considered PCD loans under CECL. In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer, excluding credit card portfolio segment to Wholesalethe wholesale portfolio segment, to align with the methodology applied in determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.
On April 7, 2020, the federal banking agencies along with the National Credit Portfolio on pages 112–119 of JPMorgan Chase’s 2018 Form 10-KUnion Administration and Note 11 of this Form 10-Q.
Total credit portfolio    
 Credit exposure 
Nonperforming(d)(e)
(in millions)Jun 30,
2019
Dec 31,
2018
 Jun 30,
2019
Dec 31,
2018
Loans retained$947,728
$969,415
 $4,469
$4,611
Loans held-for-sale4,852
11,988
 221
—
Loans at fair value4,309
3,151
 180
220
Total loans–reported956,889
984,554
 4,870
4,831
Derivative receivables52,878
54,213
 39
60
Receivables from customers and other(a)
27,414
30,217
 —
—
Total credit-related assets1,037,181
1,068,984
 4,909
4,891
Assets acquired in loan satisfactions     
Real estate ownedNA
NA
 325
269
OtherNA
NA
 26
30
Total assets acquired in loan satisfactions
NA
NA
 351
299
Lending-related commitments1,079,762
1,039,258
 465
469
Total credit portfolio$2,116,943
$2,108,242
 $5,725
$5,659
Credit derivatives used
in credit portfolio management activities(b)
$(15,292)$(12,682) $—
$—
Liquid securities and other cash collateral held against derivatives(c)
(14,676)(15,322) NA
NA
the Consumer Financial Protection Bureau, in consultation with the state
 
financial regulators, issued an interagency statement revising a March 22, 2020 interagency statement on loan modifications and the reporting for financial institutions working with customers affected by the COVID-19 pandemic (the “IA Statement”). The IA Statement reconfirmed that supervised institutions will not be directed to automatically categorize all COVID-19 related loan modifications as troubled debt restructurings (“TDRs”), including short-term and other insignificant modifications such as payment delays, fee waivers and extensions of repayment terms, and modifications or other programs mandated by the federal or state governments. The IA Statement also provides that loans that were current prior to these modifications should generally not be reported as past due or nonaccrual. Additionally, the IA Statement outlines accounting and reporting considerations for eligible loan modifications for which a financial institution elects to apply the CARES Act and forgo TDR accounting.
(in millions,
except ratios)
Three months ended
June 30,		 Six months ended
June 30,
2019
2018
 2019
2018
Net charge-offs$1,403
$1,252
 $2,764
$2,587
Average retained loans     
Loans945,209
932,042
 950,852
926,268
Loans – reported, excluding
residential real estate PCI loans		922,495
903,263
 927,681
896,856
Net charge-off rates     
Loans0.60%0.54% 0.59%0.56%
Loans – excluding PCI0.61
0.56
 0.60
0.58
The Firm’s initial response to many borrowers impacted by the COVID-19 pandemic included offering loan modifications, such as 90-day payment delays and waiving or refunding certain fees. These modifications are intended to mitigate adverse affects on borrowers due to the COVID-19 pandemic. Instances of these modifications will likely rise over the course of the second quarter of 2020. The effectiveness of the Firm’s actions in helping borrowers recover and mitigating credit losses remains uncertain in light of the unpredictable nature and duration of the COVID-19 pandemic. The impact of the Firm’s initial short-term payment delays and other insignificant modifications was not material to the performance of and credit-related information for the consumer and wholesale credit portfolios during the quarter ended March 31, 2020.


Total credit portfolio    
 Credit exposure 
Nonperforming(d)(e)
(in millions)Mar 31,
2020
Dec 31,
2019
 Mar 31,
2020
Dec 31,
2019
Loans retained$1,003,089
$945,601
 $5,834
$3,983
Loans held-for-sale6,072
7,064
 48
7
Loans at fair value6,214
7,104
 90
90
Total loans–reported1,015,375
959,769
 5,972
4,080
Derivative receivables81,648
49,766
 85
30
Receivables from customers and other(a)
33,376
33,706
 —
—
Total credit-related assets1,130,399
1,043,241
 6,057
4,110
Assets acquired in loan satisfactions     
Real estate ownedNA
NA
 342
344
OtherNA
NA
 22
43
Total assets acquired in loan satisfactions
NA
NA
 364
387
Lending-related commitments1,081,462
1,104,199
 619
474
Total credit portfolio$2,211,861
$2,147,440
 $7,040
$4,971
Credit derivatives used
in credit portfolio management activities(b)
$(20,773)$(18,030) $—
$—
Liquid securities and other cash collateral held against derivatives(c)
(26,178)(16,009) NA
NA
(in millions,
except ratios)
Three months ended March 31,
2020
2019
Net charge-offs$1,469
$1,361
Average retained loans948,635
956,557
Net charge-off rates0.62%0.58%
(a)Receivables from customers and other primarily represents prime brokerage-related held-for-investment customer receivables.
(b)Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. For additional information, referRefer to Credit derivatives on page 6663 and Note 4.5 for additional information.
(c)Includes collateral related to derivative instruments where an appropriate legal opinion hasopinions have not been either sought or obtained.obtained with respect to master netting agreements.
(d)Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as each of the pools is performing.
(e)At June 30, 2019,March 31, 2020, and December 31, 2018,2019, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $1.8 billion$616 million and $2.6 billion,$961 million, respectively, and real estate owned (“REO”) insured by U.S. government agencies of $56$29 million and $75$41 million, respectively. These amounts have been excluded based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”).

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

CONSUMER CREDIT PORTFOLIO
The Firm’s retained consumer portfolio consists primarily of residential real estate loans, credit card loans, scored auto loans, and business banking loans, as well as associated lending-related commitments. The Firm’s focus is on serving primarily the prime segment of the consumer credit market. ForRefer to Note 12 for further information on consumer loans, referas well as the Firm’s nonaccrual and charge-off accounting policies. Refer to Note 11 of this Form 10-Q and Consumer Credit Portfolio on pages 106–111 and Note 12 of JPMorgan Chase’s 2018 Form 10-K. For23 for further information on lending-related commitments, refercommitments.
Recent deterioration in the macroeconomic environment driven by the impacts of the COVID-19 pandemic, resulted in an increase in the allowance for credit losses. As of March 31, 2020, the impacts of the macroeconomic environment have had only a limited impact to Note 22consumer credit performance. The continuation or worsening of this Form 10-Qthe effects of the COVID-19 pandemic on the macroeconomic environment could result in further impacts to credit quality metrics, including delinquencies, nonaccrual loans and Note 27 of JPMorgan Chase’s 2018 Form 10-K.charge-offs.
The following table presents consumer credit-related information with respect to the scored credit portfolioportfolios held byin CCB, prime mortgage and home equity loans held by AWM and prime mortgage loans held by Corporate. For further information about the Firm’s nonaccrual and charge-off accounting policies, refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K.
Consumer credit portfolio                
      Three months ended June 30, Six months ended June 30,

(in millions, except ratios)		Credit exposure 
Nonaccrual loans(f)(g)
 
Net charge-offs/(recoveries)(h)
 
Net charge-off/(recoveries) rate(h)(i)
 
Net charge-offs/(recoveries)(h)
 
Net charge-off/(recoveries) rate(h)(i)
Jun 30,
2019
Dec 31,
2018
 Jun 30,
2019
Dec 31,
2018
 2019
2018
 2019
2018
 2019
2018
 2019
2018
Consumer, excluding credit card                 
Loans, excluding PCI loans and loans held-for-sale                 
Residential mortgage$214,744
$231,078
 $1,691
$1,765
 $(13)$(151) (0.02)%(0.27)% $(16)$(151) (0.01)%(0.14)%
Home equity26,017
28,340
 1,209
1,323
 (16)(7) (0.24)(0.09) (15)10
 (0.11)0.06
Auto(a)(b)
62,073
63,573
 108
128
 42
50
 0.27
0.31
 100
126
 0.32
0.39
Consumer & Business Banking(b)(c)
26,616
26,612
 223
245
 66
50
 1.00
0.77
 125
103
 0.95
0.80
Total loans, excluding PCI loans and loans held-for-sale329,450
349,603
 3,231
3,461
 79
(58) 0.09
(0.07) 194
88
 0.11
0.05
Loans – PCI                 
Home equity8,149
8,963
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Prime mortgage4,343
4,690
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Subprime mortgage1,857
1,945
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Option ARMs7,893
8,436
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – PCI22,242
24,034
 NA
NA
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total loans – retained351,692
373,637
 3,231
3,461
 79
(58) 0.09
(0.06) 194
88
 0.11
0.05
Loans held-for-sale1,030
95
 31
—
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total consumer, excluding credit card loans352,722
373,732
 3,262
3,461
 79
(58) 0.09
(0.06) 194
88
 0.11
0.05
Lending-related commitments(d)
51,491
46,066
               
Receivables from customers21
154
               
Total consumer exposure, excluding credit card404,234
419,952
               
Credit card                 
Loans retained(e)
157,568
156,616
 —
—
 1,240
1,164
 3.24
3.27
 2,442
2,334
 3.23
3.30
Loans held-for-sale8
16
 —
—
 NA
NA
 NA
NA
 NA
NA
 NA
NA
Total credit card loans157,576
156,632
 —
—
 1,240
1,164
 3.24
3.27
 2,442
2,334
 3.23
3.30
Lending-related commitments(d)
633,970
605,379
               
Total credit card exposure791,546
762,011
               
Total consumer credit portfolio$1,195,780
$1,181,963
 $3,262
$3,461
 $1,319
$1,106
 1.04 %0.86 % $2,636
$2,422
 1.03 %0.95 %
Memo: Total consumer credit portfolio, excluding PCI$1,173,538
$1,157,929
 $3,262
$3,461
 $1,319
$1,106
 1.09 %0.91 % $2,636
$2,422
 1.08 %1.00 %
Consumer credit portfolio           
      Three months ended March 31, 

(in millions, except ratios)		Credit exposure 
Nonaccrual loans(g)(h)
 Net charge-offs/(recoveries) 
Net charge-off/(recovery) rate(i)
 
Mar 31,
2020
Dec 31,
2019
 Mar 31,
2020
Dec 31,
2019
 2020
2019
 2020
2019
 
Consumer, excluding credit card            
Residential real estate(a)
$242,349
$243,317
 $3,730
$2,780
 (120)(2) (0.20)—
 
Auto and other(b)(c)
51,430
51,682
 147
146
 114
109
 0.89
0.85
 
Total loans – retained293,779
294,999
 3,877
2,926
 (6)107
 (0.01)0.13
 
Loans held-for-sale1,848
3,002
 —
2
 NA
NA
 NA
NA
 
Total consumer, excluding credit card loans295,627
298,001
 3,877
2,928
 (6)107
 (0.01)0.13
 
Lending-related commitments(d)
41,535
40,169
          
Total consumer exposure, excluding credit card337,162
338,170
          
Credit card            
Loans retained(e)
154,021
168,924
 —
—
 1,313
1,202
 3.25
3.23
 
Loans held-for-sale—
—
 —
—
 NA
NA
 NA
NA
 
Total credit card loans154,021
168,924
 —
—
 1,313
1,202
 3.25
3.23
 
Lending-related commitments(d)(f)
681,442
650,720
          
Total credit card exposure(f)
835,463
819,644
          
Total consumer credit portfolio(f)
$1,172,625
$1,157,814
 $3,877
$2,928
 $1,307
$1,309
 1.15 %1.10% 
(a)Includes scored mortgage and home equity loans held in CCB and AWM, and scored mortgage loans held in Corporate.
(b)At June 30, 2019,March 31, 2020, and December 31, 2018,2019, excluded operating lease assets of $21.5$23.1 billion and $20.5$22.8 billion, respectively. These operating lease assets are included in other assets on the Firm’s Consolidated balance sheets. For further information, referRefer to Note 16.
(b)Includes certain business banking and auto dealer risk-rated loans that apply the wholesale methodology17 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.further information.
(c)Predominantly includes Business Banking loans.Includes scored auto and business banking loans and overdrafts.
(d)Credit card, and home equity and certain business banking lending-related commitments represent the total available lines of credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit would be used at the same time. For credit card commitments, and if certain conditions are met, home equity commitments and certain business banking commitments, the Firm can reduce or cancel these lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. For further information, referRefer to Note 22.23 for further information.
(e)Includes billed interest and fees net of an allowance for uncollectible interest and fees.
(f)Also includes commercial card lending-related commitments primarily in CB and CIB.
(g)At June 30, 2019March 31, 2020 and December 31, 2018,2019, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $1.8 billion$616 million and $2.6 billion,$961 million, respectively. These amounts have been excluded from nonaccrual loans based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status, as permitted by regulatory guidance issued by the FFIEC.
(g)(h)ExcludesAt March 31, 2020, nonaccrual loans included $970 million of PCD loans. Prior to the adoption of CECL, nonaccrual loans excluded PCI loans. Theloans as the Firm is recognizingrecognized interest income on each pool of PCI loans as each of the pools iswas performing.
(h)Net charge-offs/(recoveries) and the net charge-off/(recovery) rates excluded write-offs in the PCI portfolio of $39 million and $73 million for the three months ended June 30, 2019 and 2018, respectively, and $89 million and $93 million for the six months ended June 30, 2019 and 2018, respectively. These write-offs decreased the allowance for loan losses for PCI loans. Refer to Allowance for Credit Losses on pages 67–68 for further information.
(i)Average consumer loans held-for-sale were $1.2$2.5 billion and $291 million$1.2 billion for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $1.2 billion and $263 million for the six months ended June 30, 2019 and 2018, respectively. These amounts were excluded when calculating net charge-off/(recovery) rates.

Consumer, excluding credit card
Portfolio analysis
Loan balances decreased from December 31, 20182019 due to lower consumer loans in the residential real estate portfolio,loans, predominantly driven by loan sales in Home Lending. The credit performance of the portfolio continues to benefit from a strong labor market and continued improvement in home prices.
The following discussions provide information concerning individual loan products, excluding PCI loans which are addressed separately. For further information about this portfolio, including information about delinquencies, loan modifications and other credit quality indicators, refer to Note 11 of this Form 10-Q.sales.
Residential mortgage:real estate: The residential mortgagereal estate portfolio, including loans held-for-sale, predominantly consists of prime mortgage loans.loans and home equity lines of credit. The portfolio decreased from December 31, 20182019 driven by paydowns and loan sales in Home Lending, as well as paydowns, partiallylargely offset by originations of prime mortgage loans that have been retained on the balance sheet. Net recoveries for the three and six months ended June 30, 2019March 31, 2020 were lowerhigher when compared with the same periodsperiod in the prior year as the prior yearcurrent quarter benefited from a recovery on a loan sale.
The carrying value of home equity lines of credit outstanding was $27.9 billion at March 31, 2020. This amount included $10.6 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modified and $9.0 billion of interest-only balloon HELOCs, which primarily mature after 2030. The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are exhibiting a material deterioration in their credit risk profile.
At June 30, 2019,March 31, 2020, and December 31, 2018,2019, the Firm’scarrying value of interest-only residential mortgage portfolio included $21.8loans was $22.8 billion and $21.6$22.5 billion, respectively, of interest-only loans.respectively. These loans have an interest-only payment period generally followed by an adjustable-rate or fixed-rate fully amortizing payment period to maturity and are typically originated as higher-balance loans to higher-income borrowers, predominantly in AWM. Performance of this portfolio for the three and six months ended June 30, 2019March 31, 2020 was in line with the performance of the broader residential mortgage portfolio for the same period.
The following table provides a summary of the Firm’s residential mortgage portfolio insured and/or guaranteed by U.S. government agencies, including loans held-for-sale. The Firm monitors its exposure to certain potential unrecoverable claim payments related to government-insured loans and considers this exposure in estimating the allowance for loan losses.
(in millions)March 31,
2020
December 31,
2019
Current$883
$1,280
30-89 days past due402
695
90 or more days past due616
961
Total government guaranteed loans$1,901
$2,936
(in millions)June 30,
2019
December 31,
2018
Current$2,319
$2,884
30-89 days past due1,080
1,528
90 or more days past due1,809
2,600
Total government guaranteed loans$5,208
$7,012
Home equity:The home equity portfolio declined from December 31, 2018 primarily reflecting loan paydowns.
At June 30, 2019, approximately 90% of the Firm’s home equity portfolio consisted of home equity lines of credit (“HELOCs”) and the remainder consisted of home equity loans (“HELOANs”). The carrying value of HELOCs outstanding was $24 billion at June 30, 2019. This amount
 
included $10 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modifiedAuto and $4 billion of interest-only balloon HELOCs, which primarily mature after 2030. The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are exhibiting a material deterioration in their credit risk profile.
For further information on the Firm’s home equity portfolio, refer to Note 11 of this Form 10-Q and Consumer Credit Portfolio on pages 106–111 of JPMorgan Chase’s 2018 Form 10-K.
Auto:other: The auto and other loan portfolio predominantly consists of prime-quality loans.scored auto and business banking loans, as well as overdrafts. The portfolio declinedwas relatively flat when compared with December 31, 2018,2019, as paydowns and charge-offs or liquidation of delinquent loans were predominantly offset by new originations.
Consumer & Business Banking: Consumer & Business Banking loans The scored auto portfolio net charge-off rates were flat when compared with December 31, 2018 as loan originations were offset by paydowns0.41% and charge-offs of delinquent loans. Net charge-offs0.50% for the three and six months ended June 30,March 31, 2020 and 2019, increased when compared with the same period in the prior year due primarily to higher deposit overdraft losses.respectively.
Purchased credit-impaired loans:PCI loans represent certain loans that were acquired and deemed to be credit-impaired on the acquisition date. PCI loans decreased from December 31, 2018 due to portfolio run off. As of June 30, 2019, approximately 10% of the option ARM PCI loans were delinquent and approximately 70% of the portfolio had been modified into fixed-rate, fully amortizing loans. The borrowers for substantially all of the remaining option ARM loans are making amortizing payments, although such payments are not necessarily fully amortizing. This latter group of loans is subject to the risk of payment shock due to future payment recast. Default rates generally increase on option ARM loans when payment recast results in a payment increase. The expected increase in default rates is considered in the Firm’s quarterly impairment assessment.

The following table provides a summary of lifetime principal loss estimates included in either the nonaccretable difference or the allowance for loan losses.
Summary of PCI loans lifetime principal loss estimates
 
Lifetime loss
 estimates(a)
 
Life-to-date
liquidation losses(b)
(in billions)Jun 30,
2019
 Dec 31,
2018
 Jun 30,
2019
 Dec 31,
2018
Home equity$13.9
 $14.1
 $13.0
 $13.0
Prime mortgage4.1
 4.1
 3.9
 3.9
Subprime mortgage3.3
 3.3
 3.2
 3.2
Option ARMs10.2
 10.3
 9.9
 9.9
Total$31.5
 $31.8
 $30.0
 $30.0
(a)Includes the original nonaccretable difference established in purchase accounting of $30.5 billion for principal losses plus additional principal losses recognized subsequent to acquisition through the provision and allowance for loan losses. The remaining nonaccretable difference for principal losses was $487 million and $512 million at June 30, 2019, and December 31, 2018, respectively.
(b)Represents both realization of loss upon loan resolution and any principal forgiven upon modification.
Geographic composition of residential real estate loans
For information on the geographic composition of the Firm’s residential real estate loans, refer to Note 11.
Currentand current estimated loan-to-value ratio of residential real estate loans
Average current estimated loan-to-value (“LTV”) ratios have declined consistent with recent improvements in home prices, customer paydowns, and charge-offs or liquidations of higher LTV loans. ForRefer to Note 12 for information on the geographic composition and current estimated LTVs of the Firm’s residential real estate loans, refer to Note 11.loans.
Loan modification activities forModified residential real estate loans
The performance of modified loans generally differs by product type due to differences in both the credit quality and the types of modifications provided. Performance metrics for modifications to the residential real estate portfolios as measured through redefault rates, were not materially different from December 31, 2018. For further information on the Firm’s redefault rates, refer to Consumer Credit Portfolio on pages 106–111 of JPMorgan Chase’s 2018 Form 10-K.
Certain modified loans have interest rate reset provisions (“step-rate modifications”) where the interest rates on these loans generally began to increase commencing in 2014 by 1% per year, and will continue to do so, until the rate reaches a specified cap. The cap on these loans is typically at a prevailing market interest rate for a fixed-rate mortgage loan as of the modification date. At June 30, 2019, the carrying value of non-PCI loans and the unpaid principal balance of PCI loans modified in step-rate modifications, which have not yet met their specified caps, were $1.4 billion and $2.6 billion, respectively. The Firm continues to monitor this risk exposure and the impact of these potential interest rate increases is considered in the Firm’s allowance for loan losses.
The following table presents information as of June 30, 2019, and December 31, 2018, relating to modified retained residential real estate loans for which concessions have been granted to borrowers experiencing financial difficulty. Fordifficulty, which include both TDRs and modified loans accounted for as PCI loans prior to the adoption of CECL. The following table does not include loans with short-term or other insignificant modifications that are not considered concessions and, therefore, are not TDRs. Refer to Note 12 for further information on modifications for the three and six months ended June 30, 2019March 31, 2020 and 2018, refer to Note 11.2019.
Modified residential real estate loans
 June 30, 2019 December 31, 2018
(in millions)Retained loans
Non-accrual
retained loans(d)
 Retained loans
Non-accrual
retained loans(d)
Modified residential real estate loans, excluding
PCI loans(a)(b)
     
Residential mortgage$4,381
$1,436
 $4,565
$1,459
Home equity1,954
946
 2,012
955
Total modified residential real estate loans, excluding PCI loans$6,335
$2,382
 $6,577
$2,414
Modified PCI loans(c)
     
Home equity$2,012
NA
 $2,086
NA
Prime mortgage3,024
NA
 3,179
NA
Subprime mortgage1,971
NA
 2,041
NA
Option ARMs6,080
NA
 6,410
NA
Total modified PCI loans$13,087
NA
 $13,716
NA
(in millions)March 31, 2020
 December 31, 2019
 
Retained loans(a)
16,717
 5,926
 
PCI loansNA
 12,372
(d) 
Nonaccrual retained loans(b)(c)
3,040
 2,332
 
(a)Amounts represent the carrying value of modified residential real estate loans.
(b)At June 30, 2019,March 31, 2020, and December 31, 2018, $2.6 billion2019, $11 million and $4.1 billion,$14 million, respectively, of loans modified subsequent to repurchase from Ginnie Mae in accordance with the standards of the appropriate government agency (i.e., Federal Housing Administration (“FHA”), U.S. Department of Veterans Affairs (“VA”), Rural Housing Service of the U.S. Department of Agriculture (“RHS”)) are not included in the table above. When such loans perform subsequent to modification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure. ForRefer to Note 14 for additional information about sales of loans in securitization transactions with Ginnie Mae, refer to Note 13.Mae.
(c)Amounts represent the unpaid principal balance of modified PCI loans.
(d)(b)At both June 30, 2019,March 31, 2020, and December 31, 2018,2019, nonaccrual loans included $2.0 billion and $1.9 billion, respectively, of troubled debt restructurings (“TDRs”) for which the borrowers were less than 90 days past due. ForRefer to Note 12 for additional information about loans modified in a TDR that are on nonaccrual status, referstatus.
(c)At March 31, 2020, nonaccrual loans included $725 million of PCD loans. Prior to Note 11.the adoption of CECL, nonaccrual loans excluded PCI loans as the Firm recognized interest income on each pool of PCI loans as each of the pools was performing.
(d)Amount represents the unpaid principal balance of modified PCI loans at December 31, 2019.




Nonperforming assets
The following table presents information as of June 30, 2019,March 31, 2020, and December 31, 2018,2019, about consumer, excluding credit card, nonperforming assets.
Nonperforming assets(a)
       
(in millions)June 30,
2019
 December 31,
2018
March 31,
2020
 December 31,
2019
 
Nonaccrual loans(b)
       
Residential real estate(b)$2,931
 $3,088
$3,730
 $2,782
 
Other consumer331
 373
Auto and other147
 146
 
Total nonaccrual loans3,262
 3,461
3,877
 2,928
 
Assets acquired in loan satisfactions       
Real estate owned247
 210
231
 208
 
Other26
 30
22
 24
 
Total assets acquired in loan satisfactions273
 240
253
 232
 
Total nonperforming assets$3,535
 $3,701
$4,130
 $3,160
 
(a)At June 30, 2019,March 31, 2020, and December 31, 2018,2019, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $1.8 billion$616 million and $2.6 billion,$961 million, respectively, and REO insured by U.S. government agencies of $56$29 million and $75$41 million, respectively. These amounts have been excluded based upon the government guarantee.
(b)Excludes
At March 31, 2020, nonaccrual loans included $970 million of PCD loans. Prior to the adoption of CECL, nonaccrual loans excluded PCI loans which are accounted for on a pool basis. Since each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, the past-due status of the pools, or that of individual loans within the pools, is not meaningful. The Firm is recognizingrecognized interest income on each pool of PCI loans as each of the pools iswas performing.
Nonaccrual loans in the residential real estate portfolio at June 30, 2019 decreased to $2.9 billion from $3.1 billion at December 31, 2018, of which 23% and 24% were greater than 150 days past due, respectively. In the aggregate, the unpaid principal balance of residential real estate loans greater than 150 days past due was charged down by approximately 31% and 32% to the estimated net realizable value of the collateral at June 30, 2019, and December 31, 2018, respectively.
Nonaccrual loans: The following table presents changes in consumer, excluding credit card, nonaccrual loans for the sixthree months ended June 30, 2019March 31, 2020 and 2018.2019.
Nonaccrual loan activity   
Six months ended June 30, (in millions) 2019
2018
Three months ended March 31,
(in millions)		2020
2019
Beginning balance $3,461
$4,209
$2,928
$3,244
Additions 1,082
1,575
 
Additions: 
PCD loans, upon adoption of CECL708
NA
Other additions784
513
Total additions1,492
513
 
Reductions:   
Principal payments and other(a)
 508
738
206
203
Charge-offs 209
246
97
97
Returned to performing status 435
666
147
207
Foreclosures and other liquidations 129
155
93
70
Total reductions 1,281
1,805
543
577
 
Net changes (199)(230)949
(64)
Ending balance $3,262
$3,979
$3,877
$3,180
(a)Other reductions includes loan sales.
Active and suspended foreclosure: ForRefer to Note 12 for information on loans that were in the process of active or suspended foreclosure, referforeclosure.
Refer to Note 11.12 for further information about the consumer credit portfolio, including information about delinquencies, loan modifications and other credit quality indicators.
Purchased credit deteriorated (“PCD”) loans
The following tables provide credit-related information for PCD loans, which were accounted for as PCI loans prior to the adoption of CECL. PCI loans are considered PCD loans under CECL and are subject to the Firm’s nonaccrual and charge-off policies. PCD loans are now reported in the consumer, excluding credit card portfolio’s residential real estate class. Refer to Note 1 for further information.
(in millions, except ratios)March 31,
2020
December 31,
2019
Loan delinquency  
Current$17,983
$18,571
30-149 days past due942
970
150 or more days past due593
822
Total retained PCD loans19,518
20,363
Held-for-sale PCD loans—
NA
Total PCD loans$19,518
$20,363
   
% of 30+ days past due to total retained PCD loans7.86%8.80%
Nonaccrual loans970
NA
(in millions, except ratios)Three months ended March 31, 2020
Net charge-offs$6
Net charge-off rate0.12%


Credit card
Total credit card loans were relatively flatdecreased from December 31, 2018 reflecting increased2019 due to seasonality and a decline in sales volumes from existing customersvolume in March as a result of the COVID-19 pandemic. The March 31, 2020 30+ and new account growth, offset by the impact of seasonality. The June 30, 2019 30+ day delinquency rate decreased to 1.71% from 1.83% at December 31, 2018, and the June 30, 2019 90+ day delinquency rate decreasedrates of 1.96% and 1.02%, respectively, increased compared to 0.87% from 0.92% atthe December 31, 2018,2019 30+ and 90+ day delinquency rates of 1.87% and 0.95%, respectively due to the decline in line with expectations.credit card loans noted above. Net charge-offs increased for the three and six months ended June 30, 2019March 31, 2020 when compared with the same period in the prior year primarily due to loan growth.growth, in line with prior expectations.
Consistent with the Firm’s policy, all credit card loans typically remain on accrual status until charged off. However, the Firm establishes anFirm’s allowance which is offset against loans and reduces interest income, for loan losses includes the estimated uncollectible portion of accrued and billed interest and fee income. Refer to Note 12 for further information about this portfolio, including information about delinquencies.
Geographic and FICO composition of credit card loans
ForRefer to Note 12 for information on the geographic and FICO composition of the Firm’s credit card loans, refer to Note 11.loans.
Modifications of credit card loans
At June 30, 2019both March 31, 2020 and December 31, 2018,2019, the Firm had $1.4$1.5 billion and $1.3 billion, respectively, of credit card loans outstanding that have been modified in TDRs, which does not include loans with short-term or other insignificant modifications that are not considered TDRs. ForRefer to Note 12 for additional information about loan modification programs to borrowers, refer to Note 11.borrowers.

WHOLESALE CREDIT PORTFOLIO
In its wholesale businesses, the Firm is exposed to credit risk primarily through its underwriting, lending, market-making, and hedging activities with and for clients and counterparties, as well as through various operating services (such as cash management and clearing activities), securities financing activities and cash placed with banks. A portion of the loans originated or acquired by the Firm’s wholesale businesses is generally retained on the balance sheet. The Firm distributes a significant percentage of the loans that it originates into the market as part of its syndicated loan business and to manage portfolio concentrations and credit risk.
The credit performance of the wholesale portfolio remained favorable for the six months ended June 30, 2019, characterized by continued low levels of criticized exposure, nonaccrual loans and charge-offs. Refer to the industry discussion on pages 62–64 for further information. Loans held-for-sale decreased, driven by a loan syndication in CIB. The wholesale portfolio is actively managed, in part by conducting ongoing, in-depth reviews of client credit quality and transaction structure inclusive of collateral where applicable, and of industry, product and client concentrations.
Refer to the industry discussion on pages 58–61 for further information.
In the following tables, theThe Firm’s wholesale credit portfolio includes exposure held in CIB, CB, AWM and Corporate as well as risk-rated business banking and excludes allauto dealer exposures held in CCB for which the wholesale methodology is applied for determining the allowance for credit losses.
Recent deterioration in the macroeconomic environment driven by the impacts of the COVID-19 pandemic and pressure on oil prices resulted in an increase in the allowance for credit losses with the largest impacts in the Oil & Gas, Real Estate and Consumer and Retail industries. As of March 31, 2020, the impacts of the macroeconomic environment have had only a limited impact to the overall credit profile, with the investment-grade percentage at 73% versus 74% at December 31, 2019. However, criticized exposure managedincreased $6.6 billion from December 31, 2019 to $21.7 billion at March 31, 2020, but remains at relatively low levels compared to the overall size of the portfolio. The increase was largely driven by CCB.downgrades in Oil & Gas resulting from lower oil prices and impacts from the COVID-19 pandemic, and in Consumer & Retail primarily due to impacts from the COVID-19 pandemic. The continuation or worsening of the effects of the COVID-19 pandemic on the macroeconomic environment could result in further impacts to credit quality metrics, including investment-grade percentages, as well as to criticized and nonperforming exposures and charge-offs.
Retained loans increased by $73.6 billion in the three months ended March 31, 2020, predominantly driven by the CIB and CB, largely to commercial and industrial clients, and predominantly driven by drawdowns on committed revolving credit facilities, which resulted in a corresponding decrease in unfunded lending-related commitments. These drawdowns, which were driven by increased activity in March that returned to more normalized levels in April, were largely made by investment-grade clients, and can be broadly attributed to:
companies in industries directly and immediately impacted by the COVID-19 pandemic;
stress in the commercial paper funding markets, and
preemptive drawdowns by companies concerned about the potential longer term impact of the COVID-19 pandemic on their cash flows and access to liquidity.
Wholesale credit portfolio
Credit exposure 
Nonperforming(c)
Credit exposure Nonperforming
(in millions)Jun 30,
2019
Dec 31,
2018
 Jun 30,
2019
Dec 31,
2018
Mar 31,
2020
Dec 31,
2019
 Mar 31,
2020
Dec 31,
2019
Loans retained$438,468
$439,162
 $1,238
$1,150
$555,289
$481,678
 $1,957
$1,057
Loans held-for-sale3,814
11,877
 190
—
4,224
4,062
 48
5
Loans at fair value4,309
3,151
 180
220
6,214
7,104
 90
90
Loans – reported446,591
454,190
 1,608
1,370
565,727
492,844
 2,095
1,152
Derivative receivables52,878
54,213
 39
60
81,648
49,766
 85
30
Receivables from customers and other(a)
27,393
30,063
 —
—
33,376
33,706
 —
—
Total wholesale credit-related assets526,862
538,466
 1,647
1,430
680,751
576,316
 2,180
1,182
Assets acquired in loan satisfactions   
Real estate ownedNA
NA
 111
136
OtherNA
NA
 —
19
Total assets acquired in loan satisfactionsNA
NA
 111
155
Lending-related commitments394,301
387,813
 465
469
358,485
413,310
 619
474
Total wholesale credit exposure$921,163
$926,279
 $2,112
$1,899
Total wholesale credit portfolio$1,039,236
$989,626
 $2,910
$1,811
Credit derivatives used in credit portfolio management activities(b)
$(15,292)$(12,682) $—
$—
$(20,773)$(18,030) $—
$—
Liquid securities and other cash collateral held against derivatives(14,676)(15,322) NA
NA
(26,178)(16,009) NA
NA
(a)Receivables from customers and other include $27.3$33.4 billion and $30.1$33.7 billion of prime brokerage-related held-for-investment customer receivables at June 30, 2019,March 31, 2020, and December 31, 2018,2019, respectively, to customersclients in CIB and AWM; these are classified in accrued interest and accounts receivable on the Consolidated balance sheets.
(b)Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. For additional information, referRefer to Credit derivatives on page 66,63 and Note 4.
(c)Excludes assets acquired in loan satisfactions.5 for additional information.


The following tables present the maturity and internal risk ratings profiles of the wholesale credit portfolio as of June 30, 2019,March 31, 2020, and December 31, 2018.2019. The Firm considers internal ratings scale is based on the Firm’s internal risk ratings, which generally correspondequivalent to the ratings assigned by S&P and Moody’s. For additional information on wholesale loan portfolio risk ratings, referBBB-/Baa3 or higher as investment grade. Refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K.for further information on internal risk ratings.
Wholesale credit exposure – maturity and ratings profileWholesale credit exposure – maturity and ratings profile     Wholesale credit exposure – maturity and ratings profile     
Maturity profile(d)
 Ratings profile
Maturity profile(d)
 Ratings profile
Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IGDue in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
June 30, 2019
(in millions, except ratios)		 AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below
March 31, 2020
(in millions, except ratios)		Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
Loans retained$131,542
$203,512
$103,414
$438,468
 $337,188
 $101,280
$438,468
77%
Derivative receivables 52,878
    52,878
  81,648
    81,648
 
Less: Liquid securities and other cash collateral held against derivatives (14,676)    (14,676)  (26,178)    (26,178) 
Total derivative receivables, net of all collateral8,089
8,444
21,669
38,202
 30,956
 7,246
38,202
81
17,069
11,637
26,764
55,470
 43,263
 12,207
55,470
78
Lending-related commitments79,456
304,412
10,433
394,301
 286,247
 108,054
394,301
73
92,209
254,173
12,103
358,485
 260,218
 98,267
358,485
73
Subtotal219,087
516,368
135,516
870,971
 654,391
 216,580
870,971
75
273,578
533,198
162,468
969,244
 710,804
 258,440
969,244
73
Loans held-for-sale and loans at fair value(a)
 8,123
    8,123
  10,438
    10,438
 
Receivables from customers and other 27,393
    27,393
  33,376
    33,376
 
Total exposure – net of liquid securities and other cash collateral held against derivatives $906,487
    $906,487
  $1,013,058
    $1,013,058
 
Credit derivatives used in credit portfolio management activities(b)(c)
$(1,741)$(10,747)$(2,804)$(15,292) $(14,271) $(1,021)$(15,292)93%$(4,011)$(9,078)$(7,684)$(20,773) $(17,477) $(3,296)$(20,773)84%
Maturity profile(d)
 Ratings profile
Maturity profile(d)
 Ratings profile
Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IGDue in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
December 31, 2018
(in millions, except ratios)		 AAA/Aaa to BBB-/Baa3 BB+/Ba1 & below
December 31, 2019
(in millions, except ratios)		Due in 1 year or lessDue after 1 year through 5 yearsDue after 5 yearsTotal Investment-grade Noninvestment-gradeTotalTotal % of IG
Loans retained$138,458
$196,974
$103,730
$439,162
 $339,729
 $99,433
$439,162
77%
Derivative receivables 54,213
    54,213
  49,766
    49,766
 
Less: Liquid securities and other cash collateral held against derivatives (15,322)    (15,322)  (16,009)    (16,009) 
Total derivative receivables, net of all collateral11,038
9,169
18,684
38,891
 31,794
 7,097
38,891
82
6,561
6,960
20,236
33,757
 26,966
 6,791
33,757
80
Lending-related commitments79,400
294,855
13,558
387,813
 288,724
 99,089
387,813
74
83,821
316,328
13,161
413,310
 294,317
 118,993
413,310
71
Subtotal228,896
500,998
135,972
865,866
 660,247
 205,619
865,866
76
232,002
541,611
155,132
928,745
 684,727
 244,018
928,745
74
Loans held-for-sale and loans at fair value(a)
 15,028
    15,028
  11,166
    11,166
 
Receivables from customers and other 30,063
    30,063
  33,706
    33,706
 
Total exposure – net of liquid securities and other cash collateral held against derivatives $910,957
    $910,957
  $973,617
    $973,617
 
Credit derivatives used in credit portfolio management activities(b)(c)
$(447)$(9,318)$(2,917)$(12,682) $(11,213) $(1,469)$(12,682)88%$(4,912)$(10,031)$(3,087)$(18,030) $(16,276) $(1,754)$(18,030)90%
(a)Represents loans held-for-sale, primarily related to syndicated loans and loans transferred from the retained portfolio, and loans at fair value.
(b)These derivatives do not qualify for hedge accounting under U.S. GAAP.
(c)The notional amounts are presented on a net basis by underlying reference entity and the ratings profile shown is based on the ratings of the reference entity on which protection has been purchased. Predominantly all of the credit derivatives entered into by the Firm where it has purchased protection used in credit portfolio management activities are executed with investment-grade counterparties.
(d)The maturity profile of retained loans, lending-related commitments and derivative receivables is based on the remaining contractual maturity. Derivative contracts that are in a receivable position at June 30, 2019,March 31, 2020, may become payable prior to maturity based on their cash flow profile or changes in market conditions.

Wholesale credit exposure – industry exposures
The Firm focuses on the management and diversification of its industry exposures, and pays particular attention to industries with actual or potential credit concerns. Exposures deemed criticized align with the U.S. banking regulators’ definition of criticized exposures, which consist
of the special mention, substandard and doubtful categories.
The total criticized component of the portfolio, excluding loans held-for-sale and loans at fair value, was approximately $12$21.7 billion at both June 30, 2019, andMarch 31, 2020, compared with $15.1 billion at December 31, 2018.2019. The increase was largely driven by downgrades in Oil & Gas resulting from lower oil prices and impacts from the COVID-19 pandemic, and downgrades in Consumer & Retail primarily due to impacts from the COVID-19 pandemic.

Below are summaries of the Firm’s exposures as of June 30, 2019,March 31, 2020, and December 31, 2018.2019. The industry of risk category is generally based on the client or counterparty’s primary business activity. For additional information on industry concentrations, refer to Note 4 of JPMorgan Chase’s 2018 Form 10-K.

Wholesale credit exposure – industries(a)
Wholesale credit exposure – industries(a)
    
Wholesale credit exposure – industries(a)
    
    Selected metrics     Selected metrics
     30 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(g)
Liquid securities
and other cash collateral held against derivative
receivables		     30 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(g)
Liquid securities
and other cash collateral held against derivative
receivables
  Noninvestment-grade  Noninvestment-grade
As of or for the six months ended
Credit exposure(f)
Investment- grade Noncriticized Criticized performingCriticized nonperforming
June 30, 2019
As of or for the three months ended
Credit exposure(f)
Investment- grade Noncriticized Criticized performingCriticized nonperforming
March 31, 202030 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(g)
Liquid securities
and other cash collateral held against derivative
receivables
(in millions)
Credit exposure(f)
Investment- grade Noncriticized Criticized performingCriticized nonperforming30 days or more past due and accruing
loans
Net
charge-offs/
(recoveries)
Credit derivative hedges(g)
Liquid securities
and other cash collateral held against derivative
receivables
Real Estate$148,246
$122,686
 $24,036
 $1,464
$60
Consumer & Retail110,669
57,486
 49,240
 3,657
286
Individuals and Individual Entities(b)
97,637
86,094
 11,041
 300
202
108,180
94,220
 12,808
 970
182
Consumer & Retail97,121
54,267
 40,876
 1,874
104
Industrials68,864
44,260
 22,998
 1,412
194
168
20
(691)(69)
Asset Managers65,880
57,006
 8,814
 37
23
14
—
—
(9,731)
Technology, Media &
Telecommunications		65,859
38,262
 25,062
 2,415
120
10
20
(746)(32)60,184
32,917
 24,144
 2,967
156
13
—
(651)(14)
Industrials58,230
38,179
 18,654
 1,213
184
148
—
(507)(45)
Banks & Finance Cos50,598
35,203
 15,012
 378
5
26
—
(636)(2,175)55,786
38,250
 16,826
 704
6
7
—
(1,137)(3,290)
Healthcare46,669
34,880
 11,097
 605
87
74
12
(190)(156)53,250
39,639
 12,155
 1,261
195
49
51
(392)(183)
Oil & Gas46,209
27,476
 17,149
 869
715
7
17
(499)(11)42,754
22,273
 16,252
 3,274
955
—
59
(527)—
Asset Managers45,514
39,966
 5,523
 4
21
5
—
—
(4,985)
Automotive36,060
24,614
 10,287
 1,156
3
29
—
(348)—
Utilities29,101
23,355
 5,486
 159
101
—
37
(361)(70)33,112
24,057
 8,645
 407
3
1
4
(437)(84)
State & Municipal Govt(c)
27,286
26,754
 529
 3
—
3
—
—
(24)30,529
30,026
 500
 —
3
55
—
—
(201)
Transportation18,624
9,247
 8,690
 535
152
30
10
(239)(48)
Chemicals & Plastics17,430
11,742
 5,364
 322
2
2
—
(12)—
Central Govt16,519
16,169
 350
 —
—
—
—
(8,380)(2,883)
Metals & Mining17,706
8,480
 8,918
 282
26
5
(1)(207)(3)15,797
6,999
 8,045
 673
80
3
10
(136)(12)
Central Govt16,947
16,534
 413
 —
—
1
—
(8,993)(2,486)
Automotive16,856
10,820
 5,672
 364
—
8
—
(157)—
Chemicals & Plastics16,386
11,329
 5,021
 36
—
28
—
(10)—
Transportation14,870
9,644
 4,827
 329
70
172
—
(37)(37)
Insurance12,913
10,079
 2,800
 20
14
1
—
(36)(2,453)14,522
10,806
 3,693
 18
5
—
—
(76)(3,209)
Financial Markets Infrastructure6,009
5,917
 92
 —
—
—
—
—
(36)9,767
9,607
 160
 —
—
—
—
—
(46)
Securities Firms4,662
2,965
 1,672
 25
—
—
—
(49)(662)8,045
5,905
 2,114
 1
25
—
—
(49)(3,281)
All other(d)
70,375
67,444
 2,643
 288
—
2
(9)(2,589)(907)81,204
75,365
 5,365
 143
331
45
(8)(7,237)(1,478)
Subtotal$885,647
$667,474
 $206,124
 $10,307
$1,742
$1,508
$128
$(15,292)$(14,676)$995,422
$733,274
 $240,486
 $19,001
$2,661
$1,208
$162
$(20,773)$(26,178)
Loans held-for-sale and loans at fair value8,123
      10,438
      
Receivables from customers and other27,393
     33,376
     
Total(e)
$921,163
     $1,039,236
     




















(continued from previous page)(continued from previous page)     (continued from previous page)     







Selected metrics





Selected metrics







30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(g)
Liquid securities
and other cash collateral held against derivative
receivables





30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(g)
Liquid securities
and other cash collateral held against derivative
receivables



Noninvestment-grade

Noninvestment-grade
As of or for the year ended
Credit exposure(f)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming
Credit exposure(f)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming
December 31, 2018
December 31, 2019
(in millions)
Credit exposure(f)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(g)
Liquid securities
and other cash collateral held against derivative
receivables
Credit exposure(f)
Investment- grade
Noncriticized
Criticized performingCriticized nonperforming30 days or more past due and accruing
loans		Net
charge-offs/
(recoveries)
Credit derivative hedges(g)
Liquid securities
and other cash collateral held against derivative
receivables
Real Estate
Consumer & Retail
Individuals and Individual Entities(b)
97,077
86,581
 10,164
 174
158
105,018
93,172

11,617

192
37
Consumer & Retail94,815
60,678

31,901

2,033
203
Industrials62,483
39,434
 21,673
 1,157
219
172
48
(746)(9)
Asset Managers51,856
45,249

6,588

6
13
18
—
—
(4,785)
Technology, Media & Telecommunications72,646
46,334
 24,081
 2,170
61
8
12
(1,011)(12)60,033
35,878
 21,066
 2,953
136
27
27
(658)(17)
Industrials58,528
38,487

18,594

1,311
136
171
20
(207)(29)
Banks & Finance Cos49,920
34,120
 15,496
 299
5
11
—
(575)(2,290)50,786
34,941

15,031

808
6
—
—
(834)(2,112)
Healthcare48,142
36,687

10,625

761
69
23
(5)(150)(133)50,824
36,988

12,544

1,141
151
108
14
(405)(145)
Oil & Gas42,600
23,356

17,451

1,158
635
6
36
(248)—
41,641
22,244

17,823

995
579
—
98
(429)(10)
Asset Managers42,807
36,722

6,067

4
14
10
—
—
(5,829)
Automotive35,118
24,255

10,246

615
2
8
1
(194)—
Utilities28,172
23,558

4,326

138
150
—
38
(142)(60)34,843
22,213

12,316

301
13
2
39
(414)(50)
State & Municipal Govt(c)
27,351
26,746

603

2
—
18
(1)—
(42)30,095
29,586

509

—
—
33
7
—
(46)
Transportation14,497
8,734
 5,336
 353
74
30
8
(37)(37)
Chemicals & Plastics17,499
12,033

5,243

221
2
5
—
(10)(13)
Central Govt14,865
14,524

341

—
—
—
—
(9,018)(1,963)
Metals & Mining15,359
8,188

6,767

385
19
1
—
(174)(22)15,586
7,095

7,789

661
41
2
(1)(33)(6)
Central Govt18,456
18,251
 124
 81
—
4
—
(7,994)(2,130)
Automotive17,339
9,637

7,310

392
—
1
—
(125)—
Chemicals & Plastics16,035
11,490

4,427

118
—
4
—
—
—
Transportation15,660
10,508

4,699

393
60
21
6
(31)(112)
Insurance12,639
9,777

2,830

—
32
—
—
(36)(2,080)12,348
9,458

2,867

19
4
3
—
(36)(1,998)
Financial Markets Infrastructure7,484
6,746

738

—
—
—
—
—
(26)4,121
3,969

152

—
—
—
—
—
(6)
Securities Firms4,558
3,099

1,459

—
—
—
—
(158)(823)7,344
5,973

1,344

27
—
—
—
(48)(3,201)
All other(d)
68,284
64,664

3,606

12
2
2
2
(1,581)(804)78,006
73,453

4,130

412
11
4
4
(4,833)(959)
Subtotal$881,188
$673,617

$195,442

$10,450
$1,679
$1,096
$155
$(12,682)$(15,322)$944,754
$699,510

$230,104

$13,579
$1,561
$1,022
$415
$(18,030)$(16,009)
Loans held-for-sale and loans at fair value15,028

















11,166

















Receivables from customers and other30,063


















33,706


















Total(e)
$926,279
     $989,626
     
(a)The industry rankings presented in the table as of December 31, 2018,2019, are based on the industry rankings of the corresponding exposures at June 30, 2019,March 31, 2020, not actual rankings of such exposures at December 31, 2018.2019.
(b)
Individuals and Individual Entities predominantly consists of Wealth Management clients within AWM and includes exposure to personal investment companies and personal and testamentary trusts.
(c)In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at June 30, 2019,March 31, 2020, and December 31, 2018,2019, noted above, the Firm held: $7.3$6.5 billion at both periods of trading assets; $30.5 billion and $7.8 billion, respectively, of trading securities; $31.9 billion and $37.7$29.8 billion, respectively, of AFS securities; and $4.8 billion at both periods of held-to-maturity (“HTM”)HTM securities, issued by U.S. state and municipal governments. For further information, referRefer to Note 2 and Note 9.10 for further information.
(d)All other includes: SPEs and Private education and civic organizations, representing approximately 91%90% and 9%10%, respectively, at June 30, 2019,both March 31, 2020 and 92% and 8%, respectively, at December 31, 2018.2019.
(e)
Excludes cash placed with banks of $259.7$354.4 billion and $268.1$254.0 billion, at June 30, 2019,March 31, 2020 and December 31, 2018,2019, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.
(f)Credit exposure is net of risk participations and excludes the benefit of credit derivatives used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables.
(g)Represents the net notional amounts of protection purchased and sold through credit derivatives used to manage the credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. The All other category includes purchased credit protection on certain credit indices.

Real Estate
Presented below is additional informationdetail on certain of the Firm’s largest industry exposures and/or certain industries which present potential heightened credit concerns.
Real Estate industry, to which the Firm has significant exposure.
Real Estate exposure andwas $148.2 billion as of March 31, 2020, largely driven by multifamily lending as shown in the investment grade percentagetable below. During the three months ended March 31, 2020 the investment-grade portion of the portfolio remained relatively flat forincreased from 81% to 83%, while the six months ended June 30, 2019 at $144.7 billion anddrawn percentage increased from 78% to 83% respectively. For further information on. Retail-related Real Estate loans, refer to Note 11.and Lodging exposure within Other in the table below was $15.1 billion as of March 31, 2020 of which 74% was investment-grade; noninvestment-grade Retail and Lodging exposure is largely secured.
June 30, 2019 March 31, 2020 
(in millions, except ratios)Loans and Lending-related Commitments Derivative Receivables Credit exposure % Investment-grade
% Drawn(c)
Loans and Lending-related Commitments Derivative Receivables Credit exposure % Investment-grade
% Drawn(c)
Multifamily(a)
$85,195
 $66
 $85,261
 89% 92% $86,630
 $125
 $86,755
 90% 92% 
Other58,940
 498
 59,438
 73
 62
 60,322
 1,169
 61,491
 73
 71
 
Total Real Estate Exposure(b)
144,135
 564
 144,699
 83
 80
 146,952
 1,294
 148,246
 83
 83
 
                    
December 31, 2018 December 31, 2019 
(in millions, except ratios)Loans and Lending-related Commitments 
Derivative
Receivables
 Credit exposure 
% Investment-
grade
% Drawn(c)
Loans and Lending-related Commitments 
Derivative
Receivables
 Credit exposure 
% Investment-
grade
% Drawn(c)
Multifamily(a)
$85,683
 $33
 $85,716
 89% 92% $86,381
 $58
 $86,439
 91% 92% 
Other57,469
 131
 57,600
 72
 63
 63,805
 561
 64,366
 67
 59
 
Total Real Estate Exposure(b)
143,152
 164
 143,316
 82
 81
 150,186
 619
 150,805
 81
 78
 
(a)Multifamily exposure is largely in California.
(b)Real Estate exposure is predominantly secured; unsecured exposure as of March 31, 2020 is predominantly investment-grade.
(c)Represents drawn exposure as a percentage of credit exposure.
Consumer & Retail
Consumer & Retail exposure was $110.7 billion as of March 31, 2020, and predominantly includes Retail, Food and Beverage, and Business and Consumer Services as shown in the table below. During the three months ended March 31, 2020, the investment-grade portion of the Consumer & Retail portfolio decreased from 55% to 52% and the drawn percentage of this portfolio increased from 35% to 49%, both driven primarily by impacts from the COVID-19 pandemic. Additionally, criticized exposure increased by approximately $1.4 billion from $2.5 billion at December 31, 2019 to $3.9 billion at March 31, 2020, also primarily driven by impacts from the COVID-19 pandemic.
 March 31, 2020 
(in millions, except ratios)Loans and Lending-related Commitments Derivative Receivables Credit exposure % Investment-grade
% Drawn(d)
Retail(a)
$31,487
 $333
 $31,820
 52% 51% 
Food and Beverage28,401
 1,192
 29,593
 63
 46
 
Business and Consumer Services23,423
 722
 24,145
 52
 51
 
Consumer Hard Goods12,667
 183
 12,850
 60
 55
 
Leisure(b)
11,867
 394
 12,261
 16
 41
 
Total Consumer & Retail(c)
107,845
 2,824
 110,669
 52
 49
 
           
 December 31, 2019 
(in millions, except ratios)Loans and Lending-related Commitments 
Derivative
Receivables
 Credit exposure 
% Investment-
grade
% Drawn(d)
Retail(a)
$29,290
 $294
 $29,584
 54% 37% 
Food and Beverage27,956
 625
 28,581
 67
 36
 
Business and Consumer Services24,242
 249
 24,491
 51
 37
 
Consumer Hard Goods13,144
 109
 13,253
 65
 35
 
Leisure(b)
10,930
 147
 11,077
 21
 19
 
Total Consumer & Retail(c)
105,562
 1,424
 106,986
 55
 35
 
(a)Retail consists of Home Improvement & Specialty Retailers, Restaurants, Supermarkets, Discount & Drug Stores, Specialty Apparel and Department Stores.
(b)Leisure consists of Gaming, Arts & Culture, Travel Services and Sports & Recreation. Approximately 90% of the noninvestment-grade Leisure portfolio is secured.
(c)Approximately 75% of the noninvestment-grade portfolio is secured.
(d)Represents drawn exposure as a percent of credit exposure.

Oil & Gas
Oil & Gas exposure was $42.8 billion as of March 31, 2020, including $21.5 billion of Exploration & Production and Oilfield Services as shown in the table below. During thethree months ended March 31, 2020, the investment-grade portion of the Oil & Gas portfolio decreased from 53% to 52%, and the drawn percentage of this portfolio increased from 31% to 37%, both driven by lower oil prices and impacts from the COVID-19 pandemic. Additionally, criticized exposure increased by $2.6 billion from $1.6 billion at December 31, 2019 to $4.2 billion at March 31, 2020, also driven by lower oil prices and impacts from the COVID-19 pandemic.
 March 31, 2020 
(in millions, except ratios)Loans and Lending-related Commitments Derivative Receivables Credit exposure % Investment-grade
% Drawn(c)
Exploration & Production ("E&P") and Oil field Services$21,280
 $213
 $21,493
 33% 44% 
Other Oil & Gas(a)
20,637
 624
 21,261
 72
 30
 
Total Oil & Gas(b)
41,917
 837
 42,754
 52
 37
 
           
 December 31, 2019 
(in millions, except ratios)Loans and Lending-related Commitments 
Derivative
Receivables
 Credit exposure 
% Investment-
grade
% Drawn(c)
Exploration & Production ("E&P") and Oil field Services$22,543
 $646
 $23,189
 38% 38% 
Other Oil & Gas(a)
18,246
 206
 18,452
 73
 23
 
Total Oil & Gas(b)
40,789
 852
 41,641
 53
 31
 
(a)Other Oil & Gas includes Integrated Oil & Gas companies, Midstream/Oil Pipeline companies and refineries.
(b)Secured lending was $15.5 billion and $15.7 billion at March 31, 2020 and December 31, 2019, respectively, approximately half of which is reserve-based lending to the Exploration & Production sub-sector; unsecured exposure is largely investment-grade.
(c)Represents drawn exposure as a percent of credit exposure.
Loans
In the normal course of its wholesale business,businesses, the Firm provides loans to a variety of clients, ranging from large corporate and institutional clients to high-net-worth individuals. ForRefer to Note 12 for a further discussion on loans, including information onabout delinquencies, loan modifications and other credit quality indicators and sales of loans, refer to Note 11.indicators.
The following table presents the change in the nonaccrual loan portfolio for the sixthree months ended June 30, 2019March 31, 2020 and 2018.2019. The increase in nonaccrual loans in the first quarter of 2020 reflects select downgrades across a number of sectors, including Oil & Gas.
Wholesale nonaccrual loan activity
Six months ended June 30,
(in millions)		 2019
2018
Three months ended March 31,
(in millions)		 20202019
Beginning balance $1,370
$1,734
 $1,152
$1,587
Additions 1,201
505
 1,333
841
Reductions:    
Paydowns and other 738
394
 171
213
Gross charge-offs 143
231
 181
60
Returned to performing status 25
176
 24
58
Sales 57
107
 14
5
Total reductions 963
908
 390
336
Net changes 238
(403) 943
505
Ending balance $1,608
$1,331
 $2,095
$2,092
 
The following table presents net charge-offs/recoveries, which are defined as gross charge-offs less recoveries, for the three and six months ended June 30, 2019March 31, 2020 and 2018.2019. The amounts in the table below do not include gains or losses from sales of nonaccrual loans.
Wholesale net charge-offs/(recoveries)Wholesale net charge-offs/(recoveries)  Wholesale net charge-offs/(recoveries)
(in millions, except ratios)Three months ended
June 30,		 Six months ended
June 30,		Three months ended
March 31,
2019
2018
 2019
2018
2020
2019
Loans – reported    
Average loans retained$434,905
$414,980
 $434,783
$409,949
$491,819
$471,957
Gross charge-offs98
176
 150
241
181
64
Gross recoveries(14)(30) (22)(76)
Gross recoveries collected(19)(12)
Net charge-offs/(recoveries)84
146
 128
165
162
52
Net charge-off/(recovery) rate0.08%0.14% 0.06%0.08%0.13%0.04%


Lending-related commitments
The Firm uses lending-related financial instruments, such as commitments (including revolving credit facilities) and guarantees, to address the financing needs of its clients. The contractual amounts of these financial instruments represent the maximum possible credit risk should the clients draw down on these commitments or when the Firm fulfillfulfills its obligations under these guarantees, and the clients subsequently fail to perform according to the terms of these contracts. Most of these commitments and guarantees arehave historically been refinanced, extended, cancelled, or expireexpired without being drawn upon or a default occurring. InAs a result, the Firm’s view,Firm does not believe that the total contractual amount of these wholesale lending-related commitments is not representative of the Firm’s expected future credit exposure or funding requirements. ForRefer to Note 23 for further information on wholesale lending-related commitments, refercommitments.
Receivables from Customers
Receivables from customers primarily represent held-for-investment margin loans to Note 22 .brokerage clients in CIB and AWM that are collateralized by assets maintained in the clients’ brokerage accounts (e.g., cash on deposit, liquid and readily marketable debt or equity securities), as such no allowance for credit losses is held against these receivables. To manage its credit risk the Firm establishes margin requirements and monitors the required margin levels on an ongoing basis, and requires clients to deposit additional cash or other collateral, or to reduce positions, when appropriate. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.
Derivative contracts
Derivatives enable clients and counterparties to manage risks including credit risk and risks arising from fluctuations in interest rates, foreign exchange, equities, and commodities. The Firm makes markets in derivatives in order to meet these needs and uses derivatives to manage certain risks associated with net open risk positions from its market-making activities, including the counterparty credit risk arising from derivative receivables. The Firm also uses derivative instruments to manage its own credit and other market risk exposure. ForRefer to Note 5 for a further discussion of derivative contracts, refer to Note 4.contracts.
The following table summarizes the net derivative receivables for the periods presented.
Derivative receivables  
(in millions)June 30,
2019
December 31,
2018
March 31,
2020
December 31,
2019
Total, net of cash collateral52,878
54,213
81,648
49,766
Liquid securities and other cash collateral held against derivative receivables(a)
(14,676)(15,322)(26,178)(16,009)
Total, net of collateral$38,202
$38,891
$55,470
$33,757
(a)Includes collateral related to derivative instruments where appropriate legal opinions have not been either sought or obtained with respect to master netting agreements.
 
The fair value of derivative receivables reported on the Consolidated balance sheets were $52.9$81.6 billion and $54.2$49.8 billion at June 30, 2019,March 31, 2020, and December 31, 2018, respectively.2019, respectively, with increases in CIB resulting from market movements, including the impact of the COVID-19 pandemic. Derivative receivables represent the fair value of the derivative contracts after giving effect to legally enforceable master netting agreements and cash collateral held by the Firm. However, in management’s view, the appropriate measure of current credit risk should also take into consideration additional liquid securities (primarily U.S. government and agency securities and other group of seven nations (“G7”) government securities) and other cash collateral held by the Firm aggregating $14.7$26.2 billion and $15.3$16.0 billion at June 30, 2019,March 31, 2020, and December 31, 2018,2019, respectively, that may be used as security when the fair value of the client’s exposure is in the Firm’s favor.
In addition to the collateral described in the preceding paragraph, theThe Firm also holds additional collateral (primarily cash, G7 government securities, other liquid government-agencygovernment agency and guaranteed securities, and corporate debt and equity securities) delivered by clients at the initiation of transactions, as well as collateral related to contracts that have a non-daily call frequency and collateral that the Firm has agreed to return but has not yet settled as of the reporting date. Although this collateral does not reduce the balances and is not included in the table above, it is available as security against potential exposure that could arise should the fair value of the client’s derivative contracts move in the Firm’s favor. The derivative receivables fair value, net of all collateral, also does not include other credit enhancements, such as letters of credit. ForRefer to Note 5 for additional information on the Firm’s use of collateral agreements, refer to Note 4.

















agreements.


The following table summarizes the ratings profile of the Firm’s derivative receivables, including credit derivatives, net of all collateral, at the dates indicated. The ratings scale is based on the Firm’sFirm considers internal ratings which generally correspondequivalent to the ratingsBBB-/Baa3 or higher as assigned by S&P and Moody’s.investment grade. Refer to Note 12 for further information on internal risk ratings.
Ratings profile of derivative receivables     
Rating equivalent
June 30, 2019 December 31, 2018

(in millions, except ratios)
Exposure net of all collateral% of exposure net of all collateral Exposure net of all collateral% of exposure net of all collateral
AAA/Aaa to AA-/Aa3$10,435
27% $11,831
31%
A+/A1 to A-/A35,154
13
 7,428
19
BBB+/Baa1 to BBB-/Baa315,367
41
 12,536
32
BB+/Ba1 to B-/B36,674
17
 6,373
16
CCC+/Caa1 and below572
2
 723
2
Total$38,202
100% $38,891
100%

Ratings profile of derivative receivables     
Internal rating equivalent
March 31, 2020 December 31, 2019

(in millions, except ratios)
Exposure net of all collateral% of exposure net of all collateral Exposure net of all collateral% of exposure net of all collateral
AAA/Aaa to AA-/Aa3$16,318
29% $8,347
25%
A+/A1 to A-/A38,297
15
 5,471
16
BBB+/Baa1 to BBB-/Baa318,648
34
 13,148
39
BB+/Ba1 to B-/B310,904
20
 6,225
18
CCC+/Caa1 and below1,303
2
 566
2
Total$55,470
100% $33,757
100%
As previously noted, the Firm uses collateral agreements to mitigate counterparty credit risk. The percentage of the Firm’s over-the-counter derivative contracts subject to collateral agreements — excluding foreign exchange spot trades, which are not typically covered by collateral agreements due to their short maturity and centrally cleared trades that are settled daily — was approximately 86% and 90% at both June 30, 2019,March 31, 2020, and December 31, 2018.2019, respectively.
Credit derivatives
The Firm uses credit derivatives for two primary purposes: first, in its capacity as a market-maker, and second, as an end-user, to manage the Firm’s own credit risk associated with various exposures.
 
Credit portfolio management activities
Included in the Firm’s end-user activities are credit derivatives used to mitigate the credit risk associated with traditional lending activities (loans and unfunded commitments) and derivatives counterparty exposure in the Firm’s wholesale businesses (collectively, “credit portfolio management” activities). Information on credit portfolio management activities is provided in the table below.
Credit derivatives used in credit portfolio management activities
Notional amount of protection
purchased and sold(a)
Notional amount of protection
purchased and sold(a)
(in millions)June 30,
2019
 December 31,
2018
March 31,
2020
 December 31,
2019
Credit derivatives used to manage:      
Loans and lending-related commitments$1,819
 $1,272
$3,511
 $2,047
Derivative receivables13,473
 11,410
17,262
 15,983
Credit derivatives used in credit portfolio management activities$15,292
 $12,682
$20,773
 $18,030
(a)Amounts are presented net, considering the Firm’s net protection purchased or sold with respect to each underlying reference entity or index.
ForRefer to Credit derivatives in Note 5 of this Form 10-Q and Note 5 of JPMorgan Chase’s 2019 Form 10-K for further information on credit derivatives and derivatives used in credit portfolio management activities, refer to Credit derivatives in Note 4 of this Form 10-Q, and Note 5 of JPMorgan Chase’s 2018 Form 10-K.activities.

ALLOWANCE FOR CREDIT LOSSES
Effective January 1, 2020, the Firm adopted the CECL accounting guidance. The adoption of this guidance established a single allowance framework for all financial assets measured at amortized cost and certain off-balance sheet credit exposures. This framework requires that management’s estimate reflects credit losses over the instrument’s remaining expected life and considers expected future changes in macroeconomic conditions. Refer to Note 1 for further information.
The Firm’s allowance for credit losses comprises:
the allowance for loan losses, which covers the Firm’s retained consumer and wholesale loan portfolios as well as the Firm’s wholesale(scored and certain consumer lending-related commitments.
For further informationrisk-rated) and is presented separately on the components of balance sheet,
the allowance for lending-related commitments, which is presented on the balance sheet in accounts payable and other liabilities, and
the allowance for credit losses on investment securities, which covers the Firm’s HTM and AFS securities and is recognized within Investment Securities on the balance sheet.
Refer to Note 13 and Note 10 for a description of the policies, methodologies and judgments used to determine the Firm’s allowances for credit losses on loans, lending-related commitments, and investment securities.
The allowance for credit losses increased compared with December 31, 2019, reflecting:
additions of $6.8 billion associated with the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic and continued pressure on oil prices including:
–$4.4 billion in consumer, predominantly in Credit Card, reflecting the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic, and
–a net $2.4 billion in wholesale, primarily reflecting the deterioration in the macroeconomic environment as a result of the impact of the COVID-19 pandemic across multiple sectors, and continued pressure on oil prices, with the largest impacts in the Oil & Gas, Real Estate, and Consumer & Retail industries, and
a net $4.3 billion addition as a result of the adoption of CECL.
In light of the rapidly evolving economic conditions and forecasts during March 2020, management updated its macroeconomic forecast near the end of its credit loss estimation process in early April. This macroeconomic forecast included a decline in the U.S. real GDP of approximately 25% and an increase in the U.S. unemployment rate to above 10%, both in the second quarter, followed by a solid recovery in the second half of 2020. In addition, the allowances for loan losses and lending-related commitments reflect the estimated impact of the Firm’s payment relief actions as well as the federal government’s stimulus programs related to the COVID-19 pandemic. Subsequent changes to this forecast and related management judgments, referestimates will be reflected in the provision for credit losses in future periods.
Refer to Critical Accounting Estimates Used by the Firm on pages 76–75–77 and Note 12 of this Form 10-Q, and Critical Accounting Estimates Used by the Firmfor further information on pages 141-143 and Note 13 of JPMorgan Chase’s 2018 Form 10-K.
At least quarterly, the allowance for credit losses is reviewed by the CRO, the CFO and the Controller of the Firm. As of June 30, 2019, JPMorgan Chase deemed the allowancerelated management judgments.
Refer to Consumer Credit Portfolio on pages 52–55, Wholesale Credit Portfolio on pages 56–63 and Note 12 for credit losses to be appropriate and sufficient to absorb probable credit losses inherent in the portfolio.
The allowance for credit losses decreased compared with December 31, 2018, largely driven by Consumer due to a $400 million reduction in the allowance for loan losses in the PCI residential real estate portfolio, reflecting continued improvement in home prices and delinquencies, partially offset by a $200 million addition to the allowance in the credit card portfolio, due to loan growth and higher loss rates, as anticipated.
For additional information on the consumer and wholesale credit portfolios, refer to Consumer Credit Portfolio on pages 55–59, Wholesale Credit Portfolio on pages 60–66 and Note 11.

portfolios.


The adoption of the CECL accounting guidance resulted in a change in the accounting for PCI loans, which are considered PCD loans. In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.
Summary of changes in the allowance for credit losses     
 2019 2018
Six months ended June 30,
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
(in millions, except ratios) 
Allowance for loan losses         
Beginning balance at January 1,$4,146
$5,184
$4,115
$13,445
 $4,579
$4,884
$4,141
$13,604
Gross charge-offs471
2,725
150
3,346
 539
2,578
241
3,358
Gross recoveries(277)(283)(22)(582) (451)(244)(76)(771)
Net charge-offs194
2,442
128
2,764
 88
2,334
165
2,587
Write-offs of PCI loans(a)
89
—
—
89
 93
—
—
93
Provision for loan losses(204)2,642
131
2,569
 90
2,334
(98)2,326
Other—
(1)6
5
 —
—
—
—
Ending balance at June 30,$3,659
$5,383
$4,124
$13,166
 $4,488
$4,884
$3,878
$13,250
Impairment methodology         
Asset-specific(b)
$145
$472
$288
$905
 $226
$402
$318
$946
Formula-based2,215
4,911
3,836
10,962
 2,130
4,482
3,560
10,172
PCI1,299
—
—
1,299
 2,132
—
—
2,132
Total allowance for loan losses$3,659
$5,383
$4,124
$13,166
 $4,488
$4,884
$3,878
$13,250
Allowance for lending-related commitments         
Beginning balance at January 1,$33
$—
$1,022
$1,055
 $33
$—
$1,035
$1,068
Provision for lending-related commitments—
—
75
75
 —
—
49
49
Other—
—
(1)(1) —
—
—
—
Ending balance at June 30,$33
$—
$1,096
$1,129
 $33
$—
$1,084
$1,117
Impairment methodology         
Asset-specific$—
$—
$136
$136
 $—
$—
$139
$139
Formula-based33
—
960
993
 33
—
945
978
Total allowance for lending-related commitments(c)
$33
$—
$1,096
$1,129
 $33
$—
$1,084
$1,117
Total allowance for credit losses$3,692
$5,383
$5,220
$14,295
 $4,521
$4,884
$4,962
$14,367
Memo:         
Retained loans, end of period$351,692
$157,568
$438,468
$947,728
 $374,587
$145,221
$420,632
$940,440
Retained loans, average363,634
152,435
434,783
950,852
 373,562
142,757
409,949
926,268
PCI loans, end of period22,242
—
—
22,242
 26,977
—
3
26,980
Credit ratios         
Allowance for loan losses to retained loans1.04%3.42%0.94%1.39% 1.20%3.36%0.92%1.41%
Allowance for loan losses to retained nonaccrual loans(d)
113
NM
333
295
 113
NM
335
258
Allowance for loan losses to retained nonaccrual loans excluding credit card113
NM
333
174
 113
NM
335
163
Net charge-off rates0.11
3.23
0.06
0.59
 0.05
3.30
0.08
0.56
Credit ratios, excluding residential real estate PCI loans         
Allowance for loan losses to retained loans0.72
3.42
0.94
1.28
 0.68
3.36
0.92
1.22
Allowance for loan losses to retained nonaccrual loans(d)
73
NM
333
266
 59
NM
335
217
Allowance for loan losses to retained nonaccrual loans excluding credit card73
NM
333
145
 59
NM
335
121
Net charge-off rates0.11%3.23%0.06%0.60% 0.05%3.30%0.08%0.58%
Note: In the table above, the financial measures which exclude the impact of PCI loans are non-GAAP financial measures.
Allowance for credit losses and related information     
 
2020(d)
 2019
Three months ended March 31,
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
(in millions, except ratios) 
Allowance for loan losses         
Beginning balance at January 1,$2,538
$5,683
$4,902
$13,123
 $3,434
$5,184
$4,827
$13,445
Cumulative effect of a change in accounting principle297
5,517
(1,642)4,172
 NA
NA
NA
NA
Gross charge-offs233
1,488
181
1,902
 234
1,344
64
1,642
Gross recoveries collected(239)(175)(19)(433) (127)(142)(12)(281)
Net charge-offs(6)1,313
162
1,469
 107
1,202
52
1,361
Write-offs of PCI loans(a)
NA
NA
NA
NA
 50
—
—
50
Provision for loan losses613
5,063
1,742
7,418
 120
1,202
170
1,492
Other—
—
—
—
 2
(1)6
7
Ending balance at March 31,$3,454
$14,950
$4,840
$23,244
 $3,399
$5,183
$4,951
$13,533
          
Allowance for lending-related commitments         
Beginning balance at January 1,$12
$—
$1,179
$1,191
 $12
$—
$1,043
$1,055
Cumulative effect of a change in accounting principle133
—
(35)98
 NA
NA
NA
NA
Provision for lending-related commitments6
—
852
858
 —
—
3
3
Other—
—
—
—
 —
—
—
—
Ending balance at March 31,$151
$—
$1,996
$2,147
 $12
$—
$1,046
$1,058
          
Impairment methodology         
Asset-specific(b)
$223
$530
$556
$1,309
 $89
$461
$479
$1,029
Portfolio-based3,231
14,420
4,284
21,935
 1,572
4,722
4,472
10,766
PCINA
NA
NA
NA
 1,738
—
—
1,738
Total allowance for loan losses$3,454
$14,950
$4,840
$23,244
 $3,399
$5,183
$4,951
$13,533
          
Impairment methodology         
Asset-specific$—
$—
$187
$187
 $—
$—
$114
$114
Portfolio-based151
—
1,809
1,960
 12
—
932
944
Total allowance for lending-related commitments$151
$—
$1,996
$2,147
 $12
$—
$1,046
$1,058
          
Total allowance for credit losses$3,605
$14,950
$6,836
$25,391
 $3,411
$5,183
$5,997
$14,591
          
Memo:         
Retained loans, end of period$293,779
$154,021
$555,289
$1,003,089
 $322,208
$150,515
$471,118
$943,841
Retained loans, average294,156
162,660
491,819
948,635
 333,480
151,120
471,957
956,557
Credit ratios         
Allowance for loan losses to retained loans1.18 %9.71%0.87%2.32% 1.05%3.44%1.05%1.43%
Allowance for loan losses to retained nonaccrual loans(c)
89
NM
247
398
 107
NM
278
273
Allowance for loan losses to retained nonaccrual loans excluding credit card89
NM
247
142
 107
NM
278
168
Net charge-off rates(0.01)3.25
0.13
0.62
 0.13
3.23
0.04
0.58
(a)Write-offsPrior to the adoption of CECL, write-offs of PCI loans arewere recorded against the allowance for loan losses when actual losses for a pool exceedexceeded estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan iswas recognized when the underlying loan iswas removed from a pool.
(b)Includes modified PCD loans and loans that have been modified or are reasonably expected to be modified in a TDR. Also includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a TDR.for the wholesale portfolio segment. The asset-specific credit card allowance for loan losses modified or reasonably expected to be modified in a TDR is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.
(c)The allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets.
(d)The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.
(d)Excludes HTM securities, which had an allowance for credit losses of $19 million and a provision for credit losses of $9 million as of and for the three months ended March 31, 2020.





INVESTMENT PORTFOLIO RISK MANAGEMENT
Investment portfolio risk is the risk associated with the loss of principal or a reduction in expected returns on investments arising from the investment securities portfolio or from principal investments. The investment securities portfolio is predominantly held predominantly by Treasury and CIO in connection with the Firm’s balance sheet or asset-liability management objectives or from principalobjectives. Principal investments are predominantly privately-held financial instruments and are managed in the LOBs and Corporate in predominantly privately-held financial instruments.Corporate. Investments are typically intended to be held over extended periods and, accordingly, the Firm has no expectation for short-term realized gains with respect to these investments.
Investment securities risk
Investment securities risk includes the exposure associated with a default in the payment of principal and interest. This risk is mitigated given that the investment securities portfolio held by Treasury and CIO substantially investis predominantly invested in high-quality securities. At June 30, 2019,March 31, 2020, the Treasury and CIO investment securities portfolio, net of allowance for credit losses, was $305.4$469.1 billion, and the average credit rating of the securities comprising the portfolio was AA+ (based upon external ratings where available and where not available, based primarily upon internal ratings that correspondrisk ratings). Refer to ratings as defined by S&PCorporate segment results on page 37 and Moody’s). ForNote 10 for further information on the investment securities portfolio referand internal risk ratings. Refer to Corporate segment resultsMarket Risk Management on pages 41–42 and Note 9. For67–71 for further information on the market risk inherent in the portfolio, referportfolio. Refer to MarketLiquidity Risk Management on pages 70–74. For45–49 for further information on related liquidity risk, refer to Liquidity Risk on pages 49–53.risk.

 
Principal investment risk
Principal investments are typically private non-traded financial instruments representing ownership or other forms of junior capital. Principal investments coverspan multiple asset classes and are made either in stand-alone investing businesses or as part of a broader business platform. In general, new principal investments include tax-oriented investments, as well as investments made to enhance or accelerate LOB and Corporate strategic business initiatives. The Firm’s principal investments are managed by the LOBs and Corporate and are reflected within their respective financial results. The carrying values of the principal investment portfolios have not been significantly affected by recent market events as a result of the COVID-19 pandemic. However, in the event that deterioration of the macroeconomic environment accelerates and/or economic recovery becomes delayed, certain principal investments could be subject to impairments, write-downs, or other negative impacts.
As of June 30, 2019March 31, 2020 and December 31, 2018,2019, the aggregate carrying values of the principal investment portfolios were $22.0$23.8 billion and $22.2$24.2 billion, respectively, which included tax-oriented investments (e.g., affordable housing and alternative energy investments) of $16.0$18.2 billion and $16.6 billion, respectively,at the end of both periods, and private equity, various debt and equity instruments, and real assets of $6.0$5.6 billion and $5.6$6.0 billion, respectively.
ForRefer to page 118 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the Firm’s Investment Portfolio Risk Management governance and oversight, refer to page 123 of JPMorgan Chase’s 2018 Form 10-K.oversight.


MARKET RISK MANAGEMENT
Market risk is the risk associated with the effect of changes in market factors such as interest and foreign exchange rates, equity and commodity prices, credit spreads or implied volatilities, on the value of assets and liabilities held for both the short and long term. ForRefer to Market Risk Management on pages 119–126 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the Firm’s Market Risk Management organization, market risk measurement, risk monitoring and control, and predominant business activities that give rise to market risk, refer to risk.
COVID-19 Pandemic
Market Risk Management is actively monitoring the impact of the COVID-19 pandemic on pages 124–131market risk exposures by leveraging existing risk measures and controls.
Models used to measure market risk are inherently imprecise and may be limited in their ability to measure certain risks or to predict losses. This imprecision may be heightened when sudden or severe shifts in market conditions occur, such as those observed during the COVID-19 pandemic. For additional discussion on model uncertainty refer to Estimations and Model Risk Management on page 74.
Market Risk Management periodically reviews the Firm’s existing market risk measures to identify opportunities for enhancement, and to the extent appropriate, will calibrate those measures accordingly over time. This is increasingly important in periods of JPMorgan Chase’s 2018sustained, heightened market volatility. Form 10-K.



Value-at-risk
JPMorgan Chase utilizes value-at-risk (“VaR”), a statistical risk measure, to estimate the potential loss from adverse market moves in the current market environment. The Firm has a single VaR framework used as a basis for calculating Risk Management VaR and Regulatory VaR.
The Firm’s Risk Management VaR is calculated assuming a one-day holding period and an expected tail-loss methodology which approximates a 95% confidence level. For risk management purposes, the Firm believes this methodology provides a daily measure of risk that is closely aligned to risk management decisions made by the lines of businessLOBs and Corporate and, along with other market risk measures, provides the appropriate information needed to respond to risk events. The Firm calculates separately a daily aggregated VaR in accordance with regulatory rules (“Regulatory VaR”), which is used to derive the Firm’s regulatory VaR-based capital requirements under Basel III.
The Firm’s VaR model calculations are periodically evaluated and enhanced in response to changes in the composition of the Firm’s portfolios, changes in market conditions, improvements in the Firm’s modeling techniques and measurements, and other factors. Such changes may affect historical comparisons of VaR results. For information regarding model reviews and approvals, referRefer to Estimations and Model Risk Management on page 140135 of JPMorgan Chase’s 20182019 Form 10-K.10-K for information regarding model reviews and approvals.
ForRefer to page 121 of JPMorgan Chase’s 2019 Form 10-K for further information regarding VaR, including the inherent limitations, and the key differences between Risk Management VaR and Regulatory VaR, referVaR. Refer to page 126 of JPMorgan Chase’s 2018 Form 10-K. ForBasel III Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website at:
(http://investor.shareholder.com/jpmorganchase/basel.cfm) for additional information on Regulatory VaR and the other components of market risk regulatory capital for the Firm (e.g., VaR-based measure, stressed VaR-based measure and the respective backtesting), refer. Refer to Other risk measures on pages 124-126 of JPMorgan Chase’s Basel III Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website at:
(2019 Form 10-K http://investor.shareholder.com/jpmorganchase/basel.cfm). Forfor further information regarding nonstatistical market risk measures used by the Firm, refer to Other risk measures on pages 129-131 of JPMorgan Chase’s 2018 Form 10-K.Firm.



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




































Three months ended
Three months ended

June 30, 2019
March 31, 2019
June 30, 2018
March 31, 2020
December 31, 2019
March 31, 2019
(in millions) Avg.MinMax
 Avg.MinMax
 Avg.MinMax

 Avg.MinMax
 Avg.MinMax
 Avg.MinMax

CIB trading VaR by risk type



































Fixed income$39

$33

$45


$44

$38

$50


$31

$26

$36

$60

$30

$156


$39

$33

$48


$44

$38

$50

Foreign exchange7

5

12


9

4

15


6

4

10

7

4

11


5

4

8


9

4

15

Equities25

14

31


16

13

22


15

13

18

20

13

41


18

13

27


16

13

22

Commodities and other9

7

10


10

9

12


7

5

9

10

7

24


7

6

9


10

9

12

Diversification benefit to CIB trading VaR(36)
(a) 
 NM
(b) 
 NM
(b) 

(32)
(a) 
 NM
(b) 
 NM
(b) 

(27)
(a) 
NM
(b) 
NM
(b) 
(40)
(a) 
 NM
(b) 
 NM
(b) 

(32)
(a) 
NM
(b) 
NM
(b) 

(32)
(a) 
NM
(b) 
NM
(b) 
CIB trading VaR44

34
(b) 
55
(b) 

47

36
(b) 
61
(b) 

32

26
(b) 
42
(b) 
57

27
(b) 
160
(b) 

37

29
(b) 
55
(b) 

47

36
(b) 
61
(b) 
Credit portfolio VaR5

4

7


5

4

6


4

3

4

9

3

25


5

3

7


5

4

6

Diversification benefit to CIB VaR(5)
(a) 
 NM
(b) 
 NM
(b) 

(4)
(a) 
NM
(b) 
NM
(b) 

(3)
(a) 
NM
(b) 
NM
(b) 
(8)
(a) 
 NM
(b) 
 NM
(b) 

(5)
(a) 
NM
(b) 
NM
(b) 

(4)
(a) 
NM
(b) 
NM
(b) 
CIB VaR44

35
(b) 
55
(b) 

48

37
(b) 
63
(b) 

33

26
(b) 
42
(b) 
58

27
(b) 
162
(b) 

37

29
(b) 
52
(b) 

48

37
(b) 
63
(b) 

CCB VaR4

2

7


2

1

3


1

1

3

7

3

11


8

3

11


2

1

3

Corporate VaR10

9

10


10

9

12


12

10

13

Corporate and other LOB VaR11

9

14


11

9

13


10

9

12

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

(2)
(a) 
NM
(b) 
NM
(b) 

(1)
(a) 
NM
(b) 
NM
(b) 
(5)
(a) 
 NM
(b) 
 NM
(b) 

(6)
(a) 
NM
(b) 
NM
(b) 

(2)
(a) 
NM
(b) 
NM
(b) 
Other VaR9

8
(b) 
11
(b) 

10

9
(b) 
11
(b) 

12

10
(b) 
14
(b) 
13

10
(b) 
16
(b) 

13

10
(b) 
17
(b) 

10

9
(b) 
11
(b) 
Diversification benefit to CIB and other VaR(7)
(a) 
 NM
(b) 
 NM
(b) 

(6)
(a) 
NM
(b) 
NM
(b) 

(10)
(a) 
NM
(b) 
NM
(b) 
(12)
(a) 
 NM
(b) 
 NM
(b) 

(13)
(a) 
NM
(b) 
NM
(b) 

(6)
(a) 
NM
(b) 
NM
(b) 
Total VaR$46

$36
(b) 
$57
(b) 

$52

$40
(b) 
$65
(b) 

$35

$28
(b) 
$44
(b) 
$59

$27
(b) 
$164
(b) 

$37

$30
(b) 
$52
(b) 

$52

$40
(b) 
$65
(b) 
(a)Average portfolio VaR is less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects that the risks are not perfectly correlated.
(b)Diversification benefit represents the difference between the total VaR and each reported level and the sum of its individual components. Diversification benefit reflects the non-additive nature of VaR due to imperfect correlation across lines of business,LOBs, Corporate, and risk types. The maximum and minimum VaR for each portfolio may have occurred on different trading days than the components and consequently diversification benefit is not meaningful.
Average VaR across the risk types and LOBs were generally higher due to increased volatility as a result of the COVID-19 pandemic.
Quarter over quarter results
Average total VaR decreasedincreased by $6$22 million for the three months ended June 30, 2019March 31, 2020 as compared with the prior quarter. This reflects a reductionsubstantial increases in volatility which occurred towards the end of the quarter, affecting the fixed income risk across Fixed Income and Foreign Exchange risk types, partially offset by Equities risk type,type. Maximum VaR for the quarter was $164 million, also driven by the inclusion of a CIB strategic investment in Tradeweb following the IPO in the second quarter of 2019.increased volatility.


Year over year results
Average total VaR increased by $11$7 million for the three months ended June 30, 2019,March 31, 2020, compared with the same period in the prior year. TheThis reflects an increase in average total VaR is primarily due to the Equitiesfixed income risk type driven by substantial increases in volatility, and increased exposure in the equities risk type due to the inclusion of a CIB strategic investment in Tradeweb following theits IPO in the second quarter of 2019, partially offset by the exit of certain CIB investments. The fixed income and equities risk type increases were partially offset by reduced exposure in the foreign exchange risk type.
In addition, average CCB VaR has increased by $5 million, driven by MSR risk management activities.
Effective January 1, 2020, the Firm refined the scope of VaR to exclude positions related to the risk management of interest rate exposure from changes in the Firm’s own credit spread on fair value option elected liabilities, and included these positions in other sensitivity-based measures. This change was made to more appropriately align the risk profilefrom changes in the Firm’s own credit spread on fair value option elected liabilities in a single market risk measure. In the absence of this refinement, the average Total VaR for Fixed Income risk typethe three months ended March 31, 2020 would have been higher by $6 million and increased volatility.each of the components would have been higher by the amounts reported in the following table:

(in millions)
Amount by which reported VaR would have been higher for the three months
ended March 31, 2020
CIB fixed income VaR $4
 
CIB trading VaR 5
 
CIB VaR 6
 


VaR back-testingbacktesting
The Firm performs daily VaR model back-testing,backtesting, which compares the daily Risk Management VaR results with the daily gains and losses actually recognized on market-risk related revenue.
that are utilized for VaR backtesting purposes. The Firm’s definition of market risk-related gains and losses is consistentin the chart below do not reflect the Firm’s revenue results as they exclude select components of total net revenue, such as those associated with the definition used by the banking regulators under Basel III. Under this definition market risk-related gainsexecution of new transactions (i.e., intraday client-driven trading and losses are defined as: gains and losses on the positions included in the Firm’s Risk Management VaR excludingintraday risk management activities), fees, commissions, certain valuation adjustments and net interest income, andincome. These excluded components of total net revenue may more than offset backtesting gains and losses arising from intraday trading.on a particular day. The definition of backtesting gains and losses above is consistent with the requirements for backtesting under Basel III capital rules.
The following chart compares actualFirmwide daily market risk-relatedbacktesting gains and losses with the Firm’s Risk Management VaR for the six12 months ended June 30, 2019. As the chart presents market risk-related gains and losses related to those positions included in the Firm’s Risk Management VaR, theMarch 31, 2020. The results in the tablechart below differ from the results of back-testingbacktesting disclosed in the Market Risk section of the Firm’s Basel III Pillar 3 Regulatory Capital Disclosures reports, which are based on Regulatory VaR applied to CIB’sthe Firm’s covered positions. The chart shows that for
For the six12 months ended June 30, 2019,March 31, 2020, the Firm observed two15 VaR back-testingbacktesting exceptions and posted market risk-relatedbacktesting gains on 82140 of the 128260 days. The Firm observed oneeight VaR back-testing exceptionbacktesting exceptions, due to volatility resulting from the COVID-19 pandemic, and posted market risk-relatedbacktesting gains on 3744 of the 6564 days, for the three months ended June 30, 2019.March 31, 2020. The number of VaR backtesting exceptions observed can differ from the statistically expected number of backtesting exceptions if the current level of market volatility is materially different from the level of market volatility during the 12 months of historical data used in the VaR calculation. Firmwide backtesting loss days differ from the two loss days for which Fixed Income Markets and Equity Markets posted losses, as disclosed in the CIB Markets revenue results, as the population of positions which compose each metric are different and due to the exclusion of select components of total net revenue in backtesting gains and losses as described above. For more information on CIB Markets revenue results, refer to page 29.
Daily Market Risk-Related Gains and Losses
vs. Risk Management VaR (1-day, 95% Confidence level)Backtesting Results
Six12 months ended June 30, 2019March 31, 2020
 
Market Risk-RelatedBacktesting Gains and Losses
 
Risk Management VaR(1-day, 95% Confidence level)
chart-03ae90a1830e5a3d86f.jpgchart-39ddae4edb9c5e73a7d.jpg
January
Second Quarter
2019
February
Third Quarter
2019
March
Fourth Quarter
2019
AprilMayJune
First Quarter
2020


Earnings-at-risk
The VaR and sensitivity measures illustrate the economic sensitivity of the Firm’s Consolidated balance sheets to changes in market variables.
The effect of interest rate exposure on the Firm’s reported net income is also important as interest rate risk represents one of the Firm’s significant market risks. Interest rate risk arises not only from trading activities but also from the Firm’s traditional banking activities, which include extension of loans and credit facilities, taking deposits and issuing debt as well as from the investment securities portfolio. Refer to the table on page 120 of JPMorgan Chase’s 2019 Form 10-K for a summary by LOB and Corporate, identifying positions included in earnings-at-risk.
One way the Firm evaluates its structural interest rate risk exposure is through earnings-at-risk, whichearnings-at-risk. Earnings-at-risk estimates the Firm’s interest rate exposure for a given interest rate scenario. It is presented as a sensitivity of the Firm’s net interest income and interest rate-sensitive fees to changes in rates. For a summary by line of business and Corporate, identifying positions included in earnings-at-risk, refer to the table on page 125 of JPMorgan Chase’s 2018 Form 10-K.
The Firm generates a baseline, forwhich includes net interest income and certain interest rate-sensitive fees,rate sensitive fees. The baseline uses market interest rates and thenin the case of deposits, pricing assumptions. The Firm conducts simulations of changes to this baseline for interest rate-sensitive assets and liabilities denominated in U.S. dollars and other currencies (“non-U.S. dollar” currencies). This simulationThese simulations primarily includesinclude retained loans, deposits, deposits with banks, investment securities, long term debt and any related interest rate hedges, and excludesexclude other positions in risk management VaR and other sensitivity-based measures as described on page 125120 of JPMorgan Chase’s 20182019 Form 10-K.
Earnings-at-risk scenarios estimate the potential change in thisto a net interest income baseline, over the following 12 months utilizing multiple assumptions. These scenarios include a parallel shift involving changes to both short-term and long-term rates by an equal amount; a steeper yield curve involving holding short-term rates constant and increasing long-term rates or decreasing short-term rates and holding long-term rates constant;rates; and a flatter yield curve involving holding short-term rates constant and decreasing long-term rates or increasing short-term rates and holding long-term rates constant. These scenarios consider themany different factors, including:
The impact on exposures as a result of instantaneous changes in interest rates from baseline rates, as well as pricing sensitivities of deposits, optionality and changes in product mix. The scenarios include forecastedrates.
Forecasted balance sheet, changes, as well as modeled prepayment and reinvestment behavior, but do not include assumptions about actions that could be taken by the Firm in response to any such instantaneous rate changes. Mortgage prepayment assumptions are based on the interest rates used in the scenarios compared with underlying contractual rates, the time since origination, and other factors which are updated periodically based on historical experience.
The pricing sensitivity of deposits, inusing normalized deposit betas which represent the baseline and scenarios use assumedamount by which deposit rates paid which maycould change upon a given change in market interest rates over the cycle. The deposit rates paid in these scenarios differ from actual deposit rates paid, particularly for retail deposits, due to timingrepricing lags and other factors.
The Firm’s earnings-at-risk scenarios are periodically evaluated and enhanced in response to changes in the composition of the Firm’s balance sheet, changes in market conditions, improvements in the Firm’s simulation and other factors. While a relevant measure of the Firm’s interest rate exposure, the earnings at risk analysis does not represent a forecast of the Firm’s net interest income (Refer to 2020 Outlook on page 7 for additional information).
The Firm’s U.S. dollar sensitivities are presented in the table below.
(in billions)June 30, 2019
 December 31, 2018
March 31, 2020
 December 31, 2019
Parallel shift:      
+100 bps shift in rates$1.1
 $0.9
$2.8
 $0.3
-100 bps shift in rates(2.7) (2.1)
Steeper yield curve:      
+100 bps shift in long-term rates0.8
 0.5
1.5
 1.2
-100 bps shift in short-term rates(1.2) (1.2)
Flatter yield curve:      
+100 bps shift in short-term rates0.3
 0.4
1.4
 (0.9)
-100 bps shift in long-term rates(1.5) (0.9)
The change in the Firm’s U.S. dollar sensitivities as of March 31, 2020 compared to December 31, 2019 reflected updates to the Firm’s baseline for lower short-term and long-term rates as well as the impact of changes in the Firm’s balance sheet.
The Firm’s sensitivity to an upward shift in short-term and long-term rates is largely a result of assets repricing at a faster pace than deposits.
The Firm’s net U.S. dollar parallel sensitivities as of June 30, 2019 increasedwhen comparedreflected updates to December 31, 2018primarily as a result of updating the Firm’s baseline to reflectfor lower rates.
Based upon current and implied market rates as of March 31, 2020, scenarios reflecting lower rates could result in negative interest rates largely offset by impacts fromrates. The U.S. has never experienced an interest rate environment where the Federal Reserve has a net change innegative interest rate policy. In a negative rate environment, the Firm’s spotmodeling assumptions used for certain assets and forecasted balance sheet.liabilities require additional management judgment.
The Firm’s non-U.S. dollar sensitivities are presented in the table below.
(in billions)June 30, 2019
 December 31, 2018
March 31, 2020
 December 31, 2019
Parallel shift:      
+100 bps shift in rates$0.6
 $0.5
$0.4
 $0.5
Flatter yield curve:      
+100 bps shift in short-term rates0.6
 0.5
0.4
 0.5
The results of the non-U.S. dollar interest rate scenario involving a steeper yield curve with long-term rates rising by 100 basis points and short-term rates staying at current levels were not material to the Firm’s earnings-at-risk at June 30, 2019March 31, 2020 and December 31, 2018.2019.



Other sensitivity-based measures
The Firm quantifies the market risk of certain investment and funding activities by assessing the potential impact on net revenue and OCIother comprehensive income (“OCI”) due to changes in relevant market variables. For additional information on the positions
captured in other sensitivity-based measures, referRefer to the table Predominant business activities that give rise to market risk on page 125120 of JPMorgan Chase’s 20182019 Form 10-K.
10-K for additional information on the positions captured in other sensitivity-based measures.
The table below represents the potential impact to net revenue or OCI for market risk-sensitive instruments that are not included in VaR or earnings-at-risk. Where appropriate, instruments used for hedging purposes are reported along with the positions being hedged. The sensitivities disclosed in the table below may not be representative of the actual gain or loss that would have been realized at June 30, 2019March 31, 2020 and December 31, 2018,2019, as the movement in market parameters across maturities may vary and are not intended to imply management’s expectation of future deteriorationchanges in these sensitivities.
Gain/(loss) (in millions)
 June 30, 2019
 December 31, 2018
 March 31, 2020
 December 31, 2019
Activity Description Sensitivity measure   Description Sensitivity measure  
        
Investment activities(a)
        
Investment management activities Consists of seed capital and related hedges; and fund co-investments 10% decline in market value $(89) $(102) Consists of seed capital and related hedges; and fund co-investments 10% decline in market value $(67) $(68)
Other investments Consists of privately held equity and other investments held at fair value 10% decline in market value (208) (218) Consists of privately held equity and other investments held at fair value 10% decline in market value (156) (192)
        
Funding activities        
Non-USD LTD cross-currency basis 
Represents the basis risk on derivatives used to hedge the foreign exchange risk on the non-USD LTD(b)
 1 basis point parallel tightening of cross currency basis (14) (13) 
Represents the basis risk on derivatives used to hedge the foreign exchange risk on the non-USD LTD(b)
 1 basis point parallel tightening of cross currency basis (16) (17)
Non-USD LTD hedges foreign currency (“FX”) exposure 
Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges(b)
 10% depreciation of currency 7
 17
 
Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges(b)
 10% depreciation of currency —
 15
Derivatives – funding spread risk Impact of changes in the spread related to derivatives FVA 1 basis point parallel increase in spread (5) (4) Impact of changes in the spread related to derivatives FVA 1 basis point parallel increase in spread (5) (5)
Fair value option elected liabilities – funding spread risk 
Impact of changes in the spread related to fair value option elected liabilities DVA(b)
 1 basis point parallel increase in spread 30
 30
 
Impact of changes in the spread related to fair value option elected liabilities DVA(b)
 1 basis point parallel increase in spread 34
 29
Fair value option elected liabilities – interest rate sensitivity 
Interest rate sensitivity on fair value option liabilities resulting from a change in the Firm’s own credit spread(b)
 1 basis point parallel increase in spread 1
 1
 
Interest rate sensitivity on fair value option liabilities resulting from a change in the Firm’s own credit spread(b)
 1 basis point parallel increase in spread 6
 (2)
Fair value option elected liabilities – interest rate sensitivity
Interest rate sensitivity related to risk management of changes in the Firm’s own credit spread on fair value option liabilities(c)

 1 basis point parallel increase in spread (6) 2
(a)Excludes equity securities without readily determinable fair values that are measured under the measurement alternative. Refer to Note 2 for additional information.
(b)Impact recognized through OCI.

(c)Refer to Total VaR on page 68 for additional information.

COUNTRY RISK MANAGEMENT
The Firm, through its lines of businessLOBs and Corporate, may be exposed to country risk resulting from financial, economic, political or other significant developments which adversely affect the value of the Firm’s exposures related to a particular country or set of countries. The Country Risk Management group actively monitors the various portfolios which may be impacted by these developments and measures the extent to which the Firm’s exposures are diversified given the Firm’s strategy and risk tolerance relative to a country.
ForRefer to pages 127–128 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of the Firm’s country risk management, refermanagement.
COVID-19 Pandemic
Country Risk Management is actively monitoring the impact of the COVID-19 pandemic on countries to pages 132–133 of JPMorgan Chase’s 2018 Form 10-K.which the Firm has exposure, leveraging existing stress testing, exposure reporting, controls and tailored analysis.
Risk Reporting
The following table presents the Firm’s top 20 exposures by country (excluding the U.S.) as of June 30, 2019March 31, 2020 and their comparative exposures as of December 31, 2018.2019. The selection of countries represents the Firm’s largest total exposures by country, based on the Firm’s internal country risk management approach, and does not represent the Firm’s view of any actual or potentially adverse credit conditions. Country exposures may fluctuate from period to period due to client activity and market flows.
The overall increase in exposuretop 20 exposures was largely driven by client activity and demand for liquidity, relative to Japan is predominantly due to increasedthe period ending December 31, 2019. This resulted in an increase in cash balances placedplacements primarily with the central bankbanks of Japan, driven by client activity.
Top 20 country exposures (excluding the U.S.)(a)

(in billions)		June 30, 2019 
December 31, 2018(e)
 
Lending and deposits(b)
Trading and investing(c)
Other(d)
Total exposure Total exposure
Germany$52.3
$7.3
$0.4
$60.0
 $62.1
Japan40.8
5.5
0.4
46.7
 29.1
United Kingdom31.8
10.5
1.1
43.4
 40.7
Switzerland11.9
0.8
5.0
17.7
 12.8
China9.5
5.9
1.9
17.3
 19.3
France11.2
4.1
1.1
16.4
 17.9
Canada11.9
1.2
0.1
13.2
 14.3
India5.4
4.5
2.5
12.4
 11.8
Luxembourg11.6
0.5
—
12.1
 11.0
Australia6.2
4.9
0.6
11.7
 13.0
Netherlands5.3
1.2
3.0
9.5
 5.8
Italy3.2
4.1
0.2
7.5
 6.4
Singapore4.1
1.6
1.8
7.5
 6.8
Brazil4.4
2.7
—
7.1
 7.3
Mexico4.6
1.7
—
6.3
 5.5
South Korea3.9
1.9
0.3
6.1
 7.6
Spain3.6
2.0
—
5.6
 5.1
Saudi Arabia4.8
0.7
—
5.5
 5.3
Hong Kong2.5
1.3
0.9
4.7
 5.4
Belgium4.4
(0.1)—
4.3
 2.3
Germany, the United Kingdom and Australia. In addition, the Firm held a larger inventory in Brazilian government bonds.
 
Top 20 country exposures (excluding the U.S.)(a)

(in billions)		March 31, 2020 
December 31, 2019(e)
 
Lending and deposits(b)
Trading and investing(c)
Other(d)
Total exposure Total exposure
Germany$67.9
$7.6
$0.5
$76.0
 $51.6
United Kingdom38.2
12.3
2.1
52.6
 42.4
Japan37.6
9.3
0.3
47.2
 43.8
China10.3
12.6
1.4
24.3
 19.2
France13.0
8.0
1.4
22.4
 18.1
Australia14.8
5.9
—
20.7
 11.7
Switzerland13.3
0.9
4.9
19.1
 18.3
Canada11.7
2.5
0.1
14.3
 13.2
Brazil4.8
9.2
—
14.0
 7.2
India4.5
6.0
3.1
13.6
 11.3
Luxembourg11.4
0.7
—
12.1
 12.9
Netherlands5.4
1.1
3.4
9.9
 9.0
South Korea4.9
4.4
0.5
9.8
 6.4
Singapore4.5
2.7
1.2
8.4
 6.8
Italy2.5
4.7
0.3
7.5
 6.8
Hong Kong SAR3.3
1.9
1.6
6.8
 5.1
Spain3.4
2.4
—
5.8
 5.8
Saudi Arabia4.4
1.4
—
5.8
 5.2
Thailand3.7
1.1
0.3
5.1
 1.5
Mexico3.9
0.7
—
4.6
 4.7
(a)Top 20 countryCountry exposures presented in the table reflect approximately 88% and 86%87% of total firmwide non-U.S. exposure, where exposure is attributed to a specific country at June 30, 2019,both March 31, 2020, and December 31, 2018 respectively.2019.
(b)Lending and deposits includes loans and accrued interest receivable (net of eligible collateral and the allowance for loan losses), deposits with banks (including central banks), acceptances, other monetary assets, issued letters of credit net of participations, and unused commitments to extend credit. Excludes intra-day and operating exposures, such as those from settlement and clearing activities.
(c)Includes market-making inventory, AFS securities, and counterparty exposure on derivative and securities financings net of eligible collateral and hedging. Includes exposure from single reference entity (“single-name”), index and other multiple reference entity transactions for which one or more of the underlying reference entities is in a country listed in the above table.
(d)Predominantly includes physical commodity inventory.
(e)The country rankings presented in the table as of December 31, 2018,2019, are based on the country rankings of the corresponding exposures at June 30, 2019,March 31, 2020, not actual rankings of such exposures at December 31, 2018.2019.

OPERATIONAL RISK MANAGEMENT
Operational risk is the risk associated with an adverse outcome resulting from inadequate or failed internal processes or systems; human factors; or external events impacting the Firm’s processes or systems; it includes compliance, conduct, legal, and estimations and model risk. Operational risk is inherent in the Firm’s activities and can manifest itself in various ways, including fraudulent acts, business interruptions, cybersecurity attacks, inappropriate employee behavior, failure to comply with applicable laws and regulations or failure of vendors to perform in accordance with their agreements. Operational Risk Management attempts to manage operational risk at appropriate levels in light of the Firm’s financial position, the characteristics of its businesses, and the markets and regulatory environments in which it operates. Refer to Operational Risk Management on pages 129-131 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the Firm’s Operational Risk Management.
Subcategories and examples of operational risks
Operational risk can manifest itself in various ways. Operational risk subcategories such as Compliance risk, Conduct risk, Legal risk, and Estimations and Model risk as well as other operational risks, can lead to losses which are captured through the Firm’s operational risk measurement processes. Refer to Compliance Risk Management on page 132, Conduct Risk Management on page 133, Legal Risk Management on page 134 and Estimations and Model Risk Management on page 135 of JPMorgan Chase’s 2019 Form 10-K for more information. Details on other select examples of operational risks are provided below.
Business and Technology Resiliency Risk
Business disruptions can occur due to forces beyond the Firm’s control such as severe weather, power or telecommunications loss, accidents, failure of a third party to provide expected services, cyberattack, flooding, transit strikes, terrorism, health emergencies, the spread of infectious diseases or pandemics. The safety of the Firm’s employees and customers is of the highest priority. The Firmwide resiliency program is intended to enable the Firm to recover its critical business functions and supporting assets (i.e., staff, technology and facilities) in the event of a business interruption. The program includes governance, awareness training, and testing of recovery strategies, as well as strategic and tactical initiatives to identify, assess, and manage business interruption and public safety risks. The strength and proficiency of the Firmwide resiliency program has played an integral role in maintaining the Firm’s business operations during and after various events.
COVID-19 Pandemic
The Firm’s Technology and Cybersecurity operations continue to monitor the Firm’s systems 24 hours a day, seven days a week including responding to threat activity using COVID-19 themes in phishing and other social engineering campaigns.
The Technology function is actively supporting the Firm’s response to the impacts of the COVID-19 pandemic, including the Firm’s expanded use of remote collaboration tools and platforms. Technology diligently monitors the operational performance of the Firm’s infrastructure to support increased market volumes as a result of the COVID-19 pandemic.

ESTIMATIONS AND MODEL RISK MANAGEMENT

Estimations and Model risk, a subcategory of operational risk, is the potential for adverse consequences from decisions based on incorrect or misused estimation outputs.
The Firm uses models and other analytical and judgment based estimations across various businesses and functions. The estimation methods are of varying levels of sophistication and are used for many purposes, such as the valuation of positions, measurement of risk, sizing the allowance for credit losses, assessing regulatory capital requirements, conducting stress testing, and making business decisions.
While models are inherently imprecise, the degree of imprecision or uncertainty can be heightened by the market or economic environment. This is particularly true when the current and forecasted environment is significantly different from the historical macroeconomic environments upon which the models were calibrated, as the Firm has experienced during the COVID-19 pandemic. This uncertainty may necessitate a greater degree of judgment and analytics to inform adjustments to model outputs than in typical periods.
Refer to Critical Accounting Estimates Used by the Firm on pages 75–77 and Note 2 of this Form 10-Q, and Estimations and Model Risk Management section on page 135 of JPMorgan Chase’s 2019 Form 10-K for a summary of model-based valuations and other valuation techniques.


CRITICAL ACCOUNTING ESTIMATES USED BY THE FIRM
JPMorgan Chase’s accounting policies and use of estimates are integral to understanding its reported results. The Firm’s most complex accounting estimates require management’s judgment to ascertain the appropriate carrying value of assets and liabilities. The Firm has established policies and control procedures intended to ensure that estimation methods, including any judgments made as part of such methods, are well-controlled, independently reviewed and applied consistently from period to period. The methods used and judgments made reflect, among other factors, the nature of the assets or liabilities and the related business and risk management strategies, which may vary across the Firm’s businesses and portfolios. In addition, the policies and procedures are intended to ensure that the process for changing methodologies occurs in an appropriate manner. The Firm believes its estimates for determining the carrying value of its assets and liabilities are appropriate. The following is a brief description of the Firm’s critical accounting estimates involving significant judgments.
Allowance for credit losses
The Firm’s allowance for credit losses coversrepresents management’s estimate of expected credit losses over the retained consumer and wholesale loan portfolios, as well asremaining expected life of the Firm’s wholesalefinancial assets measured at amortized cost, certain off-balance sheet lending-related commitments and certain consumer lending-related commitments. investment securities. The allowance for credit losses comprises:
The allowance for loan losses, is intended to adjust the carrying value ofwhich covers the Firm’s retained loan assets to reflect probable credit losses inherent in the loan portfolio as of the balance sheet date. Similarly, theportfolios (scored and risk-rated),
The allowance for lending-related commitments, is established to cover probable credit losses inherent in the lending-related commitments portfolio as of the balance sheet date.and
The allowance for credit losses includes a formula-based component, an asset-specific component,on investment securities, which covers the Firm’s HTM and a component related to PCI loans. AFS securities.
The determination of each of these componentsallowance for credit losses involves significant judgment on a number of matters. ForRefer to Note 10 and Note 13 for further information on these components, areasthe Firm’s policies, methodologies, and judgments used to determine the Firm’s allowance for credit losses.
One of judgment and methodologies usedthe most significant judgments involved in establishingestimating the Firm’s allowance for credit losses referrelates to pages 120–122, page 141 and Note 13 of JPMorgan Chase’s 2018 Form 10-K; and referthe macroeconomic forecasts used to Allowance forestimate credit losses on pages 67–68 and Note 12 of this Form 10-Q.
As noted inover the discussion on page 141 of JPMorgan Chase’s 2018 Form 10-K,eight-quarter forecast period within the Firm’s allowance for credit losses is sensitive to numerous factors, which may differ depending onmethodology. In light of the portfolio. Changes inrapidly evolving economic conditions orand forecasts during March 2020, management updated its macroeconomic forecast near the end of its credit loss estimation process in early April. However, changes in the Firm’s assumptions and estimates regarding economic conditions could significantly affect its estimate of probableexpected credit losses inherent in the portfolio at the balance sheet date. The Firm uses its best judgmentdate or lead to assess these economic conditions and loss data in estimating the allowance for credit losses and these estimates are subject to periodic refinement based on changes to underlying external or Firm-specific historical data. For further information, refer to Note 12.
To illustrate the potential magnitude of certain alternate judgments, the Firm estimates thatsignificant changes in the following inputs would haveestimate from one reporting period to the following effects onnext.
The COVID-19 pandemic has resulted in a weak labor market and weak overall economic conditions that will affect borrowers across the Firm’s modeled credit loss estimates asconsumer and wholesale lending portfolios, and significant judgment is required to estimate the severity and duration of June 30, 2019, withoutthe current economic
 
consideration of any offsetting or correlated effects of other inputs indownturn, as well as its potential impact on borrower defaults and loss severities. In particular, macroeconomic conditions and forecasts regarding the Firm’s allowance for loan losses:
A combined 5% decline in housing pricesduration and a 100 basis point increase in unemployment rates from expectations could imply:
◦an increase to modeled credit loss estimates of approximately $250 million for PCI loans.
◦an increase to modeled annual credit loss estimates of approximately $50 million for residential real estate loans, excluding PCI loans.
For credit card loans, a 100 basis point increase in unemployment rates from expectations could imply an increase to modeled annual credit loss estimates of approximately $800 million.
An increase in probability of default (“PD”) factors consistent with a one-notch downgrade in the Firm’s internal risk ratings for its entire wholesale loan portfolio could imply an increase in the Firm’s modeled credit loss estimates of approximately $1.7 billion.
A 100 basis point increase in estimated loss given default (“LGD”) for the Firm’s entire wholesale loan portfolio could imply an increase in the Firm’s modeled credit loss estimates of approximately $175 million.
The purpose of these sensitivity analyses is to provide an indicationseverity of the isolated impacts of hypothetical alternative assumptions on modeled loss estimates. Theeconomic downturn caused by the COVID-19 pandemic have been rapidly changing and remain highly uncertain, and it is difficult to predict exactly how borrower behavior will be impacted by these changes in economic conditions. The effectiveness of government support, customer relief and enhanced unemployment benefits should act as mitigants to credit losses, but the inputs presented above are not intended to imply management’s expectationextent of future deterioration of those risk factors. In addition, these analyses are not intended to estimate changes in the overall allowance for loan losses, which would also be influenced by the judgment management applies to the modeled loss estimates to reflect the uncertainty and imprecision of these modeled loss estimates based on then-current circumstances and conditions.mitigation impact remains uncertain.
It is difficult to estimate how potential changes in specific factorsany one factor or input might affect the overall allowance for credit losses because management considers a wide variety of factors and inputs in estimating the allowance for credit losses. Changes in thesethe factors and inputs considered may not occur at the same rate and may not be consistent across all geographies or product types, and changes in factors and input may be directionally inconsistent, such that improvement in one factor or input may offset deterioration in other factors. In addition, it is difficultothers.
However, to predict how changesconsider the impact of a hypothetical alternate macroeconomic forecast, the Firm compared the modeled credit losses determined using two of the five different macroeconomic scenarios considered in specific economic conditions or assumptions could affect borrower behavior or other factors considered by managementthe quantitative calculations used in estimating the allowanceallowances for credit losses. Givenloan losses and lending-related commitments. Each scenario included a full suite of macroeconomic variables, but differed in the processlevels, paths and peaks of those variables over the Firm followseight-quarter forecast period. The maximum difference in macroeconomic variables between the two scenarios over the eight-quarter forecast period was represented by an approximate 3.5% deterioration in U.S. real GDP, an approximate 250 basis point increase in the U.S. unemployment rate, and an approximate 10.5% deterioration in the judgments madenational house price index.
This analysis is not intended to estimate expected future changes in evaluating the risk factors related to its loss estimates, management believes that its current estimate of the allowance for credit losses, for a number of reasons, including:
the changes in the macroeconomic variables are not intended to imply management’s expectation of the extent or nature of future deterioration in macroeconomic variables
the impacts of changes in many macroeconomic variables are both interrelated and nonlinear, so the results of this analysis cannot be simply extrapolated for more severe changes in macroeconomic variables
the COVID-19 pandemic has stressed many macroeconomic variables at a speed and to degrees not seen in recent history, adding increased uncertainty around credit loss estimates
significant changes in the expected severity and duration of the economic downturn caused by the COVID-19 pandemic, the effects of government support and

customer relief, and the speed of the subsequent recovery could significantly affect the Firm’s estimate of expected credit losses irrespective of the estimated sensitivities described below
To demonstrate the sensitivity of credit loss estimates to macroeconomic forecasts, the difference between these two scenarios would have generated the following effects on the Firm’s modeled credit loss estimates as of March 31, 2020, without considering any offsetting or correlated effects in other components of the Firm’s allowance for credit losses for these lending exposures:
An increase of approximately $0.9 billion for residential real estate loans and lending-related commitments
An increase of approximately $1.5 billion for credit card loans
An increase of approximately $0.8 billion for wholesale loans and lending-related commitments
This analysis relates only to the modeled credit loss estimates and is appropriate.not intended to estimate changes in the overall allowance for credit losses as they do not reflect any potential changes in the adjustment to the quantitative calculation, which would also be influenced by the judgment management applies to the modeled lifetime loss estimates to reflect the uncertainty and imprecision of these modeled lifetime loss estimates based on then-current circumstances and conditions.
Recognizing that forecasts of macroeconomic conditions are inherently uncertain, particularly in light of the recent economic conditions, the Firm believes that its process to consider the available information and associated risks and uncertainties is appropriately governed and that its estimates of expected credit losses were reasonable and appropriate for the period ended March 31, 2020.

Fair value
JPMorgan Chase carries a portion of its assets and liabilities at fair value. The majority of such assets and liabilities are measured at fair value on a recurring basis, including, derivatives, structured note products and certain securities financing agreements. Certain assets and liabilities are measured at fair value on a nonrecurring basis, including certain mortgage, home equity and other loans, where the carrying value is based on the fair value of the underlying collateral.
Assets measured at fair value
The following table includes the Firm’s assets measured at fair value and the portion of such assets that are classified within level 3 of the valuation hierarchy. For further information, referRefer to Note 2.2 for further information.
June 30, 2019
(in billions, except ratios)
Total assets at fair value Total level 3 assets
March 31, 2020
(in billions, except ratios)
Total assets at fair value Total level 3 assets
Federal funds sold and securities purchased under resale agreements

$235.9
 $—
Securities borrowed51.6
 —
Trading assets:   
Trading–debt and equity instruments$470.4
  $4.4
$466.9
 $5.5
Derivative receivables(a)
52.9
 6.2
81.6
 9.7
Trading assets523.3
 10.6
Total trading assets548.5
 15.2
AFS securities276.4
 —
399.9
 —
Loans4.3
 —
6.2
 0.3
MSRs5.1
 5.1
3.3
 3.3
Other28.5
 0.8
307.6
 0.4
Total assets measured at fair value on a recurring basis
$837.6
 $16.5
1,265.5
 19.2
Total assets measured at fair value on a nonrecurring basis1.6
 0.9
3.2
 0.9
Total assets measured at fair value
$839.2
 $17.4
$1,268.7
 $20.1
Total Firm assets$2,727.4
  $3,139.4
  
Level 3 assets as a percentage of total Firm assets(a)
  0.6%  0.6%
Level 3 assets as a percentage of total Firm assets at fair value(a)
  2.1%  1.6%
(a)For purposes of the table above, the derivative receivables total reflects the impact of netting adjustments; however, the $6.2$9.7 billion of derivative receivables classified as level 3 does not reflect the netting adjustment as such netting is not relevant to a presentation based on the transparency of inputs to the valuation of an asset. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.
Valuation
Estimating fair value requires the application of judgment. The type and level of judgment required is largely dependent on the amount of observable market information available to the Firm. For instruments valued using internally developed valuation models and other valuation techniques that use significant unobservable inputs and are therefore classified within level 3 of the valuation hierarchy, judgments used to estimate fair value are more significant than those required when estimating the fair value of instruments classified within levels 1 and 2.
In arriving at an estimate of fair value for an instrument within level 3, management must first determine the appropriate valuation technique to use. Second, the lack of

observability of certain significant inputs requires management to assess all relevant empirical data in deriving valuation inputs including, for example, transaction details, yield curves, interest rates, prepayment rates, default rates, volatilities, correlations, equity or debt prices, valuations of comparable instruments, foreign exchange rates and credit curves. ForRefer to Note 2 for a further discussion of the valuation of level 3 instruments, including unobservable inputs used, refer to Note 2.used.
For instruments classified in levels 2 and 3, management judgment must be applied to assess the appropriate level of valuation adjustments to reflect counterparty credit quality, the Firm’s creditworthiness, market funding rates, liquidity considerations, unobservable parameters, and for portfolios that meet specified criteria, the size of the net open risk position. The judgments made are typically affected by the type of product and its specific contractual terms, and the level of liquidity for the product or within the market as a whole. ForIn periods of heightened market volatility and uncertainty, as was experienced in the period ended March 31, 2020, judgments are further affected by the wider variation of reasonable valuation estimates, particularly for positions that are less liquid. Refer to Note 2 for a further discussion of valuation adjustments applied by the Firm refer to Note 2.Firm.
Imprecision in estimating unobservable market inputs or other factors can affect the amount of gain or loss recorded for a particular position. Furthermore, while the Firm believes its valuation methods are appropriate and consistent with those of other market participants, the methods and assumptions used reflect management judgment and may vary across the Firm’s businesses and portfolios.
The Firm uses various methodologies and assumptions in the determination of fair value. The use of methodologies or assumptions different than those used by the Firm could result in a different estimate of fair value at the reporting date. ForRefer to Note 2 for a detailed discussion of the Firm’s valuation process and hierarchy, and its determination of fair value for individual financial instruments, refer to Note 2.instruments.

Goodwill impairment
Management applies significant judgment when testing goodwill for impairment. The goodwill associated with each business combination is allocated to the related reporting units for goodwill impairment testing. ForRefer to Goodwill impairment on page 137 of JPMorgan Chase’s 2019 Form 10-K for a description of the significant valuation judgments associated with goodwill impairment, referimpairment.
Refer to Goodwill impairment on page 142 of JPMorgan Chase’s 2018 Form 10-K.
ForNote 15 for additional information on goodwill, including the goodwill impairment assessment as of June 30, 2019, refer to Note 14.March 31, 2020.
Credit card rewards liability
The credit card rewards liability was $6.0$6.7 billion and $5.8$6.4 billion at June 30, 2019March 31, 2020 and December 31, 2018,2019, respectively, and is recorded in accounts payable and other liabilities on the Consolidated balance sheets. ForRefer to pages 137-138 of JPMorgan Chase’s 2019 Form 10-K for a description of the significant assumptions and judgments associated with the Firm’s credit card rewards liability, refer to page 143 of JPMorgan Chase’s 2018 Form 10-K.liability.
Income taxes
ForRefer to Income taxes on page 138 of JPMorgan Chase’s 2019 Form 10-K for a description of the significant assumptions, judgments and interpretations associated with the accounting for income taxes, refer to Income taxes on page 143 of JPMorgan Chase’s 2018 Form 10-K.taxes.
Litigation reserves
ForRefer to Note 25 of this Form 10-Q, and Note 30 of JPMorgan Chase’s 2019 Form 10-K for a description of the significant estimates and judgments associated with establishing litigation reserves, refer to Note 24 of this Form 10-Q, and Note 29 of JPMorgan Chase’s 2018 Form 10-K.reserves.

ACCOUNTING AND REPORTING DEVELOPMENTS
Financial Accounting Standards Board (“FASB”) Standards Adopted since January 1, 2019
StandardSummary of guidanceEffects on financial statements
Leases
Issued February 2016
 • Requires lessees to recognize all leases longer than twelve months on the Consolidated balance sheets as a lease liability with a corresponding right-of-use asset.
 • Requires lessees and lessors to classify most leases using principles similar to existing lease accounting, but eliminates the “bright line” classification tests.
 • Expands qualitative and quantitative leasing disclosures.

• Adopted January 1, 2019.
•
The Firm elected the available practical expedient to not reassess whether existing contracts contain a lease or whether classification or unamortized initial lease costs would be different under the new lease guidance. The Firm elected the modified retrospective transition method, through a cumulative-effect adjustment to retained earnings without revising prior periods.
 • For further information, refer to Note 16.




FASB Standards Issued but not yet Adopted2020
     
Standard Summary of guidance Effects on financial statements
     
Financial instrumentsInstruments – credit lossesCredit Losses (“CECL”)

Issued June 2016
 
 • Replaces existing incurred loss impairment guidance and establishesEstablishes a single allowance framework for all financial assets carriedmeasured at amortized cost which will reflectand certain off-balance sheet credit exposures. This framework requires that management’s estimate ofreflects credit losses over the fullinstrument’s remaining expected life of the financial assets and will considerconsiders expected future changes in macroeconomic conditions.
 • Eliminates existing guidance for PCI loans, and requires recognition of the nonaccretable difference as an increase to the allowance for expected credit losses on financial assets purchased with more than insignificant credit deterioration since origination, which will be offset by anwith a corresponding increase in the recorded investmentamortized cost of the related loans.
 • Requires inclusion of expected recoveries, limited to the cumulative amount of prior write-offs, when estimating the allowance for credit losses for in scope financial assets (including collateral dependentcollateral-dependent assets).
 • Amends existing impairment guidance for AFS securities to incorporate an allowance, which will allow for reversals of credit impairments in the event that the credit of an issuer improves.
 • Requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption.

 
•
 • Required effective date:Adopted January 1, 2020.(a)
 • The Firm has established a Firmwide, cross-discipline governance structure, which provides implementation oversight. The Firm continues to test and refine its current expected credit loss models that satisfy the requirements of the new standard. Oversight and testing, as well as efforts to meet expanded disclosure requirements, will extend through the remainder of 2019.  
•
The Firm expects that the allowance related to the Firm’s loans and commitments will increase as it will cover credit losses over the full remaining expected life of the portfolios. The Firm currently intends to estimate losses over a two-year forecast period using the weighted-average of a range of macroeconomic scenarios (established on a Firmwide basis), and then revert to longer term historical loss experience to estimate losses over more extended periods.
•
The Firm currently expects the increase in the allowanceRefer to be in the range of $4-6 billion, primarily driven by Card. This estimate is subject toNote 1 for further refinement based on continuing reviews and approvals of models, methodologies and judgments. The ultimate impact will depend upon the nature and characteristics of the Firm’s portfolio at the adoption date, the macroeconomic conditions and forecasts at that date, and other management judgments.
•
The Firm plans to adopt the new guidance on January 1, 2020.information.
Goodwill
Issued January 2017
 
 • Requires recognition of an impairment loss to be recognized when the estimated fair value of a reporting unit falls below its carrying value.
 • Eliminates the second condition in the current guidancerequirement that requires an impairment loss to be recognized only if the estimated implied fair value of the goodwill is below its carrying value.
 
•
 • Required effective date:Adopted January 1, 2020.
•
(a)No impact upon adoption as the guidance is to be applied prospectively.
•
Refer to Note 15 for further information.
Reference Rate Reform
Issued March 2020

 • Provides optional expedients and exceptions to current accounting guidance when financial instruments, hedging relationships, and other transactions are amended due to reference rate reform.
 • Based on current impairment test results,Provides an election to account for certain contract amendments related to reference rate reform as modifications rather than extinguishments without the Firm does not expect a material effect onrequirement to assess the Consolidated Financial Statements. However, the impactsignificance of the newamendments.
 • Allows for changes in critical terms of a hedging relationship without automatic termination of that relationship. Provides various practical expedients and elections designed to allow hedge accounting guidance will depend onto continue uninterrupted during the performancetransition period.
 • Provides a one-time election to transfer securities out of the reporting unitsheld-to-maturity classification if certain criteria are met.
•
Issued and the market conditions at the time of adoption.effective March 12, 2020.
• After adoption, the guidance may result in more frequent goodwill impairment losses due
The Firm expects to the removalapply certain of the second condition.practical expedients related to contract modifications and hedge accounting relationships and is evaluating the timing and application of those elections.
 • The Firm plans to adopt the new guidance on January 1, 2020.

(a)Early adoption is permitted.


FORWARD-LOOKING STATEMENTS
From time to time, the Firm has made and will make forward-looking statements. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipate,” “target,” “expect,” “estimate,” “intend,” “plan,” “goal,” “believe,” or other words of similar meaning. Forward-looking statements provide JPMorgan Chase’s current expectations or forecasts of future events, circumstances, results or aspirations. JPMorgan Chase’s disclosures in this Form 10-Q contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Firm also may make forward-looking statements in its other documents filed or furnished with the SEC. In addition, the Firm’s senior management may make forward-looking statements orally to investors, analysts, representatives of the media and others.
All forward-looking statements are, by their nature, subject to risks and uncertainties, many of which are beyond the Firm’s control. JPMorgan Chase’s actual future results may differ materially from those set forth in its forward-looking statements. While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ from those in the forward-looking statements:
Economic, financial and other impacts of the COVID-19 pandemic;
Local, regional and global business, economic and political conditions and geopolitical events;
Changes in laws and regulatory requirements, including capital and liquidity requirements affecting the Firm’s businesses, and the ability of the Firm to address those requirements;
Heightened regulatory and governmental oversight and scrutiny of JPMorgan Chase’s business practices, including dealings with retail customers;
Changes in trade, monetary and fiscal policies and laws;
Changes in income tax laws and regulations;
Securities and capital markets behavior, including changes in market liquidity and volatility;
Changes in investor sentiment or consumer spending or savings behavior;
Ability of the Firm to manage effectively its capital and liquidity, including approval of its capital plans by banking regulators;
Changes in credit ratings assigned to the Firm or its subsidiaries;
Damage to the Firm’s reputation;
Ability of the Firm to appropriately address social and environmental and sustainability concerns that may arise from its business activities;
Ability of the Firm to deal effectively with an economic slowdown or other economic or market disruption;disruption, including, but not limited to, in the interest rate environment;
 
Technology changes instituted by the Firm, its counterparties or competitors;
The effectiveness of the Firm’s control agenda;
Ability of the Firm to develop or discontinue products and services, and the extent to which products or services previously sold by the Firm (including but not limited to mortgages and asset-backed securities) require the Firm to incur liabilities or absorb losses not contemplated at their initiation or origination;
Acceptance of the Firm’s new and existing products and services by the marketplace and the ability of the Firm to innovate and to increase market share;
Ability of the Firm to attract and retain qualified employees;
Ability of the Firm to control expenses;
Competitive pressures;
Changes in the credit quality of the Firm’s clients, customers and counterparties;
Adequacy of the Firm’s risk management framework, disclosure controls and procedures and internal control over financial reporting;
Adverse judicial or regulatory proceedings;
Changes in applicable accounting policies, including the introduction of new accounting standards;
Ability of the Firm to determine accurate values of certain assets and liabilities;
Occurrence of natural or man-made disasters or calamities, including health emergencies, the spread of infectious diseases, pandemics or conflictsoutbreaks of hostilities, or the effects of climate change, and the Firm’s ability to deal effectively with disruptions caused by the foregoing;
Ability of the Firm to maintain the security of its financial, accounting, technology, data processing and other operational systems and facilities;
Ability of the Firm to withstand disruptions that may be caused by any failure of its operational systems or those of third parties;
Ability of the Firm to effectively defend itself against cyberattacks and other attempts by unauthorized parties to access information of the Firm or its customers or to disrupt the Firm’s systems; and
The other risks and uncertainties detailed in Part I,II,
Item 1A: Risk Factors in this form 10-Q and Part I, Item 1A: Risk Factors in JPMorgan Chase’s 20182019 Form 10-K.
Any forward-looking statements made by or on behalf of the Firm speak only as of the date they are made, and JPMorgan Chase does not undertake to update any forward-looking statements. The reader should, however, consult any further disclosures of a forward-looking nature the Firm may make in any subsequent Form 10-Ks, Quarterly Reports on Form 10-Qs, or Current Reports on Form 8-K.


JPMorgan Chase & Co.
Consolidated statements of income (unaudited)
 Three months ended
June 30,		 Six months ended
June 30,		 Three months ended
March 31,
(in millions, except per share data) 2019
 2018
 2019
 2018
 2020
 2019
Revenue            
Investment banking fees $1,851
 $2,168
 $3,691
 $3,904
 $1,866
 $1,840
Principal transactions 3,714
 3,782
 7,790
 7,734
 2,937
 4,076
Lending- and deposit-related fees(a) 1,535
 1,495
 3,017
 2,972
 1,706
 1,559
Asset management, administration and commissions(a) 4,353
 4,304
 8,467
 8,613
 4,540
 4,037
Investment securities gains/(losses) 44
 (80) 57
 (325)
Investment securities gains 233
 13
Mortgage fees and related income 279
 324
 675
 789
 320
 396
Card income 1,366
 1,020
 2,640
 2,295
 1,054
 1,274
Other income 1,292
 1,255
 2,767
 2,881
 1,156
 1,475
Noninterest revenue 14,434
 14,268
 29,104
 28,863
 13,812
 14,670
Interest income (a)
 21,603
 18,566
 42,992
 36,060
 19,161
 21,389
Interest expense (a)
 7,205
 5,081
 14,141
 9,263
 4,722
 6,936
Net interest income 14,398
 13,485
 28,851
 26,797
 14,439
 14,453
Total net revenue 28,832
 27,753
 57,955
 55,660
 28,251
 29,123
            
Provision for credit losses 1,149
 1,210
 2,644
 2,375
 8,285
 1,495
            
Noninterest expense            
Compensation expense 8,547
 8,338
 17,484
 17,200
 8,895
 8,937
Occupancy expense 1,060
 981
 2,128
 1,869
 1,066
 1,068
Technology, communications and equipment expense 2,378
 2,168
 4,742
 4,222
 2,578
 2,364
Professional and outside services 2,212
 2,126
 4,251
 4,247
 2,028
 2,039
Marketing 862
 798
 1,741
 1,598
 859
 879
Other expense 1,282
 1,560
 2,390
 2,915
 1,424
 1,108
Total noninterest expense 16,341
 15,971
 32,736
 32,051
 16,850
 16,395
Income before income tax expense 11,342
 10,572
 22,575
 21,234
 3,116
 11,233
Income tax expense 1,690
 2,256
 3,744
 4,206
 251
 2,054
Net income $9,652
 $8,316
 $18,831
 $17,028
 $2,865
 $9,179
Net income applicable to common stockholders $9,192
 $7,880
 $17,945
 $16,119
 $2,431
 $8,753
Net income per common share data            
Basic earnings per share $2.83
 $2.31
 $5.48
 $4.69
 $0.79
 $2.65
Diluted earnings per share 2.82
 2.29
 5.46
 4.66
 0.78
 2.65
            
Weighted-average basic shares 3,250.6
 3,415.2
 3,274.3
 3,436.7
 3,095.8
 3,298.0
Weighted-average diluted shares 3,259.7
 3,434.7
 3,283.9
 3,457.1
 3,100.7
 3,308.2


(a)In the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income and interest expense, but had no effect on net interest income. These changes were applied retrospectively and, accordingly, prior period(a) In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts were revised to conform with the current presentation. For additional information, refer to Note 6.

The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.




JPMorgan Chase & Co.
Consolidated statements of comprehensive income (unaudited)
 Three months ended
June 30,		 Six months ended
June 30,		Three months ended
March 31,
(in millions) 2019
 2018
 2019
 2018
2020
 2019
Net income $9,652
 $8,316
 $18,831
 $17,028
$2,865
 $9,179
Other comprehensive income/(loss), after–tax           
Unrealized gains/(losses) on investment securities 1,093
 (227) 2,507
 (1,461)1,119
 1,414
Translation adjustments, net of hedges 99
 88
 75
 115
(330) (24)
Fair value hedges 86
 (68) 88
 (108)88
 2
Cash flow hedges 97
 (166) 235
 (239)2,465
 138
Defined benefit pension and OPEB plans 41
 38
 77
 59
33
 36
DVA on fair value option elected liabilities 256
 260
 (361) 527
2,474
 (617)
Total other comprehensive income/(loss), after–tax 1,672
 (75) 2,621
 (1,107)5,849
 949
Comprehensive income $11,324
 $8,241
 $21,452
 $15,921
$8,714
 $10,128

The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.


JPMorgan Chase & Co.
Consolidated balance sheets (unaudited)
(in millions, except share data)June 30, 2019 December 31, 2018March 31, 2020 December 31, 2019
Assets      
Cash and due from banks$23,164
 $22,324
$24,001
 $21,704
Deposits with banks244,874
 256,469
343,533
 241,927
Federal funds sold and securities purchased under resale agreements (included $13,982 and $13,235 at fair value)
267,864
 321,588
Securities borrowed (included $5,685 and $5,105 at fair value)
130,661
 111,995
Trading assets (included assets pledged of $141,563 and $89,073)
523,373
 413,714
Investment securities (included $276,357 and $230,394 at fair value and assets pledged of $10,654 and $11,432)
307,264
 261,828
Loans (included $4,309 and $3,151 at fair value)
956,889
 984,554
Federal funds sold and securities purchased under resale agreements (included $235,859 and $14,561 at fair value)
248,580
 249,157
Securities borrowed (included $51,576 and $6,237 at fair value)
139,839
 139,758
Trading assets (included assets pledged of $143,900 and $111,522)
548,580
 411,103
Available-for-sale securities (amortized cost of $394,104 and $345,306; included assets pledged of $16,964 and $10,325)
399,944
 350,699
Held-to-maturity securities (net of allowance for credit losses of $19)
71,200
 47,540
Investment securities, net of allowance for credit losses471,144
 398,239
Loans (included $6,214 and $7,104 at fair value)
1,015,375
 959,769
Allowance for loan losses(13,166) (13,445)(23,244) (13,123)
Loans, net of allowance for loan losses943,723
 971,109
992,131
 946,646
Accrued interest and accounts receivable88,399
 73,200
122,064
 72,861
Premises and equipment24,665
 14,934
25,882
 25,813
Goodwill, MSRs and other intangible assets53,302
 54,349
51,867
 53,341
Other assets (included $9,544 and $9,630 at fair value and assets pledged of $2,753 and $3,457)
120,090
 121,022
Other assets (included $20,675 and $9,111 at fair value and assets pledged of $3,762 and $3,349)
171,810
 126,830
Total assets(a)
$2,727,379
 $2,622,532
$3,139,431
 $2,687,379
Liabilities      
Deposits (included $32,924 and $23,217 at fair value)
$1,524,361
 $1,470,666
Federal funds purchased and securities loaned or sold under repurchase agreements (included $981 and $935 at fair value)
201,683
 182,320
Short-term borrowings (included $7,736 and $7,130 at fair value)
59,890
 69,276
Deposits (included $22,609 and $28,589 at fair value)
$1,836,009
 $1,562,431
Federal funds purchased and securities loaned or sold under repurchase agreements (included $194,690 and $549 at fair value)
233,207
 183,675
Short-term borrowings (included $24,320 and $5,920 at fair value)
51,909
 40,920
Trading liabilities147,639
 144,773
184,196
 119,277
Accounts payable and other liabilities (included $2,873 and $3,269 at fair value)
216,137
 196,710
Beneficial interests issued by consolidated VIEs (included $0 and $28 at fair value)
25,585
 20,241
Long-term debt (included $67,828 and $54,886 at fair value)
288,869
 282,031
Accounts payable and other liabilities (included $4,131 and $3,728 at fair value)
253,874
 210,407
Beneficial interests issued by consolidated VIEs (included $77 and $36 at fair value)
19,630
 17,841
Long-term debt (included $68,617 and $75,745 at fair value)
299,344
 291,498
Total liabilities(a)
2,464,164
 2,366,017
2,878,169
 2,426,049
Commitments and contingencies (refer to Notes 22, 23 and 24)


 


Commitments and contingencies (refer to Notes 23, 24 and 25)


 


Stockholders’ equity      
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,699,250 and 2,606,750 shares)
26,993
 26,068
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 3,006,250 and 2,699,250 shares)
30,063
 26,993
Common stock ($1 par value; authorized 9,000,000,000 shares; issued 4,104,933,895 shares)
4,105
 4,105
4,105
 4,105
Additional paid-in capital88,359
 89,162
87,857
 88,522
Retained earnings212,093
 199,202
220,226
 223,211
Accumulated other comprehensive income/(loss)1,114
 (1,507)7,418
 1,569
Shares held in restricted stock units (“RSU”) Trust, at cost (472,953 shares)(21) (21)
Treasury stock, at cost (907,448,906 and 829,167,674 shares)
(69,428) (60,494)
Shares held in restricted stock units (“RSU”) Trust, at cost (472,953 shares)
(21) (21)
Treasury stock, at cost (1,057,911,018 and 1,020,912,567 shares)
(88,386) (83,049)
Total stockholders’ equity263,215
 256,515
261,262
 261,330
Total liabilities and stockholders’ equity$2,727,379
 $2,622,532
$3,139,431
 $2,687,379

(a)The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at June 30, 2019, and December 31, 2018. The assets of the consolidated VIEs are used to settle the liabilities of those entities. The holders of the beneficial interests generally do not have recourse to the general credit of JPMorgan Chase. The assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. For a further discussion, refer to Note 13.
Effective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.
The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at March 31, 2020, and December 31, 2019. The assets of the consolidated VIEs are used to settle the liabilities of those entities. The holders of the beneficial interests generally do not have recourse to the general credit of JPMorgan Chase. The assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. Refer to Note 14 for a further discussion.
(in millions)June 30, 2019 December 31, 2018March 31, 2020 December 31, 2019
Assets      
Trading assets$1,422
 $1,966
$1,935
 $2,633
Loans53,883
 59,456
42,471
 42,931
All other assets987
 1,013
991
 881
Total assets$56,292
 $62,435
$45,397
 $46,445
Liabilities      
Beneficial interests issued by consolidated VIEs$25,585
 $20,241
$19,630
 $17,841
All other liabilities291
 312
316
 447
Total liabilities$25,876
 $20,553
$19,946
 $18,288
The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

JPMorgan Chase & Co.
Consolidated statements of changes in stockholders’ equity (unaudited)
 Three months ended June 30,  Six months ended June 30,  Three months ended March 31,  
(in millions, except per share data) 2019
 2018
 2019
 2018
 2020
 2019
 
Preferred stock             
Balance at the beginning of the period $26,993
 $26,068
 $26,068
 $26,068
 $26,993
 $26,068
 
Issuance —
 —
 1,850
 —
 4,500
 1,850
 
Redemption —
 —
 (925) —
 (1,430) (925) 
Balance at June 30 26,993
 26,068
 26,993
 26,068
Balance at March 31 30,063
 26,993
 
             
Common stock             
Balance at the beginning and end of the period 4,105
 4,105
 4,105
 4,105
 4,105
 4,105
 
             
Additional paid-in capital             
Balance at the beginning of the period 88,170
 89,211
 89,162
 90,579
 88,522
 89,162
 
Shares issued and commitments to issue common stock for employee shared-based compensation awards, and related tax effects 189
 231
 (760) (1,076) (660) (949) 
Other —
 (50) (43) (111) (5) (43) 
Balance at June 30 88,359
 89,392
 88,359
 89,392
Balance at March 31 87,857
 88,170
 
             
Retained earnings             
Balance at the beginning of the period 205,437
 183,855
 199,202
 177,676
 223,211
 199,202
 
Cumulative effect of changes in accounting principles —
 —
 62
 (183)
Cumulative effect of changes in accounting principle (2,650) 62
 
Net income 9,652
 8,316
 18,831
 17,028
 2,865
 9,179
 
Dividends declared:             
Preferred stock (404) (379) (778) (788) (421) (374) 
Common stock ($0.80 and $0.56 per share and $1.60 and $1.12 per share, respectively)
 (2,592) (1,911) (5,224) (3,852)
Balance at June 30 212,093
 189,881
 212,093
 189,881
Common stock ($0.90 and $0.80 per share)
 (2,779) (2,632) 
Balance at March 31 220,226
 205,437
 
             
Accumulated other comprehensive income/(loss)             
Balance at the beginning of the period (558) (1,063) (1,507) (119) 1,569
 (1,507) 
Cumulative effect of changes in accounting principles —
 —
 —
 88
Other comprehensive income/(loss), after-tax 1,672
 (75) 2,621
 (1,107) 5,849
 949
 
Balance at June 30 1,114
 (1,138) 1,114
 (1,138)
Balance at March 31 7,418
 (558) 
             
Shares held in RSU Trust, at cost             
Balance at the beginning and end of the period (21) (21) (21) (21) (21) (21) 
             
Treasury stock, at cost             
Balance at the beginning of the period (64,289) (45,954) (60,494) (42,595) (83,049) (60,494) 
Repurchase (5,210) (4,968) (10,301) (9,639) (6,397) (5,091) 
Reissuance 71
 93
 1,367
 1,405
 1,060
 1,296
 
Balance at June 30 (69,428) (50,829) (69,428) (50,829)
Balance at March 31 (88,386) (64,289) 
             
Total stockholders’ equity $263,215
 $257,458
 $263,215
 $257,458
 $261,262
 $259,837
 


Effective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.
The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.


JPMorgan Chase & Co.
Consolidated statements of cash flows (unaudited)
Six months ended June 30,Three months ended March 31,
(in millions)2019
 2018
2020
 2019
Operating activities      
Net income$18,831
 $17,028
$2,865
 $9,179
Adjustments to reconcile net income to net cash used in operating activities:      
Provision for credit losses2,644
 2,375
8,285
 1,495
Depreciation and amortization4,084
 3,724
2,197
 2,038
Deferred tax (benefit)/expense(42) (216)(1,329) 233
Other1,164
 1,611
411
 640
Originations and purchases of loans held-for-sale(35,908) (43,141)(18,552) (15,611)
Proceeds from sales, securitizations and paydowns of loans held-for-sale44,995
 41,657
18,013
 23,528
Net change in:      
Trading assets(111,562) (42,859)(164,339) (123,064)
Securities borrowed(18,586) (3,132)145
 (11,154)
Accrued interest and accounts receivable(15,416) (8,083)(49,323) 869
Other assets(10,146) (716)(61,893) 2,292
Trading liabilities12,765
 21,997
97,078
 13,353
Accounts payable and other liabilities8,790
 12,574
45,019
 10,705
Other operating adjustments3,653
 (2,243)651
 4,617
Net cash provided by/(used in) operating activities(94,734) 576
Net cash (used in) operating activities(120,772) (80,880)
Investing activities      
Net change in:      
Federal funds sold and securities purchased under resale agreements53,757
 (28,109)1,120
 22,459
Held-to-maturity securities:      
Proceeds from paydowns and maturities1,315
 1,458
2,599
 570
Purchases(818) (7,426)(205) —
Available-for-sale securities:      
Proceeds from paydowns and maturities30,547
 19,718
12,420
 7,613
Proceeds from sales35,983
 25,228
50,990
 22,289
Purchases(106,085) (27,453)(131,605) (33,244)
Proceeds from sales and securitizations of loans held-for-investment31,291
 12,963
7,564
 14,584
Other changes in loans, net(16,903) (33,441)(64,925) 3,799
Purchases of assets pursuant to nonrecourse advances provided by the FRBB under the MMLF(11,985) —
All other investing activities, net(1,663) (1,912)(1,123) (1,769)
Net cash provided by/(used in) investing activities27,424
 (38,974)(135,150) 36,301
Financing activities      
Net change in:      
Deposits62,795
 10,100
297,976
 26,799
Federal funds purchased and securities loaned or sold under repurchase agreements19,343
 16,396
49,273
 40,352
Short-term borrowings(9,907) 12,151
12,455
 1,455
Beneficial interests issued by consolidated VIEs9,346
 (165)1,613
 5,671
Proceeds from long-term borrowings29,159
 41,166
34,851
 15,560
Payments of long-term borrowings(38,384) (50,171)(29,057) (12,425)
Proceeds from issuance of preferred stock1,850
 —
4,500
 1,850
Redemption of preferred stock(925) —
(1,430) (925)
Treasury stock repurchased(10,301) (9,639)(6,517) (5,091)
Dividends paid(6,081) (4,716)(3,188) (3,033)
All other financing activities, net(426) (1,356)1,829
 (778)
Net cash provided by financing activities56,469
 13,766
362,305
 69,435
Effect of exchange rate changes on cash and due from banks and deposits with banks86
 (1,492)(2,480) (1,045)
Net decrease in cash and due from banks and deposits with banks(10,755) (26,124)
Net increase in cash and due from banks and deposits with banks103,903
 23,811
Cash and due from banks and deposits with banks at the beginning of the period278,793
 431,304
263,631
 278,793
Cash and due from banks and deposits with banks at the end of the period$268,038
 $405,180
$367,534
 $302,604
Cash interest paid$13,794
 $9,151
$4,374
 $7,336
Cash income taxes paid, net2,892
 3,906
763
 534


The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.

Refer to the Glossary of Terms and Acronyms on pages 168–172171–176 for definitions of terms and acronyms used throughout the Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Note 1 – Basis of presentation
JPMorgan Chase & Co. (“JPMorgan Chase” or “the Firm”), a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the U.S., with operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. ForRefer to Note 26 for a further discussion of the Firm’s business segments, refer to Note 25.segments.
The accounting and financial reporting policies of JPMorgan Chase and its subsidiaries conform to U.S. GAAP. Additionally, where applicable, the policies conform to the accounting and reporting guidelines prescribed by regulatory authorities.
The unaudited Consolidated Financial Statements prepared in conformity with U.S. GAAP require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expense, and the disclosures of contingent assets and liabilities. Actual results could be different from these estimates. In the opinion of management, all normal, recurring adjustments have been included such that this interim financial information is fairly presented.
These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements, and related notes thereto, included in JPMorgan Chase’s 20182019 Form 10-K.
Certain amounts reported in prior periods have been reclassified to conform with the current presentation.
Consolidation
The Consolidated Financial Statements include the accounts of JPMorgan Chase and other entities in which the Firm has a controlling financial interest. All material intercompany balances and transactions have been eliminated.
Assets held for clients in an agency or fiduciary capacity by the Firm are not assets of JPMorgan Chase and are not included on the Consolidated balance sheets.
The Firm determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity.
For a further description of JPMorgan Chase’s accounting policies regarding consolidation, referRefer to Notes 1 and 14 of JPMorgan Chase’s 20182019 Form     10-K.10-K for a further description of JPMorgan Chase’s accounting policies regarding consolidation.
Offsetting assets and liabilities
U.S. GAAP permits entities to present derivative receivables and derivative payables with the same counterparty and the related cash collateral receivables and payables on a net
basis on the Consolidated balance sheets when a legally enforceable master netting agreement exists. U.S. GAAP also permits securities financing activities to be presented on a net basis when specified conditions are met, including the existence of a legally enforceable master netting agreement. The Firm has elected to net such balances when the specified conditions are met. ForRefer to Note 1 of JPMorgan Chase’s 2019 Form 10-K for further information on offsetting assets and liabilities, referliabilities.

Accounting standard adopted January 1, 2020
Financial Instruments – Credit Losses (“CECL”)
The adoption of this guidance established a single allowance framework for all financial assets measured at amortized cost and certain off-balance sheet credit exposures. This framework requires that management’s estimate reflects credit losses over the instrument’s remaining expected life and considers expected future changes in macroeconomic conditions. Refer to Note 1 of JPMorgan Chase’s 2018 Form 10-K.
Income tax expense 13 for further information.
The following table presents the impacts to the allowance for credit losses and retained earnings upon adoption of this guidance on January 1, 2020:
(in billions)December 31, 2019CECL adoption impactJanuary 1, 2020
Allowance for credit losses   
Consumer, excluding credit card(a)
$2.6
$0.4
$3.0
Credit card5.7
5.5
11.2
Wholesale(a)
6.0
(1.6)4.4
Firmwide$14.3
$4.3
$18.6
    
Retained earnings   
Firmwide allowance increase $4.3
 
Balance sheet reclassification(b)
 (0.8) 
Total pre-tax impact 3.5
 
Tax effect (0.8) 
Decrease to retained earnings $2.7
 
(a)In conjunction with the adoption of CECL, the Firm reclassified risk-rated business banking and auto dealer loans and lending-related commitments held in CCB from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Accordingly, $0.6 billion of the allowance for credit losses at December 31, 2019 and $(0.2) billion of the CECL adoption impact were reclassified.
(b)Represents the recognition of the nonaccretable difference on purchased credit deteriorated loans and the Firm's election to recognize the reserve for uncollectible accrued interest on credit card loans in the allowance, both of which resulted in a corresponding increase to loans.
Securities Financing Agreements
As permitted by the guidance, the Firm elected the fair value option for certain securities financing agreements. The difference between their carrying amount and fair value was immaterial and was recorded as part of the Firm’s effective tax rate was 14.9% and 16.6%cumulative-effect adjustment. Refer to Note 11 for further information.
Investment securities
Upon adoption, HTM securities are presented net of an allowance for credit losses. The guidance also amended the previous other-than-temporary impairment (“OTTI”) model for AFS securities to incorporate an allowance. Refer to Note 10 for further information.
Credit quality disclosures
As a result of the adoption of this guidance, the Firm expanded credit quality disclosures for financial assets measured at amortized cost particularly within the retained loan portfolios. Refer to Note 12 for further information.
PCD loans
The adoption resulted in a change in the three and six months ended June 30, 2019, respectively, and 21.3% and 19.8%accounting for PCI loans, which are considered purchased credit deteriorated (“PCD”) loans under CECL. Upon adoption, the Firm recognized the nonaccretable difference on PCD loans in the respective 2018 periods. The effective tax rate reflects the recognition of tax benefits relatedallowance, which resulted in a corresponding increase to loans. PCD loans are subject to the resolution of certain tax audits of $768 millionFirm’s nonaccrual and $874 million,charge-off policies and are now reported in the threeconsumer, excluding credit card portfolio’s residential real estate loan class. Refer to Note 12 for further information.
Changes in credit portfolio segments and six months ended June 30, 2019, respectively, which reducedclasses
In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer excluding credit card portfolio segment to the wholesale portoflio segment, to align with the methodology applied in determining the allowance. The Firm also revised its loan classes. Prior- period amounts have been revised to conform with the current presentation. Refer to Note 12 for further information.
Accrued interest receivables
As permitted by the guidance, the Firm elected to continue classifying accrued interest on loans, including accrued but unbilled interest on credit card loans, and investment securities in accrued interest and accounts receivables on the Consolidated balance sheets. For credit card loans, accrued interest is recognized in the loan balances as it is billed, with the related allowance recorded in the allowance for credit losses. Changes in the allowance for credit losses on accrued interest on credit card loans are recognized in the provision for credit losses and charge-offs are recognized by reversing interest income. For other loans and securities, the Firm generally does not recognize an allowance for credit losses on accrued interest receivables, consistent with its policy to write them off no later than 90 days past due by reversing interest income.
Capital transition provisions
As disclosed in the Firm’s effective tax rate2019 Form 10-K, the Firm initially elected to phase-in the January 1, 2020 (“day 1”) CECL adoption impact to retained earnings of $2.7 billion to CET1 capital, at 25% per year in each of 2020 to 2023. As part of their response to the impact of the COVID-19 pandemic, on March 31, 2020, the federal banking agencies issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by 6.8% and 3.9% respectively. For further information, refera three-year transition period (“CECL capital transition provisions”). Refer to Note 24 of JPMorgan Chase’s 2018 Form 10-K.22 for further information.

Note 2 – Fair value measurement
ForRefer to Note 2 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the Firm’s valuation methodologies for assets, liabilities and lending-related commitments measured at fair value and the fair value hierarchy, refer to Note 2 of JPMorgan Chase’s 2018 Form 10-K.hierarchy.



The following table presents the assets and liabilities reported at fair value as of June 30, 2019,March 31, 2020, and December 31, 2018,2019, by major product category and fair value hierarchy.
Assets and liabilities measured at fair value on a recurring basisAssets and liabilities measured at fair value on a recurring basis




Assets and liabilities measured at fair value on a recurring basis





Fair value hierarchy
Derivative
netting
adjustments(f)

Fair value hierarchy
Derivative
netting
adjustments(f)

          
June 30, 2019 (in millions)Level 1Level 2
Level 3
Total fair value
March 31, 2020 (in millions)Level 1Level 2
Level 3
Derivative
netting
adjustments(f)
Total fair value
Federal funds sold and securities purchased under resale agreements$—
$13,982

$—

$—
$13,982
$—
$235,859

$—

$235,859
Securities borrowed—
5,685

—

—
5,685
—
51,576

—

51,576
Trading assets:























Debt instruments:























Mortgage-backed securities:























U.S. government agencies(a)
—
104,186

617

—
104,803
U.S. GSEs and government agencies(a)
—
87,669

519

—
88,188
Residential – nonagency—
2,102

42

—
2,144
—
2,665

24

—
2,689
Commercial – nonagency—
1,708

9

—
1,717
—
2,250

3

—
2,253
Total mortgage-backed securities—
107,996

668

—
108,664
—
92,584

546

—
93,130
U.S. Treasury and government agencies(a)
88,502
9,712

—

—
98,214
U.S. Treasury, GSEs and government agencies(a)
91,922
12,722

—

—
104,644
Obligations of U.S. states and municipalities—
6,628

680

—
7,308
—
6,489

9

—
6,498
Certificates of deposit, bankers’ acceptances and commercial paper—
1,492
 —
 —
1,492
—
3,769
 —
 —
3,769
Non-U.S. government debt securities34,840
31,353
 190
 —
66,383
37,860
47,058
 175
 —
85,093
Corporate debt securities—
22,140
 562
 —
22,702
—
22,192
 953
 —
23,145
Loans(b)
—
42,180
 1,778
 —
43,958
—
42,754
 3,354
 —
46,108
Asset-backed securities—
2,643
 33
 —
2,676
—
2,739
 52
 —
2,791
Total debt instruments123,342
224,144
 3,911
 —
351,397
129,782
230,307
 5,089
 —
365,178
Equity securities98,234
456
 147
 —
98,837
82,500
97
 213
 —
82,810
Physical commodities(c)
3,692
3,339
 —
 —
7,031
4,684
2,498
 —
 —
7,182
Other—
12,874
 311
 —
13,185
—
11,494
 221
 —
11,715
Total debt and equity instruments(d)
225,268
240,813
 4,369
 —
470,450
216,966
244,396
 5,523
 —
466,885
Derivative receivables:          
Interest rate1,529
331,329
 1,698
 (308,068)26,488
7,333
392,863
 2,307
 (365,602)36,901
Credit—
14,971
 694
 (15,032)633
—
19,252
 828
 (18,895)1,185
Foreign exchange2,170
141,248
 682
 (133,437)10,663
288
242,180
 1,054
 (224,539)18,983
Equity—
41,997
 2,933
 (35,725)9,205
—
91,010
 5,135
 (82,930)13,215
Commodity—
16,663
 208
 (10,982)5,889
—
37,309
 346
 (26,291)11,364
Total derivative receivables3,699
546,208
 6,215
 (503,244)52,878
7,621
782,614
 9,670
 (718,257)81,648
Total trading assets(e)
228,967
787,021
 10,584
 (503,244)523,328
224,587
1,027,010
 15,193
 (718,257)548,533
Available-for-sale securities:          
Mortgage-backed securities:          
U.S. government agencies(a)
—
96,616
 —
 —
96,616
U.S. GSEs and government agencies(a)
—
135,620
 —
 —
135,620
Residential – nonagency—
12,740
 —
 —
12,740
—
15,443
 —
 —
15,443
Commercial – nonagency—
5,989
 —
 —
5,989
—
6,313
 —
 —
6,313
Total mortgage-backed securities—
115,345
 —
 —
115,345
—
157,376
 —
 —
157,376
U.S. Treasury and government agencies73,990
—
 —
 —
73,990
150,235
—
 —
 —
150,235
Obligations of U.S. states and municipalities—
31,901
 —
 —
31,901
—
30,545
 —
 —
30,545
Certificates of deposit—
74
 —
 —
74
—
76
 —
 —
76
Non-U.S. government debt securities14,869
7,623
 —
 —
22,492
13,192
9,569
 —
 —
22,761
Corporate debt securities—
1,778
 —
 —
1,778
—
802
 —
 —
802
Asset-backed securities:          
Collateralized loan obligations—
24,781
 —
 —
24,781
—
30,975
 —
 —
30,975
Other—
5,996
 —
 —
5,996
—
7,174
 —
 —
7,174
Total available-for-sale securities88,859
187,498
 —
 —
276,357
163,427
236,517
 —
 —
399,944
Loans—
4,304
 5
 —
4,309
—
5,931
 283
 —
6,214
Mortgage servicing rights—
—
 5,093
 —
5,093
—
—
 3,267
 —
3,267
Other assets(e)
7,784
198
 861
 —
8,843
6,923
12,724
 416
 —
20,063
Total assets measured at fair value on a recurring basis$325,610
$998,688
 $16,543
 $(503,244)$837,597
$394,937
$1,569,617
 $19,159
 $(718,257)$1,265,456
Deposits$—
$28,858
 $4,066
 $—
$32,924
$—
$19,430
 $3,179
 $—
$22,609
Federal funds purchased and securities loaned or sold under repurchase agreements—
981
 —
 —
981
—
194,690
 —
 —
194,690
Short-term borrowings—
5,684
 2,052
 —
7,736
—
22,281
 2,039
 —
24,320
Trading liabilities:     

     

Debt and equity instruments(d)
84,236
21,879
 45
 —
106,160
95,909
23,139
 61
 —
119,109
Derivative payables:     

     

Interest rate2,090
296,717
 2,242
 (292,166)8,883
8,752
353,858
 2,443
 (351,654)13,399
Credit—
16,305
 926
 (14,975)2,256
—
19,939
 939
 (18,766)2,112
Foreign exchange2,438
144,304
 875
 (136,491)11,126
283
253,779
 1,981
 (232,749)23,294
Equity—
42,205
 5,493
 (36,521)11,177
—
88,241
 5,961
 (82,165)12,037
Commodity—
18,238
 1,116
 (11,317)8,037
—
39,229
 771
 (25,755)14,245
Total derivative payables4,528
517,769
 10,652
 (491,470)41,479
9,035
755,046
 12,095
 (711,089)65,087
Total trading liabilities88,764
539,648
 10,697
 (491,470)147,639
104,944
778,185
 12,156
 (711,089)184,196
Accounts payable and other liabilities2,583
198
 92
 —
2,873
3,407
709
 15
 —
4,131
Beneficial interests issued by consolidated VIEs—
—
 —
 —
—
—
77
 —
 —
77
Long-term debt—
45,965
 21,863
 —
67,828
—
48,476
 20,141
 —
68,617
Total liabilities measured at fair value on a recurring basis$91,347
$621,334
 $38,770
 $(491,470)$259,981
$108,351
$1,063,848
 $37,530
 $(711,089)$498,640




Fair value hierarchy
Derivative
netting
adjustments(f)
 
Fair value hierarchy
Derivative
netting
adjustments(f)
 
          
December 31, 2018 (in millions)Level 1Level 2
Level 3
 Total fair value
December 31, 2019 (in millions)Level 1Level 2
Level 3
Derivative
netting
adjustments(f)
 Total fair value
Federal funds sold and securities purchased under resale agreements$—
$13,235

$—

$—
 $13,235
$—
$14,561

$—

 $14,561
Securities borrowed—
5,105

—

—
 5,105
—
6,237

—

 6,237
Trading assets: 
 
    
 
   
Debt instruments: 
 
    
 
   
Mortgage-backed securities: 
 
    
 
   
U.S. government agencies(a)
—
76,249

549

—
 76,798
U.S. GSEs and government agencies(a)
—
44,510

797

—
 45,307
Residential – nonagency—
1,798

64

—
 1,862
—
1,977

23

—
 2,000
Commercial – nonagency—
1,501

11

—
 1,512
—
1,486

4

—
 1,490
Total mortgage-backed securities—
79,548

624

—
 80,172
—
47,973

824

—
 48,797
U.S. Treasury and government agencies(a)
51,477
7,702

—

—
 59,179
U.S. Treasury, GSEs and government agencies(a)
78,289
10,295

—

—
 88,584
Obligations of U.S. states and municipalities—
7,121

689

—
 7,810
—
6,468

10

—
 6,478
Certificates of deposit, bankers’ acceptances and commercial paper—
1,214

—

—
 1,214
—
252

—

—
 252
Non-U.S. government debt securities27,878
27,056

155

—
 55,089
26,600
27,169

155

—
 53,924
Corporate debt securities—
18,655

334

—
 18,989
—
17,956

558

—
 18,514
Loans(b)
—
40,047

1,706

—
 41,753
—
47,047

1,382

—
 48,429
Asset-backed securities—
2,756

127

—
 2,883
—
2,593

37

—
 2,630
Total debt instruments79,355
184,099

3,635

—
 267,089
104,889
159,753

2,966

—
 267,608
Equity securities71,119
482

232

—
 71,833
71,890
244

196

—
 72,330
Physical commodities(c)
5,182
1,855

—

—
 7,037
3,638
3,579

—

—
 7,217
Other—
13,192

301

—
 13,493
—
13,896

232

—
 14,128
Total debt and equity instruments(d)
155,656
199,628

4,168

—
 359,452
180,417
177,472

3,394

—
 361,283
Derivative receivables: 







 

 







 

Interest rate682
266,380

1,642

(245,490) 23,214
721
311,173

1,400

(285,873) 27,421
Credit—
19,235

860

(19,483) 612
—
14,252

624

(14,175) 701
Foreign exchange771
166,238

676

(154,235) 13,450
117
137,938

432

(129,482) 9,005
Equity—
46,777

2,508

(39,339) 9,946
—
43,642

2,085

(39,250) 6,477
Commodity—
20,339

131

(13,479) 6,991
—
17,058

184

(11,080) 6,162
Total derivative receivables1,453
518,969

5,817

(472,026) 54,213
838
524,063

4,725

(479,860) 49,766
Total trading assets(e)
157,109
718,597

9,985

(472,026) 413,665
181,255
701,535

8,119

(479,860) 411,049
Available-for-sale securities: 







 

 







 

Mortgage-backed securities: 







 

 







 

U.S. government agencies(a)
—
68,646

—

—
 68,646
U.S. GSEs and government agencies(a)
—
110,117

—

—
 110,117
Residential – nonagency—
8,519

1

—
 8,520
—
12,989

1

—
 12,990
Commercial – nonagency—
6,654

—

—
 6,654
—
5,188

—

—
 5,188
Total mortgage-backed securities—
83,819

1

—
 83,820
—
128,294

1

—
 128,295
U.S. Treasury and government agencies56,059
—

—

—
 56,059
139,436
—

—

—
 139,436
Obligations of U.S. states and municipalities—
37,723

—

—
 37,723
—
29,810

—

—
 29,810
Certificates of deposit—
75

—

—
 75
—
77

—

—
 77
Non-U.S. government debt securities15,313
8,789

—

—
 24,102
12,966
8,821

—

—
 21,787
Corporate debt securities—
1,918

—

—
 1,918
—
845

—

—
 845
Asset-backed securities: 







 

 







 

Collateralized loan obligations—
19,437

—

—
 19,437
—
24,991

—

—
 24,991
Other—
7,260

—

—
 7,260
—
5,458

—

—
 5,458
Total available-for-sale securities71,372
159,021

1

—
 230,394
152,402
198,296

1

—
 350,699
Loans—
3,029

122

—
 3,151
—
7,104

—

—
 7,104
Mortgage servicing rights—
—

6,130

—
 6,130
—
—

4,699

—
 4,699
Other assets(e)
7,810
195

927

—
 8,932
7,305
452

724

—
 8,481
Total assets measured at fair value on a recurring basis$236,291
$899,182

$17,165

$(472,026) $680,612
$340,962
$928,185

$13,543

$(479,860) $802,830
Deposits$—
$19,048

$4,169

$—
 $23,217
$—
$25,229

$3,360

$—
 $28,589
Federal funds purchased and securities loaned or sold under repurchase agreements—
935

—

—
 935
—
549

—

—
 549
Short-term borrowings—
5,607

1,523

—
 7,130
—
4,246

1,674

—
 5,920
Trading liabilities: 
 


 

 
 


 

Debt and equity instruments(d)
80,199
22,755

50

—
 103,004
59,047
16,481

41

—
 75,569
Derivative payables: 



    



   
Interest rate1,526
239,576

1,680

(234,998) 7,784
795
276,746

1,732

(270,670) 8,603
Credit—
19,309

967

(18,609) 1,667
—
14,358

763

(13,469) 1,652
Foreign exchange695
163,549

973

(152,432) 12,785
109
143,960

1,039

(131,950) 13,158
Equity—
46,462

4,733

(41,034) 10,161
—
47,261

5,480

(40,204) 12,537
Commodity—
21,158

1,260

(13,046) 9,372
—
19,685

200

(12,127) 7,758
Total derivative payables2,221
490,054

9,613

(460,119) 41,769
904
502,010

9,214

(468,420) 43,708
Total trading liabilities82,420
512,809

9,663

(460,119) 144,773
59,951
518,491

9,255

(468,420) 119,277
Accounts payable and other liabilities3,063
196

10

—
 3,269
3,231
452

45

—
 3,728
Beneficial interests issued by consolidated VIEs—
27

1

—
 28
—
36

—

—
 36
Long-term debt—
35,468

19,418

—
 54,886
—
52,406

23,339

—
 75,745
Total liabilities measured at fair value on a recurring basis$85,483
$574,090

$34,784

$(460,119) $234,238
$63,182
$601,409

$37,673

$(468,420) $233,844
(a)At June 30, 2019,March 31, 2020, and December 31, 2018,2019, included total U.S. government-sponsored enterpriseGSE obligations of $153.6$161.2 billion and $92.3$104.5 billion, respectively, which were predominantly mortgage-related.
(b)At June 30, 2019,March 31, 2020, and December 31, 2018,2019, included within trading loans were $16.6$15.9 billion and $13.2$19.8 billion, respectively, of residential first-lien mortgages, and $2.8$3.0 billion and $2.3$3.4 billion, respectively, of commercial first-lien mortgages. Residential mortgage loans include conforming mortgage loans originated with the intent to sell to U.S. GSEs and government agencies of $9.9$8.9 billion and $7.6$13.6 billion, respectively.
(c)Physical commodities inventories are generally accounted for at the lower of cost or net realizable value. “Net realizable value” is a term defined in U.S. GAAP as not exceeding fair value less costs to sell (“transaction costs”). Transaction costs for the Firm’s physical commodities inventories are either not applicable or immaterial to the value of the inventory. Therefore, net realizable value approximates fair value for the Firm’s physical commodities


inventories. When fair value hedging has been applied (or when net realizable value is below cost), the carrying value of physical commodities approximates fair value, because under fair value hedge accounting, the cost basis is adjusted for changes in fair value. ForRefer to Note 5 for a further discussion of the Firm’s hedge accounting relationships, refer to Note 4.relationships. To provide consistent fair value disclosure information, all physical commodities inventories have been included in each period presented.
(d)Balances reflect the reduction of securities owned (long positions) by the amount of identical securities sold but not yet purchased (short positions).
(e)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 June 30, 2019,March 31, 2020, and December 31, 2018,2019, the fair values of these investments, which include certain hedge funds, private equity funds, real estate and other funds, were $746$659 million and $747$684 million, respectively. Included in these balances at June 30, 2019,March 31, 2020, and December 31, 2018,2019, were trading assets of $45$47 million and $49$54 million, respectively, and other assets of $701$612 million and $698$630 million, respectively.
(f)As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral received and paid when a legally enforceable master netting agreement exists. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.

Level 3 valuations
ForRefer to Note 2 of JPMorgan Chase’s 2019 Form 10-K for further information on the Firm’s valuation process and a detailed discussion of the determination of fair value for individual financial instruments, refer to Note 2 of JPMorgan Chase’s 2018 Form 10-K.instruments.
The following table presents the Firm’s primary level 3 financial instruments, the valuation techniques used to measure the fair value of those financial instruments, the significant unobservable inputs, the range of values for those inputs and for certain instruments, the weighted or arithmetic averages of such inputs. While the determination to classify an instrument within level 3 is based on the significance of the unobservable inputs to the overall fair value measurement, level 3 financial instruments typically include observable components (that is, components that are actively quoted and can be validated to external sources) in addition to the unobservable components. The level 1 and/or level 2 inputs are not included in the table. In addition, the Firm manages the risk of the observable components of level 3 financial instruments using securities and derivative positions that are classified within levels 1 or 2 of the fair value hierarchy.
The range of values presented in the table is representative of the highest and lowest level input used to value the significant groups of instruments within a product/instrument classification. Where provided, the weighted averages of the input values presented in the table are calculated based on the fair value of the instruments that the input is being used to value.
In the Firm’s view, the input range, weighted and the weightedarithmetic average valuevalues do not reflect the degree of input uncertainty or an assessment of the reasonableness of the Firm’s estimates and assumptions. Rather, they reflect the characteristics of the various instruments held by the Firm and the relative distribution of instruments within the range of characteristics. For example, two option contracts may have
similar levels of market risk exposure and valuation uncertainty, but may have significantly different implied volatility levels because the option contracts have different underlyings, tenors, or strike prices. The input range and weighted average values will therefore vary from period-to-period and parameter-to-parameter based on the characteristics of the instruments held by the Firm at each balance sheet date.
For the Firm’s derivatives and structured notes positions classified within level 3 at June 30, 2019, interest rate correlation inputs used in estimating fair value were concentrated towards the upper end of the range; equity correlation, equity-FX, and equity-IR correlation inputs were concentrated in the middle of the range; commodity correlation inputs were concentrated in the middle of the range; credit correlation inputs were concentrated towards the lower end of the range; and the interest rate-foreign exchange (“IR-FX”) correlation inputs were distributed across the range. In addition, the interest rate spread volatility inputs used in estimating fair value were distributed across the range; equity volatilities and commodity volatilities were concentrated towards the lower end of the range; and forward commodity prices used in estimating the fair value of commodity derivatives were concentrated in the middle of the range. Prepayment speed inputs used in estimating the fair value of interest rate derivatives were concentrated towards the lower end of the range. Recovery rate inputs used in estimating the fair value of credit derivatives were distributed across the range; credit spreads and conditional default rates were concentrated towards the lower end of the range; loss severity inputs were concentrated towards the upper end of the range and price inputs were concentrated towards the lower end of the range.



Level 3 inputs(a)
Level 3 inputs(a)
      
Level 3 inputs(a)
 
June 30, 2019      
March 31, 2020March 31, 2020 
Product/Instrument
Fair value
(in millions)
 Principal valuation technique
Unobservable inputs(g)
Range of input valuesWeighted average 
Fair value
(in millions)
 Principal valuation technique
Unobservable inputs(g)
Range of input values
Average(i)
Residential mortgage-backed securities and loans(b)
$942
 Discounted cash flowsYield0 %–15% 6%$1,142
 Discounted cash flowsYield1%–25% 5%
 Prepayment speed0 %–26% 13%  Prepayment speed0%–39% 11%
  Conditional default rate0 %–5% 1%  Conditional default rate0%–30% 14%
  Loss severity0 %–70% 1%  Loss severity0%–100% 8%
Commercial mortgage-backed securities and loans(c)
218
 Market comparablesPrice$0
–$110
 $85
509
 Market comparablesPrice$0–$106 $92
Obligations of U.S. states and municipalities680
 Market comparablesPrice$66
–$100
 $97
9
 Market comparablesPrice$78–$100 $97
Corporate debt securities562
 Market comparablesPrice$0
–$109
 $83
953
 Market comparablesPrice$4–$104 $71
Loans(d)
212
 Discounted cash flowsYield5 %–18% 7%167
 Discounted cash flowsYield4%–30% 7%
1,079
 Market comparablesPrice$2
–$102
 $80
2,365
 Market comparablesPrice$5–$100 $73
Asset-backed securities33
 Market comparablesPrice$1
–$100
 $38
52
 Market comparablesPrice$1–$94 $61
Net interest rate derivatives(616) Option pricingInterest rate spread volatility20 bps–30 bps (192) Option pricingInterest rate volatility6%–91% 21%
  Interest rate correlation(28)%–96%    Interest rate spread volatility16 bps–30 bps 23 bps
  IR-FX correlation45 %–60%    Interest rate correlation(65)%–94% 38%
72
 Discounted cash flowsPrepayment speed4 %–30%    IR-FX correlation(50)%–35% 1%
56
 Discounted cash flowsPrepayment speed4%–30% 3%
Net credit derivatives(265) Discounted cash flowsCredit correlation35 %–60%  (147) Discounted cash flowsCredit correlation37%–77% 50%
  Credit spread6 bps–1,402 bps    Credit spread8 bps–2,230 bps 516 bps
  Recovery rate20 %–70%    Recovery rate1%–70% 50%
  Conditional default rate2 %–91%    Conditional default rate2%–23% 11%
  Loss severity100%    Loss severity100% 100%
33
 Market comparablesPrice$1
–$115
  36
 Market comparablesPrice$1–$115 $60
Net foreign exchange derivatives(23) Option pricingIR-FX correlation(45)%–60%  (784) Option pricingIR-FX correlation(58)%–70% 33%
(170) Discounted cash flowsPrepayment speed9%  (143) Discounted cash flowsPrepayment speed9% 9%
Net equity derivatives(2,560) Option pricingEquity volatility14 %–60%  (826) Option pricing
Forward equity price(h)
54%–106% 98%
  Equity correlation25 %–98%    Equity volatility4%–179% 40%
  Equity-FX correlation(75)%–59%    Equity correlation25%–100% 78%
  Equity-IR correlation20 %–60%    Equity-FX correlation(77)%–40% (17)%
  Equity-IR correlation20%–35% 28%
Net commodity derivatives(908) Option pricingForward commodity price$49
–$ 70 per barrel(425) Option pricingForward industrial metal price$ 1,166 / MT–$ 15,357 / MT $ 6,159 / MT
  Forward power price$ 12 /MWH–$ 53 /MWH $ 22 /MWH
  Commodity volatility5 %–65%    Commodity volatility3%–236% 29%
  Commodity correlation(48)%–95%    Commodity correlation(45)%–95% 31%
MSRs5,093
 Discounted cash flowsRefer to Note 14  3,267
 Discounted cash flowsRefer to Note 15 
Other assets358
 Discounted cash flowsCredit spread45 bps  45 bps
242
 Discounted cash flowsCredit spread45 bps 45 bps
  Yield8 %–12% 12%  Yield12% 12%
814
 Market comparablesPrice$19
–$113
 $34
395
 Market comparablesPrice$16–$119 $37
Long-term debt, short-term borrowings, and deposits(e)
27,981
 Option pricingInterest rate spread volatility20 bps–30 bps 25,359
 Option pricingInterest rate volatility6%–91% 21%
 Interest rate correlation(28)%–96%    Interest rate correlation(65)%–94% 38%
 IR-FX correlation(45)%–60%    IR-FX correlation(50)%–35% 1%
 Equity correlation25 %–98%    Equity correlation25%–100% 78%
 Equity-FX correlation(75)%–59%    Equity-FX correlation(77)%–40% (17)%
 Equity-IR correlation20 %–60%    Equity-IR correlation20%–35% 28%
Other level 3 assets and liabilities, net(f)
200
      312
 
(a)The categories presented in the table have been aggregated based upon the product type, which may differ from their classification on the Consolidated balance sheets. Furthermore, the inputs presented for each valuation technique in the table are, in some cases, not applicable to every instrument valued using the technique as the characteristics of the instruments can differ.
(b)Comprises U.S. GSEs and government agency securities of $617$519 million, nonagency securities of $42$24 million and trading loans of $283$599 million.
(c)Comprises nonagency securities of $9$3 million, trading loans of $204$223 million and non-trading loans of $5$283 million.
(d)Comprises trading loans.
(e)Long-term debt, short-term borrowings and deposits include structured notes issued by the Firm that are financial instruments that typically contain embedded derivatives. The estimation of the fair value of structured notes includes the derivative features embedded within the instrument. The significant unobservable inputs are broadly consistent with those presented for derivative receivables.
(f)Includes level 3 assets and liabilities that are insignificant both individually and in aggregate.
(g)Price is a significant unobservable input for certain instruments. When quoted market prices are not readily available, reliance is generally placed on price-based internal valuation techniques. The price input is expressed assuming a par value of $100.
(h)Forward equity price is expressed as a percentage of the current equity price.
(i)Amounts represent weighted averages except for derivative related inputs where arithmetic averages are used.


Changes in and ranges of unobservable inputs
ForRefer to Note 2 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the impact on fair value of changes in unobservable inputs and the relationships between unobservable inputs as well as a description of attributes of the underlying instruments and external market factors that affect the range of inputs used in the valuation of the Firm’s positions refer to Note 2 of JPMorgan Chase’s 2018 Form 10-K.positions.
Changes in level 3 recurring fair value measurements
The following tables include a rollforward of the Consolidated balance sheets amounts (including changes in fair value) for financial instruments classified by the Firm within level 3 of the fair value hierarchy for the three and six months ended June 30, 2019March 31, 2020 and 2018.2019. When a determination is made to classify a financial instrument within level 3, the determination is based on the significance of the unobservable inputs to the overall fair
value measurement. However, level 3 financial instruments
typically include, in addition to the unobservable or level 3 components, observable components (that is, components that are actively quoted and can be validated to external sources); accordingly, the gains and losses in the table below include changes in fair value due in part to observable factors that are part of the valuation methodology. Also, the Firm risk-manages the observable components of level 3 financial instruments using securities and derivative positions that are classified within level 1 or 2 of the fair value hierarchy; as these level 1 and level 2 risk management instruments are not included below, the gains or losses in the following tables do not reflect the effect of the Firm’s risk management activities related to such level 3 instruments.





Fair value measurements using significant unobservable inputs  Fair value measurements using significant unobservable inputs  
Three months ended
June 30, 2019
(in millions)		Fair value at
April 1,
2019		Total realized/unrealized gains/(losses) 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
June 30, 2019		Change in unrealized gains/(losses) related
to financial instruments held at June 30, 2019
Purchases(f)
Sales 
Settlements(g)
Three months ended
March 31, 2020
(in millions)		Fair value at
Jan 1,
2020		Total realized/unrealized gains/(losses) 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
March 31, 2020		Change in unrealized gains/(losses) related
to financial instruments held at March 31, 2020
Purchases(f)
Sales 
Settlements(g)
Assets:(a)
                    
Trading assets:                    
Debt instruments:                    
Mortgage-backed securities:                    
U.S. government agencies$412
 $(25) $318
$(68) $(20)$—
$—
 $617
 $(24) 
U.S. GSEs and government agencies$797
 $(139) $19
$(116) $(42)$—
$—
 $519
 $(131) 
Residential – nonagency85
 1
 11
(14) (19)—
(22) 42
 —
 23
 (1) 2
—
 —
—
—
 24
 (1) 
Commercial – nonagency17
 —
 4
—
 (12)—
—
 9
 (1) 4
 —
 1
—
 (1)1
(2) 3
 —
 
Total mortgage-backed securities514
 (24) 333
(82) (51)—
(22) 668
 (25) 824
 (140) 22
(116) (43)1
(2) 546
 (132) 
U.S. Treasury and government agencies
—
 —
 —
—
 —
—
—
 —
 —
 
Obligations of U.S. states and municipalities623
 1
 57
(1) —
—
—
 680
 —
 10
 —
 —
(1) —
—
—
 9
 —
 
Non-U.S. government debt securities170
 —
 117
(103) —
9
(3) 190
 —
 155
 (12) 90
(57) —
—
(1) 175
 (10) 
Corporate debt securities568
 7
 61
(62) (53)51
(10) 562
 22
 558
 (55) 292
(42) —
227
(27) 953
 (50) 
Loans1,741
 56
 385
(216) (156)139
(171) 1,778
 68
 1,382
 (161) 699
(162) (53)1,788
(139) 3,354
 (190) 
Asset-backed securities119
 2
 2
(58) (30)—
(2) 33
 2
 37
 (2) 36
(15) (1)—
(3) 52
 (1) 
Total debt instruments3,735
 42
 955
(522) (290)199
(208) 3,911
 67
 2,966
 (370) 1,139
(393) (97)2,016
(172) 5,089
 (383) 
Equity securities202
 (12) 8
(3) —
21
(69) 147
 (12) 196
 (38) 10
(4) —
82
(33) 213
 (39) 
Other304
 20
 3
—
 (15)—
(1) 311
 35
 232
 (1) 9
(5) (12)—
(2) 221
 2
 
Total trading assets – debt and equity instruments4,241
 50
(c) 
966
(525) (305)220
(278) 4,369
 90
(c) 
3,394
 (409)
(c) 
1,158
(402) (109)2,098
(207) 5,523
 (420)
(c) 
Net derivative receivables:(b)
                    
Interest rate(147) (341) 28
(60) (57)(6)39
 (544) (459) (332) 642
 66
(50) (241)(172)(49) (136) 282
 
Credit(115) (127) 13
(1) 4
1
(7) (232) (139) (139) 108
 18
(128) (33)60
3
 (111) 65
 
Foreign exchange(356) 58
 10
(8) 114
(17)6
 (193) 82
 (607) (339) 38
(4) (14)—
(1) (927) (508) 
Equity(2,066) (21) 34
(158) (284)(148)83
 (2,560) (91) (3,395) 3,037
 59
(548) 583
(656)94
 (826) 3,707
 
Commodity(665) (171) 7
(83) 21
(17)—
 (908) (151) (16) (403) 4
(15) 9
(6)2
 (425) (399) 
Total net derivative receivables(3,349) (602)
(c) 
92
(310) (202)(187)121
 (4,437) (758)
(c) 
(4,489) 3,045
(c) 
185
(745) 304
(774)49
 (2,425) 3,147
(c) 
Available-for-sale securities:                    
Mortgage-backed securities—
 —
 —
—
 —
—
—
 —
 —
 1
 —
 —
—
 (1)—
—
 —
 —
 
Asset-backed securities—
 —
 —
—
 —
—
—
 —
 —
 
Total available-for-sale securities—
 —

—
—
 —
—
—
 —
 —

1
 —

—
—
 (1)—
—
 —
 —

Loans123
 1
(c) 
—
—
 (119)—
—
 5
 —
(c) 
—
 (11)
(c) 
—
—
 —
294
—
 283
 (10)
(c) 
Mortgage servicing rights5,957
 (826)
(d) 
426
(217) (247)—
—
 5,093
 (826)
(d) 
4,699
 (1,382)
(d) 
273
(75) (248)—
—
 3,267
 (1,382)
(d) 
Other assets841
 (89)
(c) 
142
(8) (26)1
—
 861
 (92)
(c) 
724
 (82)
(c) 
2
(28) (200)—
—
 416
 (81)
(c) 
                    
Fair value measurements using significant unobservable inputs  Fair value measurements using significant unobservable inputs  
Three months ended
June 30, 2019
(in millions)		Fair value at
April 1, 2019		Total realized/unrealized (gains)/losses 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
June 30, 2019		Change in unrealized (gains)/
losses related
to financial instruments held at June 30, 2019
PurchasesSalesIssuances
Settlements(g)
Three months ended
March 31, 2020
(in millions)		Fair value at
Jan 1,
2020		Total realized/unrealized (gains)/losses 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
March 31, 2020		Change in unrealized (gains)/losses related
to financial instruments held at March 31, 2020
PurchasesSalesIssuances
Settlements(g)
Liabilities:(a)
                    
Deposits$4,528
 $89
(c)(e) 
$—
$—
$92
$(292)$—
$(351) $4,066
 $104
(c)(e) 
$3,360
 $(149)
(c)(e) 
$—
$—
$386
$(172)$4
$(250) $3,179
 $(135)
(c)(e) 
Short-term borrowings1,502
 72
(c)(e) 
—
—
1,037
(624)67
(2) 2,052
 28
(c)(e) 
1,674
 (345)
(c)(e) 
—
—
1,615
(929)40
(16) 2,039
 (409)
(c)(e) 
Trading liabilities – debt and equity instruments52
 —

(5)5
—
—
4
(11) 45
 —

41
 3
(c) 
(75)7
—
—
86
(1) 61
 6
(c) 
Accounts payable and other liabilities15
 (1)
(c) 
(3)80
—
—
1
—
 92
 (1)
(c) 
45
 (8)
(c) 
(23)1
—
—
—
—
 15
 (7)
(c) 
Beneficial interests issued by consolidated VIEs—
 —

—
—
—
—
—
—
 —
 —

—
 —

—
—
—
—
—
—
 —
 —

Long-term debt21,655
 455
(c)(e) 
—
—
2,648
(2,729)200
(366) 21,863
 621
(c)(e) 
23,339
 (4,110)
(c)(e) 
—
—
4,607
(3,549)370
(516) 20,141
 (3,984)
(c)(e) 



Fair value measurements using significant unobservable inputs

 Fair value measurements using significant unobservable inputs

 
Three months ended
June 30, 2018
(in millions)		Fair value at
April 1,
2018		Total realized/unrealized gains/(losses)
 

Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
June 30, 2018		Change in unrealized gains/(losses) related
to financial instruments held at June 30, 2018
Purchases(f)
Sales
 
Settlements(g)
 
Three months ended
March 31, 2019
(in millions)		Fair value at
Jan 1,
2019		 Total realized/unrealized gains/(losses)
 
 

Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
March 31, 2019		Change in unrealized gains/(losses) related
to financial instruments held at March 31, 2019
Purchases(f)
Sales 
 
Settlements(g)
 
Assets:(a)



 


 









 


 
 


 








Trading assets:


 


 









 


 
 


 








Debt instruments:


 


 









 


 
 


 








Mortgage-backed securities:


 


 









 


 
 


 








U.S. government agencies$508
$—

$5
$(11)
 $(19)
$5
$(10)
$478

$—

U.S. GSEs and government agencies$549
 $(15)
$5
$(100) 
 $(18)
$1
$(10)
$412

$(16)
Residential – nonagency55
2

45
(11)
 (1)
11
(14)
87

1

64
 24

70
(69) 
 (1)
15
(18)
85

1

Commercial – nonagency14
2

1
(1)
 (12)
17
(3)
18

1

11
 2

12
(19) 
 (2)
15
(2)
17

1

Total mortgage-backed securities577
4

51
(23)
 (32)
33
(27)
583

2

624
 11

87
(188) 
 (21)
31
(30)
514

(14)
U.S. Treasury and
government agencies		—
—
 —
—
  —
 —
—
 —
 —
 
Obligations of U.S. states and municipalities704
(9)
42
—

 (1)
—
—

736

(9)
689
 13

1
(74) 
 (6)
—
—

623

14

Non-U.S. government debt securities197
(12)
126
(92)
 —

—
(36)
183

(12)
155
 (1)
71
(54) 
 —

2
(3)
170

(1)
Corporate debt securities306
(3)
60
(40)
 (10)
36
(75)
274

4

334
 22

223
(7) 
 —

28
(32)
568

39

Loans2,368
(21)
565
(806)
 (192)
251
(179)
1,986

(30)
1,706
 83

72
(118) 
 (120)
159
(41)
1,741

83

Asset-backed securities63
4

45
(9)
 (6)
2
(12)
87

4

127
 (2)
17
(21) 
 (7)
20
(15)
119

(4)
Total debt instruments4,215
(37)
889
(970)
 (241)
322
(329)
3,849

(41)
3,635
 126

471
(462) 
 (154)
240
(121)
3,735

117

Equity securities300
(13)
65
(50)
 (1)
—
(13)
288

(8)
232
 (2)
15
(79) 
 (22)
75
(17)
202

(2)
Other698
(254)
16
(34)
 (18)
—
(2)
406

(259)
301
 4

12
(1) 
 (11)
1
(2)
304

13

Total trading assets – debt and equity instruments5,213
(304)
(c) 
970
(1,054)
 (260)
322
(344)
4,543

(308)
(c) 
4,168
 128
(c) 
498
(542) 
 (187)
316
(140)
4,241

128
(c) 
Net derivative receivables:(b)










 


 










 






 
 


 








Interest rate472
287

38
(51)
 (179)
(54)(24)
489

254

(38) (322)
19
(27)
(i) 

 178
(i) 
18
25

(147)
(376)
Credit5
21

1
(5)
 (29)
(4)(13)
(24)
9

(107) (17)
—
(1) 
 6

3
1

(115)
(21)
Foreign exchange(288)94

13
(3)
 (8)
(74)21

(245)
95

(297) (245)
1
(9) 
 181

(8)21

(356)
(220)
Equity(2,512)143

606
(1,042)
 (13)
38
202

(2,578)
(24)
(2,225) 731

127
(297) 
 (401)
(67)66

(2,066)
226

Commodity(519)(35)
—
—

 (186)
(9)(3)
(752)
(65)
(1,129) 533

3
(88) 
 24

1
(9)
(665)
507

Total net derivative receivables(2,842)510
(c) 
658
(1,101)
 (415)
(103)183

(3,110)
269
(c) 
(3,796) 680
(c) 
150
(422) 
 (12)
(53)104

(3,349)
116
(c) 
Available-for-sale securities: 
 
  
 
 
 
   
  
  
 
 
 
Mortgage-backed securities1
—

—
—

 —

—
—

1

—

1
 —

—
—
 
 (1)
—
—

—

—

Asset-backed securities204
—

—
—

 (57)
—
—

147

—

Total available-for-sale securities205
—

—
—

 (57)
—
—

148

—

1
 —

—
—
 
 (1)
—
—

—

—

Loans396
(9)
(c) 
—
—

 (154)
—
(74)
159

(9)
(c) 
122
 3
(c) 
—
—
 
 (2)
—
—

123

3
(c) 
Mortgage servicing rights6,202
94
(d) 
236
(104)
 (187)
—
—

6,241

94
(d) 
6,130
 (299)
(d) 
436
(111) 
 (199)
—
—

5,957

(299)
(d) 
Other assets1,220
(13)
(c) 
24
(2)  (5) 1
—
 1,225
 (17)
(c) 
927
 (7)
(c) 
9
(80)   (1) —
(7) 841
 (10)
(c) 
                            

Fair value measurements using significant unobservable inputs

Fair value measurements using significant unobservable inputs

Three months ended
June 30, 2018
(in millions)		Fair value at
April 1,
2018		Total realized/unrealized (gains)/losses

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

Three months ended
March 31, 2019
(in millions)		Fair value at
Jan 1,
2019		 Total realized/unrealized (gains)/losses

 
 
 
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
March 31, 2019		Change in unrealized (gains)/losses related
to financial instruments held at March 31, 2019
PurchasesSales Issuances
Settlements(g)

Liabilities:(a)



 

  








 


 
 

  







Deposits$4,017
$49
(c)(e) 
$—
$—
$434
 $(57)
$1
$(139)
$4,305

$50
(c)(e) 
$4,169
 $152
(c)(e) 
$—
$—
 $335
 $(24)
$—
$(104)
$4,528

$144
(c)(e) 
Short-term borrowings2,125
(197)
(c)(e) 
—
—
862
 (614)
43
(10)
2,209

(27)
(c)(e) 
1,523
 46
(c)(e) 
—
—
 651
 (601)
1
(118)
1,502

80
(c)(e) 
Trading liabilities – debt and equity instruments50
(11)
(c) 
(25)33
—
 —

—
(4)
43

(4)
(c) 
50
 —

(2)11
 —
 —

3
(10)
52

1
(c) 
Accounts payable and other liabilities7
(1)
(c) 
—
1
—
 —

1
—

8

(1)
(c) 
10
 —

(5)10
 —
 —

—
—

15

—

Beneficial interests issued by consolidated VIEs1
—

—
—
—
 —

—
—

1

—

1
 (1)
(c) 
—
—
 —
 —

—
—

—

—

Long-term debt16,950
(344)
(c)(e) 
—
—
3,150
(i) 
(2,123)
(i) 
219
(220)
17,632
(i) 
(427)
(c)(e) 
19,418
 1,273
(c)(e) 
—
—
 2,051
 (1,188)
273
(172)
21,655

1,625
(c)(e) 




 Fair value measurements using significant unobservable inputs  
Six months ended
June 30, 2019
(in millions)		Fair value at
January 1,
2019		Total realized/unrealized gains/(losses)    
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
June 30, 2019		Change in unrealized gains/(losses) related
to financial instruments held at June 30, 2019
Purchases(f)
Sales 
Settlements(g)
Assets:(a)
               
Trading assets:               
Debt instruments:               
Mortgage-backed securities:               
U.S. government agencies$549
 $(40) $323
$(168) $(38)$1
$(10) $617
 $(37) 
Residential – nonagency64
 25
 81
(83) (20)15
(40) 42
 —
 
Commercial – nonagency11
 2
 16
(19) (14)15
(2) 9
 —
 
Total mortgage-backed securities624
 (13) 420
(270) (72)31
(52) 668
 (37) 
U.S. Treasury and government agencies
—
 —
 —
—
 —
—
—
 —
 —
 
Obligations of U.S. states and municipalities689
 14
 58
(75) (6)—
—
 680
 15
 
Non-U.S. government debt securities155
 (1) 188
(157) —
11
(6) 190
 2
 
Corporate debt securities334
 29
 284
(69) (53)79
(42) 562
 35
 
Loans1,706
 139
 457
(334) (276)298
(212) 1,778
 128
 
Asset-backed securities127
 —
 19
(79) (37)20
(17) 33
 —
 
Total debt instruments3,635
 168
 1,426
(984) (444)439
(329) 3,911
 143
 
Equity securities232
 (14) 23
(82) (22)96
(86) 147
 (11) 
Other301
 24
 15
(1) (26)1
(3) 311
 45
 
Total trading assets – debt and equity instruments4,168
 178
(c) 
1,464
(1,067) (492)536
(418) 4,369
 177
(c) 
Net derivative receivables:(b)
               
Interest rate(38) (663) 47
(207) 241
12
64
 (544) (725) 
Credit(107) (144) 13
(2) 10
4
(6) (232) (155) 
Foreign exchange(297) (187) 11
(17) 295
(25)27
 (193) (144) 
Equity(2,225) 710
 161
(455) (685)(215)149
 (2,560) (134) 
Commodity(1,129) 362
 10
(171) 45
(16)(9) (908) 485
 
Total net derivative receivables(3,796) 78
(c) 
242
(852) (94)(240)225
 (4,437) (673)
(c) 
Available-for-sale securities:               
Mortgage-backed securities1
 —
 —
—
 (1)—
—
 —
 —
 
Asset-backed securities—
 —
 —
—
 —
—
—
 —
 —
 
Total available-for-sale securities1
 —
 —
—
 (1)—
—
 —
 —
 
Loans122
 4
(c) 
—
—
 (121)—
—
 5
 5
(c) 
Mortgage servicing rights6,130
 (1,125)
(d) 
862
(328) (446)—
—
 5,093
 (1,125)
(d) 
Other assets927
 (96)
(c) 
151
(88) (27)1
(7) 861
 (98)
(c) 
                
 Fair value measurements using significant unobservable inputs  
Six months ended
June 30, 2019
(in millions)		Fair value at
January 1, 2019		Total realized/unrealized (gains)/losses    
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
June 30, 2019		Change in unrealized (gains)/
losses related
to financial instruments held at June 30, 2019
PurchasesSalesIssuances
Settlements(g)
Liabilities:(a)
               
Deposits$4,169
 $241
(c)(e) 
$—
$—
$427
$(316)$—
$(455) $4,066
 $246
(c)(e) 
Short-term borrowings1,523
 118
(c)(e) 
—
—
1,688
(1,225)68
(120) 2,052
 115
(c)(e) 
Trading liabilities – debt and equity instruments50
 —
 (7)16
—
—
7
(21) 45
 1
(c) 
Accounts payable and other liabilities10
 (1)
(c) 
(8)90
—
—
1
—
 92
 (1)
(c) 
Beneficial interests issued by consolidated VIEs1
 (1)
(c) 
—
—
—
—
—
—
 —
 —
 
Long-term debt19,418
 1,728
(c)(e) 
—
—
4,699
(3,917)473
(538) 21,863
 2,039
(c)(e) 


 Fair value measurements using significant unobservable inputs
  
Six months ended
June 30, 2018
(in millions)		Fair value at
January 1,
2018		Total realized/unrealized gains/(losses)      
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
June 30, 2018		Change in unrealized gains/(losses) related
to financial instruments held at June 30, 2018
Purchases(f)
Sales  
Settlements(g)
 
Assets:(a)
                
Trading assets:                
Debt instruments:                
Mortgage-backed securities:                
U.S. government agencies$307
$3
 $334
$(98)  $(39) $9
$(38) $478
 $1
 
Residential – nonagency60
—
 45
(13)  (3) 40
(42) 87
 1
 
Commercial – nonagency11
3
 7
(8)  (13) 21
(3) 18
 (2) 
Total mortgage-backed securities378
6
 386
(119)  (55) 70
(83) 583
 —
 
U.S. Treasury and
government agencies		1
—
 —
—
  —
 —
(1) —
 —
 
Obligations of U.S. states and municipalities744
(11) 81
—
  (78) —
—
 736
 (11) 
Non-U.S. government debt securities78
(10) 351
(184)  —
 17
(69) 183
 (9) 
Corporate debt securities312
(4) 141
(140)  (11) 167
(191) 274
 3
 
Loans2,719
41
 1,035
(1,534)  (329) 374
(320) 1,986
 (24) 
Asset-backed securities153
9
 59
(22)  (40) 13
(85) 87
 5
 
Total debt instruments4,385
31
 2,053
(1,999)  (513) 641
(749) 3,849
 (36) 
Equity securities295
(21) 93
(60)  (1) 4
(22) 288
 (8) 
Other690
(239) 34
(40)  (38) 1
(2) 406
 (251) 
Total trading assets – debt and equity instruments5,370
(229)
(c) 
2,180
(2,099)  (552) 646
(773) 4,543
 (295)
(c) 
Net derivative receivables:(b)
                
Interest rate264
340
 55
(55)  (133) (28)46
 489
 314
 
Credit(35)38
 2
(7)  (25) (1)4
 (24) 11
 
Foreign exchange(396)240
 13
(8)  3
 (112)15
 (245) 190
 
Equity(3,409)782
 824
(1,284)  421
 (73)161
 (2,578) 514
 
Commodity(674)150
 —
—
  (174) (8)(46) (752) 154
 
Total net derivative receivables(4,250)1,550
(c) 
894
(1,354)  92
 (222)180
 (3,110) 1,183
(c) 
Available-for-sale securities:                
Mortgage-backed securities1
—
 —
—
  —
 —
—
 1
 —
 
Asset-backed securities276
1
 —
—
  (130) —
—
 147
 1
 
Total available-for-sale securities277
1
(j) 
—
—
  (130) —
—
 148
 1
(d) 
Loans276
(4)
(c) 
122
—
  (161) —
(74) 159
 (5)
(c) 
Mortgage servicing rights6,030
478
(d) 
479
(399)  (347) —
—
 6,241
 478
(d) 
Other assets1,265
(50)
(c) 
47
(16)  (21) 1
(1) 1,225
 (52)
(c) 
                 
 Fair value measurements using significant unobservable inputs  
Six months ended
June 30, 2018
(in millions)		Fair value at
January 1,
2018		Total realized/unrealized (gains)/losses      
Transfers into
level 3(h)
Transfers (out of) level 3(h)
Fair value at
June 30, 2018		Change in unrealized (gains)/losses related
to financial instruments held at June 30, 2018
PurchasesSalesIssuances
Settlements(g)
 
Liabilities:(a)
                
Deposits$4,142
$(41)
(c)(e) 
$—
$—
$755
 $(255) $1
$(297) $4,305
 $(86)
(c)(e) 
Short-term borrowings1,665
(182)
(c)(e) 
—
—
2,070
 (1,360) 55
(39) 2,209
 (31)
(c)(e) 
Trading liabilities – debt and equity instruments39
(8)
(c) 
(62)76
—
 1
 2
(5) 43
 (1)
(c) 
Accounts payable and other liabilities13
(1)
(c) 
(6)1
—
 —
 1
—
 8
 (1)
(c) 
Beneficial interests issued by consolidated VIEs39
—
 —
—
—
 (38) —
—
 1
 —
 
Long-term debt16,125
(590)
(c)(e) 
—
—
6,241
(i) 
(4,386)
(i) 
594
(352) 17,632
(i) 
(706)
(c)(e) 
(a)Level 3 assets as a percentage of total Firm assets accounted for at fair value (including assets measured at fair value on a nonrecurring basis) were 2% and 3% at June 30, 2019both March 31, 2020 and December 31, 2018,2019, respectively. Level 3 liabilities as a percentage of total Firm liabilities accounted for at fair value (including liabilities measured at fair value on a nonrecurring basis) was 15%were 8% and 16%, at June 30, 2019March 31, 2020 and December 31, 2018.2019, respectively.

(b)All level 3 derivatives are presented on a net basis, irrespective of the underlying counterparty.

(c)Predominantly reported in principal transactions revenue, except for changes in fair value for CCB mortgage loans and lending-related commitments originated with the intent to sell, and mortgage loan purchase commitments, which are reported in mortgage fees and related income.
(d)Changes in fair value for MSRs are reported in mortgage fees and related income.
(e)
Realized (gains)/losses due to DVA for fair value option elected liabilities are reported in principal transactions revenue, and they were not material for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, respectively. Unrealized (gains)/losses are reported in OCI, and they were $(5) million$(1.1) billion and $(71)176 million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively and $170 million and $(123) million for the six months ended June 30, 2019 and 2018, respectively.
(f)Loan originations are included in purchases.
(g)Includes financial assets and liabilities that have matured, been partially or fully repaid, impacts of modifications, deconsolidations associated with beneficial interests in VIEs and other items.
(h)All transfers into and/or out of level 3 are based on changes in the observability and/or significance of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur.
(i)The prior periodprior-period amounts have been revised to conform with the current period presentation.
(j)Realized gains/(losses) on AFS securities, as well as other-than-temporary impairment (“OTTI”) losses that are recorded in earnings, are reported in investment securities gains/(losses). Unrealized gains/(losses) are reported in OCI. There were no realized gains/(losses) recorded in income on AFS securities for the three and six months ended June 30, 2019 and 2018, respectively. Unrealized gains/(losses) recorded on AFS securities in OCI were zero for both the three months ended June 30, 2019 and 2018, respectively and zero and $1 million for the six months ended June 30, 2019 and 2018, respectively.
Level 3 analysis
Consolidated balance sheets changes
Level 3 assets, including assets measured at fair value on a nonrecurring basis, were 0.6% of total Firm assets at June 30, 2019.March 31, 2020. The following describes significant changes to level 3 assets since December 31, 2018,2019, for those items measured at fair value on a recurring basis. For further information on changes impacting items measured at fair value on a nonrecurring basis, referRefer to Assets and liabilities measured at fair value on a nonrecurring basis on page 96.96 for further information on changes impacting items measured at fair value on a nonrecurring basis.
Three and six months ended June 30, 2019March 31, 2020
Level 3 assets were $16.5$19.2 billion at June 30, 2019, reflecting a decrease of $553 million and $622 million from March 31, 2019 and2020, reflecting an increase of $5.6 billion from December 31, 2018, respectively.2019 reflective of heightened market volatility and net transfers largely due to:
The$2.0 billion increase in trading loans.
$3.1 billion increase in gross equity derivative receivables.
$1.4 billion decrease for both the three and six months ended June 30, 2019 was driven by a reduction of approximately $1.0 billion in MSRs. For additional information, refer
Refer to the Gains and losses section below.sections below for additional information.
Transfers between levels for instruments carried at fair value on a recurring basis
For both the three and six months ended June 30, 2019March 31, 2020, significant transfers from level 2 into level 3 included the following:
$2.1 billion of total debt and 2018equity instruments, predominantly trading loans, driven by a decrease in observability.
$1.0 billion of gross equity derivative receivables and $1.7 billion of gross equity derivative payables as a result of a decrease in observability and an increase in the significance of unobservable inputs.
For the three months ended March 31, 2020, there were no individually significant transfers.transfers from level 3 into level 2.
For the three months ended March 31, 2019, there were no significant transfers from level 2 into level 3 or from level 3 into level 2.
All transfers are based on changes in the observability and/or significance of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur.
Gains and losses
The following describes significant components of total realized/unrealized gains/(losses) for instruments measured at fair value on a recurring basis for the periods indicated. These amounts exclude any effects of the Firm’s risk management activities where the financial instruments are classified as level 1 and 2 of the fair value hierarchy. For further information on these instruments, referRefer to Changes in level 3 recurring fair value measurements rollforward tables on pages 90–95.92–95 for further information on these instruments.
Three months ended June 30, 2019March 31, 2020
$1.51.2 billion of net lossesgains on assets, driven by gains in net equity derivative receivables due to market movements andlargely offset by losses in MSRs reflecting updates to model inputs and faster prepayment speeds on lower rates. Refer to Note 15 for information on MSRs.
$615 million4.6 billion of net lossesgains on liabilities, largely due topredominantly driven by market movements in long-term debt.
Three months ended June 30, 2018March 31, 2019
$278505 million of net gains on assets, and $504 million of net gains on liabilities, none of which were individually significant.
Six months ended June 30, 2019
$1.0 billion of net losses on assets, predominantly driven by MSRs reflecting updates to model inputs and faster prepayment speeds on lower rates.
$2.11.5 billion of net losses on liabilities predominantly driven by market movements in long-term debt.
Six months ended June 30, 2018
$1.7 billion of net gains on assets predominantly driven by market movements in derivative receivables, in particular equity derivative receivables.
•
$822 million of net gains on liabilities, none of which were individually significant.
Credit and funding adjustments — derivatives
The following table provides the impact of credit and funding adjustments on principal transactions revenue in the respective periods, excluding the effect of any associated hedging activities. The FVA presented below includes the impact of the Firm’s own credit quality on the inception value of liabilities as well as the impact of changes in the Firm’s own credit quality over time.
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)2019
 2018
 2019
 2018
2020
 2019
Credit and funding adjustments:          
Derivatives CVA$(44) $73
 $16
 $157
$(924) $60
Derivatives FVA(89) 97
 63
 14
(1,021) 152

ForRefer to Note 2 of JPMorgan Chase’s 2019 Form 10-K for further information about both credit and funding adjustments, as well as information about valuation adjustments on fair value option elected liabilities, refer to Note 2 of JPMorgan Chase’s 2018 Form 10-K.liabilities.

Assets and liabilities measured at fair value on a nonrecurring basis
The following tables present the assets and liabilities held as of June 30,March 31, 2020 and 2019 and 2018,, respectively, for which a nonrecurring fair value adjustment wasadjustments were recorded during the sixthree months ended June 30,March 31, 2020 and 2019 and 2018,, respectively, by major product category and fair value hierarchy.
Fair value hierarchy Total fair valueFair value hierarchy Total fair value
June 30, 2019 (in millions)Level 1
Level 2
 Level 3
 
March 31, 2020 (in millions)Level 1
Level 2
 Level 3
 Total fair value
Loans$—
$733
 $141
(b) 
$874
$—
$2,336
(c) 
$559
(d) 
Other assets(a)
—
13
 713
 726
—
11
 334
 345
Total assets measured at fair value on a nonrecurring basis$—
$746
 $854
 $1,600
$—
$2,347
 $893
 $3,240
Accounts payable and other liabilities(b)
—
—
 775
  
775
Total liabilities measured at fair value on a nonrecurring basis$—
$—
 $775
 $775
Fair value hierarchy Total fair valueFair value hierarchy Total fair value
June 30, 2018 (in millions)Level 1
Level 2
 Level 3
 
March 31, 2019 (in millions)Level 1
Level 2
 Level 3
 Total fair value
Loans$—
$325
 $210
 $535
$—
$441
 $84
 
Other assets—
217
 823
 1,040
—
11
 456
 467
Total assets measured at fair value on a nonrecurring basis$—
$542
 $1,033
 $1,575
$—
$452
 $540
 $992
(a)Primarily includes equity securities without readily determinable fair values that were adjusted based on observable price changes in orderly transactions from an identical or similar investment of the same issuer (measurement alternative). Of the $713$334 million in level 3 assets measured at fair value on a nonrecurring basis as of June 30, 2019, $564March 31, 2020, $194 million related to such equity securities.securities adjusted based on the measurement alternative. These equity securities are classified as level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.
(b)Represents at March 31, 2020 the markdowns associated with $9.4 billion of held-for-sale positions related to unfunded commitments in the bridge financing portfolio. There were 0 liabilities measured at fair value on a nonrecurring basis at March 31, 2019.
(c)Primarily includes certain mortgage loans that were reclassified to held-for-sale.
(d)Of the $141$559 million in level 3 assets measured at fair value on a nonrecurring basis as of June 30, 2019, $110March 31, 2020, $294 million related to residential real estate loans carried at the net realizable value of the underlying collateral (e.g., collateral-dependent loans and other loans charged off in accordance with regulatory guidance)loans). These amounts are classified as level 3 as they are valued using information from broker’s price opinions, appraisals and automated valuation models and discounted based upon the Firm’s experience with actual liquidation values. These discounts ranged from 14%16% to 49%46% with a weighted average of 29%28%.
There were no material liabilities measured at fair value on a nonrecurring basis at June 30, 2019 and 2018.
Nonrecurring fair value changes
The following table presents the total change in value of assets and liabilities for which a fair value adjustment hasadjustments have been recognized for the three and six months ended June 30,March 31, 2020 and 2019 and 2018,, related to assets and liabilities held at those dates.
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)2019
 2018
 2019
 2018
2020 2019
Loans$(33) $(18) $(54) $(22)$(267)
(b) 
$(21)
Other assets(a)
13
  
37
 90
 528
(169)
  
71
Accounts payable and other liabilities(775)
(c) 
—
Total nonrecurring fair value gains/(losses)$(20) $19
 $36
 $506
$(1,211) $50
(a)Included $16$(154) million and $41$78 million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively and $95 million and $534 million for the six months ended June 30, 2019 and 2018, respectively of net (losses)/gains as a result of the measurement alternative.
(b)Includes the impact of certain mortgage loans that were reclassified to held-for-sale.
(c)Represents markdowns on held-for-sale positions related to unfunded commitments in the bridge financing portfolio.
ForRefer to Note 12 for further information about the measurement of impaired collateral-dependent loans, and other loans where the carrying value is based on the fair value of the underlying collateral (e.g., residential mortgage loans charged off in accordance with regulatory guidance), refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K.loans.


Equity securities without readily determinable fair values
The Firm measures certain equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of the same issuer, with such changes recognized in earnings.other income.
In its determination of the new carrying values upon observable price changes, the Firm may adjust the prices if deemed necessary to arrive at the Firm’s estimated fair values. Such adjustments may include adjustments to reflect the different rights and obligations of similar securities, and other adjustments that are consistent with the Firm’s valuation techniques for private equity direct investments.
The following table presents the carrying value of equity securities without readily determinable fair values still held as of June 30,March 31, 2020 and 2019 and 2018,, that are measured under the measurement alternative and the related adjustments recorded during the periods presented for those securities with observable price changes. These securities are included in the nonrecurring fair value tables when applicable price changes are observable.
Three months ended Six months endedThree months ended
June 30, June 30,March 31
As of or for the period ended,          
(in millions)2019 2018 2019 20182020 2019
Other assets          
Carrying value(a)
$1,704
 $1,471
 $1,704
 $1,471
$2,560
 $1,819
Upward carrying value changes(b)
52
 67
 136
 562
9
 84
Downward carrying value changes/impairment(c)
(36) (26) (42) (28)(162) (6)
(a)The carrying value as of December 31, 20182019 was $1.5$2.4 billion.
(b)The cumulative upward carrying value changes between January 1, 2018 and June 30, 2019March 31, 2020 were $446$524 million.
(c)The cumulative downward carrying value changes/impairment between January 1, 2018 and June 30, 2019March 31, 2020 were $(202)$(360) million.
Included in other assets above is the Firm’s interest in approximately 40 million Visa Class B shares, recorded at a nominal carrying value. These shares are subject to certain transfer restrictions currently and will be convertible into Visa Class A shares upon final resolution of certain litigation matters involving Visa. The conversion rate of Visa Class B shares into Visa Class A shares is 1.62981.6228 at June 30, 2019,March 31, 2020, and may be adjusted by Visa depending on developments related to the litigation matters.

Additional disclosures about the fair value of financial instruments that are not carried on the Consolidated balance sheets at fair value
The following table presents by fair value hierarchy classification the carrying values and estimated fair values at June 30, 2019,March 31, 2020, and December 31, 2018,2019, of financial assets and liabilities, excluding financial instruments that are carried at fair value on a recurring basis, and their classification within the fair value hierarchy.
 March 31, 2020 December 31, 2019
  Estimated fair value hierarchy   Estimated fair value hierarchy 
(in billions)
Carrying
value
Level 1Level 2Level 3
Total estimated
fair value
 
Carrying
value
Level 1Level 2Level 3
Total estimated
fair value
Financial assets           
Cash and due from banks$24.0
$24.0
$—
$—
$24.0
 $21.7
$21.7
$—
$—
$21.7
Deposits with banks343.5
343.5
—
—
343.5
 241.9
241.9
—
—
241.9
Accrued interest and accounts receivable121.3
—
121.3
—
121.3
 71.3
—
71.2
0.1
71.3
Federal funds sold and securities purchased under resale agreements12.7
—
12.7
—
12.7
 234.6
—
234.6
—
234.6
Securities borrowed88.3
—
88.3
—
88.3
 133.5
—
133.5
—
133.5
Investment securities, held-to-maturity71.2
0.1
73.4
—
73.5
 47.5
0.1
48.8
—
48.9
Loans, net of allowance for loan losses(a)
985.9
—
217.4
778.6
996.0
 939.5
—
214.1
734.9
949.0
Other93.5
—
92.9
0.8
93.7
 61.3
—
60.6
0.8
61.4
Financial liabilities           
Deposits$1,813.4
$—
$1,813.7
$—
$1,813.7
 $1,533.8
$—
$1,534.1
$—
$1,534.1
Federal funds purchased and securities loaned or sold under repurchase agreements38.5
—
38.5
—
38.5
 183.1
—
183.1
—
183.1
Short-term borrowings27.6
—
27.6
—
27.6
 35.0
—
35.0
—
35.0
Accounts payable and other liabilities211.3
0.5
206.2
4.2
210.9
 164.0
0.1
160.0
3.5
163.6
Beneficial interests issued by consolidated VIEs19.6
—
19.6
—
19.6
 17.8
—
17.9
—
17.9
Long-term debt230.5
—
219.8
3.5
223.3
 215.5
—
218.3
3.5
221.8
 June 30, 2019 December 31, 2018
  Estimated fair value hierarchy   Estimated fair value hierarchy 
(in billions)
Carrying
value
Level 1Level 2Level 3
Total estimated
fair value
 
Carrying
value
Level 1Level 2Level 3
Total estimated
fair value
Financial assets           
Cash and due from banks$23.2
$23.2
$—
$—
$23.2
 $22.3
$22.3
$—
$—
$22.3
Deposits with banks244.9
244.9
—
—
244.9
 256.5
256.5
—
—
256.5
Accrued interest and accounts receivable87.2
0.8
86.3
0.1
87.2
 72.0
—
71.9
0.1
72.0
Federal funds sold and securities purchased under resale agreements253.9
—
253.9
—
253.9
 308.4
—
308.4
—
308.4
Securities borrowed125.0
—
125.0
—
125.0
 106.9
—
106.9
—
106.9
Investment securities, held-to-maturity30.9
—
32.1
—
32.1
 31.4
—
31.5
—
31.5
Loans, net of allowance for loan losses(a)
939.4
—
224.1
727.8
951.9
 968.0
—
241.5
728.5
970.0
Other59.2
—
58.4
0.9
59.3
 60.5
—
59.6
1.0
60.6
Financial liabilities           
Deposits$1,491.4
$—
$1,491.8
$—
$1,491.8
 $1,447.4
$—
$1,447.5
$—
$1,447.5
Federal funds purchased and securities loaned or sold under repurchase agreements200.7
—
200.7
—
200.7
 181.4
—
181.4
—
181.4
Short-term borrowings52.2
—
52.2
—
52.2
 62.1
—
62.1
—
62.1
Accounts payable and other liabilities175.8
0.1
172.2
3.1
175.4
 160.6
0.2
157.0
3.0
160.2
Beneficial interests issued by consolidated VIEs25.6
—
25.6
—
25.6
 20.2
—
20.2
—
20.2
Long-term debt and junior subordinated deferrable interest debentures220.8
—
221.6
3.3
224.9
 227.1
—
224.6
3.3
227.9

(a)Fair value is typically estimated using a discounted cash flow model that incorporates the characteristics of the underlying loans (including principal, contractual interest rate and contractual fees) and other key inputs, including expected lifetime credit losses, interest rates, prepayment rates, and primary origination or secondary market spreads. For certain loans, the fair value is measured based on the value of the underlying collateral. Carrying value of the loan takes into account the loan’s allowance for loan losses, which represents the loan’s expected credit losses over its remaining expected life. The difference between the estimated fair value and carrying value of a financial asset or liabilityloan is the result of the different methodologies usedgenerally attributable to determinechanges in market interest rates, including credit spreads, market liquidity premiums and other factors that affect the fair value as compared withof a loan but do not affect its carrying value. For example, credit losses are estimated for a financial asset’s remaining life in a fair value calculation but are estimated for a loss emergence period in the allowance for loan loss calculation; future loan income (interest and fees) is incorporated in a fair value calculation but is generally not considered in the allowance for loan losses.
The majority of the Firm’s lending-related commitments are not carried at fair value on a recurring basis on the Consolidated balance sheets. The carrying value of the wholesale allowance for lending-related commitments and the estimated fair value of these wholesale lending-related commitments were as follows for the periods indicated.
June 30, 2019 December 31, 2018March 31, 2020 December 31, 2019
 Estimated fair value hierarchy   Estimated fair value hierarchy  Estimated fair value hierarchy   Estimated fair value hierarchy 
(in billions)
Carrying value(a)
Level 1Level 2Level 3Total estimated fair value 
Carrying value(a)
Level 1Level 2Level 3
Total estimated fair value(b)
Carrying value(a) (b)
Level 1Level 2Level 3Total estimated fair value 
Carrying value(a)
Level 1Level 2Level 3Total estimated fair value
Wholesale lending-related commitments$1.1
$—
$—
$1.8
$1.8
 $1.0
$—
$—
$1.9
$1.9
$2.8
$—
$—
$3.3
$3.3
 $1.2
$—
$—
$1.9
$1.9
(a)Excludes the current carrying values of the guarantee liability and the offsetting asset, each of which is recognized at fair value at the inception of the guarantees.
(b)The prior period amounts have been revisedIncludes the wholesale allowance for lending-related commitments and markdowns associated with held-for-sale positions related to conform withunfunded commitments in the current period presentation.bridge financing portfolio.
The Firm does not estimate the fair value of consumer off-balance sheet lending-related commitments. In many cases, the Firm can reduce or cancel these commitments by providing the borrower notice or, in some cases as permitted by law, without notice. ForRefer to page 156 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of the valuation of lending-related commitments, refer to page 161 of JPMorgan Chase’s 2018 Form 10-K.commitments.

Note 3 – Fair value option
For a discussion of the primary financial instruments for which theThe fair value option wasprovides an option to elect fair value as an alternative measurement for selected financial assets, financial liabilities, unrecognized firm commitments, and written loan commitments.
The Firm has elected to measure certain instruments at fair value for several reasons including to mitigate income statement volatility caused by the differences between the measurement basis of elected instruments (e.g., certain instruments that otherwise would be accounted for those electionson an accrual basis) and the determinationassociated risk management arrangements that are accounted for on a fair value basis, as well as to better reflect those instruments that are managed on a fair value basis.
The Firm’s election of instrument-specificfair value includes the following instruments:
Loans purchased or originated as part of securitization warehousing activity, subject to bifurcation accounting, or managed on a fair value basis, including lending-related commitments
Certain securities financing agreements
Owned beneficial interests in securitized financial assets that contain embedded credit risk,derivatives, which would otherwise be required to be separately accounted for as a derivative instrument
Structured notes, which are predominantly financial instruments that contain embedded derivatives, that are issued as part of client-driven activities
Certain long-term beneficial interests issued by CIB’s consolidated securitization trusts where relevant, refer to Note 3 of JPMorgan Chase’s 2018 Form 10-K.the underlying assets are carried at fair value
Changes in fair value under the fair value option election
The following table presents the changes in fair value included in the Consolidated statements of income for the three months ended June 30,March 31, 2020 and 2019, and 2018, for items for which the fair value option was elected. The profit and loss information presented below only includes the financial instruments that were elected to be measured at fair value; related risk management instruments, which are required to be measured at fair value, are not included in the table.
Three months ended June 30,Three months ended March 31,

2019 20182020 2019
(in millions)Principal transactions
All other income
Total changes in fair
value recorded (e)
 Principal transactions All other income
Total changes in fair value recorded (e)
Principal transactions All other income
Total changes in fair
value recorded (e)
 Principal transactions All other income
Total changes in fair value recorded (e)
Federal funds sold and securities purchased under resale agreements$22

$—

$22

 $(33) $—
 $(33)$543
 $—
 $543
 $11
 $—
 $11
Securities borrowed43

—

43

 29
 —
 29
226
 —
 226
 37
 —
 37
Trading assets: 
 
 
                 
Debt and equity instruments, excluding loans204

—

204

 (259) 1
(c) 
(258)(2,438) (1)
(c) 
(2,439) 1,354
 —
 1,354
Loans reported as trading assets: 
 
 
                 
Changes in instrument-specific credit risk199

2
(c) 
201

 214
 (1)
(c) 
213
(589) (23)
(c) 
(612) 248
 3
(c) 
251
Other changes in fair value120

328
(c) 
448

 29
 65
(c) 
94
275
 741
(c) 
1,016
 80
 237
(c) 
317
Loans: 
 
 
                 
Changes in instrument-specific credit risk(13)
—

(13)
 (1) —
 (1)(4) —
 (4) 5
 —
 5
Other changes in fair value1

—

1

 (1) —
 (1)19
 —
 19
 —
 —
 —
Other assets2

3
(d) 
5

 —
 (3)
(d) 
(3)61
 (17)
(d) 
44
 1
 —
 1
Deposits(a)
(696)
—

(696)
 129
 —
 129
(103) —
 (103) (496) —
 (496)
Federal funds purchased and securities loaned or sold under repurchase agreements(15)
—

(15)
 9
 —
 9
(259) —
 (259) (5) —
 (5)
Short-term borrowings(a)
(70)
—

(70)
 (162) —
 (162)1,720
 —
 1,720
 (704) —
 (704)
Trading liabilities2

—

2

 6
 —
 6
—
 —
 —
 3
 —
 3
Other liabilities(4)
—

(4)
 —
 —
 —
(35) —
 (35) (4) —
 (4)
Long-term debt(a)(b)
(1,770)
—

(1,770)
 196
 —
 196
4,181
 5
(c) 
4,186
 (2,836) —
 (2,836)


























 Six months ended June 30,
 2019 2018
(in millions)Principal transactions All other income
Total changes in fair
value recorded (e)
 Principal transactions All other income
Total changes in fair value recorded (e)
Federal funds sold and securities purchased under resale agreements$33
 $—
 $33
  $(26) $—
 $(26)
Securities borrowed80
 —
 80
  2
 —
 2
Trading assets:            
Debt and equity instruments, excluding loans1,558
 —
 1,558
  (445) 1
(c) 
(444)
Loans reported as trading assets:            
Changes in instrument-specific credit risk447
 5
(c) 
452
  336
 4
(c) 
340
Other changes in fair value200
 565
(c) 
765
  70
 (25)
(c) 
45
Loans:            
Changes in instrument-specific credit risk(8) —
 (8)  (1) —
 (1)
Other changes in fair value1
 —
 1
  (2) —
 (2)
Other assets3
 3
(d) 
6
  2
 (10)
(d) 
(8)
Deposits(a)
(1,192) —
 (1,192)  339
 —
 339
Federal funds purchased and securities loaned or sold under repurchase agreements(20) —
 (20)  19
 —
 19
Short-term borrowings(a)
(774) —
 (774)  111
 —
 111
Trading liabilities5
 —
 5
  (1) —
 (1)
Other liabilities(8) —
 (8)  —
 —
 —
Long-term debt(a)(b)
(4,606) —
 (4,606)  1,227
 —
 1,227
(a)Unrealized gains/(losses) due to instrument-specific credit risk (DVA) for liabilities for which the fair value option has been elected isare recorded in OCI, while realized gains/(losses) are recorded in principal transactions revenue. Realized gains/(losses) due to instrument-specific credit risk recorded in principal transactions revenue were not$(2) million for the three months ended March 31, 2020 and were 0t material for the three and six months ended June 30, 2019 and 2018, respectively.March, 31, 2019.
(b)Long-term debt measured at fair value predominantly relates to structured notes. Although the risk associated with the structured notes is actively managed, the gains/(losses) reported in this table do not include the income statement impact of the risk management instruments used to manage such risk.
(c)Reported in mortgage fees and related income.
(d)Reported in other income.
(e)Changes in fair value exclude contractual interest, which is included in interest income and interest expense for all instruments other than hybrid financial instruments. ForRefer to Note 7 for further information regarding interest income and interest expense, refer to Note 6.expense.




Difference between aggregate fair value and aggregate remaining contractual principal balance outstanding
The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding as of June 30, 2019,March 31, 2020, and December 31, 2018,2019, for loans, long-term debt and long-term beneficial interests for which the fair value option has been elected.
June 30, 2019 December 31, 2018March 31, 2020 December 31, 2019
(in millions)Contractual principal outstanding
Fair valueFair value over/(under) contractual principal outstanding Contractual principal outstanding Fair valueFair value over/(under) contractual principal outstandingContractual principal outstanding
Fair valueFair value over/(under) contractual principal outstanding Contractual principal outstanding Fair valueFair value over/(under) contractual principal outstanding
Loans(a)







    






    
Nonaccrual loans






    






    
Loans reported as trading assets$4,038

$1,231
$(2,807) $4,240
 $1,350
$(2,890)$3,610

$1,092
$(2,518) $3,717
 $1,111
$(2,606)
Loans124

72
(52) 39
 —
(39)274

238
(36) 178
 139
(39)
Subtotal4,162

1,303
(2,859) 4,279
 1,350
(2,929)3,884

1,330
(2,554) 3,895
 1,250
(2,645)
All other performing loans






    






    
Loans reported as trading assets43,722

42,727
(995) 42,215
 40,403
(1,812)47,193

45,016
(2,177) 48,570
 47,318
(1,252)
Loans4,284

4,237
(47) 3,186
 3,151
(35)6,047

5,976
(71) 7,046
 6,965
(81)
Total loans$52,168

$48,267
$(3,901) $49,680
 $44,904
$(4,776)$57,124

$52,322
$(4,802) $59,511
 $55,533
$(3,978)
Long-term debt






    






    
Principal-protected debt$39,559
(c) 
$36,681
$(2,878) $32,674
(c) 
$28,718
$(3,956)$40,994
(c) 
$37,947
$(3,047) $40,124
(c) 
$39,246
$(878)
Nonprincipal-protected debt(b)
NA

31,147
NA
 NA
 26,168
NA
NA

30,670
NA
 NA
 36,499
NA
Total long-term debtNA

$67,828
NA
 NA
 $54,886
NA
NA

$68,617
NA
 NA
 $75,745
NA
Long-term beneficial interests              
Nonprincipal-protected debt(b)
NA

$—
NA
 NA
 $28
NA
NA

$77
NA
 NA
 $36
NA
Total long-term beneficial interestsNA

$—
NA
 NA
 $28
NA
NA

$77
NA
 NA
 $36
NA
(a)There were no0 performing loans that were ninety days or more past due as of June 30, 2019,March 31, 2020, and December 31, 2018,2019, respectively.
(b)Remaining contractual principal is not applicable to nonprincipal-protected structured notes and long-term beneficial interests. Unlike principal-protected structured notes and long-term beneficial interests, for which the Firm is obligated to return a stated amount of principal at maturity, nonprincipal-protected structured notes and long-term beneficial interests do not obligate the Firm to return a stated amount of principal at maturity, but for structured notes to return an amount based on the performance of an underlying variable or derivative feature embedded in the note. However, investors are exposed to the credit risk of the Firm as issuer for both nonprincipal-protected and principal-protected notes.
(c)Where the Firm issues principal-protected zero-coupon or discount notes, the balance reflects the contractual principal payment at maturity or, if applicable, the contractual principal payment at the Firm’s next call date.
At June 30, 2019, March 31, 2020, and December 31, 2018,2019, the contractual amount of lending-related commitments for which the fair value option was elected was $9.7$7.3 billion and $6.9$6.5 billion, respectively, with a corresponding fair value of $(95)$(97) million and $(82)$(94) million, respectively. ForRefer to Note 28 of JPMorgan Chase’s 2019 Form 10-K, and Note 23 of this Form 10-Q for further information regarding off-balance sheet lending-related financial instruments, referinstruments. The prior period amount has been revised to Note 27 of JPMorgan Chase’s 2018 Form 10-K, and Note 22 of this Form 10-Q.conform with the current period presentation.
Structured note products by balance sheet classification and risk component
The following table presents the fair value of structured notes, by balance sheet classification and the primary risk type.

June 30, 2019
December 31, 2018March 31, 2020 December 31, 2019
(in millions)Long-term debtShort-term borrowingsDepositsTotal
Long-term debtShort-term borrowingsDepositsTotalLong-term debtShort-term borrowingsDepositsTotal Long-term debtShort-term borrowingsDepositsTotal
Risk exposure
















   
Interest rate$31,670
$66
$21,048
$52,784

$24,137
$62
$12,372
$36,571
$35,203
$38
$11,699
$46,940
 $35,470
$34
$16,692
$52,196
Credit4,848
639
—
5,487

4,009
995
—
5,004
4,749
771
—
5,520
 5,715
875
—
6,590
Foreign exchange3,580
85
37
3,702

3,169
157
38
3,364
3,596
67
54
3,717
 3,862
48
5
3,915
Equity25,338
6,536
8,278
40,152

21,382
5,422
7,368
34,172
23,983
4,177
7,455
35,615
 29,294
4,852
8,177
42,323
Commodity467
6
1,320
1,793

372
34
1,207
1,613
419
25
1,140
1,584
 472
32
1,454
1,958
Total structured notes$65,903
$7,332
$30,683
$103,918

$53,069
$6,670
$20,985
$80,724
$67,950
$5,078
$20,348
$93,376
 $74,813
$5,841
$26,328
$106,982




Note 4 – Credit risk concentrations
Concentrations of credit risk arise when a number of clients, counterparties or customers are engaged in similar business activities or activities in the same geographic region, or when they have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions.
JPMorgan Chase regularly monitors various segments of its credit portfolios to assess potential credit risk concentrations and to obtain additional collateral when deemed necessary and permitted under the Firm’s agreements. Senior management is significantly involved in the credit approval and review process, and risk levels are adjusted as needed to reflect the Firm’s risk appetite.
In the Firm’s consumer portfolio, concentrations are managed primarily by product and by U.S. geographic region, with a key focus on trends and concentrations at the portfolio level, where potential credit risk concentrations can be remedied through changes in underwriting policies and portfolio guidelines. Refer to Note 12 for additional information on the geographic composition of the Firm’s consumer loan portfolios. In the wholesale portfolio, credit risk concentrations are evaluated primarily by industry and monitored regularly on both an aggregate portfolio level and on an individual client or counterparty basis.
The Firm’s wholesale exposure is managed through loan syndications and participations, loan sales, securitizations, credit derivatives, master netting agreements, collateral and other risk-reduction techniques. Refer to Note 12 for additional information on loans.
The Firm does not believe that its exposure to any particular loan product or industry segment (e.g., real estate), or its exposure to residential real estate loans with high LTV ratios, results in a significant concentration of credit risk.
Terms of loan products and collateral coverage are included in the Firm’s assessment when extending credit and establishing its allowance for loan losses.

The table below presents both on–balance sheet and off–balance sheet consumer and wholesale-related credit exposure by the Firm’s 3 credit portfolio segments as of March 31, 2020 and December 31, 2019. The wholesale industry of risk category is generally based on the client or counterparty’s primary business activity.
In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.
 March 31, 2020 December 31, 2019 
 
Credit exposure(h)
On-balance sheet
Off-balance sheet(i)
 
Credit exposure(h)
On-balance sheet
Off-balance sheet(i)
 
(in millions)LoansDerivatives LoansDerivatives 
Consumer, excluding credit card$337,162
$295,627
$—
$41,535
 $338,170
$298,001
$—
$40,169
 
Credit card(a)
835,463
154,021
—
681,442
 819,644
168,924
—
650,720
 
Total consumer-related(a)
1,172,625
449,648
—
722,977
 1,157,814
466,925
—
690,889
 
Wholesale-related(b)
          
Real Estate148,246
123,667
1,294
23,285
 150,805
117,709
619
32,477
 
Consumer & Retail110,669
54,207
2,824
53,638
 106,986
36,985
1,424
68,577
 
Individuals and Individual Entities(c)
108,180
97,020
1,864
9,296
 105,018
94,616
694
9,708
 
Industrials68,864
29,941
2,062
36,861
 62,483
22,063
878
39,542
 
Asset Managers65,880
29,134
17,395
19,351
 51,856
24,008
7,160
20,688
 
Technology, Media &
Telecommunications		60,184
20,363
2,827
36,994
 60,033
15,322
2,766
41,945
 
Banks & Finance Cos55,786
34,760
7,617
13,409
 50,786
31,191
5,165
14,430
 
Healthcare53,250
20,628
2,806
29,816
 50,824
17,607
2,078
31,139
 
Oil & Gas42,754
15,734
837
26,183
 41,641
13,101
852
27,688
 
Automotive36,060
22,644
1,076
12,340
 35,118
18,844
368
15,906
 
Utilities33,112
7,813
3,734
21,565
 34,843
5,157
2,573
27,113
 
State & Municipal Govt(d)
30,529
14,686
2,670
13,173
 30,095
13,271
2,000
14,824
 
Transportation18,624
8,584
2,305
7,735
 14,497
5,253
715
8,529
 
Chemicals & Plastics17,430
6,445
752
10,233
 17,499
4,864
459
12,176
 
Central Govt16,519
3,223
12,107
1,189
 14,865
2,840
10,477
1,548
 
Metals & Mining15,797
6,479
998
8,320
 15,586
5,364
402
9,820
 
Insurance14,522
2,213
3,675
8,634
 12,348
1,356
2,282
8,710
 
Financial Markets Infrastructure9,767
409
7,597
1,761
 4,121
13
2,482
1,626
 
Securities Firms8,045
663
4,718
2,664
 7,344
757
4,507
2,080
 
All other(e)
81,204
56,676
2,490
22,038
 78,006
51,357
1,865
24,784
 
Subtotal995,422
555,289
81,648
358,485
 944,754
481,678
49,766
413,310
 
Loans held-for-sale and loans at fair value10,438
10,438
—
—
 11,166
11,166
—
—
 
Receivables from customers and other(f)
33,376
—
—
—
 33,706
—
—
—
 
Total wholesale-related1,039,236
565,727
81,648
358,485
 989,626
492,844
49,766
413,310
 
Total exposure(g)(h)
$2,211,861
$1,015,375
$81,648
$1,081,462
 $2,147,440
$959,769
$49,766
$1,104,199
 
(a)Also includes commercial card lending-related commitments primarily in CB and CIB.
(b)The industry rankings presented in the table as of December 31, 2019, are based on the industry rankings of the corresponding exposures at March 31, 2020, not actual rankings of such exposures at December 31, 2019.
(c)Individuals and Individual Entities predominantly consists of Wealth Management clients within AWM and includes exposure to personal investment companies and personal and testamentary trusts.
(d)
In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at March 31, 2020 and December 31, 2019, noted above, the Firm held: $6.5 billion at both periods of trading assets; $30.5 billion and $29.8 billion, respectively, of AFS securities; and $4.8 billion at both periods of HTM securities, issued by U.S. state and municipal governments. Refer to Note 2 and Note 10 for further information.
(e)
All other includes: SPEs and Private education and civic organizations, representing approximately 90% and 10%, respectively, at both March 31, 2020 and December 31, 2019. Refer to Note 14 for more information on exposures to SPEs.
(f)Receivables from customers primarily represent held-for-investment margin loans to brokerage clients in CIB and AWM that are collateralized by assets maintained in the clients’ brokerage accounts (e.g., cash on deposit, liquid and readily marketable debt or equity securities), as such no allowance is held against these receivables. To manage its credit risk the Firm establishes margin requirements and monitors the required margin levels on an ongoing basis, and requires clients to deposit additional cash or other collateral, or to reduce positions, when appropriate. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.
(g)Excludes cash placed with banks of $354.4 billion and $254.0 billion, at March 31, 2020 and December 31, 2019, respectively, which is predominantly placed with various central banks, primarily Federal Reserve Banks.
(h)Credit exposure is net of risk participations and excludes the benefit of credit derivatives used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables.
(i)Represents lending-related financial instruments.

Note 5 – Derivative instruments
JPMorgan Chase makes markets in derivatives for clients and also uses derivatives to hedge or manage its own risk exposures. ForRefer to Note 5 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of the Firm’s use of and accounting policies regarding derivative instruments, refer to Note 5 of JPMorgan Chase’s 2018 Form 10-K.instruments.
The Firm’s disclosures are based on the accounting treatment and purpose of these derivatives. A limited number of the Firm’s derivatives are designated in hedge
 
accounting relationships and are disclosed according to the type of hedge (fair value hedge, cash flow hedge, or net investment hedge). Derivatives not designated in hedge accounting relationships include certain derivatives that are used to manage certain risks associated with specified assets orand liabilities (“specified risk management” positions) as well as derivatives used in the Firm’s market-making businesses or for other purposes.

The following table outlines the Firm’s primary uses of derivatives and the related hedge accounting designation or disclosure category.
Type of DerivativeUse of DerivativeDesignation and disclosure
Affected
segment or unit
10-Q page reference
Manage specifically identified risk exposures in qualifying hedge accounting relationships:
•
Interest rate
Hedge fixed rate assets and liabilitiesFair value hedgeCorporate108-109109-110
•
Interest rate
Hedge floating-rate assets and liabilitiesCash flow hedgeCorporate110111
•
Foreign exchange
Hedge foreign currency-denominated assets and liabilitiesFair value hedgeCorporate108-109109-110
•
Foreign exchange
Hedge foreign currency-denominated forecasted revenue and expenseCash flow hedgeCorporate110111
•
Foreign exchange
Hedge the value of the Firm’s investments in non-U.S. dollar functional currency entitiesNet investment hedgeCorporate111112
•
Commodity
Hedge commodity inventoryFair value hedgeCIB108-109109-110
Manage specifically identified risk exposures not designated in qualifying hedge accounting relationships:
•
Interest rate
Manage the risk of theassociated with mortgage pipeline,commitments, warehouse loans and MSRsSpecified risk managementCCB111112
•
Credit
Manage the credit risk ofassociated with wholesale lending exposuresSpecified risk managementCIB111112
•
Interest rate and foreign exchange
Manage the risk ofassociated with certain other specified assets and liabilitiesSpecified risk managementCorporate111112
Market-making derivatives and other activities:
•
Various
Market-making and related risk managementMarket-making and otherCIB111112
•
Various
Other derivativesMarket-making and otherCIB, AWM, Corporate111112



Notional amount of derivative contracts
The following table summarizes the notional amount of derivative contracts outstanding as of June 30, 2019, March 31, 2020, and December 31, 2018.2019.
Notional amounts(b)
Notional amounts(b)
(in billions)June 30, 2019
December 31, 2018
March 31, 2020
December 31, 2019
Interest rate contracts  
Swaps$25,583
$21,763
$27,659
$21,228
Futures and forwards4,600
3,562
7,504
3,152
Written options4,572
3,997
3,889
3,938
Purchased options5,054
4,322
4,277
4,361
Total interest rate contracts39,809
33,644
43,329
32,679
Credit derivatives(a)
1,294
1,501
1,560
1,242
Foreign exchange contracts  
Cross-currency swaps3,824
3,548
3,604
3,604
Spot, futures and forwards6,951
5,871
7,518
5,577
Written options922
835
838
700
Purchased options939
830
821
718
Total foreign exchange contracts12,636
11,084
12,781
10,599
Equity contracts  
Swaps365
346
330
406
Futures and forwards122
101
122
142
Written options640
528
720
646
Purchased options573
490
683
611
Total equity contracts1,700
1,465
1,855
1,805
Commodity contracts  
Swaps148
134
139
147
Spot, futures and forwards161
156
219
211
Written options143
135
169
135
Purchased options126
120
155
124
Total commodity contracts578
545
682
617
Total derivative notional amounts$56,017
$48,239
$60,207
$46,942
(a)ForRefer to the Credit derivatives discussion on page 113 for more information on volumes and types of credit derivative contracts, refer to the Credit derivatives discussion on page 112.contracts.
(b)Represents the sum of gross long and gross short third-party notional derivative contracts.
While the notional amounts disclosed above give an indication of the volume of the Firm’s derivatives activity, the notional amounts significantly exceed, in the Firm’s view, the possible losses that could arise from such transactions. For most derivative contracts, the notional amount is not exchanged; it is used simply as a reference amount used to calculate payments.

Impact of derivatives on the Consolidated balance sheets
The following table summarizes information on derivative receivables and payables (before and after netting adjustments) that are reflected on the Firm’s Consolidated balance sheets as of June 30, 2019,March 31, 2020, and December 31, 2018,2019, by accounting designation (e.g., whether the derivatives were designated in qualifying hedge accounting relationships or not) and contract type.
Free-standing derivative receivables and payables(a)
Free-standing derivative receivables and payables(a)
          
Free-standing derivative receivables and payables(a)
          
Gross derivative receivables   Gross derivative payables  Gross derivative receivables   Gross derivative payables  
June 30, 2019
(in millions)		Not designated as hedges Designated as hedges Total derivative receivables 
Net derivative receivables(b)
 Not designated as hedges 
Designated
as hedges
 Total derivative payables 
Net derivative payables(b)
March 31, 2020
(in millions)		Not designated as hedges Designated as hedges Total derivative receivables 
Net derivative receivables(b)
 Not designated as hedges 
Designated
as hedges
 Total derivative payables 
Net derivative payables(b)
Trading assets and liabilities                              
Interest rate$333,694
 $862
 $334,556
 $26,488
 $301,047
 $2
 $301,049
 $8,883
$401,677
 $826
 $402,503
 $36,901
 $365,052
 $1
 $365,053
 $13,399
Credit15,665
 —
 15,665
 633
 17,231
 —
 17,231
 2,256
20,080
 —
 20,080
 1,185
 20,878
 —
 20,878
 2,112
Foreign exchange143,659
 441
 144,100
 10,663
 146,920
 697
 147,617
 11,126
241,466
 2,056
 243,522
 18,983
 255,304
 739
 256,043
 23,294
Equity44,930
 —
 44,930
 9,205
 47,698
 —
 47,698
 11,177
96,145
 —
 96,145
 13,215
 94,202
 —
 94,202
 12,037
Commodity16,739
 132
 16,871
 5,889
 19,280
 74
 19,354
 8,037
35,960
 1,695
 37,655
 11,364
 39,069
 931
 40,000
 14,245
Total fair value of trading assets and liabilities$554,687
 $1,435
 $556,122
 $52,878
 $532,176
 $773
 $532,949
 $41,479
$795,328
 $4,577
 $799,905
 $81,648
 $774,505
 $1,671
 $776,176
 $65,087
                              
Gross derivative receivables   Gross derivative payables  Gross derivative receivables   Gross derivative payables  
December 31, 2018
(in millions)		Not designated as hedges Designated as hedges Total derivative receivables 
Net derivative receivables(b)
 Not designated as hedges Designated
as hedges		 Total derivative payables 
Net derivative payables(b)
December 31, 2019
(in millions)		Not designated as hedges Designated as hedges Total derivative receivables 
Net derivative receivables(b)
 Not designated as hedges Designated
as hedges		 Total derivative payables 
Net derivative payables(b)
Trading assets and liabilities                              
Interest rate$267,871
 $833
 $268,704
 $23,214
 $242,782
 $—
 $242,782
 $7,784
$312,451
 $843
 $313,294
 $27,421
 $279,272
 $1
 $279,273
 $8,603
Credit20,095
 —
 20,095
 612
 20,276
 —
 20,276
 1,667
14,876
 —
 14,876
 701
 15,121
 —
 15,121
 1,652
Foreign exchange167,057
 628
 167,685
 13,450
 164,392
 825
 165,217
 12,785
138,179
 308
 138,487
 9,005
 144,125
 983
 145,108
 13,158
Equity49,285
 —
 49,285
 9,946
 51,195
 —
 51,195
 10,161
45,727
 —
 45,727
 6,477
 52,741
 —
 52,741
 12,537
Commodity20,223
 247
 20,470
 6,991
 22,297
 121
 22,418
 9,372
16,914
 328
 17,242
 6,162
 19,736
 149
 19,885
 7,758
Total fair value of trading assets and liabilities$524,531
 $1,708
 $526,239
 $54,213
 $500,942
 $946
 $501,888
 $41,769
$528,147
 $1,479
 $529,626
 $49,766
 $510,995
 $1,133
 $512,128
 $43,708

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


Derivatives netting
The following tables present, as of June 30, 2019, March 31, 2020, and December 31, 2018, 2019, gross and net derivative receivables and payables by contract and settlement type. Derivative receivables and payables, as well as the related cash collateral from the same counterparty have been netted on the Consolidated balance sheets where the Firm has obtained an appropriate legal opinion with respect to the master netting agreement. Where such a legal opinion has not been either sought or obtained, amounts are not eligible for netting on the Consolidated balance sheets, and those derivative receivables and payables are shown separately in the tables below.
In addition to the cash collateral received and transferred that is presented on a net basis with derivative receivables and payables, the Firm receives and transfers additional collateral (financial instruments and cash). These amounts mitigate counterparty credit risk associated with the Firm’s derivative instruments, but are not eligible for net presentation:
•
collateral that consists of non-cash financial instruments (generally U.S. government and agency securities and other G7 government securities) and cash collateral held at third-party custodians, which are shown separately as “Collateral not nettable on the Consolidated balance sheets” in the tables below, up to the fair value exposure amount.amount;
•
the amount of collateral held or transferred that exceeds the fair value exposure at the individual counterparty level, as of the date presented, which is excluded from the tables below; and
•
collateral held or transferred that relates to derivative receivables or payables where an appropriate legal opinion has not been either sought or obtained with respect to the master netting agreement, which is excluded from the tables below.
June 30, 2019 December 31, 2018 March 31, 2020 December 31, 2019
(in millions)(in millions)Gross derivative receivablesAmounts netted on the Consolidated balance sheetsNet derivative receivables Gross derivative receivables Amounts netted on the Consolidated balance sheetsNet derivative receivables(in millions)Gross derivative receivablesAmounts netted on the Consolidated balance sheetsNet derivative receivables Gross derivative receivables Amounts netted on the Consolidated balance sheetsNet derivative receivables
U.S. GAAP nettable derivative receivablesU.S. GAAP nettable derivative receivables           U.S. GAAP nettable derivative receivables           
Interest rate contracts:Interest rate contracts:          Interest rate contracts:          
Over-the-counter (“OTC”)Over-the-counter (“OTC”)$317,682
$(295,900) $21,782
 $258,227
 $(239,498) $18,729
 Over-the-counter (“OTC”)$378,111
$(348,926) $29,185
 $299,205
 $(276,255) $22,950
 
OTC–clearedOTC–cleared11,535
(11,488) 47
 6,404
 (5,856) 548
 OTC–cleared15,768
(15,527) 241
 9,442
 (9,360) 82
 
Exchange-traded(a)
Exchange-traded(a)
747
(680) 67
 322
 (136) 186
 
Exchange-traded(a)
1,381
(1,149) 232
 347
 (258) 89
 
Total interest rate contractsTotal interest rate contracts329,964
(308,068) 21,896
 264,953
 (245,490) 19,463
 Total interest rate contracts395,260
(365,602) 29,658
 308,994
 (285,873) 23,121
 
Credit contracts:Credit contracts:          Credit contracts:          
OTCOTC11,358
(10,938) 420
 12,648
 (12,261) 387
 OTC16,918
(16,106) 812
 10,743
 (10,317) 426
 
OTC–clearedOTC–cleared4,142
(4,094) 48
 7,267
 (7,222) 45
 OTC–cleared2,828
(2,789) 39
 3,864
 (3,858) 6
 
Total credit contractsTotal credit contracts15,500
(15,032) 468
 19,915
 (19,483) 432
 Total credit contracts19,746
(18,895) 851
 14,607
 (14,175) 432
 
Foreign exchange contracts:Foreign exchange contracts:          Foreign exchange contracts:          
OTCOTC141,257
(133,171) 8,086
 163,862
 (153,988) 9,874
 OTC236,738
(223,245) 13,493
 136,252
 (129,324) 6,928
 
OTC–clearedOTC–cleared276
(260) 16
 235
 (226) 9
 OTC–cleared1,363
(1,287) 76
 185
 (152) 33
 
Exchange-traded(a)
Exchange-traded(a)
18
(6) 12
 32
 (21) 11
 
Exchange-traded(a)
70
(7) 63
 10
 (6) 4
 
Total foreign exchange contractsTotal foreign exchange contracts141,551
(133,437) 8,114
 164,129
 (154,235) 9,894
 Total foreign exchange contracts238,171
(224,539) 13,632
 136,447
 (129,482) 6,965
 
Equity contracts:Equity contracts:          Equity contracts:          
OTCOTC22,627
(20,219) 2,408
 26,178
 (23,879) 2,299
 OTC48,813
(44,174) 4,639
 23,106
 (20,820) 2,286
 
Exchange-traded(a)
Exchange-traded(a)
18,885
(15,506) 3,379
 18,876
 (15,460) 3,416
 
Exchange-traded(a)
43,646
(38,756) 4,890
 19,654
 (18,430) 1,224
 
Total equity contractsTotal equity contracts41,512
(35,725) 5,787
 45,054
 (39,339) 5,715
 Total equity contracts92,459
(82,930) 9,529
 42,760
 (39,250) 3,510
 
Commodity contracts:Commodity contracts:          Commodity contracts:          
OTCOTC6,917
(5,082) 1,835
 7,448
 (5,261) 2,187
 OTC16,410
(11,590) 4,820
 7,093
 (5,149) 1,944
 
OTC–clearedOTC–cleared13
(13) —
 —
 —
 —
 OTC–cleared34
(34) —
 28
 (28) —
 
Exchange-traded(a)
Exchange-traded(a)
6,007
(5,887) 120
 8,815
 (8,218) 597
 
Exchange-traded(a)
15,075
(14,667) 408
 6,154
 (5,903) 251
 
Total commodity contractsTotal commodity contracts12,937
(10,982) 1,955
 16,263
 (13,479) 2,784
 Total commodity contracts31,519
(26,291) 5,228
 13,275
 (11,080) 2,195
 
Derivative receivables with appropriate legal opinionDerivative receivables with appropriate legal opinion541,464
(503,244) 38,220
(d) 
510,314
 (472,026) 38,288
(d) 
Derivative receivables with appropriate legal opinion777,155
(718,257) 58,898
(d) 
516,083
 (479,860) 36,223
(d) 
Derivative receivables where an appropriate legal opinion has not been either sought or obtainedDerivative receivables where an appropriate legal opinion has not been either sought or obtained14,658
  14,658
 15,925
   15,925
 Derivative receivables where an appropriate legal opinion has not been either sought or obtained22,750
  22,750
 13,543
   13,543
 
Total derivative receivables recognized on the Consolidated balance sheetsTotal derivative receivables recognized on the Consolidated balance sheets$556,122
  $52,878
 $526,239
   $54,213
 Total derivative receivables recognized on the Consolidated balance sheets$799,905
  $81,648
 $529,626
   $49,766
 
Collateral not nettable on the Consolidated balance sheets(b)(c)
Collateral not nettable on the Consolidated balance sheets(b)(c)
  (12,168)     (13,046) 
Collateral not nettable on the Consolidated balance sheets(b)(c)
  (22,623)     (14,226) 
Net amountsNet amounts  $40,710
     $41,167
 Net amounts  $59,025
     $35,540
 



June 30, 2019 December 31, 2018 March 31, 2020 December 31, 2019
(in millions)(in millions)Gross derivative payablesAmounts netted on the Consolidated balance sheetsNet derivative payables Gross derivative payables Amounts netted on the Consolidated balance sheetsNet derivative payables(in millions)Gross derivative payablesAmounts netted on the Consolidated balance sheetsNet derivative payables Gross derivative payables Amounts netted on the Consolidated balance sheetsNet derivative payables
U.S. GAAP nettable derivative payablesU.S. GAAP nettable derivative payables          U.S. GAAP nettable derivative payables          
Interest rate contracts:Interest rate contracts:          Interest rate contracts:          
OTCOTC$286,199
$(279,425) $6,774
 $233,404
 $(228,369) $5,035
 OTC$343,787
$(334,453) $9,334
 $267,311
 $(260,229) $7,082
 
OTC–clearedOTC–cleared12,460
(12,044) 416
 7,163
 (6,494) 669
 OTC–cleared16,701
(16,051) 650
 10,217
 (10,138) 79
 
Exchange-traded(a)
Exchange-traded(a)
783
(697) 86
 210
 (135) 75
 
Exchange-traded(a)
1,410
(1,150) 260
 365
 (303) 62
 
Total interest rate contractsTotal interest rate contracts299,442
(292,166) 7,276
 240,777
 (234,998) 5,779
 Total interest rate contracts361,898
(351,654) 10,244
 277,893
 (270,670) 7,223
 
Credit contracts:Credit contracts:          Credit contracts:          
OTCOTC13,371
(11,347) 2,024
 13,412
 (11,895) 1,517
 OTC17,731
(16,080) 1,651
 11,570
 (10,080) 1,490
 
OTC–clearedOTC–cleared3,678
(3,628) 50
 6,716
 (6,714) 2
 OTC–cleared2,691
(2,686) 5
 3,390
 (3,389) 1
 
Total credit contractsTotal credit contracts17,049
(14,975) 2,074
 20,128
 (18,609) 1,519
 Total credit contracts20,422
(18,766) 1,656
 14,960
 (13,469) 1,491
 
Foreign exchange contracts:Foreign exchange contracts:          Foreign exchange contracts:          
OTCOTC144,667
(136,225) 8,442
 160,930
 (152,161) 8,769
 OTC249,340
(231,457) 17,883
 142,360
 (131,792) 10,568
 
OTC–clearedOTC–cleared260
(260) —
 274
 (268) 6
 OTC–cleared1,369
(1,273) 96
 186
 (152) 34
 
Exchange-traded(a)
Exchange-traded(a)
15
(6) 9
 16
 (3) 13
 
Exchange-traded(a)
42
(19) 23
 12
 (6) 6
 
Total foreign exchange contractsTotal foreign exchange contracts144,942
(136,491) 8,451
 161,220
 (152,432) 8,788
 Total foreign exchange contracts250,751
(232,749) 18,002
 142,558
 (131,950) 10,608
 
Equity contracts:Equity contracts:          Equity contracts:          
OTCOTC26,349
(21,015) 5,334
 29,437
 (25,544) 3,893
 OTC50,264
(43,401) 6,863
 27,594
 (21,778) 5,816
 
Exchange-traded(a)
Exchange-traded(a)
16,818
(15,506) 1,312
 16,285
 (15,490) 795
 
Exchange-traded(a)
39,581
(38,764) 817
 20,216
 (18,426) 1,790
 
Total equity contractsTotal equity contracts43,167
(36,521) 6,646
 45,722
 (41,034) 4,688
 Total equity contracts89,845
(82,165) 7,680
 47,810
 (40,204) 7,606
 
Commodity contracts:Commodity contracts:          Commodity contracts:          
OTCOTC8,153
(5,434) 2,719
 8,930
 (4,838) 4,092
 OTC19,040
(11,070) 7,970
 8,714
 (6,235) 2,479
 
OTC–clearedOTC–cleared13
(13) —
 —
 —
 —
 OTC–cleared39
(39) —
 30
 (30) —
 
Exchange-traded(a)
Exchange-traded(a)
6,193
(5,870) 323
 8,259
 (8,208) 51
 
Exchange-traded(a)
14,838
(14,646) 192
 6,012
 (5,862) 150
 
Total commodity contractsTotal commodity contracts14,359
(11,317) 3,042
 17,189
 (13,046) 4,143
 Total commodity contracts33,917
(25,755) 8,162
 14,756
 (12,127) 2,629
 
Derivative payables with appropriate legal opinionDerivative payables with appropriate legal opinion518,959
(491,470) 27,489
(d) 
485,036
 (460,119) 24,917
(d) 
Derivative payables with appropriate legal opinion756,833
(711,089) 45,744
(d) 
497,977
 (468,420) 29,557
(d) 
Derivative payables where an appropriate legal opinion has not been either sought or obtainedDerivative payables where an appropriate legal opinion has not been either sought or obtained13,990
  13,990
 16,852
   16,852
 Derivative payables where an appropriate legal opinion has not been either sought or obtained19,343
  19,343
 14,151
   14,151
 
Total derivative payables recognized on the Consolidated balance sheetsTotal derivative payables recognized on the Consolidated balance sheets$532,949
  $41,479
 $501,888
   $41,769
 Total derivative payables recognized on the Consolidated balance sheets$776,176
  $65,087
 $512,128
   $43,708
 
Collateral not nettable on the Consolidated balance sheets(b)(c)
Collateral not nettable on the Consolidated balance sheets(b)(c)
  (6,959)     (4,449) 
Collateral not nettable on the Consolidated balance sheets(b)(c)
  (10,960)     (7,896) 
Net amountsNet amounts  $34,520
     $37,320
 Net amounts  $54,127
     $35,812
 
(a)Exchange-traded derivative balances that relate to futures contracts are settled daily.
(b)Represents liquid security collateral as well as cash collateral held at third-party custodians related to derivative instruments where an appropriate legal opinion has been obtained. For some counterparties, the collateral amounts of financial instruments may exceed the derivative receivables and derivative payables balances. Where this is the case, the total amount reported is limited to the net derivative receivables and net derivative payables balances with that counterparty.
(c)Derivative collateral relates only to OTC and OTC-cleared derivative instruments.
(d)Net derivatives receivable included cash collateral netted of $65.0$90.9 billion and $55.2$65.9 billion at June 30, 2019,March 31, 2020, and December 31, 2018,2019, respectively. Net derivatives payable included cash collateral netted of $53.3$83.7 billion and $43.3$54.4 billion at June 30, 2019,March 31, 2020, and December 31, 2018,2019, respectively. Derivative cash collateral relates to OTC and OTC-cleared derivative instruments.


Liquidity risk and credit-related contingent features
ForRefer to Note 5 of JPMorgan Chase’s 2019 Form 10-K for a more detailed discussion of liquidity risk and credit-related contingent features related to the Firm’s derivative contracts, refer to Note 5 of JPMorgan Chase’s 2018 Form 10-K.contracts.
The following table shows the aggregate fair value of net derivative payables related to OTC and OTC-cleared derivatives that contain contingent collateral or termination features that may be triggered upon a ratings downgrade, and the associated collateral the Firm has posted in the normal course of business, at June 30, 2019,March 31, 2020, and December 31, 2018.2019.
OTC and OTC-cleared derivative payables containing downgrade triggers
(in millions)June 30, 2019  December 31, 2018 March 31, 2020  December 31, 2019 
Aggregate fair value of net derivative payables $15,294
 $9,396
 $29,521
 $14,819
Collateral posted 14,023
 8,907
 28,184
 13,329

The following table shows the impact of a single-notch and two-notch downgrade of the long-term issuer ratings of JPMorgan Chase & Co. and its subsidiaries, predominantly JPMorgan Chase Bank, N.A., at June 30, 2019,March 31, 2020, and December 31, 2018, 2019, related to OTC and OTC-cleared derivative contracts with contingent collateral or termination features that may be triggered upon a ratings downgrade. Derivatives contracts generally require additional collateral to be posted or terminations to be triggered when the predefined threshold rating is breached. A downgrade by a single rating agency that does not result in a rating lower than a preexisting corresponding rating provided by another major rating agency will generally not result in additional collateral (except in certain instances in which additional initial margin may be required upon a ratings downgrade), nor in termination payments requirements. The liquidity impact in the table is calculated based upon a downgrade below the lowest current rating of the rating agencies referred to in the derivative contract.
Liquidity impact of downgrade triggers on OTC and OTC-cleared derivativesLiquidity impact of downgrade triggers on OTC and OTC-cleared derivatives   Liquidity impact of downgrade triggers on OTC and OTC-cleared derivatives   
June 30, 2019 December 31, 2018March 31, 2020 December 31, 2019
(in millions)Single-notch downgradeTwo-notch downgrade Single-notch downgradeTwo-notch downgradeSingle-notch downgradeTwo-notch downgrade Single-notch downgradeTwo-notch downgrade
Amount of additional collateral to be posted upon downgrade(a)
$180
$1,228
 $76
$947
$180
$1,286
 $189
$1,467
Amount required to settle contracts with termination triggers upon downgrade(b)
302
1,613
 172
764
191
2,749
 104
1,398
(a)Includes the additional collateral to be posted for initial margin.
(b)Amounts represent fair values of derivative payables, and do not reflect collateral posted.
Derivatives executed in contemplation of a sale of the underlying financial asset
In certain instances the Firm enters into transactions in which it transfers financial assets but maintains the economic exposure to the transferred assets by entering into a derivative with the same counterparty in contemplation of the initial transfer. The Firm generally accounts for such transfers as collateralized financing transactions as described in Note 10,11, but in limited circumstances they may qualify to be accounted for as a sale and a derivative under U.S. GAAP. The amount of such transfers accounted for as a sale where the associated derivative was outstanding was not material at both June 30, 2019March 31, 2020 and December 31, 2018.2019.

Impact of derivatives on the Consolidated statements of income
The following tables provide information related to gains and losses recorded on derivatives based on their hedge accounting designation or purpose.
Fair value hedge gains and losses
The following tables present derivative instruments, by contract type, used in fair value hedge accounting relationships, as well as pre-tax gains/(losses) recorded on such derivatives and the related hedged items for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, respectively. The Firm includes gains/(losses) on the hedging derivative in the same line item in the Consolidated statements of income as the related hedged item.
Gains/(losses) recorded in income 
Income statement impact of
excluded components(e)
 OCI impactGains/(losses) recorded in income 
Income statement impact of
excluded components(e)
 OCI impact
Three months ended June 30, 2019
(in millions)		DerivativesHedged itemsIncome statement impact Amortization approachChanges in fair value 
Derivatives - Gains/(losses) recorded in OCI(f)
Three months ended March 31, 2020
(in millions)		DerivativesHedged itemsIncome statement impact Amortization approachChanges in fair value 
Derivatives - Gains/(losses) recorded in OCI(f)
Contract type          
Interest rate(a)(b)
$1,762
$(1,556)$206
 $—
$196
 $—
$4,087
$(3,788)$299
 $—
$214
 $—
Foreign exchange(c)
426
(301)125
 (229)125
 112
576
(488)88
 (179)88
 115
Commodity(d)
(154)175
21
 —
17
 —
1,528
(1,482)46
 —
49
 —
Total$2,034
$(1,682)$352
 $(229)$338
 $112
$6,191
$(5,758)$433
 $(179)$351
 $115
 Gains/(losses) recorded in income 
Income statement impact of
excluded components(e)

 OCI impact
Three months ended June 30, 2018
(in millions)		DerivativesHedged itemsIncome statement impact Amortization approachChanges in fair value 
Derivatives - Gains/(losses) recorded in OCI(f)
Contract type        
Interest rate(a)(b)
$(400)$553
$153
 $—
$152
 $—
Foreign exchange(c)
376
(254)122
 (145)122
 (89)
Commodity(d)
11
(18)(7) —
16
 —
Total$(13)$281
$268
 $(145)$290
 $(89)
 Gains/(losses) recorded in income 
Income statement impact of
excluded components(e)
 OCI impact
Six months ended June 30, 2019
(in millions)		DerivativesHedged itemsIncome statement impact Amortization approachChanges in fair value 
Derivatives - Gains/(losses) recorded in OCI(f)
Contract type        
Interest rate(a)(b)
$3,226
$(2,849)$377
 $—
$368
 $—
Foreign exchange(c)
136
108
244
 (451)244
 115
Commodity(d)
(442)469
27
 —
18
 —
Total$2,920
$(2,272)$648
 $(451)$630
 $115
Gains/(losses) recorded in income 
Income statement impact of
excluded components(e)
 OCI impactGains/(losses) recorded in income 
Income statement impact of
excluded components(e)

 OCI impact
Six months ended June 30, 2018
(in millions)		DerivativesHedged itemsIncome statement impact Amortization approachChanges in fair value 
Derivatives - Gains/(losses) recorded in OCI(f)
Three months ended March 31, 2019
(in millions)		DerivativesHedged itemsIncome statement impact Amortization approachChanges in fair value 
Derivatives - Gains/(losses) recorded in OCI(f)
Contract type          
Interest rate(a)(b)
$(1,877)$2,182
$305
 $—
$299
 $—
$1,464
$(1,293)$171
 $—
$172
 $—
Foreign exchange(c)
520
(287)233
 (267)233
 (141)(290)409
119
 (222)119
 3
Commodity(d)
195
(165)30
 —
34
 —
(288)294
6
 —
1
 —
Total$(1,162)$1,730
$568
 $(267)$566
 $(141)$886
$(590)$296
 $(222)$292
 $3
(a)Primarily consists of hedges of the benchmark (e.g., London Interbank Offered Rate (“LIBOR”)) interest rate risk of fixed-rate long-term debt and AFS securities. Gains and losses were recorded in net interest income.
(b)Excludes the amortization expense associated with the inception hedge accounting adjustment applied to the hedged item. This expense is recorded in net interest income and substantially offsets the income statement impact of the excluded components. Also excludes the accrual of interest on interest rate swaps and the related hedged items.
(c)Primarily consists of hedges of the foreign currency risk of long-term debt and AFS securities for changes in spot foreign currency rates. Gains and losses related to the derivatives and the hedged items due to changes in foreign currency rates and the income statement impact of excluded components were recorded primarily in principal transactions revenue and net interest income.
(d)Consists of overall fair value hedges of physical commodities inventories that are generally carried at the lower of cost or net realizable value (net realizable value approximates fair value). Gains and losses were recorded in principal transactions revenue.
(e)The assessment of hedge effectiveness excludes certain components of the changes in fair values of the derivatives and hedged items such as forward points on foreign exchange forward contracts, time values and cross-currency basis spreads. TheExcluded components may impact earnings either through amortization of the initial amount of the excluded components may be amortized into income over the life of the derivative, or changes inthrough fair value may bechanges recognized in the current period earnings.period.
(f)Represents the change in value of amounts excluded from the assessment of effectiveness under the amortization approach, predominantly cross-currency basis spreads. The amount excluded at inception of the hedge is recognized in earnings over the life of the derivative.


As of June 30, 2019March 31, 2020 and December 31, 2018, 2019, the following amounts were recorded on the Consolidated balance sheets related to certain cumulative fair value hedge basis adjustments that are expected to reverse through the income statement in future periods as an adjustment to yield.
 
Carrying amount of the hedged items(a)(b)
 
Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items:

 
Carrying amount of the hedged items(a)(b)
 
Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items:

June 30, 2019
(in millions)		 Active hedging relationships
Discontinued hedging relationships(d)
Total
March 31, 2020
(in millions)		 
Carrying amount of the hedged items(a)(b)
 Active hedging relationships
Discontinued hedging relationships(d)(e)
Total
Assets      
Investment securities - AFS

 $91,668
(c) 
$2,084
$292
$2,376
 $125,652
(c) 
$8,214
$246
$8,460
Liabilities        
Long-term debt $151,184
 $6,534
$55
$6,589
 $172,446
 $17,138
$747
$17,885
Beneficial interests issued by consolidated VIEs 5,208
 —
(15)(15) 2,368
 —
(6)(6)
        
 
Carrying amount of the hedged items(a)(b)
 Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items: 
Carrying amount of the hedged items(a)(b)
 Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items:
December 31, 2018
(in millions)		 Active hedging relationships
Discontinued hedging relationships(d)
Total
December 31, 2019
(in millions)		 
Carrying amount of the hedged items(a)(b)
 Active hedging relationships
Discontinued hedging relationships(d)(e)
Total
Assets      
Investment securities - AFS
 $55,313
(c) 
$(1,105)$381
$(724) $125,860
(c) 
$2,110
$278
$2,388
Liabilities        
Long-term debt $139,915
 $141
$8
$149
 $157,545
 $6,719
$161
$6,880
Beneficial interests issued by consolidated VIEs 6,987
 —
(33)(33) 2,365
 —
(8)(8)
(a)Excludes physical commodities with a carrying value of $6.6$6.7 billion and $6.8$6.5 billion at June 30, 2019March 31, 2020 and December 31, 2018,2019, respectively, to which the Firm applies fair value hedge accounting. As a result of the application of hedge accounting, these inventories are carried at fair value, thus recognizing unrealized gains and losses in current periods. GivenSince the Firm exits these positions at fair value, there is no incremental impact to net income in future periods.
(b)Excludes hedged items where only foreign currency risk is the designated hedged risk, as basis adjustments related to foreign currency hedges will not reverse through the income statement in future periods. At June 30, 2019March 31, 2020 and December 31, 2018,2019, the carrying amount excluded for available-for-saleAFS securities is $14.4$16.7 billion and $14.6$14.9 billion, respectively, and for long-term debt is $6.0$1.9 billion and $7.3$2.8 billion, respectively.
(c)Carrying amount represents the amortized cost.
(d)Represents hedged items no longer designated in qualifying fair value hedging relationships for which an associated basis adjustment exists at the balance sheet date.
(e)Positive amounts related to assets represent cumulative fair value hedge basis adjustments that will reduce net interest income in future periods. Positive (negative) amounts related to liabilities represent cumulative fair value hedge basis adjustments that will increase (reduce) net interest income in future periods.




Cash flow hedge gains and losses
The following tables present derivative instruments, by contract type, used in cash flow hedge accounting relationships, and the pre-tax gains/(losses) recorded on such derivatives, for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, respectively. The Firm includes the gain/(loss) on the hedging derivative in the same line item in the Consolidated statements of income as the change in cash flows on the related hedged item.
 Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended June 30, 2019
(in millions)		Amounts reclassified from AOCI to incomeAmounts recorded in OCITotal change
in OCI
for period
Contract type   
Interest rate(a)
$2
$155
$153
Foreign exchange(b)
(28)(54)(26)
Total$(26)$101
$127
    
 Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended June 30, 2018
(in millions)		Amounts reclassified from AOCI to incomeAmounts recorded in OCITotal change
in OCI
for period
Contract type   
Interest rate(a)
$13
$(33)$(46)
Foreign exchange(b)
6
(166)(172)
Total$19
$(199)$(218)
 Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Six months ended June 30, 2019
(in millions)		Amounts reclassified from AOCI to incomeAmounts recorded in OCI
Total change
in OCI
for period
Contract type   
Interest rate(a)
$4
$211
$207
Foreign exchange(b)
(69)31
100
Total$(65)$242
$307
Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Six months ended June 30, 2018
(in millions)		Amounts reclassified from AOCI to incomeAmounts recorded in OCI
Total change
in OCI
for period
Three months ended March 31, 2020
(in millions)		Amounts reclassified from AOCI to incomeAmounts recorded in OCITotal change
in OCI
for period
Contract type  
Interest rate(a)
$26
$(111)$(137)$(9)$3,461
$3,470
Foreign exchange(b)
45
(132)(177)17
(210)(227)
Total$71
$(243)$(314)$8
$3,251
$3,243
 
Derivatives gains/(losses) recorded in income and other comprehensive income/(loss)
Three months ended March 31, 2019
(in millions)		Amounts reclassified from AOCI to incomeAmounts recorded in OCITotal change
in OCI
for period
Contract type 
Interest rate(a)
$2
$56
$54
Foreign exchange(b)
(41)85
126
Total$(39)$141
$180
(a)Primarily consists of hedges of LIBOR-indexed floating-rate assets and floating-rate liabilities. Gains and losses were recorded in net interest income.
(b)Primarily consists of hedges of the foreign currency risk of non-U.S. dollar-denominated revenue and expense. The income statement classification of gains and losses follows the hedged item – primarily noninterest revenue and compensation expense.
The Firm did not experience any forecasted transactions that failed to occur for the three and six months ended June 30, 2019March 31, 2020 and 2018.2019.
Over the next 12 months, the Firm expects that approximately $(53) $57 million (after-tax) of net lossesgains recorded in AOCI at June 30, 2019,March 31, 2020, related to cash flow hedges will be recognized in income. For cash flow hedges that have been terminated, the maximum length of time over which the derivative results recorded in AOCI will be recognized in earnings is approximately sixten years, corresponding to the timing of the originally hedged forecasted cash flows.
For open cash flow hedges, the maximum length of time over which forecasted transactions are hedged is approximately seven years. The Firm’s longer-dated forecasted transactions relate to core lending and borrowing activities.


Net investment hedge gains and losses
The following table presents hedging instruments, by contract type, that were used in net investment hedge accounting relationships, and the pre-tax gains/(losses) recorded on such instruments for the three and six months ended June 30, 2019March 31, 2020 and 2018.2019.
Gains/(losses) recorded in income and other comprehensive income/(loss)Gains/(losses) recorded in income and other comprehensive income/(loss)
2019 20182020 2019
Three months ended June 30,
(in millions)
Amounts recorded in
income(a)(b)
Amounts recorded in OCI 
Amounts recorded in
income(a)(b)(c)
Amounts recorded in OCI
Three months ended March 31,
(in millions)
Amounts recorded in
income(a)(b)
Amounts recorded in OCI 
Amounts recorded in
income(a)(b)
Amounts recorded in OCI
Foreign exchange derivatives $27
 $(123) $—
 $1,204
 $10
 $1,589
 $21
 $(38)
        
Gains/(losses) recorded in income and other comprehensive income/(loss)
2019 2018
Six months ended June 30,
(in millions)
Amounts recorded in
income(a)(b)
Amounts recorded in OCI 
Amounts recorded in
income(a)(b)(c)
Amounts recorded in OCI
Foreign exchange derivatives $48
 $(161) $(10) $815
(a)
Certain components of hedging derivatives are permitted to be excluded from the assessment of hedge effectiveness, such as forward points on foreign exchange forward contracts. The Firm elects to record changes in fair value of these amounts directly in other income.
(b)Excludes amounts reclassified from AOCI to income on the sale or liquidation of hedged entities. For additional information, refer to Note 19.
(c)The prior period amount has been revised to conform withThere were no sales or liquidations of legal entities that resulted in reclassifications in the current period presentation.periods presented.

Gains and losses on derivatives used for specified risk management purposes
The following table presents pre-tax gains/(losses) recorded on a limited number of derivatives, not designated in hedge accounting relationships, that are used to manage risks associated with certain specified assets and liabilities, including certain risks arising from the mortgage pipeline,commitments, warehouse loans, MSRs, wholesale lending exposures, and foreign currency-denominated assets and liabilities.
Derivatives gains/(losses)
recorded in income
Derivatives gains/(losses)
recorded in income
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)20192018 2019201820202019
Contract type    
Interest rate(a)
$657
$(25) $949
$(235)$1,292
$292
Credit(b)
(2)(3) (12)(10)61
(10)
Foreign exchange(d)(c)
(75)133
 (25)103
106
50
Total (d)
$580
$105
 $912
$(142)$1,459
$332

(a)Primarily represents interest rate derivatives used to hedge the interest rate risk inherent in the mortgage pipeline,commitments, warehouse loans and MSRs, as well as written commitments to originate warehouse loans. Gains and losses were recorded predominantly in mortgage fees and related income.
(b)Relates to credit derivatives used to mitigate credit risk associated with lending exposures in the Firm’s wholesale businesses. These derivatives do not include credit derivatives used to mitigate counterparty credit risk arising from derivative receivables, which is included in gains and losses on derivatives related to market-making activities and other derivatives. Gains and losses were recorded in principal transactions revenue.
(c)Primarily relates to derivatives used to mitigate foreign exchange risk of specified foreign currency-denominated assets and liabilities. Gains and losses were recorded in principal transactions revenue.
(d)The prior period amounts have been revised to conform with the current period presentation.
 
Gains and losses on derivatives related to market-making activities and other derivatives
The Firm makes markets in derivatives in order to meet the needs of customers and uses derivatives to manage certain risks associated with net open risk positions from its market-making activities, including the counterparty credit risk arising from derivative receivables. All derivatives not included in the hedge accounting or specified risk management categories above are included in this category. Gains and losses on these derivatives are primarily recorded in principal transactions revenue. Refer to Note 5 6 for information on principal transactions revenue.

Credit derivatives
ForRefer to Note 5 of JPMorgan Chase’s 2019 Form 10-K for a more detailed discussion of credit derivatives. The following tables present a summary of the notional amounts of credit derivatives refer to Note 5and credit-related notes the Firm sold and purchased as of JPMorgan Chase’s 2018 Form 10-K.March 31, 2020 and December 31, 2019. The Firm does not use notional amounts of credit derivatives as the primary measure of risk management for such derivatives, because the notional amount does not take into account the probability of the occurrence of a credit event, the recovery value of the reference obligation, or related cash instruments and economic hedges, each of which reduces, in the Firm’s view, the risks associated with such derivatives.
Total credit derivatives and credit-related notes
Maximum payout/Notional amountMaximum payout/Notional amount
June 30, 2019 (in millions)Protection sold
Protection
purchased with
identical underlyings(b)
Net protection (sold)/purchased(c)
 
Other protection purchased(d)
March 31, 2020 (in millions)Protection sold
Protection
purchased with
identical underlyings(b)
Net protection (sold)/purchased(c)
 
Other protection purchased(d)
Credit derivatives          
Credit default swaps$(579,081) $590,894
$11,813
 $4,323
$(705,723) $721,125
$15,402
 $4,454
Other credit derivatives(a)
(50,031) 60,725
10,694
 9,111
(59,153) 61,245
2,092
 7,800
Total credit derivatives(629,112) 651,619
22,507
 13,434
(764,876) 782,370
17,494
 12,254
Credit-related notes—
 —
—
 8,812
—
 —
—
 9,002
Total$(629,112) $651,619
$22,507
 $22,246
$(764,876) $782,370
$17,494
 $21,256
          
Maximum payout/Notional amountMaximum payout/Notional amount
December 31, 2018 (in millions)Protection sold
Protection
purchased with
identical underlyings(b)
Net protection (sold)/purchased(c)
 
Other protection purchased(d)
December 31, 2019 (in millions)Protection sold
Protection
purchased with
identical underlyings(b)
Net protection (sold)/purchased(c)
 
Other protection purchased(d)
Credit derivatives          
Credit default swaps$(697,220) $707,282
$10,062
 $4,053
$(562,338) $571,892
$9,554
 $3,936
Other credit derivatives(a)
(41,244) 42,484
1,240
 8,488
(44,929) 52,007
7,078
 7,364
Total credit derivatives(738,464) 749,766
11,302
 12,541
(607,267) 623,899
16,632
 11,300
Credit-related notes—
 —
—
 8,425
—
 —
—
 9,606
Total$(738,464) $749,766
$11,302
 $20,966
$(607,267) $623,899
$16,632
 $20,906
(a)Other credit derivatives predominantly consist of credit swap options and total return swaps.
(b)Represents the total notional amount of protection purchased where the underlying reference instrument is identical to the reference instrument on protection sold; the notional amount of protection purchased for each individual identical underlying reference instrument may be greater or lower than the notional amount of protection sold.
(c)Does not take into account the fair value of the reference obligation at the time of settlement, which would generally reduce the amount the seller of protection pays to the buyer of protection in determining settlement value.
(d)Represents protection purchased by the Firm on referenced instruments (single-name, portfolio or index) where the Firm has not sold any protection on the identical reference instrument.
The following tables summarize the notional amounts by the ratings, maturity profile, and total fair value, of credit derivatives and credit-related notes as of June 30, 2019, March 31, 2020, and December 31, 2018, 2019, where JPMorgan Chase is the seller of protection. The maturity profile is based on the remaining contractual maturity of the credit derivative contracts. The ratings profile is based on the rating of the reference entity on which the credit derivative contract is based. The ratings and maturity profile of credit derivatives and credit-related notes where JPMorgan Chase is the purchaser of protection are comparable to the profile reflected below.
Protection sold — credit derivatives and credit-related notes ratings(a)/maturity profile
Protection sold — credit derivatives and credit-related notes ratings(a)/maturity profile
   
Protection sold — credit derivatives and credit-related notes ratings(a)/maturity profile
   
June 30, 2019
(in millions)		<1 year 1–5 years >5 years 
Total
notional amount
 
Fair value of receivables(b)
 
Fair value of payables(b)
 Net fair value
March 31, 2020
(in millions)		<1 year 1–5 years >5 years 
Total
notional amount
 
Fair value of receivables(b)
 
Fair value of payables(b)
 Net fair value
Risk rating of reference entity                          
Investment-grade$(103,901) $(332,277) $(39,334) $(475,512) $5,678
 $(1,699) $3,979
$(119,850) $(377,563) $(84,443) $(581,856) $2,735
 $(4,961) $(2,226)
Noninvestment-grade(41,328) (99,938) (12,334) (153,600) 4,007
 (3,612) 395
(40,423) (115,600) (26,997) (183,020) 1,837
 (9,104) (7,267)
Total$(145,229) $(432,215) $(51,668) $(629,112) $9,685
 $(5,311) $4,374
$(160,273) $(493,163) $(111,440) $(764,876) $4,572
 $(14,065) $(9,493)
December 31, 2018
(in millions)		<1 year 1–5 years >5 years 
Total
notional amount
 
Fair value of receivables(b)
 
Fair value of payables(b)
 Net fair value
December 31, 2019
(in millions)		<1 year 1–5 years >5 years 
Total
notional amount
 
Fair value of receivables(b)
 
Fair value of payables(b)
 Net fair value
Risk rating of reference entity                          
Investment-grade$(115,443) $(402,325) $(43,611) $(561,379) $5,720
 $(2,791) $2,929
$(114,460) $(311,407) $(42,129) $(467,996) $6,153
 $(911) $5,242
Noninvestment-grade(45,897) (119,348) (11,840) (177,085) 4,719
 (5,660) (941)(41,661) (87,769) (9,841) (139,271) 4,281
 (2,882) 1,399
Total$(161,340) $(521,673) $(55,451) $(738,464) $10,439
 $(8,451) $1,988
$(156,121) $(399,176) $(51,970) $(607,267) $10,434
 $(3,793) $6,641

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

Note 56 – Noninterest revenue and noninterest expense
Noninterest revenue
ForRefer to Note 6 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the components of and accounting policies for the Firm’s noninterest revenue, refer to Note 6 of JPMorgan Chase’s 2018 Form 10-K.revenue.
Investment banking fees
The following table presents the components of investment banking fees.

Three months ended June 30,
Six months ended June 30,Three months ended March 31,
(in millions)2019
 2018

2019
20182020
 2019
Underwriting









Equity$515

$573

$776

$925
$327

$261
Debt820

964

1,765

1,760
1,044

945
Total underwriting1,335

1,537

2,541

2,685
1,371

1,206
Advisory516

631

1,150

1,219
495

634
Total investment banking fees$1,851

$2,168

$3,691

$3,904
$1,866

$1,840

Principal transactions
The following table presents all realized and unrealized gains and losses recorded in principal transactions revenue. This table excludes interest income and interest expense on trading assets and liabilities, which are an integral part of the overall performance of the Firm’s client-driven market-making activities in CIB and cash deployment activities in Treasury and CIO. Refer to Note 67 for further information on interest income and interest expense.
Trading revenue is presented primarily by instrument type. The Firm’s client-driven market-making businesses generally utilize a variety of instrument types in connection with their market-making and related risk-management activities; accordingly, the trading revenue presented in the table below is not representative of the total revenue of any individual line of business.LOB.
Three months ended June 30, Six months ended June 30,Three months ended March 31, 
(in millions)2019
 2018
 2019 20182020
 2019
 
Trading revenue by instrument type           
Interest rate(a)$461
 $672
 $1,066
 $1,446
$452
 $799
(d) 
Credit(b)488
 648
 1,047
 1,028
(702)
(c) 
619
(d) 
Foreign exchange729
 745
 1,617
 1,769
1,467
 888
 
Equity1,912
 1,386
 3,527
 3,013
1,348
 1,361
(d) 
Commodity227
 246
 610
 523
437
 383
 
Total trading revenue3,817
 3,697
 7,867
 7,779
3,002
 4,050
 
Private equity gains/(losses)(103) 85
 (77) (45)(65) 26
 
Principal transactions$3,714
 $3,782
 $7,790
 $7,734
$2,937
 $4,076
 

(a)Includes the impact of changes in funding valuation adjustments on derivatives.
(b)Includes the impact of changes in credit valuation adjustments on derivatives, net of the associated hedging activities.
(c)Includes markdowns on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio.
(d)Prior-period amounts were revised to conform with the current presentation.

 
Lending- and deposit-related fees
The following table presents the components of lending- and deposit-related fees.
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)2019
 2018
 2019
 20182020
 2019
Lending-related fees$285
 $280
 $575
 $554
$291
 $290
Deposit-related fees(a)1,250
 1,215
 2,442
 2,418
1,415
 1,269
Total lending- and deposit-related fees$1,535
 $1,495
 $3,017
 $2,972
$1,706
 $1,559

(a)In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts were revised to conform with the current presentation.
Asset management, administration and commissions
The following table presents the components of Firmwide asset management, administration and commissions.
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)2019
 2018
 2019 20182020
 2019
Asset management fees          
Investment management fees(a)
$2,698
 $2,671
 $5,275
 $5,365
$2,785
 $2,577
All other asset management fees(b)
78
 66
 147
 132
93
 69
Total asset management fees2,776
 2,737
 5,422
 5,497
2,878
 2,646
          
Total administration fees(c)
544
 557
 1,079
 1,118
554
 535
          
Commissions and other fees          
Brokerage commissions(d)641
 631
 1,227
 1,283
864
 586
All other commissions and fees(e)392
 379
 739
 715
244
 270
Total commissions and fees1,033
 1,010
 1,966
 1,998
1,108
 856
Total asset management, administration and commissions$4,353
 $4,304
 $8,467
 $8,613
$4,540
 $4,037
(a)Represents fees earned from managing assets on behalf of the Firm’s clients, including investors in Firm-sponsored funds and owners of separately managed investment accounts.
(b)Represents fees for services that are ancillary to investment management services, such as commissions earned on the sales or distribution of mutual funds to clients.
(c)Predominantly includes fees for custody, securities lending, funds services and securities clearance.
(d)Represents commissions earned when the Firm acts as a broker, by facilitating its clients’ purchases and sales of securities and other financial instruments.
(e)In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts were revised to conform with the current presentation.
Card income
The following table presents the components of card income:
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)2019
 2018
 2019
 2018
2020
 2019
Interchange and merchant processing income$5,184
 $4,723
 $9,905
 $9,082
$4,782
 $4,721
Rewards costs and partner payments(a)
(3,610) (3,527) (6,846) (6,411)(3,523) (3,236)
Other card income(b)(a)
(208) (176) (419) (376)(205) (211)
Total card income$1,366
 $1,020
 $2,640
 $2,295
$1,054
 $1,274
(a)The three and six months ended June 30, 2018, included an adjustment to the credit card rewards liability of approximately $330 million.
(b)Predominantly represents annual fees and newthe amortization of account origination costs which are deferred and recognized on a straight-line basis over a 12-month period.annual fees.


ForRefer to Note 15 Goodwill and MSRs for information on mortgage fees and related income.
Refer to Note 17 for information on operating lease income included within other income, refer to Note 16.income.
Noninterest expense
Other expense
Other expense on the Firm’s Consolidated statements of income included the following:
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)2019
 2018
 2019
 2018
2020
 2019
Legal expense/(benefit)$69
 $—
 $(12) $70
$197
 $(81)
FDIC-related expense121
 368
 264
 751
99
 143


 
Note 67 – Interest income and Interest expense
ForRefer to Note 7 of JPMorgan Chase’s 2019 Form 10-K for a description of JPMorgan Chase’s accounting policies regarding interest income and interest expense, refer to Note 7 of JPMorgan Chase’s 2018 Form 10-K.expense.
The following table presents the components of interest income and interest expense.

Three months ended
June 30,		 Six months ended
June 30,		Three months ended
March 31,
(in millions)2019

2018
 2019
 2018
2020

2019
Interest income          
Loans(a)
$12,726

$11,634
 $25,606
 $22,708
$11,932

$12,880
Taxable securities1,875

1,383
 3,580
 2,696
2,233

1,705
Non-taxable securities(b)
340

395
 703
 805
300

363
Total investment securities(a)
2,215

1,778
 4,283
 3,501
2,533

2,068
Trading assets - debt instruments2,915

2,111
 5,684
 4,214
2,461

2,769
Federal funds sold and securities purchased under resale agreements1,676

807
 3,323
 1,538
1,095

1,647
Securities borrowed(c)
467

190
 864
 301
152

397
Deposits with banks1,132

1,543
 2,302
 2,864
569

1,170
All other interest-earning assets(d)(c)
472

503
 930
 934
419

458
Total interest income(c)
21,603

18,566
 42,992
 36,060
19,161

21,389
Interest expense          
Interest-bearing deposits2,413
 1,340
 4,601
 2,400
1,575
 2,188
Federal funds purchased and securities loaned or sold under repurchase agreements1,226
 759
 2,336
 1,337
787
 1,110
Short-term borrowings(e)(d)
363
 260
 790
 469
151
 427
Trading liabilities – debt and all other interest-bearing liabilities(f)(e)
762
 598
 1,481
 1,057
372
 719
Long-term debt2,266
 2,003
 4,608
 3,756
1,747
 2,342
Beneficial interest issued by consolidated VIEs175
 121
 325
 244
90
 150
Total interest expense(c)
7,205
 5,081
 14,141
 9,263
4,722
 6,936
Net interest income14,398
 13,485
 28,851
 26,797
14,439
 14,453
Provision for credit losses1,149
 1,210
 2,644
 2,375
8,285
 1,495
Net interest income after provision for credit losses$13,249
 $12,275
 $26,207
 $24,422
$6,154
 $12,958
(a)Includes the amortization/accretion of unearned income (e.g., purchase premiums/discounts, net deferred fees/costs, etc.).
(b)Represents securities which are tax-exempt for U.S. federal income tax purposes.
(c)In the second quarter of 2019, the Firm implemented certain presentation changes that impactedIncludes interest income and interest expense, but had no effectearned on net interest income. These changes were made to align the accounting treatment between the balance sheet and the related interest income or expense, primarily by offsetting interest income and expense for certain prime brokerage-related held-for-investment customer receivables and payables that are currently presented as a single margin account on the balance sheet. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation.
(d)Includes prime brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets which are classified in other assets on the Consolidated balance sheets.
(e)(d)Includes commercial paper.
(f)(e)Other interest-bearing liabilities includeincludes interest expense on prime brokerage-related customer payables.

Note 78 – Pension and other postretirement employee benefit plans
For a discussion of JPMorgan Chase’s pension and OPEB plans, referRefer to Note 8 of JPMorgan Chase’s 20182019 Form 10-K.10-K for a discussion of JPMorgan Chase’s pension and OPEB plans.
The following table presents the components of net periodic benefit costs reported in the Consolidated statements of income for the Firm’s U.S. and non-U.S. defined benefit pension, defined contribution and OPEB plans.
(in millions)Three months ended June 30, Six months ended June 30,Three months ended March 31,
20192018 20192018 20192018 2019201820202019 20202019
Pension plans OPEB plans Pension plans OPEB plansPension plans OPEB plans
Components of net periodic benefit cost          
Benefits earned during the period$89
$89
 $—
$—
 $178
$179
 $—
$—
$8
$89
 $—
$—
Interest cost on benefit obligations149
139
 6
6
 299
278
 12
12
119
150
 5
6
Expected return on plan assets(229)(247) (28)(26) (459)(495) (56)(52)(191)(230) (27)(28)
Amortization:        
   
Net (gain)/loss41
26
 —
—
 83
52
 —
—
4
42
 —
—
Prior service (credit)/cost1
(6) —
—
 2
(12) —
—
1
1
 —
—
Net periodic defined benefit cost51
1
 (22)(20) 103
2
 (44)(40)(59)52
 (22)(22)
Other defined benefit pension plans(a)
7
9
 NA
NA
 13
15
 NA
NA
9
6
 NA
NA
Total defined benefit plans58
10
 (22)(20) 116
17
 (44)(40)(50)58
 (22)(22)
Total defined contribution plans243
222
 NA
NA
 463
432
 NA
NA
299
220
 NA
NA
Total pension and OPEB cost included in noninterest expense$301
$232
 $(22)$(20) $579
$449
 $(44)$(40)$249
$278
 $(22)$(22)
(a)Includes various defined benefit pension plans which are individually immaterial.
The following table presents the fair values of plan assets for the U.S. defined benefit pension and OPEB plans and for the material non-U.S. defined benefit pension plans.
(in billions)June 30,
2019
 December 31, 2018
March 31,
2020
 December 31, 2019
Fair value of plan assets      
Defined benefit pension plans$19.7
 $18.1
$19.3
 $20.4
OPEB plans2.9
 2.6
2.7
 3.0

There are no0 expected contributions to the U.S. defined benefit pension plan for 2019.2020.

Note 89 – Employee share-based incentives
ForRefer to Note 9 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the accounting policies and other information relating to employee share-based incentives, refer to Note 9 of JPMorgan Chase’s 2018 Form 10-K.incentives.
The Firm recognized the following noncash compensation expense related to its various employee share-based incentive plans in its Consolidated statements of income.
Three months ended
June 30,		 Six months ended
June 30,		Three months ended
March 31,
(in millions)2019
 2018
 2019
 2018
2020
 2019
Cost of prior grants of RSUs, performance share units (“PSUs”) and stock appreciation rights (“SARs”) that are amortized over their applicable vesting periods$278
 $276
 $617
 $674
Cost of prior grants of RSUs, performance share units (“PSUs”), stock appreciation rights (“SARs”) and employee stock options that are amortized over their applicable vesting periods$334
 $339
Accrual of estimated costs of share-based awards to be granted in future periods including those to full-career eligible employees292
 304
 606
 612
310
 314
Total noncash compensation expense related to employee share-based incentive plans$570
 $580
 $1,223
 $1,286
$644
 $653

In the first quarter of 2019, 2020, in connection with its annual incentive grant for the 20182019 performance year, the Firm granted 2115 million RSUs and 630496 thousand PSUs with weighted-average grant date fair values of $98.98$135.64 per RSU and $98.96$135.30 per PSU.

Note 910 – Investment securities
Investment securities consist of debt securities that are classified as AFS or HTM. Debt securities classified as trading assets are discussed in Note 2. Predominantly all of the Firm’s AFS and HTM securities are held by Treasury and CIO in connection with its asset-liability management activities. At June 30,Refer to Note 10 of JPMorgan Chase’s 2019 the investment securities portfolio consisted of debt securities with an average credit rating of AA+ (based upon external ratings where available,
and where not available, based primarily upon internal ratings which correspond to ratings as defined by S&P and Moody’s). ForForm 10-K for additional information regarding the investment securities portfolio, referportfolio.
Effective January 1, 2020, the Firm adopted the CECL accounting guidance, which also amended the AFS
securities impairment guidance. Refer to Note 101 for further information.
During the first quarter of JPMorgan Chase’s 2018 Form 10-K.

2020, the Firm transferred $26.1 billion of U.S. GSE and government agency MBS from AFS to HTM for capital management purposes. These securities were transferred at fair value in a non-cash transaction. AOCI included pretax unrealized gains of $1.0 billion on the securities at the date of transfer.
The amortized costs and estimated fair values of the investment securities portfolio were as follows for the dates indicated.
June 30, 2019 December 31, 2018March 31, 2020 December 31, 2019
(in millions)Amortized costGross unrealized gainsGross unrealized lossesFair value Amortized costGross unrealized gainsGross unrealized lossesFair value
Amortized cost(e)
Gross unrealized gainsGross unrealized lossesFair value 
Amortized cost(e)
Gross unrealized gainsGross unrealized lossesFair value
Available-for-sale securities              
Mortgage-backed securities:              
U.S. government agencies(a)
$94,723
$1,979
$86
 $96,616
 $69,026
$594
$974
 $68,646
U.S. GSEs and government agencies(a)
$131,141
$4,673
$194
 $135,620
 $107,811
$2,395
$89
 $110,117
Residential:              
U.S.9,872
272
5
 10,139
 5,877
79
31
 5,925
12,241
162
199
 12,204
 10,223
233
6
 10,450
Non-U.S.2,534
69
2
 2,601
 2,529
72
6
 2,595
3,364
29
154
 3,239
 2,477
64
1
 2,540
Commercial5,910
90
11
 5,989
 6,758
43
147
 6,654
6,428
39
154
 6,313
 5,137
64
13
 5,188
Total mortgage-backed securities113,039
2,410
104
 115,345
 84,190
788
1,158
 83,820
153,174
4,903
701
 157,376
 125,648
2,756
109
 128,295
U.S. Treasury and government agencies73,919
240
169
 73,990
 55,771
366
78
 56,059
148,476
2,514
755
 150,235
 139,162
449
175
 139,436
Obligations of U.S. states and municipalities29,869
2,033
1
 31,901
 36,221
1,582
80
 37,723
28,886
1,712
53
 30,545
 27,693
2,118
1
 29,810
Certificates of deposit74
—
—
 74
 75
—
—
 75
76
—
—
 76
 77
—
—
 77
Non-U.S. government debt securities22,017
483
8
 22,492
 23,771
351
20
 24,102
22,369
400
8
 22,761
 21,427
377
17
 21,787
Corporate debt securities1,736
44
2
 1,778
 1,904
23
9
 1,918
838
—
36
 802
 823
22
—
 845
Asset-backed securities:              
Collateralized loan obligations24,827
16
62
 24,781
 19,612
1
176
 19,437
33,022
—
2,047
 30,975
 25,038
9
56
 24,991
Other5,945
61
10
 5,996
 7,225
57
22
 7,260
7,263
24
113
 7,174
 5,438
40
20
 5,458
Total available-for-sale securities(b)271,426
5,287
356
 276,357
 228,769
3,168
1,543
 230,394
394,104
9,553
3,713
 399,944
 345,306
5,771
378
 350,699
Held-to-maturity securities(c)              
Mortgage-backed securities:              
U.S. government agencies(a)
26,097
915
12
 27,000
 26,610
134
200
 26,544
U.S. GSEs and government agencies(a)
61,513
2,253
88
 63,678
 36,523
1,165
62
 37,626
Commercial107
12
—
 120
 —
—
—
 —
Total mortgage-backed securities26,097
915
12
 27,000
 26,610
134
200
 26,544
61,620
2,265
88
 63,798
 36,523
1,165
62
 37,626
U.S. Treasury and government agencies

51
2
—
 53
 51
—
1
 50
Obligations of U.S. states and municipalities4,810
262
—
 5,072
 4,824
105
15
 4,914
4,842
307
—
 5,167
 4,797
299
—
 5,096
Total held-to-maturity securities30,907
1,177
12
 32,072
 31,434
239
215
 31,458
Total investment securities$302,333
$6,464
$368
 $308,429
 $260,203
$3,407
$1,758
 $261,852
Asset-backed securities:       
Collateralized loan obligations4,687
—
181
 4,506
 6,169
—
—
 6,169
Total held-to-maturity securities, net of allowance for credit losses(d)
71,200
2,574
269
 73,524
 47,540
1,464
63
 48,941
Total investment securities, net of allowance for credit losses(d)
$465,304
$12,127
$3,982
 $473,468
 $392,846
$7,235
$441
 $399,640

(a)Includes AFS U.S. government-sponsored enterpriseGSE obligations with fair values of $69.8$86.1 billion and $50.7$78.5 billion, and HTM U.S. government-sponsored enterpriseGSE obligations with amortized cost of $20.7$51.9 billion and $20.9$31.6 billion, at June 30, 2019,March 31, 2020, and December 31, 2018,2019, respectively. As of June 30, 2019,March 31, 2020, mortgage-backed securities issued by Fannie Mae and Freddie Mac each exceeded 10% of JPMorgan Chase’s total stockholders’ equity; the amortized cost and fair value of such securities was $59.7were $83.9 billion and $61.4$87.3 billion, and $29.2$51.0 billion and $30.0$52.7 billion, respectively.
(b)There was 0 allowance for credit losses on AFS securities at March 31, 2020.
(c)The Firm purchased $205 million of HTM securities for the three months ended March 31, 2020; there were 0 purchases of HTM securities for the three months ended March 31, 2019.
(d)HTM securities measured at amortized cost are reported net of allowance for credit losses of $19 million at March 31, 2020.
(e)Excludes $2.1 billion and $1.9 billion of accrued interest receivables at March 31, 2020 and December 31, 2019, respectively. The Firm did 0t reverse through interest income any accrued interest receivables for the three months ended March 31, 2020 and 2019.



At March 31, 2020, the investment securities portfolio consisted of debt securities with an average credit rating of AA+ (based upon external ratings where available, and where not available, based primarily upon internal risk ratings). Risk ratings are used to identify the credit quality of securities and differentiate risk within the portfolio. The Firm’s internal risk ratings generally align with the qualitative characteristics (e.g., borrower capacity to meet financial commitments and vulnerability to changes in the
Investment
economic environment) defined by S&P and Moody’s, however the quantitative characteristics (e.g., PDs and LGDs) may differ as they reflect internal historical experiences and assumptions.Risk ratings are assigned at acquisition, are reviewed on a regular and ongoing basis by Credit Risk Management and are adjusted as necessary over the life of the investment for updated information affecting the issuer’s ability to fulfill its obligations.
AFS securities impairment
The following tables present the fair value and gross unrealized losses for investment securities by aging category for AFS securities at June 30, 2019,March 31, 2020 and December 31, 2018.2019. The tables exclude U.S. Treasury and government agency securities and U.S. GSE and government agency MBS with unrealized losses of $949 million and $264 million, at March 31, 2020 and December 31, 2019, respectively; changes in the value of these securities are generally driven by changes in interest rates rather than changes in their credit profile given the explicit or implicit guarantees provided by the U.S. government.
 Investment securities with gross unrealized losses
 Less than 12 months 12 months or more  
June 30, 2019 (in millions)Fair value
Gross
unrealized losses
 Fair value
Gross
unrealized losses
Total fair valueTotal gross unrealized losses
Available-for-sale securities       
Mortgage-backed securities:       
U.S. government agencies$5,701
$48
 $5,704
$38
$11,405
$86
Residential:       
U.S. 
3
—
 681
5
684
5
Non-U.S.122
—
 559
2
681
2
Commercial420
1
 843
10
1,263
11
Total mortgage-backed securities6,246
49
 7,787
55
14,033
104
U.S. Treasury and government agencies38,553
169
 —
—
38,553
169
Obligations of U.S. states and municipalities—
—
 205
1
205
1
Certificates of deposit74
—
 —
—
74
—
Non-U.S. government debt securities3,923
5
 897
3
4,820
8
Corporate debt securities47
—
 115
2
162
2
Asset-backed securities:       
Collateralized loan obligations7,766
16
 6,034
46
13,800
62
Other604
3
 2,055
7
2,659
10
Total available-for-sale securities57,213
242
 17,093
114
74,306
356
Held-to-maturity securities       
Mortgage-backed securities       
U.S. government agencies1
—
 2,747
12
2,748
12
Total mortgage-backed securities1
—
 2,747
12
2,748
12
Obligations of U.S. states and municipalities—
—
 —
—
—
—
Total held-to-maturity securities1
—
 2,747
12
2,748
12
Total investment securities
 with gross unrealized losses
$57,214
$242
 $19,840
$126
$77,054
$368


 Available-for-sale securities with gross unrealized losses
 Less than 12 months 12 months or more  
March 31, 2020 (in millions)Fair value
Gross
unrealized losses
 Fair value
Gross
unrealized losses
Total fair valueTotal gross unrealized losses
Available-for-sale securities       
Mortgage-backed securities:       
Residential:       
U.S. 
5,847
188
 320
11
6,167
199
Non-U.S.2,354
150
 259
4
2,613
154
Commercial4,136
136
 191
18
4,327
154
Total mortgage-backed securities12,337
474
 770
33
13,107
507
Obligations of U.S. states and municipalities1,059
53
 —
—
1,059
53
Certificates of deposit76
—
 —
—
76
—
Non-U.S. government debt securities2,303
5
 347
3
2,650
8
Corporate debt securities760
36
 —
—
760
36
Asset-backed securities:       
Collateralized loan obligations25,589
1,670
 5,357
377
30,946
2,047
Other4,897
71
 840
42
5,737
113
Total available-for-sale securities with gross unrealized losses47,021
2,309
 7,314
455
54,335
2,764
Investment securities with gross unrealized lossesAvailable-for-sale securities with gross unrealized losses
Less than 12 months 12 months or more Less than 12 months 12 months or more 
December 31, 2018 (in millions)Fair value
Gross
unrealized losses
 Fair value
Gross
unrealized losses
Total fair valueTotal gross unrealized losses
December 31, 2019 (in millions)Fair value
Gross
unrealized losses
 Fair value
Gross
unrealized losses
Total fair valueTotal gross unrealized losses
Available-for-sale securities      
Mortgage-backed securities:      
U.S. government agencies$17,656
$318
 $22,728
$656
$40,384
$974
Residential:      
U.S.623
4
 1,445
27
2,068
31
1,072
3
 423
3
1,495
6
Non-U.S.907
5
 165
1
1,072
6
13
—
 420
1
433
1
Commercial974
6
 3,172
141
4,146
147
1,287
12
 199
1
1,486
13
Total mortgage-backed securities20,160
333
 27,510
825
47,670
1,158
2,372
15
 1,042
5
3,414
20
U.S. Treasury and government agencies4,792
7
 2,391
71
7,183
78
Obligations of U.S. states and municipalities1,808
15
 2,477
65
4,285
80
186
1
 —
—
186
1
Certificates of deposit75
—
 —
—
75
—
77
—
 —
—
77
—
Non-U.S. government debt securities3,123
5
 1,937
15
5,060
20
3,970
13
 1,406
4
5,376
17
Corporate debt securities478
8
 37
1
515
9
—
—
 —
—
—
—
Asset-backed securities:      
Collateralized loan obligations18,681
176
 —
—
18,681
176
10,364
11
 7,756
45
18,120
56
Other1,208
6
 2,354
16
3,562
22
1,639
9
 753
11
2,392
20
Total available-for-sale securities50,325
550
 36,706
993
87,031
1,543
Held-to-maturity securities   
Mortgage-backed securities   
U.S. government agencies4,385
23
 7,082
177
11,467
200
Total mortgage-backed securities4,385
23
 7,082
177
11,467
200
Obligations of U.S. states and municipalities12
—
 1,114
15
1,126
15
Total held-to-maturity securities4,397
23
 8,196
192
12,593
215
Total investment securities with gross unrealized losses$54,722
$573
 $44,902
$1,185
$99,624
$1,758
Total available-for-sale securities with gross unrealized losses18,608
49
 10,957
65
29,565
114


Other-than-temporary
As a result of the adoption of the amended AFS securities impairment guidance, an allowance for credit losses on AFS securities is required for impaired securities if a credit loss exists.
AFS securities are considered impaired if the fair value is less than the amortized cost (excluding accrued interest receivable).
The Firm does not intendrecognizes impairment losses in earnings if the Firm has the intent to sell any investment securities with an unrealized loss in AOCI as of June 30, 2019, andthe debt security, or if it is more likely than not likely that the Firm will be required to sell these securitiesthe debt security before recovery of theirits amortized cost. In these circumstances the impairment loss recognized in earnings is equal to the full difference between the amortized cost basis. Further,(excluding accrued interest receivable and net of allowance if applicable) and the fair value of the securities.
For impaired debt securities that the Firm has the intent and ability to hold, the securities are evaluated to determine if a credit loss exists. If it is determined that a credit loss exists, that loss is recognized as an allowance for credit losses through the provision for credit losses in the Consolidated Statements of Income, limited by the amount of impairment. Any impairment not due to credit losses is recorded in OCI.
Factors considered in evaluating credit losses include adverse conditions specifically related to the industry, geographic area or financial condition of the issuer or underlying collateral of a security; and payment structure of the security.
When assessing securities issued in a securitization for credit losses, the Firm estimates cash flows considering relevant market and economic data, underlying loan-level data, and structural features of the securitization, such as subordination, excess spread, overcollateralization or other forms of credit enhancement, and compares the losses projected for the underlying collateral (“pool losses”) against the level of credit enhancement in the securitization structure to determine whether these features are sufficient to absorb the pool losses, or whether a credit loss exists.
For beneficial interests in securitizations that are rated below “AA” at their acquisition, or that can be contractually prepaid or otherwise settled in such a way that the Firm would not recover substantially all of its recorded investment, the Firm evaluates impairment for credit losses when there is an adverse change in expected cash flows.
Unrealized losses on AFS securities increased during the first quarter of 2020 due to credit spread widening amid volatile financial markets in connection with the COVID-19 pandemic. The increase was largely related to collateralized loan obligations which had gross unrealized losses of $2.0 billion as of March 31, 2020. Over 99% of these collateralized loan obligations are rated “AAA”, and the average credit enhancement was 37%. Credit enhancement in collateralized loan obligations is primarily in the form of overcollateralization, which is the excess of the par amount of collateral over the par amount of securities. Management assessed the projected collateral performance and the structural protections of these securities including underlying loan defaults and loss severity to determine if a credit loss exists. Based on this assessment, the Firm believes the unrealized losses on collateralized loan obligations are not due to credit losses.
Allowance for credit losses
Based on its assessment, the Firm did not recognize any credit-related OTTIan allowance for credit losses duringon impaired AFS securities as of January 1 or March 31, 2020.


HTM securities – credit risk
The adoption of the sixCECL accounting guidance requires management to estimate expected credit losses on HTM securities over the remaining expected life and recognize this estimate as an allowance for credit losses. As a result of the adoption of this guidance, the Firm recognized an allowance for credit losses on HTM obligations of U.S. states and municipalities of $10 million as a cumulative-effect adjustment to retained earnings as of January 1, 2020.
Credit quality indicator
The primary credit quality indicator for HTM securities is the risk rating assigned to each security. At March 31, 2020, all HTM securities were rated investment grade and were current and accruing, with approximately 92% rated AAA.
Allowance for credit losses
The allowance for credit losses on HTM obligations of U.S. states and municipalities and commercial mortgage-backed securities is calculated by applying statistical credit loss factors (estimated PD and LGD) to the amortized cost (excluding accrued interest receivable). The credit loss factors are derived using a weighted average of five internally developed eight-quarter macroeconomic scenarios, followed by a single year straight-line interpolation to revert to long run historical information for periods beyond the forecast period. Refer to Note 13 for further information on the eight-quarter macroeconomic forecast.
The allowance for credit losses on HTM collateralized loan obligations is calculated as the difference between the amortized cost (excluding accrued interest receivable) and the present value of the cash flows expected to be collected, discounted at the security’s effective interest rate. These cash flow estimates are developed based on expectations of underlying collateral performance derived using the eight-quarter macroeconomic forecast and the single year straight-line interpolation, as well as considering the structural features of the security.
The use of different inputs, estimates or methodologies could change the amount of the allowance for credit losses estimated by the Firm.
The application of different inputs and assumptions into the calculation of the allowance for credit losses is subject to significant management judgment, and emphasizing one input or assumption over another, or considering other inputs or assumptions, could affect the estimate of the allowance for credit losses on HTM securities.
The allowance for credit losses on HTM securities was $19 million as of March 31, 2020, reflecting $9 million recognized in the provision for credit losses for the three months ended June 30, 2019 and 2018. Accordingly, the Firm believes that the investment securities with an unrealized loss in AOCI as of June 30, 2019, are not other-than-temporarily impaired. For additional information on other-than-temporary impairment, refer to Note 10 of JPMorgan Chase’s 2018 Form 10-K.March 31, 2020.
 
InvestmentSelected impacts of investment securities gains and losses
The following table presents realized gains and losses and OTTI from AFS securities that were recognized in income.on the Consolidated statements of income
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)2019
2018
  2019
2018
2020
2019
Realized gains$115
$9
 $376
$79
$1,095
$261
Realized losses(71)(88) (319)(403)(862)(248)
OTTI losses(a)
—
(1) —
(1)
Net investment securities gains/(losses)$44
$(80) $57
$(325)
Net investment securities gains$233
$13
 
Provision for credit losses$9
NA

(a) Represents OTTI losses recognized in income on investment securities theThe Firm intends to sell. Excludes realized losses on securities sold of $20 million for the six months ended June 30, 2018 that had been previously reported as an OTTI loss due to the intentiondid not intend to sell any impaired AFS securities in the securities.periods presented.

Changes in the credit loss component of credit-impaired debt securities
The cumulative credit loss component, including any changes therein, of OTTI losses that have been recognized in income related to AFS securities was not material as of and during the six month periods ended June 30, 2019 and 2018.


Contractual maturities and yields
The following table presents the amortized cost and estimated fair value at June 30, 2019,March 31, 2020, of JPMorgan Chase’s investment securities portfolio by contractual maturity.
By remaining maturity
June 30, 2019 (in millions)
Due in one
year or less
Due after one year through five yearsDue after five years through 10 years
Due after
10 years(b)
 Total
By remaining maturity
March 31, 2020 (in millions)
Due in one
year or less
Due after one year through five yearsDue after five years through 10 years
Due after
10 years(b)
 Total
Available-for-sale securities      
Mortgage-backed securities      
Amortized cost$287
$89
$9,642
$103,021
 $113,039
$2
$381
$11,827
$140,964
 $153,174
Fair value287
90
9,827
105,141
 115,345
2
388
12,066
144,920
 157,376
Average yield(a)
2.27%2.55%3.18%3.50% 3.47%2.08%1.97%2.51%3.28% 3.22%
U.S. Treasury and government agencies







  







  
Amortized cost$4,550
$42,673
$18,309
$8,387
 $73,919
$7,529
$95,419
$30,655
$14,873
 $148,476
Fair value4,551
42,760
18,385
8,294
 73,990
7,557
96,795
31,748
14,135
 150,235
Average yield(a)
2.55%2.53%2.34%2.55% 2.49%0.64%0.95%1.73%1.40% 1.14%
Obligations of U.S. states and municipalities







  







  
Amortized cost$158
$410
$1,317
$27,984
 $29,869
$123
$209
$1,024
$27,530
 $28,886
Fair value159
417
1,365
29,960
 31,901
123
217
1,080
29,125
 30,545
Average yield(a)
2.83%4.27%5.69%4.99% 5.00%4.11%4.43%4.91%4.66% 4.67%
Certificates of deposit







  







  
Amortized cost$74
$—
$—
$—
 $74
$76
$—
$—
$—
 $76
Fair value74
—
—
—
 74
76
—
—
—
 76
Average yield(a)
0.49%—%—%—% 0.49%0.49%—%—%—% 0.49%
Non-U.S. government debt securities







  







  
Amortized cost$6,497
$11,961
$3,559
$—
 $22,017
$6,755
$11,028
$4,080
$506
 $22,369
Fair value6,504
12,246
3,742
—
 22,492
6,774
11,270
4,195
522
 22,761
Average yield(a)
2.38%1.94%1.20%—% 1.95%2.34%1.80%0.85%1.41% 1.78%
Corporate debt securities







  







  
Amortized cost$120
$910
$561
$145
 $1,736
$201
$334
$303
$—
 $838
Fair value121
932
572
153
 1,778
200
313
289
—
 802
Average yield(a)
4.89%4.34%4.12%4.58% 4.33%5.32%3.75%3.15%—% 3.91%
Asset-backed securities







  







  
Amortized cost$—
$2,345
$8,197
$20,230
 $30,772
$112
$3,047
$11,901
$25,225
 $40,285
Fair value—
2,348
8,195
20,234
 30,777
112
3,022
11,360
23,655
 38,149
Average yield(a)
—%2.91%3.32%3.27% 3.25%1.67%2.44%2.69%2.44% 2.51%
Total available-for-sale securities







  







  
Amortized cost$11,686
$58,388
$41,585
$159,767
 $271,426
$14,798
$110,418
$59,790
$209,098
 $394,104
Fair value11,696
58,793
42,086
163,782
 276,357
14,844
112,005
60,738
212,357
 399,944
Average yield(a)
2.46%2.46%2.76%3.68% 3.23%1.52%1.10%2.08%3.22% 2.39%
Held-to-maturity securities







  







  
Mortgage-backed securities







  







  
Amortized cost$—
$—
$4,293
$21,804
 $26,097
$—
$—
$5,782
$55,838
 $61,620
Fair value—
—
4,576
22,424
 27,000
—
—
6,402
57,396
 63,798
Average yield(a)
—%—%3.37%3.33% 3.34%—%—%3.05%3.06% 3.06%
U.S. Treasury and government agencies

   
Amortized cost

$—
$51
$—
$—
 $51
Fair value

—
53
—
—
 53
Average yield(a)

—%1.44%—%—% 1.44%
Obligations of U.S. states and municipalities







  







  
Amortized cost$—
$36
$164
$4,661
 $4,861
Fair value—
37
175
4,955
 5,167
Average yield(a)
—%3.64%3.79%3.94% 3.93%
Asset-backed securities   
Amortized cost$—
$—
$32
$4,778
 $4,810
$—
$—
$4,054
$633
 $4,687
Fair value—
—
34
5,038
 5,072
—
—
3,901
605
 4,506
Average yield(a)
—%—%3.82%4.02% 4.01%—%—%2.97%2.99% 2.97%
Total held-to-maturity securities







  







  
Amortized cost$—
$—
$4,325
$26,582
 $30,907
$—
$87
$10,000
$61,132
 $71,219
Fair value—
—
4,610
27,462
 32,072
—
90
10,478
62,956
 73,524
Average yield(a)
—%—%3.38%3.45% 3.44%—%2.35%3.03%3.13% 3.11%
(a)Average yield is computed using the effective yield of each security owned at the end of the period, weighted based on the amortized cost of each security. The effective yield considers the contractual coupon, amortization of premiums and accretion of discounts, and the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable. The effective yield excludes unscheduled principal prepayments; and accordingly, actual maturities of securities may differ from their contractual or expected maturities as certain securities may be prepaid.
(b)Substantially all of the Firm’s U.S. residential MBS and collateralized mortgage obligations are due in 10 years or more, based on contractual maturity. The estimated weighted-average life, which reflects anticipated future prepayments, is approximately 64 years for agency residential MBS, 3 years for agency residential collateralized mortgage obligations and 3 years for nonagency residential collateralized mortgage obligations.

Note 1011 – Securities financing activities
For a discussion of accounting policies relating to securities financing activities, refer to Note 11 of JPMorgan Chase’s 2018 Form 10-K. For further information regardingChase enters into resale, repurchase, securities borrowed and securities lendingloaned agreements (collectively, “securities financing agreements”) primarily to finance the Firm’s inventory positions, acquire securities to cover short sales, accommodate customers’ financing needs, settle other securities obligations and to deploy the Firm’s excess cash.
Securities financing agreements are treated as collateralized financings on the Firm’s Consolidated balance sheets. Where appropriate under applicable accounting guidance, securities financing agreements with the same counterparty are reported on a net basis. Refer to Note 1 for further discussion of the offsetting of assets and liabilities. Fees received and paid in connection with securities financing agreements are recorded over the life of the agreement in interest income and interest expense on the Consolidated statements of income.
The Firm has elected the fair value option for certain securities financing agreements. Refer to Note 3 for further information regarding the fair value option. The securities financing agreements for which the fair value option has been elected refer are reported within securities purchased under resale agreements, securities loaned or sold under repurchase agreements, and securities borrowed on the Consolidated balance sheets. Generally, for agreements carried at fair value, current-period interest accruals are recorded within interest income and interest expense, with changes in fair value reported in principal transactions revenue. However, for financial instruments containing embedded derivatives that would be separately accounted for in accordance with accounting guidance for hybrid instruments, all changes in fair value, including any interest elements, are reported in principal transactions revenue.
Securities financing agreements not elected under the fair value option are measured at amortized cost. As a result of the Firm’s credit risk mitigation practices described below, the Firm did not hold any allowance for credit losses with respect to resale and securities borrowed arrangements as of March 31, 2020 and December 31, 2019.
Credit risk mitigation practices
Securities financing agreements expose the Firm primarily to credit and liquidity risk. To manage these risks, the Firm monitors the value of the underlying securities (predominantly high-quality securities collateral, including government-issued debt and U.S. GSEs and government agencies MBS) that it has received from or provided to its counterparties compared to the value of cash proceeds and exchanged collateral, and either requests additional collateral or returns securities or collateral when appropriate. Margin levels are initially established based upon the counterparty, the type of underlying securities, and the permissible collateral, and are monitored on an ongoing basis.
In resale and securities borrowed agreements, the Firm is exposed to credit risk to the extent that the value of the securities received is less than initial cash principal advanced and any collateral amounts exchanged. In repurchase and securities loaned agreements, credit risk exposure arises to the extent that the value of underlying securities advanced exceeds the value of the initial cash principal received, and any collateral amounts exchanged.
Additionally, the Firm typically enters into master netting agreements and other similar arrangements with its counterparties, which provide for the right to liquidate the underlying securities and any collateral amounts exchanged in the event of a counterparty default. It is also the Firm’s policy to take possession, where possible, of the securities underlying resale and securities borrowed agreements. Refer to Note 3. For24 for further information regarding assets pledged and collateral received in securities financing agreements, refer to Note 23.agreements.


The table below summarizes the gross and net amounts of the Firm’s securities financing agreements as of June 30, 2019 March 31, 2020 and December 31, 2018. 2019. When the Firm has obtained an appropriate legal opinion with respect to a master netting agreement with a counterparty and where other relevant netting criteria under U.S. GAAP are met, the Firm nets, on the Consolidated balance sheets, the balances
outstanding under its securities financing agreements with the same counterparty. In addition, the Firm exchanges securities and/or cash collateral with its counterparty to reduce the economic exposure with the counterparty, but
such collateral is not eligible for net Consolidated balance sheet presentation. Where the Firm has obtained an appropriate legal opinion with respect to the counterparty master netting agreement, such collateral, along with securities financing balances that do not meet all these relevant netting criteria under U.S. GAAP, is presented in the table below as “Amounts not nettable on the Consolidated balance sheets,” and reduces the “Net amounts” presented. Where a legal opinion has not been either sought or obtained, the securities financing balances are presented gross in the “Net amounts” below.
June 30, 2019March 31, 2020
(in millions)Gross amountsAmounts netted on the Consolidated balance sheets
Amounts presented on the Consolidated balance sheets(b)
Amounts not nettable on the Consolidated balance sheets(c)
Net
amounts(d)
Gross amountsAmounts netted on the Consolidated balance sheetsAmounts presented on the Consolidated balance sheets
Amounts not nettable on the Consolidated balance sheets(b)
Net
amounts(c)
Assets      
Securities purchased under resale agreements$710,885
$(443,021)$267,864
$(256,036) $11,828
$687,109
$(438,559)$248,550
$(233,013) $15,537
Securities borrowed153,413
(22,752)130,661
(96,512) 34,149
152,908
(13,069)139,839
(101,374) 38,465
Liabilities      
Securities sold under repurchase agreements$635,858
$(443,021)$192,837
$(171,175) $21,662
$662,472
$(438,559)$223,913
$(193,881) $30,032
Securities loaned and other(a)
33,408
(22,752)10,656
(10,410) 246
23,830
(13,069)10,761
(10,582) 179
December 31, 2018December 31, 2019
(in millions)Gross amountsAmounts netted on the Consolidated balance sheets
Amounts presented on the Consolidated balance sheets(b)
Amounts not nettable on the Consolidated balance sheets(c)
Net
amounts(d)
Gross amountsAmounts netted on the Consolidated balance sheetsAmounts presented on the Consolidated balance sheets
Amounts not nettable on the Consolidated balance sheets(b)
Net
amounts(c)
Assets      
Securities purchased under resale agreements$691,116
$(369,612)$321,504
$(308,854)
$12,650
$628,609
$(379,463)$249,146
$(233,818)
$15,328
Securities borrowed132,955
(20,960)111,995
(79,747) 32,248
166,718
(26,960)139,758
(104,990) 34,768
Liabilities      
Securities sold under repurchase agreements$541,587
$(369,612)$171,975
$(149,125)
$22,850
$555,172
$(379,463)$175,709
$(151,566)
$24,143
Securities loaned and other(a)
33,700
(20,960)12,740
(12,358) 382
36,649
(26,960)9,689
(9,654) 35
(a)Includes securities-for-securities lending agreements of $2.9$4.1 billion and $3.3$3.7 billion at June 30, 2019March 31, 2020 and December 31, 2018,2019, respectively, accounted for at fair value, where the Firm is acting as lender. These amounts are presentedIn the Consolidated balance sheets, the Firm recognizes the securities received at fair value within other assets and the obligation to return those securities within accounts payable and other liabilities in the Consolidated balance sheets.liabilities.
(b)Includes securities financing agreements accounted for at fair value. At June 30, 2019 and December 31, 2018, included securities purchased under resale agreements of $14.0 billion and $13.2 billion, respectively; securities sold under repurchase agreements of $981 million and $935 million, respectively; and securities borrowed of $5.7 billion and $5.1 billion, respectively. 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 net asset or liability with that counterparty.
(d)(c)Includes securities financing agreements that provide collateral rights, but where an appropriate legal opinion with respect to the master netting agreement has not been either sought or obtained. At June 30, 2019March 31, 2020 and December 31, 2018,2019, included $9.6$12.3 billion and $7.9$11.0 billion, respectively, of securities purchased under resale agreements; $31.9$34.9 billion and $30.3$31.9 billion, respectively, of securities borrowed; $20.2$28.5 billion and $21.5$22.7 billion, respectively, of securities sold under repurchase agreements; and $18$9 million and $25$7 million, respectively, of securities loaned and other.


The tables below present as of June 30, 2019, March 31, 2020, and December 31, 2018 2019 the types of financial assets pledged in securities financing agreements and the remaining contractual maturity of the securities financing agreements.
Gross liability balanceGross liability balance
June 30, 2019 December 31, 2018March 31, 2020 December 31, 2019
(in millions)Securities sold under repurchase agreementsSecurities loaned and other Securities sold under repurchase agreementsSecurities loaned and otherSecurities sold under repurchase agreements Securities loaned and other Securities sold under repurchase agreements Securities loaned and other
Mortgage-backed securities          
U.S. government agencies$25,607
$—
 $28,811
$—
U.S. GSEs and government agencies$60,742
 $—
 $34,119
 $—
Residential - nonagency1,675
—
 2,165
—
1,860
 —
 1,239
 —
Commercial - nonagency1,654
—
 1,390
—
1,931
 —
 1,612
 —
U.S. Treasury and government agencies382,199
10
 323,078
69
U.S. Treasury, GSEs and government agencies390,151
 92
 334,398
 29
Obligations of U.S. states and municipalities1,509
—
 1,150
—
1,793
 —
 1,181
 —
Non-U.S. government debt190,950
1,912
 154,900
4,313
165,715
 1,559
 145,548
 1,528
Corporate debt securities13,151
1,301
 13,898
428
21,855
 1,582
 13,826
 1,580
Asset-backed securities2,476
—
 3,867
—
3,074
 —
 1,794
 —
Equity securities16,637
30,185
 12,328
28,890
15,351
 20,597
 21,455
 33,512
Total$635,858
$33,408
 $541,587
$33,700
$662,472
 $23,830
 $555,172
 $36,649
Remaining contractual maturity of the agreementsRemaining contractual maturity of the agreements
Overnight and continuous    
Greater than
90 days
 Overnight and continuous     
Greater than
90 days
  
June 30, 2019 (in millions) Up to 30 days 30 – 90 daysTotal
March 31, 2020 (in millions)Overnight and continuous Up to 30 days 30 – 90 days 
Greater than
90 days
 Total
Total securities sold under repurchase agreements$342,097
 $163,805
 $64,822
$65,134
$635,858
 $222,320
 $91,030
 $662,472
Total securities loaned and other29,654
 1,228
 514
2,012
33,408
20,610
 100
 697
 2,423
 23,830
Remaining contractual maturity of the agreementsRemaining contractual maturity of the agreements
Overnight and continuous    
Greater than
90 days
 Overnight and continuous     
Greater than
90 days
  
December 31, 2018 (in millions) Up to 30 days 30 – 90 daysTotal
December 31, 2019 (in millions)Overnight and continuous Up to 30 days 30 – 90 days 
Greater than
90 days
 Total
Total securities sold under repurchase agreements$247,579
 $174,971
 $71,637
$47,400
$541,587
 $195,816
(a) 
$56,020
(a) 
$555,172
Total securities loaned and other28,402
 997
 2,132
2,169
33,700
32,028
 1,706
 937
 1,978
 36,649
(a)The prior-period amounts have been revised to conform with the current period presentation.
Transfers not qualifying for sale accounting
At June 30, 2019,March 31, 2020, and December 31, 2018,2019, the Firm held $753$581 million and $2.1 billion,$743 million, respectively, of financial assets for which the rights have been transferred to third parties; however, the transfers did not qualify as a sale in accordance with U.S. GAAP. These transfers have been recognized as collateralized financing transactions. The transferred assets are recorded in trading assets and loans, and the corresponding liabilities are recorded predominantly in short-term borrowings on the Consolidated balance sheets. The prior period amount has been revised to conform with the current period presentation.

Note 1112 – Loans
Loan accounting framework
The accounting for a loan depends on management’s strategy for the loan, and on whether the loan was credit-impaired at the date of acquisition.loan. The Firm accounts for loans based on the following categories:
•
Originated or purchased loans held-for-investment (i.e., “retained”), other than PCI loans
Loans held-for-sale
Loans at fair value
PCIEffective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.
The following provides a detailed accounting discussion of these loan categories:
Loans held-for-investment
Originated or purchased loans held-for-investment are recorded at the principal amount outstanding, net of the following: charge-offs; interest applied to principal (for loans accounted for on the cost recovery method); unamortized discounts and premiums; and net deferred loan fees or costs. Credit card loans also include billed finance charges and fees.
Interest income
Interest income on performing loans held-for-investment is accrued and recognized as interest income at the contractual rate of interest. Purchase price discounts or premiums, as well as net deferred loan fees or costs, are amortized into interest income over the contractual life of the loan as an adjustment of yield.
The Firm classifies accrued interest on loans, including accrued but unbilled interest on credit card loans, in accrued interest and accounts receivables on the Consolidated balance sheets. For credit card loans, accrued interest is recognized in the loan balances as it is billed, with the related allowance recorded in the allowance for credit losses. Changes in the allowance for credit losses on accrued interest on credit card loans are recognized in the provision for credit losses and charge-offs are recognized by reversing interest income. For other loans, the Firm generally does not recognize an allowance for credit losses on accrued interest receivables, consistent with its policy to write them off no later than 90 days past due by reversing interest income.
Nonaccrual loans
Nonaccrual loans are those on which the accrual of interest has been suspended. Loans (other than credit card loans and certain consumer loans insured by U.S. government agencies) are placed on nonaccrual status and considered nonperforming when full payment of principal and interest is not expected, regardless of delinquency status, or when principal and interest has been in default for a period of 90 days or more, unless the loan is both well-secured and in the process of collection. A loan is determined to be past due when the minimum payment is not received from the borrower by the contractually specified due date or for
 
certain loans (e.g., residential real estate loans), when a monthly payment is due and unpaid for 30 days or more. Finally, collateral-dependent loans are typically maintained on nonaccrual status.
On the date a loan is placed on nonaccrual status, all interest accrued but not collected is reversed against interest income. In addition, the amortization of deferred amounts is suspended. Interest income on nonaccrual loans may be recognized as cash interest payments are received (i.e., on a cash basis) if the recorded loan balance is deemed fully collectible; however, if there is doubt regarding the ultimate collectibility of the recorded loan balance, all interest cash receipts are applied to reduce the carrying value of the loan (the cost recovery method). For consumer loans, application of this policy typically results in the Firm recognizing interest income on nonaccrual consumer loans on a detailed discussioncash basis.
A loan may be returned to accrual status when repayment is reasonably assured and there has been demonstrated performance under the terms of the loan or, if applicable, the terms of the restructured loan.
As permitted by regulatory guidance, credit card loans including accounting policies, referare generally exempt from being placed on nonaccrual status; accordingly, interest and fees related to Note 12credit card loans continue to accrue until the loan is charged off or paid in full.
Allowance for loan losses
The allowance for loan losses represents the estimated expected credit losses in the held-for-investment loan portfolio at the balance sheet date and is recognized on the balance sheet as a contra asset, which brings the amortized cost to the net carrying value. Changes in the allowance for loan losses are recorded in the provision for credit losses on the Firm’s Consolidated statements of JPMorgan Chase’s 2018 Form 10-K.income. Refer to Note 313 for further information on the Firm’s accounting policies for the allowance for loan losses.
Charge-offs
Consumer loans are generally charged off or charged down to the net realizable value of this Form 10-Qthe underlying collateral (i.e., fair value less estimated costs to sell), with an offset to the allowance for loan losses, upon reaching specified stages of delinquency in accordance with standards established by the FFIEC. Residential real estate loans, unmodified credit card loans and scored business banking loans are generally charged off no later than 180 days past due. Scored auto and modified credit card loans are charged off no later than 120 days past due.
Certain consumer loans are charged off or charged down to their net realizable value earlier than the FFIEC charge-off standards in certain circumstances as follows:
Loans modified in a TDR that are determined to be collateral-dependent.

Loans to borrowers who have experienced an event that suggests a loss is either known or highly certain are subject to accelerated charge-off standards (e.g., residential real estate and auto loans are charged off within 60 days of receiving notification of a bankruptcy filing).
Auto loans upon repossession of the automobile.
Other than in certain limited circumstances, the Firm typically does not recognize charge-offs on the government-guaranteed portion of loans.
Wholesale loans are charged off when it is highly certain that a loss has been realized. The determination of whether to recognize a charge-off includes many factors, including the prioritization of the Firm’s claim in bankruptcy, expectations of the workout/restructuring of the loan and valuation of the borrower’s equity or the loan collateral.
When a loan is charged down to the estimated net realizable value, the determination of the fair value of the collateral depends on the type of collateral (e.g., securities, real estate). In cases where the collateral is in the form of liquid securities, the fair value is based on quoted market prices or broker quotes. For illiquid securities or other financial assets, the fair value of the collateral is generally estimated using a discounted cash flow model.
For residential real estate loans, collateral values are based upon external valuation sources. When it becomes likely that a borrower is either unable or unwilling to pay, the Firm utilizes a broker’s price opinion, appraisal and/or an automated valuation model of the home based on an exterior-only valuation (“exterior opinions”), which is then updated at least every twelve months, or more frequently depending on various market factors. As soon as practicable after the Firm receives the property in satisfaction of a debt (e.g., by taking legal title or physical possession), the Firm generally obtains an appraisal based on an inspection that includes the interior of the home (“interior appraisals”). Exterior opinions and interior appraisals are discounted based upon the Firm’s experience with actual liquidation values as compared with the estimated values provided by exterior opinions and interior appraisals, considering state-specific factors.
For commercial real estate loans, collateral values are generally based on appraisals from internal and external valuation sources. Collateral values are typically updated every six to twelve months, either by obtaining a new appraisal or by performing an internal analysis, in accordance with the Firm’s policies. The Firm also considers both borrower- and market-specific factors, which may result in obtaining appraisal updates or broker price opinions at more frequent intervals.
Loans held-for-sale
Loans held-for-sale are measured at the lower of cost or fair value, with valuation changes recorded in noninterest revenue. For consumer loans, the valuation is performed on a portfolio basis. For wholesale loans, the valuation is performed on an individual loan basis.
Interest income on loans held-for-sale is accrued and recognized based on the contractual rate of interest.
Loan origination fees or costs and purchase price discounts or premiums are deferred in a contra loan account until the related loan is sold. The deferred fees or costs and discounts or premiums are an adjustment to the basis of the loan and therefore are included in the periodic determination of the lower of cost or fair value adjustments and/or the gain or loss recognized at the time of sale.
Because these loans are recognized at the lower of cost or fair value, the Firm’s allowance for loan losses and charge-off policies do not apply to these loans. However, loans held-for-sale are subject to the nonaccrual policies described above.
Loans at fair value
Loans used in a market-making strategy or risk managed on a fair value basis are measured at fair value, with changes in fair value recorded in noninterest revenue.
Interest income on these loans is accrued and recognized based on the contractual rate of interest. Changes in fair value are recognized in noninterest revenue. Loan origination fees are recognized upfront in noninterest revenue. Loan origination costs are recognized in the associated expense category as incurred.
Because these loans are recognized at fair value, the Firm’s allowance for loan losses and charge-off policies do not apply to these loans. However, loans at fair value are subject to the nonaccrual policies described above.
Refer to Note 3 for further information on the Firm’s elections of fair value accounting under the fair value option. Refer to Note 2 of this Form 10-Qand Note 3 for further information on loans carried at fair value and classified as trading assets.


Loan classification changes
Loans in the held-for-investment portfolio that management decides to sell are transferred to the held-for-sale portfolio at the lower of cost or fair value on the date of transfer. Credit-related losses are charged against the allowance for loan losses; non-credit related losses such as those due to changes in interest rates or foreign currency exchange rates are recognized in noninterest revenue.
In the event that management decides to retain a loan in the held-for-sale portfolio, the loan is transferred to the held-for-investment portfolio at the lower of cost or fair value on the date of transfer. These loans are subsequently assessed for impairment based on the Firm’s allowance methodology. Refer to Note 13 for a further discussion of the methodologies used in establishing the Firm’s allowance for loan losses.
Loan modifications
The Firm seeks to modify certain loans in conjunction with its loss mitigation activities. Through the modification, JPMorgan Chase grants one or more concessions to a borrower who is experiencing financial difficulty in order to minimize the Firm’s economic loss and avoid foreclosure or repossession of the collateral, and to ultimately maximize payments received by the Firm from the borrower. The concessions granted vary by program and by borrower-specific characteristics, and may include interest rate reductions, term extensions, payment delays, principal forgiveness, or the acceptance of equity or other assets in lieu of payments. Such modifications are accounted for and reported as TDRs. Loans with short-term and other insignificant modifications that are not considered concessions are not TDRs.
The Firm’s initial response to many borrowers impacted by the COVID-19 pandemic included offering loan modifications, such as 90-day payment delays and waiving or refunding certain fees. These initial short-term and other insignificant modifications were not considered concessions and, therefore, do not result in the related loans being considered TDRs.
Loans, except for credit card loans, modified in a TDR are generally placed on nonaccrual status, although in many cases such loans were already on nonaccrual status prior to modification. These loans may be returned to performing status (the accrual of interest is resumed) if the following criteria are met: (i) the borrower has performed under the modified terms for a minimum of six months and/or 6 payments, and (ii) the Firm has an expectation that repayment of the modified loan is reasonably assured based on, for example, the borrower’s debt capacity and level of future earnings, collateral values, LTV ratios, and other current market considerations. In certain limited and well-defined circumstances in which the loan is current at the modification date, such loans are not placed on nonaccrual status at the time of modification.
Loans modified in TDRs are generally measured for impairment using the Firm’s established asset-specific
allowance methodology, which considers the expected re-default rates for the modified loans. A loan modified in a TDR generally remains subject tothe asset-specific component of the allowance throughout its remaining life, regardless of whether the loan is performing and has been returned to accrual status. Refer to Note 13 for further discussion of the methodology used to estimate the Firm’s asset-specific allowance.
Foreclosed property
The Firm acquires property from borrowers through loan restructurings, workouts, and foreclosures. Property acquired may include real property (e.g., residential real estate, land, and buildings) and commercial and personal property (e.g., automobiles, aircraft, railcars, and ships).
The Firm recognizes foreclosed property upon receiving assets in satisfaction of a loan (e.g., by taking legal title or physical possession). For loans collateralized by real property, the Firm generally recognizes the asset received at foreclosure sale or upon the execution of a deed in lieu of foreclosure transaction with the borrower. Foreclosed assets are reported in other assets on the Consolidated balance sheets and initially recognized at fair value less estimated costs to sell. Each quarter the fair value of the acquired property is reviewed and adjusted, if necessary, to the lower of cost or fair value. Subsequent adjustments to fair value are charged/credited to noninterest revenue. Operating expense, such as real estate taxes and maintenance, are charged to other expense.

Loan portfolio
The Firm’s loan portfolio is divided into three3 portfolio segments, which are the same segments used by the Firm to determine the allowance for loan losses: Consumer, excluding credit card; Credit card; and Wholesale. Within each portfolio segment the Firm monitors and assesses the credit risk in the following classes of loans, based on the risk characteristics of each loan class.
In conjunction with the adoption of CECL, the Firm revised its classes of loans. Prior-period amounts have been revised to conform with the current presentation:
The consumer, excluding credit card portfolio segment’s residential mortgage and home equity loans and lending-related commitments have been combined into a residential real estate class.
Upon adoption of CECL, the Firm elected to discontinue the pool-level accounting for PCI loans and to account for these loans on an individual loan basis. PCI loans are considered PCD loans under CECL and are subject to the Firm’s nonaccrual and charge-off policies. PCD loans are now reported in the consumer, excluding credit card portfolio segment’s residential real estate class.
Risk-rated business banking and auto dealer loans and lending-related commitments held in CCB were reclassified from the consumer, excluding credit card portfolio segment, to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. The remaining scored auto and business banking loans and lending-related commitments have been combined into an auto and other class.
The wholesale portfolio segment’s classes, previously based on the borrower’s primary business activity, have been revised to align with the loan classifications as defined by the bank regulatory agencies, based on the loan’s collateral, purpose, and type of borrower.
Consumer, excluding
credit card(a)
 Credit card 
Wholesale(f)(c)
• Residential real estate – excluding PCI
• Residential mortgage(b)(a)
• Home equityAuto and other(c)(b)
Other consumer loans(d)
• Auto
• Consumer & Business Banking(e)
Residential real estate – PCI
• Home equity
• Prime mortgage
• Subprime mortgage
• Option ARMs
 • Credit card loans 
• Secured by real estate
• Commercial and industrial
• Real estate
• Financial institutions
• Governments & Agencies
• Other(g)(d)
(a)
Includes loans held in CCB, primescored mortgage and home equity loans held in AWMCCB and primeAWM,and scored mortgage loans held in Corporate.
(b)Predominantly includes primeIncludes scored auto and business banking loans (including option ARMs).and overdrafts.
(c)Includes seniorloans held in CIB, CB, AWM, Corporate as well as risk-rated business banking and junior lien home equity loans.auto dealer loans held in CCB for which the wholesale methodology is applied for determining the allowance for loan losses.
(d)Includes certain business bankingloans to financial institutions, states and auto dealer risk-ratedpolitical subdivisions, SPEs, nonprofits, personal investment companies and trusts, as well as loans that apply the wholesale methodology for determining the allowance for loan losses; these loans are managed by CCB, and therefore, for consistency in presentation, are included with the other consumer loan classes.
(e)Predominantly includes Business Banking loans.
(f)Includes loans held in CIB, CB, AWM and Corporate. Excludes 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:to individuals and individual entities (predominantly consists of Wealth Management clients within AWM and includes exposure to personal investment companies and personal and testamentary trusts), SPEs and Private education and civic organizations. For more information on SPEs, referAWM). Refer to Note 14 of JPMorgan Chase’s 20182019 Form 10-K.10-K for more information on SPEs.

The following tables summarize the Firm’s loan balances by portfolio segment.
June 30, 2019Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
March 31, 2020Consumer, excluding credit card Credit card Wholesale 
Total(a)
 
(in millions)Consumer, excluding credit card 
Credit card(a)
 Wholesale Total  
Retained
(b) 
$293,779
 $154,021
 $555,289
 $1,003,089
(b) 
Held-for-sale1,030
 8
 3,814
 4,852
 1,848
 —
 4,224
 6,072
 
At fair value—
 —
 4,309
 4,309
 —
 —
 6,214
 6,214
 
Total$352,722
 $157,576
 $446,591
 $956,889
 $295,627
 $154,021
 $565,727
 $1,015,375
 
                
December 31, 2018Consumer, excluding credit card 
Credit card(a)
 Wholesale Total 
December 31, 2019Consumer, excluding credit card Credit card Wholesale 
Total(a)
 
(in millions)Consumer, excluding credit card 
Credit card(a)
 Wholesale Total  
Retained
(b) 
$294,999
 $168,924
 $481,678
 $945,601
(b) 
Held-for-sale95
 16
 11,877
 11,988
 3,002
 —
 4,062
 7,064
 
At fair value—
 —
 3,151
 3,151
 —
 —
 7,104
 7,104
 
Total$373,732
 $156,632
 $454,190
 $984,554
 $298,001
 $168,924
 $492,844
 $959,769
 
(a)Includes accrued interest and fees net of an allowance for the uncollectible portionExcludes $2.9 billion of accrued interest receivables at both March 31, 2020 and fee income.December 31, 2019, respectively. Accrued interest receivables of $14 million and $12 million were written off for the three months ended March 31, 2020 and 2019, respectively.
(b)Loans (other than PCI loans and loansthose 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 June 30, 2019,March 31, 2020, and December 31, 2018.2019.


The following tables provide table provides information about the carrying value of retained loans purchased, sold and reclassified to held-for-sale during the periods indicated. Reclassifications of loans to held-for sale are non-cash transactions. The Firm manages its exposure to credit risk on an ongoing basis. Selling loans is one way that the Firm reduces its credit exposures.Loans that were reclassified to held-for-sale and sold in a subsequent period are excluded from the sales line of this table.

 
2019 20182020 2019
Three months ended June 30,
(in millions)		 
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
Three months ended March 31,
(in millions)
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
Purchases 
$234
(a)(b) 
$—
$359
$593
 $532
(a)(b) 
$—
$532
$1,064
$1,172
(b)(c) 
$—
$386
$1,558
 $551
(b)(c) 
$—
$229
$780
Sales 
6,856

—
5,400
12,256
 2,391
 —
4,943
7,334
324

—
5,452
5,776
 8,658
 —
5,445
14,103
Retained loans reclassified to held-for-sale(a) 
948
 —
924
1,872
 —

—
392
392
148
 —
469
617
 4,113

—
501
4,614
        
 2019 2018
Six months ended June 30,
(in millions)		 
Consumer, excluding
credit card
Credit cardWholesaleTotal 
Consumer, excluding
credit card
Credit cardWholesaleTotal
Purchases $785
(a)(b) 
$—
$588
$1,373
 $1,603
(a)(b) 
$—
$1,630
$3,233
Sales 15,514
 —
10,845
26,359
 2,872
 —
8,632
11,504
Retained loans reclassified to held-for-sale 5,061
 —
1,425
6,486
 36
 —
1,260
1,296

(a)Purchases predominantly representReclassifications of loans to held-for-sale are non-cash transactions.
(b)Predominantly includes purchases of residential real estate loans, including the Firm’s voluntary repurchaserepurchases of certain delinquent loans from loan pools as permitted by Government National Mortgage Association (“Ginnie Mae”) guidelines.guidelines for the three months ended March 31, 2020 and 2019. The Firm typically elects to repurchase these delinquent loans as it continues to service them and/or manage the foreclosure process in accordance with applicable requirements of Ginnie Mae, FHA, RHS, and/or VA.
(b)(c)Excludes purchases of retained loans sourced through the correspondent origination channel and underwritten in accordance with the Firm’s standards. Such purchases were $4.3$3.6 billion and $5.3$3.2 billion for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $7.5 billion and $8.9 billion for the six months ended June 30, 2019 and 2018, respectively.

Gains and losses on sales of loans
Gains andNet losses on sales of loans and lending-related commitments (including adjustments to record loans and lending-related commitments held-for-sale at the lower of cost or fair value) recognized in other incomenoninterest revenue were not material$913 million of which $142 million related to the Firmloans for the three and six months ended June 30,March 31, 2020. Gains and losses on sales of loans were 0t material for the three months ended March 31, 2019 and 2018.. In addition, the sale of loans may also result in write downs, recoveries or changes in the allowance recognized in the provision for credit losses.

Consumer, excluding credit card loan portfolio
Consumer loans, excluding credit card loans, consist primarily of scored residential mortgages, home equity loans and lines of credit, auto loans and consumer and business banking loans, with a focus on serving the prime consumer credit market. The portfolio also includes home equity loans secured by junior liens, prime mortgage loans with an interest-only payment period and certain payment-option loans that may result in negative amortization.
The following table provides information about retained consumer loans, excluding credit card, by class.
(in millions)June 30,
2019
December 31,
2018
Residential real estate – excluding PCI  
Residential mortgage$214,744
$231,078
Home equity26,017
28,340
Other consumer loans  
Auto62,073
63,573
Consumer & Business Banking26,616
26,612
Residential real estate – PCI  
Home equity8,149
8,963
Prime mortgage4,343
4,690
Subprime mortgage1,857
1,945
Option ARMs7,893
8,436
Total retained loans$351,692
$373,637
(in millions)March 31,
2020
December 31,
2019
Residential real estate$242,349
$243,317
Auto and other51,430
51,682
Total retained loans$293,779
$294,999
For further information on
Delinquency rates are the primary credit quality indicator for consumer loans. Loans that are more than 30 days past due provide an early warning of borrowers who may be experiencing financial difficulties and/or who may be unable or unwilling to repay the loan. As the loan continues to age, it becomes more clear whether the borrower is likely either unable or unwilling to pay. In the case of residential real estate loans, late-stage delinquencies (greater than 150 days past due) are a strong indicator of loans that will ultimately result in a foreclosure or similar liquidation transaction. In addition to delinquency rates, other credit quality indicators referfor consumer loans vary based on the class of loan, as follows:
For residential real estate loans, the current estimated LTV ratio, or the combined LTV ratio in the case of junior lien loans, is an indicator of the potential loss severity in the event of default. Additionally, LTV or combined LTV ratios can provide insight into a borrower’s continued willingness to Note 12pay, as the delinquency rate of JPMorgan Chase’s 2018 Form 10-K.high-LTV loans tends to be greater than that for loans where the borrower has equity in the collateral. The geographic distribution of the loan collateral also provides insight as to the credit quality of the portfolio, as factors such as the regional economy, home price changes and specific events such as natural disasters, will affect credit quality. The borrower’s current or “refreshed” FICO score is a secondary credit quality indicator for certain loans, as FICO scores are an indication of the borrower’s credit payment history. Thus, a loan to a borrower with a low FICO score (less than 660 ) is considered to be of higher risk than a loan to a borrower with a higher FICO score. Further, a loan to a borrower with a high LTV ratio and a low FICO score is at greater risk of default than a loan to a borrower that has both a high LTV ratio and a high FICO score.
For scored auto and business banking loans, geographic distribution is an indicator of the credit performance of the portfolio. Similar to residential real estate loans, geographic distribution provides insights into the portfolio performance based on regional economic activity and events.



Residential real estate – excluding PCI loans
The following table provides information by classon delinquency, which is the primary credit quality indicator for retained residential real estate – excluding PCI loans.
Residential real estate – excluding PCI loans      
(in millions, except ratios)Residential mortgage  Home equity  Total residential real estate – excluding PCI
Jun 30,
2019
Dec 31,
2018
  Jun 30,
2019
Dec 31,
2018
  Jun 30,
2019
Dec 31,
2018
Loan delinquency(a)
          
Current$211,426
$225,899
  $25,423
$27,611
  $236,849
$253,510
30–149 days past due1,788
2,763
  365
453
  2,153
3,216
150 or more days past due1,530
2,416
  229
276
  1,759
2,692
Total retained loans$214,744
$231,078
  $26,017
$28,340
  $240,761
$259,418
% of 30+ days past due to total retained loans(b)
0.46%0.48%  2.28%2.57%  0.66%0.71%
90 or more days past due and government guaranteed(c)
$1,422
$2,541
  $—
$—
  $1,422
$2,541
Nonaccrual loans1,691
1,765
  1,209
1,323
  2,900
3,088
Current estimated LTV ratios(d)(e)
         

Greater than 125% and refreshed FICO scores:         

Equal to or greater than 660$19
$25
  $5
$6
  $24
$31
Less than 66010
13
  2
1
  12
14
101% to 125% and refreshed FICO scores:         

Equal to or greater than 66035
37
  73
111
  108
148
Less than 66036
53
  23
38
  59
91
80% to 100% and refreshed FICO scores:          
Equal to or greater than 6604,528
3,977
  764
986
  5,292
4,963
Less than 660227
281
  236
326
  463
607
Less than 80% and refreshed FICO scores:         

Equal to or greater than 660198,687
212,505
  21,178
22,632
  219,865
235,137
Less than 6606,110
6,457
  2,969
3,355
  9,079
9,812
No FICO/LTV available866
813
  767
885
  1,633
1,698
U.S. government-guaranteed4,226
6,917
  —
—
  4,226
6,917
Total retained loans$214,744
$231,078
  $26,017
$28,340
  $240,761
$259,418
Geographic region(f)
          
California$71,176
$74,759
  $5,327
$5,695
  $76,503
$80,454
New York26,684
28,847
  5,276
5,769
  31,960
34,616
Illinois14,236
15,249
  1,937
2,131
  16,173
17,380
Texas12,678
13,769
  1,694
1,819
  14,372
15,588
Florida10,450
10,704
  1,429
1,575
  11,879
12,279
Washington7,937
8,304
  802
869
  8,739
9,173
Colorado7,801
8,140
  467
521
  8,268
8,661
New Jersey6,608
7,302
  1,504
1,642
  8,112
8,944
Massachusetts6,195
6,574
  219
236
  6,414
6,810
Arizona4,074
4,434
  1,042
1,158
  5,116
5,592
All other(g)
46,905
52,996
  6,320
6,925
  53,225
59,921
Total retained loans$214,744
$231,078
  $26,017
$28,340
  $240,761
$259,418
(in millions, except ratios)March 31, 2020 December 31, 2019
Term loans by origination year Revolving loans Total Total
20202019201820172016Prior to 2016 Within the revolving periodConverted to term loans  
Loan delinquency(a)
             
Current$10,590
$42,800
$21,088
$30,504
$39,809
$67,311
 $8,213
$18,927
 $239,242
 $239,979
30–149 days past due—
7
11
33
57
1,368
 7
444
 1,927
 1,910
150 or more days past due—
—
10
11
9
877
 13
260
 1,180
 1,428
Total retained loans$10,590
$42,807
$21,109
$30,548
$39,875
$69,556
 $8,233
$19,631
 $242,349
 $243,317
% of 30+ days past due to total retained loans(b)
—%0.02%0.10%0.14%0.17%3.17% 0.24%3.59% 1.27% 1.35%
(a)Individual delinquency classifications include mortgage loans insured by U.S. government agencies as follows: current included $1.9 billion$15 million and $2.8 billion;$17 million; 30–149 days past due included $1.2 billion$13 million and $2.1 billion;$20 million; and 150 or more days past due included $1.1 billion$25 million and $2.0 billion$26 million at June 30, 2019,March 31, 2020, and December 31, 2018,2019, respectively.
(b)At June 30, 2019,March 31, 2020, and December 31, 2018,2019, residential mortgagereal estate loans excluded mortgage loans insured by U.S. government agencies of $2.3 billion$38 million and $4.1 billion,$46 million, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
(c)These balances, which are 90 days or more past due, were excluded from nonaccrual loans as the loans are guaranteed by U.S government agencies. Typically the principal balance of the loans is insured and interest is guaranteed at a specified reimbursement rate subject to meeting agreed-upon servicing guidelines. At June 30, 2019, and December 31, 2018, these balances included $623 million and $999 million, respectively, of loans that are no longer accruing interest based on the agreed-upon servicing guidelines. For the remaining balance, interest is being accrued at the guaranteed reimbursement rate. There were no loans that were not guaranteed by U.S. government agencies that are 90 or more days past due and still accruing interest at June 30, 2019, and December 31, 2018.
(d)Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates. Current estimated combined LTV for junior lien home equity loans considers all available lien positions, as well as unused lines, related to the property.
(e)Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.
(f)The geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at June 30, 2019.
(g)At June 30, 2019, and December 31, 2018, included mortgage loans insured by U.S. government agencies of $4.2 billion and $6.9 billion, respectively. These amounts have been excluded from the geographic regions presented based upon the government guarantee.

Approximately 37%33% of the home equity portfoliototal revolving loans are senior lien loans; the remaining balance are junior lien HELOANs or HELOCs.loans. The following table provideslien position the Firm holds is considered in the Firm’s delinquency statisticsallowance for junior lien home equityloan losses. Revolving loans and lines of credit as of June 30, 2019, and December 31, 2018.
 Total loans Total 30+ day delinquency rate
(in millions, except ratios)Jun 30,
2019
Dec 31,
2018
 Jun 30,
2019
Dec 31,
2018
 
HELOCs:(a)
     
Within the revolving period(b)
$5,611
$5,608
 0.32%0.25%
Beyond the revolving period9,949
11,286
 2.48
2.80
HELOANs896
1,030
 2.68
2.82
Total$16,456
$17,924
 1.76%2.00%
(a)These HELOCs are predominantly revolvingthat have been converted to term loans for a 10-year period, after which time the HELOC converts to a loan with a 20-year amortization period, but also include HELOCs that allow interest-only payments beyond the revolving period.
(b)The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are experiencing financial difficulty.
HELOCs beyond the revolving period and HELOANs have higher delinquency rates than HELOCsthose that are still within the revolving period. That is primarily because the fully-amortizing payment that is generally required for those products is higher than the minimum payment options available for HELOCsrevolving loans within the revolving period. The higher delinquency rates associated with amortizing HELOCs and HELOANs are factored into the Firm’s allowance for loan losses.




Nonaccrual loans and other credit quality indicators



Impaired loans
The following table below sets forthprovides information about the Firm’s on nonaccrual and other credit quality indicators for retained residential real estate impaired loans, excluding PCI loans. These loans are considered to be impaired as they have been modified in a TDR. All impaired loans are evaluated for an asset-specific allowance as described in Note 13 of JPMorgan Chase’s 2018 Form 10-K.

(in millions)		Residential mortgage Home equity Total residential real estate – excluding PCI
Jun 30,
2019
Dec 31,
2018
 Jun 30,
2019
Dec 31,
2018
 Jun 30,
2019
Dec 31,
2018
Impaired loans        
With an allowance$3,173
$3,381
 $1,089
$1,142
 $4,262
$4,523
Without an allowance(a)
1,208
1,184
 865
870
 2,073
2,054
Total impaired loans(b)(c)
$4,381
$4,565
 $1,954
$2,012
 $6,335
$6,577
Allowance for loan losses related to impaired loans$60
$88
 $17
$45
 $77
$133
Unpaid principal balance of impaired loans(d)
5,965
6,207
 3,362
3,466
 9,327
9,673
Impaired loans on nonaccrual status(e)
1,436
1,459
 946
955
 2,382
2,414
(in millions, except weighted-average data)March 31, 2020
December 31, 2019
 
Nonaccrual loans(a)(b)(c)(d)
$3,730
$2,780
 
90 or more days past due and government guaranteed(e)
32
38
 

   
Current estimated LTV ratios(f)(g)
 

 
Greater than 125% and refreshed FICO scores: 

 
Equal to or greater than 660$31
$31
 
Less than 66028
38
 
101% to 125% and refreshed FICO scores: 

 
Equal to or greater than 660148
134
 
Less than 660119
132
 
80% to 100% and refreshed FICO scores:   
Equal to or greater than 6605,310
5,953
 
Less than 660758
764
 
Less than 80% and refreshed FICO scores: 

 
Equal to or greater than 660219,395
219,469
 
Less than 66014,545
14,681
 
No FICO/LTV available1,962
2,052
 
U.S. government-guaranteed53
63
 
Total retained loans$242,349
$243,317
 
    
Weighted average LTV ratio(f)(h)
54%55% 
Weighted average FICO(g)(h)
759
758
 
    
Geographic region(i)
   
California$81,783
$82,147
 
New York32,121
31,996
 
Illinois15,246
15,587
 
Texas14,567
14,474
 
Florida13,755
13,668
 
Washington8,915
8,990
 
Colorado8,437
8,447
 
New Jersey7,736
7,752
 
Massachusetts6,129
6,210
 
Arizona5,129
5,171
 
All other(j)
48,531
48,875
 
Total retained loans$242,349
$243,317
 
(a)RepresentsIncludes collateral-dependent residential real estate loans that are charged off to the fair value of the underlying collateral less cost to sell. The Firm reports, in accordance with regulatory guidance, residential real estate loans that have been discharged under Chapter 7 bankruptcy and not reaffirmed by the borrower (“Chapter 7 loans”) as collateral-dependent nonaccrual TDRs, regardless of their delinquency status. At June 30, 2019,March 31, 2020, approximately 8% of Chapter 7 residential real estate loans included approximately 12% of residential mortgages and 8% of home equity that were 30 days or more past due.due, respectively.
(b)At June 30, 2019, and DecemberMarch 31, 2018, $2.6 billion and $4.1 billion, respectively,2020, nonaccrual loans included $970 million of PCD loans. Prior to the adoption of CECL, nonaccrual loans modified subsequent to repurchase from Ginnie Mae in accordance withexcluded PCI loans as the standardsFirm recognized interest income on each pool of PCI loans as each of the appropriate government agency (i.e., FHA, VA, RHS) are not included in the table above. When such loans perform subsequent to modification in accordance with Ginnie Mae guidelines, they are generally sold back into Ginnie Mae loan pools. Modified loans that do not re-perform become subject to foreclosure.pools was performing.
(c)PredominantlyGenerally, all impairedconsumer nonaccrual loans inhave an allowance. In accordance with regulatory guidance, certain nonaccrual loans that are considered collateral-dependent have been charged off to the table above are infair value of their underlying collateral less costs to sell. If the U.S.value of the underlying collateral has subsequently improved, the related allowance may be negative.
(d)RepresentsThe related interest income on nonaccrual loans recorded on a cash basis was $43 million and $42 million for the contractual amount of principal owed at June 30,three months ended March 31, 2020 and 2019, and December 31, 2018. The unpaid principal balance differs from the impaired loan balances due to various factors including charge-offs, net deferred loan fees or costs, and unamortized discounts or premiums on purchased loans.respectively.
(e)These balances are excluded from nonaccrual loans as the loans are guaranteed by U.S government agencies. Typically the principal balance of the loans is insured and interest is guaranteed at a specified reimbursement rate subject to meeting agreed-upon servicing guidelines. At both June 30, 2019March 31, 2020, and December 31, 2018, nonaccrual2019, these balances included $31 million and $34 million, respectively, of loans included $2.0 billion of TDRs for whichthat are no longer accruing interest based on the borrowersagreed-upon servicing guidelines. For the remaining balance, interest is being accrued at the guaranteed reimbursement rate. There were less than0 loans that were not guaranteed by U.S. government agencies that are 90 or more days past due. For additional information about loans modified in a TDR that are on nonaccrual status refer to the Loan accounting framework in Note 12 of JPMorgan Chase’s 2018 Form 10-K.due and still accruing interest at March 31, 2020, and December 31, 2019.

The following tables present average impaired loans and the related interest income reported by the Firm.
Three months ended June 30,
(in millions)		Average impaired loans 
Interest income on
impaired loans(a)
 
Interest income on impaired
loans on a cash basis(a)
2019
2018
 2019
2018
 2019
2018
Residential mortgage$4,437
$5,254
 $57
$66
 $18
$20
Home equity1,980
2,087
 33
33
 20
21
Total residential real estate – excluding PCI$6,417
$7,341
 $90
$99
 $38
$41
         
Six months ended June 30,
(in millions)		Average impaired loans 
Interest income on
impaired loans(a)
 
Interest income on impaired
loans on a cash basis(a)
2019
2018
 2019
2018
 2019
2018
Residential mortgage$4,486
$5,431
 $116
$136
 $35
$39
Home equity1,991
2,105
 66
65
 41
42
Total residential real estate – excluding PCI$6,477
$7,536
 $182
$201
 $76
$81
(a)(f)Generally, interest income onRepresents the aggregate unpaid principal balance of loans modified in TDRs is recognized on a cash basis untildivided by the borrower has madeestimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. Current estimated combined LTV for junior lien home equity loans considers all available lien positions, as well as unused lines, related to the property.
(g)Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.
(h)Excludes loans with no FICO and/or LTV data available.
(i)The geographic regions presented in the table are ordered based on the magnitude of six payments under the new terms, unlesscorresponding loan balances at March 31, 2020.
(j)At March 31, 2020, and December 31, 2019, included mortgage loans insured by U.S. government agencies of $53 million and $63 million, respectively. These amounts have been excluded from the loan is deemed to be collateral-dependent.geographic regions presented based upon the government guarantee.


Loan modifications
Modifications of residential real estate loans excluding PCI loans,where the Firm grants concessions to borrowers who are experiencing financial difficulty are generally accounted for and reported as TDRs. Loans with short-term or other insignificant modifications that are not considered concessions are not TDRs. The carrying value of new TDRs was $142 million and $150 million for the three months ended March 31, 2020 and 2019, respectively. There were no additional commitments to lend to borrowers whose residential real estate loans excluding PCI loans, have been modified in TDRs.
The following table presents new TDRs reported by the Firm.
 Three months ended June 30, Six months ended June 30,
(in millions)2019
2018
 2019
2018
Residential mortgage$62
$100
 $131
$247
Home equity48
83
 114
186
Total residential real estate – excluding PCI$110
$183
 $245
$433



Nature and extent of modifications
The U.S. Treasury’s Making Home AffordableFirm’s proprietary modification programs as well as the Firm’s proprietary modification government programs, including U.S. GSEs, generally provide various concessions to financially troubled borrowers including, but not limited to, interest rate reductions, term or payment extensions and deferraldelays of principal and/or interest payments that would otherwise have been required under the terms of the original agreement.
The following tables provide table provides information about how residential real estate loans excluding PCI loans, were modified under the Firm’s loss mitigation programs described above during the periods presented. These tables exclude This table excludes Chapter 7 loans where the sole concession granted is the discharge of debt.
Three months ended June 30, 
Total residential
real estate –
excluding PCI
Residential mortgage Home equity 
2019
2018
 2019
2018
 2019
2018
Three months ended March 31,
2020
2019
Number of loans approved for a trial modification501
977
 411
849
 912
1,826
1,996
1,942
Number of loans permanently modified428
686
 816
1,268
 1,244
1,954
1,481
1,550
Concession granted:(a)
      
Interest rate reduction60%37% 73%53% 68%48%79%78%
Term or payment extension92
46
 74
59
 80
55
81
68
Principal and/or interest deferred29
50
 9
27
 16
35
11
12
Principal forgiveness6
8
 4
10
 4
9
4
6
Other(b)
45
32
 58
57
 54
48
55
60
     
Six months ended June 30, Total residential
real estate –
excluding PCI
Residential mortgage Home equity 
2019
2018
 2019
2018
 2019
2018
Number of loans approved for a trial modification1,238
1,276
 932
1,309
 2,170
2,585
Number of loans permanently modified871
1,655
 1,923
3,066
 2,794
4,721
Concession granted:(a)
     
Interest rate reduction60%27% 79%51% 73%42%
Term or payment extension90
35
 66
54
 74
48
Principal and/or interest deferred28
54
 8
26
 14
36
Principal forgiveness6
7
 5
7
 5
7
Other(b)
40
42
 65
58
 57
53
(a)Represents concessions granted in permanent modifications as a percentage of the number of loans permanently modified. The sum of the percentages exceeds 100% because predominantly all of the modifications include more than one type of concession. Concessions offered on trial modifications are generally consistent with those granted on permanent modifications.
(b)Includes variable interest rate to fixed interest rate modifications and forbearancespayment delays that meet the definition of a TDR for the three and six months ended June 30, 2019March 31, 2020 and 2018. Forbearances suspend or reduce monthly payments for a specific period of time to address a temporary hardship.2019.

Financial effects of modifications and redefaults
The following tables providetable provides information about the financial effects of the various concessions granted in modifications of residential real estate loans, excluding PCI loans under the loss mitigation programs described above and about redefaults of certain loans modified in TDRs for the periods presented. The following tables presenttable presents only the financial effects of permanent modifications and doesdo not include temporary concessions offered through trial modifications. These tablesThis table also excludeexcludes Chapter 7 loans where the sole concession granted is the discharge of debt.
Three months ended June 30,
(in millions, except weighted-average data)		Residential mortgage Home equity Total residential real estate – excluding PCI
2019
2018
 2019
2018
 2019
2018
(in millions, except weighted-average data)Three months ended March 31,
2020
2019
Weighted-average interest rate of loans with interest rate reductions – before TDR6.03%4.97% 5.51%5.21% 5.76%5.10%5.20%5.94%
Weighted-average interest rate of loans with interest rate reductions – after TDR4.47
3.15
 3.83
3.31
 4.14
3.24
3.48
4.00
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR19
25
 20
18
 19
23
22
20
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR39
37
 40
37
 39
38
39
38
Charge-offs recognized upon permanent modification$1
$—
 $—
$—
 $1
$—
$—
$—
Principal deferred5
4
 2
3
 7
7
5
4
Principal forgiven1
3
 1
2
 2
5
2
2
Balance of loans that redefaulted within one year of permanent modification(a)
$23
$25
 $16
$19
 $39
$44
$70
$56
     
Six months ended June 30,
(in millions, except weighted-average data)		Residential mortgage Home equity Total residential real estate – excluding PCI
2019
2018
 2019
2018
 2019
2018
Weighted-average interest rate of loans with interest rate reductions – before TDR6.28%5.03% 5.59%5.16% 5.86%5.11%
Weighted-average interest rate of loans with interest rate reductions – after TDR4.56
3.28
 3.75
3.16
 4.06
3.21
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR20
25
 20
19
 20
22
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR39
37
 40
39
 39
38
Charge-offs recognized upon permanent modification$1
$—
 $—
$1
 $1
$1
Principal deferred8
10
 3
5
 11
15
Principal forgiven2
6
 2
4
 4
10
Balance of loans that redefaulted within one year of permanent modification(a)
$56
$45
 $31
$33
 $87
$78
(a)Represents loans permanently modified in TDRs that experienced a payment default in the periods presented, and for which the payment default occurred within one year of the modification. The dollar amounts presented represent the balance of such loans at the end of the reporting period in which such loans defaulted. For residential real estate loans modified in TDRs, payment default is deemed to occur when the loan becomes two2 contractual payments past due. In the event that a modified loan redefaults, it is probable that the loan will ultimatelygenerally be liquidated through foreclosure or another similar type of liquidation transaction. Redefaults of loans modified within the last 12 months may not be representative of ultimate redefault levels.

At June 30, 2019, March 31, 2020, the weighted-average estimated remaining lives of residential real estate loans excluding PCI loans, permanently modified in TDRs were 9 years for both residential mortgage and home equity. 6 years. The estimated remaining lives of these loans reflect estimated prepayments, both voluntary and involuntary (i.e., foreclosures and other forced liquidations).

Active and suspended foreclosure
At June 30, 2019, March 31, 2020, and December 31, 2018,2019, the Firm had non-PCI residential real estate loans, excluding those insured by U.S. government agencies, with a carrying value of $609 million$1.1 billion and $653 million,$1.2 billion, respectively, that were not included in REO, but were in the process of active or suspended foreclosure.


Other consumer loansAuto and other
The following table below provides information on delinquency, which is the primary credit quality indicator for retained auto and other consumer loans.
 March 31, 2020 December 31, 2019

(in millions, except ratios)
Term Loans by origination year Revolving loans   
20202019201820172016Prior to 2016 Within the revolving periodConverted to term loansTotal Total
Loan delinquency            
Current$5,354
$17,455
$10,841
$7,478
$4,173
$2,056
 $3,268
$181
$50,806
 $51,005
30–119 days past due47
134
124
100
90
70
 26
17
608
 667
120 or more days past due—
—
—
1
—
1
 4
10
16
 10
Total retained loans$5,401
$17,589
$10,965
$7,579
$4,263
$2,127
 $3,298
$208
$51,430
 $51,682
% of 30+ days past due to total retained loans0.87%0.76%1.13%1.33%2.11%3.34% 0.91%12.98%1.21% 1.31%


Nonaccrual and other credit quality indicator
The following table provides information on nonaccrual and other credit quality indicator for retained loan classes, including auto and business bankingother consumer loans.
(in millions, except ratios)Auto 
Consumer &
Business Banking
 Total other consumerTotal Auto and other
Jun 30, 2019
Dec 31, 2018
 Jun 30, 2019
Dec 31, 2018
 Jun 30, 2019
Dec 31, 2018
Mar 31, 2020
Dec 31, 2019
Loan delinquency     
Current$61,562
$62,984
 $26,289
$26,249
 $87,851
$89,233
30–119 days past due511
589
 215
252
 726
841
120 or more days past due—
—
 112
111
 112
111
Total retained loans$62,073
$63,573
 $26,616
$26,612
 $88,689
$90,185
% of 30+ days past due to total retained loans0.82%0.93% 1.23%1.36% 0.94%1.06%
Nonaccrual loans(a)
108
128
 223
245
 331
373
Geographic region(b)
     
Nonaccrual loans(a)(b)(c)
147
146
 
Geographic region(d)
 
California$8,142
$8,330
 $5,689
$5,520
 $13,831
$13,850
$7,867
$7,795
Texas6,524
6,531
 3,060
2,993
 9,584
9,524
5,485
5,457
New York3,690
3,863
 4,349
4,381
 8,039
8,244
3,692
3,706
Florida3,060
3,025
Illinois3,625
3,716
 1,731
2,046
 5,356
5,762
2,396
2,443
Florida3,256
3,256
 1,519
1,502
 4,775
4,758
New Jersey1,778
1,798
Pennsylvania1,662
1,721
Ohio1,453
1,490
Arizona2,011
2,084
 1,275
1,491
 3,286
3,575
1,344
1,347
Ohio1,927
1,973
 1,210
1,305
 3,137
3,278
New Jersey1,936
1,981
 811
723
 2,747
2,704
Michigan1,305
1,357
 1,264
1,329
 2,569
2,686
Louisiana1,539
1,587
 789
860
 2,328
2,447
1,304
1,297
All other28,118
28,895
 4,919
4,462
 33,037
33,357
21,389
21,603
Total retained loans$62,073
$63,573
 $26,616
$26,612
 $88,689
$90,185
$51,430
$51,682
Loans by risk ratings(c)
     
Noncriticized$14,754
$15,749
 $18,707
$18,743
 $33,461
$34,492
Criticized performing407
273
 730
751
 1,137
1,024
Criticized nonaccrual—
—
 171
191
 171
191
(a)There were no0 loans that were 90 or more days past due and still accruing interest at June 30, 2019,March 31, 2020, and December 31, 2018.2019.
(b)All nonaccrual auto and other consumer loans generally have an allowance.
(c)Interest income on nonaccrual loans recognized on a cash basis was not material for the three months ended March 31, 2020 and 2019.
(d)The geographic regions presented in this table are ordered based on the magnitude of the corresponding loan balances at June 30, 2019.
(c)For risk-rated business banking and auto loans, the primary credit quality indicator is the risk rating of the loan, including whether the loans are considered to be criticized and/or nonaccrual.


Other consumer impaired loans and loan
modifications
The table below sets forth information about the Firm’s other consumer impaired loans, including risk-rated business banking and auto loans that have been placed on nonaccrual status, and loans that have been modified in TDRs.
(in millions)June 30,
2019
 December 31,
2018
Impaired loans   
With an allowance$207
 $222
Without an allowance(a)
20
 29
Total impaired loans(b)(c)
$227
 $251
Allowance for loan losses related to impaired loans$68
 $63
Unpaid principal balance of impaired loans(d)
327
 355
Impaired loans on nonaccrual status205
 229
(a)When discounted cash flows, collateral value or market price equals or exceeds the recorded investment in the loan, the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged off and/or there have been interest payments received and applied to the loan balance.
(b)Predominantly all other consumer impaired loans are in the U.S.
(c)Other consumer average impaired loans were $244 million and $277 million for the three months ended June 30, 2019 and 2018, respectively, and $245 million and $287 million for the six months ended June 30, 2019 and 2018, respectively. The related interest income on impaired loans, including those on a cash basis, was not material for the three and six months ended June 30, 2019 and 2018.
(d)Represents the contractual amount of principal owed at June 30, 2019, and DecemberMarch 31, 2018. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs, interest payments received and applied to the principal balance, net deferred loan fees or costs, and unamortized discounts or premiums on purchased loans.2020.
 
Loan modifications
Certain other consumer loan modifications are considered to be TDRs as they provide various concessions to borrowers who are experiencing financial difficulty. All of these TDRsLoans with short-term or other insignificant modifications that are reported as impaired loans. Refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K for further information on other consumer loans modified innot considered concessions are not TDRs.
At June 30, 2019 and December 31, 2018, other consumer loans modified in TDRs were $72 million and $79 million, respectively. The impact of these modifications, as well as new TDRs, were not material to the Firm for the three and six months ended June 30, 2019March 31, 2020 and 2018. 2019. Additional commitments to lend to borrowers whose loans have been modified in TDRs as of June 30, 2019 March 31, 2020 and December 31, 2018 2019 were not material. TDRs on nonaccrual status were $50 million and $57 million at June 30, 2019 and December 31, 2018, respectively.



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

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

Jun 30,
2019
Dec 31,
2018

Jun 30,
2019
Dec 31,
2018

Jun 30,
2019
Dec 31,
2018

Jun 30,
2019
Dec 31,
2018
Carrying value(a)
$8,149
$8,963

$4,343
$4,690

$1,857
$1,945

$7,893
$8,436

$22,242
$24,034
Loan delinquency (based on unpaid principal balance)



















Current$7,904
$8,624

$3,922
$4,226

$1,974
$2,033

$7,139
$7,592

$20,939
$22,475
30–149 days past due239
278

256
259

254
286

372
398

1,121
1,221
150 or more days past due193
242

185
223

105
123

395
457

878
1,045
Total loans$8,336
$9,144

$4,363
$4,708

$2,333
$2,442

$7,906
$8,447

$22,938
$24,741
% of 30+ days past due to total loans5.18%5.69%
10.11%10.24%
15.39%16.75%
9.70%10.12%
8.71%9.16%
Current estimated LTV ratios (based on unpaid principal balance)(b)(c)

















Greater than 125% and refreshed FICO scores:























Equal to or greater than 660$15
$17

$2
$1

$2
$—

$3
$3

$22
$21
Less than 66010
13

4
7

6
9

6
7

26
36
101% to 125% and refreshed FICO scores:























Equal to or greater than 660105
135

5
6

5
4

20
17

135
162
Less than 66045
65

19
22

28
35

21
33

113
155
80% to 100% and refreshed FICO scores:























Equal to or greater than 660708
805

67
75

56
54

108
119

939
1,053
Less than 660304
388

80
112

120
161

137
190

641
851
Lower than 80% and refreshed FICO scores:























Equal to or greater than 6605,241
5,548

2,692
2,689

820
739

5,143
5,111

13,896
14,087
Less than 6601,678
1,908

1,306
1,568

1,196
1,327

2,165
2,622

6,345
7,425
No FICO/LTV available230
265

188
228

100
113

303
345

821
951
Total unpaid principal balance$8,336
$9,144

$4,363
$4,708

$2,333
$2,442

$7,906
$8,447

$22,938
$24,741
Geographic region (based on unpaid principal balance)(d)




















California$4,942
$5,420

$2,381
$2,578

$568
$593

$4,517
$4,798

$12,408
$13,389
Florida901
976

306
332

224
234

660
713

2,091
2,255
New York485
525

350
365

259
268

470
502

1,564
1,660
Illinois217
233
 145
154
 119
123
 190
199
 671
709
Washington373
419

90
98

40
44

165
177

668
738
New Jersey191
210

119
134

83
88

230
258

623
690
Massachusetts59
65

108
113

71
73

226
240

464
491
Maryland44
48

91
95

93
96

169
178

397
417
Virginia49
54

84
91

35
37

197
211

365
393
Arizona149
165

63
69

39
43

103
112

354
389
All other926
1,029

626
679

802
843

979
1,059

3,333
3,610
Total unpaid principal balance$8,336
$9,144

$4,363
$4,708

$2,333
$2,442

$7,906
$8,447

$22,938
$24,741
(a)Carrying value includes the effect of fair value adjustments that were applied to the consumer PCI portfolio at the date of acquisition.
(b)Represents the aggregate unpaid principal balance of loans divided by the estimated current property value. Current property values are estimated, at a minimum, quarterly, based on home valuation models using nationally recognized home price index valuation estimates incorporating actual data to the extent available and forecasted data where actual data is not available. These property values do not represent actual appraised loan level collateral values; as such, the resulting ratios are necessarily imprecise and should be viewed as estimates. Current estimated combined LTV for junior lien home equity loans considers all available lien positions, as well as unused lines, related to the property.
(c)Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.
(d)The geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at June 30, 2019.

Approximately 26% of the PCI home equity portfolio are senior lien loans; the remaining balance are junior lien HELOANs or HELOCs.The following table represents the Firm’s delinquency statistics for PCI junior lien home equity loans and lines of credit based on the unpaid principal balance as of June 30, 2019, and December 31, 2018.
 Total loans Total 30+ day delinquency rate
(in millions, except ratios)Jun 30,
2019
Dec 31,
2018
 Jun 30,
2019
Dec 31,
2018
 
HELOCs(a)(b)
5,942
6,531
 3.69%4.00%
HELOANs250
280
 3.60
3.57
Total$6,192
$6,811
 3.68%3.98%

(a)In general, these HELOCs are revolving loans for a 10-year period, after which time the HELOC converts to an interest-only loan with a balloon payment at the end of the loan’s term. Substantially all HELOCs are beyond the revolving period.
(b)Includes loans modified into fixed rate amortizing loans.
The table below presents the accretable yield activity for the Firm’s PCI consumer loans for the three and six months ended June 30, 2019 and 2018, and represents the Firm’s estimate of gross interest income expected to be earned over the remaining life of the PCI loan portfolios. The table excludes the cost to fund the PCI portfolios, and therefore the accretable yield does not represent net interest income expected to be earned on these portfolios.
 Total PCI
(in millions, except ratios)Three months ended June 30, Six months ended June 30,
20192018 20192018
Beginning balance$8,043
$10,250
 $8,422
$11,159
Accretion into interest income(283)(327) (569)(655)
Changes in interest rates on variable-rate loans(78)(548) (94)(268)
Other changes in expected cash flows(a)
17
(653) (60)(1,514)
Balance at June 30$7,699
$8,722
 $7,699
$8,722
Accretable yield percentage5.41%4.93% 5.35%4.86%
(a)Other changes in expected cash flows may vary from period to period as the Firm continues to refine its cash flow model, for example cash flows expected to be collected due to the impact of modifications and changes in prepayment assumptions.
Active and suspended foreclosure
At June 30, 2019, and December 31, 2018, the Firm had PCI residential real estate loans with an unpaid principal balance of $826 million and $964 million, respectively, that were not included in REO, but were in the process of active or suspended foreclosure.

Credit card loan portfolio
For further
The credit card portfolio segment includes credit card loans originated and purchased by the Firm. Delinquency rates are the primary credit quality indicator for credit card loans as they provide an early warning that borrowers may be experiencing difficulties (30 days past due); information on those borrowers that have been delinquent for a longer period of time (90 days past due) is also considered. In addition to delinquency rates, the geographic distribution of the loans provides insight as to the credit quality of the portfolio based on the regional economy.
While the borrower’s credit score is another general indicator of credit quality, the Firm does not view credit scores as a primary indicator of credit quality because the borrower’s credit score tends to be a lagging indicator. The
distribution of such scores provides a general indicator of credit quality trends within the portfolio; however, the score does not capture all factors that would be predictive of future credit performance. Refreshed FICO score information, which is obtained at least quarterly, for a statistically significant random sample of the credit card loan portfolio includingis indicated in the following table. FICO is considered to be the industry benchmark for credit scores.
The Firm generally originates new card accounts to prime consumer borrowers. However, certain cardholders’ FICO scores may decrease over time, depending on the performance of the cardholder and changes in the credit score calculation.
The following table provides information on delinquency, which is the primary credit quality indicator for retained credit card loans.

(in millions, except ratios)
March 31, 2020 December 31, 2019
Within the revolving periodConverted to term loansTotal Total
Loan delinquency     
Current and less than 30 days past due
and still accruing		$149,689
$1,314
$151,003
 $165,767
30–89 days past due and still accruing1,325
126
1,451
 1,550
90 or more days past due and still accruing1,502
65
1,567
 1,607
Total retained loans$152,516
$1,505
$154,021
 $168,924
Loan delinquency ratios     
% of 30+ days past due to total retained loans1.85%12.69%1.96% 1.87%
% of 90+ days past due to total retained loans0.98
4.32
1.02
 0.95

Other credit quality indicators
The following table provides information on other credit quality indicators refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K.
The table below sets forth information about the Firm’s for retained credit card loans.
(in millions, except ratios)June 30,
2019
December 31,
2018
March 31, 2020
December 31, 2019
Loan delinquency 
Current and less than 30 days
past due and still accruing
$154,876
$153,746
30–89 days past due and still accruing1,323
1,426
90 or more days past due and still accruing1,369
1,444
Total retained loans$157,568
$156,616
Loan delinquency ratios 
% of 30+ days past due
to total retained loans
1.71%1.83%
% of 90+ days past due
to total retained loans
0.87
0.92
Geographic region(a)
  
California$24,047
$23,757
$23,199
$25,783
Texas15,495
15,085
15,517
16,728
New York13,676
13,601
13,264
14,544
Florida9,867
9,770
10,146
10,830
Illinois9,038
8,938
8,607
9,579
New Jersey6,721
6,739
6,424
7,165
Ohio5,060
5,094
4,874
5,406
Pennsylvania4,900
4,996
4,709
5,245
Colorado4,477
4,309
4,304
4,763
Michigan3,885
3,912
3,788
4,164
All other60,402
60,415
59,189
64,717
Total retained loans$157,568
$156,616
$154,021
$168,924
Percentage of portfolio based on carrying value with estimated refreshed FICO scores  
Equal to or greater than 66084.0%84.2%82.3%84.0%
Less than 66014.7
15.0
16.6
15.4
No FICO available1.3
0.8
1.1
0.6

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

Credit card impaired loans and loan modifications
For a detailed discussion of impaired credit card loans, including credit card loan modifications, refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K.
The table below sets forth information about the Firm’s impaired credit card loans. All of these loans are considered to be impaired as they have been modified in TDRs.
(in millions)June 30,
2019
December 31,
2018
Impaired credit card loans with an allowance(a)(b)(c)
$1,388
$1,319
Allowance for loan losses related to impaired credit card loans472
440
(a)The carrying value and the unpaid principal balance are the same for credit card impaired loans.
(b)There were no impaired loans without an allowance.
(c)Predominantly all impaired credit card loans are in the U.S.March 31, 2020.
The following table presents average balances of impaired credit card loans and interest income recognized on those loans.
 Three months ended June 30, Six months ended June 30,
(in millions)2019
2018
 2019
2018
Average impaired credit card loans$1,367
$1,244
 $1,353
$1,234
Interest income on impaired credit card loans18
16
 35
31

Loan modifications
The Firm may offer one of a number of loan modification programs granting concessions to credit card borrowers who are experiencing financial difficulty. MostThe Firm grants concessions for most of the credit card loans have been modified under long-term programs for borrowers who are experiencing financial difficulties.programs. These modifications involve placing the customer on a fixed payment plan, generally for 60 months, and typically include reducing the interest rate on the credit card. Substantially all modifications under the Firm’s long-term programs are considered to be TDRs. New enrollments in these loan modification programs were $226 million and $202 million for the three months ended June 30, 2019 and 2018, respectively, and $475 million and $425 million for the six months ended June 30, 2019 and 2018, respectively. For all periods disclosed, new enrollments were less than 1% of total retained credit card loans.
For additional information about credit card loanLoans with short-term or other insignificant modifications refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K.that are not considered concessions are not TDRs.
 
Financial effects of modifications and redefaults
The following table provides information about the financial effects of the concessions granted on credit card loans modified in TDRs and redefaults for the periods presented. For all periods disclosed, new enrollments were less than 1% of total retained credit card loans.
(in millions, except
weighted-average data)
Three months ended June 30, Six months ended June 30,Three months ended March 31, 
2019
2018
 2019
2018
2020
2019
 
Balance of new TDRs(a)
$277
$249
 
Weighted-average interest rate of loans –
before TDR
19.38%18.00% 19.25%17.61%18.82%19.13% 
Weighted-average interest rate of loans –
after TDR
4.71
5.06
 4.88
5.13
4.02
5.03
 
Loans that redefaulted within one year of modification(a)
$32
$25
 $66
$51
Balance of loans that redefaulted within one year of modification(b)
$36
$34
 
(a)Represents the outstanding balance prior to modification.
(b)Represents loans modified in TDRs that experienced a payment default in the periods presented, and for which the payment default occurred within one year of the modification. The amounts presented represent the balance of such loans as of the end of the quarter in which they defaulted.
For credit card loans modified in TDRs, payment default is deemed to have occurred when the borrower misses two2 consecutive contractual payments. A substantial portion of these loans are expected to be charged-offcharged off in accordance with the Firm’s standard charge-off policy. Based on historical experience, the estimated weighted-average default rate for modified credit card loans was expected to be 34.04%35.15% and 33.38%32.89% as of June 30, 2019,March 31, 2020, and December 31, 2018,2019, respectively.



Wholesale loan portfolio
Wholesale loans include loans made to a variety of clients, ranging from large corporate and institutional clients to high-net-worth individuals.
The primary credit quality indicator for wholesale loans is the internal risk rating assigned to each loan. Risk ratings are used to identify the credit quality of loans and differentiate risk within the portfolio. Risk ratings on loans consider the PD and the LGD. The PD is the likelihood that a loan will default. The LGD is the estimated loss on the loan that would be realized upon the default of the borrower and takes into consideration collateral and structural support for each credit facility.
Management considers several factors to determine an appropriate internal risk rating, including the obligor’s debt capacity and financial flexibility, the level of the obligor’s earnings, the amount and sources for repayment, the level and nature of contingencies, management strength, and the industry and geography in which the obligor operates. The Firm’s internal risk ratings generally align with the qualitative characteristics (e.g., borrower capacity to meet financial commitments and vulnerability to changes in the economic environment) defined by S&P and Moody’s, however the quantitative characteristics (e.g., PDs and LGDs) may differ as they reflect internal historical experiences and assumptions. The Firm considers internal ratings equivalent to BBB-/Baa3 or higher as investment grade, and these ratings have a lower PD and/or lower LGD than non-investment grade ratings.
Noninvestment-grade ratings are further classified as noncriticized and criticized, and the criticized portion is further subdivided into performing and nonaccrual loans, representing management’s assessment of the collectibility of principal and interest. Criticized loans have a higher PD than noncriticized loans. The Firm’s definition of criticized aligns with the U.S. banking regulatory definition of criticized exposures, which consist of special mention, substandard and doubtful categories.
 
each loan. ForRisk ratings are reviewed on a regular and ongoing basis by Credit Risk Management and are adjusted as necessary for updated information affecting the obligor’s ability to fulfill its obligations.
As noted above, the risk rating of a loan considers the industry in which the obligor conducts its operations. As part of the overall credit risk management framework, the Firm focuses on the management and diversification of its industry and client exposures, with particular attention paid to industries with actual or potential credit concern. Refer to Note 4 for further informationdetail on these risk ratings, refer to Note 12 and Note 13 of JPMorgan Chase’s 2018 Form 10-K.industry concentrations.


The table below providesfollowing tables provide information by class of receivableon internal risk rating, which is the primary credit quality indicator for the retained loans in the Wholesale portfolio segment.wholesale loans.
Commercial
 and industrial
 Real estate Financial
institutions		Governments & Agencies 
Other(d)
Total
retained loans		Secured by real estate Commercial and industrial Other Total retained loans
(in millions,
except ratios)
Jun 30,
2019		Dec 31,
2018		 Jun 30,
2019		Dec 31,
2018		 Jun 30,
2019		Dec 31,
2018		Jun 30,
2019		Dec 31,
2018		 Jun 30,
2019		Dec 31,
2018		Jun 30,
2019		Dec 31,
2018		Mar 31,
2020		Dec 31,
2019		 Mar 31,
2020		Dec 31,
2019		 Mar 31,
2020		Dec 31,
2019		 Mar 31,
2020		Dec 31,
2019
Loans by risk ratings              
Investment-grade$67,490
$73,497
 $100,115
$100,107
 $36,432
$32,178
$13,431
$13,984
 $119,720
$119,963
$337,188
$339,729
$96,786
$96,611
 $106,902
$80,489
 $203,635
$186,344
 $407,323
$363,444
Noninvestment-grade:              
Noncriticized54,639
51,720
 14,582
14,876
 14,779
15,316
258
201
 10,756
11,478
95,014
93,591
23,334
22,493
 80,210
60,437
 31,231
27,591
 134,775
110,521
Criticized performing3,478
3,738
 815
620
 198
150
3
2
 534
182
5,028
4,692
1,339
1,131
 8,459
4,399
 1,436
1,126
 11,234
6,656
Criticized nonaccrual933
851
 91
134
 10
4
—
—
 204
161
1,238
1,150
254
183
 1,278
844
 425
30
 1,957
1,057
Total noninvestment-
grade
59,050
56,309
 15,488
15,630
 14,987
15,470
261
203
 11,494
11,821
101,280
99,433
24,927
23,807
 89,947
65,680
 $33,092
28,747
 147,966
118,234
Total retained loans$126,540
$129,806
 $115,603
$115,737
 $51,419
$47,648
$13,692
$14,187
 $131,214
$131,784
$438,468
$439,162
$121,713
$120,418
 $196,849
$146,169
 $236,727
$215,091
 $555,289
$481,678
% of total criticized exposure to
total retained loans
3.49%3.54% 0.78%0.65% 0.40%0.32%0.02%0.01% 0.56%0.26%1.43%1.33%
% of investment-grade to total retained loans

79.52%80.23% 54.31%55.07% 86.02%86.63% 73.35%75.45%
% of total criticized to total retained loans1.31
1.09
 4.95
3.59
 0.79
0.54
 2.38
1.60
% of criticized nonaccrual
to total retained loans
0.74
0.66
 0.08
0.12
 0.02
0.01
—
—
 0.16
0.12
0.28
0.26
0.21
0.15
 0.65
0.58
 0.18
0.01
 0.35
0.22
       
Loans by geographic
distribution(a)
       
Total non-U.S.$31,054
$29,572
 $3,248
$2,967
 $16,632
$18,524
$2,753
$3,150
 $47,473
$48,433
$101,160
$102,646
Total U.S.95,486
100,234
 112,355
112,770
 34,787
29,124
10,939
11,037
 83,741
83,351
337,308
336,516
Total retained loans$126,540
$129,806
 $115,603
$115,737
 $51,419
$47,648
$13,692
$14,187
 $131,214
$131,784
$438,468
$439,162
       
       
Loan
delinquency(b)
       
Current and less than 30 days past due and still accruing$125,003
$128,678
 $115,409
$115,533
 $51,377
$47,622
$13,687
$14,165
 $130,246
$130,918
$435,722
$436,916
30–89 days past due
and still accruing
493
109
 99
67
 31
12
3
18
 764
702
1,390
908
90 or more days
past due and
still accruing(c)
111
168
 4
3
 1
10
2
4
 —
3
118
188
Criticized nonaccrual933
851
 91
134
 10
4
—
—
 204
161
1,238
1,150
Total
retained loans
$126,540
$129,806
 $115,603
$115,737
 $51,419
$47,648
$13,692
$14,187
 $131,214
$131,784
$438,468
$439,162
 Secured by real estate  

(in millions)
March 31, 2020 December 31, 2019
Term loans by origination year Revolving loans    
20202019201820172016Prior to 2016 Within the revolving periodConverted to term loans Total Total
Loans by risk ratings             
Investment-grade$5,211
$21,611
$15,099
$14,485
$16,839
$22,148
 $1,392
$1
 $96,786
 $96,611
Noninvestment-grade659
2,944
3,498
2,492
2,611
12,030
 692
1
 24,927
 23,807
Total retained loans$5,870
$24,555
$18,597
$16,977
$19,450
$34,178
 $2,084
$2
 $121,713
 $120,418
 Commercial and industrial  

(in millions)
March 31, 2020 December 31, 2019
Term loans by origination year Revolving loans    
20202019201820172016Prior to 2016 Within the revolving periodConverted to term loans Total Total
Loans by risk ratings             
Investment-grade$10,837
$11,781
$5,349
$4,054
$1,435
$1,662
 $71,780
$4
 $106,902
 $80,489
Noninvestment-grade6,192
11,346
6,785
2,998
970
3,079
 58,486
91
 89,947
 65,680
Total retained loans$17,029
$23,127
$12,134
$7,052
$2,405
$4,741
 $130,266
$95
 $196,849
 $146,169
 
Other(a)
  

(in millions)
March 31, 2020 December 31, 2019
Term loans by origination year Revolving loans    
20202019201820172016Prior to 2016 Within the revolving periodConverted to term loans Total Total
Loans by risk ratings             
Investment-grade$11,434
$14,841
$10,247
$7,719
$4,660
$14,835
 $139,618
$281
 $203,635
 $186,344
Noninvestment-grade2,692
3,346
2,447
743
180
686
 22,958
40
 33,092
 28,747
Total retained loans$14,126
$18,187
$12,694
$8,462
$4,840
$15,521
 $162,576
$321
 $236,727
 $215,091
(a)Includes loans to financial institutions, states and political subdivisions, SPEs, nonprofits, personal investment companies and trusts, as well as loans to individuals and individual entities (predominantly Wealth Management clients within AWM). Refer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for more information on SPEs.

The following table presents additional information on retained loans secured by real estate, which consists of loans secured wholly or substantially by a lien or liens on real property at origination.

(in millions, except ratios)
Multifamily Other commercial Total retained loans secured by real estate
Mar 31,
2020
Dec 31,
2019
 Mar 31,
2020
Dec 31,
2019
 Mar 31,
2020
Dec 31,
2019
Retained loans secured by real estate$74,494
$73,840
 $47,219
$46,578
 $121,713
$120,418
Criticized342
340
 1,251
974
 1,593
1,314
% of total criticized to total retained loans secured by real estate0.46%0.46% 2.65%2.09% 1.31%1.09%
Criticized nonaccrual$28
$28
 $226
$155
 $254
$183
% of criticized nonaccrual loans to total retained loans secured by real estate0.04%0.04% 0.48%0.33% 0.21%0.15%
Geographic distribution and delinquency
The following table provides information on the geographic distribution and delinquency for retained wholesale loans.
 Secured by real estate 
Commercial
 and industrial
 Other Total
retained loans
(in millions,
 except ratios)
Mar 31,
2020		Dec 31,
2019		 Mar 31,
2020		Dec 31,
2019		 Mar 31,
2020		Dec 31,
2019		 Mar 31,
2020		Dec 31,
2019
Loans by geographic distribution(a)
           
Total non-U.S.$2,466
$2,582
 $44,606
$34,215
 $67,738
$64,579
 $114,810
$101,376
Total U.S.119,247
117,836
 152,243
111,954
 168,989
150,512
 440,479
380,302
Total retained loans$121,713
$120,418
 $196,849
$146,169
 $236,727
$215,091
 $555,289
$481,678
Loan delinquency(b)
           
Current and less than 30 days past due and still accruing$121,173
$120,119
 $195,210
$144,839
 $235,741
$214,641
 $552,124
$479,599
30–89 days past due and still accruing286
115
 329
449
 538
415
 1,153
979
90 or more days past due and still accruing(c)
—
1
 32
37
 23
5
 55
43
Criticized nonaccrual254
183
 1,278
844
 425
30
 1,957
1,057
Total retained loans$121,713
$120,418
 $196,849
$146,169
 $236,727
$215,091
 $555,289
$481,678
(a)The U.S. and non-U.S. distribution is determined based predominantly on the domicile of the borrower.
(b)The credit quality of wholesale loans is assessed primarily through ongoing review and monitoring of an obligor’s ability to meet contractual obligations rather than relying on the past due status, which is generally a lagging indicator of credit quality. For a further discussion, refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K.
(c)Represents loans that are considered well-collateralized and therefore still accruing interest.
(d)Other includes individuals and individual entities (predominantly consists of Wealth Management clients within AWM and includes exposure to personal investment companies and personal and testamentary trusts), SPEs and Private education and civic organizations. For more information on SPEs, refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K.

Nonaccrual loans
The following table presents additionalprovides information on the real estate class of loans within the Wholesale portfolio for the periods indicated. For further information on real estate loans, refer to Note 12 of JPMorgan Chase’s 2018 Form 10-K.retained wholesale nonaccrual loans.

(in millions, except ratios)
Multifamily Other commercial Total real estate loans
Jun 30,
2019
Dec 31,
2018
 Jun 30,
2019
Dec 31,
2018
 Jun 30,
2019
Dec 31,
2018
Real estate retained loans$78,643
$79,184
 $36,960
$36,553
 $115,603
$115,737
Criticized exposure548
388
 358
366
 906
754
% of total criticized exposure to total real estate retained loans0.70%0.49% 0.97%1.00% 0.78%0.65%
Criticized nonaccrual$38
$57
 $53
$77
 $91
$134
% of criticized nonaccrual loans to total real estate retained loans0.05%0.07% 0.14%0.21% 0.08%0.12%

Wholesale impaired retained loans and loan modifications
Wholesale impaired retained loans consist of loans that have been placed on nonaccrual status and/or that have been modified in a TDR. All impaired loans are evaluated for an asset-specific allowance as described in Note 13 of JPMorgan Chase’s 2018 Form 10-K.
The table below sets forth information about the Firm’s wholesale impaired retained loans.

(in millions)
Commercial
and industrial
 Real estate 
Financial
institutions
 
Governments &
 Agencies
 Other 
Total
retained loans
 
Jun 30,
2019		Dec 31,
2018		 Jun 30,
2019		Dec 31,
2018		 Jun 30,
2019		Dec 31,
2018		 Jun 30,
2019		Dec 31,
2018		 Jun 30,
2019		Dec 31,
2018		 Jun 30,
2019		 Dec 31,
2018		 
Impaired loans                   
With an allowance$734
$807
 $78
$107
 $10
$4
 $—
$—
 $213
$152
 $1,035
 $1,070
 
Without an allowance(a)
244
140
 14
27
 —
—
 —
—
 2
13
 260
 180
 
Total impaired loans
$978
$947
 $92
$134
 $10
$4
 $—
$—
 $215
$165
 $1,295
(c) 
$1,250
(c) 
Allowance for loan losses related to impaired loans$209
$252
 $22
$25
 $2
$1
 $—
$—
 $55
$19
 $288
 $297
 
Unpaid principal balance of impaired loans(b)
1,131
1,043
 118
203
 11
4
 —
—
 228
473
 1,488
 1,723
 
 
(in millions)
Secured by real estate 
Commercial
and industrial
 Other 
Total
retained loans
Mar 31,
2020		Dec 31,
2019		 Mar 31,
2020		Dec 31,
2019		 Mar 31,
2020		Dec 31,
2019		 Mar 31,
2020		Dec 31,
2019
Nonaccrual loans           
With an allowance$232
$169
 $1,157
$688
 $345
$28
 $1,734
$885
Without an allowance(a)
22
14
 121
156
 80
2
 223
172
Total nonaccrual loans(b)
$254
$183
 $1,278
$844
 $425
$30
 $1,957
$1,057
(a)When the discounted cash flows, collateral value or market price equals or exceeds the recorded investment inamortized cost of the loan, the loan does not require an allowance. This typically occurs when the impaired loans have been partially charged-offcharged off and/or there have been interest payments received and applied to the loan balance.
(b)Represents the contractual amount of principal owed at June 30, 2019, and December 31, 2018. The unpaid principal balance differs from the impaired loan balances due to various factors, including charge-offs; interest payments received and applied to the carrying value; net deferred loan fees or costs; and unamortized discount or premiums on purchased loans.
(c)Based upon the domicile of the borrower, largely consists of loans in the U.S.
The following table presents the Firm’s average impaired retained loans for the periods indicated.
 Three months ended June 30, Six months ended June 30,
(in millions)2019
2018
 2019
2018
Commercial and industrial$953
$1,106
 $1,087
$1,224
Real estate106
142
 118
142
Financial institutions13
90
 13
91
Governments & Agencies—
—
 —
—
Other293
208
 248
219
Total(a)
$1,365
$1,546
 $1,466
$1,676
(a)The related interestInterest income on accruing impairednonaccrual loans and interest income recognized on a cash basis werewas not material for the three and six months ended June 30, 2019March 31, 2020 and 2018.2019.
Loan modifications
Certain loan modifications are considered to be TDRs as they provide various concessions to borrowers who are experiencing financial difficulty. All TDRsLoans with short-term or other insignificant modifications that are reported as impaired loans in the tables above. TDRs were $462 million and $576 million as of June 30, 2019, and December 31, 2018, respectively.not considered concessions are not TDRs. The impact of these modifications, as well as new TDRs, werewas not material to the Firm for the three and six months ended June 30, 2019March 31, 2020 and 2018.

2019.

Note 1213 – Allowance for credit losses
For
Effective January 1, 2020, the Firm adopted the CECL accounting guidance. The adoption of this guidance established a detailed discussionsingle allowance framework for all financial assets measured at amortized cost and certain off-balance sheet credit exposures. This framework requires that management’s estimate reflects credit losses over the instrument’s remaining expected life and considers expected future changes in macroeconomic conditions. Refer to Note 1 for further information.
JPMorgan Chase’s allowance for credit losses comprises:
the allowance for loan losses, which covers the Firm’s retained loan portfolios (scored and risk-rated) and is presented separately on the balance sheet,
the allowance for lending-related commitments, which is presented on the balance sheet in accounts payable and other liabilities, and
the allowance for credit losses on investment securities, which covers the Firm’s HTM and AFS securities and is recognized within Investment Securities on the balance sheet.
The income statement effect of all changes in the allowance for credit losses is recognized in the provision for credit losses.
Determining the appropriateness of the allowance for credit losses is complex and requires significant judgment by management about the effect of matters that are inherently uncertain. At least quarterly, the allowance for credit losses is reviewed by the CRO, the CFO and the related accountingController of the Firm. Subsequent evaluations of credit exposures, considering the macroeconomic conditions, forecasts and other factors then prevailing, may result in significant changes in the allowance for credit losses in future periods.
The Firm’s policies referused to determine its allowance for loan losses and its allowance for lending-related commitments are described in the following paragraphs. Refer to Note 10 for a description of the policies used to determine the allowance for credit losses on investment securities.
Methodology for allowances for loan losses and lending-related commitments
The allowance for loan losses and allowance for lending-related commitments represents expected credit losses over the remaining expected life of retained loans and lending-related commitments that are not unconditionally cancellable. The Firm does not record an allowance for future draws on unconditionally cancellable lending-related commitments (e.g., credit cards). Expected losses related to accrued interest on credit card loans are included in the Firm’s allowance for loan losses. However, the Firm does not record an allowance on other accrued interest receivables, due to its policy to write them off no later than 90 days past due by reversing interest income.
The expected life of each instrument is determined by considering its contractual term, expected prepayments, cancellation features, and certain extension and call options. The expected life of funded credit card loans is generally estimated by considering expected future payments on the
credit card account, and determining how much of those amounts should be allocated to repayments of the funded loan balance (as of the balance sheet date) versus other account activity. This allocation is made using an approach that incorporates the payment application requirements of the Credit Card Accountability Responsibility and Disclosure Act of 2009, generally paying down the highest interest rate balances first.
The estimate of expected credit losses includes expected recoveries of amounts previously charged off or expected to be charged off, even if such recoveries result in a negative allowance.
Collective and Individual Assessments
When calculating the allowance for loan losses and the allowance for lending-related commitments, the Firm assesses whether exposures share similar risk characteristics. If similar risk characteristics exist, the Firm estimates expected credit losses collectively, considering the risk associated with a particular pool and the probability that the exposures within the pool will deteriorate or default.
Relevant risk characteristics for the consumer portfolio include product type, delinquency status, current FICO scores, geographic distribution, and, for collateralized loans, current LTV ratios. Relevant risk characteristics for the wholesale portfolio include LOB, geography, risk rating, delinquency status, level and type of collateral, industry sector, credit enhancement, product type, facility purpose, tenor, and payment terms. The assessment of risk characteristics is subject to significant management judgment. Emphasizing one characteristic over another or considering additional characteristics could affect the allowance.
The majority of the Firm’s credit exposures share risk characteristics with other similar exposures, and as a result are collectively assessed for impairment (“portfolio-based component”). The portfolio-based component covers consumer loans, performing risk-rated loans and certain lending-related commitments.
If an exposure does not share risk characteristics with other exposures, the Firm generally estimates expected credit losses on an individual basis, considering expected repayment and conditions impacting that individual exposure (“asset-specific component”). The asset-specific component covers modified PCD loans, loans modified or reasonably expected to be modified in a TDR, collateral-dependent loans, as well as, risk-rated loans that have been placed on nonaccrual status.
Portfolio-based component
The portfolio-based component begins with a quantitative calculation that considers the likelihood of the borrower changing delinquency status or moving from one risk rating to another. The quantitative calculation covers expected credit losses over an instrument’s expected life and is estimated by applying credit loss factors to the Firm’s estimated exposure at default.
The credit loss factors incorporate the probability of borrower default as well as loss severity in the event of default. They are derived using a weighted average of five internally developed macroeconomic scenarios over an eight-quarter

forecast period, followed by a single year straight-line interpolation to revert to long run historical information for periods beyond the eight-quarter forecast period. The eight-quarter forecast incorporates hundreds of macroeconomic variables that are relevant for exposures across the Firm, with modeled credit losses being driven primarily by a subset of less than twenty variables, including U.S. real gross domestic product (“GDP”), U.S. unemployment rates and initial jobless claims, short- and long-term interest rates, U.S. equity prices, corporate credit spreads, housing prices, and oil prices. The specific variables that have the greatest effect on the modeled losses of each portfolio vary by portfolio and geography. The five macroeconomic scenarios consist of a central, relative adverse, extreme adverse, relative upside and extreme upside scenario, and are updated by the Firm’s central forecasting team. The scenarios take into consideration the Firm’s overarching economic outlook, internal perspectives from subject matter experts across the Firm, and market consensus and involve a governed process that incorporates feedback from senior management across LOBs, Corporate Finance and Risk Management.
In light of the rapidly evolving economic conditions and forecasts during March 2020, management updated its macroeconomic forecast near the end of its credit loss estimation process in early April. This macroeconomic forecast was used to generate an updated credit loss estimate that was the primary driver of the Firm’s provision for credit losses for the three months ended March 31, 2020. Subsequent changes to this forecast and related estimates will be reflected in the provision for credit losses in future periods.
The quantitative calculation is adjusted to take into consideration model imprecision, emerging risk assessments, trends and other subjective factors that are not yet reflected in the calculation; these adjustments are accomplished in part by analyzing the historical loss experience, including during stressed periods, for each major product segment. However, it is difficult to predict whether historical loss experience is indicative of future loss levels. In particular, the COVID-19 pandemic has stressed many macroeconomic variables to degrees not seen nor experienced in recent history, which creates additional challenges in the use of modeled credit loss estimates.
Management applies significant judgment in making this adjustment, taking into account uncertainties associated with various factors not already considered in the quantitative calculation, including current economic and political conditions, quality of underwriting standards, borrower behavior, credit concentrations or deterioration within an industry, product or portfolio, as well as other relevant internal and external factors affecting the credit quality of the portfolio. In certain instances, the interrelationships between these factors create further uncertainties.
The application of different inputs into the quantitative calculation, and the assumptions used by management to adjust the quantitative calculation, are subject to significant management judgment, and emphasizing one input or assumption over another, or considering other inputs or assumptions, could affect the estimate of the allowance for
loan losses and the allowance for lending-related commitments.
Asset-specific component
To determine the asset-specific component of the allowance, collateral-dependent loans (including those loans for which foreclosure is probable) and larger, nonaccrual risk-rated loans in the wholesale portfolio segment are generally evaluated individually, while smaller loans (both scored and risk-rated) are aggregated for evaluation using factors relevant for the respective class of assets.
The Firm generally measures the asset-specific allowance as the difference between the amortized cost of the loan and the present value of the cash flows expected to be collected, discounted at the loan’s original effective interest rate. Subsequent changes in impairment are generally recognized as an adjustment to the allowance for loan losses. For collateral-dependent loans, the fair value of collateral less estimated costs to sell is used to determine the charge-off amount for declines in value (to reduce the amortized cost of the loan to the fair value of collateral) or the amount of negative allowance that should be recognized (for recoveries of prior charge-offs associated with improvements in the fair value of collateral).
The asset-specific component of the allowance for loan losses that have been or are expected to be modified in TDRs incorporates the effect of the modification on the loan’s expected cash flows (including forgone interest, principal forgiveness, as well as other concessions), and also the potential for redefault. For residential real estate loans modified in or expected to be modified in TDRs, the Firm develops product-specific probability of default estimates, which are applied at a loan level to compute expected losses. In developing these probabilities of default, the Firm considers the relationship between the credit quality characteristics of the underlying loans and certain assumptions about housing prices and unemployment, based upon industry-wide data. The Firm also considers its own historical loss experience to-date based on actual redefaulted modified loans. For credit card loans modified in or expected to be modified in TDRs, expected losses incorporate projected redefaults based on the Firm’s historical experience by type of modification program. For wholesale loans modified or expected to be modified in TDRs, expected losses incorporate management’s expectation of the borrower’s ability to repay under the modified terms.
Estimating the timing and amounts of future cash flows is highly judgmental as these cash flow projections rely upon estimates such as loss severities, asset valuations, default rates (including redefault rates on modified loans), the amounts and timing of interest or principal payments (including any expected prepayments) or other factors that are reflective of current and expected market conditions. These estimates are, in turn, dependent on factors such as the duration of current overall economic conditions, industry-, portfolio-, or borrower-specific factors, the expected outcome of insolvency proceedings as well as, in certain circumstances, other economic factors. All of these estimates and assumptions require significant management judgment and certain assumptions are highly subjective. 13 of JPMorgan Chase’s 2018 Form 10-K.

Allowance for credit losses and related information
The table below summarizes information about the allowances for loan losses and lending-related commitments, and includes a breakdown of loans and lending-related commitments by impairment methodology. Refer to Note 10 for further information on the allowance for credit losses on investment securities.
The adoption of the CECL accounting guidance resulted in a change in the accounting for PCI loans, which are considered PCD loans. In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.
2019 2018 
2020(e)
 2019
Six months ended June 30,
(in millions)
Consumer, excluding
credit card
Credit card WholesaleTotal Consumer, excluding credit card Credit card WholesaleTotal 
Three months ended March 31,
(in millions)
Consumer, excluding
credit card
Credit cardWholesaleTotal Consumer, excluding credit cardCredit cardWholesaleTotal
Allowance for loan losses             
Beginning balance at January 1,$4,146
$5,184
 $4,115
$13,445
 $4,579
 $4,884
 $4,141
$13,604
 $2,538
$5,683
$4,902
$13,123
 $3,434
$5,184
$4,827
$13,445
Cumulative effect of a change in accounting principle297
5,517
(1,642)4,172
 NA
NA
NA
NA
Gross charge-offs471
2,725
 150
3,346
 539
 2,578
 241
3,358
 233
1,488
181
1,902
 234
1,344
64
1,642
Gross recoveries(277)(283) (22)(582) (451) (244) (76)(771) 
Gross recoveries collected(239)(175)(19)(433) (127)(142)(12)(281)
Net charge-offs194
2,442
 128
2,764
 88
 2,334
 165
2,587
 (6)1,313
162
1,469
 107
1,202
52
1,361
Write-offs of PCI loans(a)
89
—
 —
89
 93
 —
 —
93
 NA
NA
NA
NA
 50
—
—
50
Provision for loan losses(204)2,642
 131
2,569
 90
 2,334
 (98)2,326
 613
5,063
1,742
7,418
 120
1,202
170
1,492
Other—
(1) 6
5
 —
 —
 —
—
 —
—
—
—
 2
(1)6
7
Ending balance at June 30,$3,659
$5,383
 $4,124
$13,166
 $4,488
 $4,884
 $3,878
$13,250
 
Ending balance at March 31,$3,454
$14,950
$4,840
$23,244
 $3,399
$5,183
$4,951
$13,533
   
Allowance for lending-related commitments   
Beginning balance at January 1,$12
$—
$1,179
$1,191
 $12
$—
$1,043
$1,055
Cumulative effect of a change in accounting principle133
—
(35)98
 NA
NA
NA
NA
Provision for lending-related commitments6
—
852
858
 —
—
3
3
Other—
—
—
—
 —
—
—
—
Ending balance at March 31,$151
$—
$1,996
$2,147
 $12
$—
$1,046
$1,058
             
Allowance for loan losses by impairment methodology             
Asset-specific(b)
$145
$472
(c) 
$288
$905
 $226
 $402
(c) 
$318
$946
 $223
$530
$556
$1,309
 $89
$461
$479
$1,029
Formula-based2,215
4,911
 3,836
10,962
 2,130
 4,482
 3,560
10,172
 
Portfolio-based3,231
14,420
4,284
21,935
 1,572
4,722
4,472
10,766
PCI1,299
—
 —
1,299
 2,132
 —
 —
2,132
 NA
NA
NA
NA
 1,738
—
—
1,738
Total allowance for loan losses$3,659
$5,383
 $4,124
$13,166
 $4,488
 $4,884
 $3,878
$13,250
 $3,454
$14,950
$4,840
$23,244
 $3,399
$5,183
$4,951
$13,533
             
Loans by impairment methodology             
Asset-specific$6,562
$1,388
 $1,295
$9,245
 $7,387
 $1,252
 $1,327
$9,966
 
Formula-based322,888
156,180
 437,173
916,241
 340,223
 143,969
 419,302
903,494
 
Asset-specific(b)
$17,036
$1,505
$2,021
$20,562
 $6,536
$1,365
$1,860
$9,761
Portfolio-based276,743
152,516
553,268
982,527
 292,465
149,150
469,258
910,873
PCI22,242
—
 —
22,242
 26,977
 —
 3
26,980
 NA
NA
NA
NA
 23,207
—
—
23,207
Total retained loans$351,692
$157,568
 $438,468
$947,728
 $374,587
 $145,221
 $420,632
$940,440
 $293,779
$154,021
$555,289
$1,003,089
 $322,208
$150,515
$471,118
$943,841
             
Impaired collateral-dependent loans          
Collateral-dependent loans   
Net charge-offs$19
$—
 $8
$27
 $14
 $—
 $—
$14
 $29
$—
$17
$46
 $9
$—
$11
$20
Loans measured at fair value of collateral less cost to sell2,098
—
 83
2,181
 2,124
 —
 300
2,424
 2,941
—
94
3,035
 2,098
—
154
2,252
             
Allowance for lending-related commitments          
Beginning balance at January 1,$33
$—
 $1,022
$1,055
 $33
 $—
 $1,035
$1,068
 
Provision for lending-related commitments—
—
 75
75
 —
 —
 49
49
 
Other—
—
 (1)(1) —
 —
 —
—
 
Ending balance at June 30,$33
$—
 $1,096
$1,129
 $33
 $—
 $1,084
$1,117
 
          
Allowance for lending-related commitments by impairment methodology             
Asset-specific$—
$—
 $136
$136
 $—
 $—
 $139
$139
 $—
$—
$187
$187
 $—
$—
$114
$114
Formula-based33
—
 960
993
 33
 —
 945
978
 
Total allowance for lending-related commitments$33
$—
 $1,096
$1,129
 $33
 $—
 $1,084
$1,117
 
Portfolio-based151
—
1,809
1,960
 12
—
932
944
Total allowance for lending-related commitments(c)
$151
$—
$1,996
$2,147
 $12
$—
$1,046
$1,058
             
Lending-related commitments by impairment methodology             
Asset-specific$—
$—
 $465
$465
 $—
 $—
 $712
$712
 $—
$—
$619
$619
 $—
$—
$455
$455
Formula-based51,491
633,970
 393,836
1,079,297
 51,784
 592,452
 401,045
1,045,281
 
Portfolio-based(d)
33,498
—
357,866
391,364
 28,666
—
393,555
422,221
Total lending-related commitments$51,491
$633,970
 $394,301
$1,079,762
 $51,784
 $592,452
 $401,757
$1,045,993
 $33,498
$—
$358,485
$391,983
 $28,666
$—
$394,010
$422,676


(a)Write-offsPrior to the adoption of CECL, write-offs of PCI loans arewere recorded against the allowance for loan losses when actual losses for a pool exceedexceeded estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan iswas recognized when the underlying loan iswas removed from a pool.
(b)Includes modified PCD loans and loans that have been modified or are reasonably expected to be modified in a TDR. Also includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a TDR.
(c)for the wholesale portfolio segment. The asset-specific credit card allowance for loan losses is relatedloans modified, or reasonably expected to loans that have beenbe modified, in a TDR; such allowanceTDR is calculated based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.
(c)The allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets.
(d)At March 31, 2020 and 2019, lending-related commitments excluded $8.0 billion and $9.3 billion, respectively, for the consumer, excluding credit card portfolio segment; and $681.4 billion and $626.9 billion, respectively, for the credit card portfolio segment, which were not subject to the allowance for lending-related commitments.
(e)Excludes HTM securities, which had an allowance for credit losses of $19 million and a provision for credit losses of $9 million as of and for the three months ended March 31, 2020.

Discussion of current period changes
The increase in the allowances for loan losses and lending-related commitments in the first quarter of 2020 was primarily
driven by an increase in the provision for credit losses, reflecting deterioration in the macroeconomic environment as a result
of the impact of the COVID-19 pandemic and continued pressure on oil prices. In light of the rapidly evolving economic conditions and forecasts during March 2020, management updated its macroeconomic forecast near the end of its credit loss estimation process in early April. This macroeconomic forecast included a decline in the U.S. real GDP of approximately 25% and an increase in the U.S. unemployment rate to above 10%, both in the second quarter, followed by a solid recovery in the second half of 2020. In addition, the allowances for loan losses and lending-related commitments reflect the estimated impact of the Firm’s payment relief actions as well as the federal government’s stimulus programs related to the COVID-19 pandemic. Subsequent changes to this forecast and related estimates will be reflected in the provision for credit losses in future periods.

Note 1314 – Variable interest entities
ForRefer to Note 1 of JPMorgan Chase’s 2019 Form 10-K for a further description of JPMorgan Chase’s accounting policies regarding consolidation of VIEs, refer to Note 1 of JPMorgan Chase’s 2018 Form 10-K.VIEs.
The following table summarizes the most significant types of Firm-sponsored VIEs by business segment.
Line of BusinessTransaction TypeActivityForm 10-Q page reference
CCBCredit card securitization trustsSecuritization of originated credit card receivables138145
 Mortgage securitization trustsServicing and securitization of both originated and purchased residential mortgages138-140145-147
CIBMortgage and other securitization trustsSecuritization of both originated and purchased residential and commercial mortgages, and other consumer loans138-140145-147
 Multi-seller conduitsAssist clients in accessing the financial markets in a cost-efficient manner and structures transactions to meet investor needs140147
 Municipal bond vehiclesFinancing of municipal bond investments140147

The Firm also invests in and provides financing and other services to VIEs sponsored by third parties. Refer to pages 141–142 148–149 of this Note for more information on the VIEs sponsored by third parties.
Significant Firm-sponsored VIEs
Credit card securitizations
ForRefer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for a more detailed discussion of JPMorgan Chase’s involvement with credit card securitizations, refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K.securitizations.
As a result of the Firm’s continuing involvement, the Firm is considered to be the primary beneficiary of its Firm-sponsored credit card securitization trusts, including its primary vehicle,trust, the Chase Issuance Trust. Refer to the table on page 141148 of this Note for further information on consolidated VIE assets and liabilities.
 
Firm-sponsored mortgage and other securitization trusts
The Firm securitizes (or has securitized) originated and purchased residential mortgages, commercial mortgages and other consumer loans primarily in its CCB and CIB businesses. Depending on the particular transaction, as well as the respective business involved, the Firm may act as the servicer of the loans and/or retain certain beneficial interests in the securitization trusts.
ForRefer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for a detailed discussion of the Firm’s involvement with Firm-sponsored mortgage and other securitization trusts, as well as the accounting treatment relating to such trusts, refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K.trusts.


The following table presents the total unpaid principal amount of assets held in Firm-sponsored private-label securitization entities, including those in which the Firm has continuing involvement, and those that are consolidated by the Firm. Continuing involvement includes servicing the loans, holding senior interests or subordinated interests (including amounts required to be held pursuant to credit risk retention rules), recourse or guarantee arrangements, and derivative contracts. In certain instances, the Firm’s only continuing involvement is servicing the loans. The Firm’s maximum loss exposure from retained and purchased interests is the carrying value of these interests. Refer to Securitization activity on page 142 149 of this Note for further information regarding the Firm’s cash flows associated with and interests retained in nonconsolidated VIEs, and pages 142–143 149–150 of this Note for information on the Firm’s loan sales and securitization activity related to U.S. GSEs and government agencies.
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
June 30, 2019 (in millions)Total assets held by securitization VIEsAssets
held in consolidated securitization VIEs		Assets held in nonconsolidated securitization VIEs with continuing involvement Trading assets Investment securitiesOther financial assetsTotal interests held by JPMorgan
Chase
March 31, 2020 (in millions)Total assets held by securitization VIEsAssets
held in consolidated securitization VIEs		Assets held in nonconsolidated securitization VIEs with continuing involvement Trading assets Investment securitiesOther financial assetsTotal interests held by JPMorgan
Chase
Securitization-related(a)
      
Residential mortgage:      
Prime/Alt-A and option ARMs$61,838
$3,053
$49,625
 $424
$512
$—
$936
$59,615
$2,657
$48,743
 $588
$1,127
$—
$1,715
Subprime15,664
—
14,441
 19
—
—
19
14,198
51
13,024
 9
—
—
9
Commercial and other(b)
101,785
—
80,511
 785
792
215
1,792
114,032
—
94,361
 989
1,197
273
2,459
Total$179,287
$3,053
$144,577
 $1,228
$1,304
$215
$2,747
$187,845
$2,708
$156,128
 $1,586
$2,324
$273
$4,183
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
Principal amount outstanding 
JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e)
December 31, 2018 (in millions)Total assets held by securitization VIEs
Assets
held in consolidated securitization VIEs
Assets held in nonconsolidated securitization VIEs with continuing involvement Trading assets Investment securitiesOther financial assets
Total interests held by
JPMorgan
Chase
December 31, 2019 (in millions)Total assets held by securitization VIEs
Assets
held in consolidated securitization VIEs
Assets held in nonconsolidated securitization VIEs with continuing involvement Trading assets Investment securitiesOther financial assets
Total interests held by
JPMorgan
Chase
Securitization-related(a)
      
Residential mortgage:      
Prime/Alt-A and option ARMs$63,350
$3,237
$50,679
 $623
$647
$—
$1,270
$60,348
$2,796
$48,734
 $535
$625
$—
$1,160
Subprime16,729
32
15,434
 53
—
—
53
14,661
—
13,490
 7
—
—
7
Commercial and other(b)
102,961
—
79,387
 783
801
210
1,794
111,903
—
80,878
 785
773
241
1,799
Total$183,040
$3,269
$145,500
 $1,459
$1,448
$210
$3,117
$186,912
$2,796
$143,102
 $1,327
$1,398
$241
$2,966
(a)Excludes U.S. GSEs and government agency securitizations and re-securitizations, which are not Firm-sponsored. Refer to pages 142–143149–150 of this Note for information on the Firm’s loan sales and securitization activity related to U.S. GSEs and government agencies.
(b)Consists of securities backed by commercial loans (predominantly real estate)estate loans and non-mortgage-related consumer receivables purchased from third parties.
(c)
Excludes the following: retained servicing (refer to Note 1415 for a discussion of MSRs); securities retained from loan sales and securitization activity related to U.S. GSEs and government agencies; interest rate and foreign exchange derivatives primarily used to manage interest rate and foreign exchange risks of securitization entities (Refer(refer to Note 45 for further information on derivatives); senior and subordinated securities of $215$525 million and $77$184 million, respectively, at June 30, 2019,March 31, 2020, and $87$106 million and $28$94 million, respectively, at December 31, 2018,2019, which the Firm purchased in connection with CIB’s secondary market-making activities.
(d)Includes interests held in re-securitization transactions.
(e)As of June 30, 2019,March 31, 2020, and December 31, 2018, 56%2019, 64% and 60%63%, respectively, of the Firm’s retained securitization interests, which are predominantly carried at fair value and include amounts required to be held pursuant to credit risk retention rules, were risk-rated “A” or better, on an S&P-equivalent basis. The retained interests in prime residential mortgages consisted of $895 million$1.7 billion and $1.3$1.1 billion of investment-grade retained interests, and $41$61 million and $16$72 million of noninvestment-grade retained interests at June 30, 2019,March 31, 2020, and December 31, 2018,2019, respectively. The retained interests in commercial and other securitizations trusts consisted of $1.6 billion and $1.2 billion of investment-grade retained interests, at both June 30, 2019 and December 31, 2018, and $593$881 million and $623$575 million of noninvestment-grade retained interests at June 30, 2019,March 31, 2020, and December 31, 2018,2019, respectively.


Residential mortgage
The Firm securitizes residential mortgage loans originated by CCB,, as well as residential mortgage loans purchased from third parties by either CCB or CIB. ForCIB. Refer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for a more detailed description of the Firm’s involvement with residential mortgage securitizations, refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K. securitizations. Refer to the table on page 141 148 of this Note for more information on the consolidated residential mortgage securitizations, and the table on the previous page of this Note for further information on interests held in nonconsolidated residential mortgage securitizations.
Commercial mortgages and other consumer securitizations
CIB originates and securitizes commercial mortgage loans, and engages in underwriting and trading activities involving the securities issued by securitization trusts. ForRefer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for a more detailed description of the Firm’s involvement with commercial mortgage and other consumer securitizations, refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K. securitizations. Refer to the table on page 141 148 of this Note for more information on the consolidated commercial mortgage securitizations, and the table on the previous page of this Note for further information on interests held in nonconsolidated securitizations.
Re-securitizations
ForRefer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for a more detailed description of JPMorgan Chase’s participation in certain re-securitization transactions, refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K.transactions.
The following table presents the principal amount of securities transferred to re-securitization VIEs.
 Three months ended March 31,
(in millions)2020
 2019
Transfers of securities to VIEs   
U.S. GSEs and government agencies$2,717
 $4,503

 Three months ended June 30, Six months ended June 30,
(in millions)2019
 2018
 2019
 2018
Transfers of securities to VIEs       
Agency$2,564
 $3,995
 $7,067
 $8,781
The Firm did not transfer any private label securities to re-securitization VIEs during the first three months of 2020 and 2019, respectively, and retained interests in any such Firm-sponsored VIEs as of March 31, 2020 and December 31, 2019 were immaterial.
The following table presents information on nonconsolidated re-securitization VIEs.
 
Nonconsolidated
re-securitization VIEs
(in millions)March 31, 2020
 December 31, 2019
U.S. GSEs and government agencies   
Interest in VIEs$3,162
 $2,928

 
Nonconsolidated
re-securitization VIEs
(in millions)June 30, 2019
 December 31, 2018
Firm-sponsored private-label   
Assets held in VIEs with continuing involvement(a)
$22
 $118
Interest in VIEs—
 10
Agency   
Interest in VIEs2,192
 3,058
(a)Represents the principal amount and includes the notional amount of interest-only securities.
As of June 30, 2019,March 31, 2020, and December 31, 2018,2019, the Firm did not consolidate any U.S. GSE and government agency re-securitization VIEs or any Firm-sponsored private-label re-securitization VIEs.
 
Multi-seller conduits
ForRefer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for a more detailed description of JPMorgan Chase’s principal involvement with Firm-administered Firm-administered multi-seller conduits, refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K.conduits.
In the normal course of business, JPMorgan Chase makes markets in and invests in commercial paper issued by the Firm-administeredFirm-administered multi-seller conduits. The Firm held $8.2 $14.7 billion and $20.1$16.3 billion of the commercial paper issued by the Firm-administeredFirm-administered multi-seller conduits at June 30, 2019, March 31, 2020, and December 31, 2018,2019, respectively, which have been eliminated in consolidation. The Firm’s investments reflect the Firm’s funding needs and capacity and were not driven by market illiquidity.Other than the amounts required to be held pursuant to credit risk retention rules, the Firm is not obligated under any agreement to purchase the commercial paper issued by the Firm-administeredFirm-administered multi-seller conduits.
Deal-specific liquidity facilities, program-wide liquidity and credit enhancement provided by the Firm have been eliminated in consolidation. The Firm or the Firm-administered multi-seller conduits provide lending-related commitments to certain clients of the Firm-administered multi-seller conduits. The unfunded commitments were $8.4 $7.1 billion and $8.0$8.9 billion at June 30, 2019,March 31, 2020, and December 31, 2018,2019, respectively, and are reported as off-balance sheet lending-related commitments in other unfunded commitments to extend credit. ForRefer to Note 23 for more information on off-balance sheet lending-related commitments, refer to Note 22.commitments.
Municipal bond vehicles
Municipal bond vehicles or tender option bond (“TOB”) trusts allow institutions to finance their municipal bond investments at short-term rates. TOB transactions are known as customer TOB trusts and non-customer TOB trusts. Customer TOB trusts are sponsored by a third party, refer to pages 141–142 148–149 of this Note for further information.
The Firm serves as sponsor for all non-customer TOB transactions. ForRefer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for a more detailed description of JPMorgan Chase’s Municipal bond vehicles, refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K.vehicles.




Consolidated VIE assets and liabilities
The following table presents information on assets and liabilities related to VIEs consolidated by the Firm as of June 30, 2019,March 31, 2020, and December 31, 2018.2019.
Assets LiabilitiesAssets Liabilities
June 30, 2019 (in millions)Trading assetsLoans
Other(b) 
 Total
assets(c)
 
Beneficial interests in
VIE assets(d)
Other(e)
Total
liabilities
March 31, 2020 (in millions)Trading assetsLoans
Other(b) 
 Total
assets(c)
 
Beneficial interests in
VIE assets(d)
Other(e)
Total
liabilities
VIE program type      
Firm-sponsored credit card trusts$—
$28,230
$412
$28,642
 $9,302
$8
$9,310
$—
$13,202
$265
$13,467
 $6,562
$4
$6,566
Firm-administered multi-seller conduits3
22,575
335
22,913
 14,734
36
14,770
1
26,661
348
27,010
 12,174
36
12,210
Municipal bond vehicles1,304
—
3
1,307
 1,281
2
1,283
1,778
—
7
1,785
 589
4
593
Mortgage securitization entities(a)
2
3,078
55
3,135
 267
146
413
110
2,608
76
2,794
 305
125
430
Other113
—
182
295
 1
99
100
46
—
295
341
 —
147
147
Total$1,422
$53,883
$987
$56,292
 $25,585
$291
$25,876
$1,935
$42,471
$991
$45,397
 $19,630
$316
$19,946
      
Assets LiabilitiesAssets Liabilities
December 31, 2018 (in millions)Trading assetsLoans
Other(b) 
 Total
assets(c)
 
Beneficial interests in
VIE assets(d)
Other(e)
Total
liabilities
December 31, 2019 (in millions)Trading assetsLoans
Other(b) 
 Total
assets(c)
 
Beneficial interests in
VIE assets(d)
Other(e)
Total
liabilities
VIE program type      
Firm-sponsored credit card trusts$—
$31,760
$491
$32,251
 $13,404
$12
$13,416
$—
$14,986
$266
$15,252
 $6,461
$6
$6,467
Firm-administered multi-seller conduits—
24,411
300
24,711
 4,842
33
4,875
1
25,183
355
25,539
 9,223
36
9,259
Municipal bond vehicles1,779
—
4
1,783
 1,685
3
1,688
1,903
—
4
1,907
 1,881
3
1,884
Mortgage securitization entities(a)
53
3,285
40
3,378
 308
161
469
66
2,762
64
2,892
 276
130
406
Other134
—
178
312
 2
103
105
663
—
192
855
 —
272
272
Total$1,966
$59,456
$1,013
$62,435
 $20,241
$312
$20,553
$2,633
$42,931
$881
$46,445
 $17,841
$447
$18,288
(a)Includes residential and commercial mortgage securitizations.
(b)Includes assets classified as cash and other assets on the Consolidated balance sheets.
(c)The assets of the consolidated VIEs included in the program types above are used to settle the liabilities of those entities. The assets and liabilities include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation.
(d)The interest-bearing beneficial interest liabilities issued by consolidated VIEs are classified in the line item on the Consolidated balance sheets titled, “Beneficial interests issued by consolidated variable interest entities.” The holders of these beneficial interests generally do not have recourse to the general credit of JPMorgan Chase. For conduits program-wide credit enhancements, referRefer to noteNote 14 of JPMorgan Chase’s 20182019 Form 10-K.10-K for conduits program-wide credit enhancements. Included in beneficial interests in VIE assets are long-term beneficial interests of $9.6$6.9 billion and $13.7$6.7 billion at June 30, 2019,March 31, 2020, and December 31, 2018.2019, respectively.
(e)Includes liabilities classified as accounts payable and other liabilities on the Consolidated balance sheets.
VIEs sponsored by third parties
The Firm enters into transactions with VIEs structured by other parties. These include, for example, acting as a derivative counterparty, liquidity provider,, investor,, underwriter, placement agent, remarketing agent, trustee or custodian. These transactions are conducted at arm’s-length, and individual credit decisions are based on the analysis of the specific VIE, taking into consideration the quality of the underlying assets. Where the Firm does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, or a variable interest that could potentially be significant, the Firm generally does not consolidate the VIE, but it records and reports these positions on its Consolidated balance sheets in the same manner it would record and report positions in respect of any other third-party transaction.
Tax credit vehicles
The Firm holds investments in unconsolidated tax credit vehicles, which are limited partnerships and similar entities that construct, own and operate affordable housing,, wind, solar energy, and other alternative energy projects. These entities are primarily considered VIEs. A
third party is typically the
general partner or managing member and has control over the significant activities of the tax credit vehicles, and accordingly the Firm does not consolidate tax credit vehicles. The Firm generally invests in these partnerships as a limited partner and earns a return primarily through the receipt of tax credits allocated to the projects. The maximum loss exposure, represented by equity investments and funding commitments, was $16.0 $19.2 billion and $16.5$19.1 billion, of which $4.1 $5.4 billion and $4.0$5.5 billion was unfunded at June 30, 2019March 31, 2020 and December 31, 2018, 2019, respectively. In order to reduce the risk of loss, the Firm assesses each project and withholds varying amounts of its capital investment until the project qualifies for tax credits. ForRefer to Note 25 of JPMorgan Chase’s 2019 Form 10-K for further information on affordable housing tax credits, refercredits. Refer to Note 24 23 of JPMorgan Chase’s 2018this Form 10-K. For10-Q for more information on off-balance sheet lending-related commitments, refer to Note 22 of this Form 10-Q.commitments.

Customer municipal bond vehicles (TOB trusts)
The Firm may provide various services to Customercustomer TOB trusts, including remarketing agent, liquidity or tender option provider. In certain Customercustomer TOB transactions, the

Firm, as liquidity provider, has entered into a reimbursement agreement with the Residual holder.
In those transactions, upon the termination of the vehicle, the Firm has recourse to the third-party Residual holders for any shortfall. The Firm does not have any intent to protect Residual holders from potential losses on any of the underlying municipal bonds. The Firm does not consolidate Customercustomer TOB trusts, since the Firm does not have the power to make decisions that significantly impact the economic performance of the municipal bond vehicle.
The Firm’s maximum exposure as a liquidity provider to Customercustomer TOB trusts at June 30, 2019 March 31, 2020 and December 31,
2018 2019 was $5.3 billion and $4.8$5.5 billion, respectively. The fair value of assets held by such VIEs at June 30, 2019March 31, 2020 and December 31, 2018,2019, was $8.1 billion and $8.6 billion, and $7.7 billion, respectively. ForRefer to Note 23 for more information on off-balance sheet lending-related commitments, refer to Note 22.commitments.
Loan securitizations
The Firm has securitized and sold a variety of loans, including residential mortgage, credit card, and commercial mortgage. For Refer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for a further description of the Firm’s accounting policies regarding securitizations, refer to Note 14 of JPMorgan Chase’s 2018 Form 10-K.securitizations.
Securitization activity
The following table provides information related to the Firm’s securitization activities for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, related to assets held in Firm-sponsoredFirm-sponsored securitization entities that were not consolidated by the Firm, and where sale accounting was achieved at the time of the securitization.
Three months ended June 30, Six months ended June 30,Three months ended March 31,
2019 2018 2019 20182020 2019
(in millions)
Residential mortgage(e)
Commercial and other(f)
 
Residential mortgage(e)
Commercial and other(f)
 
Residential mortgage(e)
Commercial and other(f)
 
Residential mortgage(e)
Commercial and other(f)
Residential mortgage(d)
Commercial and other(e)
 
Residential mortgage(d)
Commercial and other(e)
Principal securitized$2,125
$1,974
 $3,129
$2,181
 $3,907
$2,738
 $4,459
$5,172
$3,064
$3,188
 $1,782
$764
All cash flows during the period(a):
       
All cash flows during the period:(a)
   
Proceeds received from loan sales as financial instruments(b)(c)
$2,188
$2,041
 $3,122
$2,196
 $4,010
$2,823
 $4,460
$5,187
$3,136
$3,273
 $1,822
$782
Servicing fees collected(d)
73
1
 80
—
 150
1
 161
—
62
—
 77
—
Cash flows received on interests114
98
 137
84
 199
149
 229
131
117
29
 85
51
(a)Excludes re-securitization transactions.
(b)Predominantly includes Level 2 assets.
(c)The carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale.
(d)The prior period amounts have been revised to conform with the current period presentation.
(e)Includes prime mortgages only. Excludes loan securitization transactions entered into with Ginnie Mae, Fannie Maeactivity related to U.S. GSEs and Freddie Mac.government agencies.
(f)(e)Includes commercial mortgage and other consumer loans.
Loans and excess MSRs sold to U.S. government-sponsored
enterprises and loans in securitization transactions pursuant to
Ginnie Mae guidelines
In addition to the amounts reported in the securitization activity tables above, the Firm, in the normal course of business, sells originated and purchased mortgage loans and certain originated excess MSRs on a nonrecourse basis, predominantly to U.S. government-sponsored enterprises(“U.S. GSEs”).GSEs. These loans and excess MSRs are sold primarily for the purpose of securitization by the U.S. GSEs, who provide certain guarantee provisions (e.g., credit enhancement of the loans). The Firm also sells loans into securitization transactions pursuant to Ginnie Mae guidelines; these loans are typically insured or guaranteed by another U.S. government agency. The Firm does not consolidate the securitization vehicles underlying these transactions as it is not the primary beneficiary. For a limited number of loan sales, the Firm is obligated to share
 
a portion of the credit risk associated with the sold loans with the purchaser. Refer to Note 2223 of this Form 10-Q, and Note 2728 of JPMorgan Chase’s 20182019 Form 10-K for additional information about the Firm’s loan sales- and securitization-related indemnifications. Refer to Note 14 15 for additional information about the impact of the Firm’sFirm’s sale of certain excess MSRs.


The following table summarizes the activities related to loans sold to the U.S. GSEs, and loans in securitization transactions pursuant to Ginnie Mae guidelines.
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)2019
2018
 201920182020
2019
Carrying value of loans sold$23,138
$8,076
 $38,317
$16,836
$24,935
$15,179
Proceeds received from loan sales as cash2
—
 70
—
9
68
Proceeds from loan sales as securities(a)(b)
22,823
7,959
 37,660
16,578
24,663
14,837
Total proceeds received from loan sales(c)
$22,825
$7,959
 $37,730
$16,578
$24,672
$14,905
Gains on loan sales(d)(e)
$104
$9
 $153
$23
Gains/(losses) on loan sales(d)(e)
$4
$49
(a)Includes securities from U.S. GSEs and Ginnie Mae that are generally sold shortly after receipt or retained as part of the Firm’s Investmentinvestment securities portfolio.
(b)Included in level 2 assets.
(c)Excludes the value of MSRs retained upon the sale of loans.
(d)GainsGains/(losses) on loan sales include the value of MSRs.
(e)The carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale.
Options to repurchase delinquent loans
In addition to the Firm’s obligation to repurchase certain loans due to material breaches of representations and warranties as discussed in Note 22, 23, the Firm also has the option to repurchase delinquent loans that it services for Ginnie Mae loan pools, as well as for other U.S. government
agencies under certain arrangements.arrangements. The Firm typically elects to repurchase delinquent loans from Ginnie Mae loan
pools as it continues to service them and/or manage the foreclosure process in accordance with the applicable requirements, and such loans continue to be insured or guaranteed. When the Firm’s repurchase option becomes exercisable, such loans must be reported on the Consolidated balance sheets as a loan with a corresponding liability. For additional information, referRefer to Note 11.12 for additional information.
The following table presents loans the Firm repurchased or had an option to repurchase, real estate owned, and foreclosed government-guaranteed residential mortgage loans recognized on the Firm’s Consolidated balance sheets as of June 30, 2019March 31, 2020 and December 31, 2018. 2019. Substantially all of these loans and real estate are insured or guaranteed by U.S. government agencies.
(in millions)Jun 30,
2019
Dec 31,
2018
Mar 31,
2020
Dec 31,
2019
Loans repurchased or option to repurchase(a)
$5,214
$7,021
$1,906
$2,941
Real estate owned56
75
29
41
Foreclosed government-guaranteed residential mortgage loans(b)
277
361
138
198
(a)Predominantly all of these amounts relate to loans that have been repurchased from Ginnie Mae loan pools.
(b)Relates to voluntary repurchases of loans, which are included in accrued interest and accounts receivable.

Loan delinquencies and liquidation losses
The table below includes information about components of and delinquencies related to nonconsolidated securitized financial assets held in Firm-sponsored Firm-sponsored private-label securitization entities, in which the Firm has continuing involvement and delinquencies as of June 30, 2019, March 31, 2020, and December 31, 2018.2019.
    
Net liquidation losses(a)
    Net liquidation losses
Securitized assets 90 days past due Three months ended June 30, Six months ended June 30,Securitized assets 90 days past due Three months ended March 31,
(in millions)Jun 30,
2019
Dec 31,
2018
 Jun 30,
2019
Dec 31,
2018
 2019
2018
 2019
2018
Mar 31,
2020
Dec 31,
2019
 Mar 31,
2020
Dec 31,
2019
 2020
2019
Securitized loans            
Residential mortgage:            
Prime / Alt-A & option ARMs$49,625
$50,679
 $2,900
$3,354
 $171
$168
 $328
$271
$48,743
$48,734
 $2,312
$2,449
 $99
$157
Subprime14,441
15,434
 2,076
2,478
 167
140
 311
(462)13,024
13,490
 1,654
1,813
 86
144
Commercial and other80,511
79,387
 131
225
 24
21
 165
48
94,361
80,878
 223
187
 10
141
Total loans securitized$144,577
$145,500
 $5,107
$6,057
 $362
$329
 $804
$(143)$156,128
$143,102
 $4,189
$4,449
 $195
$442

(a)Includes liquidation gains as a result of private label mortgage settlement payments during the first quarter of 2018, which were reflected as asset recoveries by trustees.



Note 1415 – Goodwill and Mortgage servicing rights
ForRefer to Note 15 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the accounting policies related to goodwill and mortgage servicing rights, refer to Note 15 of JPMorgan Chase’s 2018 Form 10-K.rights.
Goodwill
The following table presents goodwill attributed to the business segments.
(in millions)June 30,
2019
December 31,
2018
March 31,
2020
December 31,
2019
Consumer & Community Banking(a)$30,991
$30,984
$30,083
$30,082
Corporate & Investment Bank(a)6,769
6,770
7,876
7,901
Commercial Banking2,860
2,860
2,986
2,982
Asset & Wealth Management6,857
6,857
6,855
6,858
Total goodwill$47,477
$47,471
$47,800
$47,823

(a)In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB, including the associated Goodwill of $959 million. Prior periods have been revised to conform with current period presentation.
The following table presents changes in the carrying amount of goodwill.
Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions)2019
 2018
 2019
 2018
2020
 2019
Balance at beginning
of period
$47,474
 $47,499
 $47,471
 $47,507
$47,823
 $47,471
Changes during the period from:          
Other(a)
3
 (11) 6
 (19)(23) 3
Balance at June 30,$47,477
 $47,488
 $47,477
 $47,488
Balance at March 31,$47,800
 $47,474
(a)Primarily relates to foreign currency remeasurement.adjustments.
 
Goodwill impairment testing
ForEffective January 1, 2020, the Firm adopted new accounting guidance related to goodwill impairment testing. The adoption of the guidance requires recognition of an impairment loss when the estimated fair value of a reporting unit falls below its carrying value. It eliminated the requirement that an impairment loss be recognized only if the estimated implied fair value of the goodwill is below its carrying value. Refer to Note 15 of JPMorgan Chase’s 2019 Form 10-K for a further descriptiondiscussion of the Firm’s goodwill impairment testing, including the primary method used to estimate the fair value of the reporting units and the assumptions used in the goodwill impairment test, refer to Impairment testing on pages 252–253 of JPMorgan Chase’s 2018 Form 10-K.test.
The Firm reviewed current economic conditions, estimated market cost of equity, as well as actual and projections of business performanceGoodwill is tested for all its businesses. Based upon such reviews, the Firm concluded that the goodwill allocated to its reporting units was not impaired as of June 30, 2019 or December 31, 2018, nor was goodwill written off due to impairment during the six months ended June 30, 2019fourth quarter of each fiscal year, or 2018.more often if events or circumstances, such as adverse changes in the business climate, indicate that there may be an impairment.  
DeclinesUnanticipated declines in business performance, increases in credit losses, increases in capital requirements, as well as deterioration in economic or market conditions, adverse regulatory or legislative changes or increases in the estimated market cost of equity, could cause the estimated fair values of the Firm’s reporting units or their associated goodwill to decline in the future, which could result in a material impairment charge to earnings in a future period related to some portion of the associated goodwill.
As of March 31, 2020, the Firm reviewed current economic conditions, including the potential impacts of the COVID-19 pandemic on business performance, estimated market cost of equity, and also reviewed actual and projections of business performance for all its reporting units. The Firm has concluded that the goodwill allocated to its reporting units was 0t impaired as of March 31, 2020, or December 31, 2019, nor was goodwill written off due to impairment during the three months ended March 31, 2020 or 2019.


Mortgage servicing rights
MSRs represent the fair value of expected future cash flows for performing servicing activities for others. The fair value considers estimated future servicing fees and ancillary revenue, offset by estimated costs to service the loans, and generally declines over time as net servicing cash flows are received, effectively amortizing the MSR asset against contractual servicing and ancillary fee income. MSRs are either purchased from third parties or recognized upon sale or securitization of mortgage loans if servicing is retained. ForRefer to Notes 2 and 15 of JPMorgan Chase’s 2019 Form 10-K for a further description of the MSR asset, interest rate risk management, and the valuation of MSRs, refer to Notes 2 and 15 of JPMorgan Chase’s 2018 Form 10-K.MSRs.
The following table summarizes MSR activity for the three and six months ended June 30, 2019March 31, 2020 and 2018.2019.
As of or for the three months
ended June 30,		 As of or for the six months
ended June 30,		As of or for the three months
ended March 31,
(in millions, except where otherwise noted)2019
 2018
 2019
 2018
2020
 2019
Fair value at beginning of period$5,957
 $6,202
 $6,130
 $6,030
$4,699
 $6,130
MSR activity:          
Originations of MSRs424
 157
 756
 333
271
 332
Purchase of MSRs2
 79
 106
 146
2
 104
Disposition of MSRs(a)
(217) (104) (328) (399)(75) (111)
Net additions/(dispositions)209
 132
 534
 80
198
 325
          
Changes due to collection/realization of expected cash flows(247) (187) (446) (347)(248) (199)
          
Changes in valuation due to inputs and assumptions:          
Changes due to market interest rates and other(b)
(540) 103
 (841) 485
(1,370) (301)
Changes in valuation due to other inputs and assumptions:          
Projected cash flows (e.g., cost to service)(350)
(e) 
—
 (350)
(e) 
—
(1) —
Discount rates153
 —
 153
 24
—
 —
Prepayment model changes and other(c)
(89) (9) (87) (31)(11) 2
Total changes in valuation due to other inputs and assumptions(286) (9) (284) (7)(12) 2
Total changes in valuation due to inputs and assumptions(826) 94
 (1,125) 478
(1,382) (299)
Fair value at June 30,$5,093
 $6,241
 $5,093
 $6,241
Fair value at March 31,$3,267
 $5,957
          
Change in unrealized gains/(losses) included in income related to MSRs held at June 30,$(826) $94
 $(1,125) $478
Change in unrealized gains/(losses) included in income related to MSRs held at March 31,$(1,382) $(299)
Contractual service fees, late fees and other ancillary fees included in income437
 446
 857
 911
364
 420
Third-party mortgage loans serviced at June 30, (in billions)527
 534
 527
 534
Servicer advances, net of an allowance for uncollectible amounts, at June 30, (in billions)(d)
2.2
 3.3
 2.2
 3.3
Third-party mortgage loans serviced at March 31, (in billions)506
 530
Servicer advances, net of an allowance for uncollectible amounts, at March 31, (in billions)(d)
1.7
 2.6
(a)Includes excess MSRs transferred to agency-sponsored trusts in exchange for stripped mortgage backed securities (“SMBS”). In each transaction, a portion of the SMBS was acquired by third parties at the transaction date; the Firm acquired the remaining balance of those SMBS as trading securities.
(b)Represents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments.
(c)Represents changes in prepayments other than those attributable to changes in market interest rates.
(d)Represents amounts the Firm pays as the servicer (e.g., scheduled principal and interest, taxes and insurance), which will generally be reimbursed within a short period of time after the advance from future cash flows from the trust or the underlying loans. The Firm’s credit risk associated with these servicer advances is minimal because reimbursement of the advances is typically senior to all cash payments to investors. In addition, the Firm maintains the right to stop payment to investors if the collateral is insufficient to cover the advance. However, certain of these servicer advances may not be recoverable if they were not made in accordance with applicable rules and agreements.
(e)The decrease in projected cash flows was largely related to default servicing assumption updates.


The following table presents the components of mortgage fees and related income (including the impact of MSR risk management activities) for the three and six months ended June 30, 2019March 31, 2020 and 2018.2019.
 Three months ended June 30, Six months ended June 30,Three months ended March 31,
(in millions) 2019
 2018
 2019
 2018
2020
 2019
CCB mortgage fees and related income        
        
Net production revenue $353
 $93
 $553
 $188
$319
 $200
           
Net mortgage servicing revenue:           
Operating revenue:           
Loan servicing revenue 417
 441
 821
 954
339
 404
Changes in MSR asset fair value due to collection/realization of expected cash flows (247) (187) (446) (347)(248) (199)
Total operating revenue 170
 254
 375
 607
91
 205
Risk management:           
Changes in MSR asset fair value due to market interest rates and other(a)
 (540) 104
 (841) 486
(1,370) (301)
Other changes in MSR asset fair value due to other inputs and assumptions
in model(b)
 (286) (9) (284) (7)(12) 2
Change in derivative fair value and other 582
 (118) 872
 (485)1,292
 290
Total risk management (244) (23) (253) (6)(90) (9)
Total net mortgage servicing revenue (74) 231
 122
 601
1
 196
        
Total CCB mortgage fees and related income 279
 324
 675
 789
        
All other —
 —
 —
 —
Mortgage fees and related income $279
 $324
 $675
 $789
$320
 $396
(a)Represents both the impact of changes in estimated future prepayments due to changes in market interest rates, and the difference between actual and expected prepayments.
(b)Represents the aggregate impact of changes in model inputs and assumptions such as projected cash flows (e.g., cost to service), discount rates and changes in prepayments other than those attributable to changes in market interest rates (e.g., changes in prepayments due to changes in home prices).
The table below outlines the key economic assumptions used to determine the fair value of the Firm’s MSRs at June 30, 2019,March 31, 2020, and December 31, 2018,2019, and outlines hypothetical sensitivities of those fair values to immediate adverse changes in those assumptions, as defined below.
(in millions, except rates)(in millions, except rates)Jun 30,
2019
 Dec 31,
2018
(in millions, except rates)Mar 31,
2020
 Dec 31,
2019
Weighted-average prepayment speed assumption (constant prepayment rate)Weighted-average prepayment speed assumption (constant prepayment rate)11.58% 8.78%Weighted-average prepayment speed assumption (constant prepayment rate)19.12% 11.67%
Impact on fair value of 10% adverse changeImpact on fair value of 10% adverse change$(216) $(205)Impact on fair value of 10% adverse change$(206) $(200)
Impact on fair value of 20% adverse changeImpact on fair value of 20% adverse change(414) (397)Impact on fair value of 20% adverse change(391) (384)
Weighted-average option adjusted spread(b)(a)
Weighted-average option adjusted spread(b)(a)
7.84% 7.87%
Weighted-average option adjusted spread(b)(a)
8.95% 7.93%
Impact on fair value of a 100 basis point adverse changeImpact on fair value of a 100 basis point adverse change$(183) $(235)Impact on fair value of a 100 basis point adverse change$(103) $(169)
Impact on fair value of a 200 basis point adverse changeImpact on fair value of a 200 basis point adverse change(353) (452)Impact on fair value of a 200 basis point adverse change(200) (326)

(a)Includes the impact of operational risk and regulatory capital.
(b)The prior period amount has been revised to conform with the current period presentation.
 
Changes in fair value based on variations in assumptions generally cannot be easily extrapolated, because the relationship of the change in the assumptions to the change in fair value are often highly interrelated and may not be linear. In this table, the effect that a change in a particular assumption may have on the fair value is calculated without changing any other assumption. In reality, changes in one factor may result in changes in another, which would either magnify or counteract the impact of the initial change.


Note 1516 – Deposits
For further information on deposits, referRefer to Note 17 of JPMorgan Chase’s 20182019 Form 10-K.10-K for further information on deposits.
At June 30, 2019,March 31, 2020, and December 31, 2018, 2019, noninterest-bearing and interest-bearing deposits were as follows.
(in millions)June 30,
2019
 December 31, 2018
March 31,
2020
 December 31, 2019
U.S. offices      
Noninterest-bearing (included $26,673 and $17,204 at fair value)(a)(b)
$394,237
 $386,709
Interest-bearing (included $2,530 and $2,487 at fair value)(a)(b)
841,397
 813,881
Noninterest-bearing (included $17,046 and $22,637 at fair value)(a)
$448,195
 $395,667
Interest-bearing (included $2,631 and $2,534 at fair value)(a)
1,026,603
 876,156
Total deposits in U.S. offices1,235,634
 1,200,590
1,474,798
 1,271,823
Non-U.S. offices      
Noninterest-bearing (included $2,445 and $2,367 at fair value)(a)(b)
20,419
 21,459
Interest-bearing (included $1,276 and $1,159 at fair value)(a)(b)
268,308
 248,617
Noninterest-bearing (included $1,784 and $1,980 at fair value)(a)
22,192
 20,087
Interest-bearing (included $1,148 and $1,438 at fair value)(a)
339,019
 270,521
Total deposits in non-U.S. offices288,727
 270,076
361,211
 290,608
Total deposits$1,524,361
 $1,470,666
$1,836,009
 $1,562,431
(a)Includes structured notes classified as deposits for which the fair value option has been elected. For a further discussion, referRefer to Note 3 of JPMorgan Chase’s 2018 Form 10-K.for further information.
(b)In the second quarter of 2019, the Firm reclassified balances related to certain structured notes from interest-bearing to noninterest-bearing deposits as the associated returns are recorded in principal transactions revenue and not in net interest income. This change was applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation.


 
Note 1617 – Leases
Lease commitments
Effective January 1,Refer to Note 18 of JPMorgan Chase’s 2019 the Firm adopted new guidance that requires lessees to recognizeForm 10-K for a further discussion on the Consolidated balance sheets all leases with lease terms greater than twelve months as a lease liability with a corresponding right-of-use (“ROU”) asset. Accordingly, the Firm recognized operating lease liabilities and ROU assets of $8.2 billion and $8.1 billion, respectively. The adoption of the new lease guidance did not have a material impact on the Firm’s Consolidated statements of income. The change in accounting due to the adoption of the new lease guidance did not result in a material change to the future net minimum rental payments/receivables or to the net rental expense when compared to December 31, 2018.leases.
Firm as lessee
At June 30, 2019,March 31, 2020, JPMorgan Chase and its subsidiaries were obligated under a number of noncancelablenoncancellable leases, predominantly operating leases for premises and equipment used primarily for business purposes. These leases generally have terms of 20 years or less, determined based on the contractual maturity of the lease, and include periods covered by options to extend or terminate the lease when the Firm is reasonably certain that it will exercise those options. None of these lease agreements impose restrictions on the Firm’s ability to pay dividends, engage in debt or equity financing transactions or enter into further lease agreements. Certain of these leases contain escalation clauses that will increase rental payments based on maintenance, utility and tax increases, which are non-lease components. The Firm elected not to separate lease and non-lease components of a contract for its real estate leases. As such, real estate lease payments represent payments on both lease and non-lease components.
Operating lease liabilities and ROU assets are recognized at the lease commencement date based on the present value of the future minimum lease payments over the lease term. The future lease payments are discounted at a rate that represents the Firm’s collateralized borrowing rate for financing instruments of a similar term and are included in accounts payable and other liabilities. The operating lease ROU asset, included in premises and equipment, also includes any lease prepayments made, plus initial direct costs incurred, less any lease incentives received. Rental expense associated with operating leases is recognized on a straight-line basis over the lease term, and generally included in occupancy expense in the Consolidated statements of income.

The following tables providetable provides information related to the Firm’s operating leases:
As of June 30,
(in millions, except where otherwise noted)
 
2019
Right-of-use assets$8,118
Lease liabilities8,404
  
Weighted average remaining lease term (in years)8.7
Weighted average discount rate3.75%
  
Supplemental cash flow information 
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows$778
Supplemental non-cash information 
Right-of-use assets obtained in exchange for operating lease obligations$587
  


(in millions)
Three months ended June 30, 2019Six months ended June 30, 2019
Rental expense  
Gross rental expense$506
$1,020
Sublease rental income(42)(88)
Net rental expense$464
$932
(in millions)March 31, 2020December 31, 2019
Right-of-use assets$8,240
$8,190
Lease liabilities8,516
8,505

The following table presents future payments under operating leases as of June 30, 2019:
Year ended December 31, (in millions) 
2019 (excluding six months ended June 30, 2019)$787
20201,535
20211,356
20221,161
2023988
After 20234,180
Total future minimum lease payments10,007
Less: Imputed interest(1,603)
Total$8,404

In addition toFirm’s net rental expense was $475 million and $468 million for the table above, as of June 30,three months ended March 31, 2020 and 2019, the Firm had additional future operating lease commitments of $1.5 billion that were signed but had not yet commenced. These operating leases will commence between 2019 and 2022 with lease terms up to 25 years.respectively.
Firm as lessor
The Firm provides auto and equipment lease financing to its customers through lease arrangements with lease terms that may contain renewal, termination and/or purchase options. Generally, the Firm’s lease financings are generally operating leases. These assetsleases and are recognizedincluded in other assets on the Firm’s Consolidated balance sheets and are depreciated on a straight-line basis over the lease term to reduce the asset to its estimated residual value. Depreciation expense is included in technology, communications and equipment expense in the Consolidated statements of income. The
Firm’s lease income is generally recognized on a straight-line basis over the lease term and is included in other income in the Consolidated statements of income.
On a periodic basis, the Firm assesses leased assets for impairment, and if the carrying amount of the leased asset exceeds the undiscounted cash flows from the lease payments and the estimated residual value upon disposition of the leased asset, an impairment loss is recognized.
The risk of loss on auto and equipment leased assets relating to the residual value of the leased assets is monitored through projections of the asset residual values at lease origination and periodic review of residual values, and is mitigated through arrangements with certain manufacturers or lessees. 
The following table presents the carrying value of assets subject to leases reported on the Consolidated balance sheets:
(in millions) June 30, 2019December 31, 2018
Carrying value of assets subject to operating leases, net of accumulated depreciation $22,406
$21,428
Accumulated depreciation 5,643
5,303

sheets.
The following table presents the Firm’s operating lease income and the related depreciation expense on the Consolidated statements of income:
 Three months ended June 30,Six months ended June 30, Three months ended March 31,

(in millions)
 2019
2018
2019
2018
 2020
2019
Operating lease income $1,327
$1,112
$2,643
$2,159
 $1,413
$1,316
Depreciation expense 988
852
1,985
1,663
 1,140
997

The following table presents future receipts under operating leases as of June 30, 2019:
Year ended December 31, (in millions) 
2019 (excluding six months ended June 30, 2019)$2,107
20203,381
20211,866
2022386
202369
After 2023136
Total future minimum lease payments$7,945



Note 1718 - Preferred stock
ForRefer to Note 21 of JPMorgan Chase’s 2019 Form 10-K for a further discussion on preferred stock, refer to Note 20 of JPMorgan Chase’s 2018 Form 10-K.stock.
The following is a summary of JPMorgan Chase’s non-cumulative preferred stock outstanding as of June 30, 2019March 31, 2020 and December 31, 2018,2019, and the quarterly dividend declarations for the three and six months ended June 30, 2019March 31, 2020 and 2018.2019.
 Shares
Carrying value
 (in millions)
 Contractual rate in effect at March 31, 2020Earliest redemption dateFloating annualized rate of three-month LIBOR/Term SOFR plus:
Dividend declared
per share
 
 March 31, 2020December 31, 2019March 31, 2020December 31, 2019Issue date
Three months ended
March 31,
 
 20202019 
Fixed-rate:           
Series P—
—
$—
$—
2/5/2013—%3/1/2018NA$—$136.25 
Series T—
—
—
—
1/30/2014—
3/1/2019NA—167.50 
Series W—
—
—
—
6/23/2014—
9/1/2019NA—157.50 
Series Y—
143,000
—
1,430
2/12/2015—
3/1/2020NA153.13153.13 
Series AA142,500
142,500
1,425
1,425
6/4/20156.100
9/1/2020NA152.50152.50 
Series BB115,000
115,000
1,150
1,150
7/29/20156.150
9/1/2020NA153.75153.75 
Series DD169,625
169,625
1,696
1,696
9/21/20185.750
12/1/2023NA143.75143.75 
Series EE185,000
185,000
1,850
1,850
1/24/20196.000
3/1/2024NA150.00NA 
Series GG90,000
90,000
900
900
11/7/20194.750
12/1/2024NA150.42NA 
Fixed-to-floating-rate:           
Series I293,375
293,375
$2,934
$2,934
4/23/2008LIBOR + 3.47%
4/30/2018LIBOR + 3.47%$132.44$155.51 
Series Q150,000
150,000
1,500
1,500
4/23/20135.150
5/1/2023LIBOR + 3.25128.75128.75 
Series R150,000
150,000
1,500
1,500
7/29/20136.000
8/1/2023LIBOR + 3.30150.00150.00 
Series S200,000
200,000
2,000
2,000
1/22/20146.750
2/1/2024LIBOR + 3.78168.75168.75 
Series U100,000
100,000
1,000
1,000
3/10/20146.125
4/30/2024LIBOR + 3.33153.13153.13 
Series V250,000
250,000
2,500
2,500
6/9/2014LIBOR + 3.32%
7/1/2019LIBOR + 3.32130.73125.00
(a) 
Series X160,000
160,000
1,600
1,600
9/23/20146.100
10/1/2024LIBOR + 3.33152.50152.50 
Series Z200,000
200,000
2,000
2,000
4/21/20155.300
5/1/2020LIBOR + 3.80132.50132.50 
Series CC125,750
125,750
1,258
1,258
10/20/20174.625
11/1/2022LIBOR + 2.58115.63115.63 
Series FF225,000
225,000
2,250
2,250
7/31/20195.000
8/1/2024SOFR + 3.38125.00NA 
Series HH300,000
—
3,000
—
1/23/20204.600
2/1/2025SOFR + 3.125125.22NA
(b) 
Series II150,000
—
1,500
—
2/24/20204.000
4/1/2025SOFR + 2.745—NA
(c) 
Total preferred stock3,006,250
2,699,250
$30,063
$26,993
       
 Shares
Carrying value
 (in millions)
 Contractual rate in effect at June 30, 2019
Earliest redemption date(b)
Floating annual rate of three-month LIBOR plus:
Dividend declared per share(c)
 
 
June 30, 2019(a)
December 31, 2018(a)
June 30, 2019December 31, 2018Issue dateThree months ended June 30,Six months ended June 30, 
 2019201820192018 
Fixed-rate:             
Series P90,000
90,000
$900
$900
2/5/20135.450%3/1/2018NA$136.25
$136.25$272.50$272.50 
Series T—
92,500
—
925
1/30/2014—
3/1/2019NANA167.50167.50335.00 
Series W88,000
88,000
880
880
6/23/20146.300
9/1/2019NA157.50
157.50315.00315.00 
Series Y143,000
143,000
1,430
1,430
2/12/20156.125
3/1/2020NA153.13
153.13306.26306.26 
Series AA142,500
142,500
1,425
1,425
6/4/20156.100
9/1/2020NA152.50
152.50305.00305.00 
Series BB115,000
115,000
1,150
1,150
7/29/20156.150
9/1/2020NA153.75
153.75307.50307.50 
Series DD169,625
169,625
1,696
1,696
9/21/20185.750
12/1/2023NA143.75
NA287.50NA 
Series EE185,000
—
1,850
—
1/24/20196.000
3/1/2024NA211.67
NA211.67NA
(d) 
              
Fixed-to-floating-rate:             
Series I430,375
430,375
$4,304
$4,304
4/23/2008LIBOR + 3.47%
4/30/2018LIBOR + 3.47%$153.00
$147.34$308.51$344.84
(e) 
Series Q150,000
150,000
1,500
1,500
4/23/20135.150
5/1/2023LIBOR + 3.25128.75
128.75257.50257.50 
Series R150,000
150,000
1,500
1,500
7/29/20136.000
8/1/2023LIBOR + 3.30150.00
150.00300.00300.00 
Series S200,000
200,000
2,000
2,000
1/22/20146.750
2/1/2024LIBOR + 3.78168.75
168.75337.50337.50 
Series U100,000
100,000
1,000
1,000
3/10/20146.125
4/30/2024LIBOR + 3.33153.13
153.13306.25306.25 
Series V250,000
250,000
2,500
2,500
6/9/20145.000
7/1/2019LIBOR + 3.32125.00
125.00250.00250.00 
Series X160,000
160,000
1,600
1,600
9/23/20146.100
10/1/2024LIBOR + 3.33152.50
152.50305.00305.00 
Series Z200,000
200,000
2,000
2,000
4/21/20155.300
5/1/2020LIBOR + 3.80132.50
132.50265.00265.00 
Series CC125,750
125,750
1,258
1,258
10/20/20174.625
11/1/2022LIBOR + 2.58115.63
115.63231.25231.25 
Total preferred stock2,699,250
2,606,750
$26,993
$26,068
         

(a)Represented by depositary shares.Prior to July 1, 2019, the dividend rate was fixed at 5%.
(b)Fixed-to-floating rate notes convert to a floating rate at the earliest redemption date.
(c)Dividends are declared quarterly. Dividends are payable quarterly on fixed-rate preferred stock. Dividends are payable semiannually on fixed-to-floating-rate preferred stock while at a fixed rate, and payable quarterly after converting to a floating rate.
(d)Dividends in the amount of $211.67$125.22 per share were declared on April 12, 2019March 13, 2020 and include dividends from the original issue date of January 24, 201923, 2020 through MayMarch 31, 2019.2020.
(e)(c)PriorFrom the original issue date of February 24, 2020 through March 31, 2020, dividends have yet to April 30, 2018, the dividend rate was fixed at 7.90%.be declared for Series II.
Each series of preferred stock has a liquidation value and redemption price per share of $10,000, plus accrued but unpaid dividends. The aggregate liquidation value was $30.5 billion at March 31, 2020.
Redemptions
On July 31,March 1, 2020, the Firm redeemed all $1.43 billion of its 6.125% preferred stock, Series Y.
On December 1, 2019, the Firm issued $2.25 billionredeemed all $900 million of fixed-to-floating rate non-cumulativeits 5.45% preferred stock, Series FF, and on August 2,P.
On October 30, 2019, the Firm announced that it will redeemredeemed $1.37 billion of its fixed-to-floating rate perpetual preferred stock, Series I.
On September 1, 2019, the Firm redeemed all $880 million of its 6.30% non-cumulative preferred stock, Series W on September 1, 2019.W.
On January 24, 2019, the Firm issued $1.85 billion of 6.00% non-cumulative preferred stock, Series EE, and on March 1, 2019, the Firm redeemed all $925 million of its 6.70% non-cumulative preferred stock, Series T.



Note 1819 – Earnings per share
ForRefer to Note 23 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the computation of basic and diluted earnings per share (“EPS”), refer to Note 22 of JPMorgan Chase’s 2018 Form 10-K.. The following table presents the calculation of basic and diluted EPS for the three and six months ended June 30, 2019March 31, 2020 and 2018.2019.
(in millions, except per share amounts)Three months ended
June 30,		 Six months ended
June 30,		Three months ended
March 31,
2019
2018
 2019
2018
2020
2019
Basic earnings per share    
Net income$9,652
$8,316
 $18,831
$17,028
$2,865
$9,179
Less: Preferred stock dividends404
379
 778
788
421
374
Net income applicable to common equity9,248
7,937
 18,053
16,240
2,444
8,805
Less: Dividends and undistributed earnings allocated to participating securities56
57
 108
121
13
52
Net income applicable to common stockholders$9,192
$7,880
 $17,945
$16,119
$2,431
$8,753
    
Total weighted-average basic shares
outstanding
3,250.6
3,415.2
 3,274.3
3,436.7
3,095.8
3,298.0
Net income per share$2.83
$2.31
 $5.48
$4.69
$0.79
$2.65
    
Diluted earnings per share    
Net income applicable to common stockholders$9,192
$7,880
 $17,945
$16,119
$2,431
$8,753
Total weighted-average basic shares
outstanding
3,250.6
3,415.2
 3,274.3
3,436.7
3,095.8
3,298.0
Add: Employee stock options, SARs, warrants and unvested PSUs9.1
19.5
 9.6
20.4
Add: Dilutive impact of SARs and employee stock options, unvested PSUs and nondividend-earning RSUs4.9
10.2
Total weighted-average diluted shares outstanding3,259.7
3,434.7
 3,283.9
3,457.1
3,100.7
3,308.2
Net income per share$2.82
$2.29
 $5.46
$4.66
$0.78
$2.65



Note 1920 – Accumulated other comprehensive income/(loss)
AOCI includes the after-tax change in unrealized gains and losses on investment securities, foreign currency translation adjustments (including the impact of related derivatives), fair value changes of excluded components on fair value hedges, cash flow hedging activities, net loss and prior service costs/(credit) related to the Firm’s defined benefit pension and OPEB plans, and on fair value option-elected liabilities arising from changes in the Firm’s own credit risk (DVA).
 As of or for the three months ended
June 30, 2019
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit
pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at April 1, 2019 $2,616
   $(751)  $(159) $29
   $(2,272)  $(21)  $(558) 
 Net change 1,093
   99
  86
 97
   41
  256
  1,672
 
 Balance at June 30, 2019 $3,709
   $(652)  $(73) $126
   $(2,231)  $235
  $1,114
 
                        
 As of or for the three months ended
June 30, 2018
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at April 1, 2018 $1,826
   $(720)  (94) $19
   $(1,914)  $(180)  $(1,063) 
 Net change (227)   88
  (68) (166)   38
  260
  (75) 
 Balance at June 30, 2018 $1,599
   $(632)  $(162) $(147)   $(1,876)  $80
  $(1,138) 
                        
 As of or for the six months ended
June 30, 2019
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit
pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at January 1, 2019 $1,202
   $(727)  $(161) $(109)   $(2,308)  $596
  $(1,507) 
 Net change 2,507
   75
  88
 235
   77
  (361)  2,621
 
 Balance at June 30, 2019 $3,709
   $(652)  $(73) $126
   $(2,231)  $235
  $1,114
 
                        
 As of or for the six months ended
June 30, 2018
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at January 1, 2018 $2,164
   $(470)  $—
 $76
   $(1,521)  $(368)  $(119) 
 
Cumulative effect of changes in accounting principles(a)
 896
   (277)  $(54) 16
   (414)  (79)  88
 
 Net change (1,461)   115
  (108) (239)   59
  527
  (1,107) 
 Balance at June 30, 2018 $1,599
   $(632)  $(162) $(147)   $(1,876)  $80
  $(1,138) 
 As of or for the three months ended
March 31, 2020
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit
pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at January 1, 2020 $4,057
   $(707)  $(131) $63
   $(1,344)  $(369)  $1,569
 
 Net change 1,119
   (330)  88
 2,465
   33
  2,474
  5,849
 
 Balance at March 31, 2020 $5,176
(a) 

  $(1,037)  $(43) $2,528
   $(1,311)  $2,105
  $7,418
 
                        
 As of or for the three months ended
March 31, 2019
(in millions)		Unrealized
gains/(losses)
on investment securities		 Translation adjustments, net of hedges Fair value hedgesCash flow hedges Defined benefit pension and
OPEB plans		DVA on fair value option elected liabilitiesAccumulated other comprehensive income/(loss)
 
 Balance at January 1, 2019 $1,202
   $(727)  (161) $(109)   $(2,308)  $596
  $(1,507) 
 Net change 1,414
   (24)  2
 138
   36
  (617)  949
 
 Balance at March 31, 2019 $2,616
   $(751)  $(159) $29
   $(2,272)  $(21)  $(558) 

(a)Represents the adjustmentIncludes after-tax net unamortized unrealized gains of $737 million related to AOCI as a result of the accounting standards adopted in the first quarter of 2018, referAFS securities that have been transferred to Note 1 of JPMorgan Chase’s 2018 Form 10-K.HTM.





The following table presents the pre-tax and after-tax changes in the components of OCI.
2019 20182020 2019
Three months ended June 30, (in millions)Pre-tax Tax effect After-tax Pre-tax Tax effect After-tax
Three months ended March 31,
(in millions)		Pre-tax Tax effect After-tax Pre-tax Tax effect After-tax
Unrealized gains/(losses) on investment securities:                      
Net unrealized gains/(losses) arising during the period$1,491
 $(365) $1,126
 $(376) $88
 $(288)$1,709
 $(413) $1,296
 $1,875
 $(451) $1,424
Reclassification adjustment for realized (gains)/losses included in net income(a)
(44) 11
 (33) 80
 (19) 61
(233) 56
 (177) (13) 3
 (10)
Net change1,447
 (354) 1,093
 (296) 69
 (227)1,476
 (357) 1,119
 1,862
 (448) 1,414
Translation adjustments(b):
                      
Translation123
 72
 195
 (1,056) 208
 (848)(1,592) 55
 (1,537) 41
 (36) 5
Hedges(128) 32
 (96) 1,227
 (291) 936
1,589
 (382) 1,207
 (38) 9
 (29)
Net change(5) 104
 99
 171
 (83) 88
(3) (327) (330) 3
 (27) (24)
Fair value hedges, net change(c):
112
 (26) 86
 (89) 21
 (68)115
 (27) 88
 3
 (1) 2
Cash flow hedges:                      
Net unrealized gains/(losses) arising during the period101
 (24) 77
 (199) 47
 (152)3,251
 (780) 2,471
 141
 (33) 108
Reclassification adjustment for realized (gains)/losses included in net income(d)
26
 (6) 20
 (19) 5
 (14)(8) 2
 (6) 39
 (9) 30
Net change127
 (30) 97
 (218) 52
 (166)3,243
 (778) 2,465
 180
 (42) 138
Defined benefit pension and OPEB plans:                      
Net gain/(loss) arising during the period(1) —
 (1) 2
 —
 2
9
 (2) 7
 3
 (2) 1
Reclassification adjustments included in net income(e):
                      
Amortization of net loss41
 (7) 34
 26
 (6) 20
4
 (1) 3
 42
 (9) 33
Amortization of prior service cost/(credit)1
 (1) —
 (6) 2
 (4)1
 —
 1
 1
 —
 1
Foreign exchange and other9
 (1) 8
 31
 (11) 20
31
 (9) 22
 (8) 9
 1
Net change50
 (9) 41
 53
 (15) 38
45
 (12) 33
 38
 (2) 36
DVA on fair value option elected liabilities, net change:338
 (82) 256
 340
 (80) 260
3,255
 (781) 2,474
 (807) 190
 (617)
Total other comprehensive income/(loss)$2,069
 $(397) $1,672
 $(39) $(36) $(75)$8,131
 $(2,282) $5,849
 $1,279
 $(330) $949
           
2019 2018
Six months ended June 30, (in millions)Pre-tax Tax effect After-tax Pre-tax Tax effect After-tax
Unrealized gains/(losses) on investment securities:           
Net unrealized gains/(losses) arising during the period$3,366
 $(816) $2,550
 $(2,234) $525
 $(1,709)
Reclassification adjustment for realized (gains)/losses included in net income(a)
(57) 14
 (43) 325
 (77) 248
Net change3,309
 (802) 2,507
 (1,909) 448
 (1,461)
Translation adjustments(b):
           
Translation164
 36
 200
 (667) 143
 (524)
Hedges(166) 41
 (125) 838
 (199) 639
Net change(2) 77
 75
 171
 (56) 115
Fair value hedges, net change(c):
115
 (27) 88
 (141) 33
 (108)
Cash flow hedges:           
Net unrealized gains/(losses) arising during the period242
 (57) 185
 (243) 58
 (185)
Reclassification adjustment for realized (gains)/losses included in net income(d)
65
 (15) 50
 (71) 17
 (54)
Net change307
 (72) 235
 (314) 75
 (239)
Defined benefit pension and OPEB plans:           
Net gain/(loss) arising during the period2
 (2) —
 25
 (6) 19
Reclassification adjustments included in net income(e):
           
Amortization of net loss83
 (16) 67
 52
 (12) 40
Amortization of prior service cost/(credit)2
 (1) 1
 (12) 3
 (9)
Foreign exchange and other1
 8
 9
 12
 (3) 9
Net change88
 (11) 77
 77
 (18) 59
DVA on fair value option elected liabilities, net change:$(469) $108
 $(361) $690
 $(163) $527
Total other comprehensive income/(loss)$3,348
 $(727) $2,621
 $(1,426) $319
 $(1,107)
(a)The pre-tax amount is reported in Investment securities gains/(losses)gains in the Consolidated statements of income.
(b)Reclassifications of pre-tax realized gains/(losses) on translation adjustments and related hedges are reported in other income/expense in the Consolidated statements of income. During the three and six months ended June 30, 2019, the Firm reclassified net pre-tax gainsThere were no sales or liquidations of $6 million to other income and $1 million to other expense, respectively. These amounts, which related to the liquidation of certain legal entities are comprised of $5 million related to net investment hedge gains and $2 million related to cumulative translation adjustments. Duringthat resulted in reclassifications in the three and six months ended June 30, 2018, the Firm reclassified a net pre-tax loss of $174 million to other expense related to the liquidation of a legal entity, comprised of $23 million related to net investment hedge losses and $151 million related to cumulative translation adjustments.periods presented.
(c)Represents changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads, which are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income. The initial cost of cross-currency basis spreads is recognized in earnings as part of the accrual of interest on the cross currency swap.
(d)The pre-tax amounts are predominantlyprimarily recorded in noninterest revenue, net interest income and compensation expense in the Consolidated statements of income.
(e)The pre-tax amount is reported in other expense in the Consolidated statements of income.


Note 2021 – Restricted cash and other restricted
assets
ForRefer to Note 26 of JPMorgan Chase’s 2019 Form 10-K for a detailed discussion of the Firm’s restricted cash and other restricted assets, refer to Note 25 of JPMorgan Chase’s 2018 Form 10-K.assets.
Certain of the Firm’s cash and other assets are restricted as to withdrawal or usage. These restrictions are imposed by various regulatory authorities based on the particular activities of the Firm’s subsidiaries.
The Firm is also subject to rules and regulations established by other U.S. and non U.S. regulators. As part of its compliance with the respective regulatory requirements, the Firm’s broker-dealer activities are subject to certain restrictions on cash and other assets.
The following table presents the components of the Firm’s restricted cash:
(in billions)June 30,
2019
December 31, 2018
March 31,
2020
December 31, 2019
Cash reserves – Federal Reserve Banks(a)$24.9
$22.1
$—
$26.6
Segregated for the benefit of securities and futures brokerage customers16.7
14.6
Segregated for the benefit of securities and cleared derivative customers19.7
16.0
Cash reserves at non-U.S. central banks and held for other general purposes3.9
4.1
3.8
3.9
Total restricted cash(a)(b)
$45.5
$40.8
$23.5
$46.5
(a)Effective March 26, 2020, the Federal Reserve temporarily eliminated reserve requirements for depository institutions.
(b)Comprises $44.2$22.2 billion and $39.6$45.3 billion in deposits with banks, and $1.3 billion and $1.2 billion in cash and due from banks on the Consolidated balance sheetssheet as of June 30, 2019March 31, 2020 and December 31, 2018,2019, respectively.
Also, as of June 30, 2019March 31, 2020 and December 31, 2018,2019, the Firm had the following other restricted assets:
Cash and securities pledged with clearing organizations for the benefit of customers of $21.0$40.0 billion and $20.6$24.7 billion, respectively.
Securities with a fair value of $3.9$12.8 billion and $9.7$8.8 billion, respectively, were also restricted in relation to customer activity.


 
Note 2122 – Regulatory capital
ForRefer to Note 27 of JPMorgan Chase’s 2019 Form 10-K for a detailed discussion on regulatory capital, refer to Note 26 of JPMorgan Chase’s 2018 Form 10-K.capital.
The Federal Reserve establishes capital requirements, including well-capitalized standards, for the consolidated financial holding company. The Office of the Comptroller of the Currency (“OCC”) establishes similar minimum capital requirements and standards for the Firm’s insured depository institutions (“IDI”),IDI subsidiaries, including JPMorgan Chase Bank, N.A.
Effective January 1, 2019, the capital adequacy of the Firm and its IDI subsidiaries is evaluated against the fully phased-in measures under Basel III and represents the lower of the Standardized or Advanced approaches. During 2018, the required capital measures were subject to the transitional rules and as of December 31, 2018 were the same on a fully phased-in and on a transitional basis.
Under the risk-based capital and leverage-based guidelines of the Federal Reserve, JPMorgan Chase is required to maintain minimum ratios for CET1 capital, Tier 1 capital, Total capital, Tier 1 leverage and the SLR. Failure to meet these minimum requirements could cause the Federal Reserve to take action. IDI subsidiaries are also subject to these capital requirements by their respective primary regulators.
The following table representspresents the minimum and well-capitalized ratios to which the Firm and its IDI subsidiaries were subject as of June 30,March 31, 2020 and December 31, 2019.
Minimum capital ratios Well-capitalized ratiosMinimum capital ratios Well-capitalized ratios
BHC(a)(e)(f)

IDI(b)(e)(f)

 
BHC(c) 
IDI(d)

BHC(a)(e)
IDI(b)(e)
 
BHC(c) 
IDI(d)

Capital ratios     
CET110.5%7.0% N/A6.5%
Tier 112.0
8.5
 6.08.0
Total14.0
10.5
 10.010.0
CET1 capital10.57.0 N/A6.5%
Tier 1 capital12.08.5 6.08.0
Total capital14.010.5 10.010.0
Tier 1 leverage4.0
4.0
 N/A5.0
4.0 N/A5.0
SLR5.0
6.0
 N/A6.0
5.06.0 N/A6.0
Note: The table above is as defined by the regulations issued by the Federal Reserve, OCC and FDIC and to which the Firm and its IDI subsidiaries are subject.
(a)
Represents the minimum capital ratios applicable to the Firm under Basel III. The CET1, Tier 1 and Total capital minimum capital ratio includesratios include a capital conservation buffer requirement of 2.5% and GSIB surcharge of 3.5%. as calculated under Method 2.
(b)
Represents requirements for JPMorgan Chase’s IDI subsidiaries. The CET1, Tier 1 and Total capital minimum capital ratio includesratios include a capital conservation buffer requirement of 2.5% that is applicable to the IDI subsidiaries. The IDI subsidiaries are not subject to the GSIB surcharge.
(c)
Represents requirements for bank holding companies pursuant to regulations issued by the Federal Reserve.
(d)
Represents requirements for IDI subsidiaries pursuant to regulations issued under the FDIC Improvement Act.
(e)For the period ended December 31, 2018, the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm were 9.0%, 10.5%, 12.5%, and 4.0% and the CET1, Tier 1, Total and Tier 1 leverage minimum capital ratios applicable to the Firm’s IDI subsidiaries were 6.375%, 7.875%, 9.875%, and 4.0%, respectively.
(f)
Represents minimum SLR requirement of 3.0%, as well as supplementary leverage buffersbuffer requirements of 2.0% and 3.0% for BHC and IDI, respectively.
Current Expected Credit Losses
As disclosed in the Firm’s 2019 Form 10-K, the Firm initially elected to phase-in the January 1, 2020 (“day 1”) CECL adoption impact to retained earnings of $2.7 billion to CET1 capital, at 25% per year in each of 2020 to 2023. As part of their response to the impact of the COVID-19 pandemic, on March 31, 2020, the federal banking agencies issued an interim final rule that provided the option to temporarily delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period.


The interim final rule provides a uniform approach for estimating the effects of CECL compared to the legacy incurred loss model during the first two years of the transition period (the “day 2” transition amount), whereby the Firm may exclude from CET1 capital 25% of the change in the allowance for credit losses (excluding allowances on PCD loans). The cumulative day 2 transition amount as at December 31, 2021 that is not recognized in CET1 capital as well as the $2.7 billion day 1 impact, will be phased into CET1 capital at 25% per year beginning January 1, 2022. The Firm has elected to apply the CECL capital transition
provisions, and accordingly, for the period ended March 31, 2020, the capital measures of the Firm exclude $4.3 billion, which is the $2.7 billion day 1 impact to retained earnings and 25% of the $6.8 billion increase in the allowance for credit losses (excluding allowances on PCD loans).
The impacts of the CECL capital transition provisions on Tier 2 capital, adjusted average assets, and total leverage exposure have also been incorporated into the Firm’s capital measures. Refer to Note 1 for further information on the CECL accounting guidance.
The following tables present the risk-based and leverage-based capital metrics for JPMorgan Chase and JPMorgan Chase Bank, N.A. under both the Basel III Standardized and Basel III Advanced Approaches. As of June 30, 2019March 31, 2020, the capital measures are presented applying the CECL capital transition provisions. As of March 31, 2020 and December 31, 2018,2019, JPMorgan Chase and JPMorgan Chase Bank, N.A. were well-capitalized and met all capital requirements to which each was subject.

March 31, 2020
(in millions, except ratios)		Basel III Standardized Basel III Advanced
JPMorgan
Chase & Co.(c)
JPMorgan
Chase Bank, N.A.
 
JPMorgan
Chase & Co.(c)
JPMorgan
Chase Bank, N.A.
Risk-based capital metrics:(a)
     
CET1 capital$183,591
$204,679
 $183,591
$204,679
Tier 1 capital213,406
204,691
 213,406
204,691
Total capital247,541
222,994
 234,434
210,271
Risk-weighted assets1,598,828
1,527,914
 1,489,134
1,361,789
CET1 capital ratio11.5%13.4% 12.3%15.0%
Tier 1 capital ratio13.3
13.4
 14.3
15.0
Total capital ratio15.5
14.6
 15.7
15.4
Leverage-based capital metrics:     
Adjusted average assets(b)
$2,842,244
$2,439,720
 $2,842,244
$2,439,720
Tier 1 leverage ratio7.5%8.4% 7.5%8.4%
Total leverage exposureNA
NA
 $3,535,822
$3,118,192
SLRNA
NA
 6.0%6.6%
June 30, 2019
(in millions, except ratios)		Basel III Standardized Fully Phased-In Basel III Advanced Fully Phased-In
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
 
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
Regulatory capital     
CET1 capital$189,169
$217,622
 $189,169
$217,622
Tier 1 capital215,808
217,622
 215,808
217,622
Total capital244,490
235,208
 234,507
225,403
      
Assets     
Risk-weighted1,545,101
1,452,055
 1,449,211
1,302,719
Adjusted average(a)
2,692,225
2,325,199
 2,692,225
2,325,199
      
Capital ratios(b)
     
CET112.2%15.0% 13.1%16.7%
Tier 114.0
15.0
 14.9
16.7
Total15.8
16.2
 16.2
17.3
Tier 1 leverage(c)
8.0
9.4
 8.0
9.4
December 31, 2018
(in millions, except ratios)		Basel III Standardized Transitional Basel III Advanced Transitional
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.(d)
 
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.(d)
Regulatory capital     
CET1 capital$183,474
$211,671
 $183,474
$211,671
Tier 1 capital209,093
211,671
 209,093
211,671
Total capital237,511
229,952
 227,435
220,025
      
Assets     
Risk-weighted1,528,916
1,446,529
 1,421,205
1,283,146
Adjusted average(a)
2,589,887
2,250,480
 2,589,887
2,250,480
      
Capital ratios(b)
     
CET112.0%14.6% 12.9%16.5%
Tier 113.7
14.6
 14.7
16.5
Total15.5
15.9
 16.0
17.1
Tier 1 leverage(c)
8.1
9.4
 8.1
9.4
December 31, 2019
(in millions, except ratios)		Basel III Standardized Basel III Advanced
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
 
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
Risk-based capital metrics:(a)
     
CET1 capital$187,753
$206,848
 $187,753
$206,848
Tier 1 capital214,432
206,851
 214,432
206,851
Total capital242,589
224,390
 232,112
214,091
Risk-weighted assets1,515,869
1,457,689
 1,397,878
1,269,991
CET1 capital ratio12.4%14.2% 13.4%16.3%
Tier 1 capital ratio14.1
14.2
 15.3
16.3
Total capital ratio16.0
15.4
 16.6
16.9
Leverage-based capital metrics:     
Adjusted average assets(b)
$2,730,239
$2,353,432
 $2,730,239
$2,353,432
Tier 1 leverage ratio7.9%8.8% 7.9%8.8%
Total leverage exposureNA
NA
 $3,423,431
$3,044,509
SLRNA
NA
 6.3%6.8%
(a)The capital adequacy of the Firm and JPMorgan Chase Bank, N.A. is evaluated against the lower of the two ratios as calculated under Basel III approaches (Standardized or Advanced).
(b)
Adjusted average assets, for purposes of calculating the Tier 1 leverage ratio, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.
(b)(c)
For eachAs of the risk-based capital ratios,March 31, 2020, 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).
(c)
The Tier 1 leverage ratio is not a risk-based measure of capital.
(d)On May 18, 2019, Chase Bank USA, N.A. merged with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A as the surviving entity. The December 31, 2018 amounts reported for JPMorgan Chase Bank, N.A. retrospectivelymeasures reflect the impactexclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the merger.

 June 30, 2019 December 31, 2018
 Basel III Advanced Fully Phased-In Basel III Advanced Fully Phased-In
(in millions, except ratios)
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.
 
JPMorgan
Chase & Co.
JPMorgan
Chase Bank, N.A.(a)
Total leverage exposure$3,367,154
$2,984,420
 $3,269,988
$2,915,541
SLR6.4%7.3% 6.4%7.3%

(a)On May 18, 2019, Chase Bank USA, N.A. merged with and into JPMorgan Chase Bank, N.A., with JPMorgan Chase Bank, N.A as the surviving entity. The December 31, 2018 amounts reported for JPMorgan Chase Bank, N.A. retrospectively reflect the impact of the merger.MMLF.

Note 2223 – Off–balance sheet lending-related
financial instruments, guarantees, and other
commitments
JPMorgan Chase provides lending-related financial instruments (e.g., commitments and guarantees) to address the financing needs of its customers and clients. The contractual amount of these financial instruments represents the maximum possible credit risk to the Firm should the customer or client draw upon the commitment or the Firm be required to fulfill its obligation under the guarantee, and should the customer or client subsequently fail to perform according to the terms of the contract. Most of these commitments and guarantees arehave historically been refinanced, extended, cancelled, or expireexpired without being drawn or a default occurring. As a result, the total contractual amount of these instruments is not, in the Firm’s view, representative of its expected future credit exposure or funding requirements. ForRefer to Note 28 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of lending-related commitments and guarantees, and the Firm’s related accounting policies, refer to Note 27 of JPMorgan Chase’s 2018 Form 10-K.policies.
To provide for probable expectedcredit losses inherent in wholesale and certain consumer lending-related commitments, an allowance for credit losses on lending-related commitments is maintained. Refer to Note 12 13 for further information regarding the allowance for credit losses on lending-related commitments.commitments, including the impact of the Firm’s adoption of the CECL accounting guidance on January 1, 2020.
The following table summarizes the contractual amounts and carrying values of off-balance sheet lending-related financial instruments, guarantees and other commitments at June 30, 2019, March 31, 2020, and December 31, 2018. 2019. The amounts in the table below for credit card, and home equity and certain scored business banking lending-related commitments represent the total available credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit for these products will be utilized at the same time. The Firm can reduce or cancel credit card and certain scored business banking lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. In addition, the Firm typically closes credit card lines when the borrower is 60 days or more past due. The Firm may reduce or close HELOCs when there are significant decreases in the value of the underlying property, or when there has been a demonstrable decline in the creditworthiness of the borrower.


In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied in determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.
Off–balance sheet lending-related financial instruments, guarantees and other commitmentsOff–balance sheet lending-related financial instruments, guarantees and other commitments
Off–balance sheet lending-related financial instruments, guarantees and other commitments

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

June 30, 2019
Dec 31,
2018

Jun 30,
2019
Dec 31,
2018
March 31, 2020Dec 31,
2019

Mar 31,
2020
Dec 31,
2019
By remaining maturity
(in millions)		Expires in 1 year or lessExpires after
1 year through
3 years		Expires after
3 years through
5 years		Expires after 5 yearsTotal
Total

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

Lending-related        
Consumer, excluding credit card:        
Home equity$549
$1,202
$2,185
$17,263
$21,199
 $20,901
 $12
$12
Residential mortgage(a)
9,477
—
—
12
9,489
 5,481
 —
—
Auto7,694
962
95
45
8,796
 8,011
 2
2
Consumer & Business Banking10,503
679
104
721
12,007
 11,673
 19
19
Residential real estate(a)
$13,109
$1,194
$2,743
$16,279
$33,325
$30,217
 $150
$12
Auto and other7,549
1
39
621
8,210
9,952
 1
—
Total consumer, excluding credit card28,223
2,843
2,384
18,041
51,491
 46,066
 33
33
20,658
1,195
2,782
16,900
41,535
40,169
 151
12
Credit card633,970
—
—
—
633,970
 605,379
 —
—
Total consumer(b)
662,193
2,843
2,384
18,041
685,461
 651,445
 33
33
Credit card(b)
681,442
—
—
—
681,442
650,720
 —
—
Total consumer(b)(c)
702,100
1,195
2,782
16,900
722,977
690,889
 151
12
Wholesale:        
Other unfunded commitments to extend credit(c)
61,732
129,593
159,234
8,223
358,782
 351,490
 883
852
Standby letters of credit and other financial guarantees(c)
14,658
10,552
4,776
2,210
32,196
 33,498
 554
521
Other letters of credit(c)
3,066
220
37
—
3,323
 2,825
 3
3
Total wholesale(b)
79,456
140,365
164,047
10,433
394,301
 387,813
 1,440
1,376
Other unfunded commitments to extend credit(d)
73,560
107,538
131,902
10,383
323,383
376,107
 2,708
959
Standby letters of credit and other financial guarantees(d)
15,527
9,944
4,630
1,720
31,821
34,242
 434
618
Other letters of credit(d)
3,122
128
31
—
3,281
2,961
 8
4
Total wholesale(c)
92,209
117,610
136,563
12,103
358,485
413,310
 3,150
1,581
Total lending-related$741,649
$143,208
$166,431
$28,474
$1,079,762
 $1,039,258
 $1,473
$1,409
$794,309
$118,805
$139,345
$29,003
$1,081,462
$1,104,199
 $3,301
$1,593
Other guarantees and commitments        
Securities lending indemnification agreements and guarantees(d)
$203,868
$—
$—
$—
$203,868
 $186,077
 $—
$—
Securities lending indemnification agreements and guarantees(e)
$215,875
$—
$—
$—
$215,875
$204,827
 $—
$—
Derivatives qualifying as guarantees1,594
135
12,394
40,509
54,632
 55,271
 228
367
1,242
118
10,899
40,365
52,624
53,089
 661
159
Unsettled resale and securities borrowed agreements113,218
875
71
—
114,164
 102,008
 —
—
137,948
901
—
—
138,849
117,951
 30
—
Unsettled repurchase and securities loaned agreements122,806
—
—
—
122,806
 57,732
 —
—
107,979
707
—
—
108,686
73,351
 7
—
Loan sale and securitization-related indemnifications:        
Mortgage repurchase liabilityNA
NA
NA
NA
NA
 NA
 89
89
NA
NA
NA
NA
NA
NA
 84
59
Loans sold with recourseNA
NA
NA
NA
1,031
 1,019
 27
30
NA
NA
NA
NA
932
944
 28
27
Exchange & clearing house guarantees and commitments(e)
164,784
—
—
—
164,784
 58,960
 —
—
Other guarantees and commitments(f)
4,505
2,931
1,537
2,749
11,722
 8,183
 (79)(73)
Exchange & clearing house guarantees and commitments(f)
177,587
—
—
—
177,587
206,432
 —
—
Other guarantees and commitments(g)
4,861
1,123
272
3,026
9,282
9,083
(h) 
(83)(73)
(a)Includes certain commitments to purchase loans from correspondents.
(b)Also includes commercial card lending-related commitments primarily in CB and CIB.
(c)Predominantly all consumer and wholesale lending-related commitments are in the U.S.
(c)(d)At June 30, 2019,March 31, 2020, and December 31, 2018,2019, reflected the contractual amount net of risk participations totaling $193$88 million and $282$76 million, respectively, for other unfunded commitments to extend credit; $9.5$9.3 billion and $10.4$9.8 billion, respectively, for standby letters of credit and other financial guarantees; and $682$267 million and $385$546 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.
(d)(e)At June 30, 2019,March 31, 2020, and December 31, 2018,2019, collateral held by the Firm in support of securities lending indemnification agreements was $214.6$229.4 billion and $195.6$216.2 billion, respectively. Securities lending collateral primarily consists of cash, G7 government securities, and securities issued by governments that are members of the G7U.S. GSEs and U.S. government agencies.
(e)(f)At June 30, 2019,March 31, 2020, and December 31, 2018,2019, includes guarantees to the Fixed Income Clearing Corporation under the sponsored member repo program and commitments and guarantees associated with the Firm’s membership in certain clearing houses.
(f)(g)At June 30, 2019,March 31, 2020, and December 31, 2018,2019, primarily includes letters of credit hedged by derivative transactions and managed on a market risk basis, and unfunded commitments related to institutional lending. Additionally, includes unfunded commitments predominantly related to certain tax-oriented equity investments.
(g)(h)The prior period amount has been revised to conform with the current period presentation.
(i)For lending-related products, the carrying value represents the allowance for lending-related commitments and the guarantee liability; for derivative-related products, and lending-related commitments for which the fair value option was elected, the carrying value represents the fair value. At March 31, 2020, includes markdowns on held-for-sale positions related to unfunded commitments in the bridge financing portfolio.



Other unfunded commitments to extend credit
Other unfunded commitments to extend credit generally consist of commitments for working capital and general corporate purposes, extensions of credit to support commercial paper facilities and bond financings in the event that those obligations cannot be remarketed to new investors, as well as committed liquidity facilities to clearing organizations. The Firm also issues commitments under multipurpose facilities which could be drawn upon in several forms, including the issuance of a standby letter of credit.
 
Standby letters of credit and other financial guarantees
Standby letters of credit and other financial guarantees are conditional lending commitments issued by the Firm to guarantee the performance of a client or customer to a third party under certain arrangements, such as commercial paper facilities, bond financings, acquisition financings, trade and similar transactions.
The following table summarizes the contractual amount and carrying value of standby letters of credit and other financial guarantees and other letters of credit arrangements as of June 30, 2019,March 31, 2020, and December 31, 2018.2019.
Standby letters of credit, other financial guarantees and other letters of credit
June 30, 2019 December 31, 2018March 31, 2020 December 31, 2019
(in millions)Standby letters of
credit and other financial guarantees		 
Other letters
of credit
 Standby letters of
credit and other financial guarantees		 
Other letters
of credit
Standby letters of
credit and other financial guarantees		 
Other letters
of credit
 Standby letters of
credit and other financial guarantees		 
Other letters
of credit
Investment-grade(a)
$25,041
 $2,181
 $26,420
 $2,079
$24,642
 $2,454
 $26,880
 $2,137
Noninvestment-grade(a)
7,155
 1,142
 7,078
 746
7,179
 827
 7,362
 824
Total contractual amount$32,196
 $3,323
 $33,498
 $2,825
$31,821
 $3,281
 $34,242
 $2,961
              
Allowance for lending-related commitments$210
 $3
 $167
 $3
$55
 $8
 $216
 $4
Guarantee liability344
 —
 354
 —
379
 —
 402
 —
Total carrying value$554
 $3
 $521
 $3
$434
 $8
 $618
 $4
              
Commitments with collateral$17,373
 $768
 $17,400
 $583
$17,006
 $710
 $17,853
 $728
(a)The ratings scale is based on the Firm’s internal ratings which generally correspondrisk ratings. Refer to ratings as defined by S&P and Moody’s.Note 12 for further information on internal risk ratings.
Derivatives qualifying as guarantees
The Firm transacts in certain derivative contracts that have the characteristics of a guarantee under U.S. GAAP. ForRefer to Note 28 of JPMorgan Chase’s 2019 Form 10-K for further information on these derivatives, refer to Note 27 of JPMorgan Chase’s 2018 Form 10-K.derivatives.
The following table summarizes the derivatives qualifying as guarantees as of June 30, 2019, March 31, 2020, and December 31, 2018.2019.
(in millions)June 30, 2019
 December 31, 2018
March 31, 2020
 December 31, 2019
Notional amounts      
Derivative guarantees$54,632
 $55,271
$52,624
 $53,089
Stable value contracts with contractually limited exposure28,843
 28,637
28,984
 28,877
Maximum exposure of stable value contracts with contractually limited exposure2,958
 2,963
2,977
 2,967
      
Fair value      
Derivative payables228
 367
661
 159
Derivative receivables—
 —


In addition to derivative contracts that meet the characteristics of a guarantee, the Firm is both a purchaser and seller of credit protection in the credit derivatives market. ForRefer to Note 5 for a further discussion of credit derivatives, referderivatives.
Merchant charge-backs
Under the rules of payment networks, the Firm, in its role as a merchant acquirer, retains a contingent liability for disputed processed credit and debit card transactions that result in a charge-back to Note 4.the merchant. If a dispute is resolved in the cardholder’s favor, Merchant Services will (through the cardholder’s issuing bank) credit or refund the amount to the cardholder and will charge back the transaction to the merchant. If Merchant Services is unable to collect the amount from the merchant, Merchant Services will bear the loss for the amount credited or refunded to the cardholder. Merchant Services mitigates this risk by withholding future settlements, retaining cash reserve accounts or obtaining other collateral. In addition, Merchant Services recognizes a valuation allowance that covers the payment or performance risk to the Firm related to charge-backs. The carrying value of the valuation allowance was $74 million and $11 million at March 31, 2020 and December 31, 2019, respectively.

Loan sales- and securitization-related indemnifications
In connection with the Firm’s mortgage loan sale and securitization activities with GSEs the Firm has made representations and warranties that the loans sold meet certain requirements, and that may require the Firm to repurchase mortgage loans and/or indemnify the loan purchaser if such representations and warranties are breached by the Firm. Further, although the Firm’s securitizations are predominantly nonrecourse, the Firm does provide recourse servicing in certain limited cases where it agrees to share credit risk with the owner of the mortgage loans. For additional information, referRefer to Note 27 28 of JPMorgan Chase’s 20182019 Form 10-K.10-K for additional information.
The liability related to repurchase demands associated with private label securitizations is separately evaluated by the Firm in establishing its litigation reserves. For additional information regarding litigation, referRefer to Note 24 25 of this Form 10-Q and Note 2930 of JPMorgan Chase’s 20182019 Form 10-K.10-K for additional information regarding litigation.

Sponsored member repo program
In 2018 the Firm commenced the sponsored member repo program, wherein theThe Firm acts as a sponsoring member to clear eligible overnight resale and repurchase agreements through the Government Securities Division of the Fixed Income Clearing Corporation (“FICC”) on behalf of clients that become sponsored members under the FICC’s rules. The Firm also guarantees to the FICC the prompt and full payment and performance of its sponsored member clients’ respective obligations under the FICC’s rules. The Firm minimizes its liability under these overnight guarantees by obtaining a security interest in the cash or high-quality securities collateral that the clients place with the clearing house therefore the Firm expects the risk of loss to be remote. The Firm’s maximum possible exposure, without taking into consideration the associated collateral, is included in the Exchange & clearing house guarantees and commitments line on page 156. For162. Refer to Note 11 of JPMorgan Chase’s 2019 Form 10-K for additional information on credit risk mitigation practices on resale agreements and the types of collateral pledged under repurchase agreements, refer to Note 11 of JPMorgan Chase’s 2018 Form 10-K.agreements.
Guarantees of subsidiaries
The Parent Company has guaranteed certain long-term debt and structured notes of its subsidiaries, including JPMorgan Chase Financial Company LLC (“JPMFC”), a 100%-owned finance subsidiary. All securities issued by JPMFC are fully and unconditionally guaranteed by the Parent Company. These guarantees, which rank on a parity with the Firm’s unsecured and unsubordinated indebtedness, are not included in the table on page 156162 of this Note. For additional information, referRefer to Note 1920 of JPMorgan Chase’s 20182019 Form 10-K.10-K for additional information.

 
Note 2324 – Pledged assets and collateral
ForRefer to Note 29 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the Firm’s pledged assets and collateral, refer to Note 28 of JPMorgan Chase’s 2018 Form 10-K.collateral.
Pledged assets
The Firm may pledgepledges financial assets that it owns to maintain potential borrowing capacity at discount windows with Federal Reserve banks, various other central banks and FHLBs. Additionally, pledgedthe Firm pledges assets are used for other purposes, including to collateralize repurchase and other securities financing agreements, to cover short sales and to collateralize derivative contracts and deposits. Certain of these pledged assets may be sold or repledged or otherwise used by the secured parties and are parenthetically identified on the Consolidated balance sheets as assets pledged.
The following table presents the Firm’sFirm’s pledged assets.
(in billions)June 30, 2019
 December 31, 2018
Assets that may be sold or repledged or otherwise used by secured parties$155.0
 $104.0
Assets that may not be sold or repledged or otherwise used by secured parties93.6
 83.7
Assets pledged at Federal Reserve banks and FHLBs490.2
 475.3
Total assets pledged$738.8
 $663.0

Total
(in billions)March 31, 2020
 December 31, 2019
Assets that may be sold or repledged or otherwise used by secured parties$164.6
 $125.2
Assets that may not be sold or repledged or otherwise used by secured parties111.6
 80.2
Assets pledged at Federal Reserve banks and FHLBs(a)
507.3
 478.9
Total pledged assets$783.5
 $684.3
(a)Includes assets pledged to the Federal Reserve under the MMLF, PDCF and the Federal Reserve’s open market operations.
Total pledged assets do not include assets of consolidated VIEs; these assets are used to settle the liabilities of those entities. Refer to Note 13 14 for additional information on assets and liabilities of consolidated VIEs. ForRefer to Note 11 for additional information on the Firm’sFirm’s securities financing activities, referactivities. Refer to Note 10. For 20 of JPMorgan Chase’s 2019 Form 10-K for additional information on the Firm’sFirm’s long-term debt, refer to Note 19 of JPMorgan Chase’s 2018 Form 10-K.debt.
Collateral
The Firm accepts financial assets as collateral that it is permitted to sell or repledge, deliver or otherwise use. This collateral is generally obtained under resale and other securities financing agreements, prime brokerage-related held-for-investment customer receivables and derivative contracts. Collateral is generally used under repurchase and other securities financing agreements, to cover short sales and to collateralize derivative contracts and deposits.
The following table presents the fair value of collateral accepted.
(in billions)June 30, 2019
 December 31, 2018
Collateral permitted to be sold or repledged, delivered, or otherwise used$1,319.2
 $1,245.3
Collateral sold, repledged, delivered or otherwise used1,033.9
 998.3
(in billions)March 31, 2020
 December 31, 2019
Collateral permitted to be sold or repledged, delivered, or otherwise used$1,373.7
 $1,282.5
Collateral sold, repledged, delivered or otherwise used(a)
1,058.3
 1,000.5
(a)Includes collateral repledged to the Federal Reserve under the Federal Reserve’s open market operations and PDCF.

Note 2425 – Litigation
Contingencies
As of June 30, 2019,March 31, 2020, the Firm and its subsidiaries and affiliates are defendants, putative defendants or respondents in numerous legal proceedings, including private, civil litigations and regulatory/government investigations. The litigations range from individual actions involving a single plaintiff to class action lawsuits with potentially millions of class members. Investigations involve both formal and informal proceedings, by both governmental agencies and self-regulatory organizations. These legal proceedings are at varying stages of adjudication, arbitration or investigation, and involve each of the Firm’s lines of business and several geographies and a wide variety of claims (including common law tort and contract claims and statutory antitrust, securities and consumer protection claims), some of which present novel legal theories.
The Firm believes the estimate of the aggregate range of reasonably possible losses, in excess of reserves established, for its legal proceedings is from $0 to approximately $1.3 billion at June 30, 2019.March 31, 2020. This estimated aggregate range of reasonably possible losses was based upon information available as of that date for those proceedings in which the Firm believes that an estimate of reasonably possible loss can be made. For certain matters, the Firm does not believe that such an estimate can be made, as of that date. The Firm’s estimate of the aggregate range of reasonably possible losses involves significant judgment, given:
the number, variety and varying stages of the proceedings, including the fact that many are in preliminary stages,
the existence in many such proceedings of multiple defendants, including the Firm, whose share of liability (if any) has yet to be determined,
the numerous yet-unresolved issues in many of the proceedings, including issues regarding class certification and the scope of many of the claims, and
the attendant uncertainty of the various potential outcomes of such proceedings, including where the Firm has made assumptions concerning future rulings by the court or other adjudicator, or about the behavior or incentives of adverse parties or regulatory authorities, and those assumptions prove to be incorrect.
In addition, the outcome of a particular proceeding may be a result which the Firm did not take into account in its estimate because the Firm had deemed the likelihood of that outcome to be remote. Accordingly, the Firm’s estimate of the aggregate range of reasonably possible losses will change from time to time, and actual losses may vary significantly.
 
Set forth below are descriptions of the Firm’s material legal proceedings.
Federal Republic of Nigeria Litigation. JPMorgan Chase Bank, N.A. operated an escrow and depository account for the Federal Government of Nigeria (“FGN”) and two major international oil companies. The account held approximately $1.1 billion in connection with a dispute among the clients over rights to an oil field. Following the settlement of the dispute, JPMorgan Chase Bank, N.A. paid out the monies in the account in 2011 and 2013 in accordance with directions received from its clients. In November 2017, the Federal Republic of Nigeria (“FRN”) commenced a claim in the English High Court for approximately $875 million in payments made out of the accounts. The FRN, claiming to be the same entity as the FGN, alleges that the payments were instructed as part of a complex fraud not involving JPMorgan Chase Bank, N.A., but that JPMorgan Chase Bank, N.A. was or should have been on notice that the payments may be fraudulent. JPMorgan Chase Bank, N.A. applied for summary judgment and was unsuccessful. The claim is ongoing and no trial date has been set.
Foreign Exchange Investigations and Litigation. The Firm previously reported settlements with certain government authorities relating to its foreign exchange (“FX”) sales and trading activities and controls related to those activities. FX-related investigations and inquiries by government authorities, including competition authorities, are ongoing, and the Firm is cooperating with and working to resolveAmong those matters. Inresolutions, in May 2015, the Firm pleaded guilty to a single violation of federal antitrust law. In January 2017, the Firm was sentenced, with judgment entered thereafter and a term of probation ending in January 2020. The term of probation has concluded, with the Firm remaining in good standing throughout the probation period. The Department of Labor has granted the Firm a five-year exemption of disqualification that allows the Firm and its affiliates to continue to rely on the Qualified Professional Asset Manager exemption under the Employee Retirement Income Security Act (“ERISA”) until January 2023. The Firm will need to reapply in due course for a further exemption to cover the remainder of the ten-year disqualification period. In addition, the Firm has agreed to pay fines totaling $265 million in connection with the settlement of FX-related investigations conducted by the European Commission and the SwissA South Africa Competition Commission which were announced in May 2019matter is the remaining FX-related governmental inquiry, and June 2019, respectively. Separately, in February 2017is currently pending before the South Africa Competition Commission referred its FX investigation of the Firm and other banks to the South Africa Competition Tribunal, which is conducting civil proceedings concerning that matter.Tribunal.
In August 2018, the United States District Court for the Southern District of New York granted final approval to the Firm’s settlement of a consolidated class action brought by U.S.-based plaintiffs, which principally alleged violations of federal antitrust laws based on an alleged conspiracy to manipulate foreign exchange rates and also sought damages on behalf of persons who transacted in FX futures and options on futures. Certain members of the settlement class filed requests to the Court to be excluded from the class, and certain of them filed a complaint against the Firm and a number of other foreign exchange dealers in

November 2018 (the “opt-out action”). The two FX-related2018. A number of these actions brought by participants or beneficiaries of qualified ERISA plansremain pending. Further, putative class actions have been dismissed. Putative class actionsfiled against the Firm and a number of other foreign exchange dealers on behalf of certain consumers who purchased foreign currencies at allegedly inflated rates (the “consumer action”) and purported indirect purchasers of FX instruments (the “indirect purchaser action”)instruments; these actions also remain pending in the District Court. In January 2020, the Firm and 11 other defendants agreed in principle to settle the class action filed by purported indirect purchasers for a total of $10 million. That settlement remains subject to negotiation of final documentation and court approval. In addition, some FX relatedFX-related individual and putative class actions based on similar alleged underlying conduct have been filed outside the U.S.
General Motors Litigation. JPMorgan Chase Bank, N.A. participated in, and was the Administrative Agent on behalf of a syndicate of lenders on, a $1.5 billion syndicated Term Loan facility (“Term Loan”) for General Motors Corporation (“GM”). In July 2009, in connection with the GM bankruptcy

proceedings, the Official Committee of Unsecured Creditors of Motors Liquidation Company (“Creditors Committee”) filed a lawsuit against JPMorgan Chase Bank, N.A., in its individual capacity and as Administrative Agent for other lenders on the Term Loan, seeking to hold the underlying lien invalid based on the filing of a UCC-3 termination statement relating to the Term Loan. In January 2015, following several court proceedings, the United States Court of Appeals for the Second Circuit reversed the Bankruptcy Court’s dismissal of the Creditors Committee’s claim and remanded the case to the Bankruptcy Court with instructions to enter partial summary judgment for the Creditors Committee as to the termination statement. The proceedingsincluding in the Bankruptcy Court thereafter continued with respect to, among other things, additional defenses asserted by JPMorgan Chase Bank, N.A.U.K., Israel and the value of additional collateral on the Term Loan that was unaffected by the filing of the termination statement at issue. In addition, certain Term Loan lenders filed cross-claims in the Bankruptcy Court against JPMorgan Chase Bank, N.A. seeking indemnification and asserting various claims. In April 2019, the parties finalized a settlement agreement to fully resolve the litigation, and the Bankruptcy Court approved that settlement in June 2019. In July 2019, the Bankruptcy Court issued orders dismissing with prejudice all claims filed against the Firm, including the cross-claims that were brought by certain Term Loan lenders.Australia.
Interchange Litigation. GA grouproups of merchants and retail associations filed a series of class action complaints alleging that Visa and Mastercard, as well as certain banks, conspired to set the price of credit and debit card interchange fees and enacted respectiverelated rules in violation of antitrust laws. TheIn 2012, the parties initially settled the cases for a cash payment, a temporary reduction of credit card interchange, and modifications to certain credit card network rules. In December 2013, the District Court granted final approval of the settlement.
A number of merchants appealed the settlement to the United States Court of Appeals for the Second Circuit, which, in June 2016, vacated the District Court’s certification of the class action and reversed2017, after the approval of that settlement was reversed on appeal, the class settlement. In March 2017, the U.S. Supreme Court declined petitions seeking review of the decision of the Court of Appeals. The case was remanded to the District Court for further proceedings consistent with the appellate decision.
The original class action was divided into two2 separate actions, one seeking primarily monetary relief and the other seeking primarily injunctive relief. In September 2018, the parties to the class action seeking monetary relief finalized an agreement which amends and supersedes the prior settlement agreement, and the plaintiffs filed a motion seeking preliminary approval of the modified settlement.agreement. Pursuant to this settlement, the defendants have collectively contributed an additional $900 million to the approximately $5.3 billion previously held in escrow from the original settlement. In JanuaryDecember 2019, the amended agreement was preliminarily approved by the
District Court, and formal noticeCourt. Certain merchants filed notices of appeal of the District Court’s approval order. Based on the percentage of merchants that opted out of the amended class settlement, is proceeding$700 million has been returned to the defendants from the settlementescrow in accordance with the District Court’s order.settlement agreement. The class action seeking primarily injunctive relief continues separately.
In addition, certain merchants have filed individual actions raising similar allegations against Visa and Mastercard, as well as against the Firm and other banks, and some of those actions are proceeding.remain pending.
LIBOR and Other Benchmark Rate Investigations and Litigation. JPMorgan Chase has received subpoenas and requests for documents and, in some cases, interviews,responded to inquiries from federal and statevarious governmental agencies and entities including the U.S. Commodity Futures Trading Commission and various state attorneys general, as well as the European Commission (“EC”), the Swiss Competition Commission (“ComCo”) and other regulatory authorities and banking associations around the world relating primarily to the process by which interest rates were submitted to the British Bankers Association (“BBA”) in connection with the setting of the BBA’sAssociation’s London Interbank Offered Rate (“LIBOR”) for various currencies principally in 2007 and 2008. Some of the inquiries also relate to similar processes by which information on rates was submitted to the European Banking Federation (“EBF”) in connection with the setting of the EBF’sFederation’s Euro Interbank Offered Rate (“EURIBOR”). The Firm continues to cooperate with these investigations to the extent that they are ongoing. ComCo’sSwiss Competition Commission’s investigation relating to EURIBOR, to which
the Firm and other banks are subject, continues. In December 2016, the ECEuropean Commission issued a decision against the Firm and other banks finding an infringement of European antitrust rules relating to EURIBOR. The Firm has filed an appeal of that decision with the European General Court, and that appeal is pending.
In addition, the Firm has been named as a defendant along with other banks in a series of individual and putative class actions related to benchmarks, including U.S. dollar LIBOR during the period that it was administered by the BBA and, in a separate consolidated putative class action, during the period that it was administered by ICE Benchmark Administration. These actions have been filed, or consolidated for pre-trial purposes, in the United States District Court for the Southern District of New York. In these actions, plaintiffs make varying allegations that in various periods, starting in 2000 or later, defendants either individually or collectively manipulated various benchmark rates by submitting rates that were artificially low or high. Plaintiffs allege that they transacted in loans, derivatives or other financial instruments whose values are affected by changes in these rates and assert a variety of claims including antitrust claims seeking treble damages. These actions are in various stages of litigation.
In actions related to U.S. dollar LIBOR during the period that it was administered by the BBA, the District Court dismissed certain claims, including antitrust claims brought by some plaintiffs whom the District Court found did not have

standing to assert such claims, and permitted certain claims to proceed, including antitrust, Commodity Exchange Act, Section 10(b) of the Securities Exchange Act and common law claims. The plaintiffs whose antitrust claims were dismissed for lack of standing have filed an appeal. The District Court granted class certification of antitrust claims related to bonds and interest rate swaps sold directly by the defendants and denied class certification motions filed by other plaintiffs. In the consolidated putative class action related to the time period that U.S. dollar LIBOR was administered by ICE Benchmark Administration, the District Court granted defendants’ motion to dismiss plaintiffs’ complaint, and the plaintiffs have appealed. The Firm has agreed to settleFirm’s settlements of putative class actions related to Swiss franc LIBOR, the Singapore Interbank Offered Rate and the Singapore Swap Offer Rate and(“SIBOR”), the Australian Bank Bill Swap Reference Rate, as well asand certain of the putative class actions related to U.S. dollar LIBOR. TheLIBOR remain subject to court approval. In the class actions related to SIBOR and Swiss franc LIBOR, the District Court declined to grant preliminary approval to the settlement involving the Singapore Interbank Offered Rate and the Singapore Swap Offer Rate after concludingconcluded that plaintiffs lacked standing and dismissing the litigation. The remaining settlements are all subject to further documentation and court approval. The Firm has also settled the putative class action related to EURIBOR, and the Court has granted final approvallacked subject matter jurisdiction, and plaintiffs’ appeals of that settlement.those decisions are pending.
Metals and U.S. Treasuries Investigations and Litigation.Litigation and Related Inquiries. Various authorities, including the Department of Justice’s Criminal Division, are conducting investigations relating to trading practices in the metals markets and related conduct. The Firm also is responding to and cooperatingrelated requests concerning similar trading-practices issues in markets for other financial instruments, such as U.S.

Treasuries. The Firm continues to cooperate with these investigations and is currently engaged in discussions with various regulators about resolving their respective investigations. There is no assurance that such discussions will result in settlements. Several putative class action complaints have been filed in the United States District Court for the Southern District of New York against the Firm and certain current and former employees, alleging a precious metals futures and options price manipulation scheme in violation of the Commodity Exchange Act. Some of the complaints also allege unjust enrichment and deceptive acts or practices under the General Business Law of the State of New York. The Court consolidated these putative class actions in February 2019. The Firm is also a defendant in a consolidated action filed in the United States District Court for the Southern District of New York alleging monopolization of silver futures in violation of the Sherman Act.
Wendel. Since 2012, the French criminal authorities have been investigating a series of transactions entered into by senior managers of Wendel Investissement (“Wendel”) during the period from 2004 through 2007 to restructure their shareholdings in Wendel. JPMorgan Chase Bank, N.A., Paris branch provided financing for the transactions to a number of managers of Wendel in 2007. JPMorgan Chase has cooperated with the investigation. The investigating judges issued an ordonnance de renvoi in November 2016, referring JPMorgan Chase Bank, N.A. to the French tribunal correctionnel for alleged complicity in tax fraud. No date for trial has been set by the court. In January 2018, the Paris Court of Appeal issued a decision cancelling the mise en examen of JPMorgan Chase Bank, N.A. In September 2018, theThe Court of Cassation, France’s highest court, ruled in September 2018 that a mise en examen is a prerequisite for an ordonnance de renvoi and remandedin January 2020 ordered the case to the Courtannulment of Appeal. In
June 2019, the Court of Appeal declined to annul the ordonnance de renvoi referring JPMorgan Chase Bank, N.A. to the French tribunal correctionnelcorrectionnel., and the Firm has reapplied to the Court of Cassation for a determination as to whether the Court of Appeal’s decision is consistent with the Court of Cassation’s September 2018 ruling. Any further actions in the criminal proceedings are stayed pending the outcome of that application. In addition, a number of the managers have commenced civil proceedings against JPMorgan Chase Bank, N.A. The claims are separate, involve different allegations and are at various stages of proceedings.
* * *
In addition to the various legal proceedings discussed above, JPMorgan Chase and its subsidiaries are named as defendants or are otherwise involved in a substantial number of other legal proceedings. The Firm believes it has meritorious defenses to the claims asserted against it in its currently outstanding legal proceedings and it intends to defend itself vigorously. Additional legal proceedings may be initiated from time to time in the future.
The Firm has established reserves for several hundred of its currently outstanding legal proceedings. In accordance with the provisions of U.S. GAAP for contingencies, the Firm accrues for a litigation-related liability when it is probable that such a liability has been incurred and the amount of the loss can be reasonably estimated. The Firm evaluates its outstanding legal proceedings each quarter to assess its litigation reserves, and makes adjustments in such reserves, upwards or downward, as appropriate, based on management’s best judgment after consultation with counsel. The Firm’s legal expense/(benefit) was $69$197 million and $0$(81) million for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and $(12) million and $70 million for the six months ended June 30, 2019 and 2018, respectively. There is no assurance that the Firm’s litigation reserves will not need to be adjusted in the future.
In view of the inherent difficulty of predicting the outcome of legal proceedings, particularly where the claimants seek very large or indeterminate damages, or where the matters present novel legal theories, involve a large number of parties or are in early stages of discovery, the Firm cannot state with confidence what will be the eventual outcomes of the currently pending matters, the timing of their ultimate resolution or the eventual losses, fines, penalties or consequences related to those matters. JPMorgan Chase believes, based upon its current knowledge and after consultation with counsel, consideration of the material legal proceedings described above and after taking into account its current litigation reserves and its estimated aggregate range of possible losses, that the other legal proceedings currently pending against it should not have a material adverse effect on the Firm’s consolidated financial condition. The Firm notes, however, that in light of the uncertainties involved in such proceedings, there is no assurance that the ultimate resolution of these matters will

not significantly exceed the reserves it has currently accrued or that a matter will not have material reputational consequences. As a result, the outcome of a particular matter may be material to JPMorgan Chase’s operating results for a particular period, depending on, among other factors, the size of the loss or liability imposed and the level of JPMorgan Chase’s income for that period.



Note 2526 – Business segments
The Firm is managed on a line of businessan LOB basis. There are four4 major reportable business segments - Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset & Wealth Management. In addition, there is a Corporate segment. The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by the Firm’s Operating Committee. Segment results are presented on a managed basis. ForRefer to Segment results below, and Note 32 of JPMorgan Chase’s 2019 Form 10-K for a further discussion concerning JPMorgan Chase’s business segments, refer to Segment results below, and Note 31 of JPMorgan Chase’s 2018 Form 10-K.segments.
Segment results
The following tables provide a summary of the Firm’s segment results as of or for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, on a managed basis. The Firm’s
definition of managed basis starts with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm (and each of the reportable business segments) on an FTE basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. For Refer to Note 32 of JPMorgan Chase’s 2019 Form 10-K for additional information on the Firm’s managed basis, refer to Note 31 of JPMorgan Chase’s 2018 Form 10-K.basis.
Business segment capital allocation
The amount of capital assigned to each business is referred to as equity. On at least an annual basis,Periodically, the assumptions and methodologies used into allocate capital allocation are assessed and as a result, the capital allocated to lines of businessthe LOBs may change. For additional information on business segment capital allocation, referRefer to Line of business equity on page 9190 of JPMorgan Chase’s 20182019 Form 10-K.10-K for additional information on business segment capital allocation.
Business segment changes
In the first quarter of 2020, the Firm began reporting a Wholesale Payments business unit within CIB following a realignment of the Firm’s wholesale payments businesses. The Wholesale Payments business comprises:
Merchant Services, which was realigned from CCB to CIB
Treasury Services and Trade Finance in CIB. Trade Finance was previously reported in Lending in CIB.
In connection with the alignment of Wholesale Payments, the assets, liabilities and headcount associated with the Merchant Services business were realigned to CIB from CCB, and the revenue and expenses of the Merchant Services business is reported across CCB, CIB and CB based primarily on client relationships. Prior periods have been revised to reflect this realignment and revised allocation methodology.

Segment results and reconciliation(a)
Segment results and reconciliation(a)
Segment results and reconciliation(a)
As of or for the three months ended June 30,
(in millions, except ratios)		Consumer &
Community Banking		 Corporate &
Investment Bank		 Commercial Banking Asset & Wealth Management
2019
2018
 2019
2018
 2019
2018
 2019
2018
As of or for the three months ended March 31,
(in millions, except ratios)		Consumer &
Community Banking		 Corporate &
Investment Bank		 Commercial Banking Asset & Wealth Management
2020
2019
 2020
2019
 2020
2019
 2020
2019
Noninterest revenue$4,440
$3,748
 $7,483
$7,532
 $549
$633
 $2,683
$2,687
$4,018
$4,085
 $6,841
$7,836
 $621
$733
 $2,709
$2,593
Net interest income9,393
8,749
 2,158
2,391
 1,662
1,683
 876
885
9,153
9,405
 3,107
2,198
 1,557
1,680
 897
896
Total net revenue13,833
12,497
 9,641
9,923
 2,211
2,316
 3,559
3,572
13,171
13,490
 9,948
10,034
 2,178
2,413
 3,606
3,489
Provision for credit losses1,120
1,108
 —
58
 29
43
 2
2
5,772
1,314
 1,401
87
 1,010
90
 94
2
Noninterest expense7,162
6,879
 5,487
5,403
 864
844
 2,596
2,566
7,161
6,970
 5,896
5,629
 988
938
 2,659
2,647
Income before income tax expense5,551
4,510
 4,154
4,462
 1,318
1,429
 961
1,004
238
5,206
 2,651
4,318
 180
1,385
 853
840
Income tax expense1,377
1,098
 1,219
1,264
 322
342
 242
249
47
1,259
 663
1,058
 33
325
 189
179
Net income$4,174
$3,412
 $2,935
$3,198
 $996
$1,087
 $719
$755
$191
$3,947
 $1,988
$3,260
 $147
$1,060
 $664
$661
Average equity$52,000
$51,000
 $80,000
$70,000
 $22,000
$20,000
 $10,500
$9,000
$52,000
$52,000
 $80,000
$80,000
 $22,000
$22,000
 $10,500
$10,500
Total assets550,690
552,674
 962,498
908,954
 220,712
220,232
 172,149
161,474
506,147
539,127
 1,217,459
1,019,470
 247,786
216,111
 186,102
165,865
ROE31%26% 14%17% 17%21% 27%33%1%30% 9%16% 2%19% 25%25%
Overhead ratio52
55
 57
54
 39
36
 73
72
54
52
 59
56
 45
39
 74
76
As of or for the three months ended June 30,
(in millions, except ratios)		Corporate 
Reconciling Items(a)
 Total
2019
2018
 2019
2018
 2019
2018
As of or for the three months ended March 31,
(in millions, except ratios)		Corporate 
Reconciling Items(a)
 Total
2020
2019
 2020
2019
 2020
2019
Noninterest revenue$(125)$142
 $(596)$(474) $14,434
$14,268
$331
$8
 $(708)$(585) $13,812
$14,670
Net interest income447
(62) (138)(161) 14,398
13,485
(165)417
 (110)(143) 14,439
14,453
Total net revenue322
80
 (734)(635) 28,832
27,753
166
425
 (818)(728) 28,251
29,123
Provision for credit losses(2)(1) —
—
 1,149
1,210
8
2
 —
—
 8,285
1,495
Noninterest expense232
279
 —
—
 16,341
15,971
146
211
 —
—
 16,850
16,395
Income/(loss) before income tax expense/(benefit)92
(198) (734)(635) 11,342
10,572
12
212
 (818)(728) 3,116
11,233
Income tax expense/(benefit)(736)(62) (734)(635) 1,690
2,256
137
(39) (818)(728) 251
2,054
Net income/(loss)$828
$(136) $—
$—
 $9,652
$8,316
$(125)$251
 $—
$—
 $2,865
$9,179
Average equity$68,526
$78,901
 $—
$—
 $233,026
$228,901
$70,030
$65,551
 $—
$—
 $234,530
$230,051
Total assets821,330
746,716
 NA
NA
 2,727,379
2,590,050
981,937
796,615
 NA
NA
 3,139,431
2,737,188
ROENM
NM
 NM
NM
 16%14%NM
NM
 NM
NM
 4%16%
Overhead ratioNM
NM
 NM
NM
 57
58
NM
NM
 NM
NM
 60
56

(a)Segment managed results reflect revenue on an FTE basis with the corresponding income tax impact recorded within income tax expense/(benefit). These adjustments are eliminated in reconciling items to arrive at the Firm’s reported U.S. GAAP results.








Segment results and reconciliation(a)
As of or for the six months ended June 30,
(in millions, except ratios)		Consumer &
Community Banking		 Corporate &
Investment Bank		 Commercial Banking Asset & Wealth Management
2019
2018
 2019
2018
 2019
2018
 2019
2018
Noninterest revenue$8,773
$7,887
 $15,146
$15,449
 $1,207
$1,182
 $5,276
$5,317
Net interest income18,811
17,207
 4,343
4,957
 3,342
3,300
 1,772
1,761
Total net revenue27,584
25,094
 19,489
20,406
 4,549
4,482
 7,048
7,078
Provision for credit losses2,434
2,425
 87
(100) 119
38
 4
17
Noninterest expense14,373
13,788
 10,940
11,062
 1,737
1,688
 5,243
5,147
Income before income tax expense10,777
8,881
 8,462
9,444
 2,693
2,756
 1,801
1,914
Income tax expense2,640
2,143
 2,276
2,272
 644
644
 421
389
Net income$8,137
$6,738
 $6,186
$7,172
 $2,049
$2,112
 $1,380
$1,525
Average equity$52,000
$51,000
 $80,000
$70,000
 $22,000
$20,000
 $10,500
$9,000
Total assets550,690
552,674
 962,498
908,954
 220,712
220,232
 172,149
161,474
Return on equity31%26% 15%20% 18%20% 26%33%
Overhead ratio52
55
 56
54
 38
38
 74
73
As of or for the six months ended June 30,
(in millions, except ratios)		Corporate 
Reconciling Items(a)
 Total
2019
2018
 2019
2018
 2019
2018
Noninterest revenue$(117)$(43) $(1,181)$(929) $29,104
$28,863
Net interest income864
(109) (281)(319) 28,851
26,797
Total net revenue747
(152) (1,462)(1,248) 57,955
55,660
Provision for credit losses—
(5) —
—
 2,644
2,375
Noninterest expense443
366
 —
—
 32,736
32,051
Income/(loss) before income tax expense/(benefit)304
(513) (1,462)(1,248) 22,575
21,234
Income tax expense/(benefit)(775)6
 (1,462)(1,248) 3,744
4,206
Net income/(loss)$1,079
$(519) $—
$—
 $18,831
$17,028
Average equity$67,047
$78,261
 $—
$—
 $231,547
$228,261
Total assets821,330
746,716
 NA
NA
 2,727,379
2,590,050
Return on equityNM
NM
 NM
NM
 16%14%
Overhead ratioNM
NM
 NM
NM
 56
58
(a)Segment managed results reflect revenue on an FTE basis with the corresponding income tax impact recorded within income tax expense/(benefit). These adjustments are eliminated in reconciling items to arrive at the Firm’s reported U.S. GAAP results.


pwclogobwaa09.jpg
Report of Independent Registered Public Accounting Firm


To the Board of Directors and Shareholders of JPMorgan Chase & Co.:
Results of Review of Interim Financial Statements
We have reviewed the accompanying consolidated balance sheet of JPMorgan Chase & Co. and its subsidiaries (the “Firm”) as of June 30, 2019,March 31, 2020, and the related consolidated statements of income, comprehensive income, and changes in stockholders’ equity for the three-month and six-month periods ended June 30, 2019 and 2018 and the consolidated statements of cash flows for the six-monththree-month periods ended June 30,March 31, 2020 and 2019, and 2018, including the related notes (collectively referred to as the “interim financial statements”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Firm as of December 31, 2018,2019, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and of cash flows for the year then ended (not presented herein), and in our report dated February 26, 2019,25, 2020, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2018,2019, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

 
Basis for Review Results
These interim financial statements are the responsibility of the Firm’s management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Firm in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

pwcsig1q2020.jpg
August 5, 2019May 7, 2020
























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

JPMorgan Chase & Co.Consolidated average balance sheets, interest and rates (unaudited)(Taxable-equivalent interest and rates; in millions, except rates)
      
Three months ended June 30, 2019 Three months ended June 30, 2018Three months ended March 31, 2020 Three months ended March 31, 2019
Average
balance
Interest(g)
 Rate
(annualized)		 Average
balance
Interest(g)
 Rate
(annualized)		Average
balance
Interest(f)
 Rate
(annualized)		 Average
balance
Interest(f)
 Rate
(annualized)
Assets            
Deposits with banks$289,838
$1,132
 1.57% $425,942
$1,543
 1.45 $279,748
$569
 0.82% $290,281
$1,170
 1.64 
Federal funds sold and securities purchased under resale agreements288,781
1,676
 2.33
 205,001
807
 1.58 253,403
1,095
 1.74
 288,478
1,647
 2.32 
Securities borrowed(a)
126,157
467
 1.48
 112,464
190

0.68 136,127
152
 0.45
 123,467
397

1.30 
Trading assets – debt instruments(a)
351,716
2,927
 3.34
 240,254
2,127
 3.55 346,911
2,472
 2.87
 322,541
2,782
 3.50 
Taxable securities244,814
1,875
 3.07
 189,419
1,383
 2.93 388,223
2,233
 2.31
 220,817
1,705
 3.13 
Nontaxable securities(b)(a)
36,418
422
 4.65
 42,588
494
 4.65 33,306
365
 4.41
 38,583
453
 4.76 
Total investment securities281,232
2,297
 3.28
(h) 
 232,007
1,877
 3.24
(h) 
421,529
2,598
 2.48
(g) 
 259,400
2,158
 3.37
(g) 
Loans954,854
12,770
 5.36
 939,675
11,680
 4.99 962,820
11,966
 5.00
 968,019
12,920
 5.41 
All other interest-earning assets(c)(b)
46,516
472
 4.07
 50,662
503
 3.99 65,194
419
 2.58
 46,708
458
 3.98 
Total interest-earning assets(a)
2,339,094
21,741
 3.73
 2,206,005
18,727
 3.40 2,465,732
19,271
 3.14
 2,298,894
21,532
 3.80 
Allowance for loan losses(13,428)    (13,223)  (17,357)    (13,532)  
Cash and due from banks20,651
    22,050
  21,668
    21,458
  
Trading assets – equity and other instruments(a)
120,545
    128,414
  114,479
    108,598
  
Trading assets – derivative receivables52,659
    60,978
  66,309
    52,522
  
Goodwill, MSRs and other intangible assets
54,144
    54,616
  52,690
    54,302
  
Other assets165,390
    154,129
  
All other noninterest-earning assets186,711
    162,472
  
Total assets$2,739,055
    $2,612,969
  $2,890,232
    $2,684,714
  
Liabilities            
Interest-bearing deposits(a)
$1,104,051
$2,413
 0.88% $1,044,738
$1,340
 0.51 $1,216,555
$1,575
 0.52% $1,080,274
$2,188
 0.82 
Federal funds purchased and securities loaned or sold under repurchase agreements227,313
1,226
 2.16
 192,136
759
 1.58 243,922
787
 1.30
 209,065
1,110
 2.15 
Short-term borrowings(d)(c)
58,262
363
 2.49
 53,016
260
 1.97 37,288
151
 1.63
 67,074
427
 2.59 
Trading liabilities – debt and all other interest-bearing
liabilities(f)(e)
191,655
762
 1.60
 180,541
598
 1.33 192,950
372
 0.77
 183,478
719
 1.59 
Beneficial interests issued by consolidated VIEs26,713
175
 2.63
 20,906
121
 2.33 18,048
90
 2.02
 22,829
150
 2.66 
Long-term debt(a)
246,053
2,266
 3.69
 242,913
2,003
 3.31 243,996
1,747
 2.88
 248,302
2,342
 3.82 
Total interest-bearing liabilities(a)
1,854,047
7,205
 1.56
 1,734,250
5,081
 1.17 1,952,759
4,722
 0.97
 1,811,022
6,936
 1.55 
Noninterest-bearing deposits(a)
408,243
    415,757
  419,631
    399,468
  
Trading liabilities – equity and other instruments(f)(e)
30,170
    34,931
  30,721
    34,734
  
Trading liabilities – derivative payables40,233
    42,168
  54,990
    39,567
  
All other liabilities, including the allowance for lending-related commitments(a)
146,343
    130,894
  168,195
    142,746
  
Total liabilities2,479,036
    2,358,000
  2,626,296
    2,427,537
  
Stockholders’ equity            
Preferred stock26,993
    26,068
  29,406
    27,126
  
Common stockholders’ equity233,026
    228,901
  234,530
    230,051
  
Total stockholders’ equity260,019
    254,969
  263,936
    257,177
  
Total liabilities and stockholders’ equity$2,739,055
    $2,612,969
  $2,890,232
    $2,684,714
  
Interest rate spread(a)
  2.17%   2.23   2.17%   2.25 
Net interest income and net yield on interest-earning assets(a)
 $14,536
 2.49
  $13,646
 2.48  $14,549
 2.37
  $14,596
 2.57 
(a)In the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income and interest expense, but had no effect on net interest income. These changes were made to align the accounting treatment between the balance sheet and the related interest income or expense, primarily by offsetting interest income and expense for certain prime brokerage-related held-for-investment customer receivables and payables that are currently presented as a single margin account on the balance sheet. In addition, the Firm reclassified balances related to certain instruments and structured notes from interest-earning/bearing to noninterest-earning/bearing assets and liabilities as the associated returns are recorded in principal transactions revenue and not in net interest income. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation.
(b)Represents securities which are tax-exempt for U.S. federal income tax purposes.
(c)(b)Includes prime brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets, which are classified in other assets on the Consolidated Balance Sheets.
(d)(c)Includes commercial paperpaper.
(e)(d)OtherAll other interest-bearing liabilities include prime brokerage-related customer payables.
(f)(e)The combined balance of trading liabilities – debt and equity instruments was $111.0$101.1 billion eachand $107.0 billion for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively.
(g)(f)Interest includes the effect of certain related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(h)(g)The annualized rate for securities based on amortized cost was 3.32%2.52% and 3.27%3.40% for the three months ended June 30,March 31, 2020 and 2019, and 2018, respectively, and does not give effect to changes in fair value that are reflected in AOCI.


JPMorgan Chase & Co.
Consolidated average balance sheets, interest and rates (unaudited)
(Taxable-equivalent interest and rates; in millions, except rates)
    
 Six months ended June 30, 2019 Six months ended June 30, 2018
 Average
balance
Interest(g)
 Rate
(annualized)		 Average
balance
Interest(g)
 Rate
(annualized)
Assets           
Deposits with banks$290,058
$2,302
 1.60%  $424,880
$2,864
 1.36 
Federal funds sold and securities purchased under resale agreements288,631
3,323
 2.32
  201,700
1,538
 1.54 
Securities borrowed(a)
124,820
864
 1.40
  111,106
301
 0.55 
Trading assets – debt instruments(a)
337,209
5,709
 3.41
  240,062
4,245
 3.57 
Taxable securities232,880
3,580
 3.10
  192,511
2,696
 2.82 
Nontaxable securities(b)
37,496
875
 4.71
  43,348
1,004
 4.67 
Total investment securities270,376
4,455
 3.32
(h) 
 235,859
3,700
 3.16
(h) 
Loans961,400
25,690
 5.39
  933,148
22,797
 4.93 
All other interest-earning assets(a)(c)
46,611
930
 4.03
  49,920
934
 3.77 
Total interest-earning assets(a)
2,319,105
43,273
 3.76
  2,196,675
36,379
 3.34 
Allowance for loan losses(13,480)     (13,352)    
Cash and due from banks21,052
     22,111
    
Trading assets – equity and other instruments(a)
114,605
     126,149
    
Trading assets – derivative receivables52,591
     60,737
    
Goodwill, MSRs and other intangible assets
54,222
     54,659
    
Other assets163,940
     152,602
    
Total assets$2,712,035
     $2,599,581
    
Liabilities           
Interest-bearing deposits(a)
$1,092,228
$4,601
 0.85%  $1,038,502
$2,400
 0.47 
Federal funds purchased and securities loaned or sold under repurchase agreements218,240
2,336
 2.16
  194,113
1,337
 1.39 
Short-term borrowings(a)(d)
62,643
790
 2.54
  50,622
469
 1.87 
Trading liabilities – debt and all other interest-bearing liabilities(a)(e)(f)
187,590
1,481
 1.59
  175,754
1,057
 1.21 
Beneficial interests issued by consolidated VIEs24,782
325
 2.64
  22,226
244
 2.22 
Long-term debt(a)
247,171
4,608
 3.76
  245,541
3,756
 3.08 
Total interest-bearing liabilities(a)
1,832,654
14,141
 1.56
  1,726,758
9,263
 1.08 
Noninterest-bearing deposits(a)
403,880
     414,790
    
Trading liabilities – equity and other instruments(a)(f)
32,440
     32,084
    
Trading liabilities – derivative payables39,902
     41,958
    
All other liabilities, including the allowance for lending-related commitments(a)
144,553
     129,662
    
Total liabilities2,453,429
     2,345,252
    
Stockholders’ equity           
Preferred stock27,059
     26,068
    
Common stockholders’ equity231,547
     228,261
    
Total stockholders’ equity258,606
     254,329
    
Total liabilities and stockholders’ equity$2,712,035
     $2,599,581
    
Interest rate spread(a)
   2.20%     2.26 
Net interest income and net yield on interest-earning assets(a)
 $29,132
 2.53
   $27,116
 2.49 
(a)In the second quarter of 2019, the Firm implemented certain presentation changes that impacted interest income and interest expense, but had no effect on net interest income. These changes were made to align the accounting treatment between the balance sheet and the related interest income or expense, primarily by offsetting interest income and expense for certain prime brokerage-related held-for-investment customer receivables and payables that are currently presented as a single margin account on the balance sheet. In addition, the Firm reclassified balances related to certain instruments and structured notes from interest-earning/bearing to noninterest-earning/bearing assets and liabilities as the associated returns are recorded in principal transactions revenue and not in net interest income. These changes were applied retrospectively and, accordingly, prior period amounts were revised to conform with the current presentation.
(b)Represents securities which are tax-exempt for U.S. federal income tax purposes.
(c)Includes prime brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets, which are classified in other assets on the Consolidated Balance Sheets.
(d)Includes commercial paper
(e)Other interest-bearing liabilities include prime brokerage-related customer payables.
(f)The combined balance of trading liabilities – debt and equity instruments were $109.0 billion and $104.5 billion for the six months ended June 30, 2019 and 2018, respectively.
(g)Interest includes the effect of certain related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(h)The annualized rate for securities based on amortized cost was 3.36% and 3.19% for the six months ended June 30, 2019 and 2018, respectively, and does not give effect to changes in fair value that are reflected in AOCI.


GLOSSARY OF TERMS AND ACRONYMS
20182019 Form 10-K: Annual report on Form 10-K for year ended December 31, 2018,2019, filed with the U.S. Securities and Exchange Commission.
ABS: Asset-backed securities
Active foreclosures: Loans referred to foreclosure where formal foreclosure proceedings are ongoing. Includes both judicial and non-judicial states.
AFS: Available-for-sale
Allowance for loan losses to total retained loans: represents period-end allowance for loan losses divided by retained loans.
Amortized cost: Amount at which a financing receivable or investment is originated or acquired, adjusted for accretion or amortization of premium, discount, and net deferred fees or costs, collection of cash, charge-offs, foreign exchange, and fair value hedge accounting adjustments. For AFS securities, amortized cost is also reduced by any impairment losses recognized in earnings. Amortized cost is not reduced by the allowance for credit losses, except where explicitly presented net.
AOCI: Accumulated other comprehensive income/(loss)
ARM(s): Adjustable rate mortgage(s)
AUC: “Assets under custody”: Represents assets held directly or indirectly on behalf of clients under safekeeping, custody and servicing arrangements.
Auto loan and lease origination volume: Dollar amount of auto loans and leases originated.
AWM: Asset & Wealth Management
Beneficial interests issued by consolidated VIEs: represents the interest of third-party holders of debt, equity securities, or other obligations, issued by VIEs that JPMorgan Chase consolidates.
Benefit obligation: refers to the projected benefit obligation for pension plans and the accumulated postretirement benefit obligation for OPEB plans.
BHC: Bank holding company
Bridge Financing Portfolio: A portfolio of held-for-sale unfunded loan commitments and funded loans. The unfunded commitments include both short-term bridge loan commitments that will ultimately be replaced by longer term financing as well as term loan commitments. The funded loans include term loans and funded revolver facilities.
CB: Commercial Banking
CBB: Consumer & Business Banking
CCAR: Comprehensive Capital Analysis and Review
CCB: Consumer & Community Banking
CDS: Credit default swaps
CECL: Current Expected Credit Losses
CEO: Chief Executive Officer
CET1 Capital:capital: Common equity Tier 1 Capitalcapital
CFTC: Commodity Futures Trading Commission
CFO: Chief Financial Officer
Chase Bank USA, N.A.: Chase Bank USA, National Association
CIB: Corporate & Investment Bank
CIO: Chief Investment Office
Client assets: Represent assets under management as well as custody, brokerage, administration and deposit accounts.
Client deposits and other third-party liabilities: Deposits, as well as deposits that are swept to on-balance sheet liabilities (e.g., commercial paper, federal funds purchased and securities loaned or sold under repurchase agreements) as part of client cash management programs.
CLTV: Combined loan-to-value
Collateral-dependent: A loan is considered to be collateral-dependent when repayment of the loan is expected to be provided solely bysubstantially through the underlying operation or sale of thecollateral rather than by cash flows fromwhen the borrower’s operations, income or other resources.borrower is experiencing financial difficulty, including when foreclosure is deemed probable based on borrower delinquency.
Commercial Card: provides a wide range of payment services to corporate and public sector clients worldwide through the commercial card products. Services include procurement, corporate travel and entertainment, expense
management services, and business-to-business payment solutions.
Core loans: represents loans central to the Firm’s ongoing businesses; core loans excludes loans classified as trading assets, runoff portfolios, discontinued portfolios and portfolios the Firm has an intent to exit.
Credit derivatives: Financial instruments whose value is derived from the credit risk associated with the debt of a third-party issuer (the reference entity) which allow one party (the protection purchaser) to transfer that risk to another party (the protection seller). Upon the occurrence of a credit event by the reference entity, which may include, among other events, the bankruptcy or failure to pay its obligations, or certain restructurings of the debt of the reference entity, neither party has recourse to the reference entity. The protection purchaser has recourse to the protection seller for the difference between the face value of the CDS contract and the fair value at the time of settling the credit derivative contract. The determination as to whether a credit event has occurred is generally made by the relevant International Swaps and Derivatives Association (“ISDA”) Determinations Committee.
Criticized: Criticized loans, lending-related commitments and derivative receivables that are classified as special mention, substandard and doubtful categories for regulatory purposes and are generally consistent with a rating of CCC+/Caa1 and below, as defined by S&P and Moody’s.
CRO: Chief Risk Officer
CVA: Credit valuation adjustment
DVA: Debit valuation adjustment
EC: European Commission
Eligible LTD: Long-term debt satisfying certain eligibility criteria
Embedded derivatives: are implicit or explicit terms or features of a financial instrument that affect some or all of

the cash flows or the value of the instrument in a manner similar to a derivative. An instrument containing such terms or features is referred to as a “hybrid.” The component of the hybrid that is the non-derivative instrument is referred to as the “host.” For example, callable debt is a hybrid instrument that contains a plain vanilla debt instrument (i.e., the host) and an embedded option that allows the issuer to redeem the debt issue at a specified date for a specified amount (i.e., the embedded derivative). However, a floating rate instrument is not a hybrid composed of a fixed-rate instrument and an interest rate swap.
ERISA: Employee Retirement Income Security Act of 1974
EPS: Earnings per share
Exchange-traded derivatives: Derivative contracts that are executed on an exchange and settled via a central clearing house.
Expense categories:
Volume- and revenue-related expenses generally correlate with changes in the related business/transaction volume or revenue. Examples of volume- and revenue-related expenses include commissions and incentive compensation, depreciation expense related to operating lease assets, and brokerage expense related to equities trading transaction volume.
Investments include expenses associated with supporting medium- to longer-term strategic plans of the Firm. Examples of investments include initiatives in technology (including related compensation), marketing, and compensation for new bankers and client advisors.
Structural expenses are those associated with the day-to-day cost of running the bank and are expenses not covered by the above two categories. Examples of structural expenses include employee salaries and benefits, as well as noncompensation costs such as real estate and all other expenses.
EU: European Union
Fannie Mae: Federal National Mortgage Association
FASB: Financial Accounting Standards Board

FCA: Financial Conduct Authority
FDIC: Federal Deposit Insurance Corporation
Federal Reserve: The Board of the Governors of the Federal Reserve System
FFIEC: Federal Financial Institutions Examination Council
FHA: Federal Housing Administration
FHLB: Federal Home Loan Bank
FICO score: A measure of consumer credit risk based on information in consumer credit reports produced by Fair Isaac Corporation. Because certain aged data is excluded from credit reports based on rules in the Fair Credit Reporting Act, FICO scores may not reflect all historical information about a consumer.
Firm: JPMorgan Chase & Co.
Forward points: represents the interest rate differential between two currencies, which is either added to or
subtracted from the current exchange rate (i.e., “spot rate”) to determine the forward exchange rate.
FRBB: Federal Reserve Bank of Boston
FRBNY: Federal Reserve Bank of New York
Freddie Mac: Federal Home Loan Mortgage Corporation
Free-standing derivatives: is a derivative contract entered into either separate and apart from any of the Firm’s other financial instruments or equity transactions. Or, in conjunction with some other transaction and is legally detachable and separately exercisable.
FTE: Fully taxable-equivalent
FVA: Funding valuation adjustment
FX: Foreign exchange
G7: “Group of Seven nations”: Countries in the G7 are Canada, France, Germany, Italy, Japan, the U.K. and the U.S.
G7 government securities: Securities issued by the government of one of the G7 nations.
Ginnie Mae: Government National Mortgage Association
GSE: Fannie Mae and Freddie Mac
GSIB: Global systemically important banks
HELOAN: Home equity loan
HELOC: Home equity line of credit
Home equity – senior lien: represents loans and commitments where JPMorgan Chase holds the first security interest on the property.
Home equity – junior lien: represents loans and commitments where JPMorgan Chase holds a security interest that is subordinate in rank to other liens.
HQLA: High-quality liquid assets
HTM: Held-to-maturity
IBOR: Interbank Offered Rate
IDI: Insured depository institutions
IHC: JPMorgan Chase Holdings LLC, an intermediate holding company
Impaired loan:Impaired loans are loans measured at amortized cost, for which it is probable that the Firm will be unable to collect all amounts due, including principal and interest, according to the contractual terms of the agreement. Impaired loans include the following:
All wholesale nonaccrual loans
All TDRs (both wholesale and consumer), including ones that have returned to accrual status
IPO: Initial public offering
Investment-grade: An indication of credit quality based on JPMorgan Chase’s internal risk assessment system. “Investment grade” generally represents a risk profile similar to a rating of a “BBB-”/“Baa3” or better, as defined by independent rating agencies.
IR: Interest rate
ISDA:ISDA: International Swaps and Derivatives Association
JPMorgan Chase: JPMorgan Chase & Co.
JPMorgan Chase Bank, N.A.: JPMorgan Chase Bank, National Association
J.P. Morgan Securities: J.P. Morgan Securities LLC
LCR: Liquidity coverage ratio
LGD: Loss given default
LIBOR: London Interbank Offered Rate
LLC: Limited Liability Company
LOB: Line of business
Loss emergence period: represents the time period between the date at which the loss is estimated to have been incurred and the ultimate realization of that loss.
LTV: “Loan-to-value ratio”: For residential real estate loans, the relationship, expressed as a percentage, between the

principal amount of a loan and the appraised value of the collateral (i.e., residential real estate) securing the loan.
Origination date LTV ratio
The LTV ratio at the origination date of the loan. Origination date LTV ratios are calculated based on the actual appraised values of collateral (i.e., loan-level data) at the origination date.
Current estimated LTV ratio
An estimate of the LTV as of a certain date. The current estimated LTV ratios are calculated using estimated collateral values derived from a nationally recognized home price index measured at the metropolitan statistical area (“MSA”) level. These MSA-level home price indices consist of actual data to the extent available and forecasted data where actual data is not available. As a result, the estimated collateral values used to calculate these ratios do not represent actual appraised loan-level collateral values; as such, the resulting LTV ratios are necessarily imprecise and should therefore be viewed as estimates.
Combined LTV ratio
The LTV ratio considering all available lien positions, as well as unused lines, related to the property. Combined LTV ratios are used for junior lien home equity products.
Managed basis: A non-GAAP presentation of Firmwide financial results that includes reclassifications to present revenue on a fully taxable-equivalent basis. Management also uses this financial measure at the segment level, because it believes this provides information to enable investors to understand the underlying operational

performance and trends of the particular business segment and facilitates a comparison of the business segment with the performance of competitors.
Master netting agreement: A single agreement with a counterparty that permits multiple transactions governed by that agreement to be terminated or accelerated and settled through a single payment in a single currency in the event of a default (e.g., bankruptcy, failure to make a required payment or securities transfer or deliver collateral or margin when due).
Measurement alternative:alternative: Measures equity securities without readily determinable fair values at cost less impairment (if any), plus or minus observable price changes from an identical or similar investment of the same issuer.
Merchant Services: offers merchants payment processing capabilities, fraud and risk management, data and analytics, and other payments services. Through Merchant Services, merchants of all sizes can accept payments via credit and debit cards and payments in multiple currencies.
MBS: Mortgage-backed securities
MD&A: Management’s discussion and analysis
MMLF: Money Market Mutual Fund Liquidity Facility
MMMF: Money market mutual funds
Moody’s: Moody’s Investor Services
Mortgage product types:
Alt-A
Alt-A loans are generally higher in credit quality than subprime loans but have characteristics that would disqualify the borrower from a traditional prime loan. Alt-A lending characteristics may include one or more of the following: (i) limited documentation; (ii) a high CLTV ratio; (iii) loans secured by non-owner occupied properties; or (iv) a debt-to-income ratio above normal limits. A substantial proportion of the Firm’s Alt-A loans are those where a borrower does not provide complete documentation of his or her assets or the amount or source of his or her income.
Option ARMs
The option ARM real estate loan product is an adjustable-rate mortgage loan that provides the borrower with the option each month to make a fully amortizing, interest-only or minimum payment. The minimum payment on an option ARM loan is based on the interest rate charged during the introductory period. This introductory rate is usually significantly below the fully indexed rate. The fully indexed rate is calculated using an index rate plus a margin. Once the introductory period ends, the contractual interest rate charged on the loan increases to the fully indexed rate and adjusts monthly to reflect movements in the index. The minimum payment is typically insufficient to cover interest accrued in the prior month, and any unpaid interest is deferred and added to the principal balance of the loan. Option ARM loans are subject to payment recast, which converts the loan to a variable-rate fully amortizing loan upon meeting specified loan balance and anniversary date triggers.
Prime
Prime mortgage loans are made to borrowers with good credit records who meet specific underwriting requirements, including prescriptive requirements related to income and overall debt levels. New prime mortgage borrowers provide full documentation and generally have reliable payment histories.
Subprime
Subprime loans are loans that, prior to mid-2008, were offered to certain customers with one or more high risk characteristics, including but not limited to: (i) unreliable or poor payment histories; (ii) a high LTV ratio of greater than 80% (without borrower-paid mortgage insurance); (iii) a high debt-to-income ratio; (iv) an occupancy type for the loan is other than the borrower’s primary residence; or (v) a history of delinquencies or late payments on the loan.
MSA: Metropolitan statistical areas
MSR: Mortgage servicing rights
NA: Data is not applicable or available for the period presented.
NAV: Net Asset Value
Net Capital Rule: Rule 15c3-1 under the Securities Exchange Act of 1934.
Net charge-off/(recovery) rate: represents net charge-offs/(recoveries) (annualized) divided by average retained loans for the reporting period.
Net interchange income includes the following components:

•
Interchange income: Fees earned by credit and debit card issuers on sales transactions.
•
Rewards costs: The cost to the Firm for points earned by cardholders enrolled in credit card rewards programs.programs generally tied to sales transactions.
•
Partner payments: Payments to co-brand credit card partners based on the cost of loyalty program rewards earned by cardholders on credit card transactions.
Net yield on interest-earning assets: The average rate for interest-earning assets less the average rate paid for all sources of funds.
NM:NM: Not meaningful
Nonaccrual loans: Loans for which interest income is not recognized on an accrual basis. Loans (other than credit card loans and certain consumer loans insured by U.S. government agencies) are placed on nonaccrual status when full payment of principal and interest is not expected, regardless of delinquency status, or when principal and interest has been in default for a period of 90 days or more unless the loan is both well-secured and in the process of collection. Collateral-dependent loans are typically maintained on nonaccrual status.
Nonperforming assets: Nonperforming assets include nonaccrual loans, nonperforming derivatives and certain assets acquired in loan satisfactions, predominantly real estate owned and other commercial and personal property.
OCC: Office of the Comptroller of the Currency
OCI: Other comprehensive income/(loss)
OPEB: Other postretirement employee benefit
OTC: “Over-the-counter derivatives”: Derivative contracts that are negotiated, executed and settled bilaterally between two derivative counterparties, where one or both counterparties is a derivatives dealer.
OTC cleared: “Over-the-counter cleared derivatives”: Derivative contracts that are negotiated and executed bilaterally, but subsequently settled via a central clearing

house, such that each derivative counterparty is only exposed to the default of that clearing house.
OTTI:OTTI: Other-than-temporary impairment
Overhead ratio: Noninterest expense as a percentage of total net revenue.
Parent Company: JPMorgan Chase & Co.
Participating securities: represents unvested share-based compensation awards containing nonforfeitable rights to dividends or dividend equivalents (collectively, “dividends”), which are included in the earnings per share calculation using the two-class method. JPMorgan Chase grants restricted stock and RSUs to certain employees under its share-based compensation programs, which entitle the recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to the dividends paid to holders of common stock. These unvested awards meet the definition of participating securities. Under the two-class method, all earnings (distributed and undistributed) are allocated to each class of common stock and participating
securities, based on their respective rights to receive dividends.
PCD: “Purchased credit deteriorated” assets represent acquired financial assets that as of the date of acquisition have experienced a more-than-insignificant deterioration in credit quality since origination, as determined by the Firm.
PCI: “Purchased credit-impaired” loans representsrepresented certain loans that were acquired and deemed to be credit-impaired on the acquisition date in accordance with thedate. The superseded FASB guidance of the FASB. The guidance allowsallowed purchasers to aggregate credit-impaired loans acquired in the same fiscal quarter into one or more pools, provided that the loans havehad common risk characteristics (e.g., product type, LTV ratios, FICO scores, past due status, geographic location). A pool iswas then accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows.
PD: Probability of default
PDCF: Primary Dealer Credit Facility
Phishing: a type of social engineering cyberattack received through email or online messages.
PPP: Paycheck Protection Program
PRA: Prudential Regulation Authority
Pre-provision profit/(loss): represents total net revenue less noninterest expense. The Firm believes that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses.
Principal transactions revenue: Principal transactions revenue is driven by many factors, including the bid-offer spread, which is the difference between the price at which the Firm is willing to buy a financial or other instrument and the price at which the Firm is willing to sell that instrument. It also consists of realized (as a result of closing out or termination of transactions, or interim cash payments) and unrealized (as a result of changes in valuation) gains and losses on financial and other instruments (including those accounted for under the fair value option) primarily used in client-driven market-making activities and on private equity investments. In connection with its client-driven market-making activities, the Firm transacts in debt and equity instruments, derivatives and commodities (including physical commodities inventories and financial instruments that reference commodities). Principal transactions revenue also includes certain realized and unrealized gains and losses related to hedge accounting and specified risk-management activities, including: (a) certain derivatives designated in qualifying hedge accounting relationships (primarily fair value hedges of commodity and foreign
exchange risk), (b) certain derivatives used for specific risk management purposes, primarily to mitigate credit risk and foreign exchange risk, and (c) other derivatives.
PSU(s): Performance share units
Receivables from customers: primarily represents prime brokerage-related held-for-investment customer receivables from brokerage customers that are collateralized through assets maintained in the clients’ brokerage accounts, as such no allowance is held against these receivables. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.
Regulatory VaR: Daily aggregated VaR calculated in accordance with regulatory rules.
REO: Real estate owned

Reported basis: Financial statements prepared under U.S. GAAP, which excludes the impact of taxable-equivalent adjustments.
Retained loans: Loans that are held-for-investment (i.e. excludes loans held-for-sale and loans at fair value).
Revenue wallet: Total fee revenue based on estimates of investment banking fees generated across the industry (i.e., the revenue wallet) from investment banking transactions in M&A, equity and debt underwriting, and loan syndications. Source: Dealogic, a third-party provider of investment banking competitive analysis and volume based league tables for the above noted industry products.
RHS: Rural Housing Service of the U.S. Department of Agriculture
ROE: Return on equity
ROTCE: Return on tangible common equity
ROU assets: Right-of-use assets
RSU(s): Restricted stock units
RWA: “Risk-weighted assets”: Basel III establishes two comprehensive approaches for calculating RWA (a Standardized approach and an Advanced approach) which include capital requirements for credit risk, market risk, and in the case of Basel III Advanced, also operational risk. Key differences in the calculation of credit risk RWA between the Standardized and Advanced approaches are that for Basel III Advanced, credit risk RWA is based on risk-sensitive approaches which largely rely on the use of internal credit models and parameters, whereas for Basel III Standardized, credit risk RWA is generally based on supervisory risk-weightings which vary primarily by counterparty type and asset class. Market risk RWA is calculated on a generally consistent basis between Basel III Standardized and Basel III Advanced.
Scored portfolios: Consumer loan portfolios that predominantly include residential real estate loans, credit card loans, auto loans to individuals and certain small business loans.
S&P: Standard and Poors
SAR(s): Stock appreciation rights
SEC: U.S. Securities and Exchange Commission
Seed capital: Initial JPMorgan capital invested in products, such as mutual funds, with the intention of ensuring the fund is of sufficient size to represent a viable offering to clients, enabling pricing of its shares, and allowing the manager to develop a track record. After these goals are

achieved, the intent is to remove the Firm’s capital from the investment.
Shelf Deals: Shelf offerings are SEC provisions that allow issuers to register for new securities without selling the entire issuance at once. Since these issuances are filed with the SEC but are not yet priced in the market, they are not included in the league tables until the actual securities are issued.
Single-name: Single reference-entities
SLR: Supplementary leverage ratio
SMBS: Stripped mortgage-backed securities
SMCCF: Secondary Market Corporate Credit Facility
SOFR: Secured Overnight Financing Rate
SPEs: Special purpose entities
SPV: Special purpose vehicle
Structural interest rate risk: represents interest rate risk of the non-trading assets and liabilities of the Firm.
Structured notes: Structured notes are financial instruments whose cash flows are linked to the movement in one or more indexes, interest rates, foreign exchange rates, commodities prices, prepayment rates, or other market variables. The notes typically contain embedded (but not separable or detachable) derivatives. Contractual cash flows for principal, interest, or both can vary in amount and timing throughout the life of the note based on non-traditional indexes or non-traditional uses of traditional interest rates or indexes.
Suspended foreclosures: Loans referred to foreclosure where formal foreclosure proceedings have started but are currently on hold, which could be due to bankruptcy or loss mitigation. Includes both judicial and non-judicial states.
Taxable-equivalent basis: In presenting managed results, the total net revenue for each of the business segments and the Firm is presented on a tax-equivalent basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities; the corresponding income tax impact related to tax-exempt items is recorded within income tax expense.
TBVPS: Tangible book value per share
TCE: Tangible common equity
TDR: “Troubled debt restructuring” is deemed to occur when the Firm modifies the original terms of a loan agreement by granting a concession to a borrower that is experiencing financial difficulty. Loans with short-term and other insignificant modifications that are not considered concessions are not TDRs.
TLAC: Total Loss Absorbing Capacity
U.K.: United Kingdom
Unaudited: Financial statements and information that have not been subjected to auditing procedures sufficient to permit an independent certified public accountant to express an opinion.
U.S.: United States of America
U.S. government agencies: U.S. government agencies include, but are not limited to, agencies such as Ginnie Mae and FHA, and do not include Fannie Mae and Freddie Mac which are U.S. government-sponsored enterprises (“U.S. GSEs”). In general, obligations of U.S. government agencies are fully and explicitly guaranteed as to the timely payment of principal and interest by the full faith and credit of the U.S. government in the event of a default.
U.S. GAAP: Accounting principles generally accepted in the United States of America.
U.S. GSE(s): “U.S.“U.S. government-sponsored enterprises”:In the U.S., GSEs are quasi-governmental, privately-held entities established or

chartered by the U.S. government to serve public purposes as specified by the U.S. Congress to improve the flow of credit to specific sectors of the economy and provide certain essential services to the public. U.S. GSEs include Fannie Mae and Freddie Mac, but do not include Ginnie Mae which is directly owned by the U.S. Department of Housing and Urban Development.or FHA. U.S. GSE obligations are not explicitly guaranteed as to the timely payment of principal
and interest by the full faith and credit of the U.S. government.
U.S. Treasury: U.S. Department of the Treasury
VA: U.S. Department of Veterans Affairs
VaR: “Value-at-risk” is a measure of the dollar amount of potential loss from adverse market moves in an ordinary market environment.
VIEs: Variable interest entities
Warehouse loans: consist of prime mortgages originated with the intent to sell that are accounted for at fair value and classified as trading assets.

LINE OF BUSINESS METRICS
CONSUMER & COMMUNITY BANKING (“CCB”)
Debit and credit card sales volume: Dollar amount of cardmember purchases, net of returns.
Deposit margin/deposit spread: representsRepresents net interest income expressed as a percentage of average deposits.
Home Lending Production and Home Lending Servicing revenue comprises the following:
Net mortgage servicing revenue: Includes
operating revenue earned from servicing third-party
mortgage loans, which is recognized over the period in
which the service is provided,provided; changes in the fair value of
MSRs and MSRs; the impact of risk management activities
associated with MSRs.MSRs; and gains and losses on securitization of excess mortgage servicing. Net mortgage servicing revenue also includes gains and losses on sales and lower of cost or fair value adjustments of certain repurchased loans insured by U.S. government agencies.
Net production revenue: Includes fees and income
recognized as earned on mortgage loans originated with the
intent to sell;sell, and the impact of risk management activities
associated with the mortgage pipeline and warehouse
loans; and changes in the fair value of any residual interests
held from mortgage securitizations. loans. Net production revenue
also includes gains and losses on sales of mortgage loans,
and lower of cost or fair value adjustments on mortgage loans
held-for-sale (excluding certain repurchased loans insured by U.S. government agencies), and changes in the fair value on mortgage loans
originated with the intent to sell andof financial instruments measured at fair value
under the fair value option, as well as losses recognized as
incurred related to repurchases of previously sold loans.option.
Mortgage origination channels comprise the following:
Retail: Borrowers who buy or refinance a home through direct contact with a mortgage banker employed by the Firm using a branch office, the Internet or by phone. Borrowers are frequently referred to a mortgage banker by a banker in a Chase branch, real estate brokers, home builders or other third parties.
Correspondent: Banks, thrifts, other mortgage banks and other financial institutions that sell closed loans to the Firm.
Card Services: includes the Credit Card and Merchant Services businesses.
Credit Card: is a business that primarily issues credit cards to consumers and small businesses.
Merchant Services: is a business that primarily processes transactions for merchants.
Net revenue rate: represents Credit Card Services net revenue (annualized) expressed as a percentage of average loans for the period.
Auto loan and lease origination volume: Dollar amount of auto loans and leases originated.
 
CORPORATE & INVESTMENT BANK (“CIB”)
Definition of selected CIB revenue:
Investment Banking: incorporates all revenue associated with investment banking activities, and is reported net of investment banking revenue shared with other lines of business.LOBs.
Treasury Services: Wholesale Paymentsoffers a broad range of products and services that enable clients to manage payments and receipts, as well as invest and manage funds. Products include U.S. dollar and multi-currency clearing, ACH, lockbox, disbursement and reconciliation services, check deposits, and currency-related services. includes the following:
•
Treasury Services: offers a broad range of products and services that enable clients to manage payments and receipts, as well as invest and manage funds. Products include U.S. dollar and multi-currency clearing, automated clearing house, lockbox, disbursement and reconciliation services, check deposits, and currency-related services;
•
Merchant Services: primarily processes transactions for merchants; and
•
Trade Finance: which includes loans tied directly to goods crossing borders, export/import loans, commercial letters of credit, standby letters of credit, and supply chain finance.
Lending: includes net interest income, fees, gains or losses on loan sale activity, gains or losses on securities received as part of a loan restructuring, and the risk management results related to the credit portfolio. Lending also includes Trade Finance, which includes loans tied directly to goods crossing borders, export/import loans, commercial letters of credit, standby letters of credit, and supply chain finance.
Fixed Income Markets: primarily includes revenue related to market-making across global fixed income markets, including foreign exchange, interest rate, credit and commodities markets.
Equity Markets: primarily includes revenue related to market-making across global equity products, including cash instruments, derivatives, convertibles and prime brokerage.
Securities Services: primarily includes custody, fund accounting and administration, and securities lending products sold principally to asset managers, insurance companies and public and private investment funds. Also includes collateral management and depositary receipts businesses which provide collateral management products, and depositary bank services for American and global depositary receipt programs.
Description of certain business metrics:
Assets under custody (“AUC”): represents activities associated with the safekeeping and servicing of assets on which Securities Services earns fees.
Investment banking fees: represents advisory, equity underwriting, bond underwriting and loan syndication fees.


COMMERCIAL BANKING (“CB”)
Commercial Banking provides comprehensive financial solutions, including lending, treasury services,wholesale payments, investment banking and asset management products across three primary client segments: Middle Market Banking, Corporate Client Banking and Commercial Real Estate Banking. Other includes amounts not aligned with a primary client segment.
Middle Market Banking: covers small business and midsized corporations, local governments and nonprofit clients.
Corporate Client Banking: covers large corporations.
Commercial Real Estate Banking: covers investors, developers, and owners of multifamily, office, retail, industrial and affordable housing properties.
CB product revenue comprises the following:
Lending: includes a variety of financing alternatives, which are primarily provided on a secured basis; collateral includes receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures, leases, and standby letters of credit.
Treasury services:Wholesale payments: includes revenue from a broad range of products and services that enable CB clients to manage payments and receipts, as well as invest and manage funds.
Investment banking: includes revenue from a range of products providing CB clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through advisory, equity underwriting, and loan syndications. Revenue from fixed income and equity market products used by CB clients is also included.
Other: product revenue primarily includes tax-equivalent adjustments generated from Community Development Banking activity and certain income derived from principal transactions.
 
ASSET & WEALTH MANAGEMENT (“AWM”)
Assets under management (“AUM”): represent assets managed by AWM on behalf of its Private Banking, Institutional and Retail clients.
Client assets: represent assets under management, as well as custody, brokerage, administration and deposit accounts.
Multi-asset: Any fund or account that allocates assets under management to more than one asset class.
Alternative assets: The following types of assets constitute alternative investments – hedge funds, currency, real estate, private equity and other investment funds designed to focus on nontraditional strategies.
AWM’s lines of business consist of the following:
Asset Management: provides comprehensive global investment services - including asset management, pension analytics, asset-liability management and active risk-budgeting strategies.
Wealth Management: offers investment advice and wealth management, including investment management, capital markets and risk management, tax and estate planning, banking, lending and specialty-wealth advisory services.
AWM’s client segments consist of the following:
Private Banking: clients include high- and ultra-high-net-worth individuals, families, money managers, business owners and small corporations worldwide.
Institutional: clients include both corporate and public institutions, endowments, foundations, nonprofit organizations and governments worldwide.
Retail: clients include financial intermediaries and individual investors.
Asset Management has two high-level measures of its overall fund performance:
Percentage of mutual fund assets under management in funds rated 4- or 5-star: Mutual fund rating services rank funds based on their risk-adjusted performance over various periods. A 5-star rating is the best rating and represents the top 10% of industry-wide ranked funds.
A 4-star rating represents the next 22.5% of industry-wide ranked funds. A 3-star rating represents the next 35% of industry-wide ranked funds. A 2-star rating represents the next 22.5% of industry-wide ranked funds. A 1-star rating is the worst rating and represents the bottom 10% of industry-wide ranked funds. The “overall Morningstar rating” is derived from a weighted average of the performance associated with a fund’s three-, five- and ten-year (if applicable) Morningstar Rating metrics. For U.S. domiciled funds, separate star ratings are given at the individual share class level. The Nomura “star rating” is based on three-year risk-adjusted performance only. Funds with fewer than three years of history are not rated and


hence excluded from this analysis. All ratings, the assigned peer categories and the asset values used to derive this analysis are sourced from these fund rating providers. The data providers re-denominate the asset values into U.S. dollars. This % of AUM is based on star ratings at the share class level for U.S. domiciled funds, and at a “primary share class” level to represent the star rating of all other funds except for Japan where Nomura provides ratings at the fund level. The “primary share class”, as defined by Morningstar, denotes the share class recommended as being the best proxy for the portfolio and in most cases will be the most retail version (based upon annual management charge, minimum investment, currency and other factors). The performance data could have been different if all funds/accounts would have been included. Past performance is not indicative of future results.
 
Percentage of mutual fund assets under management in funds ranked in the 1st or 2nd quartile (one, three, and five years): All quartile rankings, the assigned peer categories and the asset values used to derive this analysis are sourced from the fund ranking providers. Quartile rankings are done on the net-of-fee absolute return of each fund. The data providers re-denominate the asset values into U.S. dollars. This % of AUM is based on fund performance and associated peer rankings at the share class level for U.S. domiciled funds, at a “primary share class” level to represent the quartile ranking of the U.K., Luxembourg and Hong Kong funds and at the fund level for all other funds. The “primary share class”, as defined by Morningstar, denotes the share class recommended as being the best proxy for the portfolio and in most cases will be the most retail version (based upon annual management charge, minimum investment, currency and other factors). Where peer group rankings given for a fund are in more than one “primary share class” territory both rankings are included to reflect local market competitiveness (applies to “Offshore Territories” and “HK SFC Authorized” funds only). The performance data could have been different if all funds/accounts would have been included. Past performance is not indicative of future results.


Item 3.    Quantitative and Qualitative Disclosures About Market Risk.
For a discussion of the quantitative and qualitative disclosures about market risk, referRefer to the Market Risk Management section of Management’s discussion and analysis and pages 124–131119–126 of JPMorgan Chase’s 20182019 Form 10-K.10-K for a discussion of the quantitative and qualitative disclosures about market risk.
Item 4.    Controls and Procedures.
As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of the Firm’s management, including its Chairman and Chief Executive Officer and its Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, the Chairman and Chief Executive Officer and the Chief Financial Officer concluded that these disclosure controls and procedures were effective. Refer to Exhibits 31.1 and 31.2 for the Certification statements issuedCertifications furnished by the Chairman and Chief Executive Officer and Chief Financial Officer.Officer, respectively.
The Firm is committed to maintaining high standards of internal control over financial reporting. Nevertheless, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, in a firm as large and complex as JPMorgan Chase, lapses or deficiencies in internal controls domay occur from time to time, and there can be no assurance that any such deficiencies will not result in significant deficiencies or material weaknesses in internal controlscontrol in the future. For further information, referfuture and collateral consequences therefrom. Refer to “Management’s report on internal control over financial reporting” on page 148142 of JPMorgan Chase’s 20182019 Form 10-K.10-K for further information. There was no change in the Firm’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during the three months ended June 30, 2019,March 31, 2020, that has materially affected, or is reasonably likely to materially affect, the Firm’s internal control over financial reporting.


 
Part II – Other Information
Item 1. Legal Proceedings.
ForRefer to the discussion of the Firm’s material legal proceedings in Note 25 of this Form 10-Q for information that updates the disclosures set forth under Part I, Item 3: Legal Proceedings, in JPMorgan Chase’s 20182019 Form 10-K, refer to the discussion of the Firm’s material legal proceedings in Note 24 of this Form 10-Q.10-K.
Item 1A. Risk Factors.
For aThe following discussion supplements the discussion of certain risk
factors affecting the Firm refer toas set forth in Part I, Item 1A:
Risk Factors on pages 7–6–28 of JPMorgan Chase’s 20182019 Form 10-K10-K. The discussion of risk factors, as so supplemented, sets forth the material risk factors that could affect JPMorgan Chase’s financial condition and Forward-Looking Statementsoperations. Readers should not consider any descriptions of such factors to be a complete set of all potential risks that could affect the Firm.
The COVID-19 pandemic has caused and is causing significant harm to the global economy and our businesses.
On March 11, 2020, the World Health Organization declared the outbreak of a strain of novel coronavirus disease, COVID-19, a global pandemic. The COVID-19 pandemic and governmental responses to the pandemic have had, and continue to have, a severe impact on page 79global economic conditions, including:
significant disruption and volatility in the financial markets
disruption of thisglobal supply chains
closures of many businesses, leading to loss of revenues and increased unemployment, and
the institution of social distancing and sheltering-in-place requirements in the U.S. and other countries.
If the pandemic is prolonged, or other diseases emerge that give rise to similar effects, the adverse impact on the global economy could deepen.
The continuation of the adverse economic conditions caused by the pandemic can be expected to have a significant adverse effect on JPMorgan Chase’s businesses and results of operations, including:
significantly reduced demand for products and services from JPMorgan Chase’s clients and customers
possible recognition of credit losses and increases in the allowance for credit losses, especially if businesses remain closed, unemployment continues to rise and clients and customers draw on their lines of credit or seek additional loans to help finance their businesses
possible material impacts on the value of securities, derivatives and other financial instruments which JPMorgan Chase owns or in which it makes markets due to market fluctuations
possible downgrades in JPMorgan Chase’s credit ratings

possible constraints on liquidity and capital, whether due to increases in risk-weighted assets related to supporting client activities or to regulatory actions, and
the possibility that significant portions of JPMorgan Chase’s workforce are unable to work effectively, including because of illness, quarantines, sheltering-in-place arrangements, government actions or other restrictions in connection with the pandemic.
The extent to which the COVID-19 pandemic negatively affects JPMorgan Chase’s businesses, results of operations and financial condition, as well as its regulatory capital and liquidity ratios, will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic. In addition, JPMorgan Chase’s participation directly or on behalf of customers and clients in U.S. government programs designed to support individuals, households and businesses impacted by the economic disruptions caused by the COVID-19 pandemic could be criticized and subject JPMorgan Chase to increased governmental and regulatory scrutiny, negative publicity or increased exposure to litigation, which could increase its operational, legal and compliance costs and damage its reputation. To the extent the COVID-19 pandemic adversely affects JPMorgan Chase’s business, results of operations and financial condition, it may also have the effect of heightening many of the other risks described in Risk Factors in the 2019 Form 10-Q.10-K.
Supervision and regulation
For information on Supervision and Regulation, referRefer to the Supervision and regulation section on pages 1–6 of JPMorgan Chase’s 20182019 Form 10-K.10-K for information on Supervision and Regulation.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.
The Firm did not have any unregistered sale of equity securities during the three months ended June 30, 2019.March 31, 2020.
Repurchases under the common equity repurchase program
ForRefer to Capital Risk Management on pages 39–44 of this Form 10-Q and pages 85-92 of JPMorgan Chase’s 2019 Form 10-K for information regarding repurchases under the Firm’s common equity repurchase program, refer to Capital Risk Management on pages 44–48 of this Form 10-Q and pages 85-94 of JPMorgan Chase’s 2018 Form 10-K.program.


On March 15, 2020, in response to the COVID-19 pandemic, the Firm temporarily suspended through the second quarter of 2020 repurchases of its common equity. Shares repurchased on a settlement-date basis, pursuant to the common equity repurchase program during the sixthree months ended June 30, 2019,March 31, 2020, were as follows.
Six months ended June 30, 2019Total shares of common stock repurchased 
Average price paid per share of common stock(a)
 
Aggregate repurchases
of common equity
 (in millions)(a)
 
Dollar value of remaining authorized repurchase
(in millions)(a)(b)
 
First quarter49,534,646
 $102.78
 $5,091
 $5,290
 
April15,167,534
 108.04
 1,639
 3,651
 
May17,612,730
 111.88
 1,971
 1,680
 
June14,653,991
 109.21
 1,600
 80
(c) 
Second quarter47,434,255
 109.83
 5,210
 80
(c) 
Year-to-date96,968,901
 $106.23
 $10,301
 $80
(c) 
Three months ended March 31, 2020Total 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)
 
January21,953,376
 135.92
 2,984
 12,596
 
February19,349,585
 130.45
 2,524
 10,072
 
March8,700,101
 102.15
 889
 9,183
(b) 
First quarter50,003,062
 127.92
 6,397
 9,183
(b) 
(a)Excludes commissions cost.
(b)Represents the amount remaining under the $20.7$29.4 billion repurchase program that was authorized by the Board of Directors on June 28, 2018.program.
(c)The $80 million unused portion under the prior Board authorization was canceled when the $29.4 billion program was authorized.

Item 3.    Defaults Upon Senior Securities.
None.
Item 4.    Mine Safety Disclosures.
Not applicable.
Item 5.    Other Information.
None.
 

Item 6.    Exhibits.
Exhibit No. Description of Exhibit
   
15 
Letter re: Unaudited Interim Financial Information. (a)
   
31.1 
Certification. (a)
   
31.2 
Certification. (a)
   
32 
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (b)
   
101.INS 
The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inlineInline XBRL document.(c)
101.SCH 
XBRL Taxonomy Extension Schema Document.(a)
101.CAL 
XBRL Taxonomy Extension Calculation Linkbase Document.(a)
101.DEF 
XBRL Taxonomy Extension Definition Linkbase Document.(a)
101.LAB 
XBRL Taxonomy Extension Label Linkbase Document.(a)
101.PRE 
XBRL Taxonomy Extension Presentation Linkbase Document.(a)
104 
The cover page of this Quarterly Report on Form 10-Q, formattedCover Page Interactive Data File (embedded within the Inline XBRL document and included in inline XBRL.

Exhibit 101).
(a)Filed herewith.
(b)Furnished herewith. This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
(c)Pursuant to Rule 405 of Regulation S-T, includes the following financial information included in the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019,March 31, 2020, formatted in XBRL (eXtensible Business Reporting Language) interactive data files: (i) the Consolidated statements of income (unaudited) for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, (ii) the Consolidated statements of comprehensive income (unaudited) for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, (iii) the Consolidated balance sheets (unaudited) as of June 30, 2019,March 31, 2020, and December 31, 2018,2019, (iv) the Consolidated statements of changes in stockholders’ equity (unaudited) for the three and six months ended June 30,March 31, 2020 and 2019, and 2018, (v) the Consolidated statements of cash flows (unaudited) for the sixthree months ended June 30,March 31, 2020 and 2019, and 2018, and (vi) the Notes to Consolidated Financial Statements (unaudited).

SIGNATURE



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
JPMorgan Chase & Co.
(Registrant)


By:/s/ Nicole Giles
 Nicole Giles
 Managing Director and Firmwide Controller
 (Principal Accounting Officer)


Date:August 5, 2019May 7, 2020






INDEX TO EXHIBITS



Exhibit No. Description of Exhibit
   
15 
Letter re: Unaudited Interim Financial Information.
   
31.1 
Certification.
   
31.2 
Certification.
   
32 
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.†
   
101.INS The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inlineInline XBRL document.
101.SCH XBRL Taxonomy Extension Schema Document.
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB XBRL Taxonomy Extension Label Linkbase Document.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
104 
The cover page of this Quarterly Report on Form 10-Q, formattedCover Page Interactive Data File (embedded within the Inline XBRL document and included in inline XBRL.

Exhibit 101).
   
† This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.



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