Document



 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): October 12, 2017
 
JPMorgan Chase & Co.
(Exact name of registrant as specified in its charter)
 
Delaware
1-5805
13-2624428
(State or other jurisdiction of
incorporation or organization)
(Commission File Number)
(I.R.S. employer
identification no.)
 
 
 
270 Park Avenue, New York, New York
 
10017
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (212) 270-6000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐ 

1




Item 2.02 Results of Operations and Financial Condition
On October 12, 2017, JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) reported 2017 third quarter net income of $6.7 billion, or $1.76 per share, compared with net income of $6.3 billion, or $1.58 per share, in the third quarter of 2016. A copy of the 2017 third quarter earnings release is attached hereto as Exhibit 99.1, and a copy of the earnings release financial supplement is attached hereto as Exhibit 99.2.
Each of the Exhibits provided with this Form 8-K shall be deemed to be “filed” for purposes of the Securities Exchange Act of 1934.
This Current Report on Form 8-K (including the Exhibits hereto) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause JPMorgan Chase’s actual results to differ materially from those described in the forward-looking statements can be found in JPMorgan Chase’s Annual Report on Form 10-K for the year ended December 31, 2016, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017, which have been filed with the Securities and Exchange Commission and are available on JPMorgan Chase’s website (http://investor.shareholder.com/jpmorganchase/sec.cfm) and on the Securities and Exchange Commission’s website (www.sec.gov). JPMorgan Chase does not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.











Item 9.01 Financial Statements and Exhibits

(d)    Exhibits
 
 
 
Exhibit No.
 
Description of Exhibit
 
 
 
12.1
 
12.2
 
99.1
 
99.2
 


2




SIGNATURE

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


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


Dated:
October 12, 2017



3




INDEX TO EXHIBITS
 
 
 
Exhibit No.
 
Description of Exhibit
 
 
 
12.1
 
12.2
 
99.1
 
99.2
 




4
Exhibit


EXHIBIT 12.1
JPMorgan Chase & Co.
Computation of Ratio of Earnings to Fixed Charges
 
Nine Months ended September 30, (in millions, except ratios)
2017

Excluding interest on deposits
 
Income before income tax expense
$
27,646

Fixed charges:
 
Interest expense
8,360

One-third of rents, net of income from subleases (a)
398

Total fixed charges
8,758

Add: Equity in undistributed income of affiliates
597

Income before income tax expense and fixed charges, excluding capitalized interest
$
37,001

Fixed charges, as above
$
8,758

Ratio of earnings to fixed charges
4.22

Including interest on deposits
 
Fixed charges, as above
$
8,758

Add: Interest on deposits
1,949

Total fixed charges and interest on deposits
$
10,707

Income before income tax expense and fixed charges, excluding capitalized interest, as above
$
37,001

Add: Interest on deposits
1,949

Total income before income tax expense, fixed charges and interest on deposits
$
38,950

Ratio of earnings to fixed charges
3.64




(a)
The proportion deemed representative of the interest factor.


Exhibit


EXHIBIT 12.2
JPMorgan Chase & Co.
Computation of Ratio of Earnings to Fixed Charges
and Preferred Stock Dividend Requirements
 
Nine Months ended September 30, (in millions, except ratios)
2017

Excluding interest on deposits
 
Income before income tax expense
$
27,646

Fixed charges:
 
Interest expense
8,360

One-third of rents, net of income from subleases (a)
398

Total fixed charges
8,758

Add: Equity in undistributed income of affiliates
597

Income before income tax expense and fixed charges, excluding capitalized interest
$
37,001

Fixed charges, as above
$
8,758

Preferred stock dividends (pre-tax)
1,752

Fixed charges including preferred stock dividends
$
10,510

Ratio of earnings to fixed charges and preferred stock dividend requirements
3.52

Including interest on deposits
 
Fixed charges including preferred stock dividends, as above
$
10,510

Add: Interest on deposits
1,949

Total fixed charges including preferred stock dividends and interest on deposits
$
12,459

Income before income tax expense and fixed charges, excluding capitalized interest, as above
$
37,001

Add: Interest on deposits
1,949

Total income before income tax expense, fixed charges and interest on deposits
$
38,950

Ratio of earnings to fixed charges and preferred stock dividend requirements
3.13




(a)
The proportion deemed representative of the interest factor.


Exhibit
JPMorgan Chase & Co.
270 Park Avenue, New York, NY 10017-2070
NYSE symbol: JPM
www.jpmorganchase.com

https://cdn.kscope.io/eb6a53f748c39ffb27d2d6e8a6cbd138-jpmclogoa01.gif

JPMORGAN CHASE REPORTS THIRD-QUARTER 2017 NET INCOME OF
$6.7 BILLION, OR $1.76 PER SHARE
 
THIRD-QUARTER 2017 RESULTS1 
ROE 11%
ROTCE2 13%
 
Common equity Tier 12
12.5%
 
Net payout LTM3,4
77%
Firmwide Metrics
n
Reported revenue of $25.3 billion; managed revenue of $26.2 billion2
n
Average core loans2 up 7% YoY and 2% QoQ
 
 
 
CCB

ROE 19%
n
Average core loans2 up 8%; average deposits of $646 billion, up 9%
n
29.3 million active mobile customers, up 12%
n
Credit card sales volume5 and merchant processing volume each up 13%
 
 
 
CIB

ROE 13%
n
Maintained #1 ranking for Global Investment Banking fees with 8.2% wallet share YTD
n
Banking revenue up 5%; Markets revenue down 21%
 
 
 
CB

ROE 17%
n
Record revenue of $2.1 billion, up 15%; net income of $881 million, up 13%
n
Average loan balances of $200 billion, up 10%
 
 
 
AWM

ROE 29%
n
Record net income of $674 million, up 21%; revenue of $3.2 billion, up 6%
n
Average loan balances of $125 billion, up 10%
n
Record assets under management (“AUM”) of $1.9 trillion, up 10%; 81% of mutual fund AUM ranked in the 1st or 2nd quartile over 5 years
 
Jamie Dimon, Chairman and CEO, commented on the financial results: “JPMorgan Chase delivered solid results in a competitive environment this quarter with steady core growth across the platform. And for the first time, the Firm led the nation in total U.S. deposits, as consumers and businesses continue to view us as their partner of choice.”

Dimon added: “In Consumer & Community Banking, card sales and merchant processing volumes were once again up double digits, while loans and deposits continued to grow strongly. In the Corporate & Investment Bank, we continued to lead our peers in Investment Banking fees, and Treasury Services and Securities Services each generated over $1 billion in revenue. Commercial Banking again delivered outstanding performance with record revenue as our long-term investments in the business are paying off. Our Asset & Wealth Management business delivered strong results with record net income and AUM this quarter.”

Dimon concluded: “The global economy continues to do well and the U.S. consumer remains healthy with solid wage growth. Unfortunately, natural disasters in the U.S. and abroad have impacted many of our customers and we have responded with enormous financial support as well as the expertise and generosity of our employees to help these customers, clients and communities. Building on our success to-date in Detroit, we have announced new initiatives in Chicago and Washington, D.C. to drive inclusive economic growth in those communities. We will be there to do our part. And this is in addition to the $1.7 trillion of credit and capital supplied this year to consumers and small and mid-sized businesses and corporate clients.”
 
FORTRESS PRINCIPLES
n
Book value per share of $66.95, up 5%; tangible book value per share2 of $54.03, up 5%
n
Basel III common equity Tier 1 capital2 of $187 billion and ratio2 of 12.5%
n
Firm SLR2 of 6.6%
OPERATING LEVERAGE
n
3Q17 reported expense of $14.3 billion; reported overhead ratio of 57%; 3Q17 adjusted expense2 of $14.4 billion; adjusted overhead ratio2 of 55%
CAPITAL RETURN
n
$6.5 billion4 returned to shareholders in 3Q17
n
$4.5 billion of net repurchases and common dividend of $0.56 per share


 
SUPPORTED CONSUMERS, BUSINESSES & COMMUNITIES
n
$1.7 trillion of credit and capital6 raised YTD
n
$197 billion of credit for consumers
n
$17 billion of credit for U.S. small businesses
n
$601 billion of credit for corporations
n
$820 billion of capital raised for corporate clients and non-U.S. government entities
n
$65 billion of credit and capital raised for nonprofit and U.S. government entities, including states, municipalities, hospitals and universities

Investor Contact: Jason Scott (212) 270-7325
1Percentage comparisons noted in the bullet points are calculated for the third quarter of 2017 versus the prior-year third quarter, unless otherwise specified. 
2For notes on non-GAAP financial measures, including managed basis reporting and key performance measures, see page 5.
For additional notes see page 6.
Media Contact: Joe Evangelisti (212) 270-7438


JPMorgan Chase & Co.
News Release

In the discussion below of Firmwide results of JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”), information is presented on a managed basis, which is a non-GAAP financial measure. The discussion below of the Firm's business segments is also presented on a managed basis. For more information about managed basis, and non-GAAP financial measures and key performance measures used by management to evaluate the performance of each line of business, see page 5.
Comparisons noted in the sections below are calculated for the third quarter of 2017 versus the prior-year third quarter, unless otherwise specified.
JPMORGAN CHASE (JPM)
Net revenue on a reported basis totaled $25.3 billion, $25.5 billion, and $24.7 billion for the third quarter of 2017, second quarter of 2017, and third quarter of 2016, respectively.
Results for JPM
 
 
 
 
 
 
2Q17
 
3Q16
($ millions, except per share data)
3Q17
 
2Q17
 
3Q16
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue - managed
$
26,200

 
$
26,405

 
$
25,512

 
$
(205
)
(1
)%
 
$
688

3
 %
Noninterest expense
14,318

 
14,506

 
14,463

 
(188
)
(1
)
 
(145
)
(1
)
Provision for credit losses
1,452

 
1,215

 
1,271

 
237

20

 
181

14

Net income
$
6,732

 
$
7,029

 
$
6,286

 
$
(297
)
(4
)%
 
$
446

7
 %
Earnings per share
$
1.76

 
$
1.82

 
$
1.58

 
$
(0.06
)
(3
)%
 
$
0.18

11
 %
Return on common equity
11
%
 
12
%
 
10
%
 
 
 
 
 
 
Return on tangible common equity
13

 
14

 
13

 
 
 
 
 
 
Discussion of Results:
Net income was $6.7 billion, an increase of 7%.
Net revenue was $26.2 billion, up 3%. Net interest income was $13.1 billion, up 10%, primarily driven by the net impact of rising rates and loan growth, partially offset by declines in Markets net interest income. Noninterest revenue was $13.1 billion, down 4%, driven by lower Markets revenue.
Noninterest expense was $14.3 billion, down 1%. The prior year included two items totaling $175 million in Consumer & Community Banking.
The provision for credit losses was $1.5 billion, up from $1.3 billion in the prior year. The increase reflected a net reserve build of $303 million in the Consumer portfolio, driven by Card, and higher net charge-offs of $148 million, partially offset by a net reserve release of $116 million in the Wholesale portfolio, primarily driven by Energy7 and Commercial Real Estate. The prior year included a net reserve build in the Consumer portfolio of $226 million and a net reserve release in the Wholesale portfolio of $76 million, primarily driven by Energy7.
CONSUMER & COMMUNITY BANKING (CCB)
Results for CCB
 
 
 
 
 
 
2Q17
 
3Q16
($ millions)
3Q17
 
2Q17
 
3Q16
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue
$
12,033

 
$
11,412

 
$
11,328

 
$
621

5
 %
 
$
705

6
 %
Consumer & Business Banking
5,408

 
5,233

 
4,719

 
175

3

 
689

15

Mortgage Banking
1,558

 
1,426

 
1,874

 
132

9

 
(316
)
(17
)
Card, Commerce Solutions & Auto
5,067

 
4,753

 
4,735

 
314

7

 
332

7

Noninterest expense
6,495

 
6,500

 
6,510

 
(5
)

 
(15
)

Provision for credit losses
1,517

 
1,394

 
1,294

 
123

9

 
223

17

Net income
$
2,553

 
$
2,223

 
$
2,204

 
$
330

15
 %
 
$
349

16
 %
Discussion of Results:
Net income was $2.6 billion, an increase of 16%. Net revenue was $12.0 billion, up 6%.


2

JPMorgan Chase & Co.
News Release

Consumer & Business Banking net revenue was $5.4 billion, up 15%, predominantly driven by higher deposit margins and strong deposit growth. Mortgage Banking net revenue was $1.6 billion, down 17%, largely driven by lower net servicing revenue, loan spread compression, and lower production margins. Card, Commerce Solutions & Auto net revenue was $5.1 billion, up 7%, predominantly driven by higher auto lease volumes and net interest income on higher Card loan balances, partially offset by higher Card new account origination costs.
Noninterest expense was $6.5 billion, flat compared with the prior year. The prior year included two items totaling $175 million related to liabilities from a merchant in bankruptcy and mortgage servicing reserves. Excluding these two items, noninterest expense would have been up 3%, predominantly driven by higher auto lease depreciation and business growth, partially offset by lower marketing expense.
The provision for credit losses was $1.5 billion, an increase of $223 million, driven by higher net charge-offs, due to Card but partially offset by Mortgage, and a higher reserve build in Card. Net charge-offs included $63 million of incremental charge-offs reported in accordance with regulatory guidance8, predominantly in Auto.
CORPORATE & INVESTMENT BANK (CIB)
Results for CIB
 
 
 
 
 
 
2Q17
 
3Q16
($ millions)
3Q17
 
2Q17
 
3Q16
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue
$
8,590

 
$
8,889

 
$
9,455

 
$
(299
)
(3
)%
 
$
(865
)
(9
)%
Banking
3,094

 
3,123

 
2,940

 
(29
)
(1
)
 
154

5

Markets & Investor Services
5,496

 
5,766

 
6,515

 
(270
)
(5
)
 
(1,019
)
(16
)
Noninterest expense
4,768

 
4,841

 
4,934

 
(73
)
(2
)
 
(166
)
(3
)
Provision for credit losses
(26
)
 
(53
)
 
67

 
27

51

 
(93
)
NM

Net income
$
2,546

 
$
2,710

 
$
2,912

 
$
(164
)
(6
)%
 
$
(366
)
(13
)%
Discussion of Results:
Net income was $2.5 billion, a decrease of 13%.
Net revenue was $8.6 billion, down 9% compared with the prior year. Banking revenue was $3.1 billion, up 5%. Investment Banking revenue was $1.7 billion, down 2%, driven by lower equity and debt underwriting fees, largely offset by higher advisory fees. The business continued to rank #1 in Global Investment Banking fees. Treasury Services revenue was $1.1 billion, up 15%, driven by the impact of higher interest rates and growth in operating deposits. Lending revenue was $331 million, up 17%, reflecting lower mark-to-market losses on hedges.
Markets & Investor Services revenue was $5.5 billion, down 16%, driven by lower Markets revenue, down 21%. Fixed Income Markets revenue was down 27%, as lower revenue across all products was driven by sustained low volatility and tighter credit spreads, against a very strong prior year. Equity Markets revenue was down 4% compared to a strong prior year, reflecting lower revenue in derivatives predominantly offset by strength in Prime Services and Cash Equities. Securities Services revenue was $1.0 billion, up 10%, driven by higher interest rates and deposit growth, as well as higher asset-based fees driven by improving market conditions.
Noninterest expense was $4.8 billion, down 3%, driven by lower compensation expense.
The provision for credit losses was a benefit of $26 million, which included a net reserve release in Energy7. The prior year was an expense of $67 million, which included a net reserve build in Energy7.
COMMERCIAL BANKING (CB)
Results for CB
 
 
 
 
 
 
2Q17
 
3Q16
($ millions)
3Q17
 
2Q17
 
3Q16
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue
$
2,146

 
$
2,088

 
$
1,870

 
$
58

3
 %
 
$
276

15
%
Noninterest expense
800

 
790

 
746

 
10

1

 
54

7

Provision for credit losses
(47
)
 
(130
)
 
(121
)
 
83

64

 
74

61

Net income
$
881

 
$
902

 
$
778

 
$
(21
)
(2
)%
 
$
103

13
%

3

JPMorgan Chase & Co.
News Release

Discussion of Results:
Net income was $881 million, an increase of 13%.
Net revenue was $2.1 billion, up 15%, predominantly driven by higher net interest income due to higher deposit spreads and loan growth.
Noninterest expense was $800 million, up 7%, largely driven by hiring of bankers and business-related support staff, and investments in technology.
The provision for credit losses was a benefit of $47 million, driven by reserve releases largely in Commercial Real Estate. The prior year was a benefit of $121 million driven by reserve releases largely in Energy7.
ASSET & WEALTH MANAGEMENT (AWM)
Results for AWM
 
 
 
 
 
 
2Q17
 
3Q16
($ millions)
3Q17
 
2Q17
 
3Q16
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue
$
3,245

 
$
3,212

 
$
3,047

 
$
33

1
 %
 
$
198

6
 %
Noninterest expense
2,181

 
2,192

 
2,130

 
(11
)
(1
)
 
51

2

Provision for credit losses
8

 
4

 
32

 
4

100

 
(24
)
(75
)
Net income
$
674

 
$
624

 
$
557

 
$
50

8
 %
 
$
117

21
 %
Discussion of Results:     
Net income was $674 million, an increase of 21%.
Net revenue was $3.2 billion, an increase of 6%, reflecting higher market levels and strong banking results driven by higher deposit spreads.
Noninterest expense was $2.2 billion, an increase of 2%, driven by a combination of higher compensation expense and higher external fees.
Assets under management were $1.9 trillion, up 10%, reflecting higher market levels and net inflows into liquidity and long-term products.
CORPORATE
Results for Corporate
 
 
 
 
 
 
2Q17
 
3Q16
($ millions)
3Q17
 
2Q17
 
3Q16
 
$ O/(U)
O/(U) %
 
$ O/(U)
O/(U) %
Net revenue
$
186

 
$
804

 
$
(188
)
 
$
(618
)
(77
)%
 
$
374

NM

Noninterest expense
74

 
183

 
143

 
(109
)
(60
)
 
(69
)
(48
)
Provision for credit losses

 

 
(1
)
 


 
1

100
 %
Net income/(loss)
$
78

 
$
570

 
$
(165
)
 
$
(492
)
(86
)%
 
$
243

NM

Discussion of Results:
Net income was $78 million, compared with a net loss of $165 million in the prior year.
Net revenue was $186 million, compared with a loss of $188 million in the prior year, primarily due to the benefit of higher rates. Prior quarter net revenue included a $645 million benefit from a legal settlement9.

4

JPMorgan Chase & Co.
News Release

2.
Notes on non-GAAP financial measures and key performance measures:
Notes on non-GAAP financial measures

a.
In addition to analyzing the Firm’s results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a “managed” basis; these Firmwide managed basis results are considered non-GAAP financial measures. The Firm also reviews the results of the lines of business on a managed basis. The Firm’s definition of managed basis starts, in each case, with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm and each of the reportable business segments on a fully taxable-equivalent (“FTE”) basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. These financial measures allow management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business. For a reconciliation of the Firm’s results from a reported to managed basis, see page 7 of the Earnings Release Financial Supplement.

b.
Tangible common equity (“TCE”), return on tangible common equity (“ROTCE”) and tangible book value per share (“TBVPS”), are non-GAAP financial measures. TCE represents the Firm’s common stockholders’ equity (i.e., total stockholders’ equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. For a reconciliation from common stockholders’ equity to TCE, see page 9 of the Earnings Release Financial Supplement. ROTCE measures the Firm’s net income applicable to common equity as a percentage of average TCE. TBVPS represents the Firm’s TCE at period-end divided by common shares at period-end. Book value per share was $66.95, $66.05 and $63.79 at September 30, 2017, June 30, 2017, and September 30, 2016, respectively. TCE, ROTCE, and TBVPS are meaningful to the Firm, as well as investors and analysts, in assessing the Firm’s use of equity.

c.
Adjusted expense and adjusted overhead ratio are non-GAAP financial measures. Adjusted expense excluded Firmwide legal expense/(benefit) of $(107) million, $61 million and $(71) million for the three months ended September 30, 2017, June 30, 2017, and September 30, 2016, respectively. The adjusted overhead ratio measures the Firm’s adjusted expense as a percentage of adjusted managed net revenue. Management believes this information helps investors understand the effect of these items on reported results and provides an alternate presentation of the Firm’s performance.


Notes on key performance measures

d.
Estimated as of September 30, 2017. The Basel III supplementary leverage ratio (“SLR”), to which the Firm will be subject on January 1, 2018, and Basel III Fully Phased-In capital, risk-weighted assets and capital ratios, to which the Firm will be subject on January 1, 2019, are all considered key regulatory capital measures. The capital adequacy of the Firm is evaluated against the Basel III approach (Standardized or Advanced) that results, for each quarter, in the lower ratio (the “Collins Floor”). These measures are used by management, bank regulators, investors and analysts to assess and monitor the Firm’s capital position. For additional information on these measures, including the Collins Floor, see Capital Risk Management on pages 76-85 of the Firm’s Annual Report on Form 10-K for the year ended December 31, 2016 and pages 42-48 of the Firm's Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.

e.
Core loans represent loans considered central to the Firm’s ongoing businesses; core loans exclude loans classified as trading assets, runoff portfolios, discontinued portfolios and portfolios the Firm has an intent to exit.










5

JPMorgan Chase & Co.
News Release

Additional notes:

3.
Last twelve months (“LTM”).
4.
Net of stock issued to employees.
5.
Excludes Commercial Card.
6.
The amount of credit provided to clients represents new and renewed credit, including loans and commitments. The amount of credit provided to small businesses reflects loans and increased lines of credit provided by Consumer & Business Banking; Card, Commerce Solutions & Auto; and Commercial Banking. The amount of credit provided to nonprofit and U.S. and non-U.S. government entities, including U.S. states, municipalities, hospitals and universities, represents credit provided by the Corporate & Investment Bank and Commercial Banking.
7.
Energy includes Oil & Gas, Natural Gas Pipelines, and Metals & Mining.
8.
The Firm reported $63 million of net charge-offs in the third quarter of 2017, in accordance with regulatory guidance regarding the timing of loss recognition for certain auto and residential real estate loans in bankruptcy and auto loans where assets were acquired in loan satisfaction.
9.
The legal benefit in the second quarter of 2017 related to a settlement with the FDIC receivership for Washington Mutual and with Deutsche Bank as trustee to certain Washington Mutual trusts, and was recognized in noninterest revenue in Corporate.

6

JPMorgan Chase & Co.
News Release


JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.6 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of customers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

JPMorgan Chase & Co. will host a conference call today, October 12, 2017, at 8:30 a.m. (Eastern) to present third quarter financial results. The general public can access the call by dialing (866) 541-2724 in the U.S. and Canada, or (706) 634-7246 for international participants. Please dial in 10 minutes prior to the start of the call. The live audio webcast and presentation slides will be available on the Firm’s website, www.jpmorganchase.com, under Investor Relations, Events & Presentations.

A replay of the conference call will be available beginning at approximately 12:30 p.m. on October 12, 2017, through midnight, October 26, 2017, by telephone at (800) 585-8367 (U.S. and Canada) or (404) 537-3406 (international); use Conference ID # 84336774. The replay will also be available via webcast on www.jpmorganchase.com under Investor Relations, Events & Presentations. Additional detailed financial, statistical and business-related information is included in a financial supplement. The earnings release and the financial supplement are available at www.jpmorganchase.com.

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of JPMorgan Chase & Co.’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that could cause JPMorgan Chase & Co.’s actual results to differ materially from those described in the forward-looking statements can be found in JPMorgan Chase & Co.’s Annual Report on Form 10-K for the year ended December 31, 2016 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2017 and June 30, 2017 which have been filed with the Securities and Exchange Commission and are available on JPMorgan Chase & Co.’s website (http://investor.shareholder.com/jpmorganchase/sec.cfm), and on the Securities and Exchange Commission’s website (www.sec.gov). JPMorgan Chase & Co. does not undertake to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.



7
Exhibit






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EARNINGS RELEASE FINANCIAL SUPPLEMENT

THIRD QUARTER 2017














JPMORGAN CHASE & CO.
 
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TABLE OF CONTENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page(s)
 
Consolidated Results
 
 
 
 
 
 
 
 
Consolidated Financial Highlights
 
 
 
 
 
 
2–3
 
Consolidated Statements of Income
 
 
 
 
 
 
4
 
Consolidated Balance Sheets
 
 
 
 
 
 
5
 
Condensed Average Balance Sheets and Annualized Yields
 
 
 
 
 
 
6
 
Reconciliation from Reported to Managed Basis
 
 
 
 
 
 
7
 
Segment Results - Managed Basis
 
 
 
 
 
 
8
 
Capital and Other Selected Balance Sheet Items
 
 
 
 
 
 
9
 
Earnings Per Share and Related Information
 
 
 
 
 
 
10
 
 
 
 
 
 
 
 
 
 
Business Segment Results
 
 
 
 
 
 
 
 
Consumer & Community Banking
 
 
 
 
 
 
11–14
 
Corporate & Investment Bank
 
 
 
 
 
 
15–17
 
Commercial Banking
 
 
 
 
 
 
18–19
 
Asset & Wealth Management
 
 
 
 
 
 
20–22
 
Corporate
 
 
 
 
 
 
23
 
 
 
 
 
 
 
 
 
 
Credit-Related Information
 
 
 
 
 
 
24–27
 
 
 
 
 
 
 
 
 
 
Non-GAAP Financial Measures and Key Performance Measures
 
 
 
 
 
 
28
 
Glossary of Terms and Acronyms (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Refer to the Glossary of Terms and Acronyms on pages 279–285 of JPMorgan Chase & Co.’s (the “Firm’s”) Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Annual Report”) and the Glossary of Terms and Acronyms and Line of Business Metrics on pages 168-172 and pages 173-175, respectively, of the Firm's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017.






JPMORGAN CHASE & CO.
 
 
 
 
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CONSOLIDATED FINANCIAL HIGHLIGHTS
 
 
 
 
(in millions, except per share and ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
SELECTED INCOME STATEMENT DATA
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
Reported Basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total net revenue
$
25,326

 
$
25,470

 
$
24,675

 
$
23,376

 
$
24,673

 
(1
)%

3
 %

 
$
75,471

 
$
72,292

 
4
 %

Total noninterest expense
14,318

 
14,506

 
15,019

 
13,833

 
14,463

 
(1
)
 
(1
)
 
 
43,843

 
41,938

 
5

 
Pre-provision profit
11,008

 
10,964

 
9,656

 
9,543

 
10,210

 

 
8

 
 
31,628

 
30,354

 
4

 
Provision for credit losses
1,452

 
1,215

 
1,315

 
864

 
1,271

 
20

 
14

 
 
3,982

 
4,497

 
(11
)
 
NET INCOME
6,732

 
7,029

 
6,448

 
6,727

 
6,286

 
(4
)
 
7

 
 
20,209

 
18,006

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Managed Basis (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total net revenue
26,200

 
26,405

 
25,586

 
24,333

 
25,512

 
(1
)
 
3

 
 
78,191

 
74,809

 
5

 
Total noninterest expense
14,318

 
14,506

 
15,019

 
13,833

 
14,463

 
(1
)
 
(1
)
 
 
43,843

 
41,938

 
5

 
Pre-provision profit
11,882

 
11,899

 
10,567

 
10,500

 
11,049

 

 
8

 
 
34,348

 
32,871

 
4

 
Provision for credit losses
1,452

 
1,215

 
1,315

 
864

 
1,271

 
20

 
14

 
 
3,982

 
4,497

 
(11
)
 
NET INCOME
6,732

 
7,029

 
6,448

 
6,727

 
6,286

 
(4
)
 
7

 
 
20,209

 
18,006

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EARNINGS PER SHARE DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income: Basic
$
1.77

 
$
1.83

 
$
1.66

 
$
1.73

 
$
1.60

 
(3
)
 
11

 
 
$
5.26

 
$
4.51

 
17

 
Diluted
1.76

 
1.82

 
1.65

 
1.71

 
1.58

 
(3
)
 
11

 
 
5.22

 
4.48

 
17

 
Average shares: Basic
3,534.7

 
3,574.1

 
3,601.7

 
3,611.3

 
3,637.7

 
(1
)
 
(3
)
 
 
3,570.9

 
3,674.6

 
(3
)
 
Diluted
3,559.6

 
3,599.0

 
3,630.4

 
3,646.6

 
3,669.8

 
(1
)
 
(3
)
 
 
3,597.0

 
3,704.5

 
(3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MARKET AND PER COMMON SHARE DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market capitalization
$
331,393

 
$
321,633

 
$
312,078

 
$
307,295

 
$
238,277

 
3

 
39

 
 
$
331,393

 
$
238,277

 
39

 
Common shares at period-end
3,469.7

 
3,519.0

 
3,552.8

 
3,561.2

 
3,578.3

 
(1
)
 
(3
)
 
 
3,469.7

 
3,578.3

 
(3
)
 
Closing share price (b)
$
95.51

 
$
91.40

 
$
87.84

 
$
86.29

 
$
66.59

 
4

 
43

 
 
$
95.51

 
$
66.59

 
43

 
Book value per share
66.95

 
66.05

 
64.68

 
64.06

 
63.79

 
1

 
5

 
 
66.95

 
63.79

 
5

 
Tangible book value per share (“TBVPS”) (c)
54.03

 
53.29

 
52.04

 
51.44

 
51.23

 
1

 
5

 
 
54.03

 
51.23

 
5

 
Cash dividends declared per share
0.56

(f)
0.50

 
0.50

 
0.48

 
0.48

 
12

 
17

 
 
1.56

 
1.40

 
11

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL RATIOS (d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on common equity (“ROE”)
11
%

12
%

11
%

11
%
 
10
%
 
 
 
 
 
 
11
%

10
%

 
 
Return on tangible common equity (“ROTCE”) (c)
13

 
14

 
13

 
14

 
13

 
 
 
 
 
 
14

 
13

 
 
 
Return on assets
1.04

 
1.10

 
1.03

 
1.06

 
1.01

 
 
 
 
 
 
1.06

 
0.99

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CAPITAL RATIOS (e)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common equity Tier 1 (“CET1”) capital ratio
12.6
%
(g)
12.6
%
 
12.5
%
 
12.4
%
 
12.0
%
 
 
 
 
 
 
12.6
%
(g)

12.0
%
 
 
 
Tier 1 capital ratio
14.3

(g)
14.4

 
14.3

 
14.1

 
13.6

 
 
 
 
 
 
14.3

(g)

13.6

 
 
 
Total capital ratio
16.1

(g)
16.0

 
15.6

 
15.5

 
15.1

 
 
 
 
 
 
16.1

(g)

15.1

 
 
 
Tier 1 leverage ratio
8.4

(g)
8.5

 
8.4

 
8.4

 
8.5

 
 
 
 
 
 
8.4

(g)

8.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
For a further discussion of managed basis, see Reconciliation from Reported to Managed Basis on page 7.
(b)
Share price is from the New York Stock Exchange.
(c)
TBVPS and ROTCE are non-GAAP financial measures. TBVPS represents tangible common equity (“TCE”) divided by common shares at period-end. ROTCE measures the Firm’s annualized earnings as a percentage of average TCE. TCE is also a non-GAAP financial measure; for a reconciliation of common stockholders’ equity to TCE, see page 9. For further discussion of these measures, see page 28.
(d)
Quarterly ratios are based upon annualized amounts.
(e)
Ratios presented are calculated under the Basel III Transitional capital rules and for the capital ratios represent the Collins Floor. See footnote (a) on page 9 for additional information on Basel III and the Collins Floor.
(f)
On June 28, 2017, the Board of Directors increased the quarterly common stock dividend from $0.50 to $0.56 per share.
(g)
Estimated.

Page 2



JPMORGAN CHASE & CO.
 
 
 
 
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CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED
 
 
 
(in millions, except ratio and headcount data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
SELECTED BALANCE SHEET DATA (period-end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
2,563,074

 
$
2,563,174

 
$
2,546,290

 
$
2,490,972

 
$
2,521,029

 
 %
 
2
 %
 
 
$
2,563,074

 
$
2,521,029

 
2
 %
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer, excluding credit card loans
369,601

 
365,371

 
367,055

 
364,644

 
363,796

 
1

 
2

 
 
369,601

 
363,796

 
2

 
Credit card loans
141,313

 
140,141

 
135,016

 
141,816

 
133,435

 
1

 
6

 
 
141,313

 
133,435

 
6

 
Wholesale loans
402,847

 
403,255

 
393,903

 
388,305

 
390,823

 

 
3

 
 
402,847

 
390,823

 
3

 
Total Loans
913,761

 
908,767

 
895,974

 
894,765

 
888,054

 
1

 
3

 
 
913,761

 
888,054

 
3

 
Core loans (a)
843,432

 
834,935

 
812,119

 
806,152

 
795,077

 
1

 
6

 
 
843,432

 
795,077

 
6

 
Core loans (average) (a)
837,522

 
824,583

 
805,382

 
799,698

 
779,383

 
2

 
7

 
 
822,611

 
759,207

 
8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. offices:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing
390,863

 
394,921

 
400,439

 
400,831

 
409,912

 
(1
)
 
(5
)
 
 
390,863

 
409,912

 
(5
)
 
Interest-bearing
783,233

 
781,709

 
775,258

 
737,949

 
722,294

 

 
8

 
 
783,233

 
722,294

 
8

 
Non-U.S. offices:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing
17,907

 
17,152

 
16,456

 
14,764

 
15,815

 
4

 
13

 
 
17,907

 
15,815

 
13

 
Interest-bearing
247,024

 
245,691

 
230,846

 
221,635

 
228,117

 
1

 
8

 
 
247,024

 
228,117

 
8

 
Total deposits
1,439,027

 
1,439,473

 
1,422,999

 
1,375,179

 
1,376,138

 

 
5

 
 
1,439,027

 
1,376,138

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt (b)
288,582

 
292,973

 
289,492

 
295,245

 
309,418

 
(1
)
 
(7
)
 
 
288,582

 
309,418

 
(7
)
 
Common stockholders’ equity
232,314

 
232,415

 
229,795

 
228,122

 
228,263

 

 
2

 
 
232,314

 
228,263

 
2

 
Total stockholders’ equity
258,382

 
258,483

 
255,863

 
254,190

 
254,331

 

 
2

 
 
258,382

 
254,331

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans-to-deposits ratio
63
%

63
%

63
%
 
65
%
 
65
%

 
 
 
 
 
63
%

65
%

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Headcount
251,503

 
249,257

 
246,345

 
243,355

 
242,315

 
1

 
4

 
 
251,503

 
242,315

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
95% CONFIDENCE LEVEL - TOTAL VaR
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average VaR (c)
$
30

 
$
27

 
$
25

 
$
40

 
$
43

 
11

 
(30
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LINE OF BUSINESS NET REVENUE (d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Community Banking
$
12,033

 
$
11,412

 
$
10,970

 
$
11,019

 
$
11,328

 
5

 
6

 
 
$
34,415

 
$
33,896

 
2

 
Corporate & Investment Bank
8,590

 
8,889

 
9,536

 
8,461

 
9,455

 
(3
)
 
(9
)
 
 
27,015

 
26,755

 
1

 
Commercial Banking
2,146

 
2,088

 
2,018

 
1,963

 
1,870

 
3

 
15

 
 
6,252

 
5,490

 
14

 
Asset & Wealth Management
3,245

 
3,212

 
3,087

 
3,087

 
3,047

 
1

 
6

 
 
9,544

 
8,958

 
7

 
Corporate
186

 
804

 
(25
)
 
(197
)
 
(188
)
 
(77
)
 
NM

 
 
965

 
(290
)
 
NM

 
TOTAL NET REVENUE
$
26,200

 
$
26,405

 
$
25,586

 
$
24,333

 
$
25,512

 
(1
)
 
3

 
 
$
78,191

 
$
74,809

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LINE OF BUSINESS NET INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Community Banking
$
2,553

 
$
2,223

 
$
1,988

 
$
2,364

 
$
2,204

 
15

 
16

 
 
$
6,764

 
$
7,350

 
(8
)
 
Corporate & Investment Bank
2,546

 
2,710

 
3,241

 
3,431

 
2,912

 
(6
)
 
(13
)
 
 
8,497

 
7,384

 
15

 
Commercial Banking
881

 
902

 
799

 
687

 
778

 
(2
)
 
13

 
 
2,582

 
1,970

 
31

 
Asset & Wealth Management
674

 
624

 
385

 
586

 
557

 
8

 
21

 
 
1,683

 
1,665

 
1

 
Corporate
78

 
570

 
35

 
(341
)
 
(165
)
 
(86
)
 
NM

 
 
683

 
(363
)
 
NM

 
NET INCOME
$
6,732

 
$
7,029

 
$
6,448

 
$
6,727

 
$
6,286

 
(4
)
 
7

 
 
$
20,209

 
$
18,006

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Loans considered central to the Firm’s ongoing businesses. For further discussion of core loans, see page 28.
(b)
Included unsecured long-term debt of $221.7 billion, $221.0 billion, $212.0 billion, $212.6 billion and $226.8 billion for the periods ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively.
(c)
The Firm refined the historical proxy time series inputs to certain VaR models during the first quarter of 2017. This refinement is intended to more appropriately reflect the risk exposure from certain asset-backed products. In the absence of this refinement, the average Total VaR would have been higher by the following amounts: $4 million, $6 million and $3 million for the three months ended September 30, 2017, June 30, 2017 and March 31, 2017, respectively. For information regarding CIB VaR, see page 17.
(d)
For a further discussion of managed basis, see Reconciliation from Reported to Managed Basis on page 7.

Page 3



JPMORGAN CHASE & CO.
 
 
 
 
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CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
(in millions, except per share and ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
REVENUE
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
Investment banking fees
$
1,843

 
$
1,810

 
$
1,817

 
$
1,605

 
$
1,866

 
2
 %
 
(1
)%
 
 
$
5,470

 
$
4,843

 
13
 %
 
Principal transactions
2,721

 
3,137

 
3,582

 
2,460

 
3,451

 
(13
)
 
(21
)
 
 
9,440

 
9,106

 
4

 
Lending- and deposit-related fees
1,497

 
1,482

 
1,448

 
1,484

 
1,484

 
1

 
1

 
 
4,427

 
4,290

 
3

 
Asset management, administration and commissions
3,846

 
3,824

 
3,677

 
3,689

 
3,597

 
1

 
7

 
 
11,347

 
10,902

 
4

 
Securities gains/(losses)
(1
)
 
(34
)
 
(3
)
 
5

 
64

 
97

 
NM

 
 
(38
)
 
136

 
NM

 
Mortgage fees and related income
429

 
404

 
406

 
511

 
624

 
6

 
(31
)
 
 
1,239

 
1,980

 
(37
)
 
Card income
1,242

 
1,167

 
914

 
918

 
1,202

 
6

 
3

 
 
3,323

 
3,861

 
(14
)
 
Other income
951

 
1,472

 
770

 
951

 
782

 
(35
)
 
22

 
 
3,193

 
2,844

 
12

 
Noninterest revenue
12,528

 
13,262

 
12,611

 
11,623

 
13,070

 
(6
)
 
(4
)
 
 
38,401

 
37,962

 
1

 
Interest income
16,687

 
15,650

 
15,042

 
14,466

 
14,070

 
7

 
19

 
 
47,379

 
41,435

 
14

 
Interest expense
3,889

 
3,442

 
2,978

 
2,713

 
2,467

 
13

 
58

 
 
10,309

 
7,105

 
45

 
Net interest income
12,798

 
12,208

 
12,064

 
11,753

 
11,603

 
5

 
10

 
 
37,070

 
34,330

 
8

 
TOTAL NET REVENUE
25,326

 
25,470

 
24,675

 
23,376

 
24,673

 
(1
)
 
3

 
 
75,471

 
72,292

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for credit losses
1,452

 
1,215

 
1,315

 
864

 
1,271

 
20

 
14

 
 
3,982

 
4,497

 
(11
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation expense
7,646

 
7,706

 
8,201

 
6,872

 
7,669

 
(1
)
 

 
 
23,553

 
23,107

 
2

 
Occupancy expense
930

 
912

 
961

 
957

 
899

 
2

 
3

 
 
2,803

 
2,681

 
5

 
Technology, communications and equipment expense
1,972

 
1,870

 
1,828

 
1,822

 
1,741

 
5

 
13

 
 
5,670

 
5,024

 
13

 
Professional and outside services
1,705

 
1,644

 
1,543

 
1,742

 
1,665

 
4

 
2

 
 
4,892

 
4,913

 

 
Marketing
710

 
756

 
713

 
697

 
825

 
(6
)
 
(14
)
 
 
2,179

 
2,200

 
(1
)
 
Other expense (a)
1,355

 
1,618

 
1,773

 
1,743

 
1,664

 
(16
)
 
(19
)
 
 
4,746

 
4,013

 
18

 
TOTAL NONINTEREST EXPENSE
14,318

 
14,506

 
15,019

 
13,833

 
14,463

 
(1
)
 
(1
)
 
 
43,843

 
41,938

 
5

 
Income before income tax expense
9,556

 
9,749

 
8,341

 
8,679

 
8,939

 
(2
)
 
7

 
 
27,646

 
25,857

 
7

 
Income tax expense
2,824

 
2,720

 
1,893

 
1,952

 
2,653

 
4

 
6

 
 
7,437

 
7,851

 
(5
)
 
NET INCOME
$
6,732

 
$
7,029

 
$
6,448

 
$
6,727

 
$
6,286

 
(4
)
 
7

 
 
$
20,209

 
$
18,006

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INCOME PER COMMON SHARE DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
$
1.77

 
$
1.83

 
$
1.66

 
$
1.73

 
$
1.60

 
(3
)
 
11

 
 
$
5.26

 
$
4.51

 
17

 
Diluted earnings per share
1.76

 
1.82

 
1.65

 
1.71

 
1.58

 
(3
)
 
11

 
 
5.22

 
4.48

 
17

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on common equity (b)
11
%
 
12
%
 
11
%
 
11
%
 
10
%
 
 
 
 
 
 
11
%
 
10
%
 
 
 
Return on tangible common equity (b)(c)
13

 
14

 
13

 
14

 
13

 
 
 
 
 
 
14

 
13

 
 
 
Return on assets (b)
1.04

 
1.10

 
1.03

 
1.06

 
1.01

 
 
 
 
 
 
1.06

 
0.99

 
 
 
Effective income tax rate
29.6

 
27.9

 
22.7

 
22.5

 
29.7

 
 
 
 
 
 
26.9

 
30.4

 
 
 
Overhead ratio
57

 
57

 
61

 
59

 
59

 
 
 
 
 
 
58

 
58

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Included Firmwide legal expense/(benefit) of $(107) million, $61 million, $218 million, $230 million and $(71) million for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively: and $172 million and $(547) million for the nine months ended September 30, 2017 and 2016, respectively.
(b)
Quarterly ratios are based upon annualized amounts.
(c)
For further discussion of ROTCE, see page 28.



Page 4



JPMORGAN CHASE & CO.
 
 
 
 
https://cdn.kscope.io/eb6a53f748c39ffb27d2d6e8a6cbd138-jpmclogoa01.gif
CONSOLIDATED BALANCE SHEETS
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
Sep 30,
 
Jun 30,
 
Mar 31,
 
Dec 31,
 
Sep 30,
 
Jun 30,
 
Sep 30,
 
 
2017
 
2017
 
2017
 
2016
 
2016
 
2017
 
2016
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
21,994

 
$
21,781

 
$
20,484

 
$
23,873

 
$
21,390

 
1
 %
 
3
 %
 
Deposits with banks
435,810

 
427,380

 
439,911

 
365,762

 
396,200

 
2

 
10

 
Federal funds sold and securities purchased under
 
 
 
 
 
 
 
 
 
 
 
 
 
 
resale agreements
185,454

 
218,570

 
190,566

 
229,967

 
232,637

 
(15
)
 
(20
)
 
Securities borrowed
101,680

 
90,654

 
92,309

 
96,409

 
109,197

 
12

 
(7
)
 
Trading assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt and equity instruments
362,158

 
350,558

 
346,450

 
308,052

 
309,258

 
3

 
17

 
Derivative receivables
58,260

 
56,506

 
56,063

 
64,078

 
65,579

 
3

 
(11
)
 
Securities
263,288

 
263,458

 
281,850

 
289,059

 
272,401

 

 
(3
)
 
Loans
913,761

 
908,767

 
895,974

 
894,765

 
888,054

 
1

 
3

 
Less: Allowance for loan losses
13,539

 
13,363

 
13,413

 
13,776

 
14,204

 
1

 
(5
)
 
Loans, net of allowance for loan losses
900,222

 
895,404

 
882,561

 
880,989

 
873,850

 
1

 
3

 
Accrued interest and accounts receivable
61,757

 
64,038

 
60,038

 
52,330

 
64,333

 
(4
)
 
(4
)
 
Premises and equipment
14,218

 
14,206

 
14,227

 
14,131

 
14,208

 

 

 
Goodwill
47,309

 
47,300

 
47,292

 
47,288

 
47,302

 

 

 
Mortgage servicing rights
5,738

 
5,753

 
6,079

 
6,096

 
4,937

 

 
16

 
Other intangible assets
808

 
827

 
847

 
862

 
887

 
(2
)
 
(9
)
 
Other assets
104,378

 
106,739

 
107,613

 
112,076

 
108,850

 
(2
)
 
(4
)
 
TOTAL ASSETS
$
2,563,074

 
$
2,563,174

 
$
2,546,290

 
$
2,490,972

 
$
2,521,029

 

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
$
1,439,027

 
$
1,439,473

 
$
1,422,999

 
$
1,375,179

 
$
1,376,138

 

 
5

 
Federal funds purchased and securities loaned or sold
 
 
 
 
 
 
 
 
 
 
 
 
 
 
under repurchase agreements
169,393

 
165,621

 
183,316

 
165,666

 
168,491

 
2

 
1

 
Commercial paper
24,248

 
22,207

 
14,908

 
11,738

 
12,258

 
9

 
98

 
Other borrowed funds
29,719

 
30,936

 
24,342

 
22,705

 
24,479

 
(4
)
 
21

 
Trading liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt and equity instruments
89,089

 
91,628

 
90,913

 
87,428

 
95,126

 
(3
)
 
(6
)
 
Derivative payables
39,446

 
41,795

 
44,575

 
49,231

 
48,143

 
(6
)
 
(18
)
 
Accounts payable and other liabilities
196,764

 
189,160

 
183,200

 
190,543

 
190,412

 
4

 
3

 
Beneficial interests issued by consolidated VIEs
28,424

 
30,898

 
36,682

 
39,047

 
42,233

 
(8
)
 
(33
)
 
Long-term debt
288,582

 
292,973

 
289,492

 
295,245

 
309,418

 
(1
)
 
(7
)
 
TOTAL LIABILITIES
2,304,692

 
2,304,691

 
2,290,427

 
2,236,782

 
2,266,698

 

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock
26,068

 
26,068

 
26,068

 
26,068

 
26,068

 

 

 
Common stock
4,105

 
4,105

 
4,105

 
4,105

 
4,105

 

 

 
Additional paid-in capital
90,697

 
90,604

 
90,395

 
91,627

 
92,103

 

 
(2
)
 
Retained earnings
175,827

 
171,488

 
166,663

 
162,440

 
157,870

 
3

 
11

 
Accumulated other comprehensive income/(loss)
(309
)
 
(392
)
 
(923
)
 
(1,175
)
 
1,474

 
21

 
NM

 
Shares held in RSU Trust, at cost
(21
)
 
(21
)
 
(21
)
 
(21
)
 
(21
)
 

 

 
Treasury stock, at cost
(37,985
)
 
(33,369
)
 
(30,424
)
 
(28,854
)
 
(27,268
)
 
(14
)
 
(39
)
 
TOTAL STOCKHOLDERS’ EQUITY
258,382

 
258,483

 
255,863

 
254,190

 
254,331

 

 
2

 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
2,563,074

 
$
2,563,174

 
$
2,546,290

 
$
2,490,972

 
$
2,521,029

 

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



Page 5



JPMORGAN CHASE & CO.
 
 
 
 
https://cdn.kscope.io/eb6a53f748c39ffb27d2d6e8a6cbd138-jpmclogoa01.gif
CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS
 
(in millions, except rates)
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
AVERAGE BALANCES
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits with banks
$
455,255

 
$
437,637

 
$
422,169

 
$
415,817

 
$
409,176

 
4
 %
 
11
 %
 
 
$
438,475

 
$
384,217

 
14
 %
 
Federal funds sold and securities purchased under
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
resale agreements
188,594

 
193,302

 
196,965

 
217,907

 
196,657

 
(2
)
 
(4
)
 
 
192,922

 
201,157

 
(4
)
 
Securities borrowed
95,597

 
90,151

 
95,372

 
103,928

 
102,790

 
6

 
(7
)
 
 
93,708

 
102,640

 
(9
)
 
Trading assets - debt instruments
240,876

 
234,809

 
225,801

 
218,272

 
219,816

 
3

 
10

 
 
233,884

 
214,656

 
9

 
Securities
261,117

 
274,695

 
285,565

 
280,087

 
272,993

 
(5
)
 
(4
)
 
 
273,703

 
279,152

 
(2
)
 
Loans
909,580

 
904,969

 
891,904

 
890,511

 
874,396

 
1

 
4

 
 
902,216

 
858,275

 
5

 
Other assets (a)
43,155

 
41,546

 
43,136

 
39,025

 
40,665

 
4

 
6

 
 
42,612

 
40,036

 
6

 
Total interest-earning assets
2,194,174

 
2,177,109

 
2,160,912

 
2,165,547

 
2,116,493

 
1

 
4

 
 
2,177,520

 
2,080,133

 
5

 
Trading assets - equity instruments
119,463

 
126,127

 
115,284

 
98,427

 
98,714

 
(5
)
 
21

 
 
120,307

 
94,555

 
27

 
Trading assets - derivative receivables
59,839

 
58,250

 
61,400

 
70,580

 
72,520

 
3

 
(17
)
 
 
59,824

 
71,004

 
(16
)
 
All other noninterest-earning assets
195,755

 
197,750

 
195,566

 
197,903

 
189,235

 
(1
)
 
3

 
 
196,358

 
192,142

 
2

 
TOTAL ASSETS
$
2,569,231

 
$
2,559,236

 
$
2,533,162

 
$
2,532,457

 
$
2,476,962

 

 
4

 
 
$
2,554,009

 
$
2,437,834

 
5

 
LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
$
1,029,534

 
$
1,006,008

 
$
986,015

 
$
959,779

 
$
932,738

 
2

 
10

 
 
$
1,007,345

 
$
913,682

 
10

 
Federal funds purchased and securities loaned or
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sold under repurchase agreements
181,851

 
196,331

 
189,611

 
186,579

 
180,098

 
(7
)
 
1

 
 
189,236

 
176,081

 
7

 
Commercial paper
23,022

 
19,466

 
13,364

 
11,263

 
13,798

 
18

 
67

 
 
18,653

 
16,257

 
15

 
Trading liabilities - debt, short-term and other liabilities (b)
198,674

 
197,066

 
199,981

 
202,979

 
196,247

 
1

 
1

 
 
198,569

 
197,537

 
1

 
Beneficial interests issued by consolidated VIEs
29,832

 
34,083

 
38,775

 
39,985

 
42,462

 
(12
)
 
(30
)
 
 
34,197

 
40,245

 
(15
)
 
Long-term debt
294,626

 
295,868

 
292,224

 
301,989

 
300,295

 

 
(2
)
 
 
294,248

 
293,418

 

 
Total interest-bearing liabilities
1,757,539

 
1,748,822

 
1,719,970

 
1,702,574

 
1,665,638

 

 
6

 
 
1,742,248

 
1,637,220

 
6

 
Noninterest-bearing deposits
401,489

 
404,121

 
405,548

 
414,266

 
405,237

 
(1
)
 
(1
)
 
 
403,704

 
398,814

 
1

 
Trading liabilities - equity instruments
20,905

 
19,346

 
21,072

 
21,411

 
22,262

 
8

 
(6
)
 
 
20,441

 
20,511

 

 
Trading liabilities - derivative payables
44,627

 
44,740

 
48,373

 
54,548

 
54,552

 

 
(18
)
 
 
45,900

 
56,390

 
(19
)
 
All other noninterest-bearing liabilities
86,742

 
85,939

 
84,428

 
87,180

 
77,116

 
1

 
12

 
 
85,711

 
74,797

 
15

 
TOTAL LIABILITIES
2,311,302

 
2,302,968

 
2,279,391

 
2,279,979

 
2,224,805

 

 
4

 
 
2,298,004

 
2,187,732

 
5

 
Preferred stock
26,068

 
26,068

 
26,068

 
26,068

 
26,068

 

 

 
 
26,068

 
26,068

 

 
Common stockholders’ equity
231,861

 
230,200

 
227,703

 
226,410

 
226,089

 
1

 
3

 
 
229,937

 
224,034

 
3

 
TOTAL STOCKHOLDERS’ EQUITY
257,929

 
256,268

 
253,771

 
252,478

 
252,157

 
1

 
2

 
 
256,005

 
250,102

 
2

 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
2,569,231

 
$
2,559,236

 
$
2,533,162

 
$
2,532,457

 
$
2,476,962

 

 
4

 
 
$
2,554,009

 
$
2,437,834

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AVERAGE RATES (c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTEREST-EARNING ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits with banks
1.09

%
0.92

%
0.69

%
0.47

%
0.44

%
 
 
 
 
 
0.91

%
0.48

%
 
 
Federal funds sold and securities purchased under
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
resale agreements
1.31

 
1.10

 
1.08

 
1.04

 
1.14

 
 
 
 
 
 
1.16

 
1.13

 
 
 
Securities borrowed (d)

 
(0.09
)
 
(0.19
)
 
(0.20
)
 
(0.35
)
 
 
 
 
 
 
(0.09
)
 
(0.36
)
 
 
 
Trading assets - debt instruments
3.25

 
3.13

 
3.38

 
3.40

 
3.46

 
 
 
 
 
 
3.25

 
3.43

 
 
 
Securities
3.10

 
3.11

 
3.01

 
2.87

 
2.95

 
 
 
 
 
 
3.07

 
2.96

 
 
 
Loans
4.62

 
4.46

 
4.47

 
4.30

 
4.23

 
 
 
 
 
 
4.52

 
4.24

 
 
 
Other assets (a)
4.83

 
4.28

 
3.21

 
2.57

 
2.14

 
 
 
 
 
 
4.11

 
2.08

 
 
 
Total interest-earning assets
3.07

 
2.95

 
2.88

 
2.71

 
2.70

 
 
 
 
 
 
2.97

 
2.72

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTEREST-BEARING LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
0.32

 
0.25

 
0.20

 
0.16

 
0.15

 
 
 
 
 
 
0.26

 
0.14

 
 
 
Federal funds purchased and securities loaned or
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sold under repurchase agreements
0.98

 
0.79

 
0.63

 
0.56

 
0.63

 
 
 
 
 
 
0.80

 
0.63

 
 
 
Commercial paper
1.43

 
1.29

 
1.22

 
1.09

 
0.97

 
 
 
 
 
 
1.33

 
0.86

 
 
 
Trading liabilities - debt, short-term and other liabilities (b)
1.27

 
1.12

 
0.89

 
0.67

 
0.58

 
 
 
 
 
 
1.09

 
0.56

 
 
 
Beneficial interests issued by consolidated VIEs
1.62

 
1.51

 
1.41

 
1.37

 
1.26

 
 
 
 
 
 
1.51

 
1.22

 
 
 
Long-term debt
2.37

 
2.29

 
2.21

 
2.06

 
1.84

 
 
 
 
 
 
2.29

 
1.82

 
 
 
Total interest-bearing liabilities
0.88

 
0.79

 
0.70

 
0.63

 
0.59

 
 
 
 
 
 
0.79

 
0.58

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTEREST RATE SPREAD
2.19

%
2.16

%
2.18

%
2.08

%
2.11

%
 
 
 
 
 
2.18

%
2.14

%
 
 
NET YIELD ON INTEREST-EARNING ASSETS
2.37

%
2.31

%
2.33

%
2.22

%
2.24

%
 
 
 
 
 
2.34

%
2.26

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Includes margin loans.
(b)
Includes brokerage customer payables.
(c)
Interest includes the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(d)
Negative yield is related to client-driven demand for certain securities combined with the impact of low interest rates; this is matched book activity and the negative interest expense on the corresponding securities loaned is recognized in interest expense and reported within trading liabilities - debt, short-term and other liabilities.

Page 6



JPMORGAN CHASE & CO.
 
 
 
 
https://cdn.kscope.io/eb6a53f748c39ffb27d2d6e8a6cbd138-jpmclogoa01.gif
RECONCILIATION FROM REPORTED TO MANAGED BASIS
 
(in millions, except ratios)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Firm prepares its Consolidated Financial Statements using accounting principles generally accepted in the U.S. (“U.S. GAAP”). That presentation, which is referred to as “reported” basis, provides the reader with an understanding of the Firm’s results that can be tracked consistently from year-to-year and enables a comparison of the Firm’s performance with other companies’ U.S. GAAP financial statements. In addition to analyzing the Firm’s results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a “managed” basis; these Firmwide managed basis results are considered non-GAAP financial measures. The Firm also reviews the results of the lines of business on a managed basis. For additional information on managed basis, refer to the notes on Non-GAAP Financial Measures on page 28.

The following summary table provides a reconciliation from reported U.S. GAAP results to managed basis.
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
OTHER INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other income - reported
$
951

 
$
1,472

 
$
770

 
$
951

 
$
782

 
(35
)%
 
22
 %
 
 
$
3,193

 
$
2,844

 
12
 %
 
Fully taxable-equivalent adjustments (a)
555

 
596

 
582

 
645

 
540

 
(7
)
 
3

 
 
1,733

 
1,620

 
7

 
Other income - managed
$
1,506

 
$
2,068

 
$
1,352

 
$
1,596

 
$
1,322

 
(27
)
 
14

 
 
$
4,926

 
$
4,464

 
10

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL NONINTEREST REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total noninterest revenue - reported
$
12,528

 
$
13,262

 
$
12,611

 
$
11,623

 
$
13,070

 
(6
)
 
(4
)
 
 
$
38,401

 
$
37,962

 
1

 
Fully taxable-equivalent adjustments (a)
555

 
596

 
582

 
645

 
540

 
(7
)
 
3

 
 
1,733

 
1,620

 
7

 
Total noninterest revenue - managed
$
13,083

 
$
13,858

 
$
13,193

 
$
12,268

 
$
13,610

 
(6
)
 
(4
)
 
 
$
40,134

 
$
39,582

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INTEREST INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income - reported
$
12,798

 
$
12,208

 
$
12,064

 
$
11,753

 
$
11,603

 
5

 
10

 
 
$
37,070

 
$
34,330

 
8

 
Fully taxable-equivalent adjustments (a)
319

 
339

 
329

 
312

 
299

 
(6
)
 
7

 
 
987

 
897

 
10

 
Net interest income - managed
$
13,117

 
$
12,547

 
$
12,393

 
$
12,065

 
$
11,902

 
5

 
10

 
 
$
38,057

 
$
35,227

 
8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL NET REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total net revenue - reported
$
25,326

 
$
25,470

 
$
24,675

 
$
23,376

 
$
24,673

 
(1
)
 
3

 
 
$
75,471

 
$
72,292

 
4

 
Fully taxable-equivalent adjustments (a)
874

 
935

 
911

 
957

 
839

 
(7
)
 
4

 
 
2,720

 
2,517

 
8

 
Total net revenue - managed
$
26,200

 
$
26,405

 
$
25,586

 
$
24,333

 
$
25,512

 
(1
)
 
3

 
 
$
78,191

 
$
74,809

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PRE-PROVISION PROFIT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pre-provision profit - reported
$
11,008

 
$
10,964

 
$
9,656

 
$
9,543

 
$
10,210

 

 
8

 
 
$
31,628

 
$
30,354

 
4

 
Fully taxable-equivalent adjustments (a)
874

 
935

 
911

 
957

 
839

 
(7
)
 
4

 
 
2,720

 
2,517

 
8

 
Pre-provision profit - managed
$
11,882

 
$
11,899

 
$
10,567

 
$
10,500

 
$
11,049

 

 
8

 
 
$
34,348

 
$
32,871

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME BEFORE INCOME TAX EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income tax expense - reported
$
9,556

 
$
9,749

 
$
8,341

 
$
8,679

 
$
8,939

 
(2
)
 
7

 
 
$
27,646

 
$
25,857

 
7

 
Fully taxable-equivalent adjustments (a)
874

 
935

 
911

 
957

 
839

 
(7
)
 
4

 
 
2,720

 
2,517

 
8

 
Income before income tax expense - managed
$
10,430

 
$
10,684

 
$
9,252

 
$
9,636

 
$
9,778

 
(2
)
 
7

 
 
$
30,366

 
$
28,374

 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INCOME TAX EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense - reported
$
2,824

 
$
2,720

 
$
1,893

 
$
1,952

 
$
2,653

 
4

 
6

 
 
$
7,437

 
$
7,851

 
(5
)
 
Fully taxable-equivalent adjustments (a)
874

 
935

 
911

 
957

 
839

 
(7
)
 
4

 
 
2,720

 
2,517

 
8

 
Income tax expense - managed
$
3,698

 
$
3,655

 
$
2,804

 
$
2,909

 
$
3,492

 
1

 
6

 
 
$
10,157

 
$
10,368

 
(2
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OVERHEAD RATIO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Overhead ratio - reported
57

%
57

%
61

%
59

%
59

%
 
 
 
 
 
58

%
58

%
 
 
Overhead ratio - managed
55

 
55

 
59

 
57

 
57

 
 
 
 
 
 
56

 
56

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Predominantly recognized in the CIB and Commercial Banking (“CB”) business segments and Corporate.

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SEGMENT RESULTS - MANAGED BASIS
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
TOTAL NET REVENUE (fully taxable-equivalent (“FTE”))
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Community Banking
$
12,033

 
$
11,412

 
$
10,970

 
$
11,019

 
$
11,328

 
5
 %

6
 %

 
$
34,415

 
$
33,896

 
2
 %

Corporate & Investment Bank
8,590

 
8,889

 
9,536

 
8,461

 
9,455

 
(3
)
 
(9
)
 
 
27,015

 
26,755

 
1

 
Commercial Banking
2,146

 
2,088

 
2,018

 
1,963

 
1,870

 
3

 
15

 
 
6,252

 
5,490

 
14

 
Asset & Wealth Management
3,245

 
3,212

 
3,087

 
3,087

 
3,047

 
1

 
6

 
 
9,544

 
8,958

 
7

 
Corporate
186

 
804

 
(25
)
 
(197
)
 
(188
)
 
(77
)
 
NM

 
 
965

 
(290
)
 
NM

 
TOTAL NET REVENUE
$
26,200

 
$
26,405

 
$
25,586

 
$
24,333

 
$
25,512

 
(1
)
 
3

 
 
$
78,191

 
$
74,809

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Community Banking
$
6,495

 
$
6,500

 
$
6,395

 
$
6,303

 
$
6,510

 

 

 
 
$
19,390

 
$
18,602

 
4

 
Corporate & Investment Bank
4,768

 
4,841

 
5,121

 
4,172

 
4,934

 
(2
)
 
(3
)
 
 
14,730

 
14,820

 
(1
)
 
Commercial Banking
800

 
790

 
825

 
744

 
746

 
1

 
7

 
 
2,415

 
2,190

 
10

 
Asset & Wealth Management
2,181

 
2,192

 
2,580

 
2,175

 
2,130

 
(1
)
 
2

 
 
6,953

 
6,303

 
10

 
Corporate
74

 
183

 
98

 
439

 
143

 
(60
)
 
(48
)
 
 
355

 
23

 
NM

 
TOTAL NONINTEREST EXPENSE
$
14,318

 
$
14,506

 
$
15,019

 
$
13,833

 
$
14,463

 
(1
)
 
(1
)
 
 
$
43,843

 
$
41,938

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PRE-PROVISION PROFIT/(LOSS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Community Banking
$
5,538

 
$
4,912

 
$
4,575

 
$
4,716

 
$
4,818

 
13

 
15

 
 
$
15,025

 
$
15,294

 
(2
)
 
Corporate & Investment Bank
3,822

 
4,048

 
4,415

 
4,289

 
4,521

 
(6
)
 
(15
)
 
 
12,285

 
11,935

 
3

 
Commercial Banking
1,346

 
1,298

 
1,193

 
1,219

 
1,124

 
4

 
20

 
 
3,837

 
3,300

 
16

 
Asset & Wealth Management
1,064

 
1,020

 
507

 
912

 
917

 
4

 
16

 
 
2,591

 
2,655

 
(2
)
 
Corporate
112

 
621

 
(123
)
 
(636
)
 
(331
)
 
(82
)
 
NM

 
 
610

 
(313
)
 
NM

 
PRE-PROVISION PROFIT
$
11,882

 
$
11,899

 
$
10,567

 
$
10,500

 
$
11,049

 

 
8

 
 
$
34,348

 
$
32,871

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PROVISION FOR CREDIT LOSSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Community Banking
$
1,517

 
$
1,394

 
$
1,430

 
$
949

 
$
1,294

 
9

 
17

 
 
$
4,341

 
$
3,545

 
22

 
Corporate & Investment Bank
(26
)
 
(53
)
 
(96
)
 
(198
)
 
67

 
51

 
NM

 
 
(175
)
 
761

 
NM

 
Commercial Banking
(47
)
 
(130
)
 
(37
)
 
124

 
(121
)
 
64

 
61

 
 
(214
)
 
158

 
NM

 
Asset & Wealth Management
8

 
4

 
18

 
(11
)
 
32

 
100

 
(75
)
 
 
30

 
37

 
(19
)
 
Corporate

 

 

 

 
(1
)
 

 
100

 
 

 
(4
)
 
100

 
PROVISION FOR CREDIT LOSSES
$
1,452

 
$
1,215

 
$
1,315

 
$
864

 
$
1,271

 
20

 
14

 
 
$
3,982

 
$
4,497

 
(11
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INCOME/(LOSS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Community Banking
$
2,553

 
$
2,223

 
$
1,988

 
$
2,364

 
$
2,204

 
15

 
16

 
 
$
6,764

 
$
7,350

 
(8
)
 
Corporate & Investment Bank
2,546

 
2,710

 
3,241

 
3,431

 
2,912

 
(6
)
 
(13
)
 
 
8,497

 
7,384

 
15

 
Commercial Banking
881

 
902

 
799

 
687

 
778

 
(2
)
 
13

 
 
2,582

 
1,970

 
31

 
Asset & Wealth Management
674

 
624

 
385

 
586

 
557

 
8

 
21

 
 
1,683

 
1,665

 
1

 
Corporate
78

 
570

 
35

 
(341
)
 
(165
)
 
(86
)
 
NM

 
 
683

 
(363
)
 
NM

 
TOTAL NET INCOME
$
6,732

 
$
7,029

 
$
6,448

 
$
6,727

 
$
6,286

 
(4
)
 
7

 
 
$
20,209

 
$
18,006

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



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CAPITAL AND OTHER SELECTED BALANCE SHEET ITEMS
(in millions, except ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
Sep 30,
 
 
Jun 30,
 
Mar 31,
 
Dec 31,
 
Sep 30,
 
 
Jun 30,
 
Sep 30,
 
 
 
 
 
 
 
2017 Change
 
 
2017
 
 
2017
 
2017
 
2016
 
2016
 
 
2017
 
2016
 
2017
 
 
2016
 
 
2016
 
CAPITAL (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Risk-based capital metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Standardized Transitional
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CET1 capital
$
187,061

(f)

$
186,942


$
184,337


$
182,967


$
181,606

 
 
 %
 
3
 %
 
 
 
 
 
 
 
 
 
Tier 1 capital
212,298

(f)
 
212,353

 
209,653

 
208,112

 
206,430

 
 

 
3

 
 
 
 
 
 
 
 
 
Total capital
242,948

(f)
 
243,061

 
240,222

 
239,553

 
241,004

 
 

 
1

 
 
 
 
 
 
 
 
 
Risk-weighted assets
1,486,433

(f)
 
1,478,816

 
1,468,931

 
1,464,981

 
1,480,291

 
 
1

 

 
 
 
 
 
 
 
 
 
CET1 capital ratio
12.6
%
(f)
 
12.6
%
 
12.5
%
 
12.5
%
 
12.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 capital ratio
14.3

(f)
 
14.4

 
14.3

 
14.2

 
13.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total capital ratio
16.3

(f)
 
16.4

 
16.4

 
16.4

 
16.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advanced Transitional
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CET1 capital
$
187,061

(f)
 
186,942

 
184,337

 
182,967

 
181,606

 
 

 
3

 
 
 
 
 
 
 
 
 
Tier 1 capital
212,298

(f)
 
212,353

 
209,653

 
208,112

 
206,430

 
 

 
3

 
 
 
 
 
 
 
 
 
Total capital
232,599

(f)
 
233,345

 
229,436

 
228,592

 
229,324

 
 

 
1

 
 
 
 
 
 
 
 
 
Risk-weighted assets
1,449,048

(f)
 
1,459,196

 
1,467,992

 
1,476,915

 
1,515,177

 
 
(1
)
 
(4
)
 
 
 
 
 
 
 
 
 
CET1 capital ratio
12.9
%
(f)
 
12.8
%
 
12.6
%
 
12.4
%
 
12.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 capital ratio
14.7

(f)
 
14.6

 
14.3

 
14.1

 
13.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total capital ratio
16.1

(f)
 
16.0

 
15.6

 
15.5

 
15.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leverage-based capital metrics
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted average assets (b)
$
2,521,890

(f)
 
$
2,512,120

 
$
2,486,114

 
$
2,484,631

 
$
2,427,423

 
 

 
4

 
 
 
 
 
 
 
 
 
Tier 1 leverage ratio
8.4
%
(f)
 
8.5
%
 
8.4
%
 
8.4
%
 
8.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SLR leverage exposure (c)
$
3,210,599

(f)
 
$
3,193,072

 
3,171,822

 
3,191,990

 
3,140,733

 
 
1

 
2

 
 
 
 
 
 
 
 
 
SLR (c)
6.6
%
(f)
 
6.7
%
 
6.6
%
 
6.5
%
 
6.6
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TANGIBLE COMMON EQUITY (period-end) (d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stockholders’ equity
$
232,314

 
 
$
232,415

 
$
229,795

 
$
228,122

 
$
228,263

 
 

 
2

 
 
 
 
 
 
 
 
 
Less: Goodwill
47,309

 
 
47,300

 
47,292

 
47,288

 
47,302

 
 

 

 
 
 
 
 
 
 
 
 
Less: Other intangible assets
808

 
 
827

 
847

 
862

 
887

 
 
(2
)
 
(9
)
 
 
 
 
 
 
 
 
 
Add: Deferred tax liabilities (e)
3,271

 
 
3,252

 
3,225

 
3,230

 
3,232

 
 
1

 
1

 
 
 
 
 
 
 
 
 
Total tangible common equity
$
187,468

 
 
$
187,540

 
$
184,881

 
$
183,202

 
$
183,306

 
 

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TANGIBLE COMMON EQUITY (average) (d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Common stockholders’ equity
$
231,861

 
 
$
230,200

 
$
227,703

 
$
226,410

 
$
226,089

 
 
1

 
3

 
$
229,937

 
 
$
224,034

 
 
3
 %
 
Less: Goodwill
47,309

 
 
47,290

 
47,293

 
47,296

 
47,302

 
 

 

 
47,297

 
 
47,314

 
 

 
Less: Other intangible assets
818

 
 
838

 
853

 
873

 
903

 
 
(2
)
 
(9
)
 
836

 
 
938

 
 
(11
)
 
Add: Deferred tax liabilities (e)
3,262

 
 
3,239

 
3,228

 
3,231

 
3,226

 
 
1

 
1

 
3,243

 
 
3,205

 
 
1

 
Total tangible common equity
$
186,996

 
 
$
185,311

 
$
182,785

 
$
181,472

 
$
181,110

 
 
1

 
3

 
$
185,047

 
 
$
178,987

 
 
3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTANGIBLE ASSETS (period-end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill
$
47,309

 
 
$
47,300

 
$
47,292

 
$
47,288

 
$
47,302

 
 

 

 
 
 
 
 
 
 
 
 
Mortgage servicing rights
5,738

 
 
5,753

 
6,079

 
6,096

 
4,937

 
 

 
16

 
 
 
 
 
 
 
 
 
Other intangible assets
808

 
 
827

 
847

 
862

 
887

 
 
(2
)
 
(9
)
 
 
 
 
 
 
 
 
 
Total intangible assets
$
53,855

 
 
$
53,880

 
$
54,218

 
$
54,246

 
$
53,126

 
 

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Basel III sets forth two comprehensive methodologies for calculating risk-weighted assets: a Standardized approach and an Advanced approach. As required by the Collins Amendment of the Dodd-Frank Act, the capital adequacy of the Firm is evaluated against the Basel III approach (Standardized or Advanced) that results, for each quarter, in the lower ratio (the “Collins Floor”). For further discussion of the implementation of Basel III, see Capital Risk Management on pages 76-85 of the 2016 Annual Report, and on pages 42–48 of the Firm's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017.
(b)
Adjusted average assets, for purposes of calculating leverage ratios, includes total quarterly average assets adjusted for on balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.
(c)
The supplementary leverage ratio (“SLR”) under Basel III is defined as Tier 1 capital divided by the Firm’s total leverage exposure. Total leverage exposure is calculated by taking the Firm’s adjusted average assets as calculated for the Tier 1 leverage ratio, and adding certain off-balance sheet exposures, such as undrawn commitments and derivatives potential future exposure.
(d)
For further discussion of TCE, see page 28.
(e)
Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in non-taxable transactions, which are netted against goodwill and other intangibles when calculating TCE.
(f)
Estimated.


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EARNINGS PER SHARE AND RELATED INFORMATION
 
(in millions, except per share and ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
EARNINGS PER SHARE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
6,732

 
$
7,029

 
$
6,448

 
$
6,727

 
$
6,286

 
(4
)%
 
7
 %
 
 
$
20,209

 
$
18,006

 
12
 %
 
Less: Preferred stock dividends
412

 
411

 
412

 
412

 
412

 

 

 
 
1,235

 
1,235

 

 
Net income applicable to common equity
6,320

 
6,618

 
6,036

 
6,315

 
5,874

 
(5
)
 
8

 
 
18,974

 
16,771

 
13

 
Less: Dividends and undistributed earnings allocated to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
participating securities
58

 
63

 
61

 
65

 
62

 
(8
)
 
(6
)
 
 
188

 
187

 
1

 
Net income applicable to common stockholders
$
6,262

 
$
6,555

 
$
5,975

 
$
6,250

 
$
5,812

 
(4
)
 
8

 
 
$
18,786

 
$
16,584

 
13

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total weighted-average basic shares outstanding
3,534.7

 
3,574.1

 
3,601.7

 
3,611.3

 
3,637.7

 
(1
)
 
(3
)
 
 
3,570.9

 
3,674.6

 
(3
)
 
Net income per share
$
1.77

 
$
1.83

 
$
1.66

 
$
1.73

 
$
1.60

 
(3
)
 
11

 
 
$
5.26

 
$
4.51

 
17

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted earnings per share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income applicable to common stockholders
$
6,262

 
$
6,555

 
$
5,975

 
$
6,250

 
$
5,812

 
(4
)
 
8

 
 
$
18,786

 
$
16,584

 
13

 
Total weighted-average basic shares outstanding
3,534.7

 
3,574.1

 
3,601.7

 
3,611.3

 
3,637.7

 
(1
)
 
(3
)
 
 
3,570.9

 
3,674.6

 
(3
)
 
Add: Employee stock options, stock appreciation rights (“SARs”), warrants and performance share units (“PSUs”)
24.9

 
24.9

 
28.7

 
35.3

 
32.1

 

 
(22
)
 
 
26.1

 
29.9

 
(13
)
 
Total weighted-average diluted shares outstanding
3,559.6

 
3,599.0

 
3,630.4

 
3,646.6

 
3,669.8

 
(1
)
 
(3
)
 
 
3,597.0

 
3,704.5

 
(3
)
 
Net income per share
$
1.76

 
$
1.82

 
$
1.65

 
$
1.71

 
$
1.58

 
(3
)
 
11

 
 
$
5.22

 
$
4.48

 
17

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COMMON DIVIDENDS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash dividends declared per share
$
0.56

(c)
$
0.50

 
$
0.50

 
$
0.48

 
$
0.48

 
12

 
17

 
 
$
1.56

 
$
1.40

 
11

 
Dividend payout ratio
31
%
 
27
%
 
30
%
 
28
%
 
30
%
 
 
 
 
 
 
29
%
 
31
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COMMON EQUITY REPURCHASE PROGRAM (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total shares of common stock repurchased
51.7

 
35.0

 
32.1

 
29.8

 
35.6

 
48

 
45

 
 
118.8

 
110.6

 
7

 
Average price paid per share of common stock
$
92.02

 
$
86.05

 
$
88.14

 
$
75.56

 
$
64.46

 
7

 
43

 
 
$
89.22

 
$
61.75

 
44

 
Aggregate repurchases of common equity
4,763

 
3,007

 
2,832

 
2,251

 
2,295

 
58

 
108

 
 
10,602

 
6,831

 
55

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EMPLOYEE ISSUANCE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares issued from treasury stock related to employee
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
stock-based compensation awards and employee stock
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
purchase plans
0.9

 
0.9

 
21.0

 
2.3

 
1.3

 

 
(31
)
 
 
22.8

 
24.8

 
(8
)
 
Net impact of employee issuances on stockholders’ equity (b)
$
238

 
$
270

 
$
29

 
$
164

 
$
226

 
(12
)
 
5

 
 
$
537

 
$
842

 
(36
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
On June 28, 2017, the Firm announced, that it is authorized to repurchase up to $19.4 billion of common equity between July 1, 2017 and June 30, 2018, under a new equity repurchase program authorized by the Board of Directors.
(b)
The net impact of employee issuances on stockholders’ equity is driven by the cost of equity compensation awards that is recognized over the applicable vesting periods. The cost is partially offset by tax impacts related to the distribution of shares and the exercise of employee stock options and SARs.
(c)
On June 28, 2017, the Board of Directors increased the quarterly common stock dividend from $0.50 to $0.56 per share.


Page 10




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CONSUMER & COMMUNITY BANKING
 
 
 
 
FINANCIAL HIGHLIGHTS
 
 
 
 
(in millions, except ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
INCOME STATEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lending- and deposit-related fees
$
885

 
$
850

 
$
812

 
$
841

 
$
841

 
4
 %
 
5
 %
 
 
$
2,547

 
$
2,390

 
7
 %
 
Asset management, administration and commissions
543

 
562

 
539

 
497

 
531

 
(3
)
 
2

 
 
1,644

 
1,596

 
3

 
Mortgage fees and related income
428

 
401

 
406

 
510

 
624

 
7

 
(31
)
 
 
1,235

 
1,980

 
(38
)
 
Card income
1,141

 
1,061

 
817

 
821

 
1,099

 
8

 
4

 
 
3,019

 
3,543

 
(15
)
 
All other income
901

 
810

 
743

 
774

 
773

 
11

 
17

 
 
2,454

 
2,303

 
7

 
Noninterest revenue
3,898

 
3,684

 
3,317

 
3,443

 
3,868

 
6

 
1

 
 
10,899

 
11,812

 
(8
)
 
Net interest income
8,135

 
7,728

 
7,653

 
7,576

 
7,460

 
5

 
9

 
 
23,516

 
22,084

 
6

 
TOTAL NET REVENUE
12,033

 
11,412

 
10,970

 
11,019

 
11,328

 
5

 
6

 
 
34,415

 
33,896

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for credit losses
1,517

 
1,394

 
1,430

 
949

 
1,294

 
9

 
17

 
 
4,341

 
3,545

 
22

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation expense
2,554

 
2,511

 
2,533

 
2,468

 
2,453

 
2

 
4

 
 
7,598

 
7,255

 
5

 
Noncompensation expense (a)
3,941

 
3,989

 
3,862

 
3,835

 
4,057

 
(1
)
 
(3
)
 
 
11,792

 
11,347

 
4

 
TOTAL NONINTEREST EXPENSE
6,495

 
6,500

 
6,395

 
6,303

 
6,510

 

 

 
 
19,390

 
18,602

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income tax expense
4,021

 
3,518

 
3,145

 
3,767

 
3,524

 
14

 
14

 
 
10,684

 
11,749

 
(9
)
 
Income tax expense
1,468

 
1,295

 
1,157

 
1,403

 
1,320

 
13

 
11

 
 
3,920

 
4,399

 
(11
)
 
NET INCOME
$
2,553

 
$
2,223

 
$
1,988

 
$
2,364

 
$
2,204

 
15

 
16

 
 
$
6,764

 
$
7,350

 
(8
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REVENUE BY LINE OF BUSINESS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Business Banking
$
5,408

 
$
5,233

 
$
4,906

 
$
4,774

 
$
4,719

 
3

 
15

 
 
$
15,547

 
$
13,885

 
12

 
Mortgage Banking
1,558

 
1,426

 
1,529

 
1,690

 
1,874

 
9

 
(17
)
 
 
4,513

 
5,671

 
(20
)
 
Card, Commerce Solutions & Auto
5,067

 
4,753

 
4,535

 
4,555

 
4,735

 
7

 
7

 
 
14,355

 
14,340

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MORTGAGE FEES AND RELATED INCOME DETAILS:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net production revenue
158

 
152

 
141

 
183

 
247

 
4

 
(36
)
 
 
451


670

 
(33
)
 
Net mortgage servicing revenue (b)
270

 
249

 
265

 
327

 
377

 
8

 
(28
)
 
 
784


1,310

 
(40
)
 
Mortgage fees and related income
$
428

 
$
401

 
$
406

 
$
510

 
$
624

 
7

 
(31
)
 
 
$
1,235

 
$
1,980

 
(38
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ROE
19

%
17

%
15

%
17

%
16

%
 
 
 
 
 
17

%
18

%
 
 
Overhead ratio
54

 
57

 
58

 
57

 
57

 
 
 
 
 
 
56

 
55

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Included operating lease depreciation expense of $688 million, $638 million, $599 million, $549 million and $504 million for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively, and $1.9 billion and $1.4 billion for the nine months ended September 30, 2017 and 2016, respectively.
(b)
Included MSR risk management of $(23) million, $(57) million, $(52) million, $(23) million and $38 million for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively, and $(132) million and $240 million for the nine months ended September 30, 2017 and 2016, respectively.


Page 11



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CONSUMER & COMMUNITY BANKING
 
 
 
 
FINANCIAL HIGHLIGHTS, CONTINUED
 
 
 
 
(in millions, except headcount data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
SELECTED BALANCE SHEET DATA (period-end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
537,459

 
$
529,859

 
$
524,770

 
$
535,310

 
$
521,276

 
1
 %
 
3
 %
 
 
$
537,459

 
$
521,276

 
3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Business Banking
25,275

 
25,044

 
24,386

 
24,307

 
23,846

 
1

 
6

 
 
25,275

 
23,846

 
6

 
Home equity
44,542

 
46,330

 
48,234

 
50,296

 
52,445

 
(4
)
 
(15
)
 
 
44,542

 
52,445

 
(15
)
 
Residential mortgage
195,134

 
189,661

 
185,114

 
181,196

 
181,564

 
3

 
7

 
 
195,134

 
181,564

 
7

 
Mortgage Banking
239,676

 
235,991

 
233,348

 
231,492

 
234,009

 
2

 
2

 
 
239,676

 
234,009

 
2

 
Credit Card
141,313

 
140,141

 
135,016

 
141,816

 
133,435

 
1

 
6

 
 
141,313

 
133,435

 
6

 
Auto
65,102

 
65,627

 
65,568

 
65,814

 
64,512

 
(1
)
 
1

 
 
65,102

 
64,512

 
1

 
Student
47

 
75

 
6,253

 
7,057

 
7,354

 
(37
)
 
(99
)
 
 
47

 
7,354

 
(99
)
 
Total loans
471,413

 
466,878

 
464,571

 
470,486

 
463,156

 
1

 
2

 
 
471,413

 
463,156

 
2

 
           Core loans
401,648

 
393,639

 
381,393

 
382,608

 
371,060

 
2

 
8

 
 
401,648

 
371,060

 
8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
653,460

 
648,369

 
646,962

 
618,337

 
605,117

 
1

 
8

 
 
653,460


605,117

 
8

 
Equity
51,000

 
51,000

 
51,000

 
51,000

 
51,000

 

 

 
 
51,000


51,000

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET DATA (average)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
531,959

 
$
528,598

 
$
532,098

 
$
527,684

 
$
521,882

 
1

 
2

 
 
$
530,884

 
$
512,550

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Business Banking
25,166

 
24,725

 
24,359

 
24,040

 
23,678

 
2

 
6

 
 
24,753

 
23,227

 
7

 
Home equity
45,424

 
47,339

 
49,278

 
51,393

 
53,501

 
(4
)
 
(15
)
 
 
47,333

 
55,604

 
(15
)
 
Residential mortgage
192,805

 
187,201

 
183,756

 
182,820

 
180,669

 
3

 
7

 
 
187,954

 
175,059

 
7

 
Mortgage Banking
238,229

 
234,540

 
233,034

 
234,213

 
234,170

 
2

 
2

 
 
235,287

 
230,663

 
2

 
Credit Card
141,172

 
138,132

 
137,211

 
136,181

 
132,713

 
2

 
6

 
 
138,852

 
129,481

 
7

 
Auto
65,175

 
65,474

 
65,315

 
65,286

 
64,068

 

 
2

 
 
65,321

 
62,998

 
4

 
Student
58

 
4,642

 
6,916

 
7,217

 
7,490

 
(99
)
 
(99
)
 
 
3,847

 
7,759

 
(50
)
 
Total loans
469,800

 
467,513

 
466,835

 
466,937

 
462,119

 

 
2

 
 
468,060

 
454,128

 
3

 
           Core loans
398,319

 
387,783

 
381,016

 
376,933

 
367,999

 
3

 
8

 
 
389,103

 
356,072

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
645,732

 
639,873

 
622,915

 
607,175

 
593,671

 
1

 
9

 
 
636,257

 
579,741

 
10

 
Equity
51,000

 
51,000

 
51,000

 
51,000

 
51,000

 

 

 
 
51,000

 
51,000

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Headcount
134,553

 
135,453

 
133,590

 
132,802

 
132,092

 
(1
)
 
2

 
 
134,553

 
132,092

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: In the first quarter of 2017, the Firm transferred the student loan portfolio to held-for-sale. Net charge-offs related to the portfolio predominantly reflect a write-down of the portfolio to the estimated fair value at the time of the transfer. This transfer impacted certain loan and credit-related metrics disclosed on pages 12-13 and 24-27.


Page 12



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CONSUMER & COMMUNITY BANKING
 
 
 
 
 
FINANCIAL HIGHLIGHTS, CONTINUED
 
 
 
 
 
(in millions, except ratio data)
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
CREDIT DATA AND QUALITY STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans (a)(b)
$
4,068

 
$
4,124

 
$
4,442

 
$
4,708

 
$
4,853

 
(1
)%
 
(16
)%
 
 
$
4,068

 
$
4,853

 
(16
)%
 
Net charge-offs/(recoveries) (c)(d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Business Banking
71

 
56

 
57

 
77

 
71

 
27

 

 
 
184

 
180

 
2

 
Home equity
13

 
7

 
47

 
48

 
42

 
86

 
(69
)
 
 
67

 
136

 
(51
)
 
Residential mortgage
(2
)
 
(4
)
 
3

 
3

 
7

 
50

 
NM

 
 
(3
)
 
11

 
NM

 
Mortgage Banking
11

 
3

 
50

 
51

 
49

 
267

 
(78
)
 
 
64

 
147

 
(56
)
 
Credit Card
1,019

 
1,037

 
993

 
914

 
838

 
(2
)
 
22

 
 
3,049


2,528

 
21

 
Auto
116

 
48

 
81

 
93

 
79

 
142

 
47

 
 
245


192

 
28

 
Student

 

 
498

(i)
64

 
32

 
NM

 
NM

 
 
498

(i)
98

 
408

 
Total net charge-offs/(recoveries)
$
1,217

 
$
1,144

 
$
1,679

(i)
$
1,199

 
$
1,069

 
6

 
14

 
 
$
4,040

(i)
$
3,145

 
28

 
Net charge-off/(recovery) rate (c)(d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Business Banking
1.12

%
0.91

%
0.95

%
1.27

%
1.19

%
 
 
 
 
 
0.99

%
1.04

%
 
 
Home equity (e)
0.15

 
0.08

 
0.52

 
0.50

 
0.42

 
 
 
 
 
 
0.25

 
0.44

 
 
 
Residential mortgage (e)

 
(0.01
)
 
0.01

 
0.01

 
0.02

 
 
 
 
 
 

 
0.01

 
 
 
Mortgage Banking (e)
0.02

 
0.01

 
0.10

 
0.10

 
0.10

 
 
 
 
 
 
0.04

 
0.10

 
 
 
Credit Card
2.87

 
3.01

 
2.94

 
2.67

 
2.51

 
 
 
 
 
 
2.94

 
2.61

 
 
 
Auto
0.71

 
0.29

 
0.50

 
0.57

 
0.49

 
 
 
 
 
 
0.50

 
0.41

 
 
 
Student

 

 
NM

 
3.53

 
1.70

 
 
 
 
 
 
NM

 
1.69

 
 
 
Total net charge-off/(recovery) rate (e)
1.10

 
1.07

 
1.58

(i)
1.11

 
1.00

 
 
 
 
 
 
1.25

(i)
1.01

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30+ day delinquency rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Banking (f)(g)
1.03

%
1.02

%
1.08

%
1.23

%
1.27

%
 
 
 
 
 
1.03

%
1.27

%
 
 
Credit Card
1.76

 
1.59

 
1.66

 
1.61

 
1.53

 
 
 
 
 
 
1.76

 
1.53

 
 
 
Auto
0.93

 
0.88

 
0.93

 
1.19

 
1.08

 
 
 
 
 
 
0.93

 
1.08

 
 
 
Student (h)

 

 

 
1.60

 
1.81

 
 
 
 
 
 

 
1.81

 
 
 
90+ day delinquency rate - Credit Card
0.86

 
0.80

 
0.87

 
0.81

 
0.75

 
 
 
 
 
 
0.86

 
0.75

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Business Banking
$
796

 
$
796

 
$
753

 
$
753

 
$
703

 

 
13

 
 
$
796

 
$
703

 
13

 
Mortgage Banking, excluding PCI loans
1,153

 
1,153

 
1,328

 
1,328

 
1,488

 

 
(23
)
 
 
1,153

 
1,488

 
(23
)
 
Mortgage Banking - PCI loans (d)
2,245

 
2,265

 
2,287

 
2,311

 
2,618

 
(1
)
 
(14
)
 
 
2,245

 
2,618

 
(14
)
 
Credit Card
4,684

 
4,384

 
4,034

 
4,034

 
3,884

 
7

 
21

 
 
4,684

 
3,884

 
21

 
Auto
499

 
499

 
474

 
474

 
474

 

 
5

 
 
499

 
474

 
5

 
Student

 

 

 
249

 
274

 
NM

 
NM

 
 

 
274

 
NM

 
Total allowance for loan losses (d)
$
9,377

 
$
9,097

 
$
8,876

 
$
9,149

 
$
9,441

 
3

 
(1
)
 
 
$
9,377

 
$
9,441

 
(1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note : CCB provides several non-GAAP financial measures which exclude the impact of PCI loans. For further discussion of these measures, see page 28.

(a)
Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as they are all performing.
(b)
At September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016, nonaccrual loans excluded mortgage loans 90 or more days past and insured by U.S. government agencies of $4.0 billion, $4.1 billion, $4.5 billion, $5.0 billion and $5.0 billion, respectively. Student loans insured by U.S. government agencies under the Federal Family Education Loan Program (“FFELP”) and 90 or more days past due were also excluded from nonaccrual loans prior to sale of the student loan portfolio in the second quarter of 2017. These amounts have been excluded based upon the government guarantee.
(c)
Net charge-offs and net charge-off rates for the three and nine months ended September 30, 2017 included $63 million of incremental charge-offs recorded in accordance with regulatory guidance regarding the timing of loss recognition for certain auto and residential real estate loans in bankruptcy and auto loans where assets were acquired in loan satisfaction.
(d)
Net charge-offs/(recoveries) and the net charge-off/(recovery) rates for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016, excluded write-offs in the PCI portfolio of $20 million, $22 million, $24 million, $32 million and $36 million, respectively, and for the nine months ended September 30, 2017 and 2016 excluded $66 million and $124 million, respectively. These write-offs decreased the allowance for loan losses for PCI loans. For further information on PCI write-offs, see Summary of Changes in the Allowances on page 26.
(e)
Excludes the impact of PCI loans. For the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016, the net charge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of 0.11%, 0.06%, 0.39%, 0.37% and 0.31%, respectively; (2) residential mortgage of -%, (0.01)%, 0.01%, 0.01% and 0.02%, respectively; (3) Mortgage Banking of 0.02%, 0.01%, 0.09%, 0.09% and 0.08%, respectively; and (4) total CCB of 1.03%, 0.99%, 1.46%, 1.02% and 0.92%, respectively. For the nine months ended September 30, 2017 and 2016, the net charge-off/(recovery) rates including the impact of PCI loans were as follows: (1) home equity of 0.19% and 0.33%, respectively; (2) residential mortgage of -% and 0.01%, respectively; (3) Mortgage Banking of 0.04% and 0.09%, respectively; and (4) total CCB of 1.16% and 0.93%, respectively.
(f)
At September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016, excluded mortgage loans insured by U.S. government agencies of $5.9 billion, $6.0 billion, $6.3 billion, $7.0 billion and $7.0 billion, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
(g)
Excludes PCI loans. The 30+ day delinquency rate for PCI loans was 9.30%, 9.06%, 9.11%, 9.82% and 10.01% at September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016, respectively.
(h)
Excluded student loans insured by U.S government agencies under FFELP of $468 million and $461 million at December 31, 2016 and September 30, 2016, respectively, that are 30 or more days past due. These amounts have been excluded based upon the government guarantee.
(i)
Excluding net charge-offs of $467 million related to the student loan portfolio transfer, the total net charge-off rates for the three months ended March 31, 2017 and nine months ended September 30, 2017 would have been 1.14% and 1.10%, respectively.

Page 13



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CONSUMER & COMMUNITY BANKING
 
 
 
 
 
FINANCIAL HIGHLIGHTS, CONTINUED
 
 
 
 
 
(in millions, except ratio data and where otherwise noted)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
BUSINESS METRICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Branches
5,174

 
5,217

 
5,246

 
5,258

 
5,310

 
(1
)%
 
(3
)%
 
 
5,174

 
5,310

 
(3
)%
 
Active digital customers (in thousands) (a)
46,349

 
45,876

 
45,463

 
43,836

 
43,657

 
1

 
6

 
 
46,349

 
43,657

 
6

 
Active mobile customers (in thousands) (b)
29,273

 
28,386

 
27,256

 
26,536

 
26,047

 
3

 
12

 
 
29,273

 
26,047

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debit and credit card sales volume (in billions) (c)
$
231.1

 
$
231.3

 
$
209.4

 
$
220.0

 
$
207.9

 

 
11

 
 
$
671.8

 
$
601.6

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer & Business Banking
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average deposits
$
630,351

 
$
625,381

 
$
609,035

 
$
590,653

 
$
576,573

 
1

 
9

 
 
$
621,667

 
$
564,190

 
10

 
Deposit margin
2.02

%
1.96

%
1.88

%
1.80

%
1.79

%
 
 
 
 
 
1.95

%
1.82

%
 
 
Business banking origination volume
$
1,654

 
$
2,193

 
$
1,703

 
$
1,641

 
$
1,803

 
(25
)
 
(8
)
 
 
$
5,550

 
$
5,674

 
(2
)
 
Client investment assets
262,513

 
252,993

 
245,050

 
234,532

 
231,574

 
4

 
13

 
 
262,513

 
231,574

 
13

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Banking (in billions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage origination volume by channel
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
10.6

 
$
9.7

 
$
9.0

 
$
12.7

 
$
11.7

 
9

 
(9
)
 
 
$
29.3

 
$
31.6

 
(7
)
 
Correspondent
16.3

 
14.2

 
13.4

 
16.4

 
15.4

 
15

 
6

 
 
43.9

 
42.9

 
2

 
Total mortgage origination volume (d)
$
26.9

 
$
23.9

 
$
22.4

 
$
29.1

 
$
27.1

 
13

 
(1
)
 
 
$
73.2

 
$
74.5

 
(2
)
 
Total loans serviced (period-end)
$
821.6

 
$
827.8

 
$
836.3

 
$
846.6

 
$
863.3

 
(1
)
 
(5
)
 
 
$
821.6

 
$
863.3

 
(5
)
 
Third-party mortgage loans serviced (period-end)
556.9

 
568.0

 
582.6

 
591.5

 
609.2

 
(2
)
 
(9
)
 
 
556.9

 
609.2

 
(9
)
 
MSR carrying value (period-end)
5.7

 
5.8

 
6.1

 
6.1

 
4.9

 
(2
)
 
16

 
 
5.7


4.9

 
16

 
Ratio of MSR carrying value (period-end) to third-party mortgage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
loans serviced (period-end)
1.02

%
1.02

%
1.05

%
1.03

%
0.80

%
 
 
 
 
 
1.02

%
0.80

%
 
 
MSR revenue multiple (e)
2.91
x
 
2.91
x
 
3.00
x
 
2.94
x
 
2.29
x
 
 
 
 
 
 
2.91
x
 
2.29
x
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit Card, excluding Commercial Card
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit card sales volume (in billions)
$
157.7

 
$
156.8

 
$
139.7

 
$
148.5

 
$
139.2

 
1

 
13

 
 
$
454.2

 
$
396.9

 
14

 
New accounts opened
1.9

 
2.1

 
2.5

 
2.7

 
2.7

 
(10
)
 
(30
)
 
 
6.5

 
7.7

 
(16
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Card Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue rate
10.95

%
10.53

%
10.15

%
10.14

%
11.04

%
 
 
 
 
 
10.55

%
11.70

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commerce Solutions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Merchant processing volume (in billions)
$
301.6

 
$
294.4

 
$
274.3

 
$
284.9

 
$
267.2

 
2

 
13

 
 
$
870.3

 
$
778.5

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Auto
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan and lease origination volume (in billions)
$
8.8

 
$
8.3

 
$
8.0

 
$
8.0

 
$
9.3

 
6

 
(5
)
 
 
$
25.1

 
$
27.4

 
(8
)
 
Average Auto operating lease assets
15,641

 
14,728

 
13,757

 
12,613

 
11,418

 
6

 
37

 
 
14,715


10,493

 
40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Users of all web and/or mobile platforms who have logged in within the past 90 days.
(b)
Users of all mobile platforms who have logged in within the past 90 days.
(c)
The prior period amounts have been revised to conform with the current period presentation.
(d)
Firmwide mortgage origination volume was $29.2 billion, $26.2 billion, $25.6 billion, $33.5 billion and $30.9 billion for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016, respectively, and $81.0 billion and $83.9 billion for the nine months ended September 30, 2017 and 2016, respectively.
(e)
Represents the ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) divided by the ratio of annualized loan servicing-related revenue to third-party mortgage loans serviced (average).


Page 14



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CORPORATE & INVESTMENT BANK
 
 
 
 
FINANCIAL HIGHLIGHTS
 
 
 
 
(in millions, except ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
INCOME STATEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment banking fees
$
1,819

 
$
1,803

 
$
1,812

 
$
1,612

 
$
1,855

 
1
 %
 
(2
)%
 
 
$
5,434

 
$
4,812

 
13
 %
 
Principal transactions
2,673

 
2,928

 
3,507

 
2,372

 
3,282

 
(9
)
 
(19
)
 
 
9,108

 
8,717

 
4

 
Lending- and deposit-related fees
374

 
387

 
388

 
400

 
402

 
(3
)
 
(7
)
 
 
1,149

 
1,181

 
(3
)
 
Asset management, administration and commissions
1,041

 
1,068

 
1,052

 
1,000

 
968

 
(3
)
 
8

 
 
3,161

 
3,062

 
3

 
All other income
187

 
258

 
177

 
242

 
183

 
(28
)
 
2

 
 
622

 
927

 
(33
)
 
Noninterest revenue
6,094

 
6,444

 
6,936

 
5,626

 
6,690

 
(5
)
 
(9
)
 
 
19,474

 
18,699

 
4

 
Net interest income
2,496

 
2,445

 
2,600

 
2,835

 
2,765

 
2

 
(10
)
 
 
7,541

 
8,056

 
(6
)
 
TOTAL NET REVENUE (a)
8,590

 
8,889

 
9,536

 
8,461

 
9,455

 
(3
)
 
(9
)
 
 
27,015

 
26,755

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for credit losses
(26
)
 
(53
)
 
(96
)
 
(198
)
 
67

 
51

 
NM

 
 
(175
)
 
761

 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation expense
2,286

 
2,451

 
2,800

 
1,696

 
2,513

 
(7
)
 
(9
)
 
 
7,537

 
7,850

 
(4
)
 
Noncompensation expense
2,482

 
2,390

 
2,321

 
2,476

 
2,421

 
4

 
3

 
 
7,193

 
6,970

 
3

 
TOTAL NONINTEREST EXPENSE
4,768

 
4,841

 
5,121

 
4,172

 
4,934

 
(2
)
 
(3
)
 
 
14,730

 
14,820

 
(1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income tax expense
3,848

 
4,101

 
4,511

 
4,487

 
4,454

 
(6
)
 
(14
)
 
 
12,460

 
11,174

 
12

 
Income tax expense
1,302

 
1,391

 
1,270

 
1,056

 
1,542

 
(6
)
 
(16
)
 
 
3,963

 
3,790

 
5

 
NET INCOME
$
2,546

 
$
2,710

 
$
3,241

 
$
3,431

 
$
2,912

 
(6
)
 
(13
)
 
 
$
8,497

 
$
7,384

 
15

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ROE
13
%
 
15
%
 
18
%
 
20
%
 
17
%
 
 
 
 
 
 
15
%
 
14
%
 
 
 
Overhead ratio
56

 
54

 
54

 
49

 
52

 
 
 
 
 
 
55

 
55

 
 
 
Compensation expense as a percent of total net revenue
27

 
28

 
29

 
20

 
27

 
 
 
 
 
 
28

 
29

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REVENUE BY BUSINESS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment Banking
$
1,705

 
$
1,695

 
$
1,651

 
$
1,487

 
$
1,740

 
1

 
(2
)
 
 
$
5,051

 
$
4,463

 
13

 
Treasury Services
1,058

 
1,055

 
981

 
950

 
917

 

 
15

 
 
3,094

 
2,693

 
15

 
Lending
331

 
373

 
389

 
346

 
283

 
(11
)
 
17

 
 
1,093

 
862

 
27

 
Total Banking
3,094

 
3,123

 
3,021

 
2,783

 
2,940

 
(1
)
 
5

 
 
9,238

 
8,018

 
15

 
Fixed Income Markets
3,164

 
3,216

 
4,215

 
3,369

 
4,334

 
(2
)
 
(27
)
 
 
10,595

 
11,890

 
(11
)
 
Equity Markets
1,363

 
1,586

 
1,606

 
1,150

 
1,414

 
(14
)
 
(4
)
 
 
4,555

 
4,590

 
(1
)
 
Securities Services
1,007

 
982

 
916

 
887

 
916

 
3

 
10

 
 
2,905

 
2,704

 
7

 
Credit Adjustments & Other (b)
(38
)
 
(18
)
 
(222
)
 
272

 
(149
)
 
(111
)
 
74

 
 
(278
)
 
(447
)
 
38

 
Total Markets & Investor Services
5,496

 
5,766

 
6,515

 
5,678

 
6,515

 
(5
)
 
(16
)
 
 
17,777

 
18,737

 
(5
)
 
TOTAL NET REVENUE
$
8,590

 
$
8,889

 
$
9,536

 
$
8,461

 
$
9,455

 
(3
)
 
(9
)
 
 
$
27,015

 
$
26,755

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Included tax-equivalent adjustments, predominantly due to income tax credits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; as well as tax-exempt income from municipal bonds of $505 million, $554 million, $551 million, $591 million and $483 million for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively, and $1.6 billion and $1.5 billion for the nine months ended September 30, 2017 and 2016, respectively.
(b)
Consists primarily of credit valuation adjustments (“CVA”) managed centrally within CIB, funding valuation adjustments (“FVA”) and debit valuation adjustments (“DVA”) on derivatives. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets.

Page 15



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CORPORATE & INVESTMENT BANK
 
 
 
 
FINANCIAL HIGHLIGHTS, CONTINUED
 
 
 
 
(in millions, except ratio and headcount data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
SELECTED BALANCE SHEET DATA (period-end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
$
851,808

 
$
847,377

 
$
840,304

 
$
803,511

 
$
825,933

 
1
 %
 
3
 %
 
 
$
851,808

 
$
825,933

 
3
 %
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans retained (a)
106,955

 
108,935

 
107,902

 
111,872

 
117,133

 
(2
)
 
(9
)
 
 
106,955

 
117,133

 
(9
)
 
Loans held-for-sale and loans at fair value
3,514

 
7,168

 
6,477

 
3,781

 
4,184

 
(51
)
 
(16
)
 
 
3,514

 
4,184

 
(16
)
 
Total loans
110,469

 
116,103

 
114,379

 
115,653

 
121,317

 
(5
)
 
(9
)
 
 
110,469

 
121,317

 
(9
)
 
           Core loans
110,133

 
115,764

 
114,003

 
115,243

 
120,885

 
(5
)
 
(9
)
 
 
110,133

 
120,885

 
(9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
70,000

 
70,000

 
70,000

 
64,000

 
64,000

 

 
9

 
 
70,000

 
64,000

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET DATA (average)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets
$
858,912

 
$
864,686

 
$
838,017

 
$
836,446

 
$
811,217

 
(1
)
 
6

 
 
$
853,948

 
$
808,228

 
6

 
Trading assets - debt and equity instruments
349,448

 
351,678

 
328,339

 
304,348

 
306,431

 
(1
)
 
14

 
 
343,232

 
299,350

 
15

 
Trading assets - derivative receivables
55,875

 
54,937

 
58,948

 
65,675

 
63,829

 
2

 
(12
)
 
 
56,575

 
62,619

 
(10
)
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans retained (a)
107,829

 
110,011

 
108,389

 
112,987

 
110,941

 
(2
)
 
(3
)
 
 
108,741

 
110,442

 
(2
)
 
Loans held-for-sale and loans at fair value
4,674

 
5,789

 
5,308

 
4,998

 
3,864

 
(19
)
 
21

 
 
5,254

 
3,414

 
54

 
Total loans
112,503

 
115,800

 
113,697

 
117,985

 
114,805

 
(3
)
 
(2
)
 
 
113,995

 
113,856

 

 
Core loans
112,168

 
115,434

 
113,309

 
117,570

 
114,380

 
(3
)
 
(2
)
 
 
113,631

 
113,410

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity
70,000

 
70,000

 
70,000

 
64,000

 
64,000

 

 
9

 
 
70,000

 
64,000

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Headcount
50,641

 
49,228

 
48,700

 
48,748

 
49,176

 
3

 
3

 
 
50,641

 
49,176

 
3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT DATA AND QUALITY STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs/(recoveries)
$
20

 
$
47

 
$
(18
)
 
$
29

 
$
3

 
(57
)
 
NM

 
 
$
49

 
$
139

 
(65
)
 
Nonperforming assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans retained (b)
437

 
462

 
308

 
467

 
614

 
(5
)
 
(29
)
 
 
437

 
614

 
(29
)
 
Nonaccrual loans held-for-sale and loans at fair value
2

 
31

 
109

 
109

 
26

 
(94
)
 
(92
)
 
 
2

 
26

 
(92
)
 
Total nonaccrual loans
439

 
493

 
417

 
576

 
640

 
(11
)
 
(31
)
 
 
439

 
640

 
(31
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative receivables
164

 
170

 
179

 
223

 
232

 
(4
)
 
(29
)
 
 
164

 
232

 
(29
)
 
Assets acquired in loan satisfactions
92

 
71

 
87

 
79

 
75

 
30

 
23

 
 
92

 
75

 
23

 
Total nonperforming assets
695

 
734

 
683

 
878

 
947

 
(5
)
 
(27
)
 
 
695

 
947

 
(27
)
 
Allowance for credit losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses
1,253

 
1,298

 
1,346

 
1,420

 
1,611

 
(3
)
 
(22
)
 
 
1,253

 
1,611

 
(22
)
 
Allowance for lending-related commitments
745

 
745

 
797

 
801

 
837

 

 
(11
)
 
 
745

 
837

 
(11
)
 
Total allowance for credit losses
1,998

 
2,043

 
2,143

 
2,221

 
2,448

 
(2
)
 
(18
)
 
 
1,998

 
2,448

 
(18
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-off/(recovery) rate (a)(d)
0.07
%
 
0.17
%
 
(0.07
)%
 
0.10
%
 
0.01
%
 
 
 
 
 
 
0.06
%
 
0.17
%
 
 
 
Allowance for loan losses to period-end loans retained (a)
1.17

 
1.19

 
1.25

 
1.27

 
1.38

 
 
 
 
 
 
1.17

 
1.38

 
 
 
Allowance for loan losses to period-end loans retained,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
excluding trade finance and conduits (c)
1.79

 
1.83

 
1.91

 
1.86

 
2.02

 
 
 
 
 
 
1.79

 
2.02

 
 
 
Allowance for loan losses to nonaccrual loans retained (a)(b)
287

 
281

 
437

 
304

 
262

 
 
 
 
 
 
287

 
262

 
 
 
Nonaccrual loans to total period-end loans
0.40

 
0.42

 
0.36

 
0.50

 
0.53

 
 
 
 
 
 
0.40

 
0.53

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Loans retained includes credit portfolio loans, loans held by consolidated Firm-administered multi-seller conduits, trade finance loans, other held-for-investment loans and overdrafts.
(b)
Allowance for loan losses of $177 million, $164 million, $61 million, $113 million and $202 million were held against nonaccrual loans at September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively.
(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.
(d)
Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.

Page 16



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CORPORATE & INVESTMENT BANK
 
 
 
 
FINANCIAL HIGHLIGHTS, CONTINUED
 
 
 
 
(in millions, except where otherwise noted)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
BUSINESS METRICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advisory
$
620

 
$
503

 
$
501

 
$
517

 
$
542

 
23
 %
 
14
 %
 
 
$
1,624

 
$
1,593

 
2
%
 
Equity underwriting
293

 
367

 
394

 
299

 
370

 
(20
)
 
(21
)
 
 
1,054

 
860

 
23

 
Debt underwriting
906

 
933

 
917

 
796

 
943

 
(3
)
 
(4
)
 
 
2,756

 
2,359

 
17

 
Total investment banking fees
$
1,819

 
$
1,803

 
$
1,812

 
$
1,612

 
$
1,855

 
1

 
(2
)
 
 
$
5,434

 
$
4,812

 
13

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets under custody (“AUC”) (period-end) (in billions)
$
22,738

 
$
22,134

 
$
21,383

 
$
20,520

 
$
21,224

 
3

 
7

 
 
$
22,738

 
$
21,224

 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Client deposits and other third-party liabilities (average) (a)
421,588

 
404,920

 
391,716

 
390,793

 
381,542

 
4

 
10

 
 
406,184

 
371,417

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trade finance loans (period-end)
17,171

 
17,356

 
16,613

 
15,923

 
16,957

 
(1
)
 
1

 
 
17,171

 
16,957

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
95% Confidence Level - Total CIB VaR (average) (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CIB trading VaR by risk type: (c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed income
$
28

 
$
28

 
$
28

 
$
40

 
$
49

 

 
(43
)
 
 
 
 
 
 
 
 
Foreign exchange
13

 
8

 
10

 
12

 
16

 
63

 
(19
)
 
 
 
 
 
 
 
 
Equities
12

 
12

 
11

 
10

 
8

 

 
50

 
 
 
 
 
 
 
 
Commodities and other
6

 
8

 
8

 
9

 
9

 
(25
)
 
(33
)
 
 
 
 
 
 
 
 
Diversification benefit to CIB trading VaR (d)
(31
)
 
(30
)
 
(34
)
 
(36
)
 
(42
)
 
(3
)
 
26

 
 
 
 
 
 
 
 
CIB trading VaR (c)
28

 
26

 
23

 
35

 
40

 
8

 
(30
)
 
 
 
 
 
 
 
 
Credit portfolio VaR (e)
5

 
9

 
10

 
12

 
13

 
(44
)
 
(62
)
 
 
 
 
 
 
 
 
Diversification benefit to CIB VaR (d)
(3
)
 
(8
)
 
(8
)
 
(8
)
 
(10
)
 
63

 
70

 
 
 
 
 
 
 
 
CIB VaR
$
30

 
$
27

 
$
25

 
$
39

 
$
43

 
11

 
(30
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Client deposits and other third party liabilities pertain to the Treasury Services and Securities Services businesses.
(b)
As discussed in footnote (c) on page 3, the Firm refined the historical proxy time series inputs to certain VaR models during the first quarter of 2017. In the absence of this refinement, the average VaR for each of the following reported components would have been higher by the following amounts: CIB fixed income of $4 million, $6 million and $5 million, CIB trading VaR of $5 million, $5 million and $4 million, CIB VaR of $5 million, $6 million and $3 million for the three months ended September 30, 2017, June 30 2017 and March 31, 2017, respectively.
(c)
CIB trading VaR includes substantially all market-making and client-driven activities, as well as certain risk management activities in CIB, including credit spread sensitivity to CVA. For further information, see VaR measurement on pages 118–120 of the 2016 Annual Report, and pages 72-74 of the Firm's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017.
(d)
Average portfolio VaR was less than the sum of the VaR of the components described above, which is due to portfolio diversification. The diversification effect reflects the fact that the risks were not perfectly correlated.
(e)
Credit portfolio VaR includes the derivative CVA, hedges of the CVA and hedges of the retained loan portfolio, which are reported in principal transactions revenue. This VaR does not include the retained loan portfolio, which is not reported at fair value.


Page 17



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COMMERCIAL BANKING
 
 
 
 
FINANCIAL HIGHLIGHTS
 
 
 
 
(in millions, except ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
INCOME STATEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lending- and deposit-related fees
$
223

 
$
232

 
$
235

 
$
230

 
$
228

 
(4
)%
 
(2
)%
 
 
$
690

 
$
687

 
 %
 
Asset management, administration and commissions
16

 
16

 
18

 
15

 
14

 

 
14

 
 
50

 
54

 
(7
)
 
All other income (a)
353

 
335

 
346

 
355

 
336

 
5

 
5

 
 
1,034

 
979

 
6

 
Noninterest revenue
592

 
583

 
599

 
600

 
578

 
2

 
2

 
 
1,774

 
1,720

 
3

 
Net interest income
1,554

 
1,505

 
1,419

 
1,363

 
1,292

 
3

 
20

 
 
4,478

 
3,770

 
19

 
TOTAL NET REVENUE (b)
2,146

 
2,088

 
2,018

 
1,963

 
1,870

 
3

 
15

 
 
6,252

 
5,490

 
14

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for credit losses
(47
)
 
(130
)
 
(37
)
 
124

 
(121
)
 
64

 
61

 
 
(214
)
 
158

 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation expense
370

 
365

 
371

 
333

 
343

 
1

 
8

 
 
1,106

 
999

 
11

 
Noncompensation expense
430

 
425

 
454

 
411

 
403

 
1

 
7

 
 
1,309

 
1,191

 
10

 
TOTAL NONINTEREST EXPENSE
800

 
790

 
825

 
744

 
746

 
1

 
7

 
 
2,415

 
2,190

 
10

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income tax expense
1,393

 
1,428

 
1,230

 
1,095

 
1,245

 
(2
)
 
12

 
 
4,051

 
3,142

 
29

 
Income tax expense
512

 
526

 
431

 
408

 
467

 
(3
)
 
10

 
 
1,469

 
1,172

 
25

 
NET INCOME
$
881

 
$
902

 
$
799

 
$
687

 
$
778

 
(2
)
 
13

 
 
$
2,582

 
$
1,970

 
31

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue by product
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lending
$
1,030

 
$
1,023

 
$
992

 
$
994

 
$
956

 
1

 
8

 
 
$
3,045

 
$
2,801

 
9

 
Treasury services
873

 
854

 
796

 
730

 
693

 
2

 
26

 
 
2,523

 
2,067

 
22

 
Investment banking (c)
196

 
189

 
216

 
220

 
203

 
4

 
(3
)
 
 
601

 
565

 
6

 
Other
47

 
22

 
14

 
19

 
18

 
114

 
161

 
 
83

 
57

 
46

 
Total Commercial Banking net revenue
$
2,146

 
$
2,088

 
$
2,018

 
$
1,963

 
$
1,870

 
3

 
15

 
 
$
6,252

 
$
5,490

 
14

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment banking revenue, gross (d)
$
570

 
$
524

 
$
646

 
$
608

 
$
600

 
9

 
(5
)
 
 
$
1,740

 
$
1,678

 
4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue by client segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Middle Market Banking (e)
$
848

 
$
839

 
$
784

 
$
753

 
$
706

 
1

 
20

 
 
$
2,471

 
$
2,095

 
18

 
Corporate Client Banking (e)
688

 
662

 
666

 
645

 
622

 
4

 
11

 
 
2,016

 
1,784

 
13

 
Commercial Term Lending
367

 
364

 
367

 
355

 
350

 
1

 
5

 
 
1,098

 
1,053

 
4

 
Real Estate Banking
157

 
147

 
134

 
128

 
117

 
7

 
34

 
 
438

 
328

 
34

 
Other
86

 
76

 
67

 
82

 
75

 
13

 
15

 
 
229

 
230

 

 
Total Commercial Banking net revenue
$
2,146

 
$
2,088

 
$
2,018

 
$
1,963

 
$
1,870

 
3

 
15

 
 
$
6,252

 
$
5,490

 
14

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ROE
17

%
17

%
15

%
16

%
18

%
 
 
 
 
 
16

%
15

%
 
 
Overhead ratio
37

 
38

 
41

 
38

 
40

 
 
 
 
 
 
39

 
40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Includes revenue from investment banking products and commercial card transactions.
(b)
Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities that provide loans to qualified businesses in low-income communities, as well as tax-exempt income related to municipal financing activities of $143 million, $131 million, $121 million, $134 million and $127 million for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively, and $395 million and $371 million for nine months ended September 30, 2017 and 2016, respectively.
(c)
Includes total Firm revenue from investment banking products sold to CB clients, net of revenue sharing with the CIB.
(d)
Represents total Firm revenue from investment banking products sold to CB clients.
(e)
Certain clients were transferred from Middle Market Banking to Corporate Client Banking in the second quarter of 2017. The prior period amounts have been revised to conform with the current period presentation.

Page 18



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COMMERCIAL BANKING
 
 
 
 
FINANCIAL HIGHLIGHTS, CONTINUED
 
 
 
 
(in millions, except headcount and ratio data)
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
SELECTED BALANCE SHEET DATA (period-end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
220,064

 
$
220,676

 
$
217,348

 
$
214,341

 
$
212,189

 
 %
 
4
 %
 
 
$
220,064

 
$
212,189

 
4
 %
 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans retained
201,463

 
197,912

 
194,538

 
188,261

 
185,609

 
2

 
9

 
 
201,463

 
185,609

 
9

 
Loans held-for-sale and loans at fair value
764

 
1,661

 
1,056

 
734

 
191

 
(54
)
 
300

 
 
764

 
191

 
300

 
Total loans
$
202,227

 
$
199,573

 
$
195,594

 
$
188,995

 
$
185,800

 
1

 
9

 
 
$
202,227

 
$
185,800

 
9

 
           Core loans
201,999

 
199,319

 
195,296

 
188,673

 
185,354

 
1

 
9

 
 
201,999

 
185,354

 
9

 
Equity
20,000

 
20,000

 
20,000

 
16,000

 
16,000

 

 
25

 
 
20,000

 
16,000

 
25

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period-end loans by client segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Middle Market Banking (a)
$
56,192

 
$
56,377

 
$
55,113

 
$
53,929

 
$
53,581

 

 
5

 
 
$
56,192

 
$
53,581

 
5

 
Corporate Client Banking (a)
47,682

 
45,918

 
45,798

 
43,027

 
43,517

 
4

 
10

 
 
47,682

 
43,517

 
10

 
Commercial Term Lending
74,349

 
73,760

 
72,496

 
71,249

 
69,133

 
1

 
8

 
 
74,349

 
69,133

 
8

 
Real Estate Banking
17,127

 
16,726

 
15,846

 
14,722

 
13,905

 
2

 
23

 
 
17,127

 
13,905

 
23

 
Other
6,877

 
6,792

 
6,341

 
6,068

 
5,664

 
1

 
21

 
 
6,877

 
5,664

 
21

 
Total Commercial Banking loans
$
202,227

 
$
199,573

 
$
195,594

 
$
188,995

 
$
185,800

 
1

 
9

 
 
$
202,227

 
$
185,800

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET DATA (average)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
218,196

 
$
217,694

 
$
213,784

 
$
212,848

 
$
208,765

 

 
5

 
 
$
216,574

 
$
205,748

 
5

 
Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans retained
199,487

 
196,454

 
190,774

 
187,528

 
180,962

 
2

 
10

 
 
195,604

 
175,695

 
11

 
Loans held-for-sale and loans at fair value
675

 
1,402

 
717

 
1,342

 
517

 
(52
)
 
31

 
 
931

 
516

 
80

 
Total loans
$
200,162

 
$
197,856

 
$
191,491

 
$
188,870

 
$
181,479

 
1

 
10

 
 
$
196,535

 
$
176,211

 
12

 
Core loans
199,920

 
197,567

 
191,180

 
188,478

 
181,016

 
1

 
10

 
 
196,254

 
175,651

 
12

 
Client deposits and other third-party liabilities
176,218

 
173,214

 
176,780

 
180,036

 
173,696

 
2

 
1

 
 
175,402

 
172,502

 
2

 
Equity
20,000

 
20,000

 
20,000

 
16,000

 
16,000

 

 
25

 
 
20,000

 
16,000

 
25

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average loans by client segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Middle Market Banking (a)
$
55,782

 
$
55,651

 
$
54,267

 
$
53,806

 
$
52,646

 

 
6

 
 
$
55,239

 
$
51,716

 
7

 
Corporate Client Banking (a)
46,451

 
46,483

 
43,582

 
44,390

 
42,141

 

 
10

 
 
45,516

 
40,872

 
11

 
Commercial Term Lending
74,136

 
73,081

 
71,880

 
70,316

 
67,696

 
1

 
10

 
 
73,041

 
65,486

 
12

 
Real Estate Banking
16,936

 
16,139

 
15,525

 
14,452

 
13,382

 
5

 
27

 
 
16,205

 
12,597

 
29

 
Other
6,857

 
6,502

 
6,237

 
5,906

 
5,614

 
5

 
22

 
 
6,534

 
5,540

 
18

 
Total Commercial Banking loans
$
200,162

 
$
197,856

 
$
191,491

 
$
188,870

 
$
181,479

 
1

 
10

 
 
$
196,535

 
$
176,211

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Headcount
8,965

 
8,823

 
8,554

 
8,365

 
8,333

 
2

 
8

 
 
8,965

 
8,333

 
8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT DATA AND QUALITY STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs/(recoveries)
$
19

 
$
8

 
$
(10
)
 
$
53

 
$
44

 
138

 
(57
)
 
 
$
17

 
$
110

 
(85
)
 
Nonperforming assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans retained (b)
744

 
819

 
929

 
1,149

 
1,212

 
(9
)
 
(39
)
 
 
744

 
1,212

 
(39
)
 
Nonaccrual loans held-for-sale and loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
at fair value

 

 

 

 

 

 

 
 

 

 

 
Total nonaccrual loans
744

 
819

 
929

 
1,149

 
1,212

 
(9
)
 
(39
)
 
 
744

 
1,212

 
(39
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets acquired in loan satisfactions
3

 
4

 
11

 
1

 
1

 
(25
)
 
200

 
 
3

 
1

 
200

 
Total nonperforming assets
747

 
823

 
940

 
1,150

 
1,213

 
(9
)
 
(38
)
 
 
747

 
1,213

 
(38
)
 
Allowance for credit losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses
2,620

 
2,678

 
2,896

 
2,925

 
2,858

 
(2
)
 
(8
)
 
 
2,620

 
2,858

 
(8
)
 
Allowance for lending-related commitments
323

 
331

 
251

 
248

 
244

 
(2
)
 
32

 
 
323

 
244

 
32

 
Total allowance for credit losses
2,943

 
3,009

 
3,147

 
3,173

 
3,102

 
(2
)
 
(5
)
 
 
2,943

 
3,102

 
(5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-off/(recovery) rate (c)
0.04

%
0.02

%
(0.02
)
%
0.11

%
0.10

%
 
 
 
 
 
0.01

%
0.08

%
 
 
Allowance for loan losses to period-end loans retained
1.30

 
1.35

 
1.49

 
1.55

 
1.54

 
 
 
 
 
 
1.30

 
1.54

 
 
 
Allowance for loan losses to nonaccrual loans retained (b)
352

 
327

 
312

 
255

 
236

 
 
 
 
 
 
352

 
236

 
 
 
Nonaccrual loans to period-end total loans
0.37

 
0.41

 
0.47

 
0.61

 
0.65

 
 
 
 
 
 
0.37

 
0.65

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Certain clients were transferred from Middle Market Banking to Corporate Client Banking in the second quarter of 2017. The prior period amounts have been revised to conform with the current period presentation.
(b)
Allowance for loan losses of $128 million, $112 million, $115 million, $155 million and $221 million was held against nonaccrual loans retained at September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively.
(c)
Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.

Page 19



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ASSET & WEALTH MANAGEMENT
 
 
 
 
FINANCIAL HIGHLIGHTS
 
 
 
 
(in millions, except ratio and headcount data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
INCOME STATEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset management, administration and commissions
$
2,240

 
$
2,211

 
$
2,105

 
$
2,209

 
$
2,087

 
1
 %
 
7
 %
 
 
$
6,556

 
$
6,205

 
6
 %
 
All other income
150

 
155

 
163

 
89

 
190

 
(3
)
 
(21
)
 
 
468

 
509

 
(8
)
 
Noninterest revenue
2,390

 
2,366

 
2,268

 
2,298

 
2,277

 
1

 
5

 
 
7,024

 
6,714

 
5

 
Net interest income
855

 
846

 
819

 
789

 
770

 
1

 
11

 
 
2,520

 
2,244

 
12

 
TOTAL NET REVENUE
3,245

 
3,212

 
3,087

 
3,087

 
3,047

 
1

 
6

 
 
9,544

 
8,958

 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for credit losses
8

 
4

 
18

 
(11
)
 
32

 
100

 
(75
)
 
 
30

 
37

 
(19
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST EXPENSE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Compensation expense
1,319

 
1,278

 
1,331

 
1,296

 
1,279

 
3

 
3

 
 
3,928

 
3,769

 
4

 
Noncompensation expense
862

 
914

 
1,249

 
879

 
851

 
(6
)
 
1

 
 
3,025

 
2,534

 
19

 
TOTAL NONINTEREST EXPENSE
2,181

 
2,192

 
2,580

 
2,175

 
2,130

 
(1
)
 
2

 
 
6,953

 
6,303

 
10

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income before income tax expense
1,056

 
1,016

 
489

 
923

 
885

 
4

 
19

 
 
2,561

 
2,618

 
(2
)
 
Income tax expense
382

 
392

 
104

 
337

 
328

 
(3
)
 
16

 
 
878

 
953

 
(8
)
 
NET INCOME
$
674

 
$
624

 
$
385

 
$
586

 
$
557

 
8

 
21

 
 
$
1,683

 
$
1,665

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REVENUE BY LINE OF BUSINESS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset Management
$
1,587

 
$
1,561

 
$
1,487

 
$
1,550

 
$
1,497

 
2

 
6

 
 
$
4,635

 
$
4,420

 
5

 
Wealth Management
1,658

 
1,651

 
1,600

 
1,537

 
1,550

 

 
7

 
 
4,909

 
4,538

 
8

 
TOTAL NET REVENUE
$
3,245

 
$
3,212

 
$
3,087

 
$
3,087

 
$
3,047

 
1

 
6

 
 
$
9,544

 
$
8,958

 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ROE
29

%
27

%
16

%
25

%
24

%
 
 
 
 
 
24

%
24

%
 
 
Overhead ratio
67

 
68

 
84

 
70

 
70

 
 
 
 
 
 
73

 
70

 
 
 
Pretax margin ratio:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset Management
34

 
31

 
1

 
30

 
31

 
 
 
 
 
 
22

 
31

 
 
 
Wealth Management
32

 
33

 
30

 
30

 
27

 
 
 
 
 
 
31

 
27

 
 
 
Asset & Wealth Management
33

 
32

 
16

 
30

 
29

 
 
 
 
 
 
27

 
29

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Headcount
22,685

 
22,289

 
22,196

 
21,082

 
21,142

 
2

 
7

 
 
22,685

 
21,142

 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Wealth Management client advisors
2,581

 
2,452

 
2,480

 
2,504

 
2,560

 
5

 
1

 
 
2,581

 
2,560

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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ASSET & WEALTH MANAGEMENT
 
 
 
 
FINANCIAL HIGHLIGHTS, CONTINUED
 
 
 
 
(in millions, except ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
SELECTED BALANCE SHEET DATA (period-end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
149,170

 
$
147,508

 
$
141,049

 
$
138,384

 
$
137,295

 
1
 %
 
9
 %
 
 
$
149,170

 
$
137,295

 
9
 %
 
Loans
128,038

 
124,517

 
119,947

 
118,039

 
116,043

 
3

 
10

 
 
128,038

 
116,043

 
10

 
    Core loans
128,038

 
124,517

 
119,947

 
118,039

 
116,043

 
3

 
10

 
 
128,038

 
116,043

 
10

 
Deposits
141,409

 
146,758

 
157,295

 
161,577

 
157,274

 
(4
)
 
(10
)
 
 
141,409

 
157,274

 
(10
)
 
Equity
9,000

 
9,000

 
9,000

 
9,000

 
9,000

 

 

 
 
9,000

 
9,000

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET DATA (average)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
146,388

 
$
142,966

 
$
138,178

 
$
135,213

 
$
134,920

 
2

 
8

 
 
$
142,541

 
$
132,090

 
8

 
Loans
125,445

 
122,173

 
118,310

 
115,063

 
114,201

 
3

 
10

 
 
122,002

 
112,142

 
9

 
    Core loans
125,445

 
122,173

 
118,310

 
115,063

 
114,201

 
3

 
10

 
 
122,002

 
112,142

 
9

 
Deposits
144,496

 
150,786

 
158,810

 
158,335

 
153,121

 
(4
)
 
(6
)
 
 
151,311

 
151,656

 

 
Equity
9,000

 
9,000

 
9,000

 
9,000

 
9,000

 

 

 
 
9,000

 
9,000

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT DATA AND QUALITY STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs
$
5

 
$
2

 
$
3

 
$

 
$
5

 
150

 

 
 
$
10

 
$
16

 
(38
)
 
Nonaccrual loans
337

 
400

 
379

 
390

 
372

 
(16
)
 
(9
)
 
 
337

 
372

 
(9
)
 
Allowance for credit losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses
285

 
285

 
289

 
274

 
285

 

 

 
 
285

 
285

 

 
Allowance for lending-related commitments
10

 
10

 
4

 
4

 
5

 

 
100

 
 
10

 
5

 
100

 
Total allowance for credit losses
295

 
295

 
293

 
278

 
290

 

 
2

 
 
295

 
290

 
2

 
Net charge-off/(recovery) rate
0.02

%
0.01

%
0.01

%

%
0.02

%
 
 
 
 
 
0.01

%
0.02

%
 
 
Allowance for loan losses to period-end loans
0.22

 
0.23

 
0.24

 
0.23

 
0.25

 
 
 
 
 
 
0.22

 
0.25

 
 
 
Allowance for loan losses to nonaccrual loans
85

 
71

 
76

 
70

 
77

 
 
 
 
 
 
85

 
77

 
 
 
Nonaccrual loans to period-end loans
0.26

 
0.32

 
0.32

 
0.33

 
0.32

 
 
 
 
 
 
0.26

 
0.32

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


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ASSET & WEALTH MANAGEMENT
 
 
 
 
FINANCIAL HIGHLIGHTS, CONTINUED
 
 
 
 
(in billions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
Sep 30,
 
Jun 30,
 
Mar 31,
 
Dec 31,
 
Sep 30,
 
Jun 30,
 
Sep 30,
 
 
 
 
 
 
2017 Change
 
CLIENT ASSETS
2017
 
2017
 
2017
 
2016
 
2016
 
2017
 
2016
 
 
2017
 
2016
 
2016
 
Assets by asset class
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liquidity
$
441

 
$
434

 
$
444

 
$
436

 
$
403

 
2
%
 
9
%
 
 
$
441

 
$
403

 
9
%
 
Fixed income
461

 
440

 
432

 
420

 
437

 
5

 
5

 
 
461

 
437

 
5

 
Equity
405

 
390

 
378

 
351

 
357

 
4

 
13

 
 
405

 
357

 
13

 
Multi-asset and alternatives
638

 
612

 
587

 
564

 
575

 
4

 
11

 
 
638

 
575

 
11

 
TOTAL ASSETS UNDER MANAGEMENT
1,945

 
1,876

 
1,841

 
1,771

 
1,772

 
4

 
10

 
 
1,945

 
1,772

 
10

 
Custody/brokerage/administration/deposits
733

 
722

 
707

 
682

 
675

 
2

 
9

 
 
733

 
675

 
9

 
TOTAL CLIENT ASSETS
$
2,678

 
$
2,598

 
$
2,548

 
$
2,453

 
$
2,447

 
3

 
9

 
 
$
2,678

 
$
2,447

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Memo:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Alternatives client assets (a)
$
161

 
$
159

 
$
157

 
$
154

 
$
157

 
1

 
3

 
 
$
161

 
$
157

 
3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets by client segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Banking
$
507

 
$
488

 
$
468

 
$
435

 
$
433

 
4

 
17

 
 
$
507

 
$
433

 
17

 
Institutional
921

 
889

 
889

 
869

 
862

 
4

 
7

 
 
921

 
862

 
7

 
Retail
517

 
499

 
484

 
467

 
477

 
4

 
8

 
 
517

 
477

 
8

 
TOTAL ASSETS UNDER MANAGEMENT
$
1,945

 
$
1,876

 
$
1,841

 
$
1,771

 
$
1,772

 
4

 
10

 
 
$
1,945

 
$
1,772

 
10

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private Banking
$
1,217

 
$
1,188

 
$
1,154

 
$
1,098

 
$
1,089

 
2

 
12

 
 
$
1,217

 
$
1,089

 
12

 
Institutional
941

 
909

 
908

 
886

 
879

 
4

 
7

 
 
941

 
879

 
7

 
Retail
520

 
501

 
486

 
469

 
479

 
4

 
9

 
 
520

 
479

 
9

 
TOTAL CLIENT ASSETS
$
2,678

 
$
2,598

 
$
2,548

 
$
2,453

 
$
2,447

 
3

 
9

 
 
$
2,678

 
$
2,447

 
9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets under management rollforward
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,876

 
$
1,841

 
$
1,771

 
$
1,772

 
$
1,693

 
 
 
 
 
 
$
1,771

 
$
1,723

 
 
 
Net asset flows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liquidity
5

 
(7
)
 
1

 
35

 
18

 
 
 
 
 
 
(1
)
 
(11
)
 
 
 
Fixed income
17

 
2

 
5

 
(6
)
 
9

 
 
 
 
 
 
24

 
36

 
 
 
Equity
(5
)
 
(3
)
 
(4
)
 
(12
)
 
(7
)
 
 
 
 
 
 
(12
)
 
(17
)
 
 
 
Multi-asset and alternatives
9

 
10

 
7

 
(3
)
 
21

 
 
 
 
 
 
26

 
25

 
 
 
Market/performance/other impacts
43

 
33

 
61

 
(15
)
 
38

 
 
 
 
 
 
137

 
16

 
 
 
Ending balance
$
1,945

 
$
1,876

 
$
1,841

 
$
1,771

 
$
1,772

 
 
 
 
 
 
$
1,945

 
$
1,772

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Client assets rollforward
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
2,598

 
$
2,548

 
$
2,453

 
$
2,447

 
$
2,344

 
 
 
 
 
 
$
2,453

 
$
2,350

 
 
 
Net asset flows
25

 
2

 
10

 
21

 
47

 
 
 
 
 
 
37

 
42

 
 
 
Market/performance/other impacts
55

 
48

 
85

 
(15
)
 
56

 
 
 
 
 
 
188

 
55

 
 
 
Ending balance
$
2,678

 
$
2,598

 
$
2,548

 
$
2,453

 
$
2,447

 
 
 
 
 
 
$
2,678

 
$
2,447

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


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CORPORATE
 
 
 
 
FINANCIAL HIGHLIGHTS
 
 
 
 
(in millions, except headcount data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
INCOME STATEMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Principal transactions
$
(2
)
 
$
148

 
$
15

 
$
27

 
$
57

 
NM

 
NM

 
 
$
161

 
$
183

 
(12
)%
 
Securities gains/(losses)

 
(34
)
 
(3
)
 
5

 
64

 
100

 
(100
)
 
 
(37
)
 
135

 
NM

 
All other income (a)
111

 
667

 
61

 
269

 
76

 
(83
)
 
46

 
 
839

 
319

 
163

 
Noninterest revenue
109

 
781

 
73

 
301

 
197

 
(86
)
 
(45
)
 
 
963

 
637

 
51

 
Net interest income
77

 
23

 
(98
)
 
(498
)
 
(385
)
 
235

 
NM

 
 
2

 
(927
)
 
NM

 
TOTAL NET REVENUE (b)
186

 
804

 
(25
)
 
(197
)
 
(188
)
 
(77
)
 
NM

 
 
965

 
(290
)
 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for credit losses

 

 

 

 
(1
)
 

 
100

 
 

 
(4
)
 
100

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONINTEREST EXPENSE (c)
74

 
183

 
98

 
439

 
143

 
(60
)
 
(48
)
 
 
355

 
23

 
NM

 
Income/(loss) before income tax expense/(benefit)
112

 
621

 
(123
)
 
(636
)
 
(330
)
 
(82
)
 
NM

 
 
610

 
(309
)
 
NM

 
Income tax expense/(benefit)
34

 
51

 
(158
)
 
(295
)
 
(165
)
 
(33
)
 
NM

 
 
(73
)
 
54

 
NM

 
NET INCOME/(LOSS)
$
78

 
$
570

 
$
35

 
$
(341
)
 
$
(165
)
 
(86
)
 
NM

 
 
$
683

 
$
(363
)
 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MEMO:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL NET REVENUE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Treasury and Chief Investment Office (“CIO”)
265

 
86

 
(7
)
 
(256
)
 
(211
)
 
208

 
NM

 
 
344

 
(531
)
 
NM

 
Other Corporate
(79
)
 
718

 
(18
)
 
59

 
23

 
NM

 
NM

 
 
621

 
241

 
158

 
TOTAL NET REVENUE
$
186

 
$
804

 
$
(25
)
 
$
(197
)
 
$
(188
)
 
(77
)
 
NM

 
 
$
965

 
$
(290
)
 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET INCOME/(LOSS)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Treasury and CIO
75

 
(14
)
 
(67
)
 
(197
)
 
(208
)
 
NM

 
NM

 
 
(6
)
 
(518
)
 
99

 
Other Corporate
3

 
584

 
102

 
(144
)
 
43

 
(99
)
 
(93
)
 
 
689

 
155

 
345

 
TOTAL NET INCOME/(LOSS)
$
78

 
$
570

 
$
35

 
$
(341
)
 
$
(165
)
 
(86
)
 
NM

 
 
$
683

 
$
(363
)
 
NM

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED BALANCE SHEET DATA (period-end)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
804,573

 
$
817,754

 
$
822,819

 
$
799,426

 
$
824,336

 
(2
)
 
(2
)
 
 
$
804,573

 
$
824,336

 
(2
)
 
Loans
1,614

 
1,696

 
1,483

 
1,592

 
1,738

 
(5
)
 
(7
)
 
 
1,614

 
1,738

 
(7
)
 
Core loans (d)
1,614

 
1,696

 
1,480

 
1,589

 
1,735

 
(5
)
 
(7
)
 
 
1,614

 
1,735

 
(7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Headcount
34,659

 
33,464

 
33,305

 
32,358

 
31,572

 
4

 
10

 
 
34,659

 
31,572

 
10

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SUPPLEMENTAL INFORMATION
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TREASURY and CIO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities gains
$

 
$
(34
)
 
$
(15
)
 
$
(3
)
 
$
64

 
100
 %
 
(100
)%
 
 
$
(49
)
 
$
135

 
NM

 
AFS investment securities ( average)
212,633

 
225,053

 
234,841

 
227,960

 
219,042

 
(6
)
 
(3
)
 
 
224,094

 
226,533

 
(1
)
 
HTM investment securities ( average)
47,034

 
48,232

 
49,362

 
50,883

 
52,774

 
(2
)
 
(11
)
 
 
48,201

 
51,518

 
(6
)
 
Investment securities portfolio (average)
$
259,667

 
$
273,285

 
$
284,203

 
$
278,843

 
$
271,816

 
(5
)
 
(4
)
 
 
$
272,295

 
$
278,051

 
(2
)
 
AFS investment securities ( period-end)
214,257

 
213,291

 
230,617

 
236,670

 
217,196

 

 
(1
)
 
 
214,257

 
217,196

 
(1
)
 
HTM investment securities ( period-end)
47,079

 
47,761

 
48,913

 
50,168

 
52,011

 
(1
)
 
(9
)
 
 
47,079

 
52,011

 
(9
)
 
Investment securities portfolio (period-end)
$
261,336

 
$
261,052

 
$
279,530

 
$
286,838

 
$
269,207

 

 
(3
)
 
 
$
261,336

 
$
269,207

 
(3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Included revenue related to a legal settlement of $645 million for both the three months ended June 30, 2017 and the nine months ended September 30, 2017.
(b)
Included tax-equivalent adjustments, predominantly due to tax-exempt income from municipal bond investments of $216 million, $237 million, $228 million, $222 million, and $218 million for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively and $681 million and $663 million for the nine months ended September 30, 2017 and 2016, respectively.
(c)
Included legal expense/(benefit) of $(148) million, $16 million, $(228) million, $165 million and $(85) million for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively, and $(360) million and $(550) million for the nine months ended September 30, 2017 and 2016, respectively.
(d)
Average core loans were $1.7 billion, $1.6 billion, $1.6 billion, $1.7 billion, and $1.8 billion for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively, and $1.6 billion and $1.9 billion for the nine months ended September 30, 2017 and 2016, respectively.

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CREDIT-RELATED INFORMATION
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
Sep 30,
 
Jun 30,
 
Mar 31,
 
Dec 31,
 
Sep 30,
 
Jun 30,
 
Sep 30,
 
 
2017
 
2017
 
2017
 
2016
 
2016
 
2017
 
2016
 
CREDIT EXPOSURE
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer, excluding credit card loans (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans retained, excluding PCI loans
$
337,592

 
$
332,051

 
$
326,198

 
$
328,727

 
$
326,353

 
2
 %
 
3
 %
 
Loans - PCI
31,821

 
33,064

 
34,385

 
35,679

 
37,045

 
(4
)
 
(14
)
 
Total loans retained
369,413

 
365,115

 
360,583

 
364,406

 
363,398

 
1

 
2

 
Loans held-for-sale
188

 
256

 
6,472

 
238

 
398

 
(27
)
 
(53
)
 
Total consumer, excluding credit card loans
369,601

 
365,371

 
367,055

 
364,644

 
363,796

 
1

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Credit card loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans retained
141,200

 
140,035

 
134,917

 
141,711

 
133,346

 
1

 
6

 
Loans held-for-sale
113

 
106

 
99

 
105

 
89

 
7

 
27

 
Total credit card loans
141,313

 
140,141

 
135,016

 
141,816

 
133,435

 
1

 
6

 
Total consumer loans
510,914

 
505,512

 
502,071

 
506,460

 
497,231

 
1

 
3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholesale loans (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans retained
398,569

 
394,426

 
386,370

 
383,790

 
386,449

 
1

 
3

 
Loans held-for-sale and loans at fair value
4,278

 
8,829

 
7,533

 
4,515

 
4,374

 
(52
)
 
(2
)
 
Total wholesale loans
402,847

 
403,255

 
393,903

 
388,305

 
390,823

 

 
3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans
913,761

 
908,767

 
895,974

 
894,765

 
888,054

 
1

 
3

 
Derivative receivables
58,260

 
56,506

 
56,063

 
64,078

 
65,579

 
3

 
(11
)
 
Receivables from customers and other (c)
19,350

 
19,531

 
21,473

 
17,560

 
19,163

 
(1
)
 
1

 
Total credit-related assets
991,371

 
984,804

 
973,510

 
976,403

 
972,796

 
1

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Lending-related commitments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer, excluding credit card
55,071

 
58,162

 
53,594

 
54,797

 
59,990

 
(5
)
 
(8
)
 
Credit card
574,641

 
576,264

 
577,096

 
553,891

 
549,634

 

 
5

 
Wholesale
372,380

 
366,498

 
364,520

 
368,014

 
368,987

 
2

 
1

 
Total lending-related commitments
1,002,092

 
1,000,924

 
995,210

 
976,702

 
978,611

 

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total credit exposure
$
1,993,463

 
$
1,985,728

 
$
1,968,720

 
$
1,953,105

 
$
1,951,407

 

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Memo: Total by category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer exposure (d)
$
1,140,758

 
$
1,140,074

 
$
1,132,889

 
$
1,115,268

 
$
1,106,980

 

 
3

 
Wholesale exposures (e)
852,705

 
845,654

 
835,831

 
837,837

 
844,427

 
1

 
1

 
Total credit exposure
$
1,993,463

 
$
1,985,728

 
$
1,968,720

 
$
1,953,105

 
$
1,951,407

 

 
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note 1: In the first quarter of 2017, the Firm transferred the student loan portfolio to held-for-sale. Net charge-offs related to the portfolio predominantly reflect a write-down to the estimated fair value of the portfolio at the time of the transfer. This transfer impacted certain loan and credit-related metrics disclosed on pages 12-13 and 24-27.
Note 2: The Firm provides several non-GAAP financial measures which exclude the impact of PCI loans. For further discussion of these measures, see page 28.

(a)
Includes loans reported in CCB, prime mortgage and home equity loans reported in AWM, and prime mortgage loans reported in Corporate.
(b)
Includes loans reported in CIB, CB and AWM business segments and Corporate.
(c)
Predominantly includes receivables from customers, which represent margin loans to prime and retail brokerage customers; these are classified in accrued interest and accounts receivable on the Consolidated balance sheets.
(d)
Represents total consumer loans and lending-related commitments.
(e)
Represents total wholesale loans, lending-related commitments, derivative receivables, and receivables from customers and other.

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CREDIT-RELATED INFORMATION, CONTINUED
 
 
 
(in millions, except ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
Sep 30,
 
Jun 30,
 
Mar 31,
 
Dec 31,
 
Sep 30,
 
Jun 30,
 
Sep 30,
 
 
2017
 
2017
 
2017
 
2016
 
2016
 
2017
 
2016
 
NONPERFORMING ASSETS (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer nonaccrual loans (b)(c)
$
4,161

 
$
4,226

 
$
4,549

 
$
4,820

 
$
4,961

 
(2
)
 
(16
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholesale nonaccrual loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans retained
1,470

 
1,634

 
1,571

 
1,954

 
2,151

 
(10
)
 
(32
)
 
Loans held-for-sale and loans at fair value
2

 
31

 
109

 
109

 
26

 
(94
)
 
(92
)
 
Total wholesale nonaccrual loans
1,472

 
1,665

 
1,680

 
2,063

 
2,177

 
(12
)
 
(32
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total nonaccrual loans
5,633

 
5,891

 
6,229

 
6,883

 
7,138

 
(4
)
 
(21
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative receivables
164

 
170

 
179

 
223

 
232

 
(4
)
 
(29
)
 
Assets acquired in loan satisfactions
357

 
371

 
418

 
429

 
409

 
(4
)
 
(13
)
 
Total nonperforming assets
6,154

 
6,432

 
6,826

 
7,535

 
7,779

 
(4
)
 
(21
)
 
Wholesale lending-related commitments (d)
764

 
750

 
882

 
506

 
503

 
2

 
52

 
Total nonperforming exposure
$
6,918

 
$
7,182

 
$
7,708

 
$
8,041

 
$
8,282

 
(4
)
 
(16
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NONACCRUAL LOAN-RELATED RATIOS
 
 
 
 
 
 
 
 
 
 
 
Total nonaccrual loans to total loans
0.62
%
 
0.65
%
 
0.70
%
 
0.77
%
 
0.80
%
 
 
 
 
 
Total consumer, excluding credit card nonaccrual loans to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
total consumer, excluding credit card loans
1.13

 
1.16

 
1.24

 
1.32

 
1.36

 
 
 
 
 
Total wholesale nonaccrual loans to total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
wholesale loans
0.37

 
0.41

 
0.43

 
0.53

 
0.56

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
At September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, nonperforming assets excluded: (1) mortgage loans insured by U.S. government agencies of $4.0 billion, $4.1 billion, $4.5 billion, $5.0 billion and $5.0 billion, respectively, that are 90 or more days past due; and (2) real estate owned (“REO”) insured by U.S. government agencies of $99 million, $105 million, $121 million, $142 million and $163 million, respectively. Student loans insured by U.S. government agencies under FFELP and 90 or more days past due were also excluded from nonperforming assets prior to sale of the student loan portfolio in the second quarter of 2017. These amounts have been excluded based upon the government guarantee. In addition, the Firm’s policy is generally to exempt credit card loans from being placed on nonaccrual status as permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”). Under this guidance, non-modified credit card loans are charged off by the end of the month in which the account becomes 180 days past due, while modified credit card loans are charged off when the account becomes 120 days past due. Moreover, all credit card loans must be charged off within 60 days of receiving notification about certain specified events (e.g., bankruptcy of the borrower).
(b)
Included nonaccrual loans held-for-sale of $3 million, $33 million, $156 million, $53 million and $53 million at September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016 and September 30, 2016, respectively.
(c)
Excludes PCI loans. The Firm is recognizing interest income on each pool of PCI loans as they are all performing.
(d)
Represents commitments that are risk rated as nonaccrual.

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CREDIT-RELATED INFORMATION, CONTINUED
 
 
 
(in millions, except ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
QUARTERLY TRENDS
 
 
NINE MONTHS ENDED SEPTEMBER 30,
 
 
 
 
 
 
 
 
 
 
 
 
3Q17 Change
 
 
 
 
 
 
2017 Change
 
 
3Q17
 
2Q17
 
1Q17
 
4Q16
 
3Q16
 
2Q17
 
3Q16
 
 
2017
 
2016
 
2016
 
SUMMARY OF CHANGES IN THE ALLOWANCES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALLOWANCE FOR LOAN LOSSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
13,363

 
$
13,413

 
$
13,776

 
$
14,204

 
$
14,227

 
 %
 
(6
)%
 
 
$
13,776

 
$
13,555

 
2
 %
 
Net charge-offs:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross charge-offs
1,550

 
1,468

 
1,959

 
1,532

 
1,375

 
6

 
13

 
 
4,977

 
4,165

 
19

 
Gross recoveries
(285
)
 
(264
)
 
(305
)
 
(252
)
 
(254
)
 
(8
)
 
(12
)
 
 
(854
)
 
(753
)
 
(13
)
 
Net charge-offs (a)
1,265

 
1,204

 
1,654

 
1,280

 
1,121

 
5

 
13

 
 
4,123

 
3,412

 
21

 
Write-offs of PCI loans (b)
20

 
22

 
24

 
32

 
36

 
(9
)
 
(44
)
 
 
66

 
124

 
(47
)
 
Provision for loan losses
1,460

 
1,175

 
1,316

 
896

 
1,132

 
24

 
29

 
 
3,951

 
4,184

 
(6
)
 
Other
1

 
1

 
(1
)
 
(12
)
 
2

 

 
(50
)
 
 
1

 
1

 

 
Ending balance
$
13,539

 
$
13,363

 
$
13,413

 
$
13,776

 
$
14,204

 
1

 
(5
)
 
 
$
13,539

 
$
14,204

 
(5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALLOWANCE FOR LENDING-RELATED COMMITMENTS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,117

 
$
1,077

 
$
1,078

 
$
1,100

 
$
960

 
4

 
16

 
 
$
1,078

 
$
786

 
37

 
Provision for lending-related commitments
(8
)
 
40

 
(1
)
 
(32
)
 
139

 
NM

 
NM

 
 
31

 
313

 
(90
)
 
Other

 

 

 
10

 
1

 

 
(100
)
 
 

 
1

 
(100
)
 
Ending balance
$
1,109

 
$
1,117

 
$
1,077

 
$
1,078

 
$
1,100

 
(1
)
 
1

 
 
$
1,109

 
$
1,100

 
1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total allowance for credit losses
$
14,648

 
$
14,480

 
$
14,490

 
$
14,854

 
$
15,304

 
1

 
(4
)
 
 
$
14,648

 
$
15,304

 
(4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NET CHARGE-OFF/(RECOVERY) RATES (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer retained, excluding credit card loans (c)
0.22
%
 
0.12
%
 
0.76
 %
(d)

0.31
%
 
0.26
%
 
 
 
 
 
 
0.37
%
(d)
0.23
%
 
 
 
Credit card retained loans
2.87

 
3.01

 
2.94

 
2.67

 
2.51

 
 
 
 
 
 
2.94

 
2.61

 
 
 
Total consumer retained loans
0.95

 
0.92

 
1.35

(d)

0.95

 
0.86

 
 
 
 
 
 
1.07

(d)
0.87

 
 
 
Wholesale retained loans
0.04

 
0.06

 
(0.03
)
 
0.08

 
0.05

 
 
 
 
 
 
0.03

 
0.09

 
 
 
Total retained loans
0.56

 
0.54

 
0.76

(d)

0.58

 
0.51

 
 
 
 
 
 
0.62

(d)
0.53

 
 
 
Consumer retained loans, excluding credit card and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PCI loans
0.24

 
0.13

 
0.84

(d)

0.35

 
0.29

 
 
 
 
 
 
0.40

(d)
0.26

 
 
 
Consumer retained loans, excluding PCI loans
1.02

 
0.99

 
1.46

(d)

1.03

 
0.93

 
 
 
 
 
 
1.15

(d)
0.94

 
 
 
Total retained, excluding PCI loans
0.58

 
0.56

 
0.79

(d)

0.60

 
0.54

 
 
 
 
 
 
0.64

(d)
0.56

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Memo: Average retained loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer retained, excluding credit card loans
$
367,411

 
$
362,551

 
$
366,098

 
$
364,857

 
$
362,457

 
1

 
1

 
 
$
365,359

 
$
356,347

 
3

 
Credit card retained loans
141,061

 
138,032

 
137,112

 
136,085

 
132,626

 
2

 
6

 
 
138,749

 
129,401

 
7

 
Total average retained consumer loans
508,472

 
500,583

 
503,210

 
500,942

 
495,083

 
2

 
3

 
 
504,108

 
485,748

 
4

 
Wholesale retained loans
395,420

 
392,257

 
382,367

 
382,360

 
374,593

 
1

 
6

 
 
390,062

 
368,225

 
6

 
Total average retained loans
$
903,892

 
$
892,840

 
$
885,577

 
$
883,302

 
$
869,676

 
1

 
4

 
 
$
894,170

 
$
853,973

 
5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer retained, excluding credit card and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PCI loans
$
334,987

 
$
328,816

 
$
331,057

 
$
328,507

 
$
324,741

 
2

 
3

 
 
$
331,635

 
$
317,301

 
5

 
Consumer retained, excluding PCI loans
476,048

 
466,848

 
468,169

 
464,592

 
457,367

 
2

 
4

 
 
470,384

 
446,702

 
5

 
Total retained, excluding PCI loans
871,465

 
859,102

 
850,533

 
846,949

 
831,956

 
1

 
5

 
 
860,443

 
814,923

 
6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: During the second quarter of 2017, the Firm refined its loss estimates on the wholesale portfolio by incorporating the use of internal historical data versus external credit rating agency default statistics to estimate probability of default. In addition, an adjustment to the modeled loss estimates for wholesale lending-related commitments was incorporated similar to the adjustment applied for wholesale loans. The impacts of these refinements were not material to the allowance for credit losses.

(a)
Net charge-offs and net charge-off rates for the three and nine months ended September 30, 2017 included $63 million of incremental charge-offs recorded in accordance with regulatory guidance regarding the timing of loss recognition for certain auto and residential real estate loans in bankruptcy and auto loans where assets were acquired in loan satisfaction.
(b)
Write-offs of PCI loans are recorded against the allowance for loan losses when actual losses for a pool exceed estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan is recognized when the underlying loan is removed from a pool (e.g., upon liquidation).
(c)
The net charge-off rates exclude the write-offs in the PCI portfolio. These write-offs decreased the allowance for loan losses for PCI loans.
(d)
During the first quarter of 2017, the Firm transferred the student loan portfolio to held-for-sale, resulting in a write-down of the portfolio to the estimated fair value at the time of the transfer. For the three months ended March 31, 2017, excluding net charge-offs of $467 million related to the transfer, the net charge-off rate for Consumer retained, excluding credit card loans, would have been 0.24%; Total consumer retained loans would have been 0.98%; Total retained loans would have been 0.54%; Consumer retained, excluding credit card loans and PCI loans would have been 0.27%; Total consumer retained loans excluding PCI loans would have been 1.05%; and Total retained, excluding PCI loans would have been 0.57%. For the nine months ended September 30, 2017, the net charge-off rate for Consumer retained, excluding credit card loans would have been 0.20%; Total consumer retained loans would have been 0.95%; Total retained loans would have been 0.55%; Consumer retained, excluding credit card loans and PCI loans would have been 0.22%; Total consumer retained loans excluding PCI loans would have been 1.02%; and Total retained, excluding PCI loans would have been 0.57%.

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JPMORGAN CHASE & CO.
 
 
 
 
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CREDIT-RELATED INFORMATION, CONTINUED
 
 
 
(in millions, except ratio data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Change
 
 
Sep 30,
 
Jun 30,
 
Mar 31,
 
Dec 31,
 
Sep 30,
 
Jun 30,
 
Sep 30,
 
 
2017
 
2017
 
2017
 
2016
 
2016
 
2017
 
2016
 
ALLOWANCE COMPONENTS AND RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ALLOWANCE FOR LOAN LOSSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer, excluding credit card
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset-specific (a)
$
271

 
$
296

 
$
300

 
$
308

 
$
352

 
(8
)%
 
(23
)%
 
Formula-based
2,266

 
2,239

 
2,339

 
2,579

 
2,667

 
1

 
(15
)
 
PCI
2,245

 
2,265

 
2,287

 
2,311

 
2,618

 
(1
)
 
(14
)
 
Total consumer, excluding credit card
4,782

 
4,800

 
4,926

 
5,198

 
5,637

 

 
(15
)
 
Credit card
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset-specific (a)(b)
376

 
370

 
373

 
358

 
363

 
2

 
4

 
Formula-based
4,308

 
4,014

 
3,661

 
3,676

 
3,521

 
7

 
22

 
Total credit card
4,684

 
4,384

 
4,034

 
4,034

 
3,884

 
7

 
21

 
Total consumer
9,466

 
9,184

 
8,960

 
9,232

 
9,521

 
3

 
(1
)
 
Wholesale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset-specific (a)
363

 
345

 
249

 
342

 
490

 
5

 
(26
)
 
Formula-based
3,710

 
3,834

 
4,204

 
4,202

 
4,193

 
(3
)
 
(12
)
 
Total wholesale
4,073

 
4,179

 
4,453

 
4,544

 
4,683

 
(3
)
 
(13
)
 
Total allowance for loan losses
13,539

 
13,363

 
13,413

 
13,776

 
14,204

 
1

 
(5
)
 
Allowance for lending-related commitments
1,109

 
1,117

 
1,077

 
1,078

 
1,100

 
(1
)
 
1

 
Total allowance for credit losses
$
14,648

 
$
14,480

 
$
14,490

 
$
14,854

 
$
15,304

 
1

 
(4
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT RATIOS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer, excluding credit card allowance, to total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
consumer, excluding credit card retained loans
1.29
%

1.31
%

1.37
%

1.43
%

1.55
%

 
 
 
 
Credit card allowance to total credit card retained loans
3.32

 
3.13

 
2.99

 
2.85

 
2.91

 
 
 
 
 
Wholesale allowance to total wholesale retained loans
1.02

 
1.06

 
1.15

 
1.18

 
1.21

 
 
 
 
 
Wholesale allowance to total wholesale retained loans,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
excluding trade finance and conduits (c)
1.12

 
1.17

 
1.27

 
1.30

 
1.33

 
 
 
 
 
Total allowance to total retained loans
1.49

 
1.49

 
1.52

 
1.55

 
1.61

 
 
 
 
 
Consumer, excluding credit card allowance, to consumer,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
excluding credit card retained nonaccrual loans (d)
115

 
114

 
112

 
109

 
115

 
 
 
 
 
Total allowance, excluding credit card allowance, to retained
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 nonaccrual loans, excluding credit card nonaccrual loans (d)
157

 
154

 
157

 
145

 
146

 
 
 
 
 
Wholesale allowance to wholesale retained nonaccrual loans
277

 
256

 
283

 
233

 
218

 
 
 
 
 
Total allowance to total retained nonaccrual loans
241

 
229

 
225

 
205

 
201

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CREDIT RATIOS, excluding PCI loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer, excluding credit card allowance, to total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
consumer, excluding credit card retained loans
0.75

 
0.76

 
0.81

 
0.88

 
0.93

 
 
 
 
 
Total allowance to total retained loans
1.29

 
1.28

 
1.31

 
1.34

 
1.37

 
 
 
 
 
Consumer, excluding credit card allowance, to consumer,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
excluding credit card retained nonaccrual loans (d)
61

 
60

 
60

 
61

 
62

 
 
 
 
 
Allowance, excluding credit card allowance, to retained non-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
accrual loans, excluding credit card nonaccrual loans (d)
117

 
115

 
119

 
111

 
109

 
 
 
 
 
Total allowance to total retained nonaccrual loans
201

 
190

 
187

 
171

 
164

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified in a troubled debt restructuring (“TDR”).
(b)
The asset-specific credit card allowance for loan losses relates to loans that have been modified in a TDR; the Firm calculates such allowance based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.
(c)
Management uses allowance for loan losses to period-end loans retained, excluding CIB’s trade finance and conduits, a non-GAAP financial measure, to provide a more meaningful assessment of the wholesale allowance coverage ratio.
(d)
For information on the Firm’s nonaccrual policy for credit card loans, see footnote (a) on page 25.





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JPMORGAN CHASE & CO.
 
 
 
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NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE MEASURES
 
 
 
 
 

Non-GAAP Financial Measures

(a)
In addition to analyzing the Firm’s results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a “managed” basis; these Firmwide managed basis results are considered non-GAAP financial measures. The Firm also reviews the results of the lines of business on a managed basis. The Firm’s definition of managed basis starts, in each case, with the reported U.S. GAAP results and includes certain reclassifications to present total net revenue for the Firm and each of the reportable business segments on a FTE basis. Accordingly, revenue from investments that receive tax credits and tax-exempt securities is presented in the managed results on a basis comparable to taxable investments and securities. These financial measures allow management to assess the comparability of revenue arising from both taxable and tax-exempt sources. The corresponding income tax impact related to tax-exempt items is recorded within income tax expense. These adjustments have no impact on net income as reported by the Firm as a whole or by the lines of business.

(b)
Tangible common equity (“TCE”), Return on tangible common equity (“ROTCE”), and Tangible book value per share (“TBVPS”) are non-GAAP financial measures. TCE represents the Firm’s common stockholders’ equity (i.e., total stockholders’ equity less preferred stock) less goodwill and identifiable intangible assets (other than MSRs), net of related deferred tax liabilities. ROTCE measures the Firm’s net income applicable to common equity as a percentage of average TCE. TBVPS represents the Firm’s TCE at period-end divided by common shares at period-end. TCE, ROTCE, and TBVPS are meaningful to the Firm, as well as investors and analysts, in assessing the Firm’s use of equity.

(c)
The ratios of the allowance for loan losses to period-end loans retained, the allowance for loan losses to nonaccrual loans retained, and nonaccrual loans to total period-end loans excluding credit card and PCI loans, exclude the following: loans accounted for at fair value and loans held-for-sale; PCI loans; and the allowance for loan losses related to PCI loans. Additionally, net charge-offs and net charge-off rates exclude the impact of PCI loans. The ratio of the wholesale allowance for loan losses to period-end loans retained, excluding trade finance and conduits, is calculated excluding loans accounted for at fair value, loans held-for-sale, CIB’s trade finance loans and consolidated Firm-administered multi-seller conduits, as well as their related allowances, to provide a more meaningful assessment of the wholesale allowance coverage ratio.

(d)
CIB calculates the ratio of the allowance for loan losses to end-of-period loans excluding the impact of consolidated Firm-administered multi-seller conduits and trade finance loans, to provide a more meaningful assessment of CIB’s allowance coverage ratio.

Key Performance Measures

(a)
Core loans represent loans considered central to the Firm’s ongoing businesses; core loans exclude loans classified as trading assets, runoff portfolios, discontinued portfolios and portfolios the Firm has an intent to exit.



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