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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
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For the quarterly period ended | | Commission file | |
March 31, 20232024 | | number | 1-5805 | |
JPMorgan Chase & Co.
(Exact name of registrant as specified in its charter)
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Delaware | | 13-2624428 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. employer identification no.) |
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383 Madison Avenue, | | |
New York, | New York | | 10179 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (212) 270-6000
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock | JPM | The New York Stock Exchange |
Depositary Shares, each representing a one-four hundredth interest in a share of 5.75% Non-Cumulative Preferred Stock, Series DD | JPM PR D | The New York Stock Exchange |
Depositary Shares, each representing a one-four hundredth interest in a share of 6.00% Non-Cumulative Preferred Stock, Series EE | JPM PR C | The New York Stock Exchange |
Depositary Shares, each representing a one-four hundredth interest in a share of 4.75% Non-Cumulative Preferred Stock, Series GG | JPM PR J | The New York Stock Exchange |
Depositary Shares, each representing a one-four hundredth interest in a share of 4.55% Non-Cumulative Preferred Stock, Series JJ | JPM PR K | The New York Stock Exchange |
Depositary Shares, each representing a one-four hundredth interest in a share of 4.625% Non-Cumulative Preferred Stock, Series LL | JPM PR L | The New York Stock Exchange |
Depositary Shares, each representing a one-four hundredth interest in a share of 4.20% Non-Cumulative Preferred Stock, Series MM | JPM PR M | The New York Stock Exchange |
Alerian MLP Index ETNs due May 24, 2024 | AMJ | NYSE Arca, Inc. |
Guarantee of Callable Fixed Rate Notes due June 10, 2032 of JPMorgan Chase Financial Company LLC | JPM/32 | The New York Stock Exchange |
Guarantee of Alerian MLP Index ETNs due January 28, 2044 of JPMorgan Chase Financial Company LLC | AMJB | NYSE Arca, Inc. |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | ☒ | Accelerated filer | ☐ |
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Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
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| | Emerging growth company | ☐ |
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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 March 31, 2023: 2,922,288,5092024: 2,871,667,879
FORM 10-Q
TABLE OF CONTENTS
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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) | | |
1Q23 | 4Q22 | 3Q22 | 2Q22 | 1Q22 | |
As of or for the period ended, (in millions, except per share, ratio, employee data and where otherwise noted) | |
| As of or for the period ended, (in millions, except per share, ratio, employee data and where otherwise noted) | |
| 1Q24 | |
1Q24 | |
Selected income statement data | |
Selected income statement data | |
Selected income statement data | Selected income statement data | | |
Total net revenue | Total net revenue | $ | 38,349 | | $ | 34,547 | | $ | 32,716 | | $ | 30,715 | | $ | 30,717 | | |
Total net revenue | |
Total net revenue | |
Total noninterest expense | |
Total noninterest expense | |
Total noninterest expense | Total noninterest expense | 20,107 | | 19,022 | | 19,178 | | 18,749 | | 19,191 | | |
Pre-provision profit(a) | Pre-provision profit(a) | 18,242 | | 15,525 | | 13,538 | | 11,966 | | 11,526 | | |
Pre-provision profit(a) | |
Pre-provision profit(a) | |
Provision for credit losses | |
Provision for credit losses | |
Provision for credit losses | Provision for credit losses | 2,275 | | 2,288 | | 1,537 | | 1,101 | | 1,463 | | |
Income before income tax expense | Income before income tax expense | 15,967 | | 13,237 | | 12,001 | | 10,865 | | 10,063 | | |
Income before income tax expense | |
Income before income tax expense | |
Income tax expense | Income tax expense | 3,345 | | 2,229 | | 2,264 | | 2,216 | | 1,781 | | |
Income tax expense | |
Income tax expense | |
Net income | |
Net income | |
Net income | Net income | $ | 12,622 | | $ | 11,008 | | $ | 9,737 | | $ | 8,649 | | $ | 8,282 | | |
| Earnings per share data | Earnings per share data | | |
| Earnings per share data | |
| Earnings per share data | |
Net income: Basic | |
Net income: Basic | |
Net income: Basic | Net income: Basic | $ | 4.11 | | $ | 3.58 | | $ | 3.13 | | $ | 2.77 | | $ | 2.64 | | |
Diluted | Diluted | 4.10 | | 3.57 | | 3.12 | | 2.76 | | 2.63 | | |
Diluted | |
Diluted | |
Average shares: Basic | Average shares: Basic | 2,968.5 | | 2,962.9 | | 2,961.2 | | 2,962.2 | | 2,977.0 | | |
Average shares: Basic | |
Average shares: Basic | |
Diluted | |
Diluted | |
Diluted | Diluted | 2,972.7 | | 2,967.1 | | 2,965.4 | | 2,966.3 | | 2,981.0 | | |
| Market and per common share data | Market and per common share data | | |
| Market and per common share data | |
| Market and per common share data | |
Market capitalization | |
Market capitalization | |
Market capitalization | Market capitalization | 380,803 | | 393,484 | | 306,520 | | 330,237 | | 400,379 | | |
Common shares at period-end | Common shares at period-end | 2,922.3 | | 2,934.3 | | 2,933.2 | | 2,932.6 | | 2,937.1 | | |
Common shares at period-end | |
Common shares at period-end | |
Book value per share | |
Book value per share | |
Book value per share | Book value per share | 94.34 | | 90.29 | | 87.00 | | 86.38 | | 86.16 | | |
Tangible book value per share (“TBVPS”)(a) | Tangible book value per share (“TBVPS”)(a) | 76.69 | | 73.12 | | 69.90 | | 69.53 | | 69.58 | | |
Tangible book value per share (“TBVPS”)(a) | |
Tangible book value per share (“TBVPS”)(a) | |
Cash dividends declared per share | |
Cash dividends declared per share | |
Cash dividends declared per share | Cash dividends declared per share | 1.00 | | 1.00 | | 1.00 | | 1.00 | | 1.00 | | |
| Selected ratios and metrics | Selected ratios and metrics | | |
| Selected ratios and metrics | |
| Selected ratios and metrics | |
Return on common equity (“ROE”)(b) | |
Return on common equity (“ROE”)(b) | |
Return on common equity (“ROE”)(b) | Return on common equity (“ROE”)(b) | 18 | % | 16 | % | 15 | % | 13 | % | 13 | % | |
Return on tangible common equity (“ROTCE”)(a)(b) | Return on tangible common equity (“ROTCE”)(a)(b) | 23 | | 20 | | 18 | | 17 | | 16 | | |
Return on tangible common equity (“ROTCE”)(a)(b) | |
Return on tangible common equity (“ROTCE”)(a)(b) | |
Return on assets(b) | |
Return on assets(b) | |
Return on assets(b) | Return on assets(b) | 1.38 | | 1.16 | | 1.01 | | 0.89 | | 0.86 | | |
Overhead ratio | Overhead ratio | 52 | | 55 | | 59 | | 61 | | 62 | | |
Overhead ratio | |
Overhead ratio | |
Loans-to-deposits ratio | |
Loans-to-deposits ratio | |
Loans-to-deposits ratio | Loans-to-deposits ratio | 47 | | 49 | | 46 | | 45 | | 42 | | |
Firm Liquidity coverage ratio (“LCR”) (average) | Firm Liquidity coverage ratio (“LCR”) (average) | 114 | | 112 | | 113 | | 110 | | 110 | | |
Firm Liquidity coverage ratio (“LCR”) (average) | |
Firm Liquidity coverage ratio (“LCR”) (average) | |
JPMorgan Chase Bank, N.A. LCR (average) | JPMorgan Chase Bank, N.A. LCR (average) | 140 | | 151 | | 165 | | 169 | | 181 | | |
Common equity Tier 1 (“CET1”) capital ratio(c) | 13.8 | | 13.2 | | 12.5 | | 12.2 | | 11.9 | | |
Tier 1 capital ratio(c) | 15.4 | | 14.9 | | 14.1 | | 14.1 | | 13.7 | | |
Total capital ratio(c) | 17.4 | | 16.8 | | 16.0 | | 15.7 | | 15.4 | | |
JPMorgan Chase Bank, N.A. LCR (average) | |
JPMorgan Chase Bank, N.A. LCR (average) | |
Common equity Tier 1 (“CET1”) capital ratio (c)(d) | |
Common equity Tier 1 (“CET1”) capital ratio (c)(d) | |
Common equity Tier 1 (“CET1”) capital ratio (c)(d) | |
Tier 1 capital ratio(c)(d) | |
Tier 1 capital ratio(c)(d) | |
Tier 1 capital ratio(c)(d) | |
Total capital ratio(c)(d) | |
Total capital ratio(c)(d) | |
Total capital ratio(c)(d) | |
Tier 1 leverage ratio(c) | Tier 1 leverage ratio(c) | 6.9 | | 6.6 | | 6.2 | | 6.2 | | 6.2 | | |
Tier 1 leverage ratio(c) | |
Tier 1 leverage ratio(c) | |
Supplementary leverage ratio (“SLR”)(c) | |
Supplementary leverage ratio (“SLR”)(c) | |
Supplementary leverage ratio (“SLR”)(c) | Supplementary leverage ratio (“SLR”)(c) | 5.9 | | 5.6 | | 5.3 | | 5.3 | | 5.2 | | |
| Selected balance sheet data (period-end) | Selected balance sheet data (period-end) | | |
| Selected balance sheet data (period-end) | |
| Selected balance sheet data (period-end) | |
Trading assets | |
Trading assets | |
Trading assets | Trading assets | $ | 578,892 | | $ | 453,799 | | $ | 506,487 | | $ | 465,577 | | $ | 511,528 | | |
Investment securities, net of allowance for credit losses | Investment securities, net of allowance for credit losses | 610,075 | | 631,162 | | 618,246 | | 663,718 | | 679,460 | | |
Investment securities, net of allowance for credit losses | |
Investment securities, net of allowance for credit losses | |
Loans | |
Loans | |
Loans | Loans | 1,128,896 | | 1,135,647 | | 1,112,633 | | 1,104,155 | | 1,073,285 | | |
Total assets | Total assets | 3,744,305 | | 3,665,743 | | 3,773,884 | | 3,841,314 | | 3,954,687 | | |
Total assets | |
Total assets | |
Deposits | |
Deposits | |
Deposits | Deposits | 2,377,253 | | 2,340,179 | | 2,408,615 | | 2,471,544 | | 2,561,207 | | |
Long-term debt | Long-term debt | 295,489 | | 295,865 | | 287,473 | | 288,212 | | 293,239 | | |
Long-term debt | |
Long-term debt | |
Common stockholders’ equity | |
Common stockholders’ equity | |
Common stockholders’ equity | Common stockholders’ equity | 275,678 | | 264,928 | | 255,180 | | 253,305 | | 253,061 | | |
Total stockholders’ equity | Total stockholders’ equity | 303,082 | | 292,332 | | 288,018 | | 286,143 | | 285,899 | | |
Headcount | 296,877 | | 293,723 | | 288,474 | | 278,494 | | 273,948 | | |
Total stockholders’ equity | |
Total stockholders’ equity | |
Employees | |
Employees | |
Employees | |
| Credit quality metrics | |
| Credit quality metrics | |
| Credit quality metrics | Credit quality metrics | | |
Allowances for credit losses | Allowances for credit losses | $ | 22,774 | | $ | 22,204 | | $ | 20,797 | | $ | 20,019 | | $ | 19,591 | | |
Allowances for credit losses | |
Allowances for credit losses | |
Allowance for loan losses to total retained loans | |
Allowance for loan losses to total retained loans | |
Allowance for loan losses to total retained loans | Allowance for loan losses to total retained loans | 1.85 | % | 1.81 | % | 1.70 | % | 1.69 | % | 1.69 | % | |
Nonperforming assets | Nonperforming assets | $ | 7,418 | | $ | 7,247 | | $ | 7,243 | | $ | 7,845 | | $ | 8,605 | | |
Nonperforming assets | |
Nonperforming assets | |
Net charge-offs | |
Net charge-offs | |
Net charge-offs | Net charge-offs | 1,137 | | 887 | | 727 | | 657 | | 582 | | |
Net charge-off rate | Net charge-off rate | 0.43 | % | 0.33 | % | 0.27 | % | 0.25 | % | 0.24 | % | |
Net charge-off rate | |
Net charge-off rate | |
Since the second quarter of 2023, the results of the Firm include the impact of First Republic. Refer to Business Segment Results on page 20 and Note 26 for additional information.
(a)Pre-provision profit, TBVPS and ROTCE are each non-GAAP financial measures. Tangible common equity (“TCE”) is also a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 16-17 for a further discussion of these measures.
(b)Quarterly ratiosRatios are based upon annualized amounts.
(c)The ratios reflect the Current Expected Credit Losses (“CECL”) capital transition provisions. Refer to Note 21 of this Form 10-Q and Note 27 of JPMorgan Chase’s 2023 Form 10-K for additional information.
(d)Reflects the Firm’s ratios under the Basel III Standardized approach. Refer to Capital Risk Management on pages 36-41 of this Form 10-Q and pages 86-96 of JPMorgan Chase’s 2022 Form 10-K38-43 for additional information.
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 first quarter of 2023.2024.
This Quarterly Report on Form 10-Q for the first quarter of 20232024 (“Form 10-Q”) should be read together with JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, 20222023 (“20222023 Form 10-K”). Refer to the Glossary of terms and acronyms and line of business metrics on pages 168-176176-184 for definitions of terms and acronyms used throughout this Form 10-Q.
This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q and are subject to significant risks and uncertainties. Refer to Forward-looking Statements on page 78 82of this Form 10-Q;10-Q and Part I, Item 1A, Risk Factors on pages 9-329-33 of the 20222023 Form 10-K; and Part II, Item 1A, Risk Factors on page 177 of this Form 10-Q10-K for a discussion of certain of those risks and uncertainties and the factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results will be in line with any outlook information set forth herein, and the Firm does not undertake to update any forward-looking statements.
JPMorgan Chase & Co. (NYSE: JPM), a financial holding company incorporated under Delaware law in 1968, is a leading financial services firm based in the United States of America (“U.S.”), with operations worldwide. JPMorgan Chase had $3.7$4.1 trillion in assets and $303.1$336.6 billion in stockholders’ equity as of March 31, 2023.2024. 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, predominantly in the U.S., and many of the world’s most prominent corporate, institutional and government clients globally.
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 48 states and Washington, D.C. JPMorgan Chase’s principal non-bank subsidiary is J.P. Morgan Securities LLC (“J.P. Morgan Securities”), a U.S. broker-dealer. The bank and non-bank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Firm’s principal operating subsidiaries outside the U.S. are J.P. Morgan Securities plc and J.P. Morgan SE (“JPMSE”), which are subsidiaries of JPMorgan Chase Bank, N.A. and are based in the United Kingdom (“U.K.”) and Germany, respectively.
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 the Consumer & Community Banking (“CCB”). segment. The Firm’s wholesale business segmentsbusinesses are the Corporate & Investment Bank (“CIB”), Commercial Banking (“CB”), and Asset & Wealth Management (“AWM”). segments. Refer to Business Segment Results on pages 18-3418-36 and Note 25 of this Form 10-Q, and Note 32 of JPMorgan Chase’s 20222023 Form 10-K, for a description of the Firm’s business segments and the products and services they provide to their respective client bases. As a result of the organizational changes announced on January 25, 2024, the Firm will be reorganizing its business segments to reflect the manner in which the segments will be managed. The reorganization of the business segments will be effective in the second quarter of 2024. Refer to Recent events on page 52 of JPMorgan Chase's 2023 Form 10-K for additional information.
On May 1, 2023, JPMorgan Chase acquired the substantial majority ofcertain assets and assumed the deposits and certain other liabilities of First Republic Bank (the “First Republic acquisition”) from the Federal Deposit Insurance Corporation (“the Acquisition”FDIC”). The financial information and other disclosures containedAll references in this Form 10-Q do not give effect to “excluding First Republic,” “including First Republic,” “associated with First Republic” or “attributable to First Republic” refer to excluding or including the Acquisition.relevant effects of the First Republic acquisition, as well as subsequent related business and activities, as applicable. Refer to Note 26 for additional information.
The Firm's website is www.jpmorganchase.com. JPMorgan Chase makes available on its website, free of charge, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files or furnishes such material to the U.S. Securities and Exchange Commission (the “SEC”) at www.sec.gov. JPMorgan Chase makes new and important information about the Firm available on its website at https://www.jpmorganchase.com, including on the Investor Relations section of its website at https://www.jpmorganchase.com/ir. Information on the Firm's website, including documents on the website that are referenced in this Form 10-Q, is not incorporated by reference into this Form 10-Q or the Firm’s other filings with the SEC.
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, this Form 10-Q and the 20222023 Form 10-K should be read together and in their entirety.
| Financial performance of JPMorgan Chase | |
Financial performance of JPMorgan Chase | |
Financial performance of JPMorgan Chase | Financial performance of JPMorgan Chase | | |
(unaudited) As of or for the period ended, (in millions, except per share data and ratios) | (unaudited) As of or for the period ended, (in millions, except per share data and ratios) | Three months ended March 31, | |
2023 | | 2022 | | Change | |
(unaudited) As of or for the period ended, (in millions, except per share data and ratios) | |
| 2024 | |
2024 | |
Selected income statement data | |
Selected income statement data | |
Selected income statement data | Selected income statement data | | |
Noninterest revenue | Noninterest revenue | $ | 17,638 | | $ | 16,845 | | 5% | |
Noninterest revenue | |
Noninterest revenue | |
Net interest income | |
Net interest income | |
Net interest income | Net interest income | 20,711 | | 13,872 | | 49 | |
Total net revenue | Total net revenue | 38,349 | | 30,717 | | 25 | |
Total net revenue | |
Total net revenue | |
Total noninterest expense | |
Total noninterest expense | |
Total noninterest expense | Total noninterest expense | 20,107 | | 19,191 | | 5 | |
Pre-provision profit | Pre-provision profit | 18,242 | | 11,526 | | 58 | |
Pre-provision profit | |
Pre-provision profit | |
Provision for credit losses | |
Provision for credit losses | |
Provision for credit losses | Provision for credit losses | 2,275 | | 1,463 | | 56 | |
Net income | Net income | 12,622 | | 8,282 | | 52 | |
Net income | |
Net income | |
Diluted earnings per share | |
Diluted earnings per share | |
Diluted earnings per share | Diluted earnings per share | 4.10 | | 2.63 | | 56 | |
Selected ratios and metrics | Selected ratios and metrics | | |
Selected ratios and metrics | |
Selected ratios and metrics | |
Return on common equity | |
Return on common equity | |
Return on common equity | Return on common equity | 18% | | 13% | | |
Return on tangible common equity | Return on tangible common equity | 23 | | 16 | | |
Return on tangible common equity | |
Return on tangible common equity | |
Book value per share | |
Book value per share | |
Book value per share | Book value per share | $ | 94.34 | | $ | 86.16 | | 9 | |
Tangible book value per share | Tangible book value per share | 76.69 | | 69.58 | | 10 | |
Capital ratios(a) | | |
Tangible book value per share | |
Tangible book value per share | |
Capital ratios(a)(b) | |
Capital ratios(a)(b) | |
Capital ratios(a)(b) | |
CET1 capital | |
CET1 capital | |
CET1 capital | CET1 capital | 13.8% | | 11.9% | | |
Tier 1 capital | Tier 1 capital | 15.4 | | 13.7 | | |
Tier 1 capital | |
Tier 1 capital | |
Total capital | |
Total capital | |
Total capital | Total capital | 17.4 | | 15.4 | | |
Memo: | Memo: | | |
NII excluding Markets(b) | $ | 20,936 | | | $ | 11,752 | | | 78 | |
NIR excluding Markets(b) | 10,018 | | | 11,085 | | | (10) | |
Markets(b) | 8,382 | | | 8,753 | | | (4) | |
Memo: | |
Memo: | |
NII excluding Markets(c) | |
NII excluding Markets(c) | |
NII excluding Markets(c) | |
NIR excluding Markets(c) | |
NIR excluding Markets(c) | |
NIR excluding Markets(c) | |
Markets(c) | |
Markets(c) | |
Markets(c) | |
Total net revenue - managed basis | Total net revenue - managed basis | $ | 39,336 | | | $ | 31,590 | | | 25 | |
Total net revenue - managed basis | |
Total net revenue - managed basis | |
As of and for the period ended March 31, 2024, the results of the Firm include the impact of First Republic. Refer to page 20 and Note 26 for additional information.
(a)The ratios reflect the CECL capital transition provisions. Refer to Capital Risk Management on pages 36-41Note 21 of this Form 10-Q and pages 86-96Note 27 of JPMorgan Chase’s 20222023 Form 10-K for additional information.
(b)Reflects the Firm’s ratios under the Basel III Standardized approach. Refer to Capital Risk Management on pages 38-43 for additional information.
(c)NII and NIR refer to net interest income and noninterest revenue, respectively. Markets consists of CIB's Fixed Income Markets and Equity Markets businesses.
Comparisons noted in the sections below are for the first quarter of 20232024 versus the first quarter of 2022,2023, unless otherwise specified.
Firmwide overview
For the first quarter of 2023,2024, JPMorgan Chase reported net income of $12.6$13.4 billion, up 52%6%, earnings per share of $4.10,$4.44, ROE of 18%17% and ROTCE of 23%21%. The Firm's results included a $725 million increase to the FDIC special assessment in Corporate.
•Total net revenue was $38.3$41.9 billion, up 25%9%, reflecting:
–Net interest income ("NII") of $20.7$23.1 billion, up 49%11%, driven by the acquisition of First Republic, the impact of balance sheet mix and higher rates, as well as higher revolving balances in Card Services, partially offset by lower Markets net interest incomedeposit margin compression, and lower average deposit balances. Net interest incomebalances in CCB. NII excluding Markets was $20.9$23.0 billion, up 78%10%.
–Noninterest revenue ("NIR") was $17.6$18.9 billion, up 5%7%, driven by higher principal transactions revenue in Markets, predominantly offset by higherasset management fees, lower net investment
securities losses in Treasury and CIO, lower Investment Bankingthe impact of First Republic and higher investment banking fees, lower auto operating lease income and lower production revenue in Home Lending.
–Total Markets revenue declined reflectingpartially offset by lower Markets NII, predominantly offset by higher NIR.noninterest revenue.
•Noninterest expense was $20.1$22.8 billion, up 5%13%, driven by higher structural expense and continued investments in the business, primarily compensation expense, reflecting headcount growth and wage inflation, as well asincluding an increase in employees, the impact of First Republic and the $725 million increase to the FDIC special assessment in the Federal Deposit Insurance Corporation ("FDIC") assessment that was announced in 2022, partially offset by lower auto lease depreciation.Corporate.
•The provision for credit losses was $2.3$1.9 billion, reflecting a$2.0 billion of net additioncharge-offs. Net charge-offs increased $819 million, predominantly driven by CCB, primarily Card Services.
The prior year included net charge-offs of $1.1 billion to the allowance for credit losses and a $1.1 billion of net charge-offs. The net addition to the allowance for credit losses was predominantly driven by a deterioration in the Firm's weighted-average economic outlook, including the impact from changes to the Firm's macroeconomic scenarios and increased probability of a moderate recession due to tightening financial conditions, and consisted of:
–$726 million in wholesale, which also reflected net downgrade activity, and $416 million in consumer.
Net charge-offs were up $555 million predominantly driven by CCB, reflecting continued normalization in delinquencies.
The prior year included a $902 million net addition to the allowance for credit losses and net charge-offs of $582 million.losses.
•The total allowance for credit losses was $22.8$24.7 billion at March 31, 2023.2024. The Firm had an allowance for loan losses to retained loans coverage ratio of 1.85%1.77%, compared with 1.69%1.85% in the prior year.
•The Firm’s nonperforming assets totaled $7.4$8.3 billion at March 31, 2023, a net decrease of $1.2 billion, predominantly2024, up 11%, driven by lower consumerwholesale nonaccrual loans, reflecting paydownswhich reflects downgrades in Real Estate, concentrated in Office, and loan sales,the impact of First Republic. Refer to Wholesale Credit Portfolio and lower nonperforming derivative receivables.Consumer Credit Portfolio on pages 58-66 and pages 54-57, respectively, for additional information.
•Firmwide average loans of $1.1$1.3 trillion were up 6%16%, predominantly driven by higher loans in CB, CCB and CIB, partially offset by lower loans in AWM.
•Firmwide average deposits of $2.3 trillion were down 8%, predominantly driven by:
–declines in CIB and CB, due to attrition and in AWM due to migration into higher-yielding investmentsprimarily as a result of the rising interest rate environment, partially offset by net issuances of structured notes in CIB,
–a decline in CCB from existing accounts primarily due to migration to higher-yielding investments and increased customer spending, andFirst Republic.
•Firmwide average deposits of $2.4 trillion were up 2%, driven by:
–growth in CIB due to net issuances of structured notes as a result of client demand, and net inflows in Payments and Securities Services,
–the impact of First Republic, and
–an increase in Corporate related to the Firm's ongoing international consumer initiatives,
largely offset by
.–a decline in CCB and AWM as clients seek higher-yielding investments; in CCB, the decline in deposits was also driven by increased customer spending; and in CB, the decline was due to continued deposit attrition.
Period-end deposits were up reflecting inflows in March 2023 as a result of disruptions in the market relatedRefer to recent bank failures.Liquidity Risk Management on pages 44-51 for additional information.
Selected capital and other metrics
•CET1 capital was $227$258 billion, and the Standardized and Advanced CET1 ratios were 13.8%15.0% and 13.9%15.3%, respectively.
•SLR was 5.9%6.1%.
•TBVPS grew 10%15%, ending the first quarter of 20232024 at $76.69.$88.43.
•As of March 31, 2023,2024, the Firm had average eligible end-of-period High Quality Liquid Assets (“HQLA”) of approximately $732$823 billion andunencumbered marketable securities with a fair value of approximately $700$673 billion, resulting in approximately $1.4$1.5 trillion of liquidity sources. Refer to Liquidity Risk Management on pages 42-4744-51 for additional information.
Refer to Consolidated Results of Operations and Consolidated Balance Sheets Analysis on pages 10-12 and pages 13-14, respectively, for a further discussion of the Firm's results.results, including the provision for credit losses; and Business Segment Results on page 20; and Note 5 and 26 for additional information on the FDIC special assessment and the First Republic acquisition, respectively.
Pre-provision profit, ROTCE, TCE, TBVPS, NII and NIR excluding Markets, and total net revenue on a managed basis are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 16-17 for a further discussion of each of these measures.
Business segment highlights
Selected business metrics for each of the Firm’s four lines of business ("LOB") are presented below for the first quarter of 2023.2024, and include the impact of First Republic, unless otherwise specified.
| | | | | | | | |
CCB ROE 40% 35%
| | •Average deposits down 4%;3%, or down 7% excluding First Republic; client investment assets down 1%up 46%, or up 25% excluding First Republic •Average loans up 5% year-over-year ("YoY") and flat quarter-over-quarter ("QoQ");27%, or up 6% excluding First Republic; Card Services net charge-off rate of 2.07%3.32% •Debit and credit card sales volume(a) up 10%9% •Active mobile customers(b) up 9%7% |
CIB ROE 16% 18%
| | •#1 ranking for Global Investment Banking fees with 8.7%9.1% wallet share in 1Q24 •Total Markets revenue of $8.4 billion, down 4%5%, with Fixed Income Markets flatdown 7% and Equity Markets down 12%flat |
CB ROE 18% 24%
| | •Gross Investment Banking and Markets(c)revenue of $881$913 million, up 21%4% •Average loans up 13% YoY and17%, or up 1% QoQ;excluding First Republic; average deposits flat, or down 16%3% excluding First Republic |
AWM ROE 34% 33%
| | •Assets under management ("AUM") of $3.0$3.6 trillion, up 2%19% •Average loans downup 6%, or up 1% YoY and QoQ;excluding First Republic; average deposits up 2%, or down 22%4% excluding First Republic |
(a)Excludes Commercial Card.
(b)Users of all mobile platforms who have logged in within the past 90 days. Excludes First Republic.
(c)Includes gross revenues earned by the Firm that are subject to a revenue sharing arrangement between CB and the CIB for Investment Banking and Markets products sold to CB clients. This includes revenues related to fixed income and equity markets products. Refer to page 65 of the Firm’s 2023 Form 10-K for a discussion of revenue sharing.
Refer to the Business Segment Results on pages 18-3418-36 for a detailed discussion of results by business segment.
Credit provided and capital raised
JPMorgan Chase continues to support consumers, businesses and communities around the globe. The Firm provided new and renewed credit and raised capital for wholesale and consumer clients during the first three months of 2023,2024, consisting of:of approximately:
| | | | | | | | |
$588655 billion | | Total credit provided and capital raised (including loans and commitments) |
| | |
$57
55 billion | | Credit for consumers |
| | |
$9
10 billion | | Credit for U.S. small businesses |
| | |
$232575 billion | | Credit for corporations |
| | |
$280 billion | | Capital raised for corporate clients and non-U.S. government entities |
| | |
$10 billion | | Credit and capital raisedfor corporations and non-U.S. government entities(a) |
| | |
$15 billion | | Credit and capital for nonprofit and U.S. government entities(a)(b) |
(a)Credit and capital for corporations and non-U.S. government entities include Individuals and Individual Entities primarily consisting of Global Private Bank clients within AWM.
(b)Includes states, municipalities, hospitals and universities.
Recent events
•On May 1, 2023,April 8, 2024, JPMorgan Chase announced that two of its directors, Timothy P. Flynn and Michael A. Neal, had decided to retire from the Board of Directors of the Firm acquired the substantial majority of assets and assumed the deposits and certain other liabilities of First Republic Bank from the FDIC (the “Acquisition”). The Firm believes that the Acquisition will be accretive to earnings, will help to further advance the Firm’s wealth management strategy, and is expected to be complementary to the Firm’s existing franchises.
The FDIC will provide loss sharing agreements with respect to the following loans acquired in the Acquisition: 80% of losses on single-family residential mortgage loans will be covered for seven years, and 80% of losses on commercial loans will be covered for five years.
The Firm is estimating the impact that the Acquisition will have on its financial statements, and expects to record an estimated $2.6 billion post-tax bargain purchase gain in connection with the Acquisition. The Firm also expects to recognize restructuring costs of approximately $2.0 billion over the course of 2023 and 2024. The Firm expects that these estimates will be further refined over the purchase accounting measurement period.
The Firm will repay the $25 billion of deposits placed by large U.S. banks with First Republic Bank on March 16, 2023. The Firm will eliminate its $5 billion deposit in consolidation and release the associated allowance for credit losses.
The financial information and other disclosures contained in this Form 10-Q do not give effect to the Acquisition. Refer to Note 26 for additional information concerning the Acquisition.when their terms expire.
•On March 24, 2023, JPMorgan Chase obtained final approval from China’s State AdministrationApril 8, 2024, Visa commenced an initial exchange offer expiring on May 3, 2024, for Market Regulationany and all outstanding shares of Visa Class B-1 common stock (“Visa B-1 shares”). Holders participating in the exchange offer would receive a combination of Visa Class B-2 common stock (“Visa B-2 shares”) and Visa Class C common stock (“Visa C shares”) in exchange for Visa B-1 shares that are validly tendered and accepted for exchange by Visa. The Firm has tendered its 37.2 million Visa B-1 shares, and that tender is pending Visa’s acceptance. Upon acceptance by Visa of the Firm’s tender, the Visa C shares received by the Firm would be recognized at fair value, which is expected to complete its acquisitionresult in a gain that may be recorded as early as the second quarter of China International Fund Management Co., Ltd. ("CIFM").
•On March 22, 2023, JPMorgan Chase announced that it had entered into a definitive agreement2024. Refer to acquire Aumni, a provider of investment analytics software.Note 2 for additional information.
Outlook
These current expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q, and are subject to significant risks and uncertainties. Refer to Forward-Looking Statements on page 78,82of this Form 10-Q and page 154 andPart I, Item 1A, Risk Factors on pages 9-329-33 of the Firm’s 20222023 Form 10-K for a further discussion of certain of those risks and uncertainties and the other factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results in 20232024 will be in line with the outlook information set forth below, and the Firm does not undertake to update any forward-looking statements.
JPMorgan Chase’s current outlook for full-year 20232024 should be viewed against the backdrop of the global and U.S. economies, 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. The Firm will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the business, economic, regulatory and legal environments in which it operates.
The Firm expects to be subject to a special assessment by the FDIC as a result of the estimated losses incurred by the Deposit Insurance Fund from recent bank failures. The FDIC has expressed its intent to issue a notice of proposed rulemaking related to the special assessment in May 2023.
The full-year 2023 outlook does not include the effects of the First Republic Bank acquisition.
Full-year 20232024
•Management expects both net interest income to be approximately $90 billion and net interest income excluding Markets to be approximately $81$89 billion, market dependent.
•Management expects adjusted expense to be approximately $81$91 billion, market dependent and excluding any FDIC special assessment.dependent.
•Management expects the net charge-off rate in Card Services to be approximately 2.6%less than 3.50%.
Net interest income excluding Markets and adjusted expense are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 16-17.
Business Developments
First Republic acquisition
Current marketOn May 1, 2023, JPMorgan Chase acquired certain assets and economic conditionsassumed certain liabilities of First Republic Bank (the "First Republic acquisition") from the FDIC, as receiver.
ReferJPMorgan Chase’s Consolidated Financial Statements as of and for the period ended March 31, 2024 reflect the impact of First Republic. Where meaningful to Part I, Item 1A, Risk Factors on pages 9-32the disclosure, the impact of JPMorgan Chase's 2022 Form 10-Kthe First Republic acquisition, as well as subsequent related business and Part II, Item 1A, Risk Factors on page 177activities, are disclosed in various sections of this Form 10-Q for a discussion of material risk factors that could affect the Firm. These risk factors include potential impacts10-Q. The Firm continues to the Firmconvert certain operations, and to integrate clients, products and services, associated with current marketthe First Republic acquisition to align with the Firm’s businesses and economic conditions, including inflationary pressures, rapidly rising interest rates, the failure of market participants and geopolitical tensions (including secondary effects of the war in Ukraine), any or all of which could result in additional market disruption, government actions (including with respect to monetary policies), ongoing impacts to global supply chains, and other geopolitical risks.
Interbank Offered Rate (“IBOR”) transition
operations. The Firm expects that these actions will be largely completed by the end of 2024.
Refer to Note 26 and other market participants are preparingpage 20 for the final stages of the transition from the use of the London Interbank Offered Rate (“LIBOR”) and other IBORs in accordance with the International Organization of Securities Commission’s standards for transaction-based benchmark rates. The cessation of the publication of the remaining principal tenors of U.S. dollar LIBOR (i.e., overnight, one-month, three-month, six-month and 12-month LIBOR) (“LIBOR Cessation”) is scheduled for June 30, 2023. On April 3, 2023, the U.K. Financial Conduct Authority announced that the one-month, three-month and six-month tenors of U.S. dollar LIBOR will continueadditional information related to be published on a "synthetic" basis, which will allow market participants to use such rates for certain legacy LIBOR-linked contracts through September 30, 2024.First Republic.
Regulatory developments
On March 1, 2023,5, 2024, the Consumer Financial Protection Bureau issued a final rule that lowers the threshold at or below which large credit card issuers, including the Firm, announced that, after June 30, 2023, CME Term SOFR will be the replacement reference ratecan charge late fees to customers on a "safe harbor" basis. The final rule also eliminates an automatic annual inflation adjustment for certain outstanding floating rate and fixed-to-floating rate debt securities, preferred stock and certificateslarge credit card issuers. The effective date of deposit issued by JPMorgan Chase and certain of its subsidiaries that use U.S. dollar LIBOR as the reference rate and that are governed by New York or Delaware law.this rule is May 14, 2024. The Firm is prepareddoes not expect a material impact to participate in initiatives by the principal central counterparties (“CCPs”) to convert cleared derivatives contracts linked to U.S. dollar LIBOR in the second quarter of 2023. The Firm continues its client outreach with respect to U.S. dollar LIBOR-linked products and continues to monitor and evaluate client, industry, market, regulatory and legislative developments. Refer to Business Developments on page 50 of JPMorgan Chase's 2022 Form 10-K for additional information.Firmwide net interest income.
| | | | | | | | | | | | | | |
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 months ended March 31, 20232024 and 2022,2023, unless otherwise specified. Factors that relate primarily to a single business segment are discussed in more detail within that business segment's results. Refer to pages 74-7678-80 of this Form 10-Q and pages 149-152155–158 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations.
| Revenue | Revenue | | | |
| Three months ended March 31, | |
Revenue | |
Revenue | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | | 2022 | | Change | |
Investment banking fees | Investment banking fees | $ | 1,649 | | | $ | 2,008 | | | (18) | % | |
Investment banking fees | |
Investment banking fees | |
Principal transactions | |
Principal transactions | |
Principal transactions | Principal transactions | 7,615 | | | 5,105 | | | 49 | | |
Lending- and deposit-related fees | Lending- and deposit-related fees | 1,620 | | | 1,839 | | | (12) | | |
Lending- and deposit-related fees | |
Lending- and deposit-related fees | |
Asset management fees | Asset management fees | 3,465 | | | 3,652 | | | (5) | | |
Asset management fees | |
Asset management fees | |
Commissions and other fees | |
Commissions and other fees | |
Commissions and other fees | Commissions and other fees | 1,695 | | | 1,710 | | | (1) | | |
| Investment securities losses | Investment securities losses | (868) | | | (394) | | | (120) | | |
| Investment securities losses | |
| Investment securities losses | |
Mortgage fees and related income | |
Mortgage fees and related income | |
Mortgage fees and related income | Mortgage fees and related income | 221 | | | 460 | | | (52) | | |
Card income | Card income | 1,234 | | | 975 | | | 27 | | |
Other income(a) | 1,007 | | | 1,490 | | | (32) | | |
Card income | |
Card income | |
Other income(a)(b) | |
Other income(a)(b) | |
Other income(a)(b) | |
Noninterest revenue | |
Noninterest revenue | |
Noninterest revenue | Noninterest revenue | 17,638 | | | 16,845 | | | 5 | | |
Net interest income | Net interest income | 20,711 | | | 13,872 | | | 49 | | |
Net interest income | |
Net interest income | |
Total net revenue | Total net revenue | $ | 38,349 | | | $ | 30,717 | | | 25 | % | |
Total net revenue | |
Total net revenue | |
(a) Included operating lease income of $755$672 million and $1.0 billion$755 million for the three months ended March 31, 2024 and 2023, and 2022, respectively.
(b) Also includes losses onEffective January 1, 2024, as a result of adopting updates to the Accounting for Investments in Tax Credit Structures guidance, the amortization of certain of the Firm’s alternative energy tax-oriented investments.investments that was previously recognized in other income is now being recognized in income tax expense. Refer to NoteNotes 1, 5 and 13 for additional information.
Quarterly results
Investment banking fees decreasedincreased, reflecting in CIB, reflecting lowerCIB:
•higher underwriting fees that benefited from improved market conditions, and consisted of
–an increase in debt underwriting fees predominantly driven by higher industry-wide issuance in leveraged loans and high-yield bonds, as challenging market conditions resultedwell as higher issuance in high grade bonds reflecting wallet share gains, and
–an increase in equity underwriting fees driven by IPO and convertible securities offerings, reflecting wallet share gains,
partially offset by
•lower issuance activity. advisory fees driven by a lower number of large completed transactions.
Refer to CIBCIB segment results on pages 23-2724-28 and Note 5 for additional information.
Principal transactions revenue decreased, reflecting in CIB the net impact of:
•increased, reflecting:lower Fixed Income Markets revenue in Rates and Commodities, partially offset by higher revenue in Securitized Products,
•higher netEquity Markets revenue in Fixed Income Markets, driven by Rates benefiting from favorable market conditions early in the quarterEquity Derivatives and elevated volatility in March 2023, as well as in Securitized ProductsPrime Finance, and Fixed Income Financing, partially offset by lower revenue in Currencies & Emerging Markets compared to a strong prior year,
•in Equity Markets, higher revenue in principal transactions, particularly in Prime Finance and Equity Derivatives, which was more than offset bylower losses in net interest income,
•a loss of $153$15 million in Credit Adjustments & Other in CIB, compared with a losslosses of $524$153 million in the prior year, and
•net gains on certain legacy private equity investments in Corporate, compared with net losses in the prior year.
Principal transactions revenue in CIB generally has offsets across other revenue lines, including net interest income. The Firm assesses the performance of its CIB Markets business on a total net revenue basis.
Refer to CIB results on pages 24-28 and CorporateNote 5 for additional information.
Lending- and deposit-related fees increased, reflecting:
•higher lending-related revenue predominantly driven by the amortization of the purchase discount on certain acquired lending-related commitments associated with First Republic, predominantly in AWM and CB, and
•higher other lending- and deposit-related fees in CIB and CB.
Refer to CIB, CB and AWM segment results on pages 23-2724-28, pages 29-31 and pages 33-34,32-34, respectively, and Note 5 for additional information.
Lending- and deposit-related fees decreased due to lower cash management fees in CB and CIB associated with the higher level of credits earned by clients that reduce such fees. Refer to CIB and CB segment results on pages 23-27, pages 28-29 and Note 5 for additional information.
Asset management fees decreasedincreased driven by lowerstrong net inflows and higher average market levels and lower performance fees, partially offset by the removal of most money market fund fee waiversin AWM and to a lesser extent,CCB, as well as the impact of lower market levelsFirst Republic in CCB. Refer to CCB and AWM segment results on pages 30-3221-23 and pages 32-34, respectively, and Note 5 for additional information.
Commissions and other fees:fees referincreased predominantly due to higher commissions from annuity sales in CCB and higher custody fees associated with a higher level of assets under custody in CIB. Refer to CCB and CIB and AWM segmentSegment results on pages 23-2721-23 and pages 30-3224-28, respectively, and Note 5 for additional information.
Investment securities losses reflected higherlower net losses on sales of U.S. GSE, and government agency MBS and U.S. Treasuries associated with repositioning the investment securities portfolio in Treasury and CIO. Refer to Corporate segment results on pages 33-3435-36 and Note 9 for additional information.
Mortgage fees and related income decreased driven byincreased in Home Lending, reflecting lowerhigher production revenue, from a decline in volume, and lower net mortgage servicing revenue due to a net loss compared with a net gain in which included the prior year in MSR risk management. impact of First Republic. Refer to CCB segment results on pages 20-2221-23 and Notes 5 and 14 for additional information.
Card income increased driven by:
•higher net interchange income largelydecreased due to a reductionan increase in rewards costs and partner payments related to a periodic tax refund on airline miles redeemed, and higher annual fees, partially offset by higher amortization related to new account origination costs, in CCB, and
•largely offset by higher payments-related revenue on volumeannual fees, reflecting continued growth in Commercial Cardthe portfolio, in CIB.CCB.
Refer to CCB and CIBCB segment results on pages 20-2221-23 and pages 23-27page 29, respectively, and Note 5 for additional information.
Other income decreased reflecting:
•the absence of a gain on an equity investment in the prior year in CIB,
•lower auto operating lease income in CCB from a decline in volume, and
•the absence of proceeds from an insurance settlement in the prior year,
partially offset by
•a gain of $339 million in AWM on the original minority interest in CIFM upon the Firm's acquisition of the remaining 51% interest in the entity.
Other income increased predominantly driven by the adoption of updates to the Accounting for Investments in Tax Credit Structures guidance on January 1, 2024, resulting in the amortization of certain of the Firm's alternative energy tax-oriented investments previously recognized in other income now being recognized in income tax expense.
The prior year included net valuation gains in AWM, including $339 million on the original minority interest in China International Fund Management (“CIFM”).
Refer to AWM segment results on pages 32-34 for additional information on CIFM; Notes 1, 5 and 13 for additional information on the adoption of updates to the Accounting for Investments in Tax Credit Structures guidance.
Net interest income increased, driven by the acquisition of First Republic, the impact of balance sheet mix and higher rates,, as well as higher revolving balances in Card Services, partially offset by lower Markets net interest incomedeposit margin compression reflecting higher rates paid across the LOBs, and lower average deposit balances.balances in CCB.
The Firm’s average interest-earning assets were $3.2$3.4 trillion, down $185up $229 billion, and the yield was 4.68%5.55%, up 28287 basis points (“bps”). The net yield on these assets, on an FTE basis, was 2.63%2.71%, an increase of 968 bps. The net yield excluding Markets was 3.80%3.83%, up 1853 bps.
Refer to the Consolidated average balance sheets, interest and rates schedule on page 167175 for further information. Net yield excluding Markets is a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 16-17 for a further discussion of Netnet yield excluding Markets.
| Provision for credit losses | Provision for credit losses | | |
| Three months ended March 31, | |
Provision for credit losses | |
Provision for credit losses | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | | 2022 | | Change | |
Consumer, excluding credit card | Consumer, excluding credit card | $ | 248 | | | $ | 173 | | | 43 | % | |
Consumer, excluding credit card | |
Consumer, excluding credit card | |
Credit card | |
Credit card | |
Credit card | Credit card | 1,222 | | | 506 | | | 142 | | |
Total consumer | Total consumer | 1,470 | | | 679 | | | 116 | | |
Total consumer | |
Total consumer | |
Wholesale | |
Wholesale | |
Wholesale | Wholesale | 804 | | | 785 | | | 2 | | |
Investment securities | Investment securities | 1 | | | (1) | | | NM | |
Investment securities | |
Investment securities | |
Total provision for credit losses | Total provision for credit losses | $ | 2,275 | | | $ | 1,463 | | | 56 | % | |
Total provision for credit losses | |
Total provision for credit losses | |
Quarterly results
The provision for credit losses was $2.3$1.9 billion, reflecting a net addition of $1.1 billion to the allowance for credit losses and $1.1$2.0 billion of net charge-offs.charge-offs, an increase of $819 million, predominantly driven by Card Services, as the portfolio continued to normalize.
The net addition to the allowance for credit losses was predominantly driven by a deterioration in the Firm's weighted-average economic outlook, including the impact from changes to the Firm’s macroeconomic scenarios and increased probability of a moderate recession due to tightening financial conditions, and consisted of:relatively flat, reflecting:
•$726a net reduction in the allowance of $142 million in wholesale, which also reflectedincluded a net downgrade activity, and an addition to the allowance for credit losses associated with Other assetsnet downgrade activity, largely in Corporate,Real Estate, primarily in CB, which was more than offset by the net impact of changes in the loan and lending-related commitment portfolios, as well as updates to certain macroeconomic variables, and
•$416a net addition of $44 million inconsumer., consisting of $153 million in Card Services, predominantly offset by a $125 million net reduction in Home Lending.
Net charge-offs increased $555 million, predominantly driven by CCB, reflecting continued normalizationThe provision in delinquencies.
Thethe prior year includedwas $2.3 billion, reflecting a $902 million$1.1 billion net additionaddition to the allowance for credit losses and net charge-offs of $582 million.$1.1 billion.
Refer to CCBCCB segment results on pages 20-22,21-23, CIB on pages 23-27,24-28, CB on pages 28-29,29-31, AWM on pages 30-32,32-34, Corporate on pages 35-36; Allowance for Credit Losses on pages 63-65, and67-69; Notes 9 and 12 for additional information on the credit portfolio and the allowance for credit losses.
| Noninterest expense | |
Noninterest expense | |
Noninterest expense | Noninterest expense | | | |
(in millions) | (in millions) | Three months ended March 31, | |
2023 | | 2022 | | Change | |
(in millions) | |
| 2024 | |
2024 | |
Compensation expense | |
Compensation expense | |
Compensation expense | Compensation expense | $ | 11,676 | | | $ | 10,787 | | | 8 | % | |
Noncompensation expense: | Noncompensation expense: | | |
Noncompensation expense: | |
Noncompensation expense: | |
Occupancy | |
Occupancy | |
Occupancy | Occupancy | 1,115 | | | 1,134 | | | (2) | | |
Technology, communications and equipment(a) | Technology, communications and equipment(a) | 2,184 | | | 2,360 | | | (7) | | |
Technology, communications and equipment(a) | |
Technology, communications and equipment(a) | |
Professional and outside services | |
Professional and outside services | |
Professional and outside services | Professional and outside services | 2,448 | | | 2,572 | | | (5) | | |
Marketing | Marketing | 1,045 | | | 920 | | | 14 | | |
Marketing | |
Marketing | |
Other expense(b) | |
Other expense(b) | |
Other expense(b) | Other expense(b) | 1,639 | | | 1,418 | | | 16 | | |
Total noncompensation expense | Total noncompensation expense | 8,431 | | | 8,404 | | | — | | |
Total noncompensation expense | |
Total noncompensation expense | |
Total noninterest expense | Total noninterest expense | $ | 20,107 | | | $ | 19,191 | | | 5 | % | |
Total noninterest expense | |
Total noninterest expense | |
(a)Includes depreciation expense associated with auto operating lease assets.
(b)Included Firmwide legal (benefit)/expense of $176$(72) million and $119$176 million for the three months ended March 31, 2024 and 2023, respectively; as well as FDIC-related expense of $973 million and 2022,$317 million for the three months ended March 31, 2024 and 2023, respectively. Refer to Note 5 for additional information.
(c)Included the impact of First Republic of $454 million for the three months ended March 31, 2024. Refer to Business Segment Results on page 20 for additional information.
Quarterly results
Compensation expense increased driven by additional headcount,by:
•an increase in employees, primarily in technology and operations, as well as front office and technology,
•the impact of wage inflation, partially offset by lowerFirst Republic, predominantly in CCB and Corporate, and
•higher volume- and revenue-related compensation, predominantly in CIB.CCB and AWM.
Noncompensation expense was flatincreased as a result of:
•the $725 million increase to the FDIC special assessment in Corporate,
•the impact of First Republic in CCB and primarily included:Corporate, and
•higher investments in the business, includingtechnology and marketing and technology, andin CCB,
•higher structural expense, including the impact of the increase in the FDIC assessment that was announced in 2022,
partially offset by
•lower volume-relatedlegal expense reflecting lower depreciation expense on lower Auto lease assets.in CIB.
Refer to Business Segment Results on page 20 and Note 26 for additional information on First Republic; Note 5 for additional information on other expense.
| Income tax expense | |
Income tax expense | |
Income tax expense | Income tax expense | | |
(in millions) | (in millions) | Three months ended March 31, | |
2023 | | 2022 | | Change | |
(in millions) | |
| 2024 | |
2024 | |
Income before income tax expense | |
Income before income tax expense | |
Income before income tax expense | Income before income tax expense | $ | 15,967 | | | $ | 10,063 | | | 59 | % | |
Income tax expense | Income tax expense | 3,345 | | | 1,781 | | | 88 | | |
Income tax expense | |
Income tax expense | |
Effective tax rate | Effective tax rate | 20.9 | % | | 17.7 | % | | |
Effective tax rate | |
Effective tax rate | |
(a)Effective January 1, 2024, as a result of adopting updates to the Accounting for Investments in Tax Credit Structures guidance, the amortization of certain of the Firm’s alternative energy tax-oriented investments is now being recognized in income tax expense. Refer to Notes 1, 5 and 13 for additional information.
Quarterly results
The effective tax rateincreased driven by:
•the adoption of updates to the Accounting for Investments in Tax Credit Structures guidance on January 1, 2024, resulting in an increase to income tax expense of approximately $450 million,
partially offset by
•higher benefits related to the vesting of employee share-based awards in the current period as a result of the Firm's higher level of pre-tax income that decreased the relative net impact of certainshare price.
The prior year included tax benefits from changes in the level and expenses, and the mix of income and expenses subject to U.S. federal, and state and local taxes, as well as lower benefits related to the vesting of employee share based awards in the current period.taxes.
| | | | | | | | | | | | | | |
CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS |
Consolidated balance sheets analysis
The following is a discussion of the significant changes between March 31, 2023,2024 and December 31, 2022.2023. Refer to pages 155–158 for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Balance Sheets.
| Selected Consolidated balance sheets data | Selected Consolidated balance sheets data | Selected Consolidated balance sheets data |
(in millions) | (in millions) | March 31, 2023 | | December 31, 2022 | Change | (in millions) | March 31, 2024 | | December 31, 2023 | Change |
Assets | Assets | |
Cash and due from banks | |
Cash and due from banks | |
Cash and due from banks | Cash and due from banks | $ | 25,098 | | | $ | 27,697 | | (9) | % | $ | 22,750 | | | $ | | $ | 29,066 | | (22) | (22) | % |
Deposits with banks | Deposits with banks | 520,902 | | | 539,537 | | (3) | |
Federal funds sold and securities purchased under resale agreements | Federal funds sold and securities purchased under resale agreements | 317,111 | | | 315,592 | | — | |
Securities borrowed | Securities borrowed | 195,917 | | | 185,369 | | 6 | |
Trading assets | Trading assets | 578,892 | | | 453,799 | | 28 | |
Available-for-sale securities | Available-for-sale securities | 197,248 | | | 205,857 | | (4) | |
Held-to-maturity securities | Held-to-maturity securities | 412,827 | | | 425,305 | | (3) | |
Investment securities, net of allowance for credit losses | Investment securities, net of allowance for credit losses | 610,075 | | | 631,162 | | (3) | |
Loans | Loans | 1,128,896 | | | 1,135,647 | | (1) | |
Allowance for loan losses | Allowance for loan losses | (20,053) | | | (19,726) | | (2) | |
Loans, net of allowance for loan losses | Loans, net of allowance for loan losses | 1,108,843 | | | 1,115,921 | | (1) | |
Accrued interest and accounts receivable | Accrued interest and accounts receivable | 115,316 | | | 125,189 | | (8) | |
Premises and equipment | Premises and equipment | 28,266 | | | 27,734 | | 2 | |
Goodwill, MSRs and other intangible assets | Goodwill, MSRs and other intangible assets | 62,090 | | | 60,859 | | 2 | |
Other assets | Other assets | 181,795 | | | 182,884 | | (1) | |
Total assets | Total assets | $ | 3,744,305 | | | $ | 3,665,743 | | 2 | % | Total assets | $ | 4,090,727 | | | $ | | $ | 3,875,393 | | 6 | 6 | % |
|
Cash and due from banks and deposits with banks decreased primarily as a result ofdriven by CIB Markets activities partially offset by the impact of higher deposits. Deposits with banks reflect the Firm’s placement of its excessand cash with various central banks, including the Federal Reserve Banks.deployment in Treasury and CIO.
Securities borrowedFederal funds sold and securities purchased under resale agreements increased driven by Markets, reflecting higher client-driven market-making activities and higher demand for securities to cover short positions.
positions, as well as when compared with seasonally lower levels at year-end. Refer to Note 10 for additional information on securities purchased under resale agreements and and securities borrowed.
Trading assets increased due to to:
•higher levels of debtequity and equitydebt instruments in Markets, reflecting strong client-driven market-making activities, including in the U.S. Treasury market, and when compared with the seasonally lower levels at year-end. year-end, and to a lesser extent
•higher short-term cash deployment in Treasury and CIO.
Refer to Notes 2 and 4 for additional information.
Investment securities decreased primarily due towas relatively flat, reflecting:
•lower HTM securities as a result of maturities and paydowns, of U.S. Treasuries and U.S. GSE and government agency MBS in both
•higher available-for-sale (“AFS”("AFS") and held-to-maturity (“HTM”) securities. The decrease in AFS was also due tosecurities, reflecting net sales,purchases, partially offset by the transfer of securities from HTM to AFS.maturities and paydowns.
Refer to Corporate segment results on pages 33-34,35-36, Investment Portfolio Risk Management on page 66,70, and Notes 2 and 9 for additional information.
Loans were relatively flatdecreased, reflecting,:
•a reduction in Card Services due to the impact of seasonality,
•a decline in Home Lending as sales outpaced originations, and included:
•lower wholesale loans in CIB,
•lower balances in Card Services, reflecting the impact of seasonality, and
•lower securities-based lending in AWM
predominantly offset by
•higher revolver utilization and originations in CB. due to paydowns.
The allowance for loan losses was relatively flatincreased, reflecting a net addition of $914 million to the allowance for loan losses, predominantly driven by a deterioration in the Firm's weighted-average economic outlook, including the impact from changes to the Firm’s macroeconomic scenarios and increased probability of a moderate recession due to tightening financial conditions, consisting of:, reflecting:
•$499a net reduction of $92 million in wholesale, which also reflectedincluded a net addition to the allowance associated with net downgrade activity, largely in Real Estate, primarily in CB, which was more than offset by the impact of changes in the loan portfolios as well as updates to certain macroeconomic variables, and
•a net addition of $23 million in consumer, consisting of $153 million in Card Services, predominantly offset by a $146 million net reduction in Home Lending.
There was also a $58 million net reduction in the allowance for lending-related commitments recognized in other liabilities on the Consolidated balance sheets.
Refer to Consolidated Results of Operations and $415 million in consumer.
The allowance for loan losses also reflected a reduction of $587 million as a result of the adoption of the Financial Instruments - Credit Losses: Troubled Debt Restructurings accounting guidance. References in this Form 10-Q to "changes to the TDR accounting guidance" pertain to the Firm's adoption of this guidance.
Refer to Credit and Investment Risk Management on pages 48-66,10-12 and pages 52-70, and Notes 2, 3, 11 and 12 for additional information on loans and the total allowance for credit losses.
Accrued interestlosses; and accounts receivable decreased primarily due to lower receivables in Payments related toBusiness Segment Results on page 20 and Note 26 for additional information on the timing of processing payment activities, with December 31, 2022 falling on a weekend.First Republic acquisition.
PremisesAccrued interest and equipmentaccounts receivable: refer increased predominantly driven by higher client receivables related to Note 16 for information on leases.
client-driven activities in Markets.
Goodwill, MSRs and other intangiblesintangible assets: increased due to higher other intangibles and goodwill as a result of the Firm's acquisition of the remaining 51% interest in CIFM. Referrefer to Note 14 for additional information.information on goodwill, mortgage servicing rights and other intangible assets.
| Selected Consolidated balance sheets data (continued) | Selected Consolidated balance sheets data (continued) | |
(in millions) | (in millions) | March 31, 2023 | | December 31, 2022 | Change |
(in millions) | |
(in millions) | | March 31, 2024 | | December 31, 2023 | Change |
Liabilities | Liabilities | |
Deposits | |
Deposits | |
Deposits | Deposits | $ | 2,377,253 | | | $ | 2,340,179 | | 2 | % | $ | 2,428,409 | | | $ | | $ | 2,400,688 | | 1 | 1 | % |
Federal funds purchased and securities loaned or sold under repurchase agreements | Federal funds purchased and securities loaned or sold under repurchase agreements | 246,396 | | | 202,613 | | 22 | |
Short-term borrowings | Short-term borrowings | 42,241 | | | 44,027 | | (4) | |
Trading liabilities | Trading liabilities | 189,864 | | | 177,976 | | 7 | |
Accounts payable and other liabilities | Accounts payable and other liabilities | 275,077 | | | 300,141 | | (8) | |
Beneficial interests issued by consolidated variable interest entities (“VIEs”) | Beneficial interests issued by consolidated variable interest entities (“VIEs”) | 14,903 | | | 12,610 | | 18 | |
Long-term debt | Long-term debt | 295,489 | | | 295,865 | | — | |
Total liabilities | Total liabilities | 3,441,223 | | | 3,373,411 | | 2 | |
Stockholders’ equity | Stockholders’ equity | 303,082 | | | 292,332 | | 4 | |
Total liabilities and stockholders’ equity | Total liabilities and stockholders’ equity | $ | 3,744,305 | | | $ | 3,665,743 | | 2 | % | Total liabilities and stockholders’ equity | $ | 4,090,727 | | | $ | | $ | 3,875,393 | | 6 | 6 | % |
Deposits increased, reflecting inflows in March 2023, primarily in CCB and CB, as a result of disruptions in the market related to recent bank failures, which changed the outflow trend that started in the second half of 2022. AWM also experienced deposit inflows in March which were more than offset by migration to higher-yielding investments by month end. The increase in period-end deposits also reflected:net impact of:
•net issuances of structured noteshigher balances in CIB, as a result of client demanddriven by net inflows related to client-driven activities in Payments, and Securities Services,
•an increase in Corporate relatedCCB due to new accounts and seasonal inflows,largely offset by a decline in deposits in existing accounts due to migration into higher-yielding investments,
•a decrease in AWM due to continued migration into higher-yielding investments, partially offset by an increase in deposits in existing accounts due to a change in product offerings associated with First Republic, and
•a decrease in CB primarily due to seasonal outflows and continued deposit attrition, largely offset by the Firm's ongoing international consumer initiatives.realignment of additional clients associated with First Republic from CCB to CB that began in the fourth quarter of 2023.
Federal funds purchased and securities loaned or sold under repurchase agreements increased due todriven by Markets, reflecting higher client-driven market-making activities and higher secured financing of trading assets, and the impact of aas well as when compared with seasonally lower level of netting on client-driven market-making activities in Markets.levels at year-end.
Refer to Liquidity Risk Management on pages 42-4744-51 for additional information on deposits, federal funds purchased and securities loaned or sold under repurchase agreements, and short-term borrowings; and also to Notes 2 and 15 for deposits and Note 10 for federal funds purchased and securities loaned or sold under repurchase agreements.agreements; Business Segment Results on page 20 and Note 26 for additional information on the First Republic acquisition.
Trading liabilities increased due to client-driven market-making activities in Fixed Income Markets, which resulted in higher levels of short positions in debt instruments partially offset byin Fixed Income Markets, reflecting client-driven market-making activities, and when compared with seasonally lower derivative payables as a result of market movements. levels at year-end.Refer to Notes 2 and 4 for additional information.
Accounts payable and other liabilities decreasedincreased predominantly due to lowerhigher client payables related to client-driven activities in Markets, as well as lower payables in Payments related to the timing of processing payment activities, with December 31, 2022 falling on a weekend.Markets.
Beneficial interests issued by consolidated VIEs increased driven by by:
•higher levels of Firm-administered multi-seller conduit commercial paper held by third parties. parties in CIB, reflecting changes in the Firm’s short-term liquidity management, and
•the issuance of credit card securitizations in Treasury and CIO.
Refer to Liquidity Risk Management on pages 42-4744-51 and Notes 13 and 22 for additional information, specifically Firm-sponsored VIEs and loan securitization trusts.
Long-term debt: refer increased driven by issuances in Treasury and CIO, predominantly offset by maturities. Refer to Liquidity Risk Management on pages 42-4744-51; and Note 26 for additional information.information on the First Republic acquisition.
Stockholders’ equity: refer to Consolidated statements of changes in stockholders’ equity on page 82,86, Capital Actions on page 40,42, and Note 19 for additional information.
Consolidated cash flows analysis
The following is a discussion of cash flow activities during the three months ended March 31, 20232024 and 2022.2023.
| (in millions) | |
| (in millions) | (in millions) | | | Three months ended March 31, | (in millions) | | | | Three months ended March 31, |
| | 2023 | | 2022 | | | | | | 2024 | | 2023 |
Net cash provided by/(used in) | Net cash provided by/(used in) | | | |
Operating activities | Operating activities | | | $ | (111,241) | | | $ | (41,917) | |
Operating activities | |
Operating activities | |
Investing activities | Investing activities | | | 23,794 | | | (72,608) | |
Financing activities | Financing activities | | | 64,557 | | | 132,772 | |
Effect of exchange rate changes on cash | Effect of exchange rate changes on cash | | | 1,656 | | | (4,549) | |
Net increase/(decrease) in cash and due from banks and deposits with banks | | | $ | (21,234) | | | $ | 13,698 | |
Net decrease in cash and due from banks and deposits with banks | |
Operating activities
•In 2024, cash used resulted from higher trading assets and higher accrued interest and accounts receivable, partially offset by higher trading liabilities, accounts payable and other liabilities, and lower other assets.
•In 2023, cash used resulted from higher trading assets and lower accounts payable and other liabilities, partially offset by lower other assets and accrued interest and accounts receivable.
Investing activities
•In 2022,2024, cash used resulted from higher trading assets, and accrued interest and accounts receivable, largelysecurities purchased under resale agreements, partially offset by higher accounts payableproceeds from sales and other liabilities and trading liabilities.securitizations of loans held-for-investment.
Investing activities
•In 2023, cash provided primarily reflected net proceeds from investment securities.
•In 2022, cash used resulted from higher securities purchased under resale agreements, net purchases of investment securities, and higher net originations of loans.
Financing activities
•In 2024, cash provided reflected higher securities loaned or sold under repurchase agreements, higher deposits, net proceeds from long- and short-term borrowings and proceeds from the issuance of preferred stock.
•In 2023, cash provided reflected higher securities loaned or sold under repurchase agreements and deposits, partially offset by net payments on long- and short-term borrowings.
•In 2022, cash provided reflected higher deposits and securities loaned or sold under repurchase agreements and net proceeds from long- and short-term borrowings.
•For both periods, cash was used for repurchases of common stock and cash dividends on common and preferred stock.
* * *
Refer to Consolidated Balance Sheets Analysis on pages 13-14, Capital Risk Management on pages 36-41,38-43, and Liquidity Risk Management on pages 42-47,44-51, and the Consolidated Statements of Cash Flows on page 8387 of this Form 10-Q, and pages 97-104102–109 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of the activities affecting the Firm’s cash flows.
| | |
EXPLANATION AND RECONCILIATION OF THE FIRM’S USE OF NON-GAAP FINANCIAL MEASURES |
The Firm prepares its Consolidated Financial Statements in accordance with U.S. GAAP and this presentation is referred to as “reported” basis; these financial statements appear on pages 79-83.83-87.
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);
. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the LOBs;
•Pre-provision profit, which represents total net revenue less total noninterest expense;
•Net interest income, net yield, and noninterest revenue excluding Markets;
•TCE, ROTCE, and TBVPS;
•Adjusted expense, which represents noninterest expense excluding Firmwide legal expense; and
•Allowance for loan losses to period-end loans retained, excluding trade finance and conduits.
Refer to Explanation and Reconciliation of the Firm’s Use Of Non-GAAP Financial Measures and Key Performance Measures on pages 58-6062–64 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of management’s use of non-GAAP financial measures.
The following summary tables provide a reconciliation from the Firm’s reported U.S. GAAP results to managed basis.
| | Three months ended March 31, |
| 2023 | | 2022 |
| Three months ended March 31, | | | Three months ended March 31, |
| 2024 | | | 2024 | | 2023 |
(in millions, except ratios) | (in millions, except ratios) | Reported | | Fully taxable-equivalent adjustments(a) | | Managed basis | | Reported | | Fully taxable-equivalent adjustments(a) | | Managed basis | (in millions, except ratios) | Reported | | | Fully taxable-equivalent adjustments(b) | | Managed basis | | Reported | | Fully taxable-equivalent adjustments(b) | | Managed basis |
Other income | Other income | $ | 1,007 | | | $ | 867 | | | $ | 1,874 | | $ | 1,490 | | | $ | 775 | | | $ | 2,265 | |
Total noninterest revenue | Total noninterest revenue | 17,638 | | | 867 | | | 18,505 | | 16,845 | | | 775 | | | 17,620 | |
Net interest income | Net interest income | 20,711 | | | 120 | | | 20,831 | | 13,872 | | | 98 | | | 13,970 | |
Total net revenue | Total net revenue | 38,349 | | | 987 | | | 39,336 | | 30,717 | | | 873 | | | 31,590 | |
Total noninterest expense | Total noninterest expense | 20,107 | | | NA | | 20,107 | | 19,191 | | | NA | | 19,191 | |
Pre-provision profit | Pre-provision profit | 18,242 | | | 987 | | | 19,229 | | 11,526 | | | 873 | | | 12,399 | |
Provision for credit losses | Provision for credit losses | 2,275 | | | NA | | 2,275 | | 1,463 | | | NA | | 1,463 | |
Income before income tax expense | Income before income tax expense | 15,967 | | | 987 | | | 16,954 | | 10,063 | | | 873 | | | 10,936 | |
Income tax expense | Income tax expense | 3,345 | | | 987 | | | 4,332 | | 1,781 | | | 873 | | | 2,654 | |
Net income | Net income | $ | 12,622 | | | NA | | $ | 12,622 | | $ | 8,282 | | | NA | | $ | 8,282 | |
| Overhead ratio | |
Overhead ratio | |
Overhead ratio | Overhead ratio | 52 | % | | NM | | 51 | % | | 62 | % | | NM | | 61 | % | 54 | % | | | NM | | | 53 | % | | 52 | % | | NM | | | 51 | % |
| | | | |
(a)Effective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures guidance, under the modified retrospective method.Refer to Notes 1, 5 and 13 for additional information.
(b)Predominantly recognized in CIB, CB and Corporate.
The following table provides information on net interest income, net yield, and noninterest revenue excluding Markets.
| | | | | | | | | | | | | | | | | | | |
| | | | | |
(in millions, except rates) | Three months ended March 31, | | |
2023 | 2022 | | Change | | | | | |
Net interest income – reported | $ | 20,711 | | $ | 13,872 | | | 49 | % | | | | | |
Fully taxable-equivalent adjustments | 120 | | 98 | | | 22 | | | | | | |
Net interest income – managed basis(a) | $ | 20,831 | | $ | 13,970 | | | 49 | | | | | | |
Less: Markets net interest income(b) | (105) | | 2,218 | | | NM | | | | | |
Net interest income excluding Markets(a) | $ | 20,936 | | $ | 11,752 | | | 78 | | | | | | |
| | | | | | | | | |
Average interest-earning assets | $ | 3,216,757 | | $ | 3,401,951 | | | (5) | | | | | | |
Less: Average Markets interest-earning assets(b) | 982,572 | | 963,845 | | | 2 | | | | | | |
Average interest-earning assets excluding Markets | $ | 2,234,185 | | $ | 2,438,106 | | | (8) | % | | | | | |
Net yield on average interest-earning assets – managed basis | 2.63 | % | 1.67 | % | | | | | | | |
Net yield on average Markets interest-earning assets(b) | (0.04) | | 0.93 | | | | | | | | |
Net yield on average interest-earning assets excluding Markets | 3.80 | % | 1.95 | % | | | | | | | |
| Noninterest revenue – reported | $ | 17,638 | $ | 16,845 | | 5 | % | |
| (in millions, except rates) | |
| (in millions, except rates) | |
| (in millions, except rates) | |
| 2024 | |
2024 | |
Net interest income – reported | |
Net interest income – reported | |
Net interest income – reported | |
Fully taxable-equivalent adjustments | Fully taxable-equivalent adjustments | 867 | 775 | | 12 | | |
Fully taxable-equivalent adjustments | |
Fully taxable-equivalent adjustments | |
Net interest income – managed basis(a) | |
Net interest income – managed basis(a) | |
Net interest income – managed basis(a) | |
Less: Markets net interest income(b) | |
Less: Markets net interest income(b) | |
Less: Markets net interest income(b) | |
Net interest income excluding Markets(a) | |
Net interest income excluding Markets(a) | |
Net interest income excluding Markets(a) | |
| Average interest-earning assets | |
| Average interest-earning assets | |
| Average interest-earning assets | |
Less: Average Markets interest-earning assets(b) | |
Less: Average Markets interest-earning assets(b) | |
Less: Average Markets interest-earning assets(b) | |
Average interest-earning assets excluding Markets | |
Average interest-earning assets excluding Markets | |
Average interest-earning assets excluding Markets | |
| Net yield on average interest-earning assets – managed basis | |
| Net yield on average interest-earning assets – managed basis | |
| Net yield on average interest-earning assets – managed basis | |
Net yield on average Markets interest-earning assets(b) | |
Net yield on average Markets interest-earning assets(b) | |
Net yield on average Markets interest-earning assets(b) | |
Net yield on average interest-earning assets excluding Markets | |
Net yield on average interest-earning assets excluding Markets | |
Net yield on average interest-earning assets excluding Markets | |
| Noninterest revenue – reported(c) | |
| Noninterest revenue – reported(c) | |
| Noninterest revenue – reported(c) | |
Fully taxable-equivalent adjustments(c) | |
Fully taxable-equivalent adjustments(c) | |
Fully taxable-equivalent adjustments(c) | |
Noninterest revenue – managed basis | |
Noninterest revenue – managed basis | |
Noninterest revenue – managed basis | Noninterest revenue – managed basis | $ | 18,505 | $ | 17,620 | | 5 | | |
Less: Markets noninterest revenue(b) | Less: Markets noninterest revenue(b) | 8,487 | 6,535 | | 30 | | |
Less: Markets noninterest revenue(b) | |
Less: Markets noninterest revenue(b) | |
Noninterest revenue excluding Markets | |
Noninterest revenue excluding Markets | |
Noninterest revenue excluding Markets | Noninterest revenue excluding Markets | $ | 10,018 | $ | 11,085 | | (10) | | |
| Memo: Total Markets net revenue(b) | Memo: Total Markets net revenue(b) | $ | 8,382 | $ | 8,753 | | (4) | | |
| Memo: Total Markets net revenue(b) | |
| Memo: Total Markets net revenue(b) | |
|
(a)Interest includes the effect of related hedges. Taxable-equivalent amounts are used where applicable.
(b)Refer to page 2627 for further information on Markets.
(c)Effective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures guidance, under the modified retrospective method.Refer to Notes 1, 5 and 13 for additional information.
The following summary table provides a reconciliation from the Firm’s common stockholders’ equity to TCE.
| | | Period-end | |
| | Period-end | | Average |
| Period-end | |
| | Period-end | | | Average |
(in millions, except per share and ratio data) | (in millions, except per share and ratio data) | Mar 31, 2023 | Dec 31, 2022 | | Three months ended March 31, | |
| 2023 | 2022 | |
| 2024 | |
| 2024 | |
Common stockholders’ equity | |
Common stockholders’ equity | |
Common stockholders’ equity | Common stockholders’ equity | $ | 275,678 | | $ | 264,928 | | | $ | 271,197 | | $ | 252,506 | | |
Less: Goodwill | Less: Goodwill | 52,144 | | 51,662 | | | 51,716 | | 50,307 | | |
Less: Goodwill | |
Less: Goodwill | |
Less: Other intangible assets | |
Less: Other intangible assets | |
Less: Other intangible assets | Less: Other intangible assets | 2,191 | | 1,224 | | | 1,296 | | 896 | | |
Add: Certain deferred tax liabilities(a) | Add: Certain deferred tax liabilities(a) | 2,754 | | 2,510 | | | 2,549 | | 2,498 | | |
Add: Certain deferred tax liabilities(a) | |
Add: Certain deferred tax liabilities(a) | |
Tangible common equity | |
Tangible common equity | |
Tangible common equity | Tangible common equity | $ | 224,097 | | $ | 214,552 | | | $ | 220,734 | | $ | 203,801 | | |
| Return on tangible common equity | Return on tangible common equity | NA | NA | | 23 | % | 16 | % | |
| Return on tangible common equity | |
| Return on tangible common equity | |
Tangible book value per share | Tangible book value per share | $ | 76.69 | | $ | 73.12 | | | NA | NA | |
Tangible book value per share | |
Tangible book value per share | |
(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.
The Firm is managed on an LOB basis. There are four major reportable business segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset & Wealth Management. In addition, there is a Corporate segment.
The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by the Firm’s Operating Committee. Segment results are presented on a managed basis.
As a result of the organizational changes announced on January 25, 2024, the Firm will be reorganizing its business segments to reflect the manner in which the segments will be managed. The reorganization of the business segments will be effective in the second quarter of 2024. Refer to Recent events on page 52 of JPMorgan Chase's 2023 Form 10-K for additional information.
Refer to Explanation and Reconciliation of the Firm’s use of Non-GAAP Financial Measures on pages 16-17 for a definition of managed basis.
Description of business segment reporting methodology
Results of the business segments are intended to present each segment as if it were a stand-alone business. The management reporting process that derives business segment results includes the allocation of certain income and expense items. The Firm periodically assesses the assumptions, methodologies and reporting classifications used for segment reporting, and therefore further refinements may be implemented in future periods. The Firm also assesses the level of capital required for each LOB on at least an annual basis. The Firm’s LOBs also provide various business metrics which are utilized by the Firm and its investors and analysts in assessing performance.
Revenue sharing
When business segments or businesses within each segment join efforts to sell products and services to the Firm’s clients and customers, the participating business segmentsbusinesses may agree to share revenue from those transactions. Revenue is generally recognized in the segment responsible for the related product or service, with allocations to the other segment(s)segments/businesses involved in the transaction. The segment and business results reflect these revenue-sharing agreements.
Funds transfer pricing
Funds transfer pricing (“FTP”) is the process by which the Firm allocates interest income and expense to the LOBs and Other Corporate and transfers the primary interest rate risk and liquidity risk to Treasury and CIO.
The funds transfer pricing process considers the interest rate risk and liquidity risk characteristics of assets and liabilities and off-balance sheet products. Periodically the methodology and assumptions utilized in the FTP process are adjusted to reflect economic conditions and other factors, which may impact the allocation of net interest income to the segments.
Foreign exchange risk
Foreign exchange risk is transferred from the LOBs and Other Corporate to Treasury and CIO for certain revenues and expenses. Treasury and CIO manages these risks centrally and reports the impact of foreign exchange rate movements related to the transferred risk in its results. Refer to Market Risk Management on pages 67-7271-76 for additional information.
Capital allocation
The amount of capital assigned to each business segment is referred to as equity. At least annually, the assumptions, judgments and methodologies used to allocate capital are reassessed and, as a result, the capital allocated to the LOBs may change.
Refer to Line of business equity on page 39,41, and page 9398 of JPMorgan Chase’s 20222023 Form 10-K for additional information on capital allocation.
Refer to Business Segment Results – Description of business segment reporting methodology on pages 61-6265–85 and Note 32 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of those methodologies.
Segment results – managed basis
The following tables summarize the Firm’s results by segment for the periods indicated.
| Three months ended March 31, | Three months ended March 31, | 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) | (in millions, except ratios) | 2023 | 2022 | | Change | | 2023 | 2022 | | Change | | 2023 | 2022 | | Change | (in millions, except ratios) | 2024 | 2023 | | Change | | 2024 | 2023 | | Change | | 2024 | 2023 | | Change |
Total net revenue | Total net revenue | $ | 16,456 | | $ | 12,182 | | (a) | 35% | | $ | 13,600 | $ | 13,576 | | (a) | —% | | $ | 3,511 | $ | 2,398 | | | 46% | Total net revenue | $ | 17,653 | | $ | 16,456 | | | 7 | | 7 | % | | $ | 13,633 | | $ | 13,600 | | | — | | — | % | | $ | 3,951 | | $ | 3,511 | | | 13 | | 13 | % |
Total noninterest expense | Total noninterest expense | 8,065 | | 7,655 | | (a) | 5 | | 7,483 | 7,363 | | (a) | 2 | | 1,308 | 1,129 | | | 16 | Total noninterest expense | 9,297 | | 8,065 | 8,065 | | | 15 | | 15 | | 7,218 | | 7,483 | 7,483 | | | (4) | | (4) | | 1,506 | | 1,308 | 1,308 | | | 15 | | 15 |
Pre-provision profit/(loss) | Pre-provision profit/(loss) | 8,391 | | 4,527 | | | 85 | | 6,117 | 6,213 | | | (2) | | 2,203 | 1,269 | | | 74 | Pre-provision profit/(loss) | 8,356 | | 8,391 | 8,391 | | | — | | — | | 6,415 | | 6,117 | 6,117 | | | 5 | | 5 | | 2,445 | | 2,203 | 2,203 | | | 11 | | 11 |
Provision for credit losses | Provision for credit losses | 1,402 | | 678 | | | 107 | | 58 | 445 | | | (87) | | 417 | 157 | | | 166 | Provision for credit losses | 1,913 | | 1,402 | 1,402 | | | 36 | | 36 | | 32 | | 58 | 58 | | | (45) | | (45) | | (31) | | 417 | 417 | | | NM | | NM |
Net income/(loss) | Net income/(loss) | 5,243 | | 2,908 | | (a) | 80 | | 4,421 | 4,372 | | (a) | 1 | | 1,347 | 850 | | | 58 | Net income/(loss) | 4,831 | | 5,243 | 5,243 | | | (8) | | (8) | | 4,753 | | 4,421 | 4,421 | | | 8 | | 8 | | 1,869 | | 1,347 | 1,347 | | | 39 | | 39 |
Return on equity (“ROE”) | Return on equity (“ROE”) | 40 | % | 23 | % |
| | 16 | % | 16 | % | (a) | | 18 | % | 13 | % | |
| Three months ended March 31, | Three months ended March 31, | Asset & Wealth Management | | Corporate | | Total | Three months ended March 31, | Asset & Wealth Management | | Corporate | | Total |
(in millions, except ratios) | (in millions, except ratios) | 2023 | 2022 | | Change | | 2023 | 2022 | | Change | | 2023 | 2022 | | Change | (in millions, except ratios) | 2024 | 2023 | | Change | | 2024 | 2023 | | Change | | 2024 | 2023 | | Change |
Total net revenue | Total net revenue | $ | 4,784 | $ | 4,315 | | | 11% | | $ | 985 | $ | (881) | | NM | | $ | 39,336 | $ | 31,590 | | | 25% | Total net revenue | $ | 5,109 | | $ | 4,784 | | | 7 | | 7 | % | | $ | 2,202 | $ | 985 | | 124% | | $ | 42,548 | | $ | 39,336 | | | 8 | | 8 | % |
Total noninterest expense | Total noninterest expense | 3,091 | 2,860 | | | 8 | | 160 | 184 | | (13) | | 20,107 | 19,191 | | | 5 | Total noninterest expense | 3,460 | | 3,091 | 3,091 | | | 12 | | 12 | | 1,276 | 160 | | NM | | 22,757 | | 20,107 | 20,107 | | | 13 | | 13 |
Pre-provision profit/(loss) | Pre-provision profit/(loss) | 1,693 | 1,455 | | | 16 | | 825 | (1,065) | | NM | | 19,229 | 12,399 | | | 55 | Pre-provision profit/(loss) | 1,649 | | 1,693 | 1,693 | | | (3) | | (3) | | 926 | 825 | | 12 | | 19,791 | | 19,229 | 19,229 | | | 3 | | 3 |
Provision for credit losses | Provision for credit losses | 28 | 154 | | | (82) | | 370 | 29 | | NM | | 2,275 | 1,463 | | | 56 | Provision for credit losses | (57) | | 28 | 28 | | | NM | | NM | | 27 | 370 | | (93) | | 1,884 | | 2,275 | 2,275 | | | (17) | | (17) |
Net income/(loss) | Net income/(loss) | 1,367 | 1,008 | | | 36 | | 244 | (856) | | NM | | 12,622 | 8,282 | | | 52 | Net income/(loss) | 1,290 | | 1,367 | 1,367 | | | (6) | | (6) | | 676 | 244 | | 177 | | 13,419 | | 12,622 | 12,622 | | | 6 | | 6 |
ROE | ROE | 34 | % | 23 | % | | NM | NM | | 18 | % | 13 | % | |
(a)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.
The following sections provide a comparative discussion of the Firm’s results by segment as of or for the three months ended March 31, 2023 versus the corresponding period in the prior year, unless otherwise specified.
Selected Firmwide Metrics
The following tables present key metrics for Wealth Management, which consists of the Global Private Bank in AWM and J.P. Morgan Wealth Management in CCB; and total revenue and key metrics for J.P. Morgan Payments, which consists of payments activities in CIB and CB. This presentation is intended to provide investors with additional information concerning Wealth Management and J.P. Morgan Payments, each of which consists of similar business activities conducted across LOBs to serve different types of clients and customers.
Selected metrics - Wealth Management
| Three months ended March 31, | Three months ended March 31, | 2023 | 2022 |
Three months ended March 31, | |
Three months ended March 31, | |
Client assets (in billions)(a) | |
Client assets (in billions)(a) | |
Client assets (in billions)(a) | Client assets (in billions)(a) | $ | 2,594 | | $ | 2,389 | |
Number of client advisors | Number of client advisors | 8,314 | | 7,614 | |
Number of client advisors | |
Number of client advisors | |
(a) Consists of Global Private Bank in AWM and client investment assets in J.P. Morgan Wealth Management in CCB.
Selected metrics - J.P. Morgan Payments
| Three months ended March 31, | (in millions, except where otherwise noted) | (in millions, except where otherwise noted) | 2023 | 2022 |
(in millions, except where otherwise noted) | |
| (in millions, except where otherwise noted) | |
| 2024 | |
Total net revenue(a) | Total net revenue(a) | $ | 4,458 | | $ | 2,595 | |
| Total net revenue(a) | |
Total net revenue(a) | |
Merchant processing volume (in billions)
| |
Merchant processing volume (in billions)
| |
Merchant processing volume (in billions) | Merchant processing volume (in billions) | 558.8 | | 490.2 | |
Average deposits (in billions) | Average deposits (in billions) | 707 | | 821 | |
Average deposits (in billions) | |
Average deposits (in billions) | |
(a) ExcludesIncludes certain revenues that are reported as investment banking product revenue in CB, and excludes the net impact of equity investments.
Segment information related to First Republic
The following table presents selected impacts to CCB, CB, AWM and Corporate associated with First Republic as of or for the three months ended March 31, 2024.
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| As of or for the three months ended March 31, 2024 |
(in millions) | Consumer & Community Banking | | Commercial Banking | | Asset & Wealth Management | | Corporate | | Total |
Selected Income Statement Data | | | | | | | | | |
Revenue | | | | | | | | | |
Asset management fees | $ | 133 | | | $ | — | | | $ | — | | | $ | — | | | $ | 133 | |
All other income | 146 | | | 54 | | | 69 | | | (87) | | (a) | 182 | |
Noninterest revenue | 279 | | | 54 | | | 69 | | | (87) | | | 315 | |
Net interest income | 752 | | | 298 | | | 298 | | | — | | | 1,348 | |
Total net revenue | 1,031 | | | 352 | | | 367 | | | (87) | | | 1,663 | |
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Provision for credit losses | (9) | | | 4 | | | (26) | | | — | | | (31) | |
Noninterest expense | 518 | | | 28 | | | 33 | | | 227 | | | 806 | |
Net income | 395 | | | 243 | | | 272 | | | (242) | | | 668 | |
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Selected Balance Sheet Data (period-end) | | | | | | | | | |
Loans | $ | 93,565 | | | $ | 38,126 | | | $ | 10,188 | | | $ | — | | | $ | 141,879 | |
Deposits | 40,525 | | | 8,343 | | | 14,904 | | | — | | | 63,772 | |
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(a)For the three months ended March 31, 2024, reflects measurement period adjustments, which reduced the estimated bargain purchase gain by $(16) million. Refer to Note 26 for additional information.
The following sections provide a comparative discussion of the Firm’s results by segment as of or for the three months ended March 31, 2024 and 2023, and 2022.unless otherwise specified.
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CONSUMER & COMMUNITY BANKING |
Refer to pages 63-6668-71 of JPMorgan Chase's 20222023 Form 10-K and Line of Business Metrics on page 174182 for a further discussion of the business profile of CCB.
| Selected income statement data | Selected income statement data | | |
| Three months ended March 31, | |
Selected income statement data | |
Selected income statement data | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (in millions, except ratios) | 2023 | 2022 | | Change | |
Revenue | Revenue | | |
Revenue | |
Revenue | |
Lending- and deposit-related fees | |
Lending- and deposit-related fees | |
Lending- and deposit-related fees | Lending- and deposit-related fees | $ | 823 | | $ | 805 | | | 2 | % | |
Asset management fees | Asset management fees | 676 | | 726 | |
| (7) | | |
| Asset management fees | |
Asset management fees | |
Mortgage fees and related income | |
Mortgage fees and related income | |
Mortgage fees and related income | Mortgage fees and related income | 223 | | 456 | | | (51) | | |
Card income | Card income | 739 | | 541 | | (d) | 37 | | |
Card income | |
Card income | |
All other income(a) | |
All other income(a) | |
All other income(a) | All other income(a) | 1,162 | | 1,327 | | (d) | (12) | | |
Noninterest revenue | Noninterest revenue | 3,623 | | 3,855 | | | (6) | | |
Noninterest revenue | |
Noninterest revenue | |
Net interest income | Net interest income | 12,833 | | 8,327 | | | 54 | | |
Net interest income | |
Net interest income | |
Total net revenue | |
Total net revenue | |
Total net revenue | Total net revenue | 16,456 | | 12,182 | | | 35 | | |
| Provision for credit losses | Provision for credit losses | 1,402 | | 678 | | | 107 | | |
| Provision for credit losses | |
| Provision for credit losses | |
| Noninterest expense | |
| Noninterest expense | |
| Noninterest expense | Noninterest expense | | |
Compensation expense | Compensation expense | 3,545 | | 3,171 | | | 12 | | |
Compensation expense | |
Compensation expense | |
Noncompensation expense(b) | |
Noncompensation expense(b) | |
Noncompensation expense(b) | Noncompensation expense(b) | 4,520 | | 4,484 | | (d) | 1 | | |
Total noninterest expense | Total noninterest expense | 8,065 | | 7,655 | | | 5 | | |
Total noninterest expense | |
Total noninterest expense | |
Income before income tax expense | |
Income before income tax expense | |
Income before income tax expense | Income before income tax expense | 6,989 | | 3,849 | | | 82 | | |
Income tax expense | Income tax expense | 1,746 | | 941 | | (d) | 86 | | |
Income tax expense | |
Income tax expense | |
Net income | |
Net income | |
Net income | Net income | $ | 5,243 | | $ | 2,908 | | | 80 | | |
| Revenue by line of business | | |
Revenue by business | |
| Revenue by business | |
| Revenue by business | |
Banking & Wealth Management | |
Banking & Wealth Management | |
Banking & Wealth Management | Banking & Wealth Management | $ | 10,041 | | $ | 6,015 | | (d) | 67 | | |
Home Lending | Home Lending | 720 | | 1,169 | | | (38) | | |
Home Lending | |
Home Lending | |
Card Services & Auto | |
Card Services & Auto | |
Card Services & Auto | Card Services & Auto | 5,695 | | 4,998 | | | 14 | | |
| Mortgage fees and related income details: | Mortgage fees and related income details: | | |
| Mortgage fees and related income details: | |
| Mortgage fees and related income details: | |
Production revenue | |
Production revenue | |
Production revenue | Production revenue | 75 | | 211 | | | (64) | | |
Net mortgage servicing revenue(c) | Net mortgage servicing revenue(c) | 148 | | 245 | | | (40) | | |
Net mortgage servicing revenue(c) | |
Net mortgage servicing revenue(c) | |
Mortgage fees and related income | |
Mortgage fees and related income | |
Mortgage fees and related income | Mortgage fees and related income | $ | 223 | | $ | 456 | | | (51) | % | |
| Financial ratios | Financial ratios | | |
| Financial ratios | |
| Financial ratios | |
Return on equity | |
Return on equity | |
Return on equity | Return on equity | 40 | % | 23 | % | | |
Overhead ratio | Overhead ratio | 49 | | 63 | | | |
Overhead ratio | |
Overhead ratio | |
(a)Primarily includes operating lease income and commissions and other fees. ForOperating lease income was $665 million and $741 million for the three months ended March 31, 20232024 and 2022, operating lease income was $741 million and $1.0 billion,2023, respectively.
(b)Included depreciation expense on leased assets of $407$427 million and $694$407 million for the three months ended March 31, 20232024 and 2022,2023, respectively.
(c)Included MSR risk management results of $(12)$(1) million and $109$(12) million for the three months ended March 31, 20232024 and 2022,2023, respectively.
(d)In the first quarter of 2023, the allocations ofIncludes First Republic. Refer to page 20 for additional information.
(e)Banking & Wealth Management and Home Lending included revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinuedFirst Republic of $639 million and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with$392 million, respectively, for the current presentation.three months ended March 31, 2024.
Quarterly results
Net income was $5.2$4.8 billion, up 80%down 8%.
Net revenue was $16.5$17.7 billion, an increase of 35%up 7%.
Net interest income was $12.8$13.7 billion, up 54%7%, driven by:
•deposit margin expansion on higher rates, Card Services NII, reflecting an increase in revolving balances, and
•the impact of First Republic in Home Lending,
partially offset by
•deposit margin compression, reflecting higher rates paid and lower average deposits in Banking & Wealth Management (“BWM”("BWM").
Noninterest revenue was $3.9 billion, up 9%, driven by:
•higher asset management fees reflecting higher average market levels, strong net inflows and the impact of First Republic, as well as other service fees associated with First Republic, and higher commissions from annuity sales in BWM, and
•higher revolving loansproduction revenue in Card Services,Home Lending, which included the impact of First Republic,
partially offset by
•tighter loan spreads in Home Lending.
Noninterest revenue was $3.6 billion, down 6%, driven by:
•lower auto operating lease income, as a result of a decline in volume, and
•in Home Lending lower production revenue from a decline in volume and lower net mortgage servicing revenue, reflecting a net loss compared with a net gain in the prior year in MSR risk management,
largely offset by
•an increase in card income driven by higher net interchange largely due to a reductionan increase in rewards costs and partner payments related to a periodic tax refund on airline miles redeemed, and higher annual fees, partially offset by higher amortization related to new account origination costs, and
•largely offset by higher travel-related commissionsannual fees, reflecting continued growth in Card Services.the portfolio. Net interchange income was relatively flat as the impact of increased debit and credit card sales volume was offset by higher reward costs and partner payments.
Refer to Note 5 for additional information on card income, asset management fees, and commissions and other fees. Refer to Note 14fees; and Critical Accounting Estimates on pages 78-80 for further information regarding changes in the value of the MSR asset and related hedges, and mortgage fees and related income.credit card rewards liability.
Noninterest expense was $8.1$9.3 billion, up 5%15%, largely driven by:reflecting:
•higher compensation expense, predominantly driven by wage inflationan increase in employees, including the impact of First Republic and headcount growth,in technology, as well as investments in the business,higher revenue-related compensation, primarily for bankers and advisors, and
largely offset by
•lower auto lease depreciationhigher noncompensation expense, largely driven by the impact of First Republic and investments in marketing and technology.
Refer to Business Segment Results on lower auto lease assets.page 20 and Note 26 for additional information on the First Republic acquisition.
The provision for credit losses was $1.4$1.9 billion, and included:reflecting:
•net charge-offs of $1.1$1.9 billion, up $499$827 million, predominantly driven byincluding $766 million in Card Services, reflecting continued portfolio normalization, and $50 million in delinquencies,Auto, driven by a decline in used vehicle valuations, and
•a $34 million net addition to the allowance for credit losses, consisting of:
–$153 million in Card Services, primarily due to seasoning of newer vintages, largely offset by reduced borrower uncertainty, and
•–a $125 million net reduction in Home Lending, primarily due to improvements in the outlook for home prices.
The provision in the prior year was $1.4 billion, reflecting net charge-offs of $1.1 billion and a $350 million net addition to the allowance for credit losses, driven by a deterioration in the Firm’s weighted-average economic outlook, including $300 millionpredominantly in Card Services and $50 million in Home Lending.
The prior year included a $125 million addition to the allowance for credit losses across CCB.Services.
Refer to Credit and Investment Risk Management on pages 48-6652-70 and Allowance for Credit Losses on pages 63-6567-69 for a further discussion of the credit portfolios and the allowance for credit losses.
| Selected metrics | Selected metrics | | | |
| As of or for the three months ended March 31, | |
(in millions, except headcount) | 2023 | 2022 | Change | |
Selected metrics | |
Selected metrics | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
(in millions, except employees) | |
(in millions, except employees) | |
(in millions, except employees) | |
Selected balance sheet data (period-end) | |
Selected balance sheet data (period-end) | |
Selected balance sheet data (period-end) | Selected balance sheet data (period-end) | | |
Total assets | Total assets | $ | 506,382 | | $ | 486,183 | | 4 | % | |
Total assets | |
Total assets | |
Loans: | Loans: | | |
Banking & Wealth Management(a) | 28,038 | | 32,772 | | (14) | | |
Loans: | |
Loans: | |
Banking & Wealth Management | |
Banking & Wealth Management | |
Banking & Wealth Management | |
Home Lending(a) | |
Home Lending(a) | |
Home Lending(a) | |
Card Services | |
Card Services | |
Card Services | |
Auto | |
Auto | |
Auto | |
Total loans | |
Total loans | |
Total loans | |
Deposits | |
Deposits | |
Deposits | |
Equity | |
Equity | |
Equity | |
Selected balance sheet data (average) | |
Selected balance sheet data (average) | |
Selected balance sheet data (average) | |
Total assets | |
Total assets | |
Total assets | |
Loans: | |
Loans: | |
Loans: | |
Banking & Wealth Management | |
Banking & Wealth Management | |
Banking & Wealth Management | |
Home Lending(b) | |
Home Lending(b) | |
Home Lending(b) | Home Lending(b) | 172,058 | | 172,025 | | — | | |
Card Services | Card Services | 180,079 | | 152,283 | | 18 | | |
Card Services | |
Card Services | |
Auto | |
Auto | |
Auto | Auto | 69,556 | | 69,251 | | — | | |
Total loans | Total loans | 449,731 | | 426,331 | | 5 | | |
Total loans | |
Total loans | |
Deposits | |
Deposits | |
Deposits | Deposits | 1,147,474 | | 1,189,308 | | (4) | | |
Equity | Equity | 52,000 | | 50,000 | | 4 | | |
Selected balance sheet data (average) | | |
Total assets | $ | 506,775 | | $ | 488,967 | | 4 | | |
Loans: | | |
Banking & Wealth Management | 28,504 | | 33,742 | | (16) | | |
Home Lending(c) | 172,124 | | 176,488 | | (2) | | |
Card Services | 180,451 | | 149,398 | | 21 | | |
Auto | 68,744 | | 69,250 | | (1) | | |
Total loans | 449,823 | | 428,878 | | 5 | | |
Deposits | 1,112,967 | | 1,153,513 | | (4) | | |
Equity | |
Equity | Equity | 52,000 | | 50,000 | | 4 | | |
| Headcount | 135,983 | | 129,268 | | 5 | % | |
Employees | |
| Employees | |
| Employees | |
(a)At March 31, 20232024 and 2022, included $205 million and $2.9 billion of loans, respectively, in Business Banking under the PPP. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for a further discussion of the PPP.
(b)At March 31, 2023, and 2022, Home Lending loans held-for-sale and loans at fair value were $4.2$4.8 billion and $5.8$4.2 billion, respectively.
(c)(b)Average Home Lending loans held-for sale and loans at fair value were $3.5$4.7 billion and $10.8$3.5 billion for the three months ended March 31, 20232024 and 2022,2023, respectively.
(c)At March 31, 2024, included $3.9 billion and $89.7 billion for Banking & Wealth Management and Home Lending, respectively, associated with First Republic.
(d)Includes First Republic.
(e)Average Banking & Wealth Management and Home Lending loans associated with First Republic were $4.0 billion and $90.2 billion, respectively, for the three months ended March 31, 2024.
(f)
Included $40.6 billion associated with First Republic for the three months ended March 31, 2024.
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Selected metrics | | | | | | | | | | |
| As of or for the three months ended March 31, | | |
(in millions, except ratio data) | 2023 | | 2022 | | Change | | | | | | |
Credit data and quality statistics | | | | | | | | | | | |
Nonaccrual loans(a)(b) | $ | 3,835 | | | $ | 4,531 | | | (15) | % | | | | | | |
Net charge-offs/(recoveries) | | | | | | | | | | | |
Banking & Wealth Management | 79 | | | 89 | | | (11) | | | | | | | |
Home Lending | (18) | | | (69) | | | 74 | | | | | | | |
Card Services | 922 | | | 506 | | | 82 | | | | | | | |
Auto | 69 | | | 27 | | | 156 | | | | | | | |
Total net charge-offs/(recoveries) | $ | 1,052 | | | $ | 553 | | | 90 | | | | | | | |
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Net charge-off/(recovery) rate | | | | | | | | | | | |
Banking & Wealth Management(c) | 1.12 | | % | 1.07 | | % | | | | | | | |
Home Lending | (0.04) | | | (0.17) | | | | | | | | | |
Card Services | 2.07 | | | 1.37 | | | | | | | | | |
Auto | 0.41 | | | 0.16 | | | | | | | | | |
Total net charge-off/(recovery) rate | 0.96 | | % | 0.54 | | % | | | | | | | |
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30+ day delinquency rate | | | | | | | | | | | |
Home Lending(d)(e) | 0.81 | | % | 1.03 | | % | | | | | | | |
Card Services | 1.68 | | | 1.09 | | | | | | | | | |
Auto | 0.90 | | | 0.57 | | | | | | | | | |
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90+ day delinquency rate - Card Services | 0.83 | | % | 0.54 | | % | | | | | | | |
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Allowance for loan losses | | | | | | | | | | | |
Banking & Wealth Management | $ | 720 | | | $ | 697 | | | 3 | | | | | | | |
Home Lending | 427 | | | 785 | | | (46) | | | | | | | |
Card Services | 11,400 | | | 10,250 | | | 11 | | | | | | | |
Auto | 716 | | | 738 | | | (3) | | | | | | | |
Total allowance for loan losses | $ | 13,263 | | (f) | $ | 12,470 | | | 6 | % | | | | | | |
22
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Selected metrics | | | | | | | | | | |
| As of or for the three months ended March 31, | | |
(in millions, except ratio data) | 2024 | | 2023 | | Change | | | | | | |
Credit data and quality statistics | | | | | | | | | | | |
Nonaccrual loans(a) | $ | 3,647 | | | $ | 3,835 | | | (5)% | | | | | | |
Net charge-offs/(recoveries) | | | | | | | | | | | |
Banking & Wealth Management | 79 | | | 79 | | | — | | | | | | |
Home Lending | (7) | | | (18) | | | 61 | | | | | | |
Card Services | 1,688 | | | 922 | | | 83 | | | | | | |
Auto | 119 | | | 69 | | | 72 | | | | | | |
Total net charge-offs/(recoveries) | $ | 1,879 | | | $ | 1,052 | | | 79 | | | | | | |
| | | | | | | | | | | |
Net charge-off/(recovery) rate | | | | | | | | | | | |
Banking & Wealth Management | 1.02 | | % | 1.12 | | % | | | | | | | |
Home Lending | (0.01) | | | (0.04) | | | | | | | | | |
Card Services | 3.32 | | | 2.07 | | | | | | | | | |
Auto | 0.62 | | | 0.41 | | | | | | | | | |
Total net charge-off/(recovery) rate | 1.33 | | % | 0.96 | | % | | | | | | | |
| | | | | | | | | | | |
30+ day delinquency rate | | | | | | | | | | | |
Home Lending(b) | 0.70 | | % | 0.81 | | % | | | | | | | |
Card Services | 2.23 | | | 1.68 | | | | | | | | | |
Auto | 1.03 | | | 0.90 | | | | | | | | | |
| | | | | | | | | | | |
90+ day delinquency rate - Card Services | 1.16 | | % | 0.83 | | % | | | | | | | |
| | | | | | | | | | | |
Allowance for loan losses | | | | | | | | | | | |
Banking & Wealth Management | $ | 706 | | | $ | 720 | | | (2) | | | | | | |
Home Lending | 432 | | (c) | 427 | | | 1 | | | | | | |
Card Services | 12,606 | | | 11,400 | | | 11 | | | | | | |
Auto | 742 | | | 716 | | | 4 | | | | | | |
Total allowance for loan losses | $ | 14,486 | | | $ | 13,263 | | (d) | 9% | | | | | | |
(a)At March 31, 20232024 and 2022,2023, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $164$107 million and $315$164 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.
(b)At March 31, 20232024 and 2022, generally excludes loans that were under payment deferral programs offered in response to the COVID-19 pandemic. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for further information on consumer assistance.
(c)At March 31, 2023, and 2022, included $205 million and $2.9 billion of loans, respectively, in Business Banking under the PPP. The Firm does not expect to realize material credit losses on PPP loans because the loans are guaranteed by the SBA. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for a further discussion of the PPP.
(d)At March 31, 2023 and 2022, the principal balance of loans under payment deferral programs offered in response to the COVID-19 pandemic was $353 million and $728 million in Home Lending, respectively. Loans that are performing according to their modified terms are generally not considered delinquent. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for further information on consumer assistance.
(e)At March 31, 2023 and 2022, excluded mortgage loans insured by U.S. government agencies of $219$147 million and $370$219 million, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
(f)(c)Includes First Republic.
(d)On January 1, 2023, the Firm adopted changes to the TDR accounting guidance. The adoption of this guidance resulted in a net decrease in the allowance for loan losses of $591 million, driven by residential real estate and credit card. Refer to Note 1 of JPMorgan Chase’s 2023 Form 10-K for further information.
| Selected metrics | Selected metrics | | |
| As of or for the three months ended March 31, | |
Selected metrics | |
Selected metrics | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
(in billions, except ratios and where otherwise noted) | |
(in billions, except ratios and where otherwise noted) | |
(in billions, except ratios and where otherwise noted) | (in billions, except ratios and where otherwise noted) | 2023 | | 2022 | | Change | |
Business Metrics | Business Metrics | | |
Business Metrics | |
Business Metrics | |
Number of branches | |
Number of branches | |
Number of branches | Number of branches | 4,784 | | | 4,810 | | | (1) | % | |
Active digital customers (in thousands)(a) | Active digital customers (in thousands)(a) | 64,998 | | | 60,286 | | | 8 | | |
Active digital customers (in thousands)(a) | |
Active digital customers (in thousands)(a) | |
Active mobile customers (in thousands)(b) | |
Active mobile customers (in thousands)(b) | |
Active mobile customers (in thousands)(b) | Active mobile customers (in thousands)(b) | 50,933 | | | 46,527 | | | 9 | | |
Debit and credit card sales volume | Debit and credit card sales volume | $ | 387.3 | | | $ | 351.5 | | | 10 | | |
Debit and credit card sales volume | |
Debit and credit card sales volume | |
Total payments transaction volume (in trillions)(c) | |
Total payments transaction volume (in trillions)(c) | |
Total payments transaction volume (in trillions)(c) | Total payments transaction volume (in trillions)(c) | 1.4 | | | 1.3 | | | 8 | | |
| Banking & Wealth Management | Banking & Wealth Management | | |
| Banking & Wealth Management | |
| Banking & Wealth Management | |
Average deposits | |
Average deposits | |
Average deposits | Average deposits | $ | 1,098.5 | | | $ | 1,136.1 | | | (3) | | |
Deposit margin | Deposit margin | 2.78 | % | | 1.22 | % | | |
Deposit margin | |
Deposit margin | |
Business Banking average loans | |
Business Banking average loans | |
Business Banking average loans | Business Banking average loans | $ | 19.9 | | | $ | 24.8 | | | (20) | | |
Business banking origination volume | Business banking origination volume | 1.0 | | | 1.0 | | | — | | |
Business banking origination volume | |
Business banking origination volume | |
Client investment assets(d) | Client investment assets(d) | 690.8 | | | 696.3 | | | (1) | | |
Client investment assets(d) | |
Client investment assets(d) | |
Number of client advisors | |
Number of client advisors | |
Number of client advisors | Number of client advisors | 5,125 | | | 4,816 | | | 6 | | |
| Home Lending | Home Lending | | |
| Home Lending | |
| Home Lending | |
Mortgage origination volume by channel | |
Mortgage origination volume by channel | |
Mortgage origination volume by channel | Mortgage origination volume by channel | | |
Retail | Retail | $ | 3.6 | | | $ | 15.1 | | | (76) | | |
Retail | |
Retail | |
Correspondent | Correspondent | 2.1 | | | 9.6 | | | (78) | | |
Correspondent | |
Correspondent | |
Total mortgage origination volume(e) | |
Total mortgage origination volume(e) | |
Total mortgage origination volume(e) | Total mortgage origination volume(e) | $ | 5.7 | | | $ | 24.7 | | | (77) | | |
| Third-party mortgage loans serviced (period-end) | Third-party mortgage loans serviced (period-end) | $ | 575.9 | | | $ | 575.4 | | | — | | |
| Third-party mortgage loans serviced (period-end) | |
| Third-party mortgage loans serviced (period-end) | |
MSR carrying value (period-end) | |
MSR carrying value (period-end) | |
MSR carrying value (period-end) | MSR carrying value (period-end) | 7.7 | | | 7.3 | | | 5 | | |
| Card Services | Card Services | | |
| Card Services | |
| Card Services | |
Sales volume, excluding commercial card | |
Sales volume, excluding commercial card | |
Sales volume, excluding commercial card | Sales volume, excluding commercial card | $ | 266.2 | | | $ | 236.4 | | | 13 | | |
Net revenue rate | Net revenue rate | 10.38 | % | | 9.87 | % | | |
Net revenue rate | |
Net revenue rate | |
Net yield on average loans | |
Net yield on average loans | |
Net yield on average loans | Net yield on average loans | 9.89 | | | 9.99 | | | |
| Auto | Auto | | |
| Auto | |
| Auto | |
Loan and lease origination volume | |
Loan and lease origination volume | |
Loan and lease origination volume | Loan and lease origination volume | $ | 9.2 | | | $ | 8.4 | | | 10 | | |
Average auto operating lease assets | Average auto operating lease assets | 11.5 | | | 16.4 | | | (30) | % | |
Average auto operating lease assets | |
Average auto operating lease assets | |
(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)Total payments transaction volume includes debit and credit card sales volume and gross outflows of ACH, ATM, teller, wires, BillPay, PayChase, Zelle, person-to-person and checks.
(d)Includes assets invested in managed accounts and J.P. Morgan mutual funds where AWM is the investment manager. Refer to AWM segment results on pages 30-3232-34 for additional information. At March 31, 2024, included $146.6 billion of client investment assets associated with First Republic.
(e)Firmwide mortgage origination volume was $6.8$7.6 billion and $30.2$6.8 billion for the three months ended March 31, 20232024 and 2022,2023, respectively.
(f)Excludes First Republic.
(g)Included $40.6 billion for the three months ended March 31, 2024, associated with First Republic.
(h)Included $304 million for the three months ended March 31, 2024, associated with First Republic.
| | | | | | | | | | | | | | |
CORPORATE & INVESTMENT BANK |
Refer to pages 67-7272–77 of JPMorgan Chase’s 20222023 Form 10-K and Line of Business Metrics on page 174182 for a further discussion of the business profile of CIB.
| Selected income statement data | Selected income statement data | | |
| Three months ended March 31, | |
Selected income statement data | |
Selected income statement data | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (in millions, except ratios) | 2023 | | 2022 | | Change | |
Revenue | Revenue | | |
Revenue | |
Revenue | |
Investment banking fees (a) | |
Investment banking fees (a) | |
Investment banking fees (a) | Investment banking fees (a) | $ | 1,654 | | | $ | 2,050 | | | (19) | % | |
Principal transactions | Principal transactions | 7,408 | | | 5,223 | | | 42 | | |
Principal transactions | |
Principal transactions | |
Lending- and deposit-related fees | |
Lending- and deposit-related fees | |
Lending- and deposit-related fees | Lending- and deposit-related fees | 539 | | | 641 | | | (16) | | |
Commissions and other fees | Commissions and other fees | 1,234 | | | 1,332 | | | (7) | | |
Commissions and other fees | |
Commissions and other fees | |
Card income | |
Card income | |
Card income | Card income | 315 | | | 266 | | (c) | 18 | | |
All other income | All other income | 373 | | | 492 | | (c) | (24) | | |
All other income | |
All other income | |
Noninterest revenue | |
Noninterest revenue | |
Noninterest revenue | Noninterest revenue | 11,523 | | | 10,004 | | | 15 | | |
Net interest income | Net interest income | 2,077 | | | 3,572 | | | (42) | | |
Net interest income | |
Net interest income | |
Total net revenue(b) | Total net revenue(b) | 13,600 | | | 13,576 | | | — | | |
| Total net revenue(b) | |
Total net revenue(b) | |
Provision for credit losses | |
Provision for credit losses | |
Provision for credit losses | Provision for credit losses | 58 | | | 445 | | | (87) | |
| Noninterest expense | Noninterest expense | | |
| Noninterest expense | |
| Noninterest expense | |
Compensation expense | |
Compensation expense | |
Compensation expense | Compensation expense | 4,085 | | | 4,006 | | | 2 | | |
Noncompensation expense | Noncompensation expense | 3,398 | | | 3,357 | | (c) | 1 | | |
Noncompensation expense | |
Noncompensation expense | |
Total noninterest expense | |
Total noninterest expense | |
Total noninterest expense | Total noninterest expense | 7,483 | | | 7,363 | | | 2 | | |
Income before income tax expense | Income before income tax expense | 6,059 | | | 5,768 | | | 5 | | |
Income before income tax expense | |
Income before income tax expense | |
Income tax expense | |
Income tax expense | |
Income tax expense | Income tax expense | 1,638 | | | 1,396 | | (c) | 17 | | |
Net income | Net income | $ | 4,421 | | | $ | 4,372 | | | 1 | % | |
Net income | |
Net income | |
Financial ratios | |
Financial ratios | |
Financial ratios | Financial ratios | | |
Return on equity | Return on equity | 16 | % | | 16 | % | (c) | | |
Return on equity | |
Return on equity | |
Overhead ratio | |
Overhead ratio | |
Overhead ratio | Overhead ratio | 55 | | | 54 | | | |
Compensation expense as percentage of total net revenue | Compensation expense as percentage of total net revenue | 30 | | | 30 | | | |
Compensation expense as percentage of total net revenue | |
Compensation expense as percentage of total net revenue | |
(a)Includes CB's share of revenue from investment banking products sold to CB clients through the CIB that is subject to a revenue sharing arrangement which is reported as a reduction in All other income.
(b)Includes tax-equivalent adjustments, predominantly due to income tax credits, amortization of the cost of investments and other tax benefits related to alternative energy investments; income tax creditsinvestments and amortization of the cost of investments in affordable housing projects; and tax-exempt income from municipal bondstax-exempt securities of $839$471 million and $737$839 million for the three months ended March 31, 2024 and 2023, and 2022, respectively.
(c)In Effective January 1, 2024, the first quarterFirm adopted updates to the Accounting for Investments in Tax Credit Structures guidance under the modified retrospective method, thereby lowering the amount of 2023, the allocations of revenue and expense to CCBtax-equivalent adjustments associated with a Merchant Services revenue sharing agreement were discontinuedthe alternative energy investments. Refer to Note 1, 5 and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.
13 for additional information.
| Selected income statement data | Selected income statement data | | |
| Three months ended March 31, | |
Selected income statement data | |
Selected income statement data | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | | Change | |
Revenue by business | Revenue by business | | |
Revenue by business | |
Revenue by business | |
Investment Banking | |
Investment Banking | |
Investment Banking | Investment Banking | $ | 1,560 | | $ | 2,057 | | | (24)% | |
Payments | Payments | 2,396 | | 1,901 | | (b) | 26 | |
Payments | |
Payments | |
Lending | |
Lending | |
Lending | Lending | 267 | | 321 | | | (17) | |
Total Banking | Total Banking | 4,223 | | 4,279 | | | (1) | |
Total Banking | |
Total Banking | |
Fixed Income Markets | |
Fixed Income Markets | |
Fixed Income Markets | Fixed Income Markets | 5,699 | | 5,698 | | | — | |
Equity Markets | Equity Markets | 2,683 | | 3,055 | | | (12) | |
Equity Markets | |
Equity Markets | |
Securities Services | |
Securities Services | |
Securities Services | Securities Services | 1,148 | | 1,068 | | | 7 | |
Credit Adjustments & Other(a) | Credit Adjustments & Other(a) | (153) | | (524) | | | 71 | |
Credit Adjustments & Other(a) | |
Credit Adjustments & Other(a) | |
Total Markets & Securities Services | |
Total Markets & Securities Services | |
Total Markets & Securities Services | Total Markets & Securities Services | 9,377 | | 9,297 | | | 1 | |
Total net revenue | Total net revenue | $ | 13,600 | | $ | 13,576 | | | —% | |
Total net revenue | |
Total net revenue | |
(a)Consists primarily of centrally managed credit valuation adjustments (“CVA”), funding valuation adjustments (“FVA”) on derivatives, other valuation adjustments, 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. Refer to Notes 2, 3 and 19 for
(b)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.additional information.
Quarterly results
Net income was $4.4$4.8 billion, up 1%8%.
Net revenue was $13.6 billion, relatively flat when compared to the prior year.
Banking revenue was $4.2$4.5 billion, down 1%up 6%.
•Investment Banking revenue was $1.6$2.0 billion, down 24%up 27%, predominantly driven by lowerhigher Investment Banking fees, down 19%up 21%, reflecting higher debt and equity underwriting fees, partially offset by lower debt underwritingadvisory fees. The Firm ranked #1 for Global Investment Banking fees, according to Dealogic.
–Debt underwriting fees were $663 million, down 34%$1.0 billion, up 58%, predominantly driven by higher industry-wide issuance in leveraged loans and high-yield bonds, as well as higher issuance in high grade bonds reflecting wallet share gains.
–Equity underwriting fees were $235$355 million, down 6%up 51%, as challenging market conditions resulted in lower issuance activity.driven by IPO and convertible securities offerings, reflecting wallet share gains.
–Advisory fees were $756$598 million, down 6%21%, compared to a strong prior year, driven by a lower levelnumber of announced deals.large completed transactions.
•Payments revenue was $2.4 billion, up 26% and included a gain on an equity investment in the prior year.down 1%. Excluding the net impact of equity investments, Payments revenue was up 55%down 2%, driven by deposit margin expansion oncompression reflecting higher rates partiallypaid and higher deposit-related client credits, largely offset by lowerfee growth and higher average deposits.
•Lending revenue was $267$130 million, down 17%51%, and included $103$264 million of fair value losses on hedges ofcredit protection purchased against certain retained loans.
loans and lending-related commitments.
Markets & Securities Services revenue was $9.4$9.2 billion, up 1%down 2%. Markets revenue was $8.4$8.0 billion, down 4%5%.
•Fixed Income Markets revenue was $5.7$5.3 billion, flatdown 7%, driven by lower revenues in Rates and Commodities compared to the prior year, reflecting:
–lower revenue in Currencies & Emerging Markets compared towith a strong prior year, and
–partially offset by higher revenue in Rates with favorable market conditions early in the quarter and elevated volatility in March 2023, as well as higher revenue in Credit Trading from higher client flows.Securitized Products.
•Equity Markets revenue was $2.7 billion, down 12%, driven by lower revenue in Equity Derivatives and Cash Equities,relatively flat compared to a strong first quarter in the prior year.
•Securities Services revenue was $1.1$1.2 billion, up 7%3%, driven by deposit margin expansion on higher rates, partially offset by lowermarket levels and average deposits and lower average market values of assets under custody.deposits.
•Credit Adjustments & Other was a loss of $153$15 million, driven by losses on certain components of fair value option elected liabilities, compared with a loss of $524$153 million in the prior year.
Noninterest expense was $7.5$7.2 billion, up 2%down 4%, largelypredominantly driven by higher compensation, including headcount growth and wage inflation, largely offset by lower revenue-related compensation.legal expense.
The provision for credit losses was $58$32 million, predominantly driven by net charge-offs of $50 million. The net addition to the allowance for credit losses was driven by net downgrade activity andreflecting a deterioration in the Firm's weighted-average economic outlook, largely offset by a reduction in the allowance for client-specific exposures.
The prior year provision was $445$30 million driven by a net addition to the allowance for credit losses.
The provision in the prior year was $58 million, predominantly driven by net charge-offs.
Refer to Credit and Investment Risk Management on pages 48-6652-70 and Allowance for Credit Losses on pages 63-6567-69 for a further discussionsdiscussion of the credit portfolios and the allowance for credit losses.
| Selected metrics | Selected metrics | | |
| As of or for the three months ended March 31, | |
(in millions, except headcount) | 2023 | | 2022 | | Change | |
Selected metrics | |
Selected metrics | |
(in millions, except employees) | |
| (in millions, except employees) | |
| 2024 | |
2024 | |
Selected balance sheet data (period-end) | |
Selected balance sheet data (period-end) | |
Selected balance sheet data (period-end) | Selected balance sheet data (period-end) | | |
Total assets | Total assets | $ | 1,436,237 | | | $ | 1,460,463 | | | (2) | % | |
Total assets | |
Total assets | |
Loans: | |
Loans: | |
Loans: | Loans: | | |
Loans retained(a) | Loans retained(a) | 187,133 | | | 167,791 | | | 12 | | |
Loans retained(a) | |
Loans retained(a) | |
Loans held-for-sale and loans at fair value(b) | |
Loans held-for-sale and loans at fair value(b) | |
Loans held-for-sale and loans at fair value(b) | Loans held-for-sale and loans at fair value(b) | 38,335 | | | 47,260 | | | (19) | | |
Total loans | Total loans | 225,468 | | | 215,051 | | | 5 | | |
Total loans | |
Total loans | |
Equity | |
Equity | |
Equity | Equity | 108,000 | | | 103,000 | | | 5 | | |
Selected balance sheet data (average) | Selected balance sheet data (average) | | |
Selected balance sheet data (average) | |
Selected balance sheet data (average) | |
Total assets | |
Total assets | |
Total assets | Total assets | $ | 1,429,662 | | | $ | 1,407,835 | | | 2 | | |
Trading assets-debt and equity instruments | Trading assets-debt and equity instruments | 488,767 | | | 419,346 | | | 17 | | |
Trading assets-debt and equity instruments | |
Trading assets-debt and equity instruments | |
Trading assets-derivative receivables | |
Trading assets-derivative receivables | |
Trading assets-derivative receivables | Trading assets-derivative receivables | 64,016 | | | 66,692 | | | (4) | | |
Loans: | Loans: | | |
Loans: | |
Loans: | |
Loans retained(a) | |
Loans retained(a) | |
Loans retained(a) | Loans retained(a) | $ | 185,572 | | | $ | 160,976 | | | 15 | | |
Loans held-for-sale and loans at fair value(b) | Loans held-for-sale and loans at fair value(b) | 42,569 | | | 51,398 | | | (17) | | |
Loans held-for-sale and loans at fair value(b) | |
Loans held-for-sale and loans at fair value(b) | |
Total loans | Total loans | $ | 228,141 | | | $ | 212,374 | | | 7 | | |
Total loans | |
Total loans | |
Deposits | |
Deposits | |
Deposits | |
Equity | Equity | 108,000 | | | 103,000 | | | 5 | | |
Headcount | 74,352 | | | 68,292 | | | 9 | % | |
Equity | |
Equity | |
Employees | |
Employees | |
Employees | |
(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)Loans held-for-sale and loans at fair value primarily reflect lending relatedlending-related positions originated and purchased in CIB Markets, including loans held for securitization.
| Selected metrics | Selected metrics | | | |
| As of or for the three months ended March 31, | |
Selected metrics | |
Selected metrics | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (in millions, except ratios) | 2023 | | 2022 | | Change | |
Credit data and quality statistics | Credit data and quality statistics | | |
Credit data and quality statistics | |
Credit data and quality statistics | |
Net charge-offs/(recoveries) | |
Net charge-offs/(recoveries) | |
Net charge-offs/(recoveries) | Net charge-offs/(recoveries) | $ | 50 | | | $ | 20 | | | 150 | % | |
Nonperforming assets: | Nonperforming assets: | | |
Nonperforming assets: | |
Nonperforming assets: | |
Nonaccrual loans: | |
Nonaccrual loans: | |
Nonaccrual loans: | Nonaccrual loans: | | |
Nonaccrual loans retained(a) | Nonaccrual loans retained(a) | $ | 832 | | | $ | 871 | | | (4) | | |
Nonaccrual loans retained(a) | |
Nonaccrual loans retained(a) | |
Nonaccrual loans held-for-sale and loans at fair value(b) | |
Nonaccrual loans held-for-sale and loans at fair value(b) | |
Nonaccrual loans held-for-sale and loans at fair value(b) | Nonaccrual loans held-for-sale and loans at fair value(b) | 808 | | | 949 | | | (15) | | |
Total nonaccrual loans | Total nonaccrual loans | 1,640 | | | 1,820 | | | (10) | | |
Total nonaccrual loans | |
Total nonaccrual loans | |
Derivative receivables | |
Derivative receivables | |
Derivative receivables | Derivative receivables | 291 | | | 597 | | | (51) | | |
Assets acquired in loan satisfactions | Assets acquired in loan satisfactions | 86 | | | 91 | | | (5) | | |
Assets acquired in loan satisfactions | |
Assets acquired in loan satisfactions | |
Total nonperforming assets | |
Total nonperforming assets | |
Total nonperforming assets | Total nonperforming assets | $ | 2,017 | | | $ | 2,508 | | | (20) | | |
Allowance for credit losses: | Allowance for credit losses: | | |
Allowance for credit losses: | |
Allowance for credit losses: | |
Allowance for loan losses | |
Allowance for loan losses | |
Allowance for loan losses | Allowance for loan losses | $ | 2,454 | | | $ | 1,687 | | | 45 | | |
Allowance for lending-related commitments | Allowance for lending-related commitments | 1,301 | | | 1,459 | | | (11) | | |
Allowance for lending-related commitments | |
Allowance for lending-related commitments | |
Total allowance for credit losses | |
Total allowance for credit losses | |
Total allowance for credit losses | Total allowance for credit losses | $ | 3,755 | | | $ | 3,146 | | | 19 | % | |
Net charge-off/(recovery) rate(c) | Net charge-off/(recovery) rate(c) | 0.11 | % | | 0.05 | % | | |
Net charge-off/(recovery) rate(c) | |
Net charge-off/(recovery) rate(c) | |
Allowance for loan losses to period-end loans retained | |
Allowance for loan losses to period-end loans retained | |
Allowance for loan losses to period-end loans retained | Allowance for loan losses to period-end loans retained | 1.31 | | | 1.01 | | | |
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(d) | Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(d) | 1.81 | | | 1.31 | | | |
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(d) | |
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(d) | |
Allowance for loan losses to nonaccrual loans retained(a) | |
Allowance for loan losses to nonaccrual loans retained(a) | |
Allowance for loan losses to nonaccrual loans retained(a) | Allowance for loan losses to nonaccrual loans retained(a) | 295 | | | 194 | | | |
Nonaccrual loans to total period-end loans | Nonaccrual loans to total period-end loans | 0.73 | % | | 0.85 | % | | |
Nonaccrual loans to total period-end loans | |
Nonaccrual loans to total period-end loans | |
(a)Allowance for loan losses of $153$126 million and $226$153 million were held against these nonaccrual loans at March 31, 20232024 and 2022,2023, respectively.
(b)At March 31, 20232024 and 2022,2023, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $99$50 million and $283$99 million, respectively. These amounts have been excluded based upon the government guarantee.
(c)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.
(d)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. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 16-17.
| | | | | | | | | | | | | | | | | | | | | | | |
Investment banking fees | | | | | | | | | | |
| Three months ended March 31, | | |
(in millions) | 2023 | | 2022 | | Change | | | | | | |
Advisory | $ | 756 | | | $ | 801 | | | (6) | % | | | | | | |
Equity underwriting | 235 | | | 249 | | | (6) | | | | | | | |
Debt underwriting(a) | 663 | | | 1,000 | | | (34) | | | | | | | |
Total investment banking fees | $ | 1,654 | | | $ | 2,050 | | | (19) | % | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
Investment banking fees | | | | | | | | | | |
| Three months ended March 31, | | |
(in millions) | 2024 | | 2023 | | Change | | | | | | |
Advisory | $ | 598 | | | $ | 756 | | | (21) | % | | | | | | |
Equity underwriting | 355 | | | 235 | | | 51 | | | | | | | |
Debt underwriting(a) | 1,048 | | | 663 | | | 58 | | | | | | | |
Total investment banking fees | $ | 2,001 | | | $ | 1,654 | | | 21 | % | | | | | | |
(a)Represents long-term debt and loan syndications.
| League table results – wallet share | League table results – wallet share | | | |
| Three months ended March 31, | | Full-year 2022 |
| 2023 | | 2022 | |
| Rank | | Share | | Rank | | Share | | Rank | | Share |
League table results – wallet share | |
League table results – wallet share | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | | | | | Full-year 2023 |
| 2024 | |
| Rank | |
| Rank | |
| Rank | | | Share | | Rank | | Share | | | | | | | | | | Rank | | Share |
Based on fees(a) | Based on fees(a) | | | |
M&A(b) | M&A(b) | | | |
M&A(b) | |
M&A(b) | |
Global | |
Global | |
Global | Global | # | 2 | | | 10.1 | % | | # | 3 | | | 7.5 | % | | # | 2 | | | 8.1 | % | # | 2 | | | 9.5 | | 9.5 | % | | # | 2 | | | 9.4 | | 9.4 | % | | | | | | | | | | # | 2 | | | 9.2 | | 9.2 | % |
U.S. | U.S. | 1 | | | 12.5 | | | 3 | | | 8.7 | | | 2 | | | 9.0 | |
Equity and equity-related(c) | Equity and equity-related(c) | | | |
Global | Global | 2 | | | 6.6 | | | 1 | | | 5.4 | | | 2 | | | 5.7 | |
Global | |
Global | |
U.S. | U.S. | 2 | | | 11.7 | | | 1 | | | 12.2 | | | 1 | | | 13.8 | |
Long-term debt(d) | Long-term debt(d) | | | |
Global | |
Global | |
Global | Global | 1 | | | 6.7 | | | 1 | | | 7.9 | | | 1 | | | 6.9 | |
U.S. | U.S. | 2 | | | 9.5 | | | 1 | | | 12.2 | | | 1 | | | 12.2 | |
Loan syndications | Loan syndications | | | |
Global | Global | 1 | | | 13.7 | | | 1 | | | 10.7 | | | 1 | | | 11.1 | |
Global | |
Global | |
U.S. | U.S. | 1 | | | 15.5 | | | 2 | | | 10.2 | | | 1 | | | 12.7 | |
Global investment banking fees(e) | Global investment banking fees(e) | # | 1 | | | 8.7 | % | | # | 1 | | | 7.9 | % | | # | 1 | | | 7.9 | % | Global investment banking fees(e) | # | 1 | | | 9.1 | | 9.1 | % | | # | 1 | | | 8.3 | | 8.3 | % | | | | | | | | | | # | 1 | | | 8.7 | | 8.7 | % |
(a)Source: Dealogic as of April 3, 2023.1, 2024. Reflects the ranking of revenue wallet and market share.
(b)Global M&A excludes any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S.
(c)Global equity and equity-related ranking includes rights offerings and Chinese A-Shares.
(d)Long-term debt rankings include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, asset-backed securities (“ABS”) and mortgage-backed securities (“MBS”); and exclude money market, short-term debt and U.S. municipal securities.
(e)Global investment banking fees exclude money market, short-term debt and shelf securities.
Markets revenue
The following table summarizes selected income statement data for the Markets businesses. Markets includes both Fixed Income Markets and Equity Markets. Markets revenue consists of 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 maygenerally occur across revenue line items. For example, securities that generate net interest income may be risk-managed by derivatives that are
are reflected at fair value in principal transactions revenue. Refer to Notes 5 and 6 for a description of the composition of these income statement line items. Refer to Markets revenue on page 7075 of JPMorgan Chase’s 20222023 Form 10-K for further information.
For the periods presented below, the primary source of principal transactions revenue was the amount recognized upon executing new transactions.
| | Three months ended March 31, | | Three months ended March 31, |
| 2023 | | 2022 |
| Three months ended March 31, | | | Three months ended March 31, |
| 2024 | | | 2024 | | 2023 |
(in millions) | (in millions) | Fixed Income Markets | Equity Markets | Total Markets | | Fixed Income Markets | Equity Markets | Total Markets | (in millions) | Fixed Income Markets | Equity Markets | Total Markets | | Fixed Income Markets | Equity Markets | Total Markets |
Principal transactions | Principal transactions | $ | 4,398 | | $ | 3,029 | | $ | 7,427 | | | $ | 3,389 | | $ | 2,284 | | $ | 5,673 | |
Lending- and deposit-related fees | Lending- and deposit-related fees | 70 | | 7 | | 77 | | | 78 | | 4 | | 82 | |
Commissions and other fees | Commissions and other fees | 144 | | 522 | | 666 | | | 157 | | 547 | | 704 | |
All other income | All other income | 331 | | (14) | | 317 | | | 116 | | (40) | | 76 | |
Noninterest revenue | Noninterest revenue | 4,943 | | 3,544 | | 8,487 | | | 3,740 | | 2,795 | | 6,535 | |
Net interest income(a) | Net interest income(a) | 756 | | (861) | | (105) | | | 1,958 | | 260 | | 2,218 | |
Total net revenue | Total net revenue | $ | 5,699 | | $ | 2,683 | | $ | 8,382 | | | $ | 5,698 | | $ | 3,055 | | $ | 8,753 | |
| | |
(a)The decline in Equity Markets net interest income was driven by higher funding costs.
| Selected metrics | Selected metrics | | | |
| As of or for the three months ended March 31, | |
Selected metrics | |
Selected metrics | |
(in millions, except where otherwise noted) | (in millions, except where otherwise noted) | 2023 | | 2022 | | Change | |
(in millions, except where otherwise noted) | |
| (in millions, except where otherwise noted) | |
| 2024 | |
Assets under custody (“AUC”) by asset class (period-end) (in billions): | |
Assets under custody (“AUC”) by asset class (period-end) (in billions): | |
Assets under custody (“AUC”) by asset class (period-end) (in billions): | Assets under custody (“AUC”) by asset class (period-end) (in billions): | | |
Fixed Income | Fixed Income | $ | 14,660 | | | $ | 15,489 | | | (5) | % | |
Fixed Income | |
Fixed Income | |
Equity | |
Equity | |
Equity | Equity | 11,320 | | | 12,156 | | | (7) | | |
Other(a) | Other(a) | 3,745 | | | 3,926 | | | (5) | | |
Other(a) | |
Other(a) | |
Total AUC | |
Total AUC | |
Total AUC | Total AUC | $ | 29,725 | | | $ | 31,571 | | | (6) | | |
Merchant processing volume (in billions)(b) | Merchant processing volume (in billions)(b) | $ | 558.8 | | | $ | 490.2 | | | 14 | | |
Merchant processing volume (in billions)(b) | |
Merchant processing volume (in billions)(b) | |
Client deposits and other third-party liabilities (average)(c) | Client deposits and other third-party liabilities (average)(c) | $ | 633,729 | | | $ | 709,121 | | | (11) | % | |
Client deposits and other third-party liabilities (average)(c) | |
Client deposits and other third-party liabilities (average)(c) | |
(a)Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts.
(b)Represents Firmwide merchant processing volume.
(c)Client deposits and other third-party liabilities pertain to the Payments and Securities Services businesses.
| International metrics | International metrics | | | |
| As of or for the three months ended March 31, | |
International metrics | |
International metrics | |
(in millions, except where otherwise noted) | (in millions, except where otherwise noted) | 2023 | | 2022 | | Change | |
(in millions, except where otherwise noted) | |
| (in millions, except where otherwise noted) | |
| 2024 | |
Total net revenue(a) | |
Total net revenue(a) | |
Total net revenue(a) | Total net revenue(a) | | |
Europe/Middle East/Africa | Europe/Middle East/Africa | $ | 4,268 | | | $ | 4,692 | | | (9) | % | |
Europe/Middle East/Africa | |
Europe/Middle East/Africa | |
Asia-Pacific | |
Asia-Pacific | |
Asia-Pacific | Asia-Pacific | 2,133 | | | 1,985 | | | 7 | | |
Latin America/Caribbean | Latin America/Caribbean | 562 | | | 677 | | | (17) | | |
Latin America/Caribbean | |
Latin America/Caribbean | |
Total international net revenue | |
Total international net revenue | |
Total international net revenue | Total international net revenue | 6,963 | | | 7,354 | | | (5) | | |
North America | North America | 6,637 | | | 6,222 | | (c) | 7 | | |
North America | |
North America | |
Total net revenue | |
Total net revenue | |
Total net revenue | Total net revenue | $ | 13,600 | | | $ | 13,576 | | | — | | |
| Loans retained (period-end)(a) | Loans retained (period-end)(a) | | |
| Loans retained (period-end)(a) | |
| Loans retained (period-end)(a) | |
Europe/Middle East/Africa | |
Europe/Middle East/Africa | |
Europe/Middle East/Africa | Europe/Middle East/Africa | $ | 38,568 | | | $ | 38,393 | | | — | | |
Asia-Pacific | Asia-Pacific | 14,633 | | | 17,926 | | | (18) | | |
Asia-Pacific | |
Asia-Pacific | |
Latin America/Caribbean | |
Latin America/Caribbean | |
Latin America/Caribbean | Latin America/Caribbean | 8,070 | | | 8,098 | | | — | | |
Total international loans | Total international loans | 61,271 | | | 64,417 | | | (5) | | |
Total international loans | |
Total international loans | |
North America | North America | 125,862 | | | 103,374 | | | 22 | | |
North America | |
North America | |
Total loans retained | |
Total loans retained | |
Total loans retained | Total loans retained | $ | 187,133 | | | $ | 167,791 | | | 12 | | |
| Client deposits and other third-party liabilities (average)(b) | Client deposits and other third-party liabilities (average)(b) | | |
| Client deposits and other third-party liabilities (average)(b) | |
| Client deposits and other third-party liabilities (average)(b) | |
Europe/Middle East/Africa | |
Europe/Middle East/Africa | |
Europe/Middle East/Africa | Europe/Middle East/Africa | $ | 230,833 | | | $ | 246,497 | | | (6) | | |
Asia-Pacific | Asia-Pacific | 126,026 | | | 134,767 | | | (6) | | |
Asia-Pacific | |
Asia-Pacific | |
Latin America/Caribbean | |
Latin America/Caribbean | |
Latin America/Caribbean | Latin America/Caribbean | 38,738 | | | 43,666 | | | (11) | | |
Total international | Total international | $ | 395,597 | | | $ | 424,930 | | | (7) | | |
Total international | |
Total international | |
North America | North America | 238,132 | | | 284,191 | | | (16) | | |
North America | |
North America | |
Total client deposits and other third-party liabilities | |
Total client deposits and other third-party liabilities | |
Total client deposits and other third-party liabilities | Total client deposits and other third-party liabilities | $ | 633,729 | | | $ | 709,121 | | | (11) | | |
| AUC (period-end)(b) (in billions) | AUC (period-end)(b) (in billions) | | |
| AUC (period-end)(b) (in billions) | |
| AUC (period-end)(b) (in billions) | |
North America | |
North America | |
North America | North America | $ | 19,883 | | | $ | 20,723 | | | (4) | | |
All other regions | All other regions | 9,842 | | | 10,848 | | | (9) | | |
All other regions | |
All other regions | |
Total AUC | Total AUC | $ | 29,725 | | | $ | 31,571 | | | (6) | % | |
Total AUC | |
Total AUC | |
(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 Payments and Securities Services businesses, and AUC, are based on the domicile of the client.
(c)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.
Refer to pages 73-7578–80 of JPMorgan Chase’s 20222023 Form 10-K and Line of Business Metrics on page 175183 for a discussion of the business profile of CB.
| Selected income statement data | Selected income statement data | |
| Three months ended March 31, | |
Selected income statement data | |
Selected income statement data | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | Change | |
Revenue | Revenue | | |
Revenue | |
Revenue | |
Lending- and deposit-related fees | |
Lending- and deposit-related fees | |
Lending- and deposit-related fees | Lending- and deposit-related fees | $ | 227 | | $ | 364 | | (38) | % | |
Card income | Card income | 173 | | 167 | | 4 | | |
Card income | |
Card income | |
All other income | |
All other income | |
All other income | All other income | 381 | | 336 | | 13 | | |
Noninterest revenue | Noninterest revenue | 781 | | 867 | | (10) | | |
Noninterest revenue | |
Noninterest revenue | |
Net interest income | Net interest income | 2,730 | | 1,531 | | 78 | | |
Net interest income | |
Net interest income | |
Total net revenue(a) | |
Total net revenue(a) | |
Total net revenue(a) | Total net revenue(a) | 3,511 | | 2,398 | | 46 | | |
| Provision for credit losses | Provision for credit losses | 417 | | 157 | | 166 | | |
| Provision for credit losses | |
| Provision for credit losses | |
| Noninterest expense | |
| Noninterest expense | |
| Noninterest expense | Noninterest expense | | |
Compensation expense | Compensation expense | 641 | | 553 | | 16 | | |
Compensation expense | |
Compensation expense | |
Noncompensation expense | Noncompensation expense | 667 | | 576 | | 16 | | |
Noncompensation expense | |
Noncompensation expense | |
Total noninterest expense | |
Total noninterest expense | |
Total noninterest expense | Total noninterest expense | 1,308 | | 1,129 | | 16 | | |
| Income before income tax expense | Income before income tax expense | 1,786 | | 1,112 | | 61 | | |
| Income before income tax expense | |
| Income before income tax expense | |
Income tax expense | |
Income tax expense | |
Income tax expense | Income tax expense | 439 | | 262 | | 68 | | |
Net income | Net income | $ | 1,347 | | $ | 850 | | 58 | % | |
Net income | |
Net income | |
(a)Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities and in entities established for rehabilitation of historic properties, as well as tax-exempt income related to municipal financing activities of $82$86 million and $69$82 million for the three months ended March 31, 2024 and 2023, and 2022, respectively.
(b)Includes First Republic. Refer to page 20 for additional information.
| Selected income statement data (continued) | Selected income statement data (continued) | |
| Three months ended March 31, | |
Selected income statement data (continued) | |
Selected income statement data (continued) | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (in millions, except ratios) | 2023 | 2022 | Change | |
Revenue by product | Revenue by product | | |
Revenue by product | |
Revenue by product | |
Lending | |
Lending | |
Lending | Lending | $ | 1,222 | | $ | 1,105 | | 11 | % | |
Payments | Payments | 2,028 | | 1,022 | | 98 | | |
Payments | |
Payments | |
Investment banking(a) | |
Investment banking(a) | |
Investment banking(a) | Investment banking(a) | 250 | | 219 | | 14 | | |
Other | Other | 11 | | 52 | | (79) | | |
Other | |
Other | |
Total net revenue | |
Total net revenue | |
Total net revenue | Total net revenue | $ | 3,511 | | $ | 2,398 | | 46 | | |
| Investment banking revenue, gross(b) | $ | 881 | | $ | 729 | | 21 | | |
Investment Banking and Markets revenue, gross(b) | |
| Revenue by client segments | | |
Investment Banking and Markets revenue, gross(b) | |
| Investment Banking and Markets revenue, gross(b) | |
| Revenue by client segment | |
| Revenue by client segment | |
| Revenue by client segment | |
Middle Market Banking | |
Middle Market Banking | |
Middle Market Banking | Middle Market Banking | $ | 1,681 | | $ | 980 | | 72 | | |
Corporate Client Banking | Corporate Client Banking | 1,176 | | 830 | | 42 | | |
Corporate Client Banking | |
Corporate Client Banking | |
Commercial Real Estate Banking | |
Commercial Real Estate Banking | |
Commercial Real Estate Banking | Commercial Real Estate Banking | 642 | | 581 | | 10 | | |
Other | Other | 12 | | 7 | | 71 | | |
Other | |
Other | |
Total net revenue | |
Total net revenue | |
Total net revenue | Total net revenue | $ | 3,511 | | $ | 2,398 | | 46 | % | |
| Financial ratios | Financial ratios | | |
| Financial ratios | |
| Financial ratios | |
Return on equity | |
Return on equity | |
Return on equity | Return on equity | 18 | % | 13 | % | | |
Overhead ratio | Overhead ratio | 37 | | 47 | | | |
Overhead ratio | |
Overhead ratio | |
(a)Includes CB’s share of revenue from investment bankingInvestment Banking and Markets' products sold to CB clients through the CIB which is reported in All other income.
(b)Includes gross revenues earned by the Firm that are subject to a revenue sharing arrangement withbetween CB and the CIB for Investment Banking and Markets' products sold to CB clients through the Investment Banking, Markets or Payments businesses.clients. This includes revenues related to fixed income and equity markets products. Refer to Business Segment Results on page 18 for a discussion of revenue sharing.
(c)Includes First Republic. Refer to page 20 for additional information.
(d)Middle Market Banking and Commercial Real Estate Banking included $72 million and $278 million, respectively, for the three months ended March 31, 2024, associated with First Republic.
Quarterly results
Net income was $1.3$1.9 billion, up 58%39%.
Net revenue was $3.5$4.0 billion, up 46%13%. Net interest income was $2.7$3.0 billion, up 78%11%, predominantly driven by First Republic reflecting higher average loans and the accretion of the purchase discount, partially offset by deposit margin expansion on compression reflecting higher rates partially offset by lower average deposits.paid.
Noninterest revenue was $781$925 million, down 10%up 18%, driven by lowerby:
•higher lending-related revenue as a result of the amortization of the purchase discount on certain acquired lending-related commitments associated with First Republic,
•higher deposit-related fees, due topartially offset by the higher level of client credits earned by clients that reduce such fees, partially offset by and
•higher card income and investment banking revenue.
Noninterest expense was $1.3$1.5 billion, up 16%15%, largelypredominantly driven by higher compensation expense, reflecting an increase in employees including headcount growth, as well as higher volume-related expense.front office and technology.
The provision for credit losses was $417a net benefit of $31 million, reflecting reflecting:
•a $98 million net reduction in the allowance for credit losses which included an addition to the allowance for credit losses predominantly drivenassociated with net downgrade activity, primarily in Commercial Real Estate, which was more than offset by a deteriorationupdates to certain macroeconomic variables and the impact of changes in the Firm's weighted-average economic outlookloan and lending-related commitment portfolios, and
•net downgrade activity.charge-offs of $67 million.
The provision for credit losses in the prior year was $157$417 million, driven byreflecting a net addition to the allowance for credit losses.
Refer to Credit and Investment Risk Management on pages 48-6652-70 and Allowance for Credit Losses on pages 63-6567-69 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 employees) | 2024 | | 2023 | Change | | | | | |
Selected balance sheet data (period-end) | | | | | | | | | |
Total assets | $ | 303,350 | | | $ | 261,181 | | 16 | % | | | | | |
Loans: | | | | | | | | | |
Loans retained | 281,155 | | (a) | 238,752 | | 18 | | | | | |
Loans held-for-sale and loans at fair value | 280 | | | 1,538 | | (82) | | | | | |
Total loans | $ | 281,435 | | | $ | 240,290 | | 17 | | | | | |
Equity | 30,000 | | | 28,500 | | 5 | | | | | |
| | | | | | | | | |
Period-end loans by client segment | | | | | | | | | |
Middle Market Banking | $ | 79,207 | | (b) | $ | 73,329 | | 8 | | | | | |
Corporate Client Banking | 57,373 | | | 58,256 | | (2) | | | | | |
Commercial Real Estate Banking | 144,267 | | (b) | 108,582 | | 33 | | | | | |
Other | 588 | | | 123 | | 378 | | | | | |
Total loans | $ | 281,435 | | | $ | 240,290 | | 17 | | | | | |
| | | | | | | | | |
Selected balance sheet data (average) | | | | | | | | | |
Total assets | $ | 301,221 | | | $ | 255,468 | | 18 | | | | | |
Loans: | | | | | | | | | |
Loans retained | 278,330 | | (c) | 236,808 | | 18 | | | | | |
Loans held-for-sale and loans at fair value | 1,216 | | | 1,155 | | 5 | | | | | |
Total loans | $ | 279,546 | | | $ | 237,963 | | 17 | | | | | |
| | | | | | | | | |
Average loans by client segment | | | | | | | | | |
Middle Market Banking | $ | 78,364 | | (d) | $ | 73,030 | | 7 | | | | | |
Corporate Client Banking | 56,633 | | | 56,581 | | — | | | | | |
Commercial Real Estate Banking | 143,959 | | (d) | 108,143 | | 33 | | | | | |
Other | 590 | | | 209 | | 183 | | | | | |
Total loans | $ | 279,546 | | | $ | 237,963 | | 17 | | | | | |
| | | | | | | | | |
Deposits | 265,715 | | (e) | 265,943 | | — | | | | | |
Equity | 30,000 | | | 28,500 | | 5 | | | | | |
| | | | | | | | | |
Employees | 18,111 | | | 15,026 | | 21 | % | | | | | |
(a)Includes First Republic. Refer to page 20 for additional information.
(b)As of March 31, 2024, included $5.6 billion and $32.5 billion for Middle Market Banking and Commercial Real Estate Banking, respectively, associated with First Republic.
(c)Average loans retained associated with First Republic were $38.6 billion for the three months ended March 31, 2024.
(d)Average Middle Market Banking and Commercial Real Estate Banking loans associated with First Republic were $5.8 billion and $32.7 billion, respectively, for the three months ended March 31, 2024.
(e)Included $7.1 billion associated with First Republic for the three months ended March 31, 2024. Refer to page 20 for additional information.
| | | | | | | | | | | | | | | | | | | |
Selected metrics | | | | | | | | |
| As of or for the three months ended March 31, | | |
(in millions, except headcount) | 2023 | | 2022 | Change | | | | | |
Selected balance sheet data (period-end) | | | | | | | | | |
Total assets | $ | 261,181 | | | $ | 235,127 | | 11 | % | | | | | |
Loans: | | | | | | | | | |
Loans retained | 238,752 | | | 213,073 | | 12 | | | | | | |
Loans held-for-sale and loans at fair value | 1,538 | | | 1,743 | | (12) | | | | | | |
Total loans | $ | 240,290 | | | $ | 214,816 | | 12 | | | | | | |
Equity | 28,500 | | | 25,000 | | 14 | | | | | | |
| | | | | | | | | |
Period-end loans by client segment | | | | | | | | | |
Middle Market Banking(a) | $ | 73,329 | | | $ | 64,306 | | 14 | | | | | | |
Corporate Client Banking | 58,256 | | | 46,720 | | 25 | | | | | | |
Commercial Real Estate Banking | 108,582 | | | 103,685 | | 5 | | | | | | |
Other | 123 | | | 105 | | 17 | | | | | | |
Total loans(a) | $ | 240,290 | | | $ | 214,816 | | 12 | | | | | | |
| | | | | | | | | |
Selected balance sheet data (average) | | | | | | | | | |
Total assets | $ | 255,468 | | | $ | 233,474 | | 9 | | | | | | |
Loans: | | | | | | | | | |
Loans retained | 236,808 | | | 208,540 | | 14 | | | | | | |
Loans held-for-sale and loans at fair value | 1,155 | | | 2,147 | | (46) | | | | | | |
Total loans | $ | 237,963 | | | $ | 210,687 | | 13 | | | | | | |
| | | | | | | | | |
Average loans by client segment | | | | | | | | | |
Middle Market Banking | $ | 73,030 | | | $ | 62,437 | | 17 | | | | | | |
Corporate Client Banking | 56,581 | | | 45,595 | | 24 | | | | | | |
Commercial Real Estate Banking | 108,143 | | | 102,498 | | 6 | | | | | | |
Other | 209 | | | 157 | | 33 | | | | | | |
Total loans | $ | 237,963 | | | $ | 210,687 | | 13 | | | | | | |
| | | | | | | | | |
Client deposits and other third-party liabilities | $ | 265,971 | | | $ | 316,921 | | (16) | | | | | | |
Equity | 28,500 | | | 25,000 | | 14 | | | | | | |
| | | | | | | | | |
Headcount | 15,026 | | | 13,220 | | 14 | % | | | | | |
(a)At March 31, 2023 and 2022, total loans included $88 million and $640 million of loans, respectively, under the PPP, of which $80 million and $604 million were in Middle Market Banking, respectively. Refer to Credit Portfolio on pages 108-109 of JPMorgan Chase's 2022 Form 10-K for a further discussion of the PPP.
| Selected metrics (continued) | Selected metrics (continued) | | |
| As of or for the three months ended March 31, | |
Selected metrics (continued) | |
Selected metrics (continued) | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (in millions, except ratios) | 2023 | | 2022 | Change | |
Credit data and quality statistics | Credit data and quality statistics | | |
Credit data and quality statistics | |
Credit data and quality statistics | |
Net charge-offs/(recoveries) | |
Net charge-offs/(recoveries) | |
Net charge-offs/(recoveries) | Net charge-offs/(recoveries) | $ | 37 | | | $ | 6 | | NM | |
Nonperforming assets | Nonperforming assets | | |
Nonperforming assets | |
Nonperforming assets | |
Nonaccrual loans: | |
Nonaccrual loans: | |
Nonaccrual loans: | Nonaccrual loans: | | |
Nonaccrual loans retained(a) | Nonaccrual loans retained(a) | $ | 918 | | | $ | 751 | | 22 | % | |
Nonaccrual loans retained(a) | |
Nonaccrual loans retained(a) | |
Nonaccrual loans held-for-sale and loans at fair value | |
Nonaccrual loans held-for-sale and loans at fair value | |
Nonaccrual loans held-for-sale and loans at fair value | Nonaccrual loans held-for-sale and loans at fair value | — | | | — | | — | | |
Total nonaccrual loans | Total nonaccrual loans | $ | 918 | | | $ | 751 | | 22 | | |
Total nonaccrual loans | |
Total nonaccrual loans | |
Assets acquired in loan satisfactions | |
Assets acquired in loan satisfactions | |
Assets acquired in loan satisfactions | Assets acquired in loan satisfactions | — | | | 17 | | NM | |
Total nonperforming assets | Total nonperforming assets | $ | 918 | | | $ | 768 | | 20 | | |
Total nonperforming assets | |
Total nonperforming assets | |
Allowance for credit losses: | |
Allowance for credit losses: | |
Allowance for credit losses: | Allowance for credit losses: | | |
Allowance for loan losses | Allowance for loan losses | $ | 3,566 | | | $ | 2,357 | | 51 | | |
Allowance for loan losses | |
Allowance for loan losses | |
Allowance for lending-related commitments | |
Allowance for lending-related commitments | |
Allowance for lending-related commitments | Allowance for lending-related commitments | 966 | | | 762 | | 27 | | |
Total allowance for credit losses | Total allowance for credit losses | $ | 4,532 | | | $ | 3,119 | | 45 | % | |
Total allowance for credit losses | |
Total allowance for credit losses | |
Net charge-off/(recovery) rate(b) | |
Net charge-off/(recovery) rate(b) | |
Net charge-off/(recovery) rate(b) | Net charge-off/(recovery) rate(b) | 0.06 | | % | 0.01 | % | | |
Allowance for loan losses to period-end loans retained | Allowance for loan losses to period-end loans retained | 1.49 | | | 1.11 | | | |
Allowance for loan losses to period-end loans retained | |
Allowance for loan losses to period-end loans retained | |
Allowance for loan losses to nonaccrual loans retained(a) | |
Allowance for loan losses to nonaccrual loans retained(a) | |
Allowance for loan losses to nonaccrual loans retained(a) | Allowance for loan losses to nonaccrual loans retained(a) | 388 | | | 314 | | | |
Nonaccrual loans to period-end total loans | Nonaccrual loans to period-end total loans | 0.38 | | | 0.35 | | | |
Nonaccrual loans to period-end total loans | |
Nonaccrual loans to period-end total loans | |
(a)Allowance for loan losses of $170$249 million and $104$170 million was held against nonaccrual loans retained at March 31, 20232024 and 2022,2023, respectively.
(b)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.
(c)As of March 31, 2024, included a $732 million allowance for First Republic.
| | | | | | | | | | | | | | |
ASSET & WEALTH MANAGEMENT |
Refer to pages 76-7881–83 of JPMorgan Chase’s 20222023 Form 10-K and Line of Business Metrics on pages 175-176183-184 for a discussion of the business profile of AWM.
| Selected income statement data | |
Selected income statement data | |
Selected income statement data | Selected income statement data | |
(in millions, except ratios) | (in millions, except ratios) | Three months ended March 31, | |
2023 | 2022 | Change | |
(in millions, except ratios) | |
| 2024 | |
2024 | |
Revenue | |
Revenue | |
Revenue | Revenue | | |
Asset management fees | Asset management fees | $ | 2,761 | | $ | 2,899 | | (5) | % | |
Asset management fees | |
Asset management fees | |
Commissions and other fees | Commissions and other fees | 181 | | 216 | | (16) | | |
| Commissions and other fees | |
Commissions and other fees | |
All other income | |
All other income | |
All other income | All other income | 391 | | 124 | | 215 | | |
Noninterest revenue | Noninterest revenue | 3,333 | | 3,239 | | 3 | | |
Noninterest revenue | |
Noninterest revenue | |
Net interest income | Net interest income | 1,451 | | 1,076 | | 35 | | |
Net interest income | |
Net interest income | |
Total net revenue | |
Total net revenue | |
Total net revenue | Total net revenue | 4,784 | | 4,315 | | 11 | | |
| Provision for credit losses | Provision for credit losses | 28 | | 154 | | (82) | | |
| Provision for credit losses | |
| Provision for credit losses | |
| Noninterest expense | |
| Noninterest expense | |
| Noninterest expense | Noninterest expense | | |
Compensation expense | Compensation expense | 1,735 | | 1,530 | | 13 | | |
Compensation expense | |
Compensation expense | |
Noncompensation expense | Noncompensation expense | 1,356 | | 1,330 | | 2 | | |
Noncompensation expense | |
Noncompensation expense | |
Total noninterest expense | |
Total noninterest expense | |
Total noninterest expense | Total noninterest expense | 3,091 | | 2,860 | | 8 | | |
| Income before income tax expense | Income before income tax expense | 1,665 | | 1,301 | | 28 | | |
| Income before income tax expense | |
| Income before income tax expense | |
Income tax expense | Income tax expense | 298 | | 293 | | 2 | | |
Income tax expense | |
Income tax expense | |
Net income | |
Net income | |
Net income | Net income | $ | 1,367 | | $ | 1,008 | | 36 | | |
| Revenue by line of business | Revenue by line of business | | |
| Revenue by line of business | |
| Revenue by line of business | |
Asset Management | |
Asset Management | |
Asset Management | Asset Management | $ | 2,434 | | $ | 2,314 | | 5 | | |
Global Private Bank | Global Private Bank | 2,350 | | 2,001 | | 17 | | |
Global Private Bank | |
Global Private Bank | |
Total net revenue | |
Total net revenue | |
Total net revenue | Total net revenue | $ | 4,784 | | $ | 4,315 | | 11 | % | |
| Financial ratios | Financial ratios | | |
| Financial ratios | |
| Financial ratios | |
Return on equity | |
Return on equity | |
Return on equity | Return on equity | 34 | % | 23 | % | | |
Overhead ratio | Overhead ratio | 65 | | 66 | | | |
Overhead ratio | |
Overhead ratio | |
Pre-tax margin ratio: | |
Pre-tax margin ratio: | |
Pre-tax margin ratio: | Pre-tax margin ratio: | | |
Asset Management | Asset Management | 37 | | 33 | | | |
Asset Management | |
Asset Management | |
Global Private Bank | |
Global Private Bank | |
Global Private Bank | Global Private Bank | 33 | | 27 | | | |
Asset & Wealth Management | Asset & Wealth Management | 35 | | 30 | | | |
Asset & Wealth Management | |
Asset & Wealth Management | |
(a)Includes the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic. Refer to Note 5 for additional information.
(b)Includes First Republic. Refer to page 20 for additional information.
Quarterly results
Net income was $1.4$1.3 billion, up 36%down 6%.
Net revenue was $4.8$5.1 billion, up 11%7%. Net interest income was $1.5$1.6 billion, up 35%10%. Noninterest revenue was $3.3$3.5 billion, up 3%5%.
Revenue from Asset Management was $2.4$2.3 billion, down 4%. Excluding the gain of $339 million on CIFM in the prior year, revenue was up 5%11%, driven by:
•a gain of $339 million on the original minority interest in CIFM upon the Firm's acquisition of the remaining 51% interest in the entity,
partially offset by
•lower performance fees, and
•lowerhigher asset management fees reflecting a decline instrong net inflows and higher average market levels, predominantly offset by the removal of most money market fund fee waivers.levels.
Revenue from Global Private Bank was $2.4$2.8 billion, up 17%18%, driven by:
•deposit margin expansion reflecting higher ratesnoninterest revenue, largely driven by higher management fees on lowerstrong net inflows and higher average deposit balances,
partially offset by
•an investment valuation loss,market levels, and the amortization of the purchase discount on certain acquired lending-related commitments associated with First Republic, and
•tighterhigher net interest income, driven by higher average deposits and loans associated with First Republic, and from wider spreads on lower average loans.loans, largely offset by deposit margin compression reflecting higher rates paid.
The prior year included an investment valuation loss.
Noninterest expense was $3.1$3.5 billion, up 8%12%, predominantlylargely driven by by:
•higher compensation due to headcount growth, higher including:
–revenue-related compensation, continued growth in private banking advisor teams, and
–the impact of acquisitions.First Republic, and the acquisition of J.P. Morgan Asset Management China (formerly CIFM), as well as
•higher distribution fees.
The provision for credit losses was $28 million.a net benefit of $57 million, reflecting a net reduction in the allowance for credit losses.
The provision in the prior year was $28 million, reflecting a net addition to the allowance for credit losses.
Refer to Note 5 for additional information on lending related fees.
Refer to Credit and Investment Risk Management on pages 48-6652-70 and Allowance for Credit Losses on pages 63-6567-69 for further discussions of the credit portfolios and the allowance for credit losses.
| Selected metrics | Selected metrics | | | |
| As of or for the three months ended March 31, | |
(in millions, except ranking data, headcount and ratios) | 2023 | 2022 | Change | |
% of JPM mutual fund assets rated as 4- or 5-star(a) | 68 | % | 73 | % | | |
% of JPM mutual fund assets ranked in 1st or 2nd quartile:(b) | | |
Selected metrics | |
Selected metrics | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
(in millions, except ranking data, ratios and employees) | |
(in millions, except ranking data, ratios and employees) | |
(in millions, except ranking data, ratios and employees) | |
% of JPM mutual fund assets and ETFs rated as 4- or 5-star(a) | |
% of JPM mutual fund assets and ETFs rated as 4- or 5-star(a) | |
% of JPM mutual fund assets and ETFs rated as 4- or 5-star(a) | |
% of JPM mutual fund assets and ETFs ranked in 1st or 2nd quartile:(b) | |
% of JPM mutual fund assets and ETFs ranked in 1st or 2nd quartile:(b) | |
% of JPM mutual fund assets and ETFs ranked in 1st or 2nd quartile:(b) | |
1 year | |
1 year | |
1 year | 1 year | 64 | | 62 | | | |
3 years | 3 years | 65 | | 73 | | | |
3 years | |
3 years | |
5 years | |
5 years | |
5 years | 5 years | 77 | | 81 | | | |
| Selected balance sheet data (period-end)(c) | Selected balance sheet data (period-end)(c) | | |
| Selected balance sheet data (period-end)(c) | |
| Selected balance sheet data (period-end)(c) | |
Total assets | |
Total assets | |
Total assets | Total assets | $ | 232,516 | | $ | 233,070 | | — | % | |
Loans | Loans | 211,140 | | 215,130 | | (2) | | |
Loans | |
Loans | |
Deposits | Deposits | 225,831 | | 287,293 | | (21) | | |
Deposits | |
Deposits | |
Equity | |
Equity | |
Equity | Equity | 16,000 | | 17,000 | | (6) | | |
| Selected balance sheet data (average)(c) | Selected balance sheet data (average)(c) | | |
| Selected balance sheet data (average)(c) | |
| Selected balance sheet data (average)(c) | |
Total assets | |
Total assets | |
Total assets | Total assets | $ | 228,823 | | $ | 232,310 | | (2) | | |
Loans | Loans | 211,469 | | 214,611 | | (1) | | |
Loans | |
Loans | |
Deposits | |
Deposits | |
Deposits | Deposits | 224,354 | | 287,756 | | (22) | | |
Equity | Equity | 16,000 | | 17,000 | | (6) | | |
Equity | |
Equity | |
| Headcount | 26,773 | | 23,366 | | 15 | | |
Employees | |
| Employees | |
| Employees | |
| Number of Global Private Bank client advisors | |
| Number of Global Private Bank client advisors | |
| Number of Global Private Bank client advisors | Number of Global Private Bank client advisors | 3,189 | | 2,798 | | 14 | | |
| Credit data and quality statistics(c) | Credit data and quality statistics(c) | | |
| Credit data and quality statistics(c) | |
| Credit data and quality statistics(c) | |
Net charge-offs/(recoveries) | |
Net charge-offs/(recoveries) | |
Net charge-offs/(recoveries) | Net charge-offs/(recoveries) | $ | (2) | | $ | (1) | | (100) | |
Nonaccrual loans | Nonaccrual loans | 477 | | 626 | | (24) | |
Nonaccrual loans | |
Nonaccrual loans | |
Allowance for credit losses: | |
Allowance for credit losses: | |
Allowance for credit losses: | Allowance for credit losses: | | |
Allowance for loan losses | Allowance for loan losses | $ | 526 | | $ | 516 | | 2 | |
Allowance for loan losses | |
Allowance for loan losses | |
Allowance for lending-related commitments | |
Allowance for lending-related commitments | |
Allowance for lending-related commitments | Allowance for lending-related commitments | 19 | | 19 | | — | |
Total allowance for credit losses | Total allowance for credit losses | $ | 545 | | $ | 535 | | 2% | |
Total allowance for credit losses | |
Total allowance for credit losses | |
Net charge-off/(recovery) rate | |
Net charge-off/(recovery) rate | |
Net charge-off/(recovery) rate | Net charge-off/(recovery) rate | — | % | — | % | | |
Allowance for loan losses to period-end loans | Allowance for loan losses to period-end loans | 0.25 | | 0.24 | | | |
Allowance for loan losses to period-end loans | |
Allowance for loan losses to period-end loans | |
Allowance for loan losses to nonaccrual loans | |
Allowance for loan losses to nonaccrual loans | |
Allowance for loan losses to nonaccrual loans | Allowance for loan losses to nonaccrual loans | 110 | | 82 | | | |
Nonaccrual loans to period-end loans | Nonaccrual loans to period-end loans | 0.23 | | 0.29 | | | |
Nonaccrual loans to period-end loans | |
Nonaccrual loans to period-end loans | |
(a)Represents the Morningstar Rating for all domiciled funds except for Japan domiciled funds which use Nomura. Includes only Asset Management retail active open-ended mutual funds and active ETFs that have a rating. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds. Prior-period amounts have been revised to conform with the current presentation.
(b)Quartile ranking sourced from Morningstar, Lipper and Nomura based on country of domicile. Includes only Asset Management retail active open-ended mutual funds and active ETFs that are ranked by the aforementioned sources. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds. Prior-period amounts have been revised to conform with the current presentation.
(c)Loans, deposits and related credit data and quality statistics relate to the Global Private Bank business.
(d)Includes First Republic. Refer to page 20 for additional information.
(e)Included $10.7 billion associated with First Republic for the three months ended March 31, 2024.
(f)Included $12.6 billion associated with First Republic for the three months ended March 31, 2024.
(g)
Includes First Republic.
Client assets
Assets under management of $3.0were $3.6 trillion, were up 2%19%, while client assets of $4.3were $5.2 trillion, were up 6%20%, each driven by higher market levels and continued net inflows and the impact of the acquisition of Global Shares, partially offset by lower market levels.inflows.
| Client assets | Client assets | | |
| As of March 31, |
| As of March 31, | |
| As of March 31, | |
| As of March 31, | |
(in billions) | (in billions) | 2023 | | 2022 | Change | (in billions) | 2024 | | 2023 | Change |
Assets by asset class | Assets by asset class | |
Liquidity | |
Liquidity | |
Liquidity | Liquidity | $ | 761 | | | $ | 657 | | 16 | % | $ | 927 | | | $ | | $ | 761 | | 22 | 22 | % |
Fixed income | Fixed income | 682 | | | 657 | | 4 | |
Equity | Equity | 733 | | | 739 | | (1) | |
Multi-asset | Multi-asset | 627 | | | 699 | | (10) | |
Alternatives | Alternatives | 203 | | | 208 | | (2) | |
Total assets under management | Total assets under management | 3,006 | | | 2,960 | | 2 | |
Custody/brokerage/administration/deposits | Custody/brokerage/administration/deposits | 1,341 | | (b) | 1,156 | | 16 | |
Total client assets(a) | Total client assets(a) | $ | 4,347 | | | $ | 4,116 | | 6 | |
| Assets by client segment | Assets by client segment | |
Assets by client segment | |
Assets by client segment | |
Private Banking | |
Private Banking | |
Private Banking | Private Banking | $ | 826 | | | $ | 777 | | 6 | |
Global Institutional | Global Institutional | 1,347 | | | 1,355 | | (1) | |
Global Funds | Global Funds | 833 | | | 828 | | 1 | |
Total assets under management | Total assets under management | $ | 3,006 | | | $ | 2,960 | | 2 | |
| Private Banking | Private Banking | $ | 2,090 | | (b) | $ | 1,880 | | 11 | |
Private Banking | |
Private Banking | |
Global Institutional | Global Institutional | 1,417 | | | 1,402 | | 1 | |
Global Funds | Global Funds | 840 | | | 834 | | 1 | |
Total client assets(a) | Total client assets(a) | $ | 4,347 | | | $ | 4,116 | | 6 | % | Total client assets(a) | $ | 5,219 | | | $ | | $ | 4,347 | | 20 | 20 | % |
(a)Includes CCB client investment assets invested in managed accounts and J.P. Morgan mutual funds where AWM is the investment manager.
(b)Includes the impact of the acquisition of Global Shares.
| | | | | | | | | | | |
Client assets (continued) | | | | | |
| Three months ended March 31, | |
(in billions) | 2023 | 2022 | | | |
Assets under management rollforward | | | | | |
Beginning balance | $ | 2,766 | | $ | 3,113 | | | | |
Net asset flows: | | | | | |
Liquidity | 93 | | (52) | | | | |
Fixed income | 26 | | (3) | | | | |
Equity | 22 | | 11 | | | | |
Multi-asset | (2) | | 6 | | | | |
Alternatives | 1 | | 5 | | | | |
Market/performance/other impacts | 100 | | (120) | | | | |
Ending balance, March 31 | $ | 3,006 | | $ | 2,960 | | | | |
| | | | | |
Client assets rollforward | | | | | |
Beginning balance | $ | 4,048 | | $ | 4,295 | | | | |
Net asset flows | 152 | | (5) | | | | |
Market/performance/other impacts | 147 | | (174) | | | | |
Ending balance, March 31 | $ | 4,347 | | $ | 4,116 | | | | |
| | | | | | | | | | | |
Client assets (continued) | | | | | |
| Three months ended March 31, | |
(in billions) | 2024 | 2023 | | | |
Assets under management rollforward | | | | | |
Beginning balance | $ | 3,422 | | $ | 2,766 | | | | |
Net asset flows: | | | | | |
Liquidity | (4) | | 93 | | | | |
Fixed income | 14 | | 26 | | | | |
Equity | 21 | | 22 | | | | |
Multi-asset | (2) | | (2) | | | | |
Alternatives | 1 | | 1 | | | | |
Market/performance/other impacts | 112 | | 100 | | | | |
Ending balance, March 31 | $ | 3,564 | | $ | 3,006 | | | | |
| | | | | |
Client assets rollforward | | | | | |
Beginning balance | $ | 5,012 | | $ | 4,048 | | | | |
Net asset flows | 43 | | 152 | | | | |
Market/performance/other impacts | 164 | | 147 | | | | |
Ending balance, March 31 | $ | 5,219 | | $ | 4,347 | | | | |
| International | International | |
| Three months ended March 31, | |
International | |
International | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | Change | |
Total net revenue(a) | Total net revenue(a) | | |
Total net revenue(a) | |
Total net revenue(a) | |
Europe/Middle East/Africa | |
Europe/Middle East/Africa | |
Europe/Middle East/Africa | Europe/Middle East/Africa | $ | 847 | | $ | 770 | | 10 | % | |
Asia-Pacific | Asia-Pacific | 477 | | 460 | | 4 | | |
Asia-Pacific | |
Asia-Pacific | |
Latin America/Caribbean | |
Latin America/Caribbean | |
Latin America/Caribbean | Latin America/Caribbean | 240 | | 251 | | (4) | | |
Total international net revenue | Total international net revenue | 1,564 | | 1,481 | | 6 | | |
Total international net revenue | |
Total international net revenue | |
North America | |
North America | |
North America | North America | 3,220 | | 2,834 | | 14 | | |
Total net revenue(a) | Total net revenue(a) | $ | 4,784 | | $ | 4,315 | | 11 | % | |
Total net revenue(a) | |
Total net revenue(a) | |
(a)Regional revenue is based on the domicile of the client.
| | As of March 31, | |
| As of March 31, | |
| As of March 31, | |
| As of March 31, | |
(in billions) | |
(in billions) | |
(in billions) | (in billions) | 2023 | 2022 | Change | |
Assets under management | Assets under management | | |
Assets under management | |
Assets under management | |
Europe/Middle East/Africa | |
Europe/Middle East/Africa | |
Europe/Middle East/Africa | Europe/Middle East/Africa | $ | 515 | | $ | 532 | | (3) | % | |
Asia-Pacific | Asia-Pacific | 244 | | 237 | | 3 | | |
Asia-Pacific | |
Asia-Pacific | |
Latin America/Caribbean | |
Latin America/Caribbean | |
Latin America/Caribbean | Latin America/Caribbean | 74 | | 75 | | (1) | | |
Total international assets under management | Total international assets under management | 833 | | 844 | | (1) | | |
Total international assets under management | |
Total international assets under management | |
North America | North America | 2,173 | | 2,116 | | 3 | | |
North America | |
North America | |
Total assets under management | |
Total assets under management | |
Total assets under management | Total assets under management | $ | 3,006 | | $ | 2,960 | | 2 | | |
| Client assets | Client assets | | |
| Client assets | |
| Client assets | |
Europe/Middle East/Africa | |
Europe/Middle East/Africa | |
Europe/Middle East/Africa | Europe/Middle East/Africa | $ | 649 | | $ | 653 | | (1) | | |
Asia-Pacific | Asia-Pacific | 367 | | 354 | | 4 | | |
Asia-Pacific | |
Asia-Pacific | |
Latin America/Caribbean | |
Latin America/Caribbean | |
Latin America/Caribbean | Latin America/Caribbean | 204 | | 190 | | 7 | | |
Total international client assets | Total international client assets | 1,220 | | 1,197 | | 2 | | |
Total international client assets | |
Total international client assets | |
North America | |
North America | |
North America | North America | 3,127 | | 2,919 | | 7 | | |
Total client assets | Total client assets | $ | 4,347 | | $ | 4,116 | | 6 | % | |
Total client assets | |
Total client assets | |
Refer to pages 79-8084–85 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of Corporate.
| Selected income statement and balance sheet data | Selected income statement and balance sheet data | |
| As of or for the three months ended March 31, | |
(in millions, except headcount) | 2023 | | 2022 | | Change | |
Selected income statement and balance sheet data | |
Selected income statement and balance sheet data | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
(in millions, except employees) | |
(in millions, except employees) | |
(in millions, except employees) | |
Revenue | |
Revenue | |
Revenue | Revenue | | |
Principal transactions | Principal transactions | $ | 82 | | | $ | (161) | | | NM | |
Principal transactions | |
Principal transactions | |
Investment securities losses | |
Investment securities losses | |
Investment securities losses | Investment securities losses | (868) | | | (394) | | | (120) | % | |
All other income | All other income | 31 | | | 210 | | | (85) | | |
All other income | |
All other income | |
Noninterest revenue | |
Noninterest revenue | |
Noninterest revenue | Noninterest revenue | (755) | | | (345) | | | (119) | | |
Net interest income | Net interest income | 1,740 | | | (536) | | | NM | |
Net interest income | |
Net interest income | |
Total net revenue(a) | |
Total net revenue(a) | |
Total net revenue(a) | Total net revenue(a) | 985 | | | (881) | | | NM | |
Provision for credit losses | Provision for credit losses | 370 | | | 29 | | | NM | |
Provision for credit losses | |
Provision for credit losses | |
Noninterest expense | |
Noninterest expense | |
Noninterest expense | Noninterest expense | 160 | | | 184 | | | (13) | | |
Income/(loss) before income tax expense/(benefit) | Income/(loss) before income tax expense/(benefit) | 455 | | | (1,094) | | | NM | |
Income/(loss) before income tax expense/(benefit) | |
Income/(loss) before income tax expense/(benefit) | |
Income tax expense/(benefit) | |
Income tax expense/(benefit) | |
Income tax expense/(benefit) | Income tax expense/(benefit) | 211 | | | (238) | |
| | NM | |
Net income/(loss) | Net income/(loss) | $ | 244 | | | $ | (856) | |
| | NM | |
Net income/(loss) | |
Net income/(loss) | |
Total net revenue | |
Total net revenue | |
Total net revenue | Total net revenue | | | |
Treasury and CIO | Treasury and CIO | $ | 1,106 | | | $ | (944) | | | NM | |
Treasury and CIO | |
Treasury and CIO | |
Other Corporate | |
Other Corporate | |
Other Corporate | Other Corporate | (121) | | | 63 | | | NM | |
Total net revenue | Total net revenue | $ | 985 | | | $ | (881) | | | NM | |
Total net revenue | |
Total net revenue | |
Net income/(loss) | |
Net income/(loss) | |
Net income/(loss) | Net income/(loss) | | | |
Treasury and CIO | Treasury and CIO | $ | 624 | | | $ | (748) | | | NM | |
Treasury and CIO | |
Treasury and CIO | |
Other Corporate | |
Other Corporate | |
Other Corporate | Other Corporate | (380) | | | (108) | |
| | (252) | | |
Total net income/(loss) | Total net income/(loss) | $ | 244 | | | $ | (856) | |
| | NM | |
Total net income/(loss) | |
Total net income/(loss) | |
Total assets (period-end) | |
Total assets (period-end) | |
Total assets (period-end) | Total assets (period-end) | $ | 1,307,989 | | | $ | 1,539,844 | | | (15) | | |
Loans (period-end) | Loans (period-end) | 2,267 | | | 1,957 | | | 16 | | |
Loans (period-end) | |
Loans (period-end) | |
Deposits (period-end)(b) | Deposits (period-end)(b) | 19,458 | |
| 1,434 | | | NM | |
Headcount | 44,743 | | | 39,802 | | | 12 | % | |
Deposits (period-end)(b) | |
Deposits (period-end)(b) | |
Employees | |
Employees | |
Employees | |
(a)Included tax-equivalent adjustments, driven by tax-exempt income from municipal bonds, of $56$49 million and $58$56 million for the three months ended March 31, 20232024 and 2022,2023, respectively.
(b)Predominantly relates to the Firm's international consumer initiatives.
(c)Includes the impact of the First Republic acquisition. Refer to Note 5 and 26 for additional information.
(d)Includes the increase to the FDIC special assessment. Refer to Note 5 for additional information.
Quarterly results
Net income was $244$676 million, compared with a net loss of $856$244 million in the prior year.
Net revenue was $985 million, compared with a net loss of $881 million in the prior year, driven by higher net$2.2 billion, up 124%.
Net interest income was $2.5 billion, up 42%, due to the impact of balance sheet mix and higher rates.
Noninterest revenue was a loss of $755$275 million, compared with a loss of $345 million in the prior year, driven by:
•by higherlower net investment securities losses on sales of U.S. GSE, and government agency MBS and U.S. Treasuries associated withrepositioning the investment securities portfolio.
Noninterest expense of $1.3 billion was up $1.1 billion driven by:
•portfolio,the $725 million increase to the FDIC special assessment, and
•the absence of proceeds impact from an insurance settlement in the prior yearFirst Republic, largely integration and restructuring costs.
partially offset by
•higher net gainsRefer to Business Segment Results on certain legacy private equity investments, compared with net losses inpage 20 for additional information on First Republic and Note 5 for additional information on the prior year.
Noninterest expense of $160 million was down $24 million.FDIC special assessment.
The provision for credit losses was $27 million. The provision in the prior year was $370 million, reflecting an addition to the allowance for credit losses, including an allowance for credit lossesaddition associated with certain Other assets.
Refer to Note 9 for additional information on the investment securities portfolio, and Note 12 for additional information on the allowance for credit losses.
The change in the current period tax expense was driven by the level and mix of income and expenses subject to U.S. federal and state and local taxes that also impacted the Firm's tax reserves.
Other Corporate also reflects the Firm's international consumer growth initiatives, which includes Chase U.K., the Firm's digital retail bank in the U.K.; Nutmeg, a digital wealth manager in the U.K.; and a 40%an ownership stake in C6 Bank, a digital bank in Brazil.Bank.
Treasury and CIO overview
At March 31, 2023,2024, the average credit rating of the Treasury and CIO investment securities comprising the portfolio in the table below was AA+ (based upon external ratings where available and, where not available, based primarily upon internal risk ratings). Refer to Note 9 for further information on the Firm’s investment securities portfolio and internal risk ratings.
Refer to Liquidity Risk Management on pages 42-4744-51 for further information on liquidity and funding risk. Refer to Market Risk Management on pages 67-7271-76 for information on interest rate and foreign exchange risks.
| | | | | | | | | | | | | | | | | | | | | | |
Selected income statement and balance sheet data | | | | | |
| As of or for the three months ended March 31, | |
(in millions) | 2023 | | 2022 | | Change | | | | | |
Investment securities losses | $ | (868) | | | $ | (394) | | | (120) | % | | | | | |
Available-for-sale securities (average) | $ | 202,776 | | | $ | 304,314 | | | (33) | | | | | | |
Held-to-maturity securities (average)(a) | 417,350 | | | 364,814 | | | 14 | | | | | | |
Investment securities portfolio (average) | $ | 620,126 | | | $ | 669,128 | | | (7) | | | | | | |
Available-for-sale securities (period-end) | $ | 195,228 | | | $ | 310,909 | | | (37) | | | | | | |
Held-to-maturity securities (period-end)(a) | 412,827 | | | 366,585 | | | 13 | | | | | | |
Investment securities portfolio, net of allowance for credit losses (period-end)(b) | $ | 608,055 | | | $ | 677,494 | | | (10) | % | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
Selected income statement and balance sheet data | | | | | |
| As of or for the three months ended March 31, | |
(in millions) | 2024 | | 2023 | | Change | | | | | |
Investment securities losses | $ | (366) | | | $ | (868) | | | 58 | % | | | | | |
Available-for-sale securities (average) | $ | 222,943 | | | $ | 202,776 | | | 10 | | | | | | |
Held-to-maturity securities (average)(a) | 354,759 | | | 417,350 | | | (15) | | | | | | |
Investment securities portfolio (average) | $ | 577,702 | | | $ | 620,126 | | | (7) | | | | | | |
Available-for-sale securities (period-end) | $ | 233,770 | | (c) | $ | 195,228 | | | 20 | | | | | | |
Held-to-maturity securities (period-end)(a) | 334,527 | | | 412,827 | | | (19) | | | | | | |
Investment securities portfolio, net of allowance for credit losses (period-end)(b) | $ | 568,297 | | | $ | 608,055 | | | (7) | % | | | | | |
(a)Effective January 1, 2023, the Firm adopted new hedge accounting guidance. As permitted by the guidance the Firm elected to transfer $7.1 billion of HTM securities to AFS. During 2022, the Firm transferred $78.3 billion of investment securities from AFS to HTM for capital management purposes. Refer to Note 19 of this Form 10-Q and Note 91 of JPMorgan Chase’s 2023 Form 10-K for additional information on the new hedge accounting guidance.
(b)AtAs of March 31, 20232024 and 2022,2023, the allowance for credit losses on investment securities was $120 million and $61 million, and $41 million, respectively.
(c)As of March 31, 2024, included $20.1 billion of AFS securities associated with First Republic. Refer to Note 26 for additional information.
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 business, and the associated risks, in a manner that balances serving the interests of its clients, customers and investors, and protecting the safety and soundness of the Firm.
The Firm believes that effective risk management requires, among other things:
•Acceptance of responsibility, including identification and escalation of risks by all individuals within the Firm;
•Ownership of risk identification, assessment, data and management within each of the LOBs and Corporate; and
•A Firmwide risk governance and oversight structure.
The Firm follows a disciplined and balanced compensation framework with strong internal governance and independent oversight by the Board of Directors (the “Board”). The impact of risk and control issues is carefully considered in the Firm’s performance evaluation and incentive compensation processes.
Risk governance framework
The Firm’s risk governance framework involves understanding drivers of risks, types of risks, and impacts of risks.
Refer to pages 81-8486–89 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of Firmwide risk management governance and oversight.
Risk governance and oversight functions
The following sections of this Form 10-Q and the 20222023 Form 10-K discuss the risk governance and oversight functions in place to manage the risks inherent in the Firm’s business activities.
| Risk governance and oversight functions | Risk governance and oversight functions | Form 10-Q page reference | Form 10-K page reference | Risk governance and oversight functions | Form 10-Q page reference | Form 10-K page reference |
Strategic Risk | Strategic Risk | | 85 | Strategic Risk | | 90 |
Capital Risk | Capital Risk | 36–41 | 86-96 | Capital Risk | 38–43 | 91–101 |
Liquidity Risk | Liquidity Risk | 42-47 | 97-104 | Liquidity Risk | 44–51 | 102-109 |
Reputation Risk | Reputation Risk | | 105 | Reputation Risk | | 110 |
Consumer Credit Risk | Consumer Credit Risk | 50–53 | 110-115 | Consumer Credit Risk | 54–57 | 114-119 |
Wholesale Credit Risk | Wholesale Credit Risk | 54–62 | 116-126 | Wholesale Credit Risk | 58–66 | 120-130 |
Investment Portfolio Risk | Investment Portfolio Risk | 66 | 130 | Investment Portfolio Risk | 70 | 134 |
Market Risk | Market Risk | 67–72 | 131-138 | Market Risk | 71–76 | 135-143 |
Country Risk | Country Risk | 73 | 139-140 | Country Risk | 77 | 144-145 |
Climate Risk | Climate Risk | | 141 | Climate Risk | | 146 |
Operational Risk | Operational Risk | | 142-148 | Operational Risk | | 147-150 |
Compliance Risk | Compliance Risk | | 145 | Compliance Risk | | 151 |
Conduct Risk | Conduct Risk | | 146 | Conduct Risk | | 152 |
Legal Risk | Legal Risk | | 147 | Legal Risk | | 153 |
Estimations and Model Risk | Estimations and Model Risk | | 148 | Estimations and Model Risk | | 154 |
Capital risk is the risk that the Firm has an insufficient level or composition of capital to support the Firm’s business activities and associated risks during normal economic environments and under stressed conditions.
Refer to pages 86-9691-101 of JPMorgan Chase’s 20222023 Form 10-K, Note 21 of this Form 10-Q and the Firm’s Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website, for a further discussion of the Firm’s capital risk.
Basel III Overview
The capital rules under Basel III establish minimum capital ratios and overall capital adequacy standards for large and internationally active U.S. Bank Holding Companies (“BHCs”) 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. TwoUnder the rules currently in effect, two comprehensive approaches are prescribed for calculating RWA: a standardized approach (“Basel III Standardized”), and an advanced approach (“Basel III Advanced”).
For each of thethese risk-based capital ratios, the capital adequacy of the Firm is evaluated against the lower of the Standardized or Advanced approaches compared to their respective regulatory capital ratio requirements. The Firm’s
In July 2023, the Board of Governors of the Federal Reserve System (the "Federal Reserve"), the Office of the Comptroller of the Currency ("OCC"), and the FDIC released a proposal to amend the risk-based capital framework, entitled "Regulatory capital rule: Amendments applicable to large banking organizations and to banking organizations with significant trading activity", which is referred to in this Form 10-Q as the "U.S. Basel III proposal". Under the proposal, changes to the framework would include replacement of the Advanced approach with an expanded risk-based approach, which would not permit the use of internal models for the calculation of RWA, other than for market risk. In addition, the stress capital buffer requirement would be applicable to both the expanded risk-based approach and the Standardized approach. The proposal would significantly revise risk-based capital requirements for all banks with assets of $100 billion or more, including the Firm and other U.S. global systemically important banks ("GSIBs"). The proposed effective date is July 1, 2025, with a three-year transition period applicable to the expanded risk-based approach.
Under the requirements of the U.S. Basel III proposal, the new expanded risk-based approach, when fully phased-in, would be the Firm's binding constraint. The Firm is managing its CET1 capital in anticipation of the finalization of the U.S. Basel III proposal.
Refer to page 92 of JPMorgan Chase’s 2023 Form 10-K for additional information on the U.S. Basel III proposal.
As of March 31, 2024, the Advanced Total Capital ratio is the most binding constraint of the Firm's Basel III risk-based ratios. However, as of March 31, 2024, with respect to the CET1 and Tier 1 risk-based ratios, the Standardized ratios are currently more binding than the Basel III Advanced risk-based ratios.
Basel III also includes a requirement for Advanced Approaches banking organizations, including the Firm, to calculate its SLR. Refer to SLR on page 39 for additional information.
Key Regulatory Developments
CECL regulatory capital transition
Beginning January 1, 2022, the $2.9 billion CECL capital benefit, provided by the Federal Reserve in response to the COVID-19 pandemic, is being phased out at 25% per year over a three-year period. As of March 31, 2023, the Firm's CET1 capital reflected the remaining $1.4 billion benefit associated with the CECL capital transition provisions.
Additionally, effective January 1, 2023, the Firm phased out 50% of the other CECL capital transition provisions which impacted Tier 2 capital, adjusted average assets, total leverage exposure and RWA, as applicable.
Refer to Capital Risk Management on pages 86-96page 41 of this Form 10-Q and Note 1page 98 of JPMorgan Chase’s 2022Chase's 2023 Form 10-K for furtheradditional information on CECL capital transition provisions and the CECL accounting guidance.SLR.
Refer to page 93 of JPMorgan Chase's 2023 Form 10-K for information on Other Key Regulatory Developments.
Risk-based Capital Targets
The Firm’s current target for its Basel III Standardized CET1 capital ratio is 13.0%, which the Firm surpassed in both the fourth quarter of 2022 and the first quarter of 2023. With consideration for an increase in the global systemically important banks ("GSIB") surcharge in 2024, the Firm has maintained a target ratio of 13.5% for the first quarter of 2024, which assumes no change in the Stress Capital Buffer ("SCB"). The Firm’s quarterly capital ratios may vary from these targets dependent on market conditions. These targets are based on the Basel III capital rules currently in effect.
Selected capital and RWA data
The following tables present the Firm’s risk-based capital metrics under both the Basel III Standardized and Advanced approaches and leverage-based capital metrics. Refer to Capital Risk Management on pages 86-9691-101 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of these capital metrics. Refer to Note 21 for JPMorgan Chase Bank, N.A.’s risk-based and leverage-based capital metrics.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Standardized | | Advanced |
(in millions, except ratios) | March 31, 2023 | | December 31, 2022 | | Capital ratio requirements(b) | | March 31, 2023 | December 31, 2022 | | Capital ratio requirements(b) |
Risk-based capital metrics:(a) | | | | | | | | | | |
CET1 capital | $ | 227,144 | | | $ | 218,934 | | | | | $ | 227,144 | | $ | 218,934 | | | |
Tier 1 capital | 253,837 | | | 245,631 | | | | | 253,837 | | 245,631 | | | |
Total capital | 286,398 | | | 277,769 | | | | | 273,122 | | 264,583 | | | |
Risk-weighted assets | 1,647,363 | | | 1,653,538 | | | | | 1,633,774 | | 1,609,773 | | | |
CET1 capital ratio | 13.8 | % | | 13.2 | % | | 12.5 | % | | 13.9 | % | 13.6 | % | | 11.0 | % |
Tier 1 capital ratio | 15.4 | | | 14.9 | | | 14.0 | | | 15.5 | | 15.3 | | | 12.5 | |
Total capital ratio | 17.4 | | | 16.8 | | | 16.0 | | | 16.7 | | 16.4 | | | 14.5 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Standardized | | Advanced |
(in millions, except ratios) | March 31, 2024 | | December 31, 2023 | | Capital ratio requirements(b) | | March 31, 2024 | | December 31, 2023 | | Capital ratio requirements(b) |
Risk-based capital metrics:(a) | | | | | | | | | | | |
CET1 capital | $ | 257,569 | | | $ | 250,585 | | | | | $ | 257,569 | | | $ | 250,585 | | | |
Tier 1 capital | 280,771 | | | 277,306 | | | | | 280,771 | | | 277,306 | | | |
Total capital | 312,149 | | | 308,497 | | | | | 298,766 | | (c) | 295,417 | | (c) | |
Risk-weighted assets | 1,712,081 | | | 1,671,995 | | | | | 1,681,317 | | (c) | 1,669,156 | | (c) | |
CET1 capital ratio | 15.0 | % | | 15.0 | % | | 11.9 | % | | 15.3 | % | | 15.0 | % | | 11.5 | % |
Tier 1 capital ratio | 16.4 | | | 16.6 | | | 13.4 | | | 16.7 | | | 16.6 | | | 13.0 | |
Total capital ratio | 18.2 | | | 18.5 | | | 15.4 | | | 17.8 | | | 17.7 | | | 15.0 | |
(a)The capital metrics reflect the CECL capital transition provisions. As of March 31, 2024, CET1 capital reflected the remaining $720 million CECL benefit and will be fully phased in as of January 1, 2025; as of December 31, 2023, CET1 capital reflected a $1.4 billion benefit. Refer to Note 21 for additional information.
(b)Represents minimum requirements and regulatory buffers applicable to the Firm for the period ended March 31, 2023.2024. For the period ended December 31, 2022,2023, the Basel III Standardized CET1, Tier 1, and Total capital ratio requirements applicable to the Firm were 12.0%11.4%, 13.5%12.9%, and 15.5%14.9%, respectively; the Basel III Advanced CET1, Tier 1, and Total capital ratio requirements applicable to the Firm were 10.5%11.0%, 12.0%12.5%, and 14.0%14.5%, respectively. Refer to Note 21 for additional information.
| | | | | | | | | | | | | | |
Three months ended (in millions, except ratios) | March 31, 2023 | December 31, 2022 | | Capital ratio requirements(c) |
Leverage-based capital metrics:(a) | | | | |
Adjusted average assets(b) | $ | 3,656,598 | | $ | 3,703,873 | | | |
Tier 1 leverage ratio | 6.9 | % | 6.6 | % | | 4.0 | % |
Total leverage exposure | $ | 4,327,863 | | $ | 4,367,092 | | | |
SLR | 5.9 | % | 5.6 | % | | 5.0 | % |
(c)Includes the impacts of certain assets associated with First Republic to which the Standardized approach has been applied as permitted by the transition provisions in the U.S. capital rules. Refer to Note 26 of this Form 10-Q and page 96 of JPMorgan Chase’s 2023 Form 10-K for additional information on First Republic acquisition. | | | | | | | | | | | | | | |
Three months ended (in millions, except ratios) | March 31, 2024 | December 31, 2023 | | Capital ratio requirements(c) |
Leverage-based capital metrics:(a) | | | | |
Adjusted average assets(b) | $ | 3,913,677 | | $ | 3,831,200 | | | |
Tier 1 leverage ratio | 7.2 | % | 7.2 | % | | 4.0 | % |
Total leverage exposure | $ | 4,634,634 | | $ | 4,540,465 | | | |
SLR | 6.1 | % | 6.1 | % | | 5.0 | % |
(a)The capital metrics reflect the CECL capital transition provisions. Refer to Note 21 for additional information.
(b)Adjusted average assets, for purposes of calculating the leverage ratios, includes quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill, inclusive of estimated equity method goodwill, and other intangible assets.
(c)Represents minimum requirements and regulatory buffers applicable to the Firm. Refer to Note 21 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 March 31, 20232024 and December 31, 2022.2023.
| (in millions) | (in millions) | March 31, 2023 | | December 31, 2022 | (in millions) | March 31, 2024 | | December 31, 2023 |
Total stockholders’ equity | Total stockholders’ equity | $ | 303,082 | | | $ | 292,332 | |
Less: Preferred stock | Less: Preferred stock | 27,404 | | | 27,404 | |
Common stockholders’ equity | Common stockholders’ equity | 275,678 | | | 264,928 | |
Add: | Add: | | | |
Certain deferred tax liabilities(a) | Certain deferred tax liabilities(a) | 2,754 | | | 2,510 | |
Certain deferred tax liabilities(a) | |
Certain deferred tax liabilities(a) | |
Other CET1 capital adjustments(b) | Other CET1 capital adjustments(b) | 4,939 | | | 6,221 | |
Less: | Less: | | | |
Goodwill(c) | Goodwill(c) | 54,036 | | | 53,501 | |
Goodwill(c) | |
Goodwill(c) | |
Other intangible assets | Other intangible assets | 2,191 | | | 1,224 | |
| Standardized/Advanced CET1 capital | |
Standardized/Advanced CET1 capital | |
Standardized/Advanced CET1 capital | Standardized/Advanced CET1 capital | $ | 227,144 | | | $ | 218,934 | |
Add: Preferred stock | Add: Preferred stock | 27,404 | | | 27,404 | |
Less: Other Tier 1 adjustments | Less: Other Tier 1 adjustments | 711 | | | 707 | |
Standardized/Advanced Tier 1 capital | Standardized/Advanced Tier 1 capital | $ | 253,837 | | | $ | 245,631 | |
Long-term debt and other instruments qualifying as Tier 2 capital | Long-term debt and other instruments qualifying as Tier 2 capital | $ | 13,725 | | | $ | 13,569 | |
Qualifying allowance for credit losses(d) | Qualifying allowance for credit losses(d) | 19,616 | | | 19,353 | |
Other | Other | (780) | | | (784) | |
Standardized Tier 2 capital | Standardized Tier 2 capital | $ | 32,561 | | | $ | 32,138 | |
Standardized Total capital | Standardized Total capital | $ | 286,398 | | | $ | 277,769 | |
Adjustment in qualifying allowance for credit losses for Advanced Tier 2 capital(e) | (13,276) | | | (13,186) | |
Adjustment in qualifying allowance for credit losses for Advanced Tier 2 capital(e)(f) | |
Advanced Tier 2 capital | Advanced Tier 2 capital | $ | 19,285 | | | $ | 18,952 | |
Advanced Total capital | Advanced Total capital | $ | 273,122 | | | $ | 264,583 | |
(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 CET1 capital.
(b)As of March 31, 20232024 and December 31, 2022, includes2023, included a net benefit associated with cash flow hedges and debit valuation adjustments ("DVA") related to structured notes recorded in AOCI of $4.6$5.4 billion and $5.2$4.3 billion and the benefit from the CECL capital transition provisions of $1.4 billion$720 million and $2.2$1.4 billion, respectively.
(c)Goodwill deducted from capital includes goodwill associated with equity method investments in nonconsolidated financial institutions based on regulatory requirements. Refer to Principal investment risk on page 6670 for additional information.information on principal investment risk.
(d)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. Refer to Note 21 for additional information on the CECL capital transition.
(e)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.
(f)As of March 31, 2024 and December 31, 2023, included an incremental $634 million and $655 million allowance for credit losses, respectively, on certain assets associated with First Republic to which the Standardized approach has been applied, as permitted by the transition provisions in the U.S. capital rules.
(g)As of March 31, 2024, for capital purposes, included $6.0 billion of preferred stock for which notices of redemption were issued during the first quarter and which were redeemed in the second quarter. Refer to Note 17 for additional information.
Capital rollforward
The following table presents the changes in Basel III CET1 capital, Tier 1 capital and Tier 2 capital for the three months ended March 31, 2023.2024.
| | | | | | |
Three months ended March 31, (in millions) | 20232024 | |
Standardized/Advanced CET1 capital at December 31, 20222023 | $ | 218,934250,585 | | |
Net income applicable to common equity | 12,26613,022 | | |
Dividends declared on common stock | (2,963)(3,348) | | |
Net purchase of treasury stock | (2,036)(1,829) | | |
Changes in additional paid-in capital | 111 (225) | | |
Changes related to AOCI applicable to capital: | | |
Unrealized gains/(losses) on investment securities | 2,212141 | | |
Translation adjustments, net of hedges(a) | 197 (204) | | |
Fair value hedges | (21) | | |
Defined benefit pension and other postretirement employee benefit (“OPEB”) plans | (55)26 | | |
Changes related to other CET1 capital adjustments(b) | (1,501)(578) | | |
Change in Standardized/Advanced CET1 capital | 8,2106,984 | | |
Standardized/Advanced CET1 capital at March 31, 20232024 | $ | 227,144257,569 | | |
Standardized/Advanced Tier 1 capital at December 31, 20222023 | $ | 245,631277,306 | | |
Change in CET1 capital(b) | 8,2106,984 | | |
RedemptionsNet redemptions of noncumulative perpetual preferred stock(c)
| — (3,504) | | |
Other | (4)(15) | | |
Change in Standardized/Advanced Tier 1 capital | 8,2063,465 | | |
Standardized/Advanced Tier 1 capital at March 31, 20232024 | $ | 253,837280,771 | | |
Standardized Tier 2 capital at December 31, 20222023 | $ | 32,13831,191 | | |
Change in long-term debt and other instruments qualifying as Tier 2 | 156 (89) | | |
Change in qualifying allowance for credit losses(b) | 263430 | | |
Other | 4 (154) | | |
Change in Standardized Tier 2 capital | 423187 | | |
Standardized Tier 2 capital at March 31, 20232024 | $ | 32,56131,378 | | |
Standardized Total capital at March 31, 20232024 | $ | 286,398312,149 | | |
Advanced Tier 2 capital at December 31, 20222023 | $ | 18,95218,111 | | |
Change in long-term debt and other instruments qualifying as Tier 2 | 156 (89) | | |
Change in qualifying allowance for credit losses(b)(d) | 173127 | | |
Other | 4 (154) | | |
Change in Advanced Tier 2 capital | 333 (116) | | |
Advanced Tier 2 capital at March 31, 20232024 | $ | 19,28517,995 | | |
Advanced Total capital at March 31, 20232024 | $ | 273,122298,766 | | |
(a)Includes foreign currency translation adjustments and the impact of related derivatives.
(b)Includes the impact of the CECL capital transition provisions and the cumulative effect of changes in accounting principles. Refer to Note 1 for additional information on changes in accounting principles and Note 21 for additional information on the CECL capital transition.
(c)As of March 31, 2024, for capital purposes, included $6.0 billion of preferred stock for which notices of redemption were issued during the first quarter and which were redeemed in the second quarter. Refer to Note 17 for additional information.
(d)As of March 31, 2024 and December 31, 2023, included an incremental $634 million and $655 million allowance for credit losses, respectively, on certain assets associated with First Republic to which the Standardized approach has been applied, as permitted by the transition provisions in the U.S. capital rules.
RWA rollforward
The following table presents changes in the components of RWA under Basel III Standardized and Advanced approaches for the three months ended March 31, 2023.2024. The amounts in the rollforward categories are estimates, based on the predominant driver of the change.
| | Standardized | | Advanced |
Three months ended March 31, 2023 (in millions) | Credit risk RWA(c) | Market risk RWA | Total RWA | | Credit risk RWA(c) | Market risk RWA | Operational risk RWA | Total RWA |
December 31, 2022 | $ | 1,568,536 | | $ | 85,002 | | $ | 1,653,538 | | | $ | 1,078,076 | | $ | 85,432 | | $ | 446,265 | | $ | 1,609,773 | |
| Standardized | | | Standardized | | Advanced |
Three months ended March 31, 2024 (in millions) | | Three months ended March 31, 2024 (in millions) | Credit risk RWA(c) | Market risk RWA | Total RWA | | Credit risk RWA(c)(d) | Market risk RWA | Operational risk RWA | Total RWA |
December 31, 2023 | |
Model & data changes(a) | Model & data changes(a) | (5,120) | | (839) | | (5,959) | | | (1,555) | | (839) | | — | | (2,394) | |
Movement in portfolio levels(b) | Movement in portfolio levels(b) | 3,166 | | (3,382) | | (216) | | | 28,636 | | (3,580) | | 1,339 | | 26,395 | |
Changes in RWA | Changes in RWA | (1,954) | | (4,221) | | (6,175) | | | 27,081 | | (4,419) | | 1,339 | | 24,001 | |
March 31, 2023 | $ | 1,566,582 | | $ | 80,781 | | $ | 1,647,363 | | | $ | 1,105,157 | | $ | 81,013 | | $ | 447,604 | | $ | 1,633,774 | |
March 31, 2024 | |
(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)Movement in portfolio levels (inclusive of rule changes) refers to: for Credit risk RWA, changes in book size, impacts associated with the First Republic acquisition, including position rolloffs in legacy portfolios in Home Lending,the benefit of the shared-loss agreements entered into with the FDIC, changes in composition and credit quality, market movements, and deductions for excess eligible allowances for credit reserveslosses not eligible for inclusion in Tier 2 capital; for Market risk RWA, changes in position, market movements, and changes in the Firm’s regulatory multiplier from Regulatory VaR backtesting exceptions; and for Operational risk RWA, updates to cumulative losses and macroeconomic model inputs.
(c)As of March 31, 20232024 and December 31, 2022,2023, the Basel III Standardized Credit risk RWA included wholesale and retail off balance-sheet RWA of $208.7$205.9 billion and $210.1$208.5 billion, respectively; and the Basel III Advanced Credit risk RWA included wholesale and retail off balance-sheet RWA of $184.6$187.8 billion and $180.8$188.5 billion, respectively.
(d)As of March 31, 2024 and December 31, 2023, Credit risk RWA reflected approximately $50.7 billion and $52.4 billion, respectively, of RWA calculated under the Standardized approach for certain assets associated with First Republic as permitted by the transition provisions in the U.S. capital rules.
Refer to the Firm’s Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website, for further information on Credit risk RWA, Market risk RWA and Operational risk RWA.
Supplementary leverage ratio
Refer to Supplementary Leverage Ratio on page 9398 of JPMorgan Chase’s 20222023 Form 10-K for additional information.
The following table presents the components of the Firm’s SLR.
| Three months ended (in millions, except ratio) | Three months ended (in millions, except ratio) | March 31, 2023 | December 31, 2022 | |
Three months ended (in millions, except ratio) | |
Three months ended (in millions, except ratio) | |
Tier 1 capital | |
Tier 1 capital | |
Tier 1 capital | Tier 1 capital | $ | 253,837 | | $ | 245,631 | | |
Total average assets | Total average assets | 3,709,977 | | 3,755,271 | | |
Total average assets | |
Total average assets | |
Less: Regulatory capital adjustments(a) | |
Less: Regulatory capital adjustments(a) | |
Less: Regulatory capital adjustments(a) | Less: Regulatory capital adjustments(a) | 53,379 | | 51,398 | | |
Total adjusted average assets(b) | Total adjusted average assets(b) | 3,656,598 | | 3,703,873 | | |
Total adjusted average assets(b) | |
Total adjusted average assets(b) | |
Add: Off-balance sheet exposures(c) | |
Add: Off-balance sheet exposures(c) | |
Add: Off-balance sheet exposures(c) | Add: Off-balance sheet exposures(c) | 671,265 | | 663,219 | | |
Total leverage exposure | Total leverage exposure | $ | 4,327,863 | | $ | 4,367,092 | | |
Total leverage exposure | |
Total leverage exposure | |
SLR | SLR | 5.9 | % | 5.6 | % | |
SLR | |
SLR | |
(a)For purposes of calculating the SLR, includes quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill, inclusive of estimated equity method goodwill, other intangible assets and adjustments for the CECL capital transition provisions. Refer to Note 21 for additional information on the CECL capital transition.
(b)Adjusted average assets used for the calculation of Tier 1 leverage ratio.
(c)Off-balance sheet exposures are calculated as the average of the three month-end spot balances on applicable regulatory exposures during the reporting quarter. Refer to the Firm’s Pillar 3 Regulatory Capital Disclosures reports for additional information.
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. The capital that the Firm has accumulated to meet the increased requirements of the U.S. Basel III proposal has generally been retained in Corporate. Refer to line of business equity on page 9398 of JPMorgan Chase’s 20222023 Form 10-K for additional information on capital allocation.
The following table presents the capital allocated to each business segment.
| Line of business equity (Allocated capital) | |
Line of business equity (Allocated capital) | |
Line of business equity (Allocated capital) | (in billions) | (in billions) | March 31, 2023 | | December 31, 2022 | (in billions) | March 31, 2024 | | | December 31, 2023 |
Consumer & Community Banking | Consumer & Community Banking | $ | 52.0 | | | $ | 50.0 | |
Corporate & Investment Bank | Corporate & Investment Bank | 108.0 | | | 103.0 | |
Commercial Banking | Commercial Banking | 28.5 | | | 25.0 | |
Asset & Wealth Management | Asset & Wealth Management | 16.0 | | | 17.0 | |
Corporate | Corporate | 71.2 | | | 69.9 | |
Total common stockholders’ equity | Total common stockholders’ equity | $ | 275.7 | | | $ | 264.9 | |
Capital actions
Common stock dividends
The Firm’s common stock dividends are planned as part of the Capital Management governance framework in line with the Firm’s capital management objectives.
On March 19, 2024, the Firm announced that its Board of Directors had declared a quarterly common stock dividend is currently $1.00of $1.15 per share, payable on April 30, 2024, an increase from the prior dividend of $1.05 per share. The Firm’s dividends are subject to approval by the Board of Directors on a quarterly basis.
Common stock
The Firm is authorized to purchase up to $30 billion under its common share repurchase program previously approved by the Board of Directors.
The following table sets forth the Firm’s repurchases of common stock for the three months ended March 31, 20232024 and 2022.2023.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | |
Total number of shares of common stock repurchased | Total number of shares of common stock repurchased | 22.0 | | 18.1 | | |
Aggregate purchase price of common stock repurchases | $ | 2,940 | | $ | 2,500 | | |
Total number of shares of common stock repurchased | |
Total number of shares of common stock repurchased | |
Aggregate purchase price of common stock repurchases(a) | |
Aggregate purchase price of common stock repurchases(a) | |
Aggregate purchase price of common stock repurchases(a) | |
(a)Excludes excise tax and commissions. As part of the Inflation Reduction Act of 2022, a 1% excise tax was imposed on net share repurchases effective January 1, 2023.
The Board of Directors’ authorization to repurchase common shares is utilized at management’s discretion. The $30 billion common share repurchase program approved by the Board does not establish specific price targets or timetables. Management determines the amount and timing of common share repurchases based on various factors, including market conditions; legal and regulatory considerations affecting the amount and timing of repurchase activity; the Firm’s capital position (taking into account goodwill and intangibles); internal capital generation; current and proposed future capital requirements; and other investment opportunities. The amount of common shares that the Firm repurchases in any period may be substantially more or less than the amounts estimated or actually repurchased in prior periods, reflecting the dynamic nature of the decision-making process.
Refer to Capital actions on page 9499 of JPMorgan Chase’s 20222023 Form 10-K for additional information.
Refer to Part II, Item 2: Unregistered Sales of Equity Securities and Use of Proceeds and Part II, Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities on pages 177-178185-186 of this Form 10-Q and page 3435 of JPMorgan Chase’s 20222023 Form 10-K, respectively, for additional information regarding repurchases of the Firm’s equity securities.
Preferred stock
Preferred stock dividends declared were $356$397 million and $397$356 million for the three months ended March 31, 20232024 and 2022,2023, respectively.
Refer to Note 17 of this Form 10-Q and Note 21 of JPMorgan Chase’s 20222023 Form 10-K for additional information on the Firm’s preferred stock, including the issuance and redemption of preferred stock.
Subordinated Debt
Refer to Long-term funding and issuance on page 4650 of this Form 10-Q and Note 20 of JPMorgan Chase’s 20222023 Form 10-K for additional information on the Firm’s subordinated debt.
Capital planning and stress testing
Comprehensive Capital Analysis and Review
On April 5, 2023,2024, the Firm submitted its 20232024 Capital Plan to the Federal Reserve under the Federal Reserve’sReserve's Comprehensive Capital Analysis and Review ("CCAR") process. The Firm anticipates that the Federal Reserve will disclose summary information regarding the Firm’sFirm's stress test results by June 30, 2023.2024. Following the Federal Reserve's disclosure, the Firm expects to disclose its indicative SCB requirement, which will become effective October 1, 2023.2024. The Firm's SCB is currently 4.0%2.9%.
Refer to Capital planning and stress testing on pages 86-8791-92 of JPMorgan Chase’s 20222023 Form 10-K for additional information on CCAR.
Other capital requirements
Total Loss-Absorbing Capacity
The Federal Reserve’s TLACtotal loss-absorbing capacity ("TLAC") rule requires the U.S. GSIB top-tier holding companies, including the Firm, to maintain minimum levels of external TLAC and eligible long-term debt (“("eligible LTD”LTD").
The following table presents the eligible external TLAC and eligible LTD amounts, as well as a representation of these amounts as a percentage of the Firm’s total RWA and total leverage exposure applying the impact of the CECL capital transition provisions as of March 31, 20232024 and December 31, 2022.2023.
| | March 31, 2023 | December 31, 2022 |
| March 31, 2024 | | | March 31, 2024 | December 31, 2023 |
(in billions, except ratio) | (in billions, except ratio) | External TLAC | LTD | External TLAC | LTD | (in billions, except ratio) | External TLAC | LTD | External TLAC | LTD |
Total eligible amount | Total eligible amount | $ | 488.2 | | $ | 222.1 | | $ | 486.0 | | $ | 228.5 | |
% of RWA | % of RWA | 29.6 | % | 13.5 | % | 29.4 | % | 13.8 | % | % of RWA | 30.4 | % | 13.2 | % | 30.7 | % | 13.3 | % |
Regulatory requirements | Regulatory requirements | 23.0 | | 10.0 | | 22.5 | | 9.5 | |
Surplus/(shortfall) | Surplus/(shortfall) | $ | 109.4 | | $ | 57.4 | | $ | 114.0 | | $ | 71.4 | |
% of total leverage exposure | % of total leverage exposure | 11.3 | % | 5.1 | % | 11.1 | % | 5.2 | % | % of total leverage exposure | 11.2 | % | 4.9 | % | 11.3 | % | 4.9 | % |
Regulatory requirements | Regulatory requirements | 9.5 | | 4.5 | | 9.5 | | 4.5 | |
Surplus/(shortfall) | Surplus/(shortfall) | $ | 77.1 | | $ | 27.4 | | $ | 71.2 | | $ | 32.0 | |
Effective January 1, 2023,2024, the Firm's regulatory requirementsrequirement for TLAC to RWA andits eligible LTD to RWA ratiosratio increased by 50 bps to 23.0% and 10.0%10.5%, respectively, due to the increase in the Firm’s GSIB Method 2 requirements. The Firm's regulatory requirement for its TLAC to RWA ratio remained at 23.0%. Refer to Risk-based Capital Regulatory Requirements on pages 89-9094-95 of JPMorgan Chase’s 20222023 Form 10-K for further information on the GSIB surcharge.
Refer to Liquidity Risk Management on pages 42-4744-51 for further information on long-term debt issued by the Parent Company.
Refer to Part I, Item 1A: Risk Factors on pages 9-329-33 of JPMorgan Chase’s 20222023 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 other capital requirements on page 95100 of JPMorgan Chase’s 20222023 Form 10-K for additional information on TLAC.
U.S. 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 the regulatory capital requirements of 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 is subject to regulatory capital requirements, including those imposed by the SEC, the Commodity Futures Trading Commission (“CFTC”), the Financial Industry Regulatory Authority (“FINRA”) and the National Futures Association (“NFA”).
The following table presents J.P. Morgan Securities’ net capital:capital.
| March 31, 2023 | |
March 31, 2024 | |
(in millions) | |
(in millions) | |
(in millions) | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Actual | Minimum | Actual | Minimum |
Net Capital | Net Capital | $ | 24,528 | | $ | 5,675 | |
Non-U.S. subsidiary regulatory capital
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 in the U.K. by the Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”). J.P. Morgan Securities plc is subject to the European Union (“EU”) Capital Requirements Regulation (“CRR”), as adopted in the U.K., and the PRA capital rules, each of which have implemented Basel III and thereby subject J.P. Morgan Securities plc to its requirements.
The Bank of England requires that U.K. banks, including U.K. regulated subsidiaries of overseas groups, maintain minimum requirements for own funds and eligible liabilities (“MREL”). As of March 31, 2023,2024, J.P. Morgan Securities plc was compliant with its MREL requirements.
Effective January 1, 2023, J.P. Morgan Securities plc was required to meet the minimum leverage capital requirement established by the PRA of 3.25%, plus regulatory buffers.
The following table presents J.P. Morgan Securities plc’s risk-based and leverage-based capital metrics:
| March 31, 2023 | | Regulatory Minimum ratios(a) | |
March 31, 2024 | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (in millions, except ratios) | Estimated | Regulatory Minimum ratios(a) | |
Total capital | Total capital | $ | 56,532 | |
Total capital | |
Total capital | |
CET1 capital ratio | |
CET1 capital ratio | |
CET1 capital ratio | CET1 capital ratio | 17.9 | % | 4.5 | % | | 16.4 | | % | % | 4.5 | | % | % |
Tier 1 capital ratio | Tier 1 capital ratio | 23.0 | | 6.0 | | |
Total capital ratio | Total capital ratio | 29.2 | | 8.0 | | |
Total capital ratio | |
Total capital ratio | |
| Tier 1 leverage ratio | Tier 1 leverage ratio | 7.1 | | 3.3 | | (b) |
| Tier 1 leverage ratio | |
| Tier 1 leverage ratio | | 6.6 | | | 3.3 | | (b) |
(a)Represents minimum Pillar 1 requirements specified by the PRA. J.P. Morgan Securities plc's capital ratios as of March 31, 20232024 exceeded the minimum requirements, including the additional capital requirements specified by the PRA.
(b)At least 75% of the Tier 1 leverage ratio minimum must be met with CET1 capital.
J.P. Morgan SE
JPMSE is a wholly-owned subsidiary of JPMorgan Chase Bank, N.A. and has authority to engage in banking, investment banking and markets activities. JPMSE is regulated by the European Central Bank as well as the local regulators in each of the countries in which it operates, and it is subject to EU capital requirements under Basel III.
JPMSE is required by the EU Single Resolution Board to maintain MREL. As of March 31, 2023,2024, JPMSE was compliant with its MREL requirements.
The following table presents JPMSE’s risk-based and leverage-based capital metrics:metrics.
| March 31, 2023 | | Regulatory Minimum ratios(a) |
March 31, 2024 | | March 31, 2024 | | Regulatory Minimum ratios(a) |
(in millions, except ratios) | (in millions, except ratios) | Estimated | Regulatory Minimum ratios(a) | (in millions, except ratios) | Estimated |
Total capital | Total capital | $ | 39,572 | |
CET1 capital ratio | |
CET1 capital ratio | |
CET1 capital ratio | CET1 capital ratio | 18.8 | % | 4.5 | % | 19.1 | % | 4.5 | % |
Tier 1 capital ratio | Tier 1 capital ratio | 18.8 | | 6.0 | |
Total capital ratio | Total capital ratio | 32.2 | | 8.0 | |
Tier 1 leverage ratio | Tier 1 leverage ratio | 5.2 | | 3.0 | |
(a)Represents minimum Pillar 1 requirements specified by the EU CRR. J.P. Morgan SE’s capital and leverage ratios as of March 31, 20232024 exceeded the minimum requirements, including the additional capital requirements specified by the European Banking Authority.EU regulators.
Refer to U.S. broker-dealer and Non-U.S. subsidiary regulatory capital on page 96101 of JPMorgan Chase’s 20222023 Form 10-K for further information.
| | | | | | | | | | | | | | |
LIQUIDITY RISK MANAGEMENT |
Liquidity risk is the risk that the Firm will be unable to meet its contractualcash and contingent financial obligationscollateral needs as they arise or that it does not have the appropriate amount, composition and tenor of funding and liquidity to support its assets and liabilities. Refer to pages 97-104102–109 of JPMorgan Chase’s 20222023 Form 10-K and the Firm’s U.S. LCR Disclosure reports, which are available on the Firm’s website, for a further discussion of the Firm’s liquidity risk.
LCR and HQLA
The LCR rule requires that the Firm and JPMorgan Chase Bank, N.A. maintain an amount of eligible HQLA that is sufficient to meet their respective estimated total net cash outflows over a prospective 30 calendar-day period of significant stress.
Under the LCR rule, the amount of eligible HQLA held by JPMorgan Chase Bank, N.A. that is in excess of its stand-alone 100% minimum LCR requirement, and that is not transferable to non-bank affiliates, must be excluded from the Firm’s reported eligible HQLA. The LCR for both the Firm and JPMorgan Chase Bank, N.A. is required to be a minimum of 100%.
The following table summarizes the Firm and JPMorgan Chase Bank, N.A.’s average LCR for the three months ended March 31, 2023,2024, December 31, 20222023 and March 31, 20222023 based on the Firm’s interpretation of the LCR framework.
| | Three months ended |
| Three months ended | | | Three months ended |
Average amount (in millions) | Average amount (in millions) | March 31, 2023 | December 31, 2022 | March 31, 2022 | Average amount (in millions) | March 31, 2024 | December 31, 2023 | March 31, 2023 |
JPMorgan Chase & Co.: | JPMorgan Chase & Co.: | |
HQLA | HQLA | |
HQLA | |
HQLA | |
Eligible cash(a) | |
Eligible cash(a) | |
Eligible cash(a) | Eligible cash(a) | $ | 453,287 | | $ | 542,847 | | $ | 680,003 | |
Eligible securities(b)(c) | Eligible securities(b)(c) | 278,223 | | 190,201 | | 42,512 | |
Total HQLA(d)(e) | $ | 731,510 | | $ | 733,048 | | $ | 722,515 | |
Total HQLA(d) | |
Net cash outflows | Net cash outflows | $ | 642,650 | | $ | 652,580 | | $ | 658,998 | |
LCR | LCR | 114 | % | 112 | % | 110 | % | LCR | 112 | % | 113 | % | 114 | % |
Net excess eligible HQLA(d) | Net excess eligible HQLA(d) | $ | 88,860 | | $ | 80,468 | | $ | 63,517 | |
JPMorgan Chase Bank N.A.: | JPMorgan Chase Bank N.A.: | |
LCR | LCR | 140 | % | 151 | % | 181 | % |
LCR | |
LCR | | 129 | % | 129 | % | 140 | % |
Net excess eligible HQLA | Net excess eligible HQLA | $ | 278,651 | | $ | 356,733 | | $ | 560,987 | |
(a)Represents cash on deposit at central banks, primarily the Federal Reserve Banks.
(b)Predominantly U.S. Treasuries, U.S. GSE and government agency MBS, and sovereign bonds net of applicable haircuts under the LCR rule.
(c)Eligible HQLA securities may be reported in securities borrowed or purchased under resale agreements, trading assets, or investment securities on the Firm’s Consolidated balance sheets. For purposes of calculating the LCR, HQLA securities are included at fair value, which may differ from the accounting treatment under U.S. GAAP.
(c)Predominantly U.S. Treasuries, U.S. GSE and government agency MBS, and sovereign bonds net of regulatory haircuts under the LCR rule.
(d)Excludes average excess eligible HQLA at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates.
(e)
End of period HQLA balances were $758.9 billion, $735.5 billion, and $735.8 billion for March 31, 2023, December 31, 2022 and March 31, 2022, respectively.
The Firm’s average LCR increased during the three months ended March 31, 2023, compared with the three months period ended December 31, 2022, primarily due to a return of funds from JPMorgan Chase Bank, N.A. as a result of a dividend payment to the Parent Company.
The Firm's average LCR increased during the three months ended March 31, 2023, compared with the prior year period largely driven by an increase in HQLA from long-term debt issuances.
JPMorgan Chase Bank, N.A.'s average LCR decreased during the three months ended March 31, 2023, compared with the three months ended December 31, 2022 reflecting a decrease in JPMorgan Chase Bank, N.A.’s HQLA, primarily due to a reduction in cash associated with a decline in average deposits, a dividend payment to the Parent Company, and higher average loans.
JPMorgan Chase Bank, N.A.’s average LCR for the three months ended March 31, 20232024 decreased when compared with the same periodthree months ended March 31, 2023, predominantly driven by the impact of First Republic, primarily due to the increase in loans, largely offset by the prior year, reflecting a decrease in JPMorgan Chaseaddition of the Purchase Money Note and Federal Home Loan Bank N.A.’s HQLA as a result of a reduction in cash from a decline in deposits and loan growth, as well as lower market values of HQLA-eligible investment securities. ("FHLB") advances.
Refer to Note 926 for additional information on the Firm's investment securities portfolio.First Republic acquisition.
Each of the Firm and JPMorgan Chase Bank, N.A.'s average LCR fluctuatesmay fluctuate from period to period due to changes in their respective eligible HQLA and estimated net cash outflows as a result of ongoing business activity.activity and from the impacts of Federal Reserve actions as well as other factors.
Refer to page 98103 of JPMorgan Chase’s 20222023 Form 10-K and the Firm’s U.S. LCR Disclosure reports for additional information on HQLA and net cash outflows.
Internal stress testing
The Firm conducts internal liquidity stress testing that is intended to ensure that the Firm and its material legal entities have sufficient liquidity under a variety of adverse scenarios, including scenarios analyzed as part of the Firm’s resolution and recovery planning. Internal Stress scenariosstress tests are produced on a regular basis, and other stress tests are performed in response to specific market events or concerns. Results of stress tests are considered in the formulation of the Firm’s funding plan and assessment of its liquidity position.
The Firm maintains liquidity at the Parent Company, the IHC,Intermediate Holding Company (“IHC”), and operating subsidiaries at levels sufficient to comply with liquidity risk tolerances and minimum liquidity requirements, and to manage through periods of stress when access to normal funding sources may be disrupted.
Liquidity sources
In addition to the assets reported in the Firm’s eligible HQLA discussed above, the Firm had unencumbered marketable securities, such as equity and debt securities, that the Firm believes would be available to raise liquidity. This includes excess eligible HQLA securities at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates. The fair value of these securities was approximately $700$673 billion and $694$649 billion as of March 31, 20232024 and December 31, 2022,2023, respectively, although the amount of liquidity that could be raised at any particular time would be dependent on prevailing market conditions.
The increase compared to December 31, 2023, was driven by an increase in CIB trading assets, largely offset by a decrease in excess eligible HQLA securities at JPMorgan Chase Bank, N.A.42As of March 31, 2024 and December 31, 2023, the Firm had approximately $1.5 trillion and $1.4 trillion of available cash and securities, respectively, comprised of eligible end-of-period HQLA, excluding the impact of regulatory haircuts of approximately $823 billion and $798 billion, respectively, and unencumbered marketable securities with a fair value of approximately $673 billion and $649 billion, respectively.
The Firm also had available borrowing capacity at the Federal Home Loan Banks (“FHLBs”)FHLB and the discount window at the Federal Reserve Banks as a result of collateral pledged by the Firm to such banks of approximately $330$352 billion and $323$340 billion as of March 31, 20232024 and December 31, 2022,2023, respectively. This borrowing capacity excludes the benefit of cash and securities reported in the Firm’s eligible HQLA or other unencumbered securities that are currently pledged at the Federal Reserve Banks discount window and other central banks. Available borrowing capacity increased from December 31, 2023 primarily due to a higher amount of wholesale loans pledged at the Federal Reserve Banks. Although available, the Firm does not view this borrowing capacity at the Federal Reserve Banks discount window and the other central banks as a primary source of liquidity.
NSFR
The net stable funding ratio (“NSFR”) is a liquidity requirement for large banking organizations that is intended to measure the adequacy of “available” stable funding that is sufficient to meet their “required” amounts of stable funding over a one-year horizon.
As ofFor the three months ended March 31, 2023,2024, both the Firm and JPMorgan Chase Bank, N.A. were compliant with the 100% minimum NSFR requirement, based on the Firm's current interpretation of the final rule. The Firm will be requiredRefer to publicly disclose its quarterly averagethe Firm's U.S. NSFR semiannually beginning inDisclosure report covering December 31, 2023 and September 30, 2023 on the second half of 2023.Firm’s website for additional information.
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, which includes both short- and long-term cash requirements.
The Firm funds its global balance sheet through diverse sources of funding including stable deposits, secured and unsecured funding in the capital markets and stockholders’ equity. Deposits are the primary funding source for JPMorgan Chase Bank, N.A. Additionally, JPMorgan Chase Bank, N.A. may access funding through short- or long-term secured borrowings, through the issuance of unsecured long-term
debt, or from borrowings from the Intermediate Holding Company (“IHC”).IHC. The Firm’s non-bank subsidiaries are primarily funded from long-term unsecured borrowings and short-term secured borrowings which are 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.
Refer to Note 22 for additional information on off-balance sheet obligations.
Deposits
The table below summarizes, by LOB and Corporate, the period-end deposit balances as of March 31, 2023,2024 and December 31, 2022,2023, and the average deposit balances for the three months ended March 31, 20232024 and 2022,2023, respectively.
| | March 31, 2023 | December 31, 2022 | | Three months ended March 31, | |
Deposits | | Average | |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | |
| | | Three months ended March 31, | |
| | | Three months ended March 31, | |
| | | Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | March 31, 2023 | December 31, 2022 | | 2023 | 2022 | |
Consumer & Community Banking | Consumer & Community Banking | | $ | 1,112,967 | | $ | 1,153,513 | | |
Consumer & Community Banking | |
Consumer & Community Banking | |
Corporate & Investment Bank | |
Corporate & Investment Bank | |
Corporate & Investment Bank | Corporate & Investment Bank | 705,145 | | 689,893 | | | 699,586 | | 756,643 | | |
Commercial Banking | Commercial Banking | 279,345 | | 271,342 | | | 265,943 | | 316,787 | | |
Commercial Banking | |
Commercial Banking | |
Asset & Wealth Management | |
Asset & Wealth Management | |
Asset & Wealth Management | Asset & Wealth Management | 225,831 | | 233,130 | | | 224,354 | | 287,756 | | |
Corporate | Corporate | 19,458 | | 14,203 | | | 17,629 | | 854 | | |
Corporate | |
Corporate | |
Total Firm | Total Firm | $ | 2,377,253 | | $ | 2,340,179 | | | $ | 2,320,479 | | $ | 2,515,553 | | |
Total Firm | |
Total Firm | |
The Firm believes that 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 generally considered to be stable sources of liquidity because they are generated from customers that maintain operating service relationships with the Firm.
The Firm believes that average deposit balances are generally more representative of deposit trends than period-end deposit balances. However, during periods of market disruption, average deposit trends may be impacted.
Average deposits were higherfor the three months ended March 31, 2024 compared to the three months ended March 31, 2023, reflecting the net impact of:
•growth in CIB due to net issuances of structured notes as a result of client demand, and net inflows related to client-driven activities in Payments and Securities Services, partially offset by deposit attrition, including actions taken to reduce certain deposits,
•an increase in Corporate related to the Firm's international consumer initiatives,
•growth in AWM from new and existing customers as a result of new product offeringsand the impact of First Republic, predominantly offset by continued migration into higher-yielding investments driven by the higher interest rate environment,
•a decrease in CCBreflecting a decline in deposits in existing accounts due to migration into higher-yielding investments and increased customer spending, largely offset by the impact of First Republic, and
•a decrease in CB due to continued deposit attrition, offset by the retention of inflows associated with disruptions in the market in the first quarter of 2023 and the impact of First Republic.
Period-end deposits increasedfrom December 31, 2023, reflecting the net impact of:
•higher balances in CIB, driven by net inflows related to client-driven activities in Paymentsand Securities Services,
•an increase in CCB due to new accounts and seasonal inflows,largely offset by a decline in deposits in existing accounts due to migration into higher-yielding investments,
•a decrease in AWM due to continued migration into higher-yielding investments, partially offset by an increase in deposits in existing accounts due to a change in product offerings associated with First Republic, and
•a decrease in CB primarily due to seasonal outflows and continued deposit attrition, largely offset by the realignment of additional clients associated with First Republic from CCB to CB that began in the fourth quarter of 2023.
Refer to the Firm’s Consolidated Balance Sheets Analysis and the Business Segment Results on pages 13-14 and pages 18-36, respectively, for further information on deposit and liability balance trends, as well as Note 26 for additional information on the First Republic acquisition. Refer to Note 3 for further information on structured notes.
Certain deposits are covered by insurance protection that provides additional funding stability and results in a benefit to the LCR. Deposit insurance protection may be available to depositors in the countries in which the deposits are placed. Refer to pages 100-101105–106 of JPMorgan Chase's 20222023 Form 10-K for additional disclosureinformation on the Firm's deposit balances.total uninsured deposits.
The table below presents an estimate of uninsured U.S. and non-U.S. time deposits, and their remaining maturities. The Firm’s estimates of its uninsured U.S. time deposits are based on data that the Firm calculates periodically under applicable FDIC regulations. For purposes of this presentation, all non-U.S. time deposits are deemed to be uninsured.
| | | | | | | | | | | | | | | | | | | | |
(in millions) | | March 31, 2024 | | December 31, 2023 |
| U.S. | Non-U.S. | | U.S. | Non-U.S. |
Three months or less | | $ | 89,470 | | $ | 77,944 | | | $ | 82,719 | | $ | 77,466 | |
Over three months but within 6 months | | 12,640 | | 6,341 | | | 17,736 | | 5,358 | |
Over six months but within 12 months | | 15,252 | | 3,187 | | | 10,294 | | 4,820 | |
Over 12 months | | 839 | | 2,021 | | | 710 | | 2,543 | |
Total | | $ | 118,201 | | $ | 89,493 | | | $ | 111,459 | | $ | 90,187 | |
The table below shows the loan and deposit balances, the loans-to-deposits ratios, and deposits as a percentage of total liabilities, as of March 31, 20232024 and December 31, 2022.2023.
| (in billions except ratios) | (in billions except ratios) | March 31, 2023 | | December 31, 2022 | (in billions except ratios) | March 31, 2024 | | December 31, 2023 |
Deposits | Deposits | $ | 2,377.3 | | | $ | 2,340.2 | |
Deposits as a % of total liabilities | Deposits as a % of total liabilities | 69 | % | | 69 | % | Deposits as a % of total liabilities | 65 | % | | 68 | % |
Loans | Loans | $ | 1,128.9 | | | $ | 1,135.6 | |
Loans-to-deposits ratio | Loans-to-deposits ratio | 47 | % | | 49 | % | Loans-to-deposits ratio | 54 | % | | 55 | % |
The Firm believes thatfollowing table provides a summary of the average deposit balances are generally more representativeand average interest rates of deposit trends than period-end deposit balances. However, during periods of market disruption those trends could be affected.
AverageJPMorgan Chase’s deposits were lower for the three months ended March 31, 2023 compared to the three months ended March 31, 2022. The decrease was predominantly driven by:2024 and 2023.
| | | | | | | | | | | | | | | | | | | | | | | | | |
(Unaudited) (in millions, except interest rates) | Average balances | | Average interest rates | | | | | |
Three months ended | | Three months ended | | | |
March 31, 2024 | | March 31, 2023 | | March 31, 2024 | March 31, 2023 | | | | | |
U.S. offices | | | | | | | | | | | |
Noninterest-bearing | $ | 624,112 | | | $ | 624,607 | | | NA | NA | | | | | |
Interest-bearing | | | | | | | | | | | |
Demand(a) | 278,698 | | | 280,562 | | | 3.90 | % | 2.76 | % | | | | | |
Savings(b) | 810,845 | | | 890,815 | | | 1.37 | | 0.89 | | | | | | |
Time | 208,813 | | | 98,714 | | | 5.15 | | 4.46 | | | | | | |
Total interest-bearing deposits | 1,298,356 | | | 1,270,091 | | | 2.49 | | 1.58 | | | | | | |
Total deposits in U.S. offices | 1,922,468 | | | 1,894,698 | | | 1.69 | | 1.05 | | | | | | |
Non-U.S. offices | | | | | | | | | | | |
Noninterest-bearing | 24,532 | | | 25,836 | | | NA | NA | | | | | |
Interest-bearing | | | | | | | | | | | |
Demand | 338,190 | | | 320,228 | | | 3.26 | | 2.19 | | | | | | |
Time | 89,596 | | | 79,717 | | | 6.15 | | 4.95 | | | | | | |
Total interest-bearing deposits | 427,786 | | | 399,945 | | | 3.86 | | 2.76 | | | | | | |
Total deposits in non-U.S. offices | 452,318 | | | 425,781 | | | 3.66 | | 2.60 | | | | | | |
Total deposits | $ | 2,374,786 | | | $ | 2,320,479 | | | 2.09 | % | 1.34 | % | | | | | |
•(a)declines in CIBIncludes Negotiable Order of Withdrawal accounts, and CB due to attrition and in AWM due to migration into higher-yielding investments as a result of the rising interest rate environment, partially offset by net issuances of structured notes in CIB,certain trust accounts.
•(b)a decline in CCB from existing accounts primarily due to migration to higher-yielding investments and increased customer spending, andIncludes Money Market Deposit Accounts.
•an increase in Corporate related to the Firm's ongoing international consumer initiatives.
Period-end deposits increased, reflecting inflows in March 2023, primarily in CCB and CB, as a result of disruptions in the market related to recent bank failures, which changed the outflow trend that started in the second half of 2022. AWM also experienced deposit inflows in March which were more than offset by migration to higher-yielding investments by month end. The increase in period-end deposits also reflected:
•net issuances of structured notes in CIB as a result of client demand, and
•an increase in Corporate related to the Firm's ongoing international consumer initiatives.
Refer to the Firm’s Consolidated Balance Sheets Analysis and the Business Segment Results on pages 13-14 and pages 18-34, respectively, for further information on deposit and liability balance trends. Refer to Note 3 15for furtheradditional information on structured notes.deposits.
The following table summarizes short-term and long-term funding, excluding deposits, as of March 31, 2023,2024 and December 31, 2022,2023, and average balances for the three months ended March 31, 20232024 and 2022,2023, respectively. Refer to the Consolidated Balance Sheets Analysis on pages 13-14 and Note 10 for additional information.
| | | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2023 | December 31, 2022 | | Three months ended March 31, | | | | | |
Sources of funds (excluding deposits) | Average | | | | | | |
(in millions) | 2023 | | 2022 | | | | | | | | |
Commercial paper | $ | 12,092 | | $ | 12,557 | | | $ | 12,813 | | | $ | 14,577 | | | | | | | | | |
Other borrowed funds | 9,069 | | 8,418 | | | 10,073 | | | 13,595 | | | | | | | | | |
Federal funds purchased | 1,732 | | 1,684 | | | 1,896 | | | 1,697 | | | | | | | | | |
Total short-term unsecured funding | $ | 22,893 | | $ | 22,659 | | | $ | 24,782 | | | $ | 29,869 | | | | | | | | | |
Securities sold under agreements to repurchase(a) | $ | 240,663 | | $ | 198,382 | | | $ | 246,281 | | | $ | 243,615 | | | | | | | | | |
Securities loaned(a) | 4,001 | | 2,547 | | | 4,133 | | | 4,903 | | | | | | | | | |
Other borrowed funds | 21,080 | | 23,052 | | | 22,905 | | | 27,936 | | | | | | | | | |
Obligations of Firm-administered multi-seller conduits(b) | 12,175 | | 9,236 | | | 10,491 | | | 6,470 | | | | | | | | | |
Total short-term secured funding | $ | 277,919 | | $ | 233,217 | | | $ | 283,810 | | | $ | 282,924 | | | | | | | | | |
Senior notes | $ | 183,508 | | $ | 188,025 | | | $ | 184,972 | | | $ | 190,434 | | | | | | | | | |
Subordinated debt | 21,987 | | 21,803 | | | 21,829 | | | 20,244 | | | | | | | | | |
Structured notes(c) | 74,618 | | 70,839 | | | 73,744 | | | 71,173 | | | | | | | | | |
Total long-term unsecured funding | $ | 280,113 | | $ | 280,667 | | | $ | 280,545 | | | $ | 281,851 | | | | | | | | | |
Credit card securitization(b) | $ | 999 | | $ | 1,999 | | | $ | 1,177 | | | $ | 2,275 | | | | | | | | | |
| | | | | | | | | | | | | | |
FHLB advances | 11,091 | | 11,093 | | | 11,092 | | | 11,109 | | | | | | | | | |
Other long-term secured funding(d) | 4,285 | | 4,105 | | | 4,156 | | | 3,908 | | | | | | | | | |
Total long-term secured funding | $ | 16,375 | | $ | 17,197 | | | $ | 16,425 | | | $ | 17,292 | | | | | | | | | |
Preferred stock(e) | $ | 27,404 | | $ | 27,404 | | | $ | 27,404 | | | $ | 33,526 | | | | | | | | | |
Common stockholders’ equity(e) | $ | 275,678 | | $ | 264,928 | | | $ | 271,197 | | | $ | 252,506 | | | | | | | | | |
Sources of funds (excluding deposits) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2024 | | December 31, 2023 | | | Average | | | | | |
| | | Three months ended March 31, | | | | | |
(in millions) | | | 2024 | | | 2023 | | | | | | | | |
Commercial paper | $ | 12,435 | | | $ | 14,737 | | | | $ | 13,574 | | | | $ | 12,813 | | | | | | | | | |
Other borrowed funds | 10,607 | | | 8,200 | | | | 9,924 | | | | 10,073 | | | | | | | | | |
Federal funds purchased | 1,316 | | | 787 | | | | 1,608 | | | | 1,896 | | | | | | | | | |
Total short-term unsecured funding | $ | 24,358 | | | $ | 23,724 | | | | $ | 25,106 | | | | $ | 24,782 | | | | | | | | | |
Securities sold under agreements to repurchase(a) | $ | 321,623 | | | $ | 212,804 | | | | $ | 289,217 | | | | $ | 246,281 | | | | | | | | | |
Securities loaned(a) | 2,731 | | | 2,944 | | | | 4,158 | | | | 4,133 | | | | | | | | | |
Other borrowed funds | 23,226 | | | 21,775 | |
| | 22,166 | | | | 22,905 | | | | | | | | | |
Obligations of Firm-administered multi-seller conduits(b) | 20,366 | | | 17,781 | | | | 20,547 | | | | 10,491 | | | | | | | | | |
Total short-term secured funding | $ | 367,946 | | | $ | 255,304 | | | | $ | 336,088 | | | | $ | 283,810 | | | | | | | | | |
Senior notes | $ | 192,274 | | | $ | 191,202 | | | | $ | 192,343 | | | | $ | 184,972 | | | | | | | | | |
Subordinated debt | 19,599 | | | 19,708 | | | | 19,648 | | | | 21,829 | | | | | | | | | |
Structured notes(c) | 90,829 | | | 86,056 | | | | 87,484 | | | | 73,744 | | | | | | | | | |
Total long-term unsecured funding | $ | 302,702 | | | $ | 296,966 | | | | $ | 299,475 | | | | $ | 280,545 | | | | | | | | | |
Credit card securitization(b) | $ | 5,323 | | | $ | 2,998 | | | | $ | 4,567 | | | | $ | 1,177 | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
FHLB advances | 39,214 | |
| 41,246 | |
| | 40,486 | | (g) | | 11,092 | | | | | | | | | |
Purchase Money Note(d) | 49,043 | | | 48,989 | | | | 49,008 | | | | N/A | | | | | | | | |
Other long-term secured funding(e) | 4,913 | | | 4,624 | | | | 4,795 | | | | 4,156 | | | | | | | | | |
Total long-term secured funding | $ | 98,493 | | | $ | 97,857 | | | | $ | 98,856 | | | | $ | 16,425 | | | | | | | | | |
Preferred stock(f) | $ | 29,900 | | | $ | 27,404 | | | | $ | 27,952 | | | | $ | 27,404 | | | | | | | | | |
Common stockholders’ equity(f) | $ | 306,737 | | | $ | 300,474 | | | | $ | 300,277 | | | | $ | 271,197 | | | | | | | | | |
(a)Primarily consists of short-term securities loaned or sold under agreements to repurchase.
(b)Included in beneficial interests issued by consolidated variable interest entities on the Firm’s Consolidated balance sheets.
(c)Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
(d)Reflects the Purchase Money Note associated with the First Republic acquisition on May 1, 2023. Refer to Note 26 for additional information.
(e)Includes long-term structured notes which are secured.
(e)(f)Refer to Capital Risk Management on pages 36-41,38-43 and Consolidated statements of changes in stockholders’ equity on page 8286 of this Form 10-Q, and Note 21 and Note 22 of JPMorgan Chase’s 20222023 Form 10-K for additional information on preferred stock and common stockholders’ equity.
(g)Includes the impact of First Republic. Refer to Note 26 of this Form 10-Q and pages 102–109 of JPMorgan Chase’s 2023 Form 10-K for additional information.
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. Securities sold under agreements to repurchase increased at March 31, 2023,2024, compared with December 31, 2022, due to2023, driven by Markets, reflecting higher client-driven market-making activities and higher secured financing of trading assets, and the impact of aas well as when compared with seasonally lower level of netting on client-driven market-making activities in Markets.levels at year-end.
The balances associated with securities loaned or sold under agreements to repurchase fluctuate over time due to investment and financing activities of clients, 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.
The Firm’s sources of short-term unsecured funding primarily consist of issuances of wholesale commercial paper and other borrowed funds.
The decrease in period-end commercial paper at March 31, 2023 from December 31, 2022, and for the average three months ended March 31, 2023 compared to the prior year period, was due to lower net issuance levels resulting from short-term liquidity management.
The decrease in average unsecured other borrowed funds for the three months ended March 31, 2024 from December 31, 2023 compared to the prior year period was due to lower issuance levels of overdrafts as well as net maturities of structured notes classified as other borrowed funds in CIB.primarily reflecting short-term liquidity management.
Long-term funding and issuance
Long-term funding provides an additional source 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.
Unsecured funding and issuance
The significant majority of the Firm’s total outstanding long-term unsecured funding isdebt has been issued by the Parent Company to provide flexibility in support of the funding needs of both bank and non-bank subsidiaries. The Parent Company advances substantially all net funding proceeds to its subsidiary, the IHC. The IHC does not issue debt to external counterparties. For the three months ended March 31, 2024, the increase in average structured notes compared to the prior year period was attributable to net issuances of structured notes in Markets due to client demand.
The following table summarizes long-term unsecured issuance and maturities or redemptions for the three months ended March 31, 20232024 and 2022.2023. Refer to Liquidity Risk Management on pages 97-104102–109 and Note 20 of JPMorgan Chase’s 20222023 Form 10-K for additional information on the IHC and long-term debt.
| Long-term unsecured funding | Long-term unsecured funding | | | | | |
| Three months ended March 31, | | | | Three months ended March 31, | |
| 2023 | 2022 | | | | 2023 | 2022 | |
Long-term unsecured funding | |
Long-term unsecured funding | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| 2024 | |
| 2024 | |
| 2024 | |
(Notional in millions) | |
(Notional in millions) | |
(Notional in millions) | (Notional in millions) | Parent Company | | Subsidiaries | Parent Company | | Subsidiaries |
Issuance | Issuance | | | | |
Senior notes issued in the U.S. market | Senior notes issued in the U.S. market | $ | — | | $ | 8,100 | | | | | $ | — | | $ | — | | |
Senior notes issued in the U.S. market | |
Senior notes issued in the U.S. market | |
Senior notes issued in non-U.S. markets | Senior notes issued in non-U.S. markets | — | | 2,752 | | | | | — | | — | | |
Senior notes issued in non-U.S. markets | |
Senior notes issued in non-U.S. markets | |
Total senior notes | |
Total senior notes | |
Total senior notes | Total senior notes | — | | 10,852 | | | | | — | | — | | |
| Structured notes(a) | Structured notes(a) | 881 | | 1,156 | | | | | 7,718 | | 8,449 | | |
| Structured notes(a) | |
| Structured notes(a) | |
Total long-term unsecured funding – issuance | |
Total long-term unsecured funding – issuance | |
Total long-term unsecured funding – issuance | Total long-term unsecured funding – issuance | $ | 881 | | $ | 12,008 | | | | | $ | 7,718 | | $ | 8,449 | | |
Maturities/redemptions | Maturities/redemptions | | | | |
Maturities/redemptions | |
Maturities/redemptions | |
Senior notes | Senior notes | $ | 7,098 | | $ | 3,693 | | | | | $ | 65 | | $ | 64 | | |
| Senior notes | |
Senior notes | |
Subordinated debt | |
Subordinated debt | |
Subordinated debt | |
Structured notes | |
Structured notes | |
Structured notes | Structured notes | 447 | | 977 | | | | | 7,502 | | 7,647 | | |
Total long-term unsecured funding – maturities/redemptions | Total long-term unsecured funding – maturities/redemptions | $ | 7,545 | | $ | 4,670 | | | | | $ | 7,567 | | $ | 7,711 | | |
Total long-term unsecured funding – maturities/redemptions | |
Total long-term unsecured funding – maturities/redemptions | |
(a)Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.
Secured funding and issuance
The Firm can also raise secured long-term funding through securitization of consumer credit card loans and FHLB advances. The following table summarizes the securitization issuance, andthe FHLB advances, and their respective maturities or redemptions, as applicable for the three months ended March 31, 2024 and 2023, and 2022, respectively.
| Long-term secured funding | Long-term secured funding | | |
| Three months ended March 31, | |
| Issuance | | Maturities/Redemptions | |
Long-term secured funding | |
Long-term secured funding | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| 2024 | |
| 2024 | |
| 2024 | |
(in millions) | (in millions) | 2023 | 2022 | | 2023 | 2022 | |
(in millions) | |
(in millions) | |
Credit card securitization | |
Credit card securitization | |
Credit card securitization | Credit card securitization | $ | — | | $ | — | | | $ | 1,000 | | $ | 650 | | |
| FHLB advances | FHLB advances | — | | — | | | 2 | | 2 | | |
| FHLB advances | |
| FHLB advances | |
| Other long-term secured funding(a) | |
| Other long-term secured funding(a) | |
| Other long-term secured funding(a) | Other long-term secured funding(a) | 151 | | 202 | | | 54 | | 61 | | |
Total long-term secured funding | Total long-term secured funding | $ | 151 | | $ | 202 | | | $ | 1,056 | | $ | 713 | | |
Total long-term secured funding | |
Total long-term secured funding | |
(a)Includes long-term structured notes that are secured.
(b)Includes FHLB advances associated with the First Republic acquisition on May 1, 2023. Refer to Note 26 for additional information.
The Firm’s wholesale businesses also securitize loans for client-driven transactions; those client-driven loan securitizations are not considered to be a source of funding for the Firm and are not included in the table above. Refer to Note 14 of JPMorgan Chase’s 20222023 Form 10-K for a further description of client-driven loan securitizations.
Credit ratings
The cost and availability of financing are influenced by credit ratings. Reductions in these ratings could have an adverse effect on the Firm’s access to liquidity sources, increase the cost of funds, trigger additional collateral or funding requirements and decrease the number of investors and counterparties willing to lend to the Firm. The nature and magnitude of the impact of ratings downgrades depends on numerous contractual and behavioral factors, which the Firm believes are incorporated in its liquidity risk
and stress testing metrics. The Firm believes that it maintains sufficient liquidity to withstand a potential decrease in funding capacity due to ratings downgrades.
Additionally, the Firm’s funding requirements for VIEs and other third-party commitments may be adversely affected by a decline in credit ratings. Refer to liquidity risk and credit-related contingent features in Note 4 and Note 13 for additional information on the impact of a credit ratings downgrade on the funding requirements for VIEs, and on derivatives and collateral agreements.
information.
The credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries as of March 31, 2023,2024, were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| JPMorgan Chase & Co. | | JPMorgan Chase Bank, N.A. | | J.P. Morgan Securities LLC J.P. Morgan Securities plc J.P. Morgan SE |
March 31, 20232024 | Long-term issuer | Short-term issuer | Outlook | | Long-term issuer | Short-term issuer | Outlook | | Long-term issuer | Short-term issuer | Outlook |
Moody’s Investors Service | A1 | P-1 | Stable | | Aa2 | P-1 | StableNegative | | Aa3 | P-1 | Stable |
Standard & Poor’s (a) | A- | A-2 | Stable | | A+ | A-1 | Stable | | A+ | A-1 | Stable |
Fitch Ratings | AA- | F1+ | Stable | | AA | F1+ | Stable | | AA | F1+ | Stable |
(a) On March 31, 2023,April 1, 2024, Standard & Poor's affirmed the credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries, and revised the outlook from stable to positive to stable.for the entities listed above.
Refer to page 104109 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of the factors that could affect the credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries.
| | | | | | | | | | | | | | |
CREDIT AND INVESTMENT RISK MANAGEMENT |
Credit and investment risk is the risk associated with the default or change in credit profile of a client, counterparty or customer; or loss of principal or a reduction in expected returns on investments, including consumer credit risk,
wholesale credit risk, and investment portfolio risk. Refer to Consumer Credit Portfolio, Wholesale Credit Portfolio and
Allowance for Credit Losses on pages 50-6554-69 for a further discussion of Credit Risk.
Refer to page 6670 for a further discussion of Investment Portfolio Risk. Refer to Credit and Investment Risk Management on pages 106-130111–134 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of the Firm’s Credit and Investment Risk Management framework.
Credit risk is the risk associated with the default or change in credit profile of a client, counterparty or customer.
In the following tables, total loans include loans retained (i.e., held-for-investment); loans held-for-sale; and certain loans accounted for at fair value. The following tables do not include loans which the Firm accounts for at fair value and classifies as trading assets; refer to Notes 2 and 3 for further information regarding these loans. Refer to Notes 11, 22 and 4 for additional information on the Firm’s loans, lending-related commitments and derivative receivables.
Refer to Note 9 for information regarding the credit risk inherent in the Firm’s investment securities portfolio; and refer to Note 10 for information regarding the credit risk inherent in the securities financing portfolio. Refer to Consumer Credit Portfolio on pages 50-5354-57 and Note 11 for further discussions of the consumer credit environment, consumer loans and consumer loans.nonperforming exposure. Refer to Wholesale Credit Portfolio on pages 54-6258-66 and Note 11 for further discussions of the wholesale credit environment, wholesale loans and wholesale loans.
On January 1, 2023, the Firm adopted changes to the TDR accounting guidance, which eliminated the accounting and disclosure requirements for TDRs including the requirement to assess whether a modification is reasonably expected or involves a concession. The new guidance requires disclosure for loan modifications to borrowers experiencing financial difficulty consisting of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension or a combination of these modifications. The Firm has defined these types of modifications as financial difficulty modifications ("FDMs"). As a result of the elimination of the requirement to assess whether a modification is reasonably expected or involves a concession, the population of loans considered FDMs will differ from those previously considered TDRs. Refer to Note 1 and Note 11 for further information.nonperforming exposure.
| Total credit portfolio | Total credit portfolio | | | |
| Credit exposure | | Nonperforming(c) |
| Credit exposure | |
| Credit exposure | |
| Credit exposure | | | Nonperforming(c) |
(in millions) | (in millions) | Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 | (in millions) | Mar 31, 2024 | | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 |
Loans retained | Loans retained | $ | 1,084,850 | | $ | 1,089,598 | | | $ | 6,054 | | $ | 5,837 | |
Loans held-for-sale | Loans held-for-sale | 5,500 | | 3,970 | | | 51 | | 54 | |
Loans at fair value | Loans at fair value | 38,546 | | 42,079 | | | 790 | | 829 | |
Total loans | Total loans | 1,128,896 | | 1,135,647 | | | 6,895 | | 6,720 | |
Derivative receivables | Derivative receivables | 59,274 | | 70,880 | |
| 291 | | 296 | |
Receivables from customers(a) | Receivables from customers(a) | 43,943 | | 49,257 | | | — | | — | |
Total credit-related assets | Total credit-related assets | 1,232,113 | | 1,255,784 | | | 7,186 | | 7,016 | |
Assets acquired in loan satisfactions | Assets acquired in loan satisfactions | |
Real estate owned | Real estate owned | NA | NA | | 195 | | 203 | |
Real estate owned | |
Real estate owned | |
Other | Other | NA | NA | | 37 | | 28 | |
Total assets acquired in loan satisfactions | Total assets acquired in loan satisfactions | NA | NA | | 232 | | 231 | |
Lending-related commitments | Lending-related commitments | 1,383,325 | | 1,326,782 | | | 401 | | 455 | |
Total credit portfolio | Total credit portfolio | $ | 2,615,438 | | $ | 2,582,566 | | | $ | 7,819 | | $ | 7,702 | |
Credit derivatives and credit-related notes used in credit portfolio management activities(b) | Credit derivatives and credit-related notes used in credit portfolio management activities(b) | $ | (30,794) | | $ | (19,330) | | | $ | — | | $ | — | |
Liquid securities and other cash collateral held against derivatives | Liquid securities and other cash collateral held against derivatives | (20,923) | | (23,014) | | | NA | NA | Liquid securities and other cash collateral held against derivatives | (23,012) | | | (22,461) | | (22,461) | | | NA | | NA | NA |
(a)Receivables from customers reflect held-for-investment margin loans to brokerage clients in CIB, CCB and AWM; these are reported within accrued interest and accounts receivable on the Consolidated balance sheets.
(b)Represents the net notional amount of protection purchased and sold through credit derivatives and credit-related notes used to manage credit exposures.
(c)At March 31, 2023,2024 and December 31, 2022,2023, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $263$157 million and $302$182 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.
The following table provides information about the Firm’s net charge-offs and recoveries.
| (in millions, except ratios) | (in millions, except ratios) | Three months ended March 31, | |
2023 | 2022 | |
(in millions, except ratios) | |
| 2024 | |
2024 | |
Net charge-offs | |
Net charge-offs | |
Net charge-offs | Net charge-offs | $ | 1,137 | | $ | 582 | | |
Average retained loans | Average retained loans | 1,082,437 | | 1,004,253 | | |
Average retained loans | |
Average retained loans | |
Net charge-off rates | Net charge-off rates | 0.43 | % | 0.24 | % | |
Net charge-off rates | |
Net charge-off rates | |
| | | | | | | | | | | | | | |
CONSUMER CREDIT PORTFOLIO |
The Firm’s retained consumer portfolio consists primarily of loans and lending-related commitments for residential real estate, credit card, and scored auto and business banking.banking, including those associated with First Republic, primarily in residential real estate. The consumer credit portfolio also includes loans at fair value, predominantly in residential real estate. The Firm’s focus is on serving primarily the prime segment of the consumer credit market. Refer to Note 11 of this Form 10-Q; and Consumer Credit Portfolio on pages 110-115114–119 and Note 12 of JPMorgan Chase's 20222023 Form 10-K for further information on consumer loans, as well as the Firm’s nonaccrual and charge-off accounting policies. Refer to Note 22 of this Form 10-Q and Note 28 of JPMorgan Chase's 20222023 Form 10-K for further information on lending-related commitments.
The following tables present consumer credit-related information with respect to the scored credit portfolios held in CCB, AWM, CIB and Corporate.
| Consumer credit portfolio | Consumer credit portfolio | | | |
(in millions) | (in millions) | Credit exposure | | Nonaccrual loans(i)(j)(k) |
Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 |
(in millions) | | (in millions) | Credit exposure | | Nonaccrual loans(i) |
| Mar 31, 2024 | | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 |
Consumer, excluding credit card | Consumer, excluding credit card | |
Residential real estate(a) | |
Residential real estate(a) | |
Residential real estate(a) | Residential real estate(a) | $ | 236,115 | | $ | 237,561 | | | $ | 3,710 | | $ | 3,745 | |
Auto and other(b)(c) | Auto and other(b)(c) | 64,332 | | 63,192 | | | 133 | | 129 | |
Total loans – retained | Total loans – retained | 300,447 | | 300,753 | | | 3,843 | | 3,874 | |
Loans held-for-sale | Loans held-for-sale | 572 | | 618 | | | 25 | | 28 | |
Loans at fair value(d) | Loans at fair value(d) | 10,414 | | 10,004 | | | 427 | | 423 | |
Total consumer, excluding credit card loans | Total consumer, excluding credit card loans | 311,433 | | 311,375 | | | 4,295 | | 4,325 | |
Lending-related commitments(e) | Lending-related commitments(e) | 37,568 | | 33,518 | | |
Total consumer exposure, excluding credit card | Total consumer exposure, excluding credit card | 349,001 | | 344,893 | | |
Total consumer exposure, excluding credit card | |
Total consumer exposure, excluding credit card | |
Credit card | Credit card | | |
Credit card | |
Credit card | |
Loans retained(f) | |
Loans retained(f) | |
Loans retained(f) | Loans retained(f) | 180,079 | | 185,175 | | | NA | NA | 206,740 | | | 211,123 | | 211,123 | | | NA | | NA | NA |
| Total credit card loans | Total credit card loans | 180,079 | | 185,175 | | | NA | NA |
Total credit card loans | |
Total credit card loans | | 206,740 | | | 211,123 | | | NA | NA |
Lending-related commitments(e)(g) | Lending-related commitments(e)(g) | 861,218 | | 821,284 | | |
Total credit card exposure | Total credit card exposure | 1,041,297 | | 1,006,459 | | |
Total credit card exposure | |
Total credit card exposure | |
Total consumer credit portfolio | |
Total consumer credit portfolio | |
Total consumer credit portfolio | Total consumer credit portfolio | $ | 1,390,298 | | $ | 1,351,352 | | | $ | 4,295 | | $ | 4,325 | |
Credit-related notes used in credit portfolio management activities(h) | Credit-related notes used in credit portfolio management activities(h) | $ | (1,082) | | $ | (1,187) | | |
| | Three months ended March 31, |
| Three months ended March 31, | | | Three months ended March 31, |
(in millions, except ratios) | (in millions, except ratios) | Net charge-offs/(recoveries) | | Average loans - retained | | Net charge-off/(recovery) rate(l) | (in millions, except ratios) | Net charge-offs/(recoveries) | | Average loans - retained | | Net charge-off/(recovery) rate(j) |
2023 | 2022 | | 2023 | 2022 | | 2023 | 2022 | 2024 | 2023 | | 2024 | 2023 | | 2024 | 2023 |
Consumer, excluding credit card | Consumer, excluding credit card | |
Residential real estate | |
Residential real estate | |
Residential real estate | Residential real estate | $ | (20) | | $ | (67) | | | $ | 236,781 | | $ | 225,932 | | | (0.03) | % | (0.12) | % | $ | (6) | | $ | (20) | | | $ | | $ | 323,687 | | $ | 236,781 | | | (0.01) | | (0.01) | % | (0.03) | % |
Auto and other | Auto and other | 152 | | 113 | | | 63,804 | | 69,528 | | | 0.97 | | 0.66 | |
Total consumer, excluding credit card - retained | Total consumer, excluding credit card - retained | 132 | | 46 | | | 300,585 | | 295,460 | | | 0.18 | | 0.06 | |
Credit card - retained | Credit card - retained | 922 | | 506 | | | 180,451 | | 149,398 | | | 2.07 | | 1.37 | |
Total consumer - retained | Total consumer - retained | $ | 1,054 | | $ | 552 | | | $ | 481,036 | | $ | 444,858 | | | 0.89 | % | 0.50 | % | Total consumer - retained | $ | 1,870 | | $ | 1,054 | | | $ | | $ | 598,670 | | $ | 481,036 | | | 1.26 | | 1.26 | % | 0.89 | % |
(a)Includes scored mortgage and home equity loans held in CCB and AWM, and scored mortgage loans held in Corporate.AWM.
(b)At March 31, 20232024 and December 31, 2022,2023, excluded operating lease assets of $11.3$10.5 billion and $12.0$10.4 billion, respectively. These operating lease assets are included in other assets on the Firm’s Consolidated balance sheets. Refer to Note 16 for further information.
(c)Includes scored auto and business banking loans, and overdrafts.
(d)Includes scored mortgage loans held in CCB and CIB, and other consumer unsecured loans in CIB.
(e)Credit card, home equity and certain business banking lending-related commitments represent the total available lines of credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit would be used at the same time. For credit card commitments, and if certain conditions are met, home equity commitments and certain business banking commitments, the Firm can reduce or cancel these lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. Refer to Note 22 for further information.
(f)Includes billed interest and fees.
(g)Also includes commercial card lending-related commitments primarily in CB and CIB.
(h)Represents the notional amount of protection obtained through the issuance of credit-related notes that reference certain pools of residential real estate and auto loans in the retained consumer portfolio.
(i)At March 31, 20232024 and December 31, 2022,2023, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $263$157 million and $302$182 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.
(j)Generally excludes loans under payment deferral programs offered in response to the COVID-19 pandemic.
(k)At March 31, 2023 and December 31, 2022, nonaccrual loans excluded $54 million and $101 million, respectively, of PPP loans 90 or more days past due and guaranteed by the SBA.
(l)Average consumer loans held-for-sale and loans at fair value were $11.0$15.1 billion and $23.9$11.0 billion for the three months ended March 31, 20232024 and 2022,2023, respectively. These amounts were excluded when calculating net charge-off/(recovery) rates.
Consumer, excluding credit card
Portfolio analysis
Loans were relatively flat compared todecreased from December 31, 20222023 driven by higher auto loans and loans at fair value, predominantly offset by lower retained residential real estate loans.
Residential real estate: The residential real estate portfolio, including loans held-for-sale and loans at fair value, predominantly consists of prime mortgage loans and home equity lines of credit.
Retained loans decreased compared to December 31, 2022, reflecting2023, predominantly driven by paydowns and loans sales, net of originations. Net recoveries were lower for the three months ended March 31, 20232024 compared to the same period in the prior year driven by lower prepayments due to higher interest rates.year.
Loans at fair valueheld-for-sale increased from December 31, 2022,2023, predominantly driven by a transfer of certain retained loans in anticipation of securitization.
At March 31, 2024 and December 31, 2023, the carrying value of interest-only residential mortgage loans was $90.3 billion and $90.6 billion, respectively. These loans have an increase in Home Lendinginterest-only payment period generally followed by an adjustable-rate or fixed-rate fully amortizing payment period to maturity and are typically originated as originations outpaced warehouse loan sales, largely offset by lower CIBhigher-balance loans as sales outpaced purchases.to higher-income borrowers. The credit performance of this portfolio is comparable with the performance of the broader prime mortgage portfolio.
The carrying value of home equity lines of credit outstanding was $14.9$15.3 billion at March 31, 2023. This amount2024, which included $4.8$2.4 billion associated with First Republic. The carrying value of home equity lines of credit outstanding included $4.1 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modified and $4.8$4.1 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 March 31, 2023 and December 31, 2022, the carrying value of interest-only residential mortgage loans was $36.4 billion and $36.3 billion, 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. The credit performance of this portfolio is comparable with the performance of the broader prime mortgage portfolio.
The following table provides a summary of the Firm’s residential mortgage portfolio insured and/or guaranteed by U.S. government agencies, predominantly loans held-for-sale and loans at fair value. 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) | (in millions) | March 31, 2023 | December 31, 2022 | (in millions) | March 31, 2024 | December 31, 2023 |
Current | Current | $ | 549 | | $ | 659 | |
30-89 days past due | 30-89 days past due | 117 | | 136 | |
90 or more days past due | 90 or more days past due | 263 | | 302 | |
Total government guaranteed loans | Total government guaranteed loans | $ | 929 | | $ | 1,097 | |
Geographic composition and current estimated loan-to-value ratio of residential real estate loans
Refer to Note 11 for information on the geographic composition and current estimated LTVs of the Firm’s residential real estate loans.
Modified residential real estate loans
For the three months ended March 31, 2024 and 2023, residential real estate FDMsfinancial difficulty modifications ("FDMs") were $39 million and $38 million. In addition to FDMs, the Firm also had $23 million, of loansrespectively. Loans subject to trial modification where the terms of the loans have not been permanently modified, as well as $2 million ofand loans subject to discharge under Chapter 7 bankruptcy proceedings ("Chapter 7 loans"). The changes to the TDR accounting guidance eliminated the TDR reasonably expected and concession assessment criteria. Accordingly, trial modifications and Chapter 7 loans, were considered TDRs, but not FDMs. Refer to Note 1 and Note 11material for further information.
For the three months ended March 31, 2022, residential real estate TDRs were $118 million.2024 and 2023. Refer to Note 1 of JPMorgan Chase’s 2023 Form 10-K and Note 11 of this Form 10-Q for further information on TDRs in prior periods.information.
Auto and other: The auto and other loan portfolio, including loans at fair value, generally consists of prime-quality scored auto and business banking loans, as well asother consumer unsecured loans, and overdrafts. The portfolio increaseddecreased when compared to December 31, 20222023, predominantly due to originations of scored Auto loans, predominantly offset by paydowns.a loan securitization. Net charge-offs increased for the three months ended March 31, 2023 increased2024 compared to the same period in the prior year due to higher scored Autoauto net charge-offs as delinquency levels increased andof $50 million reflecting a decline in used vehicle valuations, declined. The scored Auto net charge-off rates were 0.47% and 0.18%largely offset by lower overdraft charge-offs.Refer to Note 13 for the three months ended March 31, 2023 and 2022, respectively.further information on securitization activity.
Nonperforming assets
The following table presents information as of March 31, 20232024 and December 31, 2022,2023, about consumer, excluding credit card, nonperforming assets.
| Nonperforming assets(a) | Nonperforming assets(a) | |
(in millions) | (in millions) | March 31, 2023 | | December 31, 2022 |
(in millions) | |
(in millions) | | March 31, 2024 | | December 31, 2023 |
Nonaccrual loans | Nonaccrual loans | |
Residential real estate(b) | $ | 4,162 | | | $ | 4,196 | |
Auto and other(c) | 133 | | | 129 | |
Residential real estate | |
Residential real estate | |
Residential real estate | |
Auto and other | |
Total nonaccrual loans | Total nonaccrual loans | 4,295 | | | 4,325 | |
Assets acquired in loan satisfactions | Assets acquired in loan satisfactions | |
Real estate owned | |
Real estate owned | |
Real estate owned | Real estate owned | 123 | | | 129 | |
Other | Other | 37 | | | 28 | |
Total assets acquired in loan satisfactions | Total assets acquired in loan satisfactions | 160 | | | 157 | |
Total nonperforming assets | Total nonperforming assets | $ | 4,455 | | | $ | 4,482 | |
(a)At March 31, 20232024 and December 31, 2022,2023, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $263$157 million and $302$182 million, respectively. These amounts have been excluded based upon the government guarantee.
(b)Generally excludes loans under payment deferral programs offered in response to the COVID-19 pandemic.
(c)At March 31, 2023 and December 31, 2022, nonaccrual loans excluded $54 million and $101 million, respectively, of PPP loans 90 or more days past due and guaranteed by the SBA.
Nonaccrual loans
The following table presents changes in consumer, excluding credit card, nonaccrual loans for the three months ended March 31, 20232024 and 2022.2023.
| Nonaccrual loan activity | Nonaccrual loan activity | Nonaccrual loan activity |
Three months ended March 31, (in millions) | Three months ended March 31, (in millions) | 2023 | 2022 | Three months ended March 31, (in millions) | 2024 | 2023 |
Beginning balance | Beginning balance | $ | 4,325 | | $ | 5,350 | |
Additions | Additions | 601 | | 638 | |
Reductions: | Reductions: | |
Principal payments and other(a) | Principal payments and other(a) | 205 | | 363 | |
Principal payments and other(a) | |
Principal payments and other(a) | |
Charge-offs | Charge-offs | 101 | | 66 | |
Returned to performing status | Returned to performing status | 273 | | 495 | |
Foreclosures and other liquidations | Foreclosures and other liquidations | 52 | | 54 | |
Total reductions | Total reductions | 631 | | 978 | |
Net changes | Net changes | (30) | | (340) | |
Ending balance | Ending balance | $ | 4,295 | | $ | 5,010 | |
(a)Other reductions include loan sales.
Refer to Note 11 for further information about the consumer credit portfolio, including information about delinquencies, other credit quality indicators, loan modifications and loans that were in the process of active or suspended foreclosure.
Credit card
Total credit card loans decreased from December 31, 20222023 reflecting the impact of seasonality. The March 31, 2024 30+ and 90+ day delinquency rates of 2.23% and 1.16%, respectively, increased compared to the December 31, 2023 30+ and 90+ day delinquency rates of 1.68%2.14% and 0.83%1.05%, respectively, increased compareddue to the December 31, 2022 30+credit normalization and 90+ day delinquency rates of 1.45% and 0.68% as delinquencies continued to normalize but remained below pre-pandemic levels.newer vintages season. Net charge-offs increased for the three months ended March 31, 20232024 compared to the same period in the prior year reflecting continued normalization indue to higher delinquencies.
Consistent with the Firm’s policy, all credit card loans typically remain on accrual status until charged off. However, the Firm’s allowance for loan losses includes the estimated uncollectible portion of accrued and billed interest and fee income. Refer to Note 11 for further information about this portfolio, including information about delinquencies.
Geographic and FICO composition of credit card loans
Refer to Note 11 for information on the geographic and FICO composition of the Firm’s credit card loans.
Modifications of credit card loans
For the three months ended March 31, 2024 and 2023, credit card FDMs were $259 million and $163 million. In additionmillion, respectively. FDMs increased for the three months ended March 31, 2024 compared to FDMs, the Firm also had $24 million of loanssame period in the prior year due to higher delinquencies, reflecting growth in the portfolio. Loans subject to trial modification where the terms of the loans have not been permanently modified. The changes to the TDR accounting guidance eliminated the TDR reasonably expected and concession assessment criteria. Accordingly, trial modificationsmodified were considered TDRs, but not FDMs.
Formaterial for the three months ended March 31, 2022, credit card TDRs were $82 million.2024 and 2023.
Refer to Note 1 of JPMorgan Chase’s 2023 Form 10-K and Note 11 of this Form 10-Q for further information.
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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 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 56-5960-63 for further information.
The Firm’s wholesale credit portfolio includes exposure held in CIB, CB, AWM and Corporate, as well asand risk-rated BWM and auto dealer exposure held in CCB, for which the wholesale methodology is applied when determining the allowance for loan losses. The Firm continues to convert certain operations, and to integrate clients, products and services, associated with First Republic. Accordingly, reporting classifications and internal risk rating profiles in the wholesale portfolio may change in future periods. Refer to Business Developments on page 9 for additional information.
As of March 31, 2024, retained loans decreased by $4.7 billion and lending-related commitments decreased by $4.3 billion.
As of March 31, 2024, nonperforming exposure increased by $702 million predominantly driven by Real Estate loans concentrated in Office, and Individuals, resulting from downgrades. For the three months ended March 31, 2023, credit continued to perform well with2024, wholesale net charge-offs remaining low.were $86 million, largely in Real Estate, concentrated in Office.
As of March 31, 2023, the increase in nonperforming exposure was driven by loans, resulting from client-specific downgrades in CIB and CB, partially offset by a reduction in lending-related commitments.
As of March 31, 2023, retained loans increased $654 million driven by CB, largely offset by a decline in AWM. Lending-related commitments increased $12.6 billion driven by net portfolio activity in CB and CIB, including an increase in held-for-sale positions in the bridge financing portfolio in CB.
| Wholesale credit portfolio | Wholesale credit portfolio | Wholesale credit portfolio |
| Credit exposure | | Nonperforming |
| Credit exposure | | | Credit exposure | | Nonperforming |
(in millions) | (in millions) | Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 | (in millions) | Mar 31, 2024 | | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 |
Loans retained | Loans retained | $ | 604,324 | | $ | 603,670 | | | $ | 2,211 | | $ | 1,963 | |
Loans held-for-sale | Loans held-for-sale | 4,928 | | 3,352 | | | 26 | | 26 | |
Loans at fair value | Loans at fair value | 28,132 | | 32,075 | | | 363 | | 406 | |
Loans | Loans | 637,384 | | 639,097 | | | 2,600 | | 2,395 | |
Derivative receivables | Derivative receivables | 59,274 | | 70,880 | | | 291 | | 296 | |
Receivables from customers(a) | Receivables from customers(a) | 43,943 | | 49,257 | | | — | | — | |
Total wholesale credit-related assets | Total wholesale credit-related assets | 740,601 | | 759,234 | | | 2,891 | | 2,691 | |
Assets acquired in loan satisfactions | Assets acquired in loan satisfactions | |
Real estate owned | Real estate owned | NA | NA | | 72 | | 74 | |
Real estate owned | |
Real estate owned | |
Other | Other | NA | NA | | — | | — | |
Total assets acquired in loan satisfactions | Total assets acquired in loan satisfactions | NA | NA | | 72 | | 74 | |
Lending-related commitments | Lending-related commitments | 484,539 | | 471,980 | | | 401 | | 455 | |
Total wholesale credit portfolio | Total wholesale credit portfolio | $ | 1,225,140 | | $ | 1,231,214 | | | $ | 3,364 | | $ | 3,220 | |
Credit derivatives and credit-related notes used in credit portfolio management activities(b) | Credit derivatives and credit-related notes used in credit portfolio management activities(b) | $ | (29,712) | | $ | (18,143) | | | $ | — | | $ | — | |
Liquid securities and other cash collateral held against derivatives | Liquid securities and other cash collateral held against derivatives | (20,923) | | (23,014) | | | NA | NA | Liquid securities and other cash collateral held against derivatives | (23,012) | | | (22,461) | | (22,461) | | | NA | | NA | NA |
(a)Receivables from customers reflect held-for-investment margin loans to brokerage clients in CIB, CCB and AWM; these are reported within accrued interest and accounts receivable on the Consolidated balance sheets.
(b)Represents the net notional amount of protection purchased and sold through credit derivatives and credit-related notes used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. Refer to Credit derivatives on page 6266 and Note 4 for additional information.
Wholesale credit exposure – maturity and ratings profile
The following tables present the maturity and internal risk ratings profiles of the wholesale credit portfolio as of March 31, 2023,2024 and December 31, 2022.2023. The Firm generally considers internal ratings with qualitative characteristics equivalent to BBB-/Baa3 or higher as investment grade, and takes into consideration collateral and structural support when determining the internal risk rating for each credit facility. Refer to Note 12 of JPMorgan Chase's 20222023 Form 10-K for further information on internal risk ratings.
| | | Maturity profile(d) | | Ratings profile |
| 1 year or less | 1 year through 5 years | After 5 years | Total | | Investment-grade | | Noninvestment-grade | Total | Total % of IG |
March 31, 2023 (in millions, except ratios) | | Maturity profile(d) | |
| Maturity profile(d) | |
| Maturity profile(d) | | | Ratings profile |
| 1 year or less | | | 1 year or less | After 1 year through 5 years | After 5 years | Total | | Investment-grade | | Noninvestment-grade | Total | Total % of IG |
March 31, 2024, (in millions, except ratios) | | March 31, 2024, (in millions, except ratios) |
Loans retained | Loans retained | $ | 207,707 | | $ | 250,242 | | $ | 146,375 | | $ | 604,324 | | | $ | 424,855 | | | $ | 179,469 | | $ | 604,324 | | 70 | % | Loans retained | $ | 211,780 | | $ | 274,260 | | $ | 181,721 | | $ | 667,761 | | | $ | | $ | 453,592 | | | $ | | $ | 214,169 | | $ | 667,761 | | 68 | 68 | % |
Derivative receivables | Derivative receivables | | 59,274 | | | 59,274 | | |
Less: Liquid securities and other cash collateral held against derivatives | Less: Liquid securities and other cash collateral held against derivatives | | (20,923) | | | (20,923) | | |
Less: Liquid securities and other cash collateral held against derivatives | |
Less: Liquid securities and other cash collateral held against derivatives | |
Total derivative receivables, net of collateral | |
Total derivative receivables, net of collateral | |
Total derivative receivables, net of collateral | Total derivative receivables, net of collateral | 10,120 | | 11,450 | | 16,781 | | 38,351 | | | 29,340 | | | 9,011 | | 38,351 | | 77 | |
Lending-related commitments | Lending-related commitments | 114,538 | | 347,309 | | 22,692 | | 484,539 | | | 336,215 | | | 148,324 | | 484,539 | | 69 | |
Subtotal | Subtotal | 332,365 | | 609,001 | | 185,848 | | 1,127,214 | | | 790,410 | | | 336,804 | | 1,127,214 | | 70 | |
Loans held-for-sale and loans at fair value(a) | Loans held-for-sale and loans at fair value(a) | | 33,060 | | | 33,060 | | |
Receivables from customers | Receivables from customers | | 43,943 | | | 43,943 | | |
Receivables from customers | |
Receivables from customers | |
Total exposure – net of liquid securities and other cash collateral held against derivatives | |
Total exposure – net of liquid securities and other cash collateral held against derivatives | |
Total exposure – net of liquid securities and other cash collateral held against derivatives | Total exposure – net of liquid securities and other cash collateral held against derivatives | | $ | 1,204,217 | | | $ | 1,204,217 | | |
Credit derivatives and credit-related notes used in credit portfolio management activities(b)(c) | Credit derivatives and credit-related notes used in credit portfolio management activities(b)(c) | $ | (6,686) | | $ | (18,424) | | $ | (4,602) | | $ | (29,712) | | | $ | (25,754) | | | $ | (3,958) | | $ | (29,712) | | 87 | % |
Credit derivatives and credit-related notes used in credit portfolio management activities(b)(c) | |
Credit derivatives and credit-related notes used in credit portfolio management activities(b)(c) | | $ | (5,448) | | $ | (27,991) | | $ | (6,949) | | $ | (40,388) | | | $ | (32,157) | | | $ | (8,231) | | $ | (40,388) | | 80 | % |
| | Maturity profile(d) | | Ratings profile |
| 1 year or less | 1 year through 5 years | After 5 years | Total | | Investment-grade | | Noninvestment-grade | Total | | Total % of IG |
December 31, 2022 (in millions, except ratios) | |
| Maturity profile(d) | |
| Maturity profile(d) | |
| Maturity profile(d) | | | Ratings profile |
| 1 year or less | | | 1 year or less | After 1 year through 5 years | After 5 years | Total | | Investment-grade | | Noninvestment-grade | Total | | Total % of IG |
December 31, 2023 (in millions, except ratios) | |
Loans retained | |
Loans retained | |
Loans retained | Loans retained | $ | 204,761 | | $ | 253,896 | | $ | 145,013 | | $ | 603,670 | | | $ | 425,412 | | | $ | 178,258 | | $ | 603,670 | | | 70 | % | $ | 211,104 | | $ | 280,821 | | $ | 180,547 | | $ | 672,472 | | | $ | | $ | 458,838 | | | $ | | $ | 213,634 | | $ | 672,472 | | | 68 | | 68 | % |
Derivative receivables | Derivative receivables | | 70,880 | | | 70,880 | | | |
Less: Liquid securities and other cash collateral held against derivatives | Less: Liquid securities and other cash collateral held against derivatives | | (23,014) | | | (23,014) | | | |
Less: Liquid securities and other cash collateral held against derivatives | |
Less: Liquid securities and other cash collateral held against derivatives | |
Total derivative receivables, net of collateral | |
Total derivative receivables, net of collateral | |
Total derivative receivables, net of collateral | Total derivative receivables, net of collateral | 13,508 | | 14,880 | | 19,478 | | 47,866 | | | 36,231 | | | 11,635 | | 47,866 | | | 76 | |
Lending-related commitments | Lending-related commitments | 101,083 | | 347,456 | | 23,441 | | 471,980 | | | 327,168 | | | 144,812 | | 471,980 | | | 69 | |
Subtotal | Subtotal | 319,352 | | 616,232 | | 187,932 | | 1,123,516 | | | 788,811 | | | 334,705 | | 1,123,516 | | | 70 | |
Loans held-for-sale and loans at fair value(a) | Loans held-for-sale and loans at fair value(a) | | 35,427 | | | 35,427 | | | |
Receivables from customers | Receivables from customers | | 49,257 | | | 49,257 | | | |
Receivables from customers | |
Receivables from customers | |
Total exposure – net of liquid securities and other cash collateral held against derivatives | |
Total exposure – net of liquid securities and other cash collateral held against derivatives | |
Total exposure – net of liquid securities and other cash collateral held against derivatives | Total exposure – net of liquid securities and other cash collateral held against derivatives | | $ | 1,208,200 | | | $ | 1,208,200 | | | |
Credit derivatives and credit-related notes used in credit portfolio management activities(b)(c) | Credit derivatives and credit-related notes used in credit portfolio management activities(b)(c) | $ | (2,817) | | $ | (13,530) | | $ | (1,796) | | $ | (18,143) | | | $ | (15,115) | | | $ | (3,028) | | $ | (18,143) | | | 83 | % |
Credit derivatives and credit-related notes used in credit portfolio management activities(b)(c) | |
Credit derivatives and credit-related notes used in credit portfolio management activities(b)(c) | | $ | (3,311) | | $ | (28,353) | | $ | (5,325) | | $ | (36,989) | | | $ | (28,869) | | | $ | (8,120) | | $ | (36,989) | | | 78 | % |
(a)Loans held-for-sale are primarily related to syndicated loans and loans transferred from the retained portfolio.
(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. In addition, the Firm obtains credit protection against certain loans in the retained loan portfolio through the issuance of credit-related notes.
(d)The maturity profile of retained loans, lending-related commitments and derivative receivables is generally based on remaining contractual maturity. Derivative contracts that are in a receivable position at March 31, 2023,2024, 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 that are deemed to be criticized align with the U.S. banking regulators’ definition of criticized exposures, which consist of the special mention, substandard and doubtful categories. Total criticized exposure, excluding loans held-for-sale and loans at fair value, was $34.4$45.8 billion and $31.3$41.4 billion atas of March 31, 20232024 and December 31, 2022,2023, representing approximately 3.0%3.6% and 2.7%3.3% of total wholesale credit exposure, respectively. Crespectively;riticized of the $45.8 billion, $42.2 billion was performing. The increase in criticized exposure increased,was driven by client-specific downgrades largely in Real Estate concentrated in Office, reflecting downgrades, and held-for-sale commitments in Technology and Consumer and Retail, Industrials, and Healthcare, partially offset by client-specific upgrades. Of the $34.4 billion of criticized exposure at March 31, 2023, approximately half was undrawn and $31.5 billion was performing.& Retail.
The table below summarizes by industry the Firm’s exposures as of March 31, 20232024 and December 31, 2022.2023. The industry of risk category is generally based on the client or counterparty’s primary business activity. Refer to Note 4 of JPMorgan Chase's 20222023 Form 10-K for additional information on industry concentrations.
| Wholesale credit exposure – industries(a) | Wholesale credit exposure – industries(a) | | |
| | Selected metrics |
| 30 days or more past due and accruing loans | Net charge-offs/ (recoveries) | Credit derivative hedges and credit-related notes(h) | Liquid securities and other cash collateral held against derivative receivables |
| Noninvestment-grade |
| | | | Selected metrics | |
| | | | Selected metrics | |
| | | | Selected metrics | |
| | | | | | 30 days or more past due and accruing loans | | | | | | | | 30 days or more past due and accruing loans | Net charge-offs/ (recoveries) | Credit derivative and credit-related notes(h) | Liquid securities and other cash collateral held against derivative receivables |
| | | Noninvestment-grade | | | | | Noninvestment-grade |
As of or for the three months ended | As of or for the three months ended | Credit exposure(f)(g) | Investment- grade | Noncriticized | Criticized performing | Criticized nonperforming | 30 days or more past due and accruing loans | Net charge-offs/ (recoveries) | Credit derivative hedges and credit-related notes(h) | Liquid securities and other cash collateral held against derivative receivables | As of or for the three months ended | Credit exposure(f)(g) | Investment- grade | Noncriticized | Criticized performing | Criticized nonperforming |
March 31, 2023 | March 31, 2024 | | March 31, 2024 |
(in millions) | (in millions) | Credit exposure(f)(g) | Investment- grade | Noncriticized | Criticized performing | Criticized nonperforming | (in millions) | Net charge-offs/ (recoveries) | Credit derivative and credit-related notes(h) | Liquid securities and other cash collateral held against derivative receivables | Credit exposure(f)(g) | Investment- grade | Noncriticized | Criticized performing | Criticized nonperforming |
Real Estate | Individuals and Individual Entities(b) | Individuals and Individual Entities(b) | 1,296 | | — | | — | | — | |
Asset Managers | |
Consumer & Retail | Consumer & Retail | 123,237 | | 62,484 | | 52,596 | | 7,496 | | 661 | | 353 | | 25 | | (2,886) | | — | |
Asset Managers | 94,870 | | 78,263 | | 16,538 | | 64 | | 5 | | 174 | | — | | — | | (7,354) | |
Technology, Media & Telecommunications | Technology, Media & Telecommunications | 79,342 | | 44,217 | | 27,467 | | 7,394 | | 264 | | 164 | | 45 | | (2,820) | | — | |
Industrials | Industrials | 71,764 | | 39,666 | | 28,694 | | 3,146 | | 258 | | 204 | | 3 | | (1,946) | | — | |
Healthcare | Healthcare | 66,249 | | 44,004 | | 19,940 | | 2,145 | | 160 | | 119 | | 7 | | (2,392) | | — | |
Banks & Finance Cos | 53,942 | | 29,958 | | 22,938 | | 1,025 | | 21 | | 1 | | — | | (343) | | (1,201) | |
Banks & Finance Companies | |
State & Municipal Govt(c) | |
Utilities | Utilities | 35,238 | | 25,013 | | 9,322 | | 767 | | 136 | | 68 | | (2) | | (1,595) | | — | |
Automotive | |
Oil & Gas | Oil & Gas | 33,994 | | 19,160 | | 14,289 | | 485 | | 60 | | 16 | | — | | (1,204) | | — | |
State & Municipal Govt(c) | 33,256 | | 32,426 | | 706 | | 123 | | 1 | | 62 | | — | | (10) | | (3) | |
Automotive | 33,079 | | 23,843 | | 8,709 | | 403 | | 124 | | 68 | | — | | (694) | | — | |
Insurance | |
Chemicals & Plastics | Chemicals & Plastics | 21,302 | | 12,276 | | 8,141 | | 882 | | 3 | | 14 | | — | | (694) | | — | |
Insurance | 20,894 | | 14,720 | | 5,833 | | 341 | | — | | 48 | | — | | (457) | | (6,615) | |
Transportation | |
Central Govt | |
Metals & Mining | Metals & Mining | 16,213 | | 8,964 | | 6,738 | | 476 | | 35 | | 14 | | (6) | | (199) | | (1) | |
Central Govt | 15,543 | | 15,199 | | 220 | | 124 | | — | | — | | — | | (4,239) | | (137) | |
Transportation | 14,118 | | 6,654 | | 5,497 | | 1,887 | | 80 | | 24 | | (4) | | (429) | | — | |
Securities Firms | Securities Firms | 7,977 | | 3,997 | | 3,980 | | — | | — | | — | | — | | (15) | | (2,609) | |
Financial Markets Infrastructure | Financial Markets Infrastructure | 4,223 | | 4,111 | | 112 | | — | | — | | — | | — | | — | | — | |
All other(d) | All other(d) | 124,765 | | 106,186 | | 18,137 | | 199 | | 243 | | 9 | | (3) | | (9,063) | | (3,003) | |
Subtotal | Subtotal | $ | 1,148,137 | | $ | 810,698 | | $ | 303,073 | | $ | 31,463 | | $ | 2,903 | | $ | 3,098 | | $ | 83 | | $ | (29,712) | | $ | (20,923) | |
Loans held-for-sale and loans at fair value | Loans held-for-sale and loans at fair value | 33,060 | | |
Receivables from customers | Receivables from customers | 43,943 | | |
Receivables from customers | |
Receivables from customers | |
Total(e) | Total(e) | $ | 1,225,140 | | |
Total(e) | |
Total(e) | |
| (continued from previous page) | (continued from previous page) | | |
| Selected metrics |
| 30 days or more past due and accruing(i) loans | Net charge-offs/ (recoveries) | Credit derivative hedges and credit-related notes(h) | | Liquid securities and other cash collateral held against derivative receivables |
| Noninvestment-grade |
| | | | | | | | Selected metrics | |
| | | | | | | | Selected metrics | |
| | | | | | | | Selected metrics | |
| | | | | | | | 30 days or more past due and accruing loans | | | | | | | | | | 30 days or more past due and accruing loans | Net charge-offs/ (recoveries) | Credit derivative and credit-related notes(h) | | Liquid securities and other cash collateral held against derivative receivables |
| | | | Noninvestment-grade | | | | | | Noninvestment-grade |
As of or for the year ended | As of or for the year ended | Credit exposure(f)(g) | | Investment- grade | Noncriticized | | Criticized performing | Criticized nonperforming | 30 days or more past due and accruing(i) loans | Net charge-offs/ (recoveries) | Credit derivative hedges and credit-related notes(h) | | Liquid securities and other cash collateral held against derivative receivables | As of or for the year ended | Credit exposure(f)(g) | | Investment- grade | Noncriticized | | Criticized performing | Criticized nonperforming |
December 31, 2022 | |
December 31, 2023 | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Credit exposure(f)(g) | | Investment- grade | Noncriticized | | Criticized performing | Criticized nonperforming | 30 days or more past due and accruing(i) loans | Net charge-offs/ (recoveries) | Credit derivative hedges and credit-related notes(h) | | Liquid securities and other cash collateral held against derivative receivables |
Real Estate | Real Estate | |
Real Estate | |
Real Estate | |
Individuals and Individual Entities(b) | Individuals and Individual Entities(b) | 130,815 | | | 112,006 | | 18,104 | | | 360 | | 345 | |
Asset Managers | |
Consumer & Retail | Consumer & Retail | 120,555 | | | 60,781 | | 51,871 | | | 7,295 | | 608 | | 321 | | 49 | | (1,157) | | | — | |
Asset Managers | 95,656 | | | 78,925 | | 16,665 | | | 61 | | 5 | | 15 | | (1) | | — | | | (8,278) | |
Technology, Media & Telecommunications | Technology, Media & Telecommunications | 72,286 | | | 39,199 | | 25,689 | | | 7,096 | | 302 | | 62 | | 39 | | (1,766) | | | — | |
Industrials | Industrials | 72,483 | | | 39,052 | | 30,500 | | | 2,809 | | 122 | | 282 | | 44 | | (1,258) | | | — | |
Healthcare | Healthcare | 62,613 | | | 43,839 | | 17,117 | | | 1,479 | | 178 | | 43 | | 27 | | (1,055) | | | — | |
Banks & Finance Cos | 51,816 | | | 27,811 | | 22,994 | | | 961 | | 50 | | 36 | | — | | (262) | | | (994) | |
Banks & Finance Companies | |
State & Municipal Govt(c) | |
Utilities | Utilities | 36,218 | | | 25,981 | | 9,294 | | | 807 | | 136 | | 21 | | 15 | | (607) | | | (1) | |
Automotive | |
Oil & Gas | Oil & Gas | 38,668 | | | 20,547 | | 17,616 | | | 474 | | 31 | | 57 | | (6) | | (414) | | | — | |
State & Municipal Govt(c) | 33,847 | | | 33,191 | | 529 | | | 126 | | 1 | | 36 | | — | | (9) | | | (5) | |
Automotive | 33,287 | | | 23,908 | | 8,839 | | | 416 | | 124 | | 198 | | (2) | | (513) | | | — | |
Insurance | |
Chemicals & Plastics | Chemicals & Plastics | 20,030 | | | 12,134 | | 7,103 | | | 744 | | 49 | | 10 | | 3 | | (298) | | | — | |
Insurance | 21,045 | | | 15,468 | | 5,396 | | | 181 | | — | | 1 | | — | | (273) | | | (7,296) | |
Transportation | |
Central Govt | |
Metals & Mining | Metals & Mining | 15,915 | | | 8,825 | | 6,863 | | | 222 | | 5 | | 7 | | (1) | | (27) | | | (4) | |
Central Govt | 19,095 | | | 18,698 | | 362 | | | 35 | | — | | — | | 10 | | (4,591) | | | (677) | |
Transportation | 15,009 | | | 6,497 | | 6,862 | | | 1,574 | | 76 | | 24 | | 2 | | (339) | | | — | |
Securities Firms | Securities Firms | 8,066 | | | 4,235 | | 3,716 | | | 115 | | — | | — | | (13) | | (26) | | | (2,811) | |
Financial Markets Infrastructure | Financial Markets Infrastructure | 4,962 | | | 4,525 | | 437 | | | — | | — | | — | | — | | — | | | — | |
All other(d) | All other(d) | 123,307 | | | 105,284 | | 17,555 | | | 223 | | 245 | | 4 | | (5) | | (5,435) | | | (2,948) | |
Subtotal | Subtotal | $ | 1,146,530 | | | $ | 810,772 | | $ | 304,457 | | | $ | 28,587 | | $ | 2,714 | | $ | 2,698 | | $ | 181 | | $ | (18,143) | | | $ | (23,014) | |
Loans held-for-sale and loans at fair value | Loans held-for-sale and loans at fair value | 35,427 | | |
| |
Receivables from customers | Receivables from customers | 49,257 | | |
Receivables from customers | |
Receivables from customers | |
Total(e) | Total(e) | $ | 1,231,214 | | |
Total(e) | |
Total(e) | |
(a)The industry rankings presented in the table as of December 31, 2022,2023, are based on the industry rankings of the corresponding exposures atas of March 31, 2023,2024, not actual rankings of such exposures atas of December 31, 2022.2023.
(b)Individuals and Individual Entities predominantly consists of Global Private Bank clients within AWM and J.P. Morgan Wealth Management within CCB, and includes exposure to personal investment companies and personal and testamentary trust.trusts.
(c)In addition to the credit risk exposure to states and municipal governments (both U.S. and non-U.S.) at March 31, 2024 and December 31, 2023 noted above, the Firm held $6.1held: $5.8 billion and $6.6$5.9 billion, respectively, of trading assets at March 31, 2023, and December 31, 2022, respectively; $13.5assets; $18.8 billion and $6.8$21.4 billion, respectively, of AFS securities; and $12.3$9.6 billion and $19.7$9.9 billion, respectively, of HTM securities, issued by U.S. state and municipal governments. Refer to Note 2 and Note 9 for further information.
(d)All other includes: SPEs and Private education and civic organizations, representing approximately 95%94% and 5%6%, respectively, at both March 31, 20232024 and December 31, 2022.2023. Refer to Note 13 for more information on exposures to SPEs.
(e)Excludes cash and other deposits placed with banks of $541.5$554.1 billion and $556.6$614.1 billion, at March 31, 2023,2024 and December 31, 2022,2023, 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 and credit-related notes used in credit portfolio management activities held against derivative receivables or loans and liquid securities and other cash collateral held against derivative receivables.
(g)Credit exposure includes held-for-sale and fair value option elected lending-related commitments.
(h)Represents the net notional amounts of protection purchased and sold through credit derivatives and credit-related notes 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.
Presented below is additional detail on certain of the Firm’s industry exposures.
Real Estate
Real Estate exposure was $170.8$205.8 billion as of March 31, 2023.2024. Criticized exposure increased by $736 million$1.9 billion from $4.0$9.2 billion at December 31, 20222023 to $4.8$11.1 billion at March 31, 2023,2024, driven by client-specific downgrades concentrated in Office, partially offset by client-specific upgrades.
| | March 31, 2023 | |
| March 31, 2024 | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (in millions, except ratios) | Loans and Lending-related Commitments | | Derivative Receivables | | Credit exposure | | % Investment-grade | % Drawn(d) | Loans and Lending-related Commitments | | Derivative Receivables | | Credit exposure | | % Investment-grade | % Drawn(d) |
Multifamily(a) | Multifamily(a) | $ | 98,713 | | | $ | 25 | | | $ | 98,738 | | | 81 | % | | 88 | % | |
Industrial | Industrial | 15,964 | | | 6 | | | 15,970 | | | 73 | | | 73 | | |
Industrial | |
Industrial | |
Office | |
Office | |
Office | Office | 15,106 | | | 19 | | | 15,125 | | | 74 | | | 75 | | |
Services and Non Income Producing | Services and Non Income Producing | 14,334 | | | 66 | | | 14,400 | | | 67 | | | 52 | | |
Services and Non Income Producing | |
Services and Non Income Producing | |
Other Income Producing Properties(b) | |
Other Income Producing Properties(b) | |
Other Income Producing Properties(b) | Other Income Producing Properties(b) | 12,484 | | | 192 | | | 12,676 | | | 71 | | | 63 | | |
Retail | Retail | 10,498 | | | 16 | | | 10,514 | | | 75 | | | 68 | | |
Retail | |
Retail | |
Lodging | |
Lodging | |
Lodging | Lodging | 3,330 | | | 26 | | | 3,356 | | | 7 | | | 40 | | |
Total Real Estate Exposure(c) | Total Real Estate Exposure(c) | $ | 170,429 | | | $ | 350 | | | $ | 170,779 | | | 76 | % | | 78 | % | |
Total Real Estate Exposure(c) | |
Total Real Estate Exposure(c) | |
| | December 31, 2023 | |
| | December 31, 2022 | |
| December 31, 2023 | |
| | December 31, 2023 | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (in millions, except ratios) | Loans and Lending-related Commitments | | Derivative Receivables | | Credit exposure | | % Investment- grade | % Drawn(d) | Loans and Lending-related Commitments | | Derivative Receivables | | Credit exposure | | % Investment- grade | % Drawn(d) |
Multifamily(a) | Multifamily(a) | $ | 99,555 | | | $ | 17 | | | $ | 99,572 | | | 82 | % | | 87 | % | |
Industrial | Industrial | 15,928 | | | 1 | | | 15,929 | | | 72 | | | 71 | | |
Industrial | |
Industrial | |
Office | |
Office | |
Office | Office | 14,917 | | | 25 | | | 14,942 | | | 74 | | | 73 | | |
Services and Non Income Producing | Services and Non Income Producing | 13,968 | | | 10 | | | 13,978 | | | 65 | | | 48 | | |
Services and Non Income Producing | |
Services and Non Income Producing | |
Other Income Producing Properties(b) | |
Other Income Producing Properties(b) | |
Other Income Producing Properties(b) | Other Income Producing Properties(b) | 12,701 | | | 150 | | | 12,851 | | | 70 | | | 62 | | |
Retail | Retail | 10,192 | | | 8 | | | 10,200 | | | 75 | | | 68 | | |
Retail | |
Retail | |
Lodging | |
Lodging | |
Lodging | Lodging | 3,347 | | | 38 | | | 3,385 | | | 6 | | | 37 | | |
Total Real Estate Exposure | Total Real Estate Exposure | $ | 170,608 | | | $ | 249 | | | $ | 170,857 | | | 76 | % | | 77 | % | |
Total Real Estate Exposure | |
Total Real Estate Exposure | |
(a)Multifamily exposure is largely in California.
(b)Other Income Producing Properties consists of clients with diversified property types or other property types outside of categories listed in the table above.
(c)Real Estate exposure is approximately 78%83% secured; unsecured exposure is approximately 78% investment-grade.predominantly investment-grade largely to Real Estate Investment Trusts (“REITs”) and Real Estate Operating Companies (“REOCs”) whose underlying assets are generally diversified.
(d)Represents drawn exposure as a percentage of credit exposure.
Consumer & Retail
Consumer & Retail exposure was $123.2$125.5 billion as of March 31, 2023.2024. Criticized exposure increased by $254$612 million from $7.9$8.3 billion at December 31, 20222023 to $8.2$8.9 billion at March 31, 20232024, driven by client-specific downgrades and net portfolio activity, largely offset by client-specific upgrades and net portfolio activity.upgrades.
| | March 31, 2023 | |
| March 31, 2024 | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (in millions, except ratios) | Loans and Lending-related Commitments | | Derivative Receivables | | Credit exposure | | % Investment-grade | % Drawn(d) | Loans and Lending-related Commitments | | Derivative Receivables | | Credit exposure | | % Investment-grade | % Drawn(d) |
Retail(a) | Retail(a) | $ | 36,022 | | | $ | 268 | | | $ | 36,290 | | | 53 | % | | 31 | % | |
Business and Consumer Services | Business and Consumer Services | 32,012 | | | 409 | | | 32,421 | | | 49 | | | 40 | | |
Business and Consumer Services | |
Business and Consumer Services | |
Food and Beverage | |
Food and Beverage | |
Food and Beverage | Food and Beverage | 31,264 | | | 874 | | | 32,138 | | | 58 | | | 40 | | |
Consumer Hard Goods | Consumer Hard Goods | 13,957 | | | 171 | | | 14,128 | | | 47 | | | 38 | | |
Consumer Hard Goods | |
Consumer Hard Goods | |
Leisure(b) | |
Leisure(b) | |
Leisure(b) | Leisure(b) | 8,184 | | | 76 | | | 8,260 | | | 25 | | | 40 | | |
Total Consumer & Retail(c) | Total Consumer & Retail(c) | $ | 121,439 | | | $ | 1,798 | | | $ | 123,237 | | | 51 | % | | 37 | % | |
Total Consumer & Retail(c) | |
Total Consumer & Retail(c) | |
| | December 31, 2023 | |
| | December 31, 2022 | |
| December 31, 2023 | |
| | December 31, 2023 | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (in millions, except ratios) | Loans and Lending-related Commitments | | Derivative Receivables | | Credit exposure | | % Investment- grade | % Drawn(d) | Loans and Lending-related Commitments | | Derivative Receivables | | Credit exposure | | % Investment- grade | % Drawn(d) |
Retail(a) | Retail(a) | $ | 33,891 | | | $ | 309 | | | $ | 34,200 | | | 50 | % | | 33 | % | |
Business and Consumer Services | Business and Consumer Services | 31,256 | | | 384 | | | 31,640 | | | 50 | | | 40 | | |
Business and Consumer Services | |
Business and Consumer Services | |
Food and Beverage | |
Food and Beverage | |
Food and Beverage | Food and Beverage | 31,706 | | | 736 | | | 32,442 | | | 59 | | | 39 | | |
Consumer Hard Goods | Consumer Hard Goods | 13,879 | | | 172 | | | 14,051 | | | 51 | | | 39 | | |
Consumer Hard Goods | |
Consumer Hard Goods | |
Leisure(b) | |
Leisure(b) | |
Leisure(b) | Leisure(b) | 8,173 | | | 49 | | | 8,222 | | | 21 | | | 45 | | |
Total Consumer & Retail | Total Consumer & Retail | $ | 118,905 | | | $ | 1,650 | | | $ | 120,555 | | | 50 | % | | 38 | % | |
Total Consumer & Retail | |
Total Consumer & Retail | |
(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. As of March 31, 20232024, approximately 89%91% of the noninvestment-grade Leisure portfolio is secured.
(c)Consumer & Retail exposure is approximately 57%60% secured; unsecured exposure is approximately 79%80% investment-grade.
(d)Represents drawn exposure as a percent of credit exposure.
Oil & Gas
Oil & Gas exposure was $34.0$33.3 billion as of March 31, 20232024, of which $545$290 million was considered criticized exposure.criticized.
| | March 31, 2023 | |
| March 31, 2024 | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (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) |
Exploration & Production (“E&P”) and Oil field Services | Exploration & Production (“E&P”) and Oil field Services | $ | 16,364 | | | $ | 1,847 | | | $ | 18,211 | | | 53 | % | | 29 | % | |
Other Oil & Gas(a) | Other Oil & Gas(a) | 15,544 | | | 239 | | | 15,783 | | | 61 | | | 27 | | |
Other Oil & Gas(a) | |
Other Oil & Gas(a) | |
Total Oil & Gas(b) | |
Total Oil & Gas(b) | |
Total Oil & Gas(b) | Total Oil & Gas(b) | $ | 31,908 | | | $ | 2,086 | | | $ | 33,994 | | | 56 | % | | 28 | % | |
| | December 31, 2023 | |
| | December 31, 2022 | |
| December 31, 2023 | |
| | December 31, 2023 | |
(in millions, except ratios) | |
(in millions, except ratios) | |
(in millions, except ratios) | (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) |
Exploration & Production (“E&P”) and Oil field Services | Exploration & Production (“E&P”) and Oil field Services | $ | 17,729 | | | $ | 4,666 | | | $ | 22,395 | | | 50 | % | | 25 | % | |
Other Oil & Gas(a) | Other Oil & Gas(a) | 15,818 | | | 455 | | | 16,273 | | | 57 | | | 25 | | |
Other Oil & Gas(a) | |
Other Oil & Gas(a) | |
Total Oil & Gas | Total Oil & Gas | $ | 33,547 | | | $ | 5,121 | | | $ | 38,668 | | | 53 | % | | 25 | % | |
Total Oil & Gas | |
Total Oil & Gas | |
(a)Other Oil & Gas includes Integrated Oil & Gas companies, Midstream/Oil Pipeline companies and refineries.
(b)Oil & Gas exposure is approximately 40%38% secured, overapproximately half of which is reserve-based lending to the Exploration & Production sub-sector; unsecured exposure is approximately 68% investment-grade.
(c)Represents drawn exposure as a percent of credit exposure.
Loans
In its wholesale businesses, the Firm provides loans to a variety of clients, ranging from large corporate and institutional clients to high-net-worth individuals. Refer to Note 11 for a further discussion on loans, including information about delinquencies, loan modifications and other credit quality indicators.
The following table presents the change in the nonaccrual loan portfolio for the three months ended March 31, 20232024 and 2022.2023. Since March 31, 2022,2023, nonaccrual loan exposure decreasedincreased by $148$966 million driven by Transportation, civic organizationsretained loans in Real Estate concentrated in Office and SPEs, due to paydowns,in Healthcare, reflecting downgrades, and in Individuals, predominantly driven by the impact of First Republic, partially offset by Consumer & Retail and Industrials due toa client-specific downgrades.upgrade in civic organizations.
| Wholesale nonaccrual loan activity | Wholesale nonaccrual loan activity | Wholesale nonaccrual loan activity |
Three months ended March 31, (in millions) | Three months ended March 31, (in millions) | | 2023 | 2022 | Three months ended March 31, (in millions) | | 2024 | 2023 |
Beginning balance | Beginning balance | | $ | 2,395 | | $ | 2,445 | |
Additions | Additions | | 672 | | 866 | |
Reductions: | Reductions: | |
Paydowns and other | Paydowns and other | | 267 | | 357 | |
Paydowns and other | |
Paydowns and other | |
Gross charge-offs | Gross charge-offs | | 95 | | 17 | |
Returned to performing status | Returned to performing status | | 53 | | 186 | |
Sales | Sales | | 52 | | 3 | |
Total reductions | Total reductions | | 467 | | 563 | |
Net changes | Net changes | | 205 | | 303 | |
Ending balance | Ending balance | | $ | 2,600 | | $ | 2,748 | |
The following table presents net charge-offs/recoveries, which are defined as gross charge-offs less recoveries, for the three months ended March 31, 20232024 and 2022.2023. The amounts in the table below do not include gains or losses from sales of nonaccrual loans recognized in noninterest revenue.
| | | | | | | | | | | |
Wholesale net charge-offs/(recoveries) | |
(in millions, except ratios) | Three months ended March 31, | | |
2023 | 2022 | | | |
Loans | | | | | |
Average loans retained | $ | 601,401 | | $ | 559,395 | | | | |
Gross charge-offs | 105 | | 52 | | | | |
Gross recoveries collected | (22) | | (22) | | | | |
Net charge-offs/(recoveries) | 83 | | 30 | | | | |
Net charge-off/(recovery) rate | 0.06 | % | 0.02 | % | | | |
| | | | | | | | | | | |
Wholesale net charge-offs/(recoveries) | |
(in millions, except ratios) | Three months ended March 31, | | |
2024 | 2023 | | | |
Loans | | | | | |
Average loans retained | $ | 664,588 | | $ | 601,401 | | | | |
Gross charge-offs | 136 | | 105 | | | | |
Gross recoveries collected | (50) | | (22) | | | | |
Net charge-offs/(recoveries) | 86 | | 83 | | | | |
Net charge-off/(recovery) rate | 0.05 | % | 0.06 | % | | | |
Modified wholesale loans
The amortized cost of wholesale FDMs was $609 million and $437 million, of which $149 million and $220 million were nonaccrual loan exposure for the three months ended March 31, 2023.2024 and 2023, respectively. Refer to Note 1 of JPMorgan Chase’s 2023 Form 10-K and Note 11 of this Form 10-Q for further information.
Wholesale TDRs were $418 million for the three months ended March 31, 2022. Refer to Note 11 for further information on TDRs in prior periods.
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 fulfills its obligations under these guarantees, and the clients subsequently fail to perform according to the terms of these contracts. Most of these commitments and guarantees have historically been refinanced, extended, cancelled, or expired without being drawn upon or a default occurring. As a result, the Firm does not believe that the total contractual amount of these wholesale lending-related commitments is representative of the Firm’s expected future credit exposure or funding requirements. Refer to Note 22 for further information on wholesale lending-related commitments.
Receivables from customers
Receivables from customers reflect held-for-investment margin loans to brokerage clients in CIB, CCB and AWM that are collateralized by assets maintained in the clients’ brokerage accounts (e.g.,(including cash on deposit, and primarily liquid and readily marketable debt or equity securities). Because of this collateralization, no allowance for credit losses is generally 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. Credit risk arising from lending activities subject to collateral maintenance requirements is generally mitigated by factors such as the short-term nature of the activity, the fair value of collateral held and the Firm’s right to call for, and the borrower’s obligation to provide, additional margin when the fair value of the collateral declines. Because of these mitigating factors, these receivables generally do not require an allowance for credit losses. However, if in management’s judgment, an allowance for credit losses is required, the Firm estimates expected credit losses based on the value of the collateral and probability of borrower default. These receivables are reported within accrued interest and accounts receivable on the Firm’s Consolidated balance sheets.
Refer to Note 13of JPMorgan Chase's 2023 Form 10-K for further information on the Firm’s accounting policies for the allowance for credit losses.
Derivative contracts
Derivatives enable clients and counterparties to manage risk, including credit risk and risks arising from fluctuations in interest rates, foreign exchange and equities and commodities prices. 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 risk and other market risk exposure. The nature of the counterparty and the settlement mechanism of the
derivative affect the credit risk to which the Firm is exposed. For over-the-counter ("OTC") derivatives, the Firm is exposed to the credit risk of the derivative counterparty. For exchange-traded derivatives (“ETD”), such as futures and options, and cleared over-the-counter (“OTC-cleared”) derivatives, the Firm can also be exposed to the credit risk of the relevant central counterparty clearing house (“CCP”).CCP. Where possible, the Firm seeks to mitigate its credit risk exposures arising from derivative contracts through the use of legally enforceable master netting arrangements and collateral agreements.
The percentage of the Firm’s over-the-counterOTC derivative transactions 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 89% and 87% at both March 31, 2023,2024 and December 31, 2022, respectively.2023. Refer to Note 4 for additional information on the Firm’s use of collateral agreements and for a further discussion of derivative contracts, counterparties and settlement types.
The fair value of derivative receivables reported on the Consolidated balance sheets was $59.3$56.6 billion and $70.9$54.9 billion at March 31, 2023,2024 and December 31, 2022,2023, respectively. The decreaseincrease was primarily driven byas a result of market movements in CIB Markets.movements. Derivative receivables represent the fair value of the derivative contracts after giving effect to legally enforceable master netting agreements and the related cash collateral held by the Firm.
In addition, the Firm heldholds liquid securities and other cash collateral that may be used as security when the fair value of the client’s exposure is in the Firm’s favor. For these purposes, the definition of liquid securities is consistent with the definition of high quality liquid assets as defined in the LCR rule.
In management’s view, the appropriate measure of current credit risk should also take into consideration other collateral, which generally represents securities that do not qualify as high quality liquid assets under the LCR rule. The benefits of these additional collateral amounts for each counterparty are subject to a legally enforceable master netting agreement and limited to the net amount of the derivative receivables for each counterparty.
The Firm also holds additional collateral (primarily cash, G7 government securities, other liquid government agency and guaranteed securities, and corporate debt and equity securities) delivered by clients at the initiation of transactions, as well as collateral related to contracts that have a non-daily call frequency and collateral that the Firm has agreed to return but has not yet settled as of the reporting date. Although this collateral does not reduce the receivables balances and is not included in the tables below, 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. Refer to Note 4 for additional information on the Firm’s use of collateral agreements.agreements for derivative transactions.
The following tables summarize the net derivative receivables and the internal ratings profile for the periods presented. | Derivative receivables | Derivative receivables | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | March 31, 2023 | December 31, 2022 | March 31, 2024 | December 31, 2023 |
Total, net of cash collateral | Total, net of cash collateral | $ | 59,274 | | $ | 70,880 | |
Liquid securities and other cash collateral held against derivative receivables | Liquid securities and other cash collateral held against derivative receivables | (20,923) | | (23,014) | |
Total, net of liquid securities and other cash collateral | Total, net of liquid securities and other cash collateral | $ | 38,351 | | $ | 47,866 | |
Other collateral held against derivative receivables | Other collateral held against derivative receivables | (1,234) | | (1,261) | |
Total, net of collateral | Total, net of collateral | $ | 37,117 | | $ | 46,605 | |
| Ratings profile of derivative receivables | Ratings profile of derivative receivables | | | | |
| |
| |
|
| March 31, 2023 | | December 31, 2022 | March 31, 2024 | | December 31, 2023 |
(in millions, except ratios) |
(in millions, except ratios) | Exposure net of collateral | % of exposure net of collateral | | Exposure net of collateral | | % of exposure net of collateral |
(in millions, except ratios) | Exposure net of collateral | % of exposure net of collateral | | Exposure net of collateral | | % of exposure net of collateral |
Investment-grade | Investment-grade | $ | 28,199 | | 76 | % | | $ | 35,097 | | | 75 | % | Investment-grade | $ | 25,251 | | 78 | 78 | % | | $ | 24,004 | | | 76 | | 76 | % |
Noninvestment-grade | Noninvestment-grade | 8,918 | | 24 | | | 11,508 | | (a) | 25 | |
Total | Total | $ | 37,117 | | 100 | % | | $ | 46,605 | | | 100 | % | Total | $ | 32,450 | | 100 | 100 | % | | $ | 31,410 | | | 100 | | 100 | % |
Credit portfolio management activities
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 traditional lending activities (loans and lending-related commitments) and derivatives counterparty exposure in the Firm’s wholesale businesses. In addition, the Firm obtains credit protection against certain loans in the retained wholesale portfolio through the issuance of credit-related notes. Information on credit portfolio management activities is provided in the table below.
| Credit derivatives and credit-related notes used in credit portfolio management activities | Credit derivatives and credit-related notes used in credit portfolio management activities | Credit derivatives and credit-related notes used in credit portfolio management activities |
| Notional amount of protection purchased and sold(a) |
| Notional amount of protection purchased and sold(a) | | | Notional amount of protection purchased and sold(a) |
(in millions) | (in millions) | March 31, 2023 | | December 31, 2022 | (in millions) | March 31, 2024 | | December 31, 2023 |
Credit derivatives and credit-related notes used to manage: | Credit derivatives and credit-related notes used to manage: | |
Loans and lending-related commitments | Loans and lending-related commitments | $ | 13,923 | | | $ | 6,422 | |
Loans and lending-related commitments | |
Loans and lending-related commitments | |
Derivative receivables | Derivative receivables | 15,789 | | | 11,721 | |
Credit derivatives and credit-related notes used in credit portfolio management activities | Credit derivatives and credit-related notes used in credit portfolio management activities | $ | 29,712 | | | $ | 18,143 | |
(a)Amounts are presented net, considering the Firm’s net protection purchased or sold with respect to each underlying reference entity or index.
Refer to Credit derivatives in Note 4 of this Form 10-Q and Note 5 of JPMorgan Chase’s 20222023 Form 10-K for further information on credit derivatives and derivatives used in credit portfolio management activities.
| | | | | | | | | | | | | | |
ALLOWANCE FOR CREDIT LOSSES |
The Firm’s allowance for credit losses represents management's estimate of expected credit losses over the remaining expected life of the Firm's financial assets measured at amortized cost and certain off-balance sheet lending-related commitments. The Firm's allowance for credit losses generally consists of:
•the allowance for loan losses, which covers the Firm’s retained loan portfolios (scored and risk-rated), and is presented separately on the Consolidated balance sheets,
•the allowance for lending-related commitments, which is reflected in accounts payable and other liabilities on the Consolidated balance sheets, and
•the allowance for credit losses on investment securities, which is reflected in investment securities on the Consolidated balance sheets.
Discussion of changes in the allowance
The allowance for credit losses as of March 31, 2024 was relatively flat when compared to December 31, 2023, reflecting:
•a net reduction of $142 million in wholesale, which included a net addition associated with net downgrade activity, largely in Real Estate, primarily in CB, which was $22.8 billion, reflecting more than offset by the net impact of changes in the loan and lending-related commitment portfolios, as well as updates to certain macroeconomic variables, and
•a net addition of $1.1 billion from December 31, 2022. The$44 million in consumer, consisting of:
–$153 million in Card Services, primarily due to seasoning of newer vintages, largely offset by reduced borrower uncertainty,
predominantly offset by:
–a $125 million net addition to the allowance for credit losses was predominantly reduction in Home Lending, primarily driven by a deteriorationimprovements in the Firm's weighted-average economic outlook including the impact from changes to the Firm’s macroeconomic scenarios, andfor home prices.
The Firm has maintained the additional weight placed on the relative adverse scenario. The additional weight placed onscenarios in the relative adverse scenario reflects an increased probabilityfirst quarter of a moderate recession due2023 to tightening financial conditions, including higher inflation, changes in monetary policy, and geopolitical risks.
The net addition to the allowance consisted of:
•$726 million in wholesale, which also reflected net downgrade activity, and an addition to the allowance for credit losses associated with Other assets in Corporate, and
•$416 million in consumer.
The allowance for credit losses also reflected a reduction of $587 millionreflect downside risks as a result of the adoption of changes to the TDR accounting guidance. Refer to Note 1 for further information.persistent inflation and tightening financial conditions.
The Firm's allowance for credit losses is estimated using a weighted average of five internally developed macroeconomic scenarios. The adverse scenarios incorporate more punitive macroeconomic factors than the central case assumptions provided in the table below, resulting in a weighted average U.S. unemployment rate peaking at 5.8%5.4% in the thirdfirst quarter of 2024,2025, and a 1.2% lowerweighted average U.S. real GDP exitinglevel that is 1.7% lower than the central case at the end of the second quarter of 2024.2025.
The following table presents the Firm’s central case assumptions reflected U.S. unemployment rates and U.S. real GDP as follows:for the periods presented:
| | Assumptions at March 31, 2023 |
| 2Q23 | 4Q23 | 2Q24 |
| Central case assumptions at March 31, 2024 | | | Central case assumptions at March 31, 2024 |
| 2Q24 | | | 2Q24 | 4Q24 | 2Q25 |
U.S. unemployment rate(a) | U.S. unemployment rate(a) | 3.5 | % | 4.1 | % | 4.9 | % | U.S. unemployment rate(a) | 3.9 | % | 4.2 | % | 4.1 | % |
YoY growth in U.S. real GDP(b) | YoY growth in U.S. real GDP(b) | 2.0 | % | 0.4 | % | — | % | YoY growth in U.S. real GDP(b) | 2.6 | % | 0.9 | % | 1.2 | % |
| | Assumptions at December 31, 2022 |
| 2Q23 | 4Q23 | 2Q24 |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| 2Q24 | | | 2Q24 | 4Q24 | 2Q25 |
U.S. unemployment rate(a) | U.S. unemployment rate(a) | 3.8 | % | 4.3 | % | 5.0 | % | U.S. unemployment rate(a) | 4.1 | % | 4.4 | % | 4.1 | % |
YoY growth in U.S. real GDP(b) | YoY growth in U.S. real GDP(b) | 1.5 | % | 0.4 | % | — | % | YoY growth in U.S. real GDP(b) | 1.8 | % | 0.7 | % | 1.0 | % |
(a)Reflects quarterly average of forecasted U.S. unemployment rate.
(b)The year over year growth in U.S. real GDP in the forecast horizon of the central scenario is calculated as the percentage change in U.S. real GDP levels from the prior year.
Subsequent changes to this forecast and related estimates will be reflected in the provision for credit losses in future periods.
Refer to Note 13 and Note 10 of JPMorgan Chase's 20222023 Form 10-K for a description of the policies, methodologies and judgments used to determine the Firm’s allowancesallowance for credit losses on loans, lending-related commitments, and investment securities.securities.
Refer to Consumer Credit Portfolio on pages 50-53,54-57, Wholesale Credit Portfolio on pages 54-6258-66 and Note 11 for additional information on the consumer and wholesale credit portfolios.
Refer to Critical Accounting Estimates Used by the Firm on pages 74-7678-80 for further information on the allowance for credit losses and related management judgments.
| Allowance for credit losses and related information | Allowance for credit losses and related information | | |
| 2023 | | 2022 |
| 2024 | |
| 2024 | |
| 2024 | | | 2023 |
Three months ended March 31, | Three months ended March 31, | Consumer, excluding credit card | Credit card | Wholesale | Total | | Consumer, excluding credit card | Credit card | Wholesale | Total | Three months ended March 31, | Consumer, excluding credit card | Credit card | Wholesale | Total | | Consumer, excluding credit card | Credit card | Wholesale | Total |
(in millions, except ratios) | (in millions, except ratios) | |
Allowance for loan losses | Allowance for loan losses | |
Allowance for loan losses | |
Allowance for loan losses | |
Beginning balance at January 1, | |
Beginning balance at January 1, | |
Beginning balance at January 1, | Beginning balance at January 1, | $ | 2,040 | | $ | 11,200 | | $ | 6,486 | | $ | 19,726 | | | $ | 1,765 | | $ | 10,250 | | $ | 4,371 | | $ | 16,386 | |
Cumulative effect of a change in accounting principle(a) | Cumulative effect of a change in accounting principle(a) | (489) | | (100) | | 2 | | (587) | | | NA | Cumulative effect of a change in accounting principle(a) | NA | | (489) | (100) | 2 | (587) |
Gross charge-offs | Gross charge-offs | 235 | | 1,111 | | 105 | | 1,451 | | | 204 | | 720 | | 52 | | 976 | |
Gross recoveries collected | Gross recoveries collected | (103) | | (189) | | (22) | | (314) | | | (158) | | (214) | | (22) | | (394) | |
Net charge-offs/(recoveries) | 132 | | 922 | | 83 | | 1,137 | | | 46 | | 506 | | 30 | | 582 | |
Net charge-offs | |
Provision for loan losses | Provision for loan losses | 247 | | 1,222 | | 578 | | 2,047 | | | 175 | | 506 | | 687 | | 1,368 | |
Other | Other | — | | — | | 4 | | 4 | | | — | | 20 | | 20 | |
Ending balance at March 31, | Ending balance at March 31, | $ | 1,666 | | $ | 11,400 | | $ | 6,987 | | $ | 20,053 | | | $ | 1,894 | | $ | 10,250 | | $ | 5,048 | | $ | 17,192 | |
| Allowance for lending-related commitments | Allowance for lending-related commitments | |
Allowance for lending-related commitments | |
Allowance for lending-related commitments | |
Beginning balance at January 1, | |
Beginning balance at January 1, | |
Beginning balance at January 1, | Beginning balance at January 1, | $ | 76 | | $ | — | | $ | 2,306 | | $ | 2,382 | | | $ | 113 | | $ | — | | $ | 2,148 | | $ | 2,261 | |
Provision for lending-related commitments | Provision for lending-related commitments | 1 | | — | | (14) | | (13) | | | (2) | | — | | 98 | | 96 | |
Other | Other | — | | — | | 1 | | 1 | | | — | | — | | 1 | | 1 | |
Ending balance at March 31, | Ending balance at March 31, | $ | 77 | | $ | — | | $ | 2,293 | | $ | 2,370 | | | $ | 111 | | $ | — | | $ | 2,247 | | $ | 2,358 | |
| Impairment methodology | Impairment methodology | |
Impairment methodology | |
Impairment methodology | |
Asset-specific(b) | |
Asset-specific(b) | |
Asset-specific(b) | Asset-specific(b) | $ | (1,030) | | $ | — | | $ | 437 | | $ | (593) | | | $ | (644) | | $ | 262 | | $ | 485 | | $ | 103 | |
Portfolio-based | Portfolio-based | 2,696 | | 11,400 | | 6,550 | | 20,646 | | | 2,538 | | 9,988 | | 4,563 | | 17,089 | |
Total allowance for loan losses | Total allowance for loan losses | $ | 1,666 | | $ | 11,400 | | $ | 6,987 | | $ | 20,053 | | | $ | 1,894 | | $ | 10,250 | | $ | 5,048 | | $ | 17,192 | |
| Impairment methodology | Impairment methodology | |
Impairment methodology | |
Impairment methodology | |
Asset-specific | |
Asset-specific | |
Asset-specific | Asset-specific | $ | — | | $ | — | | $ | 45 | | $ | 45 | | | $ | — | | $ | — | | $ | 139 | | $ | 139 | |
Portfolio-based | Portfolio-based | 77 | | — | | 2,248 | | 2,325 | | | 111 | | — | | 2,108 | | 2,219 | |
Total allowance for lending-related commitments | Total allowance for lending-related commitments | $ | 77 | | $ | — | | $ | 2,293 | | $ | 2,370 | | | $ | 111 | | $ | — | | $ | 2,247 | | $ | 2,358 | |
Total allowance for investment securities | Total allowance for investment securities | NA | $ | 90 | | | NA | $ | 41 | |
Total allowance for credit losses(c) | $ | 1,743 | | $ | 11,400 | | $ | 9,280 | | $ | 22,513 | | | $ | 2,005 | | $ | 10,250 | | $ | 7,295 | | $ | 19,591 | |
Total allowance for credit losses(c)(d) | |
| Memo: | Memo: | |
Retained loans, end of period | $ | 300,447 | | $ | 180,079 | | $ | 604,324 | | $ | 1,084,850 | | | $ | 296,161 | | $ | 152,283 | | $ | 569,953 | | $ | 1,018,397 | |
Memo: | |
Memo: | |
Retained loans, end-of-period | |
Retained loans, end-of-period | |
Retained loans, end-of-period | |
Retained loans, average | Retained loans, average | 300,585 | | 180,451 | | 601,401 | | 1,082,437 | | 295,460 | | 149,398 | | 559,395 | | 1,004,253 | | Retained loans, average | 394,033 | | 204,637 | 204,637 | | 664,588 | 664,588 | | 1,263,258 | 1,263,258 | | 300,585 | | 180,451 | 180,451 | | 601,401 | 601,401 | | 1,082,437 | 1,082,437 |
Credit ratios | Credit ratios | |
Allowance for loan losses to retained loans | Allowance for loan losses to retained loans | 0.55 | % | 6.33 | % | 1.16 | % | 1.85 | % | | 0.64 | % | 6.73 | % | 0.89 | % | 1.69 | % |
Allowance for loan losses to retained nonaccrual loans(d) | 43 | | NM | 316 | | 331 | | | 42 | | NM | 221 | | 254 | |
Allowance for loan losses to retained loans | |
Allowance for loan losses to retained loans | | 0.44 | % | 6.09 | % | 1.20 | % | 1.77 | % | | 0.55 | % | 6.33 | % | 1.16 | % | 1.85 | % |
Allowance for loan losses to retained nonaccrual loans(e) | |
Allowance for loan losses to retained nonaccrual loans excluding credit card | Allowance for loan losses to retained nonaccrual loans excluding credit card | 43 | | NM | 316 | | 143 | | | 42 | | NM | 221 | | 102 | |
Net charge-off/(recovery) rates | Net charge-off/(recovery) rates | 0.18 | | 2.07 | | 0.06 | | 0.43 | | | 0.06 | | 1.37 | | 0.02 | | 0.24 | |
(a)Represents the impact to the allowance for loan losses upon the Firm's adoption of changes to the TDR accounting guidance on January 1, 2023. The adoption of this guidance eliminated the existing accounting and disclosure requirements for TDRs, including the requirement to measure the allowance using a discounted cash flow ("DCF") methodology. The Firm elected to change from an asset-specific allowance approach to its non-DCF, portfolio-based allowance approach for modified loans to troubled borrowers for all portfolios except collateral-dependent loans and nonaccrual risk-rated loans, for which the asset-specific allowance approach will continue to apply. Refer to Note 1 of JPMorgan Chase’s 2023 Form 10-K for further information.
(b)Includes collateral-dependent loans, including those for which foreclosure is deemed probable, and nonaccrual risk-rated loans for all periods presented. Prior periods also include non collateral-dependent TDRs or reasonably expected TDRs and modified purchased credit deteriorated ("PCD") loans.
(c)At March 31, 2024 and 2023, in addition to the allowance for credit losses in the table above, the Firm also had an allowance for credit losses of $274 million and $20 million, respectively, associated with certain accounts receivable in CIB. At March 31, 2023, the Firm also had an allowance for credit losses of $241 million associated with Other assets in Corporate and $20 millionCorporate.
(d)As of March 31, 2024, included the allowance for credit losses associated with certain accounts receivable in CIB.First Republic.
(d)(e)The Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance.
Allocation of allowance for loan losses
The table below presents a breakdown of the allowance for loan losses by loan class. Refer to Note 11 for further information on loan classes.
| | March 31, 2023 | | December 31, 2022 |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
(in millions, except ratios) | (in millions, except ratios) | Allowance for loan losses | Percent of retained loans to total retained loans | | Allowance for loan losses | Percent of retained loans to total retained loans | (in millions, except ratios) | Allowance for loan losses | Percent of retained loans to total retained loans | | Allowance for loan losses | Percent of retained loans to total retained loans |
Residential real estate | Residential real estate | $ | 655 | | 22 | % | | $ | 1,070 | | 22 | % | Residential real estate | $ | 656 | | 25 | 25 | % | | $ | 817 | | 25 | 25 | % |
Auto and other | Auto and other | 1,011 | | 6 | | | 970 | | 6 | |
Consumer, excluding credit card | Consumer, excluding credit card | 1,666 | | 28 | | | 2,040 | | 28 | |
Credit card | Credit card | 11,400 | | 17 | | | 11,200 | | 17 | |
Total consumer | Total consumer | 13,066 | | 44 | | | 13,240 | | 45 | |
Secured by real estate | Secured by real estate | 1,865 | | 12 | | | 1,782 | | 12 | |
Commercial and industrial | Commercial and industrial | 3,644 | | 16 | | | 3,507 | | 15 | |
Other | Other | 1,478 | | 28 | | | 1,197 | | 28 | |
Total wholesale | Total wholesale | 6,987 | | 56 | | | 6,486 | | 55 | |
Total | Total | $ | 20,053 | | 100 | % | | $ | 19,726 | | 100 | % | Total | $ | 22,351 | | 100 | 100 | % | | $ | 22,420 | | 100 | 100 | % |
| | | | | | | | | | | | | | |
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 by Treasury and CIO in connection with the Firm’s balance sheet and asset-liability management objectives. Principal investments are predominantly privately-held financial instruments and are managed in the LOBs and 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 predominantly consists of high-quality securities. At March 31, 2023,2024, the Treasury and CIO investment securities portfolio, net of the allowance for credit losses, was $608.1$568.3 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 risk ratings). Refer to Corporate segment results on pages 33-3435-36 and Note 9 for further information on the investment securities portfolio and internal risk ratings. Refer to Liquidity Risk Management on pages 42-4744-51 for further information on related liquidity risk. Refer to Market Risk Management on pages 67-7271-76 for further information on the market risk inherent in the portfolio.
Principal investment risk
Principal investments are typically privately-held financial instruments representing ownership interests or other forms of junior capital. In general, principal investments include tax-oriented investments and investments made to enhance or accelerate the Firm’s business strategies and exclude those that are consolidated on the Firm's balance sheets. These investments are made by dedicated investing businesses or as part of a broader business strategy. The Firm’s principal investments are managed by the LOBs and Corporate and are reflected within their respective financial results. The Firm’s investments will continue to evolve based on market circumstances and in line with its strategies,strategic initiatives, including the Firm’s commitment to support underserved communitiesenvironmental and minority-owned businesses.social goals.
The table below presents the aggregate carrying values of the principal investment portfolios as of March 31, 20232024 and December 31, 2022.2023.
| (in billions) | (in billions) | March 31, 2023 | | December 31, 2022 | (in billions) | March 31, 2024 | | December 31, 2023 |
Tax-oriented investments, primarily in alternative energy and affordable housing | $ | 26.1 | | | $ | 26.2 | |
Private equity, various debt and equity instruments, and real assets(a) | 10.5 | | | 10.8 | |
Tax-oriented investments, primarily in alternative energy and affordable housing(a) | |
Private equity, various debt and equity instruments, and real assets | |
Total carrying value | Total carrying value | $ | 36.6 | | | $ | 37.0 | |
(a)IncludesEffective January 1, 2024, the Firm’s 40% ownershipFirm adopted updates to the Accounting for Investments in C6 Bank and 49% ownership in Viva Wallet.Tax Credit Structures guidance. Refer to Note 13 for additional information.
Refer to page 130134 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of the Firm’s Investment Portfolio Risk Management governance and oversight.
Market risk is the risk associated with the effect of changes in market factors such as interest and foreign exchange rates, equity and commodity prices, credit spreads or implied volatilities, on the value of assets and liabilities held for both the short and long term. Refer to Market Risk Management on pages 131-138135–143 of JPMorgan Chase’s 20222023 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.
Models used to measure market risk are inherently imprecise and are 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. For additional discussion on model uncertainty refer to Estimations and Model Risk Management on page 148154 of JPMorgan Chase’s 20222023 Form 10-K.
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.
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 LOBs and Corporate and, along with other market risk measures, provides the appropriate information needed to respond to risk events. The Firm calculates separately a daily aggregated VaR in accordance with regulatory rules (“Regulatory VaR”), which is used to derive the Firm’s regulatory VaR-based capital requirements under Basel III.
The Firm’s VaR model calculations are periodically evaluated and enhanced in response to changes in the composition of the Firm’s portfolios, changes in market conditions, improvements in the Firm’s modeling techniques and measurements, and other factors. Such changes may affect historical comparisons of VaR results. Refer to Estimations and Model Risk Management on page 148154 of JPMorgan Chase’s 20222023 Form 10-K for information regarding model reviews and approvals.
Refer to page 133137 of JPMorgan Chase’s 20222023 Form 10-K for further information regarding VaR, including the inherent limitations, and the key differences between Risk Management VaR and Regulatory VaR. Refer to JPMorgan Chase’s Basel III Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website, for additional information on Regulatory VaR and the other components of market risk regulatory capital for the Firm (e.g., VaR-based measure, stressed VaR-based measure and the respective backtesting). Refer to Other risk measures on pages 136-138140–143 of JPMorgan Chase’s 20222023 Form 10-K for further information regarding nonstatistical market risk measures used by the Firm.
The table below shows the results of the Firm’s Risk Management VaR measure using a 95% confidence level. VaR can vary significantly as positions change, market volatility fluctuates, and diversification benefits change.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total VaR | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | | | | | | |
| | March 31, 2023 | | December 31, 2022 | | March 31, 2022 | | | | | |
(in millions) | | Avg. | Min | Max | | Avg. | Min | Max | | Avg. | Min | Max | | | | | | | | | |
CIB trading VaR by risk type | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed income | | $ | 56 | | | $ | 45 | | | $ | 71 | | | | $ | 66 | | | $ | 54 | | | $ | 80 | | | | $ | 47 | | | $ | 33 | | | $ | 64 | | | | | | | | | | |
Foreign exchange | | 10 | | | 6 | | | 17 | | | | 11 | | | 7 | | | 14 | | | | 4 | | | 3 | | | 7 | | | | | | | | | | |
Equities | | 7 | | | 5 | | | 10 | | | | 13 | | | 7 | | | 20 | | | | 12 | | | 9 | | | 18 | | | | | | | | | | |
Commodities and other | | 15 | | | 11 | | | 19 | | | | 18 | | | 14 | | | 28 | | | | 15 | | | 10 | | | 23 | | | | | | | | | | |
Diversification benefit to CIB trading VaR | | (44) | | (a) | NM | (f) | NM | (f) | | (50) | | (a) | NM | (f) | NM | (f) | | (33) | | (a) | NM | (f) | NM | (f) | | | | | | | | |
CIB trading VaR | | 44 | | | 34 | |
| 55 | |
| | 58 | | | 49 | | | 68 | | | | 45 | | | 34 | | | 59 | | | | | | | | | | |
Credit Portfolio VaR | | 11 | | (b)(c) | 8 | | (b) | 17 | | (b)(c) | | 10 | | (b) | 8 | | (b) | 16 | | (b) | | 29 | | (b)(c) | 4 | | (b) | 235 | | (b)(c) | | | | | | | | |
Diversification benefit to CIB VaR | | (10) | | (a) | NM | (f) | NM | (f) | | (8) | | (a) | NM | (f) | NM | (f) | | (10) | | (a) | NM | (f) | NM | (f) | | | | | | | | |
CIB VaR | | 45 | | | 35 | |
| 58 | |
| | 60 | | | 51 | |
| 72 | |
| | 64 | | | 35 | |
| 240 | |
| | | | | | | | |
CCB VaR | | 11 | | (d) | 6 | | | 15 | | | | 8 | | | 6 | | | 20 | | | | 4 | | (d) | 2 | | | 5 | | | | | | | | | | |
Corporate and other LOB VaR | | 15 | | (e) | 13 | |
| 17 | |
| | 13 | | | 10 | |
| 15 | |
| | 13 | | (e) | 10 | |
| 16 | |
| | | | | | | | |
Diversification benefit to other VaR | | (8) | | (a) | NM | (f) | NM | (f) | | (5) | | (a) | NM | (f) | NM | (f) | | (4) | | (a) | NM | (f) | NM | (f) | | | | | | | | |
Other VaR | | 18 | | | 14 | |
| 22 | |
| | 16 | | | 13 | |
| 24 | |
| | 13 | | | 10 | |
| 17 | |
| | | | | | | | |
Diversification benefit to CIB and other VaR | | (16) | | (a) | NM | (f) | NM | (f) | | (15) | | (a) | NM | (f) | NM | (f) | | (14) | | (a) | NM | (f) | NM | (f) | | | | | | | | |
Total VaR | | $ | 47 | | | $ | 37 | |
| $ | 57 | |
| | $ | 61 | | | $ | 51 | | | $ | 71 | | | | $ | 63 | | | $ | 34 | | | $ | 242 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total VaR | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three months ended | | | | | | | |
| | March 31, 2024 | | December 31, 2023 | | March 31, 2023 | | | | | |
(in millions) | | Avg. | Min | Max | | Avg. | Min | Max | | Avg. | Min | Max | | | | | | | | | |
CIB trading VaR by risk type | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Fixed income | | $ | 35 | | | $ | 30 | | | $ | 39 | | | | $ | 35 | | | $ | 31 | | | $ | 40 | | | | $ | 56 | | | $ | 45 | | | $ | 71 | | | | | | | | | | |
Foreign exchange | | 13 | | | 8 | | | 19 | | | | 10 | | | 7 | | | 16 | | | | 10 | | | 6 | | | 17 | | | | | | | | | | |
Equities | | 6 | | | 4 | | | 13 | | | | 5 | | | 3 | | | 9 | | | | 7 | | | 5 | | | 10 | | | | | | | | | | |
Commodities and other | | 7 | | | 6 | | | 10 | | | | 8 | | | 6 | | | 10 | | | | 15 | | | 11 | | | 19 | | | | | | | | | | |
Diversification benefit to CIB trading VaR(a) | | (29) | | | NM | | NM | | | (29) | | | NM | | NM | | | (44) | | | NM | | NM | | | | | | | | | |
CIB trading VaR | | 32 | | | 27 | |
| 40 | |
| | 29 | | | 24 | | | 35 | | | | 44 | | | 34 | | | 55 | | | | | | | | | | |
Credit Portfolio VaR(b) | | 24 | | | 20 | | | 28 | | | | 16 | | | 13 | | | 26 | | | | 11 | | | 8 | | | 17 | | | | | | | | | | |
Diversification benefit to CIB VaR(a) | | (15) | | | NM | | NM | | | (13) | | | NM | | NM | | | (10) | | | NM | | NM | | | | | | | | | |
CIB VaR | | 41 | | | 36 | |
| 50 | |
| | 32 | | | 23 | | | 38 | | | | 45 | | | 35 | | | 58 | | | | | | | | | | |
CCB VaR | | 3 | | | 1 | | | 6 | | | | 4 | | | 1 | | | 7 | | | | 11 | | | 6 | | | 15 | | | | | | | | | | |
Corporate and other LOB VaR(c) | | 14 | | | 13 | |
| 15 | |
| | 10 | | | 9 | | | 15 | | | | 15 | | | 13 | | | 17 | | | | | | | | | | |
Diversification benefit to other VaR(a) | | (3) | | | NM | | NM | | | (3) | | | NM | | NM | | | (8) | | | NM | | NM | | | | | | | | | |
Other VaR | | 14 | | | 12 | | | 16 | | | | 11 | | | 9 | | | 16 | | | | 18 | | | 14 | | | 22 | | | | | | | | | | |
Diversification benefit to CIB and other VaR(a) | | (7) | | | NM | | NM | | | (8) | | | NM | | NM | | | (16) | | | NM | | NM | | | | | | | | | |
Total VaR | | $ | 48 | | | $ | 43 | |
| $ | 58 | |
| | $ | 35 | | | $ | 26 | | | $ | 44 | | | | $ | 47 | | | $ | 37 | | | $ | 57 | | | | | | | | | | |
(a)DiversificationDiversification benefit represents the difference between the portfolio VaR and the sum of its individual components. This reflects the non-additive nature of VaR due to imperfect correlation across LOBs, Corporate, and risk types. For maximum and minimum VaR, diversification benefit is not meaningful as the maximum and minimum VaR for each portfolio may have occurred on different trading days than the components.
(b)Credit portfolio VaR includesIncludes the derivative CVA, hedges of the CVA and hedges of thecredit protection purchased against certain retained loan portfolio,loans and lending-related commitments, which are reported in principal transactions revenue. This VaR does not include the retained loan portfolio, which is not reported at fair value. In the first quarter of 2022, in line with the Firm's internal model governance, the credit risk component of CVA related to certain counterparties was removed from Credit Portfolio VaR due to the widening of the credit spreads for those counterparties to elevated levels. The related hedges were also removed to maintain consistency. This exposure is now reflected in other sensitivity-based measures.
(c)ForIncludes average AWM VaR of $9 million for the three monthsperiod ended March 31, 2022,2024 associated with credit protection purchased against certain retained loans and lending-related commitments, which are reported in principal transactions revenue. This VaR does not include the effects of nickel price increases and the associated volatility in the nickel market resulted in elevated average and maximum Credit Portfolio VaR. For the three months ended March 31, 2023, average and maximum Credit Portfolio VaR have decreased driven by a reduction in nickel-related exposure when compared to the same period in the prior year.
(d)The increase in CCB VaRretained loan portfolio, which is driven by interest rate volatility impacting Home Lending warehouse loans, MSR, and related hedges.
(e)The increase in Corporate and other LOB VaR is driven by higher market values fornot reported at fair value. Also includes a legacy private equity position in Corporate which is publicly traded.
(f)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.traded.
Quarter over quarter results
Average total VaR decreasedincreased by $14$13 million for the three months ended March 31, 20232024, when compared with December 31, 2022, reflecting reductions in exposure across fixed income, equities,2023, predominantly driven by credit protection purchased against certain retained loans and commodities.lending-related commitments within Credit Portfolio VaR and Corporate and other LOB VaR.
Year over year results
Average total VaR decreasedincreased by $16$1 million for the three months ended March 31, 2023,2024, compared with the same period in the prior year predominantly due to a reduction in the nickel-related counterparty exposure indriven by credit protection purchased against certain retained loans and lending-related commitments within Credit Portfolio VaR.
VaR and Corporate and other LOB VaR, predominantly offset by market volatility rolling out of the one-year historical look-back period which had impacted fixed income and commodities.
The following graph presents daily Risk Management VaR for the five trailing quarters. The movement in VaR in March 2022 was driven by changes in nickel-related counterparty exposure in the Firm's Credit Portfolio.
Daily Risk Management VaR
| | | | | | | | | | | | | | |
First Quarter 2022 | Second Quarter 2022 | Third Quarter 2022 | Fourth Quarter 2022 | First Quarter 2023 | Second Quarter 2023 | Third Quarter 2023 | Fourth Quarter 2023 | First Quarter 2024 |
VaR backtesting
The Firm performs daily VaR model backtesting, which compares the daily Risk Management VaR results with the daily gains and losses that are utilized for VaR backtesting purposes. The gains and losses depicted in the chart below do not reflect the Firm’s reported revenue as they exclude certain components of total net revenue, such as those associated with the execution of new transactions (i.e., intraday client-driven trading and intraday risk management activities), fees, commissions, other valuation adjustments and net interest income. These excluded components of total net revenue may more than offset the backtesting gain or loss on a particular day. The definition of backtesting gains and losses above is consistent with the requirements for backtesting under Basel III capital rules.
A backtesting exception occurs when the daily backtesting loss exceeds the daily Risk Management VaR for the prior day. Under the Firm’s Risk Management VaR methodology, assuming current changes in market values are consistent with the historical changes used in the simulation, the Firm would expect to incur VaR backtesting exceptions five times every 100 trading days on average. 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.
For the 12 months ended March 31, 2023,2024, the Firm posted backtesting gains on 137144 of the 259258 days, and observed 16eleven VaR backtesting exceptions. For the three months ended March 31, 2023,2024, the Firm posted backtesting gains on 4449 of the 64 days, and observed twodid not observe any VaR backtesting exceptions.
The following chart presents the distribution of Firmwide daily backtesting gains and losses for the trailing 12 months and three months ended March 31, 2023.2024. The daily backtesting losses are displayed as a percentage of the corresponding daily Risk Management VaR. The count of days with backtesting losses are shown in aggregate, in fifty percentage point intervals. Backtesting exceptions are displayed within the intervals that are greater than one hundred percent. The results in the chart below differ from the results of backtesting disclosed in the Market Risk section of the Firm’s Basel III Pillar 3 Regulatory Capital Disclosures reports, which are based on Regulatory VaR applied to the Firm’s covered positions.
Distribution of Daily Backtesting Gains and Losses
Structural interest rate risk management
The effect of interest rate exposure on the Firm’s reported net income is important as interest rate risk represents one of the Firm’s significant market risks. Interest rate risk arises not only from trading activities which are included in VaR, but also from the Firm’s traditional banking activities, which include extension of loans and credit facilities, taking deposits, issuing debt, andas well as the investment securities portfolio.portfolio, and associated derivative instruments.
Refer to the table on page 136 of JPMorgan Chase’s 2023 Form 10-K for a summary by LOB and Corporate identifying positions included in earnings-at-risk.
Earnings-at-Risk
One way that the Firm evaluates its structural interest rate risk is through earnings-at-risk. Earnings-at-risk estimates the Firm’s interest rate exposure for a given interest rate scenario. It is presented as a sensitivity to a baseline, which includes net interest income and certain interest rate sensitive fees. The baseline uses market interest rates and, in the case of deposits, pricing assumptions. The Firm conducts simulations of changes to this baseline for interest rate-sensitive assets and liabilities denominated in U.S. dollars and other currencies (“non-U.S. dollar” currencies). These simulations primarily include retained loans, deposits, deposits with banks, investment securities, long-term debt and any related interest rate hedges, and funds transfer pricing of other positions in risk management VaR and other sensitivity-based measures as described on page 132136 of JPMorgan Chase’s 20222023 Form 10-K. These simulations exclude hedges of exposure from non-U.S. dollar foreign exchange risk arising from the Firm’s capital investments. The inclusion of the hedges in these simulations would increase U.S. dollar sensitivities and decrease non-U.S. dollar sensitivities. Refer to non-U.S. dollar foreign exchange risk on page 143 of JPMorgan Chase’s 2023 Form 10-K for more information.
Earnings-at-risk scenarios estimate the potential change to a net interest income baseline, over the following 12 months utilizing multiple assumptions. These scenarios include a parallel shift involving changes to both short-term and long-term rates by an equal amount; a steeper yield curve involving holding short-term rates constant and increasing long-term rates; and a flatter yield curve involving increasing short-term rates and holding long-term rates constant or holding short-term rates constant and decreasing long-term rates. These scenarios consider many different factors, including:
•The impact on exposures as a result of instantaneous changes in interest rates from baseline rates.
•Forecasted balance sheet, as well as modeled prepayment and reinvestment behavior, but excluding assumptions about actions that could be taken by the Firm or its clients and customers in response to 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. Deposit forecasts are a key assumption in the Firm's earnings-at-risk. The baseline reflects certain assumptions relating to the reversal of Quantitative Easing that are highly uncertain and require management judgment. Therefore, the actual amount of deposits held by the Firm, at any particular time, could be impacted by actions the Federal Reserve may take as part of monetary policy, including through the use of the Reverse Repurchase Facility. In addition, there are other factors that impact the amount of deposits held at the Firm such
as the level of loans across the industry and competition for deposits.
•The pricing sensitivity of deposits, known as deposit betas, represent the amount by which deposit rates paid could change upon a given change in market interest rates. TheActual deposit rates paid in these scenariosmay differ from actual deposit rates paid,the modeled assumptions, primarily due to repricing lagscustomer behavior and other factors.competition for deposits.
The Firm performs sensitivity analyses of the assumptions used in earnings-at-risk scenarios, including with respect to deposit betas and forecasts of deposit balances, both of which are especially significant in the case of consumer deposits. The results of these sensitivity analyses are reported to the CTC Risk Committee and the Board Risk Committee.
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. The Firm is currently evaluating the modeling of repricing lags for depositsupdates to deposit rates paid used in its earnings-at-risk scenarios. Incorporating repricing lags, inscenarios considering observed pricing and client and customer behavior. In the current environment, incorporating these updated deposit rates paid would significantly affect the U.S. dollar interest rate scenarios, with higher interest rate scenarios expected to result in aan increase in positive sensitivity, and lower interest rate scenarios expected to result in aan increase in negative sensitivity, onwith respect to the Firm’s earnings-at-risk.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. Referincome (Refer to Outlook on page 8 for additional information.information).
The Firm’s U.S. dollar and non-U.S. dollar sensitivities are presented in the table below.
| (in billions) | March 31, 2023 | | December 31, 2022 |
(In billions) | |
(In billions) | |
(In billions) | |
U.S. dollar: | |
U.S. dollar: | |
U.S. dollar: | |
Parallel shift:(a) | |
Parallel shift:(a) | |
Parallel shift:(a) | Parallel shift:(a) | |
+100 bps shift in rates | +100 bps shift in rates | $ | (1.6) | | | $ | (2.0) | |
+100 bps shift in rates | |
+100 bps shift in rates | |
-100 bps shift in rates | -100 bps shift in rates | 1.7 | | | 2.4 | |
-100 bps shift in rates | |
-100 bps shift in rates | |
+200 bps shift in rates | |
+200 bps shift in rates | |
+200 bps shift in rates | |
-200 bps shift in rates | |
-200 bps shift in rates | |
-200 bps shift in rates | |
Steeper yield curve: | |
Steeper yield curve: | |
Steeper yield curve: | Steeper yield curve: | |
+100 bps shift in long-term rates | +100 bps shift in long-term rates | 0.7 | | | 0.8 | |
+100 bps shift in long-term rates | |
+100 bps shift in long-term rates | |
-100 bps shift in short-term rates | |
-100 bps shift in short-term rates | |
-100 bps shift in short-term rates | -100 bps shift in short-term rates | 2.4 | | | 3.2 | |
Flatter yield curve: | Flatter yield curve: | |
Flatter yield curve: | |
Flatter yield curve: | |
+100 bps shift in short-term rates | |
+100 bps shift in short-term rates | |
+100 bps shift in short-term rates | +100 bps shift in short-term rates | (2.3) | | | (2.8) | |
-100 bps shift in long-term rates | -100 bps shift in long-term rates | (0.7) | | | (0.9) | |
-100 bps shift in long-term rates | |
-100 bps shift in long-term rates | |
Non-U.S. dollar: | |
Non-U.S. dollar: | |
Non-U.S. dollar: | |
Parallel shift: (a) | |
Parallel shift: (a) | |
Parallel shift: (a) | |
+100 bps shift in rates | |
+100 bps shift in rates | |
+100 bps shift in rates | |
-100 bps shift in rates | |
-100 bps shift in rates | |
-100 bps shift in rates | |
(a)Reflects the simultaneous shift of U.S. dollar and non-U.S. dollar rates.
The change in the Firm’s U.S. dollar sensitivities as of March 31, 20232024 compared to December 31, 20222023 primarily reflected the impact of changes in the Firm’s balance sheet.
As of March 31, 2023,2024, the Firm’s sensitivity to the +/-100 basis points parallel and short-term shift in rates is primarily the result of a greater impact from liabilities repricing compared to the impact of assets repricing, while a +/-100 basis points shift in long-term rates is primarily the result of a greater impact from assets repricing compared to the impact of liabilities repricing.
The Firm’s non-U.S. dollar sensitivities are presented in the table below.
| | | | | | | | | | | |
(in billions) | March 31, 2023 | | December 31, 2022 |
Parallel shift: | | | |
+100 bps shift in rates | $ | 0.8 | | | $ | 0.7 | |
-100 bps shift in rates | (0.8) | | | (0.6) | |
Steeper yield curve: | | | |
-100 bps shift in short-term rates | (0.7) | | | (0.6) | |
Flatter yield curve: | | | |
+100 bps shift in short-term rates | 0.7 | | | 0.6 | |
The results of the non-U.S. dollar interest rate scenario involving a steeper/flatter yield curve with long-term rates increasing/decreasing by 100 basis points and short-term rates staying at current levels were not material to the Firm’s earnings-at-risk at March 31, 2023 and December 31, 2022.Economic Value Sensitivity
In addition to earnings-at-risk, which is measured as a sensitivity to a baseline of earnings over the next 12 months, the Firm also measures Economic Value Sensitivity (EVS)(“EVS”). EVS stress tests the longer-term economic value of equity by measuring the sensitivity of the Firm’s current balance sheet, primarily retained loans, deposits, debt and investment securities as well as related hedges, under various interest rate scenarios. The Firm's pricing and cash flow assumptions associated with deposits, as well as prepayment assumptions for loans and securities, are significant factors in the EVS measure. In accordance with the CTC structural interest rate risk management policy, the Firm has established limits on EVS as a percentage of CET1.TCE.
ReferCertain assumptions used in the EVS measure may differ from those required in the fair value disclosure. For example, certain assets and liabilities with no stated maturity, such as credit card receivables and deposits, have longer assumed durations in the EVS measure. Additional information on long-term debt and held to Other Risk Measuresmaturity investment securities is disclosed on pages 136–138 of JPMorgan Chase’s 2022 Form 10-K for additional information.page 101 in Note 2 financial instruments that are not carried at fair value on the Consolidated balance sheets.
Other sensitivity-based measures
The Firm quantifies the market risk of certain debt and equity and credit and funding-related exposures by assessing the potential impact on net revenue, other comprehensive income (“OCI”) and noninterest expense due to changes in relevant market variables. Refer to the predominant business activities that give rise to market risk on page 138136 of JPMorgan Chase’s 20222023 Form 10-K for additional information on the positions captured in other sensitivity-based measures.
The table below represents the potential impact to net revenue, OCI or noninterest expense for market risk-sensitive instruments that are not included in VaR or earnings-at-risk. Where appropriate, instruments used for hedging purposes are reported net of 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 March 31, 20232024 and December 31, 2022,2023, as the movement in market parameters across maturities may vary and are not intended to imply management’s expectation of future changes in these sensitivities.
| Gain/(loss) (in millions) | Gain/(loss) (in millions) | | March 31, 2023 | | December 31, 2022 | Gain/(loss) (in millions) | | | | | | March 31, 2024 | | December 31, 2023 |
Activity | Activity | | Description | | Sensitivity measure | |
| Debt and equity(a) | Debt and equity(a) | |
| Debt and equity(a) | |
| Debt and equity(a) | |
Asset Management activities | |
Asset Management activities | |
Asset Management activities | Asset Management activities | | Consists of seed capital and related hedges; fund co-investments(c); and certain deferred compensation and related hedges(d) | | 10% decline in market value | | $ | (47) | | | $ | (56) | |
Other debt and equity | Other debt and equity | | Consists of certain real estate-related fair value option elected loans, privately held equity and other investments held at fair value(c) | | 10% decline in market value | | (1,055) | | | (1,046) | |
| Credit- and funding-related exposures | Credit- and funding-related exposures | |
Credit- and funding-related exposures | |
Credit- and funding-related exposures | |
Non-USD LTD cross-currency basis | |
Non-USD LTD cross-currency basis | |
Non-USD LTD cross-currency basis | Non-USD LTD cross-currency basis | | Represents the basis risk on derivatives used to hedge the foreign exchange risk on the non-USD LTD(e) | | 1 basis point parallel tightening of cross currency basis | | (12) | | | (12) | |
Non-USD LTD hedges foreign currency (“FX”) exposure | Non-USD LTD hedges foreign currency (“FX”) exposure | | Primarily represents the foreign exchange revaluation on the fair value of the derivative hedges(e) | | 10% depreciation of currency | | 7 | | | 3 | |
Derivatives – funding spread risk | Derivatives – funding spread risk | | Impact of changes in the spread related to derivatives FVA(c) | | 1 basis point parallel increase in spread | | (4) | | | (4) | |
CVA - counterparty credit risk(b) | CVA - counterparty credit risk(b) | | Credit risk component of CVA and associated hedges | | 10% credit spread widening | | (1) | | | (1) | |
Fair value option elected liabilities – funding spread risk | Fair value option elected liabilities – funding spread risk | | Impact of changes in the spread related to fair value option elected liabilities DVA(e) | | 1 basis point parallel increase in spread | | 45 | | | 43 | |
Fair value option elected liabilities – interest rate sensitivity | Fair value option elected liabilities – interest rate sensitivity | | Interest rate sensitivity on fair value option elected liabilities resulting from a change in the Firm’s own credit spread(e) | | 1 basis point parallel increase in spread | | — | | | — | |
| Interest rate sensitivity related to risk management of changes in the Firm’s own credit spread on the fair value option elected liabilities noted above(c) | | 1 basis point parallel increase in spread | | — | | | — | |
(a)Excludes equity securities without readily determinable fair values that are measured under the measurement alternative. Refer to Note 2 for additional information.
(b)In the first quarter of 2022, in line with the Firm's internal model governance, the credit risk component of CVA related to certain counterparties was removed from Credit Portfolio VaR due to the widening of the credit spreads for those counterparties to elevated levels. The related hedges were also removed to maintain consistency. This exposure is now reflected in other sensitivity-based measures.
(c)Impact recognized through net revenue.
(d)Impact recognized through noninterest expense.
(e)Impact recognized through OCI.
The Firm, through its LOBs and Corporate, may be exposed to country risk resulting from financial, economic, political or other significant developments which adversely affect the value of the Firm’s exposures related to a particular country or set of countries. The Country Risk Management group actively monitors the various portfolios which may be impacted by these developments and measures the extent to which the Firm’s exposures are diversified given the Firm’s strategy and risk tolerance relative to a country.
Refer to pages 139-140144–145 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of the Firm’s country risk management.
Risk Reporting
The following table presents the Firm’s top 20 exposures by country (excluding the U.S.) as of March 31, 20232024 and their comparative exposures as of December 31, 2022.2023. The selection of countries representstop 20 country exposures represent the Firm’s largest total exposures by individual country, based on the Firm’s internal country risk management approach, and does not represent the Firm’s view of any existing or potentially adverse credit conditions.country. Country exposures may fluctuate from period to period due to a variety of factors, including client activity, market flows and market flows.
The increase in exposure to Germany was predominantly drivenliquidity management activities undertaken by increases in cash placed with the central bank of Germany and in debt securities, due to client-driven market-making activities.
The decrease in exposure to Australia was predominantly driven by a reduction in cash placed with the central bank of Australia due to client-driven activities resulting from changes in interest rates.Firm.
The Firm continues to monitor potential impactsits exposure to the Firm associated with the war in Ukraine. AsRussia which was approximately $350 million as of March 31, 2023, exposure to Russia was approximately $500 million.2024, driven by cash placed with the central bank. This amount excludes certain deposits placed on behalf of clients at the DepositoryDeposit Insurance Agency of Russia. See Note 24 on pages 167-168 for information concerning Russian litigation.
| Top 20 country exposures (excluding the U.S.)(a) | Top 20 country exposures (excluding the U.S.)(a) | |
Top 20 country exposures (excluding the U.S.)(a) | |
(in billions) | (in billions) | March 31, 2023 | | December 31, 2022(f) | (in billions) | March 31, 2024 | | December 31, 2023(f) |
| Deposits with banks(b) | Lending(c) | Trading and investing(d) | Other(e) | Total exposure | | Total exposure |
| Deposits with banks(b) | | | Deposits with banks(b) | Lending(c) | Trading and investing(d) | Other(e) | Total exposure | | Total exposure |
Germany | Germany | $ | 95.0 | | $ | 13.4 | | $ | 5.4 | | $ | 0.5 | | $ | 114.3 | | | $ | 93.2 | |
United Kingdom | United Kingdom | 35.7 | | 25.6 | | 13.7 | | 2.2 | | 77.2 | | | 70.1 | |
Japan | Japan | 44.1 | | 2.6 | | 2.8 | | 0.3 | | 49.8 | | | 55.8 | |
Canada | Canada | 1.5 | | 10.4 | | 5.0 | | 0.2 | | 17.1 | | | 14.4 | |
Australia | |
Brazil | Brazil | 3.1 | | 4.4 | | 9.5 | | — | | 17.0 | | | 17.8 | |
Switzerland | 8.7 | | 3.8 | | 1.4 | | 2.1 | | 16.0 | | | 15.3 | |
China | China | 3.8 | | 5.7 | | 4.3 | | 0.1 | | 13.9 | | | 13.7 | |
Australia | 4.8 | | 6.4 | | 2.3 | | — | | 13.5 | | | 25.7 | |
France | France | 0.4 | | 10.4 | | — | | 1.0 | | 11.8 | | | 18.1 | |
India | India | 1.4 | | 4.2 | | 4.7 | | 0.5 | | 10.8 | | | 9.0 | |
Switzerland | |
South Korea | |
Saudi Arabia | |
Singapore | Singapore | 2.2 | | 3.8 | | 3.3 | | 0.9 | | 10.2 | | | 9.9 | |
Mexico | |
Belgium | Belgium | 6.6 | | 1.6 | | 1.9 | | — | | 10.1 | | | 9.2 | |
South Korea | 2.1 | | 3.8 | | 3.2 | | 0.2 | | 9.3 | | | 10.0 | |
Italy | |
Netherlands | Netherlands | — | | 7.5 | | (0.2) | | 0.4 | | 7.7 | | | 7.1 | |
Mexico | 0.6 | | 4.5 | | 2.4 | | — | | 7.5 | | | 5.4 | |
Saudi Arabia | 0.6 | | 4.6 | | 2.2 | | — | | 7.4 | | | 7.9 | |
Spain | Spain | 0.2 | | 5.2 | | 1.2 | | — | | 6.6 | | | 5.8 | |
United Arab Emirates | |
Luxembourg | Luxembourg | 0.9 | | 3.0 | | 1.1 | | — | | 5.0 | | | 5.3 | |
Sweden | 1.2 | | 2.9 | | 0.1 | | — | | 4.2 | | | 4.4 | |
Malaysia | 3.0 | | 0.2 | | 1.0 | | — | | 4.2 | | | 4.2 | |
(a)Country exposures presented in the table reflect 88% and 87% of total FirmwideFirmwide non-U.S. exposure,where exposure is attributed to an individual country based on the Firm’s internal country risk management approach, at both March 31, 20232024 and December 31, 2022.2023, respectively.
(b)Predominantly represents cash placed with central banks.
(c)Includes loans and accrued interest receivable, lending-related commitments (net of eligible collateral and the allowance for credit losses). Excludes intra-day and operating exposures, such as those from settlement and clearing activities.
(d)Includes market-making inventory,positions and hedging, investment securities, and counterparty exposure on derivative and securities financings net of eligible collateralcollateral. Market-making positions and hedging. Includeshedging 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.
(e)Includes physical commodities inventory and clearing house guarantee funds.
(f)The country rankings presented in the table as of December 31, 2022,2023, are based on the country rankings of the corresponding exposures at March 31, 20232024, not actual rankings of such exposures at December 31, 2022.2023.
| | | | | | | | | | | | | | |
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 represents management’s estimate of expected credit losses over the remaining expected life of the Firm’s financial assets measured at amortized cost and certain off-balance sheet lending-related commitments. The allowance for credit losses generally consists of:comprises:
•The allowance for loan losses, which covers the Firm’s retained loan portfolios (scored and risk-rated).,
•The allowance for lending-related commitments, which is reflected in accounts payable and other liabilities on the Consolidated balance sheets, and
•The allowance for credit losses on investment securities, which is reflected in investment securities on the Consolidated balance sheets.securities.
The allowance for credit losses involves significant judgment on a number of matters including development and weighting of macroeconomic forecasts, incorporation of historical loss experience, assessment of risk characteristics, assignment of risk ratings, valuation of collateral, and the determination of remaining expected life. Refer to Note 10 and Note 13 of JPMorgan Chase's 20222023 Form 10-K for further information on these judgments as well as the Firm’s policies and methodologies used to determine the Firm’s allowance for credit losses;losses, and refer to Allowance for credit losses on pages 63-6567-69 and Note 12 of this Form 10-Q for further information.
One of the most significant judgments involved in estimating the Firm’s allowance for credit losses relates to the macroeconomic forecasts used to estimate credit losses over the eight-quarter forecast period within the Firm’s methodology. The eight-quarter forecast incorporates hundreds of macroeconomic variables ("MEVs") that are relevant for exposures across the Firm, with modeled credit losses being driven primarily by a subset of less than twenty
variables. The specific variables that have the greatest effect on the modeled losses of each portfolio vary by portfolio and geography.
•Key MEVs for the consumer portfolio include regional U.S. unemployment rates and U.S. HPI.
•Key MEVs for the wholesale portfolio include U.S. unemployment, U.S. real GDP, U.S. equity prices, U.S. interest rates, U.S. corporate credit spreads, oil prices, U.S. commercial real estate prices and U.S. HPI.
Changes in the Firm’s assumptions and forecasts of economic conditions could significantly affect its estimate of expected credit losses in the portfolio at the balance sheet date or lead to significant changes in the estimate from one reporting period to the next.
As a result of the First Republic acquisition, the Firm recorded an allowance for credit losses for the loans acquired and lending-related commitments assumed as of May 1, 2023. Given the differences in risk rating methodologies for the First Republic portfolio, and the ongoing integration of products and systems, the allowance for credit losses for the acquired wholesale portfolio was measured based on other facilities underwritten by the Firm with similar risk characteristics and not based on modeled estimates. As such, the First Republic wholesale portfolio is excluded from the modeled estimates sensitivity analysis below. The allowance for credit losses for predominantly all of the consumer portfolio was measured using the Firm’s modeled approach, as the consumer portfolio is predominantly residential real estate that has more commonly defined risk characteristics including loan to value ratio and credit score, and therefore is reflected in the sensitivity analysis below. Refer to Note 26 for additional information on the First Republic acquisition.
It is difficult to estimate how potential changes in any one factor or input might affect the overall allowance for credit losses because management considers a wide variety of factors and inputs in estimating the allowance for credit losses. Changes in the factors and inputs considered may not occur at the same rate and may not be consistent across all geographies or product types, and changes in factors and inputs may be directionally inconsistent, such that improvement in one factor or input may offset deterioration in others.
To consider the impact of a hypothetical alternate macroeconomic forecast, the Firm compared the modeled credit losses determined using its central and relative adverse macroeconomic scenarios, which are two of the five scenarios considered in estimating the allowances for loan losses and lending-related commitments. The central and relative adverse scenarios each included a full suite of MEVs, but differed in the levels, paths and peaks/troughs of those variables over the eight-quarter forecast period.
For example, compared to the Firm’s central scenario shown on page 63143 and in Note 12, the Firm’s relative adverse scenario assumes an elevated U.S. unemployment rate, averaging approximately 1.9%2.2% higher
over the eight-quarter forecast, with a peak difference of
2.6% in the fourth quarter of 2023; lower
U.S. real GDP with a slower recovery, remaining approximately 3.0% lower at the end of the eight-quarter forecast, with a peak difference of approximately 3.3%2.9% in the first quarter of 2024; and lower national HPI with a peak difference of approximately 9.3% in the fourth quarter of 2024.2025.
This analysis is not intended to estimate expected future changes in the allowance for credit losses, for a number of reasons, including:
•The allowance as of March 31, 2023,2024, reflects credit losses beyond those estimated under the central scenario due to the weight placed on the adverse scenarios.
•The impacts of changes in many MEVs are both interrelated and nonlinear, so the results of this analysis
cannot be simply extrapolated for more severe changes in macroeconomic variables.
•Expectations of future changes in portfolio composition and borrower behavior can significantly affect the allowance for credit losses.
To demonstrate the sensitivity of credit loss estimates to macroeconomic forecasts as of March 31, 2023,2024, the Firm compared the modeled estimates under its relative adverse scenario to its central scenario. Without considering offsetting or correlated effects in other qualitative components of the Firm’s allowance for credit losses, the comparison between these two scenarios for the exposures below reflect the following differences:
•An increase of approximately $650$800 million for residential real estate loans and lending-related commitments
•An increase of approximately $2.5$3.2 billion for credit card loans
•▪An increase of approximately $3.9$3.7 billion for wholesale loans and lending-related commitments
This analysis relates only to the modeled credit loss estimates and is not intended to estimate changes in the overall allowance for credit losses as it does not reflect any potential changes in other adjustments 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, 2023.2024.
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 fair value hierarchy. Refer to Note 2 for further information.
| March 31, 2023 (in millions, except ratios) | Total assets at fair value | | Total level 3 assets |
March 31, 2024 (in millions, except ratios) | | March 31, 2024 (in millions, except ratios) | Total assets at fair value | | Total level 3 assets |
Federal funds sold and securities purchased under resale agreements | Federal funds sold and securities purchased under resale agreements | $ | 309,336 | | | $ | — | |
Securities borrowed | Securities borrowed | 68,514 | | | — | |
Trading assets: | Trading assets: | |
Trading–debt and equity instruments | |
Trading–debt and equity instruments | |
Trading–debt and equity instruments | Trading–debt and equity instruments | 519,578 | | | 3,139 | |
Derivative receivables(a) | Derivative receivables(a) | 59,274 | | | 10,730 | |
Total trading assets | Total trading assets | 578,852 | | | 13,869 | |
AFS securities | AFS securities | 197,248 | | | 250 | |
Loans | Loans | 38,546 | | | 1,479 | |
MSRs | MSRs | 7,755 | | | 7,755 | |
Other | Other | 13,498 | | | 406 | |
Total assets measured at fair value on a recurring basis | Total assets measured at fair value on a recurring basis | 1,213,749 | | | 23,759 | |
Total assets measured at fair value on a nonrecurring basis | Total assets measured at fair value on a nonrecurring basis | 1,743 | | | 1,012 | |
Total assets measured at fair value | Total assets measured at fair value | 1,215,492 | | | 24,771 | |
Total Firm assets | Total Firm assets | 3,744,305 | | |
Level 3 assets at fair value as a percentage of total Firm assets(a) | Level 3 assets at fair value as a percentage of total Firm assets(a) | | 0.7 | % |
Level 3 assets at fair value as a percentage of total Firm assets(a) | |
Level 3 assets at fair value as a percentage of total Firm assets(a) | | | | | 1 | % |
Level 3 assets at fair value as a percentage of total Firm assets at fair value(a) | Level 3 assets at fair value as a percentage of total Firm assets at fair value(a) | | 2.0 | % | Level 3 assets at fair value as a percentage of total Firm assets at fair value(a) | | | | 2 | % |
(a)For purposes of the table above, the derivative receivables total reflects the impact of netting adjustments; however, the $10.7$10.1 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 fair value 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 model or other valuation technique to use. Second, the lack of observability of certain significant inputs requires management to assess relevant empirical data in deriving valuation inputs including, for example, transaction details, yield curves, interest rates, prepayment speed,speeds, default rates, volatilities, correlations, prices (such as commodity, equity or debt prices), valuations of comparable instruments, foreign exchange rates and credit curves. Refer to Note 2 for a further discussion of the valuation of level 3 instruments, including unobservable inputs used.
For instruments classified in levels 2 and 3, management judgment must be applied to assess the appropriate level of valuation adjustments to reflect counterparty credit quality, the Firm’s creditworthiness, market funding rates, liquidity considerations, unobservable parameters, and for portfolios that meet specified criteria, the size of the net open risk position. The judgments made are typically affected by the type of product and its specific contractual terms, and the level of liquidity for the product or within the market as a whole. In periods of heightened market volatility and uncertainty judgments are further affected by the wider variation of reasonable valuation estimates, particularly for positions that are less liquid. Refer to Note 2 for a further discussion of valuation adjustments applied by the Firm.
Imprecision in estimating unobservable market inputs or other factors can affect the amount of gain or loss recorded for a particular position. Furthermore, while the Firm believes its valuation methods are appropriate and consistent with those of other market participants, the methods and assumptions used reflect management judgment and may vary across the Firm’s businesses and portfolios.
The Firm uses various methodologies and assumptions in the determination of fair value. The use of methodologies or assumptions different than those used by the Firm could result in a different estimate of fair value at the reporting date. Refer to Note 2 for a detailed discussion of the Firm’s valuation process and hierarchy, and its determination of fair value for individual financial instruments.
Credit card rewards liability
The credit card rewards liability was $11.5 billion and $11.3$13.2 billion at both March 31, 20232024 and December 31, 2022, respectively,2023, and is recorded in accounts payable and other liabilities on the Consolidated balance sheets. Refer to page 151pages 157-158 of JPMorgan Chase’s 20222023 Form 10-K for a description of the significant assumptions and sensitivities, associated with the Firm’s credit card rewards liability.
Income taxes
Refer to Income taxes on page 152158 of JPMorgan Chase’s 20222023 Form 10-K for a description of the significant assumptions, judgments and interpretations associated with the accounting for income taxes.
Goodwill impairment
Management applies significant judgment when testing goodwill for impairment. Refer to Goodwill impairment on page 151157 of JPMorgan Chase’s 20222023 Form 10-K for a description of the significant valuation judgments associated with goodwill impairment.
Refer to Note 14 for additional information on goodwill, including the goodwill impairment assessment as of March 31, 2023.2024.
Litigation reserves
Refer to Note 24 of this Form 10-Q, and Note 30 of JPMorgan Chase’s 20222023 Form 10-K for a description of the significant estimates and judgments associated with establishing litigation reserves.
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ACCOUNTING AND REPORTING DEVELOPMENTS |
| | | | | | | | | | | |
Financial Accounting Standards Board (“FASB”) Standards Adopted since January 1, 2021 |
Standard | Summary of guidance | | Effects on financial statements |
Reference Rate
Reform
Issued March
2020 and updated January 2021 and
December 2022
| •Provides optional expedients and exceptions to current accounting guidance when financial instruments, hedge accounting relationships, and other transactions are amended due to reference rate reform.
| | •Issued and effective March 12, 2020. The January 7, 2021 and December 21, 2022 updates were effective when issued.
•Refer to Accounting and Reporting Developments on page 153 of JPMorgan Chase's 2022 Form 10-K for further information.
|
FASB Standards Adopted since January 1, 20232024 |
Standard | Summary of guidance | | Effects on financial statements |
Derivatives and Hedging: Fair Value Hedging – Portfolio Layer MethodMeasurement: Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions
Issued MarchJune 2022
| •Expands the current ability to hedgeClarifies that a portfolio of prepayable assets to allow morecontractual sale restriction is not considered part of the portfolio to be hedged. Non-prepayable assets can also be included in the same portfolio, thus increasing the sizeunit of account of the portfolioequity security and, the amount available to be hedged.therefore, is not considered in measuring fair value. •ClarifiesRequires disclosure for investments in equity securities subject to contractual sale restrictions, including: 1) fair value of these investments, 2) nature and remaining duration of the types of derivativesrestriction(s) and 3) circumstances that can be used as hedges, andcould cause a lapse in the balance sheet presentation and disclosure requirements for the hedge accounting adjustments. •Allows a one-time reclassification from HTM to AFS upon adoption.restriction(s).
| | •Adopted prospectively on January 1, 2023. •Refer2024, with no impact to Note 1 for further information.the Firm’s consolidated financial statements.
|
Financial Instruments – Credit Losses: Troubled Debt Restructurings and Vintage Disclosures
Issued March 2022
| •Eliminates existing accounting and disclosure requirements for Troubled Debt Restructurings, including the requirement to measure the allowance using a discounted cash flow methodology.
•Requires disclosure of loan modifications for borrowers experiencing financial difficulty involving principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension or a combination of these modifications.
•Requires disclosure of current period loan charge-off information by origination year.
•May be adopted prospectively, or by using a modified retrospective method wherein the effect of adoption is reflected as an adjustment to retained earnings at the effective date.
| | •Adopted under the modified retrospective method on January 1, 2023.
•Refer to Note 1 for further information.
|
FASB Standards Issued but not yet Adopted |
Standard | Summary of guidance | | Effects on financial statements |
Investments - Equity Method and Joint Ventures: Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method
Issued March 2023
| •Expands the ability to elect proportional amortization on a program-by-program basis, for moreadditional types of tax-oriented investments (beyond low incomeaffordable housing tax credit investments) on a program-by-program basis.. •May be adopted using a full retrospective method, or a modified retrospective method wherein the effect of adoption is reflected as an adjustment to retained earnings at the effective date. | | •Adopted under the modified retrospective method on January 1, 2024. •Refer to Note 1 for further information.
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FASB Standards Issued but not yet Adopted |
Standard | Summary of guidance | | Effects on financial statements |
Segment Reporting: Improvements to Reportable Segment Disclosures
Issued November 2023 | •Requires disclosure of significant segment expenses that are readily provided to the chief operating decision maker (“CODM”) and included in segment profit or loss. •Requires disclosure of the composition and aggregate amount of other segment items, which represent the difference between profit or loss and segment revenues less significant segment expenses. •Requires disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported segment measures in assessing segment performance and deciding how to allocate resources. | | •Required effective date: January 1, 2024. Annual financial statements for the year ending December 31, 2024 and for interim financial statements thereafter.(a) •The Firm is currently assessing the potential impact on its segment disclosures.
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Income Taxes: Improvements to Income Tax Disclosures
Issued December 2023 | •Requires disclosure of income taxes paid disaggregated by 1) federal, state, and foreign taxes and 2) individual jurisdiction on the basis of a quantitative threshold of equal to or greater than 5 percent of total income taxes paid (net of refunds received). •Requires disclosure of the effective tax rate reconciliation by specific categories, at a minimum, with accompanying qualitative disclosures, and separate disclosure of reconciling items based on quantitative thresholds. •Requires categories within the effective tax rate reconciliation to be further disaggregated if quantitative thresholds are met. | | •Required effective date: Annual financial statements for the year ending December 31, 2025.(a) •The guidance can be applied on a prospective basis with the option to apply the standard retrospectively. •The Firm is evaluating the potential impact on the Consolidated Financial Statements.Statements disclosures, as well as the Firm’s planned date of adoption. |
(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:
•Local, regional and global business, economic and political conditions and geopolitical events, including the war in Ukraine;geopolitical tensions and hostilities;
•Changes in laws, rules 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 the level of inflation;
•Changes in income tax laws, rules and regulations;
•Changes in FDIC assessments;
•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;
•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, environmental and sustainability concerns that may arise, including from its business activities;
•Ability of the Firm to deal effectively with an economic slowdown or other economic or market disruption, including, but not limited to, in the interest rate environment;
•Technology changes instituted by the Firm, its counterparties or competitors;
•The effectiveness of the Firm’s control agenda;
•Ability of the Firm to develop or discontinue products and services, and the extent to which products or services previously sold by the Firm 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 and diverse 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;
•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, epidemics or pandemics, an outbreak or escalation of hostilities or other geopolitical instabilities, the effects of climate change or extraordinary events beyond the Firm's control, 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 cyberattackscyber attacks and other attempts by unauthorized parties to access information of the Firm or its customers or to disrupt the Firm’s systems; and
•The other risks and uncertainties detailed in Part I, Item 1A: Risk Factors in JPMorgan Chase’s 20222023 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 Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
JPMorgan Chase & Co.
Consolidated statements of income (unaudited)
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions, except per share data) | |
(in millions, except per share data) | |
(in millions, except per share data) | (in millions, except per share data) | 2023 | | 2022 | |
Revenue | Revenue | | |
Revenue | |
Revenue | |
Investment banking fees | |
Investment banking fees | |
Investment banking fees | Investment banking fees | $ | 1,649 | | | $ | 2,008 | | |
Principal transactions | Principal transactions | 7,615 | | | 5,105 | | |
Principal transactions | |
Principal transactions | |
Lending- and deposit-related fees | |
Lending- and deposit-related fees | |
Lending- and deposit-related fees | Lending- and deposit-related fees | 1,620 | | | 1,839 | | |
Asset management fees | Asset management fees | 3,465 | | | 3,652 | | |
Asset management fees | |
Asset management fees | |
Commissions and other fees | |
Commissions and other fees | |
Commissions and other fees | Commissions and other fees | 1,695 | | | 1,710 | | |
| Investment securities losses | Investment securities losses | (868) | | | (394) | | |
| Investment securities losses | |
| Investment securities losses | |
Mortgage fees and related income | |
Mortgage fees and related income | |
Mortgage fees and related income | Mortgage fees and related income | 221 | | | 460 | | |
Card income | Card income | 1,234 | | | 975 | | |
Card income | |
Card income | |
Other income | |
Other income | |
Other income | Other income | 1,007 | | | 1,490 | | |
Noninterest revenue | Noninterest revenue | 17,638 | | | 16,845 | | |
Noninterest revenue | |
Noninterest revenue | |
Interest income | |
Interest income | |
Interest income | Interest income | 37,004 | | | 15,496 | | |
Interest expense | Interest expense | 16,293 | | | 1,624 | | |
Interest expense | |
Interest expense | |
Net interest income | Net interest income | 20,711 | | | 13,872 | | |
Net interest income | |
Net interest income | |
Total net revenue | |
Total net revenue | |
Total net revenue | Total net revenue | 38,349 | | | 30,717 | | |
| Provision for credit losses | Provision for credit losses | 2,275 | | | 1,463 | | |
| Provision for credit losses | |
| Provision for credit losses | |
| Noninterest expense | |
| Noninterest expense | |
| Noninterest expense | Noninterest expense | | |
Compensation expense | Compensation expense | 11,676 | | | 10,787 | | |
Compensation expense | |
Compensation expense | |
Occupancy expense | |
Occupancy expense | |
Occupancy expense | Occupancy expense | 1,115 | | | 1,134 | | |
Technology, communications and equipment expense | Technology, communications and equipment expense | 2,184 | | | 2,360 | | |
Technology, communications and equipment expense | |
Technology, communications and equipment expense | |
Professional and outside services | |
Professional and outside services | |
Professional and outside services | Professional and outside services | 2,448 | | | 2,572 | | |
Marketing | Marketing | 1,045 | | | 920 | | |
Marketing | |
Marketing | |
Other expense | |
Other expense | |
Other expense | Other expense | 1,639 | | | 1,418 | | |
Total noninterest expense | Total noninterest expense | 20,107 | | | 19,191 | | |
Total noninterest expense | |
Total noninterest expense | |
Income before income tax expense | |
Income before income tax expense | |
Income before income tax expense | Income before income tax expense | 15,967 | | | 10,063 | | |
Income tax expense | Income tax expense | 3,345 | | | 1,781 | | |
Income tax expense | |
Income tax expense | |
Net income | |
Net income | |
Net income | Net income | $ | 12,622 | | | $ | 8,282 | | |
Net income applicable to common stockholders | Net income applicable to common stockholders | $ | 12,193 | | | $ | 7,845 | | |
Net income applicable to common stockholders | |
Net income applicable to common stockholders | |
Net income per common share data | |
Net income per common share data | |
Net income per common share data | Net income per common share data | | |
Basic earnings per share | Basic earnings per share | $ | 4.11 | | | $ | 2.64 | | |
Basic earnings per share | |
Basic earnings per share | |
Diluted earnings per share | |
Diluted earnings per share | |
Diluted earnings per share | Diluted earnings per share | 4.10 | | | 2.63 | | |
| Weighted-average basic shares | Weighted-average basic shares | 2,968.5 | | | 2,977.0 | | |
| Weighted-average basic shares | |
| Weighted-average basic shares | |
Weighted-average diluted shares | |
Weighted-average diluted shares | |
Weighted-average diluted shares | Weighted-average diluted shares | 2,972.7 | | | 2,981.0 | | |
|
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 March 31, | | |
| | Three months ended March 31, | |
| | Three months ended March 31, | |
| | Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | | 2023 | | 2022 | | |
Net income | Net income | | $ | 12,622 | | | $ | 8,282 | | | |
Net income | |
Net income | |
Other comprehensive income/(loss), after–tax | |
Other comprehensive income/(loss), after–tax | |
Other comprehensive income/(loss), after–tax | Other comprehensive income/(loss), after–tax | | |
Unrealized gains/(losses) on investment securities | Unrealized gains/(losses) on investment securities | | 2,212 | | | (7,453) | | | |
Unrealized gains/(losses) on investment securities | |
Unrealized gains/(losses) on investment securities | |
Translation adjustments, net of hedges | |
Translation adjustments, net of hedges | |
Translation adjustments, net of hedges | Translation adjustments, net of hedges | | 197 | | | (62) | | | |
Fair value hedges | Fair value hedges | | (21) | | | 110 | | | |
Fair value hedges | |
Fair value hedges | |
Cash flow hedges | |
Cash flow hedges | |
Cash flow hedges | Cash flow hedges | | 798 | | | (2,791) | | | |
Defined benefit pension and OPEB plans | Defined benefit pension and OPEB plans | | (55) | | | 67 | | | |
Defined benefit pension and OPEB plans | |
Defined benefit pension and OPEB plans | |
DVA on fair value option elected liabilities | |
DVA on fair value option elected liabilities | |
DVA on fair value option elected liabilities | DVA on fair value option elected liabilities | | (208) | | | 646 | | | |
Total other comprehensive income/(loss), after–tax | Total other comprehensive income/(loss), after–tax | | 2,923 | | | (9,483) | | | |
Comprehensive income/(loss) | | $ | 15,545 | | | $ | (1,201) | | | |
Total other comprehensive income/(loss), after–tax | |
Total other comprehensive income/(loss), after–tax | |
Comprehensive income | |
Comprehensive income | |
Comprehensive income | |
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) | (in millions, except share data) | March 31, 2023 | | December 31, 2022 | (in millions, except share data) | March 31, 2024 | | December 31, 2023 |
Assets | Assets | |
Cash and due from banks | Cash and due from banks | $ | 25,098 | | | $ | 27,697 | |
Cash and due from banks | |
Cash and due from banks | |
Deposits with banks | Deposits with banks | 520,902 | | | 539,537 | |
Federal funds sold and securities purchased under resale agreements (included $309,336 and $311,883 at fair value) | 317,111 | | | 315,592 | |
Securities borrowed (included $68,514 and $70,041 at fair value) | 195,917 | | | 185,369 | |
Trading assets (included assets pledged of $122,046 and $93,687) | 578,892 | | | 453,799 | |
Available-for-sale securities (amortized cost of $204,671 and $216,188; included assets pledged of $13,739 and $9,158) | 197,248 | | | 205,857 | |
Federal funds sold and securities purchased under resale agreements (included $324,418 and $259,813 at fair value) | |
Securities borrowed (included $84,258 and $70,086 at fair value) | |
Trading assets (included assets pledged of $180,196 and $128,994) | |
Available-for-sale securities (amortized cost of $239,813 and $205,456; included assets pledged of $10,806 and $9,219) | |
Held-to-maturity securities | Held-to-maturity securities | 412,827 | | | 425,305 | |
Investment securities, net of allowance for credit losses | Investment securities, net of allowance for credit losses | 610,075 | | | 631,162 | |
Loans (included $38,546 and $42,079 at fair value) | 1,128,896 | | | 1,135,647 | |
Loans (included $39,046 and $38,851 at fair value) | |
Allowance for loan losses | Allowance for loan losses | (20,053) | | | (19,726) | |
Loans, net of allowance for loan losses | Loans, net of allowance for loan losses | 1,108,843 | | | 1,115,921 | |
Accrued interest and accounts receivable | Accrued interest and accounts receivable | 115,316 | | | 125,189 | |
Premises and equipment | Premises and equipment | 28,266 | | | 27,734 | |
Goodwill, MSRs and other intangible assets | Goodwill, MSRs and other intangible assets | 62,090 | | | 60,859 | |
Other assets (included $14,434 and $14,921 at fair value and assets pledged of $7,164 and $7,998) | 181,795 | | | 182,884 | |
Other assets (included $15,645 and $12,306 at fair value and assets pledged of $9,811 and $6,764) | |
Total assets(a) | Total assets(a) | $ | 3,744,305 | | | $ | 3,665,743 | |
Liabilities | Liabilities | |
Deposits (included $41,580 and $28,620 at fair value) | $ | 2,377,253 | | | $ | 2,340,179 | |
Federal funds purchased and securities loaned or sold under repurchase agreements (included $192,290 and $151,999 at fair value) | 246,396 | | | 202,613 | |
Short-term borrowings (included $18,074 and $15,792 at fair value) | 42,241 | | | 44,027 | |
Deposits (included $80,578 and $78,384 at fair value) | |
Deposits (included $80,578 and $78,384 at fair value) | |
Deposits (included $80,578 and $78,384 at fair value) | |
Federal funds purchased and securities loaned or sold under repurchase agreements (included $264,554 and $169,003 at fair value) | |
Short-term borrowings (included $22,856 and $20,042 at fair value) | |
Trading liabilities | Trading liabilities | 189,864 | | | 177,976 | |
Accounts payable and other liabilities (included $6,697 and $7,038 at fair value) | 275,077 | | | 300,141 | |
Beneficial interests issued by consolidated VIEs (included $1 and $5 at fair value) | 14,903 | | | 12,610 | |
Long-term debt (included $76,185 and $72,281 at fair value) | 295,489 | | | 295,865 | |
Accounts payable and other liabilities (included $8,917 and $5,637 at fair value) | |
Beneficial interests issued by consolidated VIEs (included $1 and $1 at fair value) | |
Long-term debt (included $92,730 and $87,924 at fair value) | |
Total liabilities(a) | Total liabilities(a) | 3,441,223 | | | 3,373,411 | |
Commitments and contingencies (refer to Notes 22, 23 and 24) | Commitments and contingencies (refer to Notes 22, 23 and 24) | | Commitments and contingencies (refer to Notes 22, 23 and 24) | | | |
Stockholders’ equity | Stockholders’ equity | |
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,740,375 and 2,740,375 shares) | 27,404 | | | 27,404 | |
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,990,375 and 2,740,375 shares) | |
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,990,375 and 2,740,375 shares) | |
Preferred stock ($1 par value; authorized 200,000,000 shares; issued 2,990,375 and 2,740,375 shares) | |
Common stock ($1 par value; authorized 9,000,000,000 shares; issued 4,104,933,895 shares) | Common stock ($1 par value; authorized 9,000,000,000 shares; issued 4,104,933,895 shares) | 4,105 | | | 4,105 | |
Additional paid-in capital | Additional paid-in capital | 89,155 | | | 89,044 | |
Retained earnings | Retained earnings | 306,208 | | | 296,456 | |
Accumulated other comprehensive losses | Accumulated other comprehensive losses | (14,418) | | | (17,341) | |
Treasury stock, at cost (1,182,645,386 and 1,170,676,094 shares) | (109,372) | | | (107,336) | |
Treasury stock, at cost (1,233,266,016 and 1,228,275,301 shares) | |
Total stockholders’ equity | Total stockholders’ equity | 303,082 | | | 292,332 | |
Total liabilities and stockholders’ equity | Total liabilities and stockholders’ equity | $ | 3,744,305 | | | $ | 3,665,743 | |
(a)The following table presents information on assets and liabilities related to VIEs that are consolidated by the Firm at March 31, 2023,2024 and December 31, 2022.2023. The assets of the consolidated VIEs are used to settle the liabilities of those entities. The holders of the beneficial interests generally do not have recourse to the general credit of JPMorgan Chase. The assets and liabilities in the table below include third-party assets and liabilities of consolidated VIEs and exclude intercompany balances that eliminate in consolidation. Refer to Note 13 for a further discussion.
| (in millions) | (in millions) | March 31, 2023 | | December 31, 2022 | (in millions) | March 31, 2024 | | December 31, 2023 |
Assets | Assets | |
Trading assets | |
Trading assets | |
Trading assets | Trading assets | $ | 2,033 | | | $ | 2,151 | |
Loans | Loans | 33,242 | | | 34,411 | |
All other assets | All other assets | 533 | | | 550 | |
Total assets | Total assets | $ | 35,808 | | | $ | 37,112 | |
Liabilities | Liabilities | |
Beneficial interests issued by consolidated VIEs | Beneficial interests issued by consolidated VIEs | $ | 14,903 | | | $ | 12,610 | |
Beneficial interests issued by consolidated VIEs | |
Beneficial interests issued by consolidated VIEs | |
All other liabilities | All other liabilities | 255 | | | 279 | |
Total liabilities | Total liabilities | $ | 15,158 | | | $ | 12,889 | |
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 March 31, | | |
(in millions, except per share data) | | 2023 | | 2022 | | | | |
Preferred stock | | | | | | | | |
Balance at the beginning of the period | | $ | 27,404 | | | $ | 34,838 | | | | | |
Issuance | | — | | | — | | | | | |
Redemption | | — | | | (2,000) | | | | | |
Balance at March 31 | | 27,404 | | | 32,838 | | | | | |
| | | | | | | | |
Common stock | | | | | | | | |
Balance at the beginning and end of the period | | 4,105 | | | 4,105 | | | | | |
| | | | | | | | |
Additional paid-in capital | | | | | | | | |
Balance at the beginning of the period | | 89,044 | | | 88,415 | | | | | |
Shares issued and commitments to issue common stock for employee share-based compensation awards, and related tax effects | | 111 | | | (155) | | | | | |
| | | | | | | | |
Balance at March 31 | | 89,155 | | | 88,260 | | | | | |
| | | | | | | | |
Retained earnings | | | | | | | | |
Balance at the beginning of the period | | 296,456 | | | 272,268 | | | | | |
Cumulative effect of change in accounting principles | | 449 | | | — | | | | | |
Net income | | 12,622 | | | 8,282 | | | | | |
Dividends declared: | | | | | | | | |
Preferred stock | | (356) | | | (397) | | | | | |
Common stock ($1.00 and $1.00 per share, respectively) | | (2,963) | | | (2,976) | | | | | |
Balance at March 31 | | 306,208 | | | 277,177 | | | | | |
| | | | | | | | |
Accumulated other comprehensive income/(loss) | | | | | | | | |
Balance at the beginning of the period | | (17,341) | | | (84) | | | | | |
Other comprehensive income/(loss), after-tax | | 2,923 | | | (9,483) | | | | | |
Balance at March 31 | | (14,418) | | | (9,567) | | | | | |
| | | | | | | | |
Treasury stock, at cost | | | | | | | | |
Balance at the beginning of the period | | (107,336) | | | (105,415) | | | | | |
Repurchase | | (2,955) | | | (2,500) | | | | | |
Reissuance | | 919 | | | 1,001 | | | | | |
Balance at March 31 | | (109,372) | | | (106,914) | | | | | |
| | | | | | | | |
Total stockholders’ equity | | $ | 303,082 | | | $ | 285,899 | | | | | |
Effective January 1, 2023, the Firm adopted the Financial Instruments – Credit Losses: Troubled Debt Restructurings and Derivatives and Hedging: Fair Value Hedging – Portfolio Layer Method accounting guidance. Refer to Note 1 for further information. | | | | | | | | | | | | | | | | | | | | |
| | Three months ended March 31, | | |
(in millions, except per share data) | | 2024 | | 2023 | | | | |
Preferred stock | | | | | | | | |
Balance at the beginning of the period | | $ | 27,404 | | | $ | 27,404 | | | | | |
Issuance | | 2,496 | | | — | | | | | |
Redemption | | — | | | — | | | | | |
Balance at March 31 | | 29,900 | | | 27,404 | | | | | |
| | | | | | | | |
Common stock | | | | | | | | |
Balance at the beginning and end of the period | | 4,105 | | | 4,105 | | | | | |
| | | | | | | | |
Additional paid-in capital | | | | | | | | |
Balance at the beginning of the period | | 90,128 | | | 89,044 | | | | | |
Shares issued and commitments to issue common stock for employee share-based compensation awards, and related tax effects | | (225) | | | 111 | | | | | |
| | | | | | | | |
Balance at March 31 | | 89,903 | | | 89,155 | | | | | |
| | | | | | | | |
Retained earnings | | | | | | | | |
Balance at the beginning of the period | | 332,901 | | | 296,456 | | | | | |
Cumulative effect of change in accounting principles | | (161) | | | 449 | | | | | |
Net income | | 13,419 | | | 12,622 | | | | | |
Dividends declared: | | | | | | | | |
Preferred stock | | (397) | | | (356) | | | | | |
Common stock ($1.15 and $1.00 per share, respectively) | | (3,348) | | | (2,963) | | | | | |
Balance at March 31 | | 342,414 | | | 306,208 | | | | | |
| | | | | | | | |
Accumulated other comprehensive income/(loss) | | | | | | | | |
Balance at the beginning of the period | | (10,443) | | | (17,341) | | | | | |
Other comprehensive income/(loss), after-tax | | (1,196) | | | 2,923 | | | | | |
Balance at March 31 | | (11,639) | | | (14,418) | | | | | |
| | | | | | | | |
Treasury stock, at cost | | | | | | | | |
Balance at the beginning of the period | | (116,217) | | | (107,336) | | | | | |
Repurchase | | (2,858) | | | (2,955) | | | | | |
Reissuance | | 1,029 | | | 919 | | | | | |
Balance at March 31 | | (118,046) | | | (109,372) | | | | | |
| | | | | | | | |
Total stockholders’ equity | | $ | 336,637 | | | $ | 303,082 | | | | | |
The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.
JPMorgan Chase & Co.
Consolidated statements of cash flows (unaudited)
| | Three months ended March 31, |
| Three months ended March 31, | | | Three months ended March 31, |
(in millions) | (in millions) | 2023 | | 2022 | (in millions) | 2024 | | 2023 |
Operating activities | Operating activities | |
Net income | Net income | $ | 12,622 | | | $ | 8,282 | |
Net income | |
Net income | |
Adjustments to reconcile net income to net cash used in operating activities: | Adjustments to reconcile net income to net cash used in operating activities: | |
Provision for credit losses | |
Provision for credit losses | |
Provision for credit losses | Provision for credit losses | 2,275 | | | 1,463 | |
Depreciation and amortization | Depreciation and amortization | 1,649 | | | 1,820 | |
Deferred tax (benefit)/expense | Deferred tax (benefit)/expense | (606) | | | (730) | |
Bargain purchase gain associated with the First Republic acquisition | |
Other | Other | 1,738 | | | 1,200 | |
Originations and purchases of loans held-for-sale | Originations and purchases of loans held-for-sale | (22,009) | | | (66,262) | |
Proceeds from sales, securitizations and paydowns of loans held-for-sale | Proceeds from sales, securitizations and paydowns of loans held-for-sale | 20,873 | | | 75,558 | |
Net change in: | Net change in: | |
Trading assets | |
Trading assets | |
Trading assets | Trading assets | (117,067) | | | (91,213) | |
Securities borrowed | Securities borrowed | (10,460) | | | (18,979) | |
Accrued interest and accounts receivable | Accrued interest and accounts receivable | 9,823 | | | (49,719) | |
Other assets | Other assets | 14,129 | | | 1,319 | |
Trading liabilities | Trading liabilities | 3,200 | | | 29,993 | |
Accounts payable and other liabilities | Accounts payable and other liabilities | (27,847) | | | 64,738 | |
Other operating adjustments | Other operating adjustments | 439 | | | 613 | |
Net cash (used in) operating activities | Net cash (used in) operating activities | (111,241) | | | (41,917) | |
Investing activities | Investing activities | |
Net change in: | Net change in: | |
Net change in: | |
Net change in: | |
Federal funds sold and securities purchased under resale agreements | |
Federal funds sold and securities purchased under resale agreements | |
Federal funds sold and securities purchased under resale agreements | Federal funds sold and securities purchased under resale agreements | (1,317) | | | (40,407) | |
Held-to-maturity securities: | Held-to-maturity securities: | |
Proceeds from paydowns and maturities | Proceeds from paydowns and maturities | 9,258 | | | 9,512 | |
Proceeds from paydowns and maturities | |
Proceeds from paydowns and maturities | |
Purchases | Purchases | (3,621) | | | (13,223) | |
Available-for-sale securities: | Available-for-sale securities: | |
Proceeds from paydowns and maturities | |
Proceeds from paydowns and maturities | |
Proceeds from paydowns and maturities | Proceeds from paydowns and maturities | 11,018 | | | 11,291 | |
Proceeds from sales | Proceeds from sales | 34,554 | | | 16,971 | |
Purchases | Purchases | (26,490) | | | (45,357) | |
Proceeds from sales and securitizations of loans held-for-investment | Proceeds from sales and securitizations of loans held-for-investment | 9,230 | | | 9,987 | |
Other changes in loans, net | Other changes in loans, net | (2,257) | | | (18,185) | |
| | All other investing activities, net | |
| All other investing activities, net | |
| All other investing activities, net | All other investing activities, net | (6,581) | | | (3,197) | |
Net cash provided by/(used in) investing activities | Net cash provided by/(used in) investing activities | 23,794 | | | (72,608) | |
Financing activities | Financing activities | |
Net change in: | Net change in: | |
Net change in: | |
Net change in: | |
Deposits | |
Deposits | |
Deposits | Deposits | 33,683 | | | 99,691 | |
Federal funds purchased and securities loaned or sold under repurchase agreements | Federal funds purchased and securities loaned or sold under repurchase agreements | 43,722 | | | 29,600 | |
Short-term borrowings | Short-term borrowings | (1,876) | | | 4,300 | |
Beneficial interests issued by consolidated VIEs | Beneficial interests issued by consolidated VIEs | 3,001 | | | 52 | |
Proceeds from long-term borrowings | Proceeds from long-term borrowings | 8,750 | | | 20,651 | |
Payments of long-term borrowings | Payments of long-term borrowings | (16,171) | | | (13,094) | |
Proceeds from issuance of preferred stock | |
| Redemption of preferred stock | — | | | (2,000) | |
Treasury stock repurchased | |
Treasury stock repurchased | |
Treasury stock repurchased | Treasury stock repurchased | (2,690) | | | (2,455) | |
Dividends paid | Dividends paid | (3,374) | | | (3,430) | |
All other financing activities, net | All other financing activities, net | (488) | | | (543) | |
Net cash provided by financing activities | Net cash provided by financing activities | 64,557 | | | 132,772 | |
Effect of exchange rate changes on cash and due from banks and deposits with banks | Effect of exchange rate changes on cash and due from banks and deposits with banks | 1,656 | | | (4,549) | |
Net increase/(decrease) in cash and due from banks and deposits with banks | (21,234) | | | 13,698 | |
Net decrease in cash and due from banks and deposits with banks | |
Cash and due from banks and deposits with banks at the beginning of the period | Cash and due from banks and deposits with banks at the beginning of the period | 567,234 | | | 740,834 | |
Cash and due from banks and deposits with banks at the end of the period | Cash and due from banks and deposits with banks at the end of the period | $ | 546,000 | | | $ | 754,532 | |
Cash interest paid | Cash interest paid | $ | 15,287 | | | $ | 1,088 | |
Cash income taxes paid, net | Cash income taxes paid, net | 1,382 | | | 705 | |
The Notes to Consolidated Financial Statements (unaudited) are an integral part of these statements.
Refer to the Glossary of Terms and Acronyms on pages 168-173176-181 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 financial services firm based 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. On May 1, 2023, JPMorgan Chase acquired certain assets and assumed certain liabilities of First Republic Bank (the “First Republic acquisition”) from the FDIC. The Firm continues to convert certain operations, and to integrate clients, products and services associated with the First Republic acquisition, to align with the Firm’s businesses and operations. Accordingly, reporting classification and internal risk rating profiles in the wholesale portfolio may change in future periods. Refer to Note 2526 for a further discussion ofadditional information on the Firm’s business segments.First Republic acquisition.
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 stated.
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 20222023 Form 10-K.
Certain amounts reported in prior periods have been revised to conform with the current presentation.
Consolidation
The Consolidated Financial Statements include the accounts of JPMorgan Chase and other entities in which the Firm has a controlling financial interest. All material intercompany balances and transactions have been eliminated.
Assets held for clients in an agency or fiduciary capacity by the Firm are not assets of JPMorgan Chase and are not included on the Consolidated balance sheets.
The Firm determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity.
Refer to Notes 1 and 14 of JPMorgan Chase’s 20222023 Form 10-K for a further description of JPMorgan Chase’s accounting policies regarding consolidation.
Offsetting assets and liabilities
U.S. GAAP permits entities to present derivative receivables and derivative payables with the same counterparty and the related cash collateral receivables and payables on a net basis on the Consolidated balance sheets when a legally enforceable master netting agreement exists. U.S. GAAP also permits securities financing activitiesbalances 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 where it has determined that the specified conditions are met. Refer to Note 1 of JPMorgan Chase’s 20222023 Form 10-K for further information on offsetting assets and liabilities.
Accounting standardsstandard adopted January 1, 20232024
DerivativesEquity Method and Hedging: Fair Value Hedging – Portfolio LayerJoint Ventures: Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method
The guidance expanded the types of tax-oriented investments, beyond affordable housing tax credit investments, that the Firm can elect on a program by program basis, to be accounted for using the proportional amortization method. This method requires the cost of eligible investments, within an elected program, to be amortized in proportion to the tax benefits received with the resulting amortization reported directly in income tax expense, which aligns with the associated tax credits and other tax benefits. Eligible investments must meet certain criteria, including that substantially all of the return is from income tax credits and other income tax benefits.
This guidance was adopted on January 1, 2024 under the modified retrospective method. The adoption of this guidance expandedresulted in a change to the ability to hedge a portfolio of prepayable assets to allow moreclassification and timing of the portfolio to be hedged. Non-prepayable assets can also be included in the same portfolio, thus increasing the sizeamortization associated with certain of the portfolioFirm's alternative energy tax-oriented investments. As a result of the adoption, the amortization of these investments that was previously recognized in other income is now being recognized in income tax expense. The change in accounting resulted in a decrease to retained earnings of $161 million and increased the Firm’s income tax expense and the amount available to be hedged. This guidance also clarified the types of derivatives that can be used as hedges,effective tax rate by approximately $450 million and the balance sheet presentation and disclosure requirementstwo percentage points, respectively, for the hedge accounting adjustments. As permitted by the guidance, the Firm electedthree months ended March 31, 2024, with no material impact to transfer HTM securities to AFS and designate those securities in a portfolio layer method hedge upon adoption. The adoption impact of the transfer on retained earnings was not material.net income.
Refer to Note 4 and Note 9 for additional information.
Financial Instruments – Credit Losses: Troubled Debt Restructurings and Vintage Disclosures
The adoption of this guidance eliminated the accounting and disclosure requirements for TDRs, including the requirement to measure the allowance using a discounted cash flow (“DCF”) methodology, and allowed the option of a non-DCF portfolio-based approach for modified loans to troubled borrowers. If a DCF methodology is still applied for these modified loans, the discount rate must be the post-modification effective interest rate, instead of the pre-modification effective interest rate.
The Firm elected to apply its non-DCF, portfolio-based allowance approach for modified loans to troubled borrowers for all portfolios except modified nonaccrual risk-rated loans which the Firm elected to continue applying a DCF methodology. Refer to Note 12 for a description of the portfolio-based allowance approach and the asset-specific allowance approach.
This guidance was adopted under the modified retrospective method which resulted in a net decrease to the allowance for credit losses of $587 million and an increase to retained earnings of $446 million, after-tax predominantly driven by residential real estate and credit card.
The adoption of this guidance eliminated the disclosure requirements for TDRs including the requirement to assess whether a modification is reasonably expected or involves a concession. The new guidance requires additional disclosure for loan modifications to borrowers experiencing financial difficulty consisting of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension orall investments that generate income tax credits and other income tax benefits from a combination of these modifications. Thetax-oriented investment program for which the Firm has defined these types of modifications as financial difficulty modifications ("FDMs"). As a result ofelected to apply the elimination of the requirement to assess whether a modification is reasonably expected or involves a concession, the population of loans considered FDMs will differ from those previously considered TDRs. Thisproportional amortization method. The guidance also requires disclosurea reevaluation of current period gross charge-offs by vintage origination year.eligible investments when significant modifications or events occur that result in a change in the nature of the investment or a change in the Firm's relationship with the underlying project.
Refer to Note 115 and Note 13 for furtheradditional information.
Note 2 – Fair value measurement
Refer to Note 2 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of the Firm’s valuation methodologies for assets, liabilities and lending-related commitments measured at fair value and the fair value hierarchy.
The following table presents the assets and liabilities reported at fair value as of March 31, 2023,2024 and December 31, 2022,2023, by major product category and fair value hierarchy.
| Assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis | | |
| Fair value hierarchy | |
| Fair value hierarchy | |
| Fair value hierarchy | |
| | Fair value hierarchy | | Derivative netting adjustments(f) | |
March 31, 2024 (in millions) | |
| March 31, 2023 (in millions) | Level 1 | Level 2 | | Level 3 | | Derivative netting adjustments(f) | Total fair value |
March 31, 2024 (in millions) | |
| March 31, 2024 (in millions) | | Level 1 | Level 2 | | Level 3 | | Total fair value |
Federal funds sold and securities purchased under resale agreements | Federal funds sold and securities purchased under resale agreements | $ | — | | $ | 309,336 | | | $ | — | | | $ | — | | $ | 309,336 | |
Securities borrowed | Securities borrowed | — | | 68,514 | | | — | | | — | | 68,514 | |
Trading assets: | Trading assets: | |
Debt instruments: | Debt instruments: | |
Debt instruments: | |
Debt instruments: | |
Mortgage-backed securities: | Mortgage-backed securities: | |
Mortgage-backed securities: | |
Mortgage-backed securities: | |
U.S. GSEs and government agencies(a) | |
U.S. GSEs and government agencies(a) | |
U.S. GSEs and government agencies(a) | U.S. GSEs and government agencies(a) | — | | 77,406 | | | 757 | | | — | | 78,163 | |
Residential – nonagency | Residential – nonagency | — | | 2,961 | | | 5 | | | — | | 2,966 | |
Commercial – nonagency | Commercial – nonagency | — | | 1,221 | | | 10 | | | — | | 1,231 | |
Total mortgage-backed securities | Total mortgage-backed securities | — | | 81,588 | | | 772 | | | — | | 82,360 | |
U.S. Treasury, GSEs and government agencies(a) | U.S. Treasury, GSEs and government agencies(a) | 110,866 | | 8,858 | | | — | | | — | | 119,724 | |
Obligations of U.S. states and municipalities | Obligations of U.S. states and municipalities | — | | 6,049 | | | 6 | | | — | | 6,055 | |
Certificates of deposit, bankers’ acceptances and commercial paper | Certificates of deposit, bankers’ acceptances and commercial paper | — | | 1,556 | | | — | | | — | | 1,556 | |
Non-U.S. government debt securities | Non-U.S. government debt securities | 31,282 | | 59,694 | | | 169 | | | — | | 91,145 | |
Corporate debt securities | Corporate debt securities | — | | 32,414 | | | 538 | | | — | | 32,952 | |
Loans | Loans | — | | 8,365 | | | 926 | | | — | | 9,291 | |
Asset-backed securities | Asset-backed securities | — | | 2,689 | | | 7 | | | — | | 2,696 | |
Total debt instruments | Total debt instruments | 142,148 | | 201,213 | | | 2,418 | | | — | | 345,779 | |
Equity securities | Equity securities | 138,312 | | 1,561 | | | 581 | | | — | | 140,454 | |
Physical commodities(b) | Physical commodities(b) | 4,434 | | 11,525 | | | — | | | — | | 15,959 | |
Other | Other | — | | 17,246 | | | 140 | | | — | | 17,386 | |
Total debt and equity instruments(c) | Total debt and equity instruments(c) | 284,894 | | 231,545 | | | 3,139 | | | — | | 519,578 | |
Derivative receivables: | Derivative receivables: | |
Interest rate | Interest rate | 2,702 | | 278,722 | | | 4,115 | | | (260,511) | | 25,028 | |
Interest rate | |
Interest rate | |
Credit | Credit | — | | 11,070 | | | 977 | | | (11,054) | | 993 | |
Foreign exchange | Foreign exchange | 163 | | 184,299 | | | 1,218 | | | (166,455) | | 19,225 | |
Equity | Equity | — | | 57,478 | | | 3,979 | | | (53,729) | | 7,728 | |
Commodity | Commodity | — | | 19,218 | | | 441 | | | (13,359) | | 6,300 | |
Total derivative receivables | Total derivative receivables | 2,865 | | 550,787 | | | 10,730 | | | (505,108) | | 59,274 | |
Total trading assets(d) | Total trading assets(d) | 287,759 | | 782,332 | | | 13,869 | | | (505,108) | | 578,852 | |
Available-for-sale securities: | Available-for-sale securities: | |
Mortgage-backed securities: | Mortgage-backed securities: | |
Mortgage-backed securities: | |
Mortgage-backed securities: | |
U.S. GSEs and government agencies(a) | |
U.S. GSEs and government agencies(a) | |
U.S. GSEs and government agencies(a) | U.S. GSEs and government agencies(a) | — | | 67,305 | | | — | | | — | | 67,305 | |
Residential – nonagency | Residential – nonagency | — | | 4,471 | | | — | | | — | | 4,471 | |
Commercial – nonagency | Commercial – nonagency | — | | 1,947 | | | — | | | — | | 1,947 | |
Total mortgage-backed securities | Total mortgage-backed securities | — | | 73,723 | | | — | | | — | | 73,723 | |
U.S. Treasury and government agencies | U.S. Treasury and government agencies | 81,639 | | — | | | — | | | — | | 81,639 | |
Obligations of U.S. states and municipalities | Obligations of U.S. states and municipalities | — | | 13,529 | | | — | | | — | | 13,529 | |
Non-U.S. government debt securities | Non-U.S. government debt securities | 10,581 | | 8,849 | | | — | | | — | | 19,430 | |
Corporate debt securities | Corporate debt securities | — | | 114 | | | 250 | | | — | | 364 | |
Asset-backed securities: | Asset-backed securities: | |
Collateralized loan obligations | Collateralized loan obligations | — | | 5,520 | | | — | | | — | | 5,520 | |
Other | — | | 3,043 | | | — | | | — | | 3,043 | |
Collateralized loan obligations | |
Collateralized loan obligations | |
Other(a) | |
Total available-for-sale securities | Total available-for-sale securities | 92,220 | | 104,778 | | | 250 | | | — | | 197,248 | |
Loans(e) | Loans(e) | — | | 37,067 | | | 1,479 | | | — | | 38,546 | |
Mortgage servicing rights | Mortgage servicing rights | — | | — | | | 7,755 | | | — | | 7,755 | |
Other assets(d) | Other assets(d) | 6,240 | | 6,852 | | | 406 | | | — | | 13,498 | |
Total assets measured at fair value on a recurring basis | Total assets measured at fair value on a recurring basis | $ | 386,219 | | $ | 1,308,879 | | | $ | 23,759 | | | $ | (505,108) | | $ | 1,213,749 | |
Deposits | Deposits | $ | — | | $ | 39,372 | | | $ | 2,208 | | | $ | — | | $ | 41,580 | |
Federal funds purchased and securities loaned or sold under repurchase agreements | Federal funds purchased and securities loaned or sold under repurchase agreements | — | | 192,290 | | | — | | | — | | 192,290 | |
Short-term borrowings | Short-term borrowings | — | | 16,664 | | | 1,410 | | | — | | 18,074 | |
Trading liabilities: | Trading liabilities: | |
Debt and equity instruments(c) | Debt and equity instruments(c) | 113,813 | | 31,277 | | | 63 | | | — | | 145,153 | |
Debt and equity instruments(c) | |
Debt and equity instruments(c) | |
Derivative payables: | Derivative payables: | |
Interest rate | |
Interest rate | |
Interest rate | Interest rate | 4,082 | | 267,285 | | | 3,361 | | | (261,428) | | 13,300 | |
Credit | Credit | — | | 11,903 | | | 525 | | | (11,576) | | 852 | |
Foreign exchange | Foreign exchange | 144 | | 186,805 | | | 673 | | | (174,408) | | 13,214 | |
Equity | Equity | — | | 61,681 | | | 4,864 | | | (56,697) | | 9,848 | |
Commodity | Commodity | — | | 20,034 | | | 728 | | | (13,265) | | 7,497 | |
Total derivative payables | Total derivative payables | 4,226 | | 547,708 | | | 10,151 | | | (517,374) | | 44,711 | |
Total trading liabilities | Total trading liabilities | 118,039 | | 578,985 | | | 10,214 | | | (517,374) | | 189,864 | |
Accounts payable and other liabilities | Accounts payable and other liabilities | 4,403 | | 2,238 | | | 56 | | | — | | 6,697 | |
Beneficial interests issued by consolidated VIEs | Beneficial interests issued by consolidated VIEs | — | | 1 | | | — | | | — | | 1 | |
Long-term debt | Long-term debt | — | | 50,958 | | | 25,227 | | | — | | 76,185 | |
Total liabilities measured at fair value on a recurring basis | Total liabilities measured at fair value on a recurring basis | $ | 122,442 | | $ | 880,508 | | | $ | 39,115 | | | $ | (517,374) | | $ | 524,691 | |
| | Fair value hierarchy | |
| | Fair value hierarchy | | Derivative netting adjustments(f) | |
December 31, 2023 (in millions) | |
| December 31, 2022 (in millions) | Level 1 | Level 2 | | Level 3 | | Derivative netting adjustments(f) | | Total fair value |
December 31, 2023 (in millions) | |
| December 31, 2023 (in millions) | | Level 1 | Level 2 | | Level 3 | | | Total fair value |
Federal funds sold and securities purchased under resale agreements | Federal funds sold and securities purchased under resale agreements | $ | — | | $ | 311,883 | | | $ | — | | | $ | — | | | $ | 311,883 | |
Securities borrowed | Securities borrowed | — | | 70,041 | | | — | | | — | | | 70,041 | |
Trading assets: | Trading assets: | |
Debt instruments: | Debt instruments: | |
Debt instruments: | |
Debt instruments: | |
Mortgage-backed securities: | Mortgage-backed securities: | |
Mortgage-backed securities: | |
Mortgage-backed securities: | |
U.S. GSEs and government agencies(a) | |
U.S. GSEs and government agencies(a) | |
U.S. GSEs and government agencies(a) | U.S. GSEs and government agencies(a) | — | | 68,162 | | | 759 | | | — | | | 68,921 | |
Residential – nonagency | Residential – nonagency | — | | 2,498 | | | 5 | | | — | | | 2,503 | |
Commercial – nonagency | Commercial – nonagency | — | | 1,448 | | | 7 | | | — | | | 1,455 | |
Total mortgage-backed securities | Total mortgage-backed securities | — | | 72,108 | | | 771 | | | — | | | 72,879 | |
U.S. Treasury, GSEs and government agencies(a) | U.S. Treasury, GSEs and government agencies(a) | 61,191 | | 8,546 | | | — | | | — | | | 69,737 | |
Obligations of U.S. states and municipalities | Obligations of U.S. states and municipalities | — | | 6,608 | | | 7 | | | — | | | 6,615 | |
Certificates of deposit, bankers’ acceptances and commercial paper | Certificates of deposit, bankers’ acceptances and commercial paper | — | | 2,009 | | | — | | | — | | | 2,009 | |
Non-U.S. government debt securities | Non-U.S. government debt securities | 18,213 | | 48,429 | | | 155 | | | — | | | 66,797 | |
Corporate debt securities | Corporate debt securities | — | | 25,626 | | | 463 | | | — | | | 26,089 | |
Loans | Loans | — | | 5,744 | | | 759 | | | — | | | 6,503 | |
Asset-backed securities | Asset-backed securities | — | | 2,536 | | | 23 | | | — | | | 2,559 | |
Total debt instruments | Total debt instruments | 79,404 | | 171,606 | | | 2,178 | | | — | | | 253,188 | |
Equity securities | Equity securities | 82,483 | | 2,060 | | | 665 | | | — | | | 85,208 | |
Physical commodities(b) | Physical commodities(b) | 9,595 | | 16,673 | | | 2 | | | — | | | 26,270 | |
Other | Other | — | | 18,146 | | | 64 | | | — | | | 18,210 | |
Total debt and equity instruments(c) | Total debt and equity instruments(c) | 171,482 | | 208,485 | | | 2,909 | | | — | | | 382,876 | |
Derivative receivables: | Derivative receivables: | |
Interest rate | Interest rate | 3,390 | | 292,956 | |
| 4,069 | | | (271,996) | | | 28,419 | |
Interest rate | |
Interest rate | |
Credit | Credit | — | | 9,722 | | | 607 | | | (9,239) | | | 1,090 | |
Foreign exchange | Foreign exchange | 169 | | 240,207 | |
| 1,203 | | | (218,214) | | | 23,365 | |
Equity | Equity | — | | 57,485 | | | 4,428 | | | (52,774) | | | 9,139 | |
Commodity | Commodity | — | | 24,982 | | | 375 | | | (16,490) | | | 8,867 | |
Total derivative receivables | Total derivative receivables | 3,559 | | 625,352 | |
| 10,682 | | | (568,713) | | | 70,880 | |
Total trading assets(d) | Total trading assets(d) | 175,041 | | 833,837 | |
| 13,591 | | | (568,713) | | | 453,756 | |
Available-for-sale securities: | Available-for-sale securities: | |
Mortgage-backed securities: | Mortgage-backed securities: | |
Mortgage-backed securities: | |
Mortgage-backed securities: | |
U.S. GSEs and government agencies(a) | |
U.S. GSEs and government agencies(a) | |
U.S. GSEs and government agencies(a) | U.S. GSEs and government agencies(a) | 3 | | 71,500 | | | — | | | — | | | 71,503 | |
Residential – nonagency | Residential – nonagency | — | | 4,620 | | | — | | | — | | | 4,620 | |
Commercial – nonagency | Commercial – nonagency | — | | 1,958 | | | — | | | — | | | 1,958 | |
Total mortgage-backed securities | Total mortgage-backed securities | 3 | | 78,078 | | | — | | | — | | | 78,081 | |
U.S. Treasury and government agencies | U.S. Treasury and government agencies | 92,060 | | — | | | — | | | — | | | 92,060 | |
Obligations of U.S. states and municipalities | Obligations of U.S. states and municipalities | — | | 6,786 | | | — | | | — | | | 6,786 | |
Non-U.S. government debt securities | Non-U.S. government debt securities | 10,591 | | 9,105 | | | — | | | — | | | 19,696 | |
Corporate debt securities | Corporate debt securities | — | | 118 | | | 239 | | | — | | | 357 | |
Asset-backed securities: | Asset-backed securities: | |
Collateralized loan obligations | Collateralized loan obligations | — | | 5,792 | | | — | | | — | | | 5,792 | |
Other | — | | 3,085 | | | — | | | — | | | 3,085 | |
Collateralized loan obligations | |
Collateralized loan obligations | |
Other(a) | |
Total available-for-sale securities | Total available-for-sale securities | 102,654 | | 102,964 | | | 239 | | | — | | | 205,857 | |
Loans(e) | Loans(e) | — | | 40,661 | | | 1,418 | | | — | | | 42,079 | |
Mortgage servicing rights | Mortgage servicing rights | — | | — | | | 7,973 | | | — | | | 7,973 | |
Other assets(d) | Other assets(d) | 7,544 | | 6,065 | | | 405 | | | — | | | 14,014 | |
Total assets measured at fair value on a recurring basis | Total assets measured at fair value on a recurring basis | $ | 285,239 | | $ | 1,365,451 | |
| $ | 23,626 | |
| $ | (568,713) | | | $ | 1,105,603 | |
Deposits | Deposits | $ | — | | $ | 26,458 | | | $ | 2,162 | | | $ | — | | | $ | 28,620 | |
Federal funds purchased and securities loaned or sold under repurchase agreements | Federal funds purchased and securities loaned or sold under repurchase agreements | — | | 151,999 | | | — | | | — | | | 151,999 | |
Short-term borrowings | Short-term borrowings | — | | 14,391 | | | 1,401 | | | — | | | 15,792 | |
Trading liabilities: | Trading liabilities: | |
Debt and equity instruments(c) | Debt and equity instruments(c) | 98,719 | | 28,032 | | | 84 | | | — | | | 126,835 | |
Debt and equity instruments(c) | |
Debt and equity instruments(c) | |
Derivative payables: | Derivative payables: | |
Interest rate | |
Interest rate | |
Interest rate | Interest rate | 2,643 | | 284,280 | |
| 3,368 | | | (274,321) | | | 15,970 | |
Credit | Credit | — | | 9,377 | |
| 594 | | | (9,217) | | | 754 | |
Foreign exchange | Foreign exchange | 160 | | 250,647 | |
| 714 | | | (232,665) | | | 18,856 | |
Equity | Equity | — | | 57,649 | |
| 4,812 | | | (53,657) | | | 8,804 | |
Commodity | Commodity | — | | 22,748 | |
| 521 | | | (16,512) | | | 6,757 | |
Total derivative payables | Total derivative payables | 2,803 | | 624,701 | |
| 10,009 | | | (586,372) | | | 51,141 | |
Total trading liabilities | Total trading liabilities | 101,522 | | 652,733 | |
| 10,093 | | | (586,372) | | | 177,976 | |
Accounts payable and other liabilities | Accounts payable and other liabilities | 5,702 | | 1,283 | |
| 53 | | | — | | | 7,038 | |
Beneficial interests issued by consolidated VIEs | Beneficial interests issued by consolidated VIEs | — | | 5 | |
| — | | | — | | | 5 | |
Long-term debt | Long-term debt | — | | 48,189 | |
| 24,092 | | | — | | | 72,281 | |
Total liabilities measured at fair value on a recurring basis | Total liabilities measured at fair value on a recurring basis | $ | 107,224 | | $ | 895,058 | |
| $ | 37,801 | | | $ | (586,372) | | | $ | 453,711 | |
(a)At March 31, 2023,2024 and December 31, 2022,2023, included total U.S. GSE obligations of $78.9$103.8 billion and $73.8$78.5 billion, respectively, which were mortgage-related.
(b)Physical commodities inventories are generally accounted for at the lower of cost or net realizable value. “Net realizable value” is a term defined in U.S. GAAP as not exceeding fair value less costs to sell (“transaction costs”). Transaction costs for the Firm’s physical commodities inventories are either not applicable or immaterial to the value of the inventory. Therefore, net realizable value approximates fair value for the Firm’s physical commodities inventories. When fair value hedging has been applied (or when net realizable value is below cost), the carrying value of physical commodities approximates fair value, because under fair value hedge accounting, the cost basis is adjusted for changes in fair value. Refer to Note 4 for a further discussion of the Firm’s hedge accounting relationships. To provide consistent fair value disclosure information, all physical commodities inventories have been included in each period presented.
(c)Balances reflect the reduction of securities owned (long positions) by the amount of identical securities sold but not yet purchased (short positions).
(d)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 March 31, 2023,2024 and December 31, 2022,2023, the fair values of these investments, which include certain hedge funds, private equity funds, real estate and other funds, were $976 million$1.1 billion and $950 million,$1.0 billion, respectively. Included in these balances at March 31, 2023,2024 and December 31, 2022,2023, were trading assets of $40$47 million and $43$42 million, respectively, and other assets of $936 million$1.0 billion and $907$984 million, respectively.
(e)At both March 31, 2023,2024 and December 31, 2022,2023, included $10.2 billion and $9.7 billion, respectively, of residential first-lien mortgages and $6.4$6.0 billion and $6.8 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 $3.6$3.4 billion and $2.4$2.9 billion, respectively.
(f)As permitted under U.S. GAAP, the Firm has elected to net derivative receivables and derivative payables and the related cash collateral received and paid when a legally enforceable master netting agreement exists. The level 3 balances would be reduced if netting were applied, including the netting benefit associated with cash collateral.
Level 3 valuations
Refer to Note 2 of JPMorgan Chase’s 20222023 Form 10-K for further information on the Firm’s valuation process and a detailed discussion of the determination of fair value for individual financial instruments.
The following table presents the Firm’s primary level 3 financial instruments, the valuation techniques used to measure the fair value of those financial instruments, the significant unobservable inputs, the range of values for those inputs and 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 arithmetic average values do not reflect the degree of input uncertainty or an assessment of the reasonableness of the Firm’s estimates and assumptions. Rather, they reflect the characteristics of the various instruments held by the Firm and the relative distribution of instruments within the range of characteristics. For example, two option contracts may have similar levels of market risk exposure and valuation uncertainty, but may have significantly different implied volatility levels because the option contracts have different underlyings, tenors, or strike prices. The input range and weighted and arithmetic 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.
| Level 3 inputs(a) | Level 3 inputs(a) | |
March 31, 2023 | | | | |
March 31, 2024 | |
March 31, 2024 | |
March 31, 2024 | |
Product/Instrument | |
Product/Instrument | |
Product/Instrument | Product/Instrument | Fair value (in millions) | | Principal valuation technique | Unobservable inputs(g) | Range of input values | Average(i) | Fair value (in millions) | | Principal valuation technique | Unobservable inputs(g) | Range of input values | Average(i) |
Residential mortgage-backed securities and loans(b) | Residential mortgage-backed securities and loans(b) | $ | 1,695 | | | Discounted cash flows | Yield | 4% | | 30% | | 7% | Residential mortgage-backed securities and loans(b) | $ | 1,599 | | | Discounted cash flows | | Discounted cash flows | Yield | 0% | | 68% | | 7% |
| Prepayment speed | 3% | | 12% | | 9% | | | | Prepayment speed | 3% | | 12% | | 9% |
| Conditional default rate | 0% | | 5% | | 0% |
| Loss severity | 0% | | 110% | | 3% |
| | | | Conditional default rate | | | | | | Conditional default rate | 0% | | 6% | | 0% |
| | | | Loss severity | | | | | | Loss severity | 0% | | 110% | | 3% |
Commercial mortgage-backed securities and loans(c) | Commercial mortgage-backed securities and loans(c) | 432 | | | Market comparables | Price | $0 | | $99 | | $80 | Commercial mortgage-backed securities and loans(c) | 1,387 | | | Market comparables | | Market comparables | Price | $0 | | $90 | | $80 |
Corporate debt securities | Corporate debt securities | 788 | | | Market comparables | Price | $0 | | $243 | | $96 | Corporate debt securities | 570 | | | Market comparables | | Market comparables | Price | $0 | | $243 | | $100 |
Loans(d) | Loans(d) | 1,050 | | | Market comparables | Price | $0 | | $356 | | $84 | Loans(d) | 1,195 | | | Market comparables | | Market comparables | Price | $0 | | $111 | | $80 |
Non-U.S. government debt securities | Non-U.S. government debt securities | 169 | | | Market comparables | Price | $6 | | $103 | | $86 | Non-U.S. government debt securities | 173 | | | Market comparables | | Market comparables | Price | $2 | | $108 | | $92 |
Net interest rate derivatives | Net interest rate derivatives | 775 | | | Option pricing | Interest rate volatility | 24 bps | | 633 bps | | 132 bps | Net interest rate derivatives | 798 | | | Option pricing | | Option pricing | Interest rate volatility | 25bps | | 420bps | | 116bps |
| Interest rate spread volatility | 33 bps | | 46 bps | | 36 bps |
| Bermudan switch value | 0% | | 52% | | 20% |
| Interest rate correlation | (89)% | | 89% | | 15% |
| IR-FX correlation | (35)% | | 60% | | 6% |
| (21) | | | Discounted cash flows | Prepayment speed | 0% | | 21% | | 7% |
| | | | Interest rate spread volatility | | | | | | Interest rate spread volatility | 37bps | | 77bps | | 64bps |
| | | | Bermudan switch value | | | | | | Bermudan switch value | 0% | | 52% | | 20% |
| | | | Interest rate correlation | | | | | | Interest rate correlation | (82)% | | 90% | | 19% |
| | | | IR-FX correlation | | | | | | IR-FX correlation | (35)% | | 60% | | 4% |
| 2 | | | 2 | | | Discounted cash flows | Prepayment speed | 0% | | 20% | | 6% |
Net credit derivatives | Net credit derivatives | 430 | | | Discounted cash flows | Credit correlation | 40% | | 65% | | 49% | Net credit derivatives | 230 | | | Discounted cash flows | | Discounted cash flows | Credit correlation | 24% | | 68% | | 46% |
| Credit spread | 0 bps | | 9,828 bps | | 370 bps |
| Recovery rate | 20% | | 90% | | 41% |
| 22 | | | Market comparables | Price | $3 | | $115 | | $80 |
| | | | Credit spread | | | | | | Credit spread | 0bps | | 2,999bps | | 263bps |
| | | | Recovery rate | | | | | | Recovery rate | 10% | | 90% | | 49% |
| 30 | | | 30 | | | Market comparables | Price | $0 | | $115 | | $72 |
Net foreign exchange derivatives | Net foreign exchange derivatives | 627 | | | Option pricing | IR-FX correlation | (40)% | | 60% | | 20% | Net foreign exchange derivatives | 83 | | | Option pricing | | Option pricing | IR-FX correlation | (40)% | | 60% | | 22% |
| (82) | | | Discounted cash flows | Prepayment speed | 11% | | 11% |
| Interest rate curve | 2% | | 18% | | 7% |
| (59) | | | (59) | | | Discounted cash flows | Prepayment speed | 11% | | 11% |
| | | | Interest rate curve | | | | | | Interest rate curve | 2% | | 17% | | 7% |
Net equity derivatives | Net equity derivatives | (885) | | | Option pricing | Forward equity price(h) | 78% | | 138% | | 101% | Net equity derivatives | (2,781) | | | Option pricing | | Option pricing | Forward equity price(h) | 76% | | 152% | | 101% |
| Equity volatility | 5% | | 139% | | 32% |
| Equity correlation | 17% | | 100% | | 58% |
| Equity-FX correlation | (86)% | | 60% | | (28)% |
| Equity-IR correlation | 5% | | 35% | | 19% |
| | | | Equity volatility | | | | | | Equity volatility | 4% | | 137% | | 32% |
| | | | Equity correlation | | | | | | Equity correlation | 1% | | 100% | | 57% |
| | | | Equity-FX correlation | | | | | | Equity-FX correlation | (88)% | | 65% | | (31)% |
| | | | Equity-IR correlation | | | | | | Equity-IR correlation | (40)% | | 25% | | 3% |
Net commodity derivatives | Net commodity derivatives | (287) | | | Option pricing | Oil commodity forward | $104 / BBL | | $286 / BBL | | $195 / BBL | Net commodity derivatives | (503) | | | Option pricing | | Option pricing | Oil commodity forward | $91 / BBL | | $277 / BBL | | $184 / BBL |
| Natural gas commodity forward | $0 / MMBTU | | $9 / MMBTU | | $5 / MMBTU |
| Commodity volatility | 4% | | 127% | | 66% |
| Commodity correlation | (30)% | | 77% | | 23% |
| | | | Natural gas commodity forward | | | | | | Natural gas commodity forward | $0 / MMBTU | | $9 / MMBTU | | $5 / MMBTU |
| | | | Commodity volatility | | | | | | Commodity volatility | 15% | | 24% | | 19% |
| | | | Commodity correlation | | | | | | Commodity correlation | (35)% | | 96% | | 31% |
MSRs | MSRs | 7,755 | | | Discounted cash flows | Refer to Note 14 | |
Long-term debt, short-term borrowings, and deposits(e) | Long-term debt, short-term borrowings, and deposits(e) | 27,517 | | | Option pricing | Interest rate volatility | 24 bps | | 633 bps | | 132 bps |
| Bermudan switch value | 0% | | 52% | | 20% |
| Interest rate correlation | (89)% | | 89% | | 15% | Long-term debt, short-term borrowings, and deposits(e) | 31,734 | | | Option pricing | | Option pricing | Interest rate volatility | 25bps | | 420bps | | 116bps |
| IR-FX correlation | (35)% | | 60% | | 6% | | | | Bermudan switch value | 0% | | 52% | | 20% |
| Equity correlation | 17% | | 100% | | 58% | | | | Interest rate correlation | (82)% | | 90% | | 19% |
| Equity-FX correlation | (86)% | | 60% | | (28)% | | | | IR-FX correlation | (35)% | | 60% | | 4% |
| Equity-IR correlation | 5% | | 35% | | 19% | | | | Equity volatility | 1% | | 134% | | 26% |
| 1,328 | | | Discounted cash flows | Credit correlation | 40% | | 65% | | 49% |
Long-term debt, short-term borrowings, and deposits(e) | | | | | Equity correlation | 1% | | 100% | | 57% |
| | | | Equity-FX correlation | (88)% | | 65% | | (31)% |
| | | | Equity-IR correlation | Long-term debt, short-term borrowings, and deposits(e) | | | | Equity-IR correlation | (40)% | | 25% | | 3% |
| | 1,205 | | | Discounted cash flows | Credit correlation | 24% | | 68% | | 46% |
| | | | | Credit spread | 1bps | | 2,501bps | | 80bps |
| | | | | Recovery rate | 20% | | 60% | | 39% |
| | | | | Yield | 5% | | 20% | | 12% |
| | | | | Loss severity | 0% | | 100% | | 50% |
Other level 3 assets and liabilities, net(f) | Other level 3 assets and liabilities, net(f) | 1,021 | | |
(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. GSE and government agency securities of $732$729 million, nonagency securities of $5$8 million and non-trading loans of $958$862 million.
(c)Comprises U.S. GSE and government agency securities of $25 million, nonagency securities of $10$12 million, trading loans of $72$65 million and non-trading loans of $325 million.$1.3 billion.
(d)Comprises trading loans of $854$466 million and non-trading loans of $196$729 million.
(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 equity securities of $796$783 million including $215$580 million in Other assets, for which quoted prices are not readily available and the fair value is generally based on internal valuation techniques such as EBITDA multiples and comparable analysis. All other level 3 assets and liabilities are insignificant both individually and in aggregate.
(g)Price is a significant unobservable input for certain instruments. When quoted market prices are not readily available, reliance is generally placed on price-based internal valuation techniques. The price input is expressed assuming a par value of $100.
(h)Forward equity price is expressed as a percentage of the current equity price.
(i)Amounts represent weighted averages except for derivative related inputs where arithmetic averages are used.
Changes in and ranges of unobservable inputs
Refer to Note 2 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of the impact on fair value of changes in unobservable inputs and the relationships between unobservable inputs as well as a description of attributes of the underlying instruments and external market factors that affect the range of inputs used in the valuation of the Firm’s positions.
Changes in level 3 recurring fair value measurements
The following tables include a rollforward of the Consolidated balance sheets amounts (including changes in fair value) for financial instruments classified by the Firm within level 3 of the fair value hierarchy for the three months ended March 31, 20232024 and 2022.2023. 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, theThe 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 | | |
Three months ended March 31, 2024 (in millions) | Fair value at Jan 1, 2024 | Total realized/unrealized gains/(losses) | | | | | Transfers into level 3 | Transfers (out of) level 3 | Fair value at March 31, 2024 | Change in unrealized gains/(losses) related to financial instruments held at March 31, 2024 |
Purchases(g) | Sales | | Settlements(h) |
Assets:(a) | | | | | | | | | | | | | | | |
Federal funds sold and securities purchased under resale agreements | $ | — | | | $ | — | | | $ | — | | $ | — | | | $ | — | | $ | — | | $ | — | | | $ | — | | | $ | — | | |
Trading assets: | | | | | | | | | | | | | | | |
Debt instruments: | | | | | | | | | | | | | | | |
Mortgage-backed securities: | | | | | | | | | | | | | | | |
U.S. GSEs and government agencies | 758 | | | 1 | | | 1 | | (17) | | | (21) | | 7 | | — | | | 729 | | | 1 | | |
Residential – nonagency | 5 | | | (1) | | | — | | — | | | — | | 4 | | — | | | 8 | | | (1) | | |
Commercial – nonagency | 12 | | | (1) | | | 1 | | — | | | — | | — | | — | | | 12 | | | (1) | | |
Total mortgage-backed securities | 775 | | | (1) | | | 2 | | (17) | | | (21) | | 11 | | — | | | 749 | | | (1) | | |
Obligations of U.S. states and municipalities | 10 | | | — | | | — | | — | | | (2) | | — | | (1) | | | 7 | | | — | | |
Non-U.S. government debt securities | 179 | | | 5 | | | 51 | | (67) | | | — | | 7 | | (2) | | | 173 | | | (4) | | |
Corporate debt securities | 484 | | | 11 | | | 214 | | (95) | | | (30) | | 4 | | (18) | | | 570 | | | 12 | | |
Loans | 684 | | | 5 | | | 143 | | (199) | | | (31) | | 62 | | (133) | | | 531 | | | 5 | | |
Asset-backed securities | 6 | | | — | | | 1 | | — | | | — | | 7 | | — | | | 14 | | | — | | |
Total debt instruments | 2,138 | | | 20 | | | 411 | | (378) | | | (84) | | 91 | | (154) | | | 2,044 | | | 12 | | |
Equity securities | 127 | | | 6 | | | 81 | | (30) | | | — | | 24 | | (5) | | | 203 | | | 7 | | |
Physical commodities | 7 | | | (2) | | | — | | — | | | (3) | | — | | — | | | 2 | | | (2) | | |
Other | 101 | | | 11 | | | 27 | | — | | | (32) | | — | | — | | | 107 | | | 4 | | |
Total trading assets – debt and equity instruments | 2,373 | | | 35 | | (c) | 519 | | (408) | | | (119) | | 115 | | (159) | | | 2,356 | | | 21 | | (c) |
Net derivative receivables:(b) | | | | | | | | | | | | | | | |
Interest rate | 502 | | | (328) | | | 53 | | (43) | | | 484 | | 129 | | 3 | | | 800 | | | (399) | | |
Credit | 265 | | | (25) | | | — | | (15) | | | 14 | | (6) | | 27 | | | 260 | | | 87 | | |
Foreign exchange | 62 | | | 3 | | | 34 | | (38) | | | (122) | | (53) | | 138 | | | 24 | | | 67 | | |
Equity | (2,402) | | | (652) | | | 321 | | (608) | | | 331 | | (49) | | 278 | | | (2,781) | | | (442) | | |
Commodity | (279) | | | (176) | | | 10 | | (68) | | | 7 | | 2 | | 1 | | | (503) | | | (182) | | |
Total net derivative receivables | (1,852) | | | (1,178) | | (c) | 418 | | (772) | | | 714 | | 23 | | 447 | | | (2,200) | | | (869) | | (c) |
Available-for-sale securities: | | | | | | | | | | | | | | | |
Corporate debt securities | — | | | — | | | — | | — | | | — | | — | | — | | | — | | | — | | |
Total available-for-sale securities | — | | | — | | | — | | — | | | — | | — | | — | | | — | | | — | | |
Loans | 3,079 | | | 37 | | (c) | 60 | | (22) | | | (392) | | 303 | | (164) | | | 2,901 | | | 35 | | (c) |
Mortgage servicing rights | 8,522 | | | 278 | | (e) | 60 | | 5 | | | (260) | | — | | — | | | 8,605 | | | 278 | | (e) |
Other assets | 758 | | | 29 | | (c) | 47 | | (9) | | | (14) | | — | | — | | | 811 | | | 28 | | (c) |
| | | | | | | | | | | | | | | |
| Fair value measurements using significant unobservable inputs | | |
Three months ended March 31, 2024 (in millions) | Fair value at Jan 1, 2024 | Total realized/unrealized (gains)/losses | | | | | Transfers into level 3 | Transfers (out of) level 3 | Fair value at March 31, 2024 | Change in unrealized (gains)/losses related to financial instruments held at March 31, 2024 |
Purchases | Sales | Issuances | Settlements(h) |
Liabilities:(a) | | | | | | | | | | | | | | | |
Deposits | $ | 1,833 | | | $ | (29) | | (c)(f) | $ | — | | $ | — | | $ | 527 | | $ | (203) | | $ | — | | $ | (73) | | | $ | 2,055 | | | $ | (25) | | (c)(f) |
Short-term borrowings | 1,758 | | | 1 | | (c)(f) | — | | — | | 1,645 | | (1,197) | | — | | (1) | | | 2,206 | | | 8 | | (c)(f) |
Trading liabilities – debt and equity instruments | 37 | | | (3) | | (c) | (1) | | 2 | | — | | — | | 3 | | (1) | | | 37 | | | (2) | | (c) |
Accounts payable and other liabilities | 52 | | | (4) | | (c) | (3) | | 3 | | — | | — | | — | | — | | | 48 | | | (4) | | (c) |
Long-term debt | 27,726 | | | 551 | | (c)(f) | — | | — | | 4,503 | | (3,851) | | 17 | | (268) | | | 28,678 | | | 500 | | (c)(f) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fair value measurements using significant unobservable inputs | | |
Three months ended March 31, 2023 (in millions) | Fair value at Jan 1, 2023 | Total realized/unrealized gains/(losses) | | | | | | | Transfers into level 3 | Transfers (out of) level 3 | Fair value at March 31, 2023 | Change in unrealized gains/(losses) related to financial instruments held at March 31, 2023 |
Purchases(g) | Sales | | | Settlements(h) | |
Assets:(a) | | | | | | | | | | | | | | | | | |
Federal funds sold and securities purchased under resale agreements | $ | — | | | $ | — | | | $ | — | | $ | — | | | | $ | — | | | $ | — | | $ | — | | | $ | — | | | $ | — | | |
Trading assets: | | | | | | | | | | | | | | | | | |
Debt instruments: | | | | | | | | | | | | | | | | | |
Mortgage-backed securities: | | | | | | | | | | | | | | | | | |
U.S. GSEs and government agencies | 759 | | | 7 | | | 25 | | (7) | | | | (24) | | | — | | (3) | | | 757 | | | 7 | | |
Residential – nonagency | 5 | | | 1 | | | — | | — | | | | (2) | | | 1 | | — | | | 5 | | | 1 | | |
Commercial – nonagency | 7 | | | 1 | | | — | | — | | | | (1) | | | 3 | | — | | | 10 | | | 1 | | |
Total mortgage-backed securities | 771 | | | 9 | | | 25 | | (7) | | | | (27) | | | 4 | | (3) | | | 772 | | | 9 | | |
Obligations of U.S. states and municipalities | 7 | | | — | | | — | | (1) | | | | — | | | — | | — | | | 6 | | | — | | |
Non-U.S. government debt securities | 155 | | | 11 | | | 50 | | (47) | | | | — | | | — | | — | | | 169 | | | 13 | | |
Corporate debt securities | 463 | | | 24 | | | 49 | | (17) | | | | — | | | 23 | | (4) | | | 538 | | | 20 | | |
Loans | 759 | | | 8 | | | 436 | | (62) | | | | (95) | | | 23 | | (143) | | | 926 | | | 8 | | |
Asset-backed securities | 23 | | | — | | | 1 | | (2) | | | | (1) | | | 1 | | (15) | | | 7 | | | — | | |
Total debt instruments | 2,178 | | | 52 | | | 561 | | (136) | | | | (123) | | | 51 | | (165) | | | 2,418 | | | 50 | | |
Equity securities | 665 | | | (31) | | | 58 | | (71) | | | | — | | | 36 | | (76) | | | 581 | | | (2) | | |
Physical commodities | 2 | | | — | | | — | | — | | | | (2) | | | — | | — | | | — | | | — | | |
Other | 64 | | | (21) | | | 94 | | — | | | | 2 | | | 1 | | — | | | 140 | | | 1 | | |
Total trading assets – debt and equity instruments | 2,909 | | | — | | | 713 | | (207) | | | | (123) | | | 88 | | (241) | | | 3,139 | | | 49 | | (c) |
Net derivative receivables:(b) | | | | | | | | | | | | | | | | | |
Interest rate | 701 | | | 346 | | | 35 | | (50) | | | | (22) | |
| (165) | | (91) | | | 754 | | | 461 | | |
Credit | 13 | | | 246 | | | 3 | | (3) | | | | 171 | | | 24 | | (2) | | | 452 | | | 239 | | |
Foreign exchange | 489 | | | 89 | | | 28 | | (41) | | | | (75) | | | 64 | | (9) | | | 545 | | | 126 | | |
Equity | (384) | | | 171 | |
| 318 | | (687) | | |
| — | |
| 111 | | (414) | |
| (885) | | | 308 | | |
Commodity | (146) | | | 8 | | | 4 | | (67) | | | | (127) | | | 1 | | 40 | | | (287) | | | (31) | | |
Total net derivative receivables | 673 | | | 860 | | (c) | 388 | | (848) | | |
| (53) | |
| 35 | | (476) | |
| 579 | | | 1,103 | | (c) |
Available-for-sale securities: | | | | | | | | | | | | | | | | | |
Corporate debt securities | 239 | | | 11 | | | — | | — | | | | — | | | — | | — | | | 250 | | | 11 | | |
Total available-for-sale securities | 239 | | | 11 | | (d) | — | | — | | | | — | | | — | | — | | | 250 | | | 11 | | (d) |
Loans | 1,418 | | | 26 | | (c) | 148 | | (66) | | | | (95) | | | 157 | | (109) | | | 1,479 | | | 16 | | (c) |
Mortgage servicing rights | 7,973 | | | (11) | | (e) | 31 | | 2 | | | | (240) | | | — | | — | | | 7,755 | | | (11) | | (e) |
Other assets | 405 | | | 5 | | (c) | 12 | | — | | | | (16) | | | — | | — | | | 406 | | | 5 | | (c) |
| | | | | | | | | | | | | | | | | |
| Fair value measurements using significant unobservable inputs | | |
Three months ended March 31, 2023 (in millions) | Fair value at Jan 1, 2023 | Total realized/unrealized (gains)/losses | | | | | | | Transfers into level 3 | Transfers (out of) level 3 | Fair value at March 31, 2023 | Change in unrealized (gains)/losses related to financial instruments held at March 31, 2023 |
Purchases | Sales | | Issuances | Settlements(h) | |
Liabilities:(a) | | | | | | | | | | | | | | | | | |
Deposits | $ | 2,162 | | | $ | 48 | | (c)(f) | $ | — | | $ | — | | | $ | 128 | | $ | (67) | | | $ | — | | $ | (63) | | | $ | 2,208 | | | $ | 48 | | (c)(f) |
Short-term borrowings | 1,401 | | | 90 | | (c)(f) | — | | — | | | 1,051 | | (1,132) | | | — | | — | | | 1,410 | | | 20 | | (c)(f) |
Trading liabilities – debt and equity instruments | 84 | | | (12) | | (c) | (27) | | 8 | | | — | | — | | | 12 | | (2) | | | 63 | | | 1 | | (c) |
Accounts payable and other liabilities | 53 | | | (1) | | (c) | — | | 4 | | | — | | — | | | — | | — | | | 56 | | | (1) | | (c) |
Long-term debt | 24,092 | | | 1,356 | | (c)(f) | — | | — | | | 2,733 | | (2,975) | |
| 91 | | (70) | | | 25,227 | |
| 1,447 | | (c)(f) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fair value measurements using significant unobservable inputs | | |
Three months ended March 31, 2022 (in millions) | Fair value at Jan 1, 2022 | Total realized/unrealized gains/(losses) | | | | | | | Transfers into level 3 | Transfers (out of) level 3 | Fair value at March 31, 2022 | Change in unrealized gains/(losses) related to financial instruments held at March 31, 2022 |
Purchases(g) | Sales | | | Settlements(h) | |
Assets:(a) | | | | | | | | | | | | | | | | | |
Federal funds sold and securities purchased under resale agreements | $ | — | | | $ | — | | | $ | — | | $ | — | | | | $ | — | | | $ | — | | $ | — | | | $ | — | | | $ | — | | |
Trading assets: | | | | | | | | | | | | | | | | | |
Debt instruments: | | | | | | | | | | | | | | | | | |
Mortgage-backed securities: | | | | | | | | | | | | | | | | | |
U.S. GSEs and government agencies | 265 | | | 27 | | | 22 | | (7) | | | | (21) | | | — | | — | | | 286 | | | 26 | | |
Residential – nonagency | 28 | | | — | | | — | | — | | | | (11) | | | — | | (7) | | | 10 | | | — | | |
Commercial – nonagency | 10 | | | — | | | — | | — | | | | — | | | — | | — | | | 10 | | | — | | |
Total mortgage-backed securities | 303 | | | 27 | | | 22 | | (7) | | | | (32) | | | — | | (7) | | | 306 | | | 26 | | |
Obligations of U.S. states and municipalities | 7 | | | — | | | — | | — | | | | — | | | — | | — | | | 7 | | | — | | |
Non-U.S. government debt securities | 81 | | | (33) | | | 228 | | (180) | | | | — | | | 37 | | — | | | 133 | | | (33) | | |
Corporate debt securities | 332 | | | (19) | | | 61 | | (59) | | | | (37) | | | 41 | | (26) | | | 293 | | | (20) | | |
Loans | 708 | | | (4) | | | 297 | | (98) | | | | (7) | | | 271 | | (118) | | | 1,049 | | | (4) | | |
Asset-backed securities | 26 | | | — | | | 1 | | — | | | | — | | | 4 | | (3) | | | 28 | | | — | | |
Total debt instruments | 1,457 | | | (29) | | | 609 | | (344) | | | | (76) | | | 353 | | (154) | | | 1,816 | | | (31) | | |
Equity securities | 662 | | | (813) | | | 223 | | (240) | | | | — | | | 853 | | (22) | | | 663 | | | (760) | | |
Physical commodities | — | | | — | | | — | | — | | | | — | | | — | | — | | | — | | | — | | |
Other | 160 | | | 1 | | | 20 | | — | | | | (5) | | | — | | (1) | | | 175 | | | 16 | | |
Total trading assets – debt and equity instruments | 2,279 | | | (841) | | (c) | 852 | | (584) | | | | (81) | | | 1,206 | | (177) | | | 2,654 | | | (775) | | (c) |
Net derivative receivables:(b) | | | | | | | | | | | | | | | | | |
Interest rate | (16) | | | 233 | | | 126 | | (94) | | | | 151 | |
| (27) | | (6) | | | 367 | | | 422 | | |
Credit | 74 | | | 67 | | | 4 | | (4) | | | | (96) | | | (3) | | 2 | | | 44 | | | 66 | | |
Foreign exchange | (419) | | | 345 | | | 132 | | (24) | | | | 70 | | | (6) | | (22) | | | 76 | | | 364 | | |
Equity | (3,626) | | | 730 | |
| 498 | | (559) | | |
| 443 | |
| (331) | | 262 | |
| (2,583) | | | 838 | | |
Commodity | (907) | | | 422 | | | 50 | | (137) | | | | 156 | | | — | | 2 | | | (414) | | | 467 | | |
Total net derivative receivables | (4,894) | | | 1,797 | | (c) | 810 | | (818) | | |
| 724 | |
| (367) | | 238 | |
| (2,510) | | | 2,157 | | (c) |
Available-for-sale securities: | | | | | | | | | | | | | | | | | |
Corporate debt securities | 161 | | | 27 | | | 17 | | — | | | | — | | | — | | — | | | 205 | | | 27 | | |
Total available-for-sale securities | 161 | | | 27 | | (d) | 17 | | — | | | | — | | | — | | — | | | 205 | | | 27 | | (d) |
Loans | 1,933 | | | 98 | | (c) | 121 | | (5) | | | | (281) | | | 390 | | (184) | | | 2,072 | | | 156 | | (c) |
Mortgage servicing rights | 5,494 | | | 959 | | (e) | 1,130 | | (57) | | | | (232) | | | — | | — | | | 7,294 | | | 959 | | (e) |
Other assets | 306 | | | 9 | | (c) | 41 | | — | | | | (17) | | | 2 | | — | | | 341 | | | 9 | | (c) |
| | | | | | | | | | | | | | | | | |
| Fair value measurements using significant unobservable inputs | | |
Three months ended March 31, 2022 (in millions) | Fair value at Jan 1, 2022 | Total realized/unrealized (gains)/losses | | | | | | | Transfers into level 3 | Transfers (out of) level 3 | Fair value at March 31, 2022 | Change in unrealized (gains)/losses related to financial instruments held at March 31, 2022 |
Purchases | Sales | | Issuances | Settlements(h) | |
Liabilities:(a) | | | | | | | | | | | | | | | | | |
Deposits | $ | 2,317 | | | $ | (142) | | (c)(f) | $ | — | | $ | — | | | $ | 108 | | $ | (48) | | | $ | — | | $ | (114) | | | $ | 2,121 | | | $ | (143) | | (c)(f) |
Short-term borrowings | 2,481 | | | (401) | | (c)(f) | — | | — | | | 1,423 | | (1,347) | | | 1 | | (11) | | | 2,146 | | | (153) | | (c)(f) |
Trading liabilities – debt and equity instruments | 30 | | | (17) | | (c) | (14) | | 30 | | | — | | — | | | 14 | | (2) | | | 41 | | | 31 | | (c) |
Accounts payable and other liabilities | 69 | | | (4) | | (c) | — | | 42 | | | — | | — | | | 1 | | — | | | 108 | | | (4) | | (c) |
Long-term debt | 24,374 | | | (1,668) | | (c)(f) | — | | — | | | 4,050 | | (2,476) | |
| 263 | | (149) | | | 24,394 | |
| (1,575) | | (c)(f) |
(a)Level 3 assets at fair value as a percentage of total Firm assets at fair value (including assets measured at fair value on a nonrecurring basis) were 2% at both March 31, 20232024 and December 31, 2022.2023. Level 3 liabilities at fair value as a percentage of total Firm liabilities at fair value (including liabilities measured at fair value on a nonrecurring basis) were 7%6% and 8% at March 31, 20232024 and December 31, 2022,2023, 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)Realized gains/(losses) on AFS securities are reported in investment securities gains/(losses). Unrealized gains/(losses) are reported in OCI. Realized and unrealized gains/(losses) recorded on level 3 AFS securities were not material for the three months ended March 31, 20232024 and 2022.2023.
(e)Changes in fair value for MSRs are reported in mortgage fees and related income.
(f)Realized (gains)/losses due to DVA for fair value option elected liabilities are reported in principal transactions revenue, and were not material for the three months ended March 31, 20232024 and 2022.2023. Unrealized (gains)/losses are reported in OCI, and were $(20) million and $(229) millionnot material for the three months ended March 31, 20232024 and 2022, respectively.2023.
(g)Loan originations are included in purchases.
(h)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.
Level 3 analysis
Consolidated balance sheets changes
The following describes significant changes to level 3 assets since December 31, 2022,2023, for those items measured at fair value on a recurring basis. Refer to Assets and liabilities measured at fair value on a nonrecurring basis on page 9599 for further information on changes impacting items measured at fair value on a nonrecurring basis.
Three months ended March 31, 20232024
Level 3 assets were $23.8$24.7 billion at March 31, 2023, relatively flat compared to2024, reflecting an increase of $1.1 billion from December 31, 2022, with no individually significant movements.2023.
The increase for the three months ended March 31, 2024 was driven by:
•$1.1 billion increase in gross derivative receivables due to gains and purchases largely offset by settlements.
Refer to the sections below for additional information.
Transfers between levels for instruments carried at fair value on a recurring basis
For the three months ended March 31, 2024, and March 31, 2023 there were no significant transfers from level 2 into level 3.
For the three months ended March 31, 2024, there were no significant transfers from level 3 into level 2.
For the three months ended March 31, 2023, significant transfers from level 3 into level 2 included the following:
•$953 million of gross equity derivative receivables as a result of an increase in observability and a decrease in the significance of unobservable inputs.
For the three months ended March 31, 2022, significant transfers from level 2 into level 3 included the following:
•$1.2 billion of total debt and equity instruments, largely due to equity securities of $853 million driven by a decrease in observability as a result of restricted access to certain markets.
For the three months ended March 31, 2022, there were no significant transfers 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. Refer to Changes in level 3 recurring fair value
measurements rollforward tables on pages 91-9495-98 for further information on these instruments.
Three months ended March 31, 2024
•$799 million of net losses on assets, predominantly driven by losses in net equity derivative receivables due to market movements.
•$516 million of net losses on liabilities, predominantly driven by losses in long-term debt due to market movements.
Three months ended March 31, 2023
•$891 million of net gains on assets, driven by gains in net derivative receivables due to market movements.
•$1.5 billion of net losses on liabilities, predominantly driven by an increase in the fair value of long-term debt due to market movements.
Three months ended March 31, 2022
•$2.0 billion of net gains on assets, predominantly driven by gains in net equity derivative receivables due to market movements and MSRs reflecting lower prepayment speeds on higher rates.
•$2.2 billion of net gains on liabilities, largely driven by gains in long-term debt due to market movements.
Refer to Note 14 for information on MSRs.
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 March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | | 2022 | |
Credit and funding adjustments: | Credit and funding adjustments: | | |
Credit and funding adjustments: | |
Credit and funding adjustments: | |
Derivatives CVA | |
Derivatives CVA | |
Derivatives CVA | Derivatives CVA | $ | 55 | | | $ | (312) | | |
Derivatives FVA | Derivatives FVA | (8) | | | (58) | | |
Derivatives FVA | |
Derivatives FVA | |
|
Refer to Note 2 of JPMorgan Chase’s 20222023 Form 10-K for further information about both credit and funding adjustments, as well as information about valuation adjustments on fair value option elected liabilities.
Assets and liabilities measured at fair value on a nonrecurring basis
The following tables present the assets and liabilities held as of March 31, 20232024 and 20222023, for which nonrecurring fair value adjustments were recorded during the three months ended March 31, 20232024 and 20222023, by major product category and fair value hierarchy.
| | Fair value hierarchy | | Total fair value |
March 31, 2023 (in millions) | Level 1 | Level 2 | | Level 3 | |
| Fair value hierarchy | | | Fair value hierarchy | | Total fair value |
March 31, 2024 (in millions) | |
Loans | |
Loans | |
Loans | Loans | $ | — | | $ | 709 | |
| $ | 833 | | (b) | $ | 1,542 | |
Other assets(a) | Other assets(a) | — | | 22 | | | 179 | | | 201 | |
Total assets measured at fair value on a nonrecurring basis | Total assets measured at fair value on a nonrecurring basis | $ | — | | $ | 731 | | | $ | 1,012 | | | $ | 1,743 | |
Accounts payable and other liabilities | Accounts payable and other liabilities | — | | — | | | 3 | | | 3 | |
Total liabilities measured at fair value on a nonrecurring basis | Total liabilities measured at fair value on a nonrecurring basis | $ | — | | $ | — | | | $ | 3 | | | $ | 3 | |
| | Fair value hierarchy | | Total fair value |
March 31, 2022 (in millions) | Level 1 | Level 2 | | Level 3 | |
| Fair value hierarchy | | | Fair value hierarchy | | Total fair value |
March 31, 2023 (in millions) | |
Loans | |
Loans | |
Loans | Loans | $ | — | | $ | 874 | |
| $ | 417 | | | $ | 1,291 | |
Other assets | Other assets | — | | 15 | | | 802 | |
| 817 | |
Total assets measured at fair value on a nonrecurring basis | Total assets measured at fair value on a nonrecurring basis | $ | — | | $ | 889 | | | $ | 1,219 | | | $ | 2,108 | |
Accounts payable and other liabilities | Accounts payable and other liabilities | — | | — | | | 28 | |
| 28 | |
Total liabilities measured at fair value on a nonrecurring basis | Total liabilities measured at fair value on a nonrecurring basis | $ | — | | $ | — | | | $ | 28 | | | $ | 28 | |
(a)Primarily includesIncluded impairments on certain equity method investments, as well as 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 $179$213 million in level 3 assets measured at fair value on a nonrecurring basis as of March 31, 2023, $1582024, $191 million related to equity 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)Of the $833 million in level 3 assets measured at fair value on a nonrecurring basis as of March 31, 2023, $14 million related to residential real estate loans carried at the net realizable value of the underlying collateral (e.g., collateral-dependent 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 13% to 48% with a weighted average of 25%.
Nonrecurring fair value changes
The following table presents the total change in value of assets and liabilities for which fair value adjustments have been recognized for the three months ended March 31, 20232024 and 20222023, related to assets and liabilities held at those dates.
| | | | | | | | | | | | | | | |
| Three months ended March 31, | | |
(in millions) | 2023 | | 2022 | | | | |
Loans | $ | (37) | | | $ | (18) | | | | | |
Other assets(a) | (65) | | | 360 | | | | | |
Accounts payable and other liabilities | (3) | | | (24) | | | | | |
Total nonrecurring fair value gains/(losses) | $ | (105) | | | $ | 318 | | | | | |
| | | | | | | | | | | | | | | |
| Three months ended March 31, | | |
(in millions) | 2024 | | 2023 | | | | |
Loans | $ | (60) | | | $ | (37) | | | | | |
Other assets(a) | (41) | | | (65) | | | | | |
Accounts payable and other liabilities | — | | | (3) | | | | | |
Total nonrecurring fair value gains/(losses) | $ | (101) | | | $ | (105) | | | | | |
(a)Included $(61)$(39) million and $376$(61) million for the three months ended March 31, 20232024 and 2022,2023, respectively, of net gains/(losses) as a result of the measurement alternative. The current period also included impairments on certain equity method investments.
Refer to Note 11 for further information about the measurement of collateral-dependent 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 (i.e., measurement alternative), with such changes recognized in 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 held as of March 31, 20232024 and 20222023, 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 March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
As of or for the period ended, (in millions) | |
As of or for the period ended, (in millions) | |
As of or for the period ended, (in millions) | As of or for the period ended, (in millions) | 2023 | | 2022 | |
Other assets | Other assets | | |
Other assets | |
Other assets | |
Carrying value(a) | |
Carrying value(a) | |
Carrying value(a) | Carrying value(a) | $ | 3,910 | | | $ | 4,131 | | |
Upward carrying value changes(b) | Upward carrying value changes(b) | 35 | | | 387 | | |
Upward carrying value changes(b) | |
Upward carrying value changes(b) | |
Downward carrying value changes/impairment(c) | |
Downward carrying value changes/impairment(c) | |
Downward carrying value changes/impairment(c) | Downward carrying value changes/impairment(c) | (96) | | | (11) | | |
|
(a)The carrying value as of December 31, 20222023 was $4.1$4.5 billion. The period-end carrying values reflect cumulative purchases and sales in addition to upward and downward carrying value changes.
(b)The cumulative upward carrying value changes between January 1, 2018 and March 31, 20232024 were $1.5$1.2 billion.
(c)The cumulative downward carrying value changes/impairment between January 1, 2018 and March 31, 20232024 were $(1.0)$(1.3) billion.
Included in other assets above is the Firm’s interest in approximately 3737.2 million Visa Class B commonB-1 shares (“Visa B shares”).which is held in the Firm's principal investment portfolio. These shares are subject to certain transfer restrictions and are convertible into Visa Class A common sharesstock (“Visa A shares”) at a specified conversion rate upon final resolution of certain litigation matters involving Visa. The conversion rate of Visa BB-1 shares intoto Visa A shares was 1.59911.5875 at March 31, 2023,2024 and the conversion rate may be adjusted by Visa depending on developments related to the litigation matters. The outcome of those litigation matters, and the effect that the resolution of those matters may have on the conversion rate, is unknown. Accordingly, as of March 31, 2023,2024, there is significant uncertainty regarding when the transfer restrictions on Visa BB-1 shares may be terminated and what the final conversion rate for the Visa BB-1 shares will be. As a result of these considerations, as well as differences in voting rights, Visa BB-1 shares are not considered to be similar to Visa A shares, and they continue to be held at their nominal carrying value.
On January 24, 2024, Visa filed a Current Report on Form 8-K with the SEC announcing that Visa’s stockholders had approved amendments to its Certificate of Incorporation that redenominated the Visa Class B common stock to Visa Class B-1 common stock (“Visa B-1 shares”) and authorized Visa to conduct one or more exchange offers.
On April 8, 2024, Visa commenced an initial exchange offer expiring May 3, 2024 for any and all outstanding shares of Visa B-1 shares. Holders participating in the exchange offer would receive a combination of Visa Class B-2 common stock (“Visa B-2 shares”) and Visa Class C common stock (“Visa C shares”) in exchange for Visa B-1 shares that are validly tendered and accepted for exchange by Visa. The Firm has tendered its 37.2 million Visa B-1 shares, and that
tender is pending Visa’s acceptance. In exchange for each Visa B-1 share that is validly tendered and accepted for exchange by Visa, the Firm would receive one half of a newly issued share of Visa Class B-2 common stock (“Visa B-2 shares”) and newly issued Visa C shares in an amount equivalent to one half of a Visa B-1 share. Upon acceptance by Visa of the Firm’s tender, the Visa C shares received by the Firm would be recognized at fair value, which is expected to result in a gain that may be recorded as early as the second quarter of 2024. The Visa B-2 shares would continue to be held at their nominal carrying value and would continue to be subject to transfer restrictions. The Firm would be entitled to sell the Visa C shares received after a brief lock-up period expires. Visa is also authorized to extend offers for potential future exchanges, each enabling the release of additional Visa B shares if certain conditions are met. The timing of future exchange offers is dependent upon actions taken by Visa and other factors that may be outside of the Firm’s control.
In connection with prior sales of Visa B shares prior to the redenomination to Visa B-1 shares, the Firm has entered into derivative instruments with the purchasers of the shares under which the Firm retains the risk associated with changes in the conversion rate. Under the termsRefer to page 194 of the derivative instruments, the Firm will (a) make or receive payments based on subsequent changes in the conversion rate and (b) make periodic interest payments to the purchasers of the Visa B shares. The payments under the derivative instruments will continue as long as the Visa B shares remain subject to transfer restrictions. The derivative instruments are accountedJPMorgan Chase’s 2023 Form 10-K for at fair value using a discounted cash flow methodology based upon the Firm’s estimate of the timing and magnitude of final resolution of the litigation matters. The derivative instruments are recorded in trading liabilities, and changes in fair value are recognized in other income. As of March 31, 2023, the Firm held derivative instruments associated with 23 million Visa B shares that the Firm had previously sold, which are all subject to similar terms and conditions.further information.
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 March 31, 2023,2024 and December 31, 2022,2023, 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, 2023 | | December 31, 2022 |
| | Estimated fair value hierarchy | | | | Estimated fair value hierarchy | |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
| | Estimated fair value hierarchy | |
(in billions) | |
(in billions) | |
(in billions) | (in billions) | Carrying value | Level 1 | Level 2 | Level 3 | Total estimated fair value | | Carrying value | Level 1 | Level 2 | Level 3 | Total estimated fair value | Carrying value | Level 1 | Level 2 | Level 3 | | Total estimated fair value | | Carrying value | Level 1 | Level 2 | Level 3 | Total estimated fair value |
Financial assets | Financial assets | |
Cash and due from banks | |
Cash and due from banks | |
Cash and due from banks | Cash and due from banks | $ | 25.1 | | $ | 25.1 | | $ | — | | $ | — | | $ | 25.1 | | | $ | 27.7 | | $ | 27.7 | | $ | — | | $ | — | | $ | 27.7 | |
Deposits with banks | Deposits with banks | 520.9 | | 520.4 | | 0.5 | | — | | 520.9 | | | 539.5 | | 539.3 | | 0.2 | | — | | 539.5 | |
Accrued interest and accounts receivable | Accrued interest and accounts receivable | 114.8 | | — | | 114.7 | | 0.1 | | 114.8 | | | 124.7 | | — | | 124.6 | | 0.1 | | 124.7 | |
Federal funds sold and securities purchased under resale agreements | Federal funds sold and securities purchased under resale agreements | 7.8 | | — | | 7.8 | | — | | 7.8 | | | 3.7 | | — | | 3.7 | | — | | 3.7 | |
Securities borrowed | Securities borrowed | 127.4 | | — | | 127.4 | | — | | 127.4 | | | 115.3 | | — | | 115.3 | | — | | 115.3 | |
Investment securities, held-to-maturity | Investment securities, held-to-maturity | 412.8 | | 187.2 | | 194.8 | | — | | 382.0 | | | 425.3 | | 189.1 | | 199.5 | | — | | 388.6 | |
Loans, net of allowance for loan losses(a) | Loans, net of allowance for loan losses(a) | 1,070.3 | | — | | 198.9 | | 851.2 | | 1,050.1 | | | 1,073.9 | | — | | 194.0 | | 853.9 | | 1,047.9 | |
Other | Other | 102.4 | | — | | 100.8 | | 1.7 | | 102.5 | | | 101.2 | | — | | 99.6 | | 1.7 | | 101.3 | |
Financial liabilities | Financial liabilities | |
Deposits | Deposits | $ | 2,335.7 | | $ | — | | $ | 2,335.9 | | $ | — | | $ | 2,335.9 | | | $ | 2,311.6 | | $ | — | | $ | 2,311.5 | | $ | — | | $ | 2,311.5 | |
Deposits | |
Deposits | |
Federal funds purchased and securities loaned or sold under repurchase agreements | Federal funds purchased and securities loaned or sold under repurchase agreements | 54.1 | | — | | 54.1 | | — | | 54.1 | | | 50.6 | | — | | 50.6 | | — | | 50.6 | |
Short-term borrowings | Short-term borrowings | 24.2 | | — | | 24.2 | | — | | 24.2 | | | 28.2 | | — | | 28.2 | | — | | 28.2 | |
Accounts payable and other liabilities | 238.5 | | — | | 232.3 | | 5.6 | | 237.9 | | | 257.5 | | — | | 251.2 | | 5.6 | | 256.8 | |
Accounts payable and other liabilities(b) | |
Beneficial interests issued by consolidated VIEs | Beneficial interests issued by consolidated VIEs | 14.9 | | — | | 14.9 | | — | | 14.9 | | | 12.6 | | — | | 12.6 | | — | | 12.6 | |
Long-term debt | Long-term debt | 219.3 | | — | | 214.3 | | 2.8 | | 217.1 | | | 223.6 | | — | | 216.5 | | 2.8 | | 219.3 | |
(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 loan is generally attributable to changes in market interest rates, including credit spreads, market liquidity premiums and other factors that affect the fair value of a loan but do not affect its carrying value.
(b)Excludes lending-related commitments disclosed in the table below.
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 and the estimated fair value of these wholesale lending-related commitments were as follows for the periods indicated.
| | March 31, 2023 | | December 31, 2022 |
| | Estimated fair value hierarchy | | | | Estimated fair value hierarchy | |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
| | Estimated fair value hierarchy | |
(in billions) | |
(in billions) | |
(in billions) | (in billions) | Carrying value(a) (b) | Level 1 | Level 2 | Level 3 | Total estimated fair value | | Carrying value(a) (b) | Level 1 | Level 2 | Level 3 | Total estimated fair value | Carrying value(a)(b)(c) | Level 1 | Level 2 | Level 3 | Total estimated fair value | | Carrying value(a)(b)(c) | Level 1 | Level 2 | Level 3 | Total estimated fair value |
Wholesale lending-related commitments | Wholesale lending-related commitments | $ | 2.3 | | $ | — | | $ | — | | $ | 3.2 | | $ | 3.2 | | | $ | 2.3 | | $ | — | | $ | — | | $ | 3.2 | | $ | 3.2 | |
(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)Includes the wholesale allowance for lending-related commitments.
(c)As of March 31, 2024 and December 31, 2023, includes fair value adjustments associated with First Republic for other unfunded commitments to extend credit totaling $935 million and $1.1 billion, respectively, recorded in accounts payable and other liabilities on the Consolidated balance sheets. Refer to Notes 22 and 26 for additional information.
The Firm does not estimate the fair value of consumer off-balance sheet lending-related commitments. In many cases, the Firm can reduce or cancel these commitments by providing the borrower notice or, in some cases as permitted by law, without notice. Refer to page 169177 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of the valuation of lending-related commitments.
Note 3 – Fair value option
The fair value option provides an option to elect fair value 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 on an accrual basis) and the associated risk management arrangements that are accounted for on a fair value basis, as well as to better reflect those instruments that are managed on a fair value basis.
The Firm’s election of fair value includes the following instruments:
•Loans purchased or originated as part of securitization warehousing activity, subject to bifurcation accounting, or managed on a fair value basis, including lending-related commitments
•Certain securities financing agreements
•Owned beneficial interests in securitized financial assets that contain embedded credit derivatives, which would otherwise be required to be separately accounted for as a derivative instrument
•Structured notes and other hybrid instruments, which are predominantly financial instruments that contain embedded derivatives, that are issued or transacted as part of client-driven activities
•Certain long-term beneficial interests issued by CIB’s consolidated securitization trusts where 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 March 31, 20232024 and 2022,2023, 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 March 31, | |
| 2023 | | 2022 | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| 2024 | |
| 2024 | |
| 2024 | |
(in millions) | |
(in millions) | |
(in millions) | (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 | Federal funds sold and securities purchased under resale agreements | $ | 202 | | | $ | — | | | $ | 202 | | | $ | (230) | | | $ | — | | | $ | (230) | | |
Securities borrowed | Securities borrowed | 88 | | | — | | | 88 | | | (198) | | | — | | | (198) | | |
Securities borrowed | |
Securities borrowed | |
Trading assets: | |
Trading assets: | |
Trading assets: | Trading assets: | | |
Debt and equity instruments, excluding loans | Debt and equity instruments, excluding loans | 1,595 | | | — | | | 1,595 | | | 344 | | | — | | | 344 | | |
Debt and equity instruments, excluding loans | |
Debt and equity instruments, excluding loans | |
Loans reported as trading assets: | |
Loans reported as trading assets: | |
Loans reported as trading assets: | Loans reported as trading assets: | | |
Changes in instrument-specific credit risk | Changes in instrument-specific credit risk | 131 | | | — | | | 131 | | | (6) | | | — | | | (6) | | |
Changes in instrument-specific credit risk | |
Changes in instrument-specific credit risk | |
Other changes in fair value | |
Other changes in fair value | |
Other changes in fair value | Other changes in fair value | 3 | | | — | | | 3 | | | (11) | | | — | | | (11) | | |
Loans: | Loans: | | |
Loans: | |
Loans: | |
Changes in instrument-specific credit risk | |
Changes in instrument-specific credit risk | |
Changes in instrument-specific credit risk | Changes in instrument-specific credit risk | 65 | | | 1 | | (c) | 66 | | | 6 | | | 12 | | (c) | 18 | | |
Other changes in fair value | Other changes in fair value | 195 | | | 110 | | (c) | 305 | | | (719) | | | (514) | | (c) | (1,233) | | |
Other changes in fair value | |
Other changes in fair value | |
Other assets | |
Other assets | |
Other assets | Other assets | 30 | | | — | |
| 30 | | | 11 | | | (3) | | (d) | 8 | | |
Deposits(a) | Deposits(a) | (473) | | | — | | | (473) | | | 402 | | | — | | | 402 | | |
Deposits(a) | |
Deposits(a) | |
Federal funds purchased and securities loaned or sold under repurchase agreements | |
Federal funds purchased and securities loaned or sold under repurchase agreements | |
Federal funds purchased and securities loaned or sold under repurchase agreements | Federal funds purchased and securities loaned or sold under repurchase agreements | (61) | | | — | | | (61) | | | 82 | | | — | | | 82 | | |
Short-term borrowings(a) | Short-term borrowings(a) | (159) | | | — | | | (159) | | | 302 | | | — | | | 302 | | |
Short-term borrowings(a) | |
Short-term borrowings(a) | |
Trading liabilities | |
Trading liabilities | |
Trading liabilities | Trading liabilities | (15) | | | — | | | (15) | | | (66) | | | — | | | (66) | | |
Beneficial interests issued by consolidated VIEs | Beneficial interests issued by consolidated VIEs | — | | | — | | | — | | | (1) | | | — | | | (1) | | |
Beneficial interests issued by consolidated VIEs | |
Beneficial interests issued by consolidated VIEs | |
Other liabilities | |
Other liabilities | |
Other liabilities | Other liabilities | — | | | — | | | — | | | 3 | | | — | | | 3 | | |
Long-term debt(a)(b) | Long-term debt(a)(b) | (2,798) | | | (26) | | (c)(d) | (2,824) | | | 3,960 | | | 19 | | (c)(d) | 3,979 | | |
Long-term debt(a)(b) | |
Long-term debt(a)(b) | |
(a)Unrealized gains/(losses) due to instrument-specific credit risk (DVA) for liabilities for which the fair value option has been elected are 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 material both for the three months ended March 31, 20232024 and 2022.2023.
(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 certain hybrid financial instruments in CIB. Refer to Note 6 for further information regarding interest income and interest expense.
Difference between aggregate fair value and aggregate remaining contractual principal balance outstanding
The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding as of March 31, 2023,2024 and December 31, 2022,2023, for loans, long-term debt and long-term beneficial interests for which the fair value option has been elected.
| | March 31, 2023 | | December 31, 2022 |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
(in millions) | (in millions) | Contractual principal outstanding | | Fair value | Fair value over/(under) contractual principal outstanding | | Contractual principal outstanding | | Fair value | Fair value over/(under) contractual principal outstanding | (in millions) | Contractual principal outstanding | | Fair value | Fair value over/(under) contractual principal outstanding | | Contractual principal outstanding | | Fair value | Fair value over/(under) contractual principal outstanding |
Loans | Loans | |
Nonaccrual loans | Nonaccrual loans | |
Nonaccrual loans | |
Nonaccrual loans | |
Loans reported as trading assets | |
Loans reported as trading assets | |
Loans reported as trading assets | Loans reported as trading assets | $ | 2,437 | | | $ | 365 | | $ | (2,072) | | | $ | 2,517 | | | $ | 368 | | $ | (2,149) | |
Loans | Loans | 934 | | | 788 | | (146) | | | 967 | | | 829 | | (138) | |
Subtotal | Subtotal | 3,371 | | | 1,153 | | (2,218) | | | 3,484 | | | 1,197 | | (2,287) | |
90 or more days past due and government guaranteed | 90 or more days past due and government guaranteed | |
Loans(a) | Loans(a) | 106 | | | 99 | | (7) | | | 124 | | | 115 | | (9) | |
Loans(a) | |
Loans(a) | |
All other performing loans(b) | All other performing loans(b) | |
Loans reported as trading assets | |
Loans reported as trading assets | |
Loans reported as trading assets | Loans reported as trading assets | 10,761 | | | 8,926 | | (1,835) | | | 7,823 | | | 6,135 | | (1,688) | |
Loans | Loans | 38,516 | | | 37,659 | | (857) | | | 42,588 | | | 41,135 | | (1,453) | |
Subtotal | Subtotal | 49,277 | | | 46,585 | | (2,692) | | | 50,411 | | | 47,270 | | (3,141) | |
Total loans | Total loans | $ | 52,754 | | | $ | 47,837 | | $ | (4,917) | | | $ | 54,019 | | | $ | 48,582 | | $ | (5,437) | |
Long-term debt | Long-term debt | |
Principal-protected debt | Principal-protected debt | $ | 44,223 | | (d) | $ | 33,595 | | $ | (10,628) | | | $ | 41,341 | | (d) | $ | 31,105 | | $ | (10,236) | |
Principal-protected debt | |
Principal-protected debt | |
Nonprincipal-protected debt(c) | Nonprincipal-protected debt(c) | NA | | 42,590 | | NA | | NA | | 41,176 | | NA | Nonprincipal-protected debt(c) | NA | | 49,198 | | NA | NA | | NA | | 49,042 | | NA | NA |
Total long-term debt | Total long-term debt | NA | | $ | 76,185 | | NA | | NA | | $ | 72,281 | | NA | Total long-term debt | NA | | $ | 92,730 | | NA | NA | | NA | | $ | 87,924 | | NA | NA |
Long-term beneficial interests | Long-term beneficial interests | |
Nonprincipal-protected debt(c) | Nonprincipal-protected debt(c) | NA | | $ | 1 | | NA | | NA | | $ | 5 | | NA |
Nonprincipal-protected debt(c) | |
Nonprincipal-protected debt(c) | | NA | | $ | 1 | | NA | | NA | | $ | 1 | | NA |
Total long-term beneficial interests | Total long-term beneficial interests | NA | | $ | 1 | | NA | | NA | | $ | 5 | | NA | Total long-term beneficial interests | NA | | $ | 1 | | NA | NA | | NA | | $ | 1 | | NA | NA |
(a)These balances are excluded from nonaccrual loans as the loans are insured and/or guaranteed by U.S. government agencies.
(b)There were no performing loans that were ninety days or more past due as of March 31, 2023,2024 and December 31, 2022.2023.
(c)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.
(d)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 March 31, 2023,2024 and December 31, 2022,2023, the contractual amount of lending-related commitments for which the fair value option was elected was $9.4$11.4 billion and $7.6$9.7 billion, respectively, with a corresponding fair value of $12$93 million and $24$97 million, respectively. Refer to Note 28 of JPMorgan Chase’s 20222023 Form 10-K, and Note 22 of this Form 10-Q for further information regarding off-balance sheet lending-related financial instruments.
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.
| | March 31, 2023 | | December 31, 2022 |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
(in millions) | (in millions) | Long-term debt | Short-term borrowings | Deposits | | Total | | Long-term debt | Short-term borrowings | Deposits | | Total | (in millions) | Long-term debt | Short-term borrowings | Deposits | | Total | | Long-term debt | Short-term borrowings | Deposits | | Total |
Risk exposure | Risk exposure | |
Interest rate | |
Interest rate | |
Interest rate | Interest rate | $ | 34,608 | | $ | 292 | | $ | 37,213 | | | $ | 72,113 | | | $ | 31,973 | | $ | 260 | | $ | 24,655 | | | $ | 56,888 | |
Credit | Credit | 4,227 | | 241 | | — | | | 4,468 | | | 4,105 | | 170 | | — | | | 4,275 | |
Foreign exchange | Foreign exchange | 2,742 | | 1,079 | | 125 | | | 3,946 | | | 2,674 | | 788 | | 50 | | | 3,512 | |
Equity | Equity | 31,936 | | 5,011 | | 3,406 | | | 40,353 | | | 30,864 | | 4,272 | | 3,545 | | | 38,681 | |
Commodity | Commodity | 1,757 | | 26 | | 2 | | (a) | 1,785 | | | 1,655 | | 16 | | 2 | | (a) | 1,673 | |
Total structured notes | Total structured notes | $ | 75,270 | | $ | 6,649 | | $ | 40,746 | | | $ | 122,665 | | | $ | 71,271 | | $ | 5,506 | | $ | 28,252 | | | $ | 105,029 | |
(a)Excludes deposits linked to precious metals for which the fair value option has not been elected of $613$636 million and $602$627 million for the periods ended March 31, 20232024 and December 31, 2022,2023, respectively.
Note 4 – Derivative instruments
JPMorgan Chase makes markets in derivatives for clients and also uses derivatives to hedge or manage its own risk exposures. Refer to Note 5 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of the Firm’s use of and accounting policies regarding derivative instruments.
The Firm’s disclosures are based on the accounting treatment and purpose of these derivatives. A limited number of the Firm’s derivatives are designated in hedge
accounting relationships and are disclosed according to the type of hedge (fair value hedge, cash flow hedge, or net investment hedge). Derivatives not designated in hedge accounting relationships include certain derivatives that are used to manage risks associated with specified assets and liabilities (“specified risk management” positions) as well as derivatives used in the Firm’s market-making businesses or for other purposes.
The following table outlines the Firm’s primary uses of derivatives and the related hedge accounting designation or disclosure category.
| | | | | | | | | | | | | | |
Type of Derivative | Use of Derivative | Designation and disclosure | Affected segment or unit | 10-Q page reference |
Manage specifically identified risk exposures in qualifying hedge accounting relationships: |
•Interest rate | Hedge fixed rate assets and liabilities | Fair value hedge | Corporate | 107-108111-112 |
•Interest rate | Hedge floating-rate assets and liabilities | Cash flow hedge | Corporate | 109113 |
•Foreign exchange | Hedge foreign currency-denominated assets and liabilities | Fair value hedge | Corporate | 107-108111-112 |
•Foreign exchange | Hedge foreign currency-denominated forecasted revenue and expense | Cash flow hedge | Corporate | 109113 |
•Foreign exchange | Hedge the value of the Firm’s investments in non-U.S. dollar functional currency entities | Net investment hedge | Corporate | 109113 |
•Commodity | Hedge commodity inventory | Fair value hedge | CIB, AWM | 107-108111-112 |
Manage specifically identified risk exposures not designated in qualifying hedge accounting relationships: |
•Interest rate | Manage the risk associated with mortgage commitments, warehouse loans and MSRs | Specified risk management | CCB | 110114 |
•Credit | Manage the credit risk associated with wholesale lending exposures | Specified risk management | CIB, AWM | 110114 |
•Interest rate and foreign exchange | Manage the risk associated with certain other specified assets and liabilities | Specified risk management | Corporate, CIB | 110114 |
Market-making derivatives and other activities: |
•Various | Market-making and related risk management | Market-making and other | CIB | 110114 |
•Various | Other derivatives | Market-making and other | CIB, AWM, Corporate | 110114 |
Notional amount of derivative contracts
The following table summarizes the notional amount of free-standing derivative contracts outstanding as of March 31, 2023,2024 and December 31, 2022.2023.
| | Notional amounts(b) | |
| Notional amounts(b) | |
| Notional amounts(b) | |
| Notional amounts(b) | |
(in billions) | |
(in billions) | |
(in billions) | (in billions) | March 31, 2023 | December 31, 2022 | |
Interest rate contracts | Interest rate contracts | | |
Interest rate contracts | |
Interest rate contracts | |
Swaps | |
Swaps | |
Swaps | Swaps | $ | 30,520 | | $ | 24,491 | | |
Futures and forwards | Futures and forwards | 3,861 | | 2,636 | | |
Futures and forwards | |
Futures and forwards | |
Written options | |
Written options | |
Written options | Written options | 3,387 | | 3,047 | | |
Purchased options | Purchased options | 3,431 | | 2,992 | | |
Purchased options | |
Purchased options | |
Total interest rate contracts | |
Total interest rate contracts | |
Total interest rate contracts | Total interest rate contracts | 41,199 | | 33,166 | | |
Credit derivatives(a) | Credit derivatives(a) | 1,506 | | 1,132 | | |
Credit derivatives(a) | |
Credit derivatives(a) | |
Foreign exchange contracts | |
Foreign exchange contracts | |
Foreign exchange contracts | Foreign exchange contracts | | |
Cross-currency swaps | Cross-currency swaps | 4,377 | | 4,196 | | |
Cross-currency swaps | |
Cross-currency swaps | |
Spot, futures and forwards | |
Spot, futures and forwards | |
Spot, futures and forwards | Spot, futures and forwards | 8,465 | | 7,017 | | |
Written options | Written options | 867 | | 775 | | |
Written options | |
Written options | |
Purchased options | |
Purchased options | |
Purchased options | Purchased options | 847 | | 759 | | |
Total foreign exchange contracts | Total foreign exchange contracts | 14,556 | | 12,747 | | |
Total foreign exchange contracts | |
Total foreign exchange contracts | |
Equity contracts | |
Equity contracts | |
Equity contracts | Equity contracts | | |
Swaps | Swaps | 674 | | 618 | | |
Swaps | |
Swaps | |
Futures and forwards | |
Futures and forwards | |
Futures and forwards | Futures and forwards | 107 | | 110 | | |
Written options | Written options | 748 | | 636 | | |
Written options | |
Written options | |
Purchased options | |
Purchased options | |
Purchased options | Purchased options | 698 | | 580 | | |
Total equity contracts | Total equity contracts | 2,227 | | 1,944 | | |
Total equity contracts | |
Total equity contracts | |
Commodity contracts | |
Commodity contracts | |
Commodity contracts | Commodity contracts | | |
Swaps | Swaps | 137 | | 136 | | |
Swaps | |
Swaps | |
Spot, futures and forwards | |
Spot, futures and forwards | |
Spot, futures and forwards | Spot, futures and forwards | 145 | | 136 | | |
Written options | Written options | 142 | | 117 | | |
Written options | |
Written options | |
Purchased options | |
Purchased options | |
Purchased options | Purchased options | 110 | | 98 | | |
Total commodity contracts | Total commodity contracts | 534 | | 487 | | |
Total commodity contracts | |
Total commodity contracts | |
Total derivative notional amounts | Total derivative notional amounts | $ | 60,022 | | $ | 49,476 | | |
Total derivative notional amounts | |
Total derivative notional amounts | |
(a)Refer to the Credit derivatives discussion on page 111115 for more information on volumes and types of credit derivative contracts.
(b)Represents the sum of gross long and gross short third-party notional derivative contracts.
While the notional amounts disclosed above give an indication of the volume of the Firm’s derivatives activity, the notional amounts significantly exceed, in the Firm’s view, the possible losses that could arise from such transactions. For most derivative contracts, the notional amount is not exchanged; it is simply 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 March 31, 2023,2024 and December 31, 2022,2023, 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) | | | |
| Gross derivative receivables | | Gross derivative payables | |
March 31, 2023 (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) |
| Gross derivative receivables | |
| Gross derivative receivables | |
| Gross derivative receivables | |
March 31, 2024 (in millions) | |
March 31, 2024 (in millions) | |
March 31, 2024 (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 | Trading assets and liabilities | |
Interest rate | |
Interest rate | |
Interest rate | Interest rate | $ | 285,532 | | | $ | 7 | | | $ | 285,539 | | | $ | 25,028 | | | $ | 274,728 | | | $ | — | | | $ | 274,728 | | | $ | 13,300 | |
Credit | Credit | 12,047 | | | — | | | 12,047 | | | 993 | | | 12,428 | | | — | | | 12,428 | | | 852 | |
Foreign exchange | Foreign exchange | 184,941 | | | 739 | | | 185,680 | | | 19,225 | | | 186,365 | | | 1,257 | | | 187,622 | | | 13,214 | |
Equity | Equity | 61,457 | | | — | | | 61,457 | | | 7,728 | | | 66,545 | | | — | | | 66,545 | | | 9,848 | |
Commodity | Commodity | 18,624 | | | 1,035 | | | 19,659 | | | 6,300 | | | 19,392 | | | 1,370 | | | 20,762 | | | 7,497 | |
Total fair value of trading assets and liabilities | Total fair value of trading assets and liabilities | $ | 562,601 | | | $ | 1,781 | | | $ | 564,382 | | | $ | 59,274 | | | $ | 559,458 | | | $ | 2,627 | | | $ | 562,085 | | | $ | 44,711 | |
| | Gross derivative receivables | | Gross derivative payables | |
December 31, 2022 (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) |
| Gross derivative receivables | |
| Gross derivative receivables | |
| Gross derivative receivables | |
December 31, 2023 (in millions) | |
December 31, 2023 (in millions) | |
December 31, 2023 (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 | Trading assets and liabilities | |
Interest rate | |
Interest rate | |
Interest rate | Interest rate | $ | 300,411 | |
| $ | 4 | | | $ | 300,415 | | | $ | 28,419 | | | $ | 290,291 | | | $ | — | | | $ | 290,291 | | | $ | 15,970 | |
Credit | Credit | 10,329 | | | — | | | 10,329 | | | 1,090 | | | 9,971 | | | — | | | 9,971 | | | 754 | |
Foreign exchange | Foreign exchange | 239,946 | | | 1,633 | | | 241,579 | | | 23,365 | | | 248,911 | | | 2,610 | | | 251,521 | | | 18,856 | |
Equity | Equity | 61,913 | | | — | | | 61,913 | | | 9,139 | | | 62,461 | | | — | | | 62,461 | | | 8,804 | |
Commodity | Commodity | 23,652 | | | 1,705 | | | 25,357 | | | 8,867 | | | 20,758 | | | 2,511 | | | 23,269 | | | 6,757 | |
Total fair value of trading assets and liabilities | Total fair value of trading assets and liabilities | $ | 636,251 | | | $ | 3,342 | | | $ | 639,593 | | | $ | 70,880 | | | $ | 632,392 | | | $ | 5,121 | | | $ | 637,513 | | | $ | 51,141 | |
(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 March 31, 2023,2024 and December 31, 2022,2023, 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 liquid securities and other 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. For the purpose of this disclosure, the definition of liquid securities is consistent with the definition of high quality liquid assets as defined in the LCR rule;
•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.
| | March 31, 2023 | | December 31, 2022 |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
(in millions) | (in millions) | Gross derivative receivables | Amounts netted on the Consolidated balance sheets | Net derivative receivables | | Gross derivative receivables | | Amounts netted on the Consolidated balance sheets | Net derivative receivables | (in millions) | Gross derivative receivables | Amounts netted on the Consolidated balance sheets | Net derivative receivables | | Gross derivative receivables | | Amounts netted on the Consolidated balance sheets | Net derivative receivables |
U.S. GAAP nettable derivative receivables | U.S. GAAP nettable derivative receivables | |
Interest rate contracts: | Interest rate contracts: | |
Interest rate contracts: | |
Interest rate contracts: | |
Over-the-counter (“OTC”) | |
Over-the-counter (“OTC”) | |
Over-the-counter (“OTC”) | Over-the-counter (“OTC”) | $ | 191,898 | | $ | (169,448) | | | $ | 22,450 | | | $ | 203,922 | | | $ | (178,261) | | | $ | 25,661 | | |
OTC–cleared | OTC–cleared | 90,955 | | (90,616) | | | 339 | | | 93,800 | | | (93,424) | | | 376 | | |
OTC–cleared | |
OTC–cleared | |
Exchange-traded(a) | |
Exchange-traded(a) | |
Exchange-traded(a) | Exchange-traded(a) | 589 | | (447) | | | 142 | | | 559 | | | (311) | | | 248 | | |
Total interest rate contracts | Total interest rate contracts | 283,442 | | (260,511) | | | 22,931 | | | 298,281 | | | (271,996) | | | 26,285 | | |
Total interest rate contracts | |
Total interest rate contracts | |
Credit contracts: | |
Credit contracts: | |
Credit contracts: | Credit contracts: | |
OTC | OTC | 8,564 | | (7,792) | | | 772 | | | 8,474 | | | (7,535) | | | 939 | | |
OTC | |
OTC | |
OTC–cleared | |
OTC–cleared | |
OTC–cleared | OTC–cleared | 3,385 | | (3,262) | | | 123 | | | 1,746 | | | (1,704) | | | 42 | | |
Total credit contracts | Total credit contracts | 11,949 | | (11,054) | | | 895 | | | 10,220 | | | (9,239) | | | 981 | | |
Total credit contracts | |
Total credit contracts | |
Foreign exchange contracts: | |
Foreign exchange contracts: | |
Foreign exchange contracts: | Foreign exchange contracts: | |
OTC | OTC | 183,060 | | (165,794) | | | 17,266 | | | 237,941 | | | (216,796) | | | 21,145 | | |
OTC | |
OTC | |
OTC–cleared | |
OTC–cleared | |
OTC–cleared | OTC–cleared | 662 | | (658) | | | 4 | | | 1,461 | | | (1,417) | | | 44 | | |
Exchange-traded(a) | Exchange-traded(a) | 26 | | (3) | | | 23 | | | 15 | | | (1) | | | 14 | | |
Exchange-traded(a) | |
Exchange-traded(a) | |
Total foreign exchange contracts | |
Total foreign exchange contracts | |
Total foreign exchange contracts | Total foreign exchange contracts | 183,748 | | (166,455) | | | 17,293 | | | 239,417 | | | (218,214) | | | 21,203 | | |
Equity contracts: | Equity contracts: | |
Equity contracts: | |
Equity contracts: | |
OTC | |
OTC | |
OTC | OTC | 26,232 | | (22,553) | | | 3,679 | | | 30,323 | | | (25,665) | | | 4,658 | | |
Exchange-traded(a) | Exchange-traded(a) | 32,080 | | (31,176) | | | 904 | | | 28,467 | | | (27,109) | | | 1,358 | | |
Exchange-traded(a) | |
Exchange-traded(a) | |
Total equity contracts | |
Total equity contracts | |
Total equity contracts | Total equity contracts | 58,312 | | (53,729) | | | 4,583 | | | 58,790 | | | (52,774) | | | 6,016 | | |
Commodity contracts: | Commodity contracts: | |
Commodity contracts: | |
Commodity contracts: | |
OTC | |
OTC | |
OTC | OTC | 11,145 | | (6,700) | | | 4,445 | | | 14,430 | | | (7,633) | | | 6,797 | | |
OTC–cleared | OTC–cleared | 107 | | (106) | | | 1 | | | 120 | | | (112) | | | 8 | | |
OTC–cleared | |
OTC–cleared | |
Exchange-traded(a) | |
Exchange-traded(a) | |
Exchange-traded(a) | Exchange-traded(a) | 6,577 | | (6,553) | | | 24 | | | 9,103 | | | (8,745) | | | 358 | | |
Total commodity contracts | Total commodity contracts | 17,829 | | (13,359) | | | 4,470 | | | 23,653 | | | (16,490) | | | 7,163 | | |
Total commodity contracts | |
Total commodity contracts | |
Derivative receivables with appropriate legal opinion | |
Derivative receivables with appropriate legal opinion | |
Derivative receivables with appropriate legal opinion | Derivative receivables with appropriate legal opinion | 555,280 | | (505,108) | | | 50,172 | | (d) | 630,361 | | | (568,713) | | | 61,648 | | (d) | 526,298 | | (477,277) | (477,277) | | | 49,021 | | 49,021 | | (d) | (d) | 531,221 | | | (484,384) | | (484,384) | | | 46,837 | | 46,837 | | (d) | (d) |
Derivative receivables where an appropriate legal opinion has not been either sought or obtained | Derivative receivables where an appropriate legal opinion has not been either sought or obtained | 9,102 | | | 9,102 | | | 9,232 | | | 9,232 | | |
Total derivative receivables recognized on the Consolidated balance sheets | Total derivative receivables recognized on the Consolidated balance sheets | $ | 564,382 | | | $ | 59,274 | | | $ | 639,593 | | | $ | 70,880 | | |
Total derivative receivables recognized on the Consolidated balance sheets | |
Total derivative receivables recognized on the Consolidated balance sheets | |
Collateral not nettable on the Consolidated balance sheets(b)(c) | |
Collateral not nettable on the Consolidated balance sheets(b)(c) | |
Collateral not nettable on the Consolidated balance sheets(b)(c) | Collateral not nettable on the Consolidated balance sheets(b)(c) | | (20,923) | | | (23,014) | | |
Net amounts | Net amounts | | $ | 38,351 | | | $ | 47,866 | | |
Net amounts | |
Net amounts | |
| | March 31, 2023 | | December 31, 2022 |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
(in millions) | (in millions) | Gross derivative payables | Amounts netted on the Consolidated balance sheets | Net derivative payables | | Gross derivative payables | | Amounts netted on the Consolidated balance sheets | Net derivative payables | (in millions) | Gross derivative payables | Amounts netted on the Consolidated balance sheets | Net derivative payables | | Gross derivative payables | | Amounts netted on the Consolidated balance sheets | Net derivative payables |
U.S. GAAP nettable derivative payables | U.S. GAAP nettable derivative payables | |
Interest rate contracts: | Interest rate contracts: | |
Interest rate contracts: | |
Interest rate contracts: | |
OTC | |
OTC | |
OTC | OTC | $ | 177,549 | | $ | (166,800) | | | $ | 10,749 | | | $ | 190,108 | | | $ | (176,890) | | | $ | 13,218 | | |
OTC–cleared | OTC–cleared | 94,500 | | (94,182) | | | 318 | | | 97,417 | | | (97,126) | | | 291 | | |
OTC–cleared | |
OTC–cleared | |
Exchange-traded(a) | |
Exchange-traded(a) | |
Exchange-traded(a) | Exchange-traded(a) | 540 | | (446) | | | 94 | | | 327 | | | (305) | | | 22 | | |
Total interest rate contracts | Total interest rate contracts | 272,589 | | (261,428) | | | 11,161 | | | 287,852 | | | (274,321) | | | 13,531 | | |
Total interest rate contracts | |
Total interest rate contracts | |
Credit contracts: | |
Credit contracts: | |
Credit contracts: | Credit contracts: | |
OTC | OTC | 9,096 | | (8,550) | | | 546 | | | 8,054 | | | (7,572) | | | 482 | | |
OTC | |
OTC | |
OTC–cleared | |
OTC–cleared | |
OTC–cleared | OTC–cleared | 3,081 | | (3,026) | | | 55 | | | 1,674 | | | (1,645) | | | 29 | | |
Total credit contracts | Total credit contracts | 12,177 | | (11,576) | | | 601 | | | 9,728 | | | (9,217) | | | 511 | | |
Total credit contracts | |
Total credit contracts | |
Foreign exchange contracts: | |
Foreign exchange contracts: | |
Foreign exchange contracts: | Foreign exchange contracts: | |
OTC | OTC | 184,746 | | (173,744) | | | 11,002 | | | 246,457 | | | (231,248) | | | 15,209 | | |
OTC | |
OTC | |
OTC–cleared | |
OTC–cleared | |
OTC–cleared | OTC–cleared | 765 | | (664) | | | 101 | | | 1,488 | | | (1,417) | | | 71 | | |
Exchange-traded(a) | Exchange-traded(a) | 31 | | — | | | 31 | | | 20 | | | — | | | 20 | | |
Exchange-traded(a) | |
Exchange-traded(a) | |
Total foreign exchange contracts | |
Total foreign exchange contracts | |
Total foreign exchange contracts | Total foreign exchange contracts | 185,542 | | (174,408) | | | 11,134 | | | 247,965 | | | (232,665) | | | 15,300 | | |
Equity contracts: | Equity contracts: | |
Equity contracts: | |
Equity contracts: | |
OTC | |
OTC | |
OTC | OTC | 29,147 | | (25,525) | | | 3,622 | | | 29,833 | | | (26,554) | | | 3,279 | | |
Exchange-traded(a) | Exchange-traded(a) | 33,357 | | (31,172) | | | 2,185 | | | 28,291 | | | (27,103) | | | 1,188 | | |
Exchange-traded(a) | |
Exchange-traded(a) | |
Total equity contracts | |
Total equity contracts | |
Total equity contracts | Total equity contracts | 62,504 | | (56,697) | | | 5,807 | | | 58,124 | | | (53,657) | | | 4,467 | | |
Commodity contracts: | Commodity contracts: | |
Commodity contracts: | |
Commodity contracts: | |
OTC | |
OTC | |
OTC | OTC | 11,189 | | (6,597) | | | 4,592 | | | 11,954 | | | (7,642) | | | 4,312 | | |
OTC–cleared | OTC–cleared | 106 | | (106) | | | — | | | 112 | | | (112) | | | — | | |
OTC–cleared | |
OTC–cleared | |
Exchange-traded(a) | |
Exchange-traded(a) | |
Exchange-traded(a) | Exchange-traded(a) | 7,093 | | (6,562) | | | 531 | | | 9,021 | | | (8,758) | | | 263 | | |
Total commodity contracts | Total commodity contracts | 18,388 | | (13,265) | | | 5,123 | | | 21,087 | | | (16,512) | | | 4,575 | | |
Total commodity contracts | |
Total commodity contracts | |
Derivative payables with appropriate legal opinion | |
Derivative payables with appropriate legal opinion | |
Derivative payables with appropriate legal opinion | Derivative payables with appropriate legal opinion | 551,200 | | (517,374) | | | 33,826 | | (d) | 624,756 | | | (586,372) | | | 38,384 | | (d) | 522,192 | | (494,080) | (494,080) | | | 28,112 | | 28,112 | | (d) | (d) | 537,679 | | | (506,125) | | (506,125) | | | 31,554 | | 31,554 | | (d) | (d) |
Derivative payables where an appropriate legal opinion has not been either sought or obtained | Derivative payables where an appropriate legal opinion has not been either sought or obtained | 10,885 | | | 10,885 | | | 12,757 | | | 12,757 | | |
Total derivative payables recognized on the Consolidated balance sheets | Total derivative payables recognized on the Consolidated balance sheets | $ | 562,085 | | | $ | 44,711 | | | $ | 637,513 | | | $ | 51,141 | | |
Total derivative payables recognized on the Consolidated balance sheets | |
Total derivative payables recognized on the Consolidated balance sheets | |
Collateral not nettable on the Consolidated balance sheets(b)(c) | |
Collateral not nettable on the Consolidated balance sheets(b)(c) | |
Collateral not nettable on the Consolidated balance sheets(b)(c) | Collateral not nettable on the Consolidated balance sheets(b)(c) | | (4,437) | | | (3,318) | | |
Net amounts | Net amounts | | $ | 40,274 | | | $ | 47,823 | | |
Net amounts | |
Net amounts | |
(a)Exchange-traded derivative balances that relate to futures contracts are settled daily.
(b)Includes liquid securities and other 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 $47.8$47.6 billion and $51.5$48.3 billion at March 31, 2023,2024 and December 31, 2022,2023, respectively. Net derivatives payable included cash collateral netted of $60.1$64.4 billion and $69.2$70.0 billion at March 31, 2023,2024 and December 31, 2022,2023, respectively. Derivative cash collateral relates to OTC and OTC-cleared derivative instruments.
Liquidity risk and credit-related contingent features
Refer to Note 5 of JPMorgan Chase’s 20222023 Form 10-K for a more detailed discussion of liquidity risk and credit-related contingent features related to the Firm’s derivative contracts.
The following table shows the aggregate fair value of net derivative payables related to OTC and OTC-cleared derivatives that contain contingent collateral or termination features that may be triggered upon a ratings downgrade, and the associated collateral the Firm has posted in the normal course of business, at March 31, 2023,2024 and December 31, 2022.2023.
| OTC and OTC-cleared derivative payables containing downgrade triggers | OTC and OTC-cleared derivative payables containing downgrade triggers | |
OTC and OTC-cleared derivative payables containing downgrade triggers | |
OTC and OTC-cleared derivative payables containing downgrade triggers | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | March 31, 2023 | | December 31, 2022 | |
Aggregate fair value of net derivative payables | Aggregate fair value of net derivative payables | | $ | 13,817 | | | $ | 16,023 | | |
Aggregate fair value of net derivative payables | |
Aggregate fair value of net derivative payables | |
Collateral posted | Collateral posted | | 13,210 | | | 15,505 | | |
Collateral posted | |
Collateral posted | |
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 March 31, 2023,2024 and December 31, 2022,2023, 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 rating threshold 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 payment requirements. The liquidity impact in the table is calculated based upon a downgrade below the lowest current rating of the rating agencies referred to in the derivative contract.
| Liquidity impact of downgrade triggers on OTC and OTC-cleared derivatives | Liquidity impact of downgrade triggers on OTC and OTC-cleared derivatives | | | | |
| March 31, 2023 | | December 31, 2022 | |
Liquidity impact of downgrade triggers on OTC and OTC-cleared derivatives | |
Liquidity impact of downgrade triggers on OTC and OTC-cleared derivatives | |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Single-notch downgrade | Two-notch downgrade | | Single-notch downgrade | Two-notch downgrade | |
Amount of additional collateral to be posted upon downgrade(a) | Amount of additional collateral to be posted upon downgrade(a) | $ | 112 | | $ | 1,216 | | | $ | 128 | | $ | 1,293 | | |
Amount of additional collateral to be posted upon downgrade(a) | |
Amount of additional collateral to be posted upon downgrade(a) | |
Amount required to settle contracts with termination triggers upon downgrade(b) | Amount required to settle contracts with termination triggers upon downgrade(b) | 84 | | 744 | | | 88 | | 925 | | |
Amount required to settle contracts with termination triggers upon downgrade(b) | |
Amount required to settle contracts with termination triggers upon downgrade(b) | |
(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, 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 March 31, 20232024 and December 31, 2022.2023.
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 months ended March 31, 20232024 and 2022,2023, respectively. The Firm includes gains/(losses) on the hedging derivative in the same line item in the Consolidated statements of income as the related hedged item.
| | Gains/(losses) recorded in income | | Income statement impact of excluded components(e) | | OCI impact |
Three months ended March 31, 2023 (in millions) | Derivatives | | Hedged items | | Income statement impact | | Amortization approach | Changes in fair value | | Derivatives - Gains/(losses) recorded in OCI(f) |
| Gains/(losses) recorded in income | | | Gains/(losses) recorded in income | | Income statement impact of excluded components(e) | | OCI impact |
Three months ended March 31, 2024 (in millions) | | Three months ended March 31, 2024 (in millions) | Derivatives | | Hedged items | | Income statement impact | | Amortization approach | Changes in fair value | | Derivatives - Gains/(losses) recorded in OCI(f) |
Contract type | Contract type | |
Interest rate(a)(b) | |
Interest rate(a)(b) | |
Interest rate(a)(b) | Interest rate(a)(b) | $ | 1,171 | | | $ | (1,103) | | | $ | 68 | | | $ | — | | $ | 9 | | | $ | — | |
Foreign exchange(c) | Foreign exchange(c) | 158 | | | (94) | | | 64 | | | (172) | | 64 | | | (28) | |
Commodity(d) | Commodity(d) | (1,540) | | | 1,625 | | | 85 | | | — | | 84 | | | — | |
Total | Total | $ | (211) | | | $ | 428 | | | $ | 217 | | | $ | (172) | | $ | 157 | | | $ | (28) | |
| | Gains/(losses) recorded in income | | Income statement impact of excluded components(e) | | OCI impact | |
Three months ended March 31, 2022 (in millions) | Derivatives | | Hedged items | | Income statement impact | | Amortization approach | Changes in fair value | | Derivatives - Gains/(losses) recorded in OCI(f) | |
| Gains/(losses) recorded in income | |
| Gains/(losses) recorded in income | |
| Gains/(losses) recorded in income | |
Three months ended March 31, 2023 (in millions) | |
Three months ended March 31, 2023 (in millions) | |
Three months ended March 31, 2023 (in millions) | |
Contract type | |
Contract type | |
Contract type | Contract type | | |
Interest rate(a)(b) | Interest rate(a)(b) | $ | (7,070) | | | $ | 6,981 | | | $ | (89) | | | $ | — | | $ | (66) | | | $ | — | | |
Interest rate(a)(b) | |
Interest rate(a)(b) | |
Foreign exchange(c) | |
Foreign exchange(c) | |
Foreign exchange(c) | Foreign exchange(c) | (690) | | | 688 | | | (2) | | | (65) | | (2) | | | 145 | | |
Commodity(d) | Commodity(d) | (176) | | | 147 | | | (29) | | | (37) | | | — | | |
Commodity(d) | |
Commodity(d) | |
Total | Total | $ | (7,936) | | | $ | 7,816 | | | $ | (120) | | | $ | (65) | | $ | (105) | | | $ | 145 | | |
Total | |
Total | |
(a)Primarily consists of hedges of the benchmark (e.g., Secured Overnight Financing Rate (“SOFR”)) interest rate risk of fixed-rate long-term debt and AFS securities. Gains and losses were recorded in net interest income.
(b)Includes the amortization of income/expense associated with the inception hedge accounting adjustment applied to the hedged item. 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. Excluded components may impact earnings either through amortization of the initial amount over the life of the derivative, or through fair value changes recognized in the current 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 March 31, 20232024 and December 31, 2022,2023, 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: |
March 31, 2023 (in millions) | | Active hedging relationships(d) | Discontinued hedging relationships(d)(e) | Total |
| | Carrying amount of the hedged items(a)(b) | | | | Carrying amount of the hedged items(a)(b) | | Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items: |
March 31, 2024 (in millions) | | March 31, 2024 (in millions) | | | Active hedging relationships(d) | Discontinued hedging relationships(d)(e) | Total |
Assets | Assets | |
Investment securities - AFS | |
Investment securities - AFS | |
Investment securities - AFS | Investment securities - AFS | | $ | 119,145 | | (C) | $ | (2,658) | | $ | (1,449) | | $ | (4,107) | |
Liabilities | Liabilities | |
Long-term debt | Long-term debt | | 172,238 | | | (7,215) | | (5,592) | | (12,807) | |
Long-term debt | |
Long-term debt | |
Beneficial interests issued by consolidated VIEs | |
| | Carrying amount of the hedged items(b)(c) | | Cumulative amount of fair value hedging adjustments included in the carrying amount of hedged items: |
December 31, 2022 (in millions) | | Active hedging relationships(d) | Discontinued hedging relationships(d)(e) | Total |
| | Carrying amount of the hedged items(a)(b) | |
| | Carrying amount of the hedged items(a)(b) | |
| | 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, 2023 (in millions) | | December 31, 2023 (in millions) | | | Active hedging relationships(d) | Discontinued hedging relationships(d)(e) | Total |
Assets | Assets | |
Investment securities - AFS | |
Investment securities - AFS | |
Investment securities - AFS | Investment securities - AFS | | $ | 84,073 | | (c) | $ | (4,149) | | $ | (1,542) | | $ | (5,691) | |
Liabilities | Liabilities | |
Long-term debt | Long-term debt | | 175,257 | | | (11,879) | | (3,313) | | (15,192) | |
Long-term debt | |
Long-term debt | |
Beneficial interests issued by consolidated VIEs | |
(a)Excludes physical commodities with a carrying value of $14.6$2.6 billion and $26.0$5.6 billion at March 31, 20232024 and December 31, 2022,2023, 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. Since the Firm exits these positions at fair value, there is no incremental impact to net income in future periods.
(b)Excludes hedged items where only foreign currency risk is the designated hedged risk, as basis adjustments related to foreign currency hedges will not reverse through the income statement in future periods. At March 31, 20232024 and December 31, 2022,2023, the carrying amount excluded for AFS securities is $19.9$15.9 billion and $20.3$19.3 billion, respectively, andrespectively. For both periods, the carrying amount excluded for long-term debt is $217 million and $221 million, respectively.zero.
(c)Carrying amount represents the amortized cost, net of allowance if applicable. Effective January 1, 2023, the Firm adopted the new portfolio layer method hedge accounting guidance which expanded the ability to hedge a portfolio of prepayable assets to allow more of the portfolio to be hedged. At March 31, 2024 and December 31, 2023, the amortized cost of the portfolio layer method closed portfolios was $38.9$69.3 billion and $83.9 billion, of which $24.5$59.0 billion and $68.0 billion was designated as hedged.hedged, respectively. The amount designated as hedged is the sum of the notional amounts of all outstanding layers in each portfolio, which includes both spot starting and forward starting layers. At March 31, 2024 and December 31, 2023, the cumulative amount of basis adjustments was $21 million.$(1.5) billion and $(165) million, which is comprised of $(1.2) billion and $73 million for active hedging relationships, and $(304) million and $(238) million for discontinued hedging relationships, respectively. Refer to Note 1 and Note 9 for additional information.
(d)Positive (negative) amounts related to assets represent cumulative fair value hedge basis adjustments that will reduce (increase) 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.
(e)Represents basis adjustments existing on the balance sheet date associated with hedged items that have been de-designated from qualifying fair value hedging relationships.
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 months ended March 31, 20232024 and 2022,2023, respectively. The Firm includes the gains/(losses) 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 March 31, 2023 (in millions) | Amounts reclassified from AOCI to income | | Amounts recorded in OCI | Total change in OCI for period |
| Derivatives gains/(losses) recorded in income and other comprehensive income/(loss) | | | Derivatives gains/(losses) recorded in income and other comprehensive income/(loss) |
Three months ended March 31, 2024 (in millions) | | Three months ended March 31, 2024 (in millions) | Amounts reclassified from AOCI to income | | Amounts recorded in OCI | Total change in OCI for period |
Contract type | Contract type | |
Interest rate(a) | |
Interest rate(a) | |
Interest rate(a) | Interest rate(a) | $ | (427) | | | $ | 461 | | $ | 888 | |
Foreign exchange(b) | Foreign exchange(b) | (56) | | | 106 | | 162 | |
Total | Total | $ | (483) | | | $ | 567 | | $ | 1,050 | |
| | Derivatives gains/(losses) recorded in income and other comprehensive income/(loss) |
Three months ended March 31, 2022 (in millions) | Amounts reclassified from AOCI to income | | Amounts recorded in OCI | Total change in OCI for period |
| Derivatives gains/(losses) recorded in income and other comprehensive income/(loss) | |
| Derivatives gains/(losses) recorded in income and other comprehensive income/(loss) | |
| Derivatives gains/(losses) recorded in income and other comprehensive income/(loss) | |
Three months ended March 31, 2023 (in millions) | | Three months ended March 31, 2023 (in millions) | Amounts reclassified from AOCI to income | | Amounts recorded in OCI | Total change in OCI for period |
Contract type | Contract type | |
Interest rate(a) | |
Interest rate(a) | |
Interest rate(a) | Interest rate(a) | $ | 243 | | | $ | (3,361) | | $ | (3,604) | |
Foreign exchange(b) | Foreign exchange(b) | (6) | | | (75) | | (69) | |
Total | Total | $ | 237 | | | $ | (3,436) | | $ | (3,673) | |
| | | | |
(a)Primarily consists of hedges of SOFR-indexed floating-rate assets. 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 months ended March 31, 20232024 and 2022.2023.
Over the next 12 months, the Firm expects that approximately $(1.4)$(1.8) billion (after-tax) of net losses recorded in AOCI at March 31, 2023,2024, 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 seven 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 months ended March 31, 20232024 and 2022.2023.
| | Gains/(losses) recorded in income and other comprehensive income/(loss) |
| 2023 | | 2022 |
| Gains/(losses) recorded in income and other comprehensive income/(loss) | | | Gains/(losses) recorded in income and other comprehensive income/(loss) |
| 2024 | | | 2024 | | 2023 |
Three months ended March 31, (in millions) | 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 | 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 | Foreign exchange derivatives | | $ | 84 | | | $ | (1,004) | | | $ | (131) | | | $ | 338 | |
| | | | |
(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. There were no sales or liquidations of legal entities that resulted in reclassifications for the three month period ended March 31, 2024. During the three months ended March 31, 2023, the Firm reclassified a pre-tax loss of $41$(41) million to other revenue related to the acquisition of CIFM. Refer to Note 19 for further information.
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 mortgage commitments, warehouse loans, MSRs, wholesale lending exposures, and foreign currency-denominated assets and liabilities.
| | Derivatives gains/(losses) recorded in income | |
| Three months ended March 31, | |
| Derivatives gains/(losses) recorded in income | |
| Derivatives gains/(losses) recorded in income | |
| Derivatives gains/(losses) recorded in income | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | |
Contract type | Contract type | | |
Contract type | |
Contract type | |
Interest rate(a) | |
Interest rate(a) | |
Interest rate(a) | Interest rate(a) | $ | (14) | | $ | (229) | | |
Credit(b) | Credit(b) | (96) | | 33 | | |
Credit(b) | |
Credit(b) | |
Foreign exchange(c) | |
Foreign exchange(c) | |
Foreign exchange(c) | Foreign exchange(c) | 2 | | (82) | | |
Total | Total | $ | (108) | | $ | (278) | | |
Total | |
Total | |
(a)Primarily represents interest rate derivatives used to hedge the interest rate risk inherent in mortgage 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.
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 for information on principal transactions revenue.
Credit derivatives
Refer to Note 5 of JPMorgan Chase’s 20222023 Form 10-K for a more detailed discussion of credit derivatives. The following tables present a summary of the notional amounts of credit derivatives and credit-related notes the Firm sold and purchased as of March 31, 20232024 and December 31, 2022.2023. The Firm does not use notional amounts of credit derivatives as the primary measure of risk management for such derivatives, because the notional amount does not take into account the probability of the occurrence of a credit event, the recovery value of the reference obligation, or related cash instruments and economic hedges, each of which reduces, in the Firm’s view, the risks associated with such derivatives.
Total credit derivatives and credit-related notes
| | Maximum payout/Notional amount | |
March 31, 2023 (in millions) | Protection sold | Protection purchased with identical underlyings(c) | | Net protection (sold)/purchased(d) | | Other protection purchased(e) | |
| Maximum payout/Notional amount | |
March 31, 2024 (in millions) | |
March 31, 2024 (in millions) | |
March 31, 2024 (in millions) | |
Credit derivatives | |
Credit derivatives | |
Credit derivatives | Credit derivatives | |
Credit default swaps | Credit default swaps | $ | (643,237) | | | $ | 667,461 | | | $ | 24,224 | | | $ | 3,187 | | |
Credit default swaps | |
Credit default swaps | |
Other credit derivatives(a) | |
Other credit derivatives(a) | |
Other credit derivatives(a) | Other credit derivatives(a) | (80,136) | | | 100,213 | | | 20,077 | | | 12,241 | | |
Total credit derivatives | Total credit derivatives | (723,373) | | | 767,674 | | | 44,301 | | | 15,428 | | |
Total credit derivatives | |
Total credit derivatives | |
Credit-related notes(b) | |
Credit-related notes(b) | |
Credit-related notes(b) | Credit-related notes(b) | — | | | — | | | — | | | 7,625 | | |
Total | Total | $ | (723,373) | | | $ | 767,674 | | | $ | 44,301 | | | $ | 23,053 | | |
Total | |
Total | |
| | Maximum payout/Notional amount | |
| | Maximum payout/Notional amount | |
December 31, 2022 (in millions) | Protection sold | Protection purchased with identical underlyings(c) | | Net protection (sold)/purchased(d) | | Other protection purchased(e) | |
| Maximum payout/Notional amount | |
| | Maximum payout/Notional amount | |
December 31, 2023 (in millions) | |
December 31, 2023 (in millions) | |
December 31, 2023 (in millions) | |
Credit derivatives | |
Credit derivatives | |
Credit derivatives | Credit derivatives | |
Credit default swaps | Credit default swaps | $ | (495,557) | | | $ | 509,846 | | | $ | 14,289 | | | $ | 2,917 | | |
Credit default swaps | |
Credit default swaps | |
Other credit derivatives(a) | |
Other credit derivatives(a) | |
Other credit derivatives(a) | Other credit derivatives(a) | (47,165) | | | 65,029 | | | 17,864 | |
| 11,746 | | |
Total credit derivatives | Total credit derivatives | (542,722) | | | 574,875 | | | 32,153 | | | 14,663 | | |
Total credit derivatives | |
Total credit derivatives | |
Credit-related notes(b) | |
Credit-related notes(b) | |
Credit-related notes(b) | Credit-related notes(b) | — | | | — | | | — | | | 7,863 | | |
Total | Total | $ | (542,722) | | | $ | 574,875 | | | $ | 32,153 | | | $ | 22,526 | | |
Total | |
Total | |
(a)Other credit derivatives predominantly consist of credit swap options and total return swaps.
(b)RepresentsPredominantly represents Other protection purchased by CIB, primarily in its market-making businesses.CIB.
(c)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.
(d)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.
(e)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. Also includes credit protection against certain loans and lending-related commitments in the retained lending portfolio through the issuance of credit derivatives and credit-related notes.
The following tables summarize the notional amounts by the ratings, maturity profile, and total fair value, of credit derivatives as of March 31, 2023,2024 and December 31, 2022,2023, 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 where JPMorgan Chase is the purchaser of protection are comparable to the profile reflected below.
| Protection sold — credit derivatives ratings(a)/maturity profile | Protection sold — credit derivatives ratings(a)/maturity profile | |
March 31, 2023 (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, 2024 (in millions) | |
March 31, 2024 (in millions) | |
March 31, 2024 (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 | Risk rating of reference entity | |
Investment-grade | |
Investment-grade | |
Investment-grade | Investment-grade | $ | (121,414) | | | $ | (362,872) | | | $ | (84,259) | | | $ | (568,545) | | | $ | 3,263 | | | $ | (1,567) | | | $ | 1,696 | |
Noninvestment-grade | Noninvestment-grade | (37,875) | | | (100,151) | | | (16,802) | | | (154,828) | | | 1,991 | | | (3,510) | | | (1,519) | |
Total | Total | $ | (159,289) | | | $ | (463,023) | | | $ | (101,061) | | | $ | (723,373) | | | $ | 5,254 | | | $ | (5,077) | | | $ | 177 | |
| December 31, 2022 (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, 2023 (in millions) | | December 31, 2023 (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 | Risk rating of reference entity | |
Investment-grade | |
Investment-grade | |
Investment-grade | Investment-grade | $ | (90,484) | | | $ | (294,791) | | | $ | (30,822) | | | $ | (416,097) | | | $ | 2,324 | | | $ | (1,495) | | | $ | 829 | |
Noninvestment-grade | Noninvestment-grade | (33,244) | | | (87,011) | | | (6,370) | | | (126,625) | | | 1,267 | | | (3,209) | | | (1,942) | |
Total | Total | $ | (123,728) | | | $ | (381,802) | | | $ | (37,192) | | | $ | (542,722) | | | $ | 3,591 | | | $ | (4,704) | | | $ | (1,113) | |
(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 including cash collateral netting.
Note 5 – Noninterest revenue and noninterest expense
Noninterest revenue
Refer to Note 6 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of the components of and accounting policies for the Firm’s noninterest revenue.
Investment banking fees
The following table presents the components of investment banking fees.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | |
Underwriting | Underwriting | | |
Underwriting | |
Underwriting | |
Equity | |
Equity | |
Equity | Equity | $ | 233 | | $ | 242 | | |
Debt | Debt | 672 | | 974 | | |
Debt | |
Debt | |
Total underwriting | |
Total underwriting | |
Total underwriting | Total underwriting | 905 | | 1,216 | | |
Advisory | Advisory | 744 | | 792 | | |
Advisory | |
Advisory | |
Total investment banking fees | Total investment banking fees | $ | 1,649 | | $ | 2,008 | | |
Total investment banking fees | |
Total investment banking fees | |
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 fund deployment activities in Treasury and CIO. Refer to Note 6 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 LOB.
| | Three months ended March 31, |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | | 2022 | |
Trading revenue by instrument type | Trading revenue by instrument type | | | | |
Trading revenue by instrument type | |
Trading revenue by instrument type | |
Interest rate(a) | |
Interest rate(a) | |
Interest rate(a) | Interest rate(a) | $ | 1,786 | | | $ | 469 | | |
Credit(b) | Credit(b) | 634 | | | 457 | | |
Credit(b) | |
Credit(b) | |
Foreign exchange | |
Foreign exchange | |
Foreign exchange | Foreign exchange | 1,551 | | | 1,324 | | |
Equity | Equity | 2,693 | | | 2,255 | | |
Equity | |
Equity | |
Commodity | |
Commodity | |
Commodity | Commodity | 926 | | | 747 | | |
Total trading revenue | Total trading revenue | 7,590 | | | 5,252 | | |
Private equity gains/(losses) | 25 | | | (147) | | |
Total trading revenue | |
Total trading revenue | |
Private equity gains | |
Private equity gains | |
Private equity gains | |
Principal transactions | Principal transactions | $ | 7,615 | | | $ | 5,105 | | |
Principal transactions | |
Principal transactions | |
(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.
Lending- and deposit-related fees
The following table presents the components of lending- and deposit-related fees.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | |
Lending-related fees | Lending-related fees | $ | 369 | | $ | 362 | | |
Lending-related fees | |
Lending-related fees | |
Deposit-related fees | |
Deposit-related fees | |
Deposit-related fees | Deposit-related fees | 1,251 | | 1,477 | | |
Total lending- and deposit-related fees | Total lending- and deposit-related fees | $ | 1,620 | | $ | 1,839 | | |
Total lending- and deposit-related fees | |
Total lending- and deposit-related fees | |
(a)Includes the amortization of the fair value discount on certain acquired lending-related commitments associated with First Republic, predominantly in AWM and CB. The discount is deferred in other liabilities and recognized on a straight-line basis over the commitment period. Refer to Note 26 for additional information.
Deposit-related fees include the impact of credits earned by clients that reduce such fees.
Asset management fees
The following table presents the components of asset management fees.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | |
Asset management fees | Asset management fees | | |
Investment management fees(a) | $ | 3,390 | | $ | 3,562 | | |
All other asset management fees(b) | 75 | | 90 | | |
Asset management fees | |
Asset management fees | |
Investment management fees | |
Investment management fees | |
Investment management fees | |
All other asset management fees | |
All other asset management fees | |
All other asset management fees | |
Total asset management fees | |
Total asset management fees | |
Total asset management fees | Total asset management fees | $ | 3,465 | | $ | 3,652 | | |
|
(a)Represents fees earned from managing assets on behalfIncludes the impact of the Firm’s clients, including investors in Firm-sponsored funds and owners of separately managed investment accounts.
(b)Represents feesFirst Republic. Refer to Note 26 for services that are ancillary to investment management services, such as commissions earned on the sales or distribution of mutual funds to clients.additional information.
Commissions and other fees
The following table presents the components of commissions and other fees.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | |
Commissions and other fees | Commissions and other fees | | |
Brokerage commissions(a) | $ | 747 | | $ | 810 | | |
Administration fees(b) | 557 | | 633 | | |
All other commissions and fees (c) | 391 | | 267 | | |
Commissions and other fees | |
Commissions and other fees | |
Brokerage commissions | |
Brokerage commissions | |
Brokerage commissions | |
Administration fees | |
Administration fees | |
Administration fees | |
All other commissions and fees (a) | |
All other commissions and fees (a) | |
All other commissions and fees (a) | |
Total commissions and other fees | Total commissions and other fees | $ | 1,695 | | $ | 1,710 | | |
Total commissions and other fees | |
Total commissions and other fees | |
(a)Represents commissions earned when the Firm acts as a broker, by facilitating its clients’ purchases and sales of securities and other financial instruments.
(b)Predominantly includes fees for custody, securities lending, funds services and securities clearance.
(c)Includes travel-related and annuity sales commissions, depositary receipt-related service fees, as well as other service fees, which are recognized as revenue when the services are rendered.
Card income
The following table presents the components of card income.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | | 2022 | |
Interchange and merchant processing income | Interchange and merchant processing income | $ | 7,139 | | | $ | 6,235 | | |
Interchange and merchant processing income | |
Interchange and merchant processing income | |
Rewards costs and partner payments | |
Rewards costs and partner payments | |
Rewards costs and partner payments | Rewards costs and partner payments | (5,509) | | | (4,870) | | |
Other card income(a) | Other card income(a) | (396) | | | (390) | | |
Other card income(a) | |
Other card income(a) | |
Total card income | Total card income | $ | 1,234 | | | $ | 975 | | |
Total card income | |
Total card income | |
(a)Predominantly represents the amortization of account origination costs and annual fees.fees, which are deferred and recognized on a straight-line basis over a 12-month period.
Refer to Note 14 for further information on mortgage fees and related income.
Other income
This revenue category includes operating lease income, as well as losses associated with the Firm’s tax-oriented investments, predominantly alternative energy equity-method investments in CIB.
The following table presents certain components of other income:income.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | |
Operating lease income | |
Operating lease income | |
Operating lease income | |
Losses on tax-oriented investments | |
Losses on tax-oriented investments | |
Losses on tax-oriented investments | |
| | | Three months ended March 31, |
(in millions) | 2023 | 2022 |
Operating lease income | $ | 755 | | $ | 1,048 | |
Losses on tax-oriented investments(a) | (412) | | (408) | |
Gain related to the acquisition of CIFM(b) | 339 | | — | |
Gain related to the acquisition of CIFM | |
| Gain related to the acquisition of CIFM | |
| Gain related to the acquisition of CIFM | |
|
(a) The losses associated with these tax-oriented investments are more than offset by lower income tax expense from the associated tax credits.
(b) Gain on the original minority interest in CIFM upon the Firm's acquisition of the remaining 51% of the entity.
Effective January 1, 2024, as a result of adopting updates to the Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method guidance, the amortization of certain of the Firm's alternative energy tax-oriented investments that was previously recognized in other income is now being recognized in income tax expense, which aligns with the associated tax credits and other tax benefits. Refer to Notes 1 and 13 for additional information.
Refer to Note 16 for information on operating lease income included within other income.
Noninterest expense
Other expense
Other expense on the Firm’s Consolidated statements of income includes the following:
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | |
Legal expense | |
Legal expense | |
Legal expense | |
| | | Three months ended March 31, | |
(in millions) | 2023 | | 2022 | |
Legal expense | $ | 176 | | | $ | 119 | | |
FDIC-related expense | |
| | FDIC-related expense | |
| FDIC-related expense | |
First Republic-related expense | |
First Republic-related expense | |
First Republic-related expense | |
|
(a)Included the increase of $725 million to the special assessment instituted by the FDIC reflecting its revised estimated losses to the Deposit Insurance Fund for the three months ended March 31, 2024, which was an adjustment to the $2.9 billion estimate recorded in the three months ended December 31, 2023.
(b)Included $155 million restructuring and integration costs associated with First Republic in the three months ended March 31, 2024. Refer to Note 26 for additional information on the First Republic acquisition.
Note 6 – Interest income and Interest expense
Refer to Note 7 of JPMorgan Chase’s 20222023 Form 10-K for a description of JPMorgan Chase’s accounting policies regarding interest income and interest expense.
The following table presents the components of interest income and interest expense.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | |
Interest income | Interest income | | |
Interest income | |
Interest income | |
Loans(a) | |
Loans(a) | |
Loans(a) | Loans(a) | $ | 17,708 | | $ | 10,633 | | |
Taxable securities | Taxable securities | 3,967 | | 1,979 | | |
Taxable securities | |
Taxable securities | |
Non-taxable securities(b) | |
Non-taxable securities(b) | |
Non-taxable securities(b) | Non-taxable securities(b) | 248 | | 245 | | |
Total investment securities(a) | Total investment securities(a) | 4,215 | | 2,224 | | |
Total investment securities(a) | |
Total investment securities(a) | |
Trading assets - debt instruments | |
Trading assets - debt instruments | |
Trading assets - debt instruments | Trading assets - debt instruments | 3,646 | | 1,767 | | |
Federal funds sold and securities purchased under resale agreements | Federal funds sold and securities purchased under resale agreements | 3,131 | | 397 | | |
Securities borrowed(c) | 1,716 | | (87) | | |
Federal funds sold and securities purchased under resale agreements | |
Federal funds sold and securities purchased under resale agreements | |
Securities borrowed | |
Securities borrowed | |
Securities borrowed | |
Deposits with banks | Deposits with banks | 4,819 | | 238 | | |
All other interest-earning assets(d) | 1,769 | | 324 | | |
Deposits with banks | |
Deposits with banks | |
All other interest-earning assets(c) | |
All other interest-earning assets(c) | |
All other interest-earning assets(c) | |
Total interest income | |
Total interest income | |
Total interest income | Total interest income | $ | 37,004 | | $ | 15,496 | | |
Interest expense | Interest expense | | |
Interest expense | |
Interest expense | |
Interest-bearing deposits | |
Interest-bearing deposits | |
Interest-bearing deposits | Interest-bearing deposits | $ | 7,637 | | $ | 182 | | |
Federal funds purchased and securities loaned or sold under repurchase agreements | Federal funds purchased and securities loaned or sold under repurchase agreements | 2,804 | | 113 | | |
Short-term borrowings(e) | 421 | | 44 | | |
Trading liabilities – debt and all other interest-bearing liabilities(f) | 1,971 | | 191 | | |
Federal funds purchased and securities loaned or sold under repurchase agreements | |
Federal funds purchased and securities loaned or sold under repurchase agreements | |
Short-term borrowings | |
Short-term borrowings | |
Short-term borrowings | |
Trading liabilities – debt and all other interest-bearing liabilities(d) | |
Trading liabilities – debt and all other interest-bearing liabilities(d) | |
Trading liabilities – debt and all other interest-bearing liabilities(d) | |
Long-term debt | |
Long-term debt | |
Long-term debt | Long-term debt | 3,313 | | 1,076 | | |
Beneficial interest issued by consolidated VIEs | Beneficial interest issued by consolidated VIEs | 147 | | 18 | | |
Beneficial interest issued by consolidated VIEs | |
Beneficial interest issued by consolidated VIEs | |
Total interest expense | |
Total interest expense | |
Total interest expense | Total interest expense | $ | 16,293 | | $ | 1,624 | | |
Net interest income | Net interest income | $ | 20,711 | | $ | 13,872 | | |
Net interest income | |
Net interest income | |
Provision for credit losses | |
Provision for credit losses | |
Provision for credit losses | Provision for credit losses | 2,275 | | 1,463 | | |
Net interest income after provision for credit losses | Net interest income after provision for credit losses | $ | 18,436 | | $ | 12,409 | | |
Net interest income after provision for credit losses | |
Net interest income after provision for credit losses | |
(a)Includes the amortization/amortization and accretion of unearned income (e.g., purchase premiums/premiums and discounts, andas well as net deferred fees/costs).fees and costs on loans.
(b)Represents securities which are tax-exempt for U.S. federal income tax purposes.
(c)Negative interest and rates reflect the net impact of interest earned offset by fees paid on client-driven prime brokerage securities borrowed transactions.
(d)Includes interest earned on 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)Includes commercial paper.
(f)(d)All other interest-bearing liabilities includes interest expense on brokerage-related customer payables.
Note 7 – Pension and other postretirement employee benefit plans
Refer to Note 8 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of JPMorgan Chase’s pension and OPEB plans.
The following table presents the net periodic benefit costs reported in the Consolidated statements of income for the Firm’s defined benefit pension, defined contribution and OPEB plans.
| (in millions) | (in millions) | Three months ended March 31, | |
2023 | | 2022 | |
Pension and OPEB plans | |
2024 | |
2024 | |
2024 | |
Pension and OPEB plans | |
Pension and OPEB plans | |
Pension and OPEB plans | |
Total net periodic defined benefit plan cost/(credit) | |
Total net periodic defined benefit plan cost/(credit) | |
Total net periodic defined benefit plan cost/(credit) | Total net periodic defined benefit plan cost/(credit) | $ | (94) | | | $ | (64) | | |
Total defined contribution plans | Total defined contribution plans | 365 | | | 344 | | |
Total defined contribution plans | |
Total defined contribution plans | |
Total pension and OPEB cost included in noninterest expense | Total pension and OPEB cost included in noninterest expense | $ | 271 | | | $ | 280 | | |
Total pension and OPEB cost included in noninterest expense | |
Total pension and OPEB cost included in noninterest expense | |
AtAs of March 31, 20232024 and December 31, 2022,2023, the fair values of plan assets for the Firm’s significant defined benefit pension and OPEB plans were $20.5$22.1 billion and $19.9$22.0 billion, respectively.
Note 8 – Employee share-based incentives
Refer to Note 9 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of the accounting policies and other information relating to employee share-based incentives.
The Firm recognized the following noncash compensation expense related to its various employee share-based incentive plans in its Consolidated statements of income.
| | Three months ended March 31, | | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | | 2022 | | |
Cost of prior grants of restricted stock units (“RSUs”), performance share units (“PSUs”) and stock appreciation rights (“SARs”) that are amortized over their applicable vesting periods | Cost of prior grants of restricted stock units (“RSUs”), performance share units (“PSUs”) and stock appreciation rights (“SARs”) that are amortized over their applicable vesting periods | $ | 357 | | | $ | 271 | | | |
Cost of prior grants of restricted stock units (“RSUs”), performance share units (“PSUs”) and stock appreciation rights (“SARs”) that are amortized over their applicable vesting periods | |
Cost of prior grants of restricted stock units (“RSUs”), performance share units (“PSUs”) and stock appreciation rights (“SARs”) that are amortized over their applicable vesting periods | |
Accrual of estimated costs of share-based awards to be granted in future periods, predominantly those to full-career eligible employees | |
Accrual of estimated costs of share-based awards to be granted in future periods, predominantly those to full-career eligible employees | |
Accrual of estimated costs of share-based awards to be granted in future periods, predominantly those to full-career eligible employees | Accrual of estimated costs of share-based awards to be granted in future periods, predominantly those to full-career eligible employees | 513 | | | 535 | | | |
Total noncash compensation expense related to employee share-based incentive plans | Total noncash compensation expense related to employee share-based incentive plans | $ | 870 | | | $ | 806 | | | |
Total noncash compensation expense related to employee share-based incentive plans | |
Total noncash compensation expense related to employee share-based incentive plans | |
In the first quarter of 2023,2024, in connection with its annual incentive grant for the 20222023 performance year, the Firm granted 2017 million RSUs and 801726 thousand PSUs with weighted-average grant date fair values of $138.57$164.42 per RSU and $139.81$165.62 per PSU.
Note 9 – 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 March 31, 2023,2024, 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).
Effective January 1, 2023, the Firm adopted the portfolio layer method hedge accounting guidance which permitted a transfer of HTM securities to AFS upon adoption. The Firm transferred obligations of U.S. states and municipalities with
a carrying value of $7.1 billion resulting in the recognition of $38 million net pre-tax unrealized losses in AOCI. This transfer was a noncash transaction. Refer to Note 1 and Note 19 for additional information.
During 2022, the Firm transferred $78.3 billion of investment securities from AFS to HTM for capital management purposes. AOCI included pretax unrealized losses of $4.8 billion on the securities at the date of transfer.
Refer to Note 10 of JPMorgan Chase’s 20222023 Form 10-K for additional information regarding the investment securities portfolio.
The amortized costs and estimated fair values of the investment securities portfolio were as follows for the dates indicated.
| | March 31, 2023 | | December 31, 2022 |
| March 31, 2024 | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Amortized cost(c)(d) | Gross unrealized gains | Gross unrealized losses | Fair value | | Amortized cost(c)(d) | Gross unrealized gains | Gross unrealized losses | Fair value |
Available-for-sale securities | Available-for-sale securities | |
Available-for-sale securities | |
Available-for-sale securities | |
Mortgage-backed securities: | |
Mortgage-backed securities: | |
Mortgage-backed securities: | Mortgage-backed securities: | |
U.S. GSEs and government agencies | U.S. GSEs and government agencies | $ | 71,570 | | $ | 592 | | $ | 4,857 | | | $ | 67,305 | | | $ | 77,194 | | $ | 479 | | $ | 6,170 | | | $ | 71,503 | |
U.S. GSEs and government agencies | |
U.S. GSEs and government agencies | |
Residential: | |
Residential: | |
Residential: | Residential: | |
U.S. | U.S. | 1,695 | | 1 | | 103 | | | 1,593 | | | 1,576 | | 1 | | 111 | | | 1,466 | |
U.S. | |
U.S. | |
Non-U.S. | |
Non-U.S. | |
Non-U.S. | Non-U.S. | 2,885 | | 4 | | 11 | | | 2,878 | | | 3,176 | | 5 | | 27 | | | 3,154 | |
Commercial | Commercial | 2,101 | | — | | 154 | | | 1,947 | | | 2,113 | | — | | 155 | | | 1,958 | |
Commercial | |
Commercial | |
Total mortgage-backed securities | |
Total mortgage-backed securities | |
Total mortgage-backed securities | Total mortgage-backed securities | 78,251 | | 597 | | 5,125 | | | 73,723 | | | 84,059 | | 485 | | 6,463 | | | 78,081 | |
U.S. Treasury and government agencies | U.S. Treasury and government agencies | 83,648 | | 513 | | 2,522 | | | 81,639 | | | 95,217 | | 302 | | 3,459 | | | 92,060 | |
U.S. Treasury and government agencies | |
U.S. Treasury and government agencies | |
Obligations of U.S. states and municipalities | |
Obligations of U.S. states and municipalities | |
Obligations of U.S. states and municipalities | Obligations of U.S. states and municipalities | 13,692 | | 166 | | 329 | | | 13,529 | | | 7,103 | | 86 | | 403 | | | 6,786 | |
Non-U.S. government debt securities | Non-U.S. government debt securities | 19,960 | | 13 | | 543 | | | 19,430 | | | 20,360 | | 14 | | 678 | | | 19,696 | |
Non-U.S. government debt securities | |
Non-U.S. government debt securities | |
Corporate debt securities | |
Corporate debt securities | |
Corporate debt securities | Corporate debt securities | 392 | | — | | 28 | | | 364 | | | 381 | | — | | 24 | | | 357 | |
Asset-backed securities: | Asset-backed securities: | |
Asset-backed securities: | |
Asset-backed securities: | |
Collateralized loan obligations | |
Collateralized loan obligations | |
Collateralized loan obligations | Collateralized loan obligations | 5,607 | | 2 | | 89 | | | 5,520 | | | 5,916 | | 1 | | 125 | | | 5,792 | |
Other | Other | 3,100 | | 4 | | 61 | | | 3,043 | | | 3,152 | | 2 | | 69 | | | 3,085 | |
Other | |
Other | |
Unallocated portfolio layer fair value basis adjustments(a) | Unallocated portfolio layer fair value basis adjustments(a) | 21 | | (21) | | — | | | NA | | NA | | NA |
Unallocated portfolio layer fair value basis adjustments(a) | |
Unallocated portfolio layer fair value basis adjustments(a) | |
Total available-for-sale securities | |
Total available-for-sale securities | |
Total available-for-sale securities | Total available-for-sale securities | 204,671 | | 1,274 | | 8,697 | | | 197,248 | | | 216,188 | | 890 | | 11,221 | | | 205,857 | | 239,813 | | 1,140 | 1,140 | | 4,801 | 4,801 | | | 236,152 | | 236,152 | |
|
| 205,456 | | 1,762 | 1,762 | | 5,514 | 5,514 | | 201,704 | 201,704 | |
|
|
Held-to-maturity securities(b) | Held-to-maturity securities(b) | |
Mortgage-backed securities: | Mortgage-backed securities: | |
Mortgage-backed securities: | |
Mortgage-backed securities: | |
U.S. GSEs and government agencies | |
U.S. GSEs and government agencies | |
U.S. GSEs and government agencies | U.S. GSEs and government agencies | 112,980 | | 84 | | 11,893 | | | 101,171 | | | 113,492 | | 35 | | 13,709 | | | 99,818 | |
U.S. Residential | U.S. Residential | 10,602 | | 5 | | 1,132 | | | 9,475 | | | 10,503 | | 3 | | 1,244 | | | 9,262 | |
U.S. Residential | |
U.S. Residential | |
Commercial | |
Commercial | |
Commercial | Commercial | 10,747 | | 10 | | 734 | | | 10,023 | | | 10,361 | | 10 | | 734 | | | 9,637 | |
Total mortgage-backed securities | Total mortgage-backed securities | 134,329 | | 99 | | 13,759 | | | 120,669 | | | 134,356 | | 48 | | 15,687 | | | 118,717 | |
Total mortgage-backed securities | |
Total mortgage-backed securities | |
U.S. Treasury and government agencies | |
U.S. Treasury and government agencies | |
U.S. Treasury and government agencies | U.S. Treasury and government agencies | 202,487 | | — | | 15,275 | | | 187,212 | | | 207,463 | | — | | 18,363 | | | 189,100 | |
Obligations of U.S. states and municipalities | Obligations of U.S. states and municipalities | 12,299 | | 52 | | 740 | | | 11,611 | | | 19,747 | | 53 | | 1,080 | | | 18,720 | |
Obligations of U.S. states and municipalities | |
Obligations of U.S. states and municipalities | |
Asset-backed securities: | |
Asset-backed securities: | |
Asset-backed securities: | Asset-backed securities: | |
Collateralized loan obligations | Collateralized loan obligations | 61,528 | | 50 | | 1,175 | | | 60,403 | | | 61,414 | | 4 | | 1,522 | | | 59,896 | |
Collateralized loan obligations | |
Collateralized loan obligations | |
Other | Other | 2,184 | | — | | 89 | | | 2,095 | | | 2,325 | | — | | 110 | | | 2,215 | |
Total held-to-maturity securities | 412,827 | | 201 | | 31,038 | | | 381,990 | | | 425,305 | | 105 | | 36,762 | | | 388,648 | |
Other | |
Other | |
Total held-to-maturity securities(c) | |
Total held-to-maturity securities(c) | |
Total held-to-maturity securities(c) | |
Total investment securities, net of allowance for credit losses | Total investment securities, net of allowance for credit losses | $ | 617,498 | | $ | 1,475 | | $ | 39,735 | | | $ | 579,238 | | | $ | 641,493 | | $ | 995 | | $ | 47,983 | | | $ | 594,505 | |
Total investment securities, net of allowance for credit losses | |
Total investment securities, net of allowance for credit losses | |
(a)Represents the amount of portfolio layer method basis adjustments related to AFS securities hedged in a closed portfolio. Under U.S. GAAP portfolio layer method basis adjustments are not allocated to individual securities, however the amounts impact the unrealized gains or losses in the table for the individualtypes of securities being hedged. Refer to Note 1 and Note 4 for additional information.
(b)The Firm purchased $3.6 billion$479 million and $13.2$3.6 billion of HTM securities for the three months ended March 31, 20232024 and 2022,2023, respectively.
(c)Effective January 1, 2023, the Firm adopted the portfolio layer method hedge accounting guidance which permitted a transfer of HTM securities to AFS upon adoption. The Firm transferred obligations of U.S. states and municipalities with a carrying value of $7.1 billion resulting in the recognition of $38 million net pre-tax unrealized losses in AOCI. This transfer was a non-cash transaction. Refer to Note 19 of this Form 10-Q and Note 1 of JPMorgan Chase’s 2023 Form 10-K for additional information.
(d)The amortized cost of investment securities is reported net of allowance for credit losses of $90$154 million and $96$128 million at March 31, 20232024 and December 31, 2022,2023, respectively.
(d)(e)Excludes $2.4$3.4 billion and $2.5$2.8 billion of accrued interest receivable at March 31, 20232024 and December 31, 2022,2023, respectively. The Firm did not reverse through interest income any accrued interest receivable for the three months ended March 31, 20232024 and 2022.2023. Refer to Note 10 of JPMorgan Chase’s 20222023 Form 10-K for further discussion of accounting policies for accrued interest receivable on investment securities.
AFS securities impairment
The following tables present the fair value and gross unrealized losses by aging category for AFS securities at March 31, 20232024 and December 31, 2022.2023. The tables exclude U.S. Treasury and government agency securities and U.S. GSE and government agency MBS with unrealized losses of $7.4$5.0 billion and $9.6$4.6 billion, at March 31, 20232024 and December 31, 2022,2023, 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.
| | Available-for-sale securities with gross unrealized losses |
| Less than 12 months | | 12 months or more | |
March 31, 2023 (in millions) | Fair value | Gross unrealized losses | | Fair value | Gross unrealized losses | Total fair value | Total gross unrealized losses |
| Available-for-sale securities with gross unrealized losses | | | Available-for-sale securities with gross unrealized losses |
| Less than 12 months | |
March 31, 2024 (in millions) | |
March 31, 2024 (in millions) | |
March 31, 2024 (in millions) | | Fair value | | Gross unrealized losses | | Fair value | Gross unrealized losses | Total fair value | Total gross unrealized losses |
Available-for-sale securities | Available-for-sale securities | |
Mortgage-backed securities: | Mortgage-backed securities: | |
Mortgage-backed securities: | |
Mortgage-backed securities: | |
Residential: | Residential: | |
Residential: | |
Residential: | |
U.S. | |
U.S. | |
U.S. | U.S. | $ | 474 | | $ | 16 | | | $ | 1,062 | | $ | 87 | | $ | 1,536 | | $ | 103 | |
Non-U.S. | Non-U.S. | 966 | | 4 | | | 1,653 | | 7 | | 2,619 | | 11 | |
Commercial | Commercial | 249 | | 17 | | | 1,678 | | 137 | | 1,927 | | 154 | |
Total mortgage-backed securities | Total mortgage-backed securities | 1,689 | | 37 | | | 4,393 | | 231 | | 6,082 | | 268 | |
Obligations of U.S. states and municipalities | Obligations of U.S. states and municipalities | 2,164 | | 66 | | | 1,202 | | 263 | | 3,366 | | 329 | |
Non-U.S. government debt securities | Non-U.S. government debt securities | 7,592 | | 70 | | | 5,475 | | 473 | | 13,067 | | 543 | |
Corporate debt securities | Corporate debt securities | 110 | | 2 | | | 249 | | 26 | | 359 | | 28 | |
Asset-backed securities: | Asset-backed securities: | |
Collateralized loan obligations | Collateralized loan obligations | 352 | | 4 | | | 4,882 | | 85 | | 5,234 | | 89 | |
Collateralized loan obligations | |
Collateralized loan obligations | |
Other | Other | 1,537 | | 29 | | | 1,071 | | 32 | | 2,608 | | 61 | |
Total available-for-sale securities with gross unrealized losses | Total available-for-sale securities with gross unrealized losses | $ | 13,444 | | $ | 208 | | | $ | 17,272 | | $ | 1,110 | | $ | 30,716 | | $ | 1,318 | |
| | Available-for-sale securities with gross unrealized losses |
| Less than 12 months | | 12 months or more | |
December 31, 2022 (in millions) | Fair value | Gross unrealized losses | | Fair value | Gross unrealized losses | Total fair value | Total gross unrealized losses |
| Available-for-sale securities with gross unrealized losses | | | Available-for-sale securities with gross unrealized losses |
| Less than 12 months | |
December 31, 2023 (in millions) | |
December 31, 2023 (in millions) | |
December 31, 2023 (in millions) | | Fair value | | Gross unrealized losses | | Fair value | Gross unrealized losses | Total fair value | Total gross unrealized losses |
Available-for-sale securities | Available-for-sale securities | |
Mortgage-backed securities: | Mortgage-backed securities: | |
Mortgage-backed securities: | |
Mortgage-backed securities: | |
Residential: | Residential: | |
Residential: | |
Residential: | |
U.S. | |
U.S. | |
U.S. | U.S. | $ | 1,187 | | $ | 71 | | | $ | 260 | | $ | 40 | | $ | 1,447 | | $ | 111 | |
Non-U.S. | Non-U.S. | 2,848 | | 25 | | | 70 | | 2 | | 2,918 | | 27 | |
Commercial | Commercial | 1,131 | | 74 | | | 813 | | 81 | | 1,944 | | 155 | |
Total mortgage-backed securities | Total mortgage-backed securities | 5,166 | | 170 | | | 1,143 | | 123 | | 6,309 | | 293 | |
Obligations of U.S. states and municipalities | Obligations of U.S. states and municipalities | 3,051 | | 241 | | | 364 | | 162 | | 3,415 | | 403 | |
Non-U.S. government debt securities | Non-U.S. government debt securities | 6,941 | | 321 | | | 3,848 | | 357 | | 10,789 | | 678 | |
Corporate debt securities | Corporate debt securities | 150 | | 2 | | | 207 | | 22 | | 357 | | 24 | |
Asset-backed securities: | Asset-backed securities: | |
Collateralized loan obligations | Collateralized loan obligations | 3,010 | | 61 | | | 2,701 | | 64 | | 5,711 | | 125 | |
Collateralized loan obligations | |
Collateralized loan obligations | |
Other | Other | 2,586 | | 51 | | | 256 | | 18 | | 2,842 | | 69 | |
Total available-for-sale securities with gross unrealized losses | Total available-for-sale securities with gross unrealized losses | $ | 20,904 | | $ | 846 | | | $ | 8,519 | | $ | 746 | | $ | 29,423 | | $ | 1,592 | |
HTM securities – credit risk
Credit quality indicator
The primary credit quality indicator for HTM securities is the risk rating assigned to each security. At both March 31, 20232024 and December 31, 2022,2023, all HTM securities were rated investment grade and were current and accruing, with approximately 99% and 98% rated at least AA+, respectively..
Allowance for credit losses on investment securities
The allowance for credit losses on investment securities was $90$154 million and $41$90 million as of March 31, 20232024 and 2022,2023, respectively, which included a cumulative-effect adjustment to retained earnings related to the transfer of HTM securities to AFS for the period ended March 31, 2023.
Refer to Note 10 of JPMorgan Chase’s 20222023 Form 10-K for further discussion of accounting policies for AFS and HTM securities.
Selected impacts of investment securities on the Consolidated statements of income
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | |
Realized gains | Realized gains | $ | 131 | | $ | 13 | | |
Realized gains | |
Realized gains | |
Realized losses | |
Realized losses | |
Realized losses | Realized losses | (999) | | (407) | | |
Investment securities losses | Investment securities losses | $ | (868) | | $ | (394) | | |
Investment securities losses | |
Investment securities losses | |
Provision for credit losses | Provision for credit losses | $ | 1 | | $ | (1) | | |
Provision for credit losses | |
Provision for credit losses | |
Contractual maturities and yields
The following table presents the amortized cost and estimated fair value at March 31, 2023,2024, of JPMorgan Chase’s investment securities portfolio by contractual maturity.
| By remaining maturity March 31, 2023 (in millions) | Due in one year or less | Due after one year through five years | Due after five years through 10 years | Due after 10 years(c) | | Total | |
By remaining maturity March 31, 2024 (in millions) | |
By remaining maturity March 31, 2024 (in millions) | |
By remaining maturity March 31, 2024 (in millions) | |
Available-for-sale securities | |
Available-for-sale securities | |
Available-for-sale securities | Available-for-sale securities | | |
Mortgage-backed securities | Mortgage-backed securities | | |
Mortgage-backed securities | |
Mortgage-backed securities | |
Amortized cost | |
Amortized cost | |
Amortized cost | Amortized cost | $ | 14 | | $ | 3,406 | | $ | 4,644 | | $ | 70,187 | | | $ | 78,251 | | |
Fair value | Fair value | 14 | | 3,259 | | 4,678 | | 65,772 | | | 73,723 | | |
Fair value | |
Fair value | |
Average yield(a) | |
Average yield(a) | |
Average yield(a) | Average yield(a) | 2.14 | % | 4.16 | % | 5.69 | % | 4.04 | % | | 4.14 | % | |
U.S. Treasury and government agencies | U.S. Treasury and government agencies | | |
U.S. Treasury and government agencies | |
U.S. Treasury and government agencies | |
Amortized cost | |
Amortized cost | |
Amortized cost | Amortized cost | $ | 11,298 | | $ | 45,163 | | $ | 20,706 | | $ | 6,481 | | | $ | 83,648 | | |
Fair value | Fair value | 11,030 | | 43,602 | | 20,506 | | 6,501 | | | 81,639 | | |
Fair value | |
Fair value | |
Average yield(a) | |
Average yield(a) | |
Average yield(a) | Average yield(a) | 0.36 | % | 3.87 | % | 4.33 | % | 6.33 | % | | 3.70 | % | |
Obligations of U.S. states and municipalities | Obligations of U.S. states and municipalities | | |
Obligations of U.S. states and municipalities | |
Obligations of U.S. states and municipalities | |
Amortized cost | |
Amortized cost | |
Amortized cost | Amortized cost | $ | 18 | | $ | 140 | | $ | 2,380 | | $ | 11,154 | | | $ | 13,692 | | |
Fair value | Fair value | 18 | | 142 | | 2,403 | | 10,966 | | | 13,529 | | |
Fair value | |
Fair value | |
Average yield(a) | |
Average yield(a) | |
Average yield(a) | Average yield(a) | 4.84 | % | 4.51 | % | 4.46 | % | 5.44 | % | | 5.26 | % | |
Non-U.S. government debt securities | Non-U.S. government debt securities | | |
Non-U.S. government debt securities | |
Non-U.S. government debt securities | |
Amortized cost | |
Amortized cost | |
Amortized cost | Amortized cost | $ | 12,348 | | $ | 2,802 | | $ | 4,436 | | $ | 374 | | | $ | 19,960 | | |
Fair value | Fair value | 12,339 | | 2,710 | | 4,006 | | 375 | | | 19,430 | | |
Fair value | |
Fair value | |
Average yield(a) | |
Average yield(a) | |
Average yield(a) | Average yield(a) | 3.89 | % | 2.20 | % | 1.47 | % | 3.51 | % | | 3.11 | % | |
Corporate debt securities | Corporate debt securities | | |
Corporate debt securities | |
Corporate debt securities | |
Amortized cost | |
Amortized cost | |
Amortized cost | Amortized cost | $ | 187 | | $ | 221 | | $ | 13 | | $ | — | | | $ | 421 | | |
Fair value | Fair value | 134 | | 217 | | 13 | | — | | | 364 | | |
Fair value | |
Fair value | |
Average yield(a) | |
Average yield(a) | |
Average yield(a) | Average yield(a) | 15.98 | % | 11.40 | % | 6.11 | % | — | % | | 13.26 | % | |
Asset-backed securities | Asset-backed securities | | |
Asset-backed securities | |
Asset-backed securities | |
Amortized cost | |
Amortized cost | |
Amortized cost | Amortized cost | $ | 103 | | $ | 1,406 | | $ | 3,645 | | $ | 3,553 | | | $ | 8,707 | | |
Fair value | Fair value | 98 | | 1,382 | | 3,598 | | 3,485 | | | 8,563 | | |
Fair value | |
Fair value | |
Average yield(a) | |
Average yield(a) | |
Average yield(a) | Average yield(a) | 5.25 | % | 3.13 | % | 5.52 | % | 5.68 | % | | 5.20 | % | |
| Total available-for-sale securities | Total available-for-sale securities | | |
| Total available-for-sale securities | |
| Total available-for-sale securities | |
Amortized cost(b) | |
Amortized cost(b) | |
Amortized cost(b) | Amortized cost(b) | $ | 23,968 | | $ | 53,138 | | $ | 35,824 | | $ | 91,749 | | | $ | 204,679 | | |
Fair value | Fair value | 23,633 | | 51,312 | | 35,204 | | 87,099 | | | 197,248 | | |
Fair value | |
Fair value | |
Average yield(a) | |
Average yield(a) | |
Average yield(a) | Average yield(a) | 2.33 | % | 3.82 | % | 4.29 | % | 4.43 | % | | 4.00 | % | |
Held-to-maturity securities | Held-to-maturity securities | | |
Held-to-maturity securities | |
Held-to-maturity securities | |
Mortgage-backed securities | |
Mortgage-backed securities | |
Mortgage-backed securities | Mortgage-backed securities | | |
Amortized cost | Amortized cost | $ | 99 | | $ | 2,755 | | $ | 11,506 | | $ | 119,996 | | | $ | 134,356 | | |
Amortized cost | |
Amortized cost | |
Fair value | |
Fair value | |
Fair value | Fair value | 96 | | 2,575 | | 10,332 | | 107,666 | | | 120,669 | | |
Average yield(a) | Average yield(a) | 5.70 | % | 2.61 | % | 2.55 | % | 2.98 | % | | 2.94 | % | |
Average yield(a) | |
Average yield(a) | |
U.S. Treasury and government agencies | |
U.S. Treasury and government agencies | |
U.S. Treasury and government agencies | U.S. Treasury and government agencies | | |
Amortized cost | Amortized cost | $ | 57,971 | | $ | 77,514 | | $ | 67,002 | | $ | — | | | $ | 202,487 | | |
Amortized cost | |
Amortized cost | |
Fair value | |
Fair value | |
Fair value | Fair value | 56,374 | | 72,935 | | 57,903 | | — | | | 187,212 | | |
Average yield(a) | Average yield(a) | 0.45 | % | 0.84 | % | 1.27 | % | — | % | | 0.87 | % | |
Average yield(a) | |
Average yield(a) | |
Obligations of U.S. states and municipalities | |
Obligations of U.S. states and municipalities | |
Obligations of U.S. states and municipalities | Obligations of U.S. states and municipalities | | |
Amortized cost | Amortized cost | $ | — | | $ | — | | $ | 738 | | $ | 11,595 | | | $ | 12,333 | | |
Amortized cost | |
Amortized cost | |
Fair value | |
Fair value | |
Fair value | Fair value | — | | — | | 711 | | 10,900 | | | 11,611 | | |
Average yield(a) | Average yield(a) | — | % | — | % | 4.20 | % | 4.06 | % | | 4.06 | % | |
Average yield(a) | |
Average yield(a) | |
Asset-backed securities | |
Asset-backed securities | |
Asset-backed securities | Asset-backed securities | | |
Amortized cost | Amortized cost | $ | — | | $ | 82 | | $ | 19,511 | | $ | 44,119 | | | $ | 63,712 | | |
Amortized cost | |
Amortized cost | |
Fair value | |
Fair value | |
Fair value | Fair value | — | | 82 | | 19,262 | | 43,154 | | | 62,498 | | |
Average yield(a) | Average yield(a) | — | % | 5.72 | % | 5.37 | % | 5.48 | % | | 5.45 | % | |
Average yield(a) | |
Average yield(a) | |
Total held-to-maturity securities | |
Total held-to-maturity securities | |
Total held-to-maturity securities | Total held-to-maturity securities | | |
Amortized cost(b) | Amortized cost(b) | $ | 58,070 | | $ | 80,351 | | $ | 98,757 | | $ | 175,710 | | | $ | 412,888 | | |
Amortized cost(b) | |
Amortized cost(b) | |
Fair value | |
Fair value | |
Fair value | Fair value | 56,470 | | 75,592 | | 88,208 | | 161,720 | | | 381,990 | | |
Average yield(a) | Average yield(a) | 0.46 | % | 0.91 | % | 2.25 | % | 3.68 | % | | 2.35 | % | |
Average yield(a) | |
Average yield(a) | |
(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, including closed portfolio hedges. 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. However, for certain callable debt securities, the average yield is calculated to the earliest call date.
(b)For purposes of this table, the amortized cost of available-for-sale securities excludes the allowance for credit losses of $(29)$34 million and the portfolio layer fair value hedge basis adjustments of $21 million$(1.2) billion at March 31, 2023.2024. The amortized cost of held-to-maturity securities also excludes the allowance for credit losses of $(61)$120 million at March 31, 2023.2024.
(c)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 seveneight years for agency residential MBS and six years for both agency residential collateralized mortgage obligations and nonagency residential collateralized mortgage obligations.
Note 10 – Securities financing activities
Refer to Note 11 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of accounting policies relating to securities financing activities. Refer to Note 3 for further information regarding securities financing agreements for which the fair value option has been elected. Refer to Note 23 for further information regarding assets pledged and collateral received in securities financing agreements.
The table below summarizes the gross and net amounts of the Firm’s securities financing agreements as of March 31, 20232024 and December 31, 2022.2023. 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. In transactions where the Firm is acting as the lender in a securities-for-securities lending agreement and receives securities that can be pledged or sold as collateral, 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 on the Consolidated balance sheets.
| | March 31, 2023 |
| March 31, 2024 | | | March 31, 2024 |
(in millions) | (in millions) | Gross amounts | Amounts netted on the Consolidated balance sheets | Amounts presented on the Consolidated balance sheets | Amounts not nettable on the Consolidated balance sheets(b) | Net amounts(c) | (in millions) | Gross amounts | Amounts netted on the Consolidated balance sheets | Amounts presented on the Consolidated balance sheets | Amounts not nettable on the Consolidated balance sheets(b) | Net amounts(c) |
Assets | Assets | |
Securities purchased under resale agreements | |
Securities purchased under resale agreements | |
Securities purchased under resale agreements | Securities purchased under resale agreements | $ | 608,147 | | $ | (291,100) | | $ | 317,047 | | $ | (308,851) | | | $ | 8,196 | |
Securities borrowed | Securities borrowed | 233,841 | | (37,924) | | 195,917 | | (142,451) | | | 53,466 | |
Liabilities | Liabilities | |
Securities sold under repurchase agreements | Securities sold under repurchase agreements | $ | 531,763 | | $ | (291,100) | | $ | 240,663 | | $ | (204,338) | | | $ | 36,325 | |
Securities sold under repurchase agreements | |
Securities sold under repurchase agreements | |
Securities loaned and other(a) | Securities loaned and other(a) | 48,570 | | (37,924) | | 10,646 | | (10,563) | | | 83 | |
| | December 31, 2022 |
| December 31, 2023 | | | December 31, 2023 |
(in millions) | (in millions) | Gross amounts | Amounts netted on the Consolidated balance sheets | Amounts presented on the Consolidated balance sheets | Amounts not nettable on the Consolidated balance sheets(b) | Net amounts(c) | (in millions) | Gross amounts | Amounts netted on the Consolidated balance sheets | Amounts presented on the Consolidated balance sheets | Amounts not nettable on the Consolidated balance sheets(b) | Net amounts(c) |
Assets | Assets | |
Securities purchased under resale agreements | |
Securities purchased under resale agreements | |
Securities purchased under resale agreements | Securities purchased under resale agreements | $ | 597,912 | | $ | (282,411) | | $ | 315,501 | | $ | (304,120) | | | $ | 11,381 | |
Securities borrowed | Securities borrowed | 228,279 | | (42,910) | | 185,369 | | (131,578) | | | 53,791 | |
Liabilities | Liabilities | |
Securities sold under repurchase agreements | Securities sold under repurchase agreements | $ | 480,793 | | $ | (282,411) | | $ | 198,382 | | $ | (167,427) | | | $ | 30,955 | |
Securities sold under repurchase agreements | |
Securities sold under repurchase agreements | |
Securities loaned and other(a) | Securities loaned and other(a) | 52,443 | | (42,910) | | 9,533 | | (9,527) | | | 6 | |
(a)Includes securities-for-securities lending agreements of $6.6$8.9 billion and $7.0$5.6 billion at March 31, 20232024 and December 31, 2022,2023, respectively, accounted for at fair value, where the Firm is acting as lender.
(b)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.
(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 March 31, 20232024 and December 31, 2022,2023, included $6.2$5.5 billion and $6.0$7.1 billion, respectively, of securities purchased under resale agreements; $49.7$45.6 billion and $49.0$50.7 billion, respectively, of securities borrowed; $35.0$36.2 billion and $29.1$30.0 billion, respectively, of securities sold under repurchase agreements; and securities loaned and other which were not material at both March 31, 20232024 and December 31, 2022.2023.
The tables below present as of March 31, 2023,2024 and December 31, 20222023 the types of financial assets pledged in securities financing agreements and the remaining contractual maturity of the securities financing agreements.
| | Gross liability balance |
| March 31, 2023 | | December 31, 2022 |
| Gross liability balance | | | Gross liability balance |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
(in millions) | (in millions) | Securities sold under repurchase agreements | | Securities loaned and other | | Securities sold under repurchase agreements | | Securities loaned and other | (in millions) | Securities sold under repurchase agreements | | Securities loaned and other | | Securities sold under repurchase agreements | | Securities loaned and other |
Mortgage-backed securities | Mortgage-backed securities | |
U.S. GSEs and government agencies | |
U.S. GSEs and government agencies | |
U.S. GSEs and government agencies | U.S. GSEs and government agencies | $ | 68,935 | | | $ | — | | | $ | 58,050 | | | $ | — | |
Residential - nonagency | Residential - nonagency | 2,538 | | | — | | | 2,414 | | | — | |
Commercial - nonagency | Commercial - nonagency | 1,689 | | | — | | | 2,007 | | | — | |
U.S. Treasury, GSEs and government agencies | U.S. Treasury, GSEs and government agencies | 242,331 | | | 1,294 | | | 191,254 | | | 1,464 | |
Obligations of U.S. states and municipalities | Obligations of U.S. states and municipalities | 1,987 | | | 39 | | | 1,735 | | | 5 | |
Non-U.S. government debt | Non-U.S. government debt | 146,097 | | | 959 | | | 155,156 | | | 1,259 | |
Corporate debt securities | Corporate debt securities | 38,013 | | | 3,422 | | | 37,121 | | | 461 | |
Asset-backed securities | Asset-backed securities | 4,017 | | | — | | | 2,981 | | | — | |
Equity securities | Equity securities | 26,156 | | | 42,856 | | | 30,075 | | | 49,254 | |
Total | Total | $ | 531,763 | | | $ | 48,570 | | | $ | 480,793 | | | $ | 52,443 | |
| | Remaining contractual maturity of the agreements |
| Overnight and continuous | | Greater than 90 days | |
March 31, 2023 (in millions) | | Up to 30 days | | 30 – 90 days | | Total |
| Remaining contractual maturity of the agreements | | | Remaining contractual maturity of the agreements |
| Overnight and continuous | |
March 31, 2024 (in millions) | |
March 31, 2024 (in millions) | |
March 31, 2024 (in millions) | | | Up to 30 days | | 30 – 90 days | | | Total |
Total securities sold under repurchase agreements | Total securities sold under repurchase agreements | $ | 261,992 | | | $ | 148,156 | | | $ | 40,759 | | | $ | 80,856 | | | $ | 531,763 | |
Total securities loaned and other | Total securities loaned and other | 47,146 | | | 339 | | | — | | | 1,085 | | | 48,570 | |
| | Remaining contractual maturity of the agreements |
| Overnight and continuous | | Greater than 90 days | |
December 31, 2022 (in millions) | | Up to 30 days | | 30 – 90 days | | Total |
| Remaining contractual maturity of the agreements | | | Remaining contractual maturity of the agreements |
| Overnight and continuous | |
December 31, 2023 (in millions) | |
December 31, 2023 (in millions) | |
December 31, 2023 (in millions) | | | Up to 30 days | | 30 – 90 days | | | Total |
Total securities sold under repurchase agreements | Total securities sold under repurchase agreements | $ | 205,235 | | | $ | 170,696 | | | $ | 37,120 | | | $ | 67,742 | | | $ | 480,793 | |
Total securities loaned and other | Total securities loaned and other | 50,138 | | | 1,285 | | | 3 | | | 1,017 | | | 52,443 | |
Transfers not qualifying for sale accounting
At March 31, 2023,2024 and December 31, 2022,2023, the Firm held $871$443 million and $692$505 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 predominantlyprimarily in short-term borrowings and long-term debt on the Consolidated balance sheets.
Note 11 – Loans
Loan accounting framework
The accounting for a loan depends on management’s strategy for the loan. The Firm accounts for loans based on the following categories:
•Originated or purchased loans held-for-investment (i.e., “retained”)
•Loans held-for-sale
•Loans at fair value
Refer to Note 12 of JPMorgan Chase's 20222023 Form 10-K for a detailed discussion of loans, including accounting policies. Refer to Note 3 of this Form 10-Q for further information on the Firm's elections of fair value accounting under the fair value option. Refer to Note 2 of this Form 10-Q for information on loans carried at fair value and classified as trading assets.
On January 1, 2023 the Firm adopted the Financial Instruments - Credit Losses: Troubled Debt Restructurings and Vintage Disclosures accounting guidance as discussed in Note 1. The adoption of this guidance eliminated the existing accounting and disclosure requirements for TDRs, and implemented additional disclosure requirements for FDMs. The disclosure requirements for FDMs are effective for periods beginning on or after January 1, 2023. Refer to Note 12 of JPMorgan Chase's 2022 Form 10-K for a detailed discussion on loan modifications prior to January 1, 2023, which were accounted for and reported as TDRs. This new guidance also requires disclosure of current period gross charge-offs by vintage origination year, effective for periods beginning on or after January 1, 2023.
Loan portfolio
The Firm’s loan portfolio is divided into three 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.
| | | | | | | | | | | | | | |
Consumer, excluding credit card | | Credit card | | Wholesale(c)(d) |
• Residential real estate(a) • Auto and other(b) | | • Credit card loans | | • Secured by real estate • Commercial and industrial • Other(e) |
(a)Includes scored mortgage and home equity loans held in CCB and AWM, and scored mortgage loans held in CIB and Corporate.CIB.
(b)Includes scored auto, and business banking and consumer unsecured loans and overdrafts.as well as overdrafts, primarily in CCB.
(c)Includes loans held in CIB, CB, AWM, Corporate, as well asand risk-rated BWM and auto dealer loansexposure held in CCB, for which the wholesale methodology is applied when determining the allowance for loan losses.
(d)The wholesale portfolio segment's classes align with loan classifications as defined by the bank regulatory agencies, based on the loan's collateral, purpose, and type of borrower.
(e)Includes loans to SPEs, financial institutions, states and political subdivisions, SPEs, nonprofits, personal investment companies and trusts, as well as loans to individuals and individual entities (predominantly Global Private Bank clients within AWM and J.P. Morgan Wealth Management within CCB)., states and political subdivisions, as well as loans to nonprofits. Refer to Note 14 of JPMorgan Chase’s 20222023 Form 10-K for more information on SPEs.
The following tables summarize the Firm’s loan balances by portfolio segment.
| March 31, 2023 | Consumer, excluding credit card | | Credit card | | Wholesale | | Total(a)(b) | |
March 31, 2024 | |
March 31, 2024 | |
March 31, 2024 | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Consumer, excluding credit card | | Credit card | | Wholesale | | Total(a)(b) | |
Retained | Retained | |
Retained | |
Retained | |
Held-for-sale | |
Held-for-sale | |
Held-for-sale | Held-for-sale | 572 | | | — | | | 4,928 | | | 5,500 | | |
At fair value | At fair value | 10,414 | | | — | | | 28,132 | | | 38,546 | | |
At fair value | |
At fair value | |
Total | |
Total | |
Total | Total | $ | 311,433 | | | $ | 180,079 | | | $ | 637,384 | | | $ | 1,128,896 | | |
| December 31, 2022 | Consumer, excluding credit card | | Credit card | | Wholesale | | Total(a)(b) | |
December 31, 2023 | |
| December 31, 2023 | |
| December 31, 2023 | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Consumer, excluding credit card | | Credit card | | Wholesale | | Total(a)(b) | |
Retained | Retained | |
Retained | |
Retained | |
Held-for-sale | |
Held-for-sale | |
Held-for-sale | Held-for-sale | 618 | | | — | | | 3,352 | | | 3,970 | | |
At fair value | At fair value | 10,004 | | | — | | | 32,075 | | | 42,079 | | |
At fair value | |
At fair value | |
Total | Total | $ | 311,375 | | | $ | 185,175 | | | $ | 639,097 | | | $ | 1,135,647 | | |
Total | |
Total | |
(a)Excludes $5.3 billion and $5.2$6.8 billion of accrued interest receivables at both March 31, 20232024 and December 31, 2022, respectively.2023. The Firm wrote off accrued interest receivables of $11$31 million and $12$11 million for the three months ended March 31, 20232024 and 2022,2023, respectively.
(b)Loans (other than those for which the fair value option has been elected) are presented net of unamortized discounts and premiums and net deferred loan fees or costs. These amounts were not material as of March 31, 2023,2024 and December 31, 2022.2023. For the discount associated with First Republic loans see Note 26 on pages 171-173.
The following tables provide information about the carrying value of retained loans purchased, sold and reclassified to held-for-sale during the periods indicated. Loans that were reclassified to held-for-sale and sold in a subsequent period are excluded from the sales line of this table.
| | 2023 | | 2022 |
| 2024 | | | 2024 | | 2023 |
Three months ended March 31, (in millions) | Three months ended March 31, (in millions) | Consumer, excluding credit card | Credit card | Wholesale | Total | | Consumer, excluding credit card | Credit card | Wholesale | Total | Three months ended March 31, (in millions) | Consumer, excluding credit card | Credit card | Wholesale | | Total | | Consumer, excluding credit card | Credit card | Wholesale | Total |
Purchases | Purchases | $ | 79 | | (b)(c) | $ | — | | $ | 163 | | $ | 242 | | | $ | 119 | | (b)(c) | $ | — | | $ | 166 | | $ | 285 | |
Sales | Sales | — | | | — | | 9,171 | | 9,171 | | | 47 | | | — | | 9,707 | | 9,754 | |
Retained loans reclassified to held-for-sale(a) | Retained loans reclassified to held-for-sale(a) | 43 | | | — | | 314 | | 357 | | | 76 | |
| — | | 273 | | 349 | |
| | | |
(a)Reclassifications of loans to held-for-sale are non-cash transactions.
(b)Predominantly includesIncludes purchases of residential real estate loans, including the Firm’s voluntary repurchases of certain delinquent loans from loan pools as permitted by Government National Mortgage Association (“Ginnie Mae”) guidelines for the three months ended March 31, 20232024 and 2022.2023. 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.
(c)Excludes purchases of retained loans of $663$204 million and $3.2 billion$663 million for the three months ended March 31, 20232024 and 2022,2023, respectively, which are predominantly sourced through the correspondent origination channel and underwritten in accordance with the Firm’s standards.
Gains and losses on sales of loans
Net gains/(losses) on sales of loans and lending-related commitments (including adjustments to record loans and lending-related commitments held-for-sale at the lower of cost or fair value) recognized in noninterest revenue was $23 million for the three months ended March 31, 2023,2024 was $96 million of which $27$66 million was related to loans. Net gains/(losses) on sales of loans and lending-related commitments was $38 million for the three months ended March 31, 2022,2023 was $23 million of which $34$27 million was related to loans. 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 and business banking loans, with a focus on serving the prime consumer credit market. The portfolio also includesThese loans include 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) | (in millions) | March 31, 2023 | December 31, 2022 | (in millions) | March 31, 2024 | | December 31, 2023 |
Residential real estate | Residential real estate | $ | 236,115 | | $ | 237,561 | |
Auto and other | Auto and other | 64,332 | | 63,192 | |
Total retained loans | Total retained loans | $ | 300,447 | | $ | 300,753 | |
Delinquency rates are the primary credit quality indicator for consumer loans. Refer to Note 12 of JPMorgan Chase's 20222023 Form 10-K for further information on consumer credit quality indicators.
Residential real estate
Delinquency is the primary credit quality indicator for retained residential real estate loans. The following tables provide information on delinquency and gross charge-offs for the three months ended March 31, 2023.charge-offs.
| (in millions, except ratios) | (in millions, except ratios) | March 31, 2023 | (in millions, except ratios) | March 31, 2024 |
Term loans by origination year(d) | | Revolving loans | | Total | Term loans by origination year(c) | | Revolving loans | | Total |
2023 | 2022 | 2021 | 2020 | 2019 | Prior to 2019 | | Within the revolving period | Converted to term loans | |
Loan delinquency(a)(b) | |
Loan delinquency(a) | |
Loan delinquency(a) | |
Loan delinquency(a) | |
Current | |
Current | |
Current | Current | $ | 2,613 | | $ | 39,656 | | $ | 65,294 | | $ | 42,762 | | $ | 15,103 | | $ | 54,592 | | | $ | 5,265 | | $ | 9,237 | | | $ | 234,522 | |
30–149 days past due | 30–149 days past due | — | | 21 | | 14 | | 13 | | 20 | | 605 | | | 16 | | 216 | | | 905 | |
150 or more days past due | 150 or more days past due | — | | 1 | | 2 | | 5 | | 11 | | 497 | | | 2 | | 170 | | | 688 | |
Total retained loans | Total retained loans | $ | 2,613 | | $ | 39,678 | | $ | 65,310 | | $ | 42,780 | | $ | 15,134 | | $ | 55,694 | | | $ | 5,283 | | $ | 9,623 | | | $ | 236,115 | |
% of 30+ days past due to total retained loans(c) | — | % | 0.06 | % | 0.02 | % | 0.04 | % | 0.20 | % | 1.94 | % | | 0.34 | % | 4.01 | % | | 0.67 | % |
% of 30+ days past due to total retained loans(b) | | % of 30+ days past due to total retained loans(b) | — | % | 0.10 | % | 0.24 | % | 0.15 | % | 0.15 | % | 1.61 | % | | 0.70 | % | 4.78 | % | | 0.66 | % |
Gross charge-offs | Gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 7 | | | $ | 8 | | $ | 3 | | | $ | 18 | |
| (in millions, except ratios) | (in millions, except ratios) | December 31, 2022 | (in millions, except ratios) | December 31, 2023 |
Term loans by origination year(d) | | Revolving loans | | Total | Term loans by origination year(c) | | Revolving loans | | Total |
2022 | 2021 | 2020 | 2019 | 2018 | Prior to 2018 | | Within the revolving period | Converted to term loans | |
Loan delinquency(a)(b) | |
Loan delinquency(a) | |
Loan delinquency(a) | |
Loan delinquency(a) | |
Current | |
Current | |
Current | Current | $ | 39,934 | $ | 66,072 | $ | 43,315 | $ | 15,397 | $ | 6,339 | $ | 49,632 | | $ | 5,589 | $ | 9,685 | | $ | 235,963 | $ | 23,216 | $ | 64,366 | $ | 84,496 | $ | 55,546 | $ | 21,530 | $ | 59,563 | | $ | 7,479 | $ | 8,151 | | $ | 324,347 |
30–149 days past due | 30–149 days past due | 29 | 11 | 14 | 20 | 597 | | 15 | 208 | | 914 | 30–149 days past due | 33 | 74 | 89 | 70 | 41 | 801 | | 49 | 223 | | 1,380 |
150 or more days past due | 150 or more days past due | 1 | 6 | 10 | 7 | 480 | | 4 | 175 | | 684 | 150 or more days past due | 1 | 10 | 17 | 8 | 21 | 456 | | 5 | 164 | | 682 |
Total retained loans | Total retained loans | $ | 39,964 | $ | 66,084 | $ | 43,335 | $ | 15,427 | $ | 6,366 | $ | 50,709 | | $ | 5,608 | $ | 10,068 | | $ | 237,561 | Total retained loans | $ | 23,250 | $ | 64,450 | $ | 84,602 | $ | 55,624 | $ | 21,592 | $ | 60,820 | | $ | 7,533 | $ | 8,538 | | $ | 326,409 |
% of 30+ days past due to total retained loans(c) | 0.08 | % | 0.02 | % | 0.05 | % | 0.19 | % | 0.42 | % | 2.07 | % | | 0.34 | % | 3.80 | % | | 0.66 | % |
% of 30+ days past due to total retained loans(b) | | % of 30+ days past due to total retained loans(b) | 0.15 | % | 0.13 | % | 0.13 | % | 0.14 | % | 0.29 | % | 2.04 | % | | 0.72 | % | 4.53 | % | | 0.63 | % |
Gross charge-offs | |
(a)Individual delinquency classifications include mortgage loans insured by U.S. government agencies which were not material at March 31, 20232024 and December 31, 20222023.
(b)At March 31, 2023 and December 31, 2022, loans under payment deferral programs offered in response to the COVID-19 pandemic which are still within their deferral period and performing according to their modified terms are generally not considered delinquent.
(c)Excludes mortgage loans that are 30 or more days past due insured by U.S. government agencies which were not material at March 31, 20232024 and December 31, 2022.2023. These amounts have been excluded based upon the government guarantee.
(d)(c)Purchased loans are included in the year in which they were originated.
Approximately 37% of the total revolving loans are senior lien loans; the remaining balance are junior lien loans. The lien position the Firm holds is considered in the Firm’s allowance for credit losses. Revolving loans that have been converted to term loans have higher delinquency rates than those that are still within the revolving period. That is primarily because the fully-amortizing payment that is generally required for those products is higher than the minimum payment options available for revolving loans within the revolving period.
Nonaccrual loans and other credit quality indicators
The following table provides information on nonaccrual and other credit quality indicators for retained residential real estate loans.
| (in millions, except weighted-average data) | (in millions, except weighted-average data) | March 31, 2023 | December 31, 2022 | | |
Nonaccrual loans(a)(b)(c)(d)(e) | $ | 3,710 | | $ | 3,745 | | | |
(in millions, except weighted-average data) | |
(in millions, except weighted-average data) | |
Nonaccrual loans(a)(b)(c)(d) | |
Nonaccrual loans(a)(b)(c)(d) | |
Nonaccrual loans(a)(b)(c)(d) | |
| Current estimated LTV ratios(f)(g)(h) | | |
Current estimated LTV ratios(e)(f)(g) | |
| Current estimated LTV ratios(e)(f)(g) | |
| Current estimated LTV ratios(e)(f)(g) | |
Greater than 125% and refreshed FICO scores: | |
Greater than 125% and refreshed FICO scores: | |
Greater than 125% and refreshed FICO scores: | Greater than 125% and refreshed FICO scores: | | |
Equal to or greater than 660 | Equal to or greater than 660 | $ | 4 | | $ | 2 | | | |
Equal to or greater than 660 | |
Equal to or greater than 660 | |
Less than 660 | |
Less than 660 | |
Less than 660 | Less than 660 | 2 | | — | | | |
101% to 125% and refreshed FICO scores: | 101% to 125% and refreshed FICO scores: | | |
101% to 125% and refreshed FICO scores: | |
101% to 125% and refreshed FICO scores: | |
Equal to or greater than 660 | |
Equal to or greater than 660 | |
Equal to or greater than 660 | Equal to or greater than 660 | 196 | | 174 | | | |
Less than 660 | Less than 660 | 5 | | 6 | | | |
Less than 660 | |
Less than 660 | |
80% to 100% and refreshed FICO scores: | |
80% to 100% and refreshed FICO scores: | |
80% to 100% and refreshed FICO scores: | 80% to 100% and refreshed FICO scores: | | |
Equal to or greater than 660 | Equal to or greater than 660 | 12,774 | | 12,034 | | | |
Equal to or greater than 660 | |
Equal to or greater than 660 | |
Less than 660 | |
Less than 660 | |
Less than 660 | Less than 660 | 250 | | 184 | | | |
Less than 80% and refreshed FICO scores: | Less than 80% and refreshed FICO scores: | | |
Less than 80% and refreshed FICO scores: | |
Less than 80% and refreshed FICO scores: | |
Equal to or greater than 660 | |
Equal to or greater than 660 | |
Equal to or greater than 660 | Equal to or greater than 660 | 213,157 | | 215,096 | | | |
Less than 660 | Less than 660 | 8,823 | | 8,659 | | | |
No FICO/LTV available | 904 | | 1,406 | | (k) | |
Less than 660 | |
Less than 660 | |
No FICO/LTV available(h) | |
No FICO/LTV available(h) | |
No FICO/LTV available(h) | |
Total retained loans | |
Total retained loans | |
Total retained loans | Total retained loans | $ | 236,115 | | $ | 237,561 | | | |
| Weighted average LTV ratio(f)(i) | 51 | % | 51 | % | | |
Weighted average FICO(g)(i) | 770 | | 769 | | | |
Weighted-average LTV ratio(e)(i) | |
| Geographic region(j)(k) | | |
Weighted-average LTV ratio(e)(i) | |
| Weighted-average LTV ratio(e)(i) | |
Weighted-average FICO(f)(i) | |
Weighted-average FICO(f)(i) | |
Weighted-average FICO(f)(i) | |
| Geographic region(h)(j) | |
| Geographic region(h)(j) | |
| Geographic region(h)(j) | |
California | |
California | |
California | California | $ | 72,610 | | $ | 73,112 | | | |
New York | New York | 34,271 | | 34,471 | | | |
New York | |
New York | |
Florida | |
Florida | |
Florida | Florida | 18,877 | | 18,870 | | | |
Texas | Texas | 14,899 | | 14,968 | | | |
Texas | |
Texas | |
Massachusetts | |
Massachusetts | |
Massachusetts | |
Colorado | |
Colorado | |
Colorado | |
Illinois | Illinois | 11,133 | | 11,296 | | | |
Colorado | 9,979 | | 9,968 | | | |
Illinois | |
Illinois | |
Washington | |
Washington | |
Washington | Washington | 9,043 | | 9,060 | | | |
New Jersey | New Jersey | 7,013 | | 7,108 | | | |
Massachusetts | 6,352 | | 6,380 | | | |
New Jersey | |
New Jersey | |
Connecticut | |
Connecticut | |
Connecticut | Connecticut | 5,408 | | 5,432 | | | |
All other | All other | 46,530 | | 46,896 | | | |
All other | |
All other | |
Total retained loans | Total retained loans | $ | 236,115 | | $ | 237,561 | | | |
Total retained loans | |
Total retained loans | |
(a)Includes collateral-dependent residential real estate loans that are charged down to the fair value of the underlying collateral less costs to sell. The Firm reports, in accordance with regulatory guidance, residential real estate loans that have been discharged under Chapter 7 bankruptcy and not reaffirmed by the borrower (“Chapter 7 loans”) as collateral-dependent nonaccrual loans, regardless of their delinquency status. At March 31, 2023,2024, approximately 9% of Chapter 7 residential real estate loans were 30 days or more past due.
(b)Mortgage loans insured by U.S. government agencies excluded from nonaccrual loans were not material at March 31, 20232024 and December 31, 2022.2023.
(c)Generally, all consumer nonaccrual loans have an allowance. In accordance with regulatory guidance, certain nonaccrual loans that are considered collateral-dependent have been charged down to the lower of amortized cost or the fair value of their underlying collateral less costs to sell. If the value of the underlying collateral improves subsequent to charge down, the related allowance may be negative.
(d)Interest income on nonaccrual loans recognized on a cash basis was $43 million and $45 million for both the three months ended March 31, 20232024 and 2022,2023, respectively.
(e)Generally excludes loans under payment deferral programs offered in response to the COVID-19 pandemic.
(f)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. 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)(f)Refreshed FICO scores represent each borrower’s most recent credit score, which is obtained by the Firm on at least a quarterly basis.
(h)(g)Includes residential real estate loans, primarily held in LLCs in AWM that did not have a refreshed FICO score. These loans have been included in a FICO band based on management’s estimation of the borrower’s credit quality.
(h)Included U.S. government-guaranteed loans as of March 31, 2024 and December 31, 2023.
(i)Excludes loans with no FICO and/or LTV data available.
(j)The geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at March 31, 2023.
(k)Prior-period amount has been revised to conform with the current presentation.2024.
Loan modifications
The Firm grants certain modifications of residential real estate loans to borrowers experiencing financial difficulty, which effective January 1, 2023, are reported as FDMs.difficulty. The Firm's proprietary modification programs as well as government programs, including U.S. GSE programs, that generally provide various modifications to borrowers experiencing financial difficulty including, but not limited to, interest rate reductions, term extensions, other-than-insignificant payment delaydeferral and principal forgiveness that would otherwise have been required under the terms of the original agreement, are considered FDMs. Refer to Note 12 of JPMorgan Chase's 2023 Form 10-K for further information.
Financial effects of FDMs
For the three months ended March 31, 2024, residential real estate FDMs were $39 million. The financial effects of the FDMs, which were predominantly in the form of term extensions and interest rate reductions, included extending the weighted-average life of the loans by 16 years and reducing the weighted-average contractual interest rate from 7.39% to 4.28%.
For the three months ended March 31, 2023, residential real estate FDMs were $38 million. The financial effects of the FDMs, which were largely in the form of term extensions and interest rate reductions, included extending the weighted-average life of the loans up to 24 years, and reducing the weighted-average contractual interest rate from 5.84% to 3.57%. There
As of March 31, 2024 and December 31, 2023, there were no additional commitments to lend to borrowers experiencing financial difficulty whose loans have been modified as FDMs. In addition to FDMs,
For the Firm also had $23 million ofthree months ended March 31, 2024 and 2023, loans subject to a trial modification and $2 million of Chapter 7 loans. The changes to the TDR accounting guidance eliminated the TDR reasonably expected and concession assessment criteria. Accordingly, trial modifications and Chapter 7 loans were considered TDRs, but not FDMs.material.
For periods ending prior to January 1, 2023, modifications
Payment status of residential real estate loans whereFDMs and defaults
The following table provides information on the Firm granted concessions to borrowers who were experiencing financial difficulty were generally accounted forpayment status of FDMs during the twelve months ended March 31, 2024 and reported as TDRs. For the three months ended March 31, 2022, new TDRs2023.
| | | | | | | | | | |
(in millions) | Amortized cost basis | |
Twelve months ended March 31, | Three months ended March 31, | | |
2024 | 2023 | | |
Current | $ | 97 | | $ | 37 | | | |
30-149 days past due | 17 | | 1 | | | |
150 or more days past due | 11 | | — | | | |
Total | $ | 125 | | $ | 38 | | | |
FDMs that defaulted in the three months ended March 31, 2024 and were $118 million.reported as FDMs in the twelve months prior to the default were not material. There were no additional commitmentsFDMs that defaulted during the three months ended March 31, 2023 and were reported as FDMs on or after January 1, 2023, the date that the Firm adopted the changes to lend to borrowers whose residential real estate loans have been modified in TDRs.the TDR accounting guidance. Refer to Note 121 of JPMorgan Chase's 20222023 Form 10-K for further information on TDRs.
Nature and extent of modifications
The following table provides information about how residential real estate loans were modified in TDRs during the period presented.
| | | | | | | | |
| | Three months ended March 31, | |
| 2022 | | |
Number of loans approved for a trial modification | | 1,526 | | | |
Number of loans permanently modified | | 1,542 | | | |
Concession granted:(a)
| | | | |
Interest rate reduction | | 64 | % | | |
Term or payment extension | | 77 | | | |
Principal and/or interest deferred | | 13 | | | |
Principal forgiveness | | 1 | | | |
Other(b)
| | 27 | | | |
(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 payment delays that meet the definition of a TDR.
Financial effects of modifications and redefaults
The following table provides information about the financial effects of the various concessions granted in modifications of residential real estate loans and about redefaults of certain loans modified in TDRs for the period presented.
| | | | | | | | |
(in millions, except weighted-average data) | | Three months ended March 31, | |
| 2022 | | |
Weighted-average interest rate of loans with interest rate reductions – before TDR | | 4.43 | % | | |
Weighted-average interest rate of loans with interest rate reductions – after TDR | | 3.31 | | | |
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – before TDR | | 23 | | |
Weighted-average remaining contractual term (in years) of loans with term or payment extensions – after TDR | | 39 | | |
Charge-offs recognized upon permanent modification | | $ | — | | | |
Principal deferred | | 7 | | | |
Principal forgiven | | 1 | | | |
Balance of loans that redefaulted within one year of permanent modification(a)
| | $ | 43 | | | |
(a)Represents loans permanently modified in TDRs that experienced a payment default in the period presented, and for which the payment default occurred within one year of the modification. The dollar amount presented represents the balance of such loans at the end of the reporting period in which such loans defaulted.
Active and suspended foreclosure
At March 31, 20232024 and December 31, 2022,2023, the Firm had residential real estate loans, excluding those insured by U.S. government agencies, with a carrying value of $580$608 million and $565$566 million, respectively, that were not included in REO, but were in the process of active or suspended foreclosure.
Auto and other
Delinquency is the primary credit quality indicator for retained auto and other loans. The following tables provide information on delinquency and gross charge-offs for the three months ended March 31, 2023.charge-offs.
| | March 31, 2023 |
| March 31, 2024 | | | March 31, 2024 |
(in millions, except ratios) | (in millions, except ratios) | Term loans by origination year | | Revolving loans |
2023 | 2022 | 2021 | 2020 | 2019 | Prior to 2019 | | Within the revolving period | Converted to term loans | Total |
2024 | |
2024 | | 2023 | 2022 | 2021 | 2020 | Prior to 2020 | | Within the revolving period | Converted to term loans | Total |
Loan delinquency | Loan delinquency | |
Current | |
Current | |
Current | Current | $ | 7,994 | | $ | 19,938 | | $ | 18,215 | | $ | 10,071 | | $ | 3,350 | | $ | 1,468 | | | $ | 2,427 | | $ | 111 | | $ | 63,574 | |
30–119 days past due | 30–119 days past due | 71 | | 212 | | 217 | | 76 | | 52 | | 35 | | | 12 | | 19 | | 694 | |
120 or more days past due | 120 or more days past due | — | | — | | 36 | | 17 | | — | | 1 | | | 2 | | 8 | | 64 | |
Total retained loans | Total retained loans | $ | 8,065 | | $ | 20,150 | | $ | 18,468 | | $ | 10,164 | | $ | 3,402 | | $ | 1,504 | | | $ | 2,441 | | $ | 138 | | $ | 64,332 | |
% of 30+ days past due to total retained loans(a) | 0.88 | % | 1.05 | % | 1.12 | % | 0.74 | % | 1.53 | % | 2.39 | % | | 0.57 | % | 19.57 | % | 1.08 | % |
% of 30+ days past due to total retained loans | | % of 30+ days past due to total retained loans | 0.76 | % | 0.88 | % | 1.69 | % | 1.56 | % | 1.07 | % | 2.21 | % | | 0.75 | % | 31.33 | % | 1.24 | % |
Gross charge-offs | Gross charge-offs | $ | 27 | | $ | 112 | | $ | 41 | | $ | 14 | | $ | 9 | | $ | 14 | | | $ | — | | $ | — | | $ | 217 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2022 |
(in millions, except ratios) | Term loans by origination year | | Revolving loans | |
2022 | 2021 | 2020 | 2019 | 2018 | Prior to 2018 | | Within the revolving period | Converted to term loans | Total |
Loan delinquency | | | | | | | | | | |
Current | $ | 22,187 | | $ | 20,212 | | $ | 11,401 | | $ | 3,991 | | $ | 1,467 | | $ | 578 | | | $ | 2,342 | | $ | 118 | | $ | 62,296 | |
30–119 days past due | 263 | | 308 | | 100 | | 68 | | 33 | | 17 | | | 12 | | 10 | | 811 | |
120 or more days past due | — | | 53 | | 24 | | — | | — | | 1 | | | 2 | | 5 | | 85 | |
Total retained loans | $ | 22,450 | | $ | 20,573 | | $ | 11,525 | | $ | 4,059 | | $ | 1,500 | | $ | 596 | | | $ | 2,356 | | $ | 133 | | $ | 63,192 | |
% of 30+ days past due to total retained loans(a) | 1.17 | % | 1.15 | % | 0.83 | % | 1.68 | % | 2.20 | % | 3.02 | % | | 0.59 | % | 11.28 | % | 1.18 | % |
(a)At March 31, 2023 and December 31, 2022, auto and other loans excluded $65 million and $153 million, respectively, of PPP loans guaranteed by the SBA that are 30 or more days past due. These amounts have been excluded based upon the SBA guarantee. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2023 |
(in millions, except ratios) | Term loans by origination year | | Revolving loans | |
2023 | 2022 | 2021 | 2020 | 2019 | Prior to 2019 | | Within the revolving period | Converted to term loans | Total |
Loan delinquency | | | | | | | | | | |
Current | $ | 30,328 | | $ | 14,797 | | $ | 12,825 | | $ | 6,538 | | $ | 1,777 | | $ | 511 | | | $ | 2,984 | | $ | 102 | | $ | 69,862 | |
30–119 days past due | 276 | | 279 | | 231 | | 78 | | 43 | | 17 | | | 19 | | 24 | | 967 | |
120 or more days past due | 1 | | 1 | | 7 | | 8 | | — | | — | | | 3 | | 17 | | 37 | |
Total retained loans | $ | 30,605 | | $ | 15,077 | | $ | 13,063 | | $ | 6,624 | | $ | 1,820 | | $ | 528 | | | $ | 3,006 | | $ | 143 | | $ | 70,866 | |
% of 30+ days past due to total retained loans | 0.91 | % | 1.86 | % | 1.75 | % | 1.15 | % | 2.36 | % | 3.22 | % | | 0.73 | % | 28.67 | % | 1.39 | % |
Gross charge-offs | $ | 333 | | $ | 297 | | $ | 161 | | $ | 53 | | $ | 35 | | $ | 64 | | | $ | — | | $ | 4 | | $ | 947 | |
Nonaccrual and other credit quality indicators
The following table provides information on nonaccrual and other credit quality indicators for retained auto and other consumer loans.
| (in millions) | (in millions) | Total Auto and other | (in millions) | Total Auto and other |
March 31, 2023 | December 31, 2022 | March 31, 2024 | December 31, 2023 |
Nonaccrual loans(a)(b)(c) | $ | 133 | | $ | 129 | |
Nonaccrual loans(a)(b) | |
| Geographic region(d) | |
Geographic region(c) | |
Geographic region(c) | |
Geographic region(c) | |
California | |
California | |
California | California | $ | 9,736 | | $ | 9,689 | |
Texas | Texas | 7,434 | | 7,216 | |
Florida | Florida | 5,013 | | 4,847 | |
New York | New York | 4,411 | | 4,345 | |
Illinois | Illinois | 2,916 | | 2,839 | |
New Jersey | New Jersey | 2,292 | | 2,219 | |
Pennsylvania | Pennsylvania | 1,823 | | 1,822 | |
Georgia | Georgia | 1,760 | | 1,708 | |
Ohio | 1,631 | | 1,603 | |
Arizona | Arizona | 1,570 | | 1,551 | |
North Carolina | |
All other | All other | 25,746 | | 25,353 | |
Total retained loans | Total retained loans | $ | 64,332 | | $ | 63,192 | |
(a)At March 31, 2023 and December 31, 2022, nonaccrual loans excluded $54 million and $101 million, respectively, of PPP loans 90 or more days past due and guaranteed by the SBA, of which $53 million and $76 million, respectively, were no longer accruing interest based on the guidelines set by the SBA. Typically the principal balance of the loans is insured and interest is guaranteed at a specified reimbursement rate subject to meeting the guidelines set by the SBA. There were no loans that were not guaranteed by the SBA that are 90 or more days past due and still accruing interest at March 31, 2023 and December 31, 2022.
(b)Generally, all consumer nonaccrual loans have an allowance. In accordance with regulatory guidance, certain nonaccrual loans that are considered collateral-dependent have been charged down to the lower of amortized cost or the fair value of their underlying collateral less costs to sell. If the value of the underlying collateral improves subsequent to charge down, the related allowance may be negative.
(c)(b)Interest income on nonaccrual loans recognized on a cash basis was not material for the three months ended March 31, 20232024 and 20222023.
(d)(c)The geographic regions presented in this table are ordered based on the magnitude of the corresponding loan balances at March 31, 2023.2024.
Loan modifications
The Firm grants certain modifications of auto and other loans to borrowers experiencing financial difficulty, which effective January 1, 2023, are reported as FDMs. difficulty.
For the three months ended March 31, 2024 and 2023, auto and other FDMs were not materialmaterial.
As of March 31, 2024 and December 31, 2023, there were no additional commitments to lend to borrowers modified as FDMs.
For the three months ended March 31, 2022, auto and other TDRs were not material.
Credit card loan portfolio
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.
Refer to Note 12 of JPMorgan Chase's 20222023 Form 10-K for further information on the credit card loan portfolio, including credit quality indicators.
The following tables provide information on delinquency and gross charge-offs for the three months ended March 31, 2023.charge-offs.
|
(in millions, except ratios) |
(in millions, except ratios) | March 31, 2023 |
(in millions, except ratios) | March 31, 2024 |
Within the revolving period | Converted to term loans | Total | Within the revolving period | Converted to term loans | Total |
Loan delinquency | Loan delinquency | |
Current and less than 30 days past due and still accruing | |
Current and less than 30 days past due and still accruing | |
Current and less than 30 days past due and still accruing | Current and less than 30 days past due and still accruing | $ | 176,353 | | $ | 702 | | $ | 177,055 | |
30–89 days past due and still accruing | 30–89 days past due and still accruing | 1,462 | | 65 | | 1,527 | |
90 or more days past due and still accruing | 90 or more days past due and still accruing | 1,464 | | 33 | | 1,497 | |
Total retained loans | Total retained loans | $ | 179,279 | | $ | 800 | | $ | 180,079 | |
Loan delinquency ratios | Loan delinquency ratios | |
% of 30+ days past due to total retained loans | % of 30+ days past due to total retained loans | 1.63 | % | 12.25 | % | 1.68 | % |
% of 30+ days past due to total retained loans | |
% of 30+ days past due to total retained loans | | 2.17 | % | 13.04 | % | 2.23 | % |
% of 90+ days past due to total retained loans | % of 90+ days past due to total retained loans | 0.82 | | 4.13 | | 0.83 | |
Gross charge-offs | Gross charge-offs | $ | 1,075 | | $ | 36 | | $ | 1,111 | |
| | | | | | | | | | | |
(in millions, except ratios) | December 31, 2022 |
Within the revolving period | Converted to term loans | Total |
Loan delinquency | | | |
Current and less than 30 days past due and still accruing | $ | 181,793 | | $ | 696 | | $ | 182,489 | |
30–89 days past due and still accruing | 1,356 | | 64 | | 1,420 | |
90 or more days past due and still accruing | 1,230 | | 36 | | 1,266 | |
Total retained loans | $ | 184,379 | | $ | 796 | | $ | 185,175 | |
Loan delinquency ratios | | | |
% of 30+ days past due to total retained loans | 1.40 | % | 12.56 | % | 1.45 | % |
% of 90+ days past due to total retained loans | 0.67 | | 4.52 | | 0.68 | |
| | | | | | | | | | | |
(in millions, except ratios) | December 31, 2023 |
Within the revolving period | Converted to term loans | Total |
Loan delinquency | | | |
Current and less than 30 days past due and still accruing | $ | 205,731 | | $ | 882 | | $ | 206,613 | |
30–89 days past due and still accruing | 2,217 | | 84 | | 2,301 | |
90 or more days past due and still accruing | 2,169 | | 40 | | 2,209 | |
Total retained loans | $ | 210,117 | | $ | 1,006 | | $ | 211,123 | |
Loan delinquency ratios | | | |
% of 30+ days past due to total retained loans | 2.09 | % | 12.33 | % | 2.14 | % |
% of 90+ days past due to total retained loans | 1.03 | | 3.98 | | 1.05 | |
Gross charge-offs | $ | 5,325 | | $ | 166 | | $ | 5,491 | |
Other credit quality indicators
The following table provides information on other credit quality indicators for retained credit card loans.
| (in millions, except ratios) | (in millions, except ratios) | March 31, 2023 | December 31, 2022 | (in millions, except ratios) | March 31, 2024 | December 31, 2023 |
Geographic region(a) | Geographic region(a) | |
California | |
California | |
California | California | $ | 27,424 | | $ | 28,154 | |
Texas | Texas | 18,924 | | 19,171 | |
New York | New York | 14,657 | | 15,046 | |
Florida | Florida | 12,778 | | 12,905 | |
Illinois | Illinois | 9,781 | | 10,089 | |
New Jersey | New Jersey | 7,410 | | 7,643 | |
Ohio | Ohio | 5,545 | | 5,792 | |
Colorado | Colorado | 5,420 | | 5,493 | |
Pennsylvania | Pennsylvania | 5,231 | | 5,517 | |
Arizona | Arizona | 4,392 | | 4,487 | |
All other | All other | 68,517 | | 70,878 | |
Total retained loans | Total retained loans | $ | 180,079 | | $ | 185,175 | |
Percentage of portfolio based on carrying value with estimated refreshed FICO scores | Percentage of portfolio based on carrying value with estimated refreshed FICO scores | |
Equal to or greater than 660 | Equal to or greater than 660 | 85.3 | % | 86.8 | % |
Equal to or greater than 660 | |
Equal to or greater than 660 | | 85.2 | % | 85.8 | % |
Less than 660 | Less than 660 | 14.5 | | 13.0 | |
No FICO available | No FICO available | 0.2 | | 0.2 | |
(a)The geographic regions presented in the table are ordered based on the magnitude of the corresponding loan balances at March 31, 2023.2024.
Loan modifications
The Firm grants certain modifications of credit card loans to borrowers experiencing financial difficulty, which effective January 1, 2023, are reported as FDMs.difficulty. These modifications may involve placing the customercustomer’s credit card account on a fixed payment plan, generally for 60 months, andwhich typically includeincludes reducing the interest rate on the credit card under long-term programs.account. If the cardholderborrower does not comply withmake the contractual payments when due under the modified payment terms, then the credit card loan continues to age and will ultimately be charged-off in accordance with the Firm's standard charge-off policy. In most cases, the Firm does not reinstate the borrower's line of credit.
Financial effects of FDMs
The following table providestables provide information on credit card loan modifications considered FDMs.
| Three months ended March 31, 2023 (in millions) | Amortized cost basis | % of loan modifications to total retained credit card loans | Financial effect of loan modification | |
| Loan modification | | |
Three months ended March 31, 2024 (in millions) | |
| Three months ended March 31, 2024 (in millions) | |
| Loan modifications | |
| Loan modifications | |
| Loan modifications | |
Term extension and interest rate reduction(a)(b) | |
Term extension and interest rate reduction(a)(b) | |
Term extension and interest rate reduction(a)(b) | Term extension and interest rate reduction(a)(b) | $ | 163 | | 0.09 | % | Term extension with a reduction in the weighted average contractual interest rate from 22.62% to 3.5% | |
Total | Total | $ | 163 | | | |
Total | |
Total | |
| | | | | | | | | | | | | |
Three months ended March 31, 2023 (in millions) | Amortized cost basis | % of loan modifications to total retained credit card loans | Financial effect of loan modifications | |
| |
Loan modifications | | | | | |
Term extension and interest rate reduction(a)(b) | $ | 163 | | 0.09 | % | Term extension with a reduction in the weighted average contractual interest rate from 22.62% to 3.50% | | |
Total | $ | 163 | | | | | |
(a)Term extension includes credit card loans whose terms have been modified under long-term programs by placing the customercustomer's credit card account on a fixed payment plan.
(b)The interestInterest rates represent the weighted average at enrollment.the time of modification.
For the periodthree months ended March 31, 2024 and 2023, the Firm also had $24 million ofcredit card loans subject to a trial modification. The changes to the TDR accounting guidance eliminated the TDR reasonably expected and concession assessment criteria. Accordingly, trial modifications arewere not considered FDMs.material.
Payment status of FDMs and defaults
The following table provides information on the payment status of FDMs.FDMs during the twelve months ended March 31, 2024 and the three months ended March 31, 2023.
| | | | | | | |
March 31, 2023 (in millions) | Amortized cost basis | |
| |
Current and less than 30 days past due and still accruing | $ | 113 | | | |
30-89 days past due and still accruing | 30 | | | |
90 or more days past due and still accruing | 20 | | | |
Total | $ | 163 | | | |
| | | | | | | | | | |
(in millions) | Amortized cost basis | |
Twelve months ended March 31, | Three months ended March 31, | | |
2024 | 2023 | | |
Current and less than 30 days past due and still accruing | $ | 626 | | $ | 113 | | | |
30-89 days past due and still accruing | 65 | | 30 | | | |
90 or more days past due and still accruing | 43 | | 20 | | | |
Total | $ | 734 | | $ | 163 | | | |
FDMs that defaulted in the three months ended March 31, 2024 and were reported as FDMs in the twelve months prior to the default were not material. There were no FDMs that re-defaulteddefaulted during the three months ended March 31, 2023.2023 and were reported as FDMs on or after January 1, 2023, the date that the Firm adopted the changes to the TDR accounting guidance. Refer to Note 1 of JPMorgan Chase's 2023 Form 10-K for further information.
For credit card loans modified as FDMs, payment default is deemed to have occurred when the borrower misses two consecutive contractual payments. Defaulted modified credit card loans remain in the modification program and continue to be charged off in accordance with the Firm's standard charge-off policy.
For periods ending prior to January 1, 2023, modifications of credit card loans where the Firm granted concessions to borrowers who were experiencing financial difficulty were generally accounted for and reported as TDRs. Refer to Note 12 of JPMorgan Chase's 2022 Form 10-K for further information on 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. New enrollments were less than 1% of total retained credit card loans.
| | | | | | | | |
(in millions, except weighted-average data) | | Three months ended March 31, | |
| 2022 | | |
Balance of new TDRs(a)
| | $ | 82 | | | |
Weighted-average interest rate of loans – before TDR | | 18.00 | % | | |
Weighted-average interest rate of loans – after TDR | | 4.87 | | | |
Balance of loans that redefaulted within one year of modification(b)
| | $ | 9 | | | |
(a)Represents the outstanding balance prior to modification.
(b)Represents loans modified in TDRs that experienced a payment default in the period presented, and for which the payment default occurred within one year of the modification. The amount presented represents the balance of such loans as of the end of the quarter in which they defaulted.
Wholesale loan portfolio
Wholesale loans include loans made to a variety of clients, ranging from large corporate and institutional clients, to small businesses and high-net-worth individuals. The primary credit quality indicator for wholesale loans is the internal risk rating assigned to each loan. Refer to Note 12 of JPMorgan Chase’s 20222023 Form 10-K for further information on these risk ratings.
Internal risk rating is the primary credit quality indicator for retained wholesale loans. The following tables provide information on internal risk rating and gross charge-offs for the three months ended March 31, 2023.charge-offs.
| | Secured by real estate | | Commercial and industrial | | Other(a) | | Total retained loans |
| Secured by real estate | |
| Secured by real estate | |
| Secured by real estate | | | Commercial and industrial | | Other(a) | | Total retained loans |
(in millions, except ratios) | (in millions, except ratios) | Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | | Dec 31, 2022 | (in millions, except ratios) | Mar 31, 2024 | Dec 31, 2023 | | Mar 31, 2024 | | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 | | Mar 31, 2024 | | Dec 31, 2023 |
Loans by risk ratings | Loans by risk ratings | |
Investment-grade | Investment-grade | $ | 99,301 | | $ | 99,552 | | | $ | 76,797 | | | $ | 76,275 | | | $ | 248,757 | | $ | 249,585 | | | $ | 424,855 | | | $ | 425,412 | |
Investment-grade | |
Investment-grade | |
Noninvestment-grade: | Noninvestment-grade: | |
Noncriticized | |
Noncriticized | |
Noncriticized | Noncriticized | 23,550 | | 23,272 | | | 80,992 | | | 81,393 | | | 57,487 | | 57,888 | | | 162,029 | | | 162,553 | |
Criticized performing | Criticized performing | 4,200 | | 3,662 | | | 9,696 | | | 8,974 | | | 1,333 | | 1,106 | | | 15,229 | | | 13,742 | |
Criticized nonaccrual | Criticized nonaccrual | 338 | | 246 | | | 1,263 | | | 1,018 | | | 610 | | 699 | | | 2,211 | | | 1,963 | |
Total noninvestment-grade | Total noninvestment-grade | 28,088 | | 27,180 | | | 91,951 | | | 91,385 | | | 59,430 | | 59,693 | | | 179,469 | | | 178,258 | |
Total retained loans | Total retained loans | $ | 127,389 | | $ | 126,732 | | | $ | 168,748 | | | $ | 167,660 | | | $ | 308,187 | | $ | 309,278 | | | $ | 604,324 | | | $ | 603,670 | |
% of investment-grade to total retained loans | % of investment-grade to total retained loans | 77.95 | % | 78.55 | % | | 45.51 | % | | 45.49 | % | | 80.72 | % | 80.70 | % | | 70.30 | % | | 70.47 | % | % of investment-grade to total retained loans | 72.82 | % | 74.17 | % | | 42.57 | % | | 43.44 | % | | 78.16 | % | 77.50 | % | | 67.93 | % | | 68.23 | % |
% of total criticized to total retained loans | % of total criticized to total retained loans | 3.56 | | 3.08 | | | 6.49 | | | 5.96 | | | 0.63 | | 0.58 | | | 2.89 | | | 2.60 | |
% of criticized nonaccrual to total retained loans | % of criticized nonaccrual to total retained loans | 0.27 | | 0.19 | | | 0.75 | | | 0.61 | | | 0.20 | | 0.23 | | | 0.37 | | | 0.33 | |
(a)Includes loans to SPEs, financial institutions, states and political subdivisions, SPEs, nonprofits, personal investment companies and trusts, as well as loans to individuals and individual entities (predominantly Global Private Bank clients within AWM and J.P. Morgan Wealth Management within CCB).CCB), states and political subdivisions, as well as loans to nonprofits. As of March 31, 2024 and December 31, 2023, predominantly consisted of $105.2 billion and $106.9 billion, respectively, to individuals and individual entities; $87.3 billion and $91.2 billion, respectively, to SPEs; and $85.1 billion and $87.5 billion, respectively, to financial institutions. Refer to Note 14 of JPMorgan Chase’s 20222023 Form 10-K for more information on SPEs.
| | Secured by real estate |
| Secured by real estate | | | Secured by real estate |
(in millions) | (in millions) | March 31, 2023 | (in millions) | March 31, 2024 |
Term loans by origination year | | Revolving loans | |
2023 | 2022 | 2021 | 2020 | 2019 | Prior to 2019 | | Within the revolving period | Converted to term loans | | Total |
2024 | |
2024 | | 2023 | 2022 | 2021 | 2020 | Prior to 2020 | | Within the revolving period | Converted to term loans | | Total |
Loans by risk ratings | Loans by risk ratings | |
Investment-grade | |
Investment-grade | |
Investment-grade | Investment-grade | $ | 1,691 | | $ | 23,975 | | $ | 22,370 | | $ | 14,280 | | $ | 14,266 | | $ | 21,517 | | | $ | 1,202 | | $ | — | | | $ | 99,301 | |
Noninvestment-grade | Noninvestment-grade | 839 | | 6,546 | | 5,805 | | 3,022 | | 3,633 | | 7,628 | | | 614 | | 1 | | | 28,088 | |
Total retained loans | Total retained loans | $ | 2,530 | | $ | 30,521 | | $ | 28,175 | | $ | 17,302 | | $ | 17,899 | | $ | 29,145 | | | $ | 1,816 | | $ | 1 | | | $ | 127,389 | |
Gross charge-offs | Gross charge-offs | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 8 | | | $ | — | | $ | — | | | $ | 8 | |
| | Secured by real estate |
| Secured by real estate | | | Secured by real estate |
(in millions) | (in millions) | December 31, 2022 | (in millions) | December 31, 2023 |
Term loans by origination year | | Revolving loans | |
2022 | 2021 | 2020 | 2019 | 2018 | Prior to 2018 | | Within the revolving period | Converted to term loans | | Total |
2023 | |
2023 | | 2022 | 2021 | 2020 | 2019 | Prior to 2019 | | Within the revolving period | Converted to term loans | | Total |
Loans by risk ratings | Loans by risk ratings | |
Investment-grade | |
Investment-grade | |
Investment-grade | Investment-grade | $ | 24,134 | | $ | 22,407 | | $ | 14,773 | | $ | 14,666 | | $ | 5,277 | | $ | 17,289 | | | $ | 1,006 | | $ | — | | | $ | 99,552 | |
Noninvestment-grade | Noninvestment-grade | 6,072 | | 5,602 | | 3,032 | | 3,498 | | 2,395 | | 5,659 | | | 920 | | 2 | | | 27,180 | |
Total retained loans | Total retained loans | $ | 30,206 | | $ | 28,009 | | $ | 17,805 | | $ | 18,164 | | $ | 7,672 | | $ | 22,948 | | | $ | 1,926 | | $ | 2 | | | $ | 126,732 | |
Gross charge-offs | |
| | Commercial and industrial | |
| Commercial and industrial | | | Commercial and industrial |
(in millions) | (in millions) | March 31, 2023 | | (in millions) | March 31, 2024 |
Term loans by origination year | | Revolving loans | |
2023 | 2022 | 2021 | 2020 | 2019 | Prior to 2019 | | Within the revolving period | Converted to term loans | | Total | |
2024 | |
2024 | | 2023 | 2022 | 2021 | 2020 | Prior to 2020 | | Within the revolving period | Converted to term loans | | Total |
Loans by risk ratings | Loans by risk ratings | |
Investment-grade | |
Investment-grade | |
Investment-grade | Investment-grade | $ | 8,780 | | $ | 14,073 | | $ | 7,567 | | $ | 2,643 | | $ | 1,396 | | $ | 1,450 | | | $ | 40,887 | | $ | 1 | | | $ | 76,797 | | |
Noninvestment-grade | Noninvestment-grade | 5,745 | | 20,505 | | 11,161 | | 2,988 | | 2,154 | | 1,409 | | | 47,906 | | 83 | | | 91,951 | | |
Total retained loans | Total retained loans | $ | 14,525 | | $ | 34,578 | | $ | 18,728 | | $ | 5,631 | | $ | 3,550 | | $ | 2,859 | | | $ | 88,793 | | $ | 84 | | | $ | 168,748 | | |
Gross charge-offs | Gross charge-offs | $ | — | | $ | — | | $ | 16 | | $ | 1 | | $ | 2 | | $ | 3 | | | $ | 63 | | $ | 1 | | | $ | 86 | | |
| | Commercial and industrial | |
| Commercial and industrial | | | Commercial and industrial |
(in millions) | (in millions) | December 31, 2022 | | (in millions) | December 31, 2023 |
Term loans by origination year | | Revolving loans | |
2022 | 2021 | 2020 | 2019 | 2018 | Prior to 2018 | | Within the revolving period | Converted to term loans | | Total | |
2023 | |
2023 | | 2022 | 2021 | 2020 | 2019 | Prior to 2019 | | Within the revolving period | Converted to term loans | | Total |
Loans by risk ratings | Loans by risk ratings | |
Investment-grade | |
Investment-grade | |
Investment-grade | Investment-grade | $ | 21,072 | | $ | 8,338 | | $ | 3,045 | | $ | 1,995 | | $ | 748 | | $ | 989 | | | $ | 40,087 | | $ | 1 | | | $ | 76,275 | | |
Noninvestment-grade | Noninvestment-grade | 24,088 | | 12,444 | | 3,459 | | 2,506 | | 525 | | 1,014 | | | 47,267 | | 82 | | | 91,385 | | |
Total retained loans | Total retained loans | $ | 45,160 | | $ | 20,782 | | $ | 6,504 | | $ | 4,501 | | $ | 1,273 | | $ | 2,003 | | | $ | 87,354 | | $ | 83 | | | $ | 167,660 | | |
Gross charge-offs | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other(a) |
(in millions) | March 31, 2023 |
Term loans by origination year | | Revolving loans | | |
2023 | 2022 | 2021 | 2020 | 2019 | Prior to 2019 | | Within the revolving period | Converted to term loans | | Total |
Loans by risk ratings | | | | | | | | | | | |
Investment-grade | $ | 10,340 | | $ | 25,435 | | $ | 14,913 | | $ | 12,359 | | $ | 4,370 | | $ | 8,158 | | | $ | 170,325 | | $ | 2,857 | | | $ | 248,757 | |
Noninvestment-grade | 2,794 | | 14,432 | | 6,165 | | 1,692 | | 692 | | 830 | | | 32,821 | | 4 | | | 59,430 | |
Total retained loans | $ | 13,134 | | $ | 39,867 | | $ | 21,078 | | $ | 14,051 | | $ | 5,062 | | $ | 8,988 | | | $ | 203,146 | | $ | 2,861 | | | $ | 308,187 | |
Gross charge-offs | $ | — | | $ | — | | $ | 5 | | $ | 5 | | $ | — | | $ | — | | | $ | 1 | | $ | — | | | $ | 11 | |
| | Other(a) |
| Other(a) | | | Other(a) |
(in millions) | (in millions) | December 31, 2022 | (in millions) | March 31, 2024 |
Term loans by origination year | | Revolving loans | |
2022 | 2021 | 2020 | 2019 | 2018 | Prior to 2018 | | Within the revolving period | Converted to term loans | | Total |
2024 | |
2024 | | 2023 | 2022 | 2021 | 2020 | Prior to 2020 | | Within the revolving period | Converted to term loans | | Total |
Loans by risk ratings | Loans by risk ratings | |
Investment-grade | |
Investment-grade | |
Investment-grade | Investment-grade | $ | 32,121 | | $ | 15,864 | | $ | 13,015 | | $ | 4,529 | | $ | 2,159 | | $ | 7,251 | | | $ | 171,049 | | $ | 3,597 | | | $ | 249,585 | |
Noninvestment-grade | Noninvestment-grade | 16,829 | | 7,096 | | 1,821 | | 699 | | 451 | | 475 | | | 32,240 | | 82 | | | 59,693 | |
Total retained loans | Total retained loans | $ | 48,950 | | $ | 22,960 | | $ | 14,836 | | $ | 5,228 | | $ | 2,610 | | $ | 7,726 | | | $ | 203,289 | | $ | 3,679 | | | $ | 309,278 | |
Gross charge-offs | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other(a) |
(in millions) | December 31, 2023 |
Term loans by origination year | | Revolving loans | | |
2023 | 2022 | 2021 | 2020 | 2019 | Prior to 2019 | | Within the revolving period | Converted to term loans | | Total |
Loans by risk ratings | | | | | | | | | | | |
Investment-grade | $ | 38,338 | | $ | 18,034 | | $ | 10,033 | | $ | 10,099 | | $ | 3,721 | | $ | 6,662 | | | $ | 176,728 | | $ | 2,194 | | | $ | 265,809 | |
Noninvestment-grade | 14,054 | | 8,092 | | 6,169 | | 2,172 | | 811 | | 2,001 | | | 43,801 | | 59 | | | 77,159 | |
Total retained loans | $ | 52,392 | | $ | 26,126 | | $ | 16,202 | | $ | 12,271 | | $ | 4,532 | | $ | 8,663 | | | $ | 220,529 | | $ | 2,253 | | | $ | 342,968 | |
Gross charge-offs | $ | 5 | | $ | 298 | | $ | 8 | | $ | 8 | | $ | — | | $ | 8 | | | $ | 13 | | $ | — | | | $ | 340 | |
(a)Includes loans to SPEs, financial institutions, states and political subdivisions, SPEs, nonprofits, personal investment companies and trusts, as well as loans to individuals and individual entities (predominantly Global Private Bank clients within AWM and J.P. Morgan Wealth Management within CCB).CCB), states and political subdivisions, as well as loans to nonprofits. Refer to Note 14 of JPMorgan Chase’s 20222023 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) | (in millions, except ratios) | Multifamily | | Other commercial | | Total retained loans secured by real estate | (in millions, except ratios) | Multifamily | | Other commercial | | Total retained loans secured by real estate |
Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 | Mar 31, 2024 | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 |
Retained loans secured by real estate | Retained loans secured by real estate | $ | 79,374 | | $ | 79,139 | | | $ | 48,015 | | $ | 47,593 | | | $ | 127,389 | | $ | 126,732 | |
Criticized | Criticized | 2,212 | | 1,916 | | | 2,326 | | 1,992 | | | 4,538 | | 3,908 | |
% of criticized to total retained loans secured by real estate | % of criticized to total retained loans secured by real estate | 2.79 | % | 2.42 | % | | 4.84 | % | 4.19 | % | | 3.56 | % | 3.08 | % | % of criticized to total retained loans secured by real estate | 3.60 | % | 3.57 | % | | 8.70 | % | 6.65 | % | | 5.53 | % | 4.74 | % |
Criticized nonaccrual | Criticized nonaccrual | $ | 60 | | $ | 51 | | | $ | 278 | | $ | 195 | | | $ | 338 | | $ | 246 | |
% of criticized nonaccrual loans to total retained loans secured by real estate | % of criticized nonaccrual loans to total retained loans secured by real estate | 0.08 | % | 0.06 | % | | 0.58 | % | 0.41 | % | | 0.27 | % | 0.19 | % | % of criticized nonaccrual loans to total retained loans secured by real estate | 0.09 | % | 0.08 | % | | 0.81 | % | 0.53 | % | | 0.36 | % | 0.25 | % |
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 |
| Secured by real estate | | | Secured by real estate | | Commercial and industrial | | Other | | Total retained loans |
(in millions) | (in millions) | Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 | (in millions) | Mar 31, 2024 | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 |
Loans by geographic distribution(a) | Loans by geographic distribution(a) | |
Total U.S. | |
Total U.S. | |
Total U.S. | Total U.S. | $ | 124,360 | | $ | 123,740 | | | $ | 127,826 | | $ | 125,324 | | | $ | 229,930 | | $ | 230,525 | | | $ | 482,116 | | $ | 479,589 | |
Total non-U.S. | Total non-U.S. | 3,029 | | 2,992 | | | 40,922 | | 42,336 | | | 78,257 | | 78,753 | | | 122,208 | | 124,081 | |
Total retained loans | Total retained loans | $ | 127,389 | | $ | 126,732 | | | $ | 168,748 | | $ | 167,660 | | | $ | 308,187 | | $ | 309,278 | |
| $ | 604,324 | | $ | 603,670 | |
Loan delinquency | Loan delinquency | |
Current and less than 30 days past due and still accruing | Current and less than 30 days past due and still accruing | $ | 126,781 | | $ | 126,083 | | | $ | 166,249 | | $ | 165,415 | | | $ | 305,985 | | $ | 307,511 | |
| $ | 599,015 | | $ | 599,009 | |
Current and less than 30 days past due and still accruing | |
Current and less than 30 days past due and still accruing | |
30–89 days past due and still accruing | 30–89 days past due and still accruing | 270 | | 402 | | | 1,160 | | 1,127 | | | 1,527 | | 1,015 | | | 2,957 | | 2,544 | |
90 or more days past due and still accruing(b) | 90 or more days past due and still accruing(b) | — | | 1 | | | 76 | | 100 | | | 65 | | 53 | | | 141 | | 154 | |
Criticized nonaccrual | Criticized nonaccrual | 338 | | 246 | | | 1,263 | | 1,018 | | | 610 | | 699 | | | 2,211 | | 1,963 | |
Total retained loans | Total retained loans | $ | 127,389 | | $ | 126,732 | | | $ | 168,748 | | $ | 167,660 | | | $ | 308,187 | | $ | 309,278 | |
| $ | 604,324 | | $ | 603,670 | |
(a)The U.S. and non-U.S. distribution is determined based predominantly on the domicile of the borrower.
(b)Represents loans that are considered well-collateralized and therefore still accruing interest.
Nonaccrual loans
The following table provides information on retained wholesale nonaccrual loans.
| (in millions) | (in millions) | Secured by real estate | | Commercial and industrial | | Other | | Total retained loans | (in millions) | Secured by real estate | | Commercial and industrial | | Other | | Total retained loans |
Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 | | Mar 31, 2023 | Dec 31, 2022 | Mar 31, 2024 | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 | | Mar 31, 2024 | Dec 31, 2023 |
Nonaccrual loans | Nonaccrual loans | |
With an allowance | With an allowance | $ | 219 | | $ | 172 | | | $ | 795 | | $ | 686 | | | $ | 384 | | $ | 487 | | | $ | 1,398 | | $ | 1,345 | |
With an allowance | |
With an allowance | |
Without an allowance(a) | Without an allowance(a) | 119 | | 74 | | | 468 | | 332 | | | 226 | | 212 | | | 813 | | 618 | |
Total nonaccrual loans(b) | Total nonaccrual loans(b) | $ | 338 | | $ | 246 | | | $ | 1,263 | | $ | 1,018 | | | $ | 610 | | $ | 699 | | | $ | 2,211 | | $ | 1,963 | |
(a)When the discounted cash flows or collateral value equals or exceeds the amortized cost of the loan, the loan does not require an allowance. This typically occurs when the loans have been partially charged off and/or there have been interest payments received and applied to the loan balance.
(b)Interest income on nonaccrual loans recognized on a cash basis waswere not material for the three months ended March 31, 20232024 and 2022.2023.
Loan modifications
The Firm grants certain modifications of wholesale loans to borrowers experiencing financial difficulty,difficulty.
Financial effects of FDMs
For the three months ended March 31, 2024, Secured by real estate FDMs were $25 million. The FDMs were primarily in the form of other-than-insignificant payment deferrals and interest rate reductions, which effective January 1,included reducing the weighted-average contractual interest by 100 bps and providing payment deferrals with delayed amounts primarily recaptured at maturity. For the three months ended March 31, 2023, are reported as FDMs. Secured by real estate FDMs were not material.
The following table providestables provide information about Commercial and industrial loan modifications considered FDMs.FDMs during the three months ended March 31, 2024 and 2023.
| | | | | | | | | | | |
Three months ended March 31, 2023 (in millions) | Commercial and industrial |
Amortized cost basis | % of loan modifications to total retained commercial and industrial wholesale loans | Financial effect of loan modification |
Loan modification | | | |
Single modifications | | | |
| | | |
Term extension | $ | 280 | | 0.17 | % | Extended loans by a weighted-average of 8 months |
| | | |
Other-than-insignificant payment delay | 49 | | 0.03 | % | Provided payment deferrals with delayed amounts primarily added to end of the original loan terms |
Multiple modifications | | | |
Term extension and principal forgiveness | $ | 44 | | 0.03 | % | Extended loans by a weighted-average of 64 months and reduced amortized cost basis of the loans by $23 million |
Total | $ | 373 | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | Commercial and industrial |
Three months ended March 31, 2024 (in millions) | | | | | | | | Amortized cost basis | % of loan modifications to total retained Commercial and industrial loans | Financial effect of loan modifications | | |
Single modifications | | | | | | | | | | |
Term extension | | | | | | | | $ | 382 | | 0.23 | % | Extended loans by a weighted average of 11 months | | |
Other-than-insignificant payment deferral | | | | | | | | 84 | | 0.05 | | Provided payment deferrals with delayed amounts largely recaptured at the end of the deferral period | | |
Multiple modifications | | | | | | | | | |
Other-than-insignificant payment deferral and term extension | | | | | | | | 94 | | 0.06 | | Provided payment deferrals with delayed amounts primarily recaptured at maturity and extended loans by a weighted average of 20 months | | |
Other(a) | | | | | | | | 4 | | — | | NM | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Total | | | | | $ | 564 | | | | | |
| | | | | | | | | | | |
Three months ended March 31, 2023 (in millions) | Commercial and industrial |
Amortized cost basis | % of loan modifications to total retained Commercial and industrial loans | Financial effect of loan modifications |
| | | |
Single modifications | | | |
| | | |
Term extension | $ | 280 | | 0.17 | % | Extended loans by a weighted average of 8 months |
Other-than-insignificant payment deferral | 49 | | 0.03 | | Provided payment deferrals with delayed amounts recaptured primarily at maturity |
| | | |
Multiple modifications | | | |
Term extension and principal forgiveness | 44 | | 0.03 | | Extended loans by a weighted average of 64 months and reduced amortized cost basis of the loans by $23 million |
Total | $ | 373 | | | |
(a)Includes a loan with multiple modifications.
The following table provides information onFor the paymentthree months ended March 31, 2024 and 2023, Other loan class FDMs were $20 million and $63 million, respectively and were primarily in the form of term extensions, which included extending the weighted-average life of the loans by 11 months and 4 months, respectively.
Payment status of CommercialFDMs and industrial FDMs.
| | | | | | | |
As of March 31, 2023 (in millions) | | Amortized cost basis |
|
Current and less than 30 days past due and still accruing | | $ | 212 | | |
30-89 days past due and still accruing | | 4 | | |
90 or more days past due and still accruing | | — | | |
Criticized nonaccrual | | 157 | | |
Total | | $ | 373 | | |
defaultsThe following table provides information onby loan class about the payment status of FDMs during the twelve months ended March 31, 2024 and the three months ended March 31, 2023.
| | | | | | | | | | | | | | | | | | | | | | |
| Amortized cost basis | |
| Twelve months ended March 31, 2024 | | | Three months ended March 31, 2023(a) | |
(in millions) | Secured by real estate | Commercial and industrial | Other | | | Commercial and industrial | Other | |
Current and less than 30 days past due and still accruing | $ | 110 | | $ | 1,033 | | $ | 383 | | | | $ | 212 | | $ | — | | |
30-89 days past due and still accruing | 7 | | 29 | | 12 | | | | 4 | | — | | |
| | | | | | | | |
Criticized nonaccrual | 46 | | 366 | | 204 | | | | 157 | | 63 | | |
Total | $ | 163 | | $ | 1,428 | | $ | 599 | | | | $ | 373 | | $ | 63 | | |
(a)Secured by real estate FDMs were not material for the three months ended March 31, 2023.
There were $77 million FDMs that defaulted in the three months ended March 31, 2024 and were reported as FDMs in the twelve months prior to default, primarily in the form of term extensions in Commercial and industrialindustrial.
Total FDMs that re-defaulteddefaulted during the three months ended March 31, 2023.
| | | | | | | |
Three months ended March 31, 2023 (in millions) | | Amortized cost basis |
|
Loan modification | | | |
| | | |
Term extension | | 4 | | |
| | | |
| | | |
| | | |
Total(a)
| | $ | 4 | | |
(a)Represents2023 and were reported as FDMs on or after January 1, 2023, the date that the Firm adopted the changes to the TDR accounting guidance were 30 days or more past due at March 31, 2023.not material.
As of March 31, 2024 and December 31, 2023, additional unfunded commitments to lendon modified loans to borrowers experiencing financial difficulty whosewere $577 million and $1.8 billion, respectively, in Commercial and industrial loans have been modified as FDMs were $909 million.
FDMs to borrowersand $29 million and $4 million, respectively, in the Other loan class were $63 million for the three months ended March 31, 2023. The financial effect of FDMs extended the loans by a weighted-average of four months and were generally in the form of term extensions.class. There were no additional commitments to borrowers experiencing financial difficulty whose loans have been modified as FDMs.
For the three months ended March 31, 2023,FDMs in Secured by real estate FDMs were not material and there were no additional commitments to lend to borrowers experiencing financial difficulty whose loans have been modified as FDMs.
Prior to January 1, 2023, certain loan modifications were considered TDRs.
For the three months ended March 31, 2022, new TDRs were $418 million and reflected the extension of maturity dates, covenant waivers, receipt of assets in partial satisfaction of the loan and deferral of principal and interest payments, predominantly in the Commercial and Industrial and Other loan classes. For the three months ended March 31, 2022, the impact of these modifications were not material to the Firm.
As a result of the elimination of the requirement to assess whether a modification is reasonably expected or involves a concession, the population of loans considered FDMs is greater than those previously considered TDRs.
estate.
Note 12 – Allowance for credit losses
The Firm's allowance for credit losses represents management's estimate of expected credit losses over the remaining expected life of the Firm's financial assets measured at amortized cost and certain off-balance sheet lending-related commitments.
On January 1, 2023 the Firm adopted the Financial Instruments - Credit Losses: Troubled Debt Restructurings accounting guidance as described in Note 1.
The adoption of this guidance eliminated the requirement to measure the allowance for TDRs using a DCF methodology and allowed the option of a non-DCF portfolio-based approach for modified loans to borrowers experiencing financial difficulty. If a DCF methodology is still applied for these modified loans, the discount rate must be the post-modification effective interest rate, instead of the pre-modification effective interest rate.
The Firm elected to change from an asset-specific allowance approach to its non-DCF, portfolio-based allowance approach for modified loans to troubled borrowers for all portfolios except collateral-dependent loans and nonaccrual risk-rated loans, for which the asset-specific allowance approach will continue to apply.
This guidance was adopted under the modified retrospective method which resulted in a net decrease to the allowance for credit losses of $587 million and an increase to retained earnings of $446 million, after-tax predominantly driven by residential real estate and credit card.
Refer to Note 13 of JPMorgan Chase's 20222023 Form 10-K for a detailed discussion of the allowance for credit losses and the related accounting policies.
Allowance for credit losses and related information
The table below summarizes information about the allowances for credit losses and includes a breakdown of loans and lending-related commitments by impairment methodology. Refer to Note 10 of JPMorgan Chase’s 20222023 Form 10-K and Note 9 of this Form 10-Q for further information on the allowance for credit losses on investment securities.
| | 2023 | | 2022 |
| 2024 | |
| 2024 | |
| 2024 | | | 2023 |
Three months ended March 31, (in millions) | Three months ended March 31, (in millions) | Consumer, excluding credit card | Credit card | Wholesale | | Total | | Consumer, excluding credit card | Credit card | Wholesale | | Total | Three months ended March 31, (in millions) | Consumer, excluding credit card | Credit card | Wholesale | | Total | | Consumer, excluding credit card | Credit card | Wholesale | | Total |
Allowance for loan losses | Allowance for loan losses | | | |
Beginning balance at January 1, | |
Beginning balance at January 1, | |
Beginning balance at January 1, | Beginning balance at January 1, | $ | 2,040 | | $ | 11,200 | | $ | 6,486 | | | $ | 19,726 | | | $ | 1,765 | | $ | 10,250 | | $ | 4,371 | | | $ | 16,386 | |
Cumulative effect of a change in accounting principle(a) | Cumulative effect of a change in accounting principle(a) | (489) | | (100) | | 2 | | | (587) | | | NA | | NA | Cumulative effect of a change in accounting principle(a) | NA | | NA | | (489) | (100) | 2 | | (587) |
Gross charge-offs | Gross charge-offs | 235 | | 1,111 | | 105 | | | 1,451 | | | 204 | | 720 | | 52 | | | 976 | |
Gross recoveries collected | Gross recoveries collected | (103) | | (189) | | (22) | | | (314) | | | (158) | | (214) | | (22) | | | (394) | |
Net charge-offs/(recoveries) | Net charge-offs/(recoveries) | 132 | | 922 | | 83 | | | 1,137 | | | 46 | | 506 | | 30 | | | 582 | |
Provision for loan losses | Provision for loan losses | 247 | | 1,222 | | 578 | | | 2,047 | | | 175 | | 506 | | 687 | | | 1,368 | |
Other | Other | — | | — | | 4 | | | 4 | | | — | | — | | 20 | | | 20 | |
Ending balance at March 31, | Ending balance at March 31, | $ | 1,666 | | $ | 11,400 | | $ | 6,987 | | | $ | 20,053 | | | $ | 1,894 | | $ | 10,250 | | $ | 5,048 | | | $ | 17,192 | |
Allowance for lending-related commitments | Allowance for lending-related commitments | | | |
Beginning balance at January 1, | Beginning balance at January 1, | $ | 76 | | $ | — | | $ | 2,306 | | | $ | 2,382 | | | $ | 113 | | $ | — | | $ | 2,148 | | | $ | 2,261 | |
Beginning balance at January 1, | |
Beginning balance at January 1, | |
Provision for lending-related commitments | Provision for lending-related commitments | 1 | | — | | (14) | | | (13) | | | (2) | | — | | 98 | | | 96 | |
Other | Other | — | | — | | 1 | | | 1 | | | — | | — | | 1 | | | 1 | |
Ending balance at March 31 | $ | 77 | | $ | — | | $ | 2,293 | | | $ | 2,370 | | | $ | 111 | | $ | — | | $ | 2,247 | | | $ | 2,358 | |
Ending balance at March 31, | |
Total allowance for investment securities | Total allowance for investment securities | NA | | 90 | | | NA | | 41 | |
Total allowance for credit losses(b) | $ | 1,743 | | $ | 11,400 | | $ | 9,280 | | | $ | 22,513 | | | $ | 2,005 | | $ | 10,250 | | $ | 7,295 | | | $ | 19,591 | |
Total allowance for credit losses(b)(c) | |
Allowance for loan losses by impairment methodology | Allowance for loan losses by impairment methodology | | | |
Asset-specific(c) | $ | (1,030) | | $ | — | | $ | 437 | | | $ | (593) | | | $ | (644) | | $ | 262 | | $ | 485 | | | $ | 103 | |
Asset-specific(d) | |
Asset-specific(d) | |
Asset-specific(d) | |
Portfolio-based | Portfolio-based | 2,696 | | 11,400 | | 6,550 | | | 20,646 | | | 2,538 | | 9,988 | | 4,563 | | | 17,089 | |
Total allowance for loan losses | Total allowance for loan losses | $ | 1,666 | | $ | 11,400 | | $ | 6,987 | | | $ | 20,053 | | | $ | 1,894 | | $ | 10,250 | | $ | 5,048 | | | $ | 17,192 | |
| Loans by impairment methodology | Loans by impairment methodology | | | |
Asset-specific(c) | $ | 3,560 | | $ | — | | $ | 2,189 | | | $ | 5,749 | | | $ | 13,186 | | $ | 901 | | $ | 2,823 | | | $ | 16,910 | |
Loans by impairment methodology | |
Loans by impairment methodology | |
Asset-specific(d) | |
Asset-specific(d) | |
Asset-specific(d) | |
Portfolio-based | Portfolio-based | 296,887 | | 180,079 | | 602,135 | | | 1,079,101 | | | 282,975 | | 151,382 | | 567,130 | | | 1,001,487 | |
Total retained loans | Total retained loans | $ | 300,447 | | $ | 180,079 | | $ | 604,324 | | | $ | 1,084,850 | | | $ | 296,161 | | $ | 152,283 | | $ | 569,953 | | | $ | 1,018,397 | |
Collateral-dependent loans | Collateral-dependent loans | | | |
Net charge-offs | Net charge-offs | $ | 4 | | $ | — | | $ | 18 | | | $ | 22 | | | $ | (5) | | $ | — | | $ | 7 | | | $ | 2 | |
Net charge-offs | |
Net charge-offs | |
Loans measured at fair value of collateral less cost to sell | Loans measured at fair value of collateral less cost to sell | 3,539 | | — | | 586 | | | 4,125 | | | 4,144 | | — | | 665 | | | 4,809 | |
Allowance for lending-related commitments by impairment methodology | Allowance for lending-related commitments by impairment methodology | | | |
Asset-specific | Asset-specific | $ | — | | $ | — | | $ | 45 | | | $ | 45 | | | $ | — | | $ | — | | $ | 139 | | | $ | 139 | |
Asset-specific | |
Asset-specific | |
Portfolio-based | Portfolio-based | 77 | | — | | 2,248 | | | 2,325 | | | 111 | | — | | 2,108 | | | 2,219 | |
Total allowance for lending-related commitments(d) | $ | 77 | | $ | — | | $ | 2,293 | | | $ | 2,370 | | | $ | 111 | | $ | — | | $ | 2,247 | | | $ | 2,358 | |
Total allowance for lending-related commitments(e) | |
Lending-related commitments by impairment methodology | Lending-related commitments by impairment methodology | | | |
Asset-specific | Asset-specific | $ | — | | $ | — | | $ | 401 | | | $ | 401 | | | $ | — | | $ | — | | $ | 767 | | | $ | 767 | |
Portfolio-based(e) | 21,569 | | — | | 466,600 | | | 488,169 | | | 31,847 | | — | | 463,570 | | | 495,417 | |
Asset-specific | |
Asset-specific | |
Portfolio-based(f) | |
Total lending-related commitments | Total lending-related commitments | $ | 21,569 | | $ | — | | $ | 467,001 | | | $ | 488,570 | | | $ | 31,847 | | $ | — | | $ | 464,337 | | | $ | 496,184 | |
(a)Represents the impact to the allowance for loan losses upon the adoption of the Financial Instruments - Credit Losses: Troubled Debt Restructuringsaccounting guidance.guidance. Refer to Note 1 of JPMorgan Chase's 2023 Form 10-K for further information.
(b)At March 31, 2024 and 2023, in addition to the allowance for credit losses in the table above, the Firm also had an allowance for credit losses of $274 million and $20 million, respectively, associated with certain accounts receivable in CIB. At March 31, 2023, the Firm also had an allowance for credit losses of $241 million associated with Other assets in Corporate and $20 millionCorporate.
(c)As of March 31, 2024, included the allowance for credit losses associated with certain accounts receivable in CIB.First Republic.
(c)(d)Includes collateral-dependent loans, including those for which foreclosure is deemed probable, and nonaccrual risk-rated loans for all periods presented. Prior periods also include non collateral-dependent TDRs or reasonably expected TDRs and modified PCD loans.
(d)(e)The allowance for lending-related commitments is reported in accounts payable and other liabilities on the Consolidated balance sheets.
(e)(f)At March 31, 20232024 and 2022,2023, lending-related commitments excluded $16.0$17.7 billion and $15.3$16.0 billion, respectively, for the consumer, excluding credit card portfolio segment; $861.2$943.9 billion and $757.3$861.2 billion, respectively, for the credit card portfolio segment; and $17.5$20.9 billion and $32.9$17.5 billion, respectively, for the wholesale portfolio segment, which were not subject to the allowance for lending-related commitments.
Discussion of changes in the allowance
The allowance for credit losses as of March 31, 2024 was relatively flat when compared to December 31, 2023, reflecting:
•a net reduction of $142 million in wholesale, which included a net addition associated with net downgrade activity, largely in Real Estate, primarily in CB, which was $22.8 billion, reflecting more than offset by the net impact of changes in the loan and lending-related commitment portfolios, as well as updates to certain macroeconomic variables, and
•a net addition of $1.1 billion from December 31, 2022. The$44 million in consumer, consisting of:
–$153 million in Card Services, primarily due to seasoning of newer vintages, largely offset by reduced borrower uncertainty,
predominantly offset by:
–a $125 million net addition to the allowance for credit losses was predominantly reduction in Home Lending, primarily driven by a deteriorationimprovements in the Firm's weighted-average economic outlook including the impact from changes to the Firm’s macroeconomic scenarios, andfor home prices.
The Firm has maintained the additional weight placed on the relative adverse scenario. The additional weight placed onscenarios in the relative adverse scenario reflects an increased probabilityfirst quarter of a moderate recession due2023 to tightening financial conditions, including higher inflation, changes in monetary policy, and geopolitical risks.
The net addition to the allowance consisted of:
•$726 million in wholesale, which also reflected net downgrade activity, and an addition to the allowance for credit losses associated with Other assets in Corporate, and
•$416 million in consumer.
The allowance for credit losses also reflected a reduction of $587 millionreflect downside risks as a result of the adoption of changes to the TDR accounting guidance. Refer to Note 1 for further information.persistent inflation and tightening financial conditions.
The Firm's allowance for credit losses is estimated using a weighted average of five internally developed macroeconomic scenarios. The adverse scenarios incorporate more punitive macroeconomic factors than the central case assumptions provided in the table below, resulting in a weighted average U.S. unemployment rate peaking at 5.8%5.4% in the thirdfirst quarter of 2024,2025, and a 1.2% lowerweighted average U.S. real GDP exitinglevel that is 1.7% lower than the central case at the end of the second quarter of 2024.2025.
The following table presents the Firm’s central case assumptions reflected U.S. unemployment rates and U.S. real GDP as follows:for the periods presented:
| | Assumptions at March 31, 2023 |
| 2Q23 | 4Q23 | 2Q24 |
| Central case assumptions at March 31, 2024 | | | Central case assumptions at March 31, 2024 |
| 2Q24 | | | 2Q24 | 4Q24 | 2Q25 |
U.S. unemployment rate(a) | U.S. unemployment rate(a) | 3.5 | % | 4.1 | % | 4.9 | % | U.S. unemployment rate(a) | 3.9 | % | 4.2 | % | 4.1 | % |
YoY growth in U.S. real GDP(b) | YoY growth in U.S. real GDP(b) | 2.0 | % | 0.4 | % | — | % | YoY growth in U.S. real GDP(b) | 2.6 | % | 0.9 | % | 1.2 | % |
| | Assumptions at December 31, 2022 |
| 2Q23 | 4Q23 | 2Q24 |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| Central case assumptions at December 31, 2023 | |
| 2Q24 | | | 2Q24 | 4Q24 | 2Q25 |
U.S. unemployment rate(a) | U.S. unemployment rate(a) | 3.8 | % | 4.3 | % | 5.0 | % | U.S. unemployment rate(a) | 4.1 | % | 4.4 | % | 4.1 | % |
YoY growth in U.S. real GDP(b) | YoY growth in U.S. real GDP(b) | 1.5 | % | 0.4 | % | — | % | YoY growth in U.S. real GDP(b) | 1.8 | % | 0.7 | % | 1.0 | % |
(a)Reflects quarterly average of forecasted U.S. unemployment rate.
(b)The year over year growth in U.S. real GDP in the forecast horizon of the central scenario is calculated as the percentage change in U.S. real GDP levels from the prior year.
Subsequent changes to this forecast and related estimates will be reflected in the provision for credit losses in future periods.
Refer to Note 13 and Note 10 of JPMorgan Chase’s 20222023 Form 10-K for a description of the policies, methodologies and judgments used to determine the Firm’s allowancesallowance for credit losses on loans, lending-related commitments, and investment securities.
Refer to Consumer Credit Portfolio on pages 50-53,54-57, Wholesale Credit Portfolio on pages 54-6258-66 and Note 11 for additional information on the consumer and wholesale credit portfolios.
Refer to Critical Accounting Estimates Used by the Firm on pages 74-7678-80 for further information on the allowance for credit losses and related management judgments.
Note 13 – Variable interest entities
Refer to Note 1 and Note 14 of JPMorgan Chase’s 20222023 Form 10-K for a further description of the Firm's accounting policies regarding consolidation of and involvement with VIEs.
The following table summarizes the most significant types of Firm-sponsored VIEs by business segment. The Firm considers a “Firm-sponsored” VIE to include any entity where: (1) JPMorgan Chase is the primary beneficiary of the structure; (2) the VIE is used by JPMorgan Chase to securitize Firm assets; (3) the VIE issues financial instruments with the JPMorgan Chase name; or (4) the entity is a JPMorgan Chase–administered asset-backed commercial paper conduit.
| | | | | | | | | | | |
Line of Business | Transaction Type | Activity | Form 10-Q page references |
CCB | Credit card securitization trusts | Securitization of originated credit card receivables | 140144 |
Mortgage securitization trusts | Servicing and securitization of both originated and purchased residential mortgages | 140-142144–146 |
CIB | Mortgage and other securitization trusts | Securitization of both originated and purchased residential and commercial mortgages, and other consumer loans | 140-142144–146 |
Multi-seller conduits | Assisting clients in accessing the financial markets in a cost-efficient manner and structuring transactions to meet investor needs | 142146 |
Municipal bond vehicles | Financing of municipal bond investments | 142146 |
The FirmIn addition, CIB also invests in and provides financing and other services to VIEs sponsored by third parties. Refer to pages 143-144147–148 of this Note for more information on consolidated VIE assets and liabilities as well as the VIEs sponsored by third parties.
Significant Firm-sponsored VIEs
Credit card securitizations
As a result of the Firm’s continuing involvement, the Firm is considered to be the primary beneficiary of its Firm-sponsored credit card securitization trust, the Chase Issuance Trust.
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.
The following tables present 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 page 150 of this Note for information on the securitization-related loan delinquencies and liquidation losses.
| | Principal amount outstanding | | JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e) |
March 31, 2023 (in millions) | Total assets held by securitization VIEs | Assets held in consolidated securitization VIEs | Assets held in nonconsolidated securitization VIEs with continuing involvement | | Trading assets | Investment securities | Other financial assets | Total interests held by JPMorgan Chase |
| Principal amount outstanding | | | Principal amount outstanding | | JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e) |
March 31, 2024 (in millions) | | March 31, 2024 (in millions) | Total assets held by securitization VIEs | Assets held in consolidated securitization VIEs | Assets held in nonconsolidated securitization VIEs with continuing involvement | | Trading assets | Investment securities | Other financial assets | Total interests held by JPMorgan Chase |
Securitization-related(a) | Securitization-related(a) | |
Residential mortgage: | Residential mortgage: | |
Residential mortgage: | |
Residential mortgage: | |
Prime/Alt-A and option ARMs | |
Prime/Alt-A and option ARMs | |
Prime/Alt-A and option ARMs | Prime/Alt-A and option ARMs | $ | 55,451 | | $ | 735 | | $ | 37,836 | | | $ | 839 | | $ | 1,959 | | $ | — | | $ | 2,798 | |
Subprime | Subprime | 9,515 | | — | | 1,701 | | | 16 | | — | | — | | 16 | |
Commercial and other(b) | Commercial and other(b) | 163,184 | | — | | 126,194 | | | 795 | | 5,398 | | 663 | | 6,856 | |
Total | Total | $ | 228,150 | | $ | 735 | | $ | 165,731 | | | $ | 1,650 | | $ | 7,357 | | $ | 663 | | $ | 9,670 | |
| | Principal amount outstanding | | JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e) |
December 31, 2022 (in millions) | Total assets held by securitization VIEs | Assets held in consolidated securitization VIEs | Assets held in nonconsolidated securitization VIEs with continuing involvement | | Trading assets | Investment securities | Other financial assets | Total interests held by JPMorgan Chase |
| Principal amount outstanding | | | Principal amount outstanding | | JPMorgan Chase interest in securitized assets in nonconsolidated VIEs(c)(d)(e) |
December 31, 2023 (in millions) | | December 31, 2023 (in millions) | Total assets held by securitization VIEs | Assets held in consolidated securitization VIEs | Assets held in nonconsolidated securitization VIEs with continuing involvement | | Trading assets | Investment securities | Other financial assets | Total interests held by JPMorgan Chase |
Securitization-related(a) | Securitization-related(a) | |
Residential mortgage: | Residential mortgage: | |
Residential mortgage: | |
Residential mortgage: | |
Prime/Alt-A and option ARMs | |
Prime/Alt-A and option ARMs | |
Prime/Alt-A and option ARMs | Prime/Alt-A and option ARMs | $ | 55,362 | | $ | 754 | | $ | 37,058 | | | $ | 744 | | $ | 1,918 | | $ | — | | $ | 2,662 | |
Subprime | Subprime | 9,709 | | — | | 1,743 | | | 10 | | — | | — | | 10 | |
Commercial and other(b) | Commercial and other(b) | 164,915 | | — | | 127,037 | | | 888 | | 5,373 | | 670 | | 6,931 | |
Total | Total | $ | 229,986 | | $ | 754 | | $ | 165,838 | | | $ | 1,642 | | $ | 7,291 | | $ | 670 | | $ | 9,603 | |
(a)Excludes U.S. GSEs and government agency securitizations and re-securitizations, which are not Firm-sponsored.
(b)Consists of securities backed by commercial real estate loans and non-mortgage-related consumer receivables.
(c)Excludes the following: retained servicing; 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; senior securities of $3$134 million and $134$52 million at March 31, 20232024 and December 31, 2022,2023, respectively, and subordinated securities which were zero$119 million and $34$38 million at March 31, 20232024 and December 31, 2022,2023, respectively, which the Firm purchased in connection with CIB’s secondary market-making activities.
(d)Includes interests held in re-securitization transactions.
(e)As of March 31, 20232024 and December 31, 2022, 83% and 84%, respectively,2023, 77% 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 $2.8$2.4 billion and $2.6$2.5 billion of investment-grade retained interests at March 31, 20232024 and December 31, 2022,2023, respectively, and $115 million and $88 million of noninvestment-grade retained interests were not material at both March 31, 20232024 and December 31, 2022.2023, respectively. The retained interests in commercial and other securitization trusts consisted of $5.8 billion and $6.1 billion of investment-grade retained interests at both March 31, 20232024 and December 31, 2022,2023, respectively, and $1.1$1.7 billion of noninvestment-grade retained interests at both March 31, 20232024 and December 31, 2022.2023.
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.
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.
Re-securitizations
The following table presents the principal amount of securities transferred to re-securitization VIEs.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | | 2022 | |
Transfers of securities to VIEs | Transfers of securities to VIEs | | |
Transfers of securities to VIEs | |
Transfers of securities to VIEs | |
U.S. GSEs and government agencies | U.S. GSEs and government agencies | $ | 3,406 | | | $ | 6,076 | | |
U.S. GSEs and government agencies | |
U.S. GSEs and government agencies | |
The Firm did not transfer any private label securities to re-securitization VIEs during the three months ended March 31, 20232024 and 2022,2023, respectively and retained interests in any such Firm-sponsored VIEs as of March 31, 20232024 and December 31, 20222023 were not material.
The following table presents information on the Firm's interests in nonconsolidated re-securitization VIEs.
| | Nonconsolidated re-securitization VIEs |
| Nonconsolidated re-securitization VIEs | | | Nonconsolidated re-securitization VIEs |
(in millions) | (in millions) | March 31, 2023 | | December 31, 2022 | (in millions) | March 31, 2024 | | December 31, 2023 |
U.S. GSEs and government agencies | U.S. GSEs and government agencies | |
Interest in VIEs | Interest in VIEs | $ | 3,411 | | | $ | 2,580 | |
Interest in VIEs | |
Interest in VIEs | |
As of March 31, 2023,2024 and December 31, 2022,2023, 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
In the normal course of business, JPMorgan Chase makes markets in and invests in commercial paper issued by the Firm-administered multi-seller conduits. The Firm held $10.4$4.6 billion and $13.8$9.8 billion of the commercial paper issued by the Firm-administered multi-seller conduits at March 31, 2023,2024 and December 31, 2022,2023, respectively, which have been eliminated in consolidation. The Firm’s investments reflect the Firm’s funding needs and capacity and were not driven by market illiquidity. Other than the amounts required to be held pursuant to credit risk retention rules, the Firm is not obligated under any agreement to purchase the commercial paper issued by the Firm-administered multi-seller conduits.
Deal-specific liquidity facilities, program-wide liquidity and credit enhancement provided by the Firm have been eliminated in consolidation. The Firm or the Firm-administered multi-seller conduits provide lending-related commitments to certain clients of the Firm-administered multi-seller conduits. The unfunded commitments were $9.8$11.2 billion and $10.6$10.8 billion at March 31, 2023,2024 and December 31, 2022,2023, respectively, and are reported as off-balance sheet lending-related commitments in other unfunded commitments to extend credit. Refer to Note 22 for more information on off-balance sheet lending-related commitments.
Municipal bond vehicles
Municipal bond vehicles or tender option bond (“TOB”) trusts allow institutions to finance their municipal bond investments at short-term rates. TOB transactions are known as customer TOB trusts and non-customer TOB trusts. Customer TOB trusts are sponsored by a third party.
The Firm serves as sponsor for all non-customer TOB transactions.
Consolidated VIE assets and liabilities
The following table presents information on assets and liabilities related to VIEs consolidated by the Firm as of March 31, 2023,2024 and December 31, 2022.2023.
| | Assets | | Liabilities |
March 31, 2023 (in millions) | Trading assets | Loans | | Other(c) | Total assets(d) | | Beneficial interests in VIE assets(e) | Other(f) | Total liabilities |
| Assets | | | Assets | | Liabilities |
March 31, 2024 (in millions) | | March 31, 2024 (in millions) | Trading assets | Loans | | Other(c) | Total assets(d) | | Beneficial interests in VIE assets(e) | Other(f) | Total liabilities |
VIE program type | VIE program type | |
Firm-sponsored credit card trusts | |
Firm-sponsored credit card trusts | |
Firm-sponsored credit card trusts | Firm-sponsored credit card trusts | $ | — | $ | 8,948 | | $ | 84 | $ | 9,032 | | $ | 999 | $ | 2 | $ | 1,001 | $ | — | $ | 12,994 | | $ | 169 | $ | 13,163 | | $ | 5,323 | $ | 10 | $ | 5,333 |
Firm-administered multi-seller conduits | Firm-administered multi-seller conduits | 4 | 22,397 | | 162 | 22,563 | | 12,175 | 29 | 12,204 | Firm-administered multi-seller conduits | 1 | 24,800 | | 180 | 24,981 | | 20,366 | 28 | 20,394 |
Municipal bond vehicles | Municipal bond vehicles | 1,965 | — | | 24 | 1,989 | | 1,593 | 8 | 1,601 | Municipal bond vehicles | 2,075 | — | | 29 | 2,104 | | 2,264 | 12 | 2,276 |
Mortgage securitization entities(a) | Mortgage securitization entities(a) | — | 764 | | 10 | 774 | | 136 | 61 | 197 | Mortgage securitization entities(a) | — | 681 | | 7 | 688 | | 122 | 56 | 178 |
Other | Other | 64 | 1,133 | (b) | 253 | 1,450 | | — | 155 | Other | 153 | 1,584 | (b) | 263 | 2,000 | | — | 176 |
Total | Total | $ | 2,033 | $ | 33,242 | | $ | 533 | $ | 35,808 | | $ | 14,903 | $ | 255 | $ | 15,158 | Total | $ | 2,229 | $ | 40,059 | | $ | 648 | $ | 42,936 | | $ | 28,075 | $ | 282 | $ | 28,357 |
| | Assets | | Liabilities |
December 31, 2022 (in millions) | Trading assets | Loans | | Other(c) | Total assets(d) | | Beneficial interests in VIE assets(e) | Other(f) | Total liabilities |
| Assets | |
| Assets | |
| Assets | | | Liabilities |
December 31, 2023 (in millions) | | December 31, 2023 (in millions) | Trading assets | Loans | | Other(c) | Total assets(d) | | Beneficial interests in VIE assets(e) | Other(f) | Total liabilities |
VIE program type | VIE program type | |
Firm-sponsored credit card trusts | |
Firm-sponsored credit card trusts | |
Firm-sponsored credit card trusts | Firm-sponsored credit card trusts | $ | — | $ | 9,699 | | $ | 100 | $ | 9,799 | | $ | 1,999 | $ | 2 | $ | 2,001 | $ | — | $ | 9,460 | | $ | 117 | $ | 9,577 | | $ | 2,998 | $ | 6 | $ | 3,004 |
Firm-administered multi-seller conduits | Firm-administered multi-seller conduits | — | 22,819 | | 170 | 22,989 | | 9,236 | 39 | 9,275 | Firm-administered multi-seller conduits | 1 | 27,372 | | 194 | 27,567 | | 17,781 | 30 | 17,811 |
Municipal bond vehicles | Municipal bond vehicles | 2,089 | — | | 7 | 2,096 | | 1,232 | 10 | 1,242 | Municipal bond vehicles | 2,056 | — | | 22 | 2,078 | | 2,116 | 11 | 2,127 |
Mortgage securitization entities(a) | Mortgage securitization entities(a) | — | 781 | | 10 | 791 | | 143 | 67 | 210 | Mortgage securitization entities(a) | — | 693 | | 8 | 701 | | 125 | 57 | 182 |
Other | Other | 62 | 1,112 | (b) | 263 | 1,437 | | — | 161 | Other | 113 | 86 | | 250 | 449 | | — | 159 |
Total | Total | $ | 2,151 | $ | 34,411 | | $ | 550 | $ | 37,112 | | $ | 12,610 | $ | 279 | $ | 12,889 | Total | $ | 2,170 | $ | 37,611 | | $ | 591 | $ | 40,372 | | $ | 23,020 | $ | 263 | $ | 23,283 |
(a)Includes residential mortgage securitizations.
(b)Primarily includes purchased supply chain finance receivables and purchased auto loan securitizationsconsumer loans in CIB.
(c)Includes assets classified as cash and other assets on the Consolidated balance sheets.
(d)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.
(e)The interest-bearing beneficial interest liabilities issued by consolidated VIEs are classified in the line item on the Consolidated balance sheets titled,as “Beneficial interests issued by consolidated VIEs”. The holders of these beneficial interests generally do not have recourse to the general credit of JPMorgan Chase. Included in beneficial interests in VIE assets are long-term beneficial interests of $1.1$5.4 billion and $2.1$3.1 billion at March 31, 2023,2024 and December 31, 2022,2023, respectively.
(f)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 own and operate affordable housing, alternative energy, and other projects. These entities are primarily considered VIEs. A third party is typically the general partner or managing
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 $30.2$33.1 billion and $35.1 billion at both March 31, 2023,2024 and December 31, 2022,2023, of which $10.7$14.3 billion and $10.6$14.7 billion was unfunded at March 31, 2023,2024 and December 31, 2022,2023, respectively. The Firm assesses each project and to reduce the risk of loss, may withhold varying amounts of its capital investment until the project qualifies for tax credits. Refer to Note 25 of JPMorgan Chase’s 20222023 Form 10-K for further information on affordable housing tax credits and Note 22 of this Form 10-Q for more information on off-balance sheet lending-related commitments.
Effective January 1, 2024, the Firm adopted updates to the Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method guidance which expanded the types of tax-oriented investments, beyond
affordable housing tax credit investments, that the Firm can elect on a program by program basis, to be accounted for using the proportional amortization method. Refer to Note 1 for further information.
The proportional amortization method requires the cost of eligible investments, within an elected program, be amortized in proportion to the tax benefits received with the resulting amortization reported directly in income tax expense, which aligns with the associated tax credits and other tax benefits. Investments must meet certain criteria to be eligible, including that substantially all of the return is from income tax credits and other income tax benefits.
In addition, under this method deferred taxes are generally not recorded as the investment is now amortized in proportion to the income tax credits and other income tax benefits received. Delayed equity contributions that are unconditional and legally binding or conditional and probable of occurring are recorded in other liabilities with a corresponding increase in the carrying value of the investment. The guidance also requires a reevaluation of eligible investments when significant modifications or events occur that result in a change in the nature of the investment or a change in the Firm's relationship with the underlying project. During the period, there were no significant modifications or events that resulted in a change in the nature of an eligible investment or a change in the Firm's relationship with the underlying project.
The following table provides information on tax-oriented investments for which the Firm elected to apply the proportional amortization method.
| | | | | | | | |
As of or for the three months ended, (in millions) | Alternative energy and affordable housing programs |
March 31, 2024 | December 31, 2023(d) |
Programs for which the Firm elected proportional amortization: | | |
Carrying value(a) | $ | 29,821 | | $ | 14,644 | |
Tax credits and other tax benefits(b) | 1,266 | | 566 | |
Investments that qualify to be accounted for using proportional amortization: | | |
Amortization gains/(losses) recognized as a component of income tax expense | (1,016) | | (399) | |
Non-income-tax-related gains/(losses) and other returns received that are recognized outside of income tax expense(c) | 48 | | — | |
(a)Recorded in Other assets on the Consolidated balance sheets. Excludes programs to which the Firm does not apply the proportional amortization method, such as historic tax credit and new market tax credit programs.
(b)Reflected in Income tax expense on the Consolidated statements of income and Investing activities on the Consolidated statements of cash flows.
(c)Recorded in Other income on the Consolidated statements of income and Investing activities on the Consolidated statements of cash flows.
(d)As of December 31, 2023, represents eligible affordable housing investments. Refer to Note 25 of JPMorgan Chase’s 2023 Form 10-K for further information on affordable housing tax credits.
Customer municipal bond vehicles (TOB trusts)
The Firm may provide various services to customer TOB trusts, including remarketing agent, liquidity or tender option provider. In certain customer TOB transactions, the Firm, as liquidity provider, has entered into a reimbursement agreement with the Residual holder.
In those transactions, upon the termination of the vehicle, the Firm has recourse to the third-party Residual holders for any shortfall. The Firm does not have any intent to protect Residual holders from potential losses on any of the underlying municipal bonds. The Firm does not consolidate customer TOB trusts, since the Firm does not have the power to make decisions that significantly impact the economic performance of the municipal bond vehicle.
The Firm’s maximum exposure as a liquidity provider to customer TOB trusts at March 31, 20232024 and December 31, 20222023 was $5.9$5.2 billion and $5.8$5.1 billion, respectively. The fair value of assets held by such VIEs at both March 31, 20232024 and December 31, 20222023 was $8.4 billion and $8.2 billion, respectively.$7.3 billion.
Loan securitizations
The Firm has securitized and sold a variety of loans, including residential mortgages, credit card receivables, commercial mortgages and other consumer loans.
Securitization activity
The following table provides information related to the Firm’s securitization activities for the three months ended March 31, 20232024 and 2022,2023, related to assets held in Firm-sponsored securitization entities that were not consolidated by the Firm, and where sale accounting was achieved at the time of the securitization.
| | Three months ended March 31, | |
| 2023 | | 2022 | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| 2024 | |
| 2024 | |
| 2024 | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | Residential mortgage(d) | Commercial and other(e) | | Residential mortgage(d) | Commercial and other(e) | |
Principal securitized | Principal securitized | $ | 1,073 | | $ | — | | | $ | 6,495 | | $ | 3,108 | | |
Principal securitized | |
Principal securitized | |
All cash flows during the period:(a) | |
All cash flows during the period:(a) | |
All cash flows during the period:(a) | All cash flows during the period:(a) | | |
Proceeds received from loan sales as financial instruments(b)(c) | Proceeds received from loan sales as financial instruments(b)(c) | $ | 1,030 | | $ | — | | | $ | 6,375 | | $ | 3,106 | | |
Proceeds received from loan sales as financial instruments(b)(c) | |
Proceeds received from loan sales as financial instruments(b)(c) | |
Servicing fees collected | |
Servicing fees collected | |
Servicing fees collected | Servicing fees collected | 6 | | — | | | 24 | | — | | |
Cash flows received on interests | Cash flows received on interests | 74 | | 87 | | | 155 | | 71 | | |
Cash flows received on interests | |
Cash flows received on interests | |
(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)Represents prime mortgages. Excludes loan securitization activity related to U.S. GSEs and government agencies.
(e)Includes commercial mortgage and other consumerauto loans.
Loans and excess MSRs sold to U.S. government-sponsored
enterprises and loans in securitization transactions pursuant to
Ginnie Mae guidelines
In addition to the amounts reported in the securitization activity tables above, the Firm, in the normal course of business, sells originated and purchased mortgage loans and certain originated excess MSRs on a nonrecourse basis, predominantly to U.S. GSEs. These loans and excess MSRs are sold primarily for the purpose of securitization by the U.S. GSEs, who provide certain guarantee provisions (e.g., credit enhancement of the loans). The Firm also sells loans into securitization transactions pursuant to Ginnie Mae guidelines; these loans are typically insured or guaranteed by another U.S. government agency. The Firm does not consolidate the securitization vehicles underlying these transactions as it is not the primary beneficiary. For a limited number of loan sales, the Firm is obligated to share
a portion of the credit risk associated with the sold loans with the purchaser. Refer to Note 22 of this Form 10-Q for additional information about the Firm’s loan sales- and securitization-related indemnifications and Note 14 for additional information about the impact of the Firm’s sale of certain excess MSRs.
The following table summarizes the activities related to loans sold to the U.S. GSEs, and loans in securitization transactions pursuant to Ginnie Mae guidelines.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | |
Carrying value of loans sold | Carrying value of loans sold | $ | 2,698 | | $ | 23,668 | | |
Carrying value of loans sold | |
Carrying value of loans sold | |
Proceeds received from loan sales as cash | |
Proceeds received from loan sales as cash | |
Proceeds received from loan sales as cash | Proceeds received from loan sales as cash | 7 | | 9 | | |
Proceeds from loan sales as securities(a)(b) | Proceeds from loan sales as securities(a)(b) | 2,662 | | 23,258 | | |
Proceeds from loan sales as securities(a)(b) | |
Proceeds from loan sales as securities(a)(b) | |
Total proceeds received from loan sales(c) | |
Total proceeds received from loan sales(c) | |
Total proceeds received from loan sales(c) | Total proceeds received from loan sales(c) | $ | 2,669 | | $ | 23,267 | | |
Gains/(losses) on loan sales(d)(e) | Gains/(losses) on loan sales(d)(e) | $ | — | | $ | — | | |
Gains/(losses) on loan sales(d)(e) | |
Gains/(losses) on loan sales(d)(e) | |
(a)Includes securities from U.S. GSEs and Ginnie Mae that are generally sold shortly after receipt or retained as part of the Firm’s investment securities portfolio.
(b)Included in level 2 assets.
(c)Excludes the value of MSRs retained upon the sale of loans.
(d)Gains/(losses) on loan sales include the value of MSRs.
(e)The carrying value of the loans accounted for at fair value approximated the proceeds received upon loan sale.
Options to repurchase delinquent loans
In addition to the Firm’s obligation to repurchase certain loans due to material breaches of representations and warranties as discussed in Note 22, the Firm also has the option to repurchase delinquent loans that it services for Ginnie Mae loan pools, as well as for other U.S. government agencies under certain arrangements. The Firm typically elects to repurchase delinquent loans from Ginnie Mae loan
pools as it continues to service them and/or manage the foreclosure process in accordance with the applicable requirements, and such loans continue to be insured or guaranteed. When the Firm’s repurchase option becomes exercisable, such loans must be reported on the Consolidated balance sheets as a loan with a corresponding liability. Refer to Note 11 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 March 31, 20232024 and December 31, 2022.2023. Substantially all of these loans and real estate are insured or guaranteed by U.S. government agencies.
| (in millions) | (in millions) | March 31, 2023 | December 31, 2022 | (in millions) | March 31, 2024 | December 31, 2023 |
Loans repurchased or option to repurchase(a) | Loans repurchased or option to repurchase(a) | $ | 709 | | $ | 839 | |
Real estate owned | Real estate owned | 10 | | 10 | |
Foreclosed government-guaranteed residential mortgage loans(b) | Foreclosed government-guaranteed residential mortgage loans(b) | 23 | | 27 | |
(a)Predominantly all of these amounts relate to loans that have been repurchased from Ginnie Mae loan pools.
(b)Relates to voluntary repurchases of loans, which are included in accrued interest and accounts receivable.
Loan delinquencies and liquidation losses
The table below includes information about components of and delinquencies related to nonconsolidated securitized financial assets held in Firm-sponsored private-label securitization entities, in which the Firm has continuing involvement as of March 31, 2023,2024 and December 31, 2022.2023. For loans sold or securitized where servicing is the Firm’s only form of continuing involvement, the Firm generally experience a loss only if the Firm was required to repurchase a delinquent loan or foreclosed asset due to a breach in representations and warranties associated with its loan sale or servicing contracts.
| | | | | | Net liquidation losses/(recoveries) |
| Securitized assets | | 90 days past due | | Three months ended March 31, | |
| | | | | Net liquidation losses/(recoveries) | |
| | | | | Net liquidation losses/(recoveries) | |
| | | | | Net liquidation losses/(recoveries) | |
| Securitized assets | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | March 31, 2023 | December 31, 2022 | | March 31, 2023 | December 31, 2022 | | 2023 | 2022 | |
Securitized loans | Securitized loans | | |
Securitized loans | |
Securitized loans | |
Residential mortgage: | |
Residential mortgage: | |
Residential mortgage: | Residential mortgage: | | |
Prime / Alt-A & option ARMs | Prime / Alt-A & option ARMs | $ | 37,836 | | $ | 37,058 | | | $ | 528 | | $ | 511 | | | $ | 7 | | $ | (6) | | |
Prime / Alt-A & option ARMs | |
Prime / Alt-A & option ARMs | |
Subprime | |
Subprime | |
Subprime | Subprime | 1,701 | | 1,743 | | | 196 | | 212 | | | 2 | | — | | |
Commercial and other | Commercial and other | 126,194 | | 127,037 | | | 863 | | 948 | | | 19 | | 6 | | |
Commercial and other | |
Commercial and other | |
Total loans securitized | Total loans securitized | $ | 165,731 | | $ | 165,838 | | | $ | 1,587 | | $ | 1,671 | | | $ | 28 | | $ | — | | |
Total loans securitized | |
Total loans securitized | |
Note 14 – Goodwill, and Mortgagemortgage servicing rights, and other intangible assets
Refer to Note 15 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of the accounting policies related to goodwill, and mortgage servicing rights.rights, and other intangible assets.
Goodwill
Goodwill is recorded upon completion of a business combination as the difference between the purchase price and the fair value of the net assets acquired, and can be adjusted up to one year from the acquisition date as additional information pertaining to facts and circumstances that existed as of the acquisition date is obtained about the fair value of assets acquired and liabilities assumed.
The following table presents goodwill attributed to the reportable business segments and Corporate.
| (in millions) | (in millions) | March 31, 2023 | December 31, 2022 | (in millions) | March 31, 2024 | December 31, 2023 |
Consumer & Community Banking | Consumer & Community Banking | $ | 32,121 | | $ | 32,121 | |
Corporate & Investment Bank | Corporate & Investment Bank | 8,008 | | 8,008 | |
Commercial Banking | Commercial Banking | 2,985 | | 2,985 | |
Asset & Wealth Management | Asset & Wealth Management | 8,366 | | 7,902 | |
Corporate | Corporate | 664 | | 646 | |
Total goodwill | Total goodwill | $ | 52,144 | | $ | 51,662 | |
The following table presents changes in the carrying amount of goodwill.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | | 2022 | |
Balance at beginning of period | Balance at beginning of period | $ | 51,662 | | | $ | 50,315 | | |
Balance at beginning of period | |
Balance at beginning of period | |
Changes during the period from: | |
Changes during the period from: | |
Changes during the period from: | Changes during the period from: | | |
Business combinations(a) | Business combinations(a) | 451 | | | — | | |
Business combinations(a) | |
Business combinations(a) | |
Other(b) | |
Other(b) | |
Other(b) | Other(b) | 31 | | | (17) | | |
Balance at March 31, | Balance at March 31, | $ | 52,144 | | | $ | 50,298 | | |
Balance at March 31, | |
Balance at March 31, | |
(a)For the three months ended March 31, 2024, represents estimated goodwill associated with the acquisition of LayerOne Financial in CIB. For the three months ended March 31, 2023, represents estimated goodwill in AWM, as a result of the Firm's acquisition of the remaining 51% interest in CIFM.
(b)PredominantlyPrimarily foreign currency adjustments.
Goodwill impairment testing
Goodwill is tested for impairment during the fourth quarter of each fiscal year, or more often if events or circumstances, such as adverse changes in the business climate, indicate that there may be an impairment. Refer to Note 15 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of the Firm’s goodwill impairment testing.
Unanticipated declines in business performance, increases in credit losses, increases in capital requirements, as well as deterioration in economic or market conditions, adverse regulatory or legislative changes or increases in the estimated market cost of equity, could cause the estimated fair values of the Firm’s reporting units 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, 2023,2024, the Firm reviewed current economic conditions, estimated market cost of equity, as well as actual business results and projections of business performance. Based on such reviews, the Firm has concluded that goodwill was not impaired as of March 31, 2023,2024, or December 31, 2022,2023, nor was goodwill written off due to impairment during the three months ended March 31, 20232024 or 2022.2023.
Mortgage servicing rights
MSRs represent the fair value of expected future cash flows for performing servicing activities for others. The fair value considers estimated future servicing fees and ancillary revenue, offset by estimated costs to service the loans, and generally declines over time as net servicing cash flows are received, effectively amortizing the MSR asset against contractual servicing and ancillary fee income. MSRs are either purchased from third parties or recognized upon sale or securitization of mortgage loans if servicing is retained. Refer to Notes 2 and 15 of JPMorgan Chase’s 20222023 Form 10-K for a further description of the MSR asset, interest rate risk management, and the valuation of MSRs.
The following table summarizes MSR activity for the three months ended March 31, 20232024 and 2022.2023.
| | As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
| As of or for the three months ended March 31, | |
(in millions, except where otherwise noted) | |
(in millions, except where otherwise noted) | |
(in millions, except where otherwise noted) | (in millions, except where otherwise noted) | 2023 | 2022 | |
Fair value at beginning of period | Fair value at beginning of period | $ | 7,973 | | $ | 5,494 | | |
Fair value at beginning of period | |
Fair value at beginning of period | |
MSR activity: | |
MSR activity: | |
MSR activity: | MSR activity: | | |
Originations of MSRs | Originations of MSRs | 32 | | 415 | | |
Originations of MSRs | |
Originations of MSRs | |
Purchase of MSRs(a) | |
Purchase of MSRs(a) | |
Purchase of MSRs(a) | Purchase of MSRs(a) | (1) | | 715 | | |
Disposition of MSRs | Disposition of MSRs | 2 | | (57) | | |
Disposition of MSRs | |
Disposition of MSRs | |
Net additions/(dispositions) | |
Net additions/(dispositions) | |
Net additions/(dispositions) | Net additions/(dispositions) | 33 | | 1,073 | | |
Changes due to collection/realization of expected cash flows | Changes due to collection/realization of expected cash flows | (240) | | (232) | | |
Changes due to collection/realization of expected cash flows | |
Changes due to collection/realization of expected cash flows | |
Changes in valuation due to inputs and assumptions: | |
Changes in valuation due to inputs and assumptions: | |
Changes in valuation due to inputs and assumptions: | Changes in valuation due to inputs and assumptions: | | |
Changes due to market interest rates and other(b) | Changes due to market interest rates and other(b) | (22) | | 894 | | |
Changes due to market interest rates and other(b) | |
Changes due to market interest rates and other(b) | |
Changes in valuation due to other inputs and assumptions: | |
Changes in valuation due to other inputs and assumptions: | |
Changes in valuation due to other inputs and assumptions: | Changes in valuation due to other inputs and assumptions: | | |
Projected cash flows (e.g., cost to service) | Projected cash flows (e.g., cost to service) | — | | — | | |
Projected cash flows (e.g., cost to service) | |
Projected cash flows (e.g., cost to service) | |
Discount rates | |
Discount rates | |
Discount rates | Discount rates | — | | — | | |
Prepayment model changes and other(c) | Prepayment model changes and other(c) | 11 | | 65 | | |
Prepayment model changes and other(c) | |
Prepayment model changes and other(c) | |
Total changes in valuation due to other inputs and assumptions | |
Total changes in valuation due to other inputs and assumptions | |
Total changes in valuation due to other inputs and assumptions | Total changes in valuation due to other inputs and assumptions | 11 | | 65 | | |
Total changes in valuation due to inputs and assumptions | Total changes in valuation due to inputs and assumptions | (11) | | 959 | | |
Total changes in valuation due to inputs and assumptions | |
Total changes in valuation due to inputs and assumptions | |
Fair value at March 31, | |
Fair value at March 31, | |
Fair value at March 31, | Fair value at March 31, | $ | 7,755 | | $ | 7,294 | | |
Changes in unrealized gains/(losses) included in income related to MSRs held at March 31, | Changes in unrealized gains/(losses) included in income related to MSRs held at March 31, | $ | (11) | | $ | 959 | | |
Changes in unrealized gains/(losses) included in income related to MSRs held at March 31, | |
Changes in unrealized gains/(losses) included in income related to MSRs held at March 31, | |
Contractual service fees, late fees and other ancillary fees included in income | |
Contractual service fees, late fees and other ancillary fees included in income | |
Contractual service fees, late fees and other ancillary fees included in income | Contractual service fees, late fees and other ancillary fees included in income | 388 | | 370 | | |
Third-party mortgage loans serviced at March 31, (in billions) | Third-party mortgage loans serviced at March 31, (in billions) | 577 | | 576 | | |
Third-party mortgage loans serviced at March 31, (in billions) | |
Third-party mortgage loans serviced at March 31, (in billions) | |
Servicer advances, net of an allowance for uncollectible amounts, at March 31(d) | Servicer advances, net of an allowance for uncollectible amounts, at March 31(d) | 671 | | 1,426 | | |
Servicer advances, net of an allowance for uncollectible amounts, at March 31(d) | |
Servicer advances, net of an allowance for uncollectible amounts, at March 31(d) | |
(a)Includes purchase price adjustments associated with MSRs purchased in the prior quarter, primarily as a result of loans that prepaid within 90 days of settlement, allowing the Firm to recover the purchase price.
(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.
The following table presents the components of mortgage fees and related income (including the impact of MSR risk management activities) for the three months ended March 31, 20232024 and 2022.2023.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | |
CCB mortgage fees and related income | CCB mortgage fees and related income | | |
CCB mortgage fees and related income | |
CCB mortgage fees and related income | |
Production revenue | |
Production revenue | |
Production revenue | Production revenue | $ | 75 | | $ | 211 | | |
| Net mortgage servicing revenue: | Net mortgage servicing revenue: | | |
| Net mortgage servicing revenue: | |
| Net mortgage servicing revenue: | |
Operating revenue: | |
Operating revenue: | |
Operating revenue: | Operating revenue: | | |
Loan servicing revenue | Loan servicing revenue | 400 | | 368 | | |
Loan servicing revenue | |
Loan servicing revenue | |
Changes in MSR asset fair value due to collection/realization of expected cash flows | |
Changes in MSR asset fair value due to collection/realization of expected cash flows | |
Changes in MSR asset fair value due to collection/realization of expected cash flows | Changes in MSR asset fair value due to collection/realization of expected cash flows | (240) | | (232) | | |
Total operating revenue | Total operating revenue | 160 | | 136 | | |
Total operating revenue | |
Total operating revenue | |
Risk management: | |
Risk management: | |
Risk management: | Risk management: | | |
Changes in MSR asset fair value due to market interest rates and other(a) | Changes in MSR asset fair value due to market interest rates and other(a) | (22) | | 894 | | |
Changes in MSR asset fair value due to market interest rates and other(a) | |
Changes in MSR asset fair value due to market interest rates and other(a) | |
Other changes in MSR asset fair value due to other inputs and assumptions in model(b) | |
Other changes in MSR asset fair value due to other inputs and assumptions in model(b) | |
Other changes in MSR asset fair value due to other inputs and assumptions in model(b) | Other changes in MSR asset fair value due to other inputs and assumptions in model(b) | 11 | | 65 | | |
Changes in derivative fair value and other | Changes in derivative fair value and other | (1) | | (850) | | |
Changes in derivative fair value and other | |
Changes in derivative fair value and other | |
Total risk management | |
Total risk management | |
Total risk management | Total risk management | (12) | | 109 | | |
Total net mortgage servicing revenue | Total net mortgage servicing revenue | 148 | | 245 | | |
Total net mortgage servicing revenue | |
Total net mortgage servicing revenue | |
Total CCB mortgage fees and related income | |
Total CCB mortgage fees and related income | |
Total CCB mortgage fees and related income | Total CCB mortgage fees and related income | 223 | | 456 | | |
All other | All other | (2) | | 4 | | |
All other | |
All other | |
Mortgage fees and related income | Mortgage fees and related income | $ | 221 | | $ | 460 | | |
Mortgage fees and related income | |
Mortgage fees and related income | |
(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).
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 the following 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.
The table below outlines the key economic assumptions used to determine the fair value of the Firm’s MSRs at March 31, 2023,2024 and December 31, 2022,2023, and outlines hypotheticalthe sensitivities of those fair values to immediate adverse changes in those assumptions, as defined below.
| (in millions, except rates) | (in millions, except rates) | Mar 31, 2023 | | Dec 31, 2022 | (in millions, except rates) | Mar 31, 2024 | | Dec 31, 2023 |
Weighted-average prepayment speed assumption (constant prepayment rate) | Weighted-average prepayment speed assumption (constant prepayment rate) | 6.32 | % | | 6.12 | % | Weighted-average prepayment speed assumption (constant prepayment rate) | 6.22 | % | | 6.29 | % |
Impact on fair value of 10% adverse change | Impact on fair value of 10% adverse change | $ | (183) | | | $ | (183) | |
Impact on fair value of 20% adverse change | Impact on fair value of 20% adverse change | (355) | | | (356) | |
Weighted-average option adjusted spread(a) | Weighted-average option adjusted spread(a) | 5.90 | % | | 5.77 | % | Weighted-average option adjusted spread(a) | 5.99 | % | | 6.10 | % |
Impact on fair value of a 100 basis point adverse change | Impact on fair value of a 100 basis point adverse change | $ | (332) | | | $ | (341) | |
Impact on fair value of a 200 basis point adverse change | Impact on fair value of a 200 basis point adverse change | (637) | | | (655) | |
(a)Includes the impact of operational risk and regulatory capital.
Other intangible assets
The Firm’s finite-lived and indefinite-lived other intangible assets are initially recorded at their fair value primarily upon completion of a business combination. Finite-lived intangible assets, including core deposit intangibles, customer relationship intangibles, and certain other intangible assets, are amortized over their useful lives, estimated based on the expected future economic benefits. The Firm’s intangible assets with indefinite lives, such as asset management contracts, are not subject to amortization and are assessed periodically for impairment.
As of March 31, 2024 and December 31, 2023, other intangible assets consisted of finite-lived intangible assets of $1.9 billion and $2.0 billion, respectively, as well as indefinite-lived intangible assets, which are not subject to amortization, of $1.2 billion for both periods.
Note 15 – Deposits
Refer to Note 17 of JPMorgan Chase’s 20222023 Form 10-K for further information on deposits.
AtAs of March 31, 20232024 and December 31, 2022,2023, noninterest-bearing and interest-bearing deposits were as follows.follows:
| (in millions) | (in millions) | March 31, 2023 | | December 31, 2022 | (in millions) | March 31, 2024 | | December 31, 2023 |
U.S. offices | U.S. offices | |
Noninterest-bearing (included $38,803 and $26,363 at fair value)(a) | $ | 663,772 | | | $ | 644,902 | |
Interest-bearing (included $595 and $586 at fair value)(a) | 1,290,614 | | | 1,276,346 | |
Noninterest-bearing (included $77,571 and $75,393 at fair value)(a) | |
Noninterest-bearing (included $77,571 and $75,393 at fair value)(a) | |
Noninterest-bearing (included $77,571 and $75,393 at fair value)(a) | |
Interest-bearing (included $563 and $573 at fair value)(a) | |
Total deposits in U.S. offices | Total deposits in U.S. offices | 1,954,386 | | | 1,921,248 | |
Non-U.S. offices | Non-U.S. offices | |
Noninterest-bearing (included $1,443 and $1,398 at fair value)(a) | 25,071 | | | 27,005 | |
Interest-bearing (included $739 and $273 at fair value)(a) | 397,796 | | | 391,926 | |
Noninterest-bearing (included $1,991 and $1,737 at fair value)(a) | |
Noninterest-bearing (included $1,991 and $1,737 at fair value)(a) | |
Noninterest-bearing (included $1,991 and $1,737 at fair value)(a) | |
Interest-bearing (included $453 and $681 at fair value)(a) | |
Total deposits in non-U.S. offices | Total deposits in non-U.S. offices | 422,867 | | | 418,931 | |
Total deposits | Total deposits | $ | 2,377,253 | | | $ | 2,340,179 | |
(a)Includes structured notes classified as deposits for which the fair value option has been elected. Refer to Note 3 for further discussion.
As of March 31, 2024, the remaining maturities of interest-bearing time deposits in each of the 12-month periods ending March 31 were as follows:
| | | | | | | | | | | | | | | | | | | | |
March 31, (in millions) | | | | | | |
| U.S. | | Non-U.S. | | Total |
2025 | | $ | 214,783 | | | $ | 86,559 | | | $ | 301,342 | |
2026 | | 931 | | | 52 | | | 983 | |
2027 | | 234 | | | 18 | | | 252 | |
2028 | | 157 | | | 38 | | | 195 | |
2029 | | 367 | | | 780 | | | 1,147 | |
After 5 years | | 214 | | | 55 | | | 269 | |
Total | | $ | 216,686 | | | $ | 87,502 | | | $ | 304,188 | |
Note 16 – Leases
Refer to Note 18 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion on leases.
Firm as lessee
At March 31, 2023,2024, JPMorgan Chase and its subsidiaries were obligated under a number of noncancellable leases, predominantly operating leases for premises and equipment used primarily for business purposes.
Operating lease liabilities and right-of-use (“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 following table provides information related tocarrying values of the Firm’s operating leases:leases were as follows:
| (in millions) | (in millions) | March 31, 2023 | December 31, 2022 | |
(in millions) | |
(in millions) | |
Right-of-use assets | |
Right-of-use assets | |
Right-of-use assets | Right-of-use assets | $ | 7,727 | | $ | 7,782 | | |
Lease liabilities | Lease liabilities | 8,113 | | 8,183 | | |
Lease liabilities | |
Lease liabilities | |
The Firm’s net rental expense was $487$541 million and $495$487 million for the three months ended March 31, 20232024 and 2022,2023, respectively.
Firm as lessor
The Firm’s lease financings are predominantly auto operating leases, and are included in other assets on the Firm’s Consolidated balance sheets.
The following table presents the Firm’s operating lease income, included within other income, and the related depreciation expense, included within technology, communications and equipment expense, on the Consolidated statements of income:income.
| | Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
| Three months ended March 31, | |
(in millions) | |
(in millions) | |
(in millions) | (in millions) | 2023 | 2022 | |
Operating lease income | Operating lease income | $ | 755 | | $ | 1,048 | | |
Operating lease income | |
Operating lease income | |
Depreciation expense | Depreciation expense | 419 | | 711 | | |
Depreciation expense | |
Depreciation expense | |
Note 17 -– Preferred stock
Refer to Note 21 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion on preferred stock.
The following is a summary of JPMorgan Chase’s non-cumulative preferred stock outstanding as of March 31, 20232024 and December 31, 2022,2023, and the quarterly dividend declarations for the three months ended March 31, 20232024 and 2022.2023.
| | Shares | Carrying value (in millions) | | Contractual rate in effect at March 31, 2023 | Earliest redemption date | Floating annualized rate(a) | Dividend declared per share | |
| March 31, 2023 | December 31, 2022 | March 31, 2023 | December 31, 2022 | Issue date | Three months ended March 31, | | |
| | | Contractual rate in effect at March 31, 2023 | Earliest redemption date | Floating annualized rate(a) |
| Shares(a) | |
| Shares(a) | |
| Shares(a) | |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | |
| 2024 | |
| 2024 | |
| 2024 | |
Fixed-rate: | |
Fixed-rate: | |
Fixed-rate: | Fixed-rate: | | | |
| Series DD | Series DD | 169,625 | | 169,625 | | $ | 1,696 | | $ | 1,696 | | 9/21/2018 | 5.750 | % | 12/1/2023 | NA | $ | 143.75 | | $ | 143.75 | | | |
| Series DD | |
| Series DD | |
Series EE | |
Series EE | |
Series EE | Series EE | 185,000 | | 185,000 | | 1,850 | | 1,850 | | 1/24/2019 | 6.000 | | 3/1/2024 | NA | 150.00 | | 150.00 | | | |
Series GG | Series GG | 90,000 | | 90,000 | | 900 | | 900 | | 11/7/2019 | 4.750 | | 12/1/2024 | NA | 118.75 | | 118.75 | | | |
Series GG | |
Series GG | |
Series JJ | |
Series JJ | |
Series JJ | Series JJ | 150,000 | | 150,000 | | 1,500 | | 1,500 | | 3/17/2021 | 4.550 | | 6/1/2026 | NA | 113.75 | | 113.75 | | | |
Series LL | Series LL | 185,000 | | 185,000 | | 1,850 | | 1,850 | | 5/20/2021 | 4.625 | | 6/1/2026 | NA | 115.63 | | 115.63 | | | |
Series LL | |
Series LL | |
Series MM | Series MM | 200,000 | | 200,000 | | 2,000 | | 2,000 | | 7/29/2021 | 4.200 | | 9/1/2026 | NA | 105.00 | | 105.00 | | | |
Fixed-to-floating-rate: | | | |
Series I | — | | — | | $ | — | | $ | — | | 4/23/2008 | — | % | 4/30/2018 | LIBOR + 3.47% | $ | — | | $ | 92.13 | | | |
Series MM | |
Series MM | |
| Fixed-to-floating rate: | |
| Fixed-to-floating rate: | |
| Fixed-to-floating rate: | |
| Series Q | |
| Series Q | |
| Series Q | Series Q | 150,000 | | 150,000 | | 1,500 | | 1,500 | | 4/23/2013 | 5.150 | | 5/1/2023 | LIBOR + 3.25 | 128.75 | | 128.75 | | | |
Series R | Series R | 150,000 | | 150,000 | | 1,500 | | 1,500 | | 7/29/2013 | 6.000 | | 8/1/2023 | LIBOR + 3.30 | 150.00 | | 150.00 | | | |
Series R | |
Series R | |
Series S | |
Series S | |
Series S | Series S | 200,000 | | 200,000 | | 2,000 | | 2,000 | | 1/22/2014 | 6.750 | | 2/1/2024 | LIBOR + 3.78 | 168.75 | | 168.75 | | | |
Series U | Series U | 100,000 | | 100,000 | | 1,000 | | 1,000 | | 3/10/2014 | 6.125 | | 4/30/2024 | LIBOR + 3.33 | 153.13 | | 153.13 | | | |
Series V | — | | — | | — | | — | | 6/9/2014 | — | | 7/1/2019 | LIBOR + 3.32 | — | | 86.40 | | | |
Series U | |
Series U | |
| Series X | Series X | 160,000 | | 160,000 | | 1,600 | | 1,600 | | 9/23/2014 | 6.100 | | 10/1/2024 | LIBOR + 3.33 | 152.50 | | 152.50 | | | |
Series Z | — | | — | | — | | — | | 4/21/2015 | — | | 5/1/2020 | LIBOR + 3.80 | — | | — | | | |
| Series X | |
| Series X | |
| Series CC | |
| Series CC | |
| Series CC | Series CC | 125,750 | | 125,750 | | 1,258 | | 1,258 | | 10/20/2017 | LIBOR + 2.58 | 11/1/2022 | LIBOR + 2.58 | 182.79 | | 115.63 | | | (b) |
Series FF | Series FF | 225,000 | | 225,000 | | 2,250 | | 2,250 | | 7/31/2019 | 5.000 | | 8/1/2024 | SOFR + 3.38 | 125.00 | | 125.00 | | | |
Series FF | |
Series FF | |
Series HH | |
Series HH | |
Series HH | Series HH | 300,000 | | 300,000 | | 3,000 | | 3,000 | | 1/23/2020 | 4.600 | | 2/1/2025 | SOFR + 3.125 | 115.00 | | 115.00 | | | |
Series II | Series II | 150,000 | | 150,000 | | 1,500 | | 1,500 | | 2/24/2020 | 4.000 | | 4/1/2025 | SOFR + 2.745 | 100.00 | | 100.00 | | | |
Series II | |
Series II | |
Series KK | Series KK | 200,000 | | 200,000 | | 2,000 | | 2,000 | | 5/12/2021 | 3.650 | | 6/1/2026 | CMT + 2.85 | 91.25 | | 91.25 | | | |
Series KK | |
Series KK | |
Series NN | |
Series NN | |
Series NN | |
Total preferred stock | Total preferred stock | 2,740,375 | | 2,740,375 | | $ | 27,404 | | $ | 27,404 | | | | |
Total preferred stock | |
Total preferred stock | |
(a)FloatingRepresented by depositary shares.
(b)Each series of fixed-to-floating rate preferred stock converts to a floating rate at the earliest redemption date.
(c)Effective June 30, 2023, CME Term SOFR became the replacement reference rate for fixed-to-floating rate preferred stock issued by the Firm that formerly referenced U.S. dollar LIBOR. References in the table to “SOFR” mean a floating annualized rate includes three-month LIBOR,equal to three-month term SOFR or(plus a spread adjustment of 0.26% per annum) plus the spreads noted. The reference to “CMT” means a floating annualized rate equal to the five-year Constant Maturity Treasury (“CMT”) rate as applicable, plus the spreads noted above.spread noted.
(b)(d)The dividend rate for Series CCQ preferred stock became floating and payable quarterly starting on NovemberMay 1, 2022;2023; prior to which the dividend rate was fixed at 4.625%5.15% or $231.25$257.50 per share payable semiannually. The dividend rate for each quarterly dividend period commencing on August 1, 2023 is three-month term SOFR (plus a spread adjustment of 0.26% per annum) plus the spread of 3.25%.
(e)The dividend rate for Series R preferred stock became floating and payable quarterly starting on August 1, 2023; prior to which the dividend rate was fixed at 6.00% or $300.00 per share payable semiannually. The dividend rate for each quarterly dividend period commencing on August 1, 2023 is three-month term SOFR (plus a spread adjustment of 0.26% per annum) plus the spread of 3.30%.
(f)The dividend rate for Series S preferred stock became floating and payable quarterly starting on February 1, 2024; prior to which the dividend rate was fixed at 6.75% or $337.50 per share payable semiannually. The dividend rate for each quarterly dividend period commencing on February 1, 2024 is three-month term SOFR (plus a spread adjustment of 0.26% per annum) plus the spread of 3.78%.
(g)As of March 31, 2024, no dividends had been declared on the Series NN preferred stock since the original issue date of March 12, 2024.
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 $27.7$30.2 billion at March 31, 2023.2024.
On March 12, 2024, the Firm issued $2.5 billion of fixed-rate reset non-cumulative preferred stock, Series NN.
Redemptions
On October 31, 2022,May 1, 2024, the Firm redeemed all $2.93 billion of its fixed to floating rate non-cumulative perpetual preferred stock, Series I.
On October 3, 2022, the Firm redeemed all $2.5$5.0 billion of its fixed-to-floating rate non-cumulative preferred stock, Series V.Q, Series R and Series S.
On February 1, 2022,April 30, 2024, the Firm redeemed all $2.0$1.0 billion of its fixed-to-floating rate non-cumulative preferred stock, Series Z.
U.
Note 18 – Earnings per share
Refer to Note 23 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of the computation of basic and diluted earnings per share (“EPS”). The following table presents the calculation of basic and diluted EPS for the three months ended March 31, 20232024 and 2022.2023.
| (in millions, except per share amounts) | (in millions, except per share amounts) | Three months ended March 31, | |
2023 | 2022 | |
(in millions, except per share amounts) | |
| 2024 | |
2024 | |
Basic earnings per share | |
Basic earnings per share | |
Basic earnings per share | Basic earnings per share | | |
Net income | Net income | $ | 12,622 | | $ | 8,282 | | |
Net income | |
Net income | |
Less: Preferred stock dividends | |
Less: Preferred stock dividends | |
Less: Preferred stock dividends | Less: Preferred stock dividends | 356 | | 397 | | |
Net income applicable to common equity | Net income applicable to common equity | 12,266 | | 7,885 | | |
Net income applicable to common equity | |
Net income applicable to common equity | |
Less: Dividends and undistributed earnings allocated to participating securities | Less: Dividends and undistributed earnings allocated to participating securities | 73 | | 40 | | |
Less: Dividends and undistributed earnings allocated to participating securities | |
Less: Dividends and undistributed earnings allocated to participating securities | |
Net income applicable to common stockholders | |
Net income applicable to common stockholders | |
Net income applicable to common stockholders | Net income applicable to common stockholders | $ | 12,193 | | $ | 7,845 | | |
| Total weighted-average basic shares outstanding | Total weighted-average basic shares outstanding | 2,968.5 | | 2,977.0 | | |
| Total weighted-average basic shares outstanding | |
| Total weighted-average basic shares outstanding | |
Net income per share | |
Net income per share | |
Net income per share | Net income per share | $ | 4.11 | | $ | 2.64 | | |
| Diluted earnings per share | Diluted earnings per share | | |
| Diluted earnings per share | |
| Diluted earnings per share | |
Net income applicable to common stockholders | |
Net income applicable to common stockholders | |
Net income applicable to common stockholders | Net income applicable to common stockholders | $ | 12,193 | | $ | 7,845 | | |
Total weighted-average basic shares outstanding | Total weighted-average basic shares outstanding | 2,968.5 | | 2,977.0 | | |
Total weighted-average basic shares outstanding | |
Total weighted-average basic shares outstanding | |
Add: Dilutive impact of unvested PSUs, nondividend-earning RSUs and SARs | |
Add: Dilutive impact of unvested PSUs, nondividend-earning RSUs and SARs | |
Add: Dilutive impact of unvested PSUs, nondividend-earning RSUs and SARs | Add: Dilutive impact of unvested PSUs, nondividend-earning RSUs and SARs | 4.2 | | 4.0 | | |
Total weighted-average diluted shares outstanding | Total weighted-average diluted shares outstanding | 2,972.7 | | 2,981.0 | | |
Total weighted-average diluted shares outstanding | |
Total weighted-average diluted shares outstanding | |
Net income per share | Net income per share | $ | 4.10 | | $ | 2.63 | | |
Net income per share | |
Net income per share | |
Note 19 – 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 gain/(loss) related to the Firm’s defined benefit pension and OPEB plans, and fair value option-elected liabilities arising from changes in the Firm’s own credit risk (DVA).
| As of or for the three months ended March 31, 2024 (in millions) | | As of or for the three months ended March 31, 2024 (in millions) | Unrealized gains/(losses) on investment securities | | Translation adjustments, net of hedges | | Fair value hedges | Cash flow hedges | | Defined benefit pension and OPEB plans | DVA on fair value option elected liabilities | Accumulated other comprehensive income/(loss) |
| Balance at January 1, 2024 | |
Balance at January 1, 2024 | |
Balance at January 1, 2024 | |
Balance at January 1, 2024 | |
Balance at January 1, 2024 | |
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Net change | |
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Balance at March 31, 2024 | |
Balance at March 31, 2024 | |
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| As of or for the three months ended March 31, 2023 (in millions) | As of or for the three months ended March 31, 2023 (in millions) | | Unrealized gains/(losses) on investment securities | | Translation adjustments, net of hedges | | Fair value hedges | Cash flow hedges | | Defined benefit pension and OPEB plans | DVA on fair value option elected liabilities | Accumulated other comprehensive income/(loss) |
| As of or for the three months ended March 31, 2023 (in millions) | As of or for the three months ended March 31, 2023 (in millions) | | Unrealized gains/(losses) on investment securities | | Translation adjustments, net of hedges | | Fair value hedges | Cash flow hedges | | Defined benefit pension and OPEB plans | DVA on fair value option elected liabilities | Accumulated other comprehensive income/(loss) |
| As of or for the three months ended March 31, 2023 (in millions) | | Unrealized gains/(losses) on investment securities | | Translation adjustments, net of hedges | | Fair value hedges | Cash flow hedges | | Defined benefit pension and OPEB plans | DVA on fair value option elected liabilities | Accumulated other comprehensive income/(loss) |
| Balance at January 1, 2023 | |
Balance at January 1, 2023 | |
Balance at January 1, 2023 | |
Balance at January 1, 2023 | |
Balance at January 1, 2023 | |
Balance at January 1, 2023 | |
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Balance at January 1, 2023 | |
Balance at January 1, 2023 | |
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Balance at January 1, 2023 | |
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Balance at January 1, 2023 | |
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Balance at January 1, 2023 | Balance at January 1, 2023 | | $ | (9,124) | | | $ | (1,545) | | | $ | (33) | | | $ | (5,656) | | | $ | (1,451) | | | $ | 468 | | | $ | (17,341) | | |
Net change | Net change | | 2,212 | | | 197 | | | (21) | | | 798 | | | (55) | | | (208) | | | 2,923 | | |
Net change | |
Net change | |
Balance at March 31, 2023 | Balance at March 31, 2023 | | $ | (6,912) | | (a) | | $ | (1,348) | | | $ | (54) | | | $ | (4,858) | | | $ | (1,506) | | | $ | 260 | | | $ | (14,418) | | |
| As of or for the three months ended March 31, 2022 (in millions) | | Unrealized gains/(losses) on investment securities | | Translation adjustments, net of hedges | | Fair value hedges | Cash flow hedges | | Defined benefit pension and OPEB plans | DVA on fair value option elected liabilities | Accumulated other comprehensive income/(loss) |
| Balance at January 1, 2022 | | $ | 2,640 | | | $ | (934) | | | $ | (131) | | | $ | (296) | | | $ | (210) | | | $ | (1,153) | | | $ | (84) | | |
Net change | | (7,453) | | | (62) | | | 110 | | | (2,791) | | | 67 | | | 646 | | | (9,483) | | |
Balance at March 31, 2022 | | $ | (4,813) | | (a) | | $ | (996) | | | $ | (21) | | | $ | (3,087) | | | $ | (143) | | | $ | (507) | | | $ | (9,567) | | |
Balance at March 31, 2023 | |
Balance at March 31, 2023 | |
| | | | | | |
(a)As of March 31, 2024 and 2023 includesincluded after-tax net unamortized unrealized gains/(losses) of $(29.1)$(824) million and $(1.3) billion related to AFS securities that have been transferred to HTM, respectively. As of March 31, 2023 included after-tax net unamortized unrealized gains/(losses) of $(29) million related to HTM securities that have been transferred to AFS as permitted by the new hedge accounting guidance. As of March 31, 2023 and 2022 includes after-tax net unamortized unrealized gains/(losses) of $(1.3) billion and $2.2 billion, related to AFS securities that have been transferred to HTM, respectively.guidance adopted on January 1, 2023. Refer to Note 9 of this Form 10-Q, and Note 10 of JPMorgan Chase's 2022 Form 10-K for further information.
The following table presents the pre-tax and after-tax changes in the components of OCI.
| | 2023 | | 2022 |
| 2024 | | | 2024 | | 2023 |
Three months ended March 31, (in millions) | Three months ended March 31, (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: | Unrealized gains/(losses) on investment securities: | |
Net unrealized gains/(losses) arising during the period | |
Net unrealized gains/(losses) arising during the period | |
Net unrealized gains/(losses) arising during the period | Net unrealized gains/(losses) arising during the period | $ | 2,042 | | | $ | (490) | | | $ | 1,552 | | | $ | (10,202) | | | $ | 2,450 | | | $ | (7,752) | |
Reclassification adjustment for realized (gains)/losses included in net income(a) | Reclassification adjustment for realized (gains)/losses included in net income(a) | 868 | | | (208) | | | 660 | | | 394 | | | (95) | | | 299 | |
Net change | Net change | 2,910 | | | (698) | | | 2,212 | | | (9,808) | | | 2,355 | | | (7,453) | |
Translation adjustments(b): | Translation adjustments(b): | |
Translation | Translation | 973 | | | (41) | | | 932 | | | (341) | | | 24 | | | (317) | |
Translation | |
Translation | |
Hedges | Hedges | (963) | | | 228 | | | (735) | | | 338 | | | (83) | | | 255 | |
Net change | Net change | 10 | | | 187 | | | 197 | | | (3) | | | (59) | | | (62) | |
Fair value hedges, net change(c): | (28) | | | 7 | | | (21) | | | 145 | | | (35) | | | 110 | |
Fair value hedges, net change(c) | |
Cash flow hedges: | Cash flow hedges: | |
Net unrealized gains/(losses) arising during the period | |
Net unrealized gains/(losses) arising during the period | |
Net unrealized gains/(losses) arising during the period | Net unrealized gains/(losses) arising during the period | 567 | | | (136) | | | 431 | | | (3,436) | | | 825 | | | (2,611) | |
Reclassification adjustment for realized (gains)/losses included in net income(d) | Reclassification adjustment for realized (gains)/losses included in net income(d) | 483 | | | (116) | | | 367 | | | (237) | | | 57 | | | (180) | |
Net change | Net change | 1,050 | | | (252) | | | 798 | | | (3,673) | | | 882 | | | (2,791) | |
Defined benefit pension and OPEB plans, net change: | (71) | | | 16 | | | (55) | | | 90 | | | (23) | | | 67 | |
DVA on fair value option elected liabilities, net change: | (274) | | | 66 | | | (208) | | | 859 | | | (213) | | | 646 | |
Defined benefit pension and OPEB plans, net change | |
DVA on fair value option elected liabilities, net change | |
Total other comprehensive income/(loss) | Total other comprehensive income/(loss) | $ | 3,597 | | | $ | (674) | | | $ | 2,923 | | | $ | (12,390) | | | $ | 2,907 | | | $ | (9,483) | |
| | |
(a)The pre-tax amount is reported in Investment securities gains/(losses) in the Consolidated statements of income.
(b)Reclassifications of pre-tax realized gains/(losses) on translation adjustments and related hedges are reported in other income/expense in the Consolidated statements of income. There were no sales or liquidations of legal entities that resulted in reclassifications for the three month period endedMarch 31, 2024. During the three months ended March 31, 2023, the Firm reclassified a net pre-tax loss of $(5) million to other revenue related to the acquisition of CIFM of which $(41) million related to the net investment hedge loss. There were no sales or liquidations of legal entities that resulted in reclassifications for the three month period ended March 31, 2022.
(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 currencycross-currency swaps.
(d)The pre-tax amounts are primarily recorded in noninterest revenue, net interest income and compensation expense in the Consolidated statements of income.
Note 20 – Restricted cash and other restricted
assets
Refer to Note 26 of JPMorgan Chase’s 20222023 Form 10-K for a detailed discussion of the Firm’s restricted cash and other restricted assets.
Certain of the Firm’s cash and other assets are restricted as to withdrawal or usage. These restrictions are imposed by various regulatory authorities based on the particular activities of the Firm’s subsidiaries.
The Firm is also subject to rules and regulations established by other U.S. and non-U.S. regulators. As part of its compliance with the respective regulatory requirements, the Firm’s broker-dealer activities are subject to certain restrictions on cash and other assets.
The following table presents the components of the Firm’s restricted cash:
| (in billions) | (in billions) | March 31, 2023 | December 31, 2022 | (in billions) | March 31, 2024 | December 31, 2023 |
Segregated for the benefit of securities and cleared derivative customers | Segregated for the benefit of securities and cleared derivative customers | $ | 13.3 | | $ | 18.7 | |
Cash reserves at non-U.S. central banks and held for other general purposes | Cash reserves at non-U.S. central banks and held for other general purposes | 8.3 | | 8.1 | |
Total restricted cash(a) | Total restricted cash(a) | $ | 21.6 | | $ | 26.8 | |
(a)Comprises $20.2$19.3 billion and $25.4$18.2 billion in deposits with banks, and $1.4$1.1 billion and $1.4 billion in cash and due from banks on the Consolidated balance sheetsheets as of March 31, 20232024 and December 31, 2022,2023, respectively.
Also, as of March 31, 20232024 and December 31, 2022,2023, the Firm had the following other restricted assets:
•Cash and securities pledged with clearing organizations for the benefit of customers of $44.4$38.1 billion and $42.4$40.5 billion, respectively.
•Securities with a fair value of $27.5$13.7 billion and $31.7$20.5 billion, respectively, were also restricted in relation to customer activity.
Note 21 – Regulatory capital
Refer to Note 27 of JPMorgan Chase’s 20222023 Form 10-K for a detailed discussion on regulatory capital.
The Federal Reserve establishes capital requirements, including well-capitalized requirements,standards, for the Firm as a consolidated financial holding company. The Office of the Comptroller of the Currency ("OCC")OCC establishes similar minimum capital requirements and standards for the Firm’s principal IDIinsured depository institution ("IDI") subsidiary, JPMorgan Chase Bank, N.A.
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 areJPMorgan Chase Bank, N.A. is also subject to these capital requirements established by their respectiveits primary regulators.
The following table presents the risk-based regulatory capital ratio requirements and well-capitalized ratios to which the Firm and its IDI subsidiariesJPMorgan Chase Bank, N.A. were subject as of March 31, 20232024 and December 31, 2022.2023.
| | Standardized capital ratio requirements | | Advanced capital ratio requirements | | Well-capitalized ratios |
| BHC(a)(b) | IDI(c) | | BHC(a)(b) | IDI(c) | | BHC(d) | IDI(e) |
| Standardized capital ratio requirements | | | Standardized capital ratio requirements | | Advanced capital ratio requirements | | Well-capitalized ratios |
| BHC(a)(b) | | | BHC(a)(b) | IDI(c) | | BHC(a)(b) | IDI(c) | | BHC(d) | IDI(e) |
Risk-based capital ratios | Risk-based capital ratios | |
CET1 capital | |
CET1 capital | |
CET1 capital | CET1 capital | 12.5 | % | 7.0 | % | | 11.0 | % | 7.0 | % | | NA | 6.5 | % | 11.9 | % | 7.0 | % | | 11.5 | % | 7.0 | % | | NA | 6.5 | % |
Tier 1 capital | Tier 1 capital | 14.0 | | 8.5 | | | 12.5 | | 8.5 | | | 6.0 | % | 8.0 | |
Total capital | Total capital | 16.0 | | 10.5 | | | 14.5 | | 10.5 | | | 10.0 | | 10.0 | |
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 subsidiariesJPMorgan Chase Bank, N.A. are subject.
(a)Represents the regulatory capital ratio requirements applicable to the Firm. The CET1, Tier 1 and Total capital ratio requirements each include a respective minimum requirement plus a GSIB surcharge of 4.0%4.5% as calculated under Method 2; plus a 4.0%2.9% SCB for Basel III Standardized ratios and a fixed 2.5% capital conservation buffer for Basel III Advanced ratios. The countercyclical buffer is currently set to 0% by the federal banking agencies.
(b)For the period ended December 31, 2022,2023, the CET1, Tier 1, and Total capital ratio requirements under Basel III Standardized applicable to the Firm were 12.0%11.4%, 13.5%12.9%, and 15.5%14.9%, respectively; the Basel III Advanced CET1, Tier 1, and Total capital ratio requirements applicable to the Firm were 10.5%11.0%, 12.0%12.5%, and 14.0%14.5%, respectively.
(c)Represents requirements for JPMorgan Chase’s IDI subsidiaries.Chase Bank, N.A. The CET1, Tier 1 and Total capital ratio requirements include a fixed capital conservation buffer requirement of 2.5% that is applicable to the IDI subsidiaries. The IDI subsidiaries areJPMorgan Chase Bank, N.A. JPMorgan Chase Bank, N.A. is not subject to the GSIB surcharge.
(d)Represents requirements for bank holding companies pursuant to regulations issued by the Federal Reserve.
(e)Represents requirements for IDI subsidiariesJPMorgan Chase Bank, N.A. pursuant to regulations issued under the FDIC Improvement Act.
The following table presents the leverage-based regulatory capital ratio requirements and well-capitalized ratios to which the Firm and its IDI subsidiariesJPMorgan Chase Bank, N.A. were subject as of March 31, 20232024 and December 31, 2022.2023.
| | | | | | | | | | | | | | | | | | | | |
| | Capital ratio requirements(a) | | Well-capitalized ratios |
| | BHC | IDI | | BHC(b) | IDI |
Leverage-based capital ratios | | | | | | |
Tier 1 leverage | | 4.0 | % | 4.0 | % | | NA | 5.0 | % |
SLR | | 5.0 | | 6.0 | | | NA | 6.0 | |
Note: The table above is as defined by the regulations issued by the Federal Reserve, OCC and FDIC and to which the Firm and its IDI subsidiariesJPMorgan Chase Bank, N.A. are subject.
(a)Represents minimum SLR requirement of 3.0%, as well as supplementary leverage buffer requirements of 2.0% and 3.0% for BHC and IDI subsidiaries,JPMorgan Chase Bank, N.A., respectively.
(b)The Federal Reserve's regulations do not establish well-capitalized thresholds for these measures for BHCs.
CECL regulatory capital transitionRegulatory Capital Transition
Beginning January 1, 2022, the $2.9 billion CECL capital benefit, provided by the Federal Reserve in response to the COVID-19 pandemic, is being phased out at 25% per year over a three-year period. As of March 31, 2024 and December 31, 2023, the Firm's CET1 capital reflected the remaining benefit of $720 million and $1.4 billion, benefitrespectively, associated with the CECL capital transition provisions.
Additionally, effectiveSimilarly, as of January 1, 2023,2024, the Firm has phased out 50%75% of the other CECL capital transition provisions which impacted Tier 2 capital, adjusted average assets, total leverage exposure and RWA, as applicable.
Refer to Note 27 of JPMorgan Chase’s 20222023 Form 10-K for further information on CECL capital transition provisions.
The following tables present risk-based capital metrics under both the Basel III Standardized and Basel III Advanced approaches and leverage-based capital metrics for JPMorgan Chase and JPMorgan Chase Bank, N.A. As of March 31, 20232024 and December 31, 2022,2023, JPMorgan Chase and JPMorgan Chase Bank, N.A. were well-capitalized and met all capital requirements to which each was subject.
| March 31, 2023 (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. | |
March 31, 2024 (in millions, except ratios) | |
| March 31, 2024 (in millions, except ratios) | |
| JPMorgan Chase & Co. | |
JPMorgan Chase & Co. | |
Risk-based capital metrics:(a) | |
Risk-based capital metrics:(a) | |
Risk-based capital metrics:(a) | Risk-based capital metrics:(a) | | | | |
CET1 capital | CET1 capital | $ | 227,144 | | $ | 273,551 | | | | $ | 227,144 | | $ | 273,551 | | |
CET1 capital | |
CET1 capital | |
Tier 1 capital | |
Tier 1 capital | |
Tier 1 capital | Tier 1 capital | 253,837 | | 273,554 | | | | 253,837 | | 273,554 | | |
Total capital | Total capital | 286,398 | | 292,244 | | | | 273,122 | | 279,218 | | |
Total capital | |
Total capital | |
| Risk-weighted assets | |
| Risk-weighted assets | |
| Risk-weighted assets | Risk-weighted assets | 1,647,363 | | 1,584,591 | | | | 1,633,774 | | 1,489,078 | | |
| CET1 capital ratio | CET1 capital ratio | 13.8 | % | 17.3 | % | | | 13.9 | % | 18.4 | % | |
| CET1 capital ratio | |
| CET1 capital ratio | |
Tier 1 capital ratio | Tier 1 capital ratio | 15.4 | | 17.3 | | | | 15.5 | | 18.4 | | |
Tier 1 capital ratio | |
Tier 1 capital ratio | |
Total capital ratio | |
Total capital ratio | |
Total capital ratio | Total capital ratio | 17.4 | | 18.4 | | | | 16.7 | | 18.8 | | |
|
| December 31, 2022 (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. | |
December 31, 2023 (in millions, except ratios) | |
| December 31, 2023 (in millions, except ratios) | |
| JPMorgan Chase & Co. | |
JPMorgan Chase & Co. | |
Risk-based capital metrics:(a) | |
Risk-based capital metrics:(a) | |
Risk-based capital metrics:(a) | Risk-based capital metrics:(a) | | | | |
CET1 capital | CET1 capital | $ | 218,934 | | $ | 269,668 | | | | $ | 218,934 | | $ | 269,668 | | |
CET1 capital | |
CET1 capital | |
Tier 1 capital | |
Tier 1 capital | |
Tier 1 capital | Tier 1 capital | 245,631 | | 269,672 | | | | 245,631 | | 269,672 | | |
Total capital | Total capital | 277,769 | | 288,433 | | | | 264,583 | | 275,255 | | |
Total capital | |
Total capital | |
| Risk-weighted assets | |
| Risk-weighted assets | |
| Risk-weighted assets | Risk-weighted assets | 1,653,538 | | 1,597,072 | | | | 1,609,773 | | 1,475,602 | | |
| CET1 capital ratio | CET1 capital ratio | 13.2 | % | 16.9 | % | | | 13.6 | % | 18.3 | % | |
| CET1 capital ratio | |
| CET1 capital ratio | |
Tier 1 capital ratio | Tier 1 capital ratio | 14.9 | | 16.9 | | | | 15.3 | | 18.3 | | |
Tier 1 capital ratio | |
Tier 1 capital ratio | |
Total capital ratio | |
Total capital ratio | |
Total capital ratio | Total capital ratio | 16.8 | | 18.1 | | | | 16.4 | | 18.7 | | |
|
(a)The capital metrics reflect the CECL capital transition provisions.
(b)As of March 31, 2024, for capital purposes, excluded $6.0 billion of preferred stock for which notices of redemption were issued during the first quarter and which were redeemed in the second quarter. Refer to Note 17 for additional information.
| | | | | | | | | | | | | | | | | | | |
Three months ended (in millions, except ratios) | March 31, 2023 | | | December 31, 2022 | |
JPMorgan Chase & Co. | JPMorgan Chase Bank, N.A. | | | JPMorgan Chase & Co. | JPMorgan Chase Bank, N.A. | |
Leverage-based capital metrics:(a) | | | | | | | |
Adjusted average assets(b) | $ | 3,656,598 | | $ | 3,180,721 | | | | $ | 3,703,873 | | $ | 3,249,912 | | |
Tier 1 leverage ratio | 6.9 | % | 8.6 | % | | | 6.6 | % | 8.3 | % | |
Total leverage exposure | $ | 4,327,863 | | $ | 3,848,373 | | | | $ | 4,367,092 | | $ | 3,925,502 | | |
SLR | 5.9 | % | 7.1 | % | | | 5.6 | % | 6.9 | % | |
(c)Includes the impacts of certain assets associated with First Republic to which the Standardized approach has been applied as permitted by the transition provisions in the U.S. capital rules. | | | | | | | | | | | | | | | | | | | |
Three months ended (in millions, except ratios) | March 31, 2024 | | | December 31, 2023 | |
JPMorgan Chase & Co. | JPMorgan Chase Bank, N.A. | | | JPMorgan Chase & Co. | JPMorgan Chase Bank, N.A. | |
Leverage-based capital metrics:(a) | | | | | | | |
Adjusted average assets(b) | $ | 3,913,677 | | $ | 3,372,219 | | | | $ | 3,831,200 | | $ | 3,337,842 | | |
Tier 1 leverage ratio | 7.2 | % | 7.9 | % | | | 7.2 | % | 7.9 | % | |
Total leverage exposure | $ | 4,634,634 | | $ | 4,088,591 | | | | $ | 4,540,465 | | $ | 4,038,739 | | |
SLR | 6.1 | % | 6.6 | % | | | 6.1 | % | 6.5 | % | |
(a)The capital metrics reflect the CECL capital transition provisions.
(b)Adjusted average assets, for purposes of calculating the leverage ratios, includes quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill, inclusive of estimated equity method goodwill, and other intangible assets.
Note 22 – 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 have historically been refinanced, extended, cancelled, or expired without being drawn or a default occurring. As a result, the total contractual amount of these instruments is not, in the Firm’s view, representative of its expected future credit exposure or funding requirements. Refer to Note 28 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of lending-related commitments and guarantees, and the Firm’s related accounting policies.
To provide for expected credit losses in wholesale and certain consumer lending-related commitments, an allowance for credit losses on lending-related commitments is maintained. Refer to Note 12 for further information regarding the allowance for credit losses on lending-related commitments.
The following table summarizes the contractual amounts and carrying values of off-balance sheet lending-related financial instruments, guarantees and other commitments at March 31, 2023,2024 and December 31, 2022.2023. The amounts in the table below for credit card, home equity and certain scored business banking lending-related commitments represent the total available credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit for these products will be utilized at the same time. The Firm can reduce or cancel credit card and certain scored business banking lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. In addition, the Firm typically closes credit card lines when the borrower is 60 days or more past due. The Firm may reduce or close HELOCs when there are significant decreases in the value of the underlying property, or when there has been a demonstrable decline in the creditworthiness of the borrower.
| Off–balance sheet lending-related financial instruments, guarantees and other commitments | Off–balance sheet lending-related financial instruments, guarantees and other commitments | | |
| Contractual amount | | Carrying value(i) | |
| March 31, 2023 | | Dec 31, 2022 | | Mar 31, 2023 | | Dec 31, 2022 | |
Off–balance sheet lending-related financial instruments, guarantees and other commitments | |
Off–balance sheet lending-related financial instruments, guarantees and other commitments | |
| Contractual amount | |
| Contractual amount | |
| Contractual amount | |
| March 31, 2024 | |
| March 31, 2024 | |
| March 31, 2024 | |
By remaining maturity (in millions) | |
By remaining maturity (in millions) | |
By remaining maturity (in millions) | By remaining maturity (in millions) | Expires in 1 year or less | Expires after 1 year through 3 years | Expires after 3 years through 5 years | Expires after 5 years | Total | | Total | | |
Lending-related | Lending-related | | | |
Lending-related | |
Lending-related | |
Consumer, excluding credit card: | Consumer, excluding credit card: | | | |
Residential real estate(a) | $ | 7,237 | | $ | 3,863 | | $ | 6,498 | | $ | 5,745 | | $ | 23,343 | | | $ | 21,287 | | | $ | 70 | | | $ | 75 | | |
Consumer, excluding credit card: | |
Consumer, excluding credit card: | |
Residential Real Estate(a) | |
Residential Real Estate(a) | |
Residential Real Estate(a) | | $ | 9,161 | | $ | 7,387 | | $ | 6,048 | | $ | 9,315 | | $ | 31,911 | | | | $ | 30,125 | | | $ | 674 | | (j) | $ | 678 | | (j) |
Auto and other | Auto and other | 12,310 | | 1 | | — | | 1,914 | | 14,225 | | | 12,231 | | | — | | | — | | | Auto and other | 11,416 | | 134 | 134 | | — | — | | 3,199 | 3,199 | | 14,749 | 14,749 | | | | 15,278 | | | 15,278 | | | 104 | | 104 | | (j) | (j) | 148 | | (j) | (j) |
Total consumer, excluding credit card | Total consumer, excluding credit card | 19,547 | | 3,864 | | 6,498 | | 7,659 | | 37,568 | | | 33,518 | | | 70 | | | 75 | | |
Credit card(b) | Credit card(b) | 861,218 | | — | | — | | — | | 861,218 | | | 821,284 | | | — | | | — | | |
Credit card(b) | |
Credit card(b) | |
Total consumer(c) | |
Total consumer(c) | |
Total consumer(c) | Total consumer(c) | 880,765 | | 3,864 | | 6,498 | | 7,659 | | 898,786 | | | 854,802 | | | 70 | | | 75 | | |
Wholesale: | Wholesale: | | | |
Wholesale: | |
Wholesale: | |
Other unfunded commitments to extend credit(d) | |
Other unfunded commitments to extend credit(d) | |
Other unfunded commitments to extend credit(d) | Other unfunded commitments to extend credit(d) | 97,803 | | 131,725 | | 202,649 | | 21,647 | | 453,824 | | | 440,407 | | | 2,282 | | (h) | 2,328 | | (h) | 119,474 | | 184,303 | 184,303 | | 172,614 | 172,614 | | 23,738 | 23,738 | | 500,129 | 500,129 | | | | 503,526 | | | 503,526 | | | 2,638 | | 2,638 | | (j) | (j) | 2,797 | | (j) | (j) |
Standby letters of credit and other financial guarantees(d) | Standby letters of credit and other financial guarantees(d) | 13,172 | | 8,279 | | 4,259 | | 1,045 | | 26,755 | | | 27,439 | | | 427 | | | 408 | | |
Other letters of credit(d) | Other letters of credit(d) | 3,563 | | 294 | | 103 | | — | | 3,960 | | | 4,134 | | | 9 | | | 6 | | |
Other letters of credit(d) | |
Other letters of credit(d) | |
Total wholesale(c) | |
Total wholesale(c) | |
Total wholesale(c) | Total wholesale(c) | 114,538 | | 140,298 | | 207,011 | | 22,692 | | 484,539 | | | 471,980 | | | 2,718 | | | 2,742 | | |
Total lending-related | Total lending-related | $ | 995,303 | | $ | 144,162 | | $ | 213,509 | | $ | 30,351 | | $ | 1,383,325 | | | $ | 1,326,782 | | | $ | 2,788 | | | $ | 2,817 | | |
Total lending-related | |
Total lending-related | |
Other guarantees and commitments | |
Other guarantees and commitments | |
Other guarantees and commitments | Other guarantees and commitments | | | |
Securities lending indemnification agreements and guarantees(e) | Securities lending indemnification agreements and guarantees(e) | $ | 325,217 | | $ | — | | $ | — | | $ | — | | $ | 325,217 | | | $ | 283,386 | | | $ | — | | | $ | — | | |
Securities lending indemnification agreements and guarantees(e) | |
Securities lending indemnification agreements and guarantees(e) | |
Derivatives qualifying as guarantees | |
Derivatives qualifying as guarantees | |
Derivatives qualifying as guarantees | Derivatives qualifying as guarantees | 3,189 | | 246 | | 12,302 | | 40,907 | | 56,644 | | | 59,180 | | | 286 | | | 649 | | |
Unsettled resale and securities borrowed agreements | Unsettled resale and securities borrowed agreements | 137,021 | | 701 | | — | | — | | 137,722 | | | 116,975 | |
| (1) | | | (2) | | |
Unsettled resale and securities borrowed agreements | |
Unsettled resale and securities borrowed agreements | |
Unsettled repurchase and securities loaned agreements | |
Unsettled repurchase and securities loaned agreements | |
Unsettled repurchase and securities loaned agreements | Unsettled repurchase and securities loaned agreements | 98,941 | | 544 | | — | | — | | 99,485 | | | 66,407 | | | (2) | | | (7) | | |
Loan sale and securitization-related indemnifications: | Loan sale and securitization-related indemnifications: | | | |
Loan sale and securitization-related indemnifications: | |
Loan sale and securitization-related indemnifications: | |
Mortgage repurchase liability | |
Mortgage repurchase liability | |
Mortgage repurchase liability | Mortgage repurchase liability | NA | | NA | | 76 | | | 76 | | |
Loans sold with recourse | Loans sold with recourse | NA | 816 | | | 820 | | | 29 | | | 28 | | |
Loans sold with recourse | |
Loans sold with recourse | |
Exchange & clearing house guarantees and commitments(f) | |
Exchange & clearing house guarantees and commitments(f) | |
Exchange & clearing house guarantees and commitments(f) | Exchange & clearing house guarantees and commitments(f) | 174,476 | | — | | — | | — | | 174,476 | | | 191,068 | | | — | | | — | | |
Other guarantees and commitments(g) | Other guarantees and commitments(g) | 7,118 | | 735 | | 159 | | 2,896 | | 10,908 | | | 8,634 | | | 51 | | | 53 | | |
Other guarantees and commitments(g) | |
Other guarantees and commitments(g) | |
(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.
(d)AtAs of March 31, 2023,2024 and December 31, 2022,2023, reflected the contractual amount net of risk participations totaling $64$82 million and $71$88 million, respectively, for other unfunded commitments to extend credit; $8.1 billion and $8.2 billion, at both March 31, 2023, and December 31, 2022,respectively, for standby letters of credit and other financial guarantees; $350$490 million and $512$589 million, respectively, for other letters of credit. In regulatory filings with the Federal Reserve these commitments are shown gross of risk participations.
(e)AtAs of March 31, 2023,2024 and December 31, 2022,2023, collateral held by the Firm in support of securities lending indemnification agreements was $340.9$335.4 billion and $298.5$300.3 billion, respectively. Securities lending collateral primarily consists of cash, G7 government securities, and securities issued by U.S. GSEs and government agencies.
(f)AtAs of March 31, 2023,2024 and December 31, 2022,2023, 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.
(g)AtAs of March 31, 2023,2024 and December 31, 2022, 2023, primarily includes unfunded commitments to purchase secondary market loans, other equity investment commitments, and unfunded commitments related to certain tax-oriented equity investments, unfunded commitmentsand reflects the impact of adopting updates to purchase secondary market loans, and other equity investment commitments.the Accounting for Investments in Tax Credit Structures guidance effective January 1, 2024.
(h)At March 31, 2023 and December 31, 2022 includes net markdowns on held-for-sale positions related to unfunded commitments in the bridge financing portfolio.
(i)For lending-related products, the carrying value representsincludes 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.
(i)For lending-related commitments, the carrying value also includes fees and any purchase discounts or premiums that are deferred and recognized in accounts payable and other liabilities on the Consolidated balance sheets. Deferred amounts for revolving commitments and commitments not expected to fund, are amortized to lending- and deposit-related fees on a straight line basis over the commitment period. For all other commitments the deferred amounts remain deferred until the commitment funds or is sold.
(j)As of March 31, 2024 and December 31, 2023, includes fair value adjustments associated with First Republic for residential real estate lending-related commitments totaling $596 million and $630 million, respectively, for auto and other lending-related commitments totaling $104 million and $148 million, respectively, and for other unfunded commitments to extend credit totaling $935 million and $1.1 billion, respectively. Refer to Note 26 for additional information.
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 financings 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 March 31, 2023,2024 and December 31, 2022.2023.
Standby letters of credit, other financial guarantees and other letters of credit
| | March 31, 2023 | | December 31, 2022 |
| March 31, 2024 | | | March 31, 2024 | | December 31, 2023 |
(in millions) | (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 | (in millions) | Standby letters of credit and other financial guarantees | | Other letters of credit | | Standby letters of credit and other financial guarantees | | Other letters of credit |
Investment-grade(a) | Investment-grade(a) | $ | 18,669 | | | $ | 2,963 | | | $ | 19,205 | | | $ | 3,040 | |
Noninvestment-grade(a) | Noninvestment-grade(a) | 8,086 | | | 997 | | | 8,234 | | | 1,094 | |
Total contractual amount | Total contractual amount | $ | 26,755 | | | $ | 3,960 | | | $ | 27,439 | | | $ | 4,134 | |
| Allowance for lending-related commitments | Allowance for lending-related commitments | $ | 90 | | | $ | 9 | | | $ | 82 | | | $ | 6 | |
Allowance for lending-related commitments | |
Allowance for lending-related commitments | |
Guarantee liability | Guarantee liability | 337 | | | — | | | 326 | | | — | |
Total carrying value | Total carrying value | $ | 427 | | | $ | 9 | | | $ | 408 | | | $ | 6 | |
Commitments with collateral | Commitments with collateral | $ | 14,843 | | | $ | 719 | | | $ | 15,296 | | | $ | 795 | |
(a)The ratings scale is based on the Firm’s internal risk ratings. Refer to Note 11 for further information on internal risk ratings.
Derivatives qualifying as guarantees
The Firm transacts in certain derivative contracts that have the characteristics of a guarantee under U.S. GAAP. Refer to Note 28 of JPMorgan Chase’s 20222023 Form 10-K for further information on these derivatives.
The following table summarizes the derivatives qualifying as guarantees as of March 31, 2023,2024 and December 31, 2022.2023.
| (in millions) | |
(in millions) | |
(in millions) | (in millions) | March 31, 2023 | | December 31, 2022 | March 31, 2024 | | December 31, 2023 |
| Notional amounts | Notional amounts | |
Notional amounts | |
Notional amounts | |
Derivative guarantees | |
Derivative guarantees | |
Derivative guarantees | Derivative guarantees | $ | 56,644 | | | $ | 59,180 | |
Stable value contracts with contractually limited exposure | Stable value contracts with contractually limited exposure | 31,758 | | | 31,820 | |
Maximum exposure of stable value contracts with contractually limited exposure | Maximum exposure of stable value contracts with contractually limited exposure | 1,448 | | | 2,063 | |
| Fair value | Fair value | |
Fair value | |
Fair value | |
Derivative payables | |
Derivative payables | |
Derivative payables | Derivative payables | 286 | | | 649 | |
|
In addition to derivative contracts that meet the characteristics of a guarantee, the Firm is both a purchaser and seller of credit protection in the credit derivatives market. Refer to Note 4 for a further discussion of credit derivatives.
Loan sales- and securitization-related indemnifications
In connection with the Firm’s mortgage loan sale and securitization activities with U.S. 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.
The liability related to repurchase demands associated with private label securitizations is separately evaluated by the Firm in establishing its litigation reserves. Refer to Note 24 of this Form 10-Q and Note 30 of JPMorgan Chase’s 2023 Form 10-K for additional information regarding litigation.
Merchant charge-backs
Under the rules of payment networks, in its role as a merchant acquirer, the Firm's Merchant Services business in CIB Payments, retains a contingent liability for disputed processed credit and debit card transactions that result in a charge-back to the merchant. If a dispute is resolved in the cardholder’s favor, the Firm 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 the Firm is unable to collect the amount from the merchant, the Firm will bear the loss for the amount credited or refunded to the cardholder. The Firm mitigates this risk by withholding future settlements, retaining cash reserve accounts or obtaining other collateral. In addition, the Firm recognizes a valuation allowance that covers the payment or performance risk related to charge-backs.
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.
The liability related to repurchase demands associated with private label securitizations is separately evaluated by the Firm in establishing its litigation reserves. Refer to Note 24 of this Form 10-Q and Note 30 of JPMorgan Chase’s 2022 Form 10-K for additional information regarding litigation.
Sponsored member repo program
The Firm acts as a sponsoring member to clear eligible overnight and term 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 guarantees by obtaining a security interest in the cash or high-quality securities collateral that the clients place with the clearing househouse; 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 157.163. Refer to Note 11 of JPMorgan Chase’s 20222023 Form 10-K for additional information on credit risk mitigation practices on resale agreements and the types of collateral pledged under repurchase 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 and no other subsidiary of the Parent Company guarantees these securities. These guarantees, which rank on a paritypari passu with the Firm’s unsecured and unsubordinated indebtedness, are not included in the table on page 157163 of this Note. Refer to Note 20 of JPMorgan Chase’s 20222023 Form 10-K for additional information.
Note 23 – Pledged assets and collateral
Refer to Note 29 of JPMorgan Chase’s 20222023 Form 10-K for a discussion of the Firm’s pledged assets and collateral.
Pledged assets
The Firm pledges financial assets that it owns to maintain potential borrowing capacity at discount windows with Federal Reserve banks, various other central banks and FHLBs. Additionally, the Firm pledges assets 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’s pledged assets.
| (in billions) | (in billions) | March 31, 2023 | | December 31, 2022 | (in billions) | March 31, 2024 | | December 31, 2023 |
Assets that may be sold or repledged or otherwise used by secured parties | Assets that may be sold or repledged or otherwise used by secured parties | $ | 142.9 | | | $ | 110.8 | |
Assets that may not be sold or repledged or otherwise used by secured parties | 143.4 | | | 114.8 | |
Assets that may not be sold or repledged or otherwise used by secured parties(a) | |
Assets pledged at Federal Reserve banks and FHLBs | Assets pledged at Federal Reserve banks and FHLBs | 571.3 | | | 567.6 | |
Total pledged assets | Total pledged assets | $ | 857.6 | | | $ | 793.2 | |
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 for additional information on assets and liabilities of consolidated VIEs. Refer to Note 10 for additional information on the Firm’s securities financing activities. Refer to Note 20 of JPMorgan Chase’s 20222023 Form 10-K for additional information on the Firm’s long-term 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) | (in billions) | March 31, 2023 | | December 31, 2022 | |
(in billions) | |
(in billions) | |
Collateral permitted to be sold or repledged, delivered, or otherwise used | |
Collateral permitted to be sold or repledged, delivered, or otherwise used | |
Collateral permitted to be sold or repledged, delivered, or otherwise used | Collateral permitted to be sold or repledged, delivered, or otherwise used | $ | 1,393.1 | | | $ | 1,346.9 | | |
Collateral sold, repledged, delivered or otherwise used | Collateral sold, repledged, delivered or otherwise used | 1,066.3 | | | 1,019.4 | | |
Collateral sold, repledged, delivered or otherwise used | |
Collateral sold, repledged, delivered or otherwise used | |
Note 24 – Litigation
Contingencies
As of March 31, 2023,2024, the Firm and its subsidiaries and affiliates are defendants or respondents in numerous evolving legal proceedings, including private civil litigations,proceedings, public proceedings, government investigations, or regulatory enforcement matters.matters, and the matters described below. The litigations range from individual actions involving a single plaintiff to class action lawsuits with potentially millions of class members. Investigations and regulatory enforcement matters 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 $1.2$1.4 billion at March 31, 2023.2024. 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 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.
1MDB Litigation. J.P. Morgan (Suisse) SA was named as a defendant in a civil litigation filed in May 2021 in Malaysia by 1Malaysia Development Berhad (“1MDB”), a Malaysian state-owned and controlled investment fund. J.P. Morgan (Suisse) SA was served in August 2022. The claim alleges “dishonest assistance” against J.P. Morgan (Suisse) SA in relation to payments of $300 million and $500 million, from 2009 and 2010, respectively, received from 1MDB and paid into an account at J.P. Morgan Suisse (SA)(Suisse) SA held by 1MDB PetroSaudi Limited, a joint venture company between 1MDB and PetroSaudi Holdings (Cayman) Limited. In September 2022,March 2024, the Firm filed an application challengingCourt upheld the Firm's challenge to the validity of service and the Malaysian Court’s jurisdiction to hear the claim. That decision has been appealed by 1MDB. In AprilAugust 2023, the Court denied an application by 1MDB discontinuedto discontinue its claim with permission to re-file a new claim in the future. An appeals court is scheduled in August 2024 to hear separate appeals filed by 1MDB and the Firm against that August 2023 decision. In its appeal, the Firm seeks to prevent any claim from continuing.
In addition, in November 2023, the Federal Office of the Attorney General (OAG) in Switzerland notified J.P. Morgan (Suisse) SA but requested permission ofthat it is conducting an investigation into possible criminal liability in connection with transactions arising from J.P. Morgan (Suisse) SA’s relationship with the Court to refile in1MDB PetroSaudi joint venture and its related persons for the future, which the Court took under consideration.period September 2009 through August 2015. The OAG investigation is ongoing.
Amrapali. India’s Enforcement Directorate (“ED”) is investigating J.P. Morgan India Private Limited in connection with investments made in 2010 and 2012 by two offshore funds formerly managed by JPMorgan Chase entities into residential housing projects developed by the Amrapali Group (“Amrapali”). In 2017, numerous creditors filed civil claims against Amrapali, including petitions brought by home buyers relating to delays in delivering or failure to deliver residential units. The home buyers’ petitions have been overseen by the Supreme Court of India and are ongoing. In August 2021, the ED issued an order fining J.P. Morgan India Private Limited approximately $31.5 million. Themillion, and the Firm is appealing the order and the fine.that order. Relatedly, in July 2019, the Supreme Court of India issued an order making preliminary findings that Amrapali and other parties, including unspecified JPMorgan Chase entities and the offshore funds that had invested in the projects, violated certain criminal currency control and money laundering provisions, and orderingordered the ED to conduct a further inquiry under India’s Prevention of Money Laundering Act (“PMLA”) and Foreign Exchange Management Act (“FEMA”). In May 2020, the ED attached approximately $25 million from J.P. Morgan India Private Limited in connection with the criminal PMLA investigation.inquiry. The Firm is responding to and cooperating with the PMLA investigation.inquiry.
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. Among those resolutions, in May 2015, the Firm pleaded guilty to a single violation of federal antitrust law. The Department of Labor ("DOL") granted the Firm exemptions
that permit the Firm and its affiliates to continue to rely on the Qualified Professional Asset Manager exemption under the Employee Retirement Income Security Act (“ERISA”)
through the ten-year disqualification period following the antitrust plea. The only remaining FX-related governmental inquiry is a South Africa Competition Commission matter which is currently pending before the South Africa Competition Tribunal.
With respect to civil litigation matters, 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. Although certain members of the settlement class filed requests to the Court to be excluded from the class, an agreement to resolve their claims was reached in December 2022. The District Court denied certification of a putative class action filed against the Firm and other foreign exchange dealers on behalf of certain parties who purchased foreign currencies at allegedly inflated rates, the District Court denied certification of a class and granted summary judgment against the named plaintiffs in March 2023. ThoseAn appeal by those plaintiffs have filed a notice of appeal.the District Court's decision is pending. In addition, some FX-related individual and putative class actions based on similar alleged underlying conduct have been filed outside the U.S., including in the U.K., Israel, the Netherlands, Brazil and Australia. An agreement to resolve one of the UKU.K. actions was reached in December 2022. In a putative class action pending beforeJuly 2023, the U.K. Court of Appeal overturned the Competition Appeal Tribunal, proposed class representatives have appealed the tribunal'sTribunal's earlier denial of a request for class certification on an opt-out basis. In Israel, a settlement in principle has been reached inon the putative class action, which remains subject to court approval.
Government Inquiries Related to the Zelle Network. The Firm is responding to inquiries from civil government authorities regarding the handling of disputes related to transfers of funds through the Zelle Network. The Firm is cooperating with these inquiries and responding to requests for information.
Interchange Litigation. Groups 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 related rules in violation of antitrust laws. In 2012, the parties initially settled the cases for a cash payment, but that settlement was reversed on appeal and remanded to the United States District Court for the Eastern District of New York.
The original class action was divided into two separate actions, one seeking primarily monetary relief and the other seeking primarily injunctive relief. In September 2018, the parties tosettled the monetary class action finalized an agreement which amends and supersedes the prior settlement agreement. Pursuant to this settlement,seeking monetary relief, with the defendants collectively contributed an additional $900 million to thecontributing approximately $5.3 billion previously held in escrow from the original settlement. In December 2019, the amended$6.2 billion. The settlement agreement washas been approved by the District Court. In March 2023, the United States Court of Appeals for the Second Circuitand affirmed the District Court’s approval of the settlement, and two merchants have filed petitions for rehearing of the Appellate Court’s approval.on appeal. Based on the percentage of merchants that opted out of the amended
class settlement, $700 million has been returned to the defendants from the settlement escrow in accordance with the settlement agreement. The injunctiveescrow. A separate class action seeking injunctive relief continues, separately, and in September 2021, the District Court granted plaintiffs’ motion for class certification in part, and denied the motion in part. In March 2024, Visa and Mastercard announced a settlement of the injunctive class action, agreeing to certain changes to their respective network rules and system-wide reductions in interchange rates for U.S.-based merchants. This settlement is subject to approval by the District Court.
Of the merchants who opted out of the amended damages class settlement, certain merchants filed individual actions raising similar allegations against Visa and Mastercard, as well as against the Firm and other banks. While some of
those actions remain pending, the defendants have reached settlements with the merchants who opted out representing approximately 65%over 70% of the combined Mastercard-branded and Visa-branded payment card sales volume.
Jeffrey Epstein Litigation. JPMorgan Chase Bank, N.A. is named as a defendant in two lawsuits filed in the United States District Court for the Southern District of New York which allege that JPMorgan Chase Bank, N.A. knowingly facilitated Jeffrey Epstein’s sex trafficking and other unlawful conduct by providing banking services to Epstein until 2013. One case, which was filed in November 2022, is a putative class action filed by an alleged sex-trafficking victim of Epstein, and the other case, which was filed in December 2022, was brought on behalf of the government of the United States Virgin Islands and also alleges certain Virgin Islands statutory claims. JPMorgan Chase Bank, N.A. moved to dismiss both complaints. In March 2023, the Court granted in part and denied in part JPMorgan Chase Bank, N.A.’s motions to dismiss, allowing some claims to proceed in both lawsuits. Also in March 2023, JPMorgan Chase Bank, N.A. filed third-party complaints impleading the Firm’s former employee, James Edward Staley, into the two lawsuits, asserting claims for indemnification, contribution, breach of fiduciary duty and violation of the faithless servant doctrine. In April 2023, Staley moved to dismiss the complaints. Also in April 2023, the putative class action plaintiff filed a motion for class certification seeking to represent a class of alleged sex-trafficking victims of Epstein. JPMorgan Chase Bank, N.A. intends to oppose both motions.
LIBOR and Other Benchmark Rate Investigations and Litigation.Litigation. JPMorgan Chase has responded to inquiries from various governmental agencies and entities around the world relating primarily to the British Bankers Association’s (“BBA”) London Interbank Offered Rate (“LIBOR”) for various currencies and the European Banking Federation’s Euro Interbank Offered Rate (“EURIBOR”). The Swiss Competition Commission’s investigation relating to EURIBOR, to which the Firm and one other bank remain subject, continues. InThe Firm appealed a December 2016 decision by the European Commission issued a decision against the Firm and other banks finding an infringement of European antitrust rules relating to EURIBOR. TheIn December 2023, the European General Court annulled the fine imposed by the European Commission, but exercised its discretion to re-impose a fine in an identical amount. In March 2024, the Firm has filed an appeal of thatthis decision with the Court of Justice of the European General Court, and that appeal is pending.Union.
In addition, the Firm has been named as a defendant along with other banks in various individual and putative class actions related to benchmark rates, including U.S. dollar LIBOR. In actions related to U.S. dollar LIBOR during the period that it was administered by the BBA, the Firm has obtained dismissal of certain actions and resolved certain other actions, and others are in various stages of litigation. The United States District Court for the Southern District of New York has granted class certification of antitrust claims related to bonds and interest rate swaps sold directly by the defendants, including the Firm. A consolidated putative class action related to the period that U.S. dollar LIBOR was administered by ICE Benchmark Administration has been dismissed. In addition, a lawsuit filed by a group of individual plaintiffs filed a lawsuit asserting antitrust claims, alleging that the Firm and other defendants were engaged in an unlawful agreement to set U.S. dollar LIBOR and conspired to monopolize the market for LIBOR-based consumer loansloans and credit cards. In September 2022, the Courtcards was dismissed plaintiffs' complaint in its entirety, and plaintiffsOctober 2023. Plaintiff filed an amended complaint asserting similar antitrust claims, which defendants have moved to dismiss. The Firm’s settlementsappeal of putative class actions relatedthe dismissal to the Singapore Interbank Offered RateUnited States Court of Appeals for the Ninth Circuit in November 2023. The Firm has resolved all non-U.S. dollar LIBOR actions.
Russian Litigation. The Firm is obligated to comply with international sanctions laws, which mandate the blocking of certain assets. These laws apply when assets associated with individuals, companies, products or services are within the scope of the sanctions. The Firm has faced actual and threatened litigation in Russia seeking payments on transactions that the Firm cannot make under and is contractually excused from paying as a result of, relevant sanctions laws. In claims involving the Firm and claims filed against other financial institutions, Russian courts have disregarded the parties’ contractual agreements concerning forum selection and did not recognize foreign sanctions laws as a basis for not making payment. As to claims against the Firm, a Russian court entered judgment against the Firm in one claim in February 2024, which the Firm has
appealed in Russia. In separate claims, in April 2024, Russian courts ordered an interim freeze of assets in Russia (including funds in bank accounts, securities, shares in authorized capital, and certain trademarks, of the named defendants) pending a determination on the underlying claims. Russian courts may rule similarly in other cases, including ordering freezes of assets. The Firm challenged the April 2024 freeze orders in the Russian courts and in a New York federal court action, and a Russian court has issued an order instructing the Firm to discontinue the New York action. The value of the current claims and the Singapore Swap Offer Rate,orders to freeze assets against the Firm exceed the total amount of available assets that the Firm holds in Russia. If the claims are enforced despite the actions taken by the Firm to challenge the claims and orders and to seek the Australian Bank Bill Swap Reference Rate received final court approvalproper application of law, the Firm’s assets in November 2022, whileRussia could be seized in full or the settlement relatedFirm could be prevented from complying with its obligations.
SEC Inquiries. The Firm is responding to Swiss franc LIBOR remains subjectrequests from the SEC regarding aspects of certain advisory programs within J.P. Morgan Securities LLC, including aggregation of accounts for billing, discounting advisory fees, and selecting portfolio managers. Separately, the Firm is responding to court approval.requests from the SEC in connection with the timing of the Firm’s liquidation of shares distributed in-kind to certain investment vehicles that invest in third-party managed private funds. The Firm is cooperating with the SEC in regard to both inquires.
Securities Lending Antitrust Litigation. JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC, J.P. Morgan Prime, Inc., and J.P. Morgan Strategic Securities Lending Corp. are named as defendants in a putative class action filed in the United States District Court for the Southern District of New York. The complaint asserts violations of federal antitrust law and New York State common law in connection with an alleged conspiracy to prevent the emergence of anonymous exchange trading for securities lending transactions. Defendants’ motion to dismiss the complaint was denied. Plaintiffs have moved to certify a class inThe settlement of this action which defendants have opposed.by the parties has been preliminarily approved, and is subject to final court approval.
Shareholder Litigation. Several shareholder putative class actions, as well as shareholder derivative actions purporting to act on behalf of the Firm, have been filed against the Firm, its Board of Directors and certain of its current and former officers.
Certain of these shareholder suits relate to historical trading practices by former employees in the precious metals and U.S. treasuries markets and related conduct which were the subject of the Firm’s resolutions with the DOJ, CFTC and SEC in September 2020, and fiduciary activities that were separately the subject of a resolution between JPMorgan Chase Bank, N.A. and the OCC in November 2020. One of these shareholder derivative suits was filed in the Supreme Court of the State of New York in May 2022, asserting breach of fiduciary duty and unjust enrichment claims relating to the historical trading practices and related conduct and fiduciary activities which
were the subject of the resolutions described above. In
December 2022, the court granted defendants’ motion to dismiss this action in full, and in JanuaryJuly 2023, the plaintiff filed a notice ofan appeal, which remains pending. A second shareholder derivative action was filed in the United States District Court for the Eastern District of New York in December 2022 relating to the historical trading practices and related conduct, which asserts breach of fiduciary duty and contribution claims and alleges that the shareholder is excused from making a demand to commence litigation because such a demand would have been futile. In addition, a consolidated putative class action is pending in the United States District Court for the Eastern District of New York on behalf of shareholders who acquired shares of JPMorgan Chase common stock during the putative class period, alleging that certain SEC filings of the Firm were materially false or misleading because they did not disclose certain information relating to the historical trading practices and conduct. Defendants have moved to dismiss the amended complaint in this action.
A separate shareholder derivative suit was filed in March 2022 in the United States District Court for the Eastern District of New York asserting state claims of breaches of fiduciary duty and federal claims of violations of federal securities laws based on the alleged failure of the Board of Directors to exercise adequate oversight over the Firm’s compliance with records preservation requirements which were the subject of resolutions between certain of the Firm’s subsidiaries and the SEC and the CFTC. In March 2024, the Court granted Defendants’ motion to dismiss the amended complaintfederal claims and declined to exercise jurisdiction over the remaining state claims.
Trading Venues Investigations. The Firm has been responding to government inquiries regarding its processes to inventory trading venues and confirm the completeness of certain data fed to trade surveillance platforms. The Firm self-identified that certain trading and order data through the CIB was not feeding into its trade surveillance platforms. The Firm has completed enhancements to the CIB’s venue inventory and data completeness controls, and other remediation is pending.underway. The Firm has also performed a review of the data not originally surveilled, which is nearly complete, and has not identified any employee misconduct, harm to clients or the market. While the identified gaps represent a fraction of the overall activity across the CIB, the data gap on one venue, which largely consisted of sponsored client access activity, was significant. The Firm is dedicated to maintaining rigorous controls and continuously enhancing the reliability of its trade infrastructure. In March 2024, the Firm entered into resolutions with the OCC and the Board of Governors of the FRB that require the Firm to, among other things, complete its remediation, engage an independent consultant, and pay aggregate civil penalties of approximately $350 million. The Firm also expects to enter into a resolution with a third U.S. regulator that will require the Firm to, among other things, pay a civil penalty of $100 million after offsets for amounts paid to the OCC and FRB. The Firm does not expect any disruption of service to clients as a result of these resolutions.
* * *
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, upward or downward, as appropriate, based on management’s best judgment after consultation with counsel. The Firm’s legal expense was $176$(72) million and $119$176 million for the three months ended March 31, 20232024 and 2022,2023, 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 25 – Business segments
The Firm is managed on an LOB basis. There are four major reportable business segments -– Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset & Wealth Management. In addition, there is a Corporate segment.
The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by the Firm’s Operating Committee. Segment results are presented on a managed basis.
As a result of the organizational changes announced on January 25, 2024, the Firm will be reorganizing its business segments to reflect the manner in which the segments will be managed. The reorganization of the business segments will be effective in the second quarter of 2024. Refer to Segment results below, andRecent events on page 52 of JPMorgan Chase's 2023 Form 10-K for additional information.
Refer to Note 32 of JPMorgan Chase’s 20222023 Form 10-K for a further discussion of JPMorgan Chase’s business segments.
Segment results
The following table provides a summary of the Firm’s segment results as of or for the three months ended March 31, 20232024 and 2022,2023, 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. Refer to Note 32 of JPMorgan Chase’s 20222023 Form 10-K for additional information on the Firm’s managed basis.
Capital allocation
The amount of capital assigned to each business segment is referred to as equity. At least annually, the assumptions, judgments and methodologies used to allocate capital are reassessed and, as a result, the capital allocated to the LOBs may change.
Refer to Line of business equity on page 93Note 32 of JPMorgan Chase’s 20222023 Form 10-K for additional information on capital allocation.
| Segment results and reconciliation(a) | |
Segment results and reconciliation(a) | |
Segment results and reconciliation(a) | Segment results and reconciliation(a) | |
As of or for the three months ended March 31, (in millions, except ratios) | 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 | |
2023 | 2022 | | 2023 | 2022 | | 2023 | 2022 | | 2023 | 2022 | |
As of or for the three months ended March 31, (in millions, except ratios) | |
| 2024 | |
2024 | |
Noninterest revenue | |
Noninterest revenue | |
Noninterest revenue | Noninterest revenue | $ | 3,623 | $ | 3,855 | (b) | $ | 11,523 | $ | 10,004 | (b) | $ | 781 | $ | 867 | | $ | 3,333 | $ | 3,239 | |
Net interest income | Net interest income | 12,833 | 8,327 | | 2,077 | 3,572 | | 2,730 | 1,531 | | 1,451 | 1,076 | |
Net interest income | |
Net interest income | |
Total net revenue | |
Total net revenue | |
Total net revenue | Total net revenue | 16,456 | 12,182 | | 13,600 | 13,576 | | 3,511 | 2,398 | | 4,784 | 4,315 | |
Provision for credit losses | Provision for credit losses | 1,402 | 678 | | 58 | 445 | | 417 | 157 | | 28 | 154 | |
Provision for credit losses | |
Provision for credit losses | |
Noninterest expense | |
Noninterest expense | |
Noninterest expense | Noninterest expense | 8,065 | 7,655 | (b) | 7,483 | 7,363 | (b) | 1,308 | 1,129 | | 3,091 | 2,860 | |
Income/(loss) before income tax expense/(benefit) | Income/(loss) before income tax expense/(benefit) | 6,989 | 3,849 | | 6,059 | 5,768 | | 1,786 | 1,112 | | 1,665 | 1,301 | |
Income/(loss) before income tax expense/(benefit) | |
Income/(loss) before income tax expense/(benefit) | |
Income tax expense/(benefit) | |
Income tax expense/(benefit) | |
Income tax expense/(benefit) | Income tax expense/(benefit) | 1,746 | 941 | (b) | 1,638 | 1,396 | (b) | 439 | 262 | | 298 | 293 | |
Net income/(loss) | Net income/(loss) | $ | 5,243 | $ | 2,908 | | $ | 4,421 | $ | 4,372 | | $ | 1,347 | $ | 850 | | $ | 1,367 | $ | 1,008 | |
Net income/(loss) | |
Net income/(loss) | |
Average equity | |
Average equity | |
Average equity | Average equity | $ | 52,000 | $ | 50,000 | | $ | 108,000 | $ | 103,000 | | $ | 28,500 | $ | 25,000 | | $ | 16,000 | $ | 17,000 | |
Total assets | Total assets | 506,382 | 486,183 | | 1,436,237 | 1,460,463 | | 261,181 | 235,127 | | 232,516 | 233,070 | |
Total assets | |
Total assets | |
ROE | |
ROE | |
ROE | ROE | 40 | % | 23 | % | | 16 | % | 16 | % | (b) | 18 | % | 13 | % | | 34 | % | 23 | % | |
Overhead ratio | Overhead ratio | 49 | | 63 | | | 55 | | 54 | | | 37 | | 47 | | | 65 | | 66 | | |
Overhead ratio | |
Overhead ratio | |
| As of or for the three months ended March 31, (in millions, except ratios) | As of or for the three months ended March 31, (in millions, except ratios) | Corporate | | Reconciling Items(a) | | Total | |
2023 | 2022 | | 2023 | 2022 | | 2023 | 2022 | |
As of or for the three months ended March 31, (in millions, except ratios) | |
| 2024 | |
2024 | |
Noninterest revenue | |
Noninterest revenue | |
Noninterest revenue | Noninterest revenue | $ | (755) | $ | (345) | | $ | (867) | $ | (775) | | $ | 17,638 | $ | 16,845 | |
Net interest income | Net interest income | 1,740 | (536) | | (120) | (98) | | 20,711 | 13,872 | |
Net interest income | |
Net interest income | |
Total net revenue | |
Total net revenue | |
Total net revenue | Total net revenue | 985 | (881) | | (987) | (873) | | 38,349 | 30,717 | |
Provision for credit losses | Provision for credit losses | 370 | 29 | | — | — | | 2,275 | 1,463 | |
Provision for credit losses | |
Provision for credit losses | |
Noninterest expense | |
Noninterest expense | |
Noninterest expense | Noninterest expense | 160 | 184 | | — | — | | 20,107 | 19,191 | |
Income/(loss) before income tax expense/(benefit) | Income/(loss) before income tax expense/(benefit) | 455 | (1,094) | | (987) | (873) | | 15,967 | 10,063 | |
Income/(loss) before income tax expense/(benefit) | |
Income/(loss) before income tax expense/(benefit) | |
Income tax expense/(benefit) | |
Income tax expense/(benefit) | |
Income tax expense/(benefit) | Income tax expense/(benefit) | 211 | (238) | | (987) | (873) | | 3,345 | 1,781 | |
Net income/(loss) | Net income/(loss) | $ | 244 | $ | (856) | | $ | — | $ | — | | $ | 12,622 | $ | 8,282 | |
Net income/(loss) | |
Net income/(loss) | |
Average equity | |
Average equity | |
Average equity | Average equity | $ | 66,697 | $ | 57,506 | | $ | — | $ | — | | $ | 271,197 | $ | 252,506 | |
Total assets | Total assets | 1,307,989 | 1,539,844 | | NA | NA | | 3,744,305 | 3,954,687 | |
Total assets | |
Total assets | |
ROE | |
ROE | |
ROE | ROE | NM | NM | | NM | NM | | 18 | % | 13 | % | |
Overhead ratio | Overhead ratio | NM | NM | | NM | NM | | 52 | | 62 | | |
Overhead ratio | |
Overhead ratio | |
(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.
(b)In the first quarter of 2023, the allocations of revenue and expense to CCB associated with a Merchant Services revenue sharing agreement were discontinued and are now retained in Payments in CIB. Prior-period amounts have been revised to conform with the current presentation.
Note 26 – Subsequent eventsBusiness combinations
On May 1, 2023, the FirmJPMorgan Chase acquired the substantial majority ofcertain assets and assumed the deposits and certain other liabilities of First Republic Bank (the "First Republic acquisition") from the Federal Deposit Insurance Corporation. In carrying out this transaction,Corporation (“FDIC”), as receiver. The Firm believes that the Firm expectsFirst Republic acquisition is complementary to further advance the Firm’s wealth management strategy and complement itsFirm's existing franchises. The Firm is estimatingacquisition resulted in an estimated bargain purchase gain, which represents the impactexcess of the acquisition on its financial statements and expects these estimates to be further refined duringestimated fair value of the net assets acquired above the purchase accounting measurement period. price.
The Firm has concludeddetermined that due tothis acquisition constitutes a business combination under U.S. GAAP. Accordingly, the limited amount of time since the date of this transaction, in accordance with the accounting guidance, it is impracticable to provide allinitial recognition of the disclosuresassets acquired and liabilities assumed were generally measured at their estimated fair values as of May 1, 2023. The determination of those fair values required for a business combinationmanagement to make certain market-based assumptions about expected future cash flows, discount rates and other valuation inputs at the time of this filing.the acquisition. The Firm believes that the fair value estimates of the assets acquired and liabilities assumed provide a reasonable basis for determining the estimated bargain purchase gain.
The First Republic acquisition resulted in a preliminary estimated bargain purchase gain of $2.7 billion. Adjustments to the purchase price and the estimated bargain purchase gain may take place up to one year from the acquisition date, as permitted by U.S. GAAP. The Firm is working to conclude the final settlement process with the FDIC. Resolution of certain matters relating to the final settlement will occur after May 1, 2024. The current estimated bargain purchase gain of $2.8 billion reflects measurement period adjustments made to the fair value of the net assets acquired, from the acquisition date through March 31, 2024, including a reduction of $16 million for the three months ended March 31, 2024.
Refer to Note 34 of JPMorgan Chase’s 2023 Form 10-K for further information on the First Republic acquisition.
The computation of the purchase price, the estimated fair values of the assets acquired and liabilities assumed as part of the First Republic acquisition and the related estimated bargain purchase gain are presented below, and reflects adjustments made through March 31, 2024 to the acquisition-date fair value of the net assets acquired.
| | | | | |
| Fair value purchase price allocation as of May 1, 2023 |
(in millions) |
Purchase price consideration | |
Amounts paid/due to the FDIC, net of cash acquired(a) | $ | 13,566 | |
Purchase Money Note (at fair value)(b) | 48,848 | |
Settlement of First Republic deposit and other related party transactions(c) | 5,447 | |
Contingent consideration - Shared-loss agreements | 15 | |
Purchase price consideration | $ | 67,876 | |
| |
Assets | |
Securities | $ | 30,285 | |
Loans | 153,242 | |
Core deposit and customer relationship intangibles | 1,455 | |
Indemnification assets - Shared-loss agreements | 675 | |
Accounts receivable and other assets(d) | 6,595 | |
Total assets acquired | $ | 192,252 | |
| |
Liabilities | |
Deposits | $ | 87,572 | |
FHLB advances | 27,919 | |
Lending-related commitments | 2,614 | |
Accounts payable and other liabilities(d) | 2,793 | |
Deferred tax liabilities | 719 | |
Total liabilities assumed | $ | 121,617 | |
| |
Fair value of net assets acquired | $ | 70,635 | |
Estimated gain on acquisition, after income taxes | $ | 2,759 | |
(a)Includes $10.6 billion of cash paid to the FDIC at acquisition and $3.6 billion payable to the FDIC, less cash acquired of $680 million.
(b)As part of the consideration paid, JPMorgan Chase issued a five-year, $50 billion secured note to the FDIC (the "Purchase Money Note").
(c)Includes $447 million of securities financing transactions with First Republic Bank that were effectively settled on the acquisition date.
(d)Other assets include $1.2 billion in tax-oriented investments and $683 million of lease right-of-use assets. Other liabilities include the related tax-oriented investment liabilities of $669 million and lease liabilities of $748 million. Refer to Note 14 and Note 18 of JPMorgan Chase's 2023 Form 10-K for additional information.
Refer to JPMorgan Chase’s 2023 Form 10-K for a discussion of the Firm’s accounting policies and valuation methodologies for securities, loans, core deposits and customer relationship intangibles, shared-loss agreements and the related indemnification assets, deposits, Purchase Money Note, FHLB advances and lending-related commitments.
Loans
The following table presents the unpaid principal balance ("UPB") and estimated fair values of the loans acquired as of May 1, 2023, and reflects adjustments made through March 31, 2024 to the acquisition-date fair value of the loans acquired.
| | | | | | | | | | | |
|
| May 1, 2023 |
(in millions) | UPB | | Fair value |
Residential real estate | $ | 106,240 | | | $ | 92,053 | |
Auto and other | 3,093 | | | 2,030 | |
Total consumer | 109,333 | | | 94,083 | |
Secured by real estate | 37,117 | | | 33,602 | |
Commercial & industrial | 4,332 | | | 3,932 | |
Other | 23,499 | | | 21,625 | |
Total wholesale | 64,948 | | | 59,159 | |
Total loans | $ | 174,281 | | | $ | 153,242 | |
Unaudited pro forma condensed combined financial information
Included in the Firm's Consolidated statements of income are noninterest revenue, net interest income and net income contributed by First Republic of $315 million, $1.3 billion and $668 million, respectively, for the three months ended March 31, 2024.
The following table presents certain unaudited pro forma financial information for the three months ended March 31, 2023 as if the First Republic acquisition had occurred on January 1, 2022, including recognition of the estimated bargain purchase gain of $2.8 billion and the provision for credit losses of $1.2 billion. Additional adjustments include the interest on the Purchase Money Note and the impact of amortizing and accreting certain estimated fair value adjustments related to intangible assets, loans and lending-related commitments.
The Firm expects to achieve operating cost savings and other business synergies resulting from the acquisition that are not reflected in the pro forma amounts. The pro forma information is not necessarily indicative of the historical results of operations had the acquisition occurred on January 1, 2022, nor is it indicative of the results of operations in future periods.
| | | | | | | | | |
| For the three months ended March 31, 2023 | | |
(in millions) | | | | |
Noninterest revenue | $ | 17,899 | | | | | |
Net interest income | 21,909 | | | | | |
Net income | 13,168 | | | | | |
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 March 31, 2023,2024, and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity and cash flows for the three-month periods ended March 31, 20232024 and 2022,2023, 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, 2022,2023, 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 21, 2023, which included a paragraph describing a change in the manner of accounting for credit losses on certain financial instruments in 2020,16, 2024, 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, 2022,2023, 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.
May 3, 20231, 2024
PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, NY 10017
| JPMorgan Chase & Co. | Consolidated average balance sheets, interest and rates (unaudited) | Consolidated average balance sheets, interest and rates (unaudited) | Consolidated average balance sheets, interest and rates (unaudited) |
(Taxable-equivalent interest and rates; in millions, except rates) | (Taxable-equivalent interest and rates; in millions, except rates) | (Taxable-equivalent interest and rates; in millions, except rates) |
| | Three months ended March 31, 2023 | | Three months ended March 31, 2022 |
| Average balance | Interest(f) | | Rate (annualized) | | Average balance | Interest(f) | | Rate (annualized) |
| Three months ended March 31, 2024 | |
| Three months ended March 31, 2024 | |
| Three months ended March 31, 2024 | | | Three months ended March 31, 2023 |
| Average balance | | | Average balance | Interest(f) | | Rate (annualized) | | Average balance | Interest(f) | | Rate (annualized) |
Assets | Assets | |
Deposits with banks | Deposits with banks | $ | 505,662 | | $ | 4,819 | | | 3.87 | % | | $ | 742,311 | | $ | 238 | | | 0.13 | % | |
Deposits with banks | |
Deposits with banks | |
Federal funds sold and securities purchased under resale agreements | |
Federal funds sold and securities purchased under resale agreements | |
Federal funds sold and securities purchased under resale agreements | Federal funds sold and securities purchased under resale agreements | 313,187 | | 3,131 | | | 4.06 | | | 294,951 | | 397 | | | 0.55 | | |
Securities borrowed | Securities borrowed | 192,843 | | 1,716 | | | 3.61 | | | 218,030 | | (87) | |
| (0.16) | | (h) |
Securities borrowed | |
Securities borrowed | |
Trading assets – debt instruments | |
Trading assets – debt instruments | |
Trading assets – debt instruments | Trading assets – debt instruments | 357,682 | | 3,660 | | | 4.15 | | | 272,116 | | 1,775 | | | 2.65 | | |
Taxable securities | Taxable securities | 596,723 | | 3,967 | | | 2.70 | | | 642,633 | | 1,979 | | | 1.25 | | |
Taxable securities | |
Taxable securities | |
Nontaxable securities(a) | |
Nontaxable securities(a) | |
Nontaxable securities(a) | Nontaxable securities(a) | 25,327 | | 308 | | | 4.93 | | | 28,532 | | 307 | | | 4.36 | | |
Total investment securities | Total investment securities | 622,050 | | 4,275 | | | 2.79 | | (g) | | 671,165 | | 2,286 | | | 1.38 | | (g) |
Total investment securities | |
Total investment securities | | 580,046 | | 5,247 | | | 3.64 | | (g) | | 622,050 | | 4,275 | | | 2.79 | | (g) |
Loans | Loans | 1,129,624 | | 17,754 | | | 6.37 | | | 1,068,637 | | 10,661 | | | 4.05 | | |
All other interest-earning assets(b) | 95,709 | | 1,769 | | | 7.50 | | | 134,741 | | 324 | | | 0.97 | | |
All other interest-earning assets(b)(c) | |
All other interest-earning assets(b)(c) | |
All other interest-earning assets(b)(c) | |
Total interest-earning assets | |
Total interest-earning assets | |
Total interest-earning assets | Total interest-earning assets | 3,216,757 | | 37,124 | | | 4.68 | | | 3,401,951 | | 15,594 | | | 1.86 | | |
Allowance for loan losses | Allowance for loan losses | (19,126) | | | (16,415) | | |
Allowance for loan losses | |
Allowance for loan losses | |
Cash and due from banks | |
Cash and due from banks | |
Cash and due from banks | Cash and due from banks | 26,056 | | | 27,964 | | |
Trading assets – equity and other instruments | Trading assets – equity and other instruments | 152,081 | | | 156,908 | | |
Trading assets – equity and other instruments | |
Trading assets – equity and other instruments | |
Trading assets – derivative receivables | |
Trading assets – derivative receivables | |
Trading assets – derivative receivables | Trading assets – derivative receivables | 64,526 | | | 67,334 | | |
Goodwill, MSRs and other intangible Assets | Goodwill, MSRs and other intangible Assets | 60,855 | | | 57,546 | | |
Goodwill, MSRs and other intangible Assets | |
Goodwill, MSRs and other intangible Assets | |
All other noninterest-earning assets | |
All other noninterest-earning assets | |
All other noninterest-earning assets | All other noninterest-earning assets | 208,828 | | | 211,500 | | |
Total assets | Total assets | $ | 3,709,977 | | | $ | 3,906,788 | | |
Total assets | |
Total assets | |
Liabilities | |
Liabilities | |
Liabilities | Liabilities | |
Interest-bearing deposits | Interest-bearing deposits | $ | 1,670,036 | | $ | 7,637 | | | 1.85 | % | | $ | 1,781,320 | | $ | 182 | | | 0.04 | % | |
Interest-bearing deposits | |
Interest-bearing deposits | |
Federal funds purchased and securities loaned or sold under repurchase agreements | Federal funds purchased and securities loaned or sold under repurchase agreements | 252,310 | | 2,804 | | | 4.51 | | | 250,215 | | 113 | | | 0.18 | | |
Short-term borrowings(c) | 38,763 | | 421 | | | 4.40 | | | 47,871 | | 44 | | | 0.36 | | |
Federal funds purchased and securities loaned or sold under repurchase agreements | |
Federal funds purchased and securities loaned or sold under repurchase agreements | |
Short-term borrowings | |
Short-term borrowings | |
Short-term borrowings | |
Trading liabilities – debt and all other interest-bearing liabilities(d)(e) | |
Trading liabilities – debt and all other interest-bearing liabilities(d)(e) | |
Trading liabilities – debt and all other interest-bearing liabilities(d)(e) | Trading liabilities – debt and all other interest-bearing liabilities(d)(e) | 277,576 | | 1,971 | | | 2.88 | | | 263,025 | | 191 | | | 0.30 | | |
Beneficial interests issued by consolidated VIEs | Beneficial interests issued by consolidated VIEs | 13,483 | | 147 | | | 4.43 | | | 10,891 | | 18 | | | 0.69 | | |
Beneficial interests issued by consolidated VIEs | |
Beneficial interests issued by consolidated VIEs | |
Long-term debt | |
Long-term debt | |
Long-term debt | Long-term debt | 249,336 | | 3,313 | | | 5.39 | | | 254,180 | | 1,076 | | | 1.72 | | |
Total interest-bearing liabilities | Total interest-bearing liabilities | 2,501,504 | | 16,293 | | | 2.64 | | | 2,607,502 | | 1,624 | | | 0.25 | | |
Total interest-bearing liabilities | |
Total interest-bearing liabilities | |
Noninterest-bearing deposits | |
Noninterest-bearing deposits | |
Noninterest-bearing deposits | Noninterest-bearing deposits | 650,443 | | | 734,233 | | |
Trading liabilities – equity and other instruments(e) | Trading liabilities – equity and other instruments(e) | 29,769 | | | 43,394 | | |
Trading liabilities – equity and other instruments(e) | |
Trading liabilities – equity and other instruments(e) | |
Trading liabilities – derivative payables | |
Trading liabilities – derivative payables | |
Trading liabilities – derivative payables | Trading liabilities – derivative payables | 49,357 | | | 54,522 | | |
All other liabilities, including the allowance for lending-related commitments | All other liabilities, including the allowance for lending-related commitments | 180,303 | | | 181,105 | | |
All other liabilities, including the allowance for lending-related commitments | |
All other liabilities, including the allowance for lending-related commitments | |
Total liabilities | |
Total liabilities | |
Total liabilities | Total liabilities | 3,411,376 | | | 3,620,756 | | |
Stockholders’ equity | Stockholders’ equity | |
Stockholders’ equity | |
Stockholders’ equity | |
Preferred stock | |
Preferred stock | |
Preferred stock | Preferred stock | 27,404 | | | 33,526 | | |
Common stockholders’ equity | Common stockholders’ equity | 271,197 | | | 252,506 | | |
Common stockholders’ equity | |
Common stockholders’ equity | |
Total stockholders’ equity | |
Total stockholders’ equity | |
Total stockholders’ equity | Total stockholders’ equity | 298,601 | | | 286,032 | | |
Total liabilities and stockholders’ equity | Total liabilities and stockholders’ equity | $ | 3,709,977 | | | $ | 3,906,788 | | |
Total liabilities and stockholders’ equity | |
Total liabilities and stockholders’ equity | |
Interest rate spread | |
Interest rate spread | |
Interest rate spread | Interest rate spread | | 2.04 | % | | 1.61 | % | |
Net interest income and net yield on interest-earning assets | Net interest income and net yield on interest-earning assets | | $ | 20,831 | | | 2.63 | | | $ | 13,970 | | | 1.67 | | |
Net interest income and net yield on interest-earning assets | |
Net interest income and net yield on interest-earning assets | |
(a)Represents securities which are tax-exempt for U.S. federal income tax purposes.
(b)Includes 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.
(c)Includes commercial paper.The rates reflect the impact of interest earned on cash collateral where the cash collateral has been netted against certain derivative payables.
(d)All other interest-bearing liabilities include brokerage-related customer payables.
(e)The combined balance of trading liabilities – debt and equity instruments was $143.3$174.1 billion and $140.1$143.3 billion for the three months ended March 31, 20232024 and 2022,2023, respectively.
(f)Interest includes the effect of certain related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(g)The annualized rate for securities based on amortized cost was 2.74%3.60% and 1.38%2.74% for the three months ended March 31, 20232024 and 2022,2023, respectively, and does not give effect to changes in fair value that are reflected in AOCI.
(h)Negative interest and rates reflect the net impact of interest earned offset by fees paid on client-driven prime brokerage securities borrowed transactions.
| | | | | | | | | | | | | | |
GLOSSARY OF TERMS AND ACRONYMS |
20222023 Form 10-K: Annual report on Form 10-K for year ended December 31, 2022,2023, 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.
BHC: Bank holding company
BWM: Banking & Wealth Management
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
CCAR: Comprehensive Capital Analysis and Review
CCB: Consumer & Community Banking
CCP: Central Counterparty
CDS: Credit default swaps
CECL: Current Expected Credit Losses
CEO: Chief Executive Officer
CET1 capital: Common equity Tier 1 capital
CFO: Chief Financial Officer
CFTC: Commodity Futures Trading Commission
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.
Client investment assets: Represent assets under management as well as custody, brokerage and annuity accounts, and deposits held in investment accounts.
CLTV: Combined loan-to-value
CMT: Constant Maturity Treasury
Collateral-dependent: A loan is considered to be collateral-dependent when repayment of the loan is expected to be provided substantially through the operation or sale of the collateral when the 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.
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.
CRR: Capital Requirements Regulation
CVA: Credit valuation adjustment
Deposit margin: Represents net interest income expressed as a percentage of average deposits.
DVA: Debit valuation adjustment
EC: European Commission
Eligible HQLA: Eligible high-quality liquid assets, for purposes of calculating the LCR, is the amount of unencumbered HQLA that satisfy certain operational considerations as defined in the LCR rule.
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.
EPS: Earnings per share
ERISA: Employee Retirement Income Security Act of 1974
ESG: Environmental, Social and Governance
ETD: “Exchange-traded derivatives”: Derivative contracts that are executed on an exchange and settled via a central clearing house.
EU: European Union
Expense categories:
•Volume- and/or 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.
Fannie Mae: Federal National Mortgage Association
FASB: Financial Accounting Standards Board
FCA: Financial Conduct Authority
FDIC: Federal Deposit Insurance Corporation
FDM: "Financial difficulty modification" applies to loan modifications effective January 1, 2023, and is deemed to
occur when the Firm modifies specific terms of the original loan agreement. The following types of modifications are considered FDMs: principal forgiveness, interest rate reduction, other-than-insignificant payment delay,deferral, term extension or a combination of these modifications.
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.
FICC: Fixed Income Clearing Corporation
FINRA: Financial Industry Regulatory Authority
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.
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
GSIB: Global systemically important banks
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
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.
IPO: Initial Public Offering
IR: Interest rate
ISDA: International Swaps and Derivatives Association
JPMorgan Chase: JPMorgan Chase & Co.
JPMorgan Chase Bank, N.A.: JPMorgan Chase Bank, National Association
JPMorgan Chase Foundation or Foundation: a not-for-profit organization that makes contributions for charitable and educational purposes.
J.P. Morgan Securities: J.P. Morgan Securities LLC
JPMSE: J.P. Morgan SE
LCR: Liquidity coverage ratio
LIBOR: London Interbank Offered Rate
LLC: Limited Liability Company
LOB: Line of business
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.
Macro businesses: the macro businesses include Rates, Currencies and Emerging Markets, Fixed Income Financing and Commodities in CIB's Fixed Income Markets.
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.
Markets: consists of CIB's Fixed Income Markets and Equity Markets businesses.
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).
MBS: Mortgage-backed securities
MD&A: Management’s discussion and analysis
Measurement 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.
MEV: Macroeconomic variable
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.
MREL: Minimum requirements for own funds and eligible liabilities
MSR: Mortgage servicing rights
NA: Data is not applicable or available for the period presented.
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 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.
NFA: National Futures Association
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.
NSFR: Net Stable Funding Ratio
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.
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.
Pillar 1: The Basel framework consists of a three “Pillar” approach. Pillar 1 establishes minimum capital requirements, defines eligible capital instruments, and prescribes rules for calculating RWA.
Pillar 3: The Basel framework consists of a three “Pillar” approach. Pillar 3 encourages market discipline through disclosure requirements which allow market participants to assess the risk and capital profiles of banks.
PPP: Paycheck Protection Program under the Small Business Association (“SBA”)
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
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.
S&P: Standard and Poors
SA-CCR: Standardized Approach for Counterparty Credit Risk
SAR as it pertains to Hong Kong: Special Administrative Region
SAR(s) as it pertains to employee stock awards: Stock appreciation rights
SCB: Stress capital buffer
Scored portfolios: Consumer loan portfolios that predominantly include residential real estate loans, credit card loans, auto loans to individuals and certain small business loans.
SEC: U.S. Securities and Exchange Commission
Securitized Products Group: Comprised of Securitized Products and tax-oriented investments.
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 securities: Securities registered with the SEC under a shelf registration statement that have not been issued, offered or sold. These securities are not included in league tables until they have actually been issued.
Single-name: Single reference-entities
SLR: Supplementary leverage ratio
SMBS: Stripped Mortgage-Backed Securities
SOFR: Secured Overnight Financing Rate
SPEs: Special purpose entities
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, underlying reference pool of loans 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” applies to loan modifications granted prior to January 1, 2023 and 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
U.S.: United States of America
U.S. GAAP: Accounting principles generally accepted in the 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. GSE(s): “U.S. government-sponsored enterprises” 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 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
Unaudited: Financial statements and/or information that have not been subject to auditing procedures by an independent registered public accounting firm.
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 loans.
CONSUMER & COMMUNITY BANKING (“CCB”)
Debit and credit card sales volume: Dollar amount of card member purchases, net of returns.
Deposit margin: Represents 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; changes in the fair value of MSRs; the impact of risk management activities associated with 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.
Production revenue: Includes fees and income recognized as earned on mortgage loans originated with the intent to sell, and the impact of risk management activities associated with the mortgage pipeline and warehouse loans. Production revenue also includes gains and losses on sales 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 of financial instruments measured under the fair value 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.
Credit card:Card Services: is a business that primarily issues credit cards to consumers and small businesses.
Net revenue rate: Represents 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 LOBs.
Payments is a full service provider of cash management solutions, which primarily includes merchant acquiring, cross border and domestic payments, liquidity and account services, and global trade for multinational corporations, e-commerce and marketplace operators, and financial institutions.
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.
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, payments, investment banking and asset management products across three primary client segments: Middle Market Banking, Corporate Client Banking and Commercial Real Estate Banking. Other includes amounts not aligned with a primary client segment.
Middle Market Banking: covers small and midsized companies, local governments and nonprofit clients.
Corporate Client Banking: covers large corporations.
Commercial Real Estate Banking: covers investors, developers, and owners of multifamily, office, retail, industrial and affordable housing properties.
CB product revenue comprisesconsists 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.
Payments: includes cash management solutions, which primarily includes merchant acquiring, cross border and domesticservices that enable CB clients to
manage payments globally across liquidity and account services,
solutions, commerce solutions, clearing, trade and global trade solutions offered to CB clients.
working capital.
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 marketmarkets products used by CB clients is also included.
Other: revenue primarily includes tax-equivalent adjustments generated from Community Development Banking and activity derived from principal transactions.
ASSET & WEALTH MANAGEMENT (“AWM”)
Assets under management (“AUM”): represent assets managed by AWM on behalf of its Private Banking, Global Institutional and Global Funds clients. Includes “Committed capital not Called.”
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: offers multi-asset investment management solutions across equities, fixed income, alternatives and money market funds to institutional and retail investors providing for a broad range of clients’ investment needs.
Global Private Bank: provides retirement products and services, brokerage, custody, trusts and estates, loans, mortgages, deposits and investment management to high net worth clients.
AWM’s client segments consist of the following:
Private Banking: clients include high- and ultra-high-net-worth individuals, families, money managers and business owners.
Global Institutional: clients include both corporate and public institutions, endowments, foundations, nonprofit organizations and governments worldwide.
Global Funds: clients include financial intermediaries and individual investors.
Asset Management has two high-level measures of its overall fund performance:
Percentage of active mutual fund and active ETF 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. An 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 provided 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 these rankings. All ratings, the assigned peer
assigned peer categories and the asset values used to derive these rankings are sourced from the applicable fund rating provider. Where applicable, the fund rating providers redenominate asset values into U.S. dollars. The percentage 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, for which Nomura provides ratings at the fund level. The performance data may have been different if all share classes had been included. Past performance is not indicative of future results.
Percentage of active mutual fund and active ETF 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 these rankings are sourced from the fund rating providers. Quartile rankings are based on the net-of-fee absolute return of each fund. Where applicable, the fund rating providers redenominate asset values into U.S. dollars. The percentage 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 for U.K., Luxembourg and Hong Kong funds and at the fund level for all other funds. The performance data may have been different if all share classes had been included. Past performance is not indicative of future results.
“Primary share class” means the C share class for European funds and Acc share class for Hong Kong and Taiwan funds. If these share classes are not available, the oldest share class is used as the primary share class.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Refer to the Market Risk Management section of Management’s discussion and analysis and pages 131-138135–143 of JPMorgan Chase’s 20222023 Form 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 Certifications furnished by the Chairman and Chief Executive Officer and Chief Financial 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 all misstatements. Deficiencies or lapses in internal controls may 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 control in the future and collateral consequences therefrom. Refer to “Management’s report on internal control over financial reporting” on page 155162 of JPMorgan Chase’s 20222023 Form 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 March 31, 2023,2024, 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.
Refer to the discussion of the Firm’s material legal proceedings in Note 24 of this Form 10-Q for information that updates the disclosures set forth under Part I, Item 3: Legal Proceedings, in JPMorgan Chase’s 20222023 Form 10-K.
Item 1A. Risk Factors.
The following discussion supplements the discussion of risk
factors affecting the Firm as set forth inRefer to Part I, Item 1A: Risk Factors on pages 9-329-33 of JPMorgan Chase’s 20222023 Form 10-K and Forward-Looking Statements on page 78 82of this Form 10-Q. The10-Q for a discussion of certain risk factors as so supplemented,
sets forthaffecting the material risk factors that could affect
JPMorgan Chase’s financial condition and operations.
Readers should not consider any descriptions of such
factors to be a complete set of all potential risks that could
affect the Firm.
JPMorgan Chase’s acquisition of certain assets and liabilities of First Republic Bank may not result in all of the benefits anticipated.
On May 1, 2023, JPMorgan Chase Bank, N.A. acquired the substantial majority of assets and assumed certain liabilities of First Republic Bank from the FDIC (the “Acquisition”). There can be no assurance that the Acquisition will have the anticipated positive results, including with respect to:
•the total cost of integration
•the time required to complete the integration
•the amount of longer-term cost savings
•the overall performance of the assets and liabilities acquired in the Acquisition, or
•an improved price for JPMorgan Chase’s common stock.
Integration of an acquired business can be complex and costly, and typically will involve the combination of relevant accounting and data processing systems and management controls, as well as managing relevant relationships with employees, clients, suppliers and other business partners. Integration efforts could divert management attention and resources, which could adversely affect JPMorgan Chase’s operations or results. In addition, JPMorgan Chase could incur unanticipated costs or losses in connection with the Acquisition and its integration efforts.
Acquisitions may also result in business disruptions that cause JPMorgan Chase to lose clients and customers, or cause clients and customers to move their business to competing financial institutions. It is possible that the integration process could result in the disruption of ongoing businesses or inconsistencies in standards, controls, procedures and policies that could adversely affect JPMorgan Chase’s ability to maintain relationships with clients, customers, depositors and employees. In addition, the loss of key employees in connection with the Acquisition could adversely affect JPMorgan Chase’s ability to successfully conduct its business.
Supervision and regulation
Refer to the Supervision and regulation section on pages 4–8 of JPMorgan Chase’s 20222023 Form 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 March 31, 2023.
Repurchases under the common share repurchase program
Refer to Capital Risk Management on pages 36-4138-43 of this Form 10-Q and pages 86-9691-101 of JPMorgan Chase’s 20222023 Form 10-K for information regarding repurchases under the Firm’s common share repurchase program.
TheEffective May 1, 2022, the Firm is authorized to purchase up to $30 billion under its common share repurchase program previously approved by the Board of Directors.Directors, which was announced on April 13, 2022.
Shares repurchased pursuant to the common share repurchase program during the three months ended March 31, 20232024 were as follows.follows:
| Three months ended March 31, 2023 | Total number of shares of common stock repurchased | | Average price paid per share of common stock(a) | | | Aggregate purchase price of common stock repurchases (in millions)(a) | | Dollar value of remaining authorized repurchase (in millions)(a)(b) |
Three months ended March 31, 2024 | |
Three months ended March 31, 2024 | |
Three months ended March 31, 2024 | | Total number of shares of common stock repurchased | | Average price paid per share of common stock(a) | | | | | | Aggregate purchase price of common stock repurchases (in millions)(a) | | Dollar value of remaining authorized repurchase (in millions)(a)(b) |
January | January | — | | | $ | — | | | | $ | — | | | $ | — | |
February | February | 3,393,245 | | | 141.29 | | | | 479 | | | 29,154 | |
March | March | 18,602,008 | | | 132.27 | | | | 2,461 | | | 26,693 | |
First quarter | First quarter | 21,995,253 | | | $ | 133.67 | | | | $ | 2,940 | | | $ | 26,693 | |
|
(a)Excludes excise tax and commissions cost.commissions. As part of the Inflation Reduction Act of 2022, a 1% excise tax was imposed on net share repurchases effective January 1, 2023.
(b)Represents the amount remaining under the $30 billion repurchase program.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Trading arrangements
The following table provides information concerning Rule 10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934) adopted in the first quarter of 2024 by any director or officer who is subject to the filing requirements of Section 16 of the Securities Exchange Act of 1934 ("Section 16 Director or Officer"). These trading arrangements are intended to satisfy the affirmative defense of Rule 10b5-1(c). Certain of the Firm's Section 16 Directors or Officers may participate in employee stock purchase plans, 401(k) plans or dividend reinvestment plans of the Firm that have been designed to comply with Rule 10b5-1(c). No non-Rule 10b5-1 trading arrangements (as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934) were adopted by any Section 16 Director or Officer during the first quarter of 2024. Additionally, no Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were terminated by any Section 16 Director or Officer in the first quarter of 2024.
| | | | | | | | | | | | | | |
Name | Title | Adoption date | Duration(b) | Aggregate number of shares to be sold |
Ashley Bacon | Chief Risk Officer | February 7, 2024 | February 7, 2024 – September 30, 2024 | 10,172 | |
Lori Beer | Chief Information Officer | February 13, 2024 | February 13, 2024 – September 30, 2024 | 5,298 | |
Mary Erdoes | CEO, AWM | February 7, 2024 | February 7, 2024 – June 28, 2024 | 15,895 | |
Stacey Friedman | General Counsel | February 14, 2024 | February 14, 2024 – September 30, 2024 | 8,830 | |
Elena Korablina | Controller | February 1, 2024 | February 1, 2024 – September 30, 2024 | 21,829 | |
Marianne Lake(a) | CEO, CCB | February 13, 2024 | February 13, 2024 – December 31, 2024 | 11,734 | |
Robin Leopold | Head of Human Resources | February 9, 2024 | February 9, 2024 – December 31, 2024 | 3,000 | |
Doug Petno | Co-Head of Global Banking, CIB | February 12, 2024 | February 12, 2024 – September 30, 2024 | 9,654 | |
Jennifer Piepszak | Co-CEO, CIB | February 6, 2024 | February 6, 2024 – December 31, 2024 | 8,831 | |
Peter Scher | Vice Chairman | February 9, 2024 | February 9, 2024 – September 30, 2024 | 4,973 | |
(a)Transaction by trust of which Ms. Lake has either a direct or indirect pecuniary interest.
(b)Sales under the trading arrangement will not commence until completion of the required cooling off period under Rule 10b5-1. Subject to compliance with Rule 10b5-1, duration could cease earlier than the final date shown above to the extent that the aggregate number of shares to be sold under the trading arrangement have been sold.
Item 6. Exhibits.
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Exhibit No. | | Description of Exhibit |
| | |
15 | | |
| | |
22 | | |
| | |
31.1 | | |
| | |
31.2 | | |
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32 | | |
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101.INS | | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline 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 | | Cover Page Interactive Data File (embedded within the Inline XBRL document and included in 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 March 31, 2023,2024, formatted in XBRL (eXtensible Business Reporting Language) interactive data files: (i) the Consolidated statements of income (unaudited) for the three months ended March 31, 20232024 and 2022,2023, (ii) the Consolidated statements of comprehensive income (unaudited) for the three months ended March 31, 20232024 and 2022,2023, (iii) the Consolidated balance sheets (unaudited) as of March 31, 2023,2024 and December 31, 2022,2023, (iv) the Consolidated statements of changes in stockholders’ equity (unaudited) for the three months ended March 31, 20232024 and 2022,2023, (v) the Consolidated statements of cash flows (unaudited) for the three months ended March 31, 20232024 and 2022,2023, 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/ Elena Korablina |
| Elena Korablina |
| Managing Director and Firmwide Controller |
| (Principal Accounting Officer) |