JPMorgan Chase & Co. (JPM) 10-Q 2020 Q2 Quarterly report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly report pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

For the quarterly period ended	Commission file
June 30, 2020	number	1-5805

JPMorgan Chase & Co.

(Exact name of registrant as specified in its charter)

Delaware		13-2624428
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)
383 Madison Avenue,
New York,	New York	10179
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 270-6000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	JPM	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.10% Non-Cumulative Preferred Stock, Series AA	JPM PR G	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.15% Non-Cumulative Preferred Stock, Series BB	JPM PR H	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 5.75% Non-Cumulative Preferred Stock, Series DD	JPM PR D	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 6.00% Non-Cumulative Preferred Stock, Series EE	JPM PR C	The New York Stock Exchange
Depositary Shares, each representing a one-four hundredth interest in a share of 4.75% Non-Cumulative Preferred Stock, Series GG	JPM PR J	The New York Stock Exchange
Alerian MLP Index ETNs due May 24, 2024	AMJ	NYSE Arca, Inc.
Guarantee of Callable Step-Up Fixed Rate Notes due April 26, 2028 of JPMorgan Chase Financial Company LLC	JPM/28	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Number of shares of common stock outstanding as of June 30, 2020: 3,047,604,487

FORM 10-Q

TABLE OF CONTENTS

Part I – Financial information		Page
Item 1.	Financial Statements.
	Consolidated Financial Statements – JPMorgan Chase & Co.:
	Consolidated statements of income (unaudited) for the three and six months ended June 30, 2020 and 2019	93
	Consolidated statements of comprehensive income (unaudited) for the three and six months ended June 30, 2020 and 2019	94
	Consolidated balance sheets (unaudited) at June 30, 2020 and December 31, 2019	95
	Consolidated statements of changes in stockholders’ equity (unaudited) for the three and six months ended June 30, 2020 and 2019	96
	Consolidated statements of cash flows (unaudited) for the six months ended June 30, 2020 and 2019	97
	Notes to Consolidated Financial Statements (unaudited)	98
	Report of Independent Registered Public Accounting Firm	188
	Consolidated Average Balance Sheets, Interest and Rates (unaudited) for the three months ended June 30, 2020 and 2019	189
	Glossary of Terms and Acronyms and Line of Business Metrics	191
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.
	Consolidated Financial Highlights	3
	Introduction	4
	Executive Overview	5
	Consolidated Results of Operations	13
	Consolidated Balance Sheets and Cash Flows Analysis	18
	Off-Balance Sheet Arrangements	21
	Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures	22
	Business Segment Results	24
	Firmwide Risk Management	48
	Capital Risk Management	49
	Liquidity Risk Management	55
	Consumer Credit Portfolio	62
	Wholesale Credit Portfolio	67
	Investment Portfolio Risk Management	79
	Market Risk Management	80
	Country Risk Management	85
	Operational Risk Management	86
	Estimations and Model Risk Management	87
	Critical Accounting Estimates Used by the Firm	88
	Accounting and Reporting Developments	91
	Forward-Looking Statements	92
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	200
Item 4.	Controls and Procedures.	200
Part II – Other information
Item 1.	Legal Proceedings.	200
Item 1A.	Risk Factors.	200
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	201
Item 3.	Defaults Upon Senior Securities.	201
Item 4.	Mine Safety Disclosures.	201
Item 5.	Other Information.	201
Item 6.	Exhibits.	202

2

JPMorgan Chase & Co.

Consolidated financial highlights (unaudited)

As of or for the period ended, (in millions, except per share, ratio, headcount data and where otherwise noted)																Six months ended June 30,
	2Q20			1Q20			4Q19			3Q19			2Q19			2020			2019
Selected income statement data
Total net revenue(a)	$	32,980		$	28,192		$	28,285		$	29,291		$	28,747		$	61,172		$	57,823
Total noninterest expense(a)	16,942			16,791			16,293			16,372			16,256			33,733			32,604
Pre-provision profit(b)	16,038			11,401			11,992			12,919			12,491			27,439			25,219
Provision for credit losses	10,473			8,285			1,427			1,514			1,149			18,758			2,644
Income before income tax expense	5,565			3,116			10,565			11,405			11,342			8,681			22,575
Income tax expense	878			251			2,045			2,325			1,690			1,129			3,744
Net income	$	4,687		$	2,865		$	8,520		$	9,080		$	9,652		$	7,552		$	18,831
Earnings per share data
Net income:     Basic	$	1.39		$	0.79		$	2.58		$	2.69		$	2.83		$	2.17		$	5.48
Diluted	1.38			0.78			2.57			2.68			2.82			2.17			5.46
Average shares: Basic	3,076.3			3,095.8			3,140.7			3,198.5			3,250.6			3,086.1			3,274.3
Diluted	3,081.0			3,100.7			3,148.5			3,207.2			3,259.7			3,090.8			3,283.9
Market and per common share data
Market capitalization	286,658			274,323			429,913			369,133			357,479			286,658			357,479
Common shares at period-end	3,047.6			3,047.0			3,084.0			3,136.5			3,197.5			3,047.6			3,197.5
Book value per share	76.91			75.88			75.98			75.24			73.88			76.91			73.88
Tangible book value per share (“TBVPS”)(b)	61.76			60.71			60.98			60.48			59.52			61.76			59.52
Cash dividends declared per share	0.90			0.90			0.90			0.90			0.80			1.80			1.60
Selected ratios and metrics
Return on common equity (“ROE”)(c)	7		%	4		%	14		%	15		%	16		%	6		%	16		%
Return on tangible common equity (“ROTCE”)(b)(c)	9			5			17			18			20			7			20
Return on assets(b)	0.58			0.40			1.22			1.30			1.41			0.50			1.40
Overhead ratio	51			60			58			56			57			55			56
Loans-to-deposits ratio	51			55			61			62			63			51			63
Liquidity coverage ratio (“LCR”) (average)	117			114			116			115			113			117			113
Common equity Tier 1 (“CET1”) capital ratio(d)	12.4			11.5			12.4			12.3			12.2			12.4			12.2
Tier 1 capital ratio(d)	14.3			13.3			14.1			14.1			14.0			14.3			14.0
Total capital ratio(d)	16.7			15.5			16.0			15.9			15.8			16.7			15.8
Tier 1 leverage ratio(d)	6.9			7.5			7.9			7.9			8.0			6.9			8.0
Supplementary leverage ratio (“SLR”)(d)	6.8			6.0			6.3			6.3			6.4			6.8			6.4
Selected balance sheet data (period-end)
Trading assets	$	526,042		$	548,580		$	411,103		$	495,875		$	523,373		$	526,042		$	523,373
Investment securities, net of allowance for credit losses	558,791			471,144			398,239			394,251			307,264			558,791			307,264
Loans	978,518			1,015,375			959,769			945,218			956,889			978,518			956,889
Total assets	3,213,115			3,139,431			2,687,379			2,764,661			2,727,379			3,213,115			2,727,379
Deposits	1,931,029			1,836,009			1,562,431			1,525,261			1,524,361			1,931,029			1,524,361
Long-term debt	317,003			299,344			291,498			296,472			288,869			317,003			288,869
Common stockholders’ equity	234,403			231,199			234,337			235,985			236,222			234,403			236,222
Total stockholders’ equity	264,466			261,262			261,330			264,348			263,215			264,466			263,215
Headcount	256,710			256,720			256,981			257,444			254,983			256,710			254,983
Credit quality metrics
Allowances for loan losses and lending-related commitments	$	34,301		$	25,391		$	14,314		$	14,400		$	14,295		$	34,301		$	14,295
Allowance for loan losses to total retained loans	3.32		%	2.32		%	1.39		%	1.42		%	1.39		%	3.32		%	1.39		%
Nonperforming assets	$	8,440		$	6,421		$	4,497		$	5,343		$	5,260		$	8,440		$	5,260
Net charge-offs	1,560			1,469			1,494			1,371			1,403			3,029			2,764
Net charge-off rate	0.64		%	0.62		%	0.63		%	0.58		%	0.60		%	0.63		%	0.59		%

Effective January 1, 2020, the Firm adopted the Financial Instruments – Credit Losses (“CECL”) accounting guidance. Refer to Note 1 for further information.

(a) In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.

(b) Pre-provision profit, TBVPS and ROTCE are each non-GAAP financial measures. Tangible common equity (“TCE”) is also a non-GAAP financial measure. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 22-23 for a further discussion of these measures.

(c) Quarterly ratios are based upon annualized amounts.

(d) Reflects the relief provided by the Federal Reserve Board in response to the COVID-19 pandemic, including the CECL capital transition provisions that became effective in the first quarter of 2020. As of June 30, 2020, the SLR reflects the temporary exclusions of U.S. Treasury securities and deposits at Federal Reserve Banks. Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 11-12 and Capital Risk Management on pages 49-54 of this Form 10-Q for additional information. Refer to Capital Risk Management on pages 85-92 of JPMorgan Chase’s 2019 Form 10-K for additional information on the Firm’s capital metrics.

3

INTRODUCTION

The following is Management’s discussion and analysis of the financial condition and results of operations (“MD&A”) of JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) for the second quarter of 2020.

This Quarterly Report on Form 10-Q for the second quarter of 2020 (“Form 10-Q”) should be read together with JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Form 10-K”). Refer to the Glossary of terms and acronyms and line of business (“LOB”) metrics on pages 191-199 for definitions of terms and acronyms used throughout this Form 10-Q.

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q and are subject to significant risks and uncertainties. For a discussion of certain of those risks and uncertainties and the factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties, refer to Forward-looking Statements on page 92 of this Form 10-Q, Part II, Item 1A, Risk Factors on pages 200-201 of this Form 10-Q and Part I, Item 1A, Risk factors, on pages 6-28 of the 2019 Form 10-K.

JPMorgan Chase & Co. (NYSE: JPM), a financial holding company incorporated under Delaware law in 1968, is a leading global financial services firm and one of the largest banking institutions in the United States of America (“U.S.”), with operations worldwide; JPMorgan Chase had $3.2 trillion in assets and $264.5 billion in stockholders’ equity as of June 30, 2020. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. Under the J.P. Morgan and Chase brands, the Firm serves millions of customers in the U.S. and many of the world’s most prominent corporate, institutional and government clients.

JPMorgan Chase’s principal bank subsidiary is JPMorgan Chase Bank, National Association (“JPMorgan Chase Bank N.A.”), a national banking association with U.S. branches in 38 states and Washington, D.C. as of June 30, 2020. JPMorgan Chase’s principal non-bank subsidiary is J.P. Morgan Securities LLC (“J.P. Morgan Securities”), a U.S. broker-dealer. The bank and non-bank subsidiaries of JPMorgan Chase operate nationally as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Firm’s principal operating subsidiary outside the U.S. is J.P. Morgan Securities plc, a U.K.-based subsidiary of JPMorgan Chase Bank, N.A.

For management reporting purposes, the Firm’s activities are organized into four major reportable business segments, as well as a Corporate segment. The Firm’s consumer business segment is Consumer & Community Banking (“CCB”). The Firm’s wholesale business segments are Corporate & Investment Bank (“CIB”), Commercial Banking (“CB”), and Asset & Wealth Management (“AWM”). For a description of the Firm’s business segments and the products and services they provide to their respective

client bases, refer to Note 26 of this Form 10-Q and Note 32 of JPMorgan Chase’s 2019 Form 10-K.

The Firm's website is www.jpmorganchase.com. JPMorgan Chase makes available on its website, free of charge, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as soon as reasonably practicable after it electronically files or furnishes such material to the U.S. Securities and Exchange Commission (the “SEC”) at www.sec.gov. JPMorgan Chase also makes additional information about the Firm available on the Investor Relations section of its website at https://www.jpmorganchase.com/corporate/investor-relations/investor-relations.htm.

4

EXECUTIVE OVERVIEW

This executive overview of the MD&A highlights selected information and does not contain all of the information that is important to readers of this Form 10-Q. For a complete description of the trends and uncertainties, as well as the risks and critical accounting estimates affecting the Firm and its various LOBs, this Form 10-Q and the 2019 Form 10-K should be read together and in their entirety.

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.

Financial performance of JPMorgan Chase
(unaudited) As of or for the period ended, (in millions, except per share data and ratios)	Three months ended June 30,								Six months ended June 30,
	2020			2019			Change		2020			2019			Change
Selected income statement data
Total net revenue(a)	$	32,980		$	28,747		15	%	$	61,172		$	57,823		6	%
Total noninterest expense(a)	16,942			16,256			4		33,733			32,604			3
Pre-provision profit	16,038			12,491			28		27,439			25,219			9
Provision for credit losses	10,473			1,149			NM		18,758			2,644			NM
Net income	4,687			9,652			(51	)	7,552			18,831			(60	)
Diluted earnings per share	$	1.38		$	2.82		(51	)	$	2.17		$	5.46		(60	)
Selected ratios and metrics
Return on common equity	7		%	16		%			6		%	16		%
Return on tangible common equity	9			20					7			20
Book value per share	$	76.91		$	73.88		4		$	76.91		$	73.88		4
Tangible book value per share	61.76			59.52			4		61.76			59.52			4
Capital ratios(b)
CET1	12.4		%	12.2		%			12.4		%	12.2		%
Tier 1 capital	14.3			14.0					14.3			14.0
Total capital	16.7			15.8					16.7			15.8

(a) In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.

(b) Reflects the relief provided by the Federal Reserve Board in response to the COVID-19 pandemic, including the CECL capital transition provisions that became effective in the first quarter of 2020. Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 11-12 and Capital Risk Management on pages 49-54 of this Form 10-Q for additional information. Refer to Capital Risk Management on pages 85-92 of JPMorgan Chase’s 2019 Form 10-K for additional information on the Firm’s capital metrics.

Comparisons noted in the sections below are for the second quarter of 2020 versus the second quarter of 2019, unless otherwise specified.

Firmwide overview

JPMorgan Chase reported net income of $4.7 billion for the second quarter of 2020, or $1.38 per share, on net revenue of $33.0 billion. The Firm reported ROE of 7% and ROTCE of 9%. The Firm recorded a number of significant items in the second quarter of 2020, including an addition to the allowance for credit losses of $8.9 billion, $678 million of markups on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio in CIB and CB, and a $510 million gain in Credit Adjustments & Other in CIB driven by funding spread tightening on derivatives.

• Net income was down 51%, driven by an increase in the provision for credit losses across the Firm.

• Total net revenue increased 15%. Noninterest revenue was $19.1 billion, up 33%, largely driven by higher CIB Markets revenue and Investment Banking fees. The increase in revenue also included $678 million of markups on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio in CIB and CB, and a $510 million gain in Credit Adjustments & Other in CIB driven by funding spread tightening on derivatives. Net interest income was $13.9 billion, down 4%, with the impact of lower rates predominantly offset by higher net interest income in CIB Markets and balance sheet growth.

• Noninterest expense was $16.9 billion, up 4%, predominantly driven by revenue-related expense, primarily compensation, partially offset by lower marketing expense in Card as a result of lower travel-related benefits and lower investments in marketing campaigns, as well as lower structural expense.

5

• The provision for credit losses was $10.5 billion, up $9.3 billion from the prior year, driven by additions to the allowance for credit losses, reflecting further deterioration and increased uncertainty in the macroeconomic outlook as a result of the impact of the COVID-19 pandemic. The addition in the wholesale allowance was $4.6 billion across multiple industry sectors, and the addition in the consumer allowance was $4.4 billion, largely in Card.

• The total allowance for credit losses was $34.3 billion at June 30, 2020, and the Firm had a loan loss coverage ratio of 3.32%, compared with 1.39% in the prior year, driven by the additions to allowance for credit losses and the adoption of CECL. The Firm’s nonperforming assets totaled $8.4 billion at June 30, 2020, an increase from $5.3 billion in the prior year. The increase was driven by downgrades in the wholesale portfolio across multiple industries on client credit deterioration, and the inclusion of purchased credit deteriorated loans in the mortgage portfolio, which are subject to nonaccrual loan treatment following the adoption of CECL.

• Firmwide average loans of $1.0 trillion were up 4%, largely reflecting drawdowns on committed revolving credit facilities in March and higher loan balances in AWM, as well as loans originated under the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”). The loan growth was partially offset by lower loan balances in Home Lending and Card.

• Firmwide average deposits of $1.9 trillion were up 25%, reflecting significant inflows across the Firm, primarily driven by the COVID-19 pandemic, as customers and clients looked to remain liquid as a result of market conditions.

Selected capital-related metrics

• The Firm’s CET1 capital was $191 billion, and the Standardized and Advanced CET1 ratios were 12.4% and 13.2%, respectively.

• The Firm’s SLR was 6.8%. As of June 30, 2020, the SLR reflects the temporary exclusions of U.S. Treasury securities and deposits at Federal Reserve Banks, as required by the Federal Reserve’s interim final rule issued on April 1, 2020. The Firm’s SLR excluding the temporary relief was 5.7%.

• The Firm grew TBVPS, ending the second quarter of 2020 at $61.76, up 4% versus the prior year.

ROTCE and TBVPS are non-GAAP financial measures. Refer to Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 22-23 for a further discussion of each of these measures.

6

Business segment highlights

Selected business metrics for each of the Firm’s four LOBs are presented below for the second quarter of 2020.

CCB ROE (2)%	• Average deposits up 20%; client investment assets up 9% • Average loans down 7%; credit card sales volume down 23% • Provision for credit losses of $5.8 billion, predominantly driven by an addition to the allowance for credit losses of $4.6 billion
CIB ROE 27%	• #1 ranking for Global Investment Banking fees with 9.8% wallet share year-to-date • Total Markets revenue of $9.7 billion, up 79%, with Fixed Income Markets up 99% and Equity Markets up 38% • Provision for credit losses of $2.0 billion, predominantly driven by an addition to the allowance for credit losses of $1.8 billion
CB ROE (14)%	• Gross Investment Banking revenue of $851 million, up 44% • Average loans up 13%; average deposits up 41% • Provision for credit losses of $2.4 billion driven by an addition to the allowance for credit losses
AWM ROE  24%	• Assets under management (AUM) of $2.5 trillion, up 15% • Average loans up 12%; average deposits up 20% • Provision for credit losses of $223 million, driven by an addition to the allowance for credit losses

Refer to the Business Segment Results on pages 24-47 for a detailed discussion of results by business segment.

Credit provided and capital raised

JPMorgan Chase continues to support consumers, businesses and communities around the globe. The Firm provided new and renewed credit and raised capital for wholesale and consumer clients during the first six months of 2020, consisting of:

$1.2 trillion		Total credit provided and capital raised (including loans and commitments)(a)
	$107 billion	Credit for consumers
	$11 billion	Credit for U.S. small businesses
	$404 billion	Credit for corporations
	$651 billion	Capital raised for corporate clients and non-U.S. government entities
	$53 billion	Credit and capital raised for nonprofit and U.S. government entities(b)
$28 billion		Loans under the Small Business Administration’s Paycheck Protection Program

(a) Excludes loans under the SBA’s PPP.

(b) Includes states, municipalities, hospitals and universities.

7

Recent events

On June 29, 2020, JPMorgan Chase announced that it had completed the 2020 Comprehensive Capital Analysis and Review (“CCAR”) stress test process. The Firm’s indicative Stress Capital Buffer (“SCB”) requirement is 3.3% and the Federal Reserve Board will provide the Firm with its final SCB requirement by August 31, 2020. The Firm’s Board of Directors currently intends to maintain the quarterly common stock dividend of $0.90 per share for the third quarter of 2020. Additionally, in June 2020, the Federal Reserve directed all large bank holding companies, including the Firm, to discontinue net share repurchases, at least through the end of the third quarter of 2020.

2020 outlook

These current expectations are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on the current beliefs and expectations of JPMorgan Chase’s management, speak only as of the date of this Form 10-Q, and are subject to significant risks and uncertainties. Refer to Forward-Looking Statements on page 92 and Risk Factors on page 200 of this Form 10-Q and pages 6–28 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of certain of those risks and uncertainties and the other factors that could cause JPMorgan Chase’s actual results to differ materially because of those risks and uncertainties. There is no assurance that actual results in the full year of 2020 will be in line with the outlook set forth below, and the Firm does not undertake to update any forward-looking statements.

JPMorgan Chase’s current outlook for the remainder of 2020 should be viewed against the backdrop of the global and U.S. economies, the COVID-19 pandemic, financial markets activity, the geopolitical environment, the competitive environment, client and customer activity levels, and regulatory and legislative developments in the U.S. and other countries where the Firm does business. Each of these factors will affect the performance of the Firm and its LOBs. The Firm will continue to make appropriate adjustments to its businesses and operations in response to ongoing developments in the business, economic, regulatory and legal environments in which it operates. The outlook information contained in this Form 10-Q supersedes all outlook information furnished by the Firm in its periodic reports filed with the SEC prior to the date of this Form 10-Q.

Firmwide

• Management expects full-year 2020 net interest income, on a managed basis, to be approximately $56 billion, market dependent.

• Management expects adjusted expense for the full-year 2020 to be approximately $65 billion.

8

Business Developments

COVID-19 Pandemic

In the first quarter of 2020, in response to the COVID-19 pandemic, the Firm invoked resiliency plans to allow its businesses to remain operational, utilizing disaster recovery sites and implementing alternative work arrangements globally, including work from home.

The Firm also implemented strategies and procedures designed to help it respond to increased market volatility, client demand for credit and liquidity, distress in certain industries/sectors and the ongoing impacts to consumers and businesses.

In the second quarter, the Firm continued its focus on responding to the COVID-19 pandemic, including developing plans to return employees to the office. The Firm continues to actively monitor the dynamic health and safety situations at local and regional levels, and plans remain flexible to adapt as these situations evolve.

Supporting clients and customers

The Firm has continued to support its clients and customers during the challenging conditions caused by the COVID-19 pandemic, including by providing liquidity. Since March, the Firm has extended more than $350 billion of new and renewed credit to its clients and customers, of which approximately $300 billion was in the wholesale businesses.

The Firm is participating in a number of U.S government facilities and programs including the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and the Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”). At June 30, 2020, the Firm had approximately $28 billion of loans under the PPP. Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 11-12 for more information on U.S. Government facilities and programs.

In addition, in March 2020 the Firm began providing payment deferrals on loans and auto leases, refunded fees, and modified covenants for clients and customers.

• In the consumer portfolio segment, through June 30, 2020, the Firm has provided customer assistance to over 2 million accounts, including refunding over $83 million in fees and granting payment deferrals on over $79 billion of loans and leases, of which $42 billion was for third-party mortgage loans serviced. As of June 30, 2020 the Firm had approximately $28 billion of retained loans that were still under payment deferral.

• In the wholesale portfolio segment, through June 30, 2020, the Firm has provided client assistance to approximately 12,000 clients, primarily risk-rated clients in CCB. The majority of the client assistance was payment deferrals on approximately $23 billion of loans. As of June 30, 2020, there were approximately $17 billion of retained loans that were still under payment deferral.

Refer to Credit Portfolio on pages 60-61 for additional information on assistance granted to customers and clients. Refer to Consumer Credit portfolio on pages 62-66 and Wholesale Credit Portfolio on pages 67-76 for additional information on retained loans that were still under payment deferral as of June 30, 2020.

Approximately three-quarters of the Firm’s branch network is operational, and ATMs remain accessible. The Firm also continues to provide a wide range of banking services accessible to clients and customers online.

Protecting and supporting employees

In addition to widespread work from home arrangements, the Firm has taken actions to protect and support its employees. These actions include providing increased safety measures for those employees whose job functions require them to continue to be onsite, a special payment for certain eligible employees and expanded healthcare resources.

Supporting communities

Since March, the Firm has committed $250 million to help address humanitarian needs and long-term economic challenges posed by the COVID-19 pandemic on the communities in which the Firm operates. This includes a $200 million commitment to be deployed over time to support underserved small businesses and nonprofits and $50 million in grants to help vulnerable communities impacted by the pandemic.

9

Departure of the U.K. from the EU

The Firm continues to execute on its Firmwide Brexit Implementation program and remains focused on the following key areas to ensure continuation of service to its EU clients: regulatory and legal entity readiness; client readiness; and business and operational readiness. The Firm’s Brexit-related planning in the second half of 2020 will focus on the possibility that the U.K. will complete its departure from the EU without having agreed the terms of their future relationship, which is commonly referred to as “hard Brexit,” as the July 1, 2020 deadline for the U.K. to request an extension of the transition period has passed. This will require completion of the relocation of certain front office roles from the U.K. to EU locations, and finalization of the migration of EU clients and certain positions to EU entities by the end of 2020. The COVID-19 pandemic has added incremental risk to the Firm’s Brexit Implementation program due to the potential impact on its ability to execute changes such as relocation of employees given travel restrictions, or the ability of clients to be operationally ready to the extent that they have diverted resources during 2020 to address the effects of the pandemic.

Interbank Offered Rate (“IBOR”) transition

On March 12, 2020, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update providing optional expedients and exceptions for applying generally accepted accounting principles to contracts and hedge relationships affected by reference rate reform. This update provides for various elective options, referred to as “practical expedients,” that are intended to simplify the operational impact of applying U.S. GAAP to certain transactions. The Firm expects to apply certain of these practical expedients relating to the IBOR transition in the second half of 2020. Refer to Accounting and Reporting Developments on page 91 for additional information. The Firm continues to monitor the transition relief being considered by the International Accounting Standards Board (“IASB”) and U.S. Treasury Department regarding accounting and tax implications of reference rate reform.

The Firm also continues to develop and implement plans to appropriately mitigate the risks associated with IBOR discontinuation. Refer to Business Developments on page 47 of the 2019 Form 10-K for a discussion of the Firm’s initiatives to address the expected discontinuation of the London Interbank Offered Rate (“LIBOR”) and other IBORs.

10

Regulatory Developments Relating to the COVID-19 Pandemic

Since March 2020, the U.S. government as well as central banks and banking authorities around the world have taken and continue to take actions to help individuals, households and businesses that have been adversely affected by the economic disruption caused by the COVID-19 pandemic. The CARES Act, which was signed into law on March 27, 2020, provides, among other things, funding to support loan facilities to assist consumers and businesses. Set forth below is a summary as of the date of this Form 10-Q of U.S. government actions currently impacting the Firm and U.S. government programs in which the Firm is participating to support individuals, businesses, and the broader economy. The Firm will continue to assess ongoing developments in government actions in response to the COVID-19 pandemic.

U.S. government actions

Eligible retained income definition. On March 17, 2020, the Office of the Comptroller of the Currency (“OCC”), the Board of Governors of the Federal Reserve System (“Federal Reserve”), and the Federal Deposit Insurance Corporation (“FDIC”), collectively the “federal banking agencies,” issued an interim final rule that revised the definition of “eligible retained income” in the regulatory capital rules that apply to all U.S. banking organizations. On March 23, 2020, the Federal Reserve issued an interim final rule that revised the definition of “eligible retained income” for purposes of the total loss-absorbing capacity (“TLAC”) buffer requirements that apply to global systemically important banking organizations. The revised definition of eligible retained income makes any automatic limitations on payout distributions that could apply under the agencies’ capital rules or TLAC rule take effect on a more graduated basis in the event that a banking organization’s capital, leverage and TLAC ratios were to decline below regulatory requirements (including buffers). The March 17, 2020 interim final rule was issued, in conjunction with an interagency statement encouraging banking organizations to use their capital and liquidity buffers, to further support banking organizations’ abilities to lend to households and businesses affected by the COVID-19 pandemic.

Reserve requirements. On March 26, 2020, the Federal Reserve reduced reserve requirement ratios to zero percent, effectively eliminating the reserve requirement for all depository institutions, an action that freed up liquidity in the banking system to support lending to households and businesses.

Refer to Liquidity Risk Management on pages 55-59 and Note 21 for additional information on the reduction to the reserve requirement.

Regulatory Capital - Current Expected Credit Losses (“CECL”) transition delay. On March 31, 2020, the federal banking agencies issued an interim final rule that provided banking organizations with the option to delay the effects of CECL on regulatory capital for two years, followed by a three-year

transition period (“CECL capital transition provisions”). The Firm elected to apply the CECL capital transition provisions.

Refer to Capital Risk Management on pages 49-54 and Note 22 on pages 176-177 for additional information on the CECL capital transition provisions and the impact to the Firm’s capital metrics.

Supplementary leverage ratio (“SLR”) temporary revision. On April 1, 2020, the Federal Reserve issued an interim final rule that requires, on a temporary basis, the calculation of total leverage exposure for purposes of calculating the SLR for bank holding companies, to exclude the on-balance sheet amounts of U.S. Treasury securities and deposits at Federal Reserve Banks. These exclusions became effective April 1, 2020, and will remain in effect through March 31, 2021.

Refer to Capital Risk Management on pages 49-54 and Note 22 for additional information on the Firm’s SLR.

Loan modifications. On April 7, 2020, the federal banking agencies along with the National Credit Union Administration, and the Consumer Financial Protection Bureau, in consultation with the state financial regulators, issued an interagency statement revising a March 22, 2020 interagency statement on loan modifications and the reporting for financial institutions working with customers affected by the COVID-19 pandemic (the “IA Statement”). The IA Statement reconfirmed that efforts to work with borrowers where the loans are prudently underwritten, and not considered past due or carried on nonaccrual status, should not result in the loans automatically being considered modified in a troubled debt restructuring (“TDR”) for accounting and financial reporting purposes, or for purposes of their respective risk-based capital rules, which would otherwise require financial institutions subject to the capital rules to hold more capital. The IA Statement also clarified the interaction between its previous guidance and Section 4013 of the CARES Act, which provides certain financial institutions with the option to suspend the application of accounting guidance for TDRs for a limited period of time for loan modifications made to address the effects of the COVID-19 pandemic.

The Firm has granted various forms of assistance to customers and clients impacted by the COVID-19 pandemic, including payment deferrals and covenant modifications. The majority of the Firm’s COVID-19 related loan modifications have not been considered TDRs as:

• they represent short-term or other insignificant modifications, whether under the Firm’s regular loan modification assessments or the IA Statement guidance, or

• the Firm has elected to apply the option to suspend the application of accounting guidance for TDRs as provided under section 4013 of the CARES Act.

To the extent that certain modifications do not meet any of the above criteria, the Firm accounts for them as TDRs. Refer to Credit Portfolio on pages 60-61 and Note 12 for

11

additional information on the Firm’s loan modification activities.

U.S. government facilities and programs. Beginning in March 2020, the Federal Reserve announced a suite of facilities using its emergency lending powers under section 13(3) of the Federal Reserve Act to support the flow of credit to individuals, households and businesses adversely affected by the COVID-19 pandemic and to support the broader economy. These facilities include the Money Market Mutual Fund Liquidity Facility (“MMLF”), Main Street Lending Facilities, Primary Dealer Credit Facility (“PDCF”), Commercial Paper Funding Facility (“CPFF”), Secondary Market Corporate Credit Facility (“SMCCF”) and Term Asset-Backed Securities Loan Facility (“TALF”). In addition, beginning April 3, 2020, the PPP, established by the CARES Act and administered by the SBA, authorized eligible lenders to provide nonrecourse loans to eligible borrowers until August 8, 2020 to provide an incentive for these businesses to keep their workers on their payroll. The Firm has participated and is participating in certain of these facilities and programs, as needed, to assist its clients and customers or to support the broader economy.

Refer to Capital Risk Management on pages 49-54, Liquidity Risk Management on pages 55-59, Note 22 and Note 24 for additional information on the Firm’s participation in the MMLF. Refer to Liquidity Risk Management on pages 55-59 for additional information on the Firm’s participation in the PDCF. Refer to Business Developments on pages 9-10, Capital Risk Management on pages 49-54, Credit Portfolio on pages 60-61 and Note 22 for additional information on the Firm’s participation in the PPP.

12

CONSOLIDATED RESULTS OF OPERATIONS

This section provides a comparative discussion of JPMorgan Chase’s Consolidated Results of Operations on a reported basis for the three and six months ended June 30, 2020 and 2019, unless otherwise specified. Factors that relate primarily to a single business segment are discussed in more detail within that business segment. Refer to pages 88-90 of this Form 10-Q and pages 136–138 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the Critical Accounting Estimates Used by the Firm that affect the Consolidated Results of Operations.

Revenue
	Three months ended June 30,						Six months ended June 30,
(in millions)	2020		2019		Change		2020		2019		Change
Investment banking fees	$	2,850	$	1,851	54	%	$	4,716	$	3,691	28	%
Principal transactions	7,621		3,714		105		10,558		7,790		36
Lending- and deposit-related fees(a)	1,431		1,624		(12	)	3,137		3,183		(1	)
Asset management, administration and commissions(a)	4,266		4,264		—		8,806		8,301		6
Investment securities gains	26		44		(41	)	259		57		354
Mortgage fees and related income	917		279		229		1,237		675		83
Card income(b)	974		1,281		(24	)	1,969		2,508		(21	)
Other income(c)	1,042		1,292		(19	)	2,198		2,767		(21	)
Noninterest revenue	19,127		14,349		33		32,880		28,972		13
Net interest income	13,853		14,398		(4	)	28,292		28,851		(2	)
Total net revenue	$	32,980	$	28,747	15	%	$	61,172	$	57,823	6	%

(a) In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts have been revised to conform with the current presentation.

(b) In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.

(c) Included operating lease income of $1.4 billion and $1.3 billion for the three months ended June 30, 2020 and 2019, respectively and $2.8 billion and$2.6 billion for the six months ended June 30, 2020 and 2019, respectively.

Quarterly results

Investment banking fees increased, driven by CIB, reflecting:

• higher debt underwriting fees due to increased industry-wide fees and wallet share gains in both investment-grade and high-yield bonds

• higher equity underwriting fees due to increased industry-wide fees and wallet share gains, primarily in follow-on offerings and convertible securities markets

– the increased activity in debt and equity underwriting reflected clients seeking access to liquidity as a result of the COVID-19 pandemic

• higher advisory fees driven by a few large completed transactions.

Refer to CIB segment results on pages 31-37 and Note 6 for additional information.

Principal transactions revenue increased and included two significant items, both of which represent reversals of a portion of the losses that were recognized in the first quarter of 2020:

• $678 million of markups on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio in CIB and CB, compared with $896 million of markdowns in the first quarter of 2020, and

• a $510 million gain in Credit Adjustments & Other in CIB driven by funding spread tightening on derivatives, compared with a $951 million loss in the first quarter of 2020.

Excluding these two items, principal transactions revenue increased in CIB driven by strong client activity in Fixed Income Markets primarily in Rates, Currencies & Emerging Markets, and Credit; and in Equity Markets related to derivatives and Cash Equities. The prior year included a gain from the initial public offering (“IPO”) of Tradeweb.

The increase in principal transactions revenue also reflected net gains on certain legacy private equity investments in Corporate, compared with net losses in the prior year.

Principal transactions revenue in CIB may in certain cases have offsets across other revenue lines, including net interest income. The Firm assesses its CIB Markets business performance on a total revenue basis.

Refer to CIB, CB and Corporate segment results on pages 31-37, pages 38-41 and page 46, and Note 6 for additional information.

Lending- and deposit-related fees decreased due to lower deposit-related fees in CCB, reflecting lower transaction activity and the impact of fee refunds related to the COVID-19 pandemic, partially offset by higher cash management fees in CIB and CB. Refer to CCB segment results on pages 26-30, CIB on pages 31-37 and CB on pages 38-41, respectively, and Note 6 for additional information.

For information on asset management, administration and commissions revenue, refer to CCB, CIB and AWM segment results on pages 26-30, pages 31-37 and pages 42-45, respectively, and Note 6.

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Refer to Corporate segment results on page 46 and Note 10 for information on investment securities gains.

Mortgage fees and related income increased due to:

• higher net mortgage production revenue reflecting higher production margins, partially offset by the absence of gains on loan sales in the prior year in Home Lending, and

• higher net mortgage servicing revenue reflecting higher MSR risk management results due to the absence of losses resulting from updates to model inputs in the prior year partially offset by lower operating revenue reflecting a lower level of third-party loans serviced.

Refer to CCB segment results on pages 26-30, Note 6 and 15 for further information.

Card income decreased due to lower net interchange income reflecting lower card sales volumes that began in March as a result of the COVID-19 pandemic, partially offset by higher annual fees and lower acquisition costs.

Refer to CCB, CIB and CB segment results on pages 26-30, pages 31-37 and pages 38-41, as well as and Note 6 for further information.

Other income decreased, reflecting:

• higher costs associated with using forward contracts to hedge certain non-U.S. dollar-denominated net investment exposures in Treasury and CIO,

• increased amortization on higher levels of alternative energy investments in CIB. The increased amortization was more than offset by lower income tax expense from the associated tax credits

• lower market-driven results on certain investments in Corporate

partially offset by

• higher operating lease income from growth in auto operating lease volume in CCB

Refer to Note 17 for further information.

Net interest income decreased due to the impact of lower rates, predominantly offset by higher net interest income in CIB Markets and balance sheet growth.

The Firm’s average interest-earning assets were $2.8 trillion, up $481 billion, and the yield was 2.31%, down 142 bps, primarily due to lower rates. The net yield on these assets, on an FTE basis, was 1.99%, a decrease of 50 bps. The net yield excluding CIB Markets was 2.27%, down 108 bps.

Net yield excluding CIB Markets is a non-GAAP financial measure. Refer to the Consolidated average balance sheets, interest and rates schedule on pages 189–190 for further details; and the Explanation and Reconciliation of the Firm’s Use of Non-GAAP Financial Measures on pages 22-23 for a further discussion of Net interest yield excluding CIB markets.

Year-to-date results

Investment banking fees increased, driven by CIB, reflecting:

• higher debt underwriting fees due to increased industry-wide fees and wallet share gains in investment-grade bonds, and for high-yield bonds, after the markets stabilized in the second quarter of 2020

• higher equity underwriting fees due to increased industry-wide fees and wallet share gains, primarily in follow-on offerings and convertible securities markets

– the increased activity in debt and equity underwriting reflected clients seeking access to liquidity as a result of the COVID-19 pandemic

partially offset by

• lower advisory fees driven by a lower number of completed transactions.

Principal transactions revenue increased despite the year-to-date results of the two significant items noted below:

• a $441 million net loss in CIB’s Credit Adjustments & Other predominantly driven by losses on certain components of fair value option elected liabilities, as well as the impact of funding spread widening on derivatives, and

• $218 million of net markdowns on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio in CIB and CB.

Excluding these two items, principal transactions revenue increased in CIB, driven by strong client activity in Fixed Income Markets primarily in Rates, Currencies & Emerging Markets, and Credit; and in Equity Markets related to derivatives and Cash Equities.

Lending- and deposit-related fees was relatively flat as the lower deposit-related fees in CCB, reflecting lower transaction activity and the impact of fee refunds related to the COVID-19 pandemic, was offset by higher cash management fees in CIB and CB.

Asset management, administration and commissions revenue increased driven by:

• higher brokerage commissions in CIB and AWM on higher client-driven volume, and

• higher asset management fees in AWM as a result of inflows into liquidity products, and in CCB related to a higher level of investment assets,

partially offset by

• lower volume of annuity sales in CCB.

Investment securities gains in both periods reflected the impact of repositioning the investment securities portfolio.

Mortgage fees and related income increased due to:

• higher net mortgage production revenue reflecting higher mortgage production volumes and margins, partially offset by the absence of gains on loan sales in the prior year in Home Lending, and

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• higher net mortgage servicing revenue reflecting higher MSR risk management results due to the absence of losses resulting from updates to model inputs in the prior year, predominantly offset by lower operating revenue reflecting a lower level of third-party loans serviced and faster prepayment speeds on lower rates.

Card income decreased due to lower net interchange income reflecting lower card sales volumes that began in March as a result of the COVID-19 pandemic, partially offset by higher annual fees.

Other income decreased reflecting:

• net losses on certain equity investments in CIB, compared with net gains in the prior year

• net valuation losses on certain investments in AWM, compared with gains in the prior year

• increased amortization on higher levels of alternative energy investments in CIB. The increased amortization is

more than offset by lower income tax expense from the associated tax credits, and

• higher costs associated with using forward contracts to hedge certain non-U.S. dollar-denominated net investment exposures in Treasury and CIO,

partially offset by

• higher operating lease income from growth in auto operating lease volume in CCB

Net interest income decreased due to the impact of lower rates, predominantly offset by higher net interest income in CIB Markets and balance sheet growth.

The Firm’s average interest-earning assets were $2.6 trillion, up $324 billion, and the yield was 2.70%, down 106 bps, primarily due to lower rates. The net yield on these assets, on an FTE basis, was 2.17%, a decrease of 36 bps. The net yield excluding CIB Markets was 2.61%, down 78 bps.

Provision for credit losses
	Three months ended June 30,						Six months ended June 30,
(in millions)	2020		2019			Change	2020		2019			Change
Consumer, excluding credit card	$	1,591	$	(366	)	NM	$	2,210	$	(246	)	NM
Credit card	4,028		1,440			180	9,091		2,642			244
Total consumer	5,619		1,074			423	11,301		2,396			372
Wholesale	4,850		75			NM	7,444		248			NM
Investment securities	4		NA			NM	13		NA			NM
Total provision for credit losses	$	10,473	$	1,149		NM	$	18,758	$	2,644		NM

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied when determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.

Quarterly results

The provision for credit losses increased driven by the further deterioration and increased uncertainty in the macroeconomic environment as a result of the impact of the COVID-19 pandemic in wholesale and consumer.

The increase in wholesale reflects a net addition of $4.6 billion to the allowance for credit losses across the LOBs impacting multiple industry sectors.

The increase in consumer was driven by:

• additions of $4.4 billion to the allowance for credit losses, consisting of $2.9 billion for Card, $900 million for Home Lending, $285 million for Auto, and $272 million for CBB,

partially offset by

• lower net charge-offs in Card reflecting higher recoveries.

The prior year included a $234 million net reduction in the allowance for credit losses.

Refer to CCB segment results on pages 26-30, CIB on pages 31-37, CB on pages 38-41, AWM on pages 42-45, the Allowance for Credit Losses on pages 77-78, and Note 13 for additional information on the credit portfolio and the allowance for credit losses.

Year-to-date results

The provision for credit losses increased driven by the deterioration and uncertainty in the macroeconomic environment as a result of the impact of the COVID-19 pandemic in consumer and wholesale.

The increase in consumer was driven by:

• additions of $8.7 billion to the allowance for credit losses, consisting of $6.6 billion for Card, $1.2 billion for Home Lending, $520 million for Auto, and $352 million for CBB,

partially offset by

• lower net charge-offs reflecting higher recoveries in Home Lending on a loan sale in the first quarter of 2020, and in Card, largely offset by higher charge-offs in Card on loan growth in the prior year.

The prior year included a $221 million net reduction in the allowance for credit losses.

The increase in wholesale reflects a net addition of $7.0 billion to the allowance for credit losses across the LOBs impacting multiple industry sectors.

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Noninterest expense
	Three months ended June 30,						Six months ended June 30,
(in millions)	2020		2019		Change		2020		2019		Change
Compensation expense	$	9,509	$	8,547	11	%	$	18,404	$	17,484	5	%
Noncompensation expense:
Occupancy	1,080		1,060		2		2,146		2,128		1
Technology, communications and equipment	2,590		2,378		9		5,168		4,742		9
Professional and outside services	1,999		2,212		(10	)	4,027		4,251		(5	)
Marketing(a)	481		777		(38	)	1,281		1,609		(20	)
Other expense(b)(c)	1,283		1,282		—		2,707		2,390		13
Total noncompensation expense	7,433		7,709		(4	)	15,329		15,120		1
Total noninterest expense	$	16,942	$	16,256	4	%	$	33,733	$	32,604	3	%

(a) In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.

(b) Included Firmwide legal expense/(benefit) of $118 million and $69 million for the three months ended June 30, 2020 and 2019, respectively, and $315 million and $(12) million for the six months ended June 30, 2020 and 2019, respectively.

(c) Included FDIC-related expense of $218 million and $121 million for the three months ended June 30, 2020 and 2019, respectively, and $317 million and $264 million for the six months ended June 30, 2020 and 2019, respectively.

Quarterly results

Compensation expense increased driven by higher revenue-related expense in CIB.

Noncompensation expense decreased as a result of:

• lower marketing expense in Card as a result of lower travel-related benefits and investments in marketing campaigns

• lower structural expense, including lower travel and entertainment across the businesses, as well as lower payment processing costs,

partially offset by

• higher volume-related expense, including depreciation from growth in auto lease assets in CCB, and brokerage expense in CIB

• higher investments in the businesses, including technology.

Year-to-date results

Compensation expense increased driven by higher revenue-related expense in CIB, partially offset by lower structural compensation expense in Corporate.

Noncompensation expense increased as a result of:

• higher legal expense primarily in CIB and Corporate

• higher volume-related expense, including depreciation from growth in auto lease assets in CCB, and brokerage expense in CIB

• higher investments in the businesses, including technology,

partially offset by

• lower marketing expense in Card as a result of lower travel-related benefits and investments in marketing campaigns

• lower structural expense, including lower travel and entertainment across the businesses, as well as lower payment processing costs.

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Income tax expense
	Three months ended June 30,								Six months ended June 30,
(in millions)	2020			2019			Change		2020			2019			Change
Income before income tax expense	$	5,565		$	11,342		(51	)%	$	8,681		$	22,575		(62	)%
Income tax expense	878			1,690			(48	)	1,129			3,744			(70	)
Effective tax rate	15.8		%	14.9		%			13.0		%	16.6		%

Quarterly results

The effective tax rate increased as the reduction in income tax expense due to the impact of changes in the level and mix of income and expenses subject to U.S. federal, and state and local taxes was more than offset by the absence of the $768 million of tax benefits recorded in the prior year related to the resolution of certain tax audits.

Year-to-date results

The effective tax rate decreased driven by changes in the level and mix of income and expenses subject to U.S. federal, and state and local taxes, as well as the more significant effect of certain tax benefits on a lower level of pre-tax income. The decrease was partially offset by the recognition of $874 million of tax benefits recorded in the prior year related to the resolution of certain tax audits.

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CONSOLIDATED BALANCE SHEETS AND CASH FLOWS ANALYSIS

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. Refer to Note 1 for further information.

Consolidated balance sheets analysis

The following is a discussion of the significant changes between June 30, 2020, and December 31, 2019.

Selected Consolidated balance sheets data
(in millions)	June 30, 2020			December 31, 2019			Change
Assets
Cash and due from banks	$	20,544		$	21,704		(5	)%
Deposits with banks	473,185			241,927			96
Federal funds sold and securities purchased under resale agreements	256,980			249,157			3
Securities borrowed	142,704			139,758			2
Trading assets	526,042			411,103			28
Available-for-sale securities	485,883			350,699			39
Held-to-maturity securities, net of allowance for credit losses	72,908			47,540			53
Investment securities, net of allowance for credit losses	558,791			398,239			40
Loans	978,518			959,769			2
Allowance for loan losses	(32,092		)	(13,123		)	145
Loans, net of allowance for loan losses	946,426			946,646			—
Accrued interest and accounts receivable	72,260			72,861			(1	)
Premises and equipment	26,301			25,813			2
Goodwill, MSRs and other intangible assets	51,669			53,341			(3	)
Other assets	138,213			126,830			9
Total assets	$	3,213,115		$	2,687,379		20	%

Cash and due from banks and deposits with banks increased primarily as a result of significant deposit inflows, which also funded asset growth across the Firm, including in investment securities. Deposits with banks reflect the Firm’s placements of its excess cash with various central banks, including the Federal Reserve Banks.

Refer to Liquidity Risk Management on pages 55-59 and Note 11 for information on federal funds sold and securities purchased under resale agreements.

Trading assets increased compared with lower levels at year-end predominantly due to client-driven market-making activities in debt instruments in Fixed Income Markets, as well as higher derivative receivables in CIB as a result of market movements.

Refer to Notes 2 and 5 for additional information.

Investment securities increased, reflecting net purchases of U.S. Treasuries and U.S. GSE and government agency MBS in the available-for-sale (“AFS”) portfolio, driven by interest rate risk management activities and cash deployment, partially offset by a non-cash transfer of $26 billion of U.S. GSE and government agency MBS from the AFS to the held-to-maturity (“HTM”) portfolio, resulting in a comparable increase in HTM.

Refer to Corporate segment results on page 46, Investment Portfolio Risk Management on page 79, and Notes 2 and 10 for additional information on Investment securities.

Loans increased, reflecting:

• the outstanding loans from the March drawdown activity on committed revolving credit facilities in CIB and CB, as a result of the COVID-19 pandemic, and the impact of the PPP loans in CBB and CB,

partially offset by

• lower loans in Card due to the decline in sales volume that began in March as a result of the COVID-19 pandemic, as well as the impact of seasonality; and lower loans in Home Lending primarily due to net repayments.

The allowance for loan losses increased primarily reflecting the deterioration and uncertainty in the macroeconomic environment as a result of the impact of the COVID-19 pandemic, consisting of:

• a $8.6 billion addition in consumer, predominantly in the credit card and residential real estate portfolios

• a net $6.2 billion addition in wholesale, across the LOBs impacting multiple industry sectors, and

• a net $4.2 billion addition as a result of the adoption of CECL.

There were also additions to the allowance for lending-related commitments, which is included in other liabilities on the consolidated balance sheets, of $920 million related to the impact of the COVID-19 pandemic, and $98 million related to the adoption of CECL, resulting in total additions to the allowance for credit losses of $15.7 billion and $4.3 billion, respectively, as of June 30, 2020.

18

Refer to Credit and Investment Risk Management on pages 60-79, and Notes 1, 2, 3, 12 and 13 for a more detailed discussion of loans and the allowance for loan losses.

Goodwill, MSRs and other intangibles decreased reflecting lower MSRs as a result of faster prepayment speeds on lower rates and the realization of expected cash flows, partially offset by net additions to the MSRs. Refer to Note 15 for additional information.

Other assets increased reflecting higher cash collateral placed with central counterparties, and the Firm’s participation in the Federal Reserve Bank of Boston’s (“FRBB”) MMLF. The assets purchased from money market mutual fund clients related to the MMLF were funded by nonrecourse advances from the FRBB, which are recorded in short-term borrowings. Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 11-12 and Liquidity Risk Management on pages 55-59 for additional information.

Selected Consolidated balance sheets data (continued)
(in millions)	June 30, 2020		December 31, 2019		Change
Liabilities
Deposits	$	1,931,029	$	1,562,431	24	%
Federal funds purchased and securities loaned or sold under repurchase agreements	235,647		183,675		28
Short-term borrowings	48,014		40,920		17
Trading liabilities	165,212		119,277		39
Accounts payable and other liabilities	230,916		210,407		10
Beneficial interests issued by consolidated variable interest entities (“VIEs”)	20,828		17,841		17
Long-term debt	317,003		291,498		9
Total liabilities	2,948,649		2,426,049		22
Stockholders’ equity	264,466		261,330		1
Total liabilities and stockholders’ equity	$	3,213,115	$	2,687,379	20	%

Deposits increased reflecting significant inflows across the LOBs primarily driven by the COVID-19 pandemic, as customers and clients looked to remain liquid as a result of market conditions.

• In the wholesale businesses, the inflows principally occurred in March, and in general were maintained through the second quarter.

• In CCB, the increase was driven by the continued growth in both existing and new accounts, as well as COVID-19 related factors, such as the government stimulus for consumers and small businesses, lower consumer spending, and delays in tax payments.

Refer to Liquidity Risk Management on pages 55-59 and Notes 2 and 16 for additional information.

Federal funds purchased and securities loaned or sold under repurchase agreements increased reflecting:

• in CIB, a net increase related to client-driven market-making activities, and higher secured financing of trading assets, partially offset by a decline in the Firm's participation in the Federal Reserve's open market operations, and

• in Treasury and CIO, higher secured financing of AFS investment securities. Refer to Liquidity Risk Management on pages 55-59 and Note 11 for additional information.

Short-term borrowings increased driven by the Firm’s participation in the FRBB’s MMLF, as well as a change in mix of funding sources in CIB activities from securities sold under repurchase agreements in CIB. The nonrecourse advances from the FRBB funded the assets purchased from money market mutual fund clients related to the MMLF, which are recorded in other assets.

Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 11-12 and Liquidity Risk Management on pages 55-59 for additional information.

Trading liabilities increased in CIB as a result of client-driven market-making activities, which resulted in higher levels of short positions in debt instruments in Fixed Income Markets, as well as higher derivative payables as a result of market movements. Refer to Notes 2 and 5 for additional information.

Accounts payable and other liabilities increased reflecting higher client payables related to client-driven activities in CIB.

Beneficial interests issued by consolidated VIEs increased reflecting higher levels of Firm-administered multi-seller conduit commercial paper held by third parties.

Refer to Off-Balance Sheet Arrangements on page 21 and Notes 14 and 23 for further information on Firm-sponsored VIEs and loan securitization trusts.

Long-term debt increased as a result of higher FHLB net advances, net issuance of senior and subordinated debt, and higher fair value hedge accounting adjustments related to lower interest rates. Refer to Liquidity Risk Management on pages 55-59 for additional information on the Firm’s long-term debt activities.

Stockholders’ equity increased reflecting the net impact of capital actions, net income, the adoption of CECL and an increase in accumulated other comprehensive income (“AOCI”). The increase in AOCI was driven by net unrealized gains on AFS securities, and higher valuation of interest rate cash flow hedges. Refer to page 96 for information on changes in stockholders’ equity and Capital actions on page 53.

19

Consolidated cash flows analysis

The following is a discussion of cash flow activities during the six months ended June 30, 2020 and 2019.

(in millions)	Six months ended June 30,
	2020			2019
Net cash provided by/(used in)
Operating activities	$	(37,032	)	$	(94,734	)
Investing activities	(183,617		)	27,424
Financing activities	451,436			56,469
Effect of exchange rate changes on cash	(689		)	86
Net increase/(decrease) in cash and due from banks and deposits with banks	$	230,098		$	(10,755	)

Operating activities

• In 2020, cash used resulted from higher trading assets and other assets, largely offset by higher trading liabilities and accounts payable and other liabilities.

• In 2019, cash used primarily resulted from higher trading assets-debt and equity instruments and securities borrowed, partially offset by increased trading liabilities and accounts payable and other liabilities, and net proceeds from loans held-for-sale.

Investing activities

• In 2020, cash used was driven by net purchases of investment securities and net loan originations.

• In 2019, cash provided resulted from a decrease in securities purchased under resale agreements, and net proceeds from sales of loans held-for-investment, partially offset by net purchases of investment securities.

Financing activities

• In 2020, cash provided was due to higher deposits, an increase in federal funds purchased and securities loaned or sold under repurchase agreements, and net proceeds from long-term borrowings.

• In 2019, cash provided resulted from higher securities loaned or sold under repurchase agreements and higher deposits.

• For both periods, cash was used for repurchases of common stock and cash dividends on common and preferred stock. On March 15, 2020, in response to the COVID-19 pandemic, the Firm temporarily suspended repurchases of its common equity. Additionally, in June 2020, the Federal Reserve directed all large bank holding companies, including the Firm, to discontinue net share repurchases, at least through the end of the third quarter of 2020.

* * *

Refer to Consolidated Balance Sheets Analysis on pages 18-19, Capital Risk Management on pages 49-54, and Liquidity Risk Management on pages 55-59 of this Form 10-Q, and pages 93–98 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of the activities affecting the Firm’s cash flows.

20

OFF-BALANCE SHEET ARRANGEMENTS

In the normal course of business, the Firm enters into various off-balance sheet arrangements and contractual obligations that may require future cash payments. Certain obligations are recognized on-balance sheet, while others are disclosed as off-balance sheet under accounting principles generally accepted in the U.S. (“U.S. GAAP”).

Special-purpose entities

The Firm has several types of off–balance sheet arrangements, including through nonconsolidated special-purpose entities (“SPEs”), which are a type of VIE, and through lending-related financial instruments (e.g., commitments and guarantees).

The Firm holds capital, as appropriate, against all SPE-related transactions and related exposures, such as derivative contracts and lending-related commitments and guarantees.

The Firm has no commitments to issue its own stock to support any SPE transaction, and its policies require that transactions with SPEs be conducted at arm’s length and reflect market pricing.

The table below provides an index of where in this Form 10-Q a discussion of the Firm’s various off-balance sheet arrangements can be found. Refer to Note 1 for additional information about the Firm’s consolidation policies.

Type of off-balance sheet arrangement	Location of disclosure	Page references
Special-purpose entities: variable interests and other obligations, including contingent obligations, arising from variable interests in nonconsolidated VIEs	Refer to Note 14	162-167
Off-balance sheet lending-related financial instruments, guarantees, and other commitments	Refer to Note 23	178-181

21

EXPLANATION AND RECONCILIATION OF THE FIRM’S USE OF NON-GAAP FINANCIAL MEASURES

The Firm prepares its Consolidated Financial Statements in accordance with U.S. GAAP and this presentation is referred to as “reported” basis; these financial statements appear on pages 93-97.

In addition to analyzing the Firm’s results on a reported basis, the Firm also reviews and uses certain non-GAAP financial measures at the Firmwide and segment level. These non-GAAP measures include:

• Firmwide “managed” basis results, including the overhead ratio, which include certain reclassifications to present total net revenue from investments that receive tax credits and tax-exempt securities on a basis comparable to taxable investments and securities (“FTE” basis)

• Pre-provision profit, which represents total net revenue less noninterest expense

• Net interest income and net yield excluding CIB’s Markets businesses

• Tangible common equity (“TCE”), ROTCE, and TBVPS

• Allowance for loan losses to period-end loans retained, excluding trade finance and conduits.

Refer to Explanation and Reconciliation of the Firm’s Use Of Non-GAAP Financial Measures and Key Performance Measures on pages 57–59 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of management’s use of non-GAAP financial measures.

The following summary tables provide a reconciliation from the Firm’s reported U.S. GAAP results to managed basis.

	Three months ended June 30,
	2020								2019
(in millions, except ratios)	Reported			Fully taxable-equivalent adjustments(b)		Managed basis			Reported			Fully taxable-equivalent adjustments(b)		Managed basis
Other income	$	1,042		$	730	$	1,772		$	1,292		$	596	$	1,888
Total noninterest revenue(a)	19,127			730		19,857			14,349			596		14,945
Net interest income	13,853			107		13,960			14,398			138		14,536
Total net revenue	32,980			837		33,817			28,747			734		29,481
Total noninterest expense(a)	16,942			NA		16,942			16,256			NA		16,256
Pre-provision profit	16,038			837		16,875			12,491			734		13,225
Provision for credit losses	10,473			NA		10,473			1,149			NA		1,149
Income before income tax expense	5,565			837		6,402			11,342			734		12,076
Income tax expense	878			837		1,715			1,690			734		2,424
Net income	$	4,687		NA		$	4,687		$	9,652		NA		$	9,652
Overhead ratio	51		%	NM		50		%	57		%	NM		55		%
	Six months ended June 30,
	2020								2019
(in millions, except ratios)	Reported			Fully taxable-equivalent adjustments(b)		Managed basis			Reported			Fully taxable-equivalent adjustments(b)		Managed basis
Other income	$	2,198		$	1,438	$	3,636		$	2,767		$	1,181	$	3,948
Total noninterest revenue(a)	32,880			1,438		34,318			28,972			1,181		30,153
Net interest income	28,292			217		28,509			28,851			281		29,132
Total net revenue	61,172			1,655		62,827			57,823			1,462		59,285
Total noninterest expense(a)	33,733			NA		33,733			32,604			NA		32,604
Pre-provision profit	27,439			1,655		29,094			25,219			1,462		26,681
Provision for credit losses	18,758			NA		18,758			2,644			NA		2,644
Income before income tax expense	8,681			1,655		10,336			22,575			1,462		24,037
Income tax expense	1,129			$	1,655	2,784			3,744			1,462		5,206
Net Income	$	7,552		NA		$	7,552		$	18,831		NA		$	18,831
Overhead ratio	55		%	NM		54		%	56		%	NM		55		%

(a) In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.

(b) Predominantly recognized in CIB, CB and Corporate.

22

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

(in millions, except rates)	Three months ended June 30,								Six months ended June 30,
	2020			2019			Change		2020			2019			Change
Net interest income – reported	$	13,853		$	14,398		(4)%		$	28,292		$	28,851		(2)%
Fully taxable-equivalent adjustments	107			138			(22)		217			281			(23)
Net interest income – managed basis(a)	$	13,960		$	14,536		(4)		$	28,509		$	29,132		(2	)
Less: CIB Markets net interest income(b)	2,536			624			306		4,132			1,248			231
Net interest income excluding CIB Markets(a)	$	11,424		$	13,912		(18)		$	24,377		$	27,884		(13	)
Average interest-earning assets	$	2,819,855		$	2,339,094		21		$	2,642,794		$	2,319,105		14
Less: Average CIB Markets interest-earning assets(b)	795,677			673,480			18		765,856			661,397			16
Average interest-earning assets excluding CIB Markets	$	2,024,178		$	1,665,614		22	%	$	1,876,938		$	1,657,708		13	%
Net yield on average interest-earning assets – managed basis	1.99		%	2.49		%			2.17		%	2.53		%
Net yield on average CIB Markets interest-earning assets(b)	1.28			0.37					1.08			0.38
Net yield on average interest-earning assets excluding CIB Markets	2.27		%	3.35		%			2.61		%	3.39		%

(a) Interest includes the effect of related hedges. Taxable-equivalent amounts are used where applicable.

(b) Refer to page 36 for further information on CIB’s Markets businesses.

The following summary table provides a reconciliation from the Firm’s common stockholders’ equity to TCE.

	Period-end				Average
(in millions, except per share and ratio data)	Jun 30, 2020		Dec 31, 2019		Three months ended June 30,						Six months ended June 30,
					2020			2019			2020			2019
Common stockholders’ equity	$	234,403	$	234,337	$	234,408		$	233,026		$	234,469		$	231,547
Less: Goodwill	47,811		47,823		47,805			47,472			47,808			47,474
Less: Other intangible assets	778		819		791			741			802			741
Add: Certain deferred tax liabilities(a)	2,397		2,381		2,393			2,304			2,388			2,296
Tangible common equity	$	188,211	$	188,076	$	188,205		$	187,117		$	188,247		$	185,628
Return on tangible common equity	NA		NA		9		%	20		%	7		%	20		%
Tangible book value per share	$	61.76	$	60.98	NA			NA			N/A			N/A

(a) Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating TCE.

23

BUSINESS SEGMENT RESULTS

The Firm is managed on an LOB basis. There are four major reportable business segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking and Asset & Wealth Management. In addition, there is a Corporate segment.

The business segments are determined based on the products and services provided, or the type of customer served, and they reflect the manner in which financial information is currently evaluated by the Firm’s Operating Committee. Segment results are presented on a managed basis. Refer to Explanation and Reconciliation of the Firm’s use of Non-GAAP Financial Measures on pages 22-23 for a definition of managed basis.

Description of business segment reporting methodology

Results of the business segments are intended to present each segment as if it were a stand-alone business. The management reporting process that derives business segment results includes the allocation of certain income and expense items. The Firm periodically assesses the assumptions, methodologies and reporting classifications used for segment reporting, and further refinements may be implemented in future periods. The Firm’s LOBs also provide various business metrics which are utilized by the Firm and its investors and analysts in assessing performance.

Revenue sharing

When business segments join efforts to sell products and services to the Firm’s clients, the participating business segments may agree to share revenue from those transactions. Revenue and expense are generally recognized in the segment responsible for the related product or service, with allocations to the other segment(s)

involved in the transaction. The segment results reflect these revenue-sharing agreements.

Business segment capital allocation

The amount of capital assigned to each business is referred to as equity. Periodically, the assumptions and methodologies used to allocate capital are assessed and as a result, the capital allocated to the LOBs may change. Refer to Line of business equity on page 90 of JPMorgan Chase’s 2019 Form 10-K for additional information on business segment capital allocation.

Refer to Business Segment Results – Description of business segment reporting methodology on pages 60–61 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of those methodologies.

Business segment changes

In the first quarter of 2020, the Firm began reporting a Wholesale Payments business unit within CIB following a realignment of the Firm’s wholesale payments businesses. The Wholesale Payments business comprises:

• Merchant Services, which was realigned from CCB to CIB

• Treasury Services and Trade Finance in CIB. Trade Finance was previously reported in Lending in CIB.

In connection with the alignment of Wholesale Payments, the assets, liabilities and headcount associated with the Merchant Services business were realigned to CIB from CCB, and the revenue and expenses of the Merchant Services business is reported across CCB, CIB and CB based primarily on client relationships. Prior periods have been revised to reflect this realignment and revised allocation methodology.

JPMorgan Chase
Consumer Businesses			Wholesale Businesses
Consumer & Community Banking			Corporate & Investment Bank		Commercial Banking	Asset & Wealth Management
Consumer & Business Banking	Home Lending	Card & Auto	Banking	Markets & Securities Services	• Middle Market Banking	• Asset Management
• Consumer Banking/Chase Wealth Management  • Business Banking	• Home Lending Production  • Home Lending Servicing  • Real Estate Portfolios	• Credit Card  • Auto	• Investment Banking  • Wholesale Payments  • Lending	• Fixed Income Markets	• Corporate Client Banking	• Wealth Management
				• Equity Markets  • Securities Services  • Credit Adjustments & Other	• Commercial Real Estate Banking

24

Segment results – managed basis

The following tables summarize the Firm’s results by segment for the periods indicated.

Three months ended June 30,	Consumer & Community Banking(a)								Corporate & Investment Bank							Commercial Banking
(in millions, except ratios)	2020			2019			Change		2020			2019			Change	2020			2019			Change
Total net revenue	$	12,217		$	13,484		(9	)%	$	16,352		$	9,831		66	$	2,392		$	2,285		5	%
Total noninterest expense	6,626			6,836			(3	)	6,764			5,661			19	899			931			(3	)
Pre-provision profit/(loss)	5,591			6,648			(16	)	9,588			4,170			130	1,493			1,354			10
Provision for credit losses	5,828			1,120			420		1,987			—			NM	2,431			29			NM
Net income/(loss)	(176		)	4,157			NM		5,464			2,946			85	(691		)	1,002			NM
Return on equity (“ROE”)	(2		)%	31		%			27		%	14		%		(14		)%	17		%

Three months ended June 30,	Asset & Wealth Management								Corporate								Total(a)
(in millions, except ratios)	2020			2019			Change		2020			2019			Change		2020			2019			Change
Total net revenue	$	3,610		$	3,559		1	%	$	(754	)	$	322		NM		$	33,817		$	29,481		15	%
Total noninterest expense	2,506			2,596			(3	)	147			232			(37	)	16,942			16,256			4
Pre-provision profit/(loss)	1,104			963			15		(901		)	90			NM		16,875			13,225			28
Provision for credit losses	223			2			NM		4			(2		)	NM		10,473			1,149			NM
Net income/(loss)	658			719			(8	)	(568		)	828			NM		4,687			9,652			(51	)
ROE	24		%	27		%			NM			NM					7		%	16		%

Six months ended June 30,	Consumer & Community Banking(a)								Corporate & Investment Bank							Commercial Banking
(in millions, except ratios)	2020			2019			Change		2020			2019			Change	2020			2019			Change
Total net revenue	$	25,329		$	26,927		(6	)%	$	26,300		$	19,865		32	$	4,570		$	4,698		(3	)%
Total noninterest expense	13,728			13,759			—		12,660			11,290			12	1,887			1,869			1
Pre-provision profit/(loss)	11,601			13,168			(12	)	13,640			8,575			59	2,683			2,829			(5	)
Provision for credit losses	11,600			2,434			377		3,388			87			NM	3,441			119			NM
Net income/(loss)	15			8,104			(100	)	7,452			6,206			20	(544		)	2,062			NM
ROE	(1		)%	31		%			18		%	15		%		(6		)%	18		%

Six months ended June 30,	Asset & Wealth Management								Corporate							Total(a)
(in millions, except ratios)	2020			2019			Change		2020			2019		Change		2020			2019			Change
Total net revenue	$	7,216		$	7,048		2	%	$	(588	)	$	747	NM		$	62,827		$	59,285		6	%
Total noninterest expense	5,165			5,243			(1	)	293			443		(34	)	33,733			32,604			3
Pre-provision profit/(loss)	2,051			1,805			14		(881		)	304		NM		29,094			26,681			9
Provision for credit losses	317			4			NM		12			—		NM		18,758			2,644			NM
Net income/(loss)	1,322			1,380			(4	)	(693		)	1,079		NM		7,552			18,831			(60	)
ROE	24		%	26		%			NM			NM				6		%	16		%

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. Prior-period amounts have been revised to conform with the current presentation.

(a) In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.

The following sections provide a comparative discussion of the Firm’s results by segment as of or for the three and six months ended June 30, 2020 versus the corresponding periods in the prior year, unless otherwise specified.

25

CONSUMER & COMMUNITY BANKING

Consumer & Community Banking offers services to consumers and businesses through bank branches, ATMs, digital (including mobile and online) and telephone banking. CCB is organized into Consumer & Business Banking (including Consumer Banking/Chase Wealth Management and Business Banking), Home Lending (including Home Lending Production, Home Lending Servicing and Real Estate Portfolios) and Card & Auto. Consumer & Business Banking offers deposit and investment products and services to consumers, and lending, deposit, and cash management and payment solutions to small businesses. Home Lending includes mortgage origination and servicing activities, as well as portfolios consisting of residential mortgages and home equity loans. Card & Auto issues credit cards to consumers and small businesses and originates and services auto loans and leases.

Refer to Line of Business Metrics on page 197 for a further discussion of the business profile of CCB.

Selected income statement data
	Three months ended June 30,								Six months ended June 30,
(in millions, except ratios)	2020			2019			Change		2020			2019			Change
Revenue
Lending- and deposit-related fees(a)	$	617		$	971		(36	)%	$	1,589		$	1,880		(15	)%
Asset management, administration and commissions(a)	536			620			(14	)	1,121			1,201			(7	)
Mortgage fees and related income	917			279			229		1,237			675			83
Card income(b)	733			913			(20	)	1,442			1,775			(19	)
All other income	1,313			1,321			(1	)	2,686			2,611			3
Noninterest revenue	4,116			4,104			—		8,075			8,142			(1	)
Net interest income	8,101			9,380			(14	)	17,254			18,785			(8	)
Total net revenue	12,217			13,484			(9	)	25,329			26,927			(6	)
Provision for credit losses	5,828			1,120			420		11,600			2,434			377
Noninterest expense
Compensation expense	2,557			2,531			1		5,154			5,097			1
Noncompensation expense(b)(c)	4,069			4,305			(5	)	8,574			8,662			(1	)
Total noninterest expense	6,626			6,836			(3	)	13,728			13,759			—
Income/(loss) before income tax expense/(benefit)	(237		)	5,528			NM		1			10,734			(100	)
Income tax expense/(benefit)	(61		)	1,371			NM		(14		)	2,630			NM
Net income/(loss)	$	(176	)	$	4,157		NM		$	15		$	8,104		(100	)
Revenue by line of business
Consumer & Business Banking	$	5,107		$	6,897		(26	)	$	11,198		$	13,558		(17	)
Home Lending	1,687			1,118			51		2,848			2,464			16
Card & Auto(b)	5,423			5,469			(1	)	11,283			10,905			3
Mortgage fees and related income details:
Net production revenue	742			353			110		1,061			553			92
Net mortgage servicing revenue(d)	175			(74		)	NM		176			122			44
Mortgage fees and related income	$	917		$	279		229	%	$	1,237		$	675		83	%
Financial ratios
Return on equity	(2		)%	31		%			(1		)%	31		%
Overhead ratio	54			51					54			51

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. Prior-period amounts have been revised to conform with the current presentation.

(a) In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts have been revised to conform with the current presentation.

(b) In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.

(c) Included depreciation expense on leased assets of $1.1 billion and $957 million for the three months ended June 30, 2020 and 2019, respectively, and $2.2 billion and $1.9 billion for six months ended June 30, 2020 and 2019, respectively.

(d) Included MSR risk management results of $79 million and $(244) million for the three months ended June 30, 2020 and 2019, respectively, and $(11) million and $(253) million for six months ended June 30, 2020 and 2019, respectively.

26

Quarterly results

Net loss was $176 million, compared with net income of $4.2 billion in the prior year, predominantly driven by an increase in the provision for credit losses.

Net revenue was $12.2 billion, a decrease of 9%.

Net interest income was $8.1 billion, down 14%, driven by:

• the impact of deposit margin compression in CBB and lower loans in Card,

partially offset by

• growth in deposits in CBB and loan margin expansion in Card.

Noninterest revenue was $4.1 billion, flat compared to the prior year, reflecting:

• higher net mortgage production revenue reflecting higher production margins, partially offset by the absence of gains on loan sales in the prior year, and

• higher net mortgage servicing revenue reflecting higher MSR risk management results due to the absence of losses resulting from updates to model inputs in the prior year partially offset by lower operating revenue reflecting a lower level of third-party loans serviced,

offset by

• lower deposit-related fees due to lower transaction activity and the impact of fee refunds related to the COVID-19 pandemic,

• lower card income due to lower net interchange income reflecting lower card sales volumes that began in March as a result of the COVID-19 pandemic, partially offset by higher annual fees and lower acquisition costs, and

• lower volume of annuity sales.

Refer to Note 15 for further information regarding changes in the value of the MSR asset and related hedges, and mortgage fees and related income.

Noninterest expense was $6.6 billion, down 3%, driven by lower marketing expense on lower travel-related benefits and lower investments in marketing campaigns, as well as lower structural expense, including lower payment processing costs.

The provision for credit losses was $5.8 billion, an increase of $4.7 billion from the prior year, driven by:

• additions to the allowance for credit losses as a result of the impact of the COVID-19 pandemic, consisting of: $2.9 billion for Card, $900 million for Home Lending, $490 million for CBB, and $310 million for Auto,

partially offset by

• lower net charge-offs in Card reflecting higher recoveries.

The prior year included a $200 million net reduction in the allowance for credit losses.

Refer to Credit and Investment Risk Management on pages 60-79 and Allowance for Credit Losses on pages 77-78 for further discussions of the credit portfolios and the allowance for credit losses.

Year-to-date results

Net income was $15 million, compared to $8.1 billion in the prior year, predominantly driven by an increase in the provision for credit losses.

Net revenue was $25.3 billion, a decrease of 6%.

Net interest income was $17.3 billion, down 8%, driven by:

• the impact of deposit margin compression in CBB, and lower loans in Home Lending predominantly due to prior year loan sales,

partially offset by

• growth in deposits in CBB, and loan margin expansion in Card.

Noninterest revenue was $8.1 billion, relatively flat, driven by:

• lower card income due to lower net interchange income reflecting lower card sales volumes that began in March as a result of the COVID-19 pandemic, partially offset by higher annual fees,

• lower deposit-related fees due to lower transaction activity and the impact of fee refunds related to the COVID-19 pandemic, and

• lower volume of annuity sales,

offset by

• higher net mortgage production revenue reflecting higher mortgage production volumes and margins, partially offset by the absence of gains on loan sales in the prior year,

• higher auto lease volume, and

• higher net mortgage servicing revenue reflecting higher MSR risk management results due to the absence of losses resulting from updates to model inputs in the prior year, predominantly offset by lower operating revenue reflecting a lower level of third-party loans serviced and faster prepayment speeds on lower rates.

Noninterest expense was $13.7 billion, flat compared to the prior year, reflecting:

• lower structural expenses, including lower payment processing costs, and

• lower marketing expenses on lower travel-related benefits and investments in marketing campaigns,

offset by

• higher volume- and revenue-related expense, including depreciation on auto lease assets, and investments in the business.

The provision for credit losses was $11.6 billion, an increase of $9.2 billion from the prior year, driven by:

• additions to the allowance for credit losses as a result of the impact of the COVID-19 pandemic, consisting of: $6.6 billion for Card, $1.2 billion for Home Lending, $649 million for CBB, and $560 million for Auto,

partially offset by

• lower net charge-offs reflecting higher recoveries in Home Lending on a loan sale in the first quarter of 2020, and in Card, largely offset by higher charge-offs in Card on loan growth in the prior year.

The prior year included a $200 million net reduction in the allowance for credit losses.

27

Selected metrics
	As of or for the three months ended June 30,							As of or for the six months ended June 30,
(in millions, except headcount)	2020			2019		Change		2020			2019		Change
Selected balance sheet data (period-end)
Total assets	$	492,251		$	536,758	(8	)%	$	492,251		$	536,758	(8	)%
Loans:
Consumer & Business Banking	46,910		(b)	26,616		76		46,910		(b)	26,616		76
Home Lending	188,576			219,533		(14	)	188,576			219,533		(14	)
Card	141,656			157,576		(10	)	141,656			157,576		(10	)
Auto	59,287			62,073		(4	)	59,287			62,073		(4	)
Total loans	436,429			465,798		(6	)	436,429			465,798		(6	)
Deposits	876,991			695,096		26		876,991			695,096		26
Equity	52,000			52,000		—		52,000			52,000		—
Selected balance sheet data (average)
Total assets	$	498,140		$	534,612	(7	)	$	507,676		$	540,296	(6	)
Loans:
Consumer & Business Banking	41,198			26,570		55		34,230			26,529		29
Home Lending	192,716			224,685		(14	)	195,379			231,778		(16	)
Card	142,377			153,746		(7	)	152,518			152,447		—
Auto	60,306			62,236		(3	)	60,599			62,498		(3	)
Total loans	436,597			467,237		(7	)	442,726			473,252		(6	)
Deposits	831,996			690,892		20		782,822			685,980		14
Equity	52,000			52,000		—		52,000			52,000		—
Headcount(a)	122,089			123,580		(1	)%	122,089			123,580		(1	)%

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. Prior-period amounts have been revised to conform with the current presentation, including a decrease to period-end assets and headcount of $13.9 billion and 4,152, respectively, as of June 30, 2019.

(a) During the second quarter of 2020, certain technology and support functions, comprising approximately 850 staff, were transferred from AWM to CCB as part of the ongoing reorganization of the U.S. Wealth Management business.

(b) At June 30, 2020, included $19.9 billion of loans in Business Banking under the PPP. Refer to Credit Portfolio on pages 60-61 for a further discussion of the PPP.

28

Selected metrics
	As of or for the three months ended June 30,									As of or for the six months ended June 30,
(in millions, except ratio data)	2020				2019			Change		2020				2019			Change
Credit data and quality statistics
Nonaccrual loans(a)(b)	$	4,407		(e)	$	3,142		40	%	$	4,407		(e)	$	3,142		40	%
Net charge-offs/(recoveries)
Consumer & Business Banking	60				66			(9	)	134				125			7
Home Lending	(5		)		(28		)	82		(127		)		(33		)	(285	)
Card	1,178				1,240			(5	)	2,491				2,442			2
Auto	45				42			7		93				100			(7	)
Total net charge-offs/(recoveries)	$	1,278			$	1,320		(3	)	$	2,591			$	2,634		(2	)
Net charge-off/(recovery) rate
Consumer & Business Banking	0.59		%	(f)	1.00		%			0.79		%	(f)	0.95		%
Home Lending	(0.01		)		(0.05		)			(0.13		)		(0.03		)
Card	3.33				3.24					3.28				3.23
Auto	0.30				0.27					0.31				0.32
Total net charge-off/(recovery) rate	1.18		%		1.14		%			1.18				1.13
30+ day delinquency rate
Home Lending(c)(d)	1.30		%	(g)	1.55		%			1.30		%	(g)	1.55		%
Card	1.71			(g)	1.71					1.71			(g)	1.71
Auto	0.54			(g)	0.82					0.54			(g)	0.82
90+ day delinquency rate — Card	0.93		%	(g)	0.87		%			0.93			(g)	0.87
Allowance for loan losses
Consumer & Business Banking	$	1,370			$	796		72		$	1,370			$	796		72
Home Lending	2,957				2,302			28		2,957				2,302			28
Card	17,800				5,383			231		17,800				5,383			231
Auto	1,044				465			125		1,044				465			125
Total allowance for loan losses	$	23,171			$	8,946		159	%	$	23,171			$	8,946		159	%

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. The adoption resulted in a change in the accounting for PCI loans, which are considered purchased credit deteriorated (“PCD”) loans under CECL. Refer to Note 1 for further information.

(a) At June 30, 2020, nonaccrual loans included $1.3 billion of PCD loans. Prior to the adoption of CECL, nonaccrual loans excluded PCI loans as the Firm recognized interest income on each pool of PCI loans as each of the pools was performing.

(b) At June 30, 2020 and 2019, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $561 million and $1.8 billion, respectively. These amounts have been excluded based upon the government guarantee.

(c) At June 30, 2020, the 30+ day delinquency rates included PCD loans. The rate prior to January 1, 2020 was revised to include the impact of PCI loans.

(d) At June 30, 2020 and 2019, excluded mortgage loans insured by U.S. government agencies of $826 million and $2.9 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.

(e) Generally excludes loans that were under payment deferral programs offered in response to the COVID-19 pandemic. Refer to Consumer Credit Portfolio on pages 62-66 for further information on consumer payment assistance activity.

(f) At June 30, 2020, included $19.9 billion of loans in Business Banking under the PPP. Given that PPP loans are guaranteed by the SBA, the Firm does not expect to realize material credit losses on these loans. Refer to Credit Portfolio on pages 60-61 for a further discussion of the PPP.

(g) At June 30, 2020, the principal balance of loans in Home Lending, Card and Auto under payment deferral programs offered in response to the COVID-19 pandemic were $18.2 billion, $4.4 billion and $12.3 billion, respectively. Loans that are performing according to their modified terms are generally not considered delinquent. Refer to Consumer Credit Portfolio on pages 62-66 for further information on consumer payment assistance activity.

29

Selected metrics
	As of or for the three months ended June 30,									As of or for the six months ended June 30,
(in billions, except ratios and where otherwise noted)	2020				2019			Change		2020				2019			Change
Business Metrics
Number of branches	4,923				4,970			(1	)%	4,923				4,970			(1	)%
Active digital customers (in thousands)(a)	54,471				51,032			7		54,471				51,032			7
Active mobile customers (in thousands)(b)	39,024				35,392			10		39,024				35,392			10
Debit and credit card sales volume	$	237.6			$	281.5		(16	)	$	503.6			$	536.6		(6	)
Consumer & Business Banking
Average deposits	$	813.2			$	676.7		20		$	766.0			$	672.6		14
Deposit margin	1.52		%		2.60		%			1.77		%		2.61		%
Business banking origination volume	$	23.0		(f)	$	1.7		NM		$	24.5		(f)	$	3.2		NM
Client investment assets	356.1				328.1			9		356.1				328.1			9
Home Lending
Mortgage origination volume by channel
Retail	$	18.0			$	12.5		44		$	32.1			$	20.4		57
Correspondent	6.2				12.0			(48	)	20.2				19.1			6
Total mortgage origination volume(c)	$	24.2			$	24.5		(1	)	$	52.3			$	39.5		32
Total loans serviced (period-end)	$	683.7			$	780.1		(12	)	$	683.7			$	780.1		(12	)
Third-party mortgage loans serviced (period-end)	482.4				526.6			(8	)	482.4				526.6			(8	)
MSR carrying value (period-end)	3.1				5.1			(39	)	3.1				5.1			(39	)
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end)	0.64		%		0.97		%			0.64		%		0.97		%
MSR revenue multiple(d)	2.29		x		2.69		x			2.21		x		2.77		x
Credit Card
Credit card sales volume, excluding Commercial Card	$	148.5			$	192.5		(23	)	$	327.6			$	365.0		(10	)
Net revenue rate(e)	11.02		%		10.31		%			10.76		%		10.43		%
Auto
Loan and lease origination volume	$	7.7			$	8.5		(9	)	$	16.0			$	16.4		(2	)
Average auto operating lease assets	22.6				21.3			6	%	22.8				21.1			8	%

(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 $28.3 billion and $26.3 billion for the three months ended June 30, 2020 and 2019, respectively and $60.2 billion and $42.7 billion for the six months ended June 30, 2020 and 2019, 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).

(e) In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.

(f) Included $21.5 billion of origination volume under the PPP for the three and six months ended June 30, 2020. Refer to Credit Portfolio on pages 60-61 for a further discussion of the PPP.

30

CORPORATE & INVESTMENT BANK

The Corporate & Investment Bank, which consists of Banking and Markets & Securities Services, offers a broad suite of investment banking, market-making, prime brokerage, and treasury and securities products and services to a global client base of corporations, investors, financial institutions, merchants, government and municipal entities. Banking offers a full range of investment banking products and services in all major capital markets, including advising on corporate strategy and structure, capital-raising in equity and debt markets, as well as loan origination and syndication. Banking also includes Wholesale Payments, which provides payments services enabling clients to manage payments and receipts globally, and cross-border financing. Markets & Securities Services includes Markets, a global market-maker in cash securities and derivative instruments, which also offers sophisticated risk management solutions, prime brokerage, and research. Markets & Securities Services also includes Securities Services, a leading global custodian which provides custody, fund accounting and administration, and securities lending products principally for asset managers, insurance companies and public and private investment funds.

Refer to Line of Business Metrics on page 197 for a further discussion of the business profile of CIB.

Selected income statement data
	Three months ended June 30,								Six months ended June 30,
(in millions, except ratios)	2020			2019			Change		2020			2019			Change
Revenue
Investment banking fees	$	2,847		$	1,846		54	%	$	4,754		$	3,690		29	%
Principal transactions	7,400			3,885			90		10,588			8,049			32
Lending- and deposit-related fees(a)	500			412			21		950			808			18
Asset management, administration and commissions(a)	1,146			1,112			3		2,407			2,179			10
All other income	380			405			(6	)	415			770			(46	)
Noninterest revenue	12,273			7,660			60		19,114			15,496			23
Net interest income	4,079			2,171			88		7,186			4,369			64
Total net revenue(b)	16,352			9,831			66		26,300			19,865			32
Provision for credit losses	1,987			—			NM		3,388			87			NM
Noninterest expense
Compensation expense	3,997			2,839			41		7,003			5,930			18
Noncompensation expense	2,767			2,822			(2	)	5,657			5,360			6
Total noninterest expense	6,764			5,661			19		12,660			11,290			12
Income before income tax expense	7,601			4,170			82		10,252			8,488			21
Income tax expense	2,137			1,224			75		2,800			2,282			23
Net income	$	5,464		$	2,946		85	%	$	7,452		$	6,206		20	%
Financial ratios
Return on equity	27		%	14		%			18		%	15		%
Overhead ratio	41			58					48			57
Compensation expense as percentage of total net revenue	24			29					27			30

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. Prior-period amounts have been revised to conform with the current presentation.

(a) In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts have been revised to conform with the current presentation.

(b) Includes tax-equivalent adjustments, predominantly due to income tax credits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; and tax-exempt income from municipal bonds of $686 million and $547 million for the three months ended June 30, 2020 and 2019, respectively, and $1.4 billion and $1.1 billion for the six months ended June 30, 2020 and 2019, respectively.

31

Selected income statement data
	Three months ended June 30,							Six months ended June 30,
(in millions)	2020		2019			Change		2020			2019		Change
Revenue by business
Investment Banking	$	3,401	$	1,776		91	%	$	4,287		$	3,521	22	%
Wholesale Payments	1,356		1,402			(3	)	2,715			2,817		(4	)
Lending	270		260			4		620			518		20
Total Banking	5,027		3,438			46		7,622			6,856		11
Fixed Income Markets	7,338		3,690			99		12,331			7,415		66
Equity Markets	2,380		1,728			38		4,617			3,469		33
Securities Services	1,097		1,045			5		2,171			2,059		5
Credit Adjustments & Other(a)	510		(70		)	NM		(441		)	66		NM
Total Markets & Securities Services	11,325		6,393			77		18,678			13,009		44
Total net revenue	$	16,352	$	9,831		66	%	$	26,300		$	19,865	32	%

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. Prior-period amounts have been revised to conform with the current presentation.

(a) Includes credit valuation adjustments (“CVA”) managed centrally within CIB and funding valuation adjustments (“FVA”) on derivatives and certain components of fair value option elected liabilities, which are primarily reported in principal transactions revenue. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets.

Quarterly results

Net income was $5.5 billion, up 85%, with record revenue more than offsetting higher noninterest expense and an increase in the provision for credit losses.

Net revenue was $16.4 billion, up 66%.

Banking revenue was $5.0 billion, up 46%.

• Investment Banking revenue was $3.4 billion, up 91%, driven by higher Investment Banking fees, up 54%, reflecting higher fees across products, as well as $659 million of markups on held-for-sale positions, including unfunded commitments, in the bridge financing portfolio as a result of improved market conditions. The Firm maintained its #1 ranking for Global Investment Banking fees, according to Dealogic.

– Debt underwriting fees were $1.3 billion, up 55%, driven by increased industry-wide fees and wallet share gains in both investment-grade and high-yield bonds.

– Equity underwriting fees were $977 million, up 93%, driven by both increased industry-wide fees and wallet share gains primarily in follow-on offerings and convertible securities markets.

– The increased activity in debt and equity underwriting reflected clients seeking access to liquidity as a result of the COVID-19 pandemic.

– Advisory fees were $602 million, up 15%, driven by a few large completed transactions.

• Wholesale Payments revenue was $1.4 billion, down 3%, driven by a reporting re-classification for certain expenses which are now reported as a reduction of revenue in Merchant Services. In addition, the impact of higher deposit balances was predominantly offset by deposit margin compression.

• Lending revenue was $270 million, up 4%, with higher net interest income on higher loan balances, as well as

higher fees, offset by fair value losses on hedges of accrual loans.

Markets & Securities Services revenue was $11.3 billion, up 77%. Markets revenue was $9.7 billion, up 79%.

• Fixed Income Markets revenue was $7.3 billion, up 99%, or up 120% excluding a gain from the IPO of Tradeweb in the prior year, driven by strong performance across products, primarily in Rates, Currencies & Emerging Markets, and Credit.

• Equity Markets revenue was $2.4 billion, up 38%, predominantly driven by strong client activity in derivatives and Cash Equities.

• Securities Services revenue was $1.1 billion, up 5%, predominantly driven by deposit balance and fee growth partially offset by deposit margin compression.

• Credit Adjustments & Other was a gain of $510 million, driven by funding spread tightening on derivatives.

Noninterest expense was $6.8 billion, up 19%, driven by higher revenue-related compensation expense.

The provision for credit losses was $2.0 billion, predominantly driven by net additions to the allowance for credit losses as a result of the impact of the COVID-19 pandemic across multiple industry sectors.

Year-to-date results

Net income was $7.5 billion, up 20%, with revenue more than offsetting higher noninterest expense and an increase in the provision for credit losses.

Net revenue was $26.3 billion, up 32%.

Banking revenue was $7.6 billion, up 11%.

• Investment Banking revenue was $4.3 billion, up 22%, driven by higher Investment Banking fees, up 29%, reflecting higher debt and equity underwriting fees, partially offset by lower advisory fees, as well as $161 million of net markdowns on held-for-sale positions,

32

including unfunded commitments, in the bridge financing portfolio. The Firm maintained its #1 ranking for Global Investment Banking fees, according to Dealogic.

– Debt underwriting fees were $2.3 billion, up 34%, driven by increased industry-wide fees and wallet share gains in investment-grade bonds, and for high-yield bonds, after the markets stabilized in the second quarter of 2020.

– Equity underwriting fees were $1.3 billion, up 70%, driven by both increased industry-wide fees and wallet share gains primarily in follow-on offerings and convertible securities markets.

– The increased activity in debt and equity underwriting reflected clients seeking access to liquidity as a result of the COVID-19 pandemic.

– Advisory fees of $1.1 billion were down 5%, driven by lower number of completed transactions.

• Wholesale payments revenue was $2.7 billion, down 4%, driven by a reporting re-classification for certain expenses which are now reported as a reduction of revenue in Merchant Services. In addition, the impact of higher balances and fee growth was predominantly offset by deposit margin compression.

• Lending revenue was $620 million, up 20%, driven by higher net interest income on higher loan balances, as well as higher fees.

Markets & Securities Services revenue was $18.7 billion, up 44%. Markets revenue was $16.9 billion, up 56%.

• Fixed Income Markets revenue was $12.3 billion, up 66%, driven by strong client activity across products primarily in Rates, Currencies & Emerging Markets, and Credit.

• Equity Markets revenue was $4.6 billion, up 33%, driven by strong client activity in derivatives and Cash Equities.

• Securities Services revenue was $2.2 billion, up 5%, predominantly driven by deposit balance and fee growth partially offset by deposit margin compression.

• Credit Adjustments & Other was a net loss of $441 million, predominantly driven by losses on certain components of fair value option elected liabilities, as well as the impact of funding spread widening on derivatives

Noninterest expense was $12.7 billion, up 12%, predominantly driven by higher revenue-related compensation expense.

The provision for credit losses was $3.4 billion, compared with $87 million in the prior year. The increase was predominantly driven by net additions to the allowance for credit losses as a result of the impact of the COVID-19 pandemic across multiple industry sectors.

Refer to Credit and Investment Risk Management on pages 60-79 and Allowance for Credit Losses on pages 77-78 for further discussions of the credit portfolios and the allowance for credit losses.

Selected metrics
	As of or for the three months ended June 30,						As of or for the six months ended June 30,
(in millions, except headcount)	2020		2019		Change		2020		2019		Change
Selected balance sheet data (period-end)
Assets	$	1,080,761	$	976,430	11	%	$	1,080,761	$	976,430	11	%
Loans:
Loans retained(a)	140,770		123,074		14		140,770		123,074		14
Loans held-for-sale and loans at fair value	10,241		6,838		50		10,241		6,838		50
Total loans	151,011		129,912		16		151,011		129,912		16
Equity	80,000		80,000		—		80,000		80,000		—
Selected balance sheet data (average)
Assets	$	1,167,807	$	1,000,517	17		$	1,125,314	$	984,165	14
Trading assets-debt and equity instruments	450,507		421,775		7		438,911		401,656		9
Trading assets-derivative receivables	76,710		48,815		57		65,922		49,707		33
Loans:
Loans retained(a)	$	154,038	$	124,194	24		$	141,438	$	125,585	13
Loans held-for-sale and loans at fair value	8,399		7,763		8		9,108		8,186		11
Total loans	$	162,437	$	131,957	23		$	150,546	$	133,771	13
Equity	80,000		80,000		—		80,000		80,000		—
Headcount	60,950		59,111		3	%	60,950		59,111		3	%

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. Prior-period amounts have been revised to conform with the current presentation, including an increase to period-end assets and headcount of $13.9 billion and 4,152, respectively, as of June 30, 2019.

(a) Loans retained includes credit portfolio loans, loans held by consolidated Firm-administered multi-seller conduits, trade finance loans, other held-for-investment loans and overdrafts.

33

Selected metrics
	As of or for the three months ended June 30,								As of or for the six months ended June 30,
(in millions, except ratios)	2020			2019			Change		2020			2019			Change
Credit data and quality statistics
Net charge-offs/(recoveries)	$	204		$	72		183	%	$	259		$	102		154	%
Nonperforming assets:
Nonaccrual loans:
Nonaccrual loans retained(a)	$	1,195		$	569		110	%	$	1,195		$	569		110
Nonaccrual loans held-for-sale and loans at fair value	250			370			(32	)	250			370			(32	)
Total nonaccrual loans	1,445			939			54		1,445			939			54
Derivative receivables	108			39			177		108			39			177
Assets acquired in loan satisfactions	35			58			(40	)	35			58			(40	)
Total nonperforming assets	$	1,588		$	1,036		53		$	1,588		$	1,036		53
Allowance for credit losses:
Allowance for loan losses	$	3,440		$	1,131		204		$	3,440		$	1,131		204
Allowance for lending-related commitments	1,233			807			53		1,233			807			53
Total allowance for credit losses	$	4,673		$	1,938		141	%	$	4,673		$	1,938		141	%
Net charge-off/(recovery) rate(b)	0.53		%	0.23		%			0.37		%	0.16		%
Allowance for loan losses to period-end loans retained	2.44			0.92					2.44			0.92
Allowance for loan losses to period-end loans retained, excluding trade finance and conduits(c)	3.27			1.27					3.27			1.27
Allowance for loan losses to nonaccrual loans retained(a)	288			199					288			199
Nonaccrual loans to total period-end loans	0.96		%	0.72		%			0.96		%	0.72		%

(a) Allowance for loan losses of $340 million and $147 million were held against these nonaccrual loans at June 30, 2020 and 2019, respectively.

(b) Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.

(c) Management uses allowance for loan losses to period-end loans retained, excluding trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of CIB’s allowance coverage ratio.

Investment banking fees
	Three months ended June 30,					Six months ended June 30,
(in millions)	2020		2019		Change	2020		2019		Change
Advisory	$	602	$	525	15	$	1,105	$	1,169	(5	)%
Equity underwriting	977		505		93	1,308		770		70
Debt underwriting(a)	1,268		816		55	2,341		1,751		34
Total investment banking fees	$	2,847	$	1,846	54	$	4,754	$	3,690	29	%

(a) Represents long-term debt and loan syndications.

34

League table results – wallet share
	Three months ended June 30,						Six months ended June 30,						Full-year 2019
	2020			2019			2020			2019
	Rank		Share	Rank		Share	Rank		Share	Rank		Share	Rank		Share
Based on fees(a)
M&A(b)
Global	#	1	10.6	#	2	8.8	#	2	9.2	#	2	9.3	#	2	9.0	%
U.S.	4		8.8	2		8.8	2		8.8	2		9.5	2		9.3
Equity and equity-related(c)
Global	2		11.8	2		9.6	2		10.9	2		9.3	1		9.3
U.S.	2		13.2	2		11.4	2		12.9	2		11.7	2		13.2
Long-term debt(d)
Global	1		10.0	1		7.4	1		9.5	1		7.6	1		7.8
U.S.	1		13.4	1		11.4	1		12.9	1		11.6	1		12.0
Loan syndications
Global	1		8.7	1		9.0	1		9.9	1		11.1	1		10.1
U.S.	3		9.2	2		10.2	1		9.8	1		13.4	1		12.5
Global investment banking fees(e)	#	1	10.6	#	1	8.6	#	1	9.8	#	1	9.1	#	1	8.9	%

(a) Source: Dealogic as of July 1, 2020. Reflects the ranking of revenue wallet and market share.

(b) Global M&A excludes any withdrawn transactions. U.S. M&A revenue wallet represents wallet from client parents based in the U.S.

(c) Global equity and equity-related ranking includes rights offerings and Chinese A-Shares.

(d) Long-term debt rankings include investment-grade, high-yield, supranationals, sovereigns, agencies, covered bonds, ABS and mortgage-backed securities (“MBS”); and exclude money market, short-term debt, and U.S. municipal securities.

(e) Global investment banking fees exclude money market, short-term debt and shelf deals.

35

Markets revenue

The following table summarizes select income statement data for the Markets businesses. Markets includes both Fixed Income Markets and Equity Markets. Markets revenue comprises principal transactions, fees, commissions and other income, as well as net interest income. The Firm assesses its Markets business performance on a total revenue basis, as offsets may occur across revenue line items. For example, securities that generate net interest income may be risk-managed by derivatives that are

recorded in principal transactions revenue. Refer to Notes 6 and 7 for a description of the composition of these income statement line items. Refer to Markets revenue on page 69 of JPMorgan Chase’s 2019 Form 10-K for further information.

For the periods presented below, the predominant source of principal transactions revenue was the amount recognized upon executing new transactions.

	Three months ended June 30,							Three months ended June 30,
	2020							2019
(in millions)	Fixed Income Markets		Equity Markets			Total Markets		Fixed Income Markets		Equity Markets			Total Markets
Principal transactions	$	4,651	$	1,737		$	6,388	$	2,431	$	1,608		$	4,039
Lending- and deposit-related fees	48		2			50		49		2			51
Asset management, administration and commissions	93		497			590		97		453			550
All other income	176		(22		)	154		173		(19		)	154
Noninterest revenue	4,968		2,214			7,182		2,750		2,044			4,794
Net interest income	2,370		166			2,536		940		(316		)	624
Total net revenue	$	7,338	$	2,380		$	9,718	$	3,690	$	1,728		$	5,418
	Six months ended June 30,							Six months ended June 30,
	2020							2019
(in millions)	Fixed Income Markets		Equity Markets			Total Markets		Fixed Income Markets		Equity Markets			Total Markets
Principal transactions	$	7,794	$	3,460		$	11,254	$	4,913	$	3,165		$	8,078
Lending- and deposit-related fees	95		4			99		98		4			102
Asset management, administration and commissions	204		1,105			1,309		200		887			1,087
All other income	177		(23		)	154		392		(23		)	369
Noninterest revenue	8,270		4,546			12,816		5,603		4,033			9,636
Net interest income	4,061		71			4,132		1,812		(564		)	1,248
Total net revenue	$	12,331	$	4,617		$	16,948	$	7,415	$	3,469		$	10,884

CIB Markets had one loss day in the second quarter of 2020 and three loss days for the six months ended June 30, 2020. Loss days represent the number of days for which CIB Markets, which consists of Fixed Income Markets and Equity Markets, posted losses to total net revenue. The loss days determined under this measure differ from the measure used to determine backtesting gains and losses. Daily backtesting gains and losses include positions in the Firm’s Risk Management value-at-risk (“VaR”) measure and exclude select components of total net revenue, which may more than offset backtesting gains or losses on a particular day. For more information on daily backtesting gains and losses, refer to the VaR discussion on pages 80-82

Selected metrics
	As of or for the three months ended June 30,						As of or for the six months ended June 30,
(in millions, except where otherwise noted)	2020		2019		Change		2020		2019		Change
Assets under custody (“AUC”) by asset class (period-end) (in billions):
Fixed Income	$	15,023	$	13,056	15	%	$	15,023	$	13,056	15	%
Equity	9,288		9,352		(1	)	9,288		9,352		(1	)
Other(a)	3,136		3,042		3		3,136		3,042		3
Total AUC	$	27,447	$	25,450	8		$	27,447	$	25,450	8
Merchant processing volume (in billions)(b)	$	371.9	$	371.6	—		$	746.7	$	728.1	3
Client deposits and other third-party liabilities (average)(c)	$	607,902	$	458,237	33	%	$	561,183	$	451,185	24	%

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. Prior-period amounts have been revised to conform with the current presentation.

(a) Consists of mutual funds, unit investment trusts, currencies, annuities, insurance contracts, options and other contracts.

(b) Represents total merchant processing volume across CIB, CCB and CB.

(c) Client deposits and other third-party liabilities pertain to the Wholesale Payments and Securities Services businesses.

36

International metrics
	As of or for the three months ended June 30,						As of or for the six months ended June 30,
(in millions, except where  otherwise noted)	2020		2019(c)		Change		2020		2019(c)		Change
Total net revenue(a)
Europe/Middle East/Africa	$	4,976	$	2,898	72	%	$	7,566	$	6,078	24	%
Asia-Pacific	2,196		1,276		72		3,972		2,683		48
Latin America/Caribbean	587		379		55		1,094		785		39
Total international net revenue	7,759		4,553		70		12,632		9,546		32
North America	8,593		5,278		63		13,668		10,319		32
Total net revenue	$	16,352	$	9,831	66		$	26,300	$	19,865	32
Loans retained (period-end)(a)
Europe/Middle East/Africa	$	28,973	$	27,843	4		$	28,973	$	27,843	4
Asia-Pacific	13,644		15,302		(11	)	13,644		15,302		(11	)
Latin America/Caribbean	8,190		7,090		16		8,190		7,090		16
Total international loans	50,807		50,235		1		50,807		50,235		1
North America	89,963		72,839		24		89,963		72,839		24
Total loans retained	$	140,770	$	123,074	14		$	140,770	$	123,074	14
Client deposits and other third-party liabilities (average)(b)
Europe/Middle East/Africa	$	216,211	$	175,189	23		$	203,594	$	169,694	20
Asia-Pacific	125,839		86,889		45		114,816		85,990		34
Latin America/Caribbean	36,339		28,860		26		33,598		28,175		19
Total international	$	378,389	$	290,938	30		$	352,008	$	283,859	24
North America	229,513		167,299		37		209,175		167,326		25
Total client deposits and other third-party liabilities	$	607,902	$	458,237	33		$	561,183	$	451,185	24
AUC (period-end)(b) (in billions)
North America	$	17,734	$	15,875	12		$	17,734	$	15,875	12
All other regions	9,713		9,575		1		9,713		9,575		1
Total AUC	$	27,447	$	25,450	8	%	$	27,447	$	25,450	8	%

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. Prior-period amounts have been revised to conform with the current presentation.

(a) Total net revenue and loans retained (excluding loans held-for-sale and loans at fair value) are based on the location of the trading desk, booking location, or domicile of the client, as applicable.

(b) Client deposits and other third-party liabilities pertaining to the Wholesale Payments and Securities Services businesses, and AUC, are based on the domicile of the client.

(c) Prior-period amounts have been revised to conform with the current presentation.

37

COMMERCIAL BANKING

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

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

Corporate Client Banking covers large corporations.

Commercial Real Estate Banking covers investors, developers, and owners of multifamily, office, retail, industrial and affordable housing properties.

Refer to Line of Business Metrics on page 198 for a discussion of the business profile of CB.

Selected income statement data
	Three months ended June 30,							Six months ended June 30,
(in millions)	2020			2019		Change		2020			2019		Change
Revenue
Lending- and deposit-related fees(a)	$	297		$	224	33	%	$	558		$	457	22	%
All other income(a)	518			399		30		878			899		(2	)
Noninterest revenue	815			623		31		1,436			1,356		6
Net interest income	1,577			1,662		(5	)	3,134			3,342		(6	)
Total net revenue(b)	2,392			2,285		5		4,570			4,698		(3	)
Provision for credit losses	2,431			29		NM		3,441			119		NM
Noninterest expense
Compensation expense	430			438		(2	)	902			887		2
Noncompensation expense	469			493		(5	)	985			982		—
Total noninterest expense	899			931		(3	)	1,887			1,869		1
Income/(loss) before income tax expense/(benefit)	(938		)	1,325		NM		(758		)	2,710		NM
Income tax expense/(benefit)	(247		)	323		NM		(214		)	648		NM
Net income/(loss)	$	(691	)	$	1,002	NM		$	(544	)	$	2,062	NM

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB and the revenue and expense of the business is reported across CCB, CIB and CB based primarily on client relationship. In conjunction with this realignment, treasury services product revenue has been renamed wholesale payments. Prior-period revenue and expense amounts have been revised to conform with the current presentation.

(a) In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions (which are included in all other income) to lending- and deposit-related fees. Prior-period amounts have been revised to conform with the current presentation.

(b) Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities and in entities established for rehabilitation of historic properties, as well as tax-exempt income related to municipal financing activities of $80 million and $100 million for the three months ended June 30, 2020 and 2019, respectively, and $161 million and $194 million for the six months ended June 30, 2020 and 2019, respectively.

Quarterly results

Net loss was $691 million, driven by an increase in the provision for credit losses.

Net revenue was $2.4 billion, up 5%. Net interest income was $1.6 billion, down 5%, driven by lower deposit margin, largely offset by higher deposit and loan balances. Noninterest revenue was $815 million, up 31%, driven by a gain on a strategic investment, higher deposit related fees, and investment banking revenue, partially offset by lower card income predominantly due to lower volumes as a result of the COVID-19 pandemic.

Noninterest expense was $899 million, down 3%, driven by lower structural expense.

The provision for credit losses was $2.4 billion, compared with $29 million in the prior year. The increase was driven by net additions to the allowance for credit losses as a result of the impact of the COVID-19 pandemic across multiple industry sectors.

Year-to-date results

Net loss was $544 million, driven by an increase in the provision for credit losses.

Net revenue was $4.6 billion, down 3%. Net interest income was $3.1 billion, down 6%, driven by lower deposit margin largely offset by higher deposit and loan balances. Noninterest revenue was $1.4 billion, up 6%, driven by higher deposit related fees and a gain on a strategic investment, largely offset by lower card income primarily

38

due to lower volumes as a result of the COVID-19 pandemic and a $57 million mark down of a held-for-sale position.

Noninterest expense was $1.9 billion, relatively flat, driven by investments in the business largely offset by lower structural expense.

The provision for credit losses was $3.4 billion, compared with $119 million in the prior year. The increase was driven by net additions to the allowance for credit losses as a result of the impact of the COVID-19 pandemic across multiple industry sectors.

Refer to Credit and Investment Risk Management on pages 60-79 and Allowance for Credit Losses on pages 77-78 for further discussions of the credit portfolios and the allowance for credit losses.

CB product revenue consists of the following:

Lending includes a variety of financing alternatives, which are primarily provided on a secured basis; collateral includes receivables, inventory, equipment, real estate or other assets. Products include term loans, revolving lines of credit, bridge financing, asset-based structures, leases, and standby letters of credit.

Wholesale payments includes revenue from a broad range of products and services that enable CB clients to manage payments and receipts, as well as invest and manage funds.

Investment banking includes revenue from a range of products providing CB clients with sophisticated capital-raising alternatives, as well as balance sheet and risk management tools through advisory, equity underwriting, and loan syndications. Revenue from Fixed Income and Equity Markets products used by CB clients is also included.

Other product revenue primarily includes tax-equivalent adjustments generated from Community Development Banking activities and certain income derived from principal transactions.

Selected income statement data (continued)
	Three months ended June 30,								Six months ended June 30,
(in millions, except ratios)	2020			2019			Change		2020			2019			Change
Revenue by product
Lending	$	1,127		$	1,012		11	%	$	2,081		$	2,024		3	%
Wholesale payments	917			1,063			(14	)	1,908			2,167			(12	)
Investment banking(a)	256			193			33		491			482			2
Other	92			17			441		90			25			260
Total Commercial Banking net revenue	$	2,392		$	2,285		5		$	4,570		$	4,698		(3	)
Investment banking revenue, gross(b)	$	851		$	592		44		$	1,537		$	1,410		9
Revenue by client segments
Middle Market Banking	$	866		$	961		(10	)	$	1,812		$	1,935		(6	)
Corporate Client Banking	859			744			15		1,540			1,595			(3	)
Commercial Real Estate Banking	566			538			5		1,107			1,085			2
Other	101			42			140		111			83			34
Total Commercial Banking net revenue	$	2,392		$	2,285		5	%	$	4,570		$	4,698		(3	)%
Financial ratios
Return on equity	(14		)%	17		%			(6		)%	18		%
Overhead ratio	38			41					41			40

In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB and the revenue and expense of the business is reported across CCB, CIB and CB based primarily on client relationship. In conjunction with this realignment, treasury services product revenue has been renamed wholesale payments. Prior-period revenue and expense amounts have been revised to conform with the current presentation.

(a) Includes CB’s share of revenue from investment banking products sold to CB clients through the CIB.

(b) Refer to Business Segment Results on page 24 for discussion of revenue sharing.

39

Selected metrics
	As of or for the three months ended June 30,							As of or for the six months ended June 30,
(in millions, except headcount)	2020			2019		Change		2020			2019		Change
Selected balance sheet data (period-end)
Total assets	$	234,934		$	220,712	6	%	$	234,934		$	220,712	6	%
Loans:
Loans retained	223,192			208,323		7		223,192			208,323		7
Loans held-for-sale and loans at fair value	917			1,284		(29	)	917			1,284		(29	)
Total loans	$	224,109		$	209,607	7		$	224,109		$	209,607	7
Equity	22,000			22,000		—		22,000			22,000		—
Period-end loans by client segment
Middle Market Banking	$	64,211	(a)	$	56,346	14		$	64,211	(a)	$	56,346	14
Corporate Client Banking	56,182			51,500		9		56,182			51,500		9
Commercial Real Estate Banking	103,117			100,751		2		103,117			100,751		2
Other	599			1,010		(41	)	599			1,010		(41	)
Total Commercial Banking loans	$	224,109	(a)	$	209,607	7		$	224,109	(a)	$	209,607	7
Selected balance sheet data (average)
Total assets	$	247,512		$	218,760	13		$	236,792		$	218,530	8
Loans:
Loans retained	233,044			206,771		13		221,516			205,623		8
Loans held-for-sale and loans at fair value	502			701		(28	)	1,167			1,165		—
Total loans	$	233,546		$	207,472	13		$	222,683		$	206,788	8
Average loans by client segment
Middle Market Banking	$	66,279		$	57,155	16		$	61,162		$	56,940	7
Corporate Client Banking	63,308			48,656		30		58,170			48,400		20
Commercial Real Estate Banking	103,516			100,671		3		102,521			100,469		2
Other	443			990		(55	)	830			979		(15	)
Total Commercial Banking loans	$	233,546		$	207,472	13		$	222,683		$	206,788	8
Client deposits and other third-party liabilities	$	236,968		$	168,247	41		$	212,888		$	167,756	27
Equity	22,000			22,000		—		22,000			22,000		—
Headcount	11,802			11,248		5	%	11,802			11,248		5	%

(a) At June 30, 2020, total loans included $6.5 billion of loans under the PPP, of which $6.3 billion were in Middle Market Banking. Refer to Credit Portfolio on pages 60-61 for a further discussion of the PPP.

40

Selected metrics (continued)
	As of or for the three months ended June 30,								As of or for the six months ended June 30,
(in millions, except ratios)	2020			2019			Change		2020			2019			Change
Credit data and quality statistics
Net charge-offs/(recoveries)	$	79		$	15		427	%	$	179		$	26		NM
Nonperforming assets
Nonaccrual loans:
Nonaccrual loans retained(a)	$	1,377		$	614		124	%	$	1,377		$	614		124	%
Nonaccrual loans held-for-sale and loans at fair value	—			—			—		—			—			—
Total nonaccrual loans	$	1,377		$	614		124		$	1,377		$	614		124
Assets acquired in loan satisfactions	24			20			20		24			20			20
Total nonperforming assets	$	1,401		$	634		121		$	1,401		$	634		121
Allowance for credit losses:
Allowance for loan losses	$	4,830		$	2,756		75		$	4,830		$	2,756		75
Allowance for lending-related commitments	707			274			158		707			274			158
Total allowance for credit losses	$	5,537		$	3,030		83	%	$	5,537		$	3,030		83	%
Net charge-off/(recovery) rate(b)	0.14		%	0.03		%			0.16		%	0.03		%
Allowance for loan losses to period-end loans retained	2.16			1.32					2.16			1.32
Allowance for loan losses to nonaccrual loans retained(a)	351			449					351			449
Nonaccrual loans to period-end total loans	0.61			0.29					0.61			0.29

(a) Allowance for loan losses of $287 million and $125 million was held against nonaccrual loans retained at June 30, 2020 and 2019, respectively.

(b) Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.

41

ASSET & WEALTH MANAGEMENT

Refer to pages 74–76 of JPMorgan Chase’s 2019 Form 10-K and Line of Business Metrics on pages 198-199 for a discussion of the business profile of AWM.

Selected income statement data
(in millions, except ratios)	Three months ended June 30,								Six months ended June 30,
	2020			2019			Change		2020			2019			Change
Revenue
Asset management, administration and commissions	$	2,589		$	2,568		1	%	$	5,295		$	4,984		6	%
All other income	131			115			14		134			292			(54	)
Noninterest revenue	2,720			2,683			1		5,429			5,276			3
Net interest income	890			876			2		1,787			1,772			1
Total net revenue	3,610			3,559			1		7,216			7,048			2
Provision for credit losses	223			2			NM		317			4			NM
Noninterest expense
Compensation expense	1,315			1,406			(6	)	2,726			2,868			(5	)
Noncompensation expense	1,191			1,190			—		2,439			2,375			3
Total noninterest expense	2,506			2,596			(3	)	5,165			5,243			(1	)
Income before income tax expense	881			961			(8	)	1,734			1,801			(4	)
Income tax expense	223			242			(8	)	412			421			(2	)
Net income	$	658		$	719		(8	)	$	1,322		$	1,380		(4	)
Revenue by line of business
Asset Management	$	1,780		$	1,785		—		$	3,520		$	3,546		(1	)
Wealth Management	1,830			1,774			3		3,696			3,502			6
Total net revenue	$	3,610		$	3,559		1	%	$	7,216		$	7,048		2	%
Financial ratios
Return on equity	24		%	27		%			24		%	26		%
Overhead ratio	69			73					72			74
Pre-tax margin ratio:
Asset Management	30			25					26			24
Wealth Management	19			29					22			27
Asset & Wealth Management	24			27					24			26

Quarterly results

Net income was $658 million, down 8%.

Net revenue was $3.6 billion, up 1%. Net interest income was $890 million, up 2%, reflecting higher deposit and loan balances, offset by deposit margin compression. Noninterest revenue was $2.7 billion, up 1%, as a result of increased brokerage commissions on higher client-driven volume partially offset by lower asset management fees as a shift in the mix toward lower yield products was predominantly offset by strong net inflows into liquidity products over the past year.

Revenue from Asset Management of $1.8 billion, was flat versus the prior year.

Revenue from Wealth Management was $1.8 billion, up 3%, driven by higher deposit and loan balances, as well as increased brokerage commissions on higher client-driven volume, largely offset by deposit margin compression.

Noninterest expense of $2.5 billion was down 3%, as lower structural as well as volume-and revenue-related expense, were partially offset by higher investments.

The provision for credit losses was $223 million, driven by additions to the allowance for credit losses predominantly as a result of the impact of the COVID-19 pandemic.

Refer to Credit and Investment Risk Management on pages 60-79 and Allowance for Credit Losses on pages 77-78 for further discussions of the credit portfolios and the allowance for credit losses.

Year-to-date results

Net income was $1.3 billion, a decrease of 4%.

Net revenue was $7.2 billion, an increase of 2%. Net interest income was $1.8 billion, up 1%, reflecting higher deposit and loan balances, offset by deposit margin compression. Noninterest revenue was $5.4 billion, up 3%, driven by increased brokerage commissions on higher client-driven volume, and higher asset management fees as a result of net inflows into liquidity products partially offset by net valuation losses on certain investments, compared with gains in the prior year.

42

Revenue from Asset Management was $3.5 billion, down 1%, driven by net valuation losses on certain investments, compared with gains in the prior year, predominantly offset by higher asset management fees as a result of net inflows into liquidity products.

Revenue from Wealth Management was $3.7 billion, up 6%, largely driven by higher deposit and loan balances as well as increased brokerage commissions on higher client-driven volume, largely offset by deposit margin compression.

Noninterest expense was $5.2 billion, a decrease of 1%, as lower structural as well as volume-and revenue-related expense, were largely offset by higher investments.

The provision for credit losses was $317 million, driven by additions to the allowance for credit losses predominantly as a result of the impact of the COVID-19 pandemic.

Selected metrics
	As of or for the three months ended June 30,								As of or for the six months ended June 30,
(in millions, except ranking data, headcount and ratios)	2020			2019			Change		2020			2019			Change
% of JPM mutual fund assets rated as 4- or 5-star(a)	54		%	63		%			54		%	63		%
% of JPM mutual fund assets ranked in 1st or 2nd quartile:(b)
1 year	54			78					54			78
3 years	69			75					69			75
5 years	72			82					72			82
Selected balance sheet data (period-end)(c)
Total assets	$	183,189		$	172,149		6	%	$	183,189		$	172,149		6	%
Loans	165,299			149,877			10		165,299			149,877			10
Deposits	169,537			136,225			24		169,537			136,225			24
Equity	10,500			10,500			—		10,500			10,500			—
Selected balance sheet data (average)(c)
Total assets	$	182,318		$	167,544		9		$	182,817		$	167,452		9
Loans	163,440			146,494			12		162,631			145,953			11
Deposits	168,573			140,317			20		159,602			139,282			15
Equity	10,500			10,500			—		10,500			10,500			—
Headcount(d)	22,949			23,683			(3	)	22,949			23,683			(3	)
Number of Wealth Management client advisors	2,869			2,735			5		2,869			2,735			5
Credit data and quality statistics(c)
Net charge-offs/(recoveries)	$	(2	)	$	(3	)	33		$	—		$	1		NM
Nonaccrual loans	775			127			NM		775			127			NM
Allowance for credit losses:
Allowance for loan losses	$	648		$	331		96		$	648		$	331		96
Allowance for lending-related commitments	28			17			65		28			17			65
Total allowance for credit losses	$	676		$	348		94	%	$	676		$	348		94	%
Net charge-off rate	—			(0.01		)%			—			—
Allowance for loan losses to period-end loans	0.39			0.22					0.39			0.22
Allowance for loan losses to nonaccrual loans	84			261					84			261
Nonaccrual loans to period-end loans	0.47			0.08					0.47			0.08

(a) Represents the Nomura “star rating” for Japan domiciled funds and Morningstar for all other domiciled funds. Includes only Asset Management retail open-ended mutual funds that have a rating. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds.

(b) Quartile ranking sourced from Lipper, Morningstar, Nomura and Fund Doctor based on country of domicile. Includes only Asset Management retail open-ended mutual funds that are ranked by the aforementioned sources. Excludes money market funds, Undiscovered Managers Fund, and Brazil domiciled funds.

(c) Loans, deposits and related credit data and quality statistics relate to the Wealth Management business.

(d) During the second quarter of 2020, certain technology and support functions, comprising approximately 850 staff, were transferred from AWM to CCB as part of the ongoing reorganization of the U.S. Wealth Management business.

43

Client assets

Client assets of $3.4 trillion and assets under management of $2.5 trillion were up 12% and 15%, respectively, driven by cumulative net inflows into liquidity and long term products as well as higher market levels.

Client assets
	As of June 30,
(in billions)	2020		2019		Change
Assets by asset class
Liquidity	$	707	$	481	47	%
Fixed income	629		543		16
Equity	457		441		4
Multi-asset and alternatives	718		713		1
Total assets under management	2,511		2,178		15
Custody/brokerage/administration/deposits	859		820		5
Total client assets	$	3,370	$	2,998	12
Memo:
Alternatives client assets (a)	$	188	$	177	6
Assets by client segment
Private Banking	$	677	$	617	10
Institutional	1,218		991		23
Retail	616		570		8
Total assets under management	$	2,511	$	2,178	15
Private Banking	$	1,500	$	1,410	6
Institutional	1,249		1,013		23
Retail	621		575		8
Total client assets	$	3,370	$	2,998	12	%

(a) Represents assets under management, as well as client balances in brokerage accounts

Client assets (continued)
	Three months ended June 30,					Six months ended June 30,
(in billions)	2020		2019			2020			2019
Assets under management rollforward
Beginning balance	$	2,239	$	2,096		$	2,364		$	1,987
Net asset flows:
Liquidity	95		4			170			(1		)
Fixed income	17		37			18			56
Equity	11		(1		)	10			(7		)
Multi-asset and alternatives	1		—			(1		)	(3		)
Market/performance/other impacts	148		42			(50		)	146
Ending balance, June 30	$	2,511	$	2,178		$	2,511		$	2,178
Client assets rollforward
Beginning balance	$	3,002	$	2,897		$	3,226		$	2,733
Net asset flows	138		52			223			61
Market/performance/other impacts	230		49			(79		)	204
Ending balance, June 30	$	3,370	$	2,998		$	3,370		$	2,998

44

International metrics
	Three months ended June 30,					Six months ended June 30,
(in millions)	2020		2019		Change	2020		2019		Change
Total net revenue (a)
Europe/Middle East/Africa	$	719	$	714	1	$	1,342	$	1,409	(5	)%
Asia-Pacific	378		376		1	778		740		5
Latin America/Caribbean	198		179		11	386		361		7
Total international net revenue	1,295		1,269		2	2,506		2,510		—
North America	2,315		2,290		1	4,710		4,538		4
Total net revenue(a)	$	3,610	$	3,559	1	$	7,216	$	7,048	2	%

(a) Regional revenue is based on the domicile of the client.

	As of June 30,						As of June 30,
(in billions)	2020		2019		Change		2020		2019		Change
Assets under management
Europe/Middle East/Africa	$	446	$	392	14	%	$	446	$	392	14	%
Asia-Pacific	205		183		12		205		183		12
Latin America/Caribbean	64		56		14		64		56		14
Total international assets under management	715		631		13		715		631		13
North America	1,796		1,547		16		1,796		1,547		16
Total assets under management	$	2,511	$	2,178	15		$	2,511	$	2,178	15
Client assets
Europe/Middle East/Africa	$	537	$	478	12		$	537	$	478	12
Asia-Pacific	286		257		11		286		257		11
Latin America/Caribbean	148		136		9		148		136		9
Total international client assets	971		871		11		971		871		11
North America	2,399		2,127		13		2,399		2,127		13
Total client assets	$	3,370	$	2,998	12	%	$	3,370	$	2,998	12	%

45

CORPORATE

Refer to pages 77–78 of JPMorgan Chase’s 2019 Form 10-K for a discussion of Corporate.

Selected income statement and balance sheet data
	As of or for the three months ended June 30,								As of or for the six months ended June 30,
(in millions, except headcount)	2020			2019			Change		2020			2019			Change
Revenue
Principal transactions	$	(2	)	$	(175	)	99	%	$	(115	)	$	(237	)	51	%
Investment securities gains	26			44			(41	)%	259			57			354	%
All other income	(91		)	6			NM		120			63			90
Noninterest revenue	(67		)	(125		)	46	%	264			(117		)	NM
Net interest income	(687		)	447			NM		(852		)	864			NM
Total net revenue(a)	(754		)	322			NM		(588		)	747			NM
Provision for credit losses	4			(2		)	NM		12			—			NM
Noninterest expense(b)	147			232			(37	)%	293			443			(34	)
Income/(loss) before income tax expense/(benefit)	(905		)	92			NM		(893		)	304			NM
Income tax expense/(benefit)	(337		)	(736		)	54		(200		)	(775		)	74	%
Net income/(loss)	$	(568	)	$	828		NM		$	(693	)	$	1,079		NM
Total net revenue
Treasury and CIO	$	(671	)	$	618		NM		$	(502	)	$	1,129		NM
Other Corporate	(83		)	(296		)	72		(86		)	(382		)	77
Total net revenue	$	(754	)	$	322		NM		$	(588	)	$	747		NM
Net income/(loss)
Treasury and CIO	$	(550	)	$	462		NM		$	(467	)	$	796		NM
Other Corporate	(18		)	366			NM		(226		)	283			NM
Total net income/(loss)	$	(568	)	$	828		NM		$	(693	)	$	1,079		NM
Total assets (period-end)	$	1,221,980		$	821,330		49		$	1,221,980		$	821,330		49
Loans (period-end)	1,670			1,695			(1	)	1,670			1,695			(1	)
Headcount	38,920			37,361			4	%	38,920			37,361			4	%

(a) Included tax-equivalent adjustments, driven by tax-exempt income from municipal bonds, of $63 million and $81 million for the three months ended June 30, 2020 and 2019, respectively, and $124 million and $167 million for the six months ended June 30, 2020 and 2019, respectively.

(b) Included a net legal benefit of $(12) million and $(67) million for the three months ended June 30, 2020 and 2019, respectively, and $(32) million and $(157) million for the six months ended June 30, 2020 and 2019, respectively.

Quarterly results

Net loss was $568 million compared with net income of $828 million in the prior year.

Net revenue was a loss of $754 million, down $1.1 billion, driven by lower net interest income on lower rates. The current quarter also included small net gains on certain legacy private equity investments compared to losses in the prior year.

Noninterest expense of $147 million was down $85 million due to lower structural expense, partially offset by a lower net legal benefit compared to the prior year.

The current period income tax benefit was predominantly driven by the change in the level and mix of income and expenses subject to U.S. federal, and state and local taxes. The prior period included tax benefits of $742 million related to the resolution of certain tax audits.

Year-to-date results

Net loss was $693 million compared with net income of $1.1 billion in the prior year.

Net revenue was a loss of $588 million, compared with $747 million in the prior year. The decrease was driven by lower net interest income on lower rates, partially offset by higher noninterest revenue primarily due to higher net investment securities gains reflecting the impact of repositioning the investment securities portfolio.

Noninterest expense of $293 million was down $150 million due to lower structural expense, partially offset by a lower net legal benefit compared to the prior year.

The current period income tax benefit was driven by the change in the level and mix of income and expenses subject to U.S. federal, and state and local taxes as well as other tax adjustments, partially offset by the impact of the Firm’s estimated full-year expected tax rate relative to the level of year-to-date pretax income. The prior period included tax benefits of $825 million related to the resolution of certain tax audits.

46

Treasury and CIO overview

At June 30, 2020, the average credit rating of the Treasury and CIO investment securities comprising the portfolio in the table below was AA+ (based upon external ratings where available and, where not available, based primarily upon internal risk ratings). Refer to Note 10 for further information on the Firm’s investment securities portfolio and internal risk ratings.

Refer to Liquidity Risk Management on pages 55-59 for further information on liquidity and funding risk. Refer to Market Risk Management on pages 80-84 for information on interest rate, foreign exchange and other risks.

Selected income statement and balance sheet data
	As of or for the three months ended June 30,						As of or for the six months ended June 30,
(in millions)	2020		2019		Change		2020		2019		Change
Investment securities gains	$	26	$	44	(41	)%	$	259	$	57	354
Available-for-sale securities (average)	$	426,470	$	248,612	72	%	$	399,712	$	237,669	68
Held-to-maturity securities (average)	71,713		30,929		132		59,193		31,005		91
Investment securities portfolio (average)	$	498,183	$	279,541	78		$	458,905	$	268,674	71
Available-for-sale securities (period-end)	$	483,752	$	274,533	76		$	483,752	$	274,533	76
Held-to-maturity securities, net of allowance for credit losses (period-end)(a)(b)	72,908		30,907		136		72,908		30,907		136
Investment securities portfolio, net of allowance for credit losses (period-end)(a)	$	556,660	$	305,440	82	%	$	556,660	$	305,440	82

(a) At June 30, 2020, the allowance for credit losses on HTM securities was $23 million.

(b) During the first quarter of 2020, the Firm transferred $26.1 billion of U.S. GSE and government agency MBS from AFS to HTM for capital management purposes.

Refer to Note 10 for further information.

47

FIRMWIDE RISK MANAGEMENT

Risk is an inherent part of JPMorgan Chase’s business activities. When the Firm extends a consumer or wholesale loan, advises customers and clients on their investment decisions, makes markets in securities, or offers other products or services, the Firm takes on some degree of risk. The Firm’s overall objective is to manage its businesses, and the associated risks, in a manner that balances serving the interests of its clients, customers and investors and protects the safety and soundness of the Firm.

The Firm believes that effective risk management requires, among other things:

• Acceptance of responsibility, including identification and escalation of risk issues, by all individuals within the Firm;

• Ownership of risk identification, assessment, data and management within each of the LOBs and Corporate; and

• Firmwide structures for risk governance.

The Firm strives for continual improvement in its efforts to enhance controls, ongoing employee training and development, talent retention, and other measures. The Firm follows a disciplined and balanced compensation framework with strong internal governance and independent oversight by the Board of Directors (the “Board”). The impact of risk and control issues is carefully considered in the Firm’s performance evaluation and incentive compensation processes.

Risk governance and oversight framework

The Firm’s risk management governance and oversight framework involves understanding drivers of risks, types of risks, and impacts of risks.

Refer to pages 79-83 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of Firmwide risk management governance and oversight.

Risk governance and oversight functions

The following sections of this Form 10-Q and the 2019 Form 10-K discuss the risk governance and oversight functions in place to manage the risks inherent in the Firm’s business activities.

Risk governance and oversight functions	Form 10-Q page reference	Form 10-K page reference
Strategic risk		84
Capital risk	49–54	85–92
Liquidity risk	55–59	93–98
Reputation risk		99
Consumer credit risk	62-66	103–107
Wholesale credit risk	67-76	108–115
Investment portfolio risk	79	118
Market risk	80-84	119–126
Country risk	85	127–128
Operational risk	86	129–135
Compliance risk		132
Conduct risk		133
Legal risk		134
Estimations and Model risk	87	135

48

CAPITAL RISK MANAGEMENT

Capital risk is the risk the Firm has an insufficient level or composition of capital to support the Firm’s business activities and associated risks during normal economic environments and under stressed conditions.

Refer to pages 85–92 of JPMorgan Chase’s 2019 Form

10-K, Note 22 of this Form 10-Q and the Firm’s Pillar 3 Regulatory Capital Disclosures reports, which are available on the Firm’s website, for further discussion of the Firm’s Capital Risk Management, including capital planning and stress testing.

COVID-19 Pandemic

The Firm has been impacted by recent market events as a result of the COVID-19 pandemic, but remains well-capitalized. However, the continuation or further deterioration of the current macroeconomic environment could result in impacts to the Firm’s capital and leverage position.

Basel III Overview

The capital rules under Basel III establish minimum capital ratios and overall capital adequacy standards for large and internationally active U.S. bank holding companies (“BHC”) and banks, including the Firm and its insured depository institution (“IDI”) subsidiaries, including JPMorgan Chase Bank, N.A. The minimum amount of regulatory capital that must be held by BHCs and banks is determined by calculating risk-weighted assets (“RWA”), which are on-balance sheet assets and off-balance sheet exposures, weighted according to risk. Two comprehensive approaches are prescribed for calculating RWA: a standardized approach (“Basel III Standardized”), and an advanced approach (“Basel III Advanced”). For each of the risk-based capital ratios, the capital adequacy of the Firm is evaluated against the lower of the Standardized or Advanced approaches.

The Firm’s Basel III Standardized-risk-based ratios are currently more binding than the Basel III Advanced-risk-based ratios.

Basel III also includes a requirement for Advanced Approach banking organizations, including the Firm, to calculate the SLR. Refer to SLR on page 90 of JPMorgan Chase’s 2019 Form 10-K for additional information.

Key Regulatory Developments

Current Expected Credit Losses. As disclosed in the Firm’s 2019 Form 10-K, the Firm initially elected to phase-in the January 1, 2020 (“day 1”) CECL adoption impact to retained earnings of $2.7 billion to CET1 capital, at 25% per year in each of 2020 to 2023. As part of their response to the impact of the COVID-19 pandemic, on March 31, 2020, the federal banking agencies issued an interim final rule that provided the option to delay the effects of CECL on regulatory capital for two years, followed by a three-year transition period (“CECL capital transition provisions”).

The interim final rule provides a uniform approach for estimating the effects of CECL compared to the legacy incurred loss model during the first two years of the transition period (the “day 2” transition amount), whereby the Firm may exclude from CET1 capital 25% of the change in the allowance for credit losses (excluding allowances on PCD loans). The cumulative day 2 transition amount as at December 31, 2021 that is not recognized in CET1 capital as well as the $2.7 billion day 1 impact, will be phased into CET1 capital at 25% per year beginning January 1, 2022. The Firm has elected to apply the CECL capital transition provisions, and accordingly, for the period ended June 30, 2020, the capital metrics of the Firm exclude $6.5 billion, which is the $2.7 billion day 1 impact to retained earnings and 25% of the $15.7 billion increase in the allowance for credit losses (excluding allowances on PCD loans).

The impacts of the CECL capital transition provisions on Tier 2 capital, adjusted average assets, and total leverage exposure have also been incorporated into the Firm’s capital metrics. Refer to Note 1 for further information on the CECL accounting guidance.

Money Market Mutual Fund Liquidity Facility. On March 18, 2020, the Federal Reserve established the MMLF facility, authorized through September 30, 2020, to enhance the liquidity and functioning of money markets. On July 28, 2020, the Federal Reserve announced that it was extending the MMLF through December 31, 2020. Under the MMLF, the FRBB makes nonrecourse advances to participating financial institutions to purchase certain types of assets from eligible money market mutual fund clients. These assets, which are reflected in other assets on the Firm’s Consolidated balance sheets, are pledged to the FRBB as collateral. On March 23, 2020, the federal banking agencies issued an interim final rule to neutralize the effects of purchasing assets through the program on risk-based and leverage-based capital ratios. As of June 30, 2020, the Firm excluded assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF in the amount of $3.8 billion from its RWA and $7.8 billion from adjusted average assets and total leverage exposure.

Supplementary leverage ratio temporary revision. On April 1, 2020, the Federal Reserve issued an interim final rule that requires, on a temporary basis, the calculation of total leverage exposure for purposes of calculating the SLR for bank holding companies, to exclude the on-balance sheet amounts of U.S. Treasury securities and deposits at Federal Reserve Banks. These exclusions became effective April 1, 2020, and will remain in effect through March 31, 2021.

On June 1, 2020, the Federal Reserve, OCC and FDIC issued an interim final rule that provides IDI subsidiaries with an option to apply this temporary exclusion subject to certain

49

restrictions. As of June 30, 2020, JPMorgan Chase Bank, N.A. has not elected to apply this exclusion.

Paycheck Protection Program. On April 13, 2020, the federal banking agencies issued an interim final rule to neutralize the regulatory capital effects of participating in the PPP on risk-based capital ratios by applying a zero percent risk weight to loans originated under the program. As of June 30, 2020, the Firm had approximately $28 billion of loans under the program.

The interim rule also provides that if the PPP loan is pledged as collateral for a non-recourse loan under the Federal Reserve’s Paycheck Protection Program Lending (“PPPL”) Facility, the PPP loans can be excluded from leverage-based capital ratios. As of June 30, 2020, the Firm had not participated in the PPPL Facility.

Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 11-12 for additional information on

regulatory actions and significant financing programs that the U.S. government and regulators have introduced to address the effects of the COVID-19 pandemic.

Stress Capital Buffer. On March 4, 2020, the Federal Reserve issued the final rule introducing the SCB framework for the Basel III Standardized approach that is designed to more closely integrate the results of the quantitative assessment in the annual CCAR with the ongoing minimum capital requirements for BHCs under the U.S. Basel III rules. The final rule replaces the static 2.5% CET1 capital conservation buffer in the Standardized approach with a dynamic institution-specific SCB. The final rule does not apply to the Advanced approach capital requirements. The SCB requirement for BHCs will be effective on October 1 of each year and is expected to remain in effect until September 30 of the following year.

The following tables present the Firm’s risk-based and leverage-based capital metrics under both the Basel III Standardized and Advanced Approaches. Refer to Capital Risk Management on pages 85–92 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of these capital metrics.

	June 30, 2020(c)(d)						December 31, 2019
(in millions, except ratios)	Standardized			Advanced			Standardized			Advanced			Minimum capital ratios(e)
Risk-based capital metrics:
CET1 capital	$	190,867		$	190,867		$	187,753		$	187,753
Tier 1 capital	220,674			220,674			214,432			214,432
Total capital	256,667			244,112			242,589			232,112
Risk-weighted assets	1,541,365			1,450,587			1,515,869			1,397,878
CET1 capital ratio	12.4		%	13.2		%	12.4		%	13.4		%	10.5	%
Tier 1 capital ratio	14.3			15.2			14.1			15.3			12.0
Total capital ratio	16.7			16.8			16.0			16.6			14.0
Leverage-based capital metrics:
Adjusted average assets(a)	$	3,176,729		$	3,176,729		$	2,730,239		$	2,730,239
Tier 1 leverage ratio	6.9		%	6.9		%	7.9		%	7.9		%	4.0	%
Total leverage exposure(b)	NA			$	3,228,424		NA			$	3,423,431
SLR(b)	NA			6.8		%	NA			6.3		%	5.0	%

(a) Adjusted average assets, for purposes of calculating the leverage ratios, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.

(b) As of June 30, 2020, total leverage exposure for purposes of calculating the SLR excludes U.S. Treasury securities and deposits at Federal Reserve Banks, as provided by the interim final rule issued by the Federal Reserve on April 1, 2020.

(c) As of June 30, 2020, the capital metrics reflect the CECL capital transition provisions.

(d) As of June 30, 2020, the capital metrics reflect the exclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF. Additionally, loans originated under the PPP receive a zero percent risk weight.

(e) Represents minimum requirements and regulatory buffers applicable to the Firm. Refer to Note 22 for additional information.

50

Capital components

The following table presents reconciliations of total stockholders’ equity to Basel III CET1 capital, Tier 1 capital and Total capital as of June 30, 2020 and December 31, 2019.

(in millions)	June 30, 2020			December 31, 2019
Total stockholders’ equity	$	264,466		$	261,330
Less: Preferred stock	30,063			26,993
Common stockholders’ equity	234,403			234,337
Add:
Certain deferred tax liabilities(a)	2,397			2,381
Less:
Goodwill	47,811			47,823
Other intangible assets	778			819
Other CET1 capital adjustments(b)	(2,656		)	323
Standardized/Advanced CET1 capital	190,867			187,753
Preferred stock	30,063			26,993
Less: Other Tier 1 adjustments	256			314
Standardized/Advanced Tier 1 capital	$	220,674		$	214,432
Long-term debt and other instruments qualifying as Tier 2 capital	$	17,894		$	13,733
Qualifying allowance for credit losses(c)	18,006			14,314
Other	93			110
Standardized Tier 2 capital	$	35,993		$	28,157
Standardized Total capital	$	256,667		$	242,589
Adjustment in qualifying allowance for credit losses for Advanced Tier 2 capital(d)	(12,555		)	(10,477		)
Advanced Tier 2 capital	$	23,438		$	17,680
Advanced Total capital	$	244,112		$	232,112

(a) Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating CET1 capital.

(b) As of June 30, 2020, the impact of the CECL capital transition provision was an increase in CET1 capital of $6.5 billion.

(c) Represents the allowance for credit losses eligible for inclusion in Tier 2 capital up to 1.25% of credit risk RWA, including the impact of the CECL capital transition provision with any excess deducted from RWA.

(d) Represents an adjustment to qualifying allowance for credit losses for the excess of eligible credit reserves over expected credit losses up to 0.6% of credit risk RWA, including the impact of the CECL capital transition provision with any excess deducted from RWA.

Capital rollforward

The following table presents the changes in Basel III CET1 capital, Tier 1 capital and Tier 2 capital for the six months ended June 30, 2020.

Six months ended June 30, (in millions)	2020
Standardized/Advanced CET1 capital at December 31, 2019	$	187,753
Net income applicable to common equity	6,730
Dividends declared on common stock	(5,559		)
Net purchase of treasury stock	(5,288		)
Changes in additional paid-in capital	(397		)
Changes related to AOCI	7,220
Adjustment related to AOCI(a)	(3,415		)
Changes related to other CET1 capital adjustments(b)	3,823
Change in Standardized/Advanced CET1 capital	3,114
Standardized/Advanced CET1 capital at June 30, 2020	$	190,867
Standardized/Advanced Tier 1 capital at December 31, 2019	$	214,432
Change in CET1 capital(b)	3,114
Net issuance of noncumulative perpetual preferred stock	3,070
Other	58
Change in Standardized/Advanced Tier 1 capital	6,242
Standardized/Advanced Tier 1 capital at June 30, 2020	$	220,674
Standardized Tier 2 capital at December 31, 2019	$	28,157
Change in long-term debt and other instruments qualifying as Tier 2	4,162
Change in qualifying allowance for credit losses(b)	3,692
Other	(18		)
Change in Standardized Tier 2 capital	7,836
Standardized Tier 2 capital at June 30, 2020	$	35,993
Standardized Total capital at June 30, 2020	$	256,667
Advanced Tier 2 capital at December 31, 2019	$	17,680
Change in long-term debt and other instruments qualifying as Tier 2	4,162
Change in qualifying allowance for credit losses(b)	1,614
Other	(18		)
Change in Advanced Tier 2 capital	5,758
Advanced Tier 2 capital at June 30, 2020	$	23,438
Advanced Total capital at June 30, 2020	$	244,112

(a) Includes cash flow hedges and DVA related to structured notes recorded in AOCI.

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

51

RWA rollforward

The following table presents changes in the components of RWA under Basel III Standardized and Advanced approaches for the six months ended June 30, 2020. The amounts in the rollforward categories are estimates, based on the predominant driver of the change.

	Standardized									Advanced
Six months ended June 30, 2020 (in millions)	Credit risk RWA			Market risk RWA			Total RWA			Credit risk RWA			Market risk RWA			Operational risk RWA			Total RWA
December 31, 2019	$	1,440,220		$	75,649		$	1,515,869		$	932,948		$	75,652		$	389,278		$	1,397,878
Model & data changes(a)	300			(15,200		)	(14,900		)	(6,300		)	(15,200		)	—			(21,500		)
Portfolio runoff(b)	(2,500		)	—			(2,500		)	(2,200		)	—			—			(2,200		)
Movement in portfolio levels(c)	(5,799		)	48,695			42,896			31,270			48,872			(3,733		)	76,409
Changes in RWA	(7,999		)	33,495			25,496			22,770			33,672			(3,733		)	52,709
June 30, 2020	$	1,432,221		$	109,144		$	1,541,365		$	955,718		$	109,324		$	385,545		$	1,450,587

(a) Model & data changes refer to material movements in levels of RWA as a result of revised methodologies and/or treatment per regulatory guidance (exclusive of rule changes).

(b) Portfolio runoff for credit risk RWA primarily reflects reduced risk from position rolloffs in legacy portfolios in Home Lending.

(c) Movement in portfolio levels (inclusive of rule changes) refers to: changes in book size, composition, credit quality, and market movements for credit risk RWA; changes in position and market movements for market risk RWA; updates to cumulative losses for operational risk RWA; and deductions to credit risk RWA for excess eligible credit reserves not eligible for inclusion in Tier 2 capital.

Supplementary leverage ratio

Refer to Supplementary Leverage Ratio on pages 87-88 of JPMorgan Chase’s 2019 Form 10-K for additional information.

The following table presents the components of the Firm’s SLR.

(in millions, except ratio)	June 30, 2020			December 31, 2019
Tier 1 capital	$	220,674		$	214,432
Total average assets	3,229,268			2,777,270
Less: Regulatory capital adjustments(a)	52,539			47,031
Total adjusted average assets(b)	3,176,729			2,730,239
Add: Off-balance sheet exposures(c)	670,606			693,192
Less: Exclusion for U.S Treasuries and Federal Reserve Bank deposits	618,911			—
Total leverage exposure	$	3,228,424		$	3,423,431
SLR	6.8		%	6.3		%

(a) For purposes of calculating the SLR, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets. As of June 30, 2020, includes adjustments for the CECL capital transition provisions and the exclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF.

(b) Adjusted average assets used for the calculation of Tier 1 leverage ratio.

(c) Off-balance sheet exposures are calculated as the average of the three month-end spot balances during the reporting quarter.

Refer to Note 22 for JPMorgan Chase Bank, N.A.’s SLR ratios.

Line of business equity

Each business segment is allocated capital by taking into consideration a variety of factors including capital levels of similarly rated peers and applicable regulatory capital requirements. Refer to line of business equity on page 90 of JPMorgan Chase’s 2019 Form 10-K for additional information on capital allocation.

The following table presents the capital allocated to each business segment:

(in billions)	June 30, 2020		December 31, 2019
Consumer & Community Banking	$	52.0	$	52.0
Corporate & Investment Bank	80.0		80.0
Commercial Banking	22.0		22.0
Asset & Wealth Management	10.5		10.5
Corporate	69.9		69.8
Total common stockholders’ equity	$	234.4	$	234.3

Planning and stress testing

Comprehensive Capital Analysis and Review

On June 29, 2020, the Firm announced that it had completed the 2020 CCAR stress test process. The Firm’s indicative SCB requirement is 3.3% and the Federal Reserve will provide the Firm with its final SCB requirement by August 31, 2020. The SCB requirement will become effective on October 1, 2020 and will remain in effect until September 30, 2021. The SCB will be integrated into the Firm’s ongoing Standardized risk-based capital requirements, increasing the minimum CET1 capital ratio to 11.3% (up from 10.5%).

The Federal Reserve has determined that changes in financial markets or the macroeconomic outlook due to the COVID-19 pandemic could have a material effect on a firm’s risk profile and financial condition and therefore is requiring all large bank holding companies, including the Firm, to update and resubmit their capital plans later this year.

Refer to Key Regulatory Developments on pages 49-50 of this Form 10-Q and capital planning and stress testing on pages 85-86 of JPMorgan Chase’s 2019 Form 10-K for additional information.

52

Capital actions

Preferred stock

Preferred stock dividends declared were $401 million and $822 million for the three and six months ended June 30, 2020.

During the three months ended June 30, 2020, the Firm did not issue or redeem any preferred stock. Refer to Note 18 of this Form 10-Q and Note 21 of JPMorgan Chase’s 2019 Form 10-K for additional information on the Firm’s preferred stock, including the issuance and redemption of preferred stock during the three months ended March 31, 2020.

Common stock dividends

The Firm’s quarterly common stock dividend is currently $0.90 per share. The Firm intends to maintain the quarterly common stock dividend for the third quarter of 2020 subject to the approval of the Board of Directors.

Common equity

On March 15, 2020, in response to the COVID-19 pandemic, the Firm temporarily suspended repurchases of its common equity. In June 2020, the Federal Reserve directed all large bank holding companies, including the Firm, to discontinue net share repurchases, at least through the end of the third quarter of 2020.

The following table sets forth the Firm’s repurchases of common equity for the three and six months ended June 30, 2020 and 2019.

	Three months ended June 30,				Six months ended June 30,
(in millions)	2020		2019		2020		2019
Total number of shares of common stock repurchased	—		47.5		50.0		97.0
Aggregate purchase price of common stock repurchases	$	—	$	5,210	$	6,397	$	10,301

Refer to Part II, Item 2: Unregistered Sales of Equity Securities and Use of Proceeds and Part II, Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities on page 201 of this Form 10-Q and page 30 of JPMorgan Chase’s 2019 Form 10-K, respectively, for additional information regarding repurchases of the Firm’s equity securities.

Other capital requirements

Total Loss-Absorbing Capacity (“TLAC”)

The Federal Reserve’s TLAC rule requires the U.S. global systemically important bank (“GSIB”) top-tier holding companies, including the Firm, to maintain minimum levels of external TLAC and eligible long-term debt (“eligible LTD”).

Refer to other capital requirements on page 91 of JPMorgan Chase’s 2019 Form 10-K for additional information on TLAC.

The following table presents the TLAC and external long-term debt minimum requirements including applicable regulatory buffers, as of June 30, 2020 and December 31, 2019.

	Minimum Requirements
TLAC to RWA	23.0	%
TLAC to leverage exposure	9.5
External long-term debt to RWA	9.5
External long-term debt to leverage	4.5

The following table presents the eligible external TLAC and eligible LTD amounts, as well as a representation of the amounts as a percentage of the Firm’s total RWA and total leverage exposure applying the impact of the CECL capital transition provisions as of June 30, 2020.

	June 30, 2020						December 31, 2019
(in billions, except ratio)	Eligible external TLAC			Eligible LTD			Eligible external TLAC			Eligible LTD
Total eligible TLAC & LTD	$	407.1		$	179.6		$	386.4		$	161.8
% of RWA	26.4		%	11.7		%	25.5		%	10.7		%
Surplus/(shortfall)	$	52.5		$	33.2		$	37.7		$	17.8
% of total leverage exposure	12.6		%	5.6		%	11.3		%	4.7		%
Surplus/(shortfall)	$	100.4		$	34.3		$	61.2		$	7.8

Refer to Part I, Item 1A: Risk Factors on pages 6–28 of JPMorgan Chase’s 2019 Form 10-K for information on the financial consequences to holders of the Firm’s debt and equity securities in a resolution scenario.

53

Broker-dealer regulatory capital

J.P. Morgan Securities

JPMorgan Chase’s principal U.S. broker-dealer subsidiary is J.P. Morgan Securities. J.P. Morgan Securities is subject to Rule 15c3-1 under the Securities Exchange Act of 1934 (the “Net Capital Rule”). J.P. Morgan Securities is also registered as a futures commission merchant and subject to the Rules of the Commodity Futures Trading Commission (“CFTC”).

Refer to Capital risk management on pages 85–92 of JPMorgan Chase’s 2019 Form 10-K for a discussion on J.P. Morgan Securities’ capital requirements.

The following table presents J.P. Morgan Securities’ net capital:

June 30, 2020
(in millions)	Actual(a)		Minimum
Net Capital	$	27,714	$	5,462

(a) Net capital reflects the exclusion of assets purchased from money market mutual fund clients pursuant to nonrecourse advances provided under the MMLF.

J.P. Morgan Securities plc

J.P. Morgan Securities plc is a wholly-owned subsidiary of JPMorgan Chase Bank, N.A. and has authority to engage in banking, investment banking and broker-dealer activities. J.P. Morgan Securities plc is jointly regulated by the U.K. Prudential Regulation Authority (“PRA”) and the Financial Conduct Authority (“FCA”).

Refer to Capital risk management on pages 85–92 of JPMorgan Chase’s 2019 Form 10-K for a further discussion on J.P. Morgan Securities plc.

The Bank of England requires, on a transitional basis, that U.K. banks, including U.K. regulated subsidiaries of overseas groups, maintain a minimum requirement for own funds and eligible liabilities (“MREL”). As of June 30, 2020, J.P. Morgan Securities plc was compliant with the requirements of the MREL rule. Refer to Supervision and Regulation on pages 1–6 of JPMorgan Chase’s 2019 Form 10-K for additional information on MREL.

The following table presents J.P. Morgan Securities plc’s capital metrics:

June 30, 2020
(in millions, except ratios)	Estimated			Minimum ratios
Total capital	$	55,188
CET1 ratio	17.6		%	4.5	%
Total capital ratio	22.5		%	8.0	%

54

LIQUIDITY RISK MANAGEMENT

Liquidity risk is the risk that the Firm will be unable to meet its contractual and contingent financial obligations as they arise or that it does not have the appropriate amount, composition and tenor of funding and liquidity to support its assets and liabilities. Refer to pages 93–98 of JPMorgan Chase’s 2019 Form 10-K and the Firm’s U.S. LCR Disclosure reports, which are available on the Firm’s website for a further discussion of the Firm’s Liquidity Risk Management.

LCR and HQLA

The LCR rule requires that the Firm maintain an amount of unencumbered High Quality Liquid Assets (“HQLA”) that is sufficient to meet its estimated total net cash outflows over a prospective 30 calendar-day period of significant stress. Under the LCR rule, the amount of HQLA held by JPMorgan Chase Bank, N.A. that is in excess of its stand-alone 100% minimum LCR requirement, and that is not transferable to non-bank affiliates, must be excluded from the Firm’s reported HQLA. The LCR is required to be a minimum of 100%. Refer to page 94 of JPMorgan Chase’s 2019 Form 10-K and the Firm’s U.S. LCR Disclosure reports for additional information on HQLA and net cash outflows.

The following table summarizes the Firm’s average LCR for the three months ended June 30, 2020, March 31, 2020 and June 30, 2019 based on the Firm’s interpretation of the finalized LCR framework.

	Three months ended
Average amount (in millions)	June 30, 2020			March 31, 2020			June 30, 2019
HQLA
Eligible cash(a)	$	426,053		$	205,027		$	219,838
Eligible securities(b)(c)	225,135			343,124			317,439
Total HQLA(d)	$	651,188		$	548,151		$	537,277
Net cash outflows	$	556,395		$	482,372		$	477,442
LCR	117		%	114		%	113		%
Net excess HQLA(d)	$	94,793		$	65,779		$	59,835

(a) Represents cash on deposit at central banks, primarily the Federal Reserve Banks.

(b) Predominantly U.S. Treasuries, U.S. GSE and government agency MBS, and sovereign bonds net of applicable haircuts under the LCR rule.

(c) HQLA eligible securities may be reported in securities borrowed or purchased under resale agreements, trading assets, or investment securities on the Firm’s Consolidated balance sheets.

(d) Excludes average excess HQLA at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates.

The Firm’s average LCR increased during the three months ended June 30, 2020, compared with the three-month period ended March 31, 2020, largely due to long-term debt issuances and a benefit from the return of funding to the Parent Company from JPMorgan Chase Bank, N.A. as a result of the bank’s strong liquidity position. Liquidity in JPMorgan Chase Bank, N.A. increased during the quarter primarily due to deposits net of loan growth. Deposits increased in the second quarter as a result of market conditions driven by the COVID-19 pandemic. Additionally, effective March 26, 2020, the Federal Reserve, in response

to the COVID-19 pandemic, reduced reserve requirements to zero percent, which increased JPMorgan Chase Bank, N.A.’s average HQLA by approximately $25 billion in the second quarter. However, these increases in excess liquidity in JPMorgan Chase Bank, N.A. are excluded from the Firm’s reported LCR under the LCR rule. Refer to Note 21 for additional information.

The Firm's average LCR increased during the three months ended June 30, 2020, compared with the prior year period, primarily due to an increase in the average amount of reportable HQLA as a result of increased cash from unsecured long-term debt issuances.

The Firm’s average LCR fluctuates from period to period, due to changes in its HQLA and estimated net cash outflows as a result of ongoing business activity.

Other liquidity sources

In addition to the assets reported in the Firm’s HQLA above, the Firm had unencumbered marketable securities, such as equity securities and fixed income debt securities, that the Firm believes would be available to raise liquidity. This includes securities included as part of the excess HQLA at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates, as described above. The fair value of these securities was approximately $606 billion and $315 billion as of June 30, 2020 and December 31, 2019, respectively, although the amount of liquidity that could be raised would be dependent on prevailing market conditions. The fair value increased compared to December 31, 2019, due to an increase in excess HQLA at JPMorgan Chase Bank, N.A. which was primarily a result of increased deposits as noted above.

The Firm also had available borrowing capacity at FHLBs and the discount window at the Federal Reserve Bank as a result of collateral pledged by the Firm to such banks of approximately $281 billion and $322 billion as of June 30, 2020 and December 31, 2019, respectively. This borrowing capacity excludes the benefit of cash and securities reported in the Firm’s HQLA or other unencumbered securities that are currently pledged at the Federal Reserve Bank discount window and other central banks. Available borrowing capacity decreased from December 31, 2019 primarily due to lower credit card receivable balances and lower collateral values due to a decline in their fair value, both driven by the COVID-19 pandemic. Although available, the Firm does not view this borrowing capacity at the Federal Reserve Bank discount window and the other central banks as a primary source of liquidity.

55

Funding

Sources of funds

Management believes that the Firm’s unsecured and secured funding capacity is sufficient to meet its on- and off-balance sheet obligations.

The Firm funds its global balance sheet through diverse sources of funding including stable deposits, secured and unsecured funding in the capital markets and stockholders’ equity. Deposits are the primary funding source for JPMorgan Chase Bank, N.A. Additionally, JPMorgan Chase Bank, N.A. may also access funding through short- or long-term secured borrowings, through the issuance of

unsecured long-term debt, or from borrowings from the Parent Company or the Intermediate Holding Company (“IHC”). The Firm’s non-bank subsidiaries are primarily funded from long-term unsecured borrowings and short-term secured borrowings, primarily securities loaned or sold under repurchase agreements. Excess funding is invested by Treasury and CIO in the Firm’s investment securities portfolio or deployed in cash or other short-term liquid investments based on their interest rate and liquidity risk characteristics.

Deposits

The table below summarizes, by the LOBs and Corporate, the deposit balances as of June 30, 2020, and December 31, 2019, and the average deposit balances for the three and six months ended June 30, 2020 and 2019, respectively.

	June 30, 2020		December 31, 2019			Three months ended June 30,				Six months ended June 30,
Deposits						Average				Average
(in millions)						2020		2019		2020		2019
Consumer & Community Banking	$	876,991	$	718,354	(a)	$	831,996	$	690,892	$	782,822	$	685,980
Corporate & Investment Bank	643,133		511,905		(a)	652,464		512,098		607,345		502,280
Commercial Banking	240,440		184,115			236,753		168,194		212,718		167,688
Asset & Wealth Management	169,537		147,804			168,573		140,317		159,602		139,282
Corporate	928		253			731		793		864		878
Total Firm	$	1,931,029	$	1,562,431		$	1,890,517	$	1,512,294	$	1,763,351	$	1,496,108

(a) In the first quarter of 2020, the Merchant Services business was realigned from CCB to CIB as part of the Firm’s Wholesale Payments business. The prior- period amounts were revised to conform with the current presentation.

Deposits provide a stable source of funding and reduce the Firm’s reliance on the wholesale funding markets. A significant portion of the Firm’s deposits are consumer deposits and wholesale operating deposits, which are both considered to be stable sources of liquidity. Wholesale operating deposits are considered to be stable sources of liquidity because they are generated from customers that maintain operating service relationships with the Firm.

The table below shows the loan and deposit balances, the loans-to-deposits ratios, and deposits as a percentage of total liabilities, as of June 30, 2020 and December 31, 2019.

(in billions except ratios)	June 30, 2020			December 31, 2019
Deposits	$	1,931.0		$	1,562.4
Deposits as a % of total liabilities	65		%	64		%
Loans	$	978.5		$	959.8
Loans-to-deposits ratio	51		%	61		%

The Firm believes that average deposit balances are generally more representative of deposit trends than period-end deposit balances, over time. However, during periods of market disruption those trends could be affected.

Average deposits increased for the three and six months ended June 30, 2020, reflecting significant inflows across the LOBs primarily driven by the COVID-19 pandemic, as customers and clients looked to remain liquid as a result of market conditions. In the wholesale businesses, the inflows principally occurred in March, and in general were maintained through the second quarter. In CCB, the increase was driven by the continued growth in both existing and new accounts, as well as COVID-19 related factors, such as the government stimulus for consumers and small businesses, lower consumer spending and delays in tax payments.

Refer to the discussion of the Firm’s Business Segment Results and the Consolidated Balance Sheets Analysis on pages 24-47 and pages 18-19, respectively, for further information on deposit and liability balance trends.

56

The following table summarizes short-term and long-term funding, excluding deposits, as of June 30, 2020, and December 31, 2019, and average balances for the three and six months ended June 30, 2020 and 2019, respectively. Refer to the Consolidated Balance Sheets Analysis on pages 18-19 and Note 11 for additional information.

	June 30, 2020		December 31, 2019		Three months ended June 30,				Six months ended June 30,
Sources of funds (excluding deposits)					Average				Average
(in millions)					2020		2019		2020		2019
Commercial paper	$	13,988	$	14,754	$	14,032	$	26,030	$	14,003	$	27,373
Other borrowed funds	8,447		7,544		8,613		11,818		8,853		11,037
Total short-term unsecured funding	$	22,435	$	22,298	$	22,645	$	37,848	$	22,856	$	38,410
Securities sold under agreements to repurchase(a)	$	229,320	$	175,709	$	268,281	$	218,057	$	251,338	$	207,812
Securities loaned(a)	4,246		5,983		5,950		8,090		6,649		9,428
Other borrowed funds(b)	25,579		18,622		28,206		27,840		23,983		31,690
Obligations of Firm-administered multi-seller conduits(c)	$	12,666	$	9,223	$	12,428	$	13,356	$	11,163	$	10,387
Total short-term secured funding	$	271,811	$	209,537	$	314,865	$	267,343	$	293,133	$	259,317
Senior notes	$	180,532	$	166,185	$	177,972	$	167,376	$	171,857	$	165,176
Subordinated debt	22,320		17,591		20,934		17,056		19,545		16,890
Structured notes(d)	73,833		74,724		71,561		62,284		72,205		59,853
Total long-term unsecured funding	$	276,685	$	258,500	$	270,467	$	246,716	$	263,607	$	241,919
Credit card securitization(c)	$	5,789	$	6,461	$	5,907	$	11,671	$	6,039	$	12,535
FHLB advances	36,129		28,635		36,130		34,541		31,629		39,227
Other long-term secured funding(e)	4,189		4,363		4,233		4,680		4,320		4,785
Total long-term secured funding	$	46,107	$	39,459	$	46,270	$	50,892	$	41,988	$	56,547
Preferred stock(f)	$	30,063	$	26,993	$	30,063	$	26,993	$	29,734	$	27,059
Common stockholders’ equity(f)	$	234,403	$	234,337	$	234,408	$	233,026	$	234,469	$	231,547

(a) Primarily consists of short-term securities loaned or sold under agreements to repurchase.

(b) Effective March 2020, includes nonrecourse advances provided under the MMLF.

(c) Included in beneficial interests issued by consolidated variable interest entities on the Firm’s Consolidated balance sheets.

(d) Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.

(e) Includes long-term structured notes which are secured.

(f) Refer to Capital Risk Management on pages 49-54 and Consolidated statements of changes in stockholders’ equity on page 96 of this Form 10-Q, and Note 21 and Note 22 of JPMorgan Chase’s 2019 Form 10-K for additional information on preferred stock and common stockholders’ equity.

Short-term funding

The Firm’s sources of short-term secured funding primarily consist of securities loaned or sold under agreements to repurchase. These instruments are secured predominantly by high-quality securities collateral, including government-issued debt and U.S. GSE and government agency MBS. Securities sold under agreements to repurchase increased at June 30, 2020, compared with December 31, 2019, reflecting in CIB, a net increase related to client-driven market-making activities, and higher secured financing of trading assets, partially offset by a decline in the Firm's participation in the Federal Reserve's open market operations, and in Treasury and CIO, higher secured financing of AFS investment securities.

The balances associated with securities loaned or sold under agreements to repurchase fluctuate over time due to customers’ investment and financing activities, the Firm’s demand for financing, the ongoing management of the mix of the Firm’s liabilities, including its secured and unsecured financing (for both the investment securities and market-making portfolios), and other market and portfolio factors.

As of June 30, 2020, the Firm participated in the MMLF government facility. The secured nonrecourse advances under the MMLF are included in other borrowed funds. Refer to Capital Risk Management on pages 49-54 for additional information on the MMLF.

The PDCF was established by the Federal Reserve on March 20, 2020, to allow primary dealers to support smooth market functioning by facilitating the availability of credit to businesses and households. Under the PDCF, the Federal Reserve Bank of New York (“FRBNY”) provides collateralized financing on a term basis to primary dealers. These financing transactions were reported as securities sold under agreements to repurchase. On July 28, 2020, the Federal Reserve announced that it was extending through December 31, 2020 the PDCF, which was previously scheduled to expire on or around September 30, 2020. The Firm participated in the PDCF in the first quarter of 2020, and ceased its participation in May 2020 as the secured financing market normalized.

The Firm also continues to participate in the Federal Reserve’s open market operations.

The Firm’s sources of short-term unsecured funding primarily consist of issuance of wholesale commercial paper. The decrease in commercial paper at June 30, 2020, from December 31, 2019 and for the average three and six months ended June 30, 2020 compared to the prior year period, was due to lower net issuance primarily for short-term liquidity management.

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Long-term funding and issuance

Long-term funding provides additional sources of stable funding and liquidity for the Firm. The Firm’s long-term funding plan is driven primarily by expected client activity, liquidity considerations, and regulatory requirements, including TLAC. Long-term funding objectives include maintaining diversification, maximizing market access and optimizing funding costs. The Firm evaluates various funding markets, tenors and currencies in creating its optimal long-term funding plan.

The significant majority of the Firm’s long-term unsecured funding is issued by the Parent Company to provide flexibility in support of both bank and non-bank subsidiary funding needs. The Parent Company advances substantially all net funding proceeds to its subsidiary, the IHC. The IHC does not issue debt to external counterparties. The following table summarizes long-term unsecured issuance and maturities or redemptions for the three and six months ended June 30, 2020 and 2019. Refer to Liquidity Risk Management on pages 93–98 and Note 20 of JPMorgan Chase’s 2019 Form 10-K for additional information on the IHC and long-term debt.

Long-term unsecured funding
	Three months ended June 30,				Six months ended June 30,				Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019		2020		2019		2020		2019
(Notional in millions)	Parent Company								Subsidiaries
Issuance
Senior notes issued in the U.S. market	$	13,500	$	4,000	$	18,750	$	8,250	$	—	$	—	$	—	$	1,750
Senior notes issued in non-U.S. markets	—		—		1,355		2,248		—		—		—		—
Total senior notes	13,500		4,000		20,105		10,498		—		—		—		1,750
Subordinated debt	3,000		—		3,000		—		—		—		—		—
Structured notes(a)	2,526		631		5,308		1,816		3,862		9,016		13,114		15,132
Total long-term unsecured funding – issuance	$	19,026	$	4,631	$	28,413	$	12,314	$	3,862	$	9,016	$	13,114	$	16,882
Maturities/redemptions
Senior notes	$	2,618	$	4,157	$	8,084	$	7,907	$	3,572	$	1	$	7,637	$	1,816
Subordinated debt	—		—		—		146		—		—		—		—
Structured notes	1,309		331		2,834		959		5,355		4,327		14,737		8,160
Total long-term unsecured funding – maturities/redemptions	$	3,927	$	4,488	$	10,918	$	9,012	$	8,927	$	4,328	$	22,374	$	9,976

(a) Includes certain TLAC-eligible long-term unsecured debt issued by the Parent Company.

The Firm can also raise secured long-term funding through securitization of consumer credit card loans and FHLB advances. The following table summarizes the securitization issuance and FHLB advances and their respective maturities or redemptions for the three and six months ended June 30, 2020 and 2019, respectively.

Long-term secured funding
	Three months ended June 30,								Six months ended June 30,
	Issuance				Maturities/Redemptions				Issuance				Maturities/Redemptions
(in millions)	2020		2019		2020		2019		2020		2019		2020		2019
Credit card securitization	$	—	$	—	$	774	$	4,125	$	1,000	$	—	$	1,674	$	4,125
FHLB advances	—		—		2		12,804		15,000		—		7,505		14,805
Other long-term secured funding(a)	89		18		229		207		323		53		434		453
Total long-term secured funding	$	89	$	18	$	1,005	$	17,136	$	16,323	$	53	$	9,613	$	19,383

(a) Includes long-term structured notes which are secured.

The Firm’s wholesale businesses also securitize loans for client-driven transactions; those client-driven loan securitizations are not considered to be a source of funding for the Firm and are not included in the table above. Refer to Note 14 of JPMorgan Chase’s 2019 Form 10-K for further description of the client-driven loan securitizations.

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Credit ratings

The cost and availability of financing are influenced by credit ratings. Reductions in these ratings could have an adverse effect on the Firm’s access to liquidity sources, increase the cost of funds, trigger additional collateral or funding requirements and decrease the number of investors and counterparties willing to lend to the Firm. The nature and magnitude of the impact of ratings downgrades depends on numerous contractual and behavioral factors, which the Firm believes are incorporated in its liquidity risk and stress testing metrics. The Firm believes that it maintains sufficient liquidity to withstand a potential decrease in funding capacity due to ratings downgrades.

Additionally, the Firm’s funding requirements for VIEs and other third-party commitments may be adversely affected by a decline in credit ratings. Refer to SPEs on page 21, and liquidity risk and credit-related contingent features in Note 5 for additional information on the impact of a credit ratings downgrade on the funding requirements for VIEs, and on derivatives and collateral agreements.

The credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries as of June 30, 2020 were as follows:

	JPMorgan Chase & Co.			JPMorgan Chase Bank, N.A.			J.P. Morgan Securities LLC J.P. Morgan Securities plc
June 30, 2020	Long-term issuer	Short-term issuer	Outlook	Long-term issuer	Short-term issuer	Outlook	Long-term issuer	Short-term issuer	Outlook
Moody’s Investors Service	A2	P-1	Stable	Aa2	P-1	Stable	Aa3	P-1	Stable
Standard & Poor’s	A-	A-2	Stable	A+	A-1	Stable	A+	A-1	Stable
Fitch Ratings(a)	AA-	F1+	Negative	AA	F1+	Negative	AA	F1+	Negative

(a) On April 18, 2020, Fitch affirmed the credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries but revised the outlook on the credit ratings from stable to negative given expectations that credit fundamentals will deteriorate as a result of the COVID-19 pandemic.

Refer to page 98 of JPMorgan Chase’s 2019 Form 10-K for a discussion of the factors that could affect credit ratings of the Parent Company and the Firm’s principal bank and non-bank subsidiaries.

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CREDIT AND INVESTMENT RISK MANAGEMENT

Credit and investment risk is the risk associated with the default or change in credit profile of a client, counterparty or customer; or loss of principal or a reduction in expected returns on investments, including consumer credit risk,

wholesale credit risk, and investment portfolio risk. Refer to pages 60-78 for a further discussion of Credit Risk.

Refer to page 79 for a further discussion of Investment Portfolio Risk. Refer to Credit and Investment Risk Management on pages 100–118 of JPMorgan Chase’s 2019 Form 10-K for a further discussion of the Firm’s Credit and Investment Risk Management framework.

CREDIT PORTFOLIO

Credit risk is the risk associated with the default or change in credit profile of a client, counterparty or customer.

Effective January 1, 2020, the Firm adopted the CECL accounting guidance. The adoption resulted in a change in the accounting for PCI loans, which are considered PCD loans under CECL. In conjunction with the adoption of CECL, the Firm reclassified risk-rated loans and lending-related commitments from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment, to align with the methodology applied when determining the allowance. Prior-period amounts have been revised to conform with the current presentation. Refer to Note 1 for further information.

The Firm has granted various forms of assistance to customers and clients impacted by the COVID-19 pandemic, including payment deferrals and covenant modifications. The majority of the Firm’s COVID-19 related loan modifications have not been considered TDRs as:

• they represent short-term or other insignificant modifications, whether under the Firm’s regular loan modification assessments or the IA Statement guidance, or

• the Firm has elected to apply the option to suspend the application of accounting guidance for TDRs as provided under section 4013 of the CARES Act.

To the extent that certain modifications do not meet any of the above criteria, the Firm accounts for them as TDRs. The Firm considers expected losses of principal and accrued interest associated with all COVID-19 related loan modifications in its allowance for credit losses. Refer to Business Developments on pages 9-10 for more information on customer and client assistance granted. Refer to Notes 12 and 13 for further information on the Firm’s accounting

policies on loan modifications and the allowance for credit losses.

The effectiveness of the Firm’s actions in helping borrowers recover and in mitigating the Firm’s credit losses remains uncertain in light of the unpredictable nature and duration of the COVID-19 pandemic. Assistance provided in response to the COVID-19 pandemic could delay the recognition of delinquencies, nonaccrual status, and net charge-offs for those customers and clients who would have otherwise moved into past due or nonaccrual status. Refer to Consumer Credit Portfolio on pages 62-66 and Wholesale Credit Portfolio on pages 67-76 for information on loan modifications as of June 30, 2020.

In the following tables, reported loans include loans retained (i.e., held-for-investment); loans held-for-sale; and certain loans accounted for at fair value. The following tables do not include loans which the Firm accounts for at fair value and classifies as trading assets; refer to Notes 2 and 3 for further information regarding these loans. Refer to Notes 12, 23, and 5 for additional information on the Firm’s loans, lending-related commitments and derivative receivables, including the Firm’s accounting policies.

Refer to Note 10 for information regarding the credit risk inherent in the Firm’s investment securities portfolio; and refer to Note 11 for information regarding the credit risk inherent in the securities financing portfolio. Refer to Consumer Credit Portfolio on pages 62-66 and Note 12 for further discussions of the consumer credit environment and consumer loans. Refer to Wholesale Credit Portfolio on pages 67-76 and Note 12 for further discussions of the wholesale credit environment and wholesale loans.

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Total credit portfolio
	Credit exposure						Nonperforming(d)(e)
(in millions)	Jun 30, 2020			Dec 31, 2019			Jun 30, 2020		Dec 31, 2019
Loans retained	$	965,448		$	945,601		$	7,669	$	3,983
Loans held-for-sale	7,147			7,064			245		7
Loans at fair value	5,923			7,104			130		90
Total loans–reported	978,518			959,769			8,044		4,080
Derivative receivables	74,846			49,766			108		30
Receivables from customers and other(a)	22,403			33,706			—		—
Total credit-related assets	1,075,767			1,043,241			8,152		4,110
Assets acquired in loan satisfactions
Real estate owned	NA			NA			284		344
Other	NA			NA			4		43
Total assets acquired in loan satisfactions	NA			NA			288		387
Lending-related commitments	1,124,677			1,104,199			762		474
Total credit portfolio	$	2,200,444		$	2,147,440		$	9,202	$	4,971
Credit derivatives used in credit portfolio management activities(b)	$	(16,542	)	$	(18,030	)	$	—	$	—
Liquid securities and other cash collateral held against derivatives(c)	(21,501		)	(16,009		)	NA		NA

(in millions, except ratios)	Three months ended June 30,						Six months ended June 30,
	2020			2019			2020			2019
Net charge-offs	$	1,560		$	1,403		$	3,029		$	2,764
Average retained loans	986,804			945,209			967,719			950,852
Net charge-off rates	0.64		%	0.60		%	0.63		%	0.59		%

(a) Receivables from customers and other primarily represents brokerage-related held-for-investment customer receivables.

(b) Represents the net notional amount of protection purchased and sold through credit derivatives used to manage both performing and nonperforming wholesale credit exposures; these derivatives do not qualify for hedge accounting under U.S. GAAP. Refer to Credit derivatives on page 76 and Note 5 for additional information.

(c) Includes collateral related to derivative instruments where appropriate legal opinions have not been either sought or obtained with respect to master netting agreements.

(d) At June 30, 2020, and December 31, 2019, nonperforming assets excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $561 million and $961 million, respectively, and real estate owned (“REO”) insured by U.S. government agencies of $13 million and $41 million, respectively. These amounts have been excluded based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”).

(e) At June 30, 2020, nonperforming loans included $1.3 billion of PCD loans on nonaccrual status. Prior to the adoption of CECL, nonaccrual loans excluded PCI loans as the Firm recognized interest income on each pool of PCI loans as each of the pools was performing.

Paycheck Protection Program

The PPP, established by the CARES Act and implemented by the SBA, provides the Firm with delegated authority to process and originate PPP loans until August 8, 2020. When certain criteria are met, PPP loans are subject to forgiveness and the Firm will receive payment of the forgiveness amount from the SBA. The term for PPP loans issued before June 5, 2020 is two years (with an option to extend to five years) and five years for those originated on or after June 5, 2020. PPP loan terms provide borrowers with an automatic payment deferral of principal and interest. Given that PPP loans are guaranteed by the SBA, the Firm does not expect to realize material credit losses on these loans. PPP processing fees are deferred and accreted into interest income over the contractual life of the loans.

At June 30, 2020, the Firm had approximately $28 billion of loans under the PPP, of which $20 billion and $8 billion are in Consumer and Wholesale, respectively. The impact on interest income related to PPP loans was not material for the three months ended June 30, 2020.

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CONSUMER CREDIT PORTFOLIO

The Firm’s retained consumer portfolio consists primarily of residential real estate loans, credit card loans, scored auto and business banking loans, as well as associated lending-related commitments. The Firm’s focus is on serving primarily the prime segment of the consumer credit market. Refer to Note 12 for further information on consumer loans, as well as the Firm’s nonaccrual and charge-off accounting policies. Refer to Note 23 for further information on lending-related commitments.

Continued weakness in the macroeconomic environment driven by the impacts of the COVID-19 pandemic, resulted in an additional increase in the allowance for credit losses. The continuation or worsening of the effects of the COVID-19 pandemic on the macroeconomic environment and the extent to which customer assistance and government stimulus efforts are effective could result in further impacts to credit quality metrics, including delinquencies, nonaccrual loans and charge-offs.

The following table presents consumer credit-related information with respect to the scored credit portfolios held in CCB, AWM and Corporate.

Consumer credit portfolio
									Three months ended June 30,											Six months ended June 30,
(in millions, except ratios)	Credit exposure				Nonaccrual loans(h)(i)(j)				Net charge-offs/(recoveries)						Net charge-off/(recovery) rate(k)					Net charge-offs/(recoveries)						Net charge-off/(recovery) rate(k)
	Jun 30, 2020		Dec 31, 2019		Jun 30, 2020		Dec 31, 2019		2020			2019			2020			2019		2020			2019			2020			2019
Consumer, excluding credit card
Residential real estate(a)	$	235,381	$	243,317	$	4,106	$	2,780	$	(5	)	$	(29	)	(0.01	)%		(0.04	)%	$	(125	)	$	(31	)	(0.10	)%		(0.02	)%
Auto and other(b)(c)(d)	71,624		51,682		140		146		88			97			0.54		(d)	0.75		202			206			0.70		(d)	0.80
Total loans – retained	307,005		294,999		4,246		2,926		83			68			0.11			0.09		77			175			0.05			0.11
Loans held-for-sale	1,912		3,002		—		2		NA			NA			NA			NA		NA			NA			NA			NA
Total consumer, excluding credit card loans	308,917		298,001		4,246		2,928		83			68			0.11			0.09		77			175			0.05			0.11
Lending-related commitments(e)	45,348		40,169
Total consumer exposure, excluding credit card	354,265		338,170
Credit card
Loans retained(f)	141,656		168,924		—		—		1,178			1,240			3.33			3.24		2,491			2,442			3.28			3.23
Loans held-for-sale	—		—		—		—		NA			NA			NA			NA		NA			NA			NA			NA
Total credit card loans	141,656		168,924		—		—		1,178			1,240			3.33			3.24		2,491			2,442			3.28			3.23
Lending-related commitments(e)(g)	673,836		650,720
Total credit card exposure(g)	815,492		819,644
Total consumer credit portfolio(g)	$	1,169,757	$	1,157,814	$	4,246	$	2,928	$	1,261		$	1,308		1.14	%		1.11	%	$	2,568		$	2,617		1.14	%		1.10	%

(a) Includes scored mortgage and home equity loans held in CCB and AWM, and scored mortgage loans held in Corporate.

(b) At June 30, 2020 and December 31, 2019, excluded operating lease assets of $22.2 billion and $22.8 billion, respectively. These operating lease assets are included in other assets on the Firm’s Consolidated balance sheets. Refer to Note 17 for further information.

(c) Includes scored auto and business banking loans and overdrafts.

(d) At June 30, 2020, included $19.9 billion of loans in Business Banking under the PPP. Given that PPP loans are guaranteed by the SBA, the Firm does not expect to realize material credit losses on these loans. Refer to Credit Portfolio on pages 60-61 for a further discussion of the PPP.

(e) Credit card, home equity and certain business banking lending-related commitments represent the total available lines of credit for these products. The Firm has not experienced, and does not anticipate, that all available lines of credit would be used at the same time. For credit card commitments, and if certain conditions are met, home equity commitments and certain business banking commitments, the Firm can reduce or cancel these lines of credit by providing the borrower notice or, in some cases as permitted by law, without notice. Refer to Note 23 for further information.

(f) Includes billed interest and fees.

(g) Also includes commercial card lending-related commitments primarily in CB and CIB.

(h) At June 30, 2020 and December 31, 2019, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $561 million and $961 million, respectively. These amounts have been excluded from nonaccrual loans based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status, as permitted by regulatory guidance issued by the FFIEC.

(i) At June 30, 2020, nonaccrual loans included $1.3 billion of PCD loans. Prior to the adoption of CECL, nonaccrual loans excluded PCI loans as the Firm recognized interest income on each pool of PCI loans as each of the pools was performing.

(j) Generally excludes loans that were under payment deferral programs offered in response to the COVID-19 pandemic.

(k) Average consumer loans held-for-sale were $1.9 billion and $1.2 billion for the three months ended June 30, 2020 and 2019, respectively, and were $2.2 billion and $1.2 billion for the six months ended June 30, 2020 and 2019, respectively. These amounts were excluded when calculating net charge-off/(recovery) rates.

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Consumer assistance

In March 2020, the Firm began providing assistance to customers in response to the COVID-19 pandemic, predominantly in the form of payment deferrals.

Predominantly all accounts that requested payment assistance were less than 30 days past due at the time of enrollment. Although borrowers are not required to make payments while still under payment deferral, on approximately 50% of accounts with payment assistance offered, borrowers have made at least one payment between March 2020 and June 30, 2020. The Firm continues to monitor the credit risk associated with loans subject to deferrals throughout the deferral period and on an ongoing basis after the borrowers are required to resume making regularly scheduled payments.

The following table presents information related to the $28 billion unpaid principal balance of retained loans still under payment deferral as of June 30, 2020.

As of June 30, 2020 (in millions, except ratios)	Loan balance(a)		Percent of loan class balance(b)		Type of modifications
Residential real estate	$	20,548	8.7	%	Rolling three month deferral up to one year; final work-out is determined at the end of the deferral period; Generally deferred payments are required to be paid at the end of the loan term
Auto and other	3,357		4.6		• Auto: Three month deferral with automatic maturity extension • Business Banking: Three month deferral with automatic deferment to either maturity (loan) or one year forward (line)
Credit card	4,384		3.1		Three month minimum payment waiver with potential one month extensions totaling six months; Interest continues to accrue during the deferral period and is added to the principal balance
Total consumer	$	28,289	6.3	%

(a) Excludes $7.5 billion of loans which were previously under payment deferral, with predominantly all returning to their original loan terms prior to June 30, 2020. Also excludes risk-rated business banking and auto dealer loans held in CCB and auto operating lease assets that were still under payment deferral as of June 30, 2020. Auto operating lease asset payment assistance consists of a three month payment deferral. Deferrals do not extend the term of the lease and all deferred payments are due at the end of the lease term.

(b) Represents the unpaid principal balance of retained loans which were still under payment deferral as of June 30, 2020, divided by the total unpaid principal balance of the respective loan classes retained loans as of June 30, 2020.

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Consumer, excluding credit card

Portfolio analysis

Loan balances increased from December 31, 2019 due to PPP loan originations in Business Banking, partially offset by lower residential real estate loans, reflecting paydowns and loan sales.

Residential real estate: The residential real estate portfolio, including loans held-for-sale, predominantly consists of prime mortgage loans and home equity lines of credit. The portfolio decreased from December 31, 2019 driven by paydowns and loan sales in Home Lending, largely offset by originations of prime mortgage loans that have been retained on the balance sheet. Net recoveries for the three months ended June 30, 2020 were lower when compared with the same period in the prior year as the current quarter included losses associated with the purchased credit deteriorated portfolio as a result of the adoption of CECL. Net recoveries for the six months ended June 30, 2020 were higher when compared with the same period in the prior year as the current year benefited from a recovery on a loan sale.

The carrying value of home equity lines of credit outstanding was $26.5 billion at June 30, 2020. This amount included $9.9 billion of HELOCs that have recast from interest-only to fully amortizing payments or have been modified and $8.7 billion of interest-only balloon HELOCs, which primarily mature after 2030. The Firm manages the risk of HELOCs during their revolving period by closing or reducing the undrawn line to the extent permitted by law when borrowers are exhibiting a material deterioration in their credit risk profile.

At June 30, 2020, and December 31, 2019, the carrying value of interest-only residential mortgage loans was $23.2 billion and $22.5 billion, respectively. These loans have an interest-only payment period generally followed by an adjustable-rate or fixed-rate fully amortizing payment period to maturity and are typically originated as higher-balance loans to higher-income borrowers, predominantly in AWM. Performance of this portfolio for the three and six months ended June 30, 2020 was in line with the performance of the broader residential mortgage portfolio for the same period.

The following table provides a summary of the Firm’s residential mortgage portfolio insured and/or guaranteed by U.S. government agencies, including loans held-for-sale. The Firm monitors its exposure to certain potential unrecoverable claim payments related to government-insured loans and considers this exposure in estimating the allowance for loan losses.

(in millions)	June 30, 2020		December 31, 2019
Current	$	692	$	1,280
30-89 days past due	265		695
90 or more days past due	561		961
Total government guaranteed loans	$	1,518	$	2,936

Geographic composition and current estimated loan-to-value ratio of residential real estate loans

Refer to Note 12 for information on the geographic composition and current estimated LTVs of the Firm’s residential real estate loans.

Modified residential real estate loans

The following table presents information relating to modified retained residential real estate loans for which concessions have been g