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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): January 15, 2021
JPMorgan Chase & Co.
(Exact name of registrant as specified in its charter)
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Delaware | 1-5805 | 13-2624428 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. employer identification no.) |
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383 Madison Avenue, | | | |
New York, | New York | | | 10179 |
(Address of principal executive offices) | | | (Zip Code) |
Registrant’s telephone number, including area code: (212) 270-6000
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:
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☐ | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock | JPM | The New York Stock Exchange |
Depositary Shares, each representing a one-four hundredth interest in a share of 6.10% Non-Cumulative Preferred Stock, Series AA | JPM PR G | The New York Stock Exchange |
Depositary Shares, each representing a one-four hundredth interest in a share of 6.15% Non-Cumulative Preferred Stock, Series BB | JPM PR H | The New York Stock Exchange |
Depositary Shares, each representing a one-four hundredth interest in a share of 5.75% Non-Cumulative Preferred Stock, Series DD | JPM PR D | The New York Stock Exchange |
Depositary Shares, each representing a one-four hundredth interest in a share of 6.00% Non-Cumulative Preferred Stock, Series EE | JPM PR C | The New York Stock Exchange |
Depositary Shares, each representing a one-four hundredth interest in a share of 4.75% Non-Cumulative Preferred Stock, Series GG | JPM PR J | The New York Stock Exchange |
Alerian MLP Index ETNs due May 24, 2024 | AMJ | NYSE Arca, Inc. |
Guarantee of Callable Step-Up Fixed Rate Notes due April 26, 2028 of JPMorgan Chase Financial Company LLC | JPM/28 | The New York Stock Exchange |
Indicate by check mark whether the registrant 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. ☐
Item 2.02 Results of Operations and Financial Condition
On January 15, 2021, JPMorgan Chase & Co. (“JPMorgan Chase” or the “Firm”) reported 2020 fourth quarter net income of $12.1 billion, or $3.79 per share, compared with net income of $8.5 billion, or $2.57 per share, in the fourth quarter of 2019. A copy of the 2020 fourth 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, 2019, and Quarterly Report on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020, which have been filed with the Securities and Exchange Commission and are available on JPMorgan Chase’s website (https://jpmorganchaseco.gcs-web.com/financial-information/sec-filings) and on the Securities and Exchange Commission’s website (www.sec.gov). JPMorgan Chase does not undertake to update any forward-looking statements.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
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Exhibit No. | | Description of Exhibit |
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99.1 | | |
99.2 | | |
101 | | Pursuant to Rule 406 of Regulation S-T, the cover page is formatted in Inline XBRL (Inline eXtensible Business Reporting Language). |
104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101). |
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.
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JPMorgan Chase & Co. |
(Registrant) |
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By: | /s/ Nicole Giles |
| Nicole Giles |
| Managing Director and Firmwide Controller |
| (Principal Accounting Officer) |
DocumentExhibit 99.1
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JPMorgan Chase & Co. 383 Madison Avenue, New York, NY 10179-0001 NYSE symbol: JPM www.jpmorganchase.com | |
JPMORGAN CHASE REPORTS FOURTH-QUARTER 2020 NET INCOME OF $12.1 BILLION ($3.79 PER SHARE), OR $9.9 BILLION EXCLUDING CREDIT RESERVE RELEASES OF $2.9 BILLION ($3.07 PER SHARE)1 FULL-YEAR 2020 NET INCOME OF $29.1 BILLION ($8.88 PER SHARE)
FULL-YEAR 2020 RESULTS
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ROE 12% ROTCE1 14% | | CET1 Capital Ratios2 Std. 13.1%; Adv. 13.8% | | Net payout LTM3,4 59% |
FOURTH-QUARTER 2020 RESULTS5
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Firmwide Metrics
ROE 19% ROTCE 24% | n | Reported revenue of $29.2 billion; managed revenue of $30.2 billion1 |
n | Credit costs net benefit of $1.9 billion included $2.9 billion of net reserve releases and $1.1 billion of net charge-offs |
n | Average loans6 up 1%; average deposits up 35% |
n | $1.4 trillion liquidity sources, including HQLA and unencumbered marketable securities7 |
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CCB
4Q20 ROE 32% 2020 ROE 15% | n | Average deposits up 30%; client investment assets up 17% |
n | Average loans6 down 6%; debit and credit card sales volume8 up 1% |
n | Active mobile customers up 10% |
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CIB
4Q20 ROE 26% 2020 ROE 20% | n | #1 ranking for Global Investment Banking fees with 9.2% wallet share for the year |
n | Total Markets revenue of $5.9 billion, up 20%, with Fixed Income Markets up 15% and Equity Markets up 32% |
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CB
4Q20 ROE 36% 2020 ROE 11% | n | Gross Investment Banking revenue of $971 million, up 53% |
n | Average loans up 1%; average deposits up 52% |
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AWM
4Q20 ROE 29% 2020 ROE 28% | n | Assets under management (AUM) of $2.7 trillion, up 17% |
n | Average deposits up 31%; average loans up 15% |
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Jamie Dimon, Chairman and CEO, commented on the financial results: “JPMorgan Chase reported strong results in the fourth quarter of 2020, concluding a challenging year where we generated record revenue, benefiting from our diversified business model and dedicated employees. While we reported record profits of $12.1 billion, we do not consider the reserve takedown of $2.9 billion to represent core or recurring profits – essentially reserve calculations, while done extremely diligently and carefully, now involve multiple, multi-year hypothetical probability-adjusted scenarios, which may or may not occur and which can be expected to introduce quarterly volatility in our reserves. While positive vaccine and stimulus developments contributed to these reserve releases this quarter, our credit reserves of over $30 billion continue to reflect significant near-term economic uncertainty and will allow us to withstand an economic environment far worse than the current base forecasts by most economists.”
Dimon added: “In Consumer & Community Banking, deposits grew 30% or over $200 billion driven primarily by growth in the Federal Reserve’s balance sheet and the continuation of modest market share gains. Within our consumer lending franchise, auto and retail mortgage originations were both up more than 20%. Consumer spending continued to recover, as reflected in combined debit and credit card spend being up for the full quarter. The Corporate & Investment Bank delivered another impressive quarter with growth in Global Investment Banking fees of 34% and Markets revenue of 20%. With a record quarter, Commercial Banking earned $3.3 billion of investment banking revenue in 2020, surpassing its previous $3 billion long-term target. In Asset & Wealth Management, AUM grew 17% due to higher asset values and net inflows of over $190 billion into long-term and liquidity products over the last twelve months.”
Dimon concluded: “We ended the year with a CET1 ratio of 13.1% (vs. 12.4% at the beginning of the year) and capital above $200 billion, providing us with meaningful capacity to further invest in our business and communities, while returning capital to our shareholders. This increase in capital was after raising over $2 trillion of credit and capital for our consumer and institutional clients around the world, which includes nonprofits and U.S. government entities, including states, municipalities, hospitals and universities and adding net $12 billion to credit reserves. We also hold $1.4 trillion of cash and marketable securities, which is currently over $450 billion in excess of what is required. We opened branches in new markets, improved our digital capabilities, and made acquisitions that will enhance our product offerings and deepen our engagement with our customers. We also continued to invest in our communities – for example, through our initial commitments to support those most impacted by the pandemic and our longer-term commitment to advance racial equality and promote economic growth. Our earnings power and healthy capital position also provide us the flexibility to pay dividends and return excess capital to shareholders through share repurchases. I want to end by thanking our frontline colleagues and those working from home who quickly adapted to the pandemic and safely helped our clients, customers, communities and governments.” |
SIGNIFICANT ITEMS
n 4Q20 results included $2.9 billion of credit reserve releases Firmwide ($0.72 increase in earnings per share (EPS))
CAPITAL DISTRIBUTED
n Common dividend of $2.8 billion, or $0.90 per share
n No repurchases in 4Q209; announced intention to begin repurchases in 1Q21
FORTRESS PRINCIPLES
n Book value per share of $81.75, up 8%; tangible book value per share1 of $66.11, up 8%
n Basel III common equity Tier 1 capital2 of $205 billion and Standardized ratio2 of 13.1%; Advanced ratio2 of 13.8%
n Firm supplementary leverage ratio of 6.9%2
OPERATING LEVERAGE
n 4Q20 reported expense of $16.0 billion; reported overhead ratio of 55%; managed overhead ratio1 of 53%
SUPPORTED CONSUMERS, BUSINESSES & COMMUNITIES
n $2.3 trillion of credit and capital10 raised in 2020
n $226 billion of credit for consumers
n $18 billion of credit for U.S. small businesses
n $865 billion of credit for corporations
n $1.1 trillion of capital raised for corporate clients and non-U.S. government entities
n $103 billion of credit and capital raised for nonprofit and U.S. government entities, including states, municipalities, hospitals and universities
n $28 billion of loans under the Small Business Administration’s Paycheck Protection Program
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Investor Contact: Reggie Chambers (212) 270-2479 Note: Totals may not sum due to rounding 1For notes on non-GAAP financial measures, including managed basis reporting, see page 6. For additional notes see page 7. | Media Contact: Joseph Evangelisti (212) 270-7438
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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, unless otherwise specified. 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 used by management to evaluate the performance of each line of business, refer to page 6.
Comparisons noted in the sections below are for the fourth quarter of 2020 versus the prior-year fourth quarter, unless otherwise specified.
Net revenue on a reported basis was $29.2 billion, $29.1 billion, and $28.3 billion for the fourth quarter of 2020, third quarter of 2020, and fourth quarter of 2019, respectively.
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Results for JPM | | | | | | | 3Q20 | | 4Q19 |
($ millions, except per share data) | 4Q20 | | 3Q20 | | 4Q19 | | $ O/(U) | O/(U) % | | $ O/(U) | O/(U) % |
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Net revenue - managed | $ | 30,161 | | | $ | 29,941 | | | $ | 29,165 | | | $ | 220 | | 1 | % | | $ | 996 | | 3 | % |
Noninterest expense | 16,048 | | | 16,875 | | | 16,293 | | | (827) | | (5) | | | (245) | | (2) | |
Provision for credit losses | (1,889) | | | 611 | | | 1,427 | | | (2,500) | | NM | | (3,316) | | NM |
Net income | $ | 12,136 | | | $ | 9,443 | | | $ | 8,520 | | | $ | 2,693 | | 29 | % | | $ | 3,616 | | 42 | % |
Earnings per share | $ | 3.79 | | | $ | 2.92 | | | $ | 2.57 | | | $ | 0.87 | | 30 | % | | $ | 1.22 | | 47 | % |
Return on common equity | 19 | % | | 15 | % | | 14 | % | | | | | | |
Return on tangible common equity | 24 | | | 19 | | | 17 | | | | | | | |
Discussion of Results11:
Net income was $12.1 billion, up 42%, largely driven by credit reserve releases of $2.9 billion.
Net revenue of $30.2 billion was up 3%. Noninterest revenue was $16.8 billion, up 13%, predominantly driven by higher Investment Banking fees, net gains on certain legacy equity investments in Corporate compared to net losses in the prior year, and higher net production revenue in Home Lending. Net interest income was $13.4 billion, down 7%, predominantly driven by the impact of lower rates as well as balance sheet mix, largely offset by balance sheet growth and higher net interest income in CIB Markets.
Noninterest expense was $16.0 billion, down 2%, predominantly driven by lower volume- and revenue-related expense partially offset by higher investments in the business.
The provision for credit losses was a net benefit of $1.9 billion, compared to an expense of $1.4 billion in the prior year driven by reserve releases in the current quarter. The Wholesale reserve release was $2.0 billion, reflecting an improvement in the macro-economic scenarios and the continued ability of clients to access liquidity and capital markets. The Consumer reserve release was $0.9 billion, in Home Lending, primarily due to improvements in HPI expectations and portfolio run-off. The prior year included a net reserve release in the Consumer portfolio and a net reserve build in the Wholesale portfolio. Net charge-offs of $1.1 billion were down $444 million from the prior year, driven by Card.
JPMorgan Chase & Co.
News Release
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CONSUMER & COMMUNITY BANKING (CCB) |
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Results for CCB | | | | | | | 3Q20 | | 4Q19 |
($ millions) | 4Q20 | | 3Q20 | | 4Q19 | | $ O/(U) | O/(U) % | | $ O/(U) | O/(U) % |
Net revenue | $ | 12,728 | | | $ | 12,895 | | | $ | 13,880 | | | $ | (167) | | (1) | % | | $ | (1,152) | | (8) | % |
Consumer & Business Banking | 5,744 | | | 5,697 | | | 6,668 | | | 47 | | 1 | | | (924) | | (14) | |
Home Lending | 1,456 | | | 1,714 | | | 1,250 | | | (258) | | (15) | | | 206 | | 16 | |
Card & Auto | 5,528 | | | 5,484 | | | 5,962 | | | 44 | | 1 | | | (434) | | (7) | |
Noninterest expense | 7,042 | | | 6,912 | | | 7,116 | | | 130 | | 2 | | | (74) | | (1) | |
Provision for credit losses | (83) | | | 795 | | | 1,207 | | | (878) | | NM | | (1,290) | | NM |
Net income | $ | 4,325 | | | $ | 3,871 | | | $ | 4,200 | | | $ | 454 | | 12 | % | | $ | 125 | | 3 | % |
Discussion of Results11,12,13:
Net income was $4.3 billion, up 3%. Net revenue was $12.7 billion, down 8%.
Consumer & Business Banking net revenue was $5.7 billion, down 14%, predominantly driven by the impact of deposit margin compression, largely offset by growth in deposit balances. Home Lending net revenue was $1.5 billion, up 16%, driven by higher net production revenue, largely offset by lower net interest income on lower balances and spread compression as well as lower net servicing revenue. Card & Auto net revenue was $5.5 billion, down 7%, predominantly driven by lower Card net interest income on lower balances.
Noninterest expense was $7.0 billion, down 1%.
The provision for credit losses was a net benefit of $83 million, reflecting a $900 million reserve release in Home Lending compared to a $151 million net reserve release in the prior year which included a $250 million reserve release also in Home Lending. Net charge-offs were $817 million, down $541 million, predominantly driven by Card.
JPMorgan Chase & Co.
News Release
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CORPORATE & INVESTMENT BANK (CIB) |
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Results for CIB | | | | | | | 3Q20 | | 4Q19 |
($ millions) | 4Q20 | | 3Q20 | | 4Q19 | | $ O/(U) | O/(U) % | | $ O/(U) | O/(U) % |
Net revenue | $ | 11,352 | | | $ | 11,546 | | | $ | 9,703 | | | $ | (194) | | (2) | % | | $ | 1,649 | | 17 | % |
Banking | 4,117 | | | 3,752 | | | 3,562 | | | 365 | | 10 | | | 555 | | 16 | |
Markets & Securities Services | 7,235 | | | 7,794 | | | 6,141 | | | (559) | | (7) | | | 1,094 | | 18 | |
Noninterest expense | 4,939 | | | 5,832 | | | 5,451 | | | (893) | | (15) | | | (512) | | (9) | |
Provision for credit losses | (581) | | | (81) | | | 98 | | | (500) | | NM | | (679) | | NM |
Net income | $ | 5,349 | | | $ | 4,309 | | | $ | 2,935 | | | $ | 1,040 | | 24 | % | | $ | 2,414 | | 82 | % |
Discussion of Results12:
Net income was $5.3 billion, up 82%, with revenue of $11.4 billion, up 17%.
Banking revenue was $4.1 billion, up 16%. Investment Banking revenue was $2.5 billion, up 37%, driven by higher Investment Banking fees, up 34%, reflecting higher fees across products. Wholesale Payments revenue was $1.4 billion, down 4%, driven by deposit margin compression and a reporting re-classification in Merchant Services, largely offset by the impact of higher deposit balances. Lending revenue was $193 million, down 23%, driven by mark-to-market losses on hedges of accrual loans partially offset by higher net interest income and fees.
Markets & Securities Services revenue was $7.2 billion, up 18%. Markets revenue was $5.9 billion, up 20%. Fixed Income Markets revenue was $4.0 billion, up 15%, driven by strong performance in Credit, Currencies & Emerging Markets and Commodities. Equity Markets revenue was $2.0 billion, up 32%, predominantly driven by strong client activity in derivatives and Cash Equities. Securities Services revenue was $1.1 billion, down 1%, with deposit margin compression predominantly offset by balance growth. Credit Adjustments & Other was a gain of $243 million largely driven by funding and credit spread tightening on derivatives.
Noninterest expense was $4.9 billion, down 9%, driven by lower compensation expense and lower legal expense.
The provision for credit losses was a net benefit of $581 million, driven by reserve releases. Net charge-offs were $88 million.
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Results for CB | | | | | | | 3Q20 | | 4Q19 |
($ millions) | 4Q20 | | 3Q20 | | 4Q19 | | $ O/(U) | O/(U) % | | $ O/(U) | O/(U) % |
Net revenue | $ | 2,463 | | | $ | 2,285 | | | $ | 2,296 | | | $ | 178 | | 8 | % | | $ | 167 | | 7 | % |
Noninterest expense | 950 | | | 969 | | | 941 | | | (19) | | (2) | | | 9 | | 1 | |
Provision for credit losses | (1,181) | | | (147) | | | 110 | | | (1,034) | | NM | | (1,291) | | NM |
Net income | $ | 2,034 | | | $ | 1,086 | | | $ | 945 | | | $ | 948 | | 87 | % | | $ | 1,089 | | 115 | % |
Discussion of Results12:
Net income was $2.0 billion, up 115%, predominantly driven by reserve releases.
Net revenue of $2.5 billion was up 7%, predominantly driven by higher deposit balances and fees, higher lending revenue due to increased portfolio spreads, and higher investment banking revenue largely offset by lower deposit margin.
Noninterest expense was $950 million, relatively flat.
The provision for credit losses was a net benefit of $1.2 billion, driven by reserve releases. Net charge-offs were $162 million.
JPMorgan Chase & Co.
News Release
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ASSET & WEALTH MANAGEMENT (AWM) |
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Results for AWM | | | | | | | 3Q20 | | 4Q19 |
($ millions) | 4Q20 | | 3Q20 | | 4Q19 | | $ O/(U) | O/(U) % | | $ O/(U) | O/(U) % |
Net revenue | $ | 3,867 | | | $ | 3,554 | | | $ | 3,514 | | | $ | 313 | | 9 | % | | $ | 353 | | 10 | % |
Noninterest expense | 2,756 | | | 2,443 | | | 2,442 | | | 313 | | 13 | | | 314 | | 13 | |
Provision for credit losses | (2) | | | (52) | | | 13 | | | 50 | | 96 | | | (15) | | NM |
Net income | $ | 786 | | | $ | 876 | | | $ | 801 | | | $ | (90) | | (10) | % | | $ | (15) | | (2) | % |
Discussion of Results13:
Net income was $786 million, down 2%.
Net revenue was $3.9 billion, up 10%, predominantly driven by higher performance and management fees, as well as higher deposit and loan balances, partially offset by deposit margin compression.
Noninterest expense was $2.8 billion, up 13%, driven by higher legal expense and volume- and revenue-related expense.
The provision for credit losses was a net benefit of $2 million.
Assets under management were $2.7 trillion, up 17%, driven by cumulative net inflows into liquidity and long-term products as well as higher market levels.
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Results for Corporate | | | | | | | 3Q20 | | 4Q19 |
($ millions) | 4Q20 | | 3Q20 | | 4Q19 | | $ O/(U) | O/(U) % | | $ O/(U) | O/(U) % |
Net revenue | $ | (249) | | | $ | (339) | | | $ | (228) | | | $ | 90 | | 27 | % | | $ | (21) | | (9) | % |
Noninterest expense | 361 | | | 719 | | | 343 | | | (358) | | (50) | | | 18 | | 5 | |
Provision for credit losses | (42) | | | 96 | | | (1) | | | (138) | | NM | | (41) | | NM |
Net income/(loss) | $ | (358) | | | $ | (699) | | | $ | (361) | | | $ | 341 | | 49 | % | | $ | 3 | | 1 | % |
Discussion of Results:
Net loss was $358 million, compared with net loss of $361 million in the prior year.
Net revenue was a loss of $249 million, compared with a net loss of $228 million in the prior year. Net interest income was down $730 million predominantly driven by lower rates, including the impact of faster prepayments on mortgage-backed securities, as well as limited deployment opportunities on the back of continued deposit growth. The current quarter also included approximately $540 million of net gains on certain legacy equity investments.
Noninterest expense was $361 million, up $18 million. The provision for credit losses was a benefit of $42 million, driven by reserve releases.
JPMorgan Chase & Co.
News Release
1. Notes on non-GAAP financial measures:
a.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 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 each 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 mortgage servicing rights), 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 $81.75, $79.08 and $75.98 at December 31, 2020, September 30, 2020, and December 31, 2019, respectively. TCE, ROTCE, and TBVPS are utilized by the Firm, as well as investors and analysts, in assessing the Firm’s use of equity.
c.Fourth-quarter 2020 net income and earnings per share excluding credit reserve releases are non-GAAP financial measures. These measures exclude the portion of the provision for credit losses attributable to the change in allowance for credit losses. Excluding these amounts resulted in a decrease of $2.2 billion (after tax) to reported net income from $12.1 billion to $9.9 billion and a decrease of $0.72 per share to reported EPS from $3.79 to $3.07. Management believes these measures provide useful information to investors and analysts in assessing the Firm’s results.
JPMorgan Chase & Co.
News Release
Additional notes:
2. Estimated. Reflects the relief provided by the Federal Reserve Board (the “Federal Reserve”) in response to the COVID-19 pandemic, including the CECL capital transition provisions that became effective in the first quarter of 2020. For the period ended December 31, 2020, the impact of the CECL capital transition provisions resulted in an increase to CET1 capital of $5.7 billion. The Firm supplementary leverage ratio reflects the temporary exclusions of U.S. Treasury securities and deposits at Federal Reserve Banks. Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 11-12 and Capital Risk Management on pages 49-54 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 for additional information. Refer to Capital Risk Management on pages 85-92 of the Firm’s 2019 Form 10-K for additional information on the Firm’s capital metrics.
3.Last twelve months (“LTM”).
4.Net of stock issued to employees.
5.Percentage comparisons noted in the bullet points are for the fourth quarter of 2020 versus the prior-year fourth quarter, unless otherwise specified
6.In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans. Prior-period amounts have been revised to conform with the current presentation.
7.Estimated. High-quality liquid assets (“HQLA”) and unencumbered marketable securities, includes the Firm’s average HQLA, other end-of-period HQLA-eligible securities which are included as part of the excess liquidity at JPMorgan Chase Bank, N.A. that are not transferable to non-bank affiliates and thus excluded from the Firm’s liquidity coverage ratio (“LCR”) under the LCR rule, and other end-of-period unencumbered marketable securities, such as equity securities and fixed income debt securities. Does not include borrowing capacity at Federal Home Loan Banks and the discount window at the Federal Reserve Bank. Refer to Liquidity Risk Management on pages 55-59 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 for additional information.
8.Excludes Commercial Card.
9.On September 30, 2020, the Federal Reserve extended its requirement for large banks to suspend net share repurchases through the end of the fourth quarter of 2020. On December 18, 2020, the Federal Reserve announced that all large banks, including the Firm, could resume share repurchases commencing in the first quarter of 2021, subject to certain restrictions. For further information, see page 10 of the Earnings Release Financial Supplement.
10.Credit provided to clients represents new and renewed credit, including loans and commitments.
11.In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
12.In the fourth quarter of 2020, payment processing-only clients along with the associated revenue and expenses were realigned to CIB’s Wholesale Payments business from CCB and CB. Prior-period amounts have been revised to conform with the current presentation. Refer to Business segment changes on page 21 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 for further information.
13.In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform with the current presentation. Refer to page 29 of the Earnings Release Financial Supplement for further information.
JPMorgan Chase & Co.
News Release
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $3.4 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, January 15, 2021, at 8:30 a.m. (Eastern) to present fourth quarter 2020 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 January 15, 2021, through midnight, January 29, 2021, by telephone at (855) 859-2056 (U.S. and Canada) or (404) 537-3406 (international); use Conference ID # 1942428. 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, 2019, and Quarterly Reports on Form 10-Q for the quarterly periods ended September 30, 2020, June 30, 2020 and March 31, 2020, which have been filed with the Securities and Exchange Commission and are available on JPMorgan Chase & Co.’s website (https://jpmorganchaseco.gcs-web.com/financial-information/sec-filings), and on the Securities and Exchange Commission’s website (www.sec.gov). JPMorgan Chase & Co. does not undertake to update any forward-looking statements.
DocumentExhibit 99.2
EARNINGS RELEASE FINANCIAL SUPPLEMENT
FOURTH QUARTER 2020
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JPMORGAN CHASE & CO. | | | |
TABLE OF CONTENTS | | | | | | | | |
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| | | | | | | 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 | |
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Business Segment Results | | | | | | | | |
Consumer & Community Banking (“CCB”) | | | | | | | 11–14 | |
Corporate & Investment Bank (“CIB”) | | | | | | | 15–17 | |
Commercial Banking (“CB”) | | | | | | | 18–19 | |
Asset & Wealth Management (“AWM”) | | | | | | | 20–22 | |
Corporate | | | | | | | 23 | |
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Credit-Related Information | | | | | | | 24–27 | |
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Non-GAAP Financial Measures | | | | | | | 28 | |
J.P. Morgan Wealth Management Reorganization | | | | | | | 29 | |
Glossary of Terms and Acronyms (a) | | | | | | | | |
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(a) Refer to the Glossary of Terms and Acronyms on pages 293–299 of JPMorgan Chase & Co.’s (the “Firm’s”) Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Form 10-K”) and the Glossary of Terms and Acronyms and Line of Business Metrics on pages 192-197 and pages 198-200, respectively, of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020.
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JPMORGAN CHASE & CO. | | | | | |
CONSOLIDATED FINANCIAL HIGHLIGHTS | | | | |
(in millions, except per share and ratio data) | | | |
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| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
SELECTED INCOME STATEMENT DATA | 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
Reported Basis | | | | | | | | | | | | | | | | | | | | | |
Total net revenue (a) | $ | 29,224 | | | $ | 29,147 | | | $ | 32,980 | | | $ | 28,192 | | | $ | 28,285 | | | — | % | | 3 | % | | | $ | 119,543 | | | $ | 115,399 | | | 4 | % | |
Total noninterest expense (a) | 16,048 | | | 16,875 | | | 16,942 | | | 16,791 | | | 16,293 | | | (5) | | | (2) | | | | 66,656 | | | 65,269 | | | 2 | | |
Pre-provision profit (b) | 13,176 | | | 12,272 | | | 16,038 | | | 11,401 | | | 11,992 | | | 7 | | | 10 | | | | 52,887 | | | 50,130 | | | 5 | | |
Provision for credit losses | (1,889) | | | 611 | | | 10,473 | | | 8,285 | | | 1,427 | | | NM | | NM | | | 17,480 | | | 5,585 | | | 213 | | |
NET INCOME | 12,136 | | | 9,443 | | | 4,687 | | | 2,865 | | | 8,520 | | | 29 | | | 42 | | | | 29,131 | | | 36,431 | | | (20) | | |
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Managed Basis (c) | | | | | | | | | | | | | | | | | | | | | |
Total net revenue (a) | 30,161 | | | 29,941 | | | 33,817 | | | 29,010 | | | 29,165 | | | 1 | | | 3 | | | | 122,929 | | | 118,464 | | | 4 | | |
Total noninterest expense (a) | 16,048 | | | 16,875 | | | 16,942 | | | 16,791 | | | 16,293 | | | (5) | | | (2) | | | | 66,656 | | | 65,269 | | | 2 | | |
Pre-provision profit (b) | 14,113 | | | 13,066 | | | 16,875 | | | 12,219 | | | 12,872 | | | 8 | | | 10 | | | | 56,273 | | | 53,195 | | | 6 | | |
Provision for credit losses | (1,889) | | | 611 | | | 10,473 | | | 8,285 | | | 1,427 | | | NM | | NM | | | 17,480 | | | 5,585 | | | 213 | | |
NET INCOME | 12,136 | | | 9,443 | | | 4,687 | | | 2,865 | | | 8,520 | | | 29 | | | 42 | | | | 29,131 | | | 36,431 | | | (20) | | |
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EARNINGS PER SHARE DATA | | | | | | | | | | | | | | | | | | | | | |
Net income: Basic | $ | 3.80 | | | $ | 2.93 | | | $ | 1.39 | | | $ | 0.79 | | | $ | 2.58 | | | 30 | | | 47 | | | | $ | 8.89 | | | $ | 10.75 | | | (17) | | |
Diluted | 3.79 | | | 2.92 | | | 1.38 | | | 0.78 | | | 2.57 | | | 30 | | | 47 | | | | 8.88 | | | 10.72 | | | (17) | | |
Average shares: Basic | 3,079.7 | | | 3,077.8 | | | 3,076.3 | | | 3,095.8 | | | 3,140.7 | | | — | | | (2) | | | | 3,082.4 | | | 3,221.5 | | | (4) | | |
Diluted | 3,085.1 | | | 3,082.8 | | | 3,081.0 | | | 3,100.7 | | | 3,148.5 | | | — | | | (2) | | | | 3,087.4 | | | 3,230.4 | | | (4) | | |
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MARKET AND PER COMMON SHARE DATA | | | | | | | | | | | | | | | | | | | | | |
Market capitalization | $ | 387,492 | | | $ | 293,451 | | | $ | 286,658 | | | $ | 274,323 | | | $ | 429,913 | | | 32 | | | (10) | | | | $ | 387,492 | | | $ | 429,913 | | | (10) | | |
Common shares at period-end | 3,049.4 | | | 3,048.2 | | | 3,047.6 | | | 3,047.0 | | | 3,084.0 | | | — | | | (1) | | | | 3,049.4 | | | 3,084.0 | | | (1) | | |
Book value per share | 81.75 | | | 79.08 | | | 76.91 | | | 75.88 | | | 75.98 | | | 3 | | | 8 | | | | 81.75 | | | 75.98 | | | 8 | | |
Tangible book value per share (“TBVPS”) (b) | 66.11 | | | 63.93 | | | 61.76 | | | 60.71 | | | 60.98 | | | 3 | | | 8 | | | | 66.11 | | | 60.98 | | | 8 | | |
Cash dividends declared per share | 0.90 | | | 0.90 | | | 0.90 | | | 0.90 | | | 0.90 | | | — | | | — | | | | 3.60 | | | 3.40 | | | 6 | | |
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FINANCIAL RATIOS (d) | | | | | | | | | | | | | | | | | | | | | |
Return on common equity (“ROE”) | 19 | % | | 15 | % | | 7 | % | | 4 | % | | 14 | % | | | | | | | 12 | % | | 15 | % | | | |
Return on tangible common equity (“ROTCE”) (b) | 24 | | | 19 | | | 9 | | | 5 | | | 17 | | | | | | | | 14 | | | 19 | | | | |
Return on assets | 1.42 | | | 1.14 | | | 0.58 | | | 0.40 | | | 1.22 | | | | | | | | 0.91 | | | 1.33 | | | | |
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CAPITAL RATIOS (e) | | | | | | | | | | | | | | | | | | | | | |
Common equity Tier 1 (“CET1”) capital ratio | 13.1 | % | (f) | 13.1 | % | | 12.4 | % | | 11.5 | % | | 12.4 | % | | | | | | | 13.1 | % | (f) | 12.4 | % | | | |
Tier 1 capital ratio | 15.0 | | (f) | 15.0 | | | 14.3 | | | 13.3 | | | 14.1 | | | | | | | | 15.0 | | (f) | 14.1 | | | | |
Total capital ratio | 17.3 | | (f) | 17.3 | | | 16.7 | | | 15.5 | | | 16.0 | | | | | | | | 17.3 | | (f) | 16.0 | | | | |
Tier 1 leverage ratio | 7.0 | | (f) | 7.0 | | | 6.9 | | | 7.5 | | | 7.9 | | | | | | | | 7.0 | | (f) | 7.9 | | | | |
Supplementary leverage ratio (“SLR”) | 6.9 | | (f) | 7.0 | | | 6.8 | | | 6.0 | | | 6.3 | | | | | | | | 6.9 | | (f) | 6.3 | | | | |
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Effective January 1, 2020, the Firm adopted the Financial Instruments – Credit Losses (“CECL”) accounting guidance, which resulted in a net increase to the allowance for credit losses of $4.3 billion and a decrease to retained earnings of $2.7 billion. Refer to Note 1 – Basis of Presentation on pages 85-86 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 for further information.
(a)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(b)Pre-provision profit, TBVPS and ROTCE are each non-GAAP financial measures. Tangible common equity (“TCE”) is also a non-GAAP financial measure; refer to page 9 for a reconciliation of common stockholders’ equity to TCE. Refer to page 28 for a further discussion of these measures.
(c)Refer to Reconciliation from Reported to Managed Basis on page 7 for a further discussion of managed basis.
(d)Quarterly ratios are based upon annualized amounts.
(e)The capital metrics reflect the relief provided by the Federal Reserve Board (the “Federal Reserve”) in response to the COVID-19 pandemic, including the CECL capital transition provisions that became effective in the first quarter of 2020. For the periods ended December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, the impact of the CECL capital transition provisions resulted in an increase to CET1 capital of $5.7 billion, $6.4 billion, $6.5 billion and $4.3 billion, respectively. The SLR reflects the temporary exclusions of U.S. Treasury securities and deposits at Federal Reserve Banks that became effective in the second quarter of 2020. Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 11-12 and Capital Risk Management on pages 49-54 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 for additional information. Refer to Capital Risk Management on pages 85-92 of the Firm’s 2019 Form 10-K for additional information on the Firm’s capital metrics.
(f)Estimated.
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JPMORGAN CHASE & CO. | | | | | |
CONSOLIDATED FINANCIAL HIGHLIGHTS, CONTINUED | | | |
(in millions, except ratio and headcount data) | | | | |
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| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
SELECTED BALANCE SHEET DATA (period-end) | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 3,386,071 | | | $ | 3,246,076 | | | $ | 3,213,616 | | (f) | $ | 3,139,431 | | | $ | 2,687,379 | | | 4 | % | | 26 | % | | | $ | 3,386,071 | | | $ | 2,687,379 | | | 26 | % | |
Loans: | | | | | | | | | | | | | | | | | | | | | |
Consumer, excluding credit card loans (a)(b) | 318,579 | | | 322,098 | | | 323,198 | | | 311,508 | | | 317,817 | | | (1) | | | — | | | | 318,579 | | | 317,817 | | | — | | |
Credit card loans | 144,216 | | | 140,377 | | | 141,656 | | | 154,021 | | | 168,924 | | | 3 | | | (15) | | | | 144,216 | | | 168,924 | | | (15) | | |
Wholesale loans (a)(b) | 550,058 | | | 527,265 | | | 544,528 | | | 584,081 | | | 510,879 | | | 4 | | | 8 | | | | 550,058 | | | 510,879 | | | 8 | | |
Total Loans | 1,012,853 | | | 989,740 | | | 1,009,382 | | | 1,049,610 | | | 997,620 | | | 2 | | | 2 | | | | 1,012,853 | | | 997,620 | | | 2 | | |
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Deposits: | | | | | | | | | | | | | | | | | | | | | |
U.S. offices: | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing | 572,711 | | | 540,116 | | | 529,729 | | | 448,195 | | | 395,667 | | | 6 | | | 45 | | | | 572,711 | | | 395,667 | | | 45 | | |
Interest-bearing | 1,197,032 | | | 1,117,149 | | | 1,061,093 | | | 1,026,603 | | | 876,156 | | | 7 | | | 37 | | | | 1,197,032 | | | 876,156 | | | 37 | | |
Non-U.S. offices: | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing | 23,435 | | | 21,406 | | | 22,752 | | | 22,192 | | | 20,087 | | | 9 | | | 17 | | | | 23,435 | | | 20,087 | | | 17 | | |
Interest-bearing | 351,079 | | | 322,745 | | | 317,455 | | | 339,019 | | | 270,521 | | | 9 | | | 30 | | | | 351,079 | | | 270,521 | | | 30 | | |
Total deposits | 2,144,257 | | | 2,001,416 | | | 1,931,029 | | | 1,836,009 | | | 1,562,431 | | | 7 | | | 37 | | | | 2,144,257 | | | 1,562,431 | | | 37 | | |
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Long-term debt | 281,685 | | | 279,175 | | | 317,003 | | | 299,344 | | | 291,498 | | | 1 | | | (3) | | | | 281,685 | | | 291,498 | | | (3) | | |
Common stockholders’ equity | 249,291 | | | 241,050 | | | 234,403 | | | 231,199 | | | 234,337 | | | 3 | | | 6 | | | | 249,291 | | | 234,337 | | | 6 | | |
Total stockholders’ equity | 279,354 | | | 271,113 | | | 264,466 | | | 261,262 | | | 261,330 | | | 3 | | | 7 | | | | 279,354 | | | 261,330 | | | 7 | | |
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Loans-to-deposits ratio (b) | 47 | % | | 49 | % | | 52 | % | | 57 | % | | 64 | % | | | | | | | 47 | % | | 64 | % | | | |
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Headcount | 255,351 | | | 256,358 | | | 256,710 | | | 256,720 | | | 256,981 | | | — | | | (1) | | | | 255,351 | | | 256,981 | | | (1) | | |
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95% CONFIDENCE LEVEL - TOTAL VaR (c) | | | | | | | | | | | | | | | | | | | | | |
Average VaR | $ | 96 | | | $ | 90 | | | $ | 130 | | | $ | 59 | | | $ | 37 | | | 7 | | | 159 | | | | | | | | | |
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LINE OF BUSINESS NET REVENUE (d) | | | | | | | | | | | | | | | | | | | | | |
Consumer & Community Banking (e) | $ | 12,728 | | | $ | 12,895 | | | $ | 12,358 | | | $ | 13,287 | | | $ | 13,880 | | | (1) | | | (8) | | | | $ | 51,268 | | | $ | 55,133 | | | (7) | | |
Corporate & Investment Bank | 11,352 | | | 11,546 | | | 16,383 | | | 10,003 | | | 9,703 | | | (2) | | | 17 | | | | 49,284 | | | 39,265 | | | 26 | | |
Commercial Banking | 2,463 | | | 2,285 | | | 2,400 | | | 2,165 | | | 2,296 | | | 8 | | | 7 | | | | 9,313 | | | 9,264 | | | 1 | | |
Asset & Wealth Management | 3,867 | | | 3,554 | | | 3,430 | | | 3,389 | | | 3,514 | | | 9 | | | 10 | | | | 14,240 | | | 13,591 | | | 5 | | |
Corporate | (249) | | | (339) | | | (754) | | | 166 | | | (228) | | | 27 | | | (9) | | | | (1,176) | | | 1,211 | | | NM | |
TOTAL NET REVENUE | $ | 30,161 | | | $ | 29,941 | | | $ | 33,817 | | | $ | 29,010 | | | $ | 29,165 | | | 1 | | | 3 | | | | $ | 122,929 | | | $ | 118,464 | | | 4 | | |
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LINE OF BUSINESS NET INCOME/(LOSS) | | | | | | | | | | | | | | | | | | | | | |
Consumer & Community Banking | $ | 4,325 | | | $ | 3,871 | | | $ | (176) | | | $ | 197 | | | $ | 4,200 | | | 12 | | | 3 | | | | $ | 8,217 | | | $ | 16,541 | | | (50) | | |
Corporate & Investment Bank | 5,349 | | | 4,309 | | | 5,451 | | | 1,985 | | | 2,935 | | | 24 | | | 82 | | | | 17,094 | | | 11,954 | | | 43 | | |
Commercial Banking | 2,034 | | | 1,086 | | | (681) | | | 139 | | | 945 | | | 87 | | | 115 | | | | 2,578 | | | 3,958 | | | (35) | | |
Asset & Wealth Management | 786 | | | 876 | | | 661 | | | 669 | | | 801 | | | (10) | | | (2) | | | | 2,992 | | | 2,867 | | | 4 | | |
Corporate | (358) | | | (699) | | | (568) | | | (125) | | | (361) | | | 49 | | | 1 | | | | (1,750) | | | 1,111 | | | NM | |
NET INCOME | $ | 12,136 | | | $ | 9,443 | | | $ | 4,687 | | | $ | 2,865 | | | $ | 8,520 | | | 29 | | | 42 | | | | $ | 29,131 | | | $ | 36,431 | | | (20) | | |
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In the fourth quarter of 2020, payment processing-only clients along with the associated revenue and expenses were realigned to CIB’s Wholesale Payments business from CCB and CB. Prior-period amounts have been revised to conform with the current presentation. Refer to Business segment changes on page 21 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 for further information.
In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform with the current presentation. Refer to page 29 for further information.
(a)In conjunction with the adoption of CECL on January 1, 2020, the Firm reclassified risk-rated business banking and auto dealer loans held in CCB from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment. Prior-period amounts have been revised to conform with the current presentation.
(b)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans. Prior-period amounts have been revised to conform with the current presentation.
(c)Effective January 1, 2020, the Firm refined the scope of VaR to exclude positions related to the risk management of interest rate exposure from changes in the Firm’s own credit spread on fair value option elected liabilities, and included these positions in other sensitivity-based measures. Additionally, effective July 1, 2020, the Firm refined the scope of VaR to exclude certain asset-backed fair value option elected loans, and included them in other sensitivity-based measures to more effectively measure the risk from these loans. In the absence of these refinements, the average Total VaR for the three months ended December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020 would have been different by $27 million, $11 million, $(8) million and $6 million, respectively.
(d)Refer to Reconciliation from Reported to Managed Basis on page 7 for a further discussion of managed basis.
(e)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(f)Prior-period amounts have been revised to conform with the current presentation.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
JPMORGAN CHASE & CO. | | | | | |
CONSOLIDATED STATEMENTS OF INCOME | | | | |
(in millions, except per share and ratio data) | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
REVENUE | 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
Investment banking fees | $ | 2,583 | | | $ | 2,187 | | | $ | 2,850 | | | $ | 1,866 | | | $ | 1,843 | | | 18 | % | | 40 | % | | | $ | 9,486 | | | $ | 7,501 | | | 26 | % | |
Principal transactions | 3,321 | | | 4,142 | | | 7,621 | | | 2,937 | | | 2,779 | | | (20) | | | 20 | | | | 18,021 | | | 14,018 | | | 29 | | |
Lending- and deposit-related fees (a) | 1,727 | | | 1,647 | | | 1,431 | | | 1,706 | | | 1,772 | | | 5 | | | (3) | | | | 6,511 | | | 6,626 | | | (2) | | |
Asset management, administration and commissions (a) | 4,901 | | | 4,470 | | | 4,266 | | | 4,540 | | | 4,301 | | | 10 | | | 14 | | | | 18,177 | | | 16,908 | | | 8 | | |
Investment securities gains | 70 | | | 473 | | | 26 | | | 233 | | | 123 | | | (85) | | | (43) | | | | 802 | | | 258 | | | 211 | | |
Mortgage fees and related income | 767 | | | 1,087 | | | 917 | | | 320 | | | 474 | | | (29) | | | 62 | | | | 3,091 | | | 2,036 | | | 52 | | |
Card income (b) | 1,297 | | | 1,169 | | | 974 | | | 995 | | | 1,335 | | | 11 | | | (3) | | | | 4,435 | | | 5,076 | | | (13) | | |
Other income | 1,300 | | | 959 | | | 1,042 | | | 1,156 | | | 1,492 | | | 36 | | | (13) | | | | 4,457 | | | 5,731 | | | (22) | | |
Noninterest revenue | 15,966 | | | 16,134 | | | 19,127 | | | 13,753 | | | 14,119 | | | (1) | | | 13 | | | | 64,980 | | | 58,154 | | | 12 | | |
Interest income | 14,550 | | | 14,700 | | | 16,112 | | | 19,161 | | | 19,927 | | | (1) | | | (27) | | | | 64,523 | | | 84,040 | | | (23) | | |
Interest expense | 1,292 | | | 1,687 | | | 2,259 | | | 4,722 | | | 5,761 | | | (23) | | | (78) | | | | 9,960 | | | 26,795 | | | (63) | | |
Net interest income | 13,258 | | | 13,013 | | | 13,853 | | | 14,439 | | | 14,166 | | | 2 | | | (6) | | | | 54,563 | | | 57,245 | | | (5) | | |
TOTAL NET REVENUE | 29,224 | | | 29,147 | | | 32,980 | | | 28,192 | | | 28,285 | | | — | | | 3 | | | | 119,543 | | | 115,399 | | | 4 | | |
| | | | | | | | | | | | | | | | | | | | | |
Provision for credit losses | (1,889) | | | 611 | | | 10,473 | | | 8,285 | | | 1,427 | | | NM | | NM | | | 17,480 | | | 5,585 | | | 213 | | |
| | | | | | | | | | | | | | | | | | | | | |
NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | |
Compensation expense | 7,954 | | | 8,630 | | | 9,509 | | | 8,895 | | | 8,088 | | | (8) | | | (2) | | | | 34,988 | | | 34,155 | | | 2 | | |
Occupancy expense | 1,161 | | | 1,142 | | | 1,080 | | | 1,066 | | | 1,084 | | | 2 | | | 7 | | | | 4,449 | | | 4,322 | | | 3 | | |
Technology, communications and equipment expense | 2,606 | | | 2,564 | | | 2,590 | | | 2,578 | | | 2,585 | | | 2 | | | 1 | | | | 10,338 | | | 9,821 | | | 5 | | |
Professional and outside services | 2,259 | | | 2,178 | | | 1,999 | | | 2,028 | | | 2,226 | | | 4 | | | 1 | | | | 8,464 | | | 8,533 | | | (1) | | |
Marketing (b) | 725 | | | 470 | | | 481 | | | 800 | | | 847 | | | 54 | | | (14) | | | | 2,476 | | | 3,351 | | | (26) | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Other expense (c) | 1,343 | | | 1,891 | | | 1,283 | | | 1,424 | | | 1,463 | | | (29) | | | (8) | | | | 5,941 | | | 5,087 | | | 17 | | |
TOTAL NONINTEREST EXPENSE | 16,048 | | | 16,875 | | | 16,942 | | | 16,791 | | | 16,293 | | | (5) | | | (2) | | | | 66,656 | | | 65,269 | | | 2 | | |
Income before income tax expense | 15,065 | | | 11,661 | | | 5,565 | | | 3,116 | | | 10,565 | | | 29 | | | 43 | | | | 35,407 | | | 44,545 | | | (21) | | |
Income tax expense | 2,929 | | | 2,218 | | | 878 | | | 251 | | | 2,045 | | | 32 | | | 43 | | | | 6,276 | | | 8,114 | | (f) | (23) | | |
NET INCOME | $ | 12,136 | | | $ | 9,443 | | | $ | 4,687 | | | $ | 2,865 | | | $ | 8,520 | | | 29 | | | 42 | | | | $ | 29,131 | | | $ | 36,431 | | | (20) | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
NET INCOME PER COMMON SHARE DATA | | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share | $ | 3.80 | | | $ | 2.93 | | | $ | 1.39 | | | $ | 0.79 | | | $ | 2.58 | | | 30 | | | 47 | | | | $ | 8.89 | | | $ | 10.75 | | | (17) | | |
Diluted earnings per share | 3.79 | | | 2.92 | | | 1.38 | | | 0.78 | | | 2.57 | | | 30 | | | 47 | | | | 8.88 | | | 10.72 | | | (17) | | |
| | | | | | | | | | | | | | | | | | | | | |
FINANCIAL RATIOS | | | | | | | | | | | | | | | | | | | | | |
Return on common equity (d) | 19 | % | | 15 | % | | 7 | % | | 4 | % | | 14 | % | | | | | | | 12 | % | | 15 | % | | | |
Return on tangible common equity (d)(e) | 24 | | | 19 | | | 9 | | | 5 | | | 17 | | | | | | | | 14 | | | 19 | | | | |
Return on assets (d) | 1.42 | | | 1.14 | | | 0.58 | | | 0.40 | | | 1.22 | | | | | | | | 0.91 | | | 1.33 | | | | |
Effective income tax rate | 19.4 | | | 19.0 | | | 15.8 | | | 8.1 | | | 19.4 | | | | | | | | 17.7 | | | 18.2 | | (f) | | |
Overhead ratio | 55 | | | 58 | | | 51 | | | 60 | | | 58 | | | | | | | | 56 | | | 57 | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
(a)In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts have been revised to conform with the current presentation.
(b)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(c)Included Firmwide legal expense/(benefit) of $276 million, $524 million, $118 million, $197 million and $241 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively, and $1.1 billion and $239 million for the full year 2020 and 2019 respectively.
(d)Quarterly ratios are based upon annualized amounts.
(e)Refer to page 28 for further discussion of ROTCE.
(f)The full year 2019 included income tax benefits of $1.1 billion due to the resolution of certain tax audits.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
JPMORGAN CHASE & CO. | | | | | |
CONSOLIDATED BALANCE SHEETS | | | | |
(in millions) | | | | |
| | | | | | | | | | | Dec 31, 2020 | |
| | | | | | | | | | | Change | |
| Dec 31, | | Sep 30, | | Jun 30, | | Mar 31, | | Dec 31, | | Sep 30, | | Dec 31, | |
| 2020 | | 2020 | | 2020 | | 2020 | | 2019 | | 2020 | | 2019 | |
ASSETS | | | | | | | | | | | | | | |
Cash and due from banks | $ | 24,874 | | | $ | 20,816 | | | $ | 20,544 | | | $ | 24,001 | | | $ | 21,704 | | | 19 | % | | 15 | % | |
Deposits with banks | 502,735 | | | 466,706 | | | 473,185 | | | 343,533 | | | 241,927 | | | 8 | | | 108 | | |
| | | | | | | | | | | | | | |
Federal funds sold and securities purchased under | | | | | | | | | | | | | | |
resale agreements | 296,284 | | | 319,849 | | | 256,980 | | | 248,580 | | | 249,157 | | | (7) | | | 19 | | |
Securities borrowed | 160,635 | | | 142,441 | | | 142,704 | | | 139,839 | | | 139,758 | | | 13 | | | 15 | | |
Trading assets: | | | | | | | | | | | | | | |
Debt and equity instruments (a) | 423,496 | | | 429,196 | | | 416,870 | | | 429,275 | | | 319,921 | | | (1) | | | 32 | | |
Derivative receivables | 79,630 | | | 76,626 | | | 74,846 | | | 81,648 | | | 49,766 | | | 4 | | | 60 | | |
Available-for-sale (“AFS”) securities | 388,178 | | | 389,583 | | | 485,883 | | | 399,944 | | | 350,699 | | | — | | | 11 | | |
Held-to-maturity (”HTM”) securities, net of allowance for credit losses (b) | 201,821 | | | 141,553 | | | 72,908 | | | 71,200 | | | 47,540 | | | 43 | | | 325 | | |
Investment securities, net of allowance for credit losses (b) | 589,999 | | | 531,136 | | | 558,791 | | | 471,144 | | | 398,239 | | | 11 | | | 48 | | |
Loans (a) | 1,012,853 | | | 989,740 | | | 1,009,382 | | | 1,049,610 | | | 997,620 | | | 2 | | | 2 | | |
Less: Allowance for loan losses | 28,328 | | | 30,814 | | | 31,591 | | (c) | 23,244 | | | 13,123 | | | (8) | | | 116 | | |
Loans, net of allowance for loan losses | 984,525 | | | 958,926 | | | 977,791 | | | 1,026,366 | | | 984,497 | | | 3 | | | — | | |
Accrued interest and accounts receivable | 90,503 | | | 76,945 | | | 72,260 | | | 122,064 | | | 72,861 | | | 18 | | | 24 | | |
Premises and equipment | 27,109 | | | 26,672 | | | 26,301 | | | 25,882 | | | 25,813 | | | 2 | | | 5 | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Goodwill, MSRs and other intangible assets | 53,428 | | | 51,594 | | | 51,669 | | | 51,867 | | | 53,341 | | | 4 | | | — | | |
Other assets (a) | 152,853 | | | 145,169 | | | 141,675 | | | 175,232 | | | 130,395 | | | 5 | | | 17 | | |
TOTAL ASSETS | $ | 3,386,071 | | | $ | 3,246,076 | | | $ | 3,213,616 | | | $ | 3,139,431 | | | $ | 2,687,379 | | | 4 | | | 26 | | |
| | | | | | | | | | | | | | |
LIABILITIES | | | | | | | | | | | | | | |
Deposits | $ | 2,144,257 | | | $ | 2,001,416 | | | $ | 1,931,029 | | | $ | 1,836,009 | | | $ | 1,562,431 | | | 7 | | | 37 | | |
Federal funds purchased and securities loaned or sold | | | | | | | | | | | | | | |
under repurchase agreements | 215,209 | | | 236,440 | | | 235,647 | | | 233,207 | | | 183,675 | | | (9) | | | 17 | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Short-term borrowings | 45,208 | | | 41,992 | | | 48,014 | | | 51,909 | | | 40,920 | | | 8 | | | 10 | | |
Trading liabilities: | | | | | | | | | | | | | | |
Debt and equity instruments | 99,558 | | | 104,835 | | | 107,735 | | | 119,109 | | | 75,569 | | | (5) | | | 32 | | |
Derivative payables | 70,623 | | | 57,658 | | | 57,477 | | | 65,087 | | | 43,708 | | | 22 | | | 62 | | |
Accounts payable and other liabilities | 232,599 | | | 234,256 | | | 231,417 | | (c) | 253,874 | | | 210,407 | | | (1) | | | 11 | | |
Beneficial interests issued by consolidated VIEs | 17,578 | | | 19,191 | | | 20,828 | | | 19,630 | | | 17,841 | | | (8) | | | (1) | | |
Long-term debt | 281,685 | | | 279,175 | | | 317,003 | | | 299,344 | | | 291,498 | | | 1 | | | (3) | | |
TOTAL LIABILITIES | 3,106,717 | | | 2,974,963 | | | 2,949,150 | | | 2,878,169 | | | 2,426,049 | | | 4 | | | 28 | | |
| | | | | | | | | | | | | | |
STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | |
Preferred stock | 30,063 | | | 30,063 | | | 30,063 | | | 30,063 | | | 26,993 | | | — | | | 11 | | |
Common stock | 4,105 | | | 4,105 | | | 4,105 | | | 4,105 | | | 4,105 | | | — | | | — | | |
Additional paid-in capital | 88,394 | | | 88,289 | | | 88,125 | | | 87,857 | | | 88,522 | | | — | | | — | | |
Retained earnings | 236,990 | | | 228,014 | | | 221,732 | | | 220,226 | | | 223,211 | | | 4 | | | 6 | | |
Accumulated other comprehensive income/(loss) | 7,986 | | | 8,940 | | | 8,789 | | | 7,418 | | | 1,569 | | | (11) | | | 409 | | |
Shares held in RSU Trust, at cost | — | | | (11) | | | (11) | | | (21) | | | (21) | | | NM | | NM | |
Treasury stock, at cost | (88,184) | | | (88,287) | | | (88,337) | | | (88,386) | | | (83,049) | | | — | | | (6) | | |
TOTAL STOCKHOLDERS’ EQUITY | 279,354 | | | 271,113 | | | 264,466 | | | 261,262 | | | 261,330 | | | 3 | | | 7 | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 3,386,071 | | | $ | 3,246,076 | | | $ | 3,213,616 | | | $ | 3,139,431 | | | $ | 2,687,379 | | | 4 | | | 26 | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
(a)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans and other assets. Prior-period amounts have been revised to conform with the current presentation.
(b)Upon adoption of the CECL accounting guidance, HTM securities are presented net of an allowance for credit losses. At December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, the allowance for credit losses on HTM securities was $78 million, $120 million, $23 million and $19 million, respectively.
(c)Prior-period amounts have been revised to conform with the current presentation.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
JPMORGAN CHASE & CO. | | | | | |
CONDENSED AVERAGE BALANCE SHEETS AND ANNUALIZED YIELDS | |
(in millions, except rates) | | | | |
| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
AVERAGE BALANCES | 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
ASSETS | | | | | | | | | | | | | | | | | | | | | |
Deposits with banks | $ | 507,194 | | | $ | 509,979 | | | $ | 477,895 | | | $ | 279,748 | | | $ | 272,648 | | | (1) | % | | 86 | % | | | $ | 444,058 | | | $ | 280,004 | | | 59 | % | |
Federal funds sold and securities purchased under resale agreements | 327,504 | | | 277,899 | | | 244,306 | | | 253,403 | | | 248,170 | | | 18 | | | 32 | | | | 275,926 | | | 275,429 | | | — | | |
Securities borrowed | 149,146 | | | 147,184 | | | 141,328 | | | 136,127 | | | 135,374 | | | 1 | | | 10 | | | | 143,472 | | | 131,291 | | | 9 | | |
Trading assets - debt instruments (a) | 319,585 | | | 322,321 | | | 345,073 | | | 304,808 | | | 280,487 | | | (1) | | | 14 | | | | 322,936 | | | 294,958 | | | 9 | | |
Investment securities | 568,354 | | | 548,544 | | | 500,254 | | | 421,529 | | | 394,002 | | | 4 | | | 44 | | | | 509,937 | | | 319,875 | | | 59 | | |
Loans (a) | 996,367 | | | 991,241 | | | 1,029,513 | | | 1,001,504 | | | 987,606 | | | 1 | | | 1 | | | | 1,004,597 | | | 989,943 | | | 1 | | |
All other interest-earning assets (a)(b) | 87,496 | | | 77,806 | | | 81,320 | | | 68,430 | | | 59,257 | | | 12 | | | 48 | | | | 78,784 | | | 53,779 | | | 46 | | |
Total interest-earning assets | 2,955,646 | | | 2,874,974 | | | 2,819,689 | | | 2,465,549 | | | 2,377,544 | | | 3 | | | 24 | | | | 2,779,710 | | | 2,345,279 | | | 19 | | |
Trading assets - equity and other instruments | 138,477 | | | 119,905 | | | 99,115 | | | 114,479 | | | 114,112 | | | 15 | | | 21 | | | | 118,055 | | | 114,323 | | | 3 | | |
Trading assets - derivative receivables | 79,300 | | | 81,300 | | | 79,298 | | | 66,309 | | | 52,860 | | | (2) | | | 50 | | | | 76,572 | | | 53,786 | | | 42 | | |
All other noninterest-earning assets (a) | 226,395 | | | 213,978 | | | 231,166 | | | 243,895 | | | 232,754 | | | 6 | | | (3) | | | | 228,811 | | | 228,453 | | | — | | |
TOTAL ASSETS | $ | 3,399,818 | | | $ | 3,290,157 | | | $ | 3,229,268 | | | $ | 2,890,232 | | | $ | 2,777,270 | | | 3 | | | 22 | | | | $ | 3,203,148 | | | $ | 2,741,841 | | | 17 | | |
LIABILITIES | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits | $ | 1,529,066 | | | $ | 1,434,034 | | | $ | 1,375,213 | | | $ | 1,216,555 | | | $ | 1,154,716 | | | 7 | | | 32 | | | | $ | 1,389,224 | | | $ | 1,115,848 | | | 24 | | |
Federal funds purchased and securities loaned or | | | | | | | | | | | | | | | | | | | | | |
sold under repurchase agreements | 247,276 | | | 253,779 | | | 276,815 | | | 243,922 | | | 235,481 | | | (3) | | | 5 | | | | 255,421 | | | 227,994 | | | 12 | | |
Short-term borrowings (c) | 36,183 | | | 36,697 | | | 45,297 | | | 37,288 | | | 39,936 | | | (1) | | | (9) | | | | 38,853 | | | 52,426 | | | (26) | | |
Trading liabilities - debt and other interest-bearing liabilities (d) | 213,989 | | | 206,643 | | | 207,322 | | | 192,950 | | | 170,049 | | | 4 | | | 26 | | | | 205,255 | | | 182,105 | | | 13 | | |
Beneficial interests issued by consolidated VIEs | 18,647 | | | 19,838 | | | 20,331 | | | 18,048 | | | 19,390 | | | (6) | | | (4) | | | | 19,216 | | | 22,501 | | | (15) | | |
Long-term debt | 237,144 | | | 267,175 | | | 269,336 | | | 243,996 | | | 248,521 | | | (11) | | | (5) | | | | 254,400 | | | 247,968 | | | 3 | | |
Total interest-bearing liabilities | 2,282,305 | | | 2,218,166 | | | 2,194,314 | | | 1,952,759 | | | 1,868,093 | | | 3 | | | 22 | | | | 2,162,369 | | | 1,848,842 | | | 17 | | |
Noninterest-bearing deposits | 582,517 | | | 551,565 | | | 515,304 | | | 419,631 | | | 413,582 | | | 6 | | | 41 | | | | 517,527 | | | 407,219 | | | 27 | | |
Trading liabilities - equity and other instruments | 33,732 | | | 32,256 | | | 33,797 | | | 30,721 | | | 28,197 | | | 5 | | | 20 | | | | 32,628 | | | 31,085 | | | 5 | | |
Trading liabilities - derivative payables | 63,551 | | | 64,599 | | | 63,178 | | | 54,990 | | | 44,361 | | | (2) | | | 43 | | | | 61,593 | | | 42,560 | | | 45 | | |
All other noninterest-bearing liabilities | 165,978 | | | 156,711 | | | 158,204 | | | 168,195 | | | 162,490 | | | 6 | | | 2 | | | | 162,267 | | | 151,717 | | | 7 | | |
TOTAL LIABILITIES | 3,128,083 | | | 3,023,297 | | | 2,964,797 | | | 2,626,296 | | | 2,516,723 | | | 3 | | | 24 | | | | 2,936,384 | | | 2,481,423 | | | 18 | | |
Preferred stock | 30,063 | | | 30,063 | | | 30,063 | | | 29,406 | | | 27,669 | | | — | | | 9 | | | | 29,899 | | | 27,511 | | | 9 | | |
Common stockholders’ equity | 241,672 | | | 236,797 | | | 234,408 | | | 234,530 | | | 232,878 | | | 2 | | | 4 | | | | 236,865 | | | 232,907 | | | 2 | | |
TOTAL STOCKHOLDERS’ EQUITY | 271,735 | | | 266,860 | | | 264,471 | | | 263,936 | | | 260,547 | | | 2 | | | 4 | | | | 266,764 | | | 260,418 | | | 2 | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 3,399,818 | | | $ | 3,290,157 | | | $ | 3,229,268 | | | $ | 2,890,232 | | | $ | 2,777,270 | | | 3 | | | 22 | | | | $ | 3,203,148 | | | $ | 2,741,841 | | | 17 | | |
| | | | | | | | | | | | | | | | | | | | | |
AVERAGE RATES (e) | | | | | | | | | | | | | | | | | | | | | |
INTEREST-EARNING ASSETS | | | | | | | | | | | | | | | | | | | | | |
Deposits with banks | 0.03 | | % | 0.05 | | % | 0.06 | | % | 0.82 | | % | 1.00 | | % | | | | | | 0.17 | | % | 1.39 | | % | | |
Federal funds sold and securities purchased under resale agreements | 0.41 | | | 0.57 | | | 0.99 | | | 1.74 | | | 2.05 | | | | | | | | 0.88 | | | 2.23 | | | | |
Securities borrowed (f) | (0.40) | | | (0.35) | | | (0.50) | | | 0.45 | | | 0.81 | | | | | | | | (0.21) | | | 1.20 | | | | |
Trading assets - debt instruments (a) | 2.32 | | | 2.29 | | | 2.42 | | | 2.74 | | | 2.87 | | | | | | | | 2.44 | | | 3.12 | | | | |
Investment securities | 1.39 | | | 1.58 | | | 2.03 | | | 2.48 | | | 2.65 | | | | | | | | 1.82 | | | 3.01 | | | | |
Loans (a) | 4.14 | | | 4.11 | | | 4.27 | | | 4.96 | | | 5.07 | | | | | | | | 4.37 | | | 5.25 | | | | |
All other interest-earning assets (a)(b) | 0.89 | | | 0.94 | | | 0.99 | | | 2.60 | | | 3.49 | | | | | | | | 1.30 | | | 3.99 | | | | |
Total interest-earning assets | 1.97 | | | 2.05 | | | 2.31 | | | 3.14 | | | 3.35 | | | | | | | | 2.34 | | | 3.61 | | | | |
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INTEREST-BEARING LIABILITIES | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits | 0.05 | | | 0.07 | | | 0.10 | | | 0.52 | | | 0.67 | | | | | | | | 0.17 | | | 0.80 | | | | |
Federal funds purchased and securities loaned or | | | | | | | | | | | | | | | | | | | | | |
sold under repurchase agreements | 0.06 | | | 0.17 | | | 0.19 | | | 1.30 | | | 1.77 | | | | | | | | 0.41 | | | 2.03 | | | | |
Short-term borrowings (c) | 0.40 | | | 0.65 | | | 1.11 | | | 1.63 | | | 1.97 | | | | | | | | 0.96 | | | 2.38 | | | | |
Trading liabilities - debt and other interest-bearing liabilities (d)(f) | (0.15) | | | (0.10) | | | (0.08) | | | 0.77 | | | 1.04 | | | | | | | | 0.10 | | | 1.42 | | | | |
Beneficial interests issued by consolidated VIEs | 0.65 | | | 0.71 | | | 1.15 | | | 2.02 | | | 2.22 | | | | | | | | 1.12 | | | 2.52 | | | | |
Long-term debt | 1.82 | | | 1.93 | | | 2.45 | | | 2.88 | | | 3.21 | | | | | | | | 2.27 | | | 3.55 | | | | |
Total interest-bearing liabilities | 0.23 | | | 0.30 | | | 0.41 | | | 0.97 | | | 1.22 | | | | | | | | 0.46 | | | 1.45 | | | | |
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INTEREST RATE SPREAD | 1.74 | | % | 1.75 | | % | 1.90 | | % | 2.17 | | % | 2.13 | | % | | | | | | 1.88 | | % | 2.16 | | % | | |
NET YIELD ON INTEREST-EARNING ASSETS | 1.80 | | % | 1.82 | | % | 1.99 | | % | 2.37 | | % | 2.38 | | % | | | | | | 1.98 | | % | 2.46 | | % | | |
Memo: Net yield on interest-earning assets excluding CIB Markets (g) | 2.01 | | % | 2.05 | | % | 2.27 | | % | 3.01 | | % | 3.06 | | % | | | | | | 2.30 | | % | 3.27 | | % | | |
(a) In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans and other assets. Prior-period amounts have been revised to conform with the current presentation.
(b) Includes brokerage-related held-for-investment customer receivables, which are classified in accrued interest and accounts receivable, and all other interest-earning assets, which are classified in other assets on the Consolidated Balance Sheets.
(c) Includes commercial paper.
(d) All other interest-bearing liabilities include brokerage-related customer payables.
(e) Interest includes the effect of related hedging derivatives. Taxable-equivalent amounts are used where applicable.
(f) Negative interest income and yields are related to the impact of current interest rates combined with the fees paid on client-driven securities borrowed balances. The negative interest expense related to prime brokerage customer payables is recognized in interest expense and reported within trading liabilities - debt and all other liabilities.
(g) Net yield on interest-earning assets excluding CIB Markets is a non-GAAP financial measure. Refer to page 28 for a further discussion of this measure.
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JPMORGAN CHASE & CO. | | | | | |
RECONCILIATION FROM REPORTED TO MANAGED BASIS | |
(in millions, except ratios) | | | | |
| | | | | | | | | | | | | | | |
The Firm prepares its Consolidated Financial Statements using accounting principles generally accepted in the U.S. (“U.S. GAAP”). That presentation, which is referred to as “reported” basis, provides the reader with an understanding of the Firm’s results that can be tracked consistently from year-to-year and enables a comparison of the Firm’s performance with other companies’ U.S. GAAP financial statements. In addition to analyzing the Firm’s results on a reported basis, management reviews Firmwide results, including the overhead ratio, on a “managed” basis; these Firmwide managed basis results are non-GAAP financial measures. The Firm also reviews the results of the lines of business on a managed basis. Refer to the notes on Non-GAAP Financial Measures on page 28 for additional information on managed basis.
The following summary table provides a reconciliation from reported U.S. GAAP results to managed basis.
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| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
OTHER INCOME | | | | | | | | | | | | | | | | | | | | | |
Other income - reported | $ | 1,300 | | | $ | 959 | | | $ | 1,042 | | | $ | 1,156 | | | $ | 1,492 | | | 36 | % | | (13) | % | | | $ | 4,457 | | | $ | 5,731 | | | (22) | % | |
Fully taxable-equivalent adjustments (a) | 840 | | | 690 | | | 730 | | | 708 | | | 757 | | | 22 | | | 11 | | | | 2,968 | | | 2,534 | | | 17 | | |
Other income - managed | $ | 2,140 | | | $ | 1,649 | | | $ | 1,772 | | | $ | 1,864 | | | $ | 2,249 | | | 30 | | | (5) | | | | $ | 7,425 | | | $ | 8,265 | | | (10) | | |
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TOTAL NONINTEREST REVENUE (b) | | | | | | | | | | | | | | | | | | | | | |
Total noninterest revenue - reported | $ | 15,966 | | | $ | 16,134 | | | $ | 19,127 | | | $ | 13,753 | | | $ | 14,119 | | | (1) | | | 13 | | | | $ | 64,980 | | | $ | 58,154 | | | 12 | | |
Fully taxable-equivalent adjustments (a) | 840 | | | 690 | | | 730 | | | 708 | | | 757 | | | 22 | | | 11 | | | | 2,968 | | | 2,534 | | | 17 | | |
Total noninterest revenue - managed | $ | 16,806 | | | $ | 16,824 | | | $ | 19,857 | | | $ | 14,461 | | | $ | 14,876 | | | — | | | 13 | | | | $ | 67,948 | | | $ | 60,688 | | | 12 | | |
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NET INTEREST INCOME | | | | | | | | | | | | | | | | | | | | | |
Net interest income - reported | $ | 13,258 | | | $ | 13,013 | | | $ | 13,853 | | | $ | 14,439 | | | $ | 14,166 | | | 2 | | | (6) | | | | $ | 54,563 | | | $ | 57,245 | | | (5) | | |
Fully taxable-equivalent adjustments (a) | 97 | | | 104 | | | 107 | | | 110 | | | 123 | | | (7) | | | (21) | | | | 418 | | | 531 | | | (21) | | |
Net interest income - managed | $ | 13,355 | | | $ | 13,117 | | | $ | 13,960 | | | $ | 14,549 | | | $ | 14,289 | | | 2 | | | (7) | | | | $ | 54,981 | | | $ | 57,776 | | | (5) | | |
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TOTAL NET REVENUE (b) | | | | | | | | | | | | | | | | | | | | | |
Total net revenue - reported | $ | 29,224 | | | $ | 29,147 | | | $ | 32,980 | | | $ | 28,192 | | | $ | 28,285 | | | — | | | 3 | | | | $ | 119,543 | | | $ | 115,399 | | | 4 | | |
Fully taxable-equivalent adjustments (a) | 937 | | | 794 | | | 837 | | | 818 | | | 880 | | | 18 | | | 6 | | | | 3,386 | | | 3,065 | | | 10 | | |
Total net revenue - managed | $ | 30,161 | | | $ | 29,941 | | | $ | 33,817 | | | $ | 29,010 | | | $ | 29,165 | | | 1 | | | 3 | | | | $ | 122,929 | | | $ | 118,464 | | | 4 | | |
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PRE-PROVISION PROFIT | | | | | | | | | | | | | | | | | | | | | |
Pre-provision profit - reported | $ | 13,176 | | | $ | 12,272 | | | $ | 16,038 | | | $ | 11,401 | | | $ | 11,992 | | | 7 | | | 10 | | | | $ | 52,887 | | | $ | 50,130 | | | 5 | | |
Fully taxable-equivalent adjustments (a) | 937 | | | 794 | | | 837 | | | 818 | | | 880 | | | 18 | | | 6 | | | | 3,386 | | | 3,065 | | | 10 | | |
Pre-provision profit - managed | $ | 14,113 | | | $ | 13,066 | | | $ | 16,875 | | | $ | 12,219 | | | $ | 12,872 | | | 8 | | | 10 | | | | $ | 56,273 | | | $ | 53,195 | | | 6 | | |
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INCOME BEFORE INCOME TAX EXPENSE | | | | | | | | | | | | | | | | | | | | | |
Income before income tax expense - reported | $ | 15,065 | | | $ | 11,661 | | | $ | 5,565 | | | $ | 3,116 | | | $ | 10,565 | | | 29 | | | 43 | | | | $ | 35,407 | | | $ | 44,545 | | | (21) | | |
Fully taxable-equivalent adjustments (a) | 937 | | | 794 | | | 837 | | | 818 | | | 880 | | | 18 | | | 6 | | | | 3,386 | | | 3,065 | | | 10 | | |
Income before income tax expense - managed | $ | 16,002 | | | $ | 12,455 | | | $ | 6,402 | | | $ | 3,934 | | | $ | 11,445 | | | 28 | | | 40 | | | | $ | 38,793 | | | $ | 47,610 | | | (19) | | |
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INCOME TAX EXPENSE | | | | | | | | | | | | | | | | | | | | | |
Income tax expense - reported | $ | 2,929 | | | $ | 2,218 | | | $ | 878 | | | $ | 251 | | | $ | 2,045 | | | 32 | | | 43 | | | | $ | 6,276 | | | $ | 8,114 | | | (23) | | |
Fully taxable-equivalent adjustments (a) | 937 | | | 794 | | | 837 | | | 818 | | | 880 | | | 18 | | | 6 | | | | 3,386 | | | 3,065 | | | 10 | | |
Income tax expense - managed | $ | 3,866 | | | $ | 3,012 | | | $ | 1,715 | | | $ | 1,069 | | | $ | 2,925 | | | 28 | | | 32 | | | | $ | 9,662 | | | $ | 11,179 | | | (14) | | |
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OVERHEAD RATIO | | | | | | | | | | | | | | | | | | | | | |
Overhead ratio - reported | 55 | | % | 58 | | % | 51 | | % | 60 | | % | 58 | | % | | | | | | 56 | | % | 57 | | % | | |
Overhead ratio - managed | 53 | | | 56 | | | 50 | | | 58 | | | 56 | | | | | | | | 54 | | | 55 | | | | |
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(a)Predominantly recognized in CIB, CB and Corporate.
(b)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
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JPMORGAN CHASE & CO. | | | | | |
SEGMENT RESULTS - MANAGED BASIS | | | | |
(in millions) | | |
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| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
TOTAL NET REVENUE (fully taxable-equivalent (“FTE”)) | | | | | | | | | | | | | | | | | | | | | |
Consumer & Community Banking (a) | $ | 12,728 | | | $ | 12,895 | | | $ | 12,358 | | | $ | 13,287 | | | $ | 13,880 | | | (1) | % | | (8) | % | | | $ | 51,268 | | | $ | 55,133 | | | (7) | % | |
Corporate & Investment Bank | 11,352 | | | 11,546 | | | 16,383 | | | 10,003 | | | 9,703 | | | (2) | | | 17 | | | | 49,284 | | | 39,265 | | | 26 | | |
Commercial Banking | 2,463 | | | 2,285 | | | 2,400 | | | 2,165 | | | 2,296 | | | 8 | | | 7 | | | | 9,313 | | | 9,264 | | | 1 | | |
Asset & Wealth Management | 3,867 | | | 3,554 | | | 3,430 | | | 3,389 | | | 3,514 | | | 9 | | | 10 | | | | 14,240 | | | 13,591 | | | 5 | | |
Corporate | (249) | | | (339) | | | (754) | | | 166 | | | (228) | | | 27 | | | (9) | | | | (1,176) | | | 1,211 | | | NM | |
TOTAL NET REVENUE | $ | 30,161 | | | $ | 29,941 | | | $ | 33,817 | | | $ | 29,010 | | | $ | 29,165 | | | 1 | | | 3 | | | | $ | 122,929 | | | $ | 118,464 | | | 4 | | |
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TOTAL NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | |
Consumer & Community Banking (a) | $ | 7,042 | | | $ | 6,912 | | | $ | 6,767 | | | $ | 7,269 | | | $ | 7,116 | | | 2 | | | (1) | | | | $ | 27,990 | | | $ | 28,276 | | | (1) | | |
Corporate & Investment Bank | 4,939 | | | 5,832 | | | 6,812 | | | 5,955 | | | 5,451 | | | (15) | | | (9) | | | | 23,538 | | | 22,444 | | | 5 | | |
Commercial Banking | 950 | | | 969 | | | 893 | | | 986 | | | 941 | | | (2) | | | 1 | | | | 3,798 | | | 3,735 | | | 2 | | |
Asset & Wealth Management | 2,756 | | | 2,443 | | | 2,323 | | | 2,435 | | | 2,442 | | | 13 | | | 13 | | | | 9,957 | | | 9,747 | | | 2 | | |
Corporate | 361 | | | 719 | | | 147 | | | 146 | | | 343 | | | (50) | | | 5 | | | | 1,373 | | | 1,067 | | | 29 | | |
TOTAL NONINTEREST EXPENSE | $ | 16,048 | | | $ | 16,875 | | | $ | 16,942 | | | $ | 16,791 | | | $ | 16,293 | | | (5) | | | (2) | | | | $ | 66,656 | | | $ | 65,269 | | | 2 | | |
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PRE-PROVISION PROFIT/(LOSS) | | | | | | | | | | | | | | | | | | | | | |
Consumer & Community Banking | $ | 5,686 | | | $ | 5,983 | | | $ | 5,591 | | | $ | 6,018 | | | $ | 6,764 | | | (5) | | | (16) | | | | $ | 23,278 | | | $ | 26,857 | | | (13) | | |
Corporate & Investment Bank | 6,413 | | | 5,714 | | | 9,571 | | | 4,048 | | | 4,252 | | | 12 | | | 51 | | | | 25,746 | | | 16,821 | | | 53 | | |
Commercial Banking | 1,513 | | | 1,316 | | | 1,507 | | | 1,179 | | | 1,355 | | | 15 | | | 12 | | | | 5,515 | | | 5,529 | | | — | | |
Asset & Wealth Management | 1,111 | | | 1,111 | | | 1,107 | | | 954 | | | 1,072 | | | — | | | 4 | | | | 4,283 | | | 3,844 | | | 11 | | |
Corporate | (610) | | | (1,058) | | | (901) | | | 20 | | | (571) | | | 42 | | | (7) | | | | (2,549) | | | 144 | | | NM | |
PRE-PROVISION PROFIT | $ | 14,113 | | | $ | 13,066 | | | $ | 16,875 | | | $ | 12,219 | | | $ | 12,872 | | | 8 | | | 10 | | | | $ | 56,273 | | | $ | 53,195 | | | 6 | | |
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PROVISION FOR CREDIT LOSSES | | | | | | | | | | | | | | | | | | | | | |
Consumer & Community Banking | $ | (83) | | | $ | 795 | | | $ | 5,828 | | | $ | 5,772 | | | $ | 1,207 | | | NM | | NM | | | $ | 12,312 | | | $ | 4,954 | | | 149 | | |
Corporate & Investment Bank | (581) | | | (81) | | | 1,987 | | | 1,401 | | | 98 | | | NM | | NM | | | 2,726 | | | 277 | | | NM | |
Commercial Banking | (1,181) | | | (147) | | | 2,431 | | | 1,010 | | | 110 | | | NM | | NM | | | 2,113 | | | 296 | | | NM | |
Asset & Wealth Management | (2) | | | (52) | | | 223 | | | 94 | | | 13 | | | 96 | | | NM | | | 263 | | | 59 | | | 346 | | |
Corporate | (42) | | | 96 | | | 4 | | | 8 | | | (1) | | | NM | | NM | | | 66 | | | (1) | | | NM | |
PROVISION FOR CREDIT LOSSES | $ | (1,889) | | | $ | 611 | | | $ | 10,473 | | | $ | 8,285 | | | $ | 1,427 | | | NM | | NM | | | $ | 17,480 | | | $ | 5,585 | | | 213 | | |
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NET INCOME/(LOSS) | | | | | | | | | | | | | | | | | | | | | |
Consumer & Community Banking | $ | 4,325 | | | $ | 3,871 | | | $ | (176) | | | $ | 197 | | | $ | 4,200 | | | 12 | | | 3 | | | | $ | 8,217 | | | $ | 16,541 | | | (50) | | |
Corporate & Investment Bank | 5,349 | | | 4,309 | | | 5,451 | | | 1,985 | | | 2,935 | | | 24 | | | 82 | | | | 17,094 | | | 11,954 | | | 43 | | |
Commercial Banking | 2,034 | | | 1,086 | | | (681) | | | 139 | | | 945 | | | 87 | | | 115 | | | | 2,578 | | | 3,958 | | | (35) | | |
Asset & Wealth Management | 786 | | | 876 | | | 661 | | | 669 | | | 801 | | | (10) | | | (2) | | | | 2,992 | | | 2,867 | | | 4 | | |
Corporate | (358) | | | (699) | | | (568) | | | (125) | | | (361) | | | 49 | | | 1 | | | | (1,750) | | | 1,111 | | | NM | |
TOTAL NET INCOME | $ | 12,136 | | | $ | 9,443 | | | $ | 4,687 | | | $ | 2,865 | | | $ | 8,520 | | | 29 | | | 42 | | | | $ | 29,131 | | | $ | 36,431 | | | (20) | | |
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In the fourth quarter of 2020, payment processing-only clients along with the associated revenue and expenses were realigned to CIB’s Wholesale Payments business from CCB and CB. Prior-period amounts have been revised to conform with the current presentation. Refer to Business segment changes on page 21 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 for further information.
In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform with the current presentation. Refer to page 29 for further information.
(a)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
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JPMORGAN CHASE & CO. | | | |
CAPITAL AND OTHER SELECTED BALANCE SHEET ITEMS |
(in millions, except ratio data) | | |
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| | | | | | | | | | | Dec 31, 2020 | | | | | | | | |
| | | | | | | | | | | Change | | | FULL YEAR | |
| Dec 31, | | Sep 30, | | Jun 30, | | Mar 31, | | Dec 31, | | Sep 30, | | Dec 31, | | | | | | | 2020 Change | |
| 2020 | | 2020 | | 2020 | | 2020 | | 2019 | | 2020 | | 2019 | | | 2020 | | 2019 | | 2019 | |
CAPITAL (a) | | | | | | | | | | | | | | | | | | | | | |
Risk-based capital metrics | | | | | | | | | | | | | | | | | | | | | |
Standardized | | | | | | | | | | | | | | | | | | | | | |
CET1 capital | $ | 205,066 | | (e) | $ | 197,719 | | | $ | 190,867 | | | $ | 183,591 | | | $ | 187,753 | | | 4 | % | | 9 | % | | | | | | | | |
Tier 1 capital | 234,835 | | (e) | 227,486 | | | 220,674 | | | 213,406 | | | 214,432 | | | 3 | | | 10 | | | | | | | | | |
Total capital | 269,933 | | (e) | 262,397 | | | 256,667 | | | 247,541 | | | 242,589 | | | 3 | | | 11 | | | | | | | | | |
Risk-weighted assets | 1,562,381 | | (e) | 1,514,509 | | | 1,541,365 | | | 1,598,828 | | | 1,515,869 | | | 3 | | | 3 | | | | | | | | | |
CET1 capital ratio | 13.1 | % | (e) | 13.1 | % | | 12.4 | % | | 11.5 | % | | 12.4 | % | | | | | | | | | | | | |
Tier 1 capital ratio | 15.0 | | (e) | 15.0 | | | 14.3 | | | 13.3 | | | 14.1 | | | | | | | | | | | | | |
Total capital ratio | 17.3 | | (e) | 17.3 | | | 16.7 | | | 15.5 | | | 16.0 | | | | | | | | | | | | | |
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Advanced | | | | | | | | | | | | | | | | | | | | | |
CET1 capital | $ | 205,066 | | (e) | $ | 197,719 | | | $ | 190,867 | | | $ | 183,591 | | | $ | 187,753 | | | 4 | | | 9 | | | | | | | | | |
Tier 1 capital | 234,835 | | (e) | 227,486 | | | 220,674 | | | 213,406 | | | 214,432 | | | 3 | | | 10 | | | | | | | | | |
Total capital | 257,222 | | (e) | 249,947 | | | 244,112 | | | 234,434 | | | 232,112 | | | 3 | | | 11 | | | | | | | | | |
Risk-weighted assets | 1,485,654 | | (e) | 1,429,334 | | | 1,450,587 | | | 1,489,134 | | | 1,397,878 | | | 4 | | | 6 | | | | | | | | | |
CET1 capital ratio | 13.8 | % | (e) | 13.8 | % | | 13.2 | % | | 12.3 | % | | 13.4 | % | | | | | | | | | | | | |
Tier 1 capital ratio | 15.8 | | (e) | 15.9 | | | 15.2 | | | 14.3 | | | 15.3 | | | | | | | | | | | | | |
Total capital ratio | 17.3 | | (e) | 17.5 | | | 16.8 | | | 15.7 | | | 16.6 | | | | | | | | | | | | | |
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Leverage-based capital metrics | | | | | | | | | | | | | | | | | | | | | |
Adjusted average assets (b) | $ | 3,353,310 | | (e) | $ | 3,243,290 | | | $ | 3,176,729 | | | $ | 2,842,244 | | | $ | 2,730,239 | | | 3 | | | 23 | | | | | | | | | |
Tier 1 leverage ratio | 7.0 | % | (e) | 7.0 | % | | 6.9 | % | | 7.5 | % | | 7.9 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Total leverage exposure | 3,396,447 | | (e) | 3,247,392 | | | 3,228,424 | | | 3,535,822 | | | 3,423,431 | | | 5 | | | (1) | | | | | | | | | |
SLR | 6.9 | % | (e) | 7.0 | % | | 6.8 | % | | 6.0 | % | | 6.3 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
TANGIBLE COMMON EQUITY (period-end) (c) | | | | | | | | | | | | | | | | | | | | | |
Common stockholders’ equity | $ | 249,291 | | | $ | 241,050 | | | $ | 234,403 | | | $ | 231,199 | | | $ | 234,337 | | | 3 | | | 6 | | | | | | | | | |
Less: Goodwill | 49,248 | | | 47,819 | | | 47,811 | | | 47,800 | | | 47,823 | | | 3 | | | 3 | | | | | | | | | |
Less: Other intangible assets | 904 | | | 759 | | | 778 | | | 800 | | | 819 | | | 19 | | | 10 | | | | | | | | | |
Add: Certain deferred tax liabilities (d) | 2,453 | | | 2,405 | | | 2,397 | | | 2,389 | | | 2,381 | | | 2 | | | 3 | | | | | | | | | |
Total tangible common equity | $ | 201,592 | | | $ | 194,877 | | | $ | 188,211 | | | $ | 184,988 | | | $ | 188,076 | | | 3 | | | 7 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
TANGIBLE COMMON EQUITY (average) (c) | | | | | | | | | | | | | | | | | | | | | |
Common stockholders’ equity | $ | 241,672 | | | $ | 236,797 | | | $ | 234,408 | | | $ | 234,530 | | | $ | 232,878 | | | 2 | | | 4 | | | | $ | 236,865 | | | $ | 232,907 | | | 2 | % | |
Less: Goodwill | 47,842 | | | 47,820 | | | 47,805 | | | 47,812 | | | 47,819 | | | — | | | — | | | | 47,820 | | | 47,620 | | | — | | |
Less: Other intangible assets | 752 | | | 769 | | | 791 | | | 812 | | | 831 | | | (2) | | | (10) | | | | 781 | | | 789 | | | (1) | | |
Add: Certain deferred tax liabilities (d) | 2,416 | | | 2,401 | | | 2,393 | | | 2,385 | | | 2,375 | | | 1 | | | 2 | | | | 2,399 | | | 2,328 | | | 3 | | |
Total tangible common equity | $ | 195,494 | | | $ | 190,609 | | | $ | 188,205 | | | $ | 188,291 | | | $ | 186,603 | | | 3 | | | 5 | | | | $ | 190,663 | | | $ | 186,826 | | | 2 | | |
| | | | | | | | | | | | | | | | | | | | | |
INTANGIBLE ASSETS (period-end) | | | | | | | | | | | | | | | | | | | | | |
Goodwill | $ | 49,248 | | | $ | 47,819 | | | $ | 47,811 | | | $ | 47,800 | | | $ | 47,823 | | | 3 | | | 3 | | | | | | | | | |
Mortgage servicing rights | 3,276 | | | 3,016 | | | 3,080 | | | 3,267 | | | 4,699 | | | 9 | | | (30) | | | | | | | | | |
Other intangible assets | 904 | | | 759 | | | 778 | | | 800 | | | 819 | | | 19 | | | 10 | | | | | | | | | |
Total intangible assets | $ | 53,428 | | | $ | 51,594 | | | $ | 51,669 | | | $ | 51,867 | | | $ | 53,341 | | | 4 | | | — | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
(a)The capital metrics reflect the relief provided by the Federal Reserve Board in response to the COVID-19 pandemic, including the CECL capital transition provisions that became effective in the first quarter of 2020. For the periods ended December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, the impact of the CECL capital transition provisions resulted in an increase to CET1 capital of $5.7 billion, $6.4 billion, $6.5 billion and $4.3 billion, respectively. The SLR reflects the temporary exclusions of U.S. Treasury securities and deposits at Federal Reserve Banks that became effective in the second quarter of 2020. Refer to Regulatory Developments Relating to the COVID-19 Pandemic on pages 11-12 and Capital Risk Management on pages 49-54 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 for additional information. Refer to Capital Risk Management on pages 85-92 of the Firm’s 2019 Form 10-K for additional information on the Firm’s capital metrics.
(b)Adjusted average assets, for purposes of calculating the leverage ratios, includes total quarterly average assets adjusted for on-balance sheet assets that are subject to deduction from Tier 1 capital, predominantly goodwill and other intangible assets.
(c)Refer to page 28 for further discussion of TCE.
(d)Represents deferred tax liabilities related to tax-deductible goodwill and to identifiable intangibles created in nontaxable transactions, which are netted against goodwill and other intangibles when calculating TCE.
(e)Estimated.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
JPMORGAN CHASE & CO. | | | | | |
EARNINGS PER SHARE AND RELATED INFORMATION | |
(in millions, except per share and ratio data) | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
EARNINGS PER SHARE | | | | | | | | | | | | | | | | | | | | | |
Basic earnings per share | | | | | | | | | | | | | | | | | | | | | |
Net income | $ | 12,136 | | | $ | 9,443 | | | $ | 4,687 | | | $ | 2,865 | | | $ | 8,520 | | | 29 | % | | 42 | % | | | $ | 29,131 | | | $ | 36,431 | | | (20) | % | |
Less: Preferred stock dividends | 380 | | | 381 | | | 401 | | | 421 | | | 386 | | | — | | | (2) | | | | 1,583 | | | 1,587 | | | — | | |
Net income applicable to common equity | 11,756 | | | 9,062 | | | 4,286 | | | 2,444 | | | 8,134 | | | 30 | | | 45 | | | | 27,548 | | | 34,844 | | | (21) | | |
Less: Dividends and undistributed earnings allocated to | | | | | | | | | | | | | | | | | | | | | |
participating securities | 57 | | | 47 | | | 21 | | | 13 | | | 44 | | | 21 | | | 30 | | | | 138 | | | 202 | | | (32) | | |
Net income applicable to common stockholders | $ | 11,699 | | | $ | 9,015 | | | $ | 4,265 | | | $ | 2,431 | | | $ | 8,090 | | | 30 | | | 45 | | | | $ | 27,410 | | | $ | 34,642 | | | (21) | | |
| | | | | | | | | | | | | | | | | | | | | |
Total weighted-average basic shares outstanding | 3,079.7 | | | 3,077.8 | | | 3,076.3 | | | 3,095.8 | | | 3,140.7 | | | — | | | (2) | | | | 3,082.4 | | | 3,221.5 | | | (4) | | |
Net income per share | $ | 3.80 | | | $ | 2.93 | | | $ | 1.39 | | | $ | 0.79 | | | $ | 2.58 | | | 30 | | | 47 | | | | $ | 8.89 | | | $ | 10.75 | | | (17) | | |
| | | | | | | | | | | | | | | | | | | | | |
Diluted earnings per share | | | | | | | | | | | | | | | | | | | | | |
Net income applicable to common stockholders | $ | 11,699 | | | $ | 9,015 | | | $ | 4,265 | | | $ | 2,431 | | | $ | 8,090 | | | 30 | | | 45 | | | | $ | 27,410 | | | $ | 34,642 | | | (21) | | |
Total weighted-average basic shares outstanding | 3,079.7 | | | 3,077.8 | | | 3,076.3 | | | 3,095.8 | | | 3,140.7 | | | — | | | (2) | | | | 3,082.4 | | | 3,221.5 | | | (4) | | |
Add: Dilutive impact of stock appreciation rights (“SARs”) and employee stock options, unvested performance share units (“PSUs”) and nondividend-earning restricted stock units (“RSUs”) | 5.4 | | | 5.0 | | | 4.7 | | | 4.9 | | | 7.8 | | | 8 | | | (31) | | | | 5.0 | | | 8.9 | | | (44) | | |
Total weighted-average diluted shares outstanding | 3,085.1 | | | 3,082.8 | | | 3,081.0 | | | 3,100.7 | | | 3,148.5 | | | — | | | (2) | | | | 3,087.4 | | | 3,230.4 | | | (4) | | |
Net income per share | $ | 3.79 | | | $ | 2.92 | | | $ | 1.38 | | | $ | 0.78 | | | $ | 2.57 | | | 30 | | | 47 | | | | $ | 8.88 | | | $ | 10.72 | | | (17) | | |
| | | | | | | | | | | | | | | | | | | | | |
COMMON DIVIDENDS | | | | | | | | | | | | | | | | | | | | | |
Cash dividends declared per share | $ | 0.90 | | | $ | 0.90 | | | $ | 0.90 | | | $ | 0.90 | | | $ | 0.90 | | | — | | | — | | | | $ | 3.60 | | | $ | 3.40 | | | 6 | | |
Dividend payout ratio | 24 | % | | 31 | % | | 65 | % | | 114 | % | | 35 | % | | | | | | | 40 | % | | 31 | % | | | |
| | | | | | | | | | | | | | | | | | | | | |
COMMON SHARE REPURCHASE PROGRAM (a) | | | | | | | | | | | | | | | | | | | | | |
Total shares of common stock repurchased | — | | | — | | | — | | | 50.0 | | | 54.0 | | | — | | | NM | | | 50.0 | | | 213.0 | | | (77) | | |
Average price paid per share of common stock | $ | — | | | $ | — | | | $ | — | | | $ | 127.92 | | | $ | 127.24 | | | — | | | NM | | | $ | 127.92 | | | $ | 113.26 | | | 13 | | |
| | | | | | | | | | | | | | | | | | | | | |
Aggregate repurchases of common stock | — | | | — | | | — | | | 6,397 | | | 6,871 | | | — | | | NM | | | 6,397 | | | 24,121 | | | (73) | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
EMPLOYEE ISSUANCE | | | | | | | | | | | | | | | | | | | | | |
Shares issued from treasury stock related to employee | | | | | | | | | | | | | | | | | | | | | |
stock-based compensation awards and employee stock | | | | | | | | | | | | | | | | | | | | | |
purchase plans | 1.5 | | | 0.6 | | | 0.8 | | | 13.0 | | | 1.5 | | | 150 | | | — | | | | 15.9 | | | 21.2 | | | (25) | | |
Net impact of employee issuances on stockholders’ equity (b) | $ | 217 | | | $ | 263 | | | $ | 325 | | | $ | 398 | | | $ | 132 | | | (17) | | | 64 | | | | $ | 1,203 | | | $ | 970 | | | 24 | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
(a)On March 15, 2020, in response to the COVID-19 pandemic, the Firm temporarily suspended repurchases of its common stock. Subsequently, the Federal Reserve directed all large banks, including the Firm, to discontinue net share repurchases through the end of 2020. On December 18, 2020, the Federal Reserve announced that all large banks, including the Firm, could resume share repurchases commencing in the first quarter of 2021, subject to certain restrictions. As a result, the Firm announced that its Board of Directors authorized a new common share repurchase program of $30 billion.
(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.
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JPMORGAN CHASE & CO. | | | | | |
CONSUMER & COMMUNITY BANKING | | | | |
FINANCIAL HIGHLIGHTS | | | | |
(in millions, except ratio data) | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
INCOME STATEMENT | | | | | | | | | | | | | | | | | | | | | |
REVENUE | | | | | | | | | | | | | | | | | | | | | |
Lending- and deposit-related fees (a) | $ | 806 | | | $ | 771 | | | $ | 617 | | | $ | 972 | | | $ | 1,032 | | | 5 | % | | (22) | % | | | $ | 3,166 | | | $ | 3,938 | | | (20) | % | |
Asset management, administration and commissions (a) | 735 | | | 703 | | | 634 | | | 708 | | | 711 | | | 5 | | | 3 | | | | 2,780 | | | 2,808 | | | (1) | | |
Mortgage fees and related income | 766 | | | 1,076 | | | 917 | | | 320 | | | 474 | | | (29) | | | 62 | | | | 3,079 | | | 2,035 | | | 51 | | |
Card income (b) | 923 | | | 826 | | | 667 | | | 652 | | | 905 | | | 12 | | | 2 | | | | 3,068 | | | 3,412 | | | (10) | | |
All other income | 1,328 | | | 1,487 | | | 1,387 | | | 1,445 | | | 1,469 | | | (11) | | | (10) | | | | 5,647 | | | 5,603 | | | 1 | | |
Noninterest revenue | 4,558 | | | 4,863 | | | 4,222 | | | 4,097 | | | 4,591 | | | (6) | | | (1) | | | | 17,740 | | | 17,796 | | | — | | |
Net interest income | 8,170 | | | 8,032 | | | 8,136 | | | 9,190 | | | 9,289 | | | 2 | | | (12) | | | | 33,528 | | | 37,337 | | | (10) | | |
TOTAL NET REVENUE | 12,728 | | | 12,895 | | | 12,358 | | | 13,287 | | | 13,880 | | | (1) | | | (8) | | | | 51,268 | | | 55,133 | | | (7) | | |
| | | | | | | | | | | | | | | | | | | | | |
Provision for credit losses | (83) | | | 795 | | | 5,828 | | | 5,772 | | | 1,207 | | | NM | | NM | | | 12,312 | | | 4,954 | | | 149 | | |
| | | | | | | | | | | | | | | | | | | | | |
NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | |
Compensation expense | 2,734 | | | 2,804 | | | 2,694 | | | 2,782 | | | 2,668 | | | (2) | | | 2 | | | | 11,014 | | | 10,815 | | | 2 | | |
Noncompensation expense (b)(c) | 4,308 | | | 4,108 | | | 4,073 | | | 4,487 | | | 4,448 | | | 5 | | | (3) | | | | 16,976 | | | 17,461 | | | (3) | | |
TOTAL NONINTEREST EXPENSE | 7,042 | | | 6,912 | | | 6,767 | | | 7,269 | | | 7,116 | | | 2 | | | (1) | | | | 27,990 | | | 28,276 | | | (1) | | |
| | | | | | | | | | | | | | | | | | | | | |
Income/(loss) before income tax expense/(benefit) | 5,769 | | | 5,188 | | | (237) | | | 246 | | | 5,557 | | | 11 | | | 4 | | | | 10,966 | | | 21,903 | | | (50) | | |
Income tax expense/(benefit) | 1,444 | | | 1,317 | | | (61) | | | 49 | | | 1,357 | | | 10 | | | 6 | | | | 2,749 | | | 5,362 | | | (49) | | |
NET INCOME/(LOSS) | $ | 4,325 | | | $ | 3,871 | | | $ | (176) | | | $ | 197 | | | $ | 4,200 | | | 12 | | | 3 | | | | $ | 8,217 | | | $ | 16,541 | | | (50) | | |
| | | | | | | | | | | | | | | | | | | | | |
REVENUE BY LINE OF BUSINESS | | | | | | | | | | | | | | | | | | | | | |
Consumer & Business Banking | $ | 5,744 | | | $ | 5,697 | | | $ | 5,248 | | | $ | 6,266 | | | $ | 6,668 | | | 1 | | | (14) | | | | $ | 22,955 | | | $ | 27,376 | | | (16) | | |
Home Lending | 1,456 | | | 1,714 | | | 1,687 | | | 1,161 | | | 1,250 | | | (15) | | | 16 | | | | 6,018 | | | 5,179 | | | 16 | | |
Card & Auto (b) | 5,528 | | | 5,484 | | | 5,423 | | | 5,860 | | | 5,962 | | | 1 | | | (7) | | | | 22,295 | | | 22,578 | | | (1) | | |
| | | | | | | | | | | | | | | | | | | | | |
MORTGAGE FEES AND RELATED INCOME DETAILS: | | | | | | | | | | | | | | | | | | | | | |
Net production revenue | 803 | | | 765 | | | 742 | | | 319 | | | 327 | | | 5 | | | 146 | | | | 2,629 | | | 1,618 | | | 62 | | |
Net mortgage servicing revenue (d) | (37) | | | 311 | | | 175 | | | 1 | | | 147 | | | NM | | NM | | | 450 | | | 417 | | | 8 | | |
Mortgage fees and related income | $ | 766 | | | $ | 1,076 | | | $ | 917 | | | $ | 320 | | | $ | 474 | | | (29) | | | 62 | | | | $ | 3,079 | | | $ | 2,035 | | | 51 | | |
| | | | | | | | | | | | | | | | | | | | | |
FINANCIAL RATIOS | | | | | | | | | | | | | | | | | | | | | |
ROE | 32 | | % | 29 | | % | (2) | | % | 1 | | % | 31 | | % | | | | | | 15 | | % | 31 | | % | | |
Overhead ratio | 55 | | | 54 | | | 55 | | | 55 | | | 51 | | | | | | | | 55 | | | 51 | | | | |
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| | | | | | | | | | | | | | | | | | | | | |
In the fourth quarter of 2020, payment processing-only clients along with the associated revenue and expenses were realigned to CIB’s Wholesale Payments business from CCB and CB. Prior-period amounts have been revised to conform with the current presentation. Refer to Business segment changes on page 21 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 for further information.
In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform with the current presentation. Refer to page 29 for further information.
(a)In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts have been revised to conform with the current presentation.
(b)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(c)Included depreciation expense on leased assets of $975 million and $1.0 billion for the three months ended December 31, 2020 and September 30, 2020, and $1.1 billion for the three months ended June 30, 2020, March 31, 2020 and December 31, 2019, respectively, and $4.2 billion and $4.0 billion for the full year 2020 and 2019, respectively.
(d)Included MSR risk management results of $(152) million, $145 million, $79 million, $(90) million and $35 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively, and $(18) million and $(165) million for the full year 2020 and 2019, respectively.
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JPMORGAN CHASE & CO. | | | | | |
CONSUMER & COMMUNITY BANKING | | | | |
FINANCIAL HIGHLIGHTS, CONTINUED | | | | |
(in millions, except headcount data) | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
SELECTED BALANCE SHEET DATA (period-end) | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 496,654 | | | $ | 487,012 | | | $ | 498,607 | | | $ | 513,301 | | | $ | 541,316 | | | 2 | % | | (8) | % | | | $ | 496,654 | | | $ | 541,316 | | | (8) | % | |
| | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | |
Consumer & Business Banking | 48,810 | | (d) | 49,646 | | (d) | 49,305 | | (d) | 30,004 | | | 29,585 | | | (2) | | | 65 | | | | 48,810 | | (d) | 29,585 | | | 65 | | |
Home Lending (a)(b) | 182,121 | | | 188,561 | | | 195,664 | | | 205,318 | | | 213,445 | | | (3) | | | (15) | | | | 182,121 | | | 213,445 | | | (15) | | |
Card | 144,216 | | | 140,377 | | | 141,656 | | | 154,021 | | | 168,924 | | | 3 | | | (15) | | | | 144,216 | | | 168,924 | | | (15) | | |
Auto | 66,432 | | | 62,304 | | | 59,287 | | | 61,468 | | | 61,522 | | | 7 | | | 8 | | | | 66,432 | | | 61,522 | | | 8 | | |
Total loans | 441,579 | | | 440,888 | | | 445,912 | | | 450,811 | | | 473,476 | | | — | | | (7) | | | | 441,579 | | | 473,476 | | | (7) | | |
| | | | | | | | | | | | | | | | | | | | | |
Deposits | 958,706 | | | 909,198 | | | 885,535 | | | 783,398 | | | 723,418 | | | 5 | | | 33 | | | | 958,706 | | | 723,418 | | | 33 | | |
Equity | 52,000 | | | 52,000 | | | 52,000 | | | 52,000 | | | 52,000 | | | — | | | — | | | | 52,000 | | | 52,000 | | | — | | |
| | | | | | | | | | | | | | | | | | | | | |
SELECTED BALANCE SHEET DATA (average) | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 486,221 | | | $ | 490,043 | | | $ | 504,520 | | | $ | 525,644 | | | $ | 534,596 | | | (1) | | | (9) | | | | $ | 501,533 | | | $ | 543,076 | | | (8) | | |
| | | | | | | | | | | | | | | | | | | | | |
Loans: | | | | | | | | | | | | | | | | | | | | | |
Consumer & Business Banking | 49,506 | | | 49,596 | | | 43,442 | | | 29,570 | | | 29,192 | | | — | | | 70 | | | | 43,064 | | | 28,859 | | | 49 | | |
Home Lending (a)(c) | 185,733 | | | 192,172 | | | 199,532 | | | 211,333 | | | 216,921 | | | (3) | | | (14) | | | | 197,148 | | | 230,662 | | | (15) | | |
Card | 141,236 | | | 140,386 | | | 142,377 | | | 162,660 | | | 162,112 | | | 1 | | | (13) | | | | 146,633 | | | 156,325 | | | (6) | | |
Auto | 64,342 | | | 60,345 | | | 60,306 | | | 60,893 | | | 61,100 | | | 7 | | | 5 | | | | 61,476 | | | 61,862 | | | (1) | | |
Total loans | 440,817 | | | 442,499 | | | 445,657 | | | 464,456 | | | 469,325 | | | — | | | (6) | | | | 448,321 | | | 477,708 | | | (6) | | |
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Deposits | 928,518 | | | 895,535 | | | 840,467 | | | 739,709 | | | 712,829 | | | 4 | | | 30 | | | | 851,390 | | | 698,378 | | | 22 | | |
Equity | 52,000 | | | 52,000 | | | 52,000 | | | 52,000 | | | 52,000 | | | — | | | — | | | | 52,000 | | | 52,000 | | | — | | |
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Headcount | 122,894 | | | 122,905 | | | 123,765 | | | 124,609 | | | 125,756 | | | — | | | (2) | | | | 122,894 | | | 125,756 | | | (2) | | |
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In the fourth quarter of 2020, payment processing-only clients along with the associated revenue and expenses were realigned to CIB’s Wholesale Payments business from CCB and CB. Prior-period amounts have been revised to conform with the current presentation. Refer to Business segment changes on page 21 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 for further information.
In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform with the current presentation. Refer to page 29 for further information.
(a)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans. Prior-period amounts have been revised to conform with the current presentation.
(b)At December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019, Home Lending loans held-for-sale and loans at fair value were $9.7 billion, $10.0 billion, $8.6 billion, $10.8 billion, and $16.6 billion, respectively.
(c)Average Home Lending loans held-for sale and loans at fair value were $10.7 billion, $9.2 billion, $8.7 billion, $15.8 billion, and $19.1 billion for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019, respectively, and were $11.1 billion and $14.1 billion for the full year 2020 and 2019, respectively.
(d)At December 31, 2020, September 30, 2020 and June 30, 2020, included $19.2 billion, $20.3 billion and $19.9 billion of loans, respectively, in Business Banking under the Paycheck Protection Program (“PPP”). Refer to page 61 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 for further information on the PPP.
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JPMORGAN CHASE & CO. | | | | | | | | | | | |
CONSUMER & COMMUNITY BANKING | | | | | | | | | | |
FINANCIAL HIGHLIGHTS, CONTINUED | | | | | | | | | | |
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(in millions, except ratio data) | QUARTERLY TRENDS | | | FULL YEAR |
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| 4Q20 | | | | | 3Q20 | | | | | 2Q20 | | | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | | | | 2019 | | 2019 |
CREDIT DATA AND QUALITY STATISTICS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans (a)(b)(c) | $ | 5,675 | | | (f) | | | $ | 5,162 | | | (f)(i) | | | $ | 4,429 | | | (f) | | $ | 4,022 | | | $ | 3,027 | | | 10 | % | | 87 | % | | | $ | 5,675 | | | (f) | | | $ | 3,027 | | | 87 | % |
Net charge-offs/(recoveries) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer & Business Banking | 75 | | | | | | 54 | | | | | | 60 | | | | | 74 | | | 93 | | | 39 | | | (19) | | | | 263 | | | | | | 298 | | | (12) | |
Home Lending | (50) | | | | | | 8 | | | | | | (5) | | | | | (122) | | | (23) | | | NM | | (117) | | | | (169) | | | | | | (98) | | | (72) | |
Card | 767 | | | | | | 1,028 | | | | | | 1,178 | | | | | 1,313 | | | 1,231 | | | (25) | | | (38) | | | | 4,286 | | | | | | 4,848 | | | (12) | |
Auto | 25 | | | | | | 5 | | | | | | 45 | | | | | 48 | | | 57 | | | 400 | | | (56) | | | | 123 | | | | | | 206 | | | (40) | |
Total net charge-offs/(recoveries) | $ | 817 | | | | | | $ | 1,095 | | | | | | $ | 1,278 | | | | | $ | 1,313 | | | $ | 1,358 | | | (25) | | | (40) | | | | $ | 4,503 | | | | | | $ | 5,254 | | | (14) | |
Net charge-off/(recovery) rate | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer & Business Banking | 0.60 | | % | (g) | | | 0.43 | | % | (g) | | | 0.56 | | % | (g) | | 1.01 | | % | 1.26 | | % | | | | | | 0.61 | | % | (g) | | | 1.03 | | % | |
Home Lending | (0.11) | | | | | | 0.02 | | | | | | (0.01) | | | | | (0.25) | | | (0.05) | | | | | | | | (0.09) | | | | | | (0.05) | | | |
Card | 2.17 | | | | | | 2.92 | | | | | | 3.33 | | | | | 3.25 | | | 3.01 | | | | | | | | 2.93 | | | | | | 3.10 | | | |
Auto | 0.15 | | | | | | 0.03 | | | | | | 0.30 | | | | | 0.32 | | | 0.37 | | | | | | | | 0.20 | | | | | | 0.33 | | | |
Total net charge-off/(recovery) rate | 0.76 | | | | | | 1.01 | | | | | | 1.18 | | | | | 1.18 | | | 1.20 | | | | | | | | 1.03 | | | | | | 1.13 | | | |
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30+ day delinquency rate | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Home Lending (d)(e) | 1.15 | | % | (h) | | | 1.62 | | % | (h) | | | 1.30 | | % | (h) | | 1.48 | | % | 1.58 | | % | | | | | | 1.15 | | % | (h) | | | 1.58 | | % | |
Card | 1.68 | | | (h) | | | 1.57 | | | (h) | | | 1.71 | | | (h) | | 1.96 | | | 1.87 | | | | | | | | 1.68 | | | (h) | | | 1.87 | | | |
Auto | 0.69 | | | (h) | | | 0.54 | | | (h) | | | 0.54 | | | (h) | | 0.89 | | | 0.94 | | | | | | | | 0.69 | | | (h) | | | 0.94 | | | |
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90+ day delinquency rate - Card | 0.92 | | | (h) | | | 0.69 | | | (h) | | | 0.93 | | | (h) | | 1.02 | | | 0.95 | | | | | | | | 0.92 | | | (h) | | | 0.95 | | | |
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Allowance for loan losses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consumer & Business Banking | $ | 1,372 | | | | | | $ | 1,372 | | | | | | $ | 1,372 | | | | | $ | 884 | | | $ | 750 | | | — | | | 83 | | | | $ | 1,372 | | | | | | $ | 750 | | | 83 | |
Home Lending | 1,813 | | | | | | 2,685 | | | | | | 2,957 | | | | | 2,137 | | | 1,890 | | | (32) | | | (4) | | | | 1,813 | | | | | | 1,890 | | | (4) | |
Card | 17,800 | | | | | | 17,800 | | | | | | 17,800 | | | | | 14,950 | | | 5,683 | | | — | | | 213 | | | | 17,800 | | | | | | 5,683 | | | 213 | |
Auto | 1,042 | | | | | | 1,044 | | | | | | 1,044 | | | | | 732 | | | 465 | | | — | | | 124 | | | | 1,042 | | | | | | 465 | | | 124 | |
Total allowance for loan losses | $ | 22,027 | | | | | | $ | 22,901 | | | | | | $ | 23,173 | | | | | $ | 18,703 | | | $ | 8,788 | | | (4) | | | 151 | | | | $ | 22,027 | | | | | | $ | 8,788 | | | 151 | |
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In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform with the current presentation. Refer to page 29 for further information.
(a)At December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, nonaccrual loans included $1.6 billion, $1.5 billion, $1.3 billion and $970 million of PCD loans, respectively. Prior to the adoption of CECL, nonaccrual loans excluded PCI loans as the Firm recognized interest income on each pool of PCI loans as each of the pools was performing.
(b)At December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $558 million, $851 million, $561 million, $616 million and $963 million, respectively. These amounts have been excluded based upon the government guarantee. Prior-period amounts of mortgage loans 90 or more days past due and insured by U.S. government agencies excluded from nonaccrual loans have been revised to conform with the current presentation, refer to footnote (c) for additional information.
(c)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans. Prior-period amounts have been revised to conform with the current presentation.
(d)At December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, the 30+ day delinquency rates included PCD loans. The rates prior to January 1, 2020 have been revised to include the impact of PCI loans.
(e)At December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019, excluded mortgage loans 30 or more days past due and insured by U.S. government agencies of $744 million, $1.1 billion, $826 million, $1.0 billion and $1.7 billion, respectively. These amounts have been excluded based upon the government guarantee. Prior-period amounts of mortgage loans 30 or more days past due and insured by U.S. government agencies excluded from 30+ day delinquency rate have been revised to conform with the current presentation, refer to footnote (c) for additional information.
(f)Generally excludes loans that were under payment deferral programs offered in response to the COVID-19 pandemic. Includes loans to customers that have exited COVID-19 payment deferral programs and are 90 or more days past due, predominantly all of which were considered collateral-dependent and charged down to the lower of amortized cost or fair value of the underlying collateral less costs to sell.
(g)At December 31, 2020, September 30, 2020 and June 30, 2020, included $19.2 billion, $20.3 billion and $19.9 billion of loans, respectively, under the PPP. Given that PPP loans are guaranteed by the SBA, the Firm does not expect to realize material credit losses on these loans. Refer to page 61 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 for further information on the PPP.
(h)At December 31, 2020, September 30, 2020 and June 30, 2020, the principal balance of loans under payment deferral programs offered in response to the COVID-19 pandemic were as follows: (1) $9.1 billion, $10.2 billion and $18.2 billion in Home Lending, respectively; (2) $264 million, $368 million and $4.4 billion in Card, respectively; and (3) $376 million, $411 million and $12.3 billion in Auto, respectively. Loans that are performing according to their modified terms are generally not considered delinquent.
(i)Prior-period amount has been revised to conform with the current presentation.
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JPMORGAN CHASE & CO. | | | | | | |
CONSUMER & COMMUNITY BANKING | | | | | |
FINANCIAL HIGHLIGHTS, CONTINUED | | | | | |
(in millions, except ratio data and where otherwise noted) | | | | | |
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| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
BUSINESS METRICS | | | | | | | | | | | | | | | | | | | | | |
Number of: | | | | | | | | | | | | | | | | | | | | | |
Branches | 4,908 | | | 4,960 | | | 4,923 | | | 4,967 | | | 4,976 | | | (1) | % | | (1) | % | | | 4,908 | | | 4,976 | | | (1) | % | |
Active digital customers (in thousands) (a) | 55,274 | | | 54,779 | | | 54,505 | | | 53,833 | | | 52,453 | | | 1 | | | 5 | | | | 55,274 | | | 52,453 | | | 5 | | |
Active mobile customers (in thousands) (b) | 40,899 | | | 40,164 | | | 39,044 | | | 38,256 | | | 37,315 | | | 2 | | | 10 | | | | 40,899 | | | 37,315 | | | 10 | | |
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Debit and credit card sales volume (in billions) | $ | 299.4 | | | $ | 278.2 | | | $ | 237.6 | | | $ | 266.0 | | | $ | 295.6 | | | 8 | | | 1 | | | | $ | 1,081.2 | | | $ | 1,114.4 | | | (3) | | |
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Consumer & Business Banking | | | | | | | | | | | | | | | | | | | | | |
Average deposits | $ | 907,884 | | | $ | 874,325 | | | $ | 821,624 | | | $ | 724,970 | | | $ | 696,572 | | | 4 | | | 30 | | | | $ | 832,523 | | | $ | 683,707 | | | 22 | | |
Deposit margin | 1.41 | | % | 1.43 | | % | 1.52 | | % | 2.05 | | % | 2.27 | | % | | | | | | 1.58 | | % | 2.48 | | % | | |
Business banking origination volume | $ | 722 | | | $ | 1,352 | | (f) | $ | 23,042 | | (f) | $ | 1,491 | | | $ | 1,827 | | | (47) | | | (60) | | | | $ | 26,607 | | (f) | $ | 6,598 | | | 303 | | |
Client investment assets | 588,403 | | | 529,196 | | | 494,390 | | | 442,634 | | | 501,360 | | | 11 | | | 17 | | | | 588,403 | | | 501,360 | | | 17 | | |
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Home Lending (in billions) | | | | | | | | | | | | | | | | | | | | | |
Mortgage origination volume by channel | | | | | | | | | | | | | | | | | | | | | |
Retail | $ | 20.1 | | | $ | 20.7 | | | $ | 18.0 | | | $ | 14.1 | | | $ | 16.4 | | | (3) | | | 23 | | | | $ | 72.9 | | | $ | 51.0 | | | 43 | | |
Correspondent | 12.4 | | | 8.3 | | | 6.2 | | | 14.0 | | | 16.9 | | | 49 | | | (27) | | | | 40.9 | | | 54.2 | | | (25) | | |
Total mortgage origination volume (c) | $ | 32.5 | | | $ | 29.0 | | | $ | 24.2 | | | $ | 28.1 | | | $ | 33.3 | | | 12 | | | (2) | | | | $ | 113.8 | | | $ | 105.2 | | | 8 | | |
Total loans serviced (period-end) | $ | 626.3 | | | $ | 654.0 | | | $ | 683.7 | | | $ | 737.8 | | | $ | 761.4 | | | (4) | | | (18) | | | | $ | 626.3 | | | $ | 761.4 | | | (18) | | |
Third-party mortgage loans serviced (period-end) | 447.3 | | | 454.8 | | | 482.4 | | | 505.0 | | | 520.8 | | | (2) | | | (14) | | | | 447.3 | | | 520.8 | | | (14) | | |
MSR carrying value (period-end) | 3.3 | | | 3.0 | | | 3.1 | | | 3.3 | | | 4.7 | | | 10 | | | (30) | | | | 3.3 | | | 4.7 | | | (30) | | |
Ratio of MSR carrying value (period-end) to third-party | | | | | | | | | | | | | | | | | | | | | |
mortgage loans serviced (period-end) | 0.74 | | % | 0.66 | | % | 0.64 | | % | 0.65 | | % | 0.90 | | % | | | | | | 0.74 | | % | 0.90 | | % | | |
MSR revenue multiple (d) | 2.64 | x | | 2.28 | x | | 2.29 | x | | 2.10 | x | | 2.73 | x | | | | | | | 2.55 | x | | 2.65 | x | | | |
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Credit Card | | | | | | | | | | | | | | | | | | | | | |
Credit card sales volume, excluding Commercial Card (in billions) | $ | 197.0 | | | $ | 178.1 | | | $ | 148.5 | | | $ | 179.1 | | | $ | 204.2 | | | 11 | | | (4) | | | | 702.7 | | | 762.8 | | | (8) | | |
Net revenue rate (e) | 11.22 | | % | 10.96 | | % | 11.02 | | % | 10.54 | | % | 10.65 | | % | | | | | | 10.92 | | % | 10.48 | | % | | |
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Auto | | | | | | | | | | | | | | | | | | | | | |
Loan and lease origination volume (in billions) | $ | 11.0 | | | $ | 11.4 | | | $ | 7.7 | | | $ | 8.3 | | | $ | 8.5 | | | (4) | | | 29 | | | | $ | 38.4 | | | $ | 34.0 | | | 13 | | |
Average auto operating lease assets | 20,810 | | | 21,684 | | | 22,579 | | | 23,081 | | | 22,427 | | | (4) | | | (7) | | | | 22,034 | | | 21,589 | | | 2 | | |
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In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform with the current presentation. Refer to page 29 for further information.
(a)Users of all web and/or mobile platforms who have logged in within the past 90 days.
(b)Users of all mobile platforms who have logged in within the past 90 days.
(c)Firmwide mortgage origination volume was $37.0 billion, $36.2 billion, $28.3 billion, $31.9 billion and $37.4 billion for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019, respectively, and $133.4 billion and $115.9 billion for the full year 2020 and 2019, respectively.
(d)Represents the ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) divided by the ratio of annualized loan servicing-related revenue to third-party mortgage loans serviced (average).
(e)In the second quarter of 2020, the Firm reclassified certain spend-based credit card reward costs from marketing expense to be a reduction of card income, with no effect on net income. Prior-period amounts have been revised to conform with the current presentation.
(f)Included $396 million and $21.5 billion of origination volume under the PPP for the three months ended September 30, 2020 and June 30, 2020, respectively, and $21.9 billion for the full year 2020. Refer to page 61 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 for further information on the PPP.
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JPMORGAN CHASE & CO. | | | | | |
CORPORATE & INVESTMENT BANK | | | | |
FINANCIAL HIGHLIGHTS | | | | |
(in millions, except ratio data) | | | | | | | | | | | | | | | | | | | | | |
| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
INCOME STATEMENT | | | | | | | | | | | | | | | | | | | | | |
REVENUE | | | | | | | | | | | | | | | | | | | | | |
Investment banking fees | $ | 2,558 | | | $ | 2,165 | | | $ | 2,847 | | | $ | 1,907 | | | $ | 1,904 | | | 18 | % | | 34 | % | | | $ | 9,477 | | | $ | 7,575 | | | 25 | % | |
Principal transactions | 2,982 | | | 3,990 | | | 7,400 | | | 3,188 | | | 2,932 | | | (25) | | | 2 | | | | 17,560 | | | 14,399 | | | 22 | | |
Lending- and deposit-related fees (a) | 574 | | | 546 | | | 500 | | | 450 | | | 462 | | | 5 | | | 24 | | | | 2,070 | | | 1,668 | | | 24 | | |
Asset management, administration and commissions (a) | 1,226 | | | 1,086 | | | 1,148 | | | 1,261 | | | 1,059 | | | 13 | | | 16 | | | | 4,721 | | | 4,400 | | | 7 | | |
All other income | 462 | | | 331 | | | 409 | | | 90 | | | 678 | | | 40 | | | (32) | | | | 1,292 | | | 2,018 | | | (36) | | |
Noninterest revenue | 7,802 | | | 8,118 | | | 12,304 | | | 6,896 | | | 7,035 | | | (4) | | | 11 | | | | 35,120 | | | 30,060 | | | 17 | | |
Net interest income | 3,550 | | | 3,428 | | | 4,079 | | | 3,107 | | | 2,668 | | | 4 | | | 33 | | | | 14,164 | | | 9,205 | | | 54 | | |
TOTAL NET REVENUE (b) | 11,352 | | | 11,546 | | | 16,383 | | | 10,003 | | | 9,703 | | | (2) | | | 17 | | | | 49,284 | | | 39,265 | | | 26 | | |
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Provision for credit losses | (581) | | | (81) | | | 1,987 | | | 1,401 | | | 98 | | | NM | | NM | | | 2,726 | | | 277 | | | NM | |
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NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | |
Compensation expense | 1,958 | | | 2,651 | | | 3,997 | | | 3,006 | | | 2,377 | | | (26) | | | (18) | | | | 11,612 | | | 11,180 | | | 4 | | |
Noncompensation expense | 2,981 | | | 3,181 | | | 2,815 | | | 2,949 | | | 3,074 | | | (6) | | | (3) | | | | 11,926 | | | 11,264 | | | 6 | | |
TOTAL NONINTEREST EXPENSE | 4,939 | | | 5,832 | | | 6,812 | | | 5,955 | | | 5,451 | | | (15) | | | (9) | | | | 23,538 | | | 22,444 | | | 5 | | |
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Income before income tax expense | 6,994 | | | 5,795 | | | 7,584 | | | 2,647 | | | 4,154 | | | 21 | | | 68 | | | | 23,020 | | | 16,544 | | | 39 | | |
Income tax expense | 1,645 | | | 1,486 | | | 2,133 | | | 662 | | | 1,219 | | | 11 | | | 35 | | | | 5,926 | | | 4,590 | | | 29 | | |
NET INCOME | $ | 5,349 | | | $ | 4,309 | | | $ | 5,451 | | | $ | 1,985 | | | $ | 2,935 | | | 24 | | | 82 | | | | $ | 17,094 | | | $ | 11,954 | | | 43 | | |
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FINANCIAL RATIOS | | | | | | | | | | | | | | | | | | | | | |
ROE | 26 | % | | 21 | % | | 27 | % | | 9 | % | | 14 | % | | | | | | | 20 | % | | 14 | % | | | |
Overhead ratio | 44 | | | 51 | | | 42 | | | 60 | | | 56 | | | | | | | | 48 | | | 57 | | | | |
Compensation expense as percentage of total net revenue | 17 | | | 23 | | | 24 | | | 30 | | | 24 | | | | | | | | 24 | | | 28 | | | | |
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REVENUE BY BUSINESS | | | | | | | | | | | | | | | | | | | | | |
Investment Banking | $ | 2,497 | | | $ | 2,087 | | | $ | 3,401 | | | $ | 886 | | | $ | 1,823 | | | 20 | | | 37 | | | | $ | 8,871 | | | $ | 7,215 | | | 23 | | |
Wholesale Payments | 1,427 | | | 1,332 | | | 1,387 | | | 1,414 | | | 1,489 | | | 7 | | | (4) | | | | 5,560 | | | 5,842 | | | (5) | | |
Lending | 193 | | | 333 | | | 270 | | | 350 | | | 250 | | | (42) | | | (23) | | | | 1,146 | | | 1,021 | | | 12 | | |
Total Banking | 4,117 | | | 3,752 | | | 5,058 | | | 2,650 | | | 3,562 | | | 10 | | | 16 | | | | 15,577 | | | 14,078 | | | 11 | | |
Fixed Income Markets | 3,950 | | | 4,597 | | | 7,338 | | | 4,993 | | | 3,446 | | | (14) | | | 15 | | | | 20,878 | | | 14,418 | | | 45 | | |
Equity Markets | 1,989 | | | 1,999 | | | 2,380 | | | 2,237 | | | 1,508 | | | (1) | | | 32 | | | | 8,605 | | | 6,494 | | | 33 | | |
Securities Services | 1,053 | | | 1,029 | | | 1,097 | | | 1,074 | | | 1,061 | | | 2 | | | (1) | | | | 4,253 | | | 4,154 | | | 2 | | |
Credit Adjustments & Other (c) | 243 | | | 169 | | | 510 | | | (951) | | | 126 | | | 44 | | | 93 | | | | (29) | | | 121 | | | NM | |
Total Markets & Securities Services | 7,235 | | | 7,794 | | | 11,325 | | | 7,353 | | | 6,141 | | | (7) | | | 18 | | | | 33,707 | | | 25,187 | | | 34 | | |
TOTAL NET REVENUE | $ | 11,352 | | | $ | 11,546 | | | $ | 16,383 | | | $ | 10,003 | | | $ | 9,703 | | | (2) | | | 17 | | | | $ | 49,284 | | | $ | 39,265 | | | 26 | | |
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In the fourth quarter of 2020, payment processing-only clients along with the associated revenue and expenses were realigned to CIB’s Wholesale Payments business from CCB and CB. Prior-period amounts have been revised to conform with the current presentation. Refer to Business segment changes on page 21 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 for further information.
(a)In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions to lending- and deposit-related fees. Prior-period amounts have been revised to conform with the current presentation.
(b)Includes tax-equivalent adjustments, predominantly due to income tax credits related to alternative energy investments; income tax credits and amortization of the cost of investments in affordable housing projects; as well as tax-exempt income from municipal bonds of $765 million, $641 million, $686 million, $667 million and $646 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively and $2.8 billion and $2.3 billion for the full year 2020 and 2019, respectively.
(c)Consists primarily of credit valuation adjustments (“CVA”) managed centrally within CIB and funding valuation adjustments (“FVA”) on derivatives and certain components of fair value option elected liabilities. Results are presented net of associated hedging activities and net of CVA and FVA amounts allocated to Fixed Income Markets and Equity Markets.
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JPMORGAN CHASE & CO. | | | | | |
CORPORATE & INVESTMENT BANK | | | | |
FINANCIAL HIGHLIGHTS, CONTINUED | | | | |
(in millions, except ratio and headcount data) | | | | | | | | | | | | | | | | | | | | | |
| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
SELECTED BALANCE SHEET DATA (period-end) | | | | | | | | | | | | | | | | | | | | | |
Assets | $ | 1,097,219 | | | $ | 1,089,293 | | | $ | 1,081,162 | | (g) | $ | 1,217,459 | | | $ | 914,705 | | | 1 | % | | 20 | % | | | $ | 1,097,219 | | | $ | 914,705 | | | 20 | % | |
Loans: | | | | | | | | | | | | | | | | | | | | | |
Loans retained (a) | 133,296 | | | 126,841 | | | 140,770 | | | 165,376 | | | 121,733 | | | 5 | | | 9 | | | | 133,296 | | | 121,733 | | | 9 | | |
Loans held-for-sale and loans at fair value (b) | 39,588 | | | 33,046 | | | 34,017 | | | 34,644 | | | 34,317 | | | 20 | | | 15 | | | | 39,588 | | | 34,317 | | | 15 | | |
Total loans | 172,884 | | | 159,887 | | | 174,787 | | | 200,020 | | | 156,050 | | | 8 | | | 11 | | | | 172,884 | | | 156,050 | | | 11 | | |
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Equity | 80,000 | | | 80,000 | | | 80,000 | | | 80,000 | | | 80,000 | | | — | | | — | | | | 80,000 | | | 80,000 | | | — | | |
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SELECTED BALANCE SHEET DATA (average) | | | | | | | | | | | | | | | | | | | | | |
Assets | $ | 1,140,524 | | | $ | 1,100,657 | | | $ | 1,167,807 | | | $ | 1,082,820 | | | $ | 994,152 | | | 4 | | | 15 | | | | 1,122,939 | | | $ | 993,508 | | | 13 | | |
Trading assets - debt and equity instruments (b) | 442,443 | | | 425,789 | | | 421,953 | | | 398,504 | | | 370,859 | | | 4 | | | 19 | | | | 422,237 | | | 376,182 | | | 12 | | |
Trading assets - derivative receivables | 77,946 | | | 78,339 | | | 76,710 | | | 55,133 | | | 45,153 | | | (1) | | | 73 | | | | 72,065 | | | 48,196 | | | 50 | | |
Loans: | | | | | | | | | | | | | | | | | | | | | |
Loans retained (a) | 128,765 | | | 131,187 | | | 154,038 | | | 128,838 | | | 119,412 | | | (2) | | | 8 | | | | 135,676 | | | 122,371 | | | 11 | | |
Loans held-for-sale and loans at fair value (b) | 36,228 | | | 30,205 | | | 33,538 | | | 35,211 | | | 33,694 | | | 20 | | | 8 | | | | 33,792 | | | 32,884 | | | 3 | | |
Total loans | 164,993 | | | 161,392 | | | 187,576 | | | 164,049 | | | 153,106 | | | 2 | | | 8 | | | | 169,468 | | | 155,255 | | | 9 | | |
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Equity | 80,000 | | | 80,000 | | | 80,000 | | | 80,000 | | | 80,000 | | | — | | | — | | | | 80,000 | | | 80,000 | | | — | | |
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Headcount | 61,733 | | | 61,830 | | | 60,950 | | | 60,245 | | | 60,013 | | | — | | | 3 | | | | 61,733 | | | 60,013 | | | 3 | | |
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CREDIT DATA AND QUALITY STATISTICS | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs/(recoveries) | $ | 88 | | | $ | 23 | | | $ | 204 | | | $ | 55 | | | $ | 43 | | | 283 | | | 105 | | | | $ | 370 | | | $ | 183 | | | 102 | | |
Nonperforming assets: | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans: | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans retained (c) | 1,008 | | | 1,178 | | | 1,195 | | | 689 | | | 308 | | | (14) | | | 227 | | | | 1,008 | | | 308 | | | 227 | | |
Nonaccrual loans held-for-sale and loans at fair value (b)(d) | 1,662 | | | 2,111 | | | 1,510 | | | 766 | | | 644 | | | (21) | | | 158 | | | | 1,662 | | | 644 | | | 158 | | |
Total nonaccrual loans | 2,670 | | | 3,289 | | | 2,705 | | | 1,455 | | | 952 | | | (19) | | | 180 | | | | 2,670 | | | 952 | | | 180 | | |
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Derivative receivables | 56 | | | 140 | | | 108 | | | 85 | | | 30 | | | (60) | | | 87 | | | | 56 | | | 30 | | | 87 | | |
Assets acquired in loan satisfactions | 85 | | | 88 | | | 35 | | | 43 | | | 70 | | | (3) | | | 21 | | | | 85 | | | 70 | | | 21 | | |
Total nonperforming assets | 2,811 | | | 3,517 | | | 2,848 | | | 1,583 | | | 1,052 | | | (20) | | | 167 | | | | 2,811 | | | 1,052 | | | 167 | | |
Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | 2,366 | | | 2,863 | | | 3,039 | | (g) | 1,422 | | | 1,202 | | | (17) | | | 97 | | | | 2,366 | | | 1,202 | | | 97 | | |
Allowance for lending-related commitments | 1,534 | | | 1,706 | | | 1,634 | | (g) | 1,468 | | | 848 | | | (10) | | | 81 | | | | 1,534 | | | 848 | | | 81 | | |
Total allowance for credit losses | 3,900 | | | 4,569 | | | 4,673 | | | 2,890 | | | 2,050 | | | (15) | | | 90 | | | | 3,900 | | | 2,050 | | | 90 | | |
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Net charge-off/(recovery) rate (a)(e) | 0.27 | % | | 0.07 | % | | 0.53 | % | | 0.17 | % | | 0.14 | % | | | | | | | 0.27 | % | | 0.15 | % | | | |
Allowance for loan losses to period-end loans retained (a) | 1.77 | | | 2.26 | | | 2.16 | | (g) | 0.86 | | | 0.99 | | | | | | | | 1.77 | | | 0.99 | | | | |
Allowance for loan losses to period-end loans retained, | | | | | | | | | | | | | | | | | | | | | |
excluding trade finance and conduits (f) | 2.54 | | | 3.15 | | | 2.87 | | (g) | 1.11 | | | 1.31 | | | | | | | | 2.54 | | | 1.31 | | | | |
Allowance for loan losses to nonaccrual loans retained (a)(c) | 235 | | | 243 | | | 254 | | (g) | 206 | | | 390 | | | | | | | | 235 | | | 390 | | | | |
Nonaccrual loans to total period-end loans (b) | 1.54 | | | 2.06 | | | 1.55 | | | 0.73 | | | 0.61 | | | | | | | | 1.54 | | | 0.61 | | | | |
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| | | | | | | | | | | | | | | | | | | | | |
In the fourth quarter of 2020, payment processing-only clients along with the associated revenue and expenses were realigned to CIB’s Wholesale Payments business from CCB and CB. Prior-period amounts have been revised to conform with the current presentation. Refer to Business segment changes on page 21 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 for further information.
(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)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans and other assets. Prior-period amounts have been revised to conform with the current presentation.
(c)Allowance for loan losses of $278 million, $320 million, $340 million, $317 million and $110 million were held against nonaccrual loans at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively.
(d)At December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020 and December 31, 2019, nonaccrual loans excluded mortgage loans 90 or more days past due and insured by U.S. government agencies of $316 million, $297 million, $135 million, $124 million and $127 million, respectively. These amounts have been excluded based upon the government guarantee.
(e)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.
(f)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.
(g)Prior-period amounts have been revised to conform with the current presentation.
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JPMORGAN CHASE & CO. | | | | | |
CORPORATE & INVESTMENT BANK | | | | |
FINANCIAL HIGHLIGHTS, CONTINUED | | | | |
(in millions, except where otherwise noted) | | | | | | | | | | | | | | | | | | | | | |
| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
BUSINESS METRICS | | | | | | | | | | | | | | | | | | | | | |
Advisory | $ | 835 | | | $ | 428 | | | $ | 602 | | | $ | 503 | | | $ | 702 | | | 95 | % | | 19 | % | | | $ | 2,368 | | | $ | 2,377 | | | — | % | |
Equity underwriting | 718 | | | 732 | | | 977 | | | 331 | | | 382 | | | (2) | | | 88 | | | | 2,758 | | | 1,666 | | | 66 | | |
Debt underwriting | 1,005 | | | 1,005 | | | 1,268 | | | 1,073 | | | 820 | | | — | | | 23 | | | | 4,351 | | | 3,532 | | | 23 | | |
Total investment banking fees | $ | 2,558 | | | $ | 2,165 | | | $ | 2,847 | | | $ | 1,907 | | | $ | 1,904 | | | 18 | | | 34 | | | | $ | 9,477 | | | $ | 7,575 | | | 25 | | |
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Client deposits and other third-party liabilities (average) (a) | 683,818 | | | 634,961 | | | 607,902 | | | 514,464 | | | 485,037 | | | 8 | | | 41 | | | | 610,555 | | | 464,795 | | | 31 | | |
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Merchant processing volume (in billions) (b) | 444.5 | | | 406.1 | | | 371.9 | | | 374.8 | | | 402.9 | | | 9 | | | 10 | | | | $ | 1,597.3 | | | $ | 1,511.5 | | | 6 | | |
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Assets under custody (“AUC”) (period-end) (in billions) | $ | 30,980 | | | $ | 28,628 | | | $ | 27,447 | | | $ | 24,409 | | | $ | 26,831 | | | 8 | | | 15 | | | | $ | 30,980 | | | $ | 26,831 | | | 15 | | |
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95% Confidence Level - Total CIB VaR (average) (c) | | | | | | | | | | | | | | | | | | | | | |
CIB trading VaR by risk type: (d) | | | | | | | | | | | | | | | | | | | | | |
Fixed income | $ | 106 | | | $ | 93 | | | $ | 129 | | | $ | 60 | | | $ | 39 | | | 14 | | | 172 | | | | | | | | | |
Foreign exchange | 12 | | | 13 | | | 9 | | | 7 | | | 5 | | | (8) | | | 140 | | | | | | | | | |
Equities | 23 | | | 26 | | | 27 | | | 20 | | | 18 | | | (12) | | | 28 | | | | | | | | | |
Commodities and other | 36 | | | 33 | | | 32 | | | 10 | | | 7 | | | 9 | | | 414 | | | | | | | | | |
Diversification benefit to CIB trading VaR (e) | (85) | | | (76) | | | (69) | | | (40) | | | (32) | | | (12) | | | (166) | | | | | | | | | |
CIB trading VaR (d) | 92 | | | 89 | | | 128 | | | 57 | | | 37 | | | 3 | | | 149 | | | | | | | | | |
Credit portfolio VaR (f) | 12 | | | 15 | | | 22 | | | 9 | | | 5 | | | (20) | | | 140 | | | | | | | | | |
Diversification benefit to CIB VaR (e) | (13) | | | (14) | | | (23) | | | (8) | | | (5) | | | 7 | | | (160) | | | | | | | | | |
CIB VaR | $ | 91 | | | $ | 90 | | | $ | 127 | | | $ | 58 | | | $ | 37 | | | 1 | | | 146 | | | | | | | | | |
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(a)Client deposits and other third-party liabilities pertain to the Wholesale Payments and Securities Services businesses.
(b)Represents total merchant processing volume across CIB, CCB and CB.
(c)Effective January 1, 2020, the Firm refined the scope of VaR to exclude positions related to the risk management of interest rate exposure from changes in the Firm’s own credit spread on fair value option elected liabilities, and included these positions in other sensitivity-based measures. Additionally, effective July 1, 2020, the Firm refined the scope of VaR to exclude certain asset-backed fair value option elected loans, and included them in other sensitivity-based measures to more effectively measure the risk from these loans. In the absence of these refinements, the average VaR for each of the following reported components would have been different by the following amounts: CIB fixed income of $33 million, $15 million, $(11) million and $4 million, CIB Trading VaR of $30 million, $11 million, $(11) million and $5 million and CIB VaR of $29 million, $11 million, $(8) million and $6 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, respectively.
(d)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. Refer to VaR measurement on pages 121–123 of the Firm’s 2019 Form 10-K, and pages 80–82 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 for further information.
(e)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.
(f)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.
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JPMORGAN CHASE & CO. | | | | | |
COMMERCIAL BANKING | | | | |
FINANCIAL HIGHLIGHTS | | | | |
(in millions, except ratio data) | | | | | | | | | | | | | | | | | | | | | |
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| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
INCOME STATEMENT | | | | | | | | | | | | | | | | | | | | | |
REVENUE | | | | | | | | | | | | | | | | | | | | | |
Lending- and deposit-related fees (a) | $ | 325 | | | $ | 304 | | | $ | 297 | | | $ | 261 | | | $ | 256 | | | 7 | % | | 27 | % | | | $ | 1,187 | | | $ | 941 | | | 26 | % | |
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All other income (a) | 550 | | | 457 | | | 526 | | | 347 | | | 436 | | | 20 | | | 26 | | | | 1,880 | | | 1,769 | | | 6 | | |
Noninterest revenue | 875 | | | 761 | | | 823 | | | 608 | | | 692 | | | 15 | | | 26 | | | | 3,067 | | | 2,710 | | | 13 | | |
Net interest income | 1,588 | | | 1,524 | | | 1,577 | | | 1,557 | | | 1,604 | | | 4 | | | (1) | | | | 6,246 | | | 6,554 | | | (5) | | |
TOTAL NET REVENUE (b) | 2,463 | | | 2,285 | | | 2,400 | | | 2,165 | | | 2,296 | | | 8 | | | 7 | | | | 9,313 | | | 9,264 | | | 1 | | |
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Provision for credit losses | (1,181) | | | (147) | | | 2,431 | | | 1,010 | | | 110 | | | NM | | NM | | | 2,113 | | | 296 | | | NM | |
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NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | |
Compensation expense | 460 | | | 492 | | | 430 | | | 472 | | | 444 | | | (7) | | | 4 | | | | 1,854 | | | 1,785 | | | 4 | | |
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Noncompensation expense | 490 | | | 477 | | | 463 | | | 514 | | | 497 | | | 3 | | | (1) | | | | 1,944 | | | 1,950 | | | — | | |
TOTAL NONINTEREST EXPENSE | 950 | | | 969 | | | 893 | | | 986 | | | 941 | | | (2) | | | 1 | | | | 3,798 | | | 3,735 | | | 2 | | |
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Income/(loss) before income tax expense/(benefit) | 2,694 | | | 1,463 | | | (924) | | | 169 | | | 1,245 | | | 84 | | | 116 | | | | 3,402 | | | 5,233 | | | (35) | | |
Income tax expense/(benefit) | 660 | | | 377 | | | (243) | | | 30 | | | 300 | | | 75 | | | 120 | | | | 824 | | | 1,275 | | | (35) | | |
NET INCOME/(LOSS) | $ | 2,034 | | | $ | 1,086 | | | $ | (681) | | | $ | 139 | | | $ | 945 | | | 87 | | | 115 | | | | $ | 2,578 | | | $ | 3,958 | | | (35) | | |
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Revenue by product | | | | | | | | | | | | | | | | | | | | | |
Lending | $ | 1,177 | | | $ | 1,138 | | | $ | 1,127 | | | $ | 954 | | | $ | 1,027 | | | 3 | | | 15 | | | | $ | 4,396 | | | $ | 4,057 | | | 8 | | |
Wholesale payments | 945 | | | 867 | | | 925 | | | 978 | | | 1,020 | | | 9 | | | (7) | | | | 3,715 | | | 4,200 | | | (12) | | |
Investment banking (c) | 318 | | | 260 | | | 256 | | | 235 | | | 211 | | | 22 | | | 51 | | | | 1,069 | | | 919 | | | 16 | | |
Other | 23 | | | 20 | | | 92 | | | (2) | | | 38 | | | 15 | | | (39) | | | | 133 | | | 88 | | | 51 | | |
Total Commercial Banking net revenue (b) | $ | 2,463 | | | $ | 2,285 | | | $ | 2,400 | | | $ | 2,165 | | | $ | 2,296 | | | 8 | | | 7 | | | | $ | 9,313 | | | $ | 9,264 | | | 1 | | |
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Investment banking revenue, gross (d) | $ | 971 | | | $ | 840 | | | $ | 851 | | | $ | 686 | | | $ | 634 | | | 16 | | | 53 | | | | $ | 3,348 | | | $ | 2,744 | | | 22 | | |
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Revenue by client segment | | | | | | | | | | | | | | | | | | | | | |
Middle Market Banking | $ | 947 | | | $ | 880 | | | $ | 870 | | | $ | 943 | | | $ | 937 | | | 8 | | | 1 | | | | $ | 3,640 | | | $ | 3,805 | | | (4) | | |
Corporate Client Banking | 856 | | | 808 | | | 866 | | | 673 | | | 758 | | | 6 | | | 13 | | | | 3,203 | | | 3,119 | | | 3 | | |
Commercial Real Estate Banking | 630 | | | 576 | | | 566 | | | 541 | | | 537 | | | 9 | | | 17 | | | | 2,313 | | | 2,169 | | | 7 | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Other | 30 | | | 21 | | | 98 | | | 8 | | | 64 | | | 43 | | | (53) | | | | 157 | | | 171 | | | (8) | | |
Total Commercial Banking net revenue (b) | $ | 2,463 | | | $ | 2,285 | | | $ | 2,400 | | | $ | 2,165 | | | $ | 2,296 | | | 8 | | | 7 | | | | $ | 9,313 | | | $ | 9,264 | | | 1 | | |
| | | | | | | | | | | | | | | | | | | | | |
FINANCIAL RATIOS | | | | | | | | | | | | | | | | | | | | | |
ROE | 36 | | % | 19 | | % | (13) | | % | 2 | | % | 16 | | % | | | | | | 11 | | % | 17 | | % | | |
Overhead ratio | 39 | | | 42 | | | 37 | | | 46 | | | 41 | | | | | | | | 41 | | | 40 | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
In the fourth quarter of 2020, payment processing-only clients along with the associated revenue and expenses were realigned to CIB’s Wholesale Payments business from CCB and CB. Prior-period amounts have been revised to conform with the current presentation. Refer to Business segment changes on page 21 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 for further information.
(a)In the first quarter of 2020, the Firm reclassified certain fees from asset management, administration and commissions (which are included in all other income) to lending- and deposit-related fees. Prior-period amounts have been revised to conform with the current presentation.
(b)Total net revenue included tax-equivalent adjustments from income tax credits related to equity investments in designated community development entities and in entities established for rehabilitation of historic properties, as well as tax-exempt income related to municipal financing activities of $108 million, $82 million, $80 million, $81 million and $152 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively, and $351 million and $460 million for the full year 2020 and 2019, respectively.
(c)Includes CB’s share of revenue from investment banking products sold to CB clients through the CIB.
(d)Refer to page 60 of the Firm’s 2019 Form 10-K for discussion of revenue sharing.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
JPMORGAN CHASE & CO. | | | | | |
COMMERCIAL BANKING | | | | |
FINANCIAL HIGHLIGHTS, CONTINUED | | | | |
(in millions, except headcount and ratio data) | QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
SELECTED BALANCE SHEET DATA (period-end) | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 228,932 | | | $ | 228,587 | | | $ | 235,034 | | (d) | $ | 247,786 | | | $ | 220,514 | | | — | % | | 4 | % | | | $ | 228,932 | | | $ | 220,514 | | | 4 | % | |
Loans: | | | | | | | | | | | | | | | | | | | | | |
Loans retained | 207,880 | | | 214,352 | | | 223,192 | | | 232,254 | | | 207,287 | | | (3) | | | — | | | | 207,880 | | | 207,287 | | | — | | |
Loans held-for-sale and loans at fair value | 2,245 | | | 349 | | | 917 | | | 1,112 | | | 1,009 | | | NM | | 122 | | | | 2,245 | | | 1,009 | | | 122 | | |
Total loans | $ | 210,125 | | | $ | 214,701 | | | $ | 224,109 | | | $ | 233,366 | | | $ | 208,296 | | | (2) | | | 1 | | | | $ | 210,125 | | | $ | 208,296 | | | 1 | | |
Equity | 22,000 | | | 22,000 | | | 22,000 | | | 22,000 | | | 22,000 | | | — | | | — | | | | 22,000 | | | 22,000 | | | — | | |
| | | | | | | | | | | | | | | | | | | | | |
Period-end loans by client segment | | | | | | | | | | | | | | | | | | | | | |
Middle Market Banking | $ | 61,115 | | (c) | $ | 61,812 | | (c) | $ | 64,211 | | (c) | $ | 60,317 | | | $ | 54,188 | | | (1) | | | 13 | | | | $ | 61,115 | | (c) | $ | 54,188 | | | 13 | | |
Corporate Client Banking | 47,420 | | | 49,857 | | | 56,182 | | | 69,540 | | | 51,165 | | | (5) | | | (7) | | | | 47,420 | | | 51,165 | | | (7) | | |
Commercial Real Estate Banking | 101,146 | | | 102,484 | | | 103,117 | | | 102,799 | | | 101,951 | | | (1) | | | (1) | | | | 101,146 | | | 101,951 | | | (1) | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Other | 444 | | | 548 | | | 599 | | | 710 | | | 992 | | | (19) | | | (55) | | | | 444 | | | 992 | | | (55) | | |
Total Commercial Banking loans | $ | 210,125 | | (c) | $ | 214,701 | | (c) | $ | 224,109 | | (c) | $ | 233,366 | | | $ | 208,296 | | | (2) | | | 1 | | | | $ | 210,125 | | (c) | $ | 208,296 | | | 1 | | |
| | | | | | | | | | | | | | | | | | | | | |
SELECTED BALANCE SHEET DATA (average) | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 227,435 | | | $ | 231,691 | | | $ | 247,512 | | | $ | 226,071 | | | $ | 219,891 | | | (2) | | | 3 | | | | $ | 233,158 | | | $ | 218,896 | | | 7 | | |
Loans: | | | | | | | | | | | | | | | | | | | | | |
Loans retained | 210,621 | | | 217,498 | | | 233,044 | | | 209,988 | | | 208,776 | | | (3) | | | 1 | | | | 217,767 | | | 206,837 | | | 5 | | |
Loans held-for-sale and loans at fair value | 1,554 | | | 629 | | | 502 | | | 1,831 | | | 1,036 | | | 147 | | | 50 | | | | 1,129 | | | 1,082 | | | 4 | | |
Total loans | $ | 212,175 | | | $ | 218,127 | | | $ | 233,546 | | | $ | 211,819 | | | $ | 209,812 | | | (3) | | | 1 | | | | $ | 218,896 | | | $ | 207,919 | | | 5 | | |
| | | | | | | | | | | | | | | | | | | | | |
Client deposits and other third-party liabilities | 276,694 | | | 248,289 | | | 236,968 | | | 188,808 | | | 182,546 | | | 11 | | | 52 | | | | 237,825 | | | 172,734 | | | 38 | | |
Equity | 22,000 | | | 22,000 | | | 22,000 | | | 22,000 | | | 22,000 | | | — | | | — | | | | 22,000 | | | 22,000 | | | — | | |
| | | | | | | | | | | | | | | | | | | | | |
Average loans by client segment | | | | | | | | | | | | | | | | | | | | | |
Middle Market Banking | $ | 60,869 | | | $ | 63,029 | | | $ | 66,279 | | | $ | 56,045 | | | $ | 54,114 | | | (3) | | | 12 | | | | $ | 61,558 | | | $ | 55,690 | | | 11 | | |
Corporate Client Banking | 48,825 | | | 51,608 | | | 63,308 | | | 53,032 | | | 53,187 | | | (5) | | | (8) | | | | 54,172 | | | 50,360 | | | 8 | | |
Commercial Real Estate Banking | 101,969 | | | 102,905 | | | 103,516 | | | 101,526 | | | 101,542 | | | (1) | | | — | | | | 102,479 | | | 100,884 | | | 2 | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Other | 512 | | | 585 | | | 443 | | | 1,216 | | | 969 | | | (12) | | | (47) | | | | 687 | | | 985 | | | (30) | | |
Total Commercial Banking loans | $ | 212,175 | | | $ | 218,127 | | | $ | 233,546 | | | $ | 211,819 | | | $ | 209,812 | | | (3) | | | 1 | | | | $ | 218,896 | | | $ | 207,919 | | | 5 | | |
| | | | | | | | | | | | | | | | | | | | | |
Headcount | 11,675 | | | 11,704 | | | 11,802 | | | 11,779 | | | 11,629 | | | — | | | — | | | | 11,675 | | | 11,629 | | | — | | |
| | | | | | | | | | | | | | | | | | | | | |
CREDIT DATA AND QUALITY STATISTICS | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs/(recoveries) | $ | 162 | | | $ | 60 | | | $ | 79 | | | $ | 100 | | | $ | 89 | | | 170 | | | 82 | | | | $ | 401 | | | $ | 160 | | | 151 | | |
Nonperforming assets | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans: | | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans retained (a) | 1,286 | | | 1,468 | | | 1,252 | | (d) | 793 | | | 498 | | | (12) | | | 158 | | | | 1,286 | | | 498 | | | 158 | | |
Nonaccrual loans held-for-sale and loans | | | | | | | | | | | | | | | | | | | | | |
at fair value | 120 | | | 85 | | | 125 | | (d) | — | | | — | | | 41 | | | NM | | | 120 | | | — | | | NM | |
Total nonaccrual loans | 1,406 | | | 1,553 | | | 1,377 | | | 793 | | | 498 | | | (9) | | | 182 | | | | 1,406 | | | 498 | | | 182 | | |
| | | | | | | | | | | | | | | | | | | | | |
Assets acquired in loan satisfactions | 24 | | | 24 | | | 24 | | | 24 | | | 25 | | | — | | | (4) | | | | 24 | | | 25 | | | (4) | | |
Total nonperforming assets | 1,430 | | | 1,577 | | | 1,401 | | | 817 | | | 523 | | | (9) | | | 173 | | | | 1,430 | | | 523 | | | 173 | | |
Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | 3,335 | | | 4,466 | | | 4,730 | | (d) | 2,680 | | | 2,780 | | | (25) | | | 20 | | | | 3,335 | | | 2,780 | | | 20 | | |
Allowance for lending-related commitments | 651 | | | 864 | | | 807 | | (d) | 505 | | | 293 | | | (25) | | | 122 | | | | 651 | | | 293 | | | 122 | | |
Total allowance for credit losses | 3,986 | | | 5,330 | | | 5,537 | | | 3,185 | | | 3,073 | | | (25) | | | 30 | | | | 3,986 | | | 3,073 | | | 30 | | |
| | | | | | | | | | | | | | | | | | | | | |
Net charge-off/(recovery) rate (b) | 0.31 | | % | 0.11 | | % | 0.14 | | % | 0.19 | | % | 0.17 | | % | | | | | | 0.18 | | % | 0.08 | | % | | |
Allowance for loan losses to period-end loans retained | 1.60 | | | 2.08 | | | 2.12 | | (d) | 1.15 | | | 1.34 | | | | | | | | 1.60 | | | 1.34 | | | | |
Allowance for loan losses to nonaccrual loans retained (a) | 259 | | | 304 | | | 378 | | (d) | 338 | | | 558 | | | | | | | | 259 | | | 558 | | | | |
Nonaccrual loans to period-end total loans | 0.67 | | | 0.72 | | | 0.61 | | | 0.34 | | | 0.24 | | | | | | | | 0.67 | | | 0.24 | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
(a)Allowance for loan losses of $273 million, $367 million, $287 million, $175 million and $114 million was held against nonaccrual loans retained at December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively.
(b)Loans held-for-sale and loans at fair value were excluded when calculating the net charge-off/(recovery) rate.
(c)At December 31, 2020, September 30, 2020 and June 30, 2020, total loans included $6.6 billion, $6.6 billion and $6.5 billion of loans, respectively, under the PPP, of which $6.4 billion, $6.4 billion and $6.3 billion was in Middle Market Banking. Refer to page 61 of the Firm’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 for further information on the PPP.
(d)Prior-period amounts have been revised to conform with the current presentation.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
JPMORGAN CHASE & CO. | | | | | |
ASSET & WEALTH MANAGEMENT | | | | |
FINANCIAL HIGHLIGHTS | | | | |
(in millions, except ratio and headcount data) | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
INCOME STATEMENT | | | | | | | | | | | | | | | | | | | | | |
REVENUE | | | | | | | | | | | | | | | | | | | | | |
Asset management, administration and commissions | $ | 2,892 | | | $ | 2,646 | | | $ | 2,489 | | | $ | 2,583 | | | $ | 2,552 | | | 9 | % | | 13 | % | | | $ | 10,610 | | | $ | 9,818 | | | 8 | % | |
All other income | 87 | | | 93 | | | 86 | | | (54) | | | 123 | | | (6) | | | (29) | | | | 212 | | | 418 | | | (49) | | |
Noninterest revenue | 2,979 | | | 2,739 | | | 2,575 | | | 2,529 | | | 2,675 | | | 9 | | | 11 | | | | 10,822 | | | 10,236 | | | 6 | | |
Net interest income | 888 | | | 815 | | | 855 | | | 860 | | | 839 | | | 9 | | | 6 | | | | 3,418 | | | 3,355 | | | 2 | | |
TOTAL NET REVENUE | 3,867 | | | 3,554 | | | 3,430 | | | 3,389 | | | 3,514 | | | 9 | | | 10 | | | | 14,240 | | | 13,591 | | | 5 | | |
| | | | | | | | | | | | | | | | | | | | | |
Provision for credit losses | (2) | | | (52) | | | 223 | | | 94 | | | 13 | | | 96 | | | NM | | | 263 | | | 59 | | | 346 | | |
| | | | | | | | | | | | | | | | | | | | | |
NONINTEREST EXPENSE | | | | | | | | | | | | | | | | | | | | | |
Compensation expense | 1,323 | | | 1,232 | | | 1,178 | | | 1,226 | | | 1,275 | | | 7 | | | 4 | | | | 4,959 | | | 5,028 | | | (1) | | |
Noncompensation expense | 1,433 | | | 1,211 | | | 1,145 | | | 1,209 | | | 1,167 | | | 18 | | | 23 | | | | 4,998 | | | 4,719 | | | 6 | | |
TOTAL NONINTEREST EXPENSE | 2,756 | | | 2,443 | | | 2,323 | | | 2,435 | | | 2,442 | | | 13 | | | 13 | | | | 9,957 | | | 9,747 | | | 2 | | |
| | | | | | | | | | | | | | | | | | | | | |
Income before income tax expense | 1,113 | | | 1,163 | | | 884 | | | 860 | | | 1,059 | | | (4) | | | 5 | | | | 4,020 | | | 3,785 | | | 6 | | |
Income tax expense | 327 | | | 287 | | | 223 | | | 191 | | | 258 | | | 14 | | | 27 | | | | 1,028 | | | 918 | | | 12 | | |
NET INCOME | $ | 786 | | | $ | 876 | | | $ | 661 | | | $ | 669 | | | $ | 801 | | | (10) | | | (2) | | | | $ | 2,992 | | | $ | 2,867 | | | 4 | | |
| | | | | | | | | | | | | | | | | | | | | |
REVENUE BY LINE OF BUSINESS | | | | | | | | | | | | | | | | | | | | | |
Asset Management | $ | 2,210 | | | $ | 1,924 | | | $ | 1,780 | | | $ | 1,740 | | | $ | 1,892 | | | 15 | | | 17 | | | | $ | 7,654 | | | $ | 7,254 | | | 6 | | |
Wealth Management | 1,657 | | | 1,630 | | | 1,650 | | | 1,649 | | | 1,622 | | | 2 | | | 2 | | | | 6,586 | | | 6,337 | | | 4 | | |
TOTAL NET REVENUE | $ | 3,867 | | | $ | 3,554 | | | $ | 3,430 | | | $ | 3,389 | | | $ | 3,514 | | | 9 | | | 10 | | | | $ | 14,240 | | | $ | 13,591 | | | 5 | | |
| | | | | | | | | | | | | | | | | | | | | |
FINANCIAL RATIOS | | | | | | | | | | | | | | | | | | | | | |
ROE | 29 | | % | 32 | | % | 24 | | % | 25 | | % | 29 | | % | | | | | | 28 | | % | 26 | | % | | |
Overhead ratio | 71 | | | 69 | | | 68 | | | 72 | | | 69 | | | | | | | | 70 | | | 72 | | | | |
Pretax margin ratio: | | | | | | | | | | | | | | | | | | | | | |
Asset Management | 31 | | | 30 | | | 30 | | | 24 | | | 30 | | | | | | | | 29 | | | 26 | | | | |
Wealth Management | 26 | | | 35 | | | 21 | | | 27 | | | 30 | | | | | | | | 27 | | | 30 | | | | |
Asset & Wealth Management | 29 | | | 33 | | | 26 | | | 25 | | | 30 | | | | | | | | 28 | | | 28 | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Headcount | 20,683 | | | 21,058 | | | 21,273 | | | 21,302 | | | 21,550 | | | (2) | | | (4) | | | | 20,683 | | | 21,550 | | | (4) | | |
| | | | | | | | | | | | | | | | | | | | | |
Number of Wealth Management client advisors | 2,462 | | | 2,520 | | | 2,409 | | | 2,418 | | | 2,419 | | | (2) | | | 2 | | | | 2,462 | | | 2,419 | | | 2 | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform with the current presentation. Refer to page 29 for further information.
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JPMORGAN CHASE & CO. | | | | | |
ASSET & WEALTH MANAGEMENT | | | | |
FINANCIAL HIGHLIGHTS, CONTINUED | | | | |
(in millions, except ratio data) | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
SELECTED BALANCE SHEET DATA (period-end) | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 203,435 | | | $ | 187,909 | | | $ | 176,833 | | | $ | 178,948 | | | $ | 173,226 | | | 8 | % | | 17 | % | | | $ | 203,435 | | | $ | 173,226 | | | 17 | % | |
Loans | 186,608 | | | 172,695 | | | 162,904 | | | 163,763 | | | 158,149 | | | 8 | | | 18 | | | | 186,608 | | | 158,149 | | | 18 | | |
Deposits | 198,755 | | | 166,049 | | | 160,993 | | | 160,231 | | | 142,740 | | | 20 | | | 39 | | | | 198,755 | | | 142,740 | | | 39 | | |
Equity | 10,500 | | | 10,500 | | | 10,500 | | | 10,500 | | | 10,500 | | | — | | | — | | | | 10,500 | | | 10,500 | | | — | | |
| | | | | | | | | | | | | | | | | | | | | |
SELECTED BALANCE SHEET DATA (average) | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 193,077 | | | $ | 181,901 | | | $ | 175,938 | | | $ | 174,885 | | | $ | 168,192 | | | 6 | | | 15 | | | | $ | 181,483 | | | $ | 161,914 | | | 12 | | |
Loans | 176,758 | | | 167,645 | | | 161,196 | | | 159,513 | | | 153,734 | | | 5 | | | 15 | | | | 166,311 | | | 147,404 | | | 13 | | |
Deposits | 180,348 | | | 162,589 | | | 160,102 | | | 144,570 | | | 138,182 | | | 11 | | | 31 | | | | 161,955 | | | 135,265 | | | 20 | | |
Equity | 10,500 | | | 10,500 | | | 10,500 | | | 10,500 | | | 10,500 | | | — | | | — | | | | 10,500 | | | 10,500 | | | — | | |
| | | | | | | | | | | | | | | | | | | | | |
CREDIT DATA AND QUALITY STATISTICS | | | | | | | | | | | | | | | | | | | | | |
Net charge-offs | $ | (16) | | | $ | 2 | | | $ | (2) | | | $ | 2 | | | $ | 3 | | | NM | | NM | | | $ | (14) | | | $ | 29 | | | NM | |
Nonaccrual loans | 785 | | | 956 | | | 768 | | | 303 | | | 115 | | | (18) | | | NM | | | 785 | | | 115 | | | NM | |
Allowance for credit losses: | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses | 598 | | | 580 | | | 646 | | | 436 | | | 350 | | | 3 | | | 71 | | | | 598 | | | 350 | | | 71 | | |
Allowance for lending-related commitments | 38 | | | 41 | | | 28 | | | 14 | | | 19 | | | (7) | | | 100 | | | | 38 | | | 19 | | | 100 | | |
Total allowance for credit losses | 636 | | | 621 | | | 674 | | | 450 | | | 369 | | | 2 | | | 72 | | | | 636 | | | 369 | | | 72 | | |
Net charge-off/(recovery) rate | (0.04) | | % | — | | % | — | | % | 0.01 | | % | 0.01 | | % | | | | | | (0.01) | | % | 0.02 | | % | | |
Allowance for loan losses to period-end loans | 0.32 | | | 0.34 | | | 0.40 | | | 0.27 | | | 0.22 | | | | | | | | 0.32 | | | 0.22 | | | | |
Allowance for loan losses to nonaccrual loans | 76 | | | 61 | | | 84 | | | 144 | | | 304 | | | | | | | | 76 | | | 304 | | | | |
Nonaccrual loans to period-end loans | 0.42 | | | 0.55 | | | 0.47 | | | 0.19 | | | 0.07 | | | | | | | | 0.42 | | | 0.07 | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform with the current presentation. Refer to page 29 for further information.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
JPMORGAN CHASE & CO. | | | | | |
ASSET & WEALTH MANAGEMENT | | | | |
FINANCIAL HIGHLIGHTS, CONTINUED | | | | |
(in billions) | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | Dec 31, 2020 | | | | | | | | |
| | | | | | | | | | | Change | | | FULL YEAR | |
| Dec 31, | | Sep 30, | | Jun 30, | | Mar 31, | | Dec 31, | | Sep 30, | | Dec 31, | | | | | | | 2020 Change | |
CLIENT ASSETS | 2020 | | 2020 | | 2020 | | 2020 | | 2019 | | 2020 | | 2019 | | | 2020 | | 2019 | | 2019 | |
Assets by asset class | | | | | | | | | | | | | | | | | | | | | |
Liquidity | $ | 641 | | | $ | 674 | | | $ | 704 | | | $ | 619 | | | $ | 539 | | | (5) | % | | 19 | % | | | $ | 641 | | | $ | 539 | | | 19 | % | |
Fixed income | 671 | | | 650 | | | 618 | | | 574 | | | 591 | | | 3 | | | 14 | | | | 671 | | | 591 | | | 14 | | |
Equity | 595 | | | 499 | | | 448 | | | 361 | | | 463 | | | 19 | | | 29 | | | | 595 | | | 463 | | | 29 | | |
Multi-asset | 656 | | | 593 | | | 566 | | | 517 | | | 596 | | | 11 | | | 10 | | | | 656 | | | 596 | | | 10 | | |
Alternatives | 153 | | | 144 | | | 140 | | | 139 | | | 139 | | | 6 | | | 10 | | | | 153 | | | 139 | | | 10 | | |
TOTAL ASSETS UNDER MANAGEMENT | 2,716 | | | 2,560 | | | 2,476 | | | 2,210 | | | 2,328 | | | 6 | | | 17 | | | | 2,716 | | | 2,328 | | | 17 | | |
Custody/brokerage/administration/deposits | 936 | | | 810 | | | 765 | | | 681 | | | 761 | | | 16 | | | 23 | | | | 936 | | | 761 | | | 23 | | |
TOTAL CLIENT ASSETS | $ | 3,652 | | | $ | 3,370 | | | $ | 3,241 | | | $ | 2,891 | | | $ | 3,089 | | | 8 | | | 18 | | | | $ | 3,652 | | | $ | 3,089 | | | 18 | | |
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Assets by client segment | | | | | | | | | | | | | | | | | | | | | |
Private Banking | $ | 689 | | | $ | 650 | | | $ | 631 | | | $ | 577 | | | $ | 628 | | | 6 | | | 10 | | | | $ | 689 | | | $ | 628 | | | 10 | | |
Institutional | 1,273 | | | 1,245 | | | 1,228 | | | 1,107 | | | 1,081 | | | 2 | | | 18 | | | | 1,273 | | | 1,081 | | | 18 | | |
Retail | 754 | | | 665 | | | 617 | | | 526 | | | 619 | | | 13 | | | 22 | | | | 754 | | | 619 | | | 22 | | |
TOTAL ASSETS UNDER MANAGEMENT | $ | 2,716 | | | $ | 2,560 | | | $ | 2,476 | | | $ | 2,210 | | | $ | 2,328 | | | 6 | | | 17 | | | | $ | 2,716 | | | $ | 2,328 | | | 17 | | |
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Private Banking | $ | 1,581 | | | $ | 1,422 | | | $ | 1,360 | | | $ | 1,233 | | | $ | 1,359 | | | 11 | | | 16 | | | | $ | 1,581 | | | $ | 1,359 | | | 16 | | |
Institutional | 1,311 | | | 1,278 | | | 1,259 | | | 1,128 | | | 1,106 | | | 3 | | | 19 | | | | 1,311 | | | 1,106 | | | 19 | | |
Retail | 760 | | | 670 | | | 622 | | | 530 | | | 624 | | | 13 | | | 22 | | | | 760 | | | 624 | | | 22 | | |
TOTAL CLIENT ASSETS | $ | 3,652 | | | $ | 3,370 | | | $ | 3,241 | | | $ | 2,891 | | | $ | 3,089 | | | 8 | | | 18 | | | | $ | 3,652 | | | $ | 3,089 | | | 18 | | |
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Assets under management rollforward | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | $ | 2,560 | | | $ | 2,476 | | | $ | 2,210 | | | $ | 2,328 | | | $ | 2,210 | | | | | | | | $ | 2,328 | | | $ | 1,958 | | | | |
Net asset flows: | | | | | | | | | | | | | | | | | | | | | |
Liquidity | (36) | | | (30) | | | 93 | | | 77 | | | 38 | | | | | | | | 104 | | | 61 | | | | |
Fixed income | 8 | | | 22 | | | 18 | | | — | | | 9 | | | | | | | | 48 | | | 104 | | | | |
Equity | 14 | | | 9 | | | 11 | | | (1) | | | (1) | | | | | | | | 33 | | | (11) | | | | |
Multi-asset | 10 | | | (1) | | | (2) | | | (2) | | | 5 | | | | | | | | 5 | | | 2 | | | | |
Alternatives | 1 | | | 2 | | | 3 | | | — | | | 1 | | | | | | | | 6 | | | 2 | | | | |
Market/performance/other impacts | 159 | | | 82 | | | 143 | | | (192) | | | 66 | | | | | | | | 192 | | | 212 | | | | |
Ending balance | $ | 2,716 | | | $ | 2,560 | | | $ | 2,476 | | | $ | 2,210 | | | $ | 2,328 | | | | | | | | $ | 2,716 | | | $ | 2,328 | | | | |
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Client assets rollforward | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | $ | 3,370 | | | $ | 3,241 | | | $ | 2,891 | | | $ | 3,089 | | | $ | 2,930 | | | | | | | | $ | 3,089 | | | $ | 2,619 | | | | |
Net asset flows | 39 | | | 11 | | | 135 | | | 91 | | | 59 | | | | | | | | 276 | | | 176 | | | | |
Market/performance/other impacts | 243 | | | 118 | | | 215 | | | (289) | | | 100 | | | | | | | | 287 | | | 294 | | | | |
Ending balance | $ | 3,652 | | | $ | 3,370 | | | $ | 3,241 | | | $ | 2,891 | | | $ | 3,089 | | | | | | | | $ | 3,652 | | | $ | 3,089 | | | | |
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In the fourth quarter of 2020, the Firm realigned certain wealth management clients from AWM to CCB. Prior-period amounts have been revised to conform with the current presentation. Refer to page 29 for further information.
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JPMORGAN CHASE & CO. | | | | | |
CORPORATE | | | | |
FINANCIAL HIGHLIGHTS | | | | |
(in millions, except headcount data) | | | | | | | | | | | | | | | | | | | | | |
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| QUARTERLY TRENDS | | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | | 2020 Change | |
| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
INCOME STATEMENT | | | | | | | | | | | | | | | | | | | | | |
REVENUE | | | | | | | | | | | | | | | | | | | | | |
Principal transactions | $ | 273 | | | $ | 87 | | | $ | (2) | | | $ | (113) | | | $ | (234) | | | 214 | % | | NM | | | $ | 245 | | | $ | (461) | | | NM | |
Investment securities gains | 70 | | | 466 | | | 26 | | | 233 | | | 123 | | | (85) | | | (43) | % | | | 795 | | | 258 | | | 208 | % | |
All other income | 249 | | | (210) | | | (91) | | | 211 | | | (6) | | | NM | | NM | | | 159 | | | 89 | | | 79 | | |
Noninterest revenue | 592 | | | 343 | | | (67) | | | 331 | | | (117) | | | 73 | | | NM | | | 1,199 | | | (114) | | | NM | |
Net interest income | (841) | | | (682) | | | (687) | | | (165) | | | (111) | | | (23) | | | NM | | | (2,375) | | | 1,325 | | | NM | |
TOTAL NET REVENUE (a) | (249) | | | (339) | | | (754) | | | 166 | | | (228) | | | 27 | | | (9) | | | | (1,176) | | | 1,211 | | | NM | |
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Provision for credit losses | (42) | | | 96 | | | 4 | | | 8 | | | (1) | | | NM | | NM | | | 66 | | | (1) | | | NM | |
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NONINTEREST EXPENSE | 361 | | | 719 | | | 147 | | | 146 | | | 343 | | | (50) | | | 5 | | | | 1,373 | | | 1,067 | | | 29 | | |
Income/(loss) before income tax expense/(benefit) | (568) | | | (1,154) | | | (905) | | | 12 | | | (570) | | | 51 | | | — | | | | (2,615) | | | 145 | | | NM | |
Income tax expense/(benefit) | (210) | | | (455) | | | (337) | | | 137 | | | (209) | | | 54 | | | — | | | | (865) | | | (966) | | (d) | 10 | | |
NET INCOME/(LOSS) | $ | (358) | | | $ | (699) | | | $ | (568) | | | $ | (125) | | | $ | (361) | | | 49 | | | 1 | | | | $ | (1,750) | | | $ | 1,111 | | | NM | |
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MEMO: | | | | | | | | | | | | | | | | | | | | | |
TOTAL NET REVENUE | | | | | | | | | | | | | | | | | | | | | |
Treasury and CIO | (623) | | | (243) | | | (671) | | | 169 | | | 102 | | | (156) | | | NM | | | (1,368) | | | 2,032 | | | NM | |
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Other Corporate | 374 | | | (96) | | | (83) | | | (3) | | | (330) | | | NM | | NM | | | 192 | | | (821) | | | NM | |
TOTAL NET REVENUE | $ | (249) | | | $ | (339) | | | $ | (754) | | | $ | 166 | | | $ | (228) | | | 27 | | | (9) | | | | $ | (1,176) | | | $ | 1,211 | | | NM | |
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NET INCOME/(LOSS) | | | | | | | | | | | | | | | | | | | | | |
Treasury and CIO | (587) | | | (349) | | | (550) | | | 83 | | | 22 | | | (68) | | | NM | | | (1,403) | | | 1,394 | | | NM | |
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Other Corporate | 229 | | | (350) | | | (18) | | | (208) | | | (383) | | | NM | | NM | | | (347) | | | (283) | | | (23) | | |
TOTAL NET INCOME/(LOSS) | $ | (358) | | | $ | (699) | | | $ | (568) | | | $ | (125) | | | $ | (361) | | | 49 | | | 1 | | | | $ | (1,750) | | | $ | 1,111 | | | NM | |
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SELECTED BALANCE SHEET DATA (period-end) | | | | | | | | | | | | | | | | | | | | | |
Total assets | $ | 1,359,831 | | | $ | 1,253,275 | | | $ | 1,221,980 | | | $ | 981,937 | | | $ | 837,618 | | | 9 | | | 62 | | | | $ | 1,359,831 | | | $ | 837,618 | | | 62 | | |
Loans | 1,657 | | | 1,569 | | | 1,670 | | | 1,650 | | | 1,649 | | | 6 | | | — | | | | 1,657 | | | 1,649 | | | — | | |
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Headcount | 38,366 | | | 38,861 | | | 38,920 | | | 38,785 | | | 38,033 | | | (1) | | | 1 | | | | 38,366 | | | 38,033 | | | 1 | | |
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SUPPLEMENTAL INFORMATION | | | | | | | | | | | | | | | | | | | | | |
TREASURY and CIO | | | | | | | | | | | | | | | | | | | | | |
Investment securities gains | $ | 70 | | | $ | 466 | | | $ | 26 | | | $ | 233 | | | $ | 123 | | | (85) | | | (43) | | | | $ | 795 | | | $ | 258 | | | 208 | | |
Available-for-sale securities (average) | 410,803 | | | 442,943 | | | 426,470 | | | 372,954 | | | 350,100 | | | (7) | | | 17 | | | | 413,367 | | | 283,205 | | | 46 | | |
Held-to-maturity securities (average) | 155,525 | | | 103,596 | | | 71,713 | | | 46,673 | | | 42,125 | | | 50 | | | 269 | | | | 94,569 | | | 34,939 | | | 171 | | |
Investment securities portfolio (average) | $ | 566,328 | | | $ | 546,539 | | | $ | 498,183 | | | $ | 419,627 | | | $ | 392,225 | | | 4 | | | 44 | | | | $ | 507,936 | | | $ | 318,144 | | | 60 | | |
Available-for-sale securities (period-end) | 386,065 | | | 387,663 | | | 483,752 | | | 397,891 | | | 348,876 | | | — | | | 11 | | | | 386,065 | | | 348,876 | | | 11 | | |
Held-to-maturity securities, net of allowance for credit losses (period-end) (b)(c) | 201,821 | | | 141,553 | | | 72,908 | | | 71,200 | | | 47,540 | | | 43 | | | 325 | | | | 201,821 | | | 47,540 | | | 325 | | |
Investment securities portfolio, net of allowance for credit losses (period-end) (b) | $ | 587,886 | | | $ | 529,216 | | | $ | 556,660 | | | $ | 469,091 | | | $ | 396,416 | | | 11 | | | 48 | | | | $ | 587,886 | | | $ | 396,416 | | | 48 | | |
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(a)Included tax-equivalent adjustments, driven by tax-exempt income from municipal bonds, of $55 million, $62 million, $63 million, $61 million and $73 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, respectively, and $241 million and $314 million for the full year 2020 and 2019, respectively.
(b)Upon adoption of the CECL accounting guidance, HTM securities are presented net of an allowance for credit losses. At December 31, 2020, September 30, 2020, June 30, 2020, and March 31, 2020, the allowance for credit losses on HTM securities was $78 million, $120 million, $23 million and $19 million, respectively.
(c)During 2020, the Firm transferred $164.2 billion of investment securities from AFS to HTM for capital management purposes, comprised of $63.7 billion, $74.4 billion and $26.1 billion in the fourth, third and first quarters of 2020, respectively.
(d)The full year 2019 included income tax benefits of $1.1 billion due to the resolution of certain tax audits.
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JPMORGAN CHASE & CO. | | | | | |
CREDIT-RELATED INFORMATION | | | | |
(in millions) | | | | |
| | | | | | | | | | | Dec 31, 2020 | |
| | | | | | | | | | | Change | |
| Dec 31, | | Sep 30, | | Jun 30, | | Mar 31, | | Dec 31, | | Sep 30, | | Dec 31, | |
| 2020 | | 2020 | | 2020 | | 2020 | | 2019 | | 2020 | | 2019 | |
CREDIT EXPOSURE | | | | | | | | | | | | | | |
Consumer, excluding credit card loans (a) | | | | | | | | | | | | | | |
Loans retained | $ | 302,127 | | | $ | 305,106 | | | $ | 307,005 | | | $ | 293,779 | | | $ | 294,999 | | | (1) | % | | 2 | % | |
Loans held-for-sale and loans at fair value (b) | 16,452 | | | 16,992 | | | 16,193 | | | 17,729 | | | 22,818 | | | (3) | | | (28) | | |
Total consumer, excluding credit card loans | 318,579 | | | 322,098 | | | 323,198 | | | 311,508 | | | 317,817 | | | (1) | | | — | | |
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Credit card loans | | | | | | | | | | | | | | |
Loans retained | 143,432 | | | 139,590 | | | 141,656 | | | 154,021 | | | 168,924 | | | 3 | | | (15) | | |
Loans held-for-sale | 784 | | | 787 | | | — | | | — | | | — | | | — | | | NM | |
Total credit card loans | 144,216 | | | 140,377 | | | 141,656 | | | 154,021 | | | 168,924 | | | 3 | | | (15) | | |
Total consumer loans | 462,795 | | | 462,475 | | | 464,854 | | | 465,529 | | | 486,741 | | | — | | | (5) | | |
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Wholesale loans (c) | | | | | | | | | | | | | | |
Loans retained | 514,947 | | | 500,841 | | | 516,787 | | | 555,289 | | | 481,678 | | | 3 | | | 7 | | |
Loans held-for-sale and loans at fair value (b) | 35,111 | | | 26,424 | | | 27,741 | | | 28,792 | | | 29,201 | | | 33 | | | 20 | | |
Total wholesale loans | 550,058 | | | 527,265 | | | 544,528 | | | 584,081 | | | 510,879 | | | 4 | | | 8 | | |
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Total loans | 1,012,853 | | | 989,740 | | | 1,009,382 | | | 1,049,610 | | | 997,620 | | | 2 | | | 2 | | |
Derivative receivables | 79,630 | | | 76,626 | | | 74,846 | | | 81,648 | | | 49,766 | | | 4 | | | 60 | | |
Receivables from customers (d) | 47,710 | | | 30,847 | | | 22,403 | | | 33,376 | | | 33,706 | | | 55 | | | 42 | | |
Total credit-related assets | 1,140,193 | | | 1,097,213 | | | 1,106,631 | | | 1,164,634 | | | 1,081,092 | | | 4 | | | 5 | | |
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Lending-related commitments | | | | | | | | | | | | | | |
Consumer, excluding credit card | 47,910 | | | 46,425 | | | 45,348 | | | 41,535 | | | 40,169 | | | 3 | | | 19 | | |
Credit card (e) | 658,506 | | | 662,860 | | | 673,836 | | | 681,442 | | | 650,720 | | | (1) | | | 1 | | |
Wholesale (b) | 449,863 | | | 441,235 | | | 413,357 | | | 363,245 | | | 417,510 | | | 2 | | | 8 | | |
Total lending-related commitments | 1,156,279 | | | 1,150,520 | | | 1,132,541 | | | 1,086,222 | | | 1,108,399 | | | 1 | | | 4 | | |
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Total credit exposure | $ | 2,296,472 | | | $ | 2,247,733 | | | $ | 2,239,172 | | | $ | 2,250,856 | | | $ | 2,189,491 | | | 2 | | | 5 | | |
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Memo: Total by category | | | | | | | | | | | | | | |
Consumer exposure (b)(f) | $ | 1,169,211 | | | $ | 1,171,760 | | | $ | 1,184,038 | | | $ | 1,188,506 | | | $ | 1,177,630 | | | — | | | (1) | | |
Wholesale exposures (b)(g) | 1,127,261 | | | 1,075,973 | | | 1,055,134 | | | 1,062,350 | | | 1,011,861 | | | 5 | | | 11 | | |
Total credit exposure | $ | 2,296,472 | | | $ | 2,247,733 | | | $ | 2,239,172 | | | $ | 2,250,856 | | | $ | 2,189,491 | | | 2 | | | 5 | | |
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Effective January 1, 2020, the Firm adopted the CECL accounting guidance. In conjunction with the adoption of CECL, the Firm reclassified risk-rated business banking and auto dealer loans and commitments held in CCB from the consumer, excluding credit card portfolio segment to the wholesale portfolio segment. Prior-period amounts have been revised to conform with the current presentation.
(a)Includes scored loans held in CCB, scored mortgage and home equity loans held in AWM, and scored mortgage loans held in CIB and Corporate.
(b)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans. Prior-period amounts have been revised to conform with the current presentation.
(c)Includes loans held in CIB, CB, AWM, Corporate as well as risk-rated business banking and auto dealer loans held in CCB for which the wholesale methodology is applied when determining the allowance for loan losses.
(d)Receivables from customers reflect brokerage-related held-for-investment customer receivables; these are classified in accrued interest and accounts receivable on the Consolidated balance sheets.
(e)Also includes commercial card lending-related commitments primarily in CB and CIB.
(f)Represents total consumer loans and lending-related commitments.
(g)Represents total wholesale loans, lending-related commitments, derivative receivables, and receivables from customers.
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JPMORGAN CHASE & CO. | | | | | |
CREDIT-RELATED INFORMATION, CONTINUED | | | |
(in millions, except ratio data) | | | | |
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| | | | | | | | | | | Dec 31, 2020 | |
| | | | | | | | | | | Change | |
| Dec 31, | | Sep 30, | | Jun 30, | | Mar 31, | | Dec 31, | | Sep 30, | | Dec 31, | |
| 2020 | | 2020 | | 2020 | | 2020 | | 2019 | | 2020 | | 2019 | |
NONPERFORMING ASSETS (a) | | | | | | | | | | | | | | |
Consumer nonaccrual loans | | | | | | | | | | | | | | |
Loans retained (b) | $ | 5,464 | | | $ | 5,047 | | (f) | $ | 4,246 | | | $ | 3,877 | | | $ | 2,926 | | | 8 | % | | 87 | % | |
Loans held-for-sale and loans at fair value (c) | 1,003 | | | 1,358 | | | 1,001 | | | 522 | | | 440 | | | (26) | | | 128 | | |
Total consumer nonaccrual loans | 6,467 | | | 6,405 | | | 5,247 | | | 4,399 | | | 3,366 | | | 1 | | | 92 | | |
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Wholesale nonaccrual loans | | | | | | | | | | | | | | |
Loans retained | 3,318 | | | 3,745 | | | 3,423 | | | 1,957 | | | 1,057 | | | (11) | | | 214 | | |
Loans held-for-sale and loans at fair value (c) | 788 | | | 852 | | | 649 | | | 257 | | | 214 | | | (8) | | | 268 | | |
Total wholesale nonaccrual loans | 4,106 | | | 4,597 | | | 4,072 | | | 2,214 | | | 1,271 | | | (11) | | | 223 | | |
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Total nonaccrual loans | 10,573 | | (e) | 11,002 | | (e) | 9,319 | | (e) | 6,613 | | | 4,637 | | | (4) | | | 128 | | |
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Derivative receivables | 56 | | | 140 | | | 108 | | | 85 | | | 30 | | | (60) | | | 87 | | |
Assets acquired in loan satisfactions | 277 | | | 320 | | | 288 | | | 364 | | | 387 | | | (13) | | | (28) | | |
Total nonperforming assets | 10,906 | | | 11,462 | | | 9,715 | | | 7,062 | | | 5,054 | | | (5) | | | 116 | | |
Wholesale lending-related commitments (c)(d) | 577 | | | 607 | | | 765 | | | 619 | | | 474 | | (f) | (5) | | | 22 | | |
Total nonperforming exposure | $ | 11,483 | | | $ | 12,069 | | | $ | 10,480 | | | $ | 7,681 | | | $ | 5,528 | | | (5) | | | 108 | | |
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NONACCRUAL LOAN-RELATED RATIOS (e) | | | | | | | | | | | |
Total nonaccrual loans to total loans (b)(c) | 1.04 | % | | 1.11 | % | | 0.92 | % | | 0.63 | % | | 0.46 | % | | | | | |
Total consumer, excluding credit card nonaccrual loans to | | | | | | | | | | | | | | |
total consumer, excluding credit card loans (b)(c) | 2.03 | | | 1.99 | | (f) | 1.62 | | | 1.41 | | | 1.06 | | | | | | |
Total wholesale nonaccrual loans to total | | | | | | | | | | | | | | |
wholesale loans (c) | 0.75 | | | 0.87 | | | 0.75 | | | 0.38 | | | 0.25 | | | | | | |
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(a)At December 31, 2020, September 30, 2020, June 30, 2020, March 31, 2020, and December 31, 2019, nonperforming assets excluded: (1) mortgage loans 90 or more days past due and insured by U.S. government agencies of $874 million, $1.1 billion, $696 million, $740 million and $1.1 billion, respectively; and (2) real estate owned (“REO”) insured by U.S. government agencies of $9 million, $10 million, $13 million, $29 million and $41 million, respectively. Prior-period amounts of mortgage loans 90 or more days past due and insured by U.S. government agencies excluded from nonperforming assets have been revised to conform with the current presentation, refer to footnote (c) below for additional information. 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. Refer to Note 12 of the Firm’s 2019 Form 10-K for additional information on the Firm’s credit card nonaccrual and charge-off policies.
(b)At December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020 nonaccrual loans included $1.6 billion, $1.5 billion, $1.3 billion and $970 million of PCD loans, respectively. Prior to the adoption of CECL, nonaccrual loans excluded PCI loans as the Firm recognized interest income on each pool of PCI loans as each of the pools was performing.
(c)In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans. Prior-period amounts have been revised to conform with the current presentation.
(d)Represents commitments that are risk rated as nonaccrual.
(e)Generally excludes loans that were under payment deferral or granted other assistance, including amendments or waivers of financial covenants in response to the COVID-19 pandemic.
(f)Prior-period amounts have been revised to conform with the current presentation.
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JPMORGAN CHASE & CO. | | | | | |
CREDIT-RELATED INFORMATION, CONTINUED | | | |
(in millions, except ratio data) | | | | |
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| QUARTERLY TRENDS | | | FULL YEAR | |
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| 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | | 2020 | | 2019 | | 2019 | |
SUMMARY OF CHANGES IN THE ALLOWANCES | | | | | | | | | | | | | | | | | | | | | |
ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | $ | 30,814 | | | $ | 31,591 | | | $ | 23,244 | | | $ | 17,295 | | (c) | $ | 13,235 | | | (2) | % | | 133 | % | | | $ | 17,295 | | | $ | 13,445 | | | 29 | % | |
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Net charge-offs: | | | | | | | | | | | | | | | | | | | | | |
Gross charge-offs | 1,471 | | | 1,586 | | | 1,877 | | | 1,902 | | | 1,788 | | | (7) | | | (18) | | | | 6,836 | | | 6,810 | | | — | | |
Gross recoveries collected | (421) | | | (406) | | | (317) | | | (433) | | | (294) | | | (4) | | | (43) | | | | (1,577) | | | (1,181) | | | (34) | | |
Net charge-offs | 1,050 | | | 1,180 | | | 1,560 | | | 1,469 | | | 1,494 | | | (11) | | | (30) | | | | 5,259 | | | 5,629 | | | (7) | | |
Write-offs of PCI loans | NA | | NA | | NA | | NA | | 19 | | (d) | NM | | NM | | | NA | | 151 | | (d) | NM | |
Provision for loan losses | (1,433) | | | 400 | | | 9,906 | | (b) | 7,418 | | | 1,401 | | | NM | | NM | | | 16,291 | | | 5,449 | | | 199 | | |
Other | (3) | | | 3 | | | 1 | | | — | | | — | | | NM | | NM | | | 1 | | | 9 | | | (89) | | |
Ending balance | $ | 28,328 | | | $ | 30,814 | | | $ | 31,591 | | | $ | 23,244 | | | $ | 13,123 | | | (8) | | | 116 | | | | $ | 28,328 | | | $ | 13,123 | | | 116 | | |
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ALLOWANCE FOR LENDING-RELATED COMMITMENTS | | | | | | | | | | | | | | | | | | | | | |
Beginning balance | $ | 2,823 | | | $ | 2,710 | | | $ | 2,147 | | | $ | 1,289 | | (c) | $ | 1,165 | | | 4 | | | 142 | | | | $ | 1,289 | | | $ | 1,055 | | | 22 | | |
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Provision for lending-related commitments | (414) | | | 114 | | | 563 | | (b) | 858 | | | 26 | | | NM | | NM | | | 1,121 | | | 136 | | | NM | |
Other | — | | | (1) | | | — | | | — | | | — | | | NM | | — | | | | (1) | | | — | | | NM | |
Ending balance | $ | 2,409 | | | $ | 2,823 | | | $ | 2,710 | | | $ | 2,147 | | | $ | 1,191 | | | (15) | | | 102 | | | | $ | 2,409 | | | $ | 1,191 | | | 102 | | |
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Total allowance for credit losses (a) | $ | 30,737 | | | $ | 33,637 | | | $ | 34,301 | | | $ | 25,391 | | | $ | 14,314 | | | (9) | | | 115 | | | | $ | 30,737 | | | $ | 14,314 | | | 115 | | |
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NET CHARGE-OFF/(RECOVERY) RATES | | | | | | | | | | | | | | | | | | | | | |
Consumer retained, excluding credit card loans | 0.05 | % | | 0.08 | % | | 0.11 | % | | (0.01) | % | | 0.15 | % | | | | | | | 0.06 | % | | 0.12 | % | | | |
Credit card retained loans | 2.17 | | | 2.92 | | | 3.33 | | | 3.25 | | | 3.01 | | | | | | | | 2.93 | | | 3.10 | | | | |
Total consumer retained loans | 0.72 | | | 0.97 | | | 1.14 | | | 1.15 | | | 1.16 | | | | | | | | 0.99 | | | 1.11 | | | | |
Wholesale retained loans | 0.19 | | | 0.07 | | | 0.22 | | | 0.13 | | | 0.13 | | | | | | | | 0.16 | | | 0.09 | | | | |
Total retained loans | 0.44 | | | 0.49 | | | 0.64 | | | 0.62 | | | 0.63 | | | | | | | | 0.55 | | | 0.60 | | | | |
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Memo: Average retained loans | | | | | | | | | | | | | | | | | | | | | |
Consumer retained, excluding credit card loans | $ | 303,421 | | | $ | 306,201 | | | $ | 304,179 | | | $ | 294,156 | | | $ | 295,258 | | | (1) | | | 3 | | | | $ | 302,005 | | | $ | 312,972 | | | (4) | | |
Credit card retained loans | 140,459 | | | 140,200 | | | 142,377 | | | 162,660 | | | 162,112 | | | — | | | (13) | | | | 146,391 | | | 156,319 | | | (6) | | |
Total average retained consumer loans | 443,880 | | | 446,401 | | | 446,556 | | | 456,816 | | | 457,370 | | | (1) | | | (3) | | | | 448,396 | | | 469,291 | | | (4) | | |
Wholesale retained loans | 503,249 | | | 504,449 | | | 540,248 | | | 491,819 | | | 476,402 | | | — | | | 6 | | | | 509,907 | | | 472,628 | | | 8 | | |
Total average retained loans | $ | 947,129 | | | $ | 950,850 | | | $ | 986,804 | | | $ | 948,635 | | | $ | 933,772 | | | — | | | 1 | | | | $ | 958,303 | | | $ | 941,919 | | | 2 | | |
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(a)At December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020 excludes allowance for credit losses on HTM securities of $78 million, $120 million, $23 million and $19 million , respectively; and provision for credit losses on HTM securities of $(42) million, $97 million, $4 million and $9 million for the three months ended December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, respectively, and $68 million for the full year 2020.
(b)Prior-period amounts have been revised to conform with the current presentation.
(c)Upon the adoption of the CECL accounting guidance on January 1, 2020, the Firm recognized a net increase of $4.3 billion (“day 1 impact”) to the allowance for credit losses, of which $4.2 billion related to the allowance for loan losses and $98 million related to the allowance for lending-related commitments.
(d)Prior to the adoption of CECL, write-offs of PCI loans were recorded against the allowance for loan losses when actual losses for a pool exceeded estimated losses that were recorded as purchase accounting adjustments at the time of acquisition. A write-off of a PCI loan was recognized when the underlying loan was removed from a pool.
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JPMORGAN CHASE & CO. | | | | | |
CREDIT-RELATED INFORMATION, CONTINUED | | | |
(in millions, except ratio data) | | | | |
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| | | | | | | | | | | Dec 31, 2020 | |
| | | | | | | | | | | Change | |
| Dec 31, | | Sep 30, | | Jun 30, | | Mar 31, | | Dec 31, | | Sep 30, | | Dec 31, | |
| 2020 | | 2020 | | 2020 | | 2020 | | 2019 | | 2020 | | 2019 | |
ALLOWANCE COMPONENTS AND RATIOS | | | | | | | | | | | | | | |
ALLOWANCE FOR LOAN LOSSES | | | | | | | | | | | | | | |
Consumer, excluding credit card | | | | | | | | | | | | | | |
Asset-specific (a) | $ | (7) | | | $ | 228 | | | $ | 263 | | | $ | 223 | | | $ | 75 | | | NM | | NM | |
Portfolio-based | 3,643 | | | 4,274 | | | 4,609 | | | 3,231 | | | 1,476 | | | (15) | % | | 147 | % | |
PCI | NA | | NA | | NA | | NA | | 987 | | | NM | | NM | |
Total consumer, excluding credit card | 3,636 | | | 4,502 | | | 4,872 | | | 3,454 | | | 2,538 | | | (19) | | | 43 | | |
Credit card | | | | | | | | | | | | | | |
Asset-specific (b) | 633 | | | 652 | | | 642 | | | 530 | | | 477 | | | (3) | | | 33 | | |
Portfolio-based | 17,167 | | | 17,148 | | | 17,158 | | | 14,420 | | | 5,206 | | | — | | | 230 | | |
Total credit card | 17,800 | | | 17,800 | | | 17,800 | | | 14,950 | | | 5,683 | | | — | | | 213 | | |
Total consumer | 21,436 | | | 22,302 | | | 22,672 | | | 18,404 | | | 8,221 | | | (4) | | | 161 | | |
Wholesale | | | | | | | | | | | | | | |
Asset-specific (c) | 682 | | | 792 | | | 757 | | | 556 | | | 295 | | | (14) | | | 131 | | |
Portfolio-based | 6,210 | | | 7,720 | | | 8,162 | | (g) | 4,284 | | | 4,607 | | | (20) | | | 35 | | |
Total wholesale | 6,892 | | | 8,512 | | | 8,919 | | | 4,840 | | | 4,902 | | | (19) | | | 41 | | |
Total allowance for loan losses | 28,328 | | | 30,814 | | | 31,591 | | | 23,244 | | | 13,123 | | | (8) | | | 116 | | |
Allowance for lending-related commitments | 2,409 | | | 2,823 | | | 2,710 | | (g) | 2,147 | | | 1,191 | | | (15) | | | 102 | | |
Total allowance for credit losses (d) | $ | 30,737 | | | $ | 33,637 | | | $ | 34,301 | | | $ | 25,391 | | | $ | 14,314 | | | (9) | | | 115 | | |
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CREDIT RATIOS | | | | | | | | | | | | | | |
Consumer, excluding credit card allowance, to total | | | | | | | | | | | | | | |
consumer, excluding credit card retained loans | 1.20 | % | | 1.48 | % | | 1.59 | % | | 1.18 | % | | 0.86 | % | | | | | |
Credit card allowance to total credit card retained loans | 12.41 | | | 12.75 | | | 12.57 | | | 9.71 | | | 3.36 | | | | | | |
Wholesale allowance to total wholesale retained loans | 1.34 | | | 1.70 | | | 1.73 | | (g) | 0.87 | | | 1.02 | | | | | | |
Wholesale allowance to total wholesale retained loans, | | | | | | | | | | | | | | |
excluding trade finance and conduits (e) | 1.45 | | | 1.83 | | | 1.84 | | (g) | 0.93 | | | 1.08 | | | | | | |
Total allowance to total retained loans | 2.95 | | | 3.26 | | | 3.27 | | | 2.32 | | | 1.39 | | | | | | |
Consumer, excluding credit card allowance, to consumer, | | | | | | | | | | | | | | |
excluding credit card retained nonaccrual loans (f) | 67 | | | 89 | | (g) | 115 | | | 89 | | | 87 | | | | | | |
Total allowance, excluding credit card allowance, to retained | | | | | | | | | | | | | | |
nonaccrual loans, excluding credit card nonaccrual loans (f) | 120 | | | 148 | | | 180 | | (g) | 142 | | | 187 | | | | | | |
Wholesale allowance to wholesale retained nonaccrual loans | 208 | | | 227 | | | 261 | | (g) | 247 | | | 464 | | | | | | |
Total allowance to total retained nonaccrual loans | 323 | | | 350 | | (g) | 412 | | | 398 | | | 329 | | | | | | |
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(a)Includes modified PCD loans and loans that have been modified or are reasonably expected to be modified in a troubled debt restructuring (“TDR”).
(b)The asset-specific credit card allowance for loan losses relates to loans that have been modified or are reasonably expected to be modified in a TDR; the Firm calculates this allowance based on the loans’ original contractual interest rates and does not consider any incremental penalty rates.
(c)Includes risk-rated loans that have been placed on nonaccrual status and loans that have been modified or are reasonably expected to be modified in a TDR.
(d)At December 31, 2020, September 30, 2020, June 30, 2020 and March 31, 2020, excludes allowance for credit losses on HTM securities of $78 million, $120 million, $23 million and $19 million, respectively.
(e)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.
(f)Refer to footnote (a) on page 25 for information on the Firm’s nonaccrual policy for credit card loans.
(g)Prior-period amounts have been revised to conform with the current presentation.
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JPMORGAN CHASE & CO. | | | |
NON-GAAP FINANCIAL MEASURES | |
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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 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)Pre-provision profit is a non-GAAP financial measure which represents total net revenue less noninterest expense. The Firm believes that this financial measure is useful in assessing the ability of a lending institution to generate income in excess of its provision for credit losses.
(c)TCE, ROTCE, and TBVPS are each 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 utilized by the Firm, as well as investors and analysts, in assessing the Firm’s use of equity.
(d)The ratio of the wholesale and CIB’s 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 respective allowance coverage ratio.
(e)In addition to reviewing net interest income and the net yield on a managed basis, management also reviews these metrics excluding CIB Markets to assess the performance of the Firm’s lending, investing (including asset-liability management) and deposit-raising activities. The resulting metrics are referred to as non-markets related net interest income and net yield. CIB Markets are Fixed Income Markets and Equity Markets. Management believes that disclosure of non-markets related net interest income and net yield provide investors and analysts with other measures by which to analyze the non-markets-related business trends of the Firm and provides a comparable measure to other financial institutions that are primarily focused on lending, investing and deposit-raising activities.
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| QUARTERLY TRENDS | | FULL YEAR | |
| | | | | | | | | | | 4Q20 Change | | | | | | 2020 Change | |
(in millions, except rates) | 4Q20 | | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 | | 3Q20 | | 4Q19 | | 2020 | | 2019 | | 2019 | |
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Net interest income - reported | $ | 13,258 | | | $ | 13,013 | | | $ | 13,853 | | | $ | 14,439 | | | $ | 14,166 | | | 2 | % | | (6) | % | | $ | 54,563 | | | $ | 57,245 | | | (5) | % | |
Fully taxable-equivalent adjustments | 97 | | | 104 | | | 107 | | | 110 | | | 123 | | | (7) | | | (21) | | | 418 | | | 531 | | | (21) | | |
Net interest income - managed basis (a) | $ | 13,355 | | | $ | 13,117 | | | $ | 13,960 | | | $ | 14,549 | | | $ | 14,289 | | | 2 | | | (7) | | | $ | 54,981 | | | $ | 57,776 | | | (5) | | |
Less: CIB Markets net interest income | 2,166 | | | 2,076 | | | 2,536 | | | 1,596 | | | 1,149 | | | 4 | | | 89 | | | 8,374 | | | 3,120 | | | 168 | | |
Net interest income excluding CIB Markets (a) | $ | 11,189 | | | $ | 11,041 | | | $ | 11,424 | | | $ | 12,953 | | | $ | 13,140 | | | 1 | | | (15) | | | $ | 46,607 | | | $ | 54,656 | | | (15) | | |
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Average interest-earning assets (b) | $ | 2,955,646 | | | $ | 2,874,974 | | | $ | 2,819,689 | | | $ | 2,465,549 | | | $ | 2,377,544 | | | 3 | | | 24 | | | $ | 2,779,710 | | | $ | 2,345,279 | | | 19 | | |
Less: Average CIB Markets interest-earning assets (b) | 743,337 | | | 730,141 | | | 795,511 | | | 735,852 | | | 676,566 | | | 2 | | | 10 | | | 751,131 | | | 672,417 | | | 12 | | |
Average interest-earning assets excluding CIB Markets | $ | 2,212,309 | | | $ | 2,144,833 | | | $ | 2,024,178 | | | $ | 1,729,697 | | | $ | 1,700,978 | | | 3 | | | 30 | | | $ | 2,028,579 | | | $ | 1,672,862 | | | 21 | | |
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Net yield on average interest-earning assets - managed basis | 1.80 | % | | 1.82 | % | | 1.99 | % | | 2.37 | % | | 2.38 | % | | | | | | 1.98 | % | | 2.46 | % | | | |
Net yield on average CIB Markets interest-earning assets | 1.16 | | | 1.13 | | | 1.28 | | | 0.87 | | | 0.67 | | | | | | | 1.11 | | | 0.46 | | | | |
Net yield on average interest-earning assets excluding CIB Markets | 2.01 | | | 2.05 | | | 2.27 | | | 3.01 | | | 3.06 | | | | | | | 2.30 | | | 3.27 | | | | |
(a) Interest includes the effect of related hedges. Taxable-equivalent amounts are used where applicable.
(b) In the third quarter of 2020, the Firm reclassified certain fair value option elected lending-related positions from trading assets to loans and other assets. Prior-period amounts have been revised to conform with the current presentation.
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JPMORGAN CHASE & CO. | | | | | | | |
J.P. MORGAN WEALTH MANAGEMENT REORGANIZATION | | |
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In the fourth quarter of 2020, the Firm transferred certain assets, liabilities, revenue, expense and headcount associated with certain wealth management clients from AWM to the J.P. Morgan Wealth Management business unit within CCB. Prior-period amounts have been revised to conform with current presentation, including technology and support staff of approximately 850 and 800 that were transferred during the second and third quarter of 2020, respectively.
The table below represents select data realigned to CCB from AWM.
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(in millions, except headcount data) | 3Q20 | | 2Q20 | | 1Q20 | | 4Q19 |
SELECTED DATA | | | | | | | |
Net revenue | $ | 183 | | | $ | 180 | | | $ | 217 | | | $ | 186 | |
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Client investment assets (period-end) | 153,128 | | | 138,247 | | | 119,635 | | | 143,324 | |
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Headcount | 946 | | | 1,676 | | | 2,528 | | | 2,641 | |
The chart below provides a mapping of the Firm’s prior reporting to the current presentation for the impacted business segments.
(a)Effective in the first quarter of 2021, Asset & Wealth Management’s Wealth Management business was renamed Global Private Bank.