EARNINGS RELEASE FINANCIAL SUPPLEMENT
THIRD QUARTER 2016
JPMORGAN CHASE & CO. | ||||||||
TABLE OF CONTENTS | ||||||||
Page(s) | ||||||||
Consolidated Results | ||||||||
Consolidated Financial Highlights | 2–3 | |||||||
Consolidated Statements of Income | 4 | |||||||
Consolidated Balance Sheets | 5 | |||||||
Condensed Average Balance Sheets and Annualized Yields | 6 | |||||||
Reconciliation from Reported to Managed Basis | 7 | |||||||
Segment Results - Managed Basis | 8 | |||||||
Capital and Other Selected Balance Sheet Items | 9 | |||||||
Earnings Per Share and Related Information | 10 | |||||||
Business Segment Results | ||||||||
Consumer & Community Banking | 11–14 | |||||||
Corporate & Investment Bank | 15–17 | |||||||
Commercial Banking | 18–19 | |||||||
Asset Management | 20–22 | |||||||
Corporate | 23 | |||||||
Credit-Related Information | 24–27 | |||||||
Non-GAAP Financial Measures, Key Performance Measures and Other Notes | 28 | |||||||
Glossary of Terms (a) | ||||||||
(a) | Refer to the Glossary of Terms on pages 311–315 of JPMorgan Chase & Co.’s (the “Firm’s”) Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Annual Report”) and the Glossary of Terms and Line of Business Metrics on pages 169–176 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016. |
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||
(in millions, except per share and ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
SELECTED INCOME STATEMENT DATA | 3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | ||||||||||||||||||||||||||||
Reported Basis | ||||||||||||||||||||||||||||||||||||||
Total net revenue | $ | 24,673 | $ | 24,380 | $ | 23,239 | $ | 22,885 | $ | 22,780 | 1 | % | 8 | % | $ | 72,292 | $ | 70,658 | 2 | % | ||||||||||||||||||
Total noninterest expense | 14,463 | 13,638 | 13,837 | 14,263 | 15,368 | 6 | (6 | ) | 41,938 | 44,751 | (6 | ) | ||||||||||||||||||||||||||
Pre-provision profit | 10,210 | 10,742 | 9,402 | 8,622 | 7,412 | (5 | ) | 38 | 30,354 | 25,907 | 17 | |||||||||||||||||||||||||||
Provision for credit losses | 1,271 | 1,402 | 1,824 | 1,251 | 682 | (9 | ) | 86 | 4,497 | 2,576 | 75 | |||||||||||||||||||||||||||
NET INCOME | 6,286 | 6,200 | 5,520 | 5,434 | 6,804 | 1 | (8 | ) | 18,006 | 19,008 | (5 | ) | ||||||||||||||||||||||||||
Managed Basis (a) | ||||||||||||||||||||||||||||||||||||||
Total net revenue | 25,512 | 25,214 | 24,083 | 23,747 | 23,535 | 1 | 8 | 74,809 | 72,886 | 3 | ||||||||||||||||||||||||||||
Total noninterest expense | 14,463 | 13,638 | 13,837 | 14,263 | 15,368 | 6 | (6 | ) | 41,938 | 44,751 | (6 | ) | ||||||||||||||||||||||||||
Pre-provision profit | 11,049 | 11,576 | 10,246 | 9,484 | 8,167 | (5 | ) | 35 | 32,871 | 28,135 | 17 | |||||||||||||||||||||||||||
Provision for credit losses | 1,271 | 1,402 | 1,824 | 1,251 | 682 | (9 | ) | 86 | 4,497 | 2,576 | 75 | |||||||||||||||||||||||||||
NET INCOME | 6,286 | 6,200 | 5,520 | 5,434 | 6,804 | 1 | (8 | ) | 18,006 | 19,008 | (5 | ) | ||||||||||||||||||||||||||
EARNINGS PER SHARE DATA | ||||||||||||||||||||||||||||||||||||||
Net income: Basic | $ | 1.60 | $ | 1.56 | $ | 1.36 | $ | 1.34 | $ | 1.70 | 3 | (6 | ) | $ | 4.51 | $ | 4.72 | (4 | ) | |||||||||||||||||||
Diluted | 1.58 | 1.55 | 1.35 | 1.32 | 1.68 | 2 | (6 | ) | 4.48 | 4.68 | (4 | ) | ||||||||||||||||||||||||||
Average shares: Basic | 3,597.4 | 3,635.8 | 3,669.9 | 3,674.2 | 3,694.4 | (1 | ) | (3 | ) | 3,634.4 | 3,709.2 | (2 | ) | |||||||||||||||||||||||||
Diluted | 3,629.6 | 3,666.5 | 3,696.9 | 3,704.6 | 3,725.6 | (1 | ) | (3 | ) | 3,664.3 | 3,742.2 | (2 | ) | |||||||||||||||||||||||||
MARKET AND PER COMMON SHARE DATA | ||||||||||||||||||||||||||||||||||||||
Market capitalization | $ | 238,277 | $ | 224,449 | $ | 216,547 | $ | 241,899 | $ | 224,438 | 6 | 6 | $ | 238,277 | $ | 224,438 | 6 | |||||||||||||||||||||
Common shares at period-end | 3,578.3 | 3,612.0 | 3,656.7 | 3,663.5 | 3,681.1 | (1 | ) | (3 | ) | 3,578.3 | 3,681.1 | (3 | ) | |||||||||||||||||||||||||
Closing share price (b) | $ | 66.59 | $ | 62.14 | $ | 59.22 | $ | 66.03 | $ | 60.97 | 7 | 9 | $ | 66.59 | $ | 60.97 | 9 | |||||||||||||||||||||
Book value per share | 63.79 | 62.67 | 61.28 | 60.46 | 59.67 | 2 | 7 | 63.79 | 59.67 | 7 | ||||||||||||||||||||||||||||
Tangible book value per share (c) | 51.23 | 50.21 | 48.96 | 48.13 | 47.36 | 2 | 8 | 51.23 | 47.36 | 8 | ||||||||||||||||||||||||||||
Cash dividends declared per share | 0.48 | 0.48 | (g) | 0.44 | 0.44 | 0.44 | — | 9 | 1.40 | (g) | 1.28 | 9 | ||||||||||||||||||||||||||
FINANCIAL RATIOS (d) | ||||||||||||||||||||||||||||||||||||||
Return on common equity (“ROE”) | 10 | % | 10 | % | 9 | % | 9 | % | 12 | % | 10 | % | 11 | % | ||||||||||||||||||||||||
Return on tangible common equity (“ROTCE”) (c) | 13 | 13 | 12 | 11 | 15 | 13 | 14 | |||||||||||||||||||||||||||||||
Return on assets | 1.01 | 1.02 | 0.93 | 0.90 | 1.11 | 0.99 | 1.02 | |||||||||||||||||||||||||||||||
High quality liquid assets (“HQLA”) (in billions) (e) | $ | 539 | (h) | $ | 516 | $ | 505 | $ | 496 | $ | 505 | 4 | 7 | $ | 539 | (h) | $ | 505 | 7 | |||||||||||||||||||
CAPITAL RATIOS (f) | ||||||||||||||||||||||||||||||||||||||
Common equity Tier 1 (“CET1”) capital ratio | 12.0 | % | (h) | 12.0 | % | 11.9 | % | 11.8 | % | 11.5 | % | 12.0 | % | (h) | 11.5 | % | ||||||||||||||||||||||
Tier 1 capital ratio | 13.6 | (h) | 13.6 | 13.5 | 13.5 | 13.3 | 13.6 | (h) | 13.3 | |||||||||||||||||||||||||||||
Total capital ratio | 15.1 | (h) | 15.2 | 15.1 | 15.1 | 14.9 | 15.1 | (h) | 14.9 | |||||||||||||||||||||||||||||
Tier 1 leverage ratio | 8.5 | (h) | 8.5 | 8.6 | 8.5 | 8.4 | 8.5 | (h) | 8.4 | |||||||||||||||||||||||||||||
Note: Effective January 1, 2016, the Firm adopted new accounting guidance related to (1) the recognition and measurement of debit valuation adjustments (“DVA”) on financial liabilities where the fair value option has been elected, and (2) the accounting for share-based payments. For additional information, see Notes 1 and 2 on page 28.
(a) | For a further discussion of managed basis, see Reconciliation from Reported to Managed Basis on page 7. |
(b) | Share price shown is from the New York Stock Exchange. |
(c) | Tangible book value per share and ROTCE are key financial performance measures. Tangible book value per share represents tangible common equity (“TCE”) divided by common shares at period-end. ROTCE measures the Firm’s annualized earnings as a percentage of average TCE. For further discussion of these measures, see page 28. |
(d) | Quarterly ratios are based upon annualized amounts. |
(e) | HQLA represents the amount of assets that qualify for inclusion in the liquidity coverage ratio under the U.S. rule (“U.S. LCR”). For additional information on HQLA and LCR, see page 160 of the 2015 Annual Report, and page 70 of the Firm's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016. |
(f) | Ratios presented are calculated under the Basel III Transitional capital rules and represent the Collins Floor. See footnote (a) on page 9 for additional information on Basel III and the Collins Floor. |
(g) | On May 17, 2016, the Board of Directors increased the quarterly common stock dividend from $0.44 to $0.48 per share. |
(h) | Estimated. |
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JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio and headcount data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 2,521,029 | $ | 2,466,096 | $ | 2,423,808 | $ | 2,351,698 | $ | 2,416,635 | 2 | % | 4 | % | $ | 2,521,029 | $ | 2,416,635 | 4 | % | ||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Consumer, excluding credit card loans | 363,796 | 361,305 | 354,192 | 344,821 | 331,969 | 1 | 10 | 363,796 | 331,969 | 10 | ||||||||||||||||||||||||||||
Credit card loans | 133,435 | 131,591 | 126,090 | 131,463 | 126,979 | 1 | 5 | 133,435 | 126,979 | 5 | ||||||||||||||||||||||||||||
Wholesale loans | 390,823 | 379,908 | 367,031 | 361,015 | 350,509 | 3 | 12 | 390,823 | 350,509 | 12 | ||||||||||||||||||||||||||||
Total Loans | 888,054 | 872,804 | 847,313 | 837,299 | 809,457 | 2 | 10 | 888,054 | 809,457 | 10 | ||||||||||||||||||||||||||||
Core loans (a) | 795,077 | 775,813 | 746,196 | 732,093 | 698,988 | 2 | 14 | 795,077 | 698,988 | 14 | ||||||||||||||||||||||||||||
Core loans (average) (a) | 779,383 | 760,721 | 737,297 | 715,282 | 680,224 | 2 | 15 | 759,207 | 655,753 | 16 | ||||||||||||||||||||||||||||
Deposits: | ||||||||||||||||||||||||||||||||||||||
U.S. offices: | ||||||||||||||||||||||||||||||||||||||
Noninterest-bearing | 409,912 | 393,294 | 383,282 | 392,721 | 404,984 | 4 | 1 | 409,912 | 404,984 | 1 | ||||||||||||||||||||||||||||
Interest-bearing | 722,294 | 695,763 | 695,667 | 663,004 | 624,014 | 4 | 16 | 722,294 | 624,014 | 16 | ||||||||||||||||||||||||||||
Non-U.S. offices: | ||||||||||||||||||||||||||||||||||||||
Noninterest-bearing | 19,397 | 20,980 | 20,913 | 18,921 | 20,174 | (8 | ) | (4 | ) | 19,397 | 20,174 | (4 | ) | |||||||||||||||||||||||||
Interest-bearing | 224,535 | 220,921 | 221,954 | 205,069 | 223,934 | 2 | — | 224,535 | 223,934 | — | ||||||||||||||||||||||||||||
Total deposits | 1,376,138 | 1,330,958 | 1,321,816 | 1,279,715 | 1,273,106 | 3 | 8 | 1,376,138 | 1,273,106 | 8 | ||||||||||||||||||||||||||||
Long-term debt (b) | 309,418 | 295,627 | 290,754 | 288,651 | 292,503 | 5 | 6 | 309,418 | 292,503 | 6 | ||||||||||||||||||||||||||||
Common stockholders’ equity | 228,263 | 226,355 | 224,089 | 221,505 | 219,660 | 1 | 4 | 228,263 | 219,660 | 4 | ||||||||||||||||||||||||||||
Total stockholders’ equity | 254,331 | 252,423 | 250,157 | 247,573 | 245,728 | 1 | 4 | 254,331 | 245,728 | 4 | ||||||||||||||||||||||||||||
Loans-to-deposits ratio | 65 | % | 66 | % | 64 | % | 65 | % | 64 | % | 65 | % | 64 | % | ||||||||||||||||||||||||
Headcount | 242,315 | 240,046 | 237,420 | 234,598 | 235,678 | 1 | 3 | 242,315 | 235,678 | 3 | ||||||||||||||||||||||||||||
95% CONFIDENCE LEVEL - TOTAL VaR | ||||||||||||||||||||||||||||||||||||||
Average VaR(c) | $ | 43 | $ | 45 | $ | 54 | $ | 49 | $ | 54 | (4 | ) | (20 | ) | $ | 47 | $ | 47 | — | |||||||||||||||||||
LINE OF BUSINESS NET REVENUE (d) | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 11,328 | $ | 11,451 | $ | 11,117 | $ | 11,222 | $ | 10,879 | (1 | ) | 4 | $ | 33,896 | $ | 32,598 | 4 | ||||||||||||||||||||
Corporate & Investment Bank | 9,455 | 9,165 | 8,135 | 7,069 | 8,168 | 3 | 16 | 26,755 | 26,473 | 1 | ||||||||||||||||||||||||||||
Commercial Banking | 1,870 | 1,817 | 1,803 | 1,760 | 1,644 | 3 | 14 | 5,490 | 5,125 | 7 | ||||||||||||||||||||||||||||
Asset Management | 3,047 | 2,939 | 2,972 | 3,045 | 2,894 | 4 | 5 | 8,958 | 9,074 | (1 | ) | |||||||||||||||||||||||||||
Corporate | (188 | ) | (158 | ) | 56 | 651 | (50 | ) | (19 | ) | (276 | ) | (290 | ) | (384 | ) | 24 | |||||||||||||||||||||
TOTAL NET REVENUE | $ | 25,512 | $ | 25,214 | $ | 24,083 | $ | 23,747 | $ | 23,535 | 1 | 8 | $ | 74,809 | $ | 72,886 | 3 | |||||||||||||||||||||
LINE OF BUSINESS NET INCOME | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 2,204 | $ | 2,656 | $ | 2,490 | $ | 2,407 | $ | 2,630 | (17 | ) | (16 | ) | $ | 7,350 | $ | 7,382 | — | |||||||||||||||||||
Corporate & Investment Bank | 2,912 | 2,493 | 1,979 | 1,748 | 1,464 | 17 | 99 | 7,384 | 6,342 | 16 | ||||||||||||||||||||||||||||
Commercial Banking | 778 | 696 | 496 | 550 | 518 | 12 | 50 | 1,970 | 1,641 | 20 | ||||||||||||||||||||||||||||
Asset Management | 557 | 521 | 587 | 507 | 475 | 7 | 17 | 1,665 | 1,428 | 17 | ||||||||||||||||||||||||||||
Corporate | (165 | ) | (166 | ) | (32 | ) | 222 | 1,717 | 1 | NM | (363 | ) | 2,215 | NM | ||||||||||||||||||||||||
NET INCOME | $ | 6,286 | $ | 6,200 | $ | 5,520 | $ | 5,434 | $ | 6,804 | 1 | (8 | ) | $ | 18,006 | $ | 19,008 | (5 | ) | |||||||||||||||||||
(a) | Loans considered central to the Firm’s ongoing businesses. For further discussion of core loans, see page 28. |
(b) | Included unsecured long-term debt of $226.8 billion, $220.6 billion, $216.1 billion, $211.8 billion and $214.6 billion for the periods ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively. |
(c) | As part of the Firm’s continuous evaluation and periodic enhancement of its market risk measures, during the third quarter of 2016 the Firm refined the scope of positions included in risk management VaR. In particular, certain private equity positions in CIB, exposure arising from non-U.S. dollar-denominated funding in Corporate, as well as seed capital and co-investments in Asset Management were removed from the VaR calculation. Commencing with the third quarter of 2016, exposure arising from these positions is captured using other sensitivity-based measures, such as a 10% decline in market value or a 1 basis point parallel shift in spreads, as appropriate, and will be separately reported in the Firm's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016. The Firm believes this refinement to its reported VaR measures more appropriately captures the risk of its market risk sensitive positions. This refinement resulted in a reduction in average Total VaR of $7 million for the three months ended September 30, 2016. For information regarding CIB VaR, see page 17. |
(d) | For a further discussion of managed basis, see Reconciliation from Reported to Managed Basis on page 7. |
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JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||||||||||||||||
(in millions, except per share and ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
REVENUE | 3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | ||||||||||||||||||||||||||||
Investment banking fees | $ | 1,866 | $ | 1,644 | $ | 1,333 | $ | 1,520 | $ | 1,604 | 14 | % | 16 | % | $ | 4,843 | $ | 5,231 | (7 | )% | ||||||||||||||||||
Principal transactions | 3,451 | 2,976 | 2,679 | 1,552 | 2,367 | 16 | 46 | 9,106 | 8,856 | 3 | ||||||||||||||||||||||||||||
Lending- and deposit-related fees | 1,484 | 1,403 | 1,403 | 1,450 | 1,463 | 6 | 1 | 4,290 | 4,244 | 1 | ||||||||||||||||||||||||||||
Asset management, administration and commissions | 3,597 | 3,681 | 3,624 | 3,842 | 3,845 | (2 | ) | (6 | ) | 10,902 | 11,667 | (7 | ) | |||||||||||||||||||||||||
Securities gains | 64 | 21 | 51 | 73 | 33 | 205 | 94 | 136 | 129 | 5 | ||||||||||||||||||||||||||||
Mortgage fees and related income | 624 | 689 | 667 | 556 | 469 | (9 | ) | 33 | 1,980 | 1,957 | 1 | |||||||||||||||||||||||||||
Card income | 1,202 | 1,358 | 1,301 | 1,431 | 1,447 | (11 | ) | (17 | ) | 3,861 | 4,493 | (14 | ) | |||||||||||||||||||||||||
Other income | 782 | 1,261 | 801 | 1,236 | 628 | (38 | ) | 25 | 2,844 | 1,796 | 58 | |||||||||||||||||||||||||||
Noninterest revenue | 13,070 | 13,033 | 11,859 | 11,660 | 11,856 | — | 10 | 37,962 | 38,373 | (1 | ) | |||||||||||||||||||||||||||
Interest income | 14,070 | 13,813 | 13,552 | 13,155 | 12,739 | 2 | 10 | 41,435 | 37,818 | 10 | ||||||||||||||||||||||||||||
Interest expense | 2,467 | 2,466 | 2,172 | 1,930 | 1,815 | — | 36 | 7,105 | 5,533 | 28 | ||||||||||||||||||||||||||||
Net interest income | 11,603 | 11,347 | 11,380 | 11,225 | 10,924 | 2 | 6 | 34,330 | 32,285 | 6 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE | 24,673 | 24,380 | 23,239 | 22,885 | 22,780 | 1 | 8 | 72,292 | 70,658 | 2 | ||||||||||||||||||||||||||||
Provision for credit losses | 1,271 | 1,402 | 1,824 | 1,251 | 682 | (9 | ) | 86 | 4,497 | 2,576 | 75 | |||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Compensation expense | 7,669 | 7,778 | 7,660 | 6,693 | 7,320 | (1 | ) | 5 | 23,107 | 23,057 | — | |||||||||||||||||||||||||||
Occupancy expense | 899 | 899 | 883 | 947 | 965 | — | (7 | ) | 2,681 | 2,821 | (5 | ) | ||||||||||||||||||||||||||
Technology, communications and equipment expense | 1,741 | 1,665 | 1,618 | 1,657 | 1,546 | 5 | 13 | 5,024 | 4,536 | 11 | ||||||||||||||||||||||||||||
Professional and outside services | 1,665 | 1,700 | 1,548 | 1,824 | 1,776 | (2 | ) | (6 | ) | 4,913 | 5,178 | (5 | ) | |||||||||||||||||||||||||
Marketing | 825 | 672 | 703 | 771 | 704 | 23 | 17 | 2,200 | 1,937 | 14 | ||||||||||||||||||||||||||||
Other expense (a) | 1,664 | 924 | 1,425 | 2,371 | 3,057 | 80 | (46 | ) | 4,013 | 7,222 | (44 | ) | ||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 14,463 | 13,638 | 13,837 | 14,263 | 15,368 | 6 | (6 | ) | 41,938 | 44,751 | (6 | ) | ||||||||||||||||||||||||||
Income before income tax expense | 8,939 | 9,340 | 7,578 | 7,371 | 6,730 | (4 | ) | 33 | 25,857 | 23,331 | 11 | |||||||||||||||||||||||||||
Income tax expense/(benefit) (b) | 2,653 | 3,140 | 2,058 | 1,937 | (74 | ) | (16 | ) | NM | 7,851 | 4,323 | 82 | ||||||||||||||||||||||||||
NET INCOME | $ | 6,286 | $ | 6,200 | $ | 5,520 | $ | 5,434 | $ | 6,804 | 1 | (8 | ) | $ | 18,006 | $ | 19,008 | (5 | ) | |||||||||||||||||||
NET INCOME PER COMMON SHARE DATA | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | $ | 1.60 | $ | 1.56 | $ | 1.36 | $ | 1.34 | $ | 1.70 | 3 | (6 | ) | $ | 4.51 | $ | 4.72 | (4 | ) | |||||||||||||||||||
Diluted earnings per share | 1.58 | 1.55 | 1.35 | 1.32 | 1.68 | 2 | (6 | ) | 4.48 | 4.68 | (4 | ) | ||||||||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||
Return on common equity (c) | 10 | % | 10 | % | 9 | % | 9 | % | 12 | % | 10 | % | 11 | % | ||||||||||||||||||||||||
Return on tangible common equity (c)(d) | 13 | 13 | 12 | 11 | 15 | 13 | 14 | |||||||||||||||||||||||||||||||
Return on assets (c) | 1.01 | 1.02 | 0.93 | 0.90 | 1.11 | 0.99 | 1.02 | |||||||||||||||||||||||||||||||
Effective income tax rate (b) | 29.7 | 33.6 | 27.2 | 26.3 | (1.1 | ) | 30.4 | 18.5 | ||||||||||||||||||||||||||||||
Overhead ratio | 59 | 56 | 60 | 62 | 67 | 58 | 63 | |||||||||||||||||||||||||||||||
See notes 1 and 2 on page 28.
(a) | Included Firmwide legal expense/(benefit) of $(71) million, $(430) million, $(46) million, $644 million and $1.3 billion for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively; and $(547) million and $2.3 billion for the nine months ended September 30, 2016, and 2015, respectively. |
(b) | The three and nine months ended September 30, 2015 reflected tax benefits of $2.2 billion and 2.7 billion, respectively, which reduced the Firm’s effective tax rate by 32.0% and 11.7%, respectively. The recognition of tax benefits in 2015 resulted from the resolution of various tax audits, as well as the release of U.S. deferred taxes associated with the restructuring of certain non-U.S. entities. |
(c) | Quarterly ratios are based upon annualized amounts. |
(d) | For further discussion of ROTCE, see page 28. |
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JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Sep 30, 2016 | ||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||
Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Jun 30, | Sep 30, | ||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
Cash and due from banks | $ | 21,390 | $ | 19,710 | $ | 18,212 | $ | 20,490 | $ | 21,258 | 9 | % | 1 | % | ||||||||||||
Deposits with banks | 396,200 | 345,595 | 360,196 | 340,015 | 376,196 | 15 | 5 | |||||||||||||||||||
Federal funds sold and securities purchased under | ||||||||||||||||||||||||||
resale agreements | 232,637 | 237,267 | 223,220 | 212,575 | 218,467 | (2 | ) | 6 | ||||||||||||||||||
Securities borrowed | 109,197 | 103,225 | 102,937 | 98,721 | 105,668 | 6 | 3 | |||||||||||||||||||
Trading assets: | ||||||||||||||||||||||||||
Debt and equity instruments | 309,258 | 302,347 | 295,944 | 284,162 | 293,040 | 2 | 6 | |||||||||||||||||||
Derivative receivables | 65,579 | 78,446 | 70,209 | 59,677 | 68,668 | (16 | ) | (4 | ) | |||||||||||||||||
Securities | 272,401 | 278,610 | 285,323 | 290,827 | 306,660 | (2 | ) | (11 | ) | |||||||||||||||||
Loans | 888,054 | 872,804 | 847,313 | 837,299 | 809,457 | 2 | 10 | |||||||||||||||||||
Less: Allowance for loan losses | 14,204 | 14,227 | 13,994 | 13,555 | 13,466 | — | 5 | |||||||||||||||||||
Loans, net of allowance for loan losses | 873,850 | 858,577 | 833,319 | 823,744 | 795,991 | 2 | 10 | |||||||||||||||||||
Accrued interest and accounts receivable | 64,333 | 64,911 | 57,649 | 46,605 | 57,926 | (1 | ) | 11 | ||||||||||||||||||
Premises and equipment | 14,208 | 14,262 | 14,195 | 14,362 | 14,709 | — | (3 | ) | ||||||||||||||||||
Goodwill | 47,302 | 47,303 | 47,310 | 47,325 | 47,405 | — | — | |||||||||||||||||||
Mortgage servicing rights | 4,937 | 5,072 | 5,658 | 6,608 | 6,716 | (3 | ) | (26 | ) | |||||||||||||||||
Other intangible assets | 887 | 917 | 940 | 1,015 | 1,036 | (3 | ) | (14 | ) | |||||||||||||||||
Other assets | 108,850 | 109,854 | 108,696 | 105,572 | 102,895 | (1 | ) | 6 | ||||||||||||||||||
TOTAL ASSETS | $ | 2,521,029 | $ | 2,466,096 | $ | 2,423,808 | $ | 2,351,698 | $ | 2,416,635 | 2 | 4 | ||||||||||||||
LIABILITIES | ||||||||||||||||||||||||||
Deposits | $ | 1,376,138 | $ | 1,330,958 | $ | 1,321,816 | $ | 1,279,715 | $ | 1,273,106 | 3 | 8 | ||||||||||||||
Federal funds purchased and securities loaned or sold | ||||||||||||||||||||||||||
under repurchase agreements | 168,491 | 166,044 | 160,999 | 152,678 | 180,319 | 1 | (7 | ) | ||||||||||||||||||
Commercial paper | 12,258 | 17,279 | 17,490 | 15,562 | 19,656 | (29 | ) | (38 | ) | |||||||||||||||||
Other borrowed funds | 24,479 | 19,945 | 19,703 | 21,105 | 27,174 | 23 | (10 | ) | ||||||||||||||||||
Trading liabilities: | ||||||||||||||||||||||||||
Debt and equity instruments | 95,126 | 101,194 | 87,963 | 74,107 | 84,334 | (6 | ) | 13 | ||||||||||||||||||
Derivative payables | 48,143 | 57,764 | 59,319 | 52,790 | 57,140 | (17 | ) | (16 | ) | |||||||||||||||||
Accounts payable and other liabilities | 190,412 | 184,635 | 176,934 | 177,638 | 187,986 | 3 | 1 | |||||||||||||||||||
Beneficial interests issued by consolidated VIEs | 42,233 | 40,227 | 38,673 | 41,879 | 48,689 | 5 | (13 | ) | ||||||||||||||||||
Long-term debt | 309,418 | 295,627 | 290,754 | 288,651 | 292,503 | 5 | 6 | |||||||||||||||||||
TOTAL LIABILITIES | 2,266,698 | 2,213,673 | 2,173,651 | 2,104,125 | 2,170,907 | 2 | 4 | |||||||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||
Preferred stock | 26,068 | 26,068 | 26,068 | 26,068 | 26,068 | — | — | |||||||||||||||||||
Common stock | 4,105 | 4,105 | 4,105 | 4,105 | 4,105 | — | — | |||||||||||||||||||
Additional paid-in capital | 92,103 | 91,974 | 91,782 | 92,500 | 92,316 | — | — | |||||||||||||||||||
Retained earnings | 157,870 | 153,749 | 149,730 | 146,420 | 143,050 | 3 | 10 | |||||||||||||||||||
Accumulated other comprehensive income | 1,474 | 1,618 | 782 | 192 | 751 | (9 | ) | 96 | ||||||||||||||||||
Shares held in RSU Trust, at cost | (21 | ) | (21 | ) | (21 | ) | (21 | ) | (21 | ) | — | — | ||||||||||||||
Treasury stock, at cost | (27,268 | ) | (25,070 | ) | (22,289 | ) | (21,691 | ) | (20,541 | ) | (9 | ) | (33 | ) | ||||||||||||
TOTAL STOCKHOLDERS’ EQUITY | 254,331 | 252,423 | 250,157 | 247,573 | 245,728 | 1 | 4 | |||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,521,029 | $ | 2,466,096 | $ | 2,423,808 | $ | 2,351,698 | $ | 2,416,635 | 2 | 4 | ||||||||||||||
See notes 1 and 2 on page 28.
Page 5
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS | ||||||||||||||||||||||||||||||||||||||
(in millions, except rates) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
AVERAGE BALANCES | 3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | ||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||||||||
Deposits with banks | $ | 409,176 | $ | 379,001 | $ | 364,200 | $ | 382,098 | $ | 413,038 | 8 | % | (1 | )% | $ | 384,217 | $ | 443,420 | (13 | )% | ||||||||||||||||||
Federal funds sold and securities purchased under | ||||||||||||||||||||||||||||||||||||||
resale agreements | 196,657 | 201,871 | 204,992 | 202,205 | 201,673 | (3 | ) | (2 | ) | 201,157 | 208,132 | (3 | ) | |||||||||||||||||||||||||
Securities borrowed | 102,790 | 101,669 | 103,461 | 104,672 | 98,193 | 1 | 5 | 102,640 | 105,475 | (3 | ) | |||||||||||||||||||||||||||
Trading assets - debt instruments | 219,816 | 215,780 | 208,315 | 204,365 | 202,388 | 2 | 9 | 214,656 | 207,065 | 4 | ||||||||||||||||||||||||||||
Securities | 272,993 | 280,041 | 284,488 | 297,648 | 307,364 | (3 | ) | (11 | ) | 279,152 | 321,990 | (13 | ) | |||||||||||||||||||||||||
Loans | 874,396 | 859,727 | 840,526 | 823,057 | 793,584 | 2 | 10 | 858,275 | 775,274 | 11 | ||||||||||||||||||||||||||||
Other assets (a) | 40,665 | 41,436 | 38,001 | 37,012 | 40,650 | (2 | ) | — | 40,036 | 39,417 | 2 | |||||||||||||||||||||||||||
Total interest-earning assets | 2,116,493 | 2,079,525 | 2,043,983 | 2,051,057 | 2,056,890 | 2 | 3 | 2,080,133 | 2,100,773 | (1 | ) | |||||||||||||||||||||||||||
Trading assets - equity instruments | 98,714 | 99,626 | 85,280 | 95,609 | 96,868 | (1 | ) | 2 | 94,555 | 108,819 | (13 | ) | ||||||||||||||||||||||||||
Trading assets - derivative receivables | 72,520 | 69,823 | 70,651 | 66,043 | 69,646 | 4 | 4 | 71,004 | 75,732 | (6 | ) | |||||||||||||||||||||||||||
All other noninterest-earning assets | 189,235 | 192,215 | 195,007 | 195,544 | 197,812 | (2 | ) | (4 | ) | 192,142 | 204,695 | (6 | ) | |||||||||||||||||||||||||
TOTAL ASSETS | $ | 2,476,962 | $ | 2,441,189 | $ | 2,394,921 | $ | 2,408,253 | $ | 2,421,216 | 1 | 2 | $ | 2,437,834 | $ | 2,490,019 | (2 | ) | ||||||||||||||||||||
LIABILITIES | ||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | $ | 929,122 | $ | 915,295 | $ | 884,082 | $ | 864,878 | $ | 852,219 | 2 | 9 | $ | 909,571 | $ | 875,164 | 4 | |||||||||||||||||||||
Federal funds purchased and securities loaned or | ||||||||||||||||||||||||||||||||||||||
sold under repurchase agreements | 180,098 | 176,855 | 171,246 | 181,995 | 188,006 | 2 | (4 | ) | 176,081 | 196,054 | (10 | ) | ||||||||||||||||||||||||||
Commercial paper | 13,798 | 17,462 | 17,537 | 17,952 | 26,167 | (21 | ) | (47 | ) | 16,257 | 44,943 | (64 | ) | |||||||||||||||||||||||||
Trading liabilities - debt, short-term and other liabilities (b) | 196,247 | 200,141 | 196,233 | 196,154 | 198,876 | (2 | ) | (1 | ) | 197,537 | 211,739 | (7 | ) | |||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs | 42,462 | 38,411 | 39,839 | 44,774 | 49,808 | 11 | (15 | ) | 40,245 | 50,692 | (21 | ) | ||||||||||||||||||||||||||
Long-term debt | 300,295 | 291,726 | 288,160 | 290,083 | 288,413 | 3 | 4 | 293,418 | 283,207 | 4 | ||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,662,022 | 1,639,890 | 1,597,097 | 1,595,836 | 1,603,489 | 1 | 4 | 1,633,109 | 1,661,799 | (2 | ) | |||||||||||||||||||||||||||
Noninterest-bearing deposits | 408,853 | 400,671 | 399,186 | 412,575 | 418,742 | 2 | (2 | ) | 402,925 | 426,802 | (6 | ) | ||||||||||||||||||||||||||
Trading liabilities - equity instruments | 22,262 | 20,747 | 18,504 | 16,806 | 17,595 | 7 | 27 | 20,511 | 17,442 | 18 | ||||||||||||||||||||||||||||
Trading liabilities - derivative payables | 54,552 | 54,048 | 60,591 | 57,053 | 61,754 | 1 | (12 | ) | 56,390 | 67,298 | (16 | ) | ||||||||||||||||||||||||||
All other noninterest-bearing liabilities | 77,116 | 75,336 | 71,914 | 80,366 | 76,895 | 2 | — | 74,797 | 78,932 | (5 | ) | |||||||||||||||||||||||||||
TOTAL LIABILITIES | 2,224,805 | 2,190,692 | 2,147,292 | 2,162,636 | 2,178,475 | 2 | 2 | 2,187,732 | 2,252,273 | (3 | ) | |||||||||||||||||||||||||||
Preferred stock | 26,068 | 26,068 | 26,068 | 26,068 | 25,718 | — | 1 | 26,068 | 23,357 | 12 | ||||||||||||||||||||||||||||
Common stockholders’ equity | 226,089 | 224,429 | 221,561 | 219,549 | 217,023 | 1 | 4 | 224,034 | 214,389 | 4 | ||||||||||||||||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY | 252,157 | 250,497 | 247,629 | 245,617 | 242,741 | 1 | 4 | 250,102 | 237,746 | 5 | ||||||||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,476,962 | $ | 2,441,189 | $ | 2,394,921 | $ | 2,408,253 | $ | 2,421,216 | 1 | 2 | $ | 2,437,834 | $ | 2,490,019 | (2 | ) | ||||||||||||||||||||
AVERAGE RATES (c) | ||||||||||||||||||||||||||||||||||||||
INTEREST-EARNING ASSETS | ||||||||||||||||||||||||||||||||||||||
Deposits with banks | 0.44 | % | 0.49 | % | 0.51 | % | 0.32 | % | 0.28 | % | 0.48 | % | 0.28 | % | ||||||||||||||||||||||||
Federal funds sold and securities purchased under | ||||||||||||||||||||||||||||||||||||||
resale agreements | 1.14 | 1.15 | 1.09 | 0.83 | 0.85 | 1.13 | 0.75 | |||||||||||||||||||||||||||||||
Securities borrowed (d) | (0.35 | ) | (0.38 | ) | (0.36 | ) | (0.51 | ) | (0.48 | ) | (0.36 | ) | (0.50 | ) | ||||||||||||||||||||||||
Trading assets - debt instruments | 3.46 | 3.50 | 3.31 | 3.16 | 3.04 | 3.43 | 3.27 | |||||||||||||||||||||||||||||||
Securities | 2.95 | 2.95 | 2.98 | 3.11 | 2.85 | 2.96 | 2.81 | |||||||||||||||||||||||||||||||
Loans | 4.23 | 4.22 | 4.26 | 4.20 | 4.24 | 4.24 | 4.24 | |||||||||||||||||||||||||||||||
Other assets (a) | 2.14 | 2.06 | 2.04 | 1.71 | 1.67 | 2.08 | 1.67 | |||||||||||||||||||||||||||||||
Total interest-earning assets | 2.70 | 2.73 | 2.72 | 2.60 | 2.51 | 2.72 | 2.46 | |||||||||||||||||||||||||||||||
INTEREST-BEARING LIABILITIES | ||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits | 0.15 | 0.14 | 0.15 | 0.13 | 0.14 | 0.14 | 0.15 | |||||||||||||||||||||||||||||||
Federal funds purchased and securities loaned or | ||||||||||||||||||||||||||||||||||||||
sold under repurchase agreements | 0.63 | 0.64 | 0.61 | 0.36 | 0.34 | 0.63 | 0.30 | |||||||||||||||||||||||||||||||
Commercial paper | 0.97 | 0.88 | 0.75 | 0.49 | 0.35 | 0.86 | 0.26 | |||||||||||||||||||||||||||||||
Trading liabilities - debt, short-term and other liabilities (b) | 0.58 | 0.63 | 0.47 | 0.33 | 0.26 | 0.56 | 0.29 | |||||||||||||||||||||||||||||||
Beneficial interests issued by consolidated VIEs | 1.26 | 1.24 | 1.14 | 0.99 | 0.92 | 1.22 | 0.85 | |||||||||||||||||||||||||||||||
Long-term debt | 1.84 | 1.92 | 1.70 | 1.62 | 1.50 | 1.82 | 1.54 | |||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 0.59 | 0.60 | 0.55 | 0.48 | 0.45 | 0.58 | 0.45 | |||||||||||||||||||||||||||||||
INTEREST RATE SPREAD | 2.11 | % | 2.13 | % | 2.17 | % | 2.12 | % | 2.06 | % | 2.14 | % | 2.01 | % | ||||||||||||||||||||||||
NET YIELD ON INTEREST-EARNING ASSETS | 2.24 | % | 2.25 | % | 2.30 | % | 2.23 | % | 2.16 | % | 2.26 | % | 2.11 | % | ||||||||||||||||||||||||
(a) | Includes margin loans. |
(b) | Includes brokerage customer payables. |
(c) | Interest includes the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable. |
(d) | Negative yield is a result of increased client-driven demand for certain securities combined with the impact of low interest rates; this is matched book activity and the negative interest expense on the corresponding securities loaned is recognized in interest expense and reported within trading liabilities - debt, short-term and other liabilities. |
Page 6
JPMORGAN CHASE & CO. | |||||||||||||||
RECONCILIATION FROM REPORTED TO MANAGED BASIS | |||||||||||||||
(in millions, except ratios) | |||||||||||||||
The Firm prepares its Consolidated Financial Statements using accounting principles generally accepted in the U.S. (“U.S. GAAP”). That presentation, which is referred to as “reported” basis, provides the reader with an understanding of the Firm’s results that can be tracked consistently from year-to-year and enables a comparison of the Firm’s performance with other companies’ U.S. GAAP financial statements. In addition to analyzing the Firm’s results on a reported basis, management reviews the Firm’s results, including the overhead ratio, and the results of the lines of business on a “managed” basis, which are non-GAAP financial measures. For additional information on managed basis, refer to the notes on Non-GAAP Financial Measures on page 28.
The following summary table provides a reconciliation from reported U.S. GAAP results to managed basis.
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
OTHER INCOME | ||||||||||||||||||||||||||||||||||||||
Other income - reported | $ | 782 | $ | 1,261 | $ | 801 | $ | 1,236 | $ | 628 | (38 | )% | 25 | % | $ | 2,844 | $ | 1,796 | 58 | % | ||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 540 | 529 | 551 | 575 | 477 | 2 | 13 | 1,620 | 1,405 | 15 | ||||||||||||||||||||||||||||
Other income - managed | $ | 1,322 | $ | 1,790 | $ | 1,352 | $ | 1,811 | $ | 1,105 | (26 | ) | 20 | $ | 4,464 | $ | 3,201 | 39 | ||||||||||||||||||||
TOTAL NONINTEREST REVENUE | ||||||||||||||||||||||||||||||||||||||
Total noninterest revenue - reported | $ | 13,070 | $ | 13,033 | $ | 11,859 | $ | 11,660 | $ | 11,856 | — | 10 | $ | 37,962 | $ | 38,373 | (1 | ) | ||||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 540 | 529 | 551 | 575 | 477 | 2 | 13 | 1,620 | 1,405 | 15 | ||||||||||||||||||||||||||||
Total noninterest revenue - managed | $ | 13,610 | $ | 13,562 | $ | 12,410 | $ | 12,235 | $ | 12,333 | — | 10 | $ | 39,582 | $ | 39,778 | — | |||||||||||||||||||||
NET INTEREST INCOME | ||||||||||||||||||||||||||||||||||||||
Net interest income - reported | $ | 11,603 | $ | 11,347 | $ | 11,380 | $ | 11,225 | $ | 10,924 | 2 | 6 | $ | 34,330 | $ | 32,285 | 6 | |||||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 299 | 305 | 293 | 287 | 278 | (2 | ) | 8 | 897 | 823 | 9 | |||||||||||||||||||||||||||
Net interest income - managed | $ | 11,902 | $ | 11,652 | $ | 11,673 | $ | 11,512 | $ | 11,202 | 2 | 6 | $ | 35,227 | $ | 33,108 | 6 | |||||||||||||||||||||
TOTAL NET REVENUE | ||||||||||||||||||||||||||||||||||||||
Total net revenue - reported | $ | 24,673 | $ | 24,380 | $ | 23,239 | $ | 22,885 | $ | 22,780 | 1 | 8 | $ | 72,292 | $ | 70,658 | 2 | |||||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 839 | 834 | 844 | 862 | 755 | 1 | 11 | 2,517 | 2,228 | 13 | ||||||||||||||||||||||||||||
Total net revenue - managed | $ | 25,512 | $ | 25,214 | $ | 24,083 | $ | 23,747 | $ | 23,535 | 1 | 8 | $ | 74,809 | $ | 72,886 | 3 | |||||||||||||||||||||
PRE-PROVISION PROFIT | ||||||||||||||||||||||||||||||||||||||
Pre-provision profit - reported | $ | 10,210 | $ | 10,742 | $ | 9,402 | $ | 8,622 | $ | 7,412 | (5 | ) | 38 | $ | 30,354 | $ | 25,907 | 17 | ||||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 839 | 834 | 844 | 862 | 755 | 1 | 11 | 2,517 | 2,228 | 13 | ||||||||||||||||||||||||||||
Pre-provision profit - managed | $ | 11,049 | $ | 11,576 | $ | 10,246 | $ | 9,484 | $ | 8,167 | (5 | ) | 35 | $ | 32,871 | $ | 28,135 | 17 | ||||||||||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | ||||||||||||||||||||||||||||||||||||||
Income before income tax expense - reported | $ | 8,939 | $ | 9,340 | $ | 7,578 | $ | 7,371 | $ | 6,730 | (4 | ) | 33 | $ | 25,857 | $ | 23,331 | 11 | ||||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 839 | 834 | 844 | 862 | 755 | 1 | 11 | 2,517 | 2,228 | 13 | ||||||||||||||||||||||||||||
Income before income tax expense - managed | $ | 9,778 | $ | 10,174 | $ | 8,422 | $ | 8,233 | $ | 7,485 | (4 | ) | 31 | $ | 28,374 | $ | 25,559 | 11 | ||||||||||||||||||||
INCOME TAX EXPENSE | ||||||||||||||||||||||||||||||||||||||
Income tax expense/(benefit) - reported | $ | 2,653 | $ | 3,140 | $ | 2,058 | $ | 1,937 | $ | (74 | ) | (16 | ) | NM | $ | 7,851 | $ | 4,323 | 82 | |||||||||||||||||||
Fully taxable-equivalent adjustments (a) | 839 | 834 | 844 | 862 | 755 | 1 | 11 | 2,517 | 2,228 | 13 | ||||||||||||||||||||||||||||
Income tax expense - managed | $ | 3,492 | $ | 3,974 | $ | 2,902 | $ | 2,799 | $ | 681 | (12 | ) | 413 | $ | 10,368 | $ | 6,551 | 58 | ||||||||||||||||||||
OVERHEAD RATIO | ||||||||||||||||||||||||||||||||||||||
Overhead ratio - reported | 59 | % | 56 | % | 60 | % | 62 | % | 67 | % | 58 | % | 63 | % | ||||||||||||||||||||||||
Overhead ratio - managed | 57 | 54 | 57 | 60 | 65 | 56 | 61 | |||||||||||||||||||||||||||||||
See notes 1 and 2 on page 28.
(a) | Predominantly recognized in the CIB and Commercial Banking (��CB”) business segments and Corporate. |
Page 7
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
SEGMENT RESULTS - MANAGED BASIS | ||||||||||||||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
TOTAL NET REVENUE (fully taxable-equivalent (“FTE”)) | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 11,328 | $ | 11,451 | $ | 11,117 | $ | 11,222 | $ | 10,879 | (1 | )% | 4 | % | $ | 33,896 | $ | 32,598 | 4 | % | ||||||||||||||||||
Corporate & Investment Bank | 9,455 | 9,165 | 8,135 | 7,069 | 8,168 | 3 | 16 | 26,755 | 26,473 | 1 | ||||||||||||||||||||||||||||
Commercial Banking | 1,870 | 1,817 | 1,803 | 1,760 | 1,644 | 3 | 14 | 5,490 | 5,125 | 7 | ||||||||||||||||||||||||||||
Asset Management | 3,047 | 2,939 | 2,972 | 3,045 | 2,894 | 4 | 5 | 8,958 | 9,074 | (1 | ) | |||||||||||||||||||||||||||
Corporate | (188 | ) | (158 | ) | 56 | 651 | (50 | ) | (19 | ) | (276 | ) | (290 | ) | (384 | ) | 24 | |||||||||||||||||||||
TOTAL NET REVENUE | $ | 25,512 | $ | 25,214 | $ | 24,083 | $ | 23,747 | $ | 23,535 | 1 | 8 | $ | 74,809 | $ | 72,886 | 3 | |||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 6,510 | $ | 6,004 | $ | 6,088 | $ | 6,272 | $ | 6,237 | 8 | 4 | $ | 18,602 | $ | 18,637 | — | |||||||||||||||||||||
Corporate & Investment Bank | 4,934 | 5,078 | 4,808 | 4,436 | 6,131 | (3 | ) | (20 | ) | 14,820 | 16,925 | (12 | ) | |||||||||||||||||||||||||
Commercial Banking | 746 | 731 | 713 | 750 | 719 | 2 | 4 | 2,190 | 2,131 | 3 | ||||||||||||||||||||||||||||
Asset Management | 2,130 | 2,098 | 2,075 | 2,196 | 2,109 | 2 | 1 | 6,303 | 6,690 | (6 | ) | |||||||||||||||||||||||||||
Corporate | 143 | (273 | ) | 153 | 609 | 172 | NM | (17 | ) | 23 | 368 | (94 | ) | |||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | $ | 14,463 | $ | 13,638 | $ | 13,837 | $ | 14,263 | $ | 15,368 | 6 | (6 | ) | $ | 41,938 | $ | 44,751 | (6 | ) | |||||||||||||||||||
PRE-PROVISION PROFIT/(LOSS) | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 4,818 | $ | 5,447 | $ | 5,029 | $ | 4,950 | $ | 4,642 | (12 | ) | 4 | $ | 15,294 | $ | 13,961 | 10 | ||||||||||||||||||||
Corporate & Investment Bank | 4,521 | 4,087 | 3,327 | 2,633 | 2,037 | 11 | 122 | 11,935 | 9,548 | 25 | ||||||||||||||||||||||||||||
Commercial Banking | 1,124 | 1,086 | 1,090 | 1,010 | 925 | 3 | 22 | 3,300 | 2,994 | 10 | ||||||||||||||||||||||||||||
Asset Management | 917 | 841 | 897 | 849 | 785 | 9 | 17 | 2,655 | 2,384 | 11 | ||||||||||||||||||||||||||||
Corporate | (331 | ) | 115 | (97 | ) | 42 | (222 | ) | NM | (49 | ) | (313 | ) | (752 | ) | 58 | ||||||||||||||||||||||
PRE-PROVISION PROFIT | $ | 11,049 | $ | 11,576 | $ | 10,246 | $ | 9,484 | $ | 8,167 | (5 | ) | 35 | $ | 32,871 | $ | 28,135 | 17 | ||||||||||||||||||||
PROVISION FOR CREDIT LOSSES | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 1,294 | $ | 1,201 | $ | 1,050 | $ | 1,038 | $ | 389 | 8 | 233 | $ | 3,545 | $ | 2,021 | 75 | |||||||||||||||||||||
Corporate & Investment Bank | 67 | 235 | 459 | 81 | 232 | (71 | ) | (71 | ) | 761 | 251 | 203 | ||||||||||||||||||||||||||
Commercial Banking | (121 | ) | (25 | ) | 304 | 117 | 82 | (384 | ) | NM | 158 | 325 | (51 | ) | ||||||||||||||||||||||||
Asset Management | 32 | (8 | ) | 13 | 17 | (17 | ) | NM | NM | 37 | (13 | ) | NM | |||||||||||||||||||||||||
Corporate | (1 | ) | (1 | ) | (2 | ) | (2 | ) | (4 | ) | — | 75 | (4 | ) | (8 | ) | 50 | |||||||||||||||||||||
PROVISION FOR CREDIT LOSSES | $ | 1,271 | $ | 1,402 | $ | 1,824 | $ | 1,251 | $ | 682 | (9 | ) | 86 | $ | 4,497 | $ | 2,576 | 75 | ||||||||||||||||||||
NET INCOME | ||||||||||||||||||||||||||||||||||||||
Consumer & Community Banking | $ | 2,204 | $ | 2,656 | $ | 2,490 | $ | 2,407 | $ | 2,630 | (17 | ) | (16 | ) | $ | 7,350 | $ | 7,382 | — | |||||||||||||||||||
Corporate & Investment Bank | 2,912 | 2,493 | 1,979 | 1,748 | 1,464 | 17 | 99 | 7,384 | 6,342 | 16 | ||||||||||||||||||||||||||||
Commercial Banking | 778 | 696 | 496 | 550 | 518 | 12 | 50 | 1,970 | 1,641 | 20 | ||||||||||||||||||||||||||||
Asset Management | 557 | 521 | 587 | 507 | 475 | 7 | 17 | 1,665 | 1,428 | 17 | ||||||||||||||||||||||||||||
Corporate | (165 | ) | (166 | ) | (32 | ) | 222 | 1,717 | 1 | NM | (363 | ) | 2,215 | NM | ||||||||||||||||||||||||
TOTAL NET INCOME | $ | 6,286 | $ | 6,200 | $ | 5,520 | $ | 5,434 | $ | 6,804 | 1 | (8 | ) | $ | 18,006 | $ | 19,008 | (5 | ) | |||||||||||||||||||
See notes 1 and 2 on page 28.
Page 8
JPMORGAN CHASE & CO. | |||||||||||||||||||||||||||||||||||||||||
CAPITAL AND OTHER SELECTED BALANCE SHEET ITEMS | |||||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | |||||||||||||||||||||||||||||||||||||||||
Sep 30, 2016 | |||||||||||||||||||||||||||||||||||||||||
Change | NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||||||||||||||||||||||||||||||||
Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Jun 30, | Sep 30, | 2016 Change | ||||||||||||||||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | 2016 | 2015 | 2015 | ||||||||||||||||||||||||||||||||
CAPITAL (a) | |||||||||||||||||||||||||||||||||||||||||
Risk-based capital metrics | |||||||||||||||||||||||||||||||||||||||||
Standardized Transitional | |||||||||||||||||||||||||||||||||||||||||
CET1 capital | $ | 181,606 | (f) | $ | 179,593 | $ | 177,531 | $ | 175,398 | $ | 173,577 | 1 | % | 5 | % | ||||||||||||||||||||||||||
Tier 1 capital | 206,425 | (f) | 204,390 | 202,399 | 200,482 | 199,211 | 1 | 4 | |||||||||||||||||||||||||||||||||
Total capital | 240,984 | (f) | 238,999 | 236,954 | 234,413 | 234,377 | 1 | 3 | |||||||||||||||||||||||||||||||||
Risk-weighted assets | 1,483,136 | (f) | 1,469,430 | 1,470,741 | 1,465,262 | 1,503,370 | 1 | (1 | ) | ||||||||||||||||||||||||||||||||
CET1 capital ratio | 12.2 | % | (f) | 12.2 | % | 12.1 | % | 12.0 | % | 11.5 | % | ||||||||||||||||||||||||||||||
Tier 1 capital ratio | 13.9 | (f) | 13.9 | 13.8 | 13.7 | 13.3 | |||||||||||||||||||||||||||||||||||
Total capital ratio | 16.2 | (f) | 16.3 | 16.1 | 16.0 | 15.6 | |||||||||||||||||||||||||||||||||||
Advanced Transitional | |||||||||||||||||||||||||||||||||||||||||
CET1 capital | $ | 181,606 | (f) | 179,593 | 177,531 | 175,398 | 173,577 | 1 | 5 | ||||||||||||||||||||||||||||||||
Tier 1 capital | 206,425 | (f) | 204,390 | 202,399 | 200,482 | 199,211 | 1 | 4 | |||||||||||||||||||||||||||||||||
Total capital | 229,351 | (f) | 227,865 | 226,190 | 224,616 | 223,877 | 1 | 2 | |||||||||||||||||||||||||||||||||
Risk-weighted assets | 1,514,416 | (f) | 1,497,509 | 1,497,870 | 1,485,336 | 1,502,685 | 1 | 1 | |||||||||||||||||||||||||||||||||
CET1 capital ratio | 12.0 | % | (f) | 12.0 | % | 11.9 | % | 11.8 | % | 11.6 | % | ||||||||||||||||||||||||||||||
Tier 1 capital ratio | 13.6 | (f) | 13.6 | 13.5 | 13.5 | 13.3 | |||||||||||||||||||||||||||||||||||
Total capital ratio | 15.1 | (f) | 15.2 | 15.1 | 15.1 | 14.9 | |||||||||||||||||||||||||||||||||||
Leverage-based capital metrics | |||||||||||||||||||||||||||||||||||||||||
Adjusted average assets (b) | $ | 2,427,418 | (f) | $ | 2,391,819 | $ | 2,345,926 | $ | 2,358,471 | $ | 2,375,317 | 1 | 2 | ||||||||||||||||||||||||||||
Tier 1 leverage ratio | 8.5 | % | (f) | 8.5 | % | 8.6 | % | 8.5 | % | 8.4 | % | ||||||||||||||||||||||||||||||
SLR leverage exposure (c) | $ | 3,143,411 | (f) | $ | 3,094,545 | 3,047,558 | 3,079,797 | 3,116,633 | 2 | 1 | |||||||||||||||||||||||||||||||
SLR (c) | 6.6 | % | (f) | 6.6 | % | 6.6 | % | 6.5 | % | 6.4 | % | ||||||||||||||||||||||||||||||
TANGIBLE COMMON EQUITY (period-end) (d) | |||||||||||||||||||||||||||||||||||||||||
Common stockholders’ equity | $ | 228,263 | $ | 226,355 | $ | 224,089 | $ | 221,505 | $ | 219,660 | 1 | 4 | |||||||||||||||||||||||||||||
Less: Goodwill | 47,302 | 47,303 | 47,310 | 47,325 | 47,405 | — | — | ||||||||||||||||||||||||||||||||||
Less: Other intangible assets | 887 | 917 | 940 | 1,015 | 1,036 | (3 | ) | (14 | ) | ||||||||||||||||||||||||||||||||
Add: Deferred tax liabilities (e) | 3,232 | 3,220 | 3,205 | 3,148 | 3,105 | — | 4 | ||||||||||||||||||||||||||||||||||
Total tangible common equity | $ | 183,306 | $ | 181,355 | $ | 179,044 | $ | 176,313 | $ | 174,324 | 1 | 5 | |||||||||||||||||||||||||||||
TANGIBLE COMMON EQUITY (average) (d) | |||||||||||||||||||||||||||||||||||||||||
Common stockholders’ equity | $ | 226,089 | $ | 224,429 | $ | 221,561 | $ | 219,549 | $ | 217,023 | 1 | 4 | $ | 224,034 | $ | 214,389 | 4 | ||||||||||||||||||||||||
Less: Goodwill | 47,302 | 47,309 | 47,332 | 47,377 | 47,428 | — | — | 47,314 | 47,468 | — | |||||||||||||||||||||||||||||||
Less: Other intangible assets | 903 | 928 | 985 | 1,030 | 1,064 | (3 | ) | (15 | ) | 938 | 1,112 | (16 | ) | ||||||||||||||||||||||||||||
Add: Deferred tax liabilities (e) | 3,226 | 3,213 | 3,177 | 3,127 | 2,991 | — | 8 | 3,205 | 2,909 | 10 | |||||||||||||||||||||||||||||||
Total tangible common equity | $ | 181,110 | $ | 179,405 | $ | 176,421 | $ | 174,269 | $ | 171,522 | 1 | 6 | $ | 178,987 | $ | 168,718 | 6 | ||||||||||||||||||||||||
INTANGIBLE ASSETS (period-end) | |||||||||||||||||||||||||||||||||||||||||
Goodwill | $ | 47,302 | $ | 47,303 | $ | 47,310 | $ | 47,325 | $ | 47,405 | — | — | |||||||||||||||||||||||||||||
Mortgage servicing rights | 4,937 | 5,072 | 5,658 | 6,608 | 6,716 | (3 | ) | (26 | ) | ||||||||||||||||||||||||||||||||
Other intangible assets | 887 | 917 | 940 | 1,015 | 1,036 | (3 | ) | (14 | ) | ||||||||||||||||||||||||||||||||
Total intangible assets | $ | 53,126 | $ | 53,292 | $ | 53,908 | $ | 54,948 | $ | 55,157 | — | (4 | ) | ||||||||||||||||||||||||||||
See notes 1 and 2 on page 28.
(a) | Basel III presents two comprehensive methodologies for calculating risk-weighted assets: a Standardized approach and an Advanced approach. As required by the Collins Amendment of the Wall Street Reform and Consumer Protection Act, the capital adequacy of the Firm is evaluated against the Basel III approach (Standardized or Advanced) that results, for each quarter, in the lower ratio (the “Collins Floor”). For further discussion of the implementation of Basel III, see Capital Management on pages 149-158 of the 2015 Annual Report, and on pages 63–69 of the Firm's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016. |
(b) | Adjusted average assets, for purposes of calculating leverage ratios, includes total quarterly average assets adjusted for on balance sheet assets that are subject to deduction from Tier 1 capital, predominately goodwill and other intangible assets. |
(c) | The supplementary leverage ratio (“SLR”) under Basel III is defined as Tier 1 capital divided by the Firm’s total leverage exposure. Total leverage exposure is calculated by taking the Firm’s adjusted average assets as calculated for the Tier 1 leverage ratio, and adding certain off-balance sheet exposures, such as undrawn commitments and derivatives potential future exposure. |
(d) | For further discussion of TCE, see page 28. |
(e) | Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in non-taxable transactions, which are netted against goodwill and other intangibles when calculating TCE. |
(f) | Estimated. |
Page 9
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE AND RELATED INFORMATION | ||||||||||||||||||||||||||||||||||||||
(in millions, except per share and ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
EARNINGS PER SHARE | ||||||||||||||||||||||||||||||||||||||
Basic earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income | $ | 6,286 | $ | 6,200 | $ | 5,520 | $ | 5,434 | $ | 6,804 | 1 | % | (8 | )% | $ | 18,006 | $ | 19,008 | (5 | )% | ||||||||||||||||||
Less: Preferred stock dividends | 412 | 411 | 412 | 418 | 393 | — | 5 | 1,235 | 1,097 | 13 | ||||||||||||||||||||||||||||
Net income applicable to common equity | 5,874 | 5,789 | 5,108 | 5,016 | 6,411 | 1 | (8 | ) | 16,771 | 17,911 | (6 | ) | ||||||||||||||||||||||||||
Less: Dividends and undistributed earnings allocated to | ||||||||||||||||||||||||||||||||||||||
participating securities | 127 | 123 | 117 | 108 | 141 | 3 | (10 | ) | 368 | 413 | (11 | ) | ||||||||||||||||||||||||||
Net income applicable to common stockholders | $ | 5,747 | $ | 5,666 | $ | 4,991 | $ | 4,908 | $ | 6,270 | 1 | (8 | ) | $ | 16,403 | $ | 17,498 | (6 | ) | |||||||||||||||||||
Total weighted-average basic shares outstanding | 3,597.4 | 3,635.8 | 3,669.9 | 3,674.2 | 3,694.4 | (1 | ) | (3 | ) | 3,634.4 | 3,709.2 | (2 | ) | |||||||||||||||||||||||||
Net income per share | $ | 1.60 | $ | 1.56 | $ | 1.36 | $ | 1.34 | $ | 1.70 | 3 | (6 | ) | $ | 4.51 | $ | 4.72 | (4 | ) | |||||||||||||||||||
Diluted earnings per share | ||||||||||||||||||||||||||||||||||||||
Net income applicable to common stockholders | $ | 5,747 | $ | 5,666 | $ | 4,991 | $ | 4,908 | $ | 6,270 | 1 | (8 | ) | $ | 16,403 | $ | 17,498 | (6 | ) | |||||||||||||||||||
Total weighted-average basic shares outstanding | 3,597.4 | 3,635.8 | 3,669.9 | 3,674.2 | 3,694.4 | (1 | ) | (3 | ) | 3,634.4 | 3,709.2 | (2 | ) | |||||||||||||||||||||||||
Add: Employee stock options, stock appreciation rights (“SARs”), warrants and performance share units (“PSUs”) | 32.2 | 30.7 | 27.0 | 30.4 | 31.2 | 5 | 3 | 29.9 | 33.0 | (9 | ) | |||||||||||||||||||||||||||
Total weighted-average diluted shares outstanding | 3,629.6 | 3,666.5 | 3,696.9 | 3,704.6 | 3,725.6 | (1 | ) | (3 | ) | 3,664.3 | 3,742.2 | (2 | ) | |||||||||||||||||||||||||
Net income per share | $ | 1.58 | $ | 1.55 | $ | 1.35 | $ | 1.32 | $ | 1.68 | 2 | (6 | ) | $ | 4.48 | $ | 4.68 | (4 | ) | |||||||||||||||||||
COMMON DIVIDENDS | ||||||||||||||||||||||||||||||||||||||
Cash dividends declared per share | $ | 0.48 | $ | 0.48 | (c) | $ | 0.44 | $ | 0.44 | $ | 0.44 | — | 9 | $ | 1.40 | (c) | $ | 1.28 | 9 | |||||||||||||||||||
Dividend payout ratio | 30 | % | 31 | % | 32 | % | 33 | % | 26 | % | 31 | % | 27 | % | ||||||||||||||||||||||||
COMMON EQUITY REPURCHASE PROGRAM (a) | ||||||||||||||||||||||||||||||||||||||
Total shares of common stock repurchased | 35.6 | 45.8 | 29.2 | 19.0 | 19.1 | (22 | ) | 86 | 110.6 | 70.8 | 56 | |||||||||||||||||||||||||||
Average price paid per share of common stock | $ | 64.46 | $ | 61.93 | $ | 58.17 | $ | 63.92 | $ | 65.30 | 4 | (1 | ) | $ | 61.75 | $ | 62.13 | (1 | ) | |||||||||||||||||||
Aggregate repurchases of common equity | 2,295 | 2,840 | 1,696 | 1,219 | 1,248 | (19 | ) | 84 | 6,831 | 4,397 | 55 | |||||||||||||||||||||||||||
EMPLOYEE ISSUANCE | ||||||||||||||||||||||||||||||||||||||
Shares issued from treasury stock related to employee | ||||||||||||||||||||||||||||||||||||||
stock-based compensation awards and employee stock | ||||||||||||||||||||||||||||||||||||||
purchase plans | 1.3 | 1.2 | 22.3 | 1.1 | 1.9 | 8 | (32 | ) | 24.8 | 32.7 | (24 | ) | ||||||||||||||||||||||||||
Net impact of employee issuances on stockholders’ equity (b) | $ | 226 | $ | 250 | $ | 366 | $ | 252 | $ | 248 | (10 | ) | (9 | ) | $ | 842 | $ | 871 | (3 | ) | ||||||||||||||||||
See notes 1 and 2 on page 28.
(a) | On June 29, 2016, the Firm announced, in connection with the release of its 2016 CCAR results, that it is authorized to repurchase up to $10.6 billion of common equity between July 1, 2016 and June 30, 2017, under a new equity repurchase program authorized by the Board of Directors. |
(b) | The net impact of employee issuances on stockholders’ equity is driven by the cost of equity compensation awards that is recognized over the applicable vesting periods. The cost is partially offset by tax impacts related to the distribution of shares and the exercise of employee stock options and SARs. |
(c) | On May 17, 2016, the Board of Directors increased the quarterly common stock dividend from $0.44 to $0.48 per share. |
Page 10
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees | $ | 841 | $ | 780 | $ | 769 | $ | 817 | $ | 836 | 8 | % | 1 | % | $ | 2,390 | $ | 2,320 | 3 | % | ||||||||||||||||||
Asset management, administration and commissions | 531 | 535 | 530 | 524 | 565 | (1 | ) | (6 | ) | 1,596 | 1,648 | (3 | ) | |||||||||||||||||||||||||
Mortgage fees and related income | 624 | 689 | 667 | 556 | 469 | (9 | ) | 33 | 1,980 | 1,955 | 1 | |||||||||||||||||||||||||||
Card income | 1,099 | 1,253 | 1,191 | 1,326 | 1,335 | (12 | ) | (18 | ) | 3,543 | 4,165 | (15 | ) | |||||||||||||||||||||||||
All other income | 773 | 881 | 649 | 815 | 524 | (12 | ) | 48 | 2,303 | 1,466 | 57 | |||||||||||||||||||||||||||
Noninterest revenue | 3,868 | 4,138 | 3,806 | 4,038 | 3,729 | (7 | ) | 4 | 11,812 | 11,554 | 2 | |||||||||||||||||||||||||||
Net interest income | 7,460 | 7,313 | 7,311 | 7,184 | 7,150 | 2 | 4 | 22,084 | 21,044 | 5 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE | 11,328 | 11,451 | 11,117 | 11,222 | 10,879 | (1 | ) | 4 | 33,896 | 32,598 | 4 | |||||||||||||||||||||||||||
Provision for credit losses | 1,294 | 1,201 | 1,050 | 1,038 | 389 | 8 | 233 | 3,545 | 2,021 | 75 | ||||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Compensation expense | 2,453 | 2,420 | 2,382 | 2,349 | 2,413 | 1 | 2 | 7,255 | 7,421 | (2 | ) | |||||||||||||||||||||||||||
Noncompensation expense (a) | 4,057 | 3,584 | 3,706 | 3,923 | 3,824 | 13 | 6 | 11,347 | 11,216 | 1 | ||||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 6,510 | 6,004 | 6,088 | 6,272 | 6,237 | 8 | 4 | 18,602 | 18,637 | — | ||||||||||||||||||||||||||||
Income before income tax expense | 3,524 | 4,246 | 3,979 | 3,912 | 4,253 | (17 | ) | (17 | ) | 11,749 | 11,940 | (2 | ) | |||||||||||||||||||||||||
Income tax expense | 1,320 | 1,590 | 1,489 | 1,505 | 1,623 | (17 | ) | (19 | ) | 4,399 | 4,558 | (3 | ) | |||||||||||||||||||||||||
NET INCOME | $ | 2,204 | $ | 2,656 | $ | 2,490 | $ | 2,407 | $ | 2,630 | (17 | ) | (16 | ) | $ | 7,350 | $ | 7,382 | — | |||||||||||||||||||
REVENUE BY LINE OF BUSINESS | ||||||||||||||||||||||||||||||||||||||
Consumer & Business Banking | $ | 4,719 | $ | 4,616 | $ | 4,550 | $ | 4,587 | $ | 4,555 | 2 | 4 | $ | 13,885 | $ | 13,396 | 4 | |||||||||||||||||||||
Mortgage Banking | 1,874 | 1,921 | 1,876 | 1,680 | 1,555 | (2 | ) | 21 | 5,671 | 5,137 | 10 | |||||||||||||||||||||||||||
Card, Commerce Solutions & Auto | 4,735 | 4,914 | 4,691 | 4,955 | 4,769 | (4 | ) | (1 | ) | 14,340 | 14,065 | 2 | ||||||||||||||||||||||||||
MORTGAGE FEES AND RELATED INCOME DETAILS: | ||||||||||||||||||||||||||||||||||||||
Net production revenue | 247 | 261 | 162 | 123 | 176 | (5 | ) | 40 | 670 | 646 | 4 | |||||||||||||||||||||||||||
Net mortgage servicing revenue (b) | 377 | 428 | 505 | 433 | 293 | (12 | ) | 29 | 1,310 | 1,309 | — | |||||||||||||||||||||||||||
Mortgage fees and related income | $ | 624 | $ | 689 | $ | 667 | $ | 556 | $ | 469 | (9 | ) | 33 | $ | 1,980 | $ | 1,955 | 1 | ||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||
ROE | 16 | % | 20 | % | 19 | % | 18 | % | 20 | % | 18 | % | 18 | % | ||||||||||||||||||||||||
Overhead ratio | 57 | 52 | 55 | 56 | 57 | 55 | 57 | |||||||||||||||||||||||||||||||
(a) | Included operating lease depreciation expense of $504 million, $460 million, $432 million, $401 million, and $372 million for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively, and $1.4 billion and $1.0 billion for the nine months ended September 30, 2016, and 2015, respectively. |
(b) | Included MSR risk management of $38 million, $73 million, $129 million, $4 million, and $(123) million for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively, and $240 million and $(121) million for the nine months ended September 30, 2016 and 2015, respectively. |
Page 11
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except headcount data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 521,276 | $ | 519,187 | $ | 505,071 | $ | 502,652 | $ | 484,253 | — | % | 8 | % | $ | 521,276 | $ | 484,253 | 8 | % | ||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Consumer & Business Banking | 23,846 | 23,588 | 22,889 | 22,730 | 22,346 | 1 | 7 | 23,846 | 22,346 | 7 | ||||||||||||||||||||||||||||
Home equity | 52,445 | 54,569 | 56,627 | 58,734 | 60,849 | (4 | ) | (14 | ) | 52,445 | 60,849 | (14 | ) | |||||||||||||||||||||||||
Residential mortgage and other | 181,564 | 178,670 | 172,413 | 164,500 | 153,730 | 2 | 18 | 181,564 | 153,730 | 18 | ||||||||||||||||||||||||||||
Mortgage Banking | 234,009 | 233,239 | 229,040 | 223,234 | 214,579 | — | 9 | 234,009 | 214,579 | 9 | ||||||||||||||||||||||||||||
Credit Card | 133,435 | 131,591 | 126,090 | 131,463 | 126,979 | 1 | 5 | 133,435 | 126,979 | 5 | ||||||||||||||||||||||||||||
Auto | 64,512 | 64,056 | 62,937 | 60,255 | 57,174 | 1 | 13 | 64,512 | 57,174 | 13 | ||||||||||||||||||||||||||||
Student | 7,354 | 7,614 | 7,890 | 8,176 | 8,462 | (3 | ) | (13 | ) | 7,354 | 8,462 | (13 | ) | |||||||||||||||||||||||||
Total loans | 463,156 | 460,088 | 448,846 | 445,858 | 429,540 | 1 | 8 | 463,156 | 429,540 | 8 | ||||||||||||||||||||||||||||
Core loans (a) | 371,060 | 364,007 | 348,802 | 341,881 | 320,415 | 2 | 16 | 371,060 | 320,415 | 16 | ||||||||||||||||||||||||||||
Deposits | 605,117 | 586,074 | 582,026 | 557,645 | 539,182 | 3 | 12 | 605,117 | 539,182 | 12 | ||||||||||||||||||||||||||||
Equity | 51,000 | 51,000 | 51,000 | 51,000 | 51,000 | — | — | 51,000 | 51,000 | — | ||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 521,882 | $ | 512,434 | $ | 503,231 | $ | 494,306 | $ | 478,914 | 2 | 9 | $ | 512,550 | $ | 465,782 | 10 | |||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Consumer & Business Banking | 23,678 | 23,223 | 22,775 | 22,445 | 22,069 | 2 | 7 | 23,227 | 21,709 | 7 | ||||||||||||||||||||||||||||
Home equity | 53,501 | 55,615 | 57,717 | 59,757 | 62,025 | (4 | ) | (14 | ) | 55,604 | 64,442 | (14 | ) | |||||||||||||||||||||||||
Residential mortgage and other | 180,669 | 175,753 | 168,694 | 160,925 | 146,432 | 3 | 23 | 175,059 | 133,341 | 31 | ||||||||||||||||||||||||||||
Mortgage Banking | 234,170 | 231,368 | 226,411 | 220,682 | 208,457 | 1 | 12 | 230,663 | 197,783 | 17 | ||||||||||||||||||||||||||||
Credit Card | 132,713 | 128,396 | 127,299 | 127,620 | 126,305 | 3 | 5 | 129,481 | 125,294 | 3 | ||||||||||||||||||||||||||||
Auto | 64,068 | 63,661 | 61,252 | 58,692 | 56,412 | 1 | 14 | 62,998 | 55,744 | 13 | ||||||||||||||||||||||||||||
Student | 7,490 | 7,757 | 8,034 | 8,326 | 8,622 | (3 | ) | (13 | ) | 7,759 | 8,911 | (13 | ) | |||||||||||||||||||||||||
Total loans | 462,119 | 454,405 | 445,771 | 437,765 | 421,865 | 2 | 10 | 454,128 | 409,441 | 11 | ||||||||||||||||||||||||||||
Core loans (a) | 367,999 | 356,380 | 343,705 | 331,296 | 309,888 | 3 | 19 | 356,072 | 291,728 | 22 | ||||||||||||||||||||||||||||
Deposits | 593,671 | 583,115 | 562,284 | 545,734 | 535,987 | 2 | 11 | 579,741 | 525,951 | 10 | ||||||||||||||||||||||||||||
Equity | 51,000 | 51,000 | 51,000 | 51,000 | 51,000 | — | — | 51,000 | 51,000 | — | ||||||||||||||||||||||||||||
Headcount | 132,092 | 131,815 | 129,925 | 127,094 | 128,601 | — | 3 | 132,092 | 128,601 | 3 | ||||||||||||||||||||||||||||
(a) | Loans considered central to the Firm’s ongoing businesses. For further discussion of core loans, see page 28. |
Page 12
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Nonaccrual loans (a)(b) | $ | 4,853 | $ | 4,980 | $ | 5,117 | $ | 5,313 | $ | 5,433 | (3 | )% | (11 | )% | $ | 4,853 | $ | 5,433 | (11 | )% | ||||||||||||||||||
Net charge-offs/(recoveries) (c) | ||||||||||||||||||||||||||||||||||||||
Consumer & Business Banking | 71 | 53 | 56 | 76 | 50 | 34 | 42 | 180 | 177 | 2 | ||||||||||||||||||||||||||||
Home equity | 42 | 35 | 59 | 45 | 82 | 20 | (49 | ) | 136 | 238 | (43 | ) | ||||||||||||||||||||||||||
Residential mortgage and other | 7 | 3 | 1 | 14 | (41 | ) | 133 | NM | 11 | (12 | ) | NM | ||||||||||||||||||||||||||
Mortgage Banking | 49 | 38 | 60 | 59 | 41 | 29 | 20 | 147 | 226 | (35 | ) | |||||||||||||||||||||||||||
Credit Card | 838 | 860 | 830 | 774 | 759 | (3 | ) | 10 | 2,528 | 2,348 | 8 | |||||||||||||||||||||||||||
Auto | 79 | 46 | 67 | 74 | 57 | 72 | 39 | 192 | 140 | 37 | ||||||||||||||||||||||||||||
Student | 32 | 29 | 37 | 55 | 58 | 10 | (45 | ) | 98 | 155 | (37 | ) | ||||||||||||||||||||||||||
Total net charge-offs/(recoveries) | $ | 1,069 | $ | 1,026 | $ | 1,050 | $ | 1,038 | $ | 965 | 4 | 11 | $ | 3,145 | $ | 3,046 | 3 | |||||||||||||||||||||
Net charge-off/(recovery) rate (c) | ||||||||||||||||||||||||||||||||||||||
Consumer & Business Banking | 1.19 | % | 0.92 | % | 0.99 | % | 1.34 | % | 0.90 | % | 1.04 | % | 1.09 | % | ||||||||||||||||||||||||
Home equity (d) | 0.42 | 0.34 | 0.55 | 0.40 | 0.70 | 0.44 | 0.66 | |||||||||||||||||||||||||||||||
Residential mortgage and other (d) | 0.02 | 0.01 | — | 0.04 | (0.14 | ) | 0.01 | (0.02 | ) | |||||||||||||||||||||||||||||
Mortgage Banking (d) | 0.10 | 0.08 | 0.13 | 0.13 | 0.10 | 0.10 | 0.20 | |||||||||||||||||||||||||||||||
Credit Card (e) | 2.51 | 2.70 | 2.62 | 2.42 | 2.41 | 2.61 | 2.54 | |||||||||||||||||||||||||||||||
Auto | 0.49 | 0.29 | 0.44 | 0.50 | 0.40 | 0.41 | 0.34 | |||||||||||||||||||||||||||||||
Student | 1.70 | 1.50 | 1.85 | 2.62 | 2.67 | 1.69 | 2.33 | |||||||||||||||||||||||||||||||
Total net charge-off/(recovery) rate (d) | 1.00 | 0.99 | 1.04 | 1.04 | 1.02 | 1.01 | 1.12 | |||||||||||||||||||||||||||||||
30+ day delinquency rate | ||||||||||||||||||||||||||||||||||||||
Mortgage Banking (f)(g) | 1.27 | % | 1.33 | % | 1.41 | % | 1.57 | % | 1.74 | % | 1.27 | % | 1.74 | % | ||||||||||||||||||||||||
Credit Card (h) | 1.53 | 1.40 | 1.45 | 1.43 | 1.38 | 1.53 | 1.38 | |||||||||||||||||||||||||||||||
Auto | 1.08 | 1.16 | 0.94 | 1.35 | 1.06 | 1.08 | 1.06 | |||||||||||||||||||||||||||||||
Student (i) | 1.81 | 1.43 | 1.41 | 1.81 | 1.99 | 1.81 | 1.99 | |||||||||||||||||||||||||||||||
90+ day delinquency rate - Credit Card (h) | 0.75 | 0.70 | 0.75 | 0.72 | 0.66 | 0.75 | 0.66 | |||||||||||||||||||||||||||||||
Allowance for loan losses | ||||||||||||||||||||||||||||||||||||||
Consumer & Business Banking | $ | 703 | $ | 703 | $ | 703 | $ | 703 | $ | 703 | — | — | $ | 703 | $ | 703 | — | |||||||||||||||||||||
Mortgage Banking, excluding PCI loans | 1,488 | 1,488 | 1,588 | 1,588 | 1,588 | — | (6 | ) | 1,488 | 1,588 | (6 | ) | ||||||||||||||||||||||||||
Mortgage Banking - PCI loans (c) | 2,618 | 2,654 | 2,695 | 2,742 | 2,788 | (1 | ) | (6 | ) | 2,618 | 2,788 | (6 | ) | |||||||||||||||||||||||||
Credit Card | 3,884 | 3,684 | 3,434 | 3,434 | 3,434 | 5 | 13 | 3,884 | 3,434 | 13 | ||||||||||||||||||||||||||||
Auto | 474 | 449 | 399 | 399 | 374 | 6 | 27 | 474 | 374 | 27 | ||||||||||||||||||||||||||||
Student | 274 | 274 | 299 | 299 | 324 | — | (15 | ) | 274 | 324 | (15 | ) | ||||||||||||||||||||||||||
Total allowance for loan losses (c) | $ | 9,441 | $ | 9,252 | $ | 9,118 | $ | 9,165 | $ | 9,211 | 2 | 2 | $ | 9,441 | $ | 9,211 | 2 |
Note: CCB provides several non-GAAP financial measures which exclude the impact of PCI loans. For further discussion of these measures, see page 28.
(a) | Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as they are all performing. |
(b) | At September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, nonaccrual loans excluded loans 90 or more days past due as follows: (1) mortgage loans insured by U.S. government agencies of $5.0 billion, $5.2 billion, $5.7 billion, $6.3 billion and $6.6 billion, respectively; and (2) student loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) of $259 million, $252 million, $269 million, $290 million and $289 million, respectively. These amounts have been excluded based upon the government guarantee. |
(c) | Net charge-offs and the net charge-off rates for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, excluded write-offs in the PCI portfolio of $36 million, $41 million, $47 million, $46 million and $52 million, respectively, and for the nine months ended September 30, 2016 and 2015 excluded $124 million and $162 million, respectively. These write-offs decreased the allowance for loan losses for PCI loans. For further information on PCI write-offs, see Summary of Changes in the Allowances on page 26. |
(d) | Excludes the impact of PCI loans. For the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, the net charge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of 0.31%, 0.25%, 0.41%, 0.30% and 0.52%, respectively; (2) residential mortgage and other of 0.02%, 0.01%, –%, 0.03% and (0.11%), respectively; (3) Mortgage Banking of 0.08%, 0.07%, 0.11%, 0.11% and 0.08%, respectively; and (4) total CCB of 0.92%, 0.91%, 0.95%, 0.94% and 0.91%, respectively. For the nine months ended September 30, 2016 and 2015, the net charge-off rates including the impact of PCI loans were as follows: (1) home equity of 0.33% and 0.49%, respectively; (2) residential mortgage and other of 0.01% and (0.01%), respectively; (3) Mortgage Banking of 0.09% and 0.15%, respectively; and (4) total CCB of 0.93% and 1.00%, respectively. |
(e) | Average credit card loans included loans held-for-sale of $87 million, $82 million, $72 million, $717 million and $1.3 billion for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively, and $80 million and $1.9 billion for the nine months ended September 30, 2016, and 2015, respectively. These amounts are excluded when calculating the net charge-off rate. |
(f) | At September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, excluded mortgage loans insured by U.S. government agencies of $7.0 billion, $7.2 billion, $7.6 billion, $8.4 billion and $8.5 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee. |
(g) | Excludes PCI loans. The 30+ day delinquency rate for PCI loans was 10.01%, 10.09%, 10.47%, 11.21% and 11.29% at September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively. |
(h) | Period-end credit card loans included loans held-for-sale of $89 million, $84 million, $78 million, $76 million and $1.3 billion at September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively. These amounts are excluded when calculating delinquency rates. |
(i) | Excluded student loans insured by U.S government agencies under FFELP of $461 million, $458 million, $471 million, $526 million and $507 million at September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee. |
Page 13
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CONSUMER & COMMUNITY BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data and where otherwise noted) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||
Number of: | ||||||||||||||||||||||||||||||||||||||
Branches | 5,310 | 5,366 | 5,385 | 5,413 | 5,471 | (1 | )% | (3 | )% | 5,310 | 5,471 | (3 | )% | |||||||||||||||||||||||||
Active digital customers (in thousands) (a) | 43,657 | 42,833 | 42,458 | 39,242 | 38,511 | 2 | 13 | 43,657 | 38,511 | 13 | ||||||||||||||||||||||||||||
Active mobile customers (in thousands) (b) | 26,047 | 24,817 | 23,821 | 22,810 | 22,232 | 5 | 17 | 26,047 | 22,232 | 17 | % | |||||||||||||||||||||||||||
Consumer & Business Banking | ||||||||||||||||||||||||||||||||||||||
Average deposits | $ | 576,573 | $ | 567,415 | $ | 548,447 | $ | 530,611 | $ | 519,414 | 2 | 11 | $ | 564,190 | $ | 510,036 | 11 | |||||||||||||||||||||
Deposit margin | 1.79 | % | 1.80 | % | 1.86 | % | 1.83 | % | 1.86 | % | 1.82 | % | 1.92 | % | ||||||||||||||||||||||||
Business banking origination volume | $ | 1,803 | $ | 2,183 | $ | 1,688 | $ | 1,609 | $ | 1,715 | (17 | ) | 5 | $ | 5,674 | $ | 5,166 | 10 | ||||||||||||||||||||
Client investment assets | 231,574 | 224,741 | 220,004 | 218,551 | 213,263 | 3 | 9 | 231,574 | 213,263 | 9 | ||||||||||||||||||||||||||||
Mortgage Banking (in billions) | ||||||||||||||||||||||||||||||||||||||
Mortgage origination volume by channel | ||||||||||||||||||||||||||||||||||||||
Retail | $ | 11.7 | $ | 11.2 | $ | 8.7 | $ | 8.7 | $ | 9.5 | 4 | 23 | $ | 31.6 | $ | 27.4 | 15 | |||||||||||||||||||||
Correspondent | 15.4 | 13.8 | 13.7 | 13.8 | 20.4 | 12 | (25 | ) | 42.9 | 56.5 | (24 | ) | ||||||||||||||||||||||||||
Total mortgage origination volume (c) | $ | 27.1 | $ | 25.0 | $ | 22.4 | $ | 22.5 | $ | 29.9 | 8 | (9 | ) | $ | 74.5 | $ | 83.9 | (11 | ) | |||||||||||||||||||
Total loans serviced (period-end) | $ | 863.3 | $ | 880.3 | $ | 898.7 | $ | 910.1 | $ | 929.0 | (2 | ) | (7 | ) | $ | 863.3 | $ | 929.0 | (7 | ) | ||||||||||||||||||
Third-party mortgage loans serviced (period-end) | 609.2 | 629.9 | 655.4 | 674.0 | 702.6 | (3 | ) | (13 | ) | 609.2 | 702.6 | (13 | ) | |||||||||||||||||||||||||
MSR carrying value (period-end) | 4.9 | 5.1 | 5.7 | 6.6 | 6.7 | (4 | ) | (27 | ) | 4.9 | 6.7 | (27 | ) | |||||||||||||||||||||||||
Ratio of MSR carrying value (period-end) to third-party mortgage | ||||||||||||||||||||||||||||||||||||||
loans serviced (period-end) | 0.80 | % | 0.81 | % | 0.87 | % | 0.98 | % | 0.95 | % | 0.80 | % | 0.95 | % | ||||||||||||||||||||||||
MSR revenue multiple (d) | 2.29 | x | 2.31 | x | 2.49 | x | 2.97 | x | 2.79 | x | 2.29 | x | 2.71 | x | ||||||||||||||||||||||||
Credit Card, excluding Commercial Card | ||||||||||||||||||||||||||||||||||||||
Sales volume (in billions) | $ | 139.2 | $ | 136.0 | $ | 121.7 | $ | 130.8 | $ | 126.6 | 2 | 10 | $ | 396.9 | $ | 365.1 | 9 | |||||||||||||||||||||
New accounts opened | 2.7 | 2.7 | 2.3 | 2.5 | 2.0 | — | 35 | 7.7 | 6.2 | 24 | ||||||||||||||||||||||||||||
Card Services | ||||||||||||||||||||||||||||||||||||||
Net revenue rate | 11.04 | % | 12.28 | % | 11.81 | % | 12.54 | % | 12.22 | % | 11.70 | % | 12.25 | % | ||||||||||||||||||||||||
Commerce Solutions | ||||||||||||||||||||||||||||||||||||||
Merchant processing volume (in billions) | $ | 267.2 | $ | 263.8 | $ | 247.5 | $ | 258.2 | $ | 235.8 | 1 | 13 | $ | 778.5 | $ | 691.1 | 13 | |||||||||||||||||||||
Auto | ||||||||||||||||||||||||||||||||||||||
Loan and lease origination volume (in billions) | $ | 9.3 | $ | 8.5 | $ | 9.6 | $ | 9.2 | $ | 8.1 | 9 | 15 | $ | 27.4 | $ | 23.2 | 18 | |||||||||||||||||||||
Average Auto operating lease assets | 11,418 | 10,435 | 9,615 | 8,794 | 8,073 | 9 | 41 | 10,493 | 7,474 | 40 | ||||||||||||||||||||||||||||
(a) | Users of all web and/or mobile platforms who have logged in within the past 90 days. |
(b) | Users of all mobile platforms who have logged in within the past 90 days. |
(c) | Firmwide mortgage origination volume was $30.9 billion, $28.6 billion, $24.4 billion, $24.7 billion and $32.2 billion for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015 and September 30, 2015, respectively, and $83.9 billion and $90.5 billion for the nine months ended September 30, 2016 and 2015, respectively. |
(d) | Represents the ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) divided by the ratio of annualized loan servicing-related revenue to third-party mortgage loans serviced (average). |
Page 14
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CORPORATE & INVESTMENT BANK | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||
Investment banking fees | $ | 1,855 | $ | 1,636 | $ | 1,321 | $ | 1,538 | $ | 1,612 | 13 | % | 15 | % | $ | 4,812 | $ | 5,198 | (7 | )% | ||||||||||||||||||
Principal transactions | 3,282 | 2,965 | 2,470 | 1,396 | 2,370 | 11 | 38 | 8,717 | 8,509 | 2 | ||||||||||||||||||||||||||||
Lending- and deposit-related fees | 402 | 385 | 394 | 387 | 389 | 4 | 3 | 1,181 | 1,186 | — | ||||||||||||||||||||||||||||
Asset management, administration and commissions | 968 | 1,025 | 1,069 | 1,049 | 1,083 | (6 | ) | (11 | ) | 3,062 | 3,418 | (10 | ) | |||||||||||||||||||||||||
All other income | 183 | 464 | 280 | 268 | 294 | (61 | ) | (38 | ) | 927 | 744 | 25 | ||||||||||||||||||||||||||
Noninterest revenue | 6,690 | 6,475 | 5,534 | 4,638 | 5,748 | 3 | 16 | 18,699 | 19,055 | (2 | ) | |||||||||||||||||||||||||||
Net interest income | 2,765 | 2,690 | 2,601 | 2,431 | 2,420 | 3 | 14 | 8,056 | 7,418 | 9 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE (a) | 9,455 | 9,165 | 8,135 | 7,069 | 8,168 | 3 | 16 | 26,755 | 26,473 | 1 | ||||||||||||||||||||||||||||
Provision for credit losses | 67 | 235 | 459 | 81 | 232 | (71 | ) | (71 | ) | 761 | 251 | 203 | ||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Compensation expense | 2,513 | 2,737 | 2,600 | 1,860 | 2,434 | (8 | ) | 3 | 7,850 | 8,113 | (3 | ) | ||||||||||||||||||||||||||
Noncompensation expense | 2,421 | 2,341 | 2,208 | 2,576 | 3,697 | 3 | (35 | ) | 6,970 | 8,812 | (21 | ) | ||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 4,934 | 5,078 | 4,808 | 4,436 | 6,131 | (3 | ) | (20 | ) | 14,820 | 16,925 | (12 | ) | |||||||||||||||||||||||||
Income before income tax expense | 4,454 | 3,852 | 2,868 | 2,552 | 1,805 | 16 | 147 | 11,174 | 9,297 | 20 | ||||||||||||||||||||||||||||
Income tax expense | 1,542 | 1,359 | 889 | 804 | 341 | 13 | 352 | 3,790 | 2,955 | 28 | ||||||||||||||||||||||||||||
NET INCOME | $ | 2,912 | $ | 2,493 | $ | 1,979 | $ | 1,748 | $ | 1,464 | 17 | 99 | $ | 7,384 | $ | 6,342 | 16 | |||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||
ROE | 17 | % | 15 | % | 11 | % | 10 | % | 8 | % | 14 | % | 13 | % | ||||||||||||||||||||||||
Overhead ratio | 52 | 55 | 59 | 63 | 75 | 55 | 64 | |||||||||||||||||||||||||||||||
Compensation expense as a percent of total net revenue | 27 | 30 | 32 | 26 | 30 | 29 | 31 | |||||||||||||||||||||||||||||||
REVENUE BY BUSINESS | ||||||||||||||||||||||||||||||||||||||
Investment Banking | $ | 1,740 | $ | 1,492 | $ | 1,231 | $ | 1,470 | $ | 1,530 | 17 | 14 | $ | 4,463 | $ | 4,906 | (9 | ) | ||||||||||||||||||||
Treasury Services | 917 | 892 | 884 | 901 | 899 | 3 | 2 | 2,693 | 2,730 | (1 | ) | |||||||||||||||||||||||||||
Lending | 283 | 277 | 302 | 390 | 334 | 2 | (15 | ) | 862 | 1,071 | (20 | ) | ||||||||||||||||||||||||||
Total Banking | 2,940 | 2,661 | 2,417 | 2,761 | 2,763 | 10 | 6 | 8,018 | 8,707 | (8 | ) | |||||||||||||||||||||||||||
Fixed Income Markets | 4,334 | 3,959 | 3,597 | 2,574 | 2,933 | 9 | 48 | 11,890 | 10,018 | 19 | ||||||||||||||||||||||||||||
Equity Markets | 1,414 | 1,600 | 1,576 | 1,064 | 1,403 | (12 | ) | 1 | 4,590 | 4,630 | (1 | ) | ||||||||||||||||||||||||||
Securities Services | 916 | 907 | 881 | 933 | 915 | 1 | — | 2,704 | 2,844 | (5 | ) | |||||||||||||||||||||||||||
Credit Adjustments & Other (b) | (149 | ) | 38 | (336 | ) | (263 | ) | 154 | NM | NM | (447 | ) | 274 | NM | ||||||||||||||||||||||||
Total Markets & Investor Services | 6,515 | 6,504 | 5,718 | 4,308 | 5,405 | — | 21 | 18,737 | 17,766 | 5 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE | $ | 9,455 | $ | 9,165 | $ | 8,135 | $ | 7,069 | $ | 8,168 | 3 | 16 | $ | 26,755 | $ | 26,473 | 1 | |||||||||||||||||||||
(a) | Included tax-equivalent adjustments, predominantly due to income tax credits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; as well as tax-exempt income from municipal bonds of $483 million, $476 million, $498 million, $486 million and $417 million for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively, and $1.5 billion and $1.2 billion for the nine months ended September 30, 2016 and 2015, respectively. |
(b) | Effective January 1, 2016, consists primarily of credit valuation adjustments (“CVA”) managed by the credit portfolio group, funding valuation adjustments (“FVA”) and debit valuation adjustments (“DVA”) on derivatives. Prior periods also include DVA on fair value option elected liabilities. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets. Effective January 1, 2016, changes in DVA on fair value option elected liabilities are recognized in other comprehensive income. For additional information, see Note 1 on page 28. |
Page 15
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CORPORATE & INVESTMENT BANK | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio and headcount data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||
Assets | $ | 825,933 | $ | 826,019 | $ | 801,053 | $ | 748,691 | $ | 801,133 | — | % | 3 | % | $ | 825,933 | $ | 801,133 | 3 | % | ||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Loans retained (a) | 117,133 | 112,637 | 109,132 | 106,908 | 101,420 | 4 | 15 | 117,133 | 101,420 | 15 | ||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 4,184 | 5,600 | 2,381 | 3,698 | 3,369 | (25 | ) | 24 | 4,184 | 3,369 | 24 | |||||||||||||||||||||||||||
Total loans | 121,317 | 118,237 | 111,513 | 110,606 | 104,789 | 3 | 16 | 121,317 | 104,789 | 16 | ||||||||||||||||||||||||||||
Core loans (b) | 120,885 | 117,821 | 111,050 | 110,084 | 104,270 | 3 | 16 | 120,885 | 104,270 | 16 | ||||||||||||||||||||||||||||
Common equity | 64,000 | 64,000 | 64,000 | 62,000 | 62,000 | — | 3 | 64,000 | 62,000 | 3 | ||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||
Assets | $ | 811,217 | $ | 815,886 | $ | 797,548 | $ | 797,427 | $ | 789,975 | (1 | ) | 3 | $ | 808,228 | $ | 833,233 | (3 | ) | |||||||||||||||||||
Trading assets - debt and equity instruments | 306,431 | 306,418 | 285,122 | 291,958 | 288,828 | — | 6 | 299,350 | 306,072 | (2 | ) | |||||||||||||||||||||||||||
Trading assets - derivative receivables | 63,829 | 61,457 | 62,557 | 59,425 | 63,561 | 4 | — | 62,619 | 69,904 | (10 | ) | |||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Loans retained (a) | 110,941 | 111,668 | 108,712 | 101,959 | 97,518 | (1 | ) | 14 | 110,442 | 97,108 | 14 | |||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 3,864 | 3,169 | 3,204 | 4,897 | 3,827 | 22 | 1 | 3,414 | 4,463 | (24 | ) | |||||||||||||||||||||||||||
Total loans | 114,805 | 114,837 | 111,916 | 106,856 | 101,345 | — | 13 | 113,856 | 101,571 | 12 | ||||||||||||||||||||||||||||
Core loans (b) | 114,380 | 114,421 | 111,417 | 106,331 | 100,809 | — | 13 | 113,410 | 100,730 | 13 | ||||||||||||||||||||||||||||
Common equity | 64,000 | 64,000 | 64,000 | 62,000 | 62,000 | — | 3 | 64,000 | 62,000 | 3 | ||||||||||||||||||||||||||||
Headcount | 49,176 | 48,805 | 49,067 | 49,067 | 49,384 | 1 | — | 49,176 | 49,384 | — | ||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs/(recoveries) | $ | 3 | $ | 90 | $ | 46 | $ | 5 | $ | 2 | (97 | ) | 50 | $ | 139 | $ | (24 | ) | NM | |||||||||||||||||||
Nonperforming assets: | ||||||||||||||||||||||||||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||||||||||||||||||||
Nonaccrual loans retained (a)(c) | 614 | 623 | 650 | 428 | 464 | (1 | ) | 32 | 614 | 464 | 32 | |||||||||||||||||||||||||||
Nonaccrual loans held-for-sale and loans at fair value | 26 | 7 | 7 | 10 | 12 | 271 | 117 | 26 | 12 | 117 | ||||||||||||||||||||||||||||
Total nonaccrual loans | 640 | 630 | 657 | 438 | 476 | 2 | 34 | 640 | 476 | 34 | ||||||||||||||||||||||||||||
Derivative receivables | 232 | 220 | 212 | 204 | 235 | 5 | (1 | ) | 232 | 235 | (1 | ) | ||||||||||||||||||||||||||
Assets acquired in loan satisfactions | 75 | 75 | 62 | 62 | 56 | — | 34 | 75 | 56 | 34 | ||||||||||||||||||||||||||||
Total nonperforming assets | 947 | 925 | 931 | 704 | 767 | 2 | 23 | 947 | 767 | 23 | ||||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | 1,611 | 1,669 | 1,497 | 1,258 | 1,205 | (3 | ) | 34 | 1,611 | 1,205 | 34 | |||||||||||||||||||||||||||
Allowance for lending-related commitments | 837 | 715 | 744 | 569 | 547 | 17 | 53 | 837 | 547 | 53 | ||||||||||||||||||||||||||||
Total allowance for credit losses | 2,448 | 2,384 | 2,241 | 1,827 | 1,752 | 3 | 40 | 2,448 | 1,752 | 40 | ||||||||||||||||||||||||||||
Net charge-off/(recovery) rate (a) | 0.01 | % | 0.32 | % | 0.17 | % | 0.02 | % | 0.01 | % | 0.17 | % | (0.03 | )% | ||||||||||||||||||||||||
Allowance for loan losses to period-end loans retained (a) | 1.38 | 1.48 | 1.37 | 1.18 | 1.19 | 1.38 | 1.19 | |||||||||||||||||||||||||||||||
Allowance for loan losses to period-end loans retained, | ||||||||||||||||||||||||||||||||||||||
excluding trade finance and conduits (d) | 2.02 | 2.23 | 2.11 | 1.88 | 1.85 | 2.02 | 1.85 | |||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans retained (a)(c) | 262 | 268 | 230 | 294 | 260 | 262 | 260 | |||||||||||||||||||||||||||||||
Nonaccrual loans to total period-end loans | 0.53 | 0.53 | 0.59 | 0.40 | 0.45 | 0.53 | 0.45 | |||||||||||||||||||||||||||||||
(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 considered central to the Firm’s ongoing businesses. For further discussion of core loans, see page 28. |
(c) | Allowance for loan losses of $202 million, $211 million, $233 million, $177 million and $160 million were held against nonaccrual loans at September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively. |
(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. |
Page 16
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CORPORATE & INVESTMENT BANK | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except where otherwise noted) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
BUSINESS METRICS | ||||||||||||||||||||||||||||||||||||||
Advisory | $ | 542 | $ | 466 | $ | 585 | $ | 622 | $ | 503 | 16 | % | 8 | % | $ | 1,593 | $ | 1,511 | 5 | % | ||||||||||||||||||
Equity underwriting | 370 | 285 | 205 | 314 | 269 | 30 | 38 | 860 | 1,120 | (23 | ) | |||||||||||||||||||||||||||
Debt underwriting | 943 | 885 | 531 | 602 | 840 | 7 | 12 | 2,359 | 2,567 | (8 | ) | |||||||||||||||||||||||||||
Total investment banking fees | $ | 1,855 | $ | 1,636 | $ | 1,321 | $ | 1,538 | $ | 1,612 | 13 | 15 | $ | 4,812 | $ | 5,198 | (7 | ) | ||||||||||||||||||||
Assets under custody (“AUC”) (period-end) (in billions) | $ | 21,224 | $ | 20,470 | $ | 20,283 | $ | 19,943 | $ | 19,691 | 4 | 8 | $ | 21,224 | $ | 19,691 | 8 | |||||||||||||||||||||
Client deposits and other third-party liabilities (average) (a) | 381,542 | 373,671 | 358,926 | 364,794 | 372,070 | 2 | 3 | 371,417 | 405,576 | (8 | ) | |||||||||||||||||||||||||||
Trade finance loans (period-end) | 16,957 | 17,362 | 18,078 | 19,255 | 21,138 | (2 | ) | (20 | ) | 16,957 | 21,138 | (20 | ) | |||||||||||||||||||||||||
95% Confidence Level - Total CIB VaR (average)(b) | ||||||||||||||||||||||||||||||||||||||
CIB trading VaR by risk type: (c) | ||||||||||||||||||||||||||||||||||||||
Fixed income | $ | 49 | $ | 46 | $ | 46 | $ | 42 | $ | 50 | 7 | (2 | ) | $ | 47 | $ | 42 | 12 | ||||||||||||||||||||
Foreign exchange | 16 | 12 | 9 | 10 | 9 | 33 | 78 | 13 | 9 | 44 | ||||||||||||||||||||||||||||
Equities | 8 | 14 | 22 | 18 | 20 | (43 | ) | (60 | ) | 15 | 18 | (17 | ) | |||||||||||||||||||||||||
Commodities and other | 9 | 9 | 9 | 11 | 10 | — | (10 | ) | 9 | 9 | — | |||||||||||||||||||||||||||
Diversification benefit to CIB trading VaR (d) | (42 | ) | (37 | ) | (32 | ) | (31 | ) | (35 | ) | (14 | ) | (20 | ) | (38 | ) | (36 | ) | (6 | ) | ||||||||||||||||||
CIB trading VaR (c) | 40 | 44 | 54 | 50 | 54 | (9 | ) | (26 | ) | 46 | 42 | 10 | ||||||||||||||||||||||||||
Credit portfolio VaR (e) | 13 | 12 | 12 | 11 | 13 | 8 | — | 12 | 15 | (20 | ) | |||||||||||||||||||||||||||
Diversification benefit to CIB VaR (d) | (10 | ) | (12 | ) | (11 | ) | (9 | ) | (10 | ) | 17 | — | (10 | ) | (9 | ) | (11 | ) | ||||||||||||||||||||
CIB VaR (c) | $ | 43 | $ | 44 | $ | 55 | $ | 52 | $ | 57 | (2 | ) | (25 | ) | $ | 48 | $ | 48 | — | |||||||||||||||||||
(a) | Client deposits and other third party liabilities pertain to the Treasury Services and Securities Services businesses. |
(b) | CIB trading VaR includes substantially all market-making and client-driven activities, as well as certain risk management activities in CIB, including credit spread sensitivity to CVA. For further information, see VaR measurement on pages 135–137 of the 2015 Annual Report, and pages 58-60 of the Firm's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016. |
(c) | As part of the Firm’s continuous evaluation and periodic enhancement of its market risk measures, during the third quarter of 2016 the Firm refined the scope of positions included in risk management VaR. In particular, certain private equity positions in CIB were removed from the VaR calculation. Commencing with the third quarter of 2016, exposure arising from these positions is captured using other sensitivity-based measures, using a 10% decline in the market value, and will be separately reported in the Firm's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2016. The Firm believes this refinement to its reported VaR measures more appropriately captures the risk of its market risk sensitive positions. This refinement resulted in a reduction in average Equities VaR of $5 million, CIB trading VaR of $4 million and CIB VaR of $6 million for the three months ended September 30, 2016. |
(d) | Average portfolio VaR was less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects the fact that the risks were not perfectly correlated. |
(e) | Credit portfolio VaR includes the derivative CVA, hedges of the CVA and hedges of the retained loan portfolio, which are reported in principal transactions revenue. This VaR does not include the retained loan portfolio, which is not reported at fair value. |
Page 17
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
COMMERCIAL BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||
Lending- and deposit-related fees | $ | 228 | $ | 227 | $ | 232 | $ | 236 | $ | 229 | — | % | — | % | $ | 687 | $ | 708 | (3 | )% | ||||||||||||||||||
Asset management, administration and commissions | 14 | 18 | 22 | 20 | 22 | (22 | ) | (36 | ) | 54 | 68 | (21 | ) | |||||||||||||||||||||||||
All other income (a) | 336 | 341 | 302 | 342 | 271 | (1 | ) | 24 | 979 | 991 | (1 | ) | ||||||||||||||||||||||||||
Noninterest revenue | 578 | 586 | 556 | 598 | 522 | (1 | ) | 11 | 1,720 | 1,767 | (3 | ) | ||||||||||||||||||||||||||
Net interest income | 1,292 | 1,231 | 1,247 | 1,162 | 1,122 | 5 | 15 | 3,770 | 3,358 | 12 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE (b) | 1,870 | 1,817 | 1,803 | 1,760 | 1,644 | 3 | 14 | 5,490 | 5,125 | 7 | ||||||||||||||||||||||||||||
Provision for credit losses | (121 | ) | (25 | ) | 304 | 117 | 82 | (384 | ) | NM | 158 | 325 | (51 | ) | ||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Compensation expense | 343 | 322 | 334 | 310 | 311 | 7 | 10 | 999 | 928 | 8 | ||||||||||||||||||||||||||||
Noncompensation expense | 403 | 409 | 379 | 440 | 408 | (1 | ) | (1 | ) | 1,191 | 1,203 | (1 | ) | |||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 746 | 731 | 713 | 750 | 719 | 2 | 4 | 2,190 | 2,131 | 3 | ||||||||||||||||||||||||||||
Income before income tax expense | 1,245 | 1,111 | 786 | 893 | 843 | 12 | 48 | 3,142 | 2,669 | 18 | ||||||||||||||||||||||||||||
Income tax expense | 467 | 415 | 290 | 343 | 325 | 13 | 44 | 1,172 | 1,028 | 14 | ||||||||||||||||||||||||||||
NET INCOME | $ | 778 | $ | 696 | $ | 496 | $ | 550 | $ | 518 | 12 | 50 | $ | 1,970 | $ | 1,641 | 20 | |||||||||||||||||||||
Revenue by product | ||||||||||||||||||||||||||||||||||||||
Lending | $ | 956 | $ | 917 | $ | 928 | $ | 887 | $ | 850 | 4 | 12 | $ | 2,801 | $ | 2,542 | 10 | |||||||||||||||||||||
Treasury services | 693 | 680 | 694 | 655 | 633 | 2 | 9 | 2,067 | 1,926 | 7 | ||||||||||||||||||||||||||||
Investment banking (c) | 203 | 207 | 155 | 156 | 130 | (2 | ) | 56 | 565 | 574 | (2 | ) | ||||||||||||||||||||||||||
Other | 18 | 13 | 26 | 62 | 31 | 38 | (42 | ) | 57 | 83 | (31 | ) | ||||||||||||||||||||||||||
Total Commercial Banking net revenue | $ | 1,870 | $ | 1,817 | $ | 1,803 | $ | 1,760 | $ | 1,644 | 3 | 14 | $ | 5,490 | $ | 5,125 | 7 | |||||||||||||||||||||
Investment banking revenue, gross (d) | $ | 600 | $ | 595 | $ | 483 | $ | 455 | $ | 382 | 1 | 57 | $ | 1,678 | $ | 1,724 | (3 | ) | ||||||||||||||||||||
Revenue by client segment (e) | ||||||||||||||||||||||||||||||||||||||
Middle Market Banking | $ | 716 | $ | 698 | $ | 707 | $ | 694 | $ | 668 | 3 | 7 | $ | 2,121 | $ | 2,012 | 5 | |||||||||||||||||||||
Corporate Client Banking | 612 | 599 | 547 | 520 | 484 | 2 | 26 | 1,758 | 1,664 | 6 | ||||||||||||||||||||||||||||
Commercial Term Lending | 350 | 342 | 361 | 331 | 318 | 2 | 10 | 1,053 | 944 | 12 | ||||||||||||||||||||||||||||
Real Estate Banking | 117 | 107 | 104 | 96 | 92 | 9 | 27 | 328 | 262 | 25 | ||||||||||||||||||||||||||||
Other | 75 | 71 | 84 | 119 | 82 | 6 | (9 | ) | 230 | 243 | (5 | ) | ||||||||||||||||||||||||||
Total Commercial Banking net revenue | $ | 1,870 | $ | 1,817 | $ | 1,803 | $ | 1,760 | $ | 1,644 | 3 | 14 | $ | 5,490 | $ | 5,125 | 7 | |||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||
ROE | 18 | % | 16 | % | 11 | % | 15 | % | 14 | % | 15 | % | 15 | % | ||||||||||||||||||||||||
Overhead ratio | 40 | 40 | 40 | 43 | 44 | 40 | 42 | |||||||||||||||||||||||||||||||
(a) | Includes revenue from investment banking products and commercial card transactions. |
(b) | Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities that provide loans to qualified businesses in low-income communities, as well as tax-exempt income related to municipal financing activity of $127 million, $124 million, $120 million, $149 million and $116 million for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, and $371 million and $344 million for nine months ended September 30, 2016 and 2015, respectively. |
(c) | Includes total Firm revenue from investment banking products sold to CB clients, net of revenue sharing with the CIB. |
(d) | Represents total Firm revenue from investment banking products sold to CB clients. |
(e) | Certain clients were transferred from Middle Market Banking to Corporate Client Banking and from Real Estate Banking to Corporate Client Banking effective in the second and third quarter of 2016, respectively. Prior period client segment amounts were revised to conform with the current period presentation. |
Page 18
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
COMMERCIAL BANKING | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except headcount and ratio data) | QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | ||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 212,189 | $ | 208,151 | $ | 204,602 | $ | 200,700 | $ | 201,157 | 2 | % | 5 | % | $ | 212,189 | $ | 201,157 | 5 | % | ||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Loans retained | 185,609 | 179,164 | 173,583 | 167,374 | 162,269 | 4 | 14 | 185,609 | 162,269 | 14 | ||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 191 | 134 | 338 | 267 | 213 | 43 | (10 | ) | 191 | 213 | (10 | ) | ||||||||||||||||||||||||||
Total loans | $ | 185,800 | $ | 179,298 | $ | 173,921 | $ | 167,641 | $ | 162,482 | 4 | 14 | $ | 185,800 | $ | 162,482 | 14 | |||||||||||||||||||||
Core loans (a) | 185,354 | 178,809 | 173,316 | 166,939 | 161,662 | 4 | 15 | 185,354 | 161,662 | 15 | ||||||||||||||||||||||||||||
Equity | 16,000 | 16,000 | 16,000 | 14,000 | 14,000 | — | 14 | 16,000 | 14,000 | 14 | ||||||||||||||||||||||||||||
Period-end loans by client segment (b) | ||||||||||||||||||||||||||||||||||||||
Middle Market Banking | $ | 53,584 | $ | 51,951 | $ | 51,644 | $ | 50,502 | $ | 51,067 | 3 | 5 | $ | 53,584 | $ | 51,067 | 5 | |||||||||||||||||||||
Corporate Client Banking | 43,514 | 42,372 | 40,712 | 37,708 | 35,163 | 3 | 24 | 43,514 | 35,163 | 24 | ||||||||||||||||||||||||||||
Commercial Term Lending | 69,133 | 66,499 | 64,292 | 62,860 | 60,684 | 4 | 14 | 69,133 | 60,684 | 14 | ||||||||||||||||||||||||||||
Real Estate Banking | 13,905 | 12,872 | 11,656 | 11,234 | 10,457 | 8 | 33 | 13,905 | 10,457 | 33 | ||||||||||||||||||||||||||||
Other | 5,664 | 5,604 | 5,617 | 5,337 | 5,111 | 1 | 11 | 5,664 | 5,111 | 11 | ||||||||||||||||||||||||||||
Total Commercial Banking loans | $ | 185,800 | $ | 179,298 | $ | 173,921 | $ | 167,641 | $ | 162,482 | 4 | 14 | $ | 185,800 | $ | 162,482 | 14 | |||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 208,765 | $ | 205,953 | $ | 202,492 | $ | 200,325 | $ | 197,274 | 1 | 6 | $ | 205,748 | $ | 197,319 | 4 | |||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Loans retained | 180,962 | 176,229 | 169,837 | 165,679 | 158,845 | 3 | 14 | 175,695 | 154,595 | 14 | ||||||||||||||||||||||||||||
Loans held-for-sale and loans at fair value | 517 | 583 | 448 | 188 | 359 | (11 | ) | 44 | 516 | 595 | (13 | ) | ||||||||||||||||||||||||||
Total loans | $ | 181,479 | $ | 176,812 | $ | 170,285 | $ | 165,867 | $ | 159,204 | 3 | 14 | $ | 176,211 | $ | 155,190 | 14 | |||||||||||||||||||||
Core loans (a) | 181,016 | 176,251 | 169,626 | 165,091 | 158,364 | 3 | 14 | 175,651 | 154,240 | 14 | ||||||||||||||||||||||||||||
Client deposits and other third-party liabilities | 173,696 | 170,717 | 173,079 | 178,637 | 180,892 | 2 | (4 | ) | 172,502 | 195,874 | (12 | ) | ||||||||||||||||||||||||||
Equity | 16,000 | 16,000 | 16,000 | 14,000 | 14,000 | — | 14 | 16,000 | 14,000 | 14 | ||||||||||||||||||||||||||||
Average loans by client segment (b) | ||||||||||||||||||||||||||||||||||||||
Middle Market Banking | $ | 52,648 | $ | 51,939 | $ | 50,557 | $ | 50,926 | $ | 50,436 | 1 | 4 | $ | 51,718 | $ | 50,136 | 3 | |||||||||||||||||||||
Corporate Client Banking | 42,139 | 41,109 | 39,348 | 37,581 | 34,314 | 3 | 23 | 40,870 | 33,454 | 22 | ||||||||||||||||||||||||||||
Commercial Term Lending | 67,696 | 65,262 | 63,475 | 61,574 | 59,323 | 4 | 14 | 65,486 | 56,980 | 15 | ||||||||||||||||||||||||||||
Real Estate Banking | 13,382 | 12,936 | 11,464 | 10,742 | 10,074 | 3 | 33 | 12,597 | 9,640 | 31 | ||||||||||||||||||||||||||||
Other | 5,614 | 5,566 | 5,441 | 5,044 | 5,057 | 1 | 11 | 5,540 | 4,980 | 11 | ||||||||||||||||||||||||||||
Total Commercial Banking loans | $ | 181,479 | $ | 176,812 | $ | 170,285 | $ | 165,867 | $ | 159,204 | 3 | 14 | $ | 176,211 | $ | 155,190 | 14 | |||||||||||||||||||||
Headcount | 8,333 | 8,127 | 7,971 | 7,845 | 7,735 | 3 | 8 | 8,333 | 7,735 | 8 | ||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs/(recoveries) | $ | 44 | $ | 60 | $ | 6 | $ | 16 | $ | (2 | ) | (27 | ) | NM | $ | 110 | $ | 5 | NM | |||||||||||||||||||
Nonperforming assets | ||||||||||||||||||||||||||||||||||||||
Nonaccrual loans: | ||||||||||||||||||||||||||||||||||||||
Nonaccrual loans retained (c) | 1,212 | 1,258 | 1,257 | 375 | 423 | (4 | ) | 187 | 1,212 | 423 | 187 | |||||||||||||||||||||||||||
Nonaccrual loans held-for-sale and loans | ||||||||||||||||||||||||||||||||||||||
at fair value | — | — | — | 18 | 16 | — | (100 | ) | — | 16 | (100 | ) | ||||||||||||||||||||||||||
Total nonaccrual loans | 1,212 | 1,258 | 1,257 | 393 | 439 | (4 | ) | 176 | 1,212 | 439 | 176 | |||||||||||||||||||||||||||
Assets acquired in loan satisfactions | 1 | 1 | 1 | 8 | 4 | — | (75 | ) | 1 | 4 | (75 | ) | ||||||||||||||||||||||||||
Total nonperforming assets | 1,213 | 1,259 | 1,258 | 401 | 443 | (4 | ) | 174 | 1,213 | 443 | 174 | |||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | 2,858 | 3,041 | 3,099 | 2,855 | 2,782 | (6 | ) | 3 | 2,858 | 2,782 | 3 | |||||||||||||||||||||||||||
Allowance for lending-related commitments | 244 | 226 | 252 | 198 | 170 | 8 | 44 | 244 | 170 | 44 | ||||||||||||||||||||||||||||
Total allowance for credit losses | 3,102 | 3,267 | 3,351 | 3,053 | 2,952 | (5 | ) | 5 | 3,102 | 2,952 | 5 | |||||||||||||||||||||||||||
Net charge-off/(recovery) rate (d) | 0.10 | % | 0.14 | % | 0.01 | % | 0.04 | % | — | % | 0.08 | % | — | % | ||||||||||||||||||||||||
Allowance for loan losses to period-end loans retained | 1.54 | 1.70 | 1.79 | 1.71 | 1.71 | 1.54 | 1.71 | |||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans retained (c) | 236 | 242 | 247 | 761 | 658 | 236 | 658 | |||||||||||||||||||||||||||||||
Nonaccrual loans to period-end total loans | 0.65 | 0.70 | 0.72 | 0.23 | 0.27 | 0.65 | 0.27 | |||||||||||||||||||||||||||||||
(a) | Loans considered central to the Firm’s ongoing businesses. For further discussion of core loans, see page 28. |
(b) | Certain clients were transferred from Middle Market Banking to Corporate Client Banking and from Real Estate Banking to Corporate Client Banking effective in the second and third quarter of 2016, respectively. Prior period client segment amounts were revised to conform with the current period presentation. |
(c) | Allowance for loan losses of $221 million, $292 million, $278 million, $64 million and $80 million was held against nonaccrual loans retained at September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively. |
(d) | Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate. |
Page 19
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
ASSET MANAGEMENT | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio and headcount data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||
Asset management, administration and commissions | $ | 2,087 | $ | 2,102 | $ | 2,016 | $ | 2,328 | $ | 2,237 | (1 | )% | (7 | )% | $ | 6,205 | $ | 6,847 | (9 | )% | ||||||||||||||||||
All other income | 190 | 90 | 229 | 46 | 24 | 111 | NM | 509 | 342 | 49 | ||||||||||||||||||||||||||||
Noninterest revenue | 2,277 | 2,192 | 2,245 | 2,374 | 2,261 | 4 | 1 | 6,714 | 7,189 | (7 | ) | |||||||||||||||||||||||||||
Net interest income | 770 | 747 | 727 | 671 | 633 | 3 | 22 | 2,244 | 1,885 | 19 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE | 3,047 | 2,939 | 2,972 | 3,045 | 2,894 | 4 | 5 | 8,958 | 9,074 | (1 | ) | |||||||||||||||||||||||||||
Provision for credit losses | 32 | (8 | ) | 13 | 17 | (17 | ) | NM | NM | 37 | (13 | ) | NM | |||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||||||||||||||
Compensation expense | 1,279 | 1,249 | 1,241 | 1,307 | 1,218 | 2 | 5 | 3,769 | 3,806 | (1 | ) | |||||||||||||||||||||||||||
Noncompensation expense | 851 | 849 | 834 | 889 | 891 | — | (4 | ) | 2,534 | 2,884 | (12 | ) | ||||||||||||||||||||||||||
TOTAL NONINTEREST EXPENSE | 2,130 | 2,098 | 2,075 | 2,196 | 2,109 | 2 | 1 | 6,303 | 6,690 | (6 | ) | |||||||||||||||||||||||||||
Income before income tax expense | 885 | 849 | 884 | 832 | 802 | 4 | 10 | 2,618 | 2,397 | 9 | ||||||||||||||||||||||||||||
Income tax expense | 328 | 328 | 297 | 325 | 327 | — | — | 953 | 969 | (2 | ) | |||||||||||||||||||||||||||
NET INCOME | $ | 557 | $ | 521 | $ | 587 | $ | 507 | $ | 475 | 7 | 17 | $ | 1,665 | $ | 1,428 | 17 | |||||||||||||||||||||
REVENUE BY LINE OF BUSINESS | ||||||||||||||||||||||||||||||||||||||
Global Investment Management | $ | 1,497 | $ | 1,424 | $ | 1,499 | $ | 1,615 | $ | 1,483 | 5 | 1 | $ | 4,420 | $ | 4,686 | (6 | ) | ||||||||||||||||||||
Global Wealth Management | 1,550 | 1,515 | 1,473 | 1,430 | 1,411 | 2 | 10 | 4,538 | 4,388 | 3 | ||||||||||||||||||||||||||||
TOTAL NET REVENUE | $ | 3,047 | $ | 2,939 | $ | 2,972 | $ | 3,045 | $ | 2,894 | 4 | 5 | $ | 8,958 | $ | 9,074 | (1 | ) | ||||||||||||||||||||
FINANCIAL RATIOS | ||||||||||||||||||||||||||||||||||||||
ROE | 24 | % | 22 | % | 25 | % | 21 | % | 20 | % | 24 | % | 20 | % | ||||||||||||||||||||||||
Overhead ratio | 70 | 71 | 70 | 72 | 73 | 70 | 74 | |||||||||||||||||||||||||||||||
Pretax margin ratio: | ||||||||||||||||||||||||||||||||||||||
Global Investment Management | 31 | 30 | 33 | 36 | 31 | 31 | 29 | |||||||||||||||||||||||||||||||
Global Wealth Management | 27 | 28 | 26 | 17 | 24 | 27 | 24 | |||||||||||||||||||||||||||||||
Asset Management | 29 | 29 | 30 | 27 | 28 | 29 | 26 | |||||||||||||||||||||||||||||||
Headcount | 21,142 | 20,897 | 20,885 | 20,975 | 20,651 | 1 | 2 | 21,142 | 20,651 | 2 | ||||||||||||||||||||||||||||
Number of client advisors | 2,560 | 2,622 | 2,750 | 2,778 | 2,796 | (2 | ) | (8 | ) | 2,560 | 2,796 | (8 | ) | |||||||||||||||||||||||||
Page 20
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
ASSET MANAGEMENT | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 137,295 | $ | 134,380 | $ | 131,276 | $ | 131,451 | $ | 131,412 | 2 | % | 4 | % | $ | 137,295 | $ | 131,412 | 4 | % | ||||||||||||||||||
Loans (a) | 116,043 | 113,319 | 111,050 | 111,007 | 110,314 | 2 | 5 | 116,043 | 110,314 | 5 | ||||||||||||||||||||||||||||
Core loans (b) | 116,043 | 113,319 | 111,050 | 111,007 | 110,314 | 2 | 5 | 116,043 | 110,314 | 5 | ||||||||||||||||||||||||||||
Deposits | 157,274 | 148,967 | 152,908 | 146,766 | 140,121 | 6 | 12 | 157,274 | 140,121 | 12 | ||||||||||||||||||||||||||||
Equity | 9,000 | 9,000 | 9,000 | 9,000 | 9,000 | — | — | 9,000 | 9,000 | — | ||||||||||||||||||||||||||||
SELECTED BALANCE SHEET DATA (average) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 134,920 | $ | 131,529 | $ | 129,790 | $ | 130,980 | $ | 131,100 | 3 | 3 | $ | 132,090 | $ | 129,326 | 2 | |||||||||||||||||||||
Loans | 114,201 | 111,704 | 110,497 | 110,305 | 108,741 | 2 | 5 | 112,142 | 106,446 | 5 | ||||||||||||||||||||||||||||
Core loans (b) | 114,201 | 111,704 | 110,497 | 110,305 | 108,741 | 2 | 5 | 112,142 | 106,446 | 5 | ||||||||||||||||||||||||||||
Deposits | 153,121 | 151,214 | 150,616 | 145,623 | 141,896 | 1 | 8 | 151,656 | 150,840 | 1 | ||||||||||||||||||||||||||||
Equity | 9,000 | 9,000 | 9,000 | 9,000 | 9,000 | — | — | 9,000 | 9,000 | — | ||||||||||||||||||||||||||||
CREDIT DATA AND QUALITY STATISTICS | ||||||||||||||||||||||||||||||||||||||
Net charge-offs | $ | 5 | $ | 2 | $ | 9 | $ | 8 | $ | 2 | 150 | % | 150 | $ | 16 | $ | 4 | 300 | % | |||||||||||||||||||
Nonaccrual loans | 372 | 254 | 335 | 218 | 229 | 46 | 62 | 372 | 229 | 62 | ||||||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||||||||
Allowance for loan losses | 285 | 258 | 270 | 266 | 258 | 10 | 10 | 285 | 258 | 10 | ||||||||||||||||||||||||||||
Allowance for lending-related commitments | 5 | 4 | 4 | 5 | 4 | 25 | 25 | 5 | 4 | 25 | ||||||||||||||||||||||||||||
Total allowance for credit losses | 290 | 262 | 274 | 271 | 262 | 11 | 11 | 290 | 262 | 11 | ||||||||||||||||||||||||||||
Net charge-off/(recovery) rate | 0.02 | % | 0.01 | % | 0.03 | % | 0.03 | % | 0.01 | % | 0.02 | % | 0.01 | % | ||||||||||||||||||||||||
Allowance for loan losses to period-end loans | 0.25 | 0.23 | 0.24 | 0.24 | 0.23 | 0.25 | 0.23 | |||||||||||||||||||||||||||||||
Allowance for loan losses to nonaccrual loans | 77 | 102 | 81 | 122 | 113 | 77 | 113 | |||||||||||||||||||||||||||||||
Nonaccrual loans to period-end loans | 0.32 | 0.22 | 0.30 | 0.20 | 0.21 | 0.32 | 0.21 | |||||||||||||||||||||||||||||||
(a) | Included $30.7 billion, $29.2 billion, $27.7 billion, $26.6 billion, and $25.4 billion of prime mortgage loans reported in the Consumer, excluding credit card, loan portfolio at September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively. |
(b) | Loans considered central to the Firm’s ongoing businesses. For further discussion of core loans, see page 28. |
Page 21
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
ASSET MANAGEMENT | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in billions) | ||||||||||||||||||||||||||||||||||||||
Sep 30, 2016 | ||||||||||||||||||||||||||||||||||||||
Change | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Jun 30, | Sep 30, | 2016 Change | |||||||||||||||||||||||||||||||
CLIENT ASSETS | 2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | 2016 | 2015 | 2015 | ||||||||||||||||||||||||||||
Assets by asset class | ||||||||||||||||||||||||||||||||||||||
Liquidity | $ | 447 | $ | 426 | $ | 424 | $ | 464 | $ | 463 | 5 | % | (3 | )% | $ | 447 | $ | 463 | (3 | )% | ||||||||||||||||||
Fixed income | 393 | 383 | 365 | 342 | 351 | 3 | 12 | 393 | 351 | 12 | ||||||||||||||||||||||||||||
Equity | 357 | 342 | 346 | 353 | 336 | 4 | 6 | 357 | 336 | 6 | ||||||||||||||||||||||||||||
Multi-asset and alternatives | 575 | 542 | 541 | 564 | 561 | 6 | 2 | 575 | 561 | 2 | ||||||||||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT | 1,772 | 1,693 | 1,676 | 1,723 | 1,711 | 5 | 4 | 1,772 | 1,711 | 4 | ||||||||||||||||||||||||||||
Custody/brokerage/administration/deposits | 675 | 651 | 647 | 627 | 612 | 4 | 10 | 675 | 612 | 10 | ||||||||||||||||||||||||||||
TOTAL CLIENT ASSETS | $ | 2,447 | $ | 2,344 | $ | 2,323 | $ | 2,350 | $ | 2,323 | 4 | 5 | $ | 2,447 | $ | 2,323 | 5 | |||||||||||||||||||||
Memo: | ||||||||||||||||||||||||||||||||||||||
Alternatives client assets (a) | $ | 157 | $ | 151 | $ | 151 | $ | 172 | $ | 172 | 4 | (9 | ) | $ | 157 | $ | 172 | (9 | ) | |||||||||||||||||||
Assets by client segment | ||||||||||||||||||||||||||||||||||||||
Private Banking | $ | 433 | $ | 425 | $ | 428 | $ | 437 | $ | 438 | 2 | (1 | ) | $ | 433 | $ | 438 | (1 | ) | |||||||||||||||||||
Institutional | 862 | 811 | 798 | 816 | 816 | 6 | 6 | 862 | 816 | 6 | ||||||||||||||||||||||||||||
Retail | 477 | 457 | 450 | 470 | 457 | 4 | 4 | 477 | 457 | 4 | ||||||||||||||||||||||||||||
TOTAL ASSETS UNDER MANAGEMENT | $ | 1,772 | $ | 1,693 | $ | 1,676 | $ | 1,723 | $ | 1,711 | 5 | 4 | $ | 1,772 | $ | 1,711 | 4 | |||||||||||||||||||||
Private Banking | $ | 1,089 | $ | 1,058 | $ | 1,057 | $ | 1,050 | $ | 1,037 | 3 | 5 | $ | 1,089 | $ | 1,037 | 5 | |||||||||||||||||||||
Institutional | 879 | 827 | 814 | 824 | 823 | 6 | 7 | 879 | 823 | 7 | ||||||||||||||||||||||||||||
Retail | 479 | 459 | 452 | 476 | 463 | 4 | 3 | 479 | 463 | 3 | ||||||||||||||||||||||||||||
TOTAL CLIENT ASSETS | $ | 2,447 | $ | 2,344 | $ | 2,323 | $ | 2,350 | $ | 2,323 | 4 | 5 | $ | 2,447 | $ | 2,323 | 5 | |||||||||||||||||||||
Assets under management rollforward | ||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 1,693 | $ | 1,676 | $ | 1,723 | $ | 1,711 | $ | 1,781 | $ | 1,723 | $ | 1,744 | ||||||||||||||||||||||||
Net asset flows: | ||||||||||||||||||||||||||||||||||||||
Liquidity | 22 | 4 | (27 | ) | (1 | ) | (5 | ) | (1 | ) | — | |||||||||||||||||||||||||||
Fixed income | 5 | 10 | 11 | (7 | ) | (5 | ) | 26 | — | |||||||||||||||||||||||||||||
Equity | (7 | ) | (5 | ) | (5 | ) | 3 | (5 | ) | (17 | ) | (2 | ) | |||||||||||||||||||||||||
Multi-asset and alternatives | 21 | (2 | ) | 6 | (5 | ) | 6 | 25 | 27 | |||||||||||||||||||||||||||||
Market/performance/other impacts | 38 | 10 | (32 | ) | 22 | (61 | ) | 16 | (58 | ) | ||||||||||||||||||||||||||||
Ending balance | $ | 1,772 | $ | 1,693 | $ | 1,676 | $ | 1,723 | $ | 1,711 | $ | 1,772 | $ | 1,711 | ||||||||||||||||||||||||
Client assets rollforward | ||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 2,344 | $ | 2,323 | $ | 2,350 | $ | 2,323 | $ | 2,423 | $ | 2,350 | $ | 2,387 | ||||||||||||||||||||||||
Net asset flows | 47 | 2 | (7 | ) | 1 | (7 | ) | 42 | 26 | |||||||||||||||||||||||||||||
Market/performance/other impacts | 56 | 19 | (20 | ) | 26 | (93 | ) | 55 | (90 | ) | ||||||||||||||||||||||||||||
Ending balance | $ | 2,447 | $ | 2,344 | $ | 2,323 | $ | 2,350 | $ | 2,323 | $ | 2,447 | $ | 2,323 | ||||||||||||||||||||||||
(a) | Represents assets under management, as well as client balances in brokerage accounts. |
Page 22
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||||||||||||||
CORPORATE | ||||||||||||||||||||||||||||||||||||||
FINANCIAL HIGHLIGHTS | ||||||||||||||||||||||||||||||||||||||
(in millions, except headcount data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
INCOME STATEMENT | ||||||||||||||||||||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||||||||||||
Principal transactions | $ | 57 | $ | 29 | $ | 97 | $ | (56 | ) | $ | (70 | ) | 97 | % | NM | $ | 183 | $ | 97 | 89 | % | |||||||||||||||||
Securities gains | 64 | 20 | 51 | 72 | 25 | 220 | 156 | 135 | 118 | 14 | ||||||||||||||||||||||||||||
All other income (a) | 76 | 122 | 121 | 571 | 118 | (38 | ) | (36 | ) | 319 | (2 | ) | NM | |||||||||||||||||||||||||
Noninterest revenue | 197 | 171 | 269 | 587 | 73 | 15 | 170 | 637 | 213 | 199 | ||||||||||||||||||||||||||||
Net interest income | (385 | ) | (329 | ) | (213 | ) | 64 | (123 | ) | (17 | ) | (213 | ) | (927 | ) | (597 | ) | (55 | ) | |||||||||||||||||||
TOTAL NET REVENUE (b) | (188 | ) | (158 | ) | 56 | 651 | (50 | ) | (19 | ) | (276 | ) | (290 | ) | (384 | ) | 24 | |||||||||||||||||||||
Provision for credit losses | (1 | ) | (1 | ) | (2 | ) | (2 | ) | (4 | ) | — | 75 | (4 | ) | (8 | ) | 50 | |||||||||||||||||||||
NONINTEREST EXPENSE (c) | 143 | (273 | ) | 153 | 609 | 172 | NM | (17 | ) | 23 | 368 | (94 | ) | |||||||||||||||||||||||||
Income/(loss) before income tax expense/(benefit) | (330 | ) | 116 | (95 | ) | 44 | (218 | ) | NM | (51 | ) | (309 | ) | (744 | ) | 58 | ||||||||||||||||||||||
Income tax expense/(benefit) (d) | (165 | ) | 282 | (63 | ) | (178 | ) | (1,935 | ) | NM | 91 | 54 | (2,959 | ) | NM | |||||||||||||||||||||||
NET INCOME/(LOSS) | $ | (165 | ) | $ | (166 | ) | $ | (32 | ) | $ | 222 | $ | 1,717 | 1 | NM | $ | (363 | ) | $ | 2,215 | NM | |||||||||||||||||
MEMO: | ||||||||||||||||||||||||||||||||||||||
TOTAL NET REVENUE | ||||||||||||||||||||||||||||||||||||||
Treasury and Chief Investment Office (“CIO”) | (211 | ) | (226 | ) | (94 | ) | 137 | (89 | ) | 7 | (137 | ) | (531 | ) | (630 | ) | 16 | |||||||||||||||||||||
Other Corporate | 23 | 68 | 150 | 514 | 39 | (66 | ) | (41 | ) | 241 | 246 | (2 | ) | |||||||||||||||||||||||||
TOTAL NET REVENUE | $ | (188 | ) | $ | (158 | ) | $ | 56 | $ | 651 | $ | (50 | ) | (19 | ) | (276 | ) | $ | (290 | ) | $ | (384 | ) | 24 | ||||||||||||||
NET INCOME/(LOSS) | ||||||||||||||||||||||||||||||||||||||
Treasury and CIO | (208 | ) | (199 | ) | (111 | ) | 138 | (40 | ) | (5 | ) | (420 | ) | (518 | ) | (373 | ) | (39 | ) | |||||||||||||||||||
Other Corporate | 43 | 33 | 79 | 84 | 1,757 | 30 | (98 | ) | 155 | 2,588 | (94 | ) | ||||||||||||||||||||||||||
TOTAL NET INCOME/(LOSS) | $ | (165 | ) | $ | (166 | ) | $ | (32 | ) | $ | 222 | $ | 1,717 | 1 | NM | $ | (363 | ) | $ | 2,215 | NM | |||||||||||||||||
SELECTED BALANCE SHEET DATA (period-end) | ||||||||||||||||||||||||||||||||||||||
Total assets | $ | 824,336 | $ | 778,359 | $ | 781,806 | $ | 768,204 | $ | 798,680 | 6 | 3 | $ | 824,336 | $ | 798,680 | 3 | |||||||||||||||||||||
Loans | 1,738 | 1,862 | 1,983 | 2,187 | 2,332 | (7 | ) | (25 | ) | 1,738 | 2,332 | (25 | ) | |||||||||||||||||||||||||
Core loans (e)(f) | 1,735 | 1,857 | 1,978 | 2,182 | 2,327 | (7 | ) | (25 | ) | 1,735 | 2,327 | (25 | ) | |||||||||||||||||||||||||
Headcount | 31,572 | 30,402 | 29,572 | 29,617 | 29,307 | 4 | 8 | 31,572 | 29,307 | 8 | ||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION | ||||||||||||||||||||||||||||||||||||||
TREASURY and CIO | ||||||||||||||||||||||||||||||||||||||
Securities gains | $ | 64 | $ | 20 | $ | 51 | $ | 72 | $ | 25 | 220 | % | 156 | % | $ | 135 | $ | 118 | 14 | % | ||||||||||||||||||
Investment securities portfolio (average) (g) | 271,816 | 278,962 | 283,443 | 296,693 | 306,370 | (3 | ) | (11 | ) | 278,051 | 320,905 | (13 | ) | |||||||||||||||||||||||||
Investment securities portfolio (period-end) (h) | 269,207 | 275,562 | 282,424 | 287,777 | 303,057 | (2 | ) | (11 | ) | 269,207 | 303,057 | (11 | ) | |||||||||||||||||||||||||
Mortgage loans (average) | 1,722 | 1,858 | 2,005 | 2,221 | 2,400 | (7 | ) | (28 | ) | 1,861 | 2,595 | (28 | ) | |||||||||||||||||||||||||
Mortgage loans (period-end) | 1,661 | 1,798 | 1,927 | 2,136 | 2,293 | (8 | ) | (28 | ) | 1,661 | 2,293 | (28 | ) | |||||||||||||||||||||||||
Private equity portfolio | ||||||||||||||||||||||||||||||||||||||
Carrying value | $ | 1,893 | $ | 1,879 | $ | 2,004 | $ | 2,103 | $ | 2,192 | 1 | (14 | ) | $ | 1,893 | $ | 2,192 | (14 | ) | |||||||||||||||||||
Cost | 2,951 | 2,941 | 3,512 | 3,798 | 3,832 | — | (23 | ) | 2,951 | 3,832 | (23 | ) | ||||||||||||||||||||||||||
(a) | Included revenue related to a legal settlement of $514 million for the three months ended December 31, 2015. |
(b) | Included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments of $218 million, $227 million, $218 million, $219 million, and $215 million for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively, and $663 million and $620 million for the nine months ended September 30, 2016, and 2015, respectively. |
(c) | Included legal expense/(benefit) of $(85) million, $(467) million, and $407 million for the three months ended September 30, 2016, June 30, 2016, and December 31, 2015, respectively; and $(550) million and $425 million for the nine months ended September 30, 2016, and 2015, respectively. Legal expense/(benefit) for the three months ended March 31, 2016 was not material. |
(d) | The three and nine months ended September 30, 2015 reflected tax benefits of $1.9 billion and $2.4 billion, respectively, due to the resolution of various tax audits. |
(e) | Average core loans were $1.8 billion, $2.0 billion, $2.1 billion, $2.3 billion, and $2.4 billion for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively, and $1.9 billion and $2.6 billion for the nine months ended September 30, 2016 and 2015, respectively. |
(f) | Loans considered central to the Firm’s ongoing businesses. For further discussion of core loans, see page 28. |
(g) | Average investment securities included held-to-maturity balances of $52.8 billion, $53.4 billion, $48.3 billion, $49.5 billion, and $50.7 billion for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively, and $51.5 billion and $50.2 billion for the nine months ended September 30, 2016, and 2015, respectively. |
(h) | Period-end investment securities included held-to-maturity balances of $52.0 billion, $53.8 billion, $47.9 billion, $49.1 billion, and $50.2 billion at September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively. |
Page 23
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||
CREDIT-RELATED INFORMATION | ||||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||
Sep 30, 2016 | ||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||
Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Jun 30, | Sep 30, | ||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | ||||||||||||||||||||
CREDIT EXPOSURE | ||||||||||||||||||||||||||
Consumer, excluding credit card loans (a) | ||||||||||||||||||||||||||
Loans retained, excluding PCI loans | $ | 326,353 | $ | 322,690 | $ | 314,128 | $ | 303,357 | $ | 289,496 | 1 | % | 13 | % | ||||||||||||
Loans - PCI | 37,045 | 38,360 | 39,743 | 40,998 | 42,236 | (3 | ) | (12 | ) | |||||||||||||||||
Total loans retained | 363,398 | 361,050 | 353,871 | 344,355 | 331,732 | 1 | 10 | |||||||||||||||||||
Loans held-for-sale | 398 | 255 | 321 | 466 | 237 | 56 | 68 | |||||||||||||||||||
Total consumer, excluding credit card loans | 363,796 | 361,305 | 354,192 | 344,821 | 331,969 | 1 | 10 | |||||||||||||||||||
Credit card loans | ||||||||||||||||||||||||||
Loans retained | 133,346 | 131,507 | 126,012 | 131,387 | 125,634 | 1 | 6 | |||||||||||||||||||
Loans held-for-sale | 89 | 84 | 78 | 76 | 1,345 | 6 | (93 | ) | ||||||||||||||||||
Total credit card loans | 133,435 | 131,591 | 126,090 | 131,463 | 126,979 | 1 | 5 | |||||||||||||||||||
Total consumer loans | 497,231 | 492,896 | 480,282 | 476,284 | 458,948 | 1 | 8 | |||||||||||||||||||
Wholesale loans (b) | ||||||||||||||||||||||||||
Loans retained | 386,449 | 374,174 | 364,312 | 357,050 | 346,927 | 3 | 11 | |||||||||||||||||||
Loans held-for-sale and loans at fair value | 4,374 | 5,734 | 2,719 | 3,965 | 3,582 | (24 | ) | 22 | ||||||||||||||||||
Total wholesale loans | 390,823 | 379,908 | 367,031 | 361,015 | 350,509 | 3 | 12 | |||||||||||||||||||
Total loans | 888,054 | 872,804 | 847,313 | 837,299 | 809,457 | 2 | 10 | |||||||||||||||||||
Derivative receivables | 65,579 | 78,446 | 70,209 | 59,677 | 68,668 | (16 | ) | (4 | ) | |||||||||||||||||
Receivables from customers and other (c) | 19,163 | 14,426 | 16,294 | 13,497 | 17,016 | 33 | 13 | |||||||||||||||||||
Total credit-related assets | 84,742 | 92,872 | 86,503 | 73,174 | 85,684 | (9 | ) | (1 | ) | |||||||||||||||||
Lending-related commitments | ||||||||||||||||||||||||||
Consumer, excluding credit card | 59,990 | 59,224 | 60,744 | 58,478 | 60,005 | 1 | — | |||||||||||||||||||
Credit card | 549,634 | 539,105 | 532,224 | 515,518 | 526,433 | 2 | 4 | |||||||||||||||||||
Wholesale | 368,987 | 357,145 | 367,466 | 366,399 | 354,348 | 3 | 4 | |||||||||||||||||||
Total lending-related commitments | 978,611 | 955,474 | 960,434 | 940,395 | 940,786 | 2 | 4 | |||||||||||||||||||
Total credit exposure | $ | 1,951,407 | $ | 1,921,150 | $ | 1,894,250 | $ | 1,850,868 | $ | 1,835,927 | 2 | 6 | ||||||||||||||
Memo: Total by category | ||||||||||||||||||||||||||
Consumer exposure (d) | $ | 1,106,980 | $ | 1,091,363 | $ | 1,073,377 | $ | 1,050,405 | $ | 1,045,505 | 1 | 6 | ||||||||||||||
Wholesale exposures (e) | 844,427 | 829,787 | 820,873 | 800,463 | 790,422 | 2 | 7 | |||||||||||||||||||
Total credit exposure | $ | 1,951,407 | $ | 1,921,150 | $ | 1,894,250 | $ | 1,850,868 | $ | 1,835,927 | 2 | 6 | ||||||||||||||
Note: The Firm provides several non-GAAP financial measures which exclude the impact of PCI loans. For further discussion of these measures, see page 28.
(a) | Includes loans reported in CCB, prime mortgage and home equity loans reported in AM, and prime mortgage loans reported in Corporate. |
(b) | Includes loans reported in CIB, CB and AM business segments and Corporate. |
(c) | Predominantly includes receivables from customers, which represent margin loans to prime and retail brokerage customers; these are classified in accrued interest and accounts receivable on the Consolidated balance sheets. |
(d) | Represents total consumer loans and lending-related commitments. |
(e) | Represents total wholesale loans and lending-related commitments, derivative receivables and receivables from customers. |
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JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||
CREDIT-RELATED INFORMATION, CONTINUED | ||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||
Sep 30, 2016 | ||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||
Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Jun 30, | Sep 30, | ||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | ||||||||||||||||||||
NONPERFORMING ASSETS (a) | ||||||||||||||||||||||||||
Consumer nonaccrual loans (b)(c) | $ | 4,961 | $ | 5,085 | $ | 5,225 | $ | 5,413 | $ | 5,530 | (2 | ) | (10 | ) | ||||||||||||
Wholesale nonaccrual loans | ||||||||||||||||||||||||||
Loans retained | 2,151 | 2,093 | 2,203 | 988 | 1,086 | 3 | 98 | |||||||||||||||||||
Loans held-for-sale and loans at fair value | 26 | 7 | 7 | 28 | 28 | 271 | (7 | ) | ||||||||||||||||||
Total wholesale nonaccrual loans | 2,177 | 2,100 | 2,210 | 1,016 | 1,114 | 4 | 95 | |||||||||||||||||||
Total nonaccrual loans | 7,138 | 7,185 | 7,435 | 6,429 | 6,644 | (1 | ) | 7 | ||||||||||||||||||
Derivative receivables | 232 | 220 | 212 | 204 | 235 | 5 | (1 | ) | ||||||||||||||||||
Assets acquired in loan satisfactions | 409 | 352 | 376 | 401 | 415 | 16 | (1 | ) | ||||||||||||||||||
Total nonperforming assets | 7,779 | 7,757 | 8,023 | 7,034 | 7,294 | — | 7 | |||||||||||||||||||
Wholesale lending-related commitments (d) | 503 | 460 | 722 | 193 | 176 | 9 | 186 | |||||||||||||||||||
Total nonperforming exposure | $ | 8,282 | $ | 8,217 | $ | 8,745 | $ | 7,227 | $ | 7,470 | 1 | 11 | ||||||||||||||
NONACCRUAL LOAN-RELATED RATIOS | ||||||||||||||||||||||||||
Total nonaccrual loans to total loans | 0.80 | % | 0.82 | % | 0.88 | % | 0.77 | % | 0.82 | % | ||||||||||||||||
Total consumer, excluding credit card nonaccrual loans to | ||||||||||||||||||||||||||
total consumer, excluding credit card loans | 1.36 | 1.41 | 1.48 | 1.57 | 1.67 | |||||||||||||||||||||
Total wholesale nonaccrual loans to total | ||||||||||||||||||||||||||
wholesale loans | 0.56 | 0.55 | 0.60 | 0.28 | 0.32 | |||||||||||||||||||||
(a) | At September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $5.0 billion, $5.2 billion, $5.7 billion, $6.3 billion and $6.6 billion, respectively, that are 90 or more days past due; (2) student loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) of $259 million, $252 million, $269 million, $290 million and $289 million, respectively, that are 90 or more days past due; (3) real estate owned (“REO”) insured by U.S. government agencies of $163 million, $355 million, $360 million, $343 million and $327 million, respectively. These amounts have been excluded based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”). Under this guidance, non-modified credit card loans are charged off by the end of the month in which the account becomes 180 days past due, while modified credit card loans are charged off when the account becomes 120 days past due. Moreover, all credit card loans must be charged off within 60 days of receiving notification about certain specified events (e.g., bankruptcy of the borrower). |
(b) | Included nonaccrual loans held-for-sale of $53 million, $61 million and $98 million at September 30, 2016, March 31, 2016, and December 31, 2015, respectively. There were no nonaccrual loans held-for-sale at June 30, 2016 or September 30, 2015. |
(c) | Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as they are all performing. |
(d) | Represents commitments that are risk rated as nonaccrual. |
Page 25
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CREDIT-RELATED INFORMATION, CONTINUED | ||||||||||||||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||||||||||||||
QUARTERLY TRENDS | NINE MONTHS ENDED SEPTEMBER 30, | |||||||||||||||||||||||||||||||||||||
3Q16 Change | 2016 Change | |||||||||||||||||||||||||||||||||||||
3Q16 | 2Q16 | 1Q16 | 4Q15 | 3Q15 | 2Q16 | 3Q15 | 2016 | 2015 | 2015 | |||||||||||||||||||||||||||||
SUMMARY OF CHANGES IN THE ALLOWANCES | ||||||||||||||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 14,227 | $ | 13,994 | $ | 13,555 | $ | 13,466 | $ | 13,915 | 2 | % | 2 | % | $ | 13,555 | $ | 14,185 | (4 | )% | ||||||||||||||||||
Net charge-offs: | ||||||||||||||||||||||||||||||||||||||
Gross charge-offs | 1,375 | 1,433 | 1,357 | 1,300 | 1,305 | (4 | ) | 5 | 4,165 | 3,941 | 6 | |||||||||||||||||||||||||||
Gross recoveries | (254 | ) | (252 | ) | (247 | ) | (236 | ) | (342 | ) | (1 | ) | 26 | (753 | ) | (919 | ) | 18 | ||||||||||||||||||||
Net charge-offs | 1,121 | 1,181 | 1,110 | 1,064 | 963 | (5 | ) | 16 | 3,412 | 3,022 | 13 | |||||||||||||||||||||||||||
Write-offs of PCI loans and other (a) | 36 | 41 | 47 | 46 | 52 | (12 | ) | (31 | ) | 124 | 162 | (23 | ) | |||||||||||||||||||||||||
Provision for loan losses | 1,132 | 1,456 | 1,596 | 1,200 | 567 | (22 | ) | 100 | 4,184 | 2,463 | 70 | |||||||||||||||||||||||||||
Other | 2 | (1 | ) | — | (1 | ) | (1 | ) | NM | NM | 1 | 2 | (50 | ) | ||||||||||||||||||||||||
Ending balance | $ | 14,204 | $ | 14,227 | $ | 13,994 | $ | 13,555 | $ | 13,466 | — | 5 | $ | 14,204 | $ | 13,466 | 5 | |||||||||||||||||||||
ALLOWANCE FOR LENDING-RELATED COMMITMENTS | ||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 960 | $ | 1,014 | $ | 786 | $ | 735 | $ | 620 | (5 | ) | 55 | $ | 786 | $ | 622 | 26 | ||||||||||||||||||||
Provision for lending-related commitments | 139 | (54 | ) | 228 | 51 | 115 | NM | 21 | 313 | 113 | 177 | |||||||||||||||||||||||||||
Other | 1 | — | — | — | — | NM | NM | 1 | — | NM | ||||||||||||||||||||||||||||
Ending balance | $ | 1,100 | $ | 960 | $ | 1,014 | $ | 786 | $ | 735 | 15 | 50 | $ | 1,100 | $ | 735 | 50 | |||||||||||||||||||||
Total allowance for credit losses | $ | 15,304 | $ | 15,187 | $ | 15,008 | $ | 14,341 | $ | 14,201 | 1 | 8 | $ | 15,304 | $ | 14,201 | 8 | |||||||||||||||||||||
NET CHARGE-OFF/(RECOVERY) RATES | ||||||||||||||||||||||||||||||||||||||
Consumer retained, excluding credit card loans (b) | 0.26 | % | 0.19 | % | 0.25 | % | 0.31 | % | 0.25 | % | 0.23 | % | 0.30 | % | ||||||||||||||||||||||||
Credit card retained loans | 2.51 | 2.70 | 2.62 | 2.42 | 2.41 | 2.61 | 2.54 | |||||||||||||||||||||||||||||||
Total consumer retained loans | 0.86 | 0.85 | 0.89 | 0.88 | 0.85 | 0.87 | 0.93 | |||||||||||||||||||||||||||||||
Wholesale retained loans | 0.05 | 0.17 | 0.07 | 0.03 | — | 0.09 | (0.01 | ) | ||||||||||||||||||||||||||||||
Total retained loans | 0.51 | 0.56 | 0.53 | 0.52 | 0.49 | 0.53 | 0.53 | |||||||||||||||||||||||||||||||
Consumer retained loans, excluding credit card and | ||||||||||||||||||||||||||||||||||||||
PCI loans | 0.29 | 0.21 | 0.29 | 0.35 | 0.29 | 0.26 | 0.35 | |||||||||||||||||||||||||||||||
Consumer retained loans, excluding PCI loans | 0.93 | 0.92 | 0.97 | 0.97 | 0.94 | 0.94 | 1.04 | |||||||||||||||||||||||||||||||
Total retained, excluding PCI loans | 0.54 | 0.58 | 0.56 | 0.54 | 0.51 | 0.56 | 0.56 | |||||||||||||||||||||||||||||||
Memo: Average retained loans | ||||||||||||||||||||||||||||||||||||||
Consumer retained, excluding credit card loans | $ | 362,457 | $ | 357,602 | $ | 348,916 | $ | 339,637 | $ | 323,458 | 1 | 12 | $ | 356,347 | $ | 311,527 | 14 | |||||||||||||||||||||
Credit card retained loans | 132,626 | 128,314 | 127,227 | 126,903 | 125,048 | 3 | 6 | 129,401 | 123,387 | 5 | ||||||||||||||||||||||||||||
Total average retained consumer loans | 495,083 | 485,916 | 476,143 | 466,540 | 448,506 | 2 | 10 | 485,748 | 434,914 | 12 | ||||||||||||||||||||||||||||
Wholesale retained loans | 374,593 | 369,706 | 360,306 | 350,370 | 339,172 | 1 | 10 | 368,225 | 333,038 | 11 | ||||||||||||||||||||||||||||
Total average retained loans | $ | 869,676 | $ | 855,622 | $ | 836,449 | $ | 816,910 | $ | 787,678 | 2 | 10 | $ | 853,973 | $ | 767,952 | 11 | |||||||||||||||||||||
Consumer retained, excluding credit card and | ||||||||||||||||||||||||||||||||||||||
PCI loans | $ | 324,741 | $ | 318,556 | $ | 308,526 | $ | 298,047 | $ | 280,475 | 2 | 16 | $ | 317,301 | $ | 267,054 | 19 | |||||||||||||||||||||
Consumer retained, excluding PCI loans | 457,367 | 446,870 | 435,753 | 424,950 | 405,524 | 2 | 13 | 446,702 | 390,441 | 14 | ||||||||||||||||||||||||||||
Total retained, excluding PCI loans | 831,956 | 816,572 | 796,055 | 775,316 | 744,692 | 2 | 12 | 814,923 | 723,475 | 13 | ||||||||||||||||||||||||||||
(a) | Write-offs of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool (e.g., upon liquidation). |
(b) | The net charge-off rates exclude the write-offs in the PCI portfolio. These write-offs decreased the allowance for loan losses for PCI loans. |
Page 26
JPMORGAN CHASE & CO. | ||||||||||||||||||||||||||
CREDIT-RELATED INFORMATION, CONTINUED | ||||||||||||||||||||||||||
(in millions, except ratio data) | ||||||||||||||||||||||||||
Sep 30, 2016 | ||||||||||||||||||||||||||
Change | ||||||||||||||||||||||||||
Sep 30, | Jun 30, | Mar 31, | Dec 31, | Sep 30, | Jun 30, | Sep 30, | ||||||||||||||||||||
2016 | 2016 | 2016 | 2015 | 2015 | 2016 | 2015 | ||||||||||||||||||||
ALLOWANCE COMPONENTS AND RATIOS | ||||||||||||||||||||||||||
ALLOWANCE FOR LOAN LOSSES | ||||||||||||||||||||||||||
Consumer, excluding credit card | ||||||||||||||||||||||||||
Asset-specific (a) | $ | 352 | $ | 365 | $ | 371 | $ | 364 | $ | 359 | (4 | )% | (2 | )% | ||||||||||||
Formula-based | 2,667 | 2,627 | 2,694 | 2,700 | 2,702 | 2 | (1 | ) | ||||||||||||||||||
PCI | 2,618 | 2,654 | 2,695 | 2,742 | 2,788 | (1 | ) | (6 | ) | |||||||||||||||||
Total consumer, excluding credit card | 5,637 | 5,646 | 5,760 | 5,806 | 5,849 | — | (4 | ) | ||||||||||||||||||
Credit card | ||||||||||||||||||||||||||
Asset-specific (a)(b) | 363 | 361 | 427 | 460 | 485 | 1 | (25 | ) | ||||||||||||||||||
Formula-based | 3,521 | 3,323 | 3,007 | 2,974 | 2,949 | 6 | 19 | |||||||||||||||||||
Total credit card | 3,884 | 3,684 | 3,434 | 3,434 | 3,434 | 5 | 13 | |||||||||||||||||||
Total consumer | 9,521 | 9,330 | 9,194 | 9,240 | 9,283 | 2 | 3 | |||||||||||||||||||
Wholesale | ||||||||||||||||||||||||||
Asset-specific (a) | 490 | 525 | 565 | 274 | 281 | (7 | ) | 74 | ||||||||||||||||||
Formula-based | 4,193 | 4,372 | 4,235 | 4,041 | 3,902 | (4 | ) | 7 | ||||||||||||||||||
Total wholesale | 4,683 | 4,897 | 4,800 | 4,315 | 4,183 | (4 | ) | 12 | ||||||||||||||||||
Total allowance for loan losses | 14,204 | 14,227 | 13,994 | 13,555 | 13,466 | — | 5 | |||||||||||||||||||
Allowance for lending-related commitments | 1,100 | 960 | 1,014 | 786 | 735 | 15 | 50 | |||||||||||||||||||
Total allowance for credit losses | $ | 15,304 | $ | 15,187 | $ | 15,008 | $ | 14,341 | $ | 14,201 | 1 | 8 | ||||||||||||||
CREDIT RATIOS | ||||||||||||||||||||||||||
Consumer, excluding credit card allowance, to total | ||||||||||||||||||||||||||
consumer, excluding credit card retained loans | 1.55 | % | 1.56 | % | 1.63 | % | 1.69 | % | 1.76 | % | ||||||||||||||||
Credit card allowance to total credit card retained loans | 2.91 | 2.80 | 2.73 | 2.61 | 2.73 | |||||||||||||||||||||
Wholesale allowance to total wholesale retained loans | 1.21 | 1.31 | 1.32 | 1.21 | 1.21 | |||||||||||||||||||||
Wholesale allowance to total wholesale retained loans, | ||||||||||||||||||||||||||
excluding trade finance and conduits (c) | 1.33 | 1.45 | 1.47 | 1.35 | 1.34 | |||||||||||||||||||||
Total allowance to total retained loans | 1.61 | 1.64 | 1.66 | 1.63 | 1.67 | |||||||||||||||||||||
Consumer, excluding credit card allowance, to consumer, | ||||||||||||||||||||||||||
excluding credit card retained nonaccrual loans (d) | 115 | 111 | 112 | 109 | 106 | |||||||||||||||||||||
Total allowance, excluding credit card allowance, to retained | ||||||||||||||||||||||||||
nonaccrual loans, excluding credit card nonaccrual loans (d) | 146 | 147 | 143 | 161 | 152 | |||||||||||||||||||||
Wholesale allowance to wholesale retained nonaccrual loans | 218 | 234 | 218 | 437 | 385 | |||||||||||||||||||||
Total allowance to total retained nonaccrual loans | 201 | 198 | 190 | 215 | 204 | |||||||||||||||||||||
CREDIT RATIOS, excluding PCI loans | ||||||||||||||||||||||||||
Consumer, excluding credit card allowance, to total | ||||||||||||||||||||||||||
consumer, excluding credit card retained loans | 0.93 | 0.93 | 0.98 | 1.01 | 1.06 | |||||||||||||||||||||
Total allowance to total retained loans | 1.37 | 1.40 | 1.40 | 1.37 | 1.40 | |||||||||||||||||||||
Consumer, excluding credit card allowance, to consumer, | ||||||||||||||||||||||||||
excluding credit card retained nonaccrual loans (d) | 62 | 59 | 59 | 58 | 55 | |||||||||||||||||||||
Allowance, excluding credit card allowance, to retained non- | ||||||||||||||||||||||||||
accrual loans, excluding credit card nonaccrual loans (d) | 109 | 110 | 107 | 117 | 109 | |||||||||||||||||||||
Total allowance to total retained nonaccrual loans | 164 | 161 | 153 | 172 | 161 | |||||||||||||||||||||
(a) | Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a troubled debt restructuring (“TDR”). |
(b) | The asset-specific credit card allowance for loan losses relates to loans that have been modified in a TDR; the Firm calculates such allowance based on the loans’ original contractual interest rates and does not consider any incremental penalty rates. |
(c) | Management uses allowance for loan losses to period-end loans retained, excluding CIB’s trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of the wholesale allowance coverage ratio. |
(d) | For information on the Firm’s nonaccrual policy for credit card loans, see footnote (a) on page 25. |
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JPMORGAN CHASE & CO. | |||||||||||||
NON-GAAP FINANCIAL MEASURES, KEY PERFORMANCE MEASURES AND OTHER NOTES | |||||||||||||
Non-GAAP Financial Measures
(a) | In addition to analyzing the Firm’s results on a reported basis, management reviews the Firm’s results, including the overhead ratio, and the results of the lines of business on a “managed” basis, which are non-GAAP financial measures. 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 a 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. These non-GAAP financial measures allow management to assess the comparability of revenue arising from both taxable and tax-exempt sources. 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 lines of business. |
(b) | The ratios of the allowance for loan losses to period-end loans retained, the allowance for loan losses to nonaccrual loans retained, and nonaccrual loans to total period-end loans excluding credit card and PCI loans, exclude the following: loans accounted for at fair value and loans held-for-sale; PCI loans; and the allowance for loan losses related to PCI loans. Additionally, net charge-offs and net charge-off rates exclude the impact of PCI loans. The ratio of the wholesale allowance for loan losses to period-end loans retained, excluding trade finance and conduits, is calculated excluding loans accounted for at fair value, loans held-for-sale, CIB’s trade finance loans and consolidated Firm-administered multi-seller conduits, as well as their related allowances, to provide a more meaningful assessment of the wholesale allowance coverage ratio. |
(c) | CIB calculates the ratio of the allowance for loan losses to end-of-period loans excluding the impact of consolidated Firm-administered multi-seller conduits and trade finance loans, to provide a more meaningful assessment of CIB’s allowance coverage ratio. |
Key Performance Measures
(a) | Core loans include loans considered central to the Firm’s ongoing businesses; core loans exclude loans classified as trading assets, runoff portfolios, discontinued portfolios and portfolios the Firm has an intent to exit. |
(b) | Tangible common equity (“TCE”), Return on tangible common equity (“ROTCE”), and Tangible book value per share (“TBVPS”) are considered key financial performance measures. TCE represents the Firm’s common stockholders’ equity (i.e., total stockholders’ equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. ROTCE measures the Firm’s net income applicable to common equity as a percentage of average TCE. TBVPS represents the Firm’s TCE at period-end divided by common shares at period-end. TCE, ROTCE, and TBVPS are meaningful to the Firm, as well as investors and analysts, in assessing the Firm’s use of equity. |
Other Notes
(1) | Effective January 1, 2016, the Firm adopted new accounting guidance related to the recognition and measurement of financial liabilities where the fair value option has been elected. This guidance requires the portion of the total change in fair value caused by changes in the Firm’s own credit risk (DVA) to be presented separately in other comprehensive income; previously these amounts were recognized in net income. The guidance was required to be applied as of the beginning of the fiscal year of adoption via a cumulative effect adjustment to the Consolidated balance sheet, which resulted in a reclassification from retained earnings to accumulated other comprehensive income. The adoption of this guidance had no material impact on the Firm’s Consolidated Financial Statements. |
(2) | Effective January 1, 2016, the Firm adopted new accounting guidance related to share-based payments, including the accounting for income taxes and classification in the statement of cash flows. The guidance requires that all excess tax benefits and tax deficiencies that pertain to share-based payment arrangements be recognized within income tax expense in the Consolidated statements of income; previously such amounts were recognized within additional paid-in capital. The adoption of this guidance had no material impact on the Firm’s Consolidated Financial Statements. |
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